Rebecca: Hi Andy! I have come to the conclusion that it is a waste of time
discussing this issue with you. You engage in continuos long winded
misinterpretation of simple questions I put to the list. I had this problem
with you before. I gave you to a large extent the benefit of the doubt. Now
under the calmer environment there is little difference.
My hope of getting serious discussion on these issues with you has been
dashed. I would just rather leave things as they are. Perhaps in the future
things will change.
Rebecca
Hi Rebecca. I hope I can answer your question in this post. I started off
this post with only a few comments in mind, but the post expanded quickly.
I apologize for the length of the post.
I think you have to be clear about whether you mean capital (a) in
general, as that which permits its owner to generate an income, this being
capital that exists in any age and in every social formation, or (b)
specifically, capital as a social relation specific to capitalism. If it
is the latter, then we must emphasize that a discussion about capital's
character and function cannot be disembedded from the capitalist relations
of production that determine its character and function; it is in these
historical relations that capital takes on the character of capital in the
capitalist sense. It is true that the latter definition subsumes much of
the general character of the former; but it transforms the meaning in
terms of historical specificity. And this is not just true of capitalism;
the same contextualization is demanded if you want to analyze capital in
another mode of production, e.g., under feudalism. (Although, in the
precapitalist cases, commercial capital generally has a much more real
independent existence than it does under capitalist relations. More on
this later.)
If we are to proceed on the grounds of Marxian method, we must be very
clear about this, Rebecca; because if you mean capital in the second sense
(capital as a social relations specific to capitalism), and it appears you
do implicitly by the way you are treating commercial capital (hence my
criticism that you are abstracting and setting temporally against each
another two simultaneously occurring forms of capital), then you already
assume capitalist relations of production. This was the purpose of my
rhetorical questions in the last post: if you already assume capitalist
relations of production, then what is your question really trying to get
at? I don't think you recognize the implicit assumption running through
your question. In its present form the question is illogical, since it is
asking the list how it is possible for commercial capital, with the
character of commercial capital under capitalist relations, to accumulate
capital outside of capitalist relations or before such relations existed.
And no general character of commercial capital is expressed in your posts
(or else there would be no need to ask the question). I want you to
understand what you are doing: you are lifting a historically specific
form of capital out of context, retaining all of its historically specific
character, and placing it in a different context, and then asking a
logically disorganized question based on this implicit premise.
To make your question answerable, it must be changed into either one of
following two questions: (1) How does merchant capital accumulate capital
in the context of capitalist relations, i.e., what is the source of and
mechanism through which surplus is produced, appropriated, and
accumulated? This was the question I answered in my previous post. (2) How
does merchant capital accumulate capital outside of capitalist relations,
i.e., what is the source of and mechanism through which this surplus is
produced, appropriated, and accumulated? For this second question I
suggested that rather than try to impose upon precapitalist forms of
social relations Marx's analysis of capital (specifically commercial
capital) in the capitalist-relational context, that you look at the
historical facts about merchant capital and, perhaps using Marx's general
theory of social formation, develop a special theory about capital and
merchants in precapitalist relations. Although commercial capital is more
really independent in precapitalist modes of production, you still must
analyze these precapitalist relations because (a) the character and the
function of the merchant's capital will be conditioned by the context in
which it is embedded and (b) if you want to understand the ultimate source
of wealth that the merchant is accumulating, you must find how labor is
exploited, which, depending on the mode of production (and labor is
exploited in many different production contexts), is accomplished
variably.
