Das Kapital III — Kap. 24

Kap. 24

G - G´: die fetischartigste Form des Kapitals, in der das gesellschaftliche Verhältnis als Verhältnis eines Dings zu sich selbst vollendet ist

The reader arrives having watched the division between interest and profit of enterprise harden until it looks, wrongly, like two separate sources of income, and having watched supervision sort itself into a wage that is really a slice of a wider fund. This unit pushes that hardened division to its limit: everything but money confronting itself drops away, and capital appears as a mysterious thing that seems to breed value the way a tree bears fruit. It settles how a form can mislead without being anyone's mistake, why an economics eager to prove capital its own source seizes on exactly this shape, and closes with a sixteenth-century voice already outraged by the same appearance, long before it had a name.

Im zinstragenden Kapital erreicht das Kapitalverhältnis seine äußerlichste und fetischartigste Form. Wir haben hier G - G´, Geld, das mehr Geld erzeugt, sich selbst verwertenden Wert, ohne den Prozeß, der die beiden Extreme vermittelt. Im Kaufmannskapital, G - W - G´, ist wenigstens die allgemeine Form der kapitalistischen Bewegung vorhanden, obgleich sie sich nur in der Zirkulationssphäre hält, der Profit daher als bloßer Veräußerungsprofit erscheint; aber immerhin stellt er sich dar als ein Produkt eines gesellschaftlichen Verhältnisses, nicht als Produkt eines bloßen Dings. Die Form des Kaufmannskapitals stellt immer noch einen Prozeß dar, die Einheit entgegengesetzter Phasen, eine Bewegung, die in zwei entgegengesetzte Vorgänge zerfällt, in Kauf und Verkauf von Waren. Dies ist ausgelöscht in G - G´, der Form des zinstragenden Kapitals. Wenn z.B. 1.000 Pfd.St. vom Kapitalisten ausgeliehen werden, und der Zinsfuß ist 5%, so ist der Wert von 1.000 Pfd.St. als Kapital für 1 Jahr = C + Cz´, wo C das Kapital und z´ der Zinsfuß, also hier 5% = 5/100 = 1/20, 1.000 + 1.000 × 1/20 = 1.050 Pfd.St. Der Wert von 1.000 Pfd.St. als Kapital ist = 1.050 Pfd.St., d.h. das Kapital ist keine einfache Größe. Es ist Größen verhältnis, Verhältnis als Hauptsumme, als gegebner Wert, zu sich selbst als sich verwertendem Wert, als Hauptsumme, die einen Mehrwert produziert hat. Und wie man gesehn, stellt sich das Kapital als solches dar, als dieser unmittelbar sich verwertende Wert, für alle aktiven Kapitalisten, ob sie mit eignem oder geborgtem Kapital fungieren.

what gets erased here

In interest-bearing capital, the capital relation takes its most bare, most fetish-like shape. Here we just have M-M′: money making more money — value that grows itself — with the whole process that connects the two ends left out.

Commercial capital, M-C-M′, still shows something of that process. It runs money into goods and back into money, so it still shows a process, still shows two opposite steps — buying and then selling — and the profit, even though it only comes from that circulation, still looks like the product of a social relation, not the product of a bare thing.

None of that survives here. Say a capitalist lends out £1,000 at 5 per cent. The value of that £1,000 as capital for a year is the sum plus the interest it earns: 1,000 + (1,000 × 1/20) = £1,050. So the value of £1,000 as capital is £1,050 — which means capital is not just an amount of money. It is a relation: the original sum, taken as a given value, set against that same sum as value that grows itself, as a sum that has produced a surplus. And, as we have seen, this is how capital presents itself to every capitalist who actively uses it — whether the capital is his own or borrowed.

G - G´: Wir haben hier den ursprünglichen Ausgangspunkt des Kapitals, das Geld in der Formel G - W - G´ reduziert auf die beiden Extreme wo G´ - G, wo G´ = G + DeltaG, Geld, das mehr Geld schafft. Es ist die ursprüngliche und allgemeine Formel des Kapitals, auf ein sinnloses Resumé zusammengezogen. Es ist das fertige Kapital, Einheit von Produktionsprozeß und Zirkulationsprozeß, und daher in bestimmter Zeitperiode bestimmten Mehrwert abwerfend. In der Form des zinstragenden Kapitals erscheint dies unmittelbar, unvermittelt durch Produktionsprozeß und Zirkulationsprozeß. Das Kapital erscheint als mysteriöse und selbstschöpferische Quelle des Zinses, seiner eignen Vermehrung. Das Ding (Geld, Ware, Wert) ist nun als bloßes Ding schon Kapital, und das Kapital erscheint als bloßes Ding; das Resultat des gesamten Reproduktionsprozesses erscheint als eine, einem Ding von selbst zukommende Eigenschaft; es hängt ab von dem Besitzer des Geldes, d.h. der Ware in ihrer stets austauschbaren Form, ob er es als Geld verausgaben oder als Kapital vermieten will. Im zinstragenden Kapital ist daher dieser automatische Fetisch rein herausgearbeitet, der sich selbst verwertende Wert, Geld heckendes Geld, und trägt es in dieser Form keine Narben seiner Entstehung mehr. Das gesellschaftliche Verhältnis ist vollendet als Verhältnis eines Dings, des Geldes, zu sich selbst. Statt der wirklichen Verwandlung von Geld in Kapital zeigt sich hier nur ihre inhaltlose Form. Wie bei der Arbeitskraft wird der Gebrauchswert des Geldes hier der, Wert zu schaffen, größren Wert, als der in ihm selbst enthalten ist. Das Geld als solches ist bereits potentiell sich verwertender Wert und wird als solcher verliehen, was die Form des Verkaufens für diese eigentümliche Ware ist. Es wird ganz so Eigenschaft des Geldes, Wert zu schaffen, Zins abzuwerfen, wie die eines Birnbaums, Birnen zu tragen. Und als solches zinstragendes Ding verkauft der Geldverleiher sein Geld. Damit nicht genug. Das wirklich fungierende Kapital, wie gesehn, stellt sich selbst so dar, daß es den Zins nicht als fungierendes Kapital, sondern als Kapital an sich, als Geldkapital abwirft.

