Thursday 16 January 2020

Theories of Surplus Value, Part III, Addenda - Part 37

In considering the use value land, the rent appears as so much money for so much land. For example, £100 for the rent of ten hectares of land. In considering labour-power, the wages again appear as so much money for so much labour-power, e.g. £100 wages for 10 hours of labour-power, or as it actually it appears, for 10 hours of labour. But, when it comes to capital, this relation appears to fall apart, because the unit of measurement of capital is money itself. In other words, the industrial capitalist does not buy a hectare or a kilogram, or an hour of capital, but, say, £1,000 of capital. Yet, the price of this £1,000 of capital appears to be, say, £1,050! 

In this contradiction is, in fact, expressed the nature of capital as self-expanding value. The reason that £1,000 equals £1,050 is precisely that explained in previous chapters, which is that what this expresses is the difference between the value of commodities worth £1,000 (or £1,000 of money as the general commodity), as commodities, and the value of those same commodities (or money) acting not as commodities, but as capital

A capital of the average organic composition, and average rate of turnover, self expands in value, i.e. its value as capital is greater than its value as commodities, or money, because it produces surplus value. But, now, because of the formation of an average rate of profit, and prices of production, as a result of competition, every capital has the right to this average profit, whether it produces surplus value or not, whether it produces a lot of surplus value or a little. That is why commercial capital which produces no surplus value has this right to claim the average profit; it is why capital that operated a fully automated system of production, employing no labour, would still claim this average profit. It means that all capital, as capital, has the use value of being self-expanding value, of producing average profit, whether it utilises variable-capital or not. It is this use value that is sold by the owner of capital, and whose price is the rate of interest

“Here it is a question not of a relation which is alien to capital, but of the capital relation itself; of a relation which arises out of capitalist production, is specific to it, and expresses the essence of capital; of an aspect of capital in which it appears as capital.” (p 489) 

The use value of capital is that it is self-expanding value. The price of this use value is the rate of interest, which itself is determined, as a market price of capital, via competition between borrowers and lenders. But, now, interest is then an intrinsic quality of capital. Although capitalist production, and the creation of surplus value/profit is a precondition for interest, now all capital has the property of producing interest, whether it takes part in production or not. Now, the interest is taken into the production process from the start. For the industrial capitalist, therefore, interest appears as a cost of production, just as rent appears as a cost of production for the producer of primary products. 

“... it is precisely this alienated form which is presupposed and declared to be the essential feature of interest. The alienated form has assumed an independent and rigid existence as something antagonistic to the real nature of surplus-value. The relationship of capital to labour is obliterated in interest-bearing capital.” (p 489) 

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