Spring 1999

Capital, Volume 3

Part 4: Merchant's capital and stages of imperialism


Part 4 is about merchant's capital, which is divided into two forms or subspecies: commercial capital and money capital.  "Commercial capital ... is nothing but the transformed form of a portion of ... circulation capital which is always to be found on the market, in the course of its metamorphosis, and perpetually confined to the circulation sphere" (380).  Money capital involves simply trading in the money commodity, that is, money-dealing, borrowing and lending, and so forth.  Marx’s primary task in this Part is to understand the source of the profits of merchant capital or commercial capital.  These profits are paradoxical because commenrcial capital produces no value. 

Read p. 392 top: “Commercial capital is nothing . . . already existed in the commodity.”

This is an extension of the labor theory of value.  Marx resolves the paradox by claiming that commercial capital shares a portion of the profit of industrial capital.  It has an indirect relationship to surplus value.

Read p. 392 bottom: “In so far as it contributes . . . the surplus value he produces.”

Read p. 407 mid: “Commercial capital’s relationship to surplus-value . . . industrial capital to itself.”

Now, the thorny question of wage-laborers employed by commercial capital: “they directly produce profit for their employers, even though they do not directly produce surplus value” (p. 407).  The emphasis is on directly and indirectly here.  The answer to this paradox is that these workers indirectly produce surplus value, since their labor substitutes in a way for that of workers in production.

Read p. 414 mid: “What he bring in is a function not of any direct creation of surplus-value but of his assistance . . . he performs labour (part of it unpaid).”

            Marx’s central point in all this is that industrial capital is dominant over commercial capital.

Read p. 419 mid: “Despite the autonomy it has acquired . . . within the criculation sphere.”

Commerical capital is dependent on industrial capital.  Dependent here means precisely that industrial capital is the primary agent that determines the general rate of profit and hence prices.

Read p. 421 bot: “The two limits to his sale price . . . no control over either.”

Mystified standpoint of commercial capital.  Actual inner movement vs. apparent movement (p. 428).


            What I find most interesting about this part of the book is the final chapter, Chapter 20 on the historical shift in the role and importance of merchant's capital, which corresponds, from my perspective, to a theory of stages of European imperialism.  Like Part 8 on Primitive Accumulation in Vol. 1, this is a sort of appendix that presents the historical development that corresponds to the preceding logical devlopment.  The general claim is that in an earlier period circulation and trade were primary over production, or really that merchant's capital dominated productive capital; in the later period, then, circulation and trade (merchant's capital) have been subordinated to productive capital.

Read p. 444 top: “The less develped production . . . specific form of mercantile wealth.”

·Now, it's not quite clear immediately how this shift in priority should be correlated with the passage from a pre-capitalist to a capitalist phase.  Marx says, for example, "In the stages that preceded capitalist society, it was trade that prevailed over industry; in modern [read capitalist] society it is the reverse" (448).  That might lead you to say as soon as an economy becomes capitalist industry becomes prior to trade, but that is not really it.  What is really at question here is not whether an economy is capitalist or not but rather how the dominant capitalist world interacts with the subordinated non-capitalist world.  In other words, it has to do with the form of imperialism.

·The first historical passage Marx links this to is the shift in priority in England from the trading cities such as Liverpool to the manufacturing towns such as Manchester and Birmingham.  This English shift, however, is only a symptom of a more fundamental shift on a world scale.  The primary historical example of the passage that Marx gives is the shift from Holland's dominance in the world economy to England's dominance.  "The history of Holland's decline as the dominant trading nation is the history of the subordination of commercial capital to industrial capital" (451).  Holland gave priority to trading and did not generally transform the mode of production of the subordinate and/or colonial territory.  England, in contrast, because of the priority of industry over trade, tended to destroy the existing mode of production and impose capitalist relations of production (Marx's examples here are India and China).

·I see Holland and England standing in here for two models or stages of imperialism.  The first stage operates primarily by plunder and theft: "Commercial capital, when it holds a dominant position, is thus in all cases a system of plunder" (448).  At this stage the production of the subordinated territory is not transformed; its products are simply stolen.  Dutch and Spanish colonialism might be the appropriate examples of this.  The second stage, in contrast, involves the destruction of the existing production system and the creation of capitalist production at home and in the subordinated territory.  This is an imperialism of formal subsumption and thus is not characterized by theft and plunder but exploitation.  England serves as Marx's example.  So here we have two kinds of capitalist imperialism, one of trade and plunder and the other of industry and formal subsumption, along with an historical tendency that moves from one to the other.

Read p. 455 bot: “The genuine science of modern economics . . . the production process.”