Circulating capital is distinguished from fixed capital in that the whole value of the former is consumed and returned, at the completion of a turnover of capital, whereas only the wear and tear of the latter is consumed and returned in each turnover period. The terms fixed and circulating capital only apply to productive-capital, but, as Marx sets out, in Capital III, a parallel exists with interest-bearing capital. For example, where money is loaned, this is like circulating capital. £100 is loaned and £100 is repaid, along with, say, £10 of interest, at the end of the loan period. Where, say, a machine is loaned, the borrower pays the lender an equivalent of the wear and tear, plus the relevant interest, on the full value of the machine, for the period of the loan. Another form of this would be Hire Purchase, where something is loaned, and the borrower pays back at regular periods an amount covering interest, and wear and tear, and, at the end of the period also then has the option to buy at its residual value. The lease schemes now used by car companies are an example of such an arrangement.
Another variation is a mortgage, whereby the lender advances an amount of money to the borrower, who puts up, as collateral, title to the house they buy with the mortgage. The borrower retains ownership of the house, but gives possession of its title deeds to the lender. The lender retains ownership of the money they lend, but gives possession of it to the borrower, who uses it to buy the house. The lender then either pays a monthly amount which covers the interest only on the capital sum borrowed, with the requirement then to also pay back the capital sum at the end of the mortgage, or else pays a monthly sum, which covers the interest on the outstanding balance of the capital sum borrowed, plus an amount to cover the gradual repayment of the capital sum (equivalent to a sum to cover wear and tear).
But, such a mortgage could just as easily be to an industrial capitalist to buy a factory or shop. For the money-lending capitalist, it is all the same. The only circuit of capital they see is M – M`. The advance of a sum of money and the return of a greater sum of money. Everything that actually happens in the interim between these points is obscured to them. It appears that the advance of money itself is sufficient for a self-expansion of its value, as though this was intrinsic to its nature as loanable money-capital.
“In profit as such, surplus-value, and consequently its real source, is already obscured and mystified:” (p 459)
That is even more so the case with interest and interest-bearing capital. Profit obscures surplus value, because where surplus value is produced by variable-capital, profit is produced by the whole capital advanced, be it constant or variable, fixed or circulating capital. The price of production of any commodity is determined not by the variable-capital and surplus value it produces, but by the average rate of profit it obtains on the total capital advanced for its production. Profit, therefore, appears to have no relation to surplus value, or to the variable-capital, but only to the total capital advanced. Profit appears to be the natural fruit of industrial capital, just as interest appears as the natural fruit of interest-bearing capital.
In the same way that precapitalist rent differs from capitalist rent, so interest under capitalism differs from the interest on usurer's capital, in precapitalist modes of production. Rent, in precapitalist modes of production, is the main means by which the exploiting class appropriates surplus value from the labourers. It depends initially on the labourer being able to produce enough for their own reproduction, in part of the week, leaving the rest of the week for them to undertake surplus labour. As Marx describes, in Capital III, Labour Rent evolves over the centuries into Rent In Kind, where instead of performing this free labour, the labourer hands over their surplus product, and eventually, as Money Rent, they hand over an amount of exchange-value, equal to the value of this surplus product.
Under capitalism, the capitalist farmer only pays in rent what exists for them as surplus profit. But, the concept of surplus profit itself presumes the existence of an average rate of profit, which itself only comes into existence as a consequence of capitalist competition, and the formation of prices of production. But, similarly, the rate of interest on money-lending capital, under capitalism, is equally dependent upon the existence of this average rate of profit. It is because all capital and not just variable-capital, produces profit that any capital is thereby able to obtain this average rate of profit. The use value of all capital, thereby, is this ability to produce the average rate of profit. It is this use value that the owner of loanable money-capital sells, and whose price is the rate of interest.
The difference between the sale of this use value of capital, and the sale of any other commodity is that the sale is only temporary, and for a given period. In other words, it is lent rather than actually sold. The industrial capitalist who advances capital has the potential to produce the average profit on the capital they advance, but to actually do so depends on them undertaking a number of other actions. They must buy means of production and labour-power, and then engage in production, before selling the output and so realising the profit. All of this takes an amount of time (turnover time) that is largely out of their control. But that is not the case with the money lending capitalist. They determine the exact time when their capital must be returned to them – as anyone who has taken up an offer of 0% credit is aware – and how much the interest on the loan must be.
“In this case therefore, the return is not the consequence and result of a series of economic processes but is effected by a particular juridical transaction between buyer and seller, by the fact that it is lent instead of being sold, and therefore it is alienated only temporarily. What is sold is, in fact, its use-value, whose function in this case is to produce exchange-value, to yield profit, in other words to produce more value than it itself contains. As money it does not change through being used. It is however expended as money and it flows back as money.” (p 458)
No comments:
Post a Comment