|
Post by IBDaMann on Sept 20, 2020 20:57:23 GMT
Volume III Part IV. Conversion of Commodity-Capital and MoneyCapital into Commercial Capital and Money-Dealing Capital (Merchant's Capital) Chapter 16. Commercial Capital Merchant's, or trading, capital breaks up into two forms or sub-divisions, namely, commercial capital and money-dealing capital, which we shall now define more closely, in so far as this is necessary for our analysis of capital in its basic structure. This is all the more necessary, because modern political economy, even in the persons of its best exponents, throws trading capital and industrial capital indiscriminately together and, in effect, wholly overlooks the characteristic peculiarities of the former. The movements of commodity-capital have been analysed in Book II. To take the total capital of society, one part of it – always made up of different elements and even changing in magnitude – always exists in the form of commodities on the market, to be converted into money. Another part exists on the market in the form of money, to be converted into commodities. It is always in the process of this transition, of this formal metamorphosis. Inasmuch as this function of capital in the process of circulation is at all set apart as a special function of a special capital, as a function established by virtue of the division of labour to a special group of capitalists, commodity-capital becomes commercial capital. We have explained (Book II, Chapter VI, “The Costs of Circulation,”) to what extent the transport industry, storage and distribution of commodities in a distributable form, may be regarded as production processes continuing within the process of circulation. These episodes incidental to the circulation of commodity-capital are sometimes confused with the distinct functions of merchant's or commercial capital. Sometimes they are, indeed, practically bound up with these distinct, specific functions, although with the development of the social division of labour the function of merchant's capital evolves in a pure form,i.e., divorced from those real functions, and independent of them. Those functions are therefore irrelevant to our purpose, which is to define the specific difference of this special form of capital. In so far as capital solely employed in the circulation process, special commercial capital, partly combines those functions with its specific ones, it does not appear in its pure form. We obtain its pure form after stripping it of all these incidental functions. We have seen that the existence of capital as commodity-capital and the metamorphosis it undergoes within the sphere of circulation in the market as commodity-capital – a metamorphosis which resolves itself into buying and selling, converting commodity-capital into money-capital and money-capital into commodity-capital – that this forms a phase in the reproduction process of industrial capital, hence in its process of production as a whole. We have also seen, however, that it is distinguished in its function as a capital of circulation from its function as productive capital. These are two different and separate forms of existence of the same capital. One portion of the total social capital is continually on the market in the form of capital of circulation, passing through this process of transmutation, although for each individual capital its existence as commodity-capital, and its metamorphosis as such, merely represent ever-vanishing and ever renewed nodal points – i.e., stages of transition in the continuity of its production process, and although the elements of commodity-capital in the market vary continuously for this reason, being constantly withdrawn from the commodity-market and equally periodically returned to it as new products of the process of production. Commercial capital is nothing but a transmuted form of a part of this capital of circulation constantly to be found in the market, ever in the process of its metamorphosis, and always encompassed by the sphere of circulation. We say a part, because a part of the selling and buying of commodities always takes place directly between industrial capitalists. We leave this part entirely out of consideration in this analysis, because it contributes nothing to defining the conception, or to understanding the specific nature of merchant's capital, and because it has furthermore been exhaustively treated for our purpose in Book II. The dealer in commodities, as a capitalist generally, appears on the market primarily as the representative of a certain sum of money, which be advances as a capitalist, i.e., which he wants to turn from x (its original value) into x + ∆x (the original sum plus profit). But it is evident to him – not being just a capitalist in general, but rather a special dealer in commodities – that his capital must first enter the market in the form of money-capital, for he does not produce commodities. He merely trades in them, expedites their movement, and to operate with them he must first buy them, and, therefore, must be in possession of money-capital. Suppose that a dealer in commodities owns £3,000 which he invests as a trading capital. With these £3,000 he buys, say, 30,000 yards of linen from some linen manufacturer at 2s. per yard. He then sells the 30,000 yards. If the annual average rate of profit = 10% and he makes an annual profit of 10% after deducting all incidental expenses, then by the end of the year he has converted his £3,000 into £3,300. How he makes this profit is a question which we shall discuss later. At present, we intend to consider solely the form of the movements of his capital. With his £3,000 he keeps buying linen and selling it; he constantly repeats this operation of buying in order to sell, M – C – M', the simple form of capital as it obtains entirely in the process of circulation, uninterrupted by the production process, which lies outside its own movement and function. What is now the relation of this commercial capital to commodity-capital as a mere form of existence of industrial capital? So far as the linen manufacturer is concerned, he has realised the value of his linen with the merchant's money and thereby completed the first phase in the metamorphosis of his commodity-capital – its conversion into money. Other conditions being equal, he can now proceed to reconvert this money into yarn, coal, wages, etc., and into means of existence, etc., for the consumption of his revenue. Hence, leaving aside the revenue expenditure, he can go on with his process of reproduction. But while the sale of the linen, its metamorphosis into money, has taken place for him, as producer, it has not yet taken place for the linen itself. It is still on the market as commoditycapital awaiting to undergo its first metamorphosis – to be sold. Nothing has happened to this linen besides a change in the person of its owner. As concerns its purpose, as concerns its place in the process, it is still commodity-capital, a saleable commodity, with the only difference that it is now in the merchant's hands instead of the manufacturer's. The function of selling it, of effecting the first phase of its metamorphosis, has passed from the manufacturer to the merchant, has become the special business of the merchant, whereas previously it was a function which the producer had to perform himself after having completed the function of its production. Let us assume that the merchant fails to sell the 30,000 yards of linen during the interval required by the linen manufacturer to bring another 30,000 yards to market at a value of £3,000. The merchant cannot buy them again, because he still has in stock the unsold 30,000 yards which have not as yet been reconverted into money-capital. A stoppage ensues, i.e., an interruption of reproduction. The linen producer might, of course, have additional money-capital at his disposal, which he could convert into productive capital, regardless of the sale of the 30,000 yards, in order to continue the production process. But this would not alter the situation. So far as the capital tied up in the 30,000 yards of linen is concerned, its process of reproduction is, and remains, interrupted. It is, indeed, easily seen here that the merchant's operations are really nothing but operations that must be performed at all events to convert the producer's commodity-capital into money. They are operations which effect the functions of commodity-capital in the circulation and reproduction processes. If it devolved upon the producer's clerk to attend exclusively to the sale, and also the purchase, instead of an independent merchant, this connection would not be obscured for a single moment. Commercial capital is, therefore, nothing but the producer's commodity – capital which has to undergo the process of conversion into money – to perform its function of commodity-capital on the market – the only difference being that instead of representing an incidental function of the producer, it is now the exclusive operation of a special kind of capitalist, the merchant, and is set apart as the business of a special investment of capital. This becomes evident, furthermore, in the specific form of circulation of commercial capital The merchant buys a commodity and then sells it: M – C – M'. In the simple circulation of commodities, or even in the circulation of commodities as it appears in the circulation process of industrial capital, C' – M – C, circulation is effected by each piece of money changing hands twice. The linen manufacturer sells his commodity-linen, converting it into money; the buyer's money passes into his hands. With this same money he buys yarn, coal, labour, etc. – expends the money for reconverting the value of linen into the commodities which make up its production elements. The commodity he buys is not the same commodity, not the same kind of commodity which he sells. He has sold products and bought means of production. But it is different with respect to the movements of merchant's capital. With his £3,000 the linen merchant buys 30,000 yards of linen; he sells the same 30,000 yards of linen in order to retrieve his money-capital (£3,000 and the profit) from circulation. It is not the same pieces of money, but rather the same commodity which here changes places twice; the commodity passes from the seller into the hands of the buyer, and from the hands of the buyer, who now becomes seller, into those of another buyer. It is sold twice, and may be sold repeatedly through the medium of a series of merchants. And it is precisely through this repeated sale, through this two-fold change of place of the same commodity, that the money advanced for its purchase by the first buyer is retrieved, its reflux to him effected. In one case, C' – M – C effects the two-fold change of place of the same money, the sale of a commodity in one form and the purchase of a commodity in another. In the other case, M – C – M' effects the two-fold change of place of the same commodity, the withdrawal of advanced money from circulation. It is evident that the commodity has not been finally sold when it passes from the producer into the hands of the merchant, in that the latter merely carries on the operation of selling – or effects the function of commodity-capital. But at the same time it is evident that what is C – M, a mere function of his capital in its transient form of commoditycapital for the productive capitalist, is M – C – M', a specific increase in the value of his advanced money-capital, for the merchant. One phase of the metamorphosis of commodities appears here in respect to the merchant in the form of M – C – M', hence as evolution of a distinct kind of capital. The merchant finally sells his commodity, that is, the linen, to the consumer, be it a productive consumer (for instance, a bleacher), or an individual who acquires the linen for his private use. The merchant thereby recovers his advanced capital (with a profit), and can repeat his operation anew. Had the money served merely as a means of payment in purchasing the linen, so that the merchant would have had to pay only after six weeks, and had he succeeded in selling before this term was out, he could have paid the linen manufacturer without advancing any money-capital of his own. Had he not sold it, he would have had to advance his £3,000 on the date of expiration, instead of on delivery of the linen. And if a drop in the market-prices had compelled him to sell below the purchase price, he would have had to make good the shortage out of his own capital. What is it, then, that lends to commercial capital the character of an independently operating capital, whereas in the hands of the producer who does his own selling it is obviously merely a special form of his capital in a specific phase of the reproduction process during its sojourn in the sphere of circulation? First: The fact that commodity-capital is finally converted into money, that it performs its initial metamorphosis, i.e., its appropriate function on the market qua commodity-capital while in the hands of an agent other than the producer, and that this function of commodity-capital is effected by the merchant in his operations, his buying and selling, so that these operations assume the appearance of a separate undertaking distinct from the other functions of industrial capital – and hence of an independent undertaking. It is a distinct form of the social division of labour, so that part of the function ordinarily performed as a special phase of the reproduction process of capital, in this case – circulation, appears as the exclusive function of specific circulation agent distinct from the producer. But this alone would by no means give this particular business the aspect of a function of a specific capital distinct from, and independent of, industrial capital engaged in the process of reproduction; indeed, it does not so appear in cases where trade is carried on by travelling salesmen or other direct agents of the industrial capitalist. Therefore, there must be a second element involved. Second: This arises from the fact that in his capacity as an independent circulation agent, the merchant advances money-capital (his own or borrowed). The transaction which for industrial capital in the reproduction process amounts merely to C – M, i.e., converting commodity-capital into money-capital, or mere sale, assumes for the merchant the form of M – C – M', or purchase and sale of the same commodity, and thus of a reflux of money-capital which leaves him in the purchase, and returns to him in the sale. It is always C – M, the conversion of commodity-capital into money-capital, which for the merchant assumes the form of M – C – M, inasmuch as he advances capital to purchase commodities from their producers; it is always the first metamorphosis of commodity-capital, although for a producer, or for industrial capital in process of reproduction, the same transaction may amount to M – C, to a reconversion of money into commodities (means of production), to the second phase of the metamorphosis. For the linen producer, the first metamorphosis was C – M, the conversion of his commodity-capital into money-capital. For the merchant the same act appears as M – C, as a conversion of his money-capital into commodity-capital. Now, if he sells this linen to a bleacher, it will mean M – C, i.e., the conversion of money capital into productive capital, this being the second metamorphosis of his commodity-capital for the bleacher, while for the merchant it means C – M, the sale of the linen he had bought. But in fact it is only at this point that the commodity-capital produced by the linen manufacturer has been finally sold. In other words, this M – C – M of the merchant represents no more than a middleman's function for C – M between two manufacturers. Or let us assume that the linen manufacturer buys yarn from a yarn dealer with a portion of the value of the sold linen. This is M – C for him. But for the merchant selling the yarn it is C – M, the resale of the yarn. As concerning the yarn in its capacity of commodity-capital, it is no more than its final sale, whereby it passes from the sphere of circulation into that of consumption; it is C – M, the consummation of its first metamorphosis. Whether the merchant buys, or sells to the industrial capitalist, his M – C – M, the circuit of merchant's capital, always expresses what is just C – M, or simply the completion of its first metamorphosis, with regard to the commodity-capital, a transient form of industrial capital in process of reproduction. The M – C of merchant's capital is C – M only for the industrial capitalist, not for the commodity-capital produced by him. It is but the transfer of commoditycapital from the industrial capitalist to the circulation agent. It is not until the merchant's capital closes C – M that functioning commodity-capital performs its final C – M. M – C – M amounts solely to two C – M's of the same commodity-capital, two successive sales of it, which merely effect its last and final sale. Thus, commodity-capital assumes in commercial capital the form of an independent type of capital because the merchant advances money-capital, which is realised and functions as capital only by serving exclusively to mediate the metamorphosis of commodity-capital, its function as commodity-capital, i.e., its conversion into money, and it accomplishes this by the continual purchase and sale of commodities. This is its exclusive operation. This activity of effecting the circulation process of industrial capital is the exclusive function of the money-capital with which the merchant operates. By means of this function he converts his money into money-capital, moulds his M into M – C – M, and by the same process converts commodity-capital into commercial capital. So long and so far as commercial capital exists in the form of commodity-capital, it is obviously nothing else – from the standpoint of the reproduction process of the total social capital – but a portion of industrial capital in the market in process of metamorphosis, which exists and functions as commodity-capital. It is therefore only the money-capital advanced by the merchant which is exclusively destined for purchase and sale and for this reason never assumes any other form but that of commodity-capital and money-capital, never that of productive capital, and is always confined to the sphere of circulation of capital – it is only this money-capital which is now to be regarded with reference to the entire reproduction process of capital. As soon as the producer, the linen manufacturer, has sold his 30,000 yards to the merchant for £3,000, he uses the money so obtained to buy the necessary means of production, so that his capital returns to the production process. His process of production continues without interruption. So far as he is concerned, the conversion of his commodity into money is accomplished. But for the linen itself, as we have seen, its metamorphosis has not yet taken place. It has not yet been finally reconverted into money, has not yet passed as a use-value into either productive or individual consumption. It is now the linen merchant who represents on the market the same commodity-capital originally represented by the linen manufacturer. For the latter the process of transformation has been curtailed, only to be continued in the merchant's hands. Had the linen producer been obliged to wait until his linen had really ceased being a commodity, until it has passed into the hands of its ultimate buyer, its productive or individual consumer, his process of reproduction would have been interrupted. Or, to avoid interrupting it, he would have had to curtail his operations, to convert a smaller portion of his linen into yarn, coal, labour, etc., in short, into the elements of productive capital, and to retain a larger portion of it as a money reserve, so that with one portion of his capital on the market in the shape of commodities, another would continue the process of production; one portion would be on the market in the form of commodities, while the other returned in the form of money. This division of his capital is not abolished by the merchant's intervention. But without it the portion of money reserve in the capital of circulation would always have to be greater in relation to the part employed in the form of productive capital, and the scale of reproduction would have to be restricted accordingly. Instead, however, the manufacturer is enabled to constantly employ a larger portion of his capital in the actual process of production, and a smaller portion as money reserve. On the other hand, however, another portion of the social capital, in the form of merchant's capital, is kept continually within the sphere of circulation. It is employed all the time for the sole purpose of buying and selling. Hence there seems to have been no more than a replacement of persons holding this capital in their hands. If, instead of buying £3,000 worth of linen with the purpose of selling it again, the merchant had applied these £3,000 productively, the productive capital of society would have increased. True, the linen manufacturer would then have been obliged to hold back a larger portion of his capital as money reserve, and likewise the merchant, now transformed into an industrial capitalist. On the other hand, if the merchant remains merchant, the manufacturer saves time in selling, which he can devote to supervising the production process, while the merchant must apply all his time to selling. If merchant's capital does not overstep its necessary proportions, it is to be inferred, 1) that as a result of the division of labour the capital devoted exclusively to buying and selling (and this includes not only the money required to buy commodities, but also the money which must be invested in labour to maintain the merchant's establishment, and in his constant capitalthe