Sunday 5 January 2020

Theories of Surplus Value, Part III, Addenda - Part 26

It is this fact, that money and commodities can always be potentially capital, and thereby appropriate the average rate of profit, that represents the use value of capital as capital. As a use value, it can, within the context of capitalism, always then be sold as a commodity. 

“This aspect—separated from the capitalist production process itself of which it is the constant result, and as its constant result it is also its constant prerequisite—manifests itself in the fact that money [and] commodities are as such, latently, capital, that they can be sold as capital, and that in this form they represent the mere ownership of capital, and the capitalist as the mere owner, apart from his capitalist functions. Money and commodities considered as such constitute command over other people’s labour, and therefore self-expanding value and a claim to the appropriation of other people’s labour.” (p 476) 

What appears to produce interest is then not the production process, and the creation of surplus value, but merely the ownership of capital. Conversely, the fact that interest-bearing assets do produce interest, in the same way that land produces rent, enables these assets themselves to be bought and sold as commodities. The owner of loanable money-capital sells the use-value of capital to the productive-capitalist. The price of this capital is the rate of interest. The lender of the capital might get, in exchange, a bond or a share certificate. The bonds or shares now also constitute assets. They too can be bought and sold as commodities, on financial markets, with their prices rising and falling sometimes in exaggerated movements based purely on speculation. 

“On the other hand, industrial profit [appears] as the portion of surplus-value accruing to the capitalist not as the owner of capital, but as the operating owner representing the operating capital. In the same way as everything in this mode of production appears to be upside down, so likewise does the final reversal in the relation of interest to profit, so that the portion of profit separated under a special heading [interest] appears as the product intrinsically belonging to capital, and industrial profit appears as a mere addition appended to it.” (p 476-7) 

The owners of interest-bearing capital, the owners of fictitious capital, in the shape of bonds and shares, obtain their interest/dividends whilst remaining entirely outside the sphere of productive activity. The rate of interest, posted each day, in the financial press, appears stable from day to day, and week to week. It appears as a natural return to capital as capital. By contrast, the rate of profit, as far as it can even be determined, appears almost infinitely variable. It varies as economic conditions and the flux of demand and supply ebbs and flows. The rate of profit in industry X varies from that in industry Y, and within both X and Y, every individual firm enjoys different rates of profit that appears to result from the individual talents of the managers of each firm. 

“... partly because the conditions under which they produce are more or less favourable, partly because they exploit labour in capitalist fashion with different degrees of circumspection and energy, and partly because they cheat buyers or sellers of commodities with different degrees of luck and cunning (profit upon expropriation, alienation)—it therefore appears natural to them, whether they are or are not owners of the capital involved in the production process, that interest is something due to capital as such, to the ownership of capital, to the owner of capital, whether they themselves own the capital or someone else; industrial profit, on the other hand, appears to be the result of their labour. As operating capitalists—as real agents of capitalist production—they therefore confront themselves or others representing merely idle capital, as workers they consequently confront themselves and others as property owners. And since they are, as matters stand, workers, they are in fact wage-workers, and because of their superiority they are simply better-paid workers, which they owe partly also to the fact that they pay themselves their wages.” (p 477) 

The most obvious manifestation of this is the managers of the worker owned cooperatives, but objectively it is also true of the functioning capitalists of the joint stock company, as against the executives and directors of those companies. The latter are merely the appointed agents of the owners of fictitious capital, whose role is to protect their interests as against the interests of the company. 

“Whereas, therefore, interest and interest-bearing capital merely express the contradiction of materialised wealth as against labour, and thereby its existence as capital, this position is turned upside down in the consciousness of men because, prima facie, the moneyed capitalist does not appear to have any relations with the wage-worker, but only with other capitalists, while these other capitalists, instead of appearing to be in opposition to the wage-workers, appear rather as workers, in opposition to themselves or to other [capitalists] considered as mere owners of capital, representing the mere existence of capital.” (p 477) 

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