But, then again, you might just want to refer to Marx himself, who, in
Capital Volume III, discusses the nature of merchant capital (and
commercial capital) in precapitalist relations. Marx stresses that "not
only trade, but also trading capital, is older than the capitalist mode of
production, and is in fact the oldest historical mode in which capital has
an independent existence." Money-dealing capital (one form of merchant
capital), and "the capital advanced in it, needs nothing more for its
development than the existence of large-scale trade in general, and
subsequently of commercial, commodity-dealing capital, it is only this
latter which we have to deal with now." So, at the most abstract level, to
understand commercial capital in precapitalist relations, one only need
understand merchant capital generally in terms of large-scale trade (a
precondition also for capitalism); and more specifically in terms of the
mode of production to which it is attached. In any case, commercial
capital is always confined to the sphere of circulation, and "its sole
function is to mediate the exchanges of commodities." Therefore, "no
further conditions are needed for [commercial capital's] existence...than
are necessary for the simple circulation of commodities and money." Marx
writes that "[w]hatever mode of production is the basis on which the
products circulating are produced - whether the primitive community, slave
production, small peasant and petty-bourgeois production, or capitalist
production - this in no way alters their character as commodities, and as
commodities they have to go through the exchange process and the changes
of form that accompany it."
Since, Rebecca, according to Marx, "[c]ommercial capital simply mediates
the movement of those extremes, the commodities, as preconditions already
given to it," the question of whence surplus labor is bound up in the
origin of the commodity traded, the existence of which is presupposed in
commercial capital and *whatever the mode of production is where
commercial capital operates*. Commercial capital, its independent claim to
fame being the mediation of exchange, moves over the top of precapitalist
relations. I had hoped you would do this bit of work on your own, but I
think the answer you want is found here (but, then again, like Dorothy
trying to go home, it was there all along). Marx writes: "The extent to
which production goes into trade and passes through the hands of merchants
depends on the mode of production, reaching a maximum with the full
development of capitalist production, where the product is produced simply
as a commodity and not at all as a direct means of subsistence. On the
other hand, whatever the mode of production is the basis, trade promotes
the generation of a surplus product designed to go into exchange, so as to
increase the consumption or the hoards of the producers (which we take
here to mean the owners of the products). It thus gives production a
character oriented more and more towards exchange-value."
Sorry for the long passage, but this is relevant (and I am not sure that
Rebecca has a copy of Volume III).
The metamorphosis of commodities, their movement, consists (1)
materially, in the exchange of different commodities for one
another, (2) formally, in the transformation of commodities into
money, selling, and the transformation of money into commodities,
buying. And the function of commercial capital is reducible to
these functions, the exchange of commodities through buying and
selling. Commercial capital thus simply mediates the exchange of
commodities, though it should be understood right from the start
that this is not just an exchange between the immediate producers.
In the case of the slave relationship, the serf relationship, and
the relationship of tribute (where the primitive community is
under consideration), it is the slaveowner, the feudal lord or the
state receiving tribute that is the owner of the product and
therefore its seller. The merchant buys and sells for many people.
Sales and purchases are concentrated in his hands and in this way
buying and selling cease to be linked with the direct need of the
buyer (as merchant).
But whatever the social organization of the spheres of production
whose commodity exchange the merchant mediates, his wealth always
exists as money wealth and his money always functions as capital.
Its form is always M-C-M'; money, the independent form of
exchange-value, is the starting-point, and the increase of
exchange-value the independent purpose. Commodity exchange itself,
and the operations that mediate it - separated from production and
performed by non-producers - becomes simply a means of increasing
wealth, and not just wealth, but wealth in its general social form
as exchange-value. [...]
The less developed production is, the more monetary wealth is
concentrated in the hands of merchants and appears in the specific
form of mercantile wealth.
Within the capitalist mode of production - i.e., once capital
takes command of production itself and gives it a completely
altered and specific form - commercial capital appears simply as
capital in a *particular* function. In all earlier modes of
production, however, commercial capital rather appears as the
function of capital *par excellence*, and the more so, the more
production is directly the production of the producer's means of
subsistence.
Thus there is no problem at all in understanding why commercial
capital appears as the historic form of capital long before
capital has subjected production to its sway. Its existence, and
its development to a certain level, is itself a historical
precondition for the development of the capitalist mode of
production (1) as a precondition for the concentration of
monetary wealth, and (2) because the capitalist mode of
production presupposes production for trade, wholesale outlet
rather than supply to the individual client, so that a merchant
does not buy simply to satisfy his own personal needs, but rather
concentrates in his act of purchase acts of many. On the other
hand, every development in commercial capital gives production a
character ever more to exchange-value, transforming products more
and more into commodities. Even so, this development, taken by
itself, is insufficient to explain the transition from one mode of
production to the other....