storehouses, transport, etc.) is smaller than it would be if the industrial capitalist were constrained to carry on the entire commercial part of his business on his own; 2) that because the merchant devotes all his time exclusively to this business, the producer is able to convert his commodities more rapidly into money, and, moreover, the commodity-capital itself passes more rapidly through its metamorphosis than it would in the hands of the producer; 3) that in viewing the aggregate merchant's capital in its relation to industrial capital, one turnover of merchant's capital may represent not only the turnovers of many capitals in one sphere of production, but the turnovers of a number of capitals in different spheres of production. The former is the case when, for instance, the linen merchant, after buying the product of some linen manufacturer with his £3,000, sells it before the same manufacturer brings another lot of the same quantity to market, and buys, and again sells, the product of another, or several other, linen manufacturers, thus effecting the turnovers of different capitals in the same sphere of production. The latter is the case if, for example, the merchant after selling his linen buys silk, thus effecting the turnover of a capital in a different sphere of production. In general, it may be noted that the turnover of industrial capital is limited not by the time of circulation alone, but also by the time of production. The turnover of merchant's capital dealing in one kind of commodity is not merely limited by the turnover of a single industrial capital, but by that of all industrial capitals in the same branch of production. After the merchant has bought and sold the linen of one producer he can buy and sell that of another, before the first brings another lot to the market. The same merchant's capital may, therefore, successively promote the different turnovers of capitals invested in a certain branch of production, with the effect that its turnover is not identical with the turnovers of a sole industrial capital, and does not therefore replace just the single money reserve which that one industrial capitalist would have had to hold in petto. The turnover of merchant's capital in one sphere of production is naturally restricted by the total production of that sphere. But it is not restricted by the scale of production, or the period of turnover, of any one capital of the same sphere, so far as its period of turnover is qualified by its time of production. Suppose, A supplies a commodity requiring three months for its production. After the merchant has bought and sold it, say, in one month, he can buy and sell the same product of some other manufacturer. Or after he has sold, say, the corn of one farmer, he can buy and sell that of another with the same money, etc. The turnover of his capital is restricted by the mass of corn he is able to buy and sell successively within a certain period, for instance, in one year, while the turnover of the farmer's capital is, regardless of the time of turnover, restricted by the time of production, which lasts one year. However, the turnover of the same merchant's capital may equally well effect the turnovers of capitals in different branches of production. In so far as the same merchant's capital serves in different turnovers to transform different commodity-capitals successively into money, buying and selling them one after another, it performs the same function in its capacity of money-capital with regard to commodity-capital, which money in general performs by means of the number of its turnovers in a given period with regard to commodities. The turnover of merchant's capital is not identical with the turnover, or a single reproduction, of an industrial capital of equal size; it is rather equal to the sum of the turnovers of a number of such capitals, whether in the same or in different spheres of production. The more quickly merchant's capital is turned over, the smaller the portion of total money-capital serving as merchant's capital; and conversely, the more slowly it is turned over, the larger this portion. The less developed production, the larger the sum of merchant's capital in its relation to the sum of the commodities thrown into circulation; but the smaller in absolute terms, or in comparison with more developed conditions, and vice versa. In such undeveloped conditions, therefore, the greater part of the actual money-capital is in the hands of merchants, whose fortune constitutes money wealth vis-à-vis the others. The velocity of circulation of the money-capital advanced by the merchant depends 1) on the speed with which the process of production is renewed and the different processes of production are linked together; and 2) on the velocity of consumption. To accomplish the turnover we have examined above, merchant's capital does not first have to buy commodities for its full amount of value, and then to sell them. Instead, the merchant performs both movements simultaneously. His capital then breaks up into two parts. One of them consists of commodity-capital, and the other of money-capital. He buys and converts his money into commodities at one place. Elsewhere, he sells and converts another part of his commoditycapital into money. On one side, his capital returns to him in the form of money-capital, while on the other he gets commodity-capital. The larger the portion in one form, the smaller the portion in the other. This alternates and balances itself. If the use of money as a medium of circulation combines with its use as a means of payment and the attendant development of the credit system, then the money-capital part of merchant's capital is reduced still more in relation to the volume of the transactions this merchant's capital effects. If I buy £3,000 worth of wine on three months' credit and sell all the wine for cash before this term expires, I do not need to advance a single penny for these transactions. In this case it is also quite obvious that the money-capital, which here acts as merchant's capital, is nothing more than industrial capital in its money-capital form, in its process of reflux in the form of money. (The fact that the manufacturer who sold £3,000 worth of wine on three months' credit may discount his promissory note at the banker's does not alter the matter at all and has nothing to do with the merchant's capital.) If market-prices should fall in the meantime by, say, 1/10, the merchant, far from making a profit, would recover only £2,700 instead of £3,000. He would have to put up £300 out of his own pocket. These £300 would serve merely as a reserve to balance the difference in price. But the same applies to the manufacturer. If he himself had sold at falling prices, he would likewise have lost £300, and would not be able to resume production on the same scale without reserve capital. The linen merchant buys £3,000 worth of linen from the manufacturer. The latter pays, say, £2,000 of the £3,000 for yarn. He buys this yarn from a yarn dealer. The money which the manufacturer pays to the yarn dealer is not the linen dealer's money, for the latter has received commodities to this amount. It is the money-form of the manufacturer's own capital. Now in the hands of the yarn dealer these £2,000 appear as returned money-capital. But to what extent are they that as distinct from the £2,000 representing the discarded money-form of the linen and the assumed money-form of the yarn? If the yarn dealer bought on credit and sold for cash before the expiration of his term of payment, then these £2,000 do not contain one penny of merchant's capital as distinct from the money-form which the industrial capital itself assumes in the course of its circuit. In so far as commercial capital is not, therefore, just a form of industrial capital in the merchant's hands as commodity- or money-capital, it is nothing but that portion of money-capital which belongs directly to the merchant and circulates in the purchase and sale of commodities. On a reduced scale this portion represents that part of capital advanced for production which should always have to be in the hands of the industrialist as money reserve and means of purchase, and which should always have to circulate as his money-capital. This portion, on a reduced scale, is now in the hands of merchant capitalists and performs its functions as such in the process of circulation. It is that portion of the total capital which, aside from what is expended as revenue, must continually circulate on the market as a means of purchase in order to maintain the continuity of the process of reproduction. The more rapid the process of reproduction, and the more developed the function of money as a means of payment, i.e., the more developed the credit system, the smaller that portion is in relation to the total capital. Merchant's capital is simply capital functioning in the sphere of circulation. The process of circulation is a phase of the total process of reproduction. But no value is produced in the process of circulation, and, therefore, no surplus-value. Only changes of form of the same mass of value take place. In fact, nothing occurs there outside the metamorphosis of commodities, and this has nothing to do as such either with the creation or change of values. If a surplus-value is realised in the sale of produced commodities, then this is only because it already existed in them. In the second act, the re-exchange of money-capital against commodities (elements of production), the buyer therefore does not realise any surplus-value either. He merely initiates the production of surplus-value through exchanging his money for means of production and labour-power. But so far as these metamorphoses require circulation time – time during which capital does not produce at all, least of all surplus-value – it restricts the creation of values, and the surplus-value expresses itself through the rate of profit in inverse ratio to the duration of the circulation period. Merchant's capital, therefore, does not create either value or surplus-value, at least not directly. In so far as it contributes to shortening the time of circulation, it may help indirectly to increase the surplusvalue produced by the industrial capitalists. In so far as it helps to expand the market and effects the division of labour between capitals, hence enabling capital to operate on a larger scale, its function promotes the productivity of industrial capital, and its accumulation. In so far as it shortens circulation time, it raises the ratio of surplus-value to advanced capital, hence the rate of profit. And to the extent that it confines a smaller portion of capital to the sphere of circulation in the form of money-capital, it increases that portion of capital which is engaged directly in production. 1 To be able to classify merchant's capital as productive capital, Ramsay confounds it with the transportation industry and calls commerce “the transport of commodities from one place to another.” (An Essay on the Distribution of Wealth, p. 19.) The same confusion by Verri (Meditazioni sulla Economia Politica, § 4 [In: Scrittori Classici Italiani di Economia Politica. Parte Moderna, t. XV, p.32. – Ed.]) and by Say (Traité d'économie politique, I, 14, 15). In his Elements of Political Economy (Andover and New York, 1835) S.P. Newman says: “In the existing economical arrangements of society, the very act, which is performed by the merchant, of standing between the producer and the consumer, advancing to the former capital and receiving products in return, and then handing over these products to the latter, receiving back capital in return, is a transaction which both facilitates the economical processes of the community, and adds value to the products in relation to which it is performed” (p. 174). Producer and consumer thus save time and money through the intervention of the merchant. This service requires an advance of capital and labour, and must be rewarded, “since it adds value to products, for the same products in the hands of consumers are worth more than in the hands of producers.” And so commerce appears to him, as it does to M. Say, as “strictly an act of production” (p. 175). This Newman's view is fundamentally wrong. The use-value of a commodity is greater in the hands of the consumer than in those of the producer, because it is first realised by the consumer. For the use-value of a commodity does not serve its end, does not begin to function until the commodity enters the sphere of consumption. So long as it is in the hands of the producer, it exists only in potential form. But one does not pay twice for a commodity – first for its exchange-value, and then for its use-value. By paying for its exchange-value, I appropriate its use-value. And its exchangevalue is not in the least augmented by transferring the commodity from the producer or middleman to the consumer.
|
|
|
Post by IBDaMann on Sept 20, 2020 20:58:45 GMT
Volume III Part IV. Conversion of Commodity-Capital and MoneyCapital into Commercial Capital and Money-Dealing Capital (Merchant's Capital) Chapter 17. Commercial Profit We have seen in Book II that the pure functions of capital in the sphere of Circulation – the operations which the industrial capitalist must perform, first, to realise the value of his commodities, and second, to reconvert this value into elements of production, operations effecting the metamorphosis of commodity-capital, C' – M – C, hence the acts of selling and buying-produce neither value nor surplus-value. It was rather seen that the time required for this purpose, objectively in regard to commodities and subjectively in regard to the capitalist, sets the limit to the production of value and surplus-value. What is true of the metamorphosis of commodity-capital in general, is, of course, not in the least altered by the fact that a part of it may assume the shape of commercial capital, or that the operations, effecting the metamorphosis of commodity-capital, appear as the special concern of a special group of capitalists, or as the exclusive function of a portion of the money-capital. If selling and buying commodities – and that is what the metamorphosis of commodity-capital C' – M – C amounts to – by industrial capitalists themselves are not operations which create value or surplus-value, they will certainly not create either of these when carried out by persons other than the industrial capitalists. Furthermore, if that portion of the total social capital, which must continually be on hand as money-capital, in order that the process of reproduction is not interrupted by the process of circulation and proceeds continuously – if this money-capital creates neither value nor surplus-value, it cannot acquire the properties of creating them by being continually thrown into circulation by some section of capitalists other than the industrial capitalists, to perform the same function. We have already indicated to what extent merchant's capital may be indirectly productive, and we shall later discuss this point at greater length. Commercial capital, therefore – stripped of all heterogeneous functions, such as storing, expressing, transporting, distributing, retailing, which may be connected with it, and confined to its true function of buying in order to sell – creates neither value nor surplus-value, but acts as middleman in their realisation and thereby simultaneously in the actual exchange of commodities, i.e., in their transfer from hand to hand, in the social metabolism. Nevertheless, since the circulation phase of industrial capital is just as much a phase of the reproduction process as production is, the capital operating independently in the process of circulation must yield the average annual profit just as well as capital operating in the various branches of production. Should merchant's capital yield a higher percentage of average profit than industrial capital, then a portion of the latter would transform itself into merchant's capital. Should it yield a lower average profit, then the converse would result. A portion of the merchant's capital would then be transformed into industrial capital. No species of capital changes its purpose, or function, with greater ease than merchant's capital. Since merchant's capital does not itself produce surplus-value, it is evident that the surplus-value which it pockets in the form of average profit must be a portion of the surplus-value produced by the total productive capital. But now the question arises: How does merchant's capital attract its share of the surplus-value or profit produced by the productive capital? It is just an illusion that commercial profit is a mere addition to, or a nominal rise of, the prices of commodities in excess of their value. It is plain that the merchant can draw his profit only out of the price of the commodities he sells, and plainer still that the profit he makes in selling his commodities must be equal to the difference between his purchase price and his selling price, i.e., equal to the excess of the latter over the former. It is possible that additional costs (costs of circulation) may enter into the commodities after their purchase and before their sale, and it is also possible that this may not happen. If such costs should occur, it is plain that the excess of the selling price over the purchase price would not be all profit. To simplify the analysis, we shall assume at this point that no such costs occur. For the industrial capitalist the difference between the selling price and the purchase price of his commodities is equal to the difference between their price of production and their cost-price, or, from the standpoint of the total social capital, equal to the difference between the value of the commodities and their cost-price for the capitalists, which again comes down to the difference between the total quantity of labour and the quantity of paid labour incorporated in them. Before the commodities bought by the industrial capitalist are thrown back on the market as saleable commodities, they pass through the process of production, in which alone the portion of their price to be realised as profit is created. But it is different with the merchant. The commodities are in his hands only so long as they are in the process of circulation. He merely continues their sale, the realisation of their price which was begun by the productive capitalist, and therefore does not cause them to pass through any intermediate process in which they could again absorb surplusvalue. While the industrial capitalist merely realises the previously produced surplus-value, or profit, in the process of circulation, the merchant has not only to realise his profit during and through circulation, but must first make it. There appears to be no other way of doing this outside of selling the commodities bought by him from the industrial capitalist at their prices of production, or, from the standpoint of the total commodity-capital, at their values in excess of their prices of production, making a nominal extra charge to their prices, hence, selling them, from the standpoint of the total commodity-capital, above their value, and pocketing this excess of their nominal value over their real value; in short, selling them for more than they are worth. This method of adding an extra charge is easy to grasp. For instance, one yard of linen costs 2s. If I want to make a 10% profit in reselling it, I must add 1/10 to the price, hence sell the yard at 2s. 2 2/5 d. The difference between its actual price of production and its selling price is then = 2 2/5d., and this represents a profit of 10% on 2s. This amounts to my selling the yard to the buyer at a price which is in reality the price of 1 1/10 yard. Or, what amounts to the same, it is as though I sold to the buyer only 10/11 of a yard for 2s. and kept 1/11 of a yard for myself. In fact I can buy back 1/11 of a yard for 2 2/5d. at the price of 2s. 2 2/5d. per yard. This would, therefore, be just a roundabout way of sharing in the surplus-value and surplus-product by a nominal rise in the price of commodities. This is realisation of commercial profit by raising the price of commodities, as it appears at first glance. And, indeed, this whole notion that profit originates from a nominal rise in the price of commodities, or from their sale above their value, springs from the observations of commercial capital. But it is quickly apparent on closer inspection that this is mere illusion. Assuming capitalist production to be predominant, commercial profit cannot be realised in this manner. (It is here always a question of averages, not of isolated cases.) Why do we assume that the merchant can realise a profit of no more than, say, 10% on his commodities by selling them 10% above their price of production? Because we assume that the producer of these commodities, the industrial capitalist (who appears as “the producer” before the outside world, being the personification of industrial capital), had sold them to the dealer at their prices of production. If the purchase price of commodities paid by the dealer is equal to their price of production, or, in the last instance, equal to their value, so that the price of production or, in the last instance, the value, represent the merchant's cost-price, then, indeed, the excess of his selling price over his purchase price – and this difference alone is the source of his profit – must be an excess of their commercial price over their price of production, so that in the final analysis the merchant sells all commodities above their values. But why was it assumed that the industrial capitalist sells his commodities to the merchant at their prices of production? Or rather, what was taken for granted in that assumption? It was that merchant's capital did not go into forming the general rate of profit (we are dealing with it as yet only in its capacity of commercial