as long as it permits the capitalist to procure the surplus-value. The aim of the capitalist is, rather unsurprisingly, the “unceasing movement of profit-making” (254). This sounds like the plot of Balzac’s Eugenie Grandet!
This boundless drive for enrichment, this passionate chase after value, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The ceaseless augmentation of value, which the miser seeks to attain by saving his money from circulation, is achieved by the more acute capitalist by means of throwing his money again and again into circulation. (254)
Capital is, therefore, value in motion. But it is value-in-motion that appears in different forms. “If we pin down the specific forms of appearance”—notice this phrase again—“assumed in turn by self-valorizing value in the course of its life, we reach the following elucidation: capital is money, capital is commodities” (255). Marx now makes the process definition of capital explicit:
In truth, however, value is here 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. For the movement in the course of which it adds surplus-value is its own movement, its valorization is therefore self-valorization … By virtue of being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or at least lays golden eggs. (255)
Of course, Marx is being heavily ironic here. I mention this because I once read a dissertation that took the magical qualities of self-expansion ascribed to capital seriously. In this dense text, it is often rather too easy to miss the irony. In this instance, the “occult” qualities of capital and its seemingly magical capacity to lay “golden eggs” exist only in the realm of appearance. But it is not hard to see how this fetish construct could be taken for real—a capitalist system of production depends on this very fiction, as we saw in chapter 1. You put money in a savings account, and at the end of the year it has grown. Do you ever ask yourself where the growth came from? The tendency is to assume that this expansion simply belongs to the nature of money. We have, of course, seen periods when the savings rate has been negative, i.e., when inflation has been so high and interest rates so low that the net return to the saver had been negative (as is the case now, in 2008). But it does really appear as if your money in the bank inherently grows at the rate of interest. Marx wants to know what is hidden behind the fetish. This is the mystery that has to be solved.
There is, he says, one moment in this circulation process that we always come back to and that therefore appears to be more important than the others, and that is the money moment: M-M. Why? Because money is the universal representation and ultimate measure of value. It is therefore only at the money moment—the moment of capitalist universality—that we can tell where we are in relation to value and surplus-value. It’s hard to tell that just looking at the particularity of commodities. “Money therefore forms the starting-point and the conclusion of every valorization process” (255). In Marx’s example, the conclusion should yield ₤110 from the ₤100 the capitalist started out with:
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, and, what is more, a wonderful means for making still more money out of money. (256)
Remarks of this sort have been grist for a significant debate over Marx’s supposed anti-Semitism. It is indeed perfectly true that these kinds of phrases crop up periodically. The context of the time was one of widespread anti-Semitism (e.g., the portrayal of Fagin in Dickens’s Oliver Twist). So you can either conclude that Marx, coming from a Jewish family that converted for job-holding reasons, was subconsciously going against his past or unthinkingly echoing the prejudices of his time, or, at least in this case, you can conclude that his intent is to take all the opprobrium that was typically cast on Jews and to say that it really should be assigned to the capitalist as a capitalist. I will leave you to your own conclusions on that.
Back in the text we find Marx still chipping away at the fetishistic surface appearance:
But now, in the circulation M-C-M, value suddenly 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. But there is more to come: instead of simply representing the relations of commodities, it now enters into a private relationship with itself, as it were. It differentiates itself as original value from itself as surplus-value, just as God the Father differentiates himself from himself as God the Son … Value therefore now becomes value in process, money in process, and, as such, capital. (256)
That’s the next step in the fundamental definition of capital: value in process, money in process. And how different this is from capital as a fixed stock of assets or a factor of production. (Yet it is Marx, not the economists, who gets criticized for supposedly static “structural” formulations!) Capital “comes out of circulation, enters into it again, preserves and multiplies itself within circulation, emerges from it with an increased size, and starts the same cycle again and again” (256). The powerful sense of flow is palpable. Capital is process, and that is that.
Marx briefly returns to merchants’ capital and usurers’ capital (his historical, rather than logical, starting point). While industrial capital is what he is really concerned with, he has to recognize that there are these other forms of circulation—merchants’ capital (buying cheap in order to sell dear) and interest-bearing capital, through which a seeming self-expansion of value can also be accomplished. So we see different possibilities: industrial, merchant and interest-bearing capital, all of which have the M-C-M + ΔM form of circulation. This form of circulation, he concludes, is “the general formula for capital, in the form in which it appears directly in the sphere of circulation” (257). It is this form of circulation that has to be put under the microscope and scrutinized in order to demystify its “occult” qualities. So: does capital lay its own golden eggs?
CHAPTER 5: CONTRADICTIONS IN THE GENERAL FORMULA
Marx begins the search for an answer by examining the contradictions within the M-C-M + ΔM form of circulation. The fundamental question is quite simply this: where does the increment, the surplus-value, come from? The rules and laws of exchange in their pure form (as presupposed in utopian liberalism) say there has to be a rule of equivalence in the transitions from M to C and in C to M. Surplus-value cannot, therefore, be derived from exchange in its pure form. “Where equality exists there is not gain.” In practice, of course, “it is true that commodities may be sold at prices which diverge from their values, but this divergence appears as an infringement of the laws governing the exchange of commodities.” These laws are those presupposed in the classical political-economic model of perfectly functioning markets. “In its pure form, the exchange of commodities is an exchange of equivalents, and thus it is not a method of increasing value” (260–1).
Faced with this conundrum, the capitalists and their economists, like Condillac, tried to attribute the increase to the field of use-values. But Marx rejects this. You can’t suddenly appeal to use-values to cure a problem that derives from the equivalence of exchange-values.
If commodities, or commodities and money, of equal exchange-value, and consequently equivalents, are exchanged, it is plain that no one abstracts more value from circulation than he throws into it. The formation of surplus-value does not take place. In its pure form, the circulation process necessitates the exchange of equivalents. (262)
But Marx knows full well that “in reality processes do not take place in their pure form” so he then goes on to “assume an exchange of non-equivalents.” This gives rise to a number of possibilities. For one, the seller has “some inexplicable privilege … to sell his commodities above their value.” But this doesn’t work, when you start to think about the relationship between buyers and sellers in generalized markets, any more than it works to say that the buyer has a privilege to purchase commodities below their value. “The formation of surplus-value [cannot] be explained by assuming that commodities are sold above their value,” or “are bought at less than their value” (262–3).
He then briefly