thebase.works · Das Kapital III Kap. 22 · semantic zoom
Z3
Kap. 22
Die Grenzen des Zinses und die Tendenz des Zinsfußes zu fallen
Behind the reader stands the peculiar commodity money becomes once lent, its price an irrational one. Left open is how far that price can run and what, if anything, governs it. This unit fixes profit as the outer limit interest cannot pass, admits the limit carries its own exceptions, and shows through a hypothetical that different interest rates can express one constant share of a divisible profit. It then asks, hedging as it goes, whether interest tracks the general rate of profit, offers the trade cycle as loose evidence rather than a rule, and closes by naming two forces that drag the rate down for reasons that have nothing to do with profit.
Der Gegenstand dieses Kapitels, sowie überhaupt alle später zu behandelnden Erscheinungen des Kredits, können hier nicht im einzelnen untersucht werden. Die Konkurrenz zwischen Verleihern und Borgern und die daher resultierenden kürzern Schwankungen des Geldmarkts fallen außerhalb des Bereichs unsrer Betrachtung. Der Kreislauf, den die Zinsrate während des industriellen Zyklus durchläuft, unterstellt zu seiner Darstellung die Darstellung dieses Zyklus selbst, die ebenfalls hier nicht gegeben werden kann. Dasselbe gilt für die größere oder geringere, annähernde Ausgleichung des Zinsfußes auf dem Weltmarkt. Wir haben es hier nur damit zu tun, die selbständige Gestalt des zinstragenden Kapitals und die Verselbständigung des Zinses gegen den Profit zu entwickeln.
scoping the chapter

This chapter's subject, like all the credit phenomena we'll get to later, can't be gone into in detail here. The competition between lenders and borrowers, and the short-term ups and downs in the money market that come from it, are outside what we're looking at. Tracing the path the rate of interest follows over the industrial cycle would mean first laying out that cycle itself, and that can't be done here either. The same goes for how far the rate of interest evens out, more or less, across the world market. All we're dealing with here is the independent shape interest-bearing capital takes, and the way interest becomes independent of profit.

Da der Zins bloß ein Teil des Profits ist, der nach unsrer bisherigen Voraussetzung vom industriellen Kapitalisten an den Geldkapitalisten zu zahlen ist, so erscheint als Maximalgrenze des Zinses der Profit selbst, wo der Teil, der dem fungierenden Kapitalisten zufiele, = 0 wäre. Abgesehn von einzelnen Fällen, wo der Zins tatsächlich größer als der Profit sein, dann aber auch nicht aus dem Profit gezahlt werden kann, könnte man vielleicht als Maximalgrenze des Zinses betrachten den ganzen Profit minus dem später unten zu entwickelnden Teil desselben, der in Aufsichtslohn (wages of superintendence) auflösbar. Die Minimalgrenze des Zinses ist ganz und gar unbestimmbar. Er kann zu jeder beliebigen Tiefe fallen. Indessen treten dann immer wieder gegenwirkende Umstände ein und heben ihn über dies relative Minimum.
the bound on interest

Interest is only a part of profit — on what we've assumed so far, the part the industrial capitalist has to pay the money capitalist. So the maximum limit on interest would seem to be profit itself, the point where the functioning capitalist's share would be zero. Leaving aside particular cases where interest is actually bigger than profit, and so can't be paid out of profit at all, perhaps the maximum limit should really be counted as the whole profit minus the part of it that, as we'll see later, resolves into wages of superintendence. The minimum limit of interest, by contrast, is completely indeterminate. It could fall to any depth at all. But circumstances working the other way keep stepping in and pushing it back up above that relative minimum.

"Das Verhältnis zwischen der Summe, bezahlt für den Gebrauch eines Kapitals, und diesem Kapital selbst, drückt die Rate des Zinsfußes aus, gemessen in Geld." -"Die Zinsrate hängt ab 1. von der Profitrate; 2. von dem Verhältnis, worin der Gesamtprofit geteilt wird zwischen Verleiher und Borger." ("Economist", 22. Januar 1853.)
quoted: the Economist

'The relation between the sum paid for the use of a capital and that capital itself gives the rate of interest, measured in money.' 'The rate of interest depends, first, on the rate of profit; second, on the proportion in which the total profit is divided between lender and borrower' (the Economist, 22 January 1853).

"Da das, was man als Zins bezahlt, für den Gebrauch dessen, was man borgt, ein Teil des Profits ist, den das Geborgte zu produzieren fähig ist, so muß dieser Zins stets reguliert sein durch jenen Profit." (Massie, l.c.p. 49.)
quoted: Massie

Massie's point is that what a borrower pays as interest for the use of a sum is a part of the profit that sum is capable of producing, so the interest must always be governed by that profit.

Wir wollen zuerst annehmen, es existiere ein fixes Verhältnis zwischen dem Gesamtprofit und dem Teil desselben, der als Zins an den Geldkapitalisten wegzuzahlen ist. Dann ist es klar, daß der Zins steigen oder fallen wird wie der Gesamtprofit, und dieser ist bestimmt durch die allgemeine Profitrate und ihre Schwankungen. Wäre z.B. die Durchschnittsprofitrate = 20% und der Zins = 1/4 des Profits, so der Zinsfuß = 5%; wenn jene = 16%, so der Zins = 4%. Bei einer Profitrate von 20% könnte der Zins auf 8% steigen, und der industrielle Kapitalist würde immer noch denselben Profit machen wie bei einer Profitrate = 16% und Zinsfuß = 4%, nämlich 12%. Stiege der Zins nur auf 6 oder 7%, so würde er immer noch einen größern Teil des Profits behalten. Wäre der Zins gleich einem konstanten Quotum des Durchschnittsprofits, so folgte, daß je höher die allgemeine Profitrate, um so größer die absolute Differenz zwischen dem Gesamtprofit und dem Zins, um so größer also der Teil des Gesamtprofits, der dem fungierenden Kapitalisten zufällt, und umgekehrt. Gesetzt, der Zins sei = 1/5 des Durchschnittsprofits. 1/5 von 10 ist 2; Differenz zwischen dem Gesamtprofit und dem Zins = 8. 1/5 von 20 ist = 4; Differenz = 20 - 4 = 16; 1/5 von 25 = 5; Differenz =25 - 5= 20; 1/5 von 30 = 6; Differenz = 30 - 6 = 24; 1/5 von 35 = 7; Differenz = 35 - 7 = 28. Die verschiednen Zinsraten von 4, 5, 6, 7% würden hier immer nur 1/5 % oder 20% vom Gesamtprofit ausdrücken. Sind also die Profitraten verschieden, so können verschiedne Zinsraten dieselben aliquoten Teile des Gesamtprofits oder denselben Prozentanteil am Gesamtprofit ausdrücken. Bei solch konstantem Verhältnis des Zinses wäre der industrielle Profit (die Differenz zwischen dem Gesamtprofit und dem Zins) um so größer, je höher die allgemeine Profitrate, und umgekehrt.
the numerical example

Assume for a moment that interest holds a fixed share of total profit. Then interest simply tracks profit, and profit tracks the average rate of profit as it rises and falls. Say that share is one fifth: at a profit rate of 20 per cent, interest is 4 per cent and the functioning capitalist keeps 16; at 35 per cent, interest is 7 per cent and he keeps 28. Different profit rates yield different rates of interest, but each time the same fixed fraction of total profit is being taken as interest. And because the fraction stays fixed, the higher the general rate of profit climbs, the bigger the absolute gap between total profit and interest grows — meaning the functioning capitalist's own share grows too, not just proportionally but in raw amount.

Alle andern Umstände gleichgesetzt, d.h., das Verhältnis zwischen Zins und Gesamtprofit als mehr oder weniger konstant angenommen, wird der fungierende Kapitalist fähig und willig sein, höhern oder niedern Zins zu zahlen im direkten Verhältnis zur Höhe der Profitrate.61 Da man gesehn, daß die Höhe der Profitrate im umgekehrten Verhältnis steht zur Entwicklung der kapitalistischen Produktion, so folgt daher, daß der höhere oder niedre Zinsfuß in einem Lande in demselben umgekehrten Verhältnis zur Höhe der industriellen Entwicklung steht, soweit nämlich die Verschiedenheit des Zinsfußes wirklich Verschiedenheit der Profitraten ausdrückt. Man wird später sehn, daß dies keineswegs stets der Fall zu sein braucht. In diesem Sinn kann man sagen, daß der Zins reguliert wird durch den Profit, näher durch die allgemeine Profitrate. Und diese Art seiner Regulierung gilt selbst für seinen Durchschnitt.
regulated by profit, hedged

Set aside everything else and treat the ratio between interest and total profit as fairly stable. Then the functioning capitalist is both able and willing to pay a higher or lower interest in direct proportion to his rate of profit — and since, as we have seen, the level of the rate of profit stands in inverse proportion to the development of capitalist production, a country's higher or lower rate of interest stands in that same inverse proportion to its level of industrial development. But this only holds so far as a difference in interest rates actually reflects a difference in profit rates, and that turns out by no means always to be true, as we'll see later. Still, in this qualified sense, one can say profit governs interest — more exactly, the general rate of profit does — and that this holds even for the average rate of interest.

Jedenfalls ist die Durchschnittsrate des Profits als die endgültig bestimmende Maximalgrenze des Zinses zu betrachten.
the bound restated

In any case, the average rate of profit is to be taken as the maximum limit that ultimately determines interest.

Den Umstand, daß der Zins auf den Durchschnittsprofit zu beziehn, werden wir gleich näher betrachten. Wo ein gegebnes Ganze, wie der Profit, zwischen zweien zu teilen ist, kommt es natürlich zunächst auf die Größe des zu teilenden Ganzen an, und diese, die Größe des Profits, ist bestimmt durch seine Durchschnittsrate. Die allgemeine Profitrate, also die Größe des Profits für ein Kapital von gegebner Größe, sage = 100, als gegeben vorausgesetzt, stehn die Variationen des Zinses offenbar im umgekehrten Verhältnis zu denen des Profitteils, der dem fungierenden, aber mit geborgtem Kapital arbeitenden Kapitalisten bleibt. Und die Umstände, welche die Größe des zu verteilenden Profits, des Wertprodukts unbezahlter Arbeit, bestimmen, sind sehr verschieden von denen, die seine Verteilung unter diese beiden Sorten Kapitalisten bestimmen, und wirken oft nach ganz entgegengesetzten Seiten.62
size of the whole, terms of division

We'll look more closely in a moment at relating interest to the average profit. Where a given whole, like profit, has to be divided between two people, what matters first is naturally the size of the whole being divided, and that — the size of the profit — is set by its average rate. Take the general rate of profit, and so the size of profit on a capital of a given size, say 100, as given: then variations in interest plainly run inversely to variations in the share of profit left to the functioning capitalist who works with borrowed capital. And the circumstances that set the size of the profit to be shared out — the value produced by unpaid labour — are very different from the circumstances that set how it's divided between these two kinds of capitalist, and often pull in quite opposite directions.

