Chapter 16, 17, Capital Vol.3

* The circuit of industrial capital covers both production and circulation spheres. Within the latter, the industrial capital assumes the form of commodity capital and money capital. When the function of the latter two is taken over by independent capitalists they become commercial capital and money-dealing capital, respectively. Marx calls the two merchant capital. Part IV of Capital Vol.3 is about merchant capital.

Chapter 16. Commercial Capital

1. Distinction between commodity capital & commercial capital
 1) Commodity capital:
   - 'A mere form of existence of industrial capital'
   - Pertains to a more abstract analysis about 'capital in general' in Vol.2
 2) Commercial capital:
   - Commodity capital becomes commercial capital when the function of metamorphosis between money and commodity acquires independent life as a special function of a special capital being fixed by the division of labour.
   - Pertains to a more concrete analysis about 'capital in competition' in Vol.3
 
2. Turnover
  - 'The velocity of circulation of commercial capital' depends on:
    i) The speed with which the production is repeated & the way various production processes are interconnected
    ii) The speed of consumption
    iii) The development of the function of money as means of payment, i.e. the credit system
  - The faster the turnover, the smaller is the part of total money capital that figures as commercial capital, and vice versa.
  - As no value, and thus no surplus-value, is produced in the circulation process, the length of circulation time is in inverse relation to the rate of profit.
  - Commercial capital indirectly contribute to value production; namely, by shortening the circulation time and realizing the already produced value.
 (Dialectical nature of the relation commercial capital has with industrial capital)



Chapter 17. Commercial Profit

1. Scientific analysis vs. historical development:
   - "In the course of scientific analysis, the formation of the general rate of profit appears to proceed from industrial capitals and the competition between them, being only later rectified, supplemented and modified by the intervention of commercial capital. In the course of historical development, the situation is exactly the reverse. It is commercial capital which first fixes the prices of commodities more or less according to their values, and it is the sphere of circulation that mediates the reproduction process in which a general rate of profit is first formed. Commercial profit originally determines industrial profit" (400).
   - "Concentration historically appears in commerce earlier than in the industrial workshop" (409).
   - How should we understand this contradiction? Is Marx's emphasis of industrial capital over commercial capital compatible with some historical observation, say by Sweezy, that commercial capital played a vital role in the transition from feudalism to capitalism and in the advent of capitalism? Marx's answer could be found in chapter 20 "Historical Materials on Merchant Capital".

2. Commercial labour & the source of commercial profit
   - "Whereas industrial capital appropriates the unpaid labour of others, commercial capital appropriates a portion of this surplus-value by getting it transferred from industrial capital to itself. It is only by way of its function in the realization of values that commercial capital functions as capital in the reproduction process, and therefore draws, as functioning capital, on the surplus-value that the total capital produces" (407). 
   - "Commercial employees' unpaid labour, even though it does not create surplus-value, does create his ability to appropriate surplus-value. They are the source of the profit for commercial capitalists. Just as the unpaid labour of the worker creates surplus-value for productive capital directly, so also does the unpaid labour of the commercial employee create a share in that surplus-value for commercial capital" (407).

3. General rate of profit:
   - Commercial capital contributes to the formation of the general rate of profit. Therefore, it must yield the average profit as industrial capital does according to the proportion it forms in the total capital even though it is not involved in the production of surplus-value.

   - Commercial profit is not an excess over the value of commodities (in case of social capital as a whole); it emerges since commodities are sold to a merchant at the price below their value and sold by her/him at their value. 

4. Two theoretical questions Marx raises:

   1) Do we add money capital the merchant advanced to purchase commodities from the producer into the final sale price? No, but only profit on the commercial capital is added. "Commercial capital is similar to fixed capital in the sense that in so far as it is not consumed, its value does not constitute an element of the commodity’s value."

     - I think Marx's numerical example in p.398 is strange; in his calculation, the merchant buys C from the producer at 1,062. But here we are assuming a commercial capital of 100 at the start. With what money then does the merchant pay the producer 1,062? If she/he has to advance 1,062 of initial money capital to purchase C as Marx is explicit in his example in p.410-11, all the calculations that follow, i.e. the general rate of profit, commercial profit, price of production, etc. should be revised, it seems.
    Marx raises this question in p.412, but his answer given in the following pages does not seem to directly address the issue.

   2) Do we add variable capital of a commercial capitalist into the final sale price? No, as wage for commercial labourers is not an origin, but a result, of surplus-value production. "Wages of commercial labourers employed in the circulation sphere derive solely from the commercial profit as their labour is not value-creating one."