Capital III, Chapter 36 - Part 1

Pre-Capitalist Relationships

“Interest-bearing capital, or, as we may call it in its antiquated form, usurer's capital, belongs together with its twin brother, merchant's capital, to the antediluvian forms of capital, which long precede the capitalist mode of production and are to be found in the most diverse economic formations of society.

The existence of usurer's capital merely requires that at least a portion of products should be transformed into commodities, and that money should have developed in its various functions along with trade in commodities.” (p 593)

Usurers capital develops along with merchant capital, and particularly money-dealing capital. It is an obvious step for the money dealer who simply transfers other people's money, to become also a provider of loans. As stated previously, these forms of capital are not really capital at all, in the developed sense of the term. They are not based on an exploitation of wage labour, and extraction of surplus value. They are able to expand in value only via unequal exchange, and the ability thereby to acquire a portion of society's surplus product, in its money form. The highest expression of this form of “capital” in the ancient world, Marx says, occurred in ancient Rome, during the last years of the Republic.

As was shown in Capital I, as soon as money arises, money hoarding arises with it. However, the miser who simply hoards money, is economically insignificant. Money hoards only become important when they form the basis of loanable capital, i.e. to be used for the purpose of expansion, rather than as a means of purchasing commodities.

“The merchant borrows money in order to make a profit with it, in order to use it as capital, that is, to expend it. Hence in earlier forms of society the money-lender stands in the same relation to him as to the modern capitalist.” (p 593)

Here, as seen previously, the merchant makes a profit for two reasons. Firstly, because of their knowledge of markets and commodity values, they are able to buy low in one market and sell high in another. Secondly, the commodity producer has costs in selling, which detract from the value they realise in selling the commodity. The merchant relieves them of that cost, and because the merchant, as a specialist, has lower selling costs, they can make a profit on the difference. The usurer, therefore, obtains their interest by obtaining a share of this profit.

But, the usurer can obtain interest from lending to producers too. By lending money to a slave-owner, which they use to buy slaves, land and other means of production, the usurer obtains their interest from sharing in the value of the resulting surplus product.

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