the fetish in its finished form

M-M'. This is capital's original starting point: money in the formula money-goods-money, cut down to just its two ends, so that the second sum equals the first plus an increase. It is capital's oldest, most general formula, squeezed into a phrase that, taken on its own, makes no sense. It is capital in its finished state, production and circulation rolled into one, throwing off a fixed surplus over a given stretch of time. In interest-bearing capital this shows up directly, with no production process and no circulation process standing behind it. Capital appears as a mysterious source that creates its own growth out of itself. The thing itself — money, a commodity, a sum of value — is now capital simply by being that thing; the outcome of the whole reproduction process looks like a property the thing carries on its own; and it is up to whoever holds the money, that is, holds a commodity in its always-exchangeable form, whether to spend it as plain money or hire it out as capital.

So in interest-bearing capital this automatic fetish is worked out in its purest form: value that grows itself, money that breeds money — and in this shape it no longer carries any trace of where it came from. The social relation is completed as the relation of a thing, money, to itself. Instead of the real turning of money into capital, all that shows here is that transformation's empty shell.

As with labour-power, the use-value money has here is that of creating value — a greater value than it itself contains. Money as such is already, in potential, value that grows itself, and it is lent out as just that — which is what selling means for this peculiar commodity. It becomes exactly as much a property of money to create value, to throw off interest, as it is a property of a pear tree to bear pears. And it is as this interest-bearing thing that the money-lender sells his money.

Nor does it stop there. Capital that is actually at work, as we have seen, presents its own interest not as the yield of capital doing that work, but as the yield of capital as such, of money capital.

Es verdreht sich auch dies: Während der Zins nur ein Teil des Profits ist, d.h. des Mehrwerts, den der fungierende Kapitalist dem Arbeiter auspreßt, erscheint jetzt umgekehrt der Zins als die eigentliche Frucht des Kapitals, als das Ursprüngliche, und der Profit, nun in die Form des Unternehmergewinns verwandelt, als bloßes im Reproduktionsprozeß hinzukommendes Accessorium und Zutat. Hier ist die Fetischgestalt des Kapitals und die Vorstellung vom Kapitalfetisch fertig. In G - G´ haben wir die begriffslose Form des Kapitals, die Verkehrung und Versachlichung der Produktionsverhältnisse in der höchsten Potenz: zinstragende Gestalt, die einfache Gestalt des Kapitals, worin es seinem eignen Reproduktionsprozeß vorausgesetzt ist; Fähigkeit des Geldes, resp. der Ware, ihren eignen Wert zu verwerten, unabhängig von der Reproduktion - die Kapitalmystifikation in der grellsten Form.

fruit and accessory swapped

And there's a further twist. Interest is really only one part of the profit — that is, of the surplus-value — that the functioning capitalist squeezes out of the worker. But now it appears the other way round: interest looks like capital's own proper fruit, the original thing, while profit — now recast as profit of enterprise — looks like a mere extra, a trimming added on in the course of reproduction. At this point the fetish-shape of capital, the whole picture of capital as a fetish, is complete.

In M-M' we have capital's most conceptless form, the inversion and thing-ification of the relations of production carried to its highest power: the interest-bearing shape, capital's simplest shape, in which capital is treated as if it existed before its own reproduction process; the ability of money, or of a commodity, to grow its own value on its own, independent of reproduction — capital's mystification in its most glaring form.

Für die Vulgärökonomie, die das Kapital als selbständige Quelle des Werts, der Wertschöpfung, darstellen will, ist natürlich diese Form ein gefundnes Fressen, eine Form, worin die Quelle des Profits nicht mehr erkenntlich und worin das Resultat des kapitalistischen Produktionsprozesses- getrennt vom Prozeß selbst - ein selbständiges Dasein erhält.

why vulgar economics loves this

For vulgar economics, which wants to present capital as an independent source of value, of value-creation itself, this form is of course a godsend — a form in which the source of profit can no longer be made out, and in which the result of the capitalist production process, cut loose from the process itself, gets a life of its own.

Erst im Geldkapital ist das Kapital zur Ware geworden, deren sich selbst verwertende Qualität einen fixen Preis hat, der im jedesmaligen Zinsfuß notiert ist.

only as money capital, a commodity

Only as money capital does capital become a commodity — one whose value-growing quality has a fixed price, quoted as the going rate of interest.

Als zinstragendes Kapital, und zwar in seiner unmittelbaren Form als zinstragendes Geldkapital (die andren Formen des zinstragenden Kapitals, die uns hier nichts angehn, sind wieder von dieser Form abgeleitet und unterstellen sie) erhält das Kapital seine reine Fetischform, G - G´ als Subjekt, verkaufbares Ding. Erstens durch sein fortwährendes Dasein als Geld, eine Form, worin alle Bestimmtheiten desselben ausgelöscht und seine realen Elemente unsichtbar sind. Geld ist ja grade die Form, worin der Unterschied der Waren als Gebrauchswerte ausgelöscht ist, daher auch der Unterschied der industriellen Kapitale, die aus diesen Waren und ihren Produktionsbedingungen bestehn; es ist die Form, worin Wert - und hier Kapital - als selbständiger Tauschwert existiert. Im Reproduktionsprozeß des Kapitals ist die Geldform eine verschwindende, ein bloßes Durchgangsmoment. Auf dem Geldmarkt dagegen existiert das Kapital stets in dieser Form. - Zweitens, der von ihm erzeugte Mehrwert, hier wieder in der Form des Geldes, erscheint ihm als solchem zukommend. Wie das Wachsen den Bäumen, so scheint das Geldzeugen ( tokoz) <Zins; Geborenes>dem Kapital in dieser Form als Geldkapital eigen.

two grounds of the pure fetish

As interest-bearing capital — and specifically in its direct form, interest-bearing money capital (the other forms of interest-bearing capital, which don't concern us here, are derived from this one and assume it) — capital reaches its pure fetish form: M-M' as the subject, a sellable thing.