capital). We proceeded necessarily from this premise in discussing the general rate of profit, first, because merchant's capital as such did not exist for us at the time, and, second, because average profit, and hence the general rate of profit, had first to be developed as a levelling of profits or surplus-values actually produced by the industrial capitals in the different spheres of production. But in the case of merchant's capital we are dealing with a capital which shares in the profit without participating in its production. Hence, it is now necessary to supplement our earlier exposition. Suppose, the total industrial capital advanced in the course of the year = 720c + 180v = 900 (say million £), and that s' = 100%. The product therefore = 720c + 180v + 180s. Let us call this product or the produced commodity-capital, C, whose value, or price of production (since both are identical for the totality of commodities) = 1,080, and the rate of profit for the total social capital of 900 = 20%. These 20% are, according to our earlier analyses, the average rate of profit, since the surplus-value is not calculated here on this or that capital of any particular composition, but on the total industrial capital of average composition. Thus, C = 1,080, and the rate of profit = 20%. Let us now assume, however, that aside from these £900 of industrial capital, there are still £100 of merchant's capital, which shares in the profit pro rata to its magnitude just as the former. According to our assumption, it is 1/10 of the total capital of 1,000. Therefore, it participates to the extent of 1/10 in the total surplus-value of 180, and thus secures a profit of 18%. Actually, then, the profit to be distributed among the other 1/10 of the total capital is only = 162, or on the capital of 900 likewise = 18%. Hence, the price at which C is sold by the owners of the industrial capital of 900 to the merchants = 720c + 180v + 162s = 1,062. If the dealer then adds the average profit of 18% to his capital of 100, he sells the commodities at 1,062 + 18 = 1,080, i.e., at their price of production, or, from the standpoint of the total commodity-capital, at their value, although he makes his profit only during and through the circulation process, and only from an excess of his selling price over his purchase price. Yet he does not sell the commodities above their value, or above their price of production, precisely because he has bought them from the industrial capitalist below their value, or below their price of production. Thus, merchant's capital enters the formation of the general rate of profit as a determinant pro rata to its part in the total capital. Hence, if we say in the given case that the average rate of profit = 18%, it would = 20%, if it were not that 1/10 of the total capital was merchant's capital and the general rate of profit thereby lowered by 1/10. This leads to a closer and more comprehensive definition of the price of production. By price of production we mean, just as before, the price of a commodity = its costs (the value of the constant + variable capital contained in it) + the average profit. But this average profit is now determined differently. It is determined by the total profit produced by the total productive capital; but not as calculated on the total productive capital alone, so that if this = 900, as assumed above, and the profit = 180, then the average rate of profit = 180/900 = 20%. But, rather, as calculated on the total productive + merchant's capital, so that with 900 productive and 100 merchant's capital, the average rate of profit = 180/1,000 = 18%. The price of production is, therefore = k (the costs) + 18, instead of k + 20. The share of the total profit falling to merchant's capital is thus included in the average rate of profit. The actual value, or price of production, of the total commodity-capital is therefore = k + p + m (where m is commercial profit). The price of production, or the price at which the industrial capitalist as such sells his commodities, is thus smaller than the actual price of production of the commodity; or in terms of all commodities taken together, the prices at which the class of industrial capitalists sell their commodities are lower than their value. Hence, in the above case, 900 (costs) + 18% on 900, or 900 + 162= 1,062. It follows, then, that in selling a commodity at 118 for which he paid 100 the merchant does, indeed, add 18% to the price. But since this commodity, for which he paid 100, is really worth 118, he does not sell it above its value. We shall henceforth use the term price of production in this, its more precise, sense. It is evident, therefore, that the profit of the industrial capitalist equals the excess of the price of production of the commodity over its costprice, and that commercial profit, as distinct from this industrial profit, equals the excess of the selling price over the price of production of the commodity which, for the merchant, is its purchase price; but that the actual price of the commodity = its price of production + the commercial profit. Just as industrial capital realises only such profits as already exist in the value of commodities as surplus-value, so merchant's capital realises profits only because the entire surplus-value, or profit, has not as yet been fully realised in the price charged for the commodities by the industrial capitalist.1 The merchant's selling price thus exceeds the purchase price not because the former exceeds the total value, but because the latter is below this value. Merchant's capital, therefore, participates in levelling surplus-value to average profit, although it does not take part in its production. Thus, the general rate of profit contains a deduction from surplus-value due to merchant's capital, hence a deduction from the profit of industrial capital. It follows from the foregoing: 1) The larger the merchant's capital in proportion to the industrial capital, the smaller the rate of industrial profit, and vice versa. 2) It was demonstrated in the first part that the rate of profit is always lower than the rate of the actual surplus-value, i.e., it always understates the intensity of exploitation, as in the above case, 720c + 180v + 180s, the rate of surplus-value of 100% and a rate of profit of only 20%. And the difference becomes still greater, inasmuch as the average rate of profit appears smaller again, dropping from 20% to 18%, if the share falling to merchant's capital is also taken into account. The average rate of profit of the direct capitalist exploiter, therefore, expresses a rate of profit smaller than it actually is. Assuming all other circumstances remaining the same, the relative volume of merchant's capital (with the exception of the small dealer who represents a hybrid form) is in inverse proportion to the velocity of its turnover, hence in inverse proportion to the energy of the process of reproduction in general. In the course of scientific analysis, the formation of a general rate of profit appears to result from industrial capitals and their competition, and is only later corrected, supplemented, and modified by the intervention of merchant's capital. In the course of its historical development, however, the process is really reversed. It is the commercial capital which first determines the prices of commodities more or less in accordance with their values, and it is the sphere of circulation, the sphere that promotes the process of reproduction, in which a general rate of profit initially takes shape. It is originally the commercial profit which determines the industrial profit. Not until the capitalist mode of production has asserted itself and the producer himself has become merchant, is commercial profit reduced to that aliquot part of the total surplus-value falling to the share of merchant's capital as an aliquot part of the total capital engaged in the social process of reproduction. It was seen in the supplementary equalisation of profit through the intervention of merchant's capital that no additional element entered the value of commodities with the merchant's advanced money-capital, and that the extra charge to the price, whereby the merchant makes his profit, was merely equal to that portion of the value of the commodities, which productive capital had not calculated in the price of production, i.e., had left out. The case of this money-capital is similar to that of the industrial capitalist's fixed capital, since it is not consumed and its value, therefore, does not make up an element of the value of commodity. It is in the purchase price of commodity-capital that the merchant replaces its price of production = M, in money. His own selling price, as previously shown, is = M + ∆M, where ∆M stands for the addition to the price of commodities determined by the general rate of profit. Once he sells the commodities, his original money-capital, which he advanced for their purchase, returns to him together with this ∆M. We see once more that his money-capital is nothing but the industrial capitalist's commodity-capital transformed into money-capital, which affects the magnitude of the value of this commoditycapital no more than would a direct sale of the latter to the ultimate consumer, instead of to the merchant. It, actually, merely anticipates the payment of the consumer. However, this is correct only on the condition hitherto assumed, that the merchant has no overhead expenses, or that aside from the money-capital which he must advance to buy commodities from the producer he need not advance any other capital, circulating or fixed, in the process of commodity metamorphosis., the process of buying and selling. But this is not so in reality, as we have seen in the analysis of the costs of circulation (Book II, Chap. VI). These costs of circulation are partly expenses which the merchant has to reclaim from other agents of circulation, and partly expenses arising directly from his specific business. No matter what the nature of these costs of circulation – whether they arise from the purely commercial nature of the merchant's establishment as such and hence belong to the merchant's specific costs of circulation, or represent items which are charges for subsequent processes of production added in the process of circulation, such as expressage, transport, storage, etc. – they always require of the merchant, aside from his money-capital, advanced to the purchase of commodities, some additional capital for the purchase and payment of such means of circulation. As much of this element of cost as consists of circulating capital passes wholly as an additional element into the selling price of the commodities; and as much of it as consists of fixed capital only to the extent of its wear and tear. But only as an element which forms a nominal value, even if as the purely commercial costs of circulation, it does not add any real value to the commodities. But whether fixed or circulating, this entire additional capital participates in forming the general rate of profit. The purely commercial costs of circulation (hence, excluding costs of expressage, shipping, storage, etc.) resolve themselves into costs required to realise the value of commodities, to transform it from commodities into money, or from money into commodities, to effect their exchange. We leave entirely out of consideration all possible processes of production which may continue in the process of circulation, and from which the merchant's business can be altogether separated; as, in fact, the actual transport industry and expressage may be, and are, industrial branches entirely distinct from commercial; and purchaseable and saleable commodities may be stored in docks or in other public premises, with the resultant cost of storage being charged to the merchant by third persons inasmuch as he has to advance it. All this takes place in actual wholesale commerce, where merchant's capital appears in its purest form, unmixed with other functions. The express company owner, the railway director, and the shipowner, are not “merchants.” The costs which we consider here are those of buying and selling. We have already remarked earlier that these resolve themselves into accounting, book-keeping, marketing, correspondence, etc. The constant capital required for this purpose consists of offices, paper, postage, etc. The other costs break up into variable capital advanced for the employment of mercantile wage-workers. (Expressage, transport costs, advances for customs duties, etc., may partly be considered as being advanced by the merchant in purchasing commodities and thus enter the purchase price as far as he is concerned.) All these costs are not incurred in producing the use-value of commodities, but in realising their value. They are pure costs of circulation. They do not enter into the immediate process of production, but since they are part of the process of circulation they are also part of the total process of reproduction. The only portion of these costs of interest to us at this point is that advanced as variable capital. (The following questions should also be analysed: First, how does the law that only necessary labour enters the value of commodities operate in the process of circulation? Second, how does accumulation obtain in merchant's capital? Third, how does merchant's capital function in the actual aggregate reproduction process of society?) These costs arise due to the product having the economic form of a commodity. If the labour-time which the industrial capitalists themselves lose while directly selling commodities to one another – hence, speaking objectively, the circulation time of the commodities – does not add value to these commodities, it is evident that this labour-time does not change its nature in the least by falling to the merchant instead of the industrial capitalist. The conversion of commodities (products) into money, and of money into commodities (means of production) is a necessary function of industrial capital and, therefore, a necessary operation of the capitalist – who is actually but personified capital endowed with a consciousness of its own and a will. But these functions neither create value, nor produce surplus-value. By performing these operations and carrying on the functions of capital in the sphere of circulation after the productive capitalist has ceased to be involved the merchant merely takes the place of the industrial capitalist. The labour-time required in these operations is devoted to certain necessary operations of the reproduction process of capital, but yields no additional value. If the merchant did not perform these operations (hence, did not expend the labour-time entailed), he would not be applying his capital as a circulation agent of industrial capital; he would not then be continuing the interrupted function of the industrial capitalist, and consequently could not participate as a capitalist pro rata to his advanced capital, in the mass of profit produced by industrial capitalists. In order to share in the mass of surplus-value, to expand the value of his advance as capital, the commercial capitalist need not employ wage-workers. If his business and capital are small, he may be the only worker in it. He is paid with that portion of the profit which falls to him through the difference between the purchase price paid by him for commodities and their actual price of production. But, on the other hand, the profit realised by the merchant on a small amount of advanced capital may be no larger, or may even be smaller, than the wages of one of the better-paid skilled wageworkers. In fact, he brushes shoulders with many direct commercial agents of the productive capitalist, such as buyers, sellers, travellers, who enjoy the same or a higher income either in the form of wages, or in the form of a share in the profit (percentages, bonuses) made from each sale. In the first case, the merchant pockets the mercantile profit as an independent capitalist; in the other, the salesman, the industrial capitalist's wage-labourer, receives a portion of the profit either in the form of wages, or as a proportional share in the profit of the industrial capitalist, whose direct agent he is, while his employer pockets both the industrial and the commercial profit. But in all these cases, although his income may appear to the circulation agent as an ordinary wage, as payment for work performed, and although, where it does not so appear, the profit may be no larger than the wage of a better-paid labourer, his income is derived solely from the mercantile profit. This follows from his labour not being labour which produces value. The lengthening of the act of circulation represents for the industrial capitalist 1) a personal loss of time, since it prevents him from performing in person his function as manager of the productive process; 2) a longer stay of his product in money- or commodity-form, in the circulation process, hence in a process where it does not expand value and where the direct production process is interrupted. If this process is not to be interrupted, production must either be curtailed, or more money-capital must be advanced to maintain the process of production on the same scale. This means that each time either a smaller profit is made on the capital hitherto invested, or that additional money-capital must be advanced to make the previous profit. All this remains unchanged when the merchant takes the place of the industrial capitalist. Instead of the industrial capitalist devoting more time to the process of circulation, it is the merchant who is so engaged; instead of the industrial capitalist it is the merchant who advances additional capital for circulation; or, what amounts to the same thing, instead of a large portion of the industrial capital being continually diverted into the process of circulation, it is the merchant's capital which is wholly tied up in it; and instead of making a smaller profit, the industrial capitalist must yield a portion of his profit wholly to the merchant. So long as merchant's capital remains within the bounds in which it is necessary, the only difference is that this division of the functions of capital reduces the time exclusively used up in the process of circulation, that less additional capital is advanced for this purpose, and that the loss in total profit, represented by mercantile profit, is smaller than it would otherwise have been. If in the above example, 720c + 180v + 180s, assisted by a merchant's capital of 100, produces a profit of 162, or 18%, for the industrial capitalist, hence implying a deduction of 18, then, but for this independent merchant's capital, the additional capital required would probably be 200, and we should have a total advance by the industrial capitalist of 1,100 instead of 900, which, based upon a surplus-value of 180, would yield a rate of profit of only 16 4/11%. If the industrial capitalist who acts as his own merchant advances not only the additional capital to buy new commodities before his product in the process of circulation has been reconverted into money, but also capital (office expenses and wages for commercial employees) to realise the value of his commodity-capital, or, in other words, for the process of circulation, then these supplements form additional capital, but do not create surplus-value. They must be made good out of the value of the commodities, because a portion of the value of these commodities must be reconverted into these circulation costs. But no additional surplus-value is created thereby. So far as this concerns the total capital of society, it means in fact that a portion of it must be set aside for secondary operations which are no part of the self-expansion process, and that this portion of the social capital must be continually reproduced for this purpose. This reduces the rate of profit for the individual capitalist and for the entire class of industrial capitalists, an effect arising from every new investment of additional capital whenever such capital is required to set in motion the same mass of variable capital. In so far as these additional costs connected with the business of circulation are transferred from the industrial to the commercial capitalist, there takes place a similar reduction in the rate of profit, but to a lesser degree and in a different way. It now develops that the merchant advances more capital than would be necessary if these costs did not exist, and that the profit on this additional capital increases the amount of the commercial profit, so that more of the merchant's capital joins industrial capital in levelling the average rate of profit and thereby the average profit falls. If in our above example an additional capital of 50 is advanced besides the merchant's capital of 100 to cover the costs in question, then the total surplus-value of 180 is distributed with respect to a productive capital of 900 plus a merchant's capital of 150, together = 1,050. The average rate of profit, therefore, sinks to 17 1/7% The industrial capitalist sells his commodities to the merchant at 900 + 154 2/7 = 1,0542 1/7, and the merchant sells them at 1,130 (1,080 + 50 for costs which he must recover). Moreover, it must be admitted that the division between merchant's and industrial capital is accompanied by a centralisation of the commercial expenses and, consequently, by their reduction. The question now arises: What about the commercial wage-workers employed by the commercial capitalist, here the merchant? In one respect, such a commercial employee is a wage-worker like any other. In the first place, his labour-power is bought with the variable capital of the merchant, not with money expended as revenue, and consequently it is not bought for private service, but for the purpose of expanding the value of the capital advanced for it. In the second place, the value of his labour-power, and thus his wages, are