Industrial capital . Capital that successively moves through its three phases: two in circulation and one in production and adopts three functional forms and in each of them fulfills the corresponding functions, was called by Marx industrial capital. From this it follows that industrial capital is considered to be invested not only in industry, but also in any other branch of material production.
Summary
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- 1 Differences with other forms of capital
- 2 Three figures in the cycle of industrial capital
- 1 Monetary capital cycle
- 2 Cycle of productive capital
- 3 Cycle of mercantile capital
- 4 Unity and differences
- 3 Sources
- 4 External links
Differences with other forms of capital
Industrial capital differs from commercial capital and usury capital that preceded it in the first place by the form of its movement. The movement of commercial capital (D – M – D ‘) and usurious capital (D – D’) takes place only in the sphere of circulation, while the movement of industrial capital constitutes the indissoluble fusion of production and circulation. Secondly, commercial capital and usurious capital increase in value in the course of their movement, but do not create value nor produce an increase in it, while industrial capital manifests itself as a means of creating surplus value .
Industrial capital is the foundation of all types of capital. In its development it subordinates and transforms according to its laws all the previously inherited forms of capital historically. Industrial capital seizes production and circulation and gives them a capitalist character, transforming them according to their needs for valorization.
Three Figures of the Industrial Capital Cycle
All capital has a monetary form at first, and then entirely takes the form of productive capital and later that of mercantile capital. Such an assumption is necessary to explain the problem of the three phases and the three forms of capital movement in its most essential aspect. In fact, at every moment, all individual capital is simultaneously in its three different functional forms and in the three different phases of its movement. A part of any industrial capital is in monetary form and is destined to pay wagesof the workers and buy means of production. This part of capital must be in existence at all times, since otherwise the production process will temporarily cease. another part of industrial capital is found in a productive form, that is, in the form of operating means of production and labor power ; Finally, the third part, in commercial form, in the form of a mass of merchandise that has left the production process ready to be carried out.
The simultaneous permanence of capital in all three forms is a necessary condition for the uninterrupted continuity of capitalist production. If all capital were in one of its forms, its permanence in the other forms would be ruled out at the given moment, and this would mean an inevitable suspension of the production process. Each capitalist would be obliged to suspend the production process for as long as his capital is in the monetary and mercantile forms, being in the sphere of circulation and fulfilling its functions therein.
In turn, each form of capital is not in a static state. Within the general movement of all capital , each of its forms performs its own movement as an independent cycle.
The cycle of all capital is divided into its interior into three independent cycles, carried out by each of its functional forms: monetary capital, productive capital, and mercantile capital. Only taken in their entirety the three figures of the cycle ensure the incessant movement of capital , they constitute the general movement of capital and its passage from one phase to another.
Money Capital Cycle
The money capital cycle is represented by the formula:
Movement of money capital
Historically all individual capital begins its movement in monetary form. Monetary capital gives a boost to the entire movement. Without it it is not possible to start capitalist production. The return of capital as a result of the cycle is an indispensable condition for the repetition and renewal of the production process. The monetary form is at the same time the form in which the surplus valueCreated by capital, it takes an independent form of existence, it can be practically separated from the value of the anticipated capital and used by the capitalist for personal and productive needs. In this figure of the cycle the objective of capitalist production and circulation, the appropriation of surplus value, is more clearly manifested. The cycle of money capital has the general character of the movement of capital.
In the cycle of monetary capital the movement begins and ends with the monetary form. Here it is clearly stated that, first, money is not spent , but it is anticipated, and second, that it is not only anticipated, but is anticipated so that it returns with an increase, with additional money, to provide surplus value .
While showing in the most palpable way the objective of the entire movement of capital, the cycle of monetary capital watches over and conceals the real means by means of which that objective is achieved. In this figure of the cycle, the production process appears as an intermediate link between the phases of circulation D – M and M’- D ‘and it seems that it plays a subordinate, secondary role. The impression is created that surplus value arises from the acts of circulation, and not from the act of production.
Productive capital cycle
The productive capital cycle is expressed by the following formula:
Movement of productive capital
In this way, the starting point and the end point of the cycle are productive capital. The purpose of the entire cycle is to ensure constant renewal of the production process. If, in the cycle of monetary capital, production appears as an intermediate link in the circulation process, now in the form P… P the situation changes markedly. Circulation appears as an intermediate in the process of reproduction of productive capital and plays a subordinate role. The determining role of the production process in the entire movement of capital value is most palpably manifested. At the same time, in this form of the cycle, the true end of capitalist production appears hidden. The impression is created that the meaning of the entire movement of capital consists in constant renewal, in the repetition of the production process.productive forces of society.
The role of money is different in the cycle of productive capital . In the cycle of monetary capital, money appears as the fundamental end and incentive of the entire movement of capital, now it is reduced to the situation of an ordinary means of circulation. The goods that come out of the production process are sold for money , and with that money the material elements of production are bought. The money appears as a means of buying goods, but not as an end in itself, as a lever of the whole process.
Mercantile capital cycle
The cycle of mercantile capital is expressed by the formula:
Movement of mercantile capital
If the reproduction is made on an enlarged scale, the final M is greater than the initial, so it is designated with the M ”. The characteristic feature of this cycle is that it begins with circulation comprising its two opposite phases, while in the first form, circulation is interrupted by the production process, and in the second, it serves as an intermediate link in the production process. . The figure of the cycle clearly indicates the dependence of capitalist production on circulation, on the one hand, and on consumption, on the other hand.
The cycle of mercantile capital differs from the others in the fact that the starting point of its movement is the increased value of capital, which already contains surplus value in the mercantile form (M ‘). In this figure of the cycle, the problem of realization becomes of primary importance. And on its solution depends the course of all the subsequent movement of capital.
Examining the cycle of money capital and the cycle of productive capital, it may appear that the movement of capital is not linked to, and can take place independently of, personal consumption. All capital demands means of production and labor power , but does not directly demand consumer goods. If the capitalist spends part of his money to satisfy personal needs, then his money is not money capital, but ordinary money , the movement of which is regulated by the general laws of simple mercantile circulation. When the worker buys the means of existence with his salary, in this case money does not move as capital, but as money.Ordinary. The movement of monetary capital and productive capital appears as something indifferent to consumer goods.
In reality, this independence is relative. In order for the capitalist to find the labor force commodity in the market, it is necessary that this commodity constantly reproduce itself. And this is only possible if the worker finds the necessary means of existence in the market. If all capitalists launched nothing but means of production onto the market, the working class would be doomed to extinction. On the other hand, the capitalist class needs that on the market there are the necessary luxury articles for the satisfaction of its needs. From this it follows that the mercantile capital of the entire class of capitalist must be constituted by its material form not only of means of production, but of articles of consumption.
In the cycle of individual mercantile capital it is discovered that in its movement capital is not only linked with productive consumption, but also with personal consumption, and that circulation appears here not only as a phase of the reproduction of capital, but as its link between production and consumption as a whole. In simple mercantile production this link appears indirectly.
Unity and differences
All the figures in the cycle form an indissoluble unit. The movement of all individual capital presupposes these three figures and is inconceivable without them. What is common among these figures is that in all cases the movement is carried out in the form of a cycle, it is divided into the three consecutive phases and is related to the transformation of capital from one functional form to another; the difference lies in the succession of the phases of the movement and in the changes of the forms. Each of the figures in the cycle characterizes in its own way the role, place and importance of production and circulation in the movement of capital and expresses in different ways the objective of capitalist production and circulation.