The first ground is its continuing existence as money — a form in which every particular feature of capital is dissolved away and its real, concrete elements become invisible. Money is exactly the form in which the differences between commodities as use-values are wiped out, and so too the differences between the various industrial capitals made up of those commodities and their conditions of production; it is the form in which value — capital, here — exists as an independent exchange-value. Within capital's own reproduction process, the money form is a fleeting thing, a mere moment of passage. On the money market, though, capital exists in this form all the time.

The second ground is that the surplus-value capital creates — again here in the form of money — seems to belong to the thing itself. Just as growing seems a property of trees, so the generation of money seems a property that belongs to capital in this money-capital form.

Im zinstragenden Kapital ist die Bewegung des Kapitals ins Kurze zusammengezogen; der vermittelnde Prozeß ist weggelassen, und so ist ein Kapital = 1.000 fixiert als ein Ding, das an sich = 1.000 <1. Auflage: 1.100> ist und in einer gewissen Periode sich in 1.100 verwandelt, wie der Wein im Keller nach einer gewissen Zeit auch seinen Gebrauchswert verbessert. Das Kapital ist jetzt Ding, aber als Ding Kapital. Das Geld hat jetzt Lieb´ im Leibe. Sobald es verliehen ist oder auch im Reproduktionsprozeß angelegt (insofern es dem fungierenden Kapitalisten als seinem Eigentümer Zins abwirft, getrennt vom Unternehmergewinn), wächst ihm der Zins an, es mag schlafen oder wachen, sich zu Hause oder auf Reisen befinden, bei Tag und bei Nacht. So ist im zinstragenden Geldkapital (und alles Kapital ist seinem Wertausdruck nach Geldkapital oder gilt jetzt als der Ausdruck des Geldkapitals) der fromme Wunsch des Schatzbildners realisiert.

capital shrunk into a thing

In interest-bearing capital, capital's whole movement gets compressed to almost nothing. The process that used to connect the two ends is left out, so a capital of 1,000 is simply fixed as a thing that is, in itself, 1,000, and that, over some stretch of time, turns into 1,100 — the way wine improves in the cellar and gains in use-value after a while. Capital is now a thing, but a thing that is capital. The money now has love in its body, so to speak. As soon as it's lent out — or even just put to work in the reproduction process, so far as it throws off interest to the functioning capitalist as its owner, kept separate from profit of enterprise — interest keeps growing on it, whether it's asleep or awake, at home or travelling, day and night. So in interest-bearing money capital (and every capital, expressed in terms of value, is money capital, or now counts as an expression of money capital) the hoarder's oldest wish comes true.

Es ist dies Eingewachsensein des Zinses in das Geldkapital als in ein Ding (wie hier die Produktion des Mehrwerts durch das Kapital erscheint), was Luther in seiner naiven Polterei gegen den Wucher so sehr beschäftigt. Nachdem er entwickelt, daß Zins verlangt werden könne, wenn aus der nichterfolgten Rückzahlung am bestimmten Termin dem Verleiher, der seinerseits zu zahlen hat, Unkosten erwachsen oder wenn ihm ein Profit, den er durch Kaufen, z.B. eines Gartens, habe machen können, aus diesem Grunde verlorengeht, fährt er fort:

Luther on usury, introduced

This growing-together of interest with money capital, as if interest were a property of a thing (which is how the production of surplus-value by capital appears here), is exactly what troubled Luther so much in his naive, blustering attack on usury. He first works out that interest may be charged when a loan is not repaid on the agreed date and this causes the lender, who himself owes payments to others, real expenses — or when it costs him a profit he could otherwise have made, say by buying a garden. Then he goes on:

"Nu ich dir sie (100 Gulden) geliehen habe, machest mir einen Zwilling aus dem Schadewacht, dass hie nicht bezalen, und dort nicht kaufen kann, und also zu beiden Teilen muss Schaden leiden, das heisst man duplex interesse, damni emergentis et lucri cessantis <doppelter Schaden, der des entstehenden Verlusts und der des versäumten Gewinns> ... nachdem sie gehöret, dass Hans mit seinen verliehnen Hundert Gülden hat Schaden gelitten und billige Erstattung seines Schadens fordert, faren sie plumps einhin, und schlahen auf ein jeglich Hundert Gülden, solche zween Schadewacht, nämlich, des Bezalens Unkost, und des versäumeten Gartens Kauf, gerade als weren den Hundert Gülden natürlich solche zween Schadewacht angewachsen, dass, wo Hundert Gülden vorhanden sind, die thun sie aus, und rechnen darauf solche zween Schaden, die sie doch nicht erlitten haben ... Darum bist du ein Wucherer, der du selber deinen ertichten Schaden von deines Nähesten Gelde büssest, den dir doch Niemand getan hat, und kannst ihn auch nicht beweisen, noch berechnen. Solchen Schaden heissen die Juristen, non verum sed phantasticum interesse <keinen wirklichen, sondern eingebildeten Schaden>. Ein Schaden, den ein jeglicher ihm selber ertreumet ... es gilt nicht also sagen, Es künnten die Schaden geschehn, dass ich nicht habe können bezalen noch kaufen. Sonst heisst's, Ex contingente necessarium <Aus dem Zufälligen das Notwendige machen>, aus dem das nicht ist, machen das, das sein müsse, aus dem das ungewiss ist, eitel gewiss Ding machen. Solt' solcher Wucher nicht die Welt auffressen in kurzen Jaren ... es ist zufällig Unglück, das dem Leiher widerfaret, ohne seinen Willen, dass er sich erholen muss, aber in den Handeln ist's umgekehrt und gar das Widerspiel, da suchet und ertichtet man Schaden, auf den benetigten Nehesten, will damit sich neren und reich werden, faul und müssig prassen und prangen von ander Leut Arbeit, sonder Sorge, Fahr und Schaden; dass ich sitze hinter dem Ofen und lasse meine Hundert Gülden für mich auf dem Lande werben, und doch weil es geliehen Geld ist, gewiss im Beutel behalte, ohne all Fahr und Sorge, Lieber, wer möchte das nicht?" (M. Luther, An die Pfarrherrn wider den Wucher zu predigen etc.", Wittenberg 1540.

