Commercial Capital - Summary

Summary

• Commercial capital is that capital which operates in the sphere of circulation.
• It is the commodity-capital and money-capital, which becomes externalised and takes on independent form, performing the functions of commercial workers employed by industrial capital.
• Commercial capital comprises both merchant capital, and money-dealing capital, which is a specific form of merchant capital.
• Commercial capital is a part of industrial capital. It represents capital in circulation.
• As part of industrial capital commercial capital obtains the average annual industrial rate of profit.
• Commercial capital does not produce additional value or surplus value, but it does reduce the costs of circulation, and increases the rate of turnover of capital. It thereby increases the amount of realised profit, and rate of realised profit. Commercial capital is an inextricable part of industrial capital, and is, thereby, part of the denominator in the calculation of the average annual rate of profit.
• Because commercial capital does not produce value or surplus value, its increase is dependent upon an increase in value or surplus value produced by productive-capital. Industrial capital always tries to keep the amount of capital employed as commercial capital to a minimum.
  “The capitalist increases the number of these labourers whenever he has more value and profits to realise. The increase of this labour is always a result, never a cause of more surplus-value...
  There is duplication, therefore. On the one hand, the functions as commodity-capital and money-capital (hence further designated as merchant's capital) are general definite forms assumed by industrial capital. On the other hand, specific capitals, and therefore specific groups of capitalists, are exclusively devoted to these functions; and these functions thus develop into specific spheres of self-expansion of capital.
  In the case of mercantile capital, the commercial functions and circulation costs are found only in individualised form. That side of industrial capital which is devoted to circulation, continuously exists not only in the shape of commodity-capital and money-capital, but also in the office alongside the workshop. But it becomes independent in the case of mercantile capital. In the latter's case, the office is its only workshop. The portion of capital employed in the form of circulation costs appears much larger in the case of the big merchant than in that of the industrialist, because besides their own offices connected with every industrial workshop, that part of capital which would have to be so applied by the entire class of industrial capitalists is concentrated in the hands of a few merchants, who in carrying out the functions of circulation also provide for the growing expenses incidental to their continuation.”
  (Capital III, Chapter 17)
• If the annual rate of profit for commercial capital rises above that for productive-capital, capital will move from the latter to the former, and competition will then restore the average, and vice versa.

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