It is to obtain this use value of being self-expanding value that capitalists are prepared to pay a price for it, i.e. the rate of interest. The owners of loanable money-capital are then always able to charge a price for this use value, in the form of interest. What that price will be, i.e. what the rate of interest will be is determined, as with any other market price, by the interaction of demand and supply. If demand for this capital is greater than the supply, interest rates will rise, and vice versa. With other market prices, the market value, or, under capitalism, the price of production, forms a pivot point around which the market price fluctuates. But, because capital has no value, i.e. it is not the product of labour, it has no market value or price of production, so there is no natural rate of interest. It has two boundaries. On the lower bound, money-lenders will not lend it for free, on the upper bound, capitalists will not pay a rate of interest higher than the average rate of profit, because that would mean handing over more in interest than they obtain in profit. The exception to this, as set out earlier, is where the money is being borrowed not to function as money-capital, but to function merely as money/currency. In that case, the borrower, acting in desperation, will pay whatever rate of interest is required.
It is because interest-bearing capital, as Usurer's Capital, has always existed to perform this function of lending money to the desperate that a continuation of this form of capital appears to occur, even though the nature of interest-bearing capital, in its capitalist form, is fundamentally different to that of Usurer's Capital, and is ruled by different laws of motion. And, because it appears outside the circuit of capital, and outside the production and exchange of commodities entirely, it creates this illusion of being self-expanding value par excellence. This history of usury also helps create the illusion that the rate of interest is a price for money, rather than for capital, and so leads to the illusion that interest rates are a function of the quantity of money/currency supply put forward by the proponents of Modern Monetary Theory.
Interest-bearing capital always assumes the form of various debt instruments, and these debt instruments themselves then become commodities traded in secondary markets. The most obvious forms of these traded debt instruments are shares and bonds. But all debt instruments can become traded commodities. For example, a bank that issues loans to a company holds a debt instrument in the form of a loan agreement/certificate. These form part of the banks assets, and can be used by the bank as collateral in making further loans. But, the bank can itself bundle up and sell these loans to other financial institutions. An obvious example of that is that banks and finance houses bundled up mortgages into Mortgage Backed Securities (MBS) and sold these on to other financial institutions, and speculators.
An owner of shares or bonds can sell them directly to other speculators on the stock and bond markets. In addition, even in Marx' and Engels' time, financial institutions began to bundle stocks and bonds into packages, and to sell these packages to speculators, in the form of what today we would call a Unit Trust, or Mutual Fund. Secondary markets exist for nearly all of these debt instruments and their derivatives. The prices of the debt instruments and their derivatives rise or fall on the basis of whether the revenues underlying them are likely to be rising or falling, and whether interest rates are rising or falling. If the underlying revenues are rising then the prices of these instruments will rise, if interest rates are rising, then the prices of these instruments will fall, because the capitalised value of the underlying revenue will be falling.
These debt instruments, and their derivatives constitute fictitious capital.
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