Luther's own words, quoted

'Now that I've lent you these hundred guilders, you turn my loss into two losses: I can't pay what I owe, and I can't buy what I meant to buy, so I lose on both counts. Lawyers call this double damage — one for the loss that actually happens, one for the profit that's missed... Once people hear that Hans lost out on the hundred guilders he lent, and that he's asking for fair compensation, they jump straight in and charge two losses on every hundred guilders — the cost of not being able to pay, and the missed chance to buy the garden — exactly as if those two losses had grown naturally onto the hundred guilders themselves, so that wherever there's a hundred guilders, out it goes, and they count those two losses on top of it, losses they never actually suffered...

That makes you a usurer: you make your neighbour pay for a loss you only imagined, a loss nobody actually caused you, and one you can't prove or calculate. Lawyers call a loss like that not a real damage but an imagined one — a loss each man dreams up for himself... It is no excuse to say the loss might have happened, that I might not have been able to pay or buy. That would be turning a mere possibility into a certainty — making something sure out of what was never sure to begin with. Wouldn't usury like that swallow up the whole world in a few years...

An accidental misfortune that happens to a lender against his will — from that he may well need to recover. But in trade it works the other way round, exactly the opposite: there people go looking for losses, inventing them, at their needy neighbour's expense, wanting to live off it and get rich, to lounge about idle and live well off other people's work, without any worry, risk, or loss of their own — so that I can sit by my stove, let my hundred guilders go out and earn for me in the countryside, and still keep it safe in my purse, since it was only ever lent out, with no risk or worry at all. My friend, who wouldn't want that?'

Kap. 24

Der Zinseszins des Dr. Price, seine Grenze im Gesamtarbeitstag, und die vollendete Vorstellung vom Kapitalfetisch

Coming in, the reader has watched interest harden into a fixed, palpable magnitude and profit of enterprise get mistaken for a wage, the whole relation dressed up as two incomes from two sources. Here that mystification meets its most extravagant test case: a clergyman's arithmetic promising that a penny lent at the birth of Christ would now outweigh the earth many times over. This unit settles what the fantasy actually rests on, grants Marx's own narrow sense in which accumulation resembles compound interest, and then draws the real limit that arithmetic alone could never supply.

Die Vorstellung vom Kapital als sich selbst reproduzierendem und in der Reproduktion vermehrendem Wert, kraft seiner eingebornen Eigenschaft als ewig währender und wachsender Wert - also kraft der verborgnen Qualität der Scholastiker -, hat zu den fabelhaften Einfällen des Dr. Price geleitet, die bei weitem die Phantasien der Alchimisten hinter sich lassen; Einfällen, an die Pitt ernsthaft glaubte und die er in seinen Gesetzen über den sinking fund <Staatsschulden-Tilgungsfond>zu Säulen seiner Finanzwirtschaft machte.

where price's fantasies come from

The idea that capital reproduces itself and grows all on its own, simply because it has a built-in property of being value that lasts forever and keeps expanding — the same 'hidden quality' the medieval schoolmen once imagined — is what led Dr Price to his fantastic claims, claims that leave the fantasies of the alchemists far behind. Pitt believed these claims in all seriousness, and made them the pillars of his financial policy in the laws that set up the sinking fund.

"Geld, das Zinseszinsen trägt, wächst anfangs langsam; da aber die Rate des Wachstums sich fortwährend beschleunigt, wird sie nach einiger Zeit so rasch, daß sie jeder Einbildung spottet. Ein Penny, ausgeliehen bei der Geburt unsers Erlösers auf Zinseszinsen zu 5%, würde schon jetzt zu einer größren Summe herangewachsen sein, als enthalten wäre in 150 Millionen Erden, alle von gediegnem Gold. Aber ausgelegt auf einfache Zinsen, würde er in derselben Zeit nur angewachsen sein auf 7 sh. 4 1/2 d. Bis jetzt hat unsre Regierung vorgezogen, ihre Finanzen auf diesem letzteren, statt auf dem ersteren Weg zu verbessern."⁸⁰

price's own calculation, quoted

Price wrote: money lent out at compound interest grows slowly at first, but since the rate of growth keeps speeding up, it soon becomes so fast that it outstrips anything you could imagine. A penny lent out at the birth of our Saviour at five per cent compound interest would by now have grown into a larger sum than is contained in a hundred and fifty million earths, all of solid gold. But laid out at simple interest over the same time, it would have grown only to seven shillings and four-and-a-half pence. Up to now our government has chosen to improve its finances the second way rather than the first.

Noch höher fliegt er in seinen "Observations on reversionary payments etc.", London 1772:

still higher, a second claim

He flies still higher in his Observations on Reversionary Payments, etc., London 1772:

"1 sh., ausgelegt bei der Geburt unsers Erlösers" (also wohl im Tempel von Jerusalem) "zu 6% Zinseszinsen, würde angewachsen sein zu einer größern Summe als das ganze Sonnensystem einbegreifen könnte, wenn in eine Kugel verwandelt von einem Durchmesser gleich dem der Bahn des Saturn." - "Ein Staat braucht deswegen sich nie in Schwierigkeiten zu befinden; denn mit den kleinsten Ersparnissen kann er die größte Schuld abzahlen in einer so kurzen Zeit wie sein Interesse erfordern mag." (p. XIII, XIV.)

the shilling outgrows the solar system

A shilling, laid out at the birth of our Saviour (presumably in the Temple of Jerusalem) at six per cent compound interest, would have grown into a larger sum than the whole solar system could hold, even turned into a sphere as wide across as the orbit of Saturn. A state, therefore, need never find itself in difficulties: with the smallest savings it can pay off the largest debt in as short a time as its interest may require. (pp. xiii, xiv.)

Welche hübsche theoretische Einleitung zur englischen Staatsschuld!

an ironic aside

What a charming theoretical send-off for the English national debt!