determined as those of other wage-workers, i.e., by the cost of production and reproduction of his specific labour-power, not by the product of his labour. However, we must make the same distinction between him and the wage-workers directly employed by industrial capital which exists between industrial capital and merchant's capital, and thus between the industrial capitalist and the merchant. Since the merchant, as a mere agent of circulation, produces neither value nor surplus-value (for the additional value which he adds to the commodities through his expenses resolves itself into an addition of previously existing values, although the question here poses itself, how he preserves this value of his constant capital?) it follows that the mercantile workers employed by him in these same functions cannot directly create surplus-value for him. Here, as in the case of productive labourers, we assume that wages are determined by the value of the labour-power, and that, hence, the merchant does not enrich himself by depressing wages, so that he does not enter into his cost account an advance for labour which he has paid only in part; in other words, that he does not enrich himself through cheating his clerks, etc. The difficulty as concerns mercantile wage-workers is by no means to explain how they produce direct profits for their employer without creating any direct surplus-value (of which profit is but a transmuted form). This question has, indeed, already been solved in the general analysis of commercial profits. Just as industrial capital makes profit by selling labour embodied and realised in commodities, for which it has not paid any equivalent, so merchant's capital derives profit from not paying in full to productive capital for all the unpaid labour contained in the commodities (in commodities, in so far as capital invested in their production functions as an aliquot part of the total industrial capital), and by demanding payment for this unpaid portion still contained in the commodities when making a sale. The relation of merchant's capital to surplus-value is different from that of industrial capital. The latter produces surplus-value by directly appropriating the unpaid labour of others. The former appropriates a portion of this surplus-value by having this portion transferred from industrial capital to itself. It is only through its function of realising values that merchant's capital acts as capital in the process of reproduction, and hence draws on the surplus-value produced by the total capital. The mass of the individual merchant's profits depends on the mass of capital that he can apply in this process, and he can apply so much more of it in buying and selling, the more the unpaid labour of his clerks. The very function, by virtue of which the merchant's money becomes capital, is largely done through his employees. The unpaid labour of these clerks, while it does not create surplusvalue, enables him to appropriate surplus-value, which, in effect, amounts to the same thing with respect to his capital. It is, therefore, a source of profit for him. Otherwise commerce could never be conducted on a large scale, capitalistically. Just as the labourer's unpaid labour directly creates surplus-value for productive capital, so the unpaid labour of the commercial wage-worker secures a share of this surplus-value for merchant's capital. The difficulty lies here: Since the merchant's labour-time and labour do not create value, although they secure for him a share of already produced surplus-value, how does the matter stand with the variable capital which he lays out in purchasing commercial labour-power? Is this variable capital to be included in the cost outlays of the advanced merchant's capital? If not, this appears to conflict with the law of equalisation of the rate of profit; what capitalist would advance 150 if he could charge only 100 to advanced capital? If so, it seems to conflict with the nature of merchant's capital, since this kind of capital does not act as capital by setting in motion the labour of others, as industrial capital does, but rather by doing its own work, i.e., performing the functions of buying and selling, this being precisely the means and the reason why it receives a portion of the surplus-value produced by the industrial capital. (We must therefore analyse the following points: the merchant's variable capital; the law of necessary labour in the sphere of circulation; how the merchant's labour maintains the value of his constant capital; the part played by merchant's capital in the process of reproduction as a whole; and, finally, the duplication in commodity-capital and money-capital, on the one hand, and in commercial capital and money-dealing capital on the other.) If every merchant had only as much capital as he himself were able to turn over by his own labour, there would be infinite fragmentation of merchant's capital. This fragmentation would increase in the same proportion as productive capital raised production and operated with greater masses in the forward march of the capitalist mode of production. Hence, an increasing disproportion of the two. Capital in the sphere of circulation would become decentralised in the same proportion as it became centralised in the sphere of production. The purely commercial business of the industrial capitalist, and thus his purely commercial expenses, would expand infinitely thereby, for he would have to deal with, say, 1,000 merchants, instead of 100. Thus, the advantages of independently operating merchant's capital would largely be lost. And not the purely commercial expenses alone, but also the other costs of circulation, such as sorting, expressage, etc., would grow. This, as far as the industrial capital is concerned. Now let us consider merchant's capital. Firstly, the purely commercial operations. It does not take more time to deal with large figures than with small ones. It takes ten times as much time to make 10 purchases at £100 each as it does to make one purchase at £1,000. It takes ten times as much correspondence, paper, and postage, to correspond with 10 small merchants as it does with one large merchant. The clearly defined division of labour in a commercial office, in which one keeps the books, another looks after money matters, a third has charge of correspondence, one buys, another sells, a third travels, etc., saves immense quantities of labour-time, so that the number of workers employed in wholesale commerce are in no way related to the comparative size of the establishment. This is so, because in commerce much more than in industry the same function requires the same labour-time, whether performed on a large or a small scale. This is the reason why concentration appears earlier historically in the merchant's business than in the industrial workshop. Further, regarding outlays in constant capital. One hundred small offices cost incomparably more than one large office, 100 small warehouses more than a large one, etc. The costs of transport, which enter the accounts of a commercial establishment at least as costs to be advanced, grow with the fragmentation. The industrial capitalist would have to lay out more in labour and in circulation costs in the commercial part of his business. The same merchant's capital, when divided among many small capitalists, would, owing to this fragmentation, require more labourers to perform its functions, and more merchant's capital would, furthermore, be needed to turn over the same commoditycapital. Suppose B is the entire merchant's capital directly applied in buying and selling commodities, and b the corresponding variable capital paid out in wages to the commercial employees. Then B + b is smaller than the total merchant's capital, B, would be if every merchant had to get along without assistants, hence would invest nothing in b. However, we have not yet overcome the difficulty. The selling price of the commodities must suffice 1) to pay the average profit on B + b. This is explained if only by the fact that B + b is generally a reduction of the original B, representing a smaller merchant's capital than would be required without b. But this selling price must suffice 2) to cover not only the additional profit on b, but to replace also the paid wages, the merchant's variable capital = b. This last consideration gives rise to the difficulty. Does b represent a new constituent of the price, or is it merely a part of the profit made by means of B + b, which appears as wages only so far as the mercantile wage-worker is concerned, and as concerns the merchant simply replaces variable capital? In the latter case, the merchant's profit on his advanced capital B + b would just equal the profit due to B by virtue of the general rate, plus b, which he pays out in the form of wages, but which does not itself yield a profit. The crux of the matter is, indeed, to find the limits (mathematically speaking) of b. Let us first accurately define the problem. Let B stand for capital invested directly in buying and selling commodities, K for the constant capital (actual handling costs) consumed in this function, and b for the variable capital invested by the merchant. Recovering B offers no difficulties at all. For the merchant it is simply the realised purchase price, and the price of production for the manufacturer. It is the price paid by the merchant, and in reselling he recovers B as part of his selling price; in addition to this B, he makes a profit on B, as previously explained. For example, let the commodity cost £100. Suppose the profit is 10%. In that case, the commodity is sold at 110. The commodity previously cost 100, and the merchant's capital of 100 merely adds 10 to it. Now if we look at K, it is at most as large as, but in fact smaller than, the portion of constant capital which the producer would use up in buying and selling, but then it would form an addition to the constant capital he requires directly in production. This portion, nonetheless, must be continually recovered in the price of the commodity, or, what amounts to the same, a corresponding portion of the commodity must be continually expended in this form, or, from the standpoint of the total capital of society, must be continually reproduced in this form. This portion of the advanced constant capital would have a limiting effect on the rate of profit, just as the entire mass of it directly invested in production. In so far as the industrial capitalist leaves the commercial part of his business to the merchant, he need not advance this part of the capital. The merchant advances it in his stead. In a way, he does this but nominally, since a merchant neither produces, nor reproduces, the constant capital consumed by him (the actual handling costs). Its production appears a separate business, or at least a part of the business, of some industrial capitalists who thus play a role similar to those who supply constant capital to producers of necessities of life. First, therefore, the merchant has this constant capital recovered for him and, secondly, receives his profit on it. Through both of these, therefore, the industrial capitalist's profit is reduced. But owing to economising and concentration which are bound up with division of labour, it shrinks less than it would if he himself had to advance this capital. The reduction in the rate of profit is less, because the capital thus advanced is less. So far, then, the selling price is made up of B + K + the profit on B + K. This portion of it offers no further difficulties. But now b, the variable capital advanced by the merchant, enters into it. The resultant selling price is B + K + b + the profit on B + K + the profit on b. B merely recovers the purchase price and adds nothing to it but the profit on B. K adds the profit on K, and K itself; but K + the profit on K, the part of the circulation costs advanced in the form of constant capital + the corresponding average profit, would be larger in the hands of the industrial capitalist than in the merchant's. The shrinking of the average profit appears in the form of the full average profit calculated after deducting B + K from the advanced industrial capital, with the deduction from the average profit on B + K paid to the merchant, so that this deduction appears as the profit of a specific capital, merchant's capital. But the situation is different with respect to b + the profit on b, or, in the present case, where the rate of profit is assumed = 10%, with b + 1/10 b. And the real difficulty lies here. What the merchant buys with b is, according to our assumption, nothing but commercial labour, hence labour required to perform the functions of circulating capital, C – M and M – C. But commercial labour is the labour generally necessary for a capital to operate as merchant's capital, to help convert commodities into money and money into commodities. It is labour which realises, but does not create, values. And only in so far as a capital performs these functions – hence a capitalist performs these operations, or this work with his capital – does it serve as merchant's capital and participate in regulating the general rate of profit, i.e., draw its dividends out of the total profit. But (b + the profit on b) appears to include, first, payment for labour (for it makes no difference whether the industrial capitalist pays the merchant for his own labour, or the labour of the clerks paid by the merchant), and, secondly, the profit on the payment for this labour, which the merchant would have to perform in person. First, merchant's capital gets its b refunded, and, secondly, he makes the profit on it. This arises from the fact, therefore, that, first, it requires payment for the work whereby it operates as merchant's capital, and that, secondly, it demands the profit, because it operates as capital, i.e., because it performs work for which profit is paid to it as functioning capital. This is, therefore, the question to be solved. Let us assume that B = 100, b = 10, and the rate of profit = 10%. We take it that K = 0, in order to leave out of consideration this element of the purchase price, which does not belong here and has already been accounted for. Hence, the selling price would = B + p + b + p (= B + Bp' + b + bp'; where p stands for the rate of profit) = 100 + 40 + 10 + 1=121. But if b were not invested by the merchant in wages – since b is paid only for commercial labour, hence labour required, to realise the value of the commodity – capital thrown on the market by industrial capital – the matter would stand as follows: to buy or sell for B = 100, the merchant would devote his time, and we wish to assume that this is the only time at his disposal. The commercial labour represented by b, or 10, if paid for by profit instead of wages, would presuppose another merchant's capital = 100, since at 10% this makes b = 10. This second B = 100 would not additionally go into the price of commodities, but the 10% would. There would, hence, be two operations at 100 = 200, that would buy commodities at 200 + 20 = 220. Since merchant's capital is absolutely nothing but an individualised form of a portion of industrial capital engaged in the process of circulation, all questions referring to it must be solved by representing the problem primarily in a form; in which the phenomena peculiar to merchant's capital do not yet appear independently, but still in direct connection with industrial capital, as a branch of it. As an office, distinct from a workshop, mercantile capital operates continually in the circulation process. It is here – in the office of the industrial capitalist himself – that we must first analyse the b now under consideration. The office is from the outset always infinitesimally small compared to the industrial workshop. As for the rest, it is clear that as the scale of production is extended, commercial operations required constantly for the circulation of industrial capital, in order to sell the product existing as commodity-capital, to reconvert the money so received into means of production, and to keep account of the whole process, multiply accordingly. Calculation of prices, book-keeping, managing funds, correspondence – all belong under this head. The more developed the scale of production, the greater, even if not proportionately greater, the commercial operations of the industrial capital, and consequently the labour and other costs of circulation involved in realising value and surplus-value. This necessitates the employment of commercial wage-workers who make up the actual office staff. The outlay for these, although made in the form of wages, differs from the variable capital laid out in purchasing productive labour. It increases the outlay of the industrial capitalist, the mass of the capital to be advanced, without directly increasing surplusvalue. Because it is an outlay for labour employed solely in realising value already created. Like every other outlay of this kind, it reduces the rate of profit be-cause the advanced capital increases, but not the surplus-value. If surplus-value s remains constant while advanced capital C increases to C + ∆C, then the rate of profit s/C is replaced by the smaller rate of profit s/C + ∆C. The industrial capitalist endeavours, therefore, to cut these expenses of circulation down to a minimum, just as his expenses for constant capital. Hence, industrial capital does not maintain the same attitude to its commercial wage-labourers as it does to its productive wage-labourers. The more productive wage-labourers it employs under otherwise equal circumstances, the greater the output, and the greater the surplus-value, or profit. Conversely, however, the larger the scale of production, the greater the quantity of value and surplus-value to be realised, the greater the produced commodity-capital, the greater are the absolute, if not relative, office costs, giving rise to a kind of division of labour. To what extent profit is the precondition for these outlays, is seen, among other things, from the fact that with the increase of commercial salaries, a part of them is frequently paid by a share in the profit. It is in the nature of things that labour consisting merely of intermediate operations connected partly with calculating values, partly with realising them, and partly with reconverting the realised money into means of production, is a labour whose magnitude therefore depends on the quantity of the produced values that have to he realised, and does not act as the cause, like directly productive labour, but rather as an effect, of the respective magnitudes and masses of these values. The same applies to the other costs of circulation. To do much measuring, weighing, packing, and transporting, much must be on hand. The amount of packing, transporting, etc., depends on the quantity of commodities which are the objects of this activity, not vice versa. The commercial worker produces no surplus-value directly. But the price of his labour is determined by the value of his labour-power, hence by its costs of production, while the application of this labour-power, its exertion, expenditure of energy, and wear and tear, is as in the ease of every other wage-labourer by no means limited by its value. His wage, therefore, is not necessarily proportionate to the mass of profit which he helps the capitalist to realise. What he costs the capitalist and what he brings in for him, are two different things. He creates no direct surplus-value, but adds to the capitalist's income by helping him to reduce the cost of realising surplus-value, inasmuch as he performs partly unpaid labour. The commercial worker, in the strict sense of the term, belongs to the better-paid class of wage-workers – to those whose labour is classed as skilled and stands above average labour. Yet the wage tends to fall, even in relation to average labour, with the advance of the capitalist mode of production. This is due partly to the division of labour in the office, implying a one-sided development of the labour capacity, the cost of which does not fall entirely on the capitalist, since the labourer's skill develops by itself through the exercise of his function, and all the more rapidly as division of labour makes it more one-sided. Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education the more the capitalist mode of production directs teaching methods, etc., towards practical purposes. The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases. 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.2 There is duplication, therefore. On the one hand, the functions as commodity-capital and moneycapital (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. To industrial capital the costs of circulation appear as unproductive expenses, and so they are. To the merchant they appear as a source of his profit, proportional, given the general rate of profit, to their size. The outlay to be made for these circulation costs is, therefore, a productive investment for mercantile capital. And for this reason, the commercial labour which it buys is likewise immediately productive for it. 1 John Bellers [Essays about the Poor, Manufactures, Trade, Plantations, and Immorality, London, 1699, p. 10. – Ed.]. 2 How well this forecast of the fate of the commercial proletariat, written in 1865, has stood the test of time can be corroborated by hundreds of German clerks, who are trained in all commercial operations and acquainted with three or four languages, and offer their services in vain in London City at 25 shillings per week, which is far below the wages of a good machinist. A blank of two pages in the manuscript indicates that this point was to have been treated at greater length. For the rest, we refer the reader to Book II (Kap. VI.) (“The Costs of Circulation”) [English edition: Vol. II, Ch. VI. – Ed.], where various matters belonging under this head have already been discussed. – F.E.
