| KARL MARX |
By Malik Sekou OSEI
Here we all must begin in a not so easy discussion and that can be rather
complex that everyone may need to examine more than once. To the reader it’s
important to pick volumes I, II, III of Capital by the thinker Karl Marx to
approach a level of rigor beyond the American phenomenon of intellectual
sloganeering. Also what will be needed is two other books, the first one is by
Rudolf Hilferding and called Finance Capital (1910), the second book is by Geoffrey Kay Development
and Underdevelopment, A Marxist Analysis (1975).
 |
| RUDOLF HILFERDING |
Capital as a social relation is an energetic
occurrence following a circuit of capital in which it takes on different forms
at different points of the circuit and its development within history. If we
can start with capital in the form of money (M), it is transformed into
commodities (meaning of the production and labor power) to become then
productive capital (P). The result of this process of production is commodity
capital (C) which has to be actualized through sales and thus re-transformed
into money capital. In that sense, capital assumes different forms, but M and C
by themselves are lifeless; it makes more sense to talk of capital having
specialized occupations and meanings within each stage of the circuit.
Productive
capital, (P) is a process. It is the factory or farm at work. In the case
of a hypothetical and theoretic, simple capital system the enterprise that runs
the factory may also have full control over dealing in commodities and money,
but in reality these processes have been specialized functions and are distinct
forms of capital. Merchant capital has the specialize function of
dealing in commodities. It is typified by the great trading houses that make
profits by buying and selling the raw materials for industry or by the many
multiple stores that trade in finished commodities (the C in the
circuit), but there are a variety of intermediary forms. To the degree that
banks simply deal in money (the M in the circuit) by exchanging it, they, too,
are operating a type of merchant capital. However, the development of the
monetary system in relation to these processes gives rises to CREDIT and the
development of a different, specialized form of interests-bearing
capital. Interests bearing capital is involved in the practice of lending
money capital to industrial capital so that the initial M in the circuit of
industrial capital is increased and expanded from that source.
We
have to go back to parts IV and V of Capital III. were involved with the
specialized forms of capital. They are a significant component in
authenticating and confirming Marx’s claim to be able to explain the
complexities of the world from principles uncovered by examining highly
abstract, general categories, for Marx reaches these chapters after having
examined the nature of capital in its undifferentiated forms. In Capital I and
II and the early parts of Capital III, Marx presented the laws of capital in
general, and of much industrial capital in competition, and Marx believed that
the specialized forms of capital could only be understood on the basis of these
laws. In particular, the earlier analysis uncovers the way in which SURPLUS
VALUE is produced and distributed between industrial capitals, whereas in parts
IV, V and the VII of Capital III the question is how this surplus value is
distributed in various types of revenue between different specialized form
being industrial capital alone, to industrial capital plus merchant capital
plus interest-bearing capital. And whereas in the earlier analysis surplus
value takes the forms of PROFIT. Industrial capital receives only
profit-of-enterprise while interest-bearing capital receives a portion of
surplus value as interest and merchant capital also receives profits,
commercial profit, which is a deduction from the total surplus value. The
revenues received by merchant capital and interest-bearing capital and their
separation from other forms of surplus value, merit further analysis.
19th century Europe
Merchant capital, operating in the realm of circulation does not directly
generate surplus value, but it does appropriate as profit some of the surplus
value that is generated in the only place possible, the sphere of production in
capitalist industry and agriculture. Merchant do more than simply buy
commodities for resale; order to accomplish their role they also expend capital
upon the labor power of shop-workers, clerks and so on. However, this labor is
unproductive according to objective laws; it does not directly produce surplus
value, although by reducing the cost of circulation below what they would have
been if non-specialist industrial capitalist had undertaken it, it may
indirectly contribute to it. Given that merchant capital does not generate
surplus value in a process of production controlled by it, its profit is
obtained from its dealing with industrial (and agriculture) capital. Merchants
buy commodities from industry below their value and sell them at their value.