Wenn man die Umschlagszyklen betrachtet, worin sich die moderne Industrie bewegt - Zustand der Ruhe, wachsende Belebung, Prosperität, Überproduktion, Krach, Stagnation, Zustand der Ruhe etc., Zyklen, deren weitere Analyse außerhalb unserer Betrachtung fällt -, so wird man finden, daß meist niedriger Stand des Zinses den Perioden der Prosperität oder des Extraprofits entspricht, Steigen des Zinses der Scheide zwischen der Prosperität und ihrem Umschlag, Maximum des Zinses bis zur äußersten Wucherhöhe aber der Krisis.63 Vom Sommer 1843 an trat entschiedne Prosperität ein; der Zinsfuß, im Frühling 1842 noch 4 1/2 %, fiel im Frühling und Sommer 1843 auf 2%64; im September selbst auf 1 1/2 % (Gilbart, ["A practical treatise on banking", 5. Ausg., London 1849], I, p. 166); dann während der Krise 1847 stieg er auf 8% und mehr.
interest across the cycle

Looking at the turnover cycles modern industry moves through — calm, growing activity, prosperity, overproduction, crash, stagnation, calm again, and so on, cycles whose further analysis falls outside what we're looking at here — one finds that a low rate of interest generally corresponds to periods of prosperity or extra profit, a rising rate of interest to the turning point between prosperity and its collapse, and the maximum rate of interest, up to the harshest usury, to crisis. From summer 1843 there was a decided prosperity; the rate of interest, still 4 1/2 per cent in spring 1842, fell in spring and summer 1843 to 2 per cent, and in September even to 1 1/2 per cent; then during the 1847 crisis it rose to 8 per cent and more.

Allerdings kann andrerseits niedriger Zins mit Stockung, und mäßig steigender Zins mit wachsender Belebung zusammengehn.
the counter-case

Still, on the other hand, low interest can go together with stagnation, and a moderately rising interest with growing activity.

Der Zinsfuß erreicht seine äußerste Höhe während der Krisen, wo geborgt werden muß, um zu zahlen, was es auch koste. Es ist dies zugleich, da dem Steigen des Zinses ein Fallen im Preise der Wertpapiere entspricht, eine sehr artige Gelegenheit für Leute mit disponiblem Geldkapital, um sich zu Spottpreisen solcher zinstragenden Papiere zu bemächtigen, die, im regelmäßigen Verlauf der Dinge, mindestens ihren Durchschnittspreis wieder erreichen müssen, sobald der Zinsfuß wieder fällt.65
the crisis peak, and its opportunity

The rate of interest reaches its highest point during crises, when people have to borrow to pay, whatever it costs. And since a rise in interest corresponds to a fall in the price of securities, this is at the same time a very handy opportunity for people with money capital available to snap up such interest-bearing securities at give-away prices — securities that, in the normal course of things, must climb back to at least their average price once the rate of interest falls again.

Es existiert aber auch eine Tendenz zum Fallen des Zinsfußes, ganz unabhängig von den Schwankungen der Profitrate. Und zwar aus zwei Hauptursachen:
two causes, independent of profit

But there is also a tendency for the rate of interest to fall that is quite independent of any swings in the rate of profit. And it has two main causes:

I. "Unterstellen wir selbst, Kapital würde nie anders aufgenommen als für produktive Anlagen, so ist es dennoch möglich, daß der Zinsfuß wechselt ohne irgendwelchen Wechsel in der Rate des Bruttoprofits. Denn, wie ein Volk fortschreitet in der Entwicklung des Reichtums, entsteht und wächst immer mehr eine Klasse von Leuten, die durch die Arbeiten ihrer Vorfahren sich im Besitz von Fonds befinden, von deren bloßem Zins sie leben können. Viele, auch die in der Jugend und Mannheit aktiv im Geschäft beteiligt, ziehn sich zurück, um im Alter ruhig vom Zins der akkumulierten Summen zu leben. Diese beiden Klassen haben eine Tendenz, mit dem wachsenden Reichtum des Landes sich zu vermehren; denn die, die schon mit einem mittelmäßigen Kapital anfangen, bringen es leichter zu einem unabhängigen Vermögen, als die mit wenigem anfangen. In alten und reichen Ländern macht daher der Teil des Nationalkapitals, dessen Eigentümer ihn nicht selbst anwenden wollen, ein größeres Verhältnis aus zum gesamten produktiven Kapital der Gesellschaft als in neu angebauten und armen Ländern. Wie zahlreich ist nicht die Klasse der Rentiers in England! Im Verhältnis wie die Klasse der Rentiers wächst, wächst auch die der Kapitalverleiher, denn sie sind beides dieselben." (Ramsay, "Essay on the Distribution of Wealth", p. 201, 202.)
quoted: Ramsay on rentiers

I. 'Even supposing that capital were never borrowed except for productive investment, it is still possible for the rate of interest to shift without any shift at all in the rate of gross profit. For as a nation advances in the growth of wealth, a class of people keeps arising and growing who, through the work of their forebears, find themselves holding funds ample enough to live handsomely on the interest alone. Many others, too, who were active in business in their youth and prime, withdraw to live quietly in old age on the interest of the sums they themselves have accumulated. Both these classes tend to grow along with the country's growing wealth, since those who start out with a moderate capital reach an independent fortune more easily than those who start with little. So in old, rich countries, the part of the national capital whose owners do not want to put it to work themselves makes up a larger share of the society's whole productive capital than it does in newly settled, poorer countries. How numerous the class of rentiers is in England! And as the class of rentiers grows, so does the class of lenders of capital — for they are one and the same' (Ramsay).

II. Die Entwicklung des Kreditsystems und die damit beständig wachsende, durch die Bankiers vermittelte, Verfügung der Industriellen und Kaufleute über alle Geldersparnisse aller Klassen der Gesellschaft und die fortschreitende Konzentration dieser Ersparnisse zu den Massen, worin sie als Geldkapital wirken können, muß ebenfalls auf den Zinsfuß drücken. Mehr hierüber später.
the credit system, second cause

II. The growth of the credit system, and with it the ever-growing hold that industrialists and merchants gain, through the bankers, over the money savings of every class in society, together with the advancing concentration of those savings into the sums that let them work as money capital — this too is bound to press the rate of interest down. More on this later.

Mit Bezug auf Bestimmung der Zinsrate sagt Ramsay, daß sie "abhängt zum Teil von der Rate des Bruttoprofits, zum Teil von der Proportion, worin dieser geteilt wird in Zins und Unternehmergewinn (profits of enterprise). Diese Proportion hängt ab von der Konkurrenz zwischen Verleihern und Borgern von Kapital; diese Konkurrenz wird beeinflußt, aber nicht ausschließlich reguliert durch die voraussichtliche Rate des Bruttoprofits.66 Die Konkurrenz wird nicht ausschließlich hierdurch reguliert, weil auf der einen Seite viele borgen, ohne irgendwelche Absicht produktiver Anlage, und weil andrerseits die Größe des gesamten leihbaren Kapitals wechselt mit dem Reichtum des Landes, unabhängig von irgendwelchem Wechsel im Bruttoprofit. (Ramsay, l.c.p. 206, 207.)
quoted: Ramsay on what fixes it

On what fixes the rate of interest, Ramsay says it 'depends partly on the rate of gross profit, partly on the proportion in which that profit is divided into interest and profits of enterprise. This proportion depends on the competition between lenders and borrowers of capital; and that competition is influenced, but not exclusively governed, by the expected rate of gross profit. It is not exclusively governed by this, because on the one hand many people borrow with no intention at all of productive investment, and on the other hand the size of the whole loanable capital varies with the wealth of the country, independently of any change in gross profit' (Ramsay).

Kap. 22
Keine "natürliche" Rate des Zinsfußes - die qualitative Scheidung entspringt der rein quantitativen Teilung
Carried forward is the picture of interest as a slice of one profit, bounded above by profit itself and squeezed from below by counter-pressures with no fixed floor. This unit asks what decides how that slice gets cut, and finds no answer of the kind economists give for wages or profit: no natural rate, only competition, custom and accident settling an inherently arbitrary division. It then explains why that lawlessness is not chaos but a structural reversal — the qualitative distinction between interest and profit of enterprise is produced by, not the source of, a purely quantitative split. What settles here is why that lawless level still yields the most rigid, publicly quoted figure in the system.
Um die Durchschnittsrate des Zinses zu finden, ist 1. der Durchschnitt des Zinsfußes während seiner Variationen in den großen industriellen Zyklen zu berechnen; 2. der Zinsfuß in solchen Anlagen, wo Kapital für längere Zeit ausgeliehen wird.
finding the average rate: two steps

To work out the average rate of interest, you need two things: the average interest rate across the big ups and downs of the industrial cycle, and the rate charged on longer-term loans.

Die in einem Lande herrschende Durchschnittsrate des Zinses - im Unterschied von den beständig schwankenden Marktraten - ist durchaus durch kein Gesetz bestimmbar. Es gibt in dieser Art keine natürliche Rate des Zinses in dem Sinn, wie die Ökonomen von einer natürlichen Profitrate und einer natürlichen Rate des Arbeitslohns sprechen. Schon Massie bemerkt hier mit vollem Recht (p. 49):
no law sets it, no natural rate

The average rate of interest that prevails in a country — as opposed to the market rate, which keeps shifting — cannot be fixed by any law. There is no natural rate of interest in the sense economists mean when they speak of a natural rate of profit or a natural rate of wages. Massie already put this exactly right:

"The only thing which any man can be in doubt about on this occasion, is, what proportion of these profits do of right belong to the borrower, and what to the lender; and this there is no other method of determining than by the opinions of borrowers and lenders in general; for right and wrong, in this respect, are only what common consent makes so." <"Das einzige, worüber hier jemand im Zweifel sein kann, ist, welcher Anteil an diesem Profit von Rechts wegen dem Borger und welcher dem Verleiher zukommt; und es gibt keine andere Methode, dies zu bestimmen, als durch die Meinungen der Borger und Verleiher im allgemeinen; denn Recht oder Unrecht ist in dieser Hinsicht nur, was die allgemeine Zustimmung dazu macht.">
Massie: whose share, and who settles it

The only real question, Massie said, is what share of these profits rightfully belongs to the borrower and what share to the lender; and there is no way to settle that except by the opinions of borrowers and lenders generally — because right and wrong here are simply whatever common consent makes them.