|
|
|
Post by IBDaMann on Sept 20, 2020 21:00:08 GMT
Volume III Part IV. Conversion of Commodity-Capital and MoneyCapital into Commercial Capital and Money-Dealing Capital (Merchant's Capital) Chapter 18. The Turnover of Merchant's Capital. Prices. The turnover of industrial capital is a combination of its period of production and time of circulation, and therefore embraces the entire process of production. The turnover of merchant's capital, on the other hand, being in reality nothing but an alienated movement of commoditycapital, represents only the first phase in the metamorphosis of a commodity, C – M, as the refluent movement of a specific capital; M – C, C – M, is, from the mercantile point of view, the turnover of merchant's capital. The merchant buys, converting his money into commodities, then sells, converting the latter back into money, and so forth in constant repetition. Within circulation, the metamorphosis of industrial capital always presents itself in the form of C1 – M – C2; the money realised by the sale of the produced commodity C1 is used to purchase new means of production, C2. This amounts to a practical exchange of C1 for C2, and the same money thus changes hands twice. Its movement mediates the exchange of two different kinds of commodities, C1 and C2. But in the case of the merchant, it is, conversely, the same commodity which changes hands twice in M – C – M'. It merely promotes the reflux of his money. If, for example, a certain merchant's capital is £100, and for these £100 the merchant buys commodities and sells them for £110, then his capital of £100 has completed one turnover, and the number of such turnovers per year depends on the number of times this movement M – C – M' is repeated. We here leave entirely out of consideration the costs which may be concealed in the difference between the purchase price and the selling price, since these do not alter in any way the form, which we are now analysing. The number of turnovers of a given merchant's capital, therefore, is analogous in this case to the repeated cycles of money as a mere medium of circulation. Just as the same thaler buys ten times its value in commodities in making ten cycles, so the same money-capital of the merchant, when turned over ten times, buys ten times its value in commodities, or realises a total commoditycapital of ten times its value; a merchant's capital of 100, for instance, a ten-fold value = 1,000. But there is this difference: In the cycle of money as a medium of circulation it is the same piece of money that passes through different hands, thus repeatedly performing the same function and hence making up for the mass of the circulating pieces of money by its velocity. But in the merchant's case it is the same money capital, the same money-value, regardless of what pieces of money it may be composed, which repeatedly buys and sells commodity-capital to the amount of its value and which therefore returns to the same hands, the same point of departure as M + ∆M, i.e., value plus surplus-value. This characterises its turnover as a capital turnover. It always withdraws more money from circulation than it throws in. It is self-evident, at any rate, that an accelerated turnover of merchant's capital (given a developed credit system, the function of money as a means of payment predominates) implies a more rapid circulation of the same quantity of money. A repeated turnover of commercial capital, however, never connotes more than repeated buying and selling; while a repeated turnover of industrial capital connotes the periodicity and renovation of the entire reproduction process (which includes the process of consumption). For merchant's capital this appears merely as an external condition. Industrial capital must continually bring commodities to the market and withdraw them from it, in order that rapid turnover of merchant's capital may remain possible. If the process of reproduction is slow, then so is the turnover of merchant's capital. True, merchant's capital promotes the turnover of productive capital, but only in so far as it shortens its time of circulation. It has no direct influence on the time of production, which is also a barrier to the period of turnover of industrial capital. This is the first barrier for the turnover of merchant's capital. Secondly, aside from the barrier formed by reproductive consumption, the turnover of merchant's capital is ultimately limited by the velocity and volume of the total individual consumption, since all the commodity-capital which is part of the consumption-fund depends on it. However (aside from the turnovers in the world of commerce, in which one merchant always sells the same commodity to another, and this sort of circulation may appear highly prosperous in times of speculation), the merchant's capital, in the first place, curtails phase C – M for productive capital. Secondly, under the modern credit system it disposes of a large portion of the total social money-capital, so that it can repeat its purchases even before it has definitely sold what has previously been purchased. And it is immaterial in this case, whether our merchant sells directly to the ultimate consumer, or there are a dozen other intermediate merchants between them. Owing to the immense elasticity of the reproduction process, which may always be pushed beyond any given bounds, it does not encounter any obstacle in production itself, or at best a very elastic one. Aside from the separation of C – M and M – C, which follows from the nature of the commodities, a fictitious demand is then created. In spite of its independent status, the movement of merchant's capital is never more than the movement of industrial capital within the sphere of circulation. But by virtue of its independent status it moves, within certain limits, independently of the bounds of the reproduction process and thereby even drives the latter beyond its bounds. This internal dependence and external independence push merchant's capital to a point where the internal connection is violently restored through a crisis. Hence the phenomenon that crises do not come to the surface, do not break out, in the retail business first, which deals with direct consumption, but in the spheres of wholesale trade, and of banking, which places the money-capital of society at the disposal of the former. The manufacturer may actually sell to the exporter, and the exporter, in his turn, to his foreign customer; the importer may sell his raw materials to the manufacturer, and the latter may sell his products to the wholesale merchant, etc. But at some particular imperceptible point the goods lie unsold, or else, again, all producers and middlemen may gradually become overstocked. Consumption is then generally at its highest, either because one industrial capitalist sets a succession of others in motion; or because the labourers employed by them are fully employed and have more to spend than usual. The capitalists' expenditures increase together with their growing income. Besides, as we have seen (Book II, Part III), continuous circulation takes place between constant capital and constant capital (even regardless of accelerated accumulation). It is at first independent of individual consumption because it never enters the latter. But this consumption definitely limits it nevertheless, since constant capital is never produced for its own sake but solely because more of it is needed in spheres of production whose products go into individual consumption. However, this may go on undisturbed for some time, stimulated by prospective demand, and in such branches, therefore, the business of merchants and industrialists goes briskly forth. The crisis occurs when the returns of merchants who sell in distant markets (or whose supplies have also accumulated on the home market) become so slow and meagre that the banks press for payment, or promissory notes for purchased commodities become due before the latter have been resold. Then forced sales take place, sales in order to meet payments. Then comes the crash, which brings the illusory prosperity to an abrupt end. But the superficiality and meaninglessness of the turnover of merchant's capital are still greater, because the turnover of one and the same merchant's capital may simultaneously or successively promote the turnovers of several productive capitals. The turnover of merchant's capital does not just promote the turnovers of several industrial capitals, it can also expedite the opposite phases of the metamorphosis of commodity-capital. For instance, the merchant buys linen from the manufacturer and sells it to the bleacher. In this case, therefore the turnover of the same merchant's capital – in fact, the same C – M, a realisation of the linen – represents two opposite phases for two different industrial capitals. Inasmuch as the merchant sells for productive consumption, his C – M is always M – C for one industrial capitalist, and his M – C always C – M for another industrial capitalist. If we leave out K, the circulation costs, as we do in this chapter, if, in other words, we leave aside that portion of capital which the merchant advances along with the money required to purchase commodities, it follows that we also omit ∆K, the additional profit made on this additional capital. This is thus the strictly logical and mathematically correct mode of analysis if we want to see how profit and turnover of merchant's capital affect prices. If the price of production of 1 lb. of sugar were £1, the merchant could buy 100 lbs. of sugar with £100. If he buys and sells this quantity in the course of the year, and if the average annual rate of profit is 15%, he would add £15 to the £100, and 3s. to £1, the price of production of 1 lb. of sugar. That is, he would sell 1 lb. of sugar at £1.3s. But if the price of production of 1 lb. of sugar should fall to 1s., the merchant could buy 2,000 lbs. of sugar with £100, and sell the sugar at 1s. 1 4/5d. per lb. The annual profit on capital invested in the sugar business would still be £15 on each £100. But the merchant has to sell 100 lbs. in the first case, and 2,000 lbs. in the second. The high or low level of the price of production has nothing to do with the rate of profit. But it would greatly and decisively affect that aliquot part of the selling price of each lb. of sugar, which resolves itself in mercantile profit, i.e., the addition to the price which the merchant makes on a certain quantity of commodities or products. If the price of production of a commodity is small, so, too, the amount the merchant advances in its purchase price, i.e., for a certain quantity of it. Hence, with a given rate of profit, the amount of profit he makes on this quantity of cheap commodities is small as well. Or, what amounts to the same, he can then buy with a certain amount of capital, say, 100, a larger quantity of these cheap commodities, and the total profit of 15, which he makes per 100, breaks up into small fractions over each individual piece or portion belonging to this mass of commodities. If the opposite takes place, then the reverse is true. This depends entirely on the greater or smaller productivity of the industrial capital in whose products he trades. If we except the cases in which the merchant is a monopolist and simultaneously monopolises production, as did the Dutch East India Company in its day, nothing can be more ridiculous than the current idea that it depends on the merchant whether he sells many commodities at a small profit or few commodities at a large profit on each individual piece of the commodities. The two limits of his selling price are: on the one hand, the price of production of the commodities, over which he has no control; on the other hand, the average rate of profit, over which he has just as little control. The only thing up to him to decide is whether he wants to deal in dear or in cheap commodities, and even here the size of his available capital and other circumstances also have their effect. Therefore, it depends wholly on the degree of development of the capitalist mode of production, not on the merchant's goodwill, what course he shall follow. A purely commercial company like the old Dutch East India Company, which had a monopoly of production, could fancy that it could continue a method adapted at best to the beginnings of capitalist production, under entirely changed conditions.1 The following circumstances, among others, help to maintain that popular prejudice, which, like all false conceptions of profit, etc., arises from the observation of pure commerce and merchants' prejudice: First: phenomena of competition, which, however, apply merely to the distribution of mercantile profit among individual merchants, the shareholders of the total merchant's capital; if one, for example, sells cheaper, in order to drive his competitors off the field. Secondly: an economist of the calibre of Professor Roscher may still imagine in Leipzig that it was “common sense and humanitarian” [Roscher, Die Grundlagen der Nationalökonomie, 3. Auflage, 1858, S. 192. – Ed.] grounds, which produced the change in selling prices, and that it was not a result of a revolutionised mode of production. Thirdly: if production prices fall due to greater productivity of labour, and selling prices fall for the same reason, the demand, and with it the market-prices, often rise even faster than the supply, so that selling prices yield more than the average profit. Fourthly: a merchant may reduce his selling price (which is never more than a reduction of the usual profit that he adds to the price) so as to turn over a larger capital more rapidly. All these are matters that only concern competition between the merchants themselves. We have already shown in Book I [English edition: Vol. 1, pp. 519-20. – Ed]. that high or low commodity-prices do not determine either the mass of surplus-value produced by a given capital, or the rate of surplus-value; although the price of a commodity, and with it the share of surplusvalue in this price, are greater or smaller, depending on the relative quantity of commodities produced by a given quantity of labour. The prices of every specified quantity of a commodity are, so far as they correspond to the values, determined by the total quantity of labour incorporated in this commodity. If little labour is incorporated in much commodity, the unit price of the commodity is low and the surplus-value in it is small. How this labour incorporated in a commodity breaks up into paid and unpaid labour and what portion of its price, therefore, represents surplus-value, has nothing to do with this total quantity of labour, nor, consequently, with the price of the commodity. But the rate of surplus-value does not depend on the absolute magnitude of the surplus-value contained in the unit price of the commodity. It depends on its relative magnitude, its proportion to the wages contained in the same commodity. The rate of surplus-value may therefore be large, while the absolute magnitude of surplus-value in each unit of the commodity is small. This absolute magnitude of surplus-value in each piece of the commodity depends primarily on the productivity of labour, and only secondarily on its division into paid and unpaid labour. Now, in the case of the commercial selling price, the price of production is a given external precondition. The high commercial commodity-prices in former times were due 1) to the high prices of production, i.e., the unproductiveness of labour; 2) to the absence of a general rate of profit, with merchant's capital absorbing a much larger quota of surplus-value than would have fallen to its share if capitals enjoyed greater general mobility. The ending of this situation, in both its aspects, is therefore the result of the development of the capitalist mode of production. The turnovers of merchant's capital vary in duration, their annual number consequently being greater or smaller, in different branches of commerce. Within the same branch the turnover is more or less rapid in the different phases of the economic cycle. Yet there is an average number of turnovers, determined by experience. We have already seen that the turnover of merchant's capital differs from that of industrial capital. This is in the nature of things. One single phase in the turnover of industrial capital appears as a complete turnover of an independently constituted merchant's capital, or yet of its part. It also stands in a different relation to profit and price determination. In the case of industrial capital, its turnover expresses, on the one hand, the periodicity of reproduction, and, therefore, the mass of commodities thrown on the market in a certain period depends on it. On the other hand, its time of circulation creates a barrier, an extensible one, and exerts more or less of a restraint on the creation of value and surplus-value, because it affects the volume of the production process. The turnover, therefore, acts as a determining element on the mass of annually produced surplus-value, and hence on the formation of the general rate of profit, but it acts as a limiting, rather than positive, element. For merchant's capital, on the contrary, the average rate of profit is a given magnitude. The merchant's capital does not directly participate in creating profit or surplus-value, and joins in shaping the general rate of profit only in so far as it draws a dividend proportionate to its share in the total capital, out of the mass of profit produced by industrial capital. The greater the number of turnovers of an industrial capital under conditions described in Book II, Part II, the greater the mass of profit it creates. True, through the formation of a general rate of profit, the total profit is distributed among the different capitals not in proportion to their actual part in its production, but in proportion to the aliquot part they make up of the total capital, i.e., in proportion to their magnitude. But this does not alter the essence of the matter. The greater the number of turnovers of the total industrial capital, the greater the mass of profits, the mass of annually produced surplus-value, and, therefore, other circumstances remaining unchanged, the rate of profit. It is different with merchant's capital. The rate of profit is a given magnitude with respect to it, determined on the one hand by the mass of profit produced by industrial capital, and on the other by the relative magnitude of the total merchant's capital, by its quantitative relation to the sum of capital advanced in the processes of production and circulation. The number of its turnovers does, indeed, decisively affect its relation to the total capital, or the relative magnitude of merchant's capital required for the circulation, for it is evident that the absolute magnitude of the required merchant's capital and the velocity of its turnovers stand in inverse proportion. But, all other conditions remaining equal, the relative magnitude of merchant's capital, or the part it makes up of the total capital, is determined by its absolute magnitude. If the total capital is 10,000, and the merchant's capital 1/10 of that sum, it is = 1,000; if the total capital is 1,000, then 1/10 of it = 100. The absolute magnitude of merchant's capital varies, depending on the magnitude of the total capital, although its relative magnitude remains the same. But here we assume that its relative magnitude, say, 1/10 of the total capital, is given. This relative magnitude, however, is again determined by the turnover. If it is turned over rapidly, its absolute magnitude, for example, will = £1,000 in the first case, = 100 in the second, and hence its relative magnitude = 1/10. With a slower turnover its absolute magnitude is, say, = 2,000 in the first case, and = 200 in the second. Its relative magnitude will then have increased from 1/10 to 1/5 of the total capital. Circumstances which reduce the average turnover of merchant's capital, like the development of means of transportation, for instance, reduce pro tanto the absolute magnitude of merchant's capital, and thereby increase the general rate of profit. If the opposite takes place, then the reverse is true. A developed capitalist mode of production, compared with earlier conditions, exerts a two-fold influence on merchant's capital. On the one hand, the same quantity of commodities is turned over with a smaller mass of actually functioning merchant's capital; owing to the more rapid turnover of merchant's capital, and the more rapid reproduction process, on which this depends, the relation of merchant's capital to industrial capital diminishes. On the other hand, with the development of the capitalist mode of production all production becomes the production of commodities, which places all products into the hands of agents of circulation. It is to be added that under the previous mode of production, which produced on a small scale, a very large portion of the producers sold their goods directly to the consumers, or worked on their personal orders, save for the mass of products consumed directly, in kind, by the producer himself, and the mass of services performed in kind. While, therefore, under former modes of production commercial capital was greater in relation to the commodity-capital which it turned over, it was: 1) absolutely smaller, because a disproportionately smaller part of the total product was produced as commodities, and passed as commodity-capital into circulation, falling into the hands of merchants. It was smaller, because the commodity-capital was smaller. But at the same time it was proportionately larger, not only because its turnover was slower and not only in relation to the mass of commodities turned over by it. It was larger also because the price of this mass of commodities, and hence the merchant's capital to be advanced for it, were greater than under capitalist production on account of a lower productivity of labour, so that the same value was incorporated in a smaller mass of commodities. 