Price wurde einfach geblendet durch die Ungeheuerlichkeit der Zahl, die aus geometrischer Progression entsteht. Da er das Kapital, ohne Rücksicht auf die Bedingungen der Reproduktion und der Arbeit, als selbsttätigen Automaten betrachtete, als eine bloße, sich selbst vermehrende Zahl (ganz wie Malthus den Menschen in seiner geometrischen Progression), konnte er wähnen, das Gesetz seines Wachstums gefunden zu haben in der Formel s = c (1 + z) n, wo s = Summe von Kapital + Zinseszins, c = dem vorgeschoßnen Kapital, z = dem Zinsfuß (in aliquoten Teilen von 100 ausgedrückt) und n die Reihe der Jahre, worin der Prozeß vorgeht.

the diagnosis: capital as automaton

Price was simply dazzled by the sheer size of the figure a geometric progression produces. Because he looked at capital without any regard for the conditions of reproduction and of labour, treating it as a self-acting automaton, a bare number that multiplies itself by itself — exactly the same mistake made when population is treated as a bare geometric progression — he could imagine he had found the law of its growth in the formula s = c(1 + i)ⁿ, where s is the sum of capital plus compound interest, c is the capital advanced, i is the rate of interest (expressed as a fraction of 100), and n is the number of years the process runs.

Pitt nimmt die Mystifikation des Dr. Price ganz ernst. 1786 hatte das Haus der Gemeinen beschlossen, es solle 1 Million Pfd.St. erhoben werden für den öffentlichen Nutzen. Nach Price, an den Pitt glaubte, war natürlich nichts besser, als das Volk besteuern, um die so erhobne Summe zu "akkumulieren" und so die Staatsschuld durch das Mysterium des Zinseszinses wegzuhexen. Jener Resolution des Hauses der Gemeinen folgte bald ein von Pitt veranlaßtes Gesetz, das die Akkumulation von 250.000 Pfd.St. anordnete, "bis daß, mit den verfallnen Leibrenten, der Fonds auf 4.000.000 Pfd.St. jährlich angewachsen sei". (Act 26 Georg III., Kap. 31.)

pitt takes it seriously

Pitt took Dr Price's mystification entirely seriously. In 1786 the House of Commons decided that £1,000,000 should be raised for public purposes. Following Price, whom Pitt believed, the obvious thing was to tax the people so as to 'accumulate' the sum raised, and so conjure the national debt away by the mystery of compound interest. That resolution of the House of Commons was soon followed by an act, brought in by Pitt, ordering the accumulation of £250,000 'until, together with the lapsed annuities, the fund should have grown to £4,000,000 a year.' (Act 26 George III, chapter 31.)

In seiner Rede von 1792, worin Pitt die dem Tilgungsfonds gewidmete Summe zu vermehren vorschlug, führte er an unter den Ursachen des kommerziellen Übergewichts Englands: Maschinen, Kredit etc., aber als "die ausgedehnteste und dauerhafteste Ursache die Akkumulation. Dies Prinzip sei nun vollständig entwickelt und hinreichend erklärt in dem Werk Smiths, dieses Genies ... diese Akkumulation der Kapitale bewirke sich, indem man mindestens einen Teil des jährlichen Profits zurücklege, um die Hauptsumme zu vermehren, die in derselben Weise im nächsten Jahr zu verwenden sei und so einen kontinuierlichen Profit gebe."

pitt's speech on accumulation

In a speech of 1792, proposing to increase the sum set aside for the sinking fund, Pitt listed machines, credit, and the like among the causes of England's commercial dominance — but named as 'the most far-reaching and lasting cause, accumulation.' This principle, he said, had now been fully worked out and explained in the work of that genius, Smith... this accumulation of capital came about, he said, by setting aside at least part of the year's profit to enlarge the main sum, which would then be employed the same way the following year, yielding a continual profit.

Vermittelst des Dr. Price verwandelt Pitt so Smiths Akkumulationstheorie in die Bereicherung eines Volks durch Akkumulation von Schulden und kommt in den angenehmen Progreß ins Unendliche der Anleihen, Anleihen, um Anleihen zu zahlen.

smith's theory turned into debt

By way of Dr Price, then, Pitt turned Smith's theory of accumulation into a way of enriching a nation by piling up debt, and arrived at the pleasant prospect of an endless progression of loans — loans taken out to pay off loans.

Wir finden schon bei Josias Child, dem Vater des modernen Bankiertums, daß "100 Pfd.St. zu 10% in 70 Jahren, bei Zins von Zins, 102.400 Pfd.St. produzieren würden." ("Traité sur le commerce etc. per J. Child, traduit etc.", Amsterdam et Berlin 1754, p. 115. Geschrieben 1669.)

child anticipated the arithmetic

We already find the same idea in Josiah Child, the father of modern banking: that '£100 at 10 per cent, compounded over seventy years, would produce £102,400.' (Treatise on Trade, by J. Child, translated, Amsterdam and Berlin 1754, p. 115. Written in 1669.)

Wie die Anschauung des Dr. Price bei der modernen Ökonomie gedankenlos unterläuft, zeigt der "Economist" in folgender Stelle:

the economist's unwitting echo

How thoughtlessly Dr Price's way of seeing things has crept into modern economics is shown by the following passage from the Economist:

"Capital, with compound interest on every portion of capital saved, is so all-engrossing that all the wealth in the world from which income is derived, has long ago become the interest of capital ... all rent is now the payment of interest on capital previously invested in the land." <"Kapital mit Zinseszins auf jeden Teil des gesparten Kapitals reißt so sehr alles an sich, daß aller Reichtum der Welt, aus dem man Einkommen zieht, längst zu Zins von Kapital geworden ist ... alle Rente ist jetzt die Zinszahlung auf Kapital, das früher im Boden angelegt wurde."> ("Economist", 19. July 1851.)

the economist's claim, reported

Writing in 1851, the Economist put it this way: because compound interest keeps adding to every bit of capital that gets saved, all the wealth in the world that income is drawn from has long since turned into interest on capital, so that all rent is really nothing but interest on capital that was sunk into the land at some earlier point.