Das Decken der Nachfrage und Zufuhr - die Durchschnittsprofitrate als gegeben vorausgesetzt - heißt hier durchaus nichts. Wo sonst zu dieser Formel Zuflucht genommen wird (und dies ist dann auch praktisch richtig), dient sie als eine Formel, um die von der Konkurrenz unabhängige und vielmehr sie bestimmende Grundregel (die regulierenden Grenzen oder die begrenzenden Größen) zu finden; namentlich als eine Formel für die in der Praxis der Konkurrenz, in ihren Erscheinungen und den daraus sich entwickelnden Vorstellungen Befangnen, um zu einer, wenn auch selbst wieder oberflächlichen Vorstellung eines innerhalb der Konkurrenz sich darstellenden innern Zusammenhangs der ökonomischen Verhältnisse zu gelangen. Es ist eine Methode, um von den die Konkurrenz begleitenden Variationen zu den Grenzen dieser Variationen zu kommen. Dies ist nicht der Fall bei dem Durchschnittszinsfuß. Es ist durchaus kein Grund vorhanden, warum die mittleren Konkurrenzverhältnisse, das Gleichgewicht zwischen Ausleiher und Anleiher, dem Ausleiher einen Zinsfuß von 3, 4, 5% etc. auf sein Kapital oder aber einen bestimmten Prozentanteil, 20% oder 50% vom Bruttoprofit, geben sollten. Wo hier die Konkurrenz als solche entscheidet, ist die Bestimmung an und für sich zufällig, rein empirisch, und nur Pedanterie oder Phantasterei kann diese Zufälligkeit als etwas Notwendiges entwickeln wollen.67 Nichts ist amüsanter in den Parlamentsberichten von 1857 und 1858 über die Bankgesetzgebung und die Handelskrise, als Direktoren der Bank von England, Londoner Bankiers, Provinzial-Bankiers und professionelle Theoretiker hin und her schwatzen zu hören über die "real rate produced" <tatsächlich hervorgebrachte Zinsrate>, ohne daß sie es je weiter brächten als zu Gemeinplätzen, wie z.B., daß "der Preis, der von verleihbarem Kapital bezahlt wird, mit dem Angebot dieses Kapitals wechseln dürfte", daß "hohe Zinsrate und niedrige Profitrate auf die Dauer nicht nebeneinander bestehn können" und andre solche Plattheiten.68 Gewohnheit, gesetzliche Tradition etc. haben ebensosehr, wie die Konkurrenz selbst, zu tun mit der Bestimmung des mittlern Zinsfußes, soweit dieser nicht nur als Durchschnittszahl, sondern als faktische Größe existiert. Ein mittlerer Zinsfuß muß schon in vielen Rechtsstreitigkeiten, wo Zinsen zu berechnen, als legal angenommen werden. Fragt man nun weiter, warum die Grenzen des mittlern Zinsfußes nicht aus allgemeinen Gesetzen abzuleiten sind, so liegt die Antwort einfach in der Natur des Zinses. Er ist bloß ein Teil des Durchschnittsprofits. Dasselbe Kapital erscheint in doppelter Bestimmung, als leihbares Kapital in der Hand des Verleihers, als industrielles oder kommerzielles Kapital in den Händen des fungierenden Kapitalisten. Aber es fungiert nur einmal und produziert selbst den Profit nur einmal. Im Produktionsprozeß selbst spielt der Charakter des Kapitals als verleihbares keine Rolle. Wie sich die beiden Personen darin teilen, die Ansprüche auf diesen Profit haben, ist an und für sich eine ebenso rein empirische, dem Reich des Zufälligen angehörige Tatsache wie die Teilung der Prozentanteile des gemeinschaftlichen Profits eines Kompaniegeschäfts unter die verschiednen Teilhaber. Bei der Teilung zwischen Mehrwert und Arbeitslohn, worauf die Bestimmung der Profitrate wesentlich beruht, wirken zwei ganz verschiedne Elemente, Arbeitskraft und Kapital, bestimmend ein; es sind Funktionen zweier unabhängigen Variablen, die sich gegenseitig Grenzen setzen; und aus ihrem qualitativen Unterschied geht die quantitative Teilung des produzierten Werts hervor. Man wird später sehn, daß dasselbe stattfindet bei der Teilung des Mehrwerts zwischen Rente und Profit. Bei dem Zins findet nichts Derartiges statt. Hier geht die qualitative Unterscheidung, wie wir gleich sehn werden, umgekehrt aus der rein quantitativen Teilung desselben Stücks des Mehrwerts hervor.
why no law governs it

Demand and supply balancing out — even granting the average rate of profit as a starting point — means nothing at all here. Elsewhere that method is useful: it points past the surface of competition to the underlying rule that competition doesn't set but is instead governed by, and it lets someone caught up in the day-to-day of competition glimpse, however roughly, the real connection running underneath it. It is a way of getting from the ups and downs that go with competition to the outer limits of those ups and downs.

Not so with the average rate of interest. There is no reason at all why the ordinary give-and-take between lender and borrower should settle on, say, 3, 4 or 5 per cent, or on some fixed share — 20 or 50 per cent — of the gross profit. Where competition alone is doing the deciding, the outcome is simply accidental, a purely empirical matter; only pedantry or fantasy would try to dress up that accident as something necessary. Custom and legal tradition have just as much to do with fixing the average rate as competition itself does, at least once that rate is more than a statistical average and becomes an actual, going figure — courts even have to assume some average rate of interest as the legal one whenever interest has to be reckoned.

So why can the limits of the average rate not be derived from any general law? The answer lies simply in what interest is. It is only a part of the average profit. The same capital shows up in two capacities at once — as capital lent out, in the lender's hands, and as industrial or commercial capital, in the hands of the capitalist who actually puts it to work. But it functions, and produces profit, only once. Whether it counts as loan capital makes no difference inside the production process itself. How the two people with a claim on that one profit actually divide it between them is, as it stands, exactly as much a matter of chance and empirical fact as how partners divide up the shares of a joint business's profit.

Compare this with the division between surplus-value and wages, which is what mainly decides the rate of profit in the first place: there, two genuinely different elements are at work — labour-power and capital — each an independent variable setting limits on the other, and it is their qualitative difference that produces the quantitative split of the value they produce between them. The same holds, as we shall see later, for the division of surplus-value between rent and profit. With interest, nothing of the kind happens. Here the qualitative distinction — as we are about to see — runs the other way round: it comes FROM a purely quantitative split of one and the same piece of surplus-value.

Aus dem bisher Entwickelten ergibt sich, daß es keine "natürliche" Zinsrate gibt. Wenn aber auf der einen Seite im Gegensatz zur allgemeinen Profitrate der mittlere Zinsfuß oder die Durchschnittsrate des Zinses, im Unterschied von den beständig schwankenden Marktraten des Zinses, in seinen Grenzen durch kein allgemeines Gesetz feststellbar ist, weil es sich nur um Teilung des Bruttoprofits zwischen zwei Besitzern des Kapitals, unter verschiednen Titeln, handelt, erscheint umgekehrt der Zinsfuß, sei es der mittlere, sei es die jedesmalige Marktrate, ganz anders als eine gleichmäßige, bestimmte und handgreifliche Größe als dies bei der allgemeinen Profitrate der Fall ist.69
so: no natural rate, yet fixed

So: there is no 'natural' rate of interest. And yet, set against that: while no general law can fix the limits of the average or middling rate of interest — as distinct from the constantly shifting market rate — because all that is really going on is a split of the gross profit between two people who hold capital under different titles, the rate of interest, whether the average rate or the going market rate, appears, conversely, as something quite unlike the general rate of profit: a uniform, definite, palpable magnitude.

Der Zinsfuß verhält sich zur Profitrate ähnlich wie der Marktpreis der Ware zu ihrem Wert. Soweit der Zinsfuß durch die Profitrate bestimmt ist, ist es stets durch die allgemeine Profitrate, nicht durch die spezifischen Profitraten, die in besondern Industriezweigen herrschen mögen, und noch weniger durch den Extraprofit, den der einzelne Kapitalist in einer besondren Geschäftssphäre machen mag.70 Die allgemeine Profitrate erscheint daher in der Tat als empirisches, gegebnes Faktum wieder in der Durchschnittszinsrate, obgleich die letztre kein reiner oder zuverlässiger Ausdruck der erstern.
like market price to value

The rate of interest relates to the rate of profit rather as a commodity's market price relates to its value. Where the rate of interest is determined by the rate of profit at all, it is always by the general rate of profit — never by whatever specific rate happens to prevail in some particular branch of industry, and still less by the extra profit an individual capitalist might make in some particular line of business. So the general rate of profit does reappear in the average rate of interest as an empirical, given fact — though the average rate of interest is not a pure or reliable expression of it.

Es ist zwar richtig, daß die Zinsrate selbst, je nach den Klassen der von den Borgern gegebnen Sicherheiten und nach der Zeitdauer der Anleihe beständig verschieden ist; aber für jede dieser Klassen ist sie in einem gegebnen Moment uniform. Dieser Unterschied beeinträchtigt also nicht die fixe und uniforme Gestalt des Zinsfußes.71
varies by class, fixed within it

It is true that the rate of interest itself is always different depending on the class of security the borrower offers and on how long the loan runs. But within each of those classes it is uniform at any given moment. So this variation does not undermine the fixed, uniform character of the rate of interest.

Kap. 22
Der Zinsfuß als fixe, gegebne Größe gegen die allgemeine Profitrate als bloße Tendenz
The reader arrives having just watched Marx insist that nothing fixes how one profit splits into interest and a remainder except competition and custom — there is no natural rate, only a shifting level inside a bound set by profit itself. That leaves an odd asymmetry unexplained: interest still confronts everyone as a hard, quoted number, the way a commodity's price does, while the average rate of profit stays a blur nobody can simply read off. This unit settles why, tracing the difference to how loan capital and functioning capital actually meet on the money market, and to what makes interest-bearing capital a commodity unlike any other.
Der mittlere Zinsfuß erscheint in jedem Lande für längre Epochen als konstante Größe, weil die allgemeine Profitrate - trotz des beständigen Wechsels der besondren Profitraten, wo aber der Wechsel in einer Sphäre durch entgegengesetzten in der andern sich ausgleicht - nur in längern Epochen wechselt. Und ihre relative Konstanz erscheint eben in diesem mehr oder minder konstanten Charakter des mittlern Zinsfußes (average rate or common rate of interest).
why the average rate looks steady

In any country the average rate of interest appears, over long stretches, as a constant figure. That's not because interest follows some law of its own — it's because the general rate of profit itself only shifts slowly. The particular rates of profit in different branches keep changing all the time, but a change in one branch is offset by an opposite change in another, so the general rate barely moves over the long run. And it is exactly this fairly constant character of the general profit rate that shows up as the fairly constant character of the average, or common, rate of interest.

