Theories of Surplus Value, Part I, Chapter 6 - Part 9

It is then not the fact that these commodities form a part of capital – productive-capital or constant capital – that is significant in these exchanges, but only the fact that they are commodities. As Marx sets out in Capital II, it is not capital that is bought and sold, but only commodities, even where these commodities form the components of capital. Where capital itself is sold as a commodity, then, as Marx describes in Capital III, it is not capital as a machine, quantity of raw material etc., that is being sold, but only the use value of capital itself, as self-expanding value.

This has caused confusion to Proudhon and other writers, as Marx describes.

Suppose the average rate of profit is 10%, then a capital value of £1,000 will produce a profit of £100. It does not matter whether the capital value is in the form of a sum of money, a machine or a quantity of material. Provided any of these things act as capital, they have the ability to produce this £100 of profit. It is this use value of capital, to self expand in value that is sold as a commodity.

This use value has no value, because it is not the product of labour. But, its clear that the owners of the capital will not give this use value away for free. If I have a machine worth £1,000, which could produce £100 of profit, I will not let someone borrow the machine without them compensating me for the loss of this £100 of profit. Its price, the rate of interest, is then determined solely on the basis of supply and demand for this use value of capital to produce profit.

At the same time, someone who may want to borrow the machine will not be prepared to pay £100 for the ability to do so, because that would take up all of their profit. In fact, what the price of this capital will be, the rate of interest, is somewhere between £0 and £100, or 0 and 10%, determined by the supply and demand for the capital.

“But although M—C—M, representing the money circulation between capitalist and labourer, in itself does not imply any act of reproduction, nevertheless this is implied by the continuous repetition of this act, the continuity of the return circuit. There cannot be a buyer continually becoming a seller without the reproduction of the commodity which he sells. In fact, this holds good for everyone except those who live on rent or interest or taxes.” (p 325)

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