Abstract
Here, Nakatani, Teixeira, and Gomes rigorously expose the co-pertinence and the contradictions between “real” capital and monetary capital in order to highlight their specificities in contemporary capitalism. To achieve this, the authors unpack the concept of capital, in general, and its metamorphoses under autonomous functional forms, putting emphasis on the monetary capital form and its reproduction in the credit system. Thereby is established the foundation of the concept of interest-bearing capital and its fictitious forms, articulated to the analysis of the circulation of the total social capital exposed in the second volume of Capital. Under such a theoretical framework, the elementary ways in which the functional forms of capital manifest themselves in effective reality are unveiled.
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Notes
- 1.
The recent publication of the Manuscripts of 1864–1865 by MEGA2 in the original form as written by Marx, does not appear to be contributing to clearing up doubts about the organization of the material. Although it is a rich material, it will still take some time for scholars of Marx’s work to establish a more conclusive judgment on the structuring Engels gave to the Manuscripts in Volume III of Capital.
- 2.
In the Grundrisse, Marx calls the existence of capital in general “many capitals”; in this text, we prefer to use multiples: “Capital exists and can only exist as many capitals, and its self-determination therefore appears as their reciprocal interaction with one another” (Marx 2015, p. 340). At other times, both in the Grundrisse and in Capital, he calls it private or individual capital.
- 3.
Concerning this, Engels makes an observation on Volume III: “(Marx is not referring at all here to unconvertible paper money; unconvertible banknotes can become general means of circulation only where they are in actual fact supported by the state’s credit, as is the case today in Russia, for example. These therefore fall under the laws of inconvertible state paper money, as already developed: Volume 1, Chapter 3, 2, c: ‘Coin. The Symbol of Value’. F. E.)” (Marx 1991, pp. 656–657).
- 4.
Braga et al. (2017) cite authors who discuss the “financialisation of commodities”, of “housing”, “education”, “urban policy”, “consumption”, “water”, “labour relations”, the “social financialisation”, and so on. With this comprehensive and perhaps abusive use the category (financialisation) tends to lose in heuristic power and analytical rigor.
- 5.
“Capital, as self-accumulating value, does not just comprise class relations, a definite social character that depends on the existence of labour as wage-labour. It is a movement, a circulatory process through different stages, which itself in turn includes three different forms of the circulatory process. Hence it can only be grasped as a movement, and not as a static thing. Those who consider the autonomisation [Verse/bststiindi- gung] of value as a mere abstraction forget that the movement of industrial capital is this abstraction in action. Here value passes through different forms, different movements in which it is both preserved and increases, is valorised” (Marx 1992, p. 185).
- 6.
Rosdolsky discusses the relationship between capital in general and the multiplicity of capitals in Chap. 2 and cites Marx: “Capital in general, as distinct from the particular capitals, does indeed appear (1) only as an abstraction; not an arbitrary abstraction, but an abstraction which grasps the specific characteristics which distinguish capital from all other forms of wealth – or modes in which (social) production develops. These are the aspects common to every capital as such, or which make every specific sum of values into capital. And the distinctions within this abstraction are likewise abstract particularities which characterise every kind of capital, in that it is their position [Position] or negation [Negation]; (2) however, capital in general, as distinct from the particular real capitals, is itself a real existence” (Marx 2015, pp. 375–376).
- 7.
Taking the concept of capital in general as a starting point and agreeing that Marx developed his analysis both in Grundrisse and in the first two volumes of Capital within the framework of that concept, the central argument of the present chapter is developed with emphasis on two levels of abstraction, universality, and singularity. In future works, another way of approaching the theme was an analysis of the financialization process in contemporary capitalism at three levels of abstraction; first, that of capital in general as a universality, the preponderant moment of Volume I; second, that of the autonomous functional forms, particularly emphasizing on Volume II; and finally, Volume III, as a singularity, a sphere of the forms of existence of capital.
