The industrial capitalist who borrows money and then employs it as money-capital, borrows this use value of capital to produce the average profit. For them, profit itself is already alienated from surplus value. Their appropriation of the average profit appears to have nothing to do with the variable-capital they advance, because they may employ very little labour, and yet enjoy sizeable profits. Those profits appear to them to be some mystical combination of the advance of the capital itself plus their own unique entrepreneurial talents. But, it is only the existence of the average rate of profit that makes possible interest as the price of obtaining it.
“The basis of interest however is this already externalised form of surplus-value, i.e., its existence as profit. This form differs from its first simple aspect, in which it still reveals the umbilical cord of its birth, and is, at first sight, by no means recognisable as a form of surplus-value. Interest directly presupposes not surplus-value, but profit, of which it is merely a part placed in a special category or division. It is therefore much more difficult to recognise surplus-value in interest than in profit, since interest is directly connected with surplus-value only in the form of profit.” (p 459)
Its clear with industrial capital that something has to happen before a profit is produced. A manufacturer must buy materials and labour-power etc., and produce a commodity for sale. A commercial capitalist must buy commodities and arrange for their sale and marketing etc. The actual source of the profit deriving from the production of surplus value is not apparent, but at least it can be seen that the profit derives from this activity in some way. But that is not the case with interest-bearing capital. The owner of this capital need do nothing other than lend it to the borrower.
“Interest, as distinct from profit, represents the value of mere ownership of capital—i.e., it transforms the ownership of money (of a sum of values, commodities, whatever the form may be) in itself, into ownership of capital, and consequently commodities or money as such into self-expanding values.” (p 460)
The source of profit, for the industrial capitalist, is obscured. Because interest appears to flow directly to money-capital (or commodities that are loaned in the same way) the impression is given that the revenue produced by capital is then interest, not profit. Capital becomes seen as this money-capital, and not the productive-capital, which is the real source of the surplus value. The loanable money-capital becomes seen as the real capital and so the same money-capital, when it is used to buy the means of production and labour-power, is seen as the start and end point of the circuit of capital itself. The actual productive-capital, which is the real start and end point of the circuit of industrial capital, is then reduced to nothing more than a collection of commodities required for production, and otherwise incidental to the whole money making exercise.
Instead of this productive-capital being the whole purpose of capitalism, its start and end point, with its production of surplus value, so as to accumulate more of it, and thereby produce more surplus value, the purpose appears as simply the tawdry business of turning one amount of money into a greater sum of money, as this money earns interest. If the return to capital then becomes seen as interest, profit is reduced to what? If it is no longer the return to capital, it can only now be seen as the return to entrepreneurship. It becomes nothing more than a form of wages paid to the industrial capitalist in payment for their specific business skills and acumen. It is then nothing more than the reward they obtain from skilled buying of inputs, their skill in organising production on a more efficient basis than their competitors, and their skill in marketing the output. In short, it reduces profit to the ability to buy low and sell high. It reduces the analysis of profit once more to that of the Mercantilists, of profit on alienation.
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