The productive capitalists are prepared to allow the commercial capital to take on these functions for the reasons set out earlier. The merchant capitalists reduce the costs of circulation, and so increase the amount of realised profit, and as shown above these costs are significant in terms of the mass and rate of realised profit. In other words, if the producers had to take on the task of selling their own output to consumers, they might need to advance £200 million for that purpose, because they turn over the commodity-capital more slowly. The same £180 million of surplus value is produced, but now, this £180 million represents an average annual rate of profit of only 16.36%. For the productive-capitalists they have had to tie up this additional £100 million of capital. Not only may the producers not turn over the commodity-capital as quickly as merchants, leading to the extra tie-up of capital, but, in reality, there are the costs of circulation Marx referred to above, which have to be deducted from the profit.
In terms of the realised profit, and rate of profit, these higher costs of circulation could destroy the profit. If the total costs for the industrial capital, including circulation costs, now come to £1,100 million, but they can only sell at the output value of £1,080 million, it leaves the industrial capital with a realised loss of £20 million! In addition, the merchant capitalists, are able to speed up the circulation process, and in so doing, they increase the rate of turnover of industrial capital as a whole, which, in turn, raises the average annual rate of profit. The importance of commercial capital for the realised mass and rate of profit should not be understated.
The commercial capital consists not just of the merchant capital, but also of the money-dealing capital, which is a specific branch of merchant capital. Money-dealing capital is distinguished from money-lending, or interest-bearing capital, which exists outside the circuit of industrial capital. Money-dealing capital is that capital which deals with those commercial functions of industrial capital related to the making and receipt of payments, and the keeping of records of such transactions. A bank, in so far as it fulfils these functions acts as money-dealing capital, as opposed to its investment activities, where it acts as money-lending capital. A discount house that processes Bills of Exchange is money-dealing capital, as is a foreign exchange dealer, or businesses such as PayPal, ApplePay, and so on.
All money-dealing capital, which acts to speed up the payments system acts to reduce the turnover time for industrial capital, and thereby raises the annual average rate of industrial profit, as well as releasing capital for accumulation, because it reduces the time that capital resides in the state of being unproductive-money-capital, and increases the time in which it acts as productive-capital. The Internet, and modern computer systems have increased that considerably. The American Banker wrote in 2013,
“In the United Kingdom, you can send money to someone else's bank account within a couple of hours. In Mexico, the process takes no more than a minute or two. In Sweden, it happens even faster, via mobile phones.
Here in the United States, electronic payments move at a snail's pace by comparison. Times vary by bank, but it's common for three, four or five days to elapse before the cash arrives in the recipient's account.”
Whilst commercial capital does not produce value or surplus value directly, therefore, it does act to realise value and surplus value, and by reducing those costs of such realisation, as well as reducing the circulation time for capital, it does act to increase the amount of realised value and surplus value, and also, thereby to release capital which can then be used productively for additional accumulation. As a component part of industrial capital, it participates in the formation of the average annual industrial rate of profit, and likewise participates in its distribution.
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