Boffy's Blog: Interest-Bearing Capital

Interest-bearing capital is capital which self expands directly M - M`, without ever having to enter the circuit of capital.

It is the most alienated form of capital, capital par excellence, because it represents this essential characteristic feature of capital as self-expanding value, but without any reference to the process by which capital actually self-expands via the production of surplus value.
It is usually thought of as loanable money-capital, but it actually refers to anything that can be loaned at interest, such as a machine. In the case of, say, a machine, the borrower must pay back to the lender not just the value of wear and tear on the machine, during the period of the loan, but also an amount of interest.
As with merchant capital, interest-bearing capital is an antediluvian form of capital, existing in all precapitalist modes of production. As with landed property and rent, the outward appearance of these forms, in precapitalist modes of production, hides their inner differences with the capitalist forms, and the different laws of motion that apply to them under capitalism.
The dominance of these antediluvian forms of capital is incompatible with capitalism, whilst once capitalism becomes dominant, all of these other forms are subordinated to it.

Boffy's Blog