[Note: I have somehow received probably 3 or 4 copies of Rebecca People's
latest post to WSN (WSN posts always come to me in pairs, so that makes
around 6 or 8 copies of the same post). Is there a clitch with the
listserv? Or are you, Rebecca, repeatedly sending these posts to list? The
last round of the same posts are all indented, as if it was forwarded
again.]
Hi Rebecca,
I am very busy with other projects right now, so I really only have time
for this post. I will try to answer any questions or points you raise, but
it will probably take some time to respond, and then I fear not
thoroughly, as the rest of my summer looks hectic.
On Tue, 14 Jul 1998, Rebecca Peoples wrote:
> If what you write is correct then how does this explain the apprenently
> significant accumulation of merchant capital in the commercial phase of
> capitalism. If there cannot exist, generally speaking, unequal exchange
> as a necessary condition for the development of commodity circulation
> then what was the basis for this accumulation of capital by commercial
> capital?
What I quoted from Marx was a typification presented to wage workers to
explain where the origin of their economic exploitation lies, that is,
whence the source of surplus-value. To do this clearly it was necessary
for Marx to explain, in ideal-typical terms, the labor process under
industrial capital relations, and to explain competing theories away, in
this case the theory that profits arise in unequal exchange as a general
rule: if the source of profits was the result of everybody selling dear
then every seller's gain would be cancelled by his next transaction.
Therefore, in an ideal-typical situation, i.e., on average given ideal
market circumstances, such a claim would represent a contradiction. It is
typical of Marx to use the assumptions of classical political economy,
which are generally pitched in ideal form, to show how that theoretical
system cannot work even on its own ideal terms. This doesn't mean that
unequal exchange does not go on, of course; and all of the different forms
of labor productive inputs, monopoly arrangements, as has been noted, and
myriad other complexities, must be kept in mind as real constituents of
concrete historical systems.
But, all that aside, I am not sure, given the character of other
contributions to this thread, that people will find this particular point
all that relevant, Rebecca. "Unequal exchange" as it is being discussed
here, I think (and I have not been following the thread that closely), is
in reference to the theory presented by Arghiri Emmanuel in the early
1970s as a theory to explain uneven development of the world economy,
namely, why rich nations keep getting richer and why poor nations keep
getting poorer.
As for your question on commercial capital, I will give that one a shot.
Before doing so, it should be emphasized that equal exchange in the
typification that Marx developed in Value, Price, and Profit applies to a
particular phase, geography, and sector in the development and expansion
of capitalism. I will say more about this at the end of my post when I
talk about accumulation. I emphasize this now because my discussion of
commercial capital also proceeds from the same object of analysis.
According to Marx, commercial capital is one form of merchant or trading
capital, the other form being money-dealing capital. Commodity capital
becomes either one of these as a "transitional phase" of capital. In
Capital, Volume III, Marx defines commercial capital as the transformed
portion of circulation capital that is always found in the market, "in the
course of its metamorphosis," and "perpetually confined to the circulation
sphere." By demanding that we understand commercial capital in relation to
the larger set of economic relations in which it is embedded - note the
explicitly transitive terminology, e.g., "metamorphosis" - Marx is urging
us to think dialectically. He uses this reasoning to pierce through the
illusion that commercial capital somehow represents a form of capital
independent from productive capital. The point Marx makes is that although
commercial capital has the character of an independently functioning
capital, if who sold the commodity was an agent of the producer himself,
rather than as the merchant capitalist, it would appear at once as only a
particular form of capital at a particular phase in the reproduction
process. It is, therefore, to confuse matters to suppose that only because
this form exists in the sphere of circulation that it is somehow
independent from the production cycle. (Actually, this does sort of bear
in a far sort of way on the uneven exchange conversation, since as I
recall Bettelheim criticizes Emmanuel for dislodging the circulation
process, i.e., the exchange relations in the market, from the context of
production relations.)