In seiner Eigenschaft als zinstragendes Kapital gehört dem Kapital aller Reichtum, der überhaupt je produziert werden kann, und alles, was es bisher erhalten hat, ist nur Abschlagszahlung an seinen all-engrossing Appetit. Nach seinen eingebornen Gesetzen gehört ihm alle Surplusarbeit, die das Menschengeschlecht je liefern kann. Moloch.

capital's claim on all wealth

In its capacity as interest-bearing capital, all the wealth that can ever be produced belongs to capital; everything it has received so far is only a first instalment against its all-engrossing appetite. By its own built-in laws, all the surplus labour the human race can ever supply belongs to it. Moloch.

Schließlich noch folgender Galimathias des "romantischen" Müller:

müller's garbled version

Finally, one more piece of gibberish, from the 'romantic' Müller:

"Des Dr. Price ungeheurer Anwachs des Zinseszinses, oder der sich selbst beschleunigenden Kräfte der Menschen, setzt, wenn er diese ungeheuren Wirkungen hervorbringen soll, eine ungeteilte oder ungebrochne gleichförmige Ordnung durch mehrere Jahrhunderte voraus. Sobald das Kapital zerteilt, in mehrere einzelne, in sich fortwachsende Ableger zerschnitten wird, fängt der gesamte Prozeß der Akkumulation von Kräften von neuem an. Die Natur hat die Progression der Kraft auf eine Laufbahn von etwa 20 bis 25 Jahren, die im Durchschnitt etwa jedem einzelnen Arbeiter (!) zuteil werden, verteilt. Nach Ablauf dieser Zeit verläßt der Arbeiter seine Laufbahn, und muß er nun das durch den Zinseszins der Arbeit gewonnene Kapital einem neuen Arbeiter übertragen, meistenteils es unter mehrere Arbeiter oder Kinder verteilen. Diese müssen das ihnen zufallende Kapital, ehe sie eigentlichen Zinseszins davon ziehn können, erst beleben und anwenden lernen. Ferner wird eine ungeheure Menge des Kapitals, das die bürgerliche Gesellschaft gewinnt, auch selbst in den bewegtesten Gemeinwesen, lange Jahre hindurch allmählich aufgehäuft und nicht zur unmittelbaren Erweiterung der Arbeit verwendet, vielmehr, sobald eine namhafte Summe zusammengebracht ist, einem andern Individuum, einem Arbeiter, einer Bank, Staat, unter der Benennung Anleihe übertragen, wo dann der Empfänger, indem er das Kapital in wirkliche Bewegung setzt, aus demselben Zinseszins zieht, und sich leicht anheischig machen kann, dem Darbringer einfache Zinsen zu bezahlen. Endlich reagiert gegen jene ungeheuren Progressionen, in welchen sich die Kräfte der Menschen und ihr Produkt vermehren möchten, wenn das Gesetz der Produktion oder der Sparsamkeit allein gelten sollen, das Gesetz des Verzehrens, Begehren, Verschwendung." (A Müller, l.c., III., p. 147-149.)

müller's passage, quoted

Dr Price's enormous growth of compound interest — or of the self-accelerating powers of human beings — can only produce these enormous effects if it presupposes an undivided, unbroken, uniform order running across several centuries. As soon as the capital is split up, cut into several separate branches each growing on its own, the whole process of accumulating powers starts over again. Nature has spread the growth of a person's powers over a career of about twenty to twenty-five years, on average, allotted to each individual worker(!). Once that time is up, the worker leaves his career and must now hand over the capital built up through compound interest on his labour to a new worker, usually splitting it among several workers or children. Before these can actually draw real compound interest from the capital that falls to them, they first have to learn to bring it to life and put it to use. Moreover, a huge amount of the capital bourgeois society gains, even in the most energetic communities, is only gradually piled up over long years and not put directly toward expanding labour; rather, once a sizeable sum has been collected, it is handed over to another person — a worker, a bank, the state — under the name of a loan, and the recipient, by actually setting the capital in motion, draws compound interest from it, and can easily undertake to pay the lender only simple interest. Finally, working against those enormous progressions in which people's powers and their products might grow, if the law of production or of thrift alone were to hold, stands the law of consumption, of desire, of waste. (A. Müller, cited work, III, pp. 147-149.)

Es ist unmöglich, in wenigen Zeilen mehr haarsträubenden Unsinn zusammenzufaseln. Nicht zu erwähnen der drolligen Verwechslung von Arbeiter und Kapitalist, von Wert der Arbeitskraft und Zins von Kapital usw., soll die Abnahme des Zinseszinses u.a. daraus erklärt werden, daß Kapital "ausgeliehen" wird, wo es "dann Zinseszins" bringt. Das Verfahren unsers Müller ist für die Romantik in allen Fächern charakteristisch. Ihr Inhalt besteht aus Alltagsvorurteilen, abgeschöpft von dem oberflächlichsten Schein der Dinge. Dieser falsche und triviale Inhalt soll dann durch eine mystifizierende Ausdrucksweise "erhöht" und poetisiert werden.

the verdict: hair-raising nonsense

It is impossible to pack more hair-raising nonsense into so few lines. Not to mention the comical mix-up of worker with capitalist, of the value of labour-power with interest on capital, and so on — the whole explanation offered for why compound interest falls off comes down to saying that capital 'is lent out,' where it 'then brings compound interest.' This is how our Müller always proceeds, and it is typical of the Romantics in every field. Their content is made up of everyday prejudices, skimmed off the most superficial appearance of things. This false and trivial content is then supposedly 'elevated' and turned poetic by a mystifying way of talking.

