Friday 17 January 2020

Theories of Surplus Value, Part III, Addenda - Part 38

Profit, which is, in fact, the primary form of surplus value, the form surplus value assumes before the industrial capitalist pays out rent, interest and taxes, has now itself been obscured. Instead of surplus value assuming the form of profit, a part of which is then appropriated by the landlord as rent, and another part appropriated by the owner of capital as interest, it now appears that first the industrial capitalist must pay rent, as a cost for the land they use, and interest as the cost of the capital they use, so that profit is then reduced to only what is left over, after these costs of production have been met. Profit is then reduced to being only profit of enterprise and this profit of enterprise not only appears to be, but actually is, for each individual capital, a consequence of profit on alienation; of the individual characteristics of each firm, and its managers; of its ability to buy low and sell high, to operate more efficiently than its competitors, and so on, and this enhances the appearance that profit itself is only a special form of wages to these managers that exhibit these skills. 

“Thus even the last form of surplus-value, which to some extent recalls its origin, is separated and conceived not only as an alienated form, but as one which is in direct contradiction to its origin; consequently the nature of capital and of surplus-value as well as that of capitalist production in general is, finally, completely mystified.” (p 490) 

Interest-bearing capital exists outside the circuit of industrial capital. Its circuit is M – M`. The owner of capital claims interest on it, whether it is used productively or not. The money-lending capitalist can lend money to the aristocrat who uses it solely for unproductive consumption. They repay the money lender by a direct transfer of value, by liquidating some of their assets. The money lender lends to the peasant producer, who pays the interest not out of profits, but again as a direct transfer of value, resulting from their own surplus labour

What determines interest-bearing capital under capitalism, even in these instances, which can also be seen in previous modes of production, is that it is now capital, and its laws of motion that determines the rate of interest, just as it does with the rate of rent. As with landed property, and the payment of rent, so too the payment of interest derives not from its role in the production process, but from its existence as property. 

Surplus value, and its manifestation as profit is a consequence of the production process. The surplus value arises because capital as variable-capital is advanced to production. It is the production process that creates the surplus-value, because the labour employed creates a greater sum of new value than is represented by the variable-capital. The surplus-value assumes the form of profit, because alongside the variable-capital, constant capital is employed, and the profit is the surplus-value related to this total advanced capital, not just to the variable-capital. 

But, rent comes to the landlord irrespective of the production process. The landlord demands the rent having played no part in production, but merely on the basis of their ownership of land as property. The money-lending capitalist, be they a bank that makes a loan, or a bond or shareholder, who lends money in exchange for bonds and shares, also has no role in production. They are as much a useless and parasitic layer as the landlords. They claim their interest not on the basis of performing any useful role in production, but also merely on the basis of being the owner of a particular type of property

Industrial profit, in contradistinction to interest, represents capital in the [production] process in contradistinction to capital outside the process, capital as a process in contradistinction to capital as property; it therefore represents the capitalist as functioning capitalist, as representative of working capital as opposed to the capitalist as mere personification of capital, as mere owner of capital. He thus appears as working capitalist in contrast to himself as capitalist, and further, as worker in contrast to himself as mere owner.” (p 490) 

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