Industrial Capital - Summary

Summary

• Industrial capital refers to the capital that operates within the circuit of industrial capital, which actually comprises the three circuits of money-capital, commodity-capital and productive-capital. It, thereby, comprises productive-capital and commercial capital.
• The circuit of industrial capital is P...C` - M`.M – C ...P. Its expanded version is:

• The three circuits of money-capital, commodity-capital and productive-capital that together comprise the circuit of industrial capital, divide into production time and circulation time. But, these are not different capitals. They are the same industrial capital that is in these different forms simultaneously, as capital represents a continuous process. The purpose is to, at least, reproduce the initial physical mass of capital (simple reproduction), but, in reality must involve the accumulation of additional physical capital (expanded reproduction), so that the mass of labour employed expands, so that, thereby, the mass of surplus value produced increases.
  “the whole of all these parts, exists simultaneously in its various phases and functions and thus describes all three circuits at the same time.”
• As a continuous process, outputs are simultaneously inputs.
  “In a ramified factory system the product is constantly in the various stages of its process of formation and constantly passes from one phase of production to another.”
• The capital involved in production is productive-capital, whereas the capital involved in circulation is capital in circulation, not to be confused with circulating capital. The capital in circulation comprises the money-capital and commodity-capital.
• The capital in circulation takes on independent form as commercial capital, that is as merchant capital and money-dealing capital, which is a branch of merchant capital. The fact that both become independent forms of capital does not change the fact that they continue to take part in the circuit of industrial capital, and are, therefore, a part of industrial capital. Industrial capital should not be confused with productive-capital, or capital involved in production, as against commercial capital. Commercial capital is part of industrial capital, just as commercial capital takes part in the formation of the average industrial rate of profit, alongside productive-capital, and similarly obtains the average industrial rate of profit.
• Industrial capital is distinguished from interest-bearing capital, which does not take part in the circuit of industrial capital, but stands outside it, and does not take part in the formation of the average industrial rate of profit, or obtain a share in it. Rather than obtaining the average rate of profit, interest-bearing capital obtains the market rate of interest, determined by the demand for and supply of loanable money-capital. It is a deduction from profit.
• Industrial Capital is similarly distinguished from landed property, which also stands outside the circuit of industrial capital, and plays no part in the determination of the average rate of industrial profit. Landed property also does not obtain the average industrial profit, but rather obtains rent, being the amount of surplus profit (profit in excess of the average industrial profit) enjoyed by capital employed on the land. Rent, like interest, is also, thereby, a deduction from profit.

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