MarxReadingGroup Ch 23 & 24 5 October 2012
[Basing on the analysis in the previous chapters, the interest and the profit of enterprise (owner’s income) appear originally merely as portions of the profit (surplus value). The difference between these two things is originally quantitative. But they in reality are viewed as something qualitatively different, and fetishised. In these two chapters, Marx explains why and how was this formed. ]
[This may be considered as an exercise of “the advance from the abstract to the concrete”, while Marx’s method is definitely more complex than this formula. ]
---The ossification and individualisation of the two parts of the gross profit in respect to one another, as though they originated from two essentially different sources.
---The capitalist operating on his own capital, like the one operating on borrowed capital, divides the gross profit into interest due to himself as owner, as his own lender, and into profit of enterprise due to him as to an active capitalist performing his function.
---The moneyed capitalist does not appear to have any relations with the wage-worker, but only with other capitalists, while these other capitalists, instead of appearing to be in opposition to the wage-workers, appear rather as workers, in opposition to themselves or to other [capitalists] considered as mere owners of capital, representing the mere existence of capital. (Theories of Surplus Value, vol.3)
---He creates surplus-value not because he works as a capitalist, but because he also works, regardless of his capacity of capitalist. This portion of surplus-value is thus no longer surplus-value, but its opposite, an equivalent for labour performed.
---The social form of capital falls to interest, but expressed in a neutral and indifferent form. The economic function of capital falls to profit of enterprise, but abstracted from the specific capitalist character of this function.
Marx asks: Why and how is this so?
Marx’s method: Analysis; From the abstract to the concrete; Fetishism criticism
--- It is not only a matter of different quotas of profit assigned to different persons, but two different categories of profit which are differently related to the capital, hence related to different aspects of the capital. >>>> What’s the relationship between the aspects?
--- The simple empirical circumstance that the majority of industrial capitalists…work with their own and with borrowed capital.
--- as soon as a portion of profit universally assumes the form of interest, the difference between average profit and interest, or the portion of profit over and above the interest, assumes a form opposite to interest – the form of profit of enterprise. These two forms, interest and profit of enterprise, exist only as opposites. Hence, they are not related to surplus-value, of which they are but parts placed under different categories, heads or names, but rather to one another. It is because one portion of profit turns into interest, that the other appears as profit of enterprise. >>>> logical antitheism or real conflict (competition)?
--- Yet historically interest-bearing capital existed as a completed traditional form, and hence interest as a completed sub-division of surplus-value produced by capital, long before the capitalist mode of production and its attendant conceptions of capital and profit. Thus it is that to the popular mind money-capital, or interest-bearing capital, is still capital as such, as capital par excellence. >>>> The historical becomes the fetishised. (The process of capital becoming capital or its development before the capitalist production process exists, and its realisation in the capitalist process of production itself belong to two historically different periods. In the second, capital is taken for granted, and its existence and automatic functioning is presupposed. In the first period, capital is the sediment resulting from the process of dissolution of a different social formation. It is the product of a different [formation], not the product of its own reproduction, as is the case later.(Theories of Surplus Value, vol.3))
--- There is a real reason at the root of this. Money (as an expression of the value of commodities in general) in the [production] process appropriates surplus-value, no matter what name it bears or whatever parts it is split into, because it is already presupposed as capital before the production process. (Theories of Surplus Value, vol.3)
--- Just as the conversion of money, and of value in general, into capital is the constant result of capitalist production, so is its existence as capital its constant precondition. >>>> The Reality as the fetish
--- the class of money-capitalists confronts him as a special kind of capitalists, money-capital as an independent kind of capital, and interest as an independent form of surplus-value peculiar to this specific capital.
--- however the gross profit,…the portion belonging to the functioning capitalist is determined by the interest, since this is fixed by the general rate of interest (leaving aside any special legal stipulations) and assumed to be given beforehand, before the process of production begins, hence before its result, the gross profit, is achieved.
--- [The notion that the capital would yield a surplus-value even if not applied productively]… is correct in the practical sense for the individual capitalist. He has the choice of making use of his capital by lending it out as interest-bearing capital, or of expanding its value on his own by using it as productive capital, regardless of whether it exists as money-capital from the very first, or whether it still has to be converted into money-capital. But to apply it to the total capital of society, as some vulgar economists do, and to go so far as to define it as the cause of profit, is, of course, preposterous. >>>> Fallacy of composition. Opportunity cost. Fisherian theory of the rate of interest and profit?
--- interest falls to the share of the capitalist even when he does not perform the function of a capitalist and is merely the owner of capital; and that, on the other hand, profit of enterprise does fall to the share of the functioning capitalist even when he is not the owner of the capital on which he operates. >>>> beyond the legal form of property
--- Interest...represents the ownership of capital as a means of appropriating the products of the labour of others. …Interest represents this characteristic not as directly counterposed to labour, but rather as unrelated to labour, and simply as a relationship of one capitalist to another. …Interest is a relationship between two capitalists, not between capitalist and labourer.
--- On the other hand, this form of interest lends the other portion of profit the qualitative form of profit of enterprise, and further of wages of superintendence. …He creates surplus-value not because he works as a capitalist, but because he also works, regardless of his capacity of capitalist. This portion of surplus-value is thus no longer surplus-value, but its opposite, an equivalent for labour performed. >>>> “entrepreneurship”
--- It is just as if a king, who, as king, has nominal command of the army, were to be assumed to command the army not because he, as the owner of the kingship, commands, plays the role of commander-in-chief, but on the contrary that he is king because he commands, exercises the function of commander-in-chief. (Theories of Value, vol.3) >>>> Lacan’s quote, Marx’s Capital vol.1 note.21, and here, to be a king by pretending otherwise
--- Thus the nature of surplus-value, the essence of capital and the character of capitalist production are not only completely obliterated in these two forms of surplus-value, they are turned into their opposites. But even insofar as the character and form of capital are complete [it is] nonsensical [if] presented without any intermediate links and expressed as the subjectification of objects, the objectification of subjects, as the reversal of cause and effect, the religious quid pro quo, the pure form of capital expressed in the formula M—M'. The ossification of relations, their presentation as the relation of men to things having a definite social character is here likewise brought out in quite a different manner from that of the simple mystification of commodities and the more complicated mystification of money. The transubstantiation, the fetishism, is complete. >>>> mystification and fragmentization (anti-financial but pro-industrial capital)
Question1: Basically, Marx employs the consistent method of analysis here to define the distinct economic and class forms of interest and enterprise profit (owner’s income). It’s very similar with the twofold character of the commodity. Interest appears as a general, pure form of the exchange value of capital, basing on the mere ownership of capital, and the enterprise appears as coming from some specific forms of the use value, basing on the functioning “labor” of capital. As in the case of commodity, which has use-value and exchange-value, these two aspects are just twofold character of capital, and indicate to no antagonism or conflict between them.
But Marx also said right after the beginning of chapter 23 that it is only the competition (appears only once) between these two kinds of capitalists which creates the rate of interest. And he mentioned also the contradiction (appears only once too) between the function of capital in the reproduction process and the mere ownership of capital outside of the reproduction process. These two are terms containing at least potential antagonism or conflicts.
What are the meanings of the competition and contradiction here? What’s the relation between these two kinds of capital?
Question 2: What’s the base and distinct character for the interest in pre-capitalist society?
--- In M – M' we have the meaningless form of capital, the perversion and objectification of production relations in their highest degree, the interest-bearing form, the simple form of capital, in which it antecedes its own process of reproduction. It is the capacity of money, or of a commodity, to expand its own value independently of reproduction – which is a mystification of capital in its most flagrant form.