The confusion comes in here: Because the merchant (or commercial)
capitalist turns a profit, but does not purchase (not directly, anyway)
labor-power or otherwise directly extract surplus labor; the merchant
capitalist never invests in productive capital. How does the merchant
(commercial capitalist) make his profits? Marx contends that like any
other capitalist, the merchant capitalist appears on the market bearing
money capital that he advances to turn a profit. He buys commodities and
sells them. But because it is a step removed from the end result of
production, it does not appear tied to the production of surplus-value,
and so it seems a contradiction is found: if commodities sell, on average,
at their values, how is it possible that the profit the merchant
capitalist takes has its origin in surplus-value? After all, from the
point of view of the producer, hasn't the owner of productive capital
realized his profit with his sale of commodities to the merchant? Is this
unequal exchange?
Ah, but the commodity, from *its* point of view (so to speak), has not
been sold for itself, i.e., it remains a commodity still in the process of
exchange. From the point of view of the reproduction of total social
capital, the commodity has simply changed owners. It is in the hands of
the merchant and not the capitalist, but it retains its character as
commodity capital because it has not yet been consumed (finally sold).
Therefore, although the commodity dealer valorizes his money as trading
capital, Marx emphasizes that we must put that to one side in the ultimate
analysis, because adopting that point of view mystifies the reality that
commercial capital is the producer's commodity capital that must enter the
circuit and be transformed into money. Commodity capital still must
"perform its function as commodity capital on the market." The difference
between the producer's commodities he sells to the merchant, and the
merchant's commodities that he sells to the consumer, is only a matter of
an extra (and theoretically unnecessary) phase of transformation, where
"instead of being an incidental operation carried out by the producer
himself, this function now appears as the exclusive operation of a
particular species of capitalist, the merchant, and acquires independence
as the business of a particular capitalist investment."
Let's go into this a little deeper, because, still, there is more money
to be explained at the end of the process than was there at the beginning
of the process; to quote Marx: "the merchant buys a commodity and later
sells it: M-C-M'." This is the equation for expanding capital.
Marx explains this by appealing to the essential difference between the
producer and the merchant (an illusory difference from the perspective of
total social capital, but real within the specific forms of capital
compared): the difference is that what the producer buys is not what he
sells; this is not the case for the merchant because in the sphere of
circulation involving commercial capital, the commodity is sold twice (and
more times than this potentially). Through the reasoning presented below,
Marx concludes that the commodity is not "definitively sold," that the
merchant is "only continuing the operation of sale - or the facilitation
of the commodity capital's function."
[I]t is precisely through this repeated sale, the double change of
place of the same commodity, that the money advanced by the
first buyer for the purchase of the commodity effects its return
to him. In the case, C'-M-C, the same money's double change of
place makes it possible for the commodity to be alienated in one
shape and appropriated in another. In the case M-C-M', the double
change of place of the same commodity makes it possible for the
money advanced to be withdrawn from circulation again. All of
this shows precisely that the commodity has not yet been
definitively sold when it passes from the hands of the producer
into those of the merchant, and that the latter is only continuing
the operation of sale - or the facilitation of the commodity
capital's function. It also shows at the same time how what was
for the productive capitalist C-M, simply a function of his
capital in its transient shape of commodity capital, is for the
merchant M-C-M', a particular valorization of the money capital he
has advanced. One phase of the commodity's metamorphosis now
exhibits itself; with respect to the merchant, as M-C-M', i.e.,
as the evolution of a specific kind of capital.
Thus it is a "transient shape" of the commodity capital, and is a
particular valorization of the money the merchant advanced. It is the
merchant who has definitively sold the commodity. The merchant becomes
part of the circuit, one of the steps completing the process. This
development is functional for capitalism because: "as a result of the
division of labour, the capital that is exclusively concerned with buying
and selling is smaller than it would be if the capitalist had to conduct
the entire commercial part of the business himself." The commercial
capitalist is an independent extension of the producer, a role that could
theoretically be met by an agent of the producer, but only inefficiently
for the real system as a whole. Also, because the merchant concentrates on
his side of the business, and because he is buying up the producer's
commodities, the producer is able to convert capital more quickly, it
completes is "metamorphosis" more rapidly, and this the whole system is
reproduced and expanded that much faster.