Was aber die beständig fluktuierende Marktrate des Zinses betrifft, so ist sie in jedem Moment als fixe Größe gegeben, wie der Marktpreis der Waren, weil auf dem Geldmarkt beständig alles leihbare Kapital als Gesamtmasse dem fungierenden Kapital gegenübersteht, also das Verhältnis des Angebots von leihbarem Kapital auf der einen Seite, die Nachfrage darnach auf der andern den jedesmaligen Marktstand des Zinses entscheidet. Dies ist um so mehr der Fall, je mehr die Entwicklung und damit verbundne Konzentration des Kreditwesens dem leihbaren Kapital einen allgemein gesellschaftlichen Charakter gibt und es auf einmal, gleichzeitig, auf den Geldmarkt wirft. Dagegen existiert die allgemeine Profitrate beständig nur als Tendenz, als Bewegung der Ausgleichung der besondren Profitraten. Die Konkurrenz der Kapitalisten - die selbst diese Bewegung der Ausgleichung ist - besteht hier darin, daß sie den Sphären, wo der Profit auf längre Zeit unter dem Durchschnitt, allmählich Kapital entziehn und den Sphären, wo er darüber, ebenso allmählich Kapital zuführen; oder auch, daß sich Zusatzkapital nach und nach in verschiednen Proportionen zwischen diese Sphären verteilt. Es ist beständige Variation der Zufuhr und der Entziehung von Kapital, diesen verschiednen Sphären gegenüber, nie gleichzeitige Massenwirkung wie bei der Bestimmung des Zinsfußes.
market rate fixed, profit rate a trend

The market rate of interest is different: it keeps fluctuating, but at any given moment it stands as a fixed figure, the way a commodity's market price does. Why? Because on the money market, all the capital available to be lent confronts the capital actually at work as one single combined mass — so the balance between the supply of loanable capital on one side and the demand for it on the other settles the going rate of interest at that moment. And the more credit develops and concentrates, the more loanable capital takes on this general, social character and gets thrown onto the money market all at once, in one lump.

The general rate of profit is nothing like this. It only ever exists as a tendency — as the ongoing movement by which the particular rates of profit in different branches get levelled toward each other. This levelling is what the competition of capitalists actually consists of here: capitalists gradually pull capital out of branches where profit has stayed below average for a long time, and gradually pour it into branches where profit has stayed above average; or they divide up new capital between these branches in varying proportions. Here there is constant back-and-forth — capital flowing in and being drawn out between these different branches — but never that single, simultaneous, mass-scale movement you get when the rate of interest is being set.

Man hat gesehn, daß, obgleich eine von der Ware absolut verschiedne Kategorie, das zinstragende Kapital, zur Ware sui generis und deshalb der Zins sein Preis wird, der, wie bei der gewöhnlichen Ware ihr Marktpreis, jedesmal durch Nachfrage und Angebot fixiert wird. Die Marktrate des Zinses, obgleich beständig schwankend, erscheint daher in jedem gegebnen Moment ebenso beständig fixiert und uniform wie der jedesmalige Marktpreis der Ware. Die Geldkapitalisten führen diese Ware zu, und die fungierenden Kapitalisten kaufen sie, bilden die Nachfrage dafür. Dies findet bei der Ausgleichung zur allgemeinen Profitrate nicht statt. Stehn die Preise der Waren in einer Sphäre unter oder über dem Produktionspreis (wobei von den, jedem Geschäft eignen und mit den verschiednen Phasen des industriellen Zyklus zusammenhängenden Schwankungen abgesehn wird), so findet Ausgleichung statt durch Erweiterung oder Einengung der Produktion, d.h. Ausdehnung oder Verkürzung der von den industriellen Kapitalen auf den Markt geworfenen Warenmassen, vermittelt durch Ein- oder Auswanderung von Kapital mit Bezug auf die besondren Produktionssphären. Durch die so herbeigeführte Ausgleichung der durchschnittlichen Marktpreise der Waren zu Produktionspreisen ist es, daß die Abweichungen der besondren Profitraten von der allgemeinen oder Durchschnittsprofitrate korrigiert werden. Dieser Prozeß erscheint nie so und kann nie so erscheinen, daß das industrielle oder merkantile Kapital als solches Ware gegenüber einem Käufer ist, wie das zinstragende Kapital. Soweit er erscheint, erscheint er nur in den Schwankungen und Ausgleichungen der Marktpreise der Waren zu Produktionspreisen; nicht als direkte Festsetzung des Durchschnittsprofits. Die allgemeine Profitrate ist in der Tat bestimmt 1. durch den Mehrwert, den das Gesamtkapital produziert, 2. durch das Verhältnis dieses Mehrwerts zum Wert des Gesamtkapitals, und 3. durch die Konkurrenz, aber nur soweit, als diese die Bewegung ist, wodurch die in besondren Produktionssphären angelegten Kapitale gleiche Dividenden aus diesem Mehrwert, im Verhältnis zu ihren relativen Größen zu ziehn suchen. Die allgemeine Profitrate schöpft also in der Tat ihre Bestimmung aus ganz andren und viel komplizierteren Gründen, als die durch das Verhältnis von Nachfrage und Angebot direkt und unmittelbar bestimmte Marktrate des Zinses, und ist daher kein handgreifliches und gegebnes Faktum in der Art, wie es der Zinsfuß ist. Die besondren Profitraten in den verschiednen Produktionssphären sind selbst mehr oder minder unsicher; aber soweit sie erscheinen, ist es nicht ihre Uniformität, sondern ihre Verschiedenheit, die erscheint. Die allgemeine Profitrate selbst aber erscheint nur als Minimalgrenze des Profits, nicht als empirische, direkt sichtbare Gestalt der wirklichen Profitrate.
a commodity's price against a hazy trend

We have seen that interest-bearing capital, though it belongs to a completely different category from an ordinary commodity, becomes a commodity of its own special kind — and that is why interest is its price, fixed at every moment by supply and demand, exactly the way an ordinary commodity's market price is. So the market rate of interest, even though it never stops moving, still shows up at any given moment looking just as fixed and uniform as a commodity's momentary market price. The money capitalists supply this commodity; the functioning capitalists buy it — they are its demand.

None of this happens when particular rates of profit get levelled to the general rate. If the prices of goods in some branch sit below or above their price of production — leaving aside the swings tied to a particular business or to the industrial cycle — the levelling happens by production expanding or shrinking, that is, by more or fewer goods being thrown on the market, which comes about as capital moves into or out of that branch. It is this levelling of average market prices down or up to prices of production that corrects the gap between a branch's own rate of profit and the general, average rate. But this process never looks like, and never can look like, industrial or commercial capital itself standing there as a commodity before a buyer, the way interest-bearing capital does. So far as it shows itself at all, it shows itself only in the swings and levellings that bring market prices of goods into line with prices of production — never as a direct fixing of the average profit.

The general rate of profit is actually fixed by: first, the surplus-value the total capital produces; second, the ratio of that surplus-value to the value of the total capital; and third, competition — but only so far as competition is the movement through which capitals invested in particular branches try to draw an equal share of that surplus-value, in proportion to their own size. So the general rate of profit gets its determination from grounds quite different from, and far more complicated than, the market rate of interest, which is fixed directly and immediately by supply and demand — and that is why it is not a plain, given fact the way the rate of interest is. The particular rates of profit in the different branches are themselves more or less uncertain; but so far as they do show themselves, what shows is not how alike they are but how much they differ. And the general rate of profit itself never shows up as an actual, directly visible shape of the real rate of profit — it appears only as a floor beneath profit.

Indem wir diesen Unterschied zwischen der Zinsrate und der Profitrate hervorheben, sehn wir selbst ab von folgenden beiden, die Konsolidation des Zinsfußes begünstigenden Umständen: 1. der historischen Präexistenz des zinstragenden Kapitals und der Existenz eines traditionell überlieferten allgemeinen Zinsfußes; 2. dem viel größern unmittelbaren Einfluß, den der Weltmarkt, unabhängig von den Produktionsbedingungen eines Landes, auf die Feststellung des Zinsfußes ausübt, verglichen mit seinem Einfluß auf die Profitrate.
two more steadying factors, set aside

In drawing out this difference between the rate of interest and the rate of profit, we have so far left aside two more things that help keep the rate of interest steady. First, interest-bearing capital already existed in earlier times, and there is a general rate of interest handed down by tradition. Second, the world market has a much more direct influence on fixing the rate of interest — independent of any one country's own conditions of production — than it has on the rate of profit.

Der Durchschnittsprofit erscheint nicht als unmittelbar gegebne Tatsache, sondern als erst durch die Untersuchung festzustellendes Endresultat der Ausgleichung entgegengesetzter Schwankungen. Anders mit dem Zinsfuß. Er ist in seiner, wenigstens lokalen, Allgemeingültigkeit ein täglich fixiertes Faktum, ein Faktum, das dem industriellen und merkantilen Kapital sogar als Voraussetzung und Posten in der Kalkulation bei seinen Operationen dient. Es wird ein allgemeines Vermögen jeder Geldsumme von 100 Pfd.St., 2, 3, 4, 5% abzuwerfen. Meteorologische Berichte zeichnen nicht genauer den Stand von Barometer und Thermometer auf, als Börsenberichte den Stand des Zinsfußes, nicht für dieses oder jenes Kapital, sondern für das auf dem Geldmarkt befindliche, d.h. überhaupt verleihbare Kapital.
a daily fact against a worked-out result

Average profit is never simply given; it only turns up as the end result of working out how opposing swings cancel each other out — and that takes investigation. The rate of interest is different. Wherever it holds generally, even just for one place, it is a fact fixed fresh every day, a fact that industrial and commercial capital actually build into their calculations as a given, a starting point. It becomes a plain property of any sum of £100 that it will bring in 2, 3, 4, or 5 per cent. Weather reports do not record the barometer and thermometer more exactly than stock-market reports record the rate of interest — not for this or that particular sum of capital, but for loanable capital as such, capital on the money market generally.