- 8.
In the Introduction to Volume II, Mandel seems to draw an analogy between capital in general and total social capital. “That is why the study of ‘capital in general’ – provisionally abstracted from competition and ‘many capitals’ – encompasses the process of production and the process of circulation both of commodities”, and in the following paragraph, “Marx introduces a new and passionately interesting object of study: the reproduction and (‘turnover’) circulation of the total social capital” (Mandel 1992, p. 16). It is not our intention to study these two categories in this text.
- 9.
“The real circuit of industrial capital in its continuity is therefore not only a unified process of circulation and production, but also a unity of all its three circuits. But it can only be such a unity in so far as each different part of the capital runs in succession through the successive phases of the circuit, can pass over from one phase and one functional form into the other; hence industrial capital, as the whole of these parts, exists simultaneously in its various phases and functions, and thus describes all three circuits at once” (Marx 1992, p. 183).
- 10.
“Industrial capital is the only mode of existence of capital in which not only the appropriation of surplus-value or surplus product, but also its creation, is a function of capital. It thus requires production to be capitalist in character; its existence includes that of the class antagonism between capitalists and wage-labourers” (Marx 1992, pp. 135–136).
- 11.
Marx had already demonstrated in Volume I, Part two, “The transformation of Money in to Capital” that added value cannot arise in the circulation. In Volume II he states that, “In order to grasp these forms in their pure state , we must firstly abstract from all aspects that have nothing to do with the change and constitution of the forms as such. We shall therefore assume here, both that commodities are sold at their values, and that the circumstances in which this takes place do not change. We shall also ignore any changes of value that may occur in the course of the cyclical process” (Marx 1992, p. 109).
- 12.
“[I]ts whole movement within the circulation phase, merely forms an interruption, and hence a mediation, between the productive capital that opens the circuit as the first extreme and closes it in the same form as the last extreme, i.e. in the form of its new beginning” (Marx 1992, p. 144).
- 13.
“The general circulation includes the intertwining of the circuits of the various independent fractions of the social capital, i.e. the totality of individual capitals, as well as the circulation of those values that are not placed on the market as capital, in other words those going into individual consumption” (Marx 1992, p. 150).
- 14.
“What differentiates the third form from the two earlier ones is that it is only in this circuit that the accumulated capital value, and not the original capital value that has still to be accumulated, appears as the starting-point of its own accumulation” (Marx 1992, p. 173).
- 15.
“Capital, as self-accumulating value, does not just comprise class relations, a definite social character that depends on the existence of labour as wage-labour. It is a movement, a circulatory process through different stages, which itself in turn includes three different forms of the circulatory process. Hence it can only be grasped as a movement, and not as a static thing” (Marx 1992, p. 185).
- 16.
“What makes this particular act of commodity circulation a part of the whole process with a well-defined function in the independent circuit of an individual capital is not primarily the form of the act, but rather its material content, the specific use character of the commodities that change place with money” (Marx 1992, p. 110).
- 17.
In contemporary capitalism, this interlocking operation of multiple capitals already occurs on a worldwide scale, with the production of parts and components in one country and assembly in other countries. Here, we would like to draw attention to the debate on capital in general and competition within multiple capital cities. At the most concrete level, while the functioning of private capital requires its intertwining and reciprocal needs, it also requires sustained competition between them.
- 18.
“In considering the general forms of the circuit, and throughout this second volume in general, we take money to be metal money, excluding symbolic money, mere tokens of value which are specific to particular countries, as well as credit money, which we have not yet developed” (Marx 1992, p. 192), and “the interest and credit categories still do not appear systematically developed (this only occurs in Volume III), which is why Marx needs to presuppose the existence of treasures” (Heinrich 2014, p. 21).
- 19.