In the context of capitalist production, commercial capital is
demoted from its earlier separate existence, to become a
particular moment of capitalist investment in general, and the
equalization of profits reduced its profit rate to the general
average. It now functions simply as the agent of productive
capital.
>From the beginning, I assumed you meant merchant capital as capitalism,
Rebecca, *because* you were treating it as merchant capital under
capitalism. So I went to Volume III of Capital and explained to you Marx's
theory on the matter. Remember, you wanted to know how, given the
assumption of equal exchange, "the apprenently [sic] significant
accumulation of merchant capital in the commercial phase of capitalism,"
is possible. Volume III has a section specifically on this matter, which I
interpreted thoroughly. The commercial phase of capitalism takes place in
the sphere of circulation, and capital is accumulated by the merchant as
part of the overall circuit of capital, the merchant being an extension of
one of the phases of commodity transformation. When commercial capital
takes place outside of capitalist relations, then one must proceed on the
grounds of the development of a special theory examining the economic
relations of the precapitalist mode of production, whatever this might be.
*But* commercial capital in any mode of production must depend on the
surplus labor of that mode of production for its wealth, since it does not
produce surplus itself. This means that the accumulation of capital
ultimately occurs through the exploitation of some source of labor,
whether this is in capitalist relations or precapitalist relations. It was
not like commercial capital prior to capitalism conjured its wealth from
thin air. The wealth had to come from somewhere, and since the merchant
invests nothing in productive capital, nor does he produce surplus with
his hands, we can reasonably assume that the wealth comes from whatever
mode of production the merchant is attaching himself to.
Your question makes the case that, without the fully developed industrial
capitalist mode of production, none of this can take place. The argument
you have advanced stands not only against Marx's analysis in particular,
which is the perspective you hail from, but it flies in the face of the
general understanding of commercial capital down through history. And note
that during this discussion, neither Marx nor I have said that commodities
on average even in non-capitalist markets are exchanged unequally, that
unequal exchange in markets is the source of profit. What I objected to
was that in arguing for the precondition for equal exchange for the
accumulation of capital in precapitalist modes of production, you carried
over with it and out of context, surplus-value produced by wage-labor. You
made all the conditions of one specific economic system - no, more
accurately, one advanced sector in an economic system, the preconditions
for capital accumulation historically.
In one of your posts you asked this: "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?" The specific basis for accumulation of
capital by commercial capital depends on the mechanism of accumulation of
the mode of production to which the merchant has attached himself. So, if
surplus labor has its source in slave production, then the capital that is
accumulated by the merchant finds its origins in the labor activity of the
slave. The problem of equal exchange is to show that the profits obtained
by the merchant do not arise from unequal exchange, on average, but arise
from the exploitation of some labor source. At one level of abstraction,
if one must presuppose an average equality of exchange in markets for
commodities to be circulated, then one may reasonably make this
presupposition; but the basis for accumulating capital still lies in
surplus labor, and so one also must admit at once that s/he cannot claim
that exploiting labor and capital accumulation only occurs under
capitalist relations. Since this is the case, the merchant accumulates
capital from the exploitation of labor whether in a capitalist economy or
a feudal economy.
The interesting thing about Marx analysis of merchant capital is that it
shows how what appears to be selling dear is in reality, from the view of
total social capital, merely a functional extension of the transformation
of the commodity-form of capital onto money-capital.
I want to reiterate the main point and introduce an important related
matter. In Capital Volume II, Marx emphasizes that in capitalist relations
of production, that productive capital, commodity capital, and money
capital are all, in the relations of capitalism (the two latter to the
sphere of circulation, former to the sphere of production, which Marx
calls "industrial capital"). So, the main point is that one must keep in
mind that it is the capitalist relations that define these movements as a
particular sort capital. Therefore, Rebecca, if you want merchant capital
to be capital in the sense of being *capitalist* then you must have them
moving in a capitalist economy. If you want merchant capital just in the
general sense of a merchant's capacity to generate income, then you have
to do historical analysis about a given social formation to determine the
specific mechanism through which the merchant accumulates capital. Marx
points the way to such an analysis, even generating a cursory analysis of
the matter himself.