Auf dem Geldmarkt stehn sich nur Verleiher und Borger gegenüber. Die Ware hat dieselbe Form, Geld. Alle besondren Gestalten des Kapitals, je nach seiner Anlage in besondren Produktions- oder Zirkulationssphären sind hier ausgelöscht. Es existiert hier in der unterschiedslosen, sich selbst gleichen Gestalt des selbständigen Werts, des Geldes. Die Konkurrenz der besondren Sphären hört hier auf; sie sind alle zusammengeworfen als Geldborger, und das Kapital steht allen auch gegenüber in der Form, worin es noch gleichgültig gegen die bestimmte Art und Weise seiner Anwendung ist. Als was das industrielle Kapital nur in der Bewegung und Konkurrenz zwischen den besondren Sphären erscheint, als an sich gemeinsames Kapital der Klasse, tritt es hier wirklich, der Wucht nach, in der Nachfrage und Angebot von Kapital auf. Andrerseits besitzt das Geldkapital auf dem Geldmarkt wirklich die Gestalt, worin es als gemeinsames Element, gleichgültig gegen seine besondre Anwendung, sich unter die verschiednen Sphären, unter die Kapitalistenklasse verteilt, je nach den Produktionsbedürfnissen jeder besondren Sphäre. Es kommt hinzu, daß mit Entwicklung der großen Industrie das Geldkapital mehr und mehr, soweit es auf dem Markt erscheint, nicht vom einzelnen Kapitalisten vertreten wird, dem Eigentümer dieses oder jenes Bruchteils des auf dem Markt befindlichen Kapitals, sondern als konzentrierte, organisierte Masse auftritt, die ganz anders als die reelle Produktion unter die Kontrolle der das gesellschaftliche Kapital vertretenden Bankiers gestellt ist. So daß sowohl, was die Form der Nachfrage angeht, dem verleihbaren Kapital die Wucht einer Klasse gegenübertritt; wie, was das Angebot angeht, es selbst als Leihkapital en masse auftritt.
lenders and borrowers, capital as one mass

On the money market only lenders and borrowers face each other. The commodity has one and the same form: money. Every particular shape capital can take — depending on which branch of production or circulation it is invested in — is wiped out here. Capital exists here purely as value on its own account, in money's undifferentiated, self-identical form. The competition between particular branches stops here too: they are all lumped together simply as borrowers of money, and capital confronts every one of them in a form that is still indifferent to just how it will actually be used.

What industrial capital only appears as through the movement and competition among the particular branches — the common capital of the class, in principle — capital here really is that, in weight and mass, in the demand and supply for capital. And money capital on the money market really does take the form in which, as a shared element indifferent to its particular use, it gets distributed among the different branches, among the capitalist class, according to what each branch's production actually needs. On top of this, as large-scale industry develops, money capital, so far as it shows up on the market at all, is less and less represented by the individual capitalist who owns this or that slice of the capital that is out there — more and more it turns up as a concentrated, organized mass, placed under the control of bankers who represent the capital of society, in a way quite unlike anything in actual production itself. So on the demand side, loanable capital is confronted by the sheer weight of a whole class; and on the supply side, it itself shows up en masse as loan capital.

Dies sind einige der Gründe, warum die allgemeine Profitrate als ein verschwimmendes Nebelbild erscheint neben dem bestimmten Zinsfuß, der zwar seiner Größe nach schwankt, aber dadurch, daß er gleichmäßig für alle Borger schwankt, ihnen stets als fixer, gegebner gegenübertritt. Ganz wie die Wertwechsel des Geldes es nicht hindern, allen Waren gegenüber gleichen Wert zu haben. Ganz wie die Marktpreise der Waren täglich schwanken, was sie nicht hindert, täglich in den Berichten notiert zu werden. Ganz so der Zinsfuß, der ebenso regelmäßig als "Preis des Geldes" notiert wird. Es ist, weil hier das Kapital selbst in Geldform als Ware angeboten wird; die Fixation seines Preises daher Fixierung seines Marktpreises wie bei allen andern Waren ist; der Zinsfuß sich daher stets als allgemeiner Zinsfuß, als soviel für so viel Geld, als quantitativ bestimmt darstellt. Die Profitrate dagegen kann selbst innerhalb derselben Sphäre, bei gleichen Marktpreisen der Ware, verschieden sein, je nach den verschiednen Bedingungen, worin die einzelnen Kapitale dieselbe Ware produzieren; denn die Profitrate für das Einzelkapital wird bestimmt nicht durch den Marktpreis der Ware, sondern durch die Differenz zwischen Marktpreis und Kostpreis. Und diese verschiednen Profitraten, erst innerhalb derselben Sphäre und dann zwischen den verschiednen Sphären selbst, können sich nur durch beständige Schwankungen ausgleichen.
quoted daily, a blur beside it

These are some of the reasons why the general rate of profit looks like a blurred, hazy picture standing next to the sharply fixed rate of interest — a rate that does move up and down in size, but because it moves the same way for every borrower, it always confronts them as something fixed and given. It is much like the way money's own value can change without stopping it from having the same value against every commodity; or the way market prices of goods change every day without stopping the daily reports from quoting them. It is exactly the same with the rate of interest, which gets quoted just as regularly as the 'price of money'. That is because here capital itself, in money form, is offered as a commodity; fixing its price is simply fixing its market price, the way it is fixed for every other commodity — so the rate of interest always presents itself as a general rate, so much for so much money, a plain quantity.

The rate of profit is nothing like that. It can differ even within one and the same branch, at the very same market price, depending on the different conditions under which individual capitals produce the same good — because the rate of profit on an individual capital is not set by the market price of the good at all, but by the gap between the market price and the cost price. And these different rates of profit — first within one branch, then between different branches — can only ever be levelled out through constant fluctuation.

__________
*
(Notiz für spätere Ausarbeitung.) Eine besondre Form des Kredits: Man weiß, daß, wenn das Geld als Zahlungsmittel statt als Kaufmittel fungiert, die Ware veräußert, aber ihr Wert erst später realisiert wird. Findet die Zahlung erst statt, nachdem die Ware wieder verkauft ist, so erscheint dieser Verkauf nicht als Folge des Kaufs, sondern es ist durch den Verkauf, daß der Kauf realisiert wird. Oder der Verkauf wird ein Mittel des Kaufens. - Zweitens: Schuldtitel, Wechsel etc., werden Zahlungsmittel für den Gläubiger. - Drittens: die Kompensation der Schuldtitel ersetzt das Geld.
an unfinished note on credit

(A note for working out later.) A particular form of credit. As we know, when money serves as a means of payment rather than a means of purchase, the goods change hands first and their value is only realized later. If payment only happens after the goods have been resold, then that resale does not look like a consequence of the purchase — rather, it is the sale that makes the purchase real. The sale, in other words, becomes a way of buying.

Second: certificates of debt, bills of exchange, and the like become means of payment for the creditor.

Third: settling debt certificates against each other takes the place of money.

Kap. 22
The Limits of Interest and the Tendency of the Rate of Interest to Fall
Behind the reader stands the peculiar commodity money becomes once lent, its price an irrational one. Left open is how far that price can run and what, if anything, governs it. This unit fixes profit as the outer limit interest cannot pass, admits the limit carries its own exceptions, and shows through a hypothetical that different interest rates can express one constant share of a divisible profit. It then asks, hedging as it goes, whether interest tracks the general rate of profit, offers the trade cycle as loose evidence rather than a rule, and closes by naming two forces that drag the rate down for reasons that have nothing to do with profit.
The object of this chapter, like the various phenomena of credit that we shall be dealing with later, cannot be investigated in detail. Competition between lenders and borrowers, and the resulting short-term fluctuations in the money market, fall outside the scope of our discussion. The circuit which the rate of interest describes during the industrial cycle can only be dealt with after the cycle itself. Nor can we go into the latter here. The same applies for the approximate equalization of the rate of interest, more or less, on the world market. All that we are concerned with here is the independent form of interest-bearing capital and the way that interest acquires autonomy vis-à-vis profit.
scoping the chapter

This chapter's subject, like all the credit phenomena we'll get to later, can't be gone into in detail here. The competition between lenders and borrowers, and the short-term ups and downs in the money market that come from it, are outside what we're looking at. Tracing the path the rate of interest follows over the industrial cycle would mean first laying out that cycle itself, and that can't be done here either. The same goes for how far the rate of interest evens out, more or less, across the world market. All we're dealing with here is the independent shape interest-bearing capital takes, and the way interest becomes independent of profit.

Since interest is simply a part of profit, a part which we have assumed the industrial capitalist has to pay to the money capitalist, the maximum limit of interest would seem to be the profit itself, in which case the share that accrues to the functioning capitalist would be zero. Leaving aside those special cases where interest is actually greater than profit, so that it cannot all be paid out of the profit, we might perhaps consider the maximum limit of interest as the whole profit minus the part of it reducible to ‘wages of superintendence’, to be developed later. The minimum limit of interest is completely indeterminate. It could fall to any level, however low. But countervailing circumstances constantly enter to raise it above this relative minimum.
the bound on interest

Interest is only a part of profit — on what we've assumed so far, the part the industrial capitalist has to pay the money capitalist. So the maximum limit on interest would seem to be profit itself, the point where the functioning capitalist's share would be zero. Leaving aside particular cases where interest is actually bigger than profit, and so can't be paid out of profit at all, perhaps the maximum limit should really be counted as the whole profit minus the part of it that, as we'll see later, resolves into wages of superintendence. The minimum limit of interest, by contrast, is completely indeterminate. It could fall to any depth at all. But circumstances working the other way keep stepping in and pushing it back up above that relative minimum.

‘The relation between the sum paid for the use of capital and the capital expresses the rate of interest as measured in money.’ ‘The rate of interest depends (1) on the rate of profit; (2) on the proportion in which the entire profit is divided between the lender and borrower’ (The Economist, 22 January 1853). ‘If that which men pay as interest for the use of what they borrow, be a part of the profits it is capable of producing, this interest must always be governed by those profits’ (Massie, op. cit., p. 49).
quoted: the Economist

'The relation between the sum paid for the use of a capital and that capital itself gives the rate of interest, measured in money.' 'The rate of interest depends, first, on the rate of profit; second, on the proportion in which the total profit is divided between lender and borrower' (the Economist, 22 January 1853).

English joined this paragraph
quoted: Massie

Massie's point is that what a borrower pays as interest for the use of a sum is a part of the profit that sum is capable of producing, so the interest must always be governed by that profit.

We shall start by assuming a fixed ratio between the total profit and the part of it paid to the money capitalist as interest. Then it is clear that the interest will rise or fall with the total profit, and the latter is determined by the general rate of profit and its fluctuations. If the average profit rate is 20 per cent, for example, and interest a quarter of the profit, the interest rate will be 5 per cent; if profit is 16 per cent, interest will be 4 per cent. Given a rate of profit of 20 per cent, interest could rise to 8 per cent and the industrial capitalist would still make the same profit as with a profit rate of 16 per cent and an interest rate of 4 per cent; i.e. 12 per cent. If interest were to rise to 6 or 7 per cent, he would in fact retain a greater part of the profit. But if interest is a constant proportion of the average profit, it will follow that the higher the general rate of profit, the greater is the absolute difference between total profit and interest, and the greater therefore the total profit that accrues to the functioning capitalist, and vice versa. Let us assume that interest is one-fifth of the average profit. 1/5 of 10 is 2; the difference between the total profit and the interest is 8. 1/5 of 20 is 4. The difference = 20 — 4 = 16; 1/5 of 25 is 5; difference = 25 — 5 = 20; 1/5 of 30 is 6; difference = 30 — 6 = 24; 1/5 of 35 is 7; difference = 35 — 7 = 28. The various interest rates of 4, 5, 6 and 7 per cent would here always be one-fifth or 20 per cent of the total profit. As the rate of profit varies, so different rates of interest can express the same aliquot part of the total profit or the same percentage share in it. With interest such a constant proportion, the industrial profit (the difference between the total profit and the interest) would be greater, the higher the general rate of profit, and vice versa.
the numerical example

Assume for a moment that interest holds a fixed share of total profit. Then interest simply tracks profit, and profit tracks the average rate of profit as it rises and falls. Say that share is one fifth: at a profit rate of 20 per cent, interest is 4 per cent and the functioning capitalist keeps 16; at 35 per cent, interest is 7 per cent and he keeps 28. Different profit rates yield different rates of interest, but each time the same fixed fraction of total profit is being taken as interest. And because the fraction stays fixed, the higher the general rate of profit climbs, the bigger the absolute gap between total profit and interest grows — meaning the functioning capitalist's own share grows too, not just proportionally but in raw amount.