The conversion of commercial banks to multiple banks was the result of the Glass Steagall Act of 1933, which separated the functions of commercial banks from investment banks. After its repeal in 1999, banks began to integrate into their activities not only those of commercial banks, but all other financial activities and this was becoming widespread for the whole world. The most important issue in this transformation was the secondary creation of the credit currency, which was totally unrelated to bank deposits and reserves.
- 20.
The role played by these funds can be found in Chesnais (2005), in particular in the writings of Catherine Sauviat, Dominique Plihon, Luc Manpaey, and Claude Serfati.
- 21.
“This finding leads to a picture that this is due to the ‘demands of finance’ (the famous 15%)” (Husson 2010, p. 321).
- 22.
One of the ways was, and still is, the famous agreement of corporations’ administrators with the stock-options clause. The contractor receives the option to purchase shares of the company in the future at the price of the contract day. Thus, the higher the shares price of that individual capital, the greater the gain to be obtained. This option was disseminated to the level of the company’s employees in order to obtain a greater mass of added value, it also produced immense fraud.
- 23.
“The collective worker in department I has sold his labour-power to the collective capitalist (…); he receives this value paid in money in the form of a wage” (Marx 1992, p. 516). And also, “we can see that each individual capitalist, just like the totality of all capitalists in each particular sphere of production, participates in the exploitation of the entire working class by capital as a whole, and in the level of this exploitation” (Marx 1991, p. 298).
- 24.
See Chap. 4 on virtual currencies.
- 25.
A quarter of a century ago, Joel Kurtzman published a volume he called “The death of money: how the electronic economy has destabilised world markets and created financial chaos” (Kurtzman 1994).
- 26.
The function of world money began to be exercised by the US dollar, convertible into gold, after the Bretton Woods Agreement in 1944, and became unconvertable from 1971.
- 27.
We consider that the separation of public and private is misplaced for the understanding of the movement of capital. In its metamorphosis, capital moves continuously between the public and private spheres, between business families and government, either through the credit system, through financing mechanisms, or through government operational expenditures.
- 28.
- 29.
Reserves generally consist of a small amount of gold and major currencies, such as the dollar, euro, sterling, and yen. But currency reserves are usually in debt securities denominated in their respective currencies, particularly US Treasury in the case of the dollar. Thus, they are in the form of interest-bearing capital in the fictitious form of public debt securities.
- 30.
Central banks carry out other functions, one of these is as the lenders of last resort, which we do not deal with in this text.
- 31.
It should be noted that in each specific circumstance in which the laws regulate a greater or lesser opening of the foreign exchange market, then a greater or smaller part of these operations is carried out by the banking system.
- 32.
The whole technical process of monetary creation by the banking system is called the fractional reserve system. Reserves, called compulsory reserves, are usually a percentage of demand deposits set by central banks. According to conventional monetary theory, this rate determines the magnitude of the monetary multiplier, that is, how often each monetary unit created by the central bank is secondarily multiplied by the commercial banks. If the rate is 100%, the multiplier is zero and if it is 0%, the multiplier is infinite. Currently, in several countries, central banks no longer require a compulsory reserve.
- 33.
This mechanism worked in an analogous way in the nineteenth century, but much less developed than in the contemporary world. “The amount of notes in circulation is governed by the needs of commerce, and each superfluous note immediately finds its way back to its issuer” (Marx 1991, p. 657).
- 34.
Banks can also operate in other markets of the credit system, such as stock exchanges.
- 35.
“The greater part of banker’s capital is therefore purely fictitious” (Marx 1991, p. 600).
- 36.
We refer here to the political, social, ideological, and even psychological or psychoanalytic dimensions in the course of the class struggle and the accumulation of capital in general and private capitals.
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Nakatani, P., Teixeira, A.L.A., Gomes, H. (2019). Financialization and the Contradictory Unity Between the Real and Financial Dimensions of Capital Accumulation. In: Mello, G., Sabadini, M. (eds) Financial Speculation and Fictitious Profits. Marx, Engels, and Marxisms. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-23360-0_5
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