2) It is not only that a larger mass of commodities is produced on the basis of capitalist production (taking into account also the reduced value of this mass of commodities), but the same mass of products, for instance, of corn, also forms a greater commodity mass, i.e., more and more of it becomes an object of commerce. As a consequence, there is an increase not only of the mass of merchant's capital, but of all capital applied in circulation, such as in marine shipping, railways, telegraph, etc. 3) However, and this is an aspect which belongs to the discussion of “competition among capitals”: idle or only half-functioning merchant's capital grows with the progress of the capitalist mode of production, with the ease of entering retail trade, with speculation, and the redundance of released capital. But, assuming the relative magnitude of merchant's capital to total capital to be given, the difference of turnovers in the various branches of commerce does not affect either the magnitude of the total profit falling to the share of merchant's capital, or the general rate of profit. The merchant's profit is not determined by the mass of commodity-capital turned over by him, but by the dimensions of the money-capital advanced by him to promote this turnover. If the general annual rate of profit is 15%, and the merchant advances £100, which he turns over once a year, he will sell his commodities at 115. If his capital turns over five times a year, he will sell a commodity-capital he bought at 100 at 103 five times a year, hence in a year a commodity-capital of 500 at 515. This gives the same annual profit of 15 on his advanced capital of 100. If this were not so, merchant's capital would yield a much higher profit, proportionate to the number of its turnovers, than industrial capital, which would be in conflict with the law of the general rate of profit. Hence, the number of turnovers of merchant's capital in the various branches of commerce has a direct influence on the mercantile prices of commodities. The amount added to the mercantile price, the aliquot part of mercantile profit of a given capital, which falls upon the price of production of a commodity, is in inverse proportion to the number of turnovers, or the velocity of turnover, of merchants' capitals in the various lines of commerce. If a certain merchant's capital is turned over five times a year, it will add to a commodity-capital of equal value but 1/5 of what another merchant's capital, which turns over just once a year, adds to a commodity-capital of equal value. The modification of selling prices by the average period of turnover of capitals in different branches of commerce amounts to this: The same mass of profits, determined for any given magnitude of merchant's capital by the general annual rate of profit, hence determined independently of the specific character of the commercial operations of this capital, is differently distributed – proportionately to the rate of turnover – over masses of commodities of equal value, so that, for instance, if a merchant's capital is turned over five times a year, 15/5 = 3% if once a year, 15%, is added to the price of the commodities. The same percentage of commercial profit in different branches of commerce, therefore, increases the selling prices of commodities by quite different percentages of their values, all depending on their periods of turnover. On the other hand, in the case of industrial capital, the period of turnover does not in any way affect the magnitude of the value of individual commodities produced, although it does affect the mass of values and surplus-values produced in a given time by a given capital, because it affects the mass of exploited labour. This is concealed, to be sure, and seems to be otherwise as soon as one turns to prices of production. But this is due solely to the fact that, according to previously analysed laws, the prices of production of various commodities deviate from their values. If we look upon the process of production as a whole, and upon the mass of commodities produced by the total industrial capital, we shall at once find the general law vindicated. While, therefore, a closer inspection of the influence of the period of turnover on the formation of values by industrial capital leads us back to the general law and to the basis of political economy, that the values of commodities are determined by the labour-time contained in them, the influence of the turnovers of merchant's capital on mercantile prices reveals phenomena which, without benefit of a very far-reaching analysis of the connecting links, seem to point to a purely arbitrary determination of prices; namely, that they are fixed by a capital simply bent upon pocketing a certain quantity of profit in a year. Due particularly to this influence of turnovers, it appears that within certain limits the process of circulation as such determines commodity-prices independently of the process of production. All superficial and false conceptions of the process of reproduction as a whole are derived from examinations of merchant's capital and from the conceptions which its peculiar movements call forth in the minds of circulation agents. If, as the reader will have realised to his great dismay, the analysis of the actual intrinsic relations of the capitalist process of production is a very complicated matter and very extensive; if it is a work of science to resolve the visible, merely external movement into the true intrinsic movement, it is self-evident that conceptions which arise about the laws of production in the minds of agents of capitalist production and circulation will diverge drastically from these real laws and will merely be the conscious expression of the visible movements. The conceptions of the merchant, stockbroker, and banker, are necessarily quite distorted. Those of the manufacturers are vitiated by the acts of circulation to which their capital is subject, and by the levelling of the general rate of profit.2 Competition likewise assumes a completely distorted role in their minds. If the limits of value and surplus-value are given, it is easy to grasp how competition of capitals transforms values into prices of production and further into mercantile prices, and surplus-value into average profit. But without these limits, it is absolutely unintelligible why competition should reduce the general rate of profit to one level instead of another, e.g., make it 15% instead of 1,500%. Competition can at best only reduce the general rate of profit to one level. But it contains no element by which it could determine this level itself. From the standpoint of merchant's capital, therefore, it is the turnover which appears to determine prices. On the other hand, while the rate of turnover of industrial capital, in so far as it enables a certain capital to exploit more or less labour, exerts a determining and limiting influence on the mass of profit, and thus on the general rate of profit, this rate of profit obtains for merchant's capital as an external fact, its internal connection with the production of surplus-value being entirely obliterated. If, under otherwise equal circumstances and particularly the same organic composition, the same industrial capital is turned over four times a year instead of twice, it produces twice as much surplus-value and, consequently, profit. And this is apparent as soon, and as long, as this capital has a monopoly on an improved method of production, which makes this accelerated turnover possible. Conversely, differences in the periods of turnover in different branches of commerce manifest themselves in the fact that profit made on the turnover of a given commodity-capital is in inverse proportion to the number of times the money-capital turns over this commodity-capital. Small profits and quick returns appear to the shopkeeper to be the principle which he follows out of sheer principle. For the rest, it is self-evident that regardless of alternating, mutually compensating, speedier and slower turnovers, this law of turnover of merchant's capital holds good in each branch of commerce only for the average turnovers made by the entire merchant's capital invested in each particular branch. The capital of A, who deals in the same branch as B, may make more or less than the average number of turnovers. In this case the others make less or more. This does not alter the turnover of the total mass of merchant's capital invested in this line. But it is of decisive moment for the individual merchant or shopkeeper. In this case he makes an extra profit, just as industrial capitalists make extra profits if they produce under better than average conditions. If competition compels him, he can sell cheaper than his competitors without lowering his profit below the average. If the conditions which would enable him to turn over his capital more rapidly, are themselves for sale, such as a favourable shop location, he can pay extra rent for it, i.e., convert a portion of his surplus-profit into ground-rent. 1 “Profit, on the general principle, is always the same, whatever be price; keeping its place like an incumbent body on the swelling or sinking tide. As, therefore, prices rise, a tradesman raises price; as prices fall, a tradesman lowers price.” (Corbet, An Inquiry into the Causes, etc., of the Wealth of Individuals, London, 1841, p. 20.) Here, as in the text generally; it is only a matter of ordinary commerce, not of speculation. The analysis of speculation, as well as everything else pertaining to the division of mercantile capital, falls outside the field of our inquiry. “The profit of trade is a value added to capital which is independent of price, the second” (speculation) “is founded on the variation in the value of capital or in price itself” (1. c., p. 128). 2 This is a very naive, but also a very correct remark: “Surely the fact that one and the same commodity may be had from different sellers at considerably different prices is frequently due to mistakes of calculation.” (Feller and Odermann, Das Ganze der kaufmännischen Arithmetik, 7th ed., 1859, S.451.) This shows how purely theoretical, that is, abstract, becomes the determination of prices.
|
|
|
Post by IBDaMann on Sept 20, 2020 21:01:16 GMT
Volume III Part IV. Conversion of Commodity-Capital and MoneyCapital into Commercial Capital and Money-Dealing Capital (Merchant's Capital) Chapter 19. Money-Dealing Capital The purely technical movements performed by money in the circulation process of industrial, and, as we may now add, of commercial capital (since it takes over a part of the circulation movement of industrial capital as its own, peculiar movement), if individualised as a function of some particular capital performing just these, and only these, operations as its specific operations, convert this capital into money-dealing capital. A portion of industrial capital, and, more precisely, also of commercial capital, not only obtains all the time in the form of money, as money-capital in general, but as money-capital engaged precisely in these technical functions. A definite part of the total capital dissociates itself from the rest and stands apart in the form of money-capital, whose capitalist function consists exclusively in performing these operations for the entire class of industrial and commercial capitalists. As in the case of commercial capital, a portion of industrial capital engaged in the circulation process in the form of money-capital separates from the rest and performs these operations of the reproduction process for all the other capital. The movements of this money-capital are, therefore, once more merely movements of an individualised part of industrial capital engaged in the reproduction process. It is only when, and in so far as, capital is newly invested – which also applies to accumulation – that capital in money-form appears as the starting-point and the end result of the movement. But for all capitals already engaged in the process, these first and last points appear merely as points of transit. Since, as already seen in the case of simple commodity-circulation, from the moment of leaving the sphere of production to the moment of its re-entry industrial capital undergoes the metamorphosis C' – M – C, M in fact represents the end result of one phase of the metamorphosis, just to become the starting-point of the reverse phase, which supplements it. And although the C – M of industrial capital is always M – C – M for merchant's capital, the actual process for the latter is continually also C – M – C once it has begun to function. But it performs the acts C – M and M – C simultaneously. This is to say that there is not just one capital in the stage C – M while another is in the stage M – C, but that the same capital buys continually and sells continually at one and the same time because of the continuity of the production process. It is to be found always in both stages at one and the same time. While one of its parts turns into money, later to be reconverted into commodities, another turns simultaneously into commodities, to be reconverted into money. It all depends on the form of the commodity exchange whether the money serves here as a means of circulation or of payment. In both cases the capitalist has to pay out money constantly to many persons, and to receive money continually from many persons. This purely technical operation of disbursing and receiving money is in itself labour which, as long as the money serves as a means of payment, necessitates drawing up payment balances and acts of balancing accounts. This labour is a cost of circulation, i.e., not labour creating value. It is shortened in being carried out by a special section of agents, or capitalists, for the rest of the capitalist class. A definite portion of the capital must be on hand constantly as a hoard, as potential money-capital – a reserve of means of purchase, a reserve of means of payment, and idle capital in the form of money waiting to be put to work. Another portion streams back continually in this form. Aside from collecting, paying, and book-keeping, this entails safekeeping the hoard, which is an operation all in itself. It is, indeed, a continuous conversion of the hoard into means of circulation and means of payment, and its restoration by means of money secured through sales and from payments due. This constant movement of the part of capital existing as money, dissociated from the function of capital itself, this purely technical function, causes its own labour and expense, classified as costs of circulation. The division of labour brings it about that these technical operations, dependent upon the functions of capital, should be performed for the entire capitalist class as much as possible by a special section of agents or capitalists as their exclusive function – or that these operations should be concentrated in their hands. We have here, as in merchant's capital, division of labour in a twofold sense. It becomes a specialised business, and because performed as a specialised business for the money-mechanism of the whole class, it is concentrated and conducted on a large scale. A further division of labour takes place within it, both through division into various independent branches, and through segmentation of work within these branches (large offices, numerous book-keepers and cashiers, and far-reaching division of labour). Paying and receiving money, settling accounts, keeping current accounts, storing money, etc. – all this, dissociated from the acts necessitating these technical operations, makes money-dealing capital of the capital advanced for these functions. The various operations, whose individualisation into specific businesses gives rise to the money trade, spring from the different purposes of money itself and from its functions, which capital in its money-form must therefore likewise carry out. I have pointed out earlier that finance developed originally from the exchange of products between different communities.1 Trading in money, commerce in the money-commodity, first developed therefore out of international commerce. Ever since different national coins have existed merchants buying in foreign countries have had to exchange their national coins for local coins, and vice versa, or to exchange different coins for uncoined pure silver or gold – the world-money. Hence the exchange business which is to be regarded as one of the natural foundations of modern finance.2 Out of it developed banks of exchange, in which silver (or gold) serves as world-money – now called bank money or commercial money – as distinct from currency. Exchange transactions, in the sense of mere notes of payment to travellers from a money-changer in one country to a changer in another country, developed back in Rome and Greece out of the actual money-changing. Trading in gold and silver as commodities (raw materials for the making of luxury articles) is the natural basis of the bullion trade, or the trade which acts as a medium for the functions of money as universal money. These functions, as previously explained (Buch I, Kap. III, 3, c [ English edition: Ch. III, 3, c. – Ed.]), are two-fold: currency movement back and forth between the various national spheres of circulation in order to balance international payments and in connection with the migrations of capital in quest of interest; simultaneously, flow of precious metals from their sources of production via the world-market and their distribution among the various national spheres of circulation. Goldsmiths acted as bankers still during the greater part of the 17th century in England. We shall completely disregard the way in which the balancing of international accounts developed further in the bill jobbing, etc., and everything referring to transactions in valuable papers; in short, we shall leave out of consideration all special forms of the credit system, which do not as yet concern us here. National money discards its local character in the capacity of universal money; one national currency is expressed in another, and thus all of them are finally reduced to their content of gold or silver, while the latter, being the two commodities circulating as world-money, are simultaneously reduced to their reciprocal value-ratio, which changes continually. It is this intermediate operation which the money trader makes his special occupation. Money-changing and the bullion trade are thus the original forms of the money trade, and spring from the two-fold functions of money – as national money and world-money. The capitalist process of production, just as commerce in general, even under pre-capitalist methods, imply: First, the accumulation of money as a hoard, i.e., here as that part of capital which must always be on hand in the form of money as a reserve fund of means of payment and purchase. This is the first form of a hoard, as it reappears under the capitalist mode of production, and as it appears generally with the development of merchant's capital, at least for the purposes of this capital. Both remarks apply to national, as well as international, circulation. The hoard is in continuous flux, pours ceaselessly into circulation, and returns ceaselessly from it. The second form of a hoard is that of idle, temporarily unemployed capital in the shape of money, including newly accumulated and not yet invested money-capital. The functions entailed by this formation of a hoard are primarily those of safekeeping, bookkeeping, etc. Secondly, however, this involves outlays of money for purchases, collecting money from sales, making and receiving payments, balancing payments, etc. The money-dealer performs all these services at first as a simple cashier of the merchants and industrial capitalists. 3 The money trade becomes fully developed, even in its first stages, as soon as its ordinary functions are supplemented by lending and borrowing and by credit. Of this more in the next part, which deals with interest-bearing capital. The bullion trade itself, the transfer of gold or silver from one country to another, is merely the result of trading in commodities. It is determined by the rate of exchange which expresses the standing of international payments and the interest rates in the different markets. The bullion trader as such acts merely as an intermediary of the results. In discussing money and the way its movements and forms develop out of simple commoditycirculation, we saw (Book 1 Ch. III) that the movements of the mass of money circulating as means of purchase and payment depend on the metamorphosis of commodities, on the volume and velocity of this metamorphosis, which we now know to be but a phase in the entire process of reproduction. As for securing the money materials – gold and silver – from their sources of production, this resolves itself into a direct exchange of commodities, an exchange of gold and silver as commodities for other commodities. Hence, it is itself as much a phase of the exchange of commodities as the securing of iron or other metals. However, so far as the movement of precious metals on the world-market is concerned (we here leave aside movements expressing the transfer of capital by loans – a type of transfer which also obtains in the shape of commoditycapital), it is quite as much determined by the international exchange of commodities as the movement of money as a national means of purchase and payment is determined by the exchange of commodities in the home market. The inflow and outflow of precious metals from one national sphere of circulation to another, inasmuch as this is caused merely by a depreciation of the national currency, or by a double standard, are alien to money circulation as such and merely represent corrections of deviations brought about arbitrarily by state decrees. Finally, as concerns the formations of hoards which constitute reserve funds for means of purchase and payment, be it for home or foreign trade, and which also merely represent a form of temporarily idle capital, they are in both cases necessary precipitates of the circulation process. If the entire circulation of money is in volume, form and movement purely a result of commoditycirculation, which, in its turn, from the capitalist point of view, is only the circulation process of capital (also embracing the exchange of capital for revenue, and of revenue for revenue, so far as outlay of revenue is effected through retail trade), it is self-evident that dealing in money does not merely promote the circulation of money, a mere result and phenomenon of commoditycirculation. This circulation of money itself, a phase in commodity-circulation, is taken for granted in money-dealing. What the latter promotes is merely the technical operations of money circulation which it concentrates, shortens, and simplifies. Dealing in money does not form the hoards. It provides the technical means by which the formation of hoards may, so far as it is voluntary (hence, not an expression of unemployed capital or of disturbances in the reproduction process), be reduced to its economic minimum because, if managed for the capitalist class as a whole, the reserve funds of means of purchase and payment need not be as large as they would have to be if each capitalist were to manage his own. The money-dealers do not buy the precious metals. They merely handle their distribution as soon as the commodity trade has bought them. They facilitate the settling of balances, inasmuch as money serves as the means of payment, and reduce through the artificial mechanism of these settlements the amount of money required for this purpose. But they do not determine either the connections, or the volume, of the mutual payments. The bills of exchange and the cheques, for instance, which are exchanged for one another in banks and clearing houses, represent quite independent transactions and are the results of given operations, and it is merely a question of a better technical settlement of these results. So far as money circulates as a means of purchase, the volume and number of purchases and sales have no connection whatever with money-dealing. The latter can do no more than shorten the technical operations that go with buying and selling, and thus reduce the amount of cash money required to turn over the commodities. Money-dealing in its pure form, which we consider here, i.e., set apart from the credit system, is thus concerned only with the technique of a certain phase of commodity-circulation, namely, that of money circulation and the different functions of money arising in its circulation. This substantially distinguishes dealing in money from the dealing in commodities, which promotes the metamorphosis of commodities and their exchange, or even gives this process of the commodity-capital the appearance of a process of a capital set apart from industrial capital. While, therefore, commercial capital has its own form of circulation, M – C – M, in which the commodity changes hands twice and thus provides a reflux of money, as distinct from C – M – C, in which money changes hands twice and thus promotes commodity exchange, there is no such special form in the case of money-dealing capital. In so far as money-capital is advanced by a separate class of capitalists in this technical promotion of money circulation – a capital which on a reduced scale represents the additional capital the merchants and industrial capitalists would otherwise have to advance themselves for these purposes – the general form of capital, M – M', occurs here as well. By advancing M, the advancing capitalist secures M + ΔM. But promotion of M – M' does not here concern the material, but only the technical, processes of the metamorphosis. It is evident that the mass of money-capital with which the money-dealers operate is the moneycapital of merchants and industrial capitalists in the process of circulation, and that the moneydealers' operations are actually operations of merchants and industrial capitalists, in which they act as middlemen. It is equally evident that the money-dealers' profit is nothing but a deduction from the surplusvalue, since they operate with already realised values (even when realised in the form of creditors' claims). Just as in the commodity trade, there is a duplication of functions, because a part of the technical operations connected with money circulation must be carried out by the dealers and producers of commodities themselves. 