All other circumstances taken as equal, i.e. taking the ratio between interest and total profit as more or less constant, the functioning capitalist will be able and willing to pay a higher or lower interest in direct proportion to the level of his profit rate.61 Since we have seen that the level of the profit rate stands in inverse proportion to the development of capitalist production, it follows that the higher or lower rate of interest in a country stands in the same inverse proportion to the level of industrial development, particularly in so far as the variation in the rate of interest expresses an actual variation in the profit rate. We shall see later on that this need by no means always be the case. In this sense one can say that interest is governed by profit, and more precisely by the general rate of profit. And this kind of regulation applies even to its average.
regulated by profit, hedged

Set aside everything else and treat the ratio between interest and total profit as fairly stable. Then the functioning capitalist is both able and willing to pay a higher or lower interest in direct proportion to his rate of profit — and since, as we have seen, the level of the rate of profit stands in inverse proportion to the development of capitalist production, a country's higher or lower rate of interest stands in that same inverse proportion to its level of industrial development. But this only holds so far as a difference in interest rates actually reflects a difference in profit rates, and that turns out by no means always to be true, as we'll see later. Still, in this qualified sense, one can say profit governs interest — more exactly, the general rate of profit does — and that this holds even for the average rate of interest.

At all events, the average rate of profit should be considered as ultimately determining the maximum limit of the interest.
the bound restated

In any case, the average rate of profit is to be taken as the maximum limit that ultimately determines interest.

We shall immediately go on to consider more closely this circumstance that interest is to be related to the average profit. Where a given whole such as profit is to be divided in two, the first thing that matters is of course the size of the whole to be divided, and this, the magnitude of profit, is determined by the average rate of profit. Once the general rate of profit is given, i.e. the amount of profit on a capital of given size, which we can take as 100, then interest evidently varies in inverse proportion to the part of profit that remains to the functioning capitalist who operates with borrowed capital. And the circumstances that determine the magnitude of the profit to be divided, the value product of unpaid labour, are very different from those that determine its distribution among these two kinds of capitalist, and often operate in completely opposite directions.62
size of the whole, terms of division

We'll look more closely in a moment at relating interest to the average profit. Where a given whole, like profit, has to be divided between two people, what matters first is naturally the size of the whole being divided, and that — the size of the profit — is set by its average rate. Take the general rate of profit, and so the size of profit on a capital of a given size, say 100, as given: then variations in interest plainly run inversely to variations in the share of profit left to the functioning capitalist who works with borrowed capital. And the circumstances that set the size of the profit to be shared out — the value produced by unpaid labour — are very different from the circumstances that set how it's divided between these two kinds of capitalist, and often pull in quite opposite directions.

If we consider the turnover cycles in which modern industry moves — inactivity, growing animation, prosperity, overproduction, crash, stagnation, inactivity, etc., cycles which it falls outside the scope of our argument to analyse further — we find that a low level of interest generally corresponds to periods of prosperity or especially high profit, a rise in interest comes between prosperity and its collapse, while maximum interest up to extreme usury corresponds to a period of crisis.63 From summer 1843 onwards there was a period of marked prosperity. The rate of interest, which in spring 1842 was still 4 1/2 per cent, fell in spring and summer 1843 to 2 per cent;64 in September it even fell to 1 1/2 per cent (Gilbart [op. cit.], I, p. 166). During the crisis of 1847, it rose to 8 per cent and more.
interest across the cycle

Looking at the turnover cycles modern industry moves through — calm, growing activity, prosperity, overproduction, crash, stagnation, calm again, and so on, cycles whose further analysis falls outside what we're looking at here — one finds that a low rate of interest generally corresponds to periods of prosperity or extra profit, a rising rate of interest to the turning point between prosperity and its collapse, and the maximum rate of interest, up to the harshest usury, to crisis. From summer 1843 there was a decided prosperity; the rate of interest, still 4 1/2 per cent in spring 1842, fell in spring and summer 1843 to 2 per cent, and in September even to 1 1/2 per cent; then during the 1847 crisis it rose to 8 per cent and more.

Yet low interest can also be accompanied by stagnation, and a moderate rise in interest by growing animation.
the counter-case

Still, on the other hand, low interest can go together with stagnation, and a moderately rising interest with growing activity.

The rate of interest reaches its highest level during crises, when people have to borrow in order to pay, no matter what the cost. And since a rise in interest corresponds to a fall in the price of securities, this is at the same time a very suitable opportunity for people with available money capital to buy up such interest-bearing securities at ridiculously low prices, and in the regular course of events these securities are bound to reach at least their average price again as soon as the interest rate falls.65
the crisis peak, and its opportunity

The rate of interest reaches its highest point during crises, when people have to borrow to pay, whatever it costs. And since a rise in interest corresponds to a fall in the price of securities, this is at the same time a very handy opportunity for people with money capital available to snap up such interest-bearing securities at give-away prices — securities that, in the normal course of things, must climb back to at least their average price once the rate of interest falls again.

But there is also a tendency for the rate of interest to fall, quite independently of fluctuations in the rate of profit. And there are two major reasons for this.
two causes, independent of profit

But there is also a tendency for the rate of interest to fall that is quite independent of any swings in the rate of profit. And it has two main causes:

(1) ‘Were we even to suppose that capital was never borrowed with any view but to productive employment, I think it very possible that interest might vary without any change in the rate of gross profits. For as a nation advances in the career of wealth, a class of men springs up and increases more and more, who by the labours of their ancestors find themselves in the possession of funds sufficiently ample to afford a handsome maintenance from the interest alone. Very many also who during youth and middle age were actively engaged in business, retire in their latter days to live quietly on the interest of the sums they have themselves accumulated. This class, as well as the former, has a tendency to increase with the increasing riches of the country, for those who begin with a tolerable stock are likely to make an independence sooner than they who commence with little. Thus it comes to pass, that in old and rich countries, the amount of national capital belonging to those who are unwilling to take the trouble of employing ing it themselves, bears a larger proportion to the whole productive stock of the society, than in newly settled and poorer districts. How much more numerous in proportion to the population is the class of rentiers . . . in England! As the class of rentiers increases, so also does that of lenders of capital, for they are one and the same’ (Ramsay, An Essay on the Distribution of Wealth, pp. 201-2).
quoted: Ramsay on rentiers

I. 'Even supposing that capital were never borrowed except for productive investment, it is still possible for the rate of interest to shift without any shift at all in the rate of gross profit. For as a nation advances in the growth of wealth, a class of people keeps arising and growing who, through the work of their forebears, find themselves holding funds ample enough to live handsomely on the interest alone. Many others, too, who were active in business in their youth and prime, withdraw to live quietly in old age on the interest of the sums they themselves have accumulated. Both these classes tend to grow along with the country's growing wealth, since those who start out with a moderate capital reach an independent fortune more easily than those who start with little. So in old, rich countries, the part of the national capital whose owners do not want to put it to work themselves makes up a larger share of the society's whole productive capital than it does in newly settled, poorer countries. How numerous the class of rentiers is in England! And as the class of rentiers grows, so does the class of lenders of capital — for they are one and the same' (Ramsay).

(2) The development of the credit system, the ever growing control this gives industrialists and merchants over the monetary savings of all classes of society through the mediation of the bankers, as well as the progressive concentration of these savings on a mass scale, so that they can function as money capital, must also press down the rate of interest. More on this later.
the credit system, second cause

II. The growth of the credit system, and with it the ever-growing hold that industrialists and merchants gain, through the bankers, over the money savings of every class in society, together with the advancing concentration of those savings into the sums that let them work as money capital — this too is bound to press the rate of interest down. More on this later.

As far as the determination of the rate of interest is concerned, Ramsay says it ‘depends partly upon the rate of gross profits, partly on the proportion in which these are separated into profits of capital and those of enterprise. This proportion again depends upon the competition between the lenders of capital and the borrowers; which competition is influenced, though by no means entirely regulated, by the rate of gross profit expected to be realized.66 And the reason why competition is not exclusively regulated by this cause, is, because on the one hand many borrow without any view to productive employment; and, on the other, because the proportion of the whole capital to be lent, varies with the riches of the country independently of any change in gross profits’ (Ramsay, op. cit., pp. 206-7).
quoted: Ramsay on what fixes it

On what fixes the rate of interest, Ramsay says it 'depends partly on the rate of gross profit, partly on the proportion in which that profit is divided into interest and profits of enterprise. This proportion depends on the competition between lenders and borrowers of capital; and that competition is influenced, but not exclusively governed, by the expected rate of gross profit. It is not exclusively governed by this, because on the one hand many people borrow with no intention at all of productive investment, and on the other hand the size of the whole loanable capital varies with the wealth of the country, independently of any change in gross profit' (Ramsay).

Kap. 22
No 'Natural' Rate of Interest: The Qualitative Distinction Proceeds from the Purely Quantitative Division
Carried forward is the picture of interest as a slice of one profit, bounded above by profit itself and squeezed from below by counter-pressures with no fixed floor. This unit asks what decides how that slice gets cut, and finds no answer of the kind economists give for wages or profit: no natural rate, only competition, custom and accident settling an inherently arbitrary division. It then explains why that lawlessness is not chaos but a structural reversal — the qualitative distinction between interest and profit of enterprise is produced by, not the source of, a purely quantitative split. What settles here is why that lawless level still yields the most rigid, publicly quoted figure in the system.
In order to find the average rate of interest, we have to calculate (1) the average interest rate as it varies over the major industrial cycles; (2) the rate of interest in those investments where capital is lent for longer periods.
finding the average rate: two steps

To work out the average rate of interest, you need two things: the average interest rate across the big ups and downs of the industrial cycle, and the rate charged on longer-term loans.

The prevailing average rate of interest in a country, as distinct from the constantly fluctuating market rate, cannot be determined by any law. There is no natural rate of interest, therefore, in the sense that economists speak of a natural rate of profit and a natural rate of wages. Massie was already completely correct when he noted (op. cit., p. 49):
no law sets it, no natural rate

The average rate of interest that prevails in a country — as opposed to the market rate, which keeps shifting — cannot be fixed by any law. There is no natural rate of interest in the sense economists mean when they speak of a natural rate of profit or a natural rate of wages. Massie already put this exactly right:

‘The only thing which any man can be in doubt about on this occasion, is, what proportion of these profits do of right belong to the borrower, and what to the lender; and this there is no other method of determining than by the opinions of borrowers and lenders in general; for right and wrong, in this respect, are only what common consent makes so.’
Massie: whose share, and who settles it

The only real question, Massie said, is what share of these profits rightfully belongs to the borrower and what share to the lender; and there is no way to settle that except by the opinions of borrowers and lenders generally — because right and wrong here are simply whatever common consent makes them.

The coincidence of demand and supply means nothing at all here, even taking the average rate of profit as given. Where this formula is resorted to in other cases (and this is then correct for practical purposes), it serves as a formula for finding basic rules which are independent of competition and, instead, determine it (regulating limits or limiting quantities); i.e. it is a formula for those caught up in the practice of competition, in its manifestations and in the ideas that develop out of these. With it they can arrive at some idea, even if still a superficial one, of the inner connection of economic relations that presents itself within competition. It is a method of getting from the variations that accompany competition to the limits of these variations. This is not the case with the average rate of interest. There is no reason at all why the average conditions of competition, of equilibrium between lender and borrower, should give the lender an interest of 3, 4, 5 per cent, etc. on his capital, or alternatively a certain percentage, 20 per cent or 50 per cent, of the gross profit. Where, as here, it is competition as such that decides, the determination is inherently accidental, purely empirical, and only pedantry or fantasy can seek to present this accident as something necessary.67 Nothing is more amusing in the parliamentary reports of 1857 and 1858 concerning bank legislation and the commercial crisis than when directors of the Bank of England, London and country bankers and professional theorists chatter back and forth about the ‘real rate produced’, without getting any further than such commonplaces as, for example, that ‘the price paid for the use of loanable capital should vary with the supply of such capital’, that ‘a high rate and a low profit cannot permanently exist’, and other platitudes of the same kind.68 Custom, legal tradition, etc. are just as much involved in the determination of the average rate of interest as is competition itself, in so far as this average rate exists not only as an average number but as an actual magnitude. An average interest must be assumed in many legal contexts where interest has to be reckoned. If we go on to ask why the limits of the average interest rate cannot be derived from general laws, the answer simply lies in the nature of interest. It is merely a part of the average profit. The same capital appears in a double capacity, as capital for loan in the hands of the lender, and as industrial or commercial capital in the hands of the functioning capitalist. But it functions only once, and produces profit only once. In the production process itself, the character of capital as loan capital does not play any role. How the two parties who have claims on this profit actually share it between them is as it stands a purely empirical fact, pertaining to the realm of chance, just as the respective shares in the common profit of a business partnership are distributed among its various members. With the division between surplus-value and wages, on which the determination of the profit rate essentially depends, two quite different elements are involved, labour-power and capital. It is the functions of two independent variables which set limits to one another, and the quantitative division of the value produced emerges from their qualitative distinction. We shall see later on that the same thing takes place with the division of surplus-value between rent and profit. With interest, there is nothing of the kind. Here, on the contrary, the qualitative distinction proceeds from the purely quantitative division of the same piece of surplus-value, as we shall immediately go on to see.
why no law governs it

Demand and supply balancing out — even granting the average rate of profit as a starting point — means nothing at all here. Elsewhere that method is useful: it points past the surface of competition to the underlying rule that competition doesn't set but is instead governed by, and it lets someone caught up in the day-to-day of competition glimpse, however roughly, the real connection running underneath it. It is a way of getting from the ups and downs that go with competition to the outer limits of those ups and downs.

Not so with the average rate of interest. There is no reason at all why the ordinary give-and-take between lender and borrower should settle on, say, 3, 4 or 5 per cent, or on some fixed share — 20 or 50 per cent — of the gross profit. Where competition alone is doing the deciding, the outcome is simply accidental, a purely empirical matter; only pedantry or fantasy would try to dress up that accident as something necessary. Custom and legal tradition have just as much to do with fixing the average rate as competition itself does, at least once that rate is more than a statistical average and becomes an actual, going figure — courts even have to assume some average rate of interest as the legal one whenever interest has to be reckoned.

So why can the limits of the average rate not be derived from any general law? The answer lies simply in what interest is. It is only a part of the average profit. The same capital shows up in two capacities at once — as capital lent out, in the lender's hands, and as industrial or commercial capital, in the hands of the capitalist who actually puts it to work. But it functions, and produces profit, only once. Whether it counts as loan capital makes no difference inside the production process itself. How the two people with a claim on that one profit actually divide it between them is, as it stands, exactly as much a matter of chance and empirical fact as how partners divide up the shares of a joint business's profit.

Compare this with the division between surplus-value and wages, which is what mainly decides the rate of profit in the first place: there, two genuinely different elements are at work — labour-power and capital — each an independent variable setting limits on the other, and it is their qualitative difference that produces the quantitative split of the value they produce between them. The same holds, as we shall see later, for the division of surplus-value between rent and profit. With interest, nothing of the kind happens. Here the qualitative distinction — as we are about to see — runs the other way round: it comes FROM a purely quantitative split of one and the same piece of surplus-value.

From what has already been developed, it follows that there is no ‘natural’ rate of interest. But if on the one hand the average or middling rate of interest, as distinct from the constantly fluctuating market rate, cannot be given limits by a general law, since what is involved is simply a distribution of the gross profit between two persons who possess capital under different titles, the rate of interest, conversely, whether it is the average rate or the market rate of the time, appears as something quite different from the general rate of profit, as a uniform, definite and palpable magnitude.69
so: no natural rate, yet fixed

So: there is no 'natural' rate of interest. And yet, set against that: while no general law can fix the limits of the average or middling rate of interest — as distinct from the constantly shifting market rate — because all that is really going on is a split of the gross profit between two people who hold capital under different titles, the rate of interest, whether the average rate or the going market rate, appears, conversely, as something quite unlike the general rate of profit: a uniform, definite, palpable magnitude.

The rate of interest is related to the profit rate in a similar way as the market price of a commodity is to its value. In so far as the rate of interest is determined by the profit rate, this is always through the general rate of profit and not through the specific profit rates that may prevail in particular branches of industry, still less by the extra profit that the individual capitalist might make in a particular sphere of business.70 The general rate of profit, in fact, reappears in the average rate of interest as an empirical, given fact, even though the latter is not a pure or reliable ex pression of the former. It is certainly true that the interest rate itself is always different according to the class of security provided by the borrowers, and according to the duration of the loan as well; but for each of these categories, it is uniform at a given moment of time. This distinction, therefore, does not militate against the fixed and uniform character of the rate of interest.71
like market price to value

The rate of interest relates to the rate of profit rather as a commodity's market price relates to its value. Where the rate of interest is determined by the rate of profit at all, it is always by the general rate of profit — never by whatever specific rate happens to prevail in some particular branch of industry, and still less by the extra profit an individual capitalist might make in some particular line of business. So the general rate of profit does reappear in the average rate of interest as an empirical, given fact — though the average rate of interest is not a pure or reliable expression of it.

English joined this paragraph
varies by class, fixed within it

It is true that the rate of interest itself is always different depending on the class of security the borrower offers and on how long the loan runs. But within each of those classes it is uniform at any given moment. So this variation does not undermine the fixed, uniform character of the rate of interest.

Kap. 22
The Rate of Interest as a Fixed, Given Magnitude against the General Rate of Profit as a Mere Tendency
The reader arrives having just watched Marx insist that nothing fixes how one profit splits into interest and a remainder except competition and custom — there is no natural rate, only a shifting level inside a bound set by profit itself. That leaves an odd asymmetry unexplained: interest still confronts everyone as a hard, quoted number, the way a commodity's price does, while the average rate of profit stays a blur nobody can simply read off. This unit settles why, tracing the difference to how loan capital and functioning capital actually meet on the money market, and to what makes interest-bearing capital a commodity unlike any other.
In any given country, the average rate of interest is constant over long periods, because the general rate of profit changes only in the long run — despite constant change in the particular rates of profit, a change in one sphere being offset by an opposite change in another. And the relative constancy of the profit rate is precisely reflected in this more or less constant character of the average or common rate of interest.
why the average rate looks steady

In any country the average rate of interest appears, over long stretches, as a constant figure. That's not because interest follows some law of its own — it's because the general rate of profit itself only shifts slowly. The particular rates of profit in different branches keep changing all the time, but a change in one branch is offset by an opposite change in another, so the general rate barely moves over the long run. And it is exactly this fairly constant character of the general profit rate that shows up as the fairly constant character of the average, or common, rate of interest.

As far as the permanently fluctuating market rate of interest is concerned, this is a fixed magnitude at any given moment, just like the market price of commodities, because on the money market all capital for loan confronts the functioning capital as an overall mass; i.e. the relationship between the supply of loan capital on the one hand, and the demand for it on the other, is what determines the market level of interest at any given time. This is all the more true, the more the development and associated concentration of the credit system gives loan capital a general social character, and puts it on the money market all at once, simultaneously. The general rate of profit, on the other hand, only ever exists as a tendency, as a movement of equalization between particular rates of profit. The competition between capitalists — which is itself this movement of equalization — consists here in their withdrawing capital bit by bit from those spheres where profit is below the average for a long period, and similarly injecting it bit by bit into spheres where it is above this; or, alternatively, in their dividing additional capital between these spheres in varying proportions.
There is a constant variation in the injection and withdrawal of capital vis-à-vis these various spheres, never a simultaneous effect on a mass scale as with the determination of the interest rate.
market rate fixed, profit rate a trend

The market rate of interest is different: it keeps fluctuating, but at any given moment it stands as a fixed figure, the way a commodity's market price does. Why? Because on the money market, all the capital available to be lent confronts the capital actually at work as one single combined mass — so the balance between the supply of loanable capital on one side and the demand for it on the other settles the going rate of interest at that moment. And the more credit develops and concentrates, the more loanable capital takes on this general, social character and gets thrown onto the money market all at once, in one lump.

The general rate of profit is nothing like this. It only ever exists as a tendency — as the ongoing movement by which the particular rates of profit in different branches get levelled toward each other. This levelling is what the competition of capitalists actually consists of here: capitalists gradually pull capital out of branches where profit has stayed below average for a long time, and gradually pour it into branches where profit has stayed above average; or they divide up new capital between these branches in varying proportions. Here there is constant back-and-forth — capital flowing in and being drawn out between these different branches — but never that single, simultaneous, mass-scale movement you get when the rate of interest is being set.