The difference, which they appropriate, has a tendency to equal the general
rate of profit; competition ensures that the rate of profit accruing to
merchants on the capital they advance equals that accruing to industrialists on
their capital, and each equals the total surplus value divided by the total of
the (merchant and industrial) capital.
That
consideration of commercial profit ignores the deduction of interest; and the
nature of interest-bearing capital, too, is considered by concentrating on its
relation to industrial capital alone. Interest is paid by industrial capitalize
out of their profits, and what remains is profits-of-enterprise, a proportion
of the total. Marx considered that the proportions which result from this
division are a matter of “accidental” forces of demand and supply, so that no
general principles determining the rate of interest (or rate of
profit-of-enterprise) could be postulated except as the general limits to the
range of values it could take. .
The
final type of revenue which derives from surplus value is RENT, but this return
to land ownership is not the same as a return on a specialized form of capital.
The
specialized forms of capital are more than simply the basis for the division of
surplus value into different types of revenue, for the development of each has
an important historical impact. Although merchant capital depends on industrial
capital for the source of its profits, it arose in an early form before
industrial capital. Indeed, the role of trade and plunder in the rise of
capitalism, the process of PRIMITIVE ACCUMULATION, means the merchant capital
was crucial for amassing the resources and stimulating the growth of social
relations that were necessary for capitalism. The early monopolists trading
companies were its typical representatives in this respect. However, although
merchant capital laid the origins of capitalism in Europe, it has been argued
that its predominance in Europe’s relation to the so-called third world blocked
the ability of the countries of Africa, Asia, and Latin America to undertake
capitalist development. In the work of Geoffrey Kay, in his book Development
and Underdevelopment (1975) he argues that merchant capital within Europe lost
its independence as industrial capitalism developed, and therefore did not
hinder the development of the latter, the rise of a class making profits
through organizing production. In many countries of the Third World however,
merchant capital has continued to predominate, at least until recently, and to
exercise a rather deal of independence in pursuing profits through trading
rather than developing capitalist production. Geoffrey Kay argues this
independence has had a paradoxical character at least since the mid-nineteenth
century when it gained and lost its independence. Independence was retained in
the sense that it was the only form of capital in the underdeveloped countries,
but since, in the world as a whole, it coexisted with industrial capital it had
to modify its actions to act partially as an agent. It had to trade in the
later in the Third World. As an agent it had to trade in the manner required by
industrial capitalism (shipping raw materials and food to the capitalist
countries and selling their manufactured goods in captive 3rd World
Markets), and only influenced local production in the minimal manner necessary
to serve Europe’s need for raw materials and food.
| European imperialism and the suppression of 3rd World economic development laid the political foundation for contemporary capitalism. |
Interest-bearing capital’s role in history was recognized and acknowledged by
Karl Marx in terms of the effect of the credit system on the centralization of
capital and mainly on the founding and quick development of JOINT-STOCK
COMPANIES. These developments were seen as exhibiting a new step and as having
an important and noteworthy consequence. This is to give rise to the
responding and thwarting tendencies to the FALLING RATE OF PROFIT, since those
who advance capital to the joint-stock companies are believed to accept a lower
return as a result of the control of interests as a form of surplus value. And
they give rise to a change in class configuration as the actually operational
capitalist is distinguished from owners of the capital which the industry uses.
Interests-bearing capital, however, does not lie in repose unchanged once it
arises; it develops more complex characteristic and Hilferding back in 1910
laid out in his book called Finance Capital the other
factor that he identified as the transformation into FINANCE CAPITAL as
especially complex, but through it all there is a needed rigor of understanding
beyond protest slogans.
This
discussion has never been easy and too many approach this river without the
ability to swim and they drown by their lack of training and rigor. I have
suggested the review of three important works that lay foundations for study.
Right now it is important to understand, living in the imperialistic
epoch, the different forms of capital and their functions and the maintenance
and power of an economic system that thrives on the spread of material
underdevelopment and human suffering and which fosters a culture of urban degeneracy,
of urban rugged individualism and information ignorance as the norm. Our
intelligentsia, meanwhile, postures in performance only to entertain everyone
to death.
For
History is on our side, but, not time.