Der Akkumulationsprozeß des Kapitals kann insofern als Akkumulation von Zinseszins aufgefaßt werden, als der Teil des Profits (Mehrwerts), der in Kapital rückverwandelt wird, d.h. zur Aufsaugung von neuer Mehrarbeit dient, Zins genannt werden kann. Aber:

the narrow concession

In one sense, the process by which capital accumulates can be understood as an accumulation of compound interest: the part of profit — of surplus-value — that gets turned back into capital, that is, that goes to absorb fresh surplus labour, can be called interest. But:

1. Von allen zufälligen Störungen abgesehn, wird im Lauf des Reproduktionsprozesses beständig ein großer Teil des vorhandnen Kapitals mehr oder weniger entwertet, weil der Wert der Waren bestimmt ist nicht durch die Arbeitszeit, die ihre Produktion ursprünglich kostet, sondern durch die Arbeitszeit, die ihre Reproduktion kostet, und diese infolge der Entwicklung der gesellschaftlichen Produktivkraft der Arbeit fortwährend abnimmt. Auf einer höhern Entwicklungsstufe der gesellschaftlichen Produktivität erscheint daher alles vorhandne Kapital, statt als das Resultat eines langen Prozesses der Kapitalaufsparung, als das Resultat einer verhältnismäßig sehr kurzen Reproduktionszeit.⁸¹

first limit: capital keeps losing value

First — setting aside all the accidental disruptions — over the course of the reproduction process, a large part of the existing capital keeps losing value, more or less, because the value of commodities is set not by the labour-time their production originally cost, but by the labour-time their reproduction costs now, and that keeps falling as the social productive power of labour develops. So at a higher stage of social productivity, all the capital that exists appears not as the result of a long process of accumulating capital, but as the result of a comparatively short reproduction time.

2. Wie im Abschnitt III dieses Buchs bewiesen, nimmt die Profitrate ab im Verhältnis zur steigenden Akkumulation des Kapitals und der ihr entsprechenden steigenden Produktivkraft der gesellschaftlichen Arbeit, die sich gerade in der wachsenden relativen Abnahme des variablen Kapitalteils, gegenüber dem konstanten, ausdrückt. Um dieselbe Profitrate hervorzubringen, wenn das von einem Arbeiter in Bewegung gesetzte konstante Kapital sich verzehnfacht, müßte die Mehrarbeitszeit sich verzehnfachen, und bald würde die ganze Arbeitszeit, ja die 24 Stunden des Tages dazu nicht hinreichen, selbst wenn ganz vom Kapital angeeignet. Die Vorstellung, daß die Profitrate sich nicht verringert, liegt aber der Priceschen Progression zugrunde und überhaupt dem "all-engrossing capital, with compound interest" <"Kapital mit Zinseszins, das alles an sich reißt">.⁸²

second limit: profit rate falls

Second — as was shown in Part Three of this book, the rate of profit falls as capital accumulates and, correspondingly, as the productive power of social labour rises, which shows up precisely in the constant part of capital growing relative to the variable part. To keep producing the same rate of profit, if the constant capital set in motion by one worker were to grow tenfold, the surplus labour-time would have to grow tenfold too — and before long the whole working day, even the full twenty-four hours of it, would not be enough, even if capital seized the whole of it. It is the assumption that the rate of profit does not fall that underlies Price's progression, and indeed the whole idea of 'all-engrossing capital, at compound interest.'

Durch die Identität des Mehrwerts mit der Mehrarbeit ist eine qualitative Grenze für die Akkumulation des Kapitals gesetzt: der Gesamtarbeitstag, die jedesmal vorhandne Entwicklung der Produktivkräfte und der Bevölkerung, welche die Anzahl der gleichzeitig exploitierbaren Arbeitstage begrenzt. Wird dagegen der Mehrwert in der begriffslosen Form des Zinses gefaßt, so ist die Grenze nur quantitativ und spottet jeder Phantasie.

the real limit: the working day

Because surplus-value is identical with surplus labour, a qualitative limit is set on the accumulation of capital: the total working day, together with whatever level the productive forces and the population have reached at the time, which is what bounds how many working days can be exploited at once. But if surplus-value is grasped instead in the conceptless form of interest, the limit becomes merely quantitative, and mocks any fantasy you like.

Indem zinstragenden Kapital ist aber die Vorstellung vom Kapitalfetisch vollendet, die Vorstellung, die dem aufgehäuften Arbeitsprodukt, und noch dazu fixiert als Geld, die Kraft zuschreibt, durch eine eingeborne geheime Qualität, als reiner Automat, in geometrischer Progression Mehrwert zu erzeugen, so daß dies aufgehäufte Arbeitsprodukt, wie der "Economist" meint, allen Reichtum der Welt für alle Zeiten als ihm von Rechts wegen gehörig und zufallend schon längst diskontiert hat. Das Produkt vergangner Arbeit, die vergangne Arbeit selbst, ist hier an und für sich geschwängert mit einem Stück gegenwärtiger oder zukünftiger lebendiger Mehrarbeit. Man weiß dagegen, daß in der Tat die Erhaltung, und insoweit auch die Reproduktion des Werts der Produkte vergangner Arbeit nur das Resultat ihres Kontakts mit der lebendigen Arbeit ist; und zweitens: daß das Kommando der Produkte vergangner Arbeit über lebendige Mehrarbeit grade nur so lange dauert, wie das Kapitalverhältnis dauert, das bestimmte soziale Verhältnis, worin die vergangne Arbeit selbständig und übermächtig der lebendigen gegenübertritt.

the fetish completed, then corrected

Yet it is in interest-bearing capital that the idea of the capital fetish reaches its finished form — the idea that credits the accumulated product of labour, fixed moreover as money, with the power, by some innate secret quality, to produce surplus-value in geometric progression all on its own, like a pure automaton, so that, as the Economist believes, this accumulated product of labour has long since laid claim in advance to all the wealth of the world for all time, as rightfully its own and rightfully coming to it.

The product of past labour, past labour itself, appears here as pregnant in its own right with a piece of present or future living surplus labour. But we know that, in actual fact, the preservation — and so also the reproduction — of the value of the products of past labour is only the result of their contact with living labour; and, second, that the command the products of past labour hold over living surplus labour lasts only exactly as long as the capital relation lasts — that particular social relation in which past labour confronts living labour as something independent and more powerful.

