Saturday 28 December 2019

Theories of Surplus Value, Part III, Addenda - Part 18

As described in Capital II, this function of making and receiving payments for goods bough and sold, by firms, which is an essential part of the circuit of capital, corresponding to that part of the circulation period when commodity-capital is metamorphosed into money-capital, and then back into productive-capital, becomes the preserve of a specific form of commercial capital, i.e. money-dealing capital. But, as also set out in Capital II, the other element of the part of the circuit of industrial capital, concerned with circulation also takes on an independent existence of its own. In other words, every productive-capital having produced a mass of commodity-capital, must sell it, in order to metamorphose its capital value into money-capital, before it can metamorphose the money-capital back into productive-capital. It must employ capital for that purpose of selling its output. Merchant capital, specialising in performing that task, and thereby reducing the amount of capital required to do so, separates off from the productive-capital. 

Marx discusses the way this arises as part of the primary accumulation of capital

“The merchant, instead of buying commodities, buys wage-labour with which he produces the commodities which he intends to sell on the market. But commercial capital thereby loses the fixed form which it previously possessed in contrast to production. This was the way the medieval guilds were undermined by manufacture and the handicrafts confined to a narrower sphere... 

The producer, conversely, becomes a merchant. For example, the cloth producer himself buys material in accordance with the size of his capital, etc., instead of gradually obtaining his material in small amounts from the merchant and working for him. The conditions of production enter into the process [of production] as commodities which he himself has bought. And instead of producing for individual merchants or for particular customers, he now produces for the world of commerce.” (p 469) 

The increase in trade creates the conditions by which markets are established and expanded, which makes possible larger scale production, which is a precondition for capitalist production, and the dissolution of guild production. But, this capitalist production, by then destroying guild and other production, as a result of the low prices if its commodities, itself then acts to create new markets and to dominate them. It is these low prices, as Marx says in The Communist Manifesto, which acts as the battering rams, which it uses to break down all Chinese walls to those markets. 

“As soon as manufacture gains strength (and this applies to an even greater extent to large-scale industry), it in turn creates the market, conquers it, opens up, partly by force, markets which it conquers, however, by means of its commodities. From now on, trade is merely a servant of industrial production for which a constantly expanding market has become a very condition of existence...” (p 470) 

No comments: