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.
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” 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 Capital Volume 1 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
else “Main Street” as opposed to “Wall Street”.
Please download and read this text:
Capital Volume
3, Chapter 19, Money-Dealing Capital (3323 words)
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