Posts
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Comment from 'Kumiko':
You are on the right track
generally as far as the theoretical framework goes. But I'd note that in Vol
II, where the analytical assumption of the identity of individual with total
social capital is still in place, Marx 1) divides the total productive capital
into productive-, commodity-, and money-capital circuits, and regards each
independently. Here Marx arrives at the conclusion that the commodity-capital
circuit can be excluded from further consideration for the purpose of the
analysis, that purpose being the determinations of the sources and destinations
of surplus value, the source being found in production, the destination
necessarily being found in money under capitalism. But Marx also notes the
peculiarity of the commodity-capital circuit in that it is the only circuit of
the three to both begin and end "bearing" surplus value. In practice that
could give rise to various interesting arbitrage possibilities for independent
commerce, once the assumption of identity is dropped.
And that brings me to Vol III
Part IV. This is limited to the regard of commercial capital in independent
form. Note also Marx's assumption that independent commercial capital is
scheduled for extinction in the course of the development of capitalist industrial
production. This may be true enough, but the question begged here concerns the
*combined* forms of industrial, commercial and financial capital, these being
the common social aliases for the three circuits mentioned above. You are
correct to dismiss the traditional counter-position of "industry"
with "finance" as if these still exist only in independent form.
Further, one could go on to critique the classical Hilferding formula for
"finance capital" that combines banking with industrial capital as perhaps
only applicable to Germany in a certain historical period, as only a specific
combination of the three circuits. Even if we agree that modern capital nearly
always appears in combined form, we could go on to question the
"balance" in the combination of the three circuits, where one or
another "dominant", with that dominance also fluctuating with the
other circuits over the course of history. And finally we can also question the
"inevitability" of the rise to "dominance" of industrial
capital, particularly in the three different cases of the United States,
Britain and France. Otherwise we would not be speaking of
"deindustrialization" today.
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My reply:
I agree with your remarks more
than might appear at first sight. My focus in the book (and the logic of the
book’s exposition as outlined in this blog post) was on how to understand
‘finance’ in a value framework. I saw this as necessary, given the prevalence
of shallow, ‘radical’ critiques of finance that usually boiled down to a call
for a regulated capitalism. In other words, I wanted to explain how to
understand the evolution of the form of value and the key role of finance in
the imperialist world economy. This was the subject of my PhD thesis, from
which the book, after much rewriting and updating, was derived.
In the book, I do have a critique
Hilferding’s concept of ‘finance capital’, both as being too Germany-centric
and as a one-sided, nationally-based understanding of how the form of value
evolves. I argue instead to analyse how finance develops in the world economy,
in particular the role of financial securities and the banking system, to get a
clearer view of how the world works.
I take your point that the
‘commercial capital’ aspect of modern capitalism is also a critical one. My
priority in the book was different, but it has been on my mind for a while now
that commercial capital deserves more attention. For example, major
corporations like Apple, Google, Facebook and Amazon are more in the commercial
than the industrial sphere. Most of their activities are buying/selling what
other companies produce, or getting advertising revenues from these sales. This
is also linked to the financial and market power they are able to use. William
Milberg and others have looked at this from a ‘value chains’ perspective; John
Smith, in his new book Imperialism in the 21st Century, explains well
how this amounts to ‘value capture’ in his focus on the globalisation of
production.
The latter point also brings out
how commercial capital still depends upon production, and how production
companies can turn themselves into more commercial ones by getting others to do
the producing in markets that are dominated by the powerful corporations. Even
in the late 19th century, Britain was more the ‘warehouse of the world’ than
the workshop of the world, with huge revenues from maritime transport,
shipping, insurance, trade finance, etc, adding to those from its foreign investments.
Does that show how industry was
not the ‘dominant’ force in capital accumulation? Not really. Industry (which
Marx considered the main form of productive capital) conditioned the developing
role of commerce and finance from at least the early 19th century, moulding it
into a form that would suit industrial capital. However, it is true that other
developments need to be considered. Marx was wrong if he thought that industry
had to be the dominant form of capitalist enterprise, but this does not necessarily
follow from the logic of his argument if one allows for the development of the
world economy, which he had not fully analysed.
While a huge commercial capital
sector (or financial sector) could not exist within a single economy taken out
of its relationship with others, it is a different question when a small number
of powerful capitalist countries dominate the world economy. Britain, for
example, could have an outsized commercial/financial sector because Britain
dominated world trade and its surplus value was sourced worldwide, not just
from within the national economy. This example can be used to understand what
has happened today, where domination of world commerce and finance benefits
particular countries that, in value terms, produce relatively little
themselves. This is explained more fully in my book regarding finance;
analogously this is true of commerce as well today, when others do the
producing.
Tony Norfield, 16 July 2016
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