We have seen that although it is a category absolutely different from the commodity, interest-bearing capital becomes a commodity sui generis with interest as its price, and this price, just like the market price of an ordinary commodity, is fixed at any given time by demand and supply. The market rate of interest, though in constant flux, thus appears at any given moment as every bit as fixed and uniform as the momentary market price of any commodity. The money capitalists supply this commodity, and the functioning capitalists buy it; they constitute the demand for it. This process of fixing the rate by supply and demand does not apply to the equalization that produces the general rate of profit. If the prices of commodities in one sphere are below or above their price of production (and in this connection we ignore the fluctuations connected with the industrial cycle, or those that simply bear on the individual business), an equalization takes place by the expansion or contraction of production, i.e. an increase or decrease in the quantity of commodities that these industrial capitals put on the market, mediated by the immigration or emigration of capital with respect to these particular spheres of production. It is the equalization brought about in this way, whereby the average market prices of commodities are reduced to their prices of production, that corrects divergences between the particular rates of profit and the general or average profit rate. This process never appears and never can appear as if industrial or commercial capital as such were a commodity vis-a-vis a buyer, in the way that interest-bearing capital is. It appears only in the fluctuations and equalizations that reduce the market prices of commodities to their production prices; not as the direct establishment of an average profit. The general rate of profit is determined in fact (1) by the surplus-value that the total capital produces; (2) by the ratio of this surplus-value to the value of the total capital; and (3) by competition, but only in so far as this is the movement through which the capitals invested in particular spheres of production seek to draw equal dividends from this surplus-value in proportion to their relative size. The general rate of profit, in other words, obtains its determination in quite different and far more complicated ways than does the market rate of interest, which is directly and immediately determined by the relation of supply and demand, and it is therefore not a palpable and given fact in the way that the interest rate is. The particular profit rates in the various spheres of production are themselves more or less uncertain; but in so far as they do show themselves, it is not their uniformity that is apparent but rather their variation. The general rate of profit itself simply appears as the minimum limit of profit, not as an empirical and directly visible form of the actual profit rate.
a commodity's price against a hazy trend

We have seen that interest-bearing capital, though it belongs to a completely different category from an ordinary commodity, becomes a commodity of its own special kind — and that is why interest is its price, fixed at every moment by supply and demand, exactly the way an ordinary commodity's market price is. So the market rate of interest, even though it never stops moving, still shows up at any given moment looking just as fixed and uniform as a commodity's momentary market price. The money capitalists supply this commodity; the functioning capitalists buy it — they are its demand.

None of this happens when particular rates of profit get levelled to the general rate. If the prices of goods in some branch sit below or above their price of production — leaving aside the swings tied to a particular business or to the industrial cycle — the levelling happens by production expanding or shrinking, that is, by more or fewer goods being thrown on the market, which comes about as capital moves into or out of that branch. It is this levelling of average market prices down or up to prices of production that corrects the gap between a branch's own rate of profit and the general, average rate. But this process never looks like, and never can look like, industrial or commercial capital itself standing there as a commodity before a buyer, the way interest-bearing capital does. So far as it shows itself at all, it shows itself only in the swings and levellings that bring market prices of goods into line with prices of production — never as a direct fixing of the average profit.

The general rate of profit is actually fixed by: first, the surplus-value the total capital produces; second, the ratio of that surplus-value to the value of the total capital; and third, competition — but only so far as competition is the movement through which capitals invested in particular branches try to draw an equal share of that surplus-value, in proportion to their own size. So the general rate of profit gets its determination from grounds quite different from, and far more complicated than, the market rate of interest, which is fixed directly and immediately by supply and demand — and that is why it is not a plain, given fact the way the rate of interest is. The particular rates of profit in the different branches are themselves more or less uncertain; but so far as they do show themselves, what shows is not how alike they are but how much they differ. And the general rate of profit itself never shows up as an actual, directly visible shape of the real rate of profit — it appears only as a floor beneath profit.

In stressing this distinction between the interest rate and the profit rate, we have so far left aside the following two factors, which favour the consolidation of the interest rate: (1) the historical pre-existence of interest-bearing capital and the existence of a general rate of interest handed down by tradition; (2) the far stronger direct influence that the world market exerts on the establishment of the interest rate, independently of the conditions of production in a country, as compared with its influence on the profit rate.
two more steadying factors, set aside

In drawing out this difference between the rate of interest and the rate of profit, we have so far left aside two more things that help keep the rate of interest steady. First, interest-bearing capital already existed in earlier times, and there is a general rate of interest handed down by tradition. Second, the world market has a much more direct influence on fixing the rate of interest — independent of any one country's own conditions of production — than it has on the rate of profit.

Average profit does not appear as a directly given fact, but rather as the end-product of an equalization of opposing tendencies that can only be established by investigation. With the interest rate it is different. Where it is a universal governing rule, which occurs at least locally, it is a fact fixed every day, a fact that even serves industrial and commercial capital as a presupposition and postulate in their operating calculations. It becomes a general property of any sum of £100 that it will yield 2, 3, 4, 5 per cent. Meteorological reports do not show more precisely the level of the barometer and thermometer than do stock-market reports the level of the interest rate, not for this capital or that, but rather for the generality of loan capital to be found on the money market.
a daily fact against a worked-out result

Average profit is never simply given; it only turns up as the end result of working out how opposing swings cancel each other out — and that takes investigation. The rate of interest is different. Wherever it holds generally, even just for one place, it is a fact fixed fresh every day, a fact that industrial and commercial capital actually build into their calculations as a given, a starting point. It becomes a plain property of any sum of £100 that it will bring in 2, 3, 4, or 5 per cent. Weather reports do not record the barometer and thermometer more exactly than stock-market reports record the rate of interest — not for this or that particular sum of capital, but for loanable capital as such, capital on the money market generally.

On the money market it is only lenders and borrowers who face one another. The commodity has the same form, money. All particular forms of capital, arising from its investment in particular spheres of production or circulation, are obliterated here. It exists in the undifferentiated, self-identical form of independent value, of money. Competition between particular spheres now ceases; they are all thrown together as borrowers of money, and capital confronts them all in a form still indifferent to the specific manner and mode of its application. Here capital really does emerge, in the pressure of its demand and supply, as the common capital of the class, whereas industrial capital appears like this only in the movement and competition between the particular spheres. Money capital on the money market, moreover, really does possess the form in which it is distributed as a common element among these various spheres, among the capitalist class, quite irrespective of its particular application, according to the production requirements of each particular sphere. On top of this, with the development of large-scale industry money capital emerges more and more, in so far as it appears on the market, as not represented by the individual capitalist, the proprietor of this or that fraction of the mass of capital on the market, but rather as a concentrated and organized mass, placed under the control of the bankers as representatives of the social capital in a quite different manner to real production. The result is that, as far as the form of demand goes, capital for loan is faced with the entire weight of a class, while, as far as supply goes, it itself appears en masse as loan capital.
lenders and borrowers, capital as one mass

On the money market only lenders and borrowers face each other. The commodity has one and the same form: money. Every particular shape capital can take — depending on which branch of production or circulation it is invested in — is wiped out here. Capital exists here purely as value on its own account, in money's undifferentiated, self-identical form. The competition between particular branches stops here too: they are all lumped together simply as borrowers of money, and capital confronts every one of them in a form that is still indifferent to just how it will actually be used.

What industrial capital only appears as through the movement and competition among the particular branches — the common capital of the class, in principle — capital here really is that, in weight and mass, in the demand and supply for capital. And money capital on the money market really does take the form in which, as a shared element indifferent to its particular use, it gets distributed among the different branches, among the capitalist class, according to what each branch's production actually needs. On top of this, as large-scale industry develops, money capital, so far as it shows up on the market at all, is less and less represented by the individual capitalist who owns this or that slice of the capital that is out there — more and more it turns up as a concentrated, organized mass, placed under the control of bankers who represent the capital of society, in a way quite unlike anything in actual production itself. So on the demand side, loanable capital is confronted by the sheer weight of a whole class; and on the supply side, it itself shows up en masse as loan capital.

These are some of the reasons why the general rate of profit presents a blurred and hazy picture compared with the sharply defined rate of interest, which although its level fluctuates always confronts the borrowers as fixed and given, because it fluctuates in the same way for them all. In the same way, changes in the value of money do not prevent it from having the same value in relation to every commodity, and market prices of commodities fluctuate daily, although this does not prevent them from being noted every day in the reports. It is just the same with the rate of interest, which is noted just as regularly as the ‘price of money’. This is because capital itself is offered here as a commodity in the money form. The establishment of its price is therefore the establishment of its market price, just as with all other commodities; and so the rate of interest presents itself always as a general rate of interest, as so much for so much money, as quantitatively determined. The rate of profit, on the other hand, can vary even within the same sphere, given the same market price, according to the different conditions in which individual capitals produce the same commodity; for the profit rate on an individual capital is not determined simply by the market price of the commodity, but rather by the difference between market price and cost price. And these various rates of profit, firstly within the same sphere and then within the various different spheres, can be equalized only through constant fluctuations.
quoted daily, a blur beside it

These are some of the reasons why the general rate of profit looks like a blurred, hazy picture standing next to the sharply fixed rate of interest — a rate that does move up and down in size, but because it moves the same way for every borrower, it always confronts them as something fixed and given. It is much like the way money's own value can change without stopping it from having the same value against every commodity; or the way market prices of goods change every day without stopping the daily reports from quoting them. It is exactly the same with the rate of interest, which gets quoted just as regularly as the 'price of money'. That is because here capital itself, in money form, is offered as a commodity; fixing its price is simply fixing its market price, the way it is fixed for every other commodity — so the rate of interest always presents itself as a general rate, so much for so much money, a plain quantity.

The rate of profit is nothing like that. It can differ even within one and the same branch, at the very same market price, depending on the different conditions under which individual capitals produce the same good — because the rate of profit on an individual capital is not set by the market price of the good at all, but by the gap between the market price and the cost price. And these different rates of profit — first within one branch, then between different branches — can only ever be levelled out through constant fluctuation.

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(Note for later elaboration.) A particular form of credit. We know that when money functions as means of payment instead of means of purchase, the commodity is alienated first and its value realized only later. If payment takes place only after the commodity has been re-sold, this sale does not appear as a consequence of the purchase, but rather it is by the sale that the purchase is realized. Sale, in other words, becomes a means of purchase. — Secondly, certificates of debt, bills, etc. become means of payment for the creditor. — Thirdly, money is replaced by the settlement of outstanding debt certificates.
an unfinished note on credit

(A note for working out later.) A particular form of credit. As we know, when money serves as a means of payment rather than a means of purchase, the goods change hands first and their value is only realized later. If payment only happens after the goods have been resold, then that resale does not look like a consequence of the purchase — rather, it is the sale that makes the purchase real. The sale, in other words, becomes a way of buying.

Second: certificates of debt, bills of exchange, and the like become means of payment for the creditor.

Third: settling debt certificates against each other takes the place of money.