I quote a conclusion by Marx:
Commercial capital, in so far as it exists in the form of
commodity capital - and what we are considering here is the
reproduction process of the entire social capital - is evidently
nothing more than the part of industrial capital that is still on
the market and engaged in its process of metamorphosis. This money
exists and functions as commodity capital. Thus it is only the
*money* capital advanced by the merchant, the money capital
exclusively designated for buying and selling, which never assumes
any other form than that of commodity capital and money capital,
never assumes that of productive capital, and remains for ever
penned into capital's circulation sphere....
Note again that Marx is talking about the reproduction of the whole social
capital. "Commercial capital is nothing more than capital functioning with
the circulation sphere. The circulation process is one phase in the
reproduction process as a whole." You can already see, Rebecca, how you
have conceptually and erroneously lifted commercial capital out of its
relations.
To pull out of all this perhaps the essential point, Marx writes: "But in
the process of circulation, no value is produced, and thus also no
surplus-value. The same value simply undergoes changes of form." This
point is crucial. Surplus-value, according to Marx's theory, can only be
generated in production, through the exploitation of some labor input
whose productions are destined for capitalist markets. So to explain the
M-C-M' process in commercial capital, it must be understood in terms of
the production relations that it moves over the top of, and it moves over
the top of many different production stages in the development of the
capitalist economy.
The error I think you have made, Rebecca, is failing to situate commercial
capital, a relation specific to the sphere of circulation, in the
productive relations that underpin it. Commercial capital, since it does
not invest in productive capital, must have a commodity source to tap for
commodities to circulate, which means that productive capital, and its
transitional form, commodity capital, are presupposed. You have, it
appears, separated out aspects of capital and staged them temporally,
rather than conceptualized them dialectically, as a moving unity.
Now, part of your question concerns accumulation; you want to tie in your
perceived demand that, for accumulation to be possible, equal exchange in
commmodities must be generalized and surplus-value under wage-labor also
must be generalized. But accumulation operates differently depending on
the point in the development of capitalism one wishes to look at: in
primitive accumulation, wage-labor is created; under articulation with
precapitalist modes in colonized societies, accumulation is used to expand
the production of primary commodities (raw materials); in manufacture, the
capitalist accumulates to pay wages; in machinery and machinofacture,
fixed capital is objectified through accumulation. It is this later point
in development that Marx analyzes in-depth in Capital (although he
analyzes the other forms, too), and all of its attendant social problems,
such as the surplus labor population. However, this more advanced form of
accumulation should not be taken as the theoretically necessary form and
projected back upon earlier stages, regions, and sectors in the
development of capitalism (although abstractions from it can be used as
analytical tools to understand earlier forms). This is an incorrect
method.
One other thing. Merchant capital(ism) is independent enough in its sphere
(circulation) to attach itself like a parasite onto all sorts of modes of
production. It has been historically argued that, unlike its relationship
with productive capital, where viewed by Marx from the standpoint of total
social capital reproduction it is a dependent and transitional form of
capital, in articulation with other modes of production it remains
external, thus tapping the commodities generated by precapitalist
exploitative relations, whatever these might be (and certainly this has a
bearing on the unequal exchange discussion). However, to the degree that
such external economic activity over time conditions and determines the
character of the precapitalist mode of production one must reconsider the
degree of externality of merchant capital to these modes of production. I
would argue that a considerable time ago, while this may have been true
initially, historically, it became inappropriate to conceptualize
commercial capital as external to precapitalist (or backward,
underdevelopment, etc.) modes of production. And there is the matter of
superficial "precapitalist" modes of production that developed internally
the capitalist economy, wherein merchant capital can be misconceived as
external.
Peace,
Andy