Is merchant's capital really capital?

[Halleluhwah]

I've been trying to study marxian economic theory, but I'm very confused about mercantile capital, specifically its designation as capital.

In Chapter VI of Capital, Volume I, Marx writes:
"Yet we know by experience that a circulation of commodities relatively primitive, suffices for the production of all these forms. Otherwise with capital. The historic conditions of its existence are by no means given with the mere circulation of money and commodities. It can spring into life only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world's history. Capital, therefore, announces from its first appearance a new epoch in the process of social production."

Elsewhere, Marx makes other indications that capital and wage labor are interdependent.

Is 'mercantile capital' a misnomer? In Ernest Mandel's Introduction to Marxist Economic Theory, he states that "Capital is far older than the capitalist mode of production. The former probably goes back some 3,000 years, whereas the latter is barely 200 years old. What form does capital take in precapitalist society? It is basically usury capital and merchant or commercial capital."

When I once asked this question, I was told that in some sense it is capital, but in another sense it isn't, or in other words, mercantile capital is kind of capital, but not really. While Marx can be difficult to understand, once I realize what he's saying, he rarely comes across as equivocal or self-contradictory. However, it seems like the definition of capital changes throughout his and other Marxists' works. What am I missing?

Also, I hope this is the right forum for this thread.

[Luís Henrique]

I've been trying to study marxian economic theory, but I'm very confused about mercantile capital, specifically its designation as capital.

In Chapter VI of Capital, Volume I, Marx writes:
"Yet we know by experience that a circulation of commodities relatively primitive, suffices for the production of all these forms. Otherwise with capital. The historic conditions of its existence are by no means given with the mere circulation of money and commodities. It can spring into life only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world's history. Capital, therefore, announces from its first appearance a new epoch in the process of social production."

Elsewhere, Marx makes other indications that capital and wage labor are interdependent.

Is 'mercantile capital' a misnomer? In Ernest Mandel's Introduction to Marxist Economic Theory, he states that "Capital is far older than the capitalist mode of production. The former probably goes back some 3,000 years, whereas the latter is barely 200 years old. What form does capital take in precapitalist society? It is basically usury capital and merchant or commercial capital."

When I once asked this question, I was told that in some sense it is capital, but in another sense it isn't, or in other words, mercantile capital is kind of capital, but not really. While Marx can be difficult to understand, once I realize what he's saying, he rarely comes across as equivocal or self-contradictory. However, it seems like the definition of capital changes throughout his and other Marxists' works. What am I missing?

Also, I hope this is the right forum for this thread.

In a letter to Engels (http://www.marxists.org/archive/marx/works/1858/letters/58_04_02.htm), dated April 2, 1858, Marx writes:


c) Money qua money. This is a development of the formula M-C-C-M. Money, the independent existence of value as opposed to circulation; material existence of abstract wealth. Already manifested in circulation in so far as it appears, not only as a means of circulation, but as realising price. In this capacity c), in which a) and b) appear to be no more than functions, money is the universal commodity of contracts (here the variability of its value acquires importance: value being determined by labour time); it becomes an object of hoarding. (This would still seem to be an important function in Asia, as formerly in the ancient world and in the Middle Ages generally. Now persists only in a subordinate capacity within the banking system. In times of crisis money in this form again acquires importance. In this form money considered along with the world-historical delusions which it engenders, etc. Destructive properties, etc.) As the realisation of all higher forms in which value will appear; definitive forms in which all relations of value are externally concluded. Money, however, once fixed in this form, ceases to be an economic relation which is lost in its material medium, gold and silver. On the other hand, in so far as money comes into circulation and is again exchanged for C, the final process, the consumption of the commodity, again falls outside the economic relation. The principle of self-reproduction is not intrinsic to simple money circulation, which therefore implies something extrinsic to itself. Implicit in money — as the elaboration of its definitions shows — is the postulate capital, i.e. value entering into and maintaining itself in circulation, of which it is at the same time the prerequisite. This transition also historical. The antediluvian form of capital is commercial capital, which always generates money. At the same time the emergence of real capital, either from money or merchant capital, which gains control of production.

It would seem that Marx distinguishes here two sences of the word "capital", one more general (in which pre-capitalist commercial capital counts as capital, albeit in an "antediluvian form"), and other more restrict, in which pre-capitalist commercial capital isn't "real capital", which necessarily "gains the control of production".

So it seems that those who told you that "in some sense [commercial capital] is capital, but in another sense it isn't" are strictly speaking correct, though failing to be really informative. In one sence, it is capital in general, as money that begets more money; in another sence, it is not capital strictu sensu, as it does not operates such increase in the process of production. (Pre-capitalist commercial capital relies in some kind of actual fraud, buying below actual value and/or selling above actual value, on contrary to "real capital" that buys and sells by the actual value. This, I think, is the reason why pre-capitalist commercial capital usually relies on long distance trade: because the actual value of a (say) European commodity would be unknown to the (say) Chinese, and the actual value of a Chinese commodity would be unknown to the Europeans, thus allowing the merchants to cheat.)

Luís Henrique

[Teacher]

Merchants and trade have probably existed since the Neolithic Revolution, much longer than capitalism. The Mesopotamian civilizations conducted limited long-distance trade with the the Harappan cities in modern day Pakistan and India.

Commerce does not equal capitalism. There is a sort of debate about this among Marxists -- I would suggest Ellen Meiksins Wood's Origins of Capitalism which has an overview of the debate.