from the books: Capital, vol. 1, 1867, Ch. 4, Karl Marx and A Companion to Marx’s Capital, 2010, David Harvey

(Money-Commodity-Money) x (irony)


Key: (page numbers for Penguin Classics edition of Capital), [page numbers for David Harvey’s Companion to Capital]


Chapter 4: The General Formula for Capital


  • (247) Capital starts with circulation of commodities
    • Production of commodities and their circulation in developed form: trade
    • World trade begins in 16th century
    • Money (ultimate product of commodity circulation) is the first form of appearance of capital
  • Capital first confronts landed property in the form of money
    • In form of monetary wealth, merchants’ capital and usurers’ capital
    • All new capital steps onto the stage (i.e. onto the market) in the shape of money, money that has to be shaped into capital by definite processes
  • First distinction between money as money and money as capital: nothing more than a difference in their form of circulation
    • (248) I.e. “money as money” = C-M-C, while “money as capital” = M-C-M
    • Money described in the “buy in order to sell” logic of M-C-M is capital
  • M-C-M eventually distills down to M-M
    • Example: I buy 2,000 lbs of cotton for $100. I sell the cotton for $110. I exchanged $100 for $110 — or, money for money
  • First task of chapter: to characterize the formal distinctions between C-M-C and M-C-M, which will provide us with the difference in content that lies behind these formal distinctions
    • In common: can be divided into same 2 antithetical phases: C-M and M-C
      • (249) Here, same material elements, as well as same dramatis personae (i.e. a buyer and a seller) confront each other
      • Unity of these same 2 antithetical phases is mediated by emergence of 3 participants in a contract:
        1. One only sells
        2. One only buys
        3. A third both buys and sells
  • (250) In M-C-M, money isn’t spent, but advanced
    • Reflux of money: in M-C-M, money flows back into its original position; profit doesn’t determine this reflux
    • This reflux is a palpable difference between money as capital and money as money
  • C-M-C: its final phase is that of consumption, in which the commodity falls out of circulation
    • Consumption: the satisfaction of needs, or use-value
  • But M-C-M proceeds from the extreme of money, only to end with money
    • Its driving/motivating force is exchange-value
  • (251) M-C-M is a tautology, since beginning and ending with the universal equivalent involves no qualitatively different use-values
    • (because money is precisely the converted form of commodities, in which their particular use-values have been extinguished)
    • As purposeless as it is absurd
  • (Footnote #4 on pp 251: MacCulloch: “Every transaction in which an individual buys produce in order to sell it again is in fact a speculation”)
    • One sum of money is distinguishable from another only by the amount
  • (252) The complete form of M-C-M is M-C-M` (notice the ` , or “prime”), where M` = M + ΔM
    • Surplus value: this increment (i.e. ΔM) or excess over the original value
      • German word that Marx uses in conjunction with surplus value and with no English translation: Verwertung/ “verwertet sich”
    • “The value originally advanced not only remains intact while in circulation, but increases its magnitude, adds to itself a surplus-value,” which converts it into capital
  • Can get similar change in the value exchanged with C-M-C, but “the fact that two commodities are equivalents does not deprive the process of all sense and meaning — it’s rather a necessary condition of its normal use”
  • (253) Once spend, the $110 is no longer capital; sitting as a hoard until Judgment Day, it can’t approach “absolute wealth” as it wants to
    • “Therefore, the final result of each separate cycle, in which a purchase and consequent sale are completed, forms of itself the starting point of a new cycle”
  • (254) “As the conscious bearer [Träger] of this movement, the possessor of money becomes a capitalist”
    • Neither the accruement of use-vales nor the immediate profit are the capitalist’s end-goal
      • Rather, his/her goal is “the unceasing movement of profit-making”
  • (255) Monetary form, which the value of commodities assumes in simple circulation (C-M-C), “does nothing but mediate the exchange of commodities, and it vanishes in the final result of the movement”
    • On the other hand: in M-C-M, both the money AND the commodity function only as different modes of existence of value itself
      • Money = general mode of existence of value
      • Commodity = particular, or disguised form
  • “In truth, value is the subject of a process in which, while constantly assuming the form in turn of money and commodities, it changes its own magnitude, throws off surplus-value from itself considered as original value, and thus valorizes itself independently
  • (256) “The capitalist knows that all commodities, however tattered they may look, or however badly they may smell, are in faith and in truth money, are by nature circumcised Jews (Yikes, Marx…) and, what’s more, a wonderful means for making still more money out of money”
  • Value in M-C-M presents itself as a self-moving substance which passes through a process of its own, and for which commodities and money are both mere forms
    • Instead of representing relations of commodities, value enters into a private relation with itself
    • It differentiates itself as original value from itself as surplus-value, just as God the Father differentiates himself from himself as God the Son
      • Although both are of the same age and form, in fact one single person
      • For only by the surplus-value of $10 does the $100 originally advanced become capital
      • And as soon as this has happened, as soon as the son has been created and, through the son, the Father, their difference vanishes again, and both become one, $110
  • [87] Marx starts chapter 4 by looking at how capital historically confronted the power of landed property in the transition from feudalism to capitalism
    • Merchant’s capital and usurer’s capital (specific forms) payed an important historical role
    • These forms are different from industrial capitalism, the central subject of a fully developed capitalist mode of production
    • Dissolution of feudal form — dissolution of the power of landed property and feudal land control, was largely accomplished through merchant capital and usury
  • [88] For Marx, capital is not a thing, but a process, a process specifically of the circulation of values
    • This processual definition of capital is key, and it varies greatly from classical liberal political economists
      • [89] Classic: capital is a stock of assets (machines, money, etc.)
      • Conventional economists: capital is a thing-like factor of production
      • But they can’t analyze it, and so label it “K” and inject it into their equations
    • For Marx, capital is money used in a certain way
  • The Capitalist produces use-values only in order to gain exchange-values
  • Capital is value in motion
  • [91] Most important moment in the M-C-M process is the money moment, M-M
    • “Because money is the universal representation and ultimate measure of value, it is therefore only at the money moment — a moment of capitalist universality — that we can tell where we are in relation to value and surplus-value

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