1 Zur Kritik der politischen Oekonomie, S. 27. 2 “The great differences among coins as concerns their grain and coinage by many princes and towns that were privileged to coin money, necessitated the creation of business establishments to enable merchants to use local money wherever compensation for the different coins was required. To be able to make cash payments, merchants who travelled to a foreign market provided themselves with uncoined pure silver, or gold. In the same way they exchanged money received in local markets for uncoined silver or gold when returning home. The business of exchanging money, the exchange of uncoined precious metals for local coins, and vice versa, thus became a widespread and paying business.” (Hüllmann, Städtewesen des Mittelalters. Bonn, 1826-29, I, S. 437-38.) “Banks of exchange do not owe their name to the fact that they issue bills of exchange... but to the fact that they used to exchange coins. Long before the establishment of the Amsterdam Bank of Exchange in 1609, there existed in the Dutch merchant towns money-changers and exchange houses, even exchange banks ... The business of these money-changers consisted in exchanging the numerous varieties of coin brought into the country by foreign traders for the currency of the realm. Gradually their circle of activity extended ... They became the bankers and cashiers of their times. But the government of Amsterdam viewed as dangerous the combination of cashier and exchange businesses, and to meet this danger it was resolved to establish a large chartered institution able to perform both the cashier and exchange operations. This institution was the famous Amsterdam Bank of Exchange of 1609. In like manner, the exchange banks of Venice, Genoa, Stockholm, Hamburg, owe their origin to the continual necessity of changing money. Of all these, the Hamburg Exchange is the only one today still doing business, because the need for such an institution is still felt in that merchants' town, which has no Mint of its own, etc.” (S. Vissering, Handboek van Praktische Staathuishoudkunde, Amsterdam, 1860-61, I, 247-48.) 3 “The institution of cashier has probably nowhere preserved its original independent character so pure as in the Dutch merchant towns” (cf. on the origin of the cashier business in Amsterdam. E. Lusac, Holland's Rykdom, Part III). “Its functions coincide in part with those of the old Amsterdam Bank of Exchange. The cashier receives from the merchants, who employ his services, a certain amount of money, for which he opens a 'credit' for them in his books. Later, they send him their claims, which he collects for them and credits to their account. At the same time, he makes payments on their drafts (kassiers briefes) and charges the amounts to their account. He makes a small charge for these receipts and payments, which yields him a remuneration for his labours only corresponding to the size of the turnover accomplished between the two parties. If payments are to be balanced between two merchants, who both deal with the same cashier, such payments are settled very simply by mutual entries in the books, for the cashiers balance their mutual claims from day to day. The cashier's actual business thus consists basically of this mediation in payments. Therefore, it excludes industrial enterprises, speculation, and opening of unlimited credits; for it must be the rule in this business that the cashier makes no payment over and above the credit of any one keeping an account with him.” (Vissering, loc. cit., p. 434.) Re the banking associations of Venice: “The requirements and locality of Venice, where carrying bullion was less convenient than in other places, induced the large merchants of that city to found banking associations under due safeguards, supervision and management. Members of such associations deposited certain sums, on which they drew drafts for their creditors, whereupon the paid sum was deducted from the debtor's account on the page of the book reserved for that purpose and added to the sum credited in the same book to the creditor. This is the earliest beginning of the so-called giro banks. These associations are indeed old. But if attributed to the 12th century, they are being confounded with the State Loan Institute established in 1171.” (Hüllmann, Loc. cit., pp. 453-54.)
|
|
|
Post by IBDaMann on Sept 20, 2020 21:03:05 GMT
Volume III Part IV. Conversion of Commodity-Capital and MoneyCapital into Commercial Capital and Money-Dealing Capital (Merchant's Capital) Chapter 20. Historical Facts about Merchant's Capital The particular form in which commercial and money-dealing capitals accumulate money will be discussed in the next part. It is self-evident from what has gone before that nothing could be more absurd than to regard merchant's capital, whether in the shape of commercial or of money-dealing capital, as a particular variety of industrial capital, such as, say, mining, agriculture, cattle-raising, manufacturing, transport, etc., which are side lines of industrial capital occasioned by the division of social labour, and hence different spheres of investment. The simple observation that in the circulation phase of its reproduction process every industrial capital performs as commoditycapital and as money-capital the very functions which appear as the exclusive functions of the two forms of merchant's capital, should rule out such a crude notion. On the other hand, in commercial and money-dealing capital the differences between industrial capital as productive capital and the same capital in the sphere of circulation are individualised through the fact that the definite forms and functions which capital assumes for the moment appear as independent forms and functions of a separate portion of the capital and are exclusively bound up with it. The transmuted form of industrial capital and the material differences between productive capitals applied in different branches of industry, which arise from the nature of these various branches, are worlds apart. Aside from the crudity with which the economist generally considers distinctions of form, which really concern him only from their substantive side, this misconception by the vulgar economist is explained on two additional counts. First, his inability to explain the peculiar nature of mercantile profit; and, secondly, his apologetic endeavours to deduce commodity-capital and money-capital, and later commercial capital and money-dealing capital as forms arising necessarily from the process of production as such, whereas they are due to the specific form of the capitalist mode of production, which above all presupposes the circulation of commodities, and hence of money, as its basis. If commercial capital and money-dealing capital do not differ from grain production any more than this differs from cattle-raising and manufacturing, it is plain as day that production and capitalist production are altogether identical, and that, among other things, the distribution of the social products among the members of a society, be it for productive or individual consumption, must just as consistently be handled by merchants and bankers as the consumption of meat by cattle-raising and that of clothing by their manufacture. 1 The great economists, such as Smith, Ricardo, etc., are perplexed over mercantile capital being a special variety, since they consider the basic form of capital, capital as industrial capital, and circulation capital (commodity-capital and money-capital) solely because it is a phase in the reproduction process of every capital. The rules concerning the formation of value, profit, etc., immediately deduced by them from their study of industrial capital, do not extend directly to merchant's capital. For this reason, they leave merchant's capital entirely aside and mention it only as a kind of industrial capital. Wherever they make a special analysis of it, as Ricardo does in dealing with foreign trade, they seek to demonstrate that it creates no value (and consequently no surplus-value). But whatever is true of foreign trade, is also true of home trade. Hitherto we have considered merchant's capital merely from the standpoint, and within the limits, of the capitalist mode of production. However, not commerce alone, but also merchant's capital, is older than the capitalist mode of production, is, in fact, historically the oldest free state of existence of capital. Since we have already seen that money-dealing and the capital advanced for it require nothing more for their development than the existence of wholesale commerce, and further of commercial capital, it is only the latter which we must occupy ourselves with here. Since merchant's capital is penned in the sphere of circulation, and since its function consists exclusively of promoting the exchange of commodities, it requires no other conditions for its existence – aside from the undeveloped forms arising from direct barter – outside those necessary for the simple circulation of commodities and money. Or rather, the latter is the condition of its existence. No matter what the basis on which products are produced, which are thrown into circulation as commodities – whether the basis of the primitive community, of slave production, of small peasant and petty bourgeois, or the capitalist basis, the character of products as commodities is not altered, and as commodities they must pass through the process of exchange and its attendant changes of form. The extremes between which merchant's capital acts as mediator exist for it as given, just as they are given for money and for its movements. The only necessary thing is that these extremes should be on hand as commodities, regardless of whether production is wholly a production of commodities, or whether only the surplus of the independent producers' immediate needs, satisfied by their own production, is thrown on the market. Merchant's capital promotes only the movements of these extremes, of these commodities, which are preconditions of its own existence. The extent to which products enter trade and go through the merchants' hands depends on the mode of production, and reaches its maximum in the ultimate development of capitalist production, where the product is produced solely as a commodity, and not as a direct means of subsistence. On the other hand, on the basis of every mode of production, trade facilitates the production of surplus-products destined for exchange, in order to increase the enjoyments, or the wealth, of the producers (here meant are the owners of the products). Hence, commerce imparts to production a character directed more and more towards exchange-value. The metamorphosis of commodities, their movement, consists 1) materially, of the exchange of different commodities for one another, and 2) formally, of the conversion of commodities into money by sale, and of money into commodities by purchase. And the function of merchant's capital resolves itself into these very acts of buying and selling commodities. It therefore merely promotes the exchange of commodities; yet this exchange is not to be conceived at the outset as a bare exchange of commodities between direct producers. Under slavery, feudalism and vassalage (so far as primitive communities are concerned) it is the slave-owner, the feudal lord, the tributecollecting state, who are the owners, hence sellers, of the products. The merchant buys and sells for many. Purchases and sales are concentrated in his hands and consequently are no longer bound to the direct requirements of the buyer (as merchant). But whatever the social organisation of the spheres of production whose commodity exchange the merchant promotes, his wealth exists always in the form of money, and his money always serves as capital. Its form is always M – C – M'. Money, the independent form of exchange-value, is the point of departure, and increasing the exchange-value an end in itself. Commodity exchange as such and the operations effecting it – separated from production and performed by non-producers – are just a means of increasing wealth not as mere wealth, but as wealth in its most universal social form, as exchange-value. The compelling motive and determining purpose are the conversion of M into M + ΔM. The transactions M – C and C – M', which promote M – M', appear merely as stages of transition in this conversion of M into M + ΔM. This M – C – M', the characteristic movement of merchant's capital, distinguishes it from C – M – C, trade in commodities directly between producers, which has for its ultimate end the exchange of usevalues. The less developed the production, the more wealth in money is concentrated in the hands of merchants or appears in the specific form of merchants' wealth. Within the capitalist mode of production – i.e., as soon as capital has established its sway over production and imparted to it a wholly changed and specific form – merchant's capital appears merely as a capital with a specific function. In all previous modes of production, and all the more, wherever production ministers to the immediate wants of the producer, merchant's capital appears to perform the function par excellence of capital. There is, therefore, not the least difficulty in understanding why merchant's capital appears as the historical form of capital long before capital established its own domination over production. Its existence and development to a certain level are in themselves historical premises for the development of capitalist production 1) as premises for the concentration of money wealth, and 2) because the capitalist mode of production presupposes production for trade, selling on a large scale, and not to the individual customer, hence also a merchant who does not buy to satisfy his personal wants but concentrates the purchases of many buyers in his one purchase. On the other hand, all development of merchant's capital tends to give production more and more the character of production for exchange-value and to turn products more and more into commodities. Yet its development, as we shall presently see, is incapable by itself of promoting and explaining the transition from one mode of production to another. Within capitalist production merchant's capital is reduced from its former independent existence to a special phase in the investment of capital, and the levelling of profits reduces its rate of profit to the general average. It functions only as an agent of productive capital. The special social conditions that take shape with the development of merchant's capital, are here no longer paramount. On the contrary, wherever merchant's capital still predominates we find backward conditions. This is true even within one and the same country, in which, for instance, the specifically merchant towns present far more striking analogies with past conditions than industrial towns.2 The independent and predominant development of capital as merchant's capital is tantamount to the non-subjection of production to capital, and hence to capital developing on the basis of an alien social mode of production which is also independent of it. The independent development of merchant's capital, therefore, stands in inverse proportion to the general economic development of society. Independent mercantile wealth as a predominant form of capital represents the separation of the circulation process from its extremes, and these extremes are the exchanging producers themselves. They remain independent of the circulation process, just as the latter remains independent of them. The product becomes a commodity by way of commerce. It is commerce which here turns products into commodities, not the produced commodity which by its movements gives rise to commerce. Thus, capital appears here first as capital in the process of circulation. It is in the circulation process that money develops into capital. It is in circulation that products first develop as exchange-values, as commodities and as money. Capital can, and must, form in the process of circulation, before it learns to control its extremes – the various spheres of production between which circulation mediates. Money and commodity circulation can mediate between spheres of production of widely different organisation, whose internal structure is still chiefly adjusted to the output of use-values. This individualisation of the circulation process, in which spheres of production are interconnected by means of a third, has a two-fold significance. On the one hand, that circulation has not as yet established a hold on production, but is related to it as to a given premise. On the other hand, that the production process has not as yet absorbed circulation as a mere phase of production. Both, however, are the case in capitalist production. The production process rests wholly upon circulation, and circulation is a mere transitional phase of production, in which the product created as a commodity is realised and its elements of production, likewise created as commodities, are replaced. That form of capital – merchant's capital – which developed directly out of circulation appears here merely as one of the forms of capital occurring in its reproduction process. The law that the independent development of merchant's capital is inversely proportional to the degree of development of capitalist production is particularly evident in the history of the carrying trade, as among the Venetians, Genoese, Dutch, etc., where the principal gains were not thus made by exporting domestic products, but by promoting the exchange of products of commercially and otherwise economically undeveloped societies, and by exploiting both producing countries.3 Here, merchant's capital is in its pure form, separated from the extremes – the spheres of production between which it mediates. This is the main source of its development. But this monopoly of the carrying trade disintegrates, and with it this trade itself, proportionately to the economic development of the peoples, whom it exploits at both ends of its course, and whose lack of development was the basis of its existence. In the case of the carrying trade this appears not only as the decline of a special branch of commerce, but also that of the predominance of the purely trading nations, and of their commercial wealth in general, which rested upon the carrying trade. This is but a special form, in which is expressed the subordination of merchants to industrial capital with the advance of capitalist production. The behaviour of merchant's capital wherever it rules over production is strikingly illustrated not only by the colonial economy (the so-called colonial system) in general, but quite specifically by the methods of the old Dutch East India Company. Since the movement of merchant's capital is M – C – M', the merchant's profit is made, first, in acts which occur only within the circulation process, hence in the two acts of buying and selling; and, secondly, it is realised in the last act, the sale. It is therefore profit upon alienation. Prima facie, a pure and independent commercial profit seems impossible so long as products are sold at their value. To buy cheap in order to sell dear is the rule of trade. Hence, not the exchange of equivalents. The conception of value is included in it in so far as the various commodities are all values, and therefore money. In respect to quality they are all expressions of social labour. But they are not values of equal magnitude. The quantitative ratio in which products are exchanged is at first quite arbitrary. They assume the form of commodities inasmuch as they are exchangeables, i.e., expressions of one and the same third. Continued exchange and more regular reproduction for exchange reduces this arbitrariness more and more. But at first not for the producer and consumer, but for their go-between, the merchant, who compares money-prices and pockets the difference. It is through his own movements that he establishes equivalence. Merchant's capital is originally merely the intervening movement between extremes which it does not control, and between premises which it does not create. Just as money originates from the bare form of commodity-circulation, C – M – C, not only as a measure of value and a medium of circulation, but also as the absolute form of commodity, and hence of wealth, or hoard, so that its conservation and accumulation as money becomes an end in itself, so, too, does money, the hoard, as something that preserves and increases itself through mere alienation, originate from the bare form of the circulation of merchant's capital, M – C – M'. The trading nations of ancient times existed like the gods of Epicurus in the intermediate worlds of the universe, or rather like the Jews in the pores of Polish society. The trade of the first independent flourishing merchant towns and trading nations rested as a pure carrying trade upon the barbarism of the producing nations, between whom they acted the middleman. In the pre-capitalist stages of society commerce ruled industry. In modern society the reverse is true. Of course, commerce will have more or less of a counter-effect on the communities between which it is carried on. It will subordinate production more and more to exchange-value by making luxuries and subsistence more dependent on sale than on the immediate use of the products. Thereby it dissolves the old relationships. It multiplies money circulation. It encompasses no longer merely the surplus of production, but bites deeper and deeper into the latter, and makes entire branches of production dependent upon it. Nevertheless this disintegrating effect depends very much on the nature of the producing community. So long as merchant's capital promotes the exchange of products between undeveloped societies, commercial profit not only appears as out-bargaining and cheating, but also largely originates from them. Aside from the fact that it exploits the difference between the prices of production of various countries (and in this respect it tends to level and fix the values of commodities), those modes of production bring it about that merchant's capital appropriates an overwhelming portion of the surplus-product partly as a mediator between communities which still substantially produce for use-value, and for whose economic organisation the sale of the portion of their product entering circulation, or for that matter any sale of products at their value, is of secondary importance; and partly, because under those earlier modes of production the principal owners of the surplus-product with whom the merchant dealt, namely, the slave-owner, the feudal lord, and the state (for instance, the oriental despot) represent the consuming wealth and luxury which the merchant seeks to trap, as Adam Smith correctly scented in the passage on feudal times quoted earlier. Merchant's capital, when it holds a position of dominance, stands everywhere for a system of robbery,4 so that its development among the trading nations of old and modern times is always directly connected with plundering, piracy, kidnapping slaves, and colonial conquest; as in Carthage, Rome, and later among the Venetians, Portuguese, Dutch, etc. The development of commerce and merchant's capital gives rise everywhere to the tendency towards production of exchange-values, increases its volume, multiplies it, makes it cosmopolitan, and develops money into world-money. Commerce, therefore, has a more or less dissolving influence everywhere on the producing organisation, which it finds at hand and whose different forms are mainly carried on with a view to use-value. To what extent it brings about a dissolution of the old mode of production depends on its solidity and internal structure. And whither this process of dissolution will lead, in other words, what new mode of production will replace the old, does not depend on commerce, but on the character of the old mode of production itself. In the ancient world the effect of commerce and the development of merchant's capital always resulted in a slave economy; depending on the point of departure, only in the transformation of patriarchal slave system devoted to the production of immediate means of subsistence into one devoted to the production of surplus-value. However, in the modern world, it results in the capitalist mode of production. It follows therefrom that these results spring in themselves from circumstances other than the development of merchant's capital. It is in the nature of things that as soon as town industry as such separates from agricultural industry, its products are from the outset commodities and thus require the mediation of commerce for their sale. The leaning of commerce towards the development of towns, and, on the other hand, the dependence of towns upon commerce, are so far natural. However, it depends on altogether different circumstances to what measure industrial development will go hand in hand with this development. Ancient Rome, in its later republican days, developed merchant's capital to a higher degree than ever before in the ancient world, without showing any progress in the development of crafts, while in Corinth and other Grecian towns in Europe and Asia Minor the development of commerce was accompanied by highly developed crafts. On the other hand, quite contrary to the growth of towns and attendant conditions, the trading spirit and the development of merchant's capital occur frequently among unsettled nomadic peoples. There is no doubt – and it is precisely this fact which has led to wholly erroneous conceptions – that in the 16th and 17th centuries the great revolutions, which took place in commerce with the geographical discoveries and speeded the development of merchant's capital, constitute one of the principal elements in furthering the transition from feudal to capitalist mode of production. The sudden expansion of the world-market, the multiplication of circulating commodities, the competitive zeal of the European nations to possess themselves of the products of Asia and the treasures of America, and the colonial system – all contributed materially toward destroying the feudal fetters on production. However, in its first period – the manufacturing period – the modern mode of production developed only where the conditions for it had taken shape within the Middle Ages. Compare, for instance, Holland with Portugal.5 And when in the 16th, and partially still in the 17th, century the sudden expansion of commerce and emergence of a new world-market overwhelmingly contributed to the fall of the old mode of production and the rise of capitalist production, this was accomplished conversely on the basis of the already existing capitalist mode of production. The world-market itself forms the basis for this mode of production. On the other hand, the immanent necessity of this mode of production to produce on an ever-enlarged scale tends to extend the world-market continually, so that it is not commerce in this case which revolutionises industry, but industry which constantly revolutionises commerce. Commercial supremacy itself is now linked with the prevalence to a greater or lesser degree of conditions for a large industry. Compare, for instance, England and Holland. The history of the decline of Holland as the ruling trading nation is the history of the subordination of merchant's capital to industrial capital. The obstacles presented by the internal solidity and organisation of pre-capitalistic, national modes of production to the corrosive influence of commerce are strikingly illustrated in the intercourse of the English with India and China. The broad basis of the mode of production here is formed by the unity of small-scale agriculture and home industry, to which in India we should add the form of village communities built upon the common ownership of land, which, incidentally, was the original form in China as well. In India the English lost no time in exercising their direct political and economic power, as rulers and landlords, to disrupt these small economic communities.6 English commerce exerted a revolutionary influence on these communities and tore them apart only in so far as the low prices of its goods served to destroy the spinning and weaving industries, which were an ancient integrating element of this unity of industrial and agricultural production. And even so this work of dissolution proceeds very gradually. And still more slowly in China, where it is not reinforced by direct political power. The substantial economy and saving in time afforded by the association of agriculture with manufacture put up a stubborn resistance to the products of the big industries, whose prices include the faux frais of the circulation process which pervades them. Unlike the English, Russian commerce, on the other hand, leaves the economic groundwork of Asiatic production untouched.7 The transition from the feudal mode of production is two-fold. The producer becomes merchant and capitalist, in contrast to the natural agricultural economy and the guild-bound handicrafts of the medieval urban industries. This is the really revolutionising path. Or else, the merchant establishes direct sway over production. However much this serves historically as a steppingstone – witness the English 17th-century clothier, who brings the weavers, independent as they are, under his control by selling their wool to them and buying their cloth – it cannot by itself contribute to the overthrow of the old mode of production, but tends rather to preserve and retain it as its precondition. The manufacturer in the French silk industry and in the English hosiery and lace industries, for example, was thus mostly but nominally a manufacturer until the middle of the 19th century. In point of fact, he was merely a merchant, who let the weavers carry on in their old unorganised way and exerted only a merchant's control, for that was for whom they really worked.8 This system presents everywhere an obstacle to the real capitalist mode of production and goes under with its development. Without revolutionising the mode of production, it only worsens the condition of the direct producers, turns them into mere wage-workers and proletarians under conditions worse than those under the immediate control of capital, and appropriates their surplus-labour on the basis of the old mode of production. The same conditions exist in somewhat modified form in part of the London handicraft furniture industry. It is practised notably in the Tower Hamlets on a very large scale. The whole production is divided into very numerous separate branches of business independent of one another. One establishment makes only chairs, another only tables, a third only bureaus, etc. But these establishments themselves are run more or less like handicrafts by a single minor master and a few journeymen. Nevertheless, production is too large to work directly for private persons. The buyers are the owners of furniture stores. On Saturdays the master visits them and sells his product, the transaction being closed with as much haggling as in a pawnshop over a loan. The masters depend on this weekly sale, if for no other reason than to be able to buy raw materials for the following week and to pay out wages. Under these circumstances, they are really only middlemen between the merchant and their own labourers. The merchant is the actual capitalist who pockets the lion's share of the surplus-value.9 Almost the same applies in the transition to manufacture of branches formerly carried on as handicrafts or side lines to rural industries. The transition to large-scale industry depends on the technical development of these small owner-operated establishments – wherever they employ machinery that admits of a handicraft-like operation. The machine is driven by steam, instead of by hand. This is of late the case, for instance, in the English hosiery industry. There is, consequently, a three-fold transition. First, the merchant becomes directly an industrial capitalist. This is true in crafts based on trade, especially crafts producing luxuries and imported by merchants together with the raw materials and labourers from foreign lands, as in Italy from Constantinople in the 15th century. Second, the merchant turns the small masters into his middlemen, or buys directly from the independent producer, leaving him nominally independent and his mode of production unchanged. Third, the industrialist becomes merchant and produces directly for the wholesale market. In the Middle Ages, the merchant was merely one who, as Poppe rightly says, “transferred” the goods produced by guilds or peasants [Poppe,Geschichte der Technologie seit der Wiederherstellung der Wissenschaften bis an das Ende des achtzehnten Jahrhunderts, Band I, Göttingen. 1807, S. 70. – Ed.] The merchant becomes industrialist, or rather, makes craftsmen, particularly the small rural producers, work for him. Conversely, the producer becomes merchant. The master weaver, for instance, buys his wool or yarn himself and sells his cloth to the merchant, instead of receiving his wool from the merchant piecemeal and working for him together with his journeymen. The elements of production pass into the production process as commodities bought by himself. And instead of producing for some individual merchant, or for specified customers, he produces for the world of trade. The producer is himself a merchant. Merchant's capital does no more than carry on the process of circulation. Originally, commerce was the precondition for the transformation of the crafts, the rural domestic industries, and feudal agriculture, into capitalist enterprises. It develops the product into a commodity, partly by creating a market for it, and partly by introducing new commodity equivalents and supplying production with new raw and auxiliary materials, thereby opening new branches of production based from the first upon commerce, both as concerns production for the home and world-market, and as concerns conditions of production originating in the world-market. As soon as manufacture gains sufficient strength, and particularly large-scale industry, it creates in its turn a market for itself, by capturing it through its commodities. At this point commerce becomes the servant of industrial production, for which continued expansion of the market becomes a vital necessity. Ever more extended mass production floods the existing market and thereby works continually for a still greater expansion of this market for breaking out of its limits. What restricts this mass production is not commerce (in so far as it expresses the existing demand), but the magnitude of employed capital and the level of development of the productivity of labour. The industrial capitalist always has the world-market before him, compares, and must constantly compare, his own cost-prices with the market-prices at home, and throughout the world. In the earlier period such comparison fell almost entirely to the merchants, and thus secured the predominance of merchant's capital over industrial capital. The first theoretical treatment of the modern mode of production – the mercantile system – proceeded necessarily from the superficial phenomena of the circulation process as individualised in the movements of merchant's capital, and therefore grasped only the appearance of matters. Partly because merchant's capital is the first free state of existence of capital in general. And partly because of the overwhelming influence which it exerted during the first revolutionising period of feudal production – the genesis of modern production. The real science of modern economy only begins when the theoretical analysis passes from the process of circulation to the process of production. Interest-bearing capital is, indeed, likewise a very old form of capital. But we shall see later why mercantilism does not take it as its point of departure, but rather carries on a polemic against it. 1 The sage Mr. Roscher [Die Grundlagen der Nationalökonomie, 3. Auflage, 1858, § 60, 5. 103. – Ed.] has figured out that, since certain people designate trade as mediation between producers and consumers, “one” might just as well designate production itself as mediation of consumption (between whom?), and this implies, of course, that merchant's capital is as much a part of productive capital as agricultural and industrial capital. In other words, because I can say, that man can mediate his consumption only by means of production (and he has to do this even without getting his education at Leipzig), or that labour is required for the appropriation of the products of Nature (which might be called mediation), it follows, of course, that social mediation arising from a specific social form of production – because mediation – has the same absolute character of necessity, and the same rank. The word mediation settles everything. By the way, the merchants are not mediators between producers and consumers (consumers as distinct from producers, consumers, that is, who do not produce, are left aside for the moment), but mediators in the exchange of the products of these producers among themselves. They are but middlemen in an exchange, which in thousands of cases proceeds without them. 2 Herr W. Kiesselbach (in his Der Gang des Welthandels im Mittelalter, 1860) is indeed still enwrapped in the ideas of a world, in which merchant's capital is the general form of capital. He has not the least idea of the modern meaning of capital, any more than Mommsen when he speaks in his history of Rome of “capital” and the rule of capital. In modern English history, the commercial estate proper and the merchant towns are also politically reactionary and in league with the landed and moneyed interest against industrial capital. Compare, for instance, the political role of Liverpool with that of Manchester and Birmingham. The complete rule of industrial capital was not acknowledged by English merchant's capital and moneyed interest until after the abolition of the corn tax, etc. 3 “The inhabitants of trading cities, by importing the improved manufactures and expensive luxuries of richer countries afforded some food to the vanity of the great proprietors, who eagerly purchased them with great quantities of the rude produce of their own lands. The commerce of a great part of Europe in those times, accordingly consisted chiefly, in the exchange of their own rude produce for the manufactured produce of more civilised nations.... When this taste became so general as to occasion a considerable demand, the merchants, in order to save the expense of carriage, naturally endeavoured to establish some manufactures of the same kind in their own country.” (Adam Smith [Wealth of Nations], Book III, Ch. III, London, 1776, pp. 489, 490.) 4 “Now there is among merchants much complaint about the nobles, or robbers, because they must trade under great danger and run the risk of being kidnapped, beaten, blackmailed, and robbed. If they would suffer these things for the sake of justice, the merchants would be saintly people.... But since such great wrong and unchristian thievery and robbery are committed all over the world by merchants, and even among themselves, is it any wonder that God should procure that such great wealth, gained by wrong, should again be lost or stolen, and they themselves be hit over the head or made prisoner? ... And the princes should punish such unjust bargains with due rigour and take care that their subjects shall not be so outrageously abused by merchants. Because they fail to do so, God employs knights and robbers, and punishes the merchants through them for the wrongs they committed, and uses them as his devils, just as he plagues Egypt and all the world with devils, or destroys through enemies. He thus pits one against the other, without thereby insinuating that knights are any the less robbers than merchants, although the merchants daily rob the whole world, while a knight may rob one or two once or twice a year.” “Go by the word of Isaiah: Thy princes have become the companions of robbers. For they hang the thieves, who have stolen a gulden or a half gulden, but they associate with those, who rob all the world and steal with greater assurance than all others, so that the proverb remains true: Big thieves hang little thieves; and as the Roman senator Cato said: Mean thieves lie in prisons and stocks, but public thieves are clothed in gold and silks. But what will God say finally? He will do as he said to Ezekiel; he will amalgamate princes and merchants, one thief with another, like lead and iron, as when a city burns down, leaving neither princes nor merchants.” (Martin Luther, Von Kaufshandlung und Wucher, 1524, S. 296-97.) 5 How predominant fishery, manufacture and agriculture, aside from other circumstances, were as the basis for Holland's development, has already been explained by 18th-century writers, such as Massie [p. 60]. In contradistinction to the former view, which underrated the volume and importance of commerce in Asia, in Antiquity, and in the Middle Ages, it has now come to be the custom to extremely overrate it. The best antidote against this conception is to study the imports and exports of England in the early 18th century and to compare them with modern imports and exports. And yet they were incomparably greater than those of any former trading nation. (See Anderson, An Historical and Chronological Deduction of the Origin of Commerce. [Vol. II, London, 1764, p. 261 et seq. – Ed.]) 6 If any nation's history, then the history of the English in India is a string of futile and really absurd (in practice infamous) economic experiments. In Bengal they created a caricature of large-scale English landed estates; in south-eastern India a caricature of small parcelled property; in the northwest they did all they could to transform the Indian economic community with common ownership of the soil into a caricature of itself. 7 Since Russia has been making frantic exertions to develop its own capitalist production, which is exclusively dependent upon its domestic and the neighbouring Asiatic market, this is also beginning to change. – F.E. 8 The same is true of the ribbon and basting makers and the silk weavers of the Rhine. Even a railway has been built near Krefeld for the intercourse of these rural hand-weavers with the town “manufacturer.” But this was later put out of business, together with the hand-weavers, by the mechanical weaving industry. – F.E. 9 This system has been developed since 1865 on a still larger scale. For details see the First Report of the Select Committee of the House of Lords on the Sweating System, London, 1888. – F.E.
|
|