Secondly, an important related matter, Marx writes that "other varieties
of capital which appeared previously, within past and declining social
conditions of production, are not only subordinated to [the capitalist
mode of production] and correspondingly altered in the mechanism of their
functioning, but they now move only on its basis, thus live and die, stand
and fall together with this basis." There are several important points to
be made. First, according to Marx, capital exists, in other varieties,
prior to capitalist relations. This must be capital in general, in the
sense of the capacity for generating income. So merchants are accumulating
capital in all manner of contexts, most of which have historically not
been capitalist. Second, these other forms of capital, upon entering into
capitalist relations, become subordinated to capitalist production
relations and they are transformed by them. That is, they are "altered in
the mechanism of their functioning," and become capitalist. Suppose, for
instance, that corvee production becomes subsumed under capitalism; this
production becomes capitalist; the mechanism of its functioning becomes
altered; and surplus labor bound up in commodities for exchange in
capitalist markets becomes surplus-value (see Capital Volume I, Ch. 10,
Sec. 2, for a discussion of how surplus labor becomes surplus-value under
capitalist relations). An important distinction must be made here. There
are other forms of, for example, productive capital that superficially
appear as precapitalist forms. They are often identified as precapitalist
because they resemble forms of capital in other modes of production (which
are themselves very broad abstractions). An example is the productive and
commodity capital of the US slave plantation. One might say that under
capitalist relations this variety of capital becomes capitalist, since it
is subordinated to capitalist relations and its form is altered in this
regard. However, slavery in the US South does not have an independent or
pre-existing existence to the world-economy of which it was a part and
which determined the character of its commodities. Thus, slavery is not
subsumed under capitalist relations like corvee production was in Europe;
and slavery in the US South is only superficially similar to the ancient
slavery mode of production Marx supposed (but never studied). But, in any
case, as Marx emphasizes in Capital Volume I, both slave-labor and
corvee-labor produce surplus-value under capital, since the commodities
generated are exchanged in capitalist markets, they are exchange-values.
And, whether you want to call it surplus, surplus-value, surplus labor, or
so on, capital is accumulated, and it is accumulated in both capitalist
and precapitalist social formations. To specify this further, one can look
the issue of labor and labor power. As you probably know, Rebecca, when
someone cannot exchange the products of labor themselves for income, then
they must exchange their labor power, here the labor activity going to the
objectification of objects controlled and consumed by another. The
exchange of labor can be for wages or for commodities, these use-values
reproducing labor power. And this exchange takes place under variable
conditions of coercion, sometimes directly, as in slavery, or by
necessity, as it is under conditions of wage-labor. (Surely this is a form
of unequal exchange.) The purpose of this relevant matter is to show the
process all the way through given various labor processes as they enter,
one way or another, into the capitalist economy.
The bottom-line is that one must make a clear distinction between the
general forms of capital and labor, and specific forms of capital and
labor. One determines the general in the same fashion that one determines
the general in any other science: through comparison, common
characteristics are abstracted from examination of various specific
species. Each species will have its own special character, and these can
be judged unique by their absence in other species. One can neither
neglect the unique features of a species of social formation nor impose
unique features of a specific social formation upon previous social forms.
If one could do this, then these would not be unique features. Scientific
description and explanation requires that the distinction between the
general and the specific be strictly observed. Among many of the things not
special to capitalism are these: (1) various forms of capital, e.g.,
merchant capital, productive capital, commodity capital; (2) large-scale
trade; (3) surplus labor and exploitation; (4) equal and unequal exchange
(and uneven development); and (5) capital accumulation.
I hope that this helps, Rebecca. If it doesn't, I hope that some other
person can supply you with the answer you desire. I hope you will accept
the critique that accompanies this answer in the spirit it is meant.
Again, I apologize for the length of the post.
Hope all is well,
Andy