Thursday 2 January 2020

Theories of Surplus Value, Part III, Addenda - Part 23

For the individual private capitalist who uses their own money-capital to fund the purchase of the elements of productive-capital, they now, also, come to see their profit as dividing into interest and profit. If the rate of interest is 5%, and they have provided £1,000 of capital, they see £50 of their profit simply as interest, paid to them as the owner of capital. If the total profit is £100, they see the other £50 as industrial profit, or a return to them as wages of superintendence, or a return for their entrepreneurship, of their skill in buying low and selling high. In that way, capital becomes identified with money-capital. The return to capital becomes interest not profit, and the source of profit becomes further obscured. It appears that capital produces interest naturally, simply by being lent, and the circuit of capital comes to be seen as starting from this advance of money-capital rather than from the advance of productive-capital

“This 5 per cent interest, which he as an “industrial capitalist” owes to himself as “owner” of the capital, is due to his capital as such, and consequently it is due to him as owner of the capital as such (which is at one and the same time the existence of capital in itself, or the existence of capital as the capitalist, as property which debars other people from owning it), capital abstracted from the production process as opposed to operating capital, capital involved in the production process, and to the “industrial capitalist” as representative of this operating, “working” capital.” (p 473) 

This is like a capitalist farmer who owns the land they farm, and who is, thereby, also a landowner. They see that part of their profit, which they would otherwise have paid as rent to a landowner, still as rent rather than profit. They see the rent as being the natural return to land, and so the equivalent amount of their profit as coming to them, as a landowner, rather than as a capitalist. But, as seen earlier, neither interest-bearing capital nor land creates any new value, nor surplus value/profit. It is only variable-capital that produces surplus value, and industrial capital that produces profit. Interest and rent are merely appropriations from profit by the owners of, respectively, interest-bearing capital, and land, because industrial capital needs the use value of them, allowing the owners of those use values to sell them as commodities, and to charge a price for them, i.e. interest and rent, respectively. 

It is not money-capital that creates interest, nor land that creates rent. It is industrial capital that creates profit, without which neither interest nor rent is possible under capitalism. Money-capital does not create interest; it is only that the owner of money-capital is able to appropriate a portion of profit as interest, just as the owner of land is able to appropriate a portion of profit as rent. 

“Thus one aspect of capital confronts another aspect of the same capital just as rigidly as do landed property and capital which, in fact, constitute the separate claims to appropriation of other people’s labour which are based on two essentially different means of production.” (p 474) 

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