Money-Dealing
Capital
Capital Volume 3, Part 4:
Conversion of Commodity-Capital and Money-Capital into Commercial Capital and
Money-Dealing Capital (Merchant's Capital)
Since 2008 in particular, the
world has been described as being in a “global economic meltdown”. This crude
bogey is not in fact a new phenomenon. The nature of banking and money-dealing
has been well known since the publication of Capital Volume 3, as was noted in
various publications at the start of the “meltdown”. One good example is
an article by Dave Lindorff in CounterPunch on 3 October 2008, which
quotes Chapter 30 in Part 5 of
Capital Volume 3 (“Money Capital and Real Capital”) to show that Marx
had in that chapter described the working of the “meltdown” very completely and
very concisely.
Here is the quote, with
Lindorff’s edits:
"In a
system...where the entire continuity of the...process rests upon credit, a
crisis must obviously occur -- a tremendous rush for means of payment -- when
credit suddenly ceases and only cash payments have validity. At first glance,
therefore, the whole crisis seems to be merely a credit and money crisis. And
in fact it is only a question of the convertibility of bills of exchange into
money. But the majority of these bills represent actual sales and purchases, whose extension far beyond the needs of
society is, after all, the basis of the whole crisis. At the same time, an
enormous quantity of these bills of exchange represents plain swindle, which
now reaches the light of day and collapses; furthermore, unsuccessful
speculation with the capital of other people; finally, commodity-capital which
has depreciated or is completely unsaleable, or returns that can never more be
realized again. The entire artificial system of forced expansion of the
[economy] cannot, of course, be remedied by having some bank, like the [Federal
Reserve], give to all the swindlers the deficient capital by means of its paper
and having it buy up all the depreciated commodities at their old nominal
values. Incidentally, everything here appears distorted, since in this paper
world, the real price and its real basis appear nowhere, but only bullion,
metal coin, notes, bills of exchange, securities. Particularly in centres where
the entire money business of the country is concentrated, like London [or New
York]...the entire process becomes incomprehensible."
Broadly it appears that the
ability of bankers and of traders in financial instruments to create money is
unrestrained. In Marx’s time there was a link between money and gold and
silver, and this link remained, officially, until the 1970s. The de-facto
position of gold remains, but even gold has now been fictionalised to an
extent, so that there is a lot more gold “on the books” than physically exists.
This is therefore another
area wherein the writings of Karl Marx, particularly here in Capital, Volume 3,
speak directly to the bourgeois economists of today. Marx is however quite
explicit in saying that the source of increase of wealth in capitalist society
remains one and the same as before: surplus value extracted by the exploitation
of labour power paid for with wages at the point of production.
In Chapter 19, on
“Money-Dealing Capital” (attached; download linked below) Marx states
at the beginning:
“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.”
There is nothing in the above
to suggest that the identification of the extraction of surplus value in
Capital Volume 1 as the essence of capital has been surpassed or rendered
obsolete. On the contrary, Capital Volume 1 is hereby confirmed as continuing
to be the essential and necessary basis and foundation in reality upon which
the ever-more-fantastic world of money-dealing is erected.
Marx concludes the chapter as
follows:
“It is
evident that the mass of money-capital with which the money-dealers operate is
the money-capital of merchants and industrial capitalists in the process of
circulation, and that the money-dealers' 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 surplus-value, since they operate
with already realised values (even when realised in the form of creditors'
claims).”
“Nothing but a deduction from the surplus-value” is as plain a statement as could be, and this
corresponds to the current jargon of “the real economy”, or in other words, of
“Main Street” as opposed to “Wall Street”.
The distinction is the same
as the one between the financial economy and the “productive economy”, referred
to during the Red October campaign of 2014 in South Africa. Under capitalism,
the “productive economy” is the economy of extraction of surplus value.
·
The above is to
introduce the original reading-text: Capital Volume 3, Chapter 19, Money-Dealing
Capital.