Kap. 24

M-M’: The Most Fetish-Like Form of Capital, in Which the Social Relation Is Consummated as the Relation of a Thing to Itself

In interest-bearing capital, the capital relationship reaches its most superficial and fetishized form. Here we have M-M’, money that produces more money, self-valorizing value, without the process that mediates the two extremes. In commercial capital, M-C-M’, at least the general form of the capitalist movement is present, even though this takes place only in the circulation sphere, so that profit appears as merely profit upon alienation; but for all that, it presents itself as the product of a social relation, not the product of a mere thing. The form of commercial capital still exhibits a process, the unity of opposing phases, a movement that breaks down into two opposite procedures, the purchase and sale of commodities. This is obliterated in M-M’, the form of interest-bearing capital. If £1,000 is lent out by a capitalist, for example, and the interest rate is 5 per cent, the value of the £1,000 as capital for one year is C + Ci’, where C is the capital and i’ the rate of interest. In this case we have 5 per cent = 5/100 = 1/20; 1,000 + (1,000 × 1/20) = £1,050. The value of £1,000 as capital is £1,050. In other words, capital is not a simple quantity. It is a relation of quantities, a ratio between the principal as a given value, and itself as self-valorizing value, as a principal that has produced a surplus-value. And as we have seen, capital presents itself in this way, as this directly self-valorizing value, for all active capitalists, whether they function with their own capital or with borrowed capital.

what gets erased here

M-M’. Here we have the original starting-point of capital, money in the formula M-C-M’, reduced to the two extremes M-M’, where M’ = M + ΔM, money that creates more money. This is the original and general formula for capital reduced to a meaningless abbreviation. It is capital in its finished form, the unity of the production and circulation processes, and hence capital yielding a definite surplus-value in a specific period of time. In the form of interest-bearing capital, capital appears immediately in this form, unmediated by the production and circulation processes. Capital appears as a mysterious and self-creating source of interest, of its own increase. The thing (money, commodity, value) is now already capital simply as a thing; the result of the overall reproduction process appears as a property devolving on a thing in itself; it is up to the possessor of money, i.e. of commodities in their ever-exchangeable form, whether he wants to spend this money as money or hire it out as capital. In interest-bearing capital, therefore, this automatic fetish is elaborated into its pure form, self-valorizing value, money breeding money, and in this form it no longer bears any marks of its origin. The social relation is consummated in the relationship of a thing, money, to itself. Instead of the actual transformation of money into capital, we have here only the form of this devoid of content. As in the case of labour-power, here the use-value of money is that of creating value, a greater value than is contained in itself. Money as such is already potentially self-valorizing value, and it is as such that it is lent, this being the form of sale for this particular commodity. Thus it becomes as completely the property of money to create value, to yield interest, as it is the property of a pear tree to bear pears. And it is as this interest-bearing thing that the money-lender sells his money. Nor is that all. The actually functioning capital, as we have seen, presents itself in such a way that it yields interest not as functioning capital, but rather as capital in itself, as money capital.

the fetish in its finished form

There is still a further distortion. While interest is simply one part of the profit, i.e. the surplus-value, extorted from the worker by the functioning capitalist, it now appears conversely as if interest is the specific fruit of capital, the original thing, while profit, now transformed into the form of profit of enterprise, appears as a mere accessory and trimming added in the reproduction process. The fetish character of capital and the representation of this capital fetish is now complete. In M-M’ we have the irrational form of capital, the misrepresentation and objectification of the relations of production, in its highest power: the interest-bearing form, the simple form of capital, in which it is taken as logically anterior to its own reproduction process; the ability of money or a commodity to valorize its own value independent of reproduction — the capital mystification in the most flagrant form.

fruit and accessory swapped

For vulgar economics, which seeks to present capital as an independent source of wealth, of value creation, this form is of course a godsend, a form in which the source of profit is no longer recognizable and in which the result of the capitalist production process — separate from the process itself — obtains an autonomous existence.

why vulgar economics loves this

It is only in money capital that capital becomes a commodity, whose self-valorizing quality has a fixed price as expressed in the prevailing rate of interest.

only as money capital, a commodity

Only as money capital does capital become a commodity — one whose value-growing quality has a fixed price, quoted as the going rate of interest.

As interest-bearing capital, and moreover in its immediate form of interest-bearing money capital (the other forms of interest-bearing capital, which do not concern us here, are derived from this form and presuppose it), capital obtains its pure fetish form, M-M’ being the subject, a thing for sale. Firstly, by way of its continuing existence as money, a form in which all capital’s determinations are dissolved and its real elements are invisible. Money is in fact the very form in which the distinctions between commodities as different use-values are obliterated, and hence also the distinctions between industrial capitals, which consist of these commodities and the conditions of their production; it is the form in which value — and here capital — exists as autonomous exchange-value. In the reproduction process of capital, the money form is an evanescent moment, a moment of mere transition. On the money market, on the contrary, capital always exists in this form. Secondly, the surplus-value it creates, here again in the form of money, appears to accrue to it as such. Like the growth of trees, so the generation of money (τόκος) seems a property of capital in this form of money capital.

two grounds of the pure fetish

In interest-bearing capital, the movement of capital is abbreviated. The mediating process is omitted, and a capital of 1,000 is characterized as a thing that in itself is 1,000 and in a certain period is transformed into 1,100, just as wine in the cellar improves its use-value after a given period of time. Capital is now a thing, but the thing is capital. The money’s body is now by love possessed. As soon as it is lent, or else applied in the reproduction process (in so far as it yields interest to the functioning capitalist as its owner, separate from profit of enterprise), interest accrues to it no matter whether it is asleep or awake, at home or abroad, by day and by night. In interest-bearing capital, therefore (and all capital is money capital in its value expression, or is now taken as the expression of money capital), the hoarder’s most fervent wish is realized.

capital shrunk into a thing

It is this ingrown existence of interest in money capital as a thing (which is how the production of surplus-value by capital appears here) that Luther was so concerned with in his naive polemic against usury. After he explains that interest may be demanded if the failure to repay a loan at the specified date causes the lender certain expenses that he has to pay, or if he missed the opportunity for a profitable bargain (he gives the example of the purchase of a garden), he continues:

Luther on usury, introