Archive for the ‘Capital Volume 1, Part 2: The Transformation of Money into Capital’ Category

What Marx did in the last chapter in reaching the impasse that we currently find ourselves in was of course to deal with, in order to dispense with, the theories of vulgar bourgeois political economy regarding the source of profit (and hence capital). What characterises these theories as a whole is a failure to distinguish between use-value and exchange-value, a failure to see that in the exchange of commodities, while what changes hands is use-value, what is exchanged is value. And since we know that value, although it appears in circulation, arises in production, in that it is the determined by the quantity of labour expended in the production of commodities, we are already close to resolving our problem. We shall see that the conclusion that surplus-value arises in circulation and does not arise in circulation is not such a contradictory finding, for we shall see that surplus-value arises in part in circulation and in part in production, i.e. outside of circulation.

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We have now established that capital is self-valorising value. The killer question now is, established what capital does, how does it do it? Whence the ΔM? But as soon as we ask this question, problems present themselves at every turn.

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I  From the circulation of commodities to capital

Marx begins by making two observations about ‘capital’ (a term he has yet to define). First, he notes that commodity circulation is the starting point and historical presupposition of capital (Marx will say that capital is money – hence the necessity of commodity production, which leads to money – which differentiates itself first from money by the manner of its circulation). Marx clarifies ‘commodity circulation’ as ‘the production of commodities and their circulation in its developed form, namely trade.’ Second, he notes that the modern history of capital starts to unfold from the emergence of world trade and the world market, from the sixteenth century.

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