Capital Volume II: Class 5

Reading: Capital III, ch. 16-20

Having described in Volume II the full circuit of capital from production through circulation and back to production, in Volume III Marx extends his analysis to the class structure of these different phases of capital’s movement.

He lays out his dialectical view of this class structure in the following way: “In commercial and money-dealing capital, rather, the distinctions between industrial capital as productive capital and the same capital in the sphere of circulation attain autonomy in the following way: the specific forms and functions that capital temporarily assumes in the latter case come to appear as independent forms and functions of a part of the capital that has separated off and become completely confined to this sphere.” (440)

As discussed in Volume II, there are three forms of capital: productive, commodity and money. Here, he essentially argues that a branch of the capitalist class specializes in each of these three phases to create a division of labor. The industrial capitalist focuses solely on production, the commercial capitalist focuses solely on commodity exchange and the money-dealing capitalist focuses solely on the technical movement of money.

In the quote above, however, Marx indicates that the autonomy that each of these sections of the capitalist class attains makes them only appear as independent. In fact, commercial capital and money-dealing capital are integrally linked to productive capital because they represent the same underlying capital—just in the circulation form as opposed to in production. It is a fallacy of classical political economists to describe each of these sections of capital as independent because they are unable to see that value is only created in production. Instead, commercial capital and money-dealing capital should be seen as ultimately dependent on productive capital because, without it, there would be no value for them to circulate.

What is the nature of this interdependence as expressed in value?

Marx states that, while productive capital is just that—productive of surplus-value—commercial capital and money-dealing capital are unproductive—they do not create any surplus-value. Instead, they facilitate the circulation process and make it more efficient through a division of labor. This allows the productive capitalists to specialize on production, focusing all their capital there; while the commercial capitalists focus exclusively on moving the product, i.e. circulation; and the money-dealing capitalists handle the accounts and payments. All of this saves time for the productive capitalists, who are uniquely constrained by the production process. While production is running, they cannot move value, but commercial capitalists can because they are limited only by the number of products they can buy and sell in a given amount of time. As a result, they can scale up and move products from multiple productive capitalists at once. On a general level, this division of labor increases the overall profit in the economy because it is more efficient for commercial and money-dealing capitalists to centralize the functions of circulation than it is for each industrial capitalist to devote part of his capital to these functions.

So while productive capital produces surplus-value directly by exploiting workers, commercial capital “…appropriates a portion of this surplus-value by getting it transferred from industrial capital to itself.” (407) It does this by paying productive capitalists for commodities below their value and then selling them to consumers at their value. Essentially, the productive capitalist is sacrificing part of his surplus-value to the commercial capitalist with the knowledge that he would have to sacrifice more surplus-value if he had to handle circulation himself. Similarly, the profit of money-dealing capital is a deduction from the surplus-value of productive capital, but Marx is sparse on details in these chapters.

If commercial capital is not productive, then how does the commercial capitalist make his profit? Marx writes of workers in commercial capital enterprises, “Their unpaid labour, even though it does not create surplus-value, does create his ability to appropriate surplus-value, which, as far as this capital is concerned, gives exactly the same result; i.e. it is its source of profit.” (407; my emphasis) As is the case for productive workers, unproductive workers (workers who, while they may work very hard, are not productive of surplus-value) are paid based on the value of their labor-power. The portion of their labor that is unpaid is the source of profit, but it does not correspond to surplus-value. Instead it creates for the commercial capitalist, a share in the surplus-value of productive capital.

Marx elaborates on the implications of the interdependence of these three sections of the capitalist class. A basic problem in capitalism is commodity realization: the productive capitalist has to sell his commodities at their value quickly in order to put the profits back into production. Without that, he cannot produce more surplus-value. Commercial capital attempts to solve this problem. However, its autonomy creates new problems because it can easily over-accumulate. Marx writes, “But by virtue of this autonomy, its movement is within certain limits independent of the reproduction process and its barriers, and hence it also drives this process beyond its own barriers. This inner dependence in combination with external autonomy drives commercial capital to a point where the inner connection is forcibly re-established by way of a crisis.” (419) Commercial capital—particularly wholesaling—represents a unique stress point because it can keep accumulating commodities beyond the point of effective demand. While it may seem independent, especially in times of high speculation, its dependence on productive capital violently reasserts itself once the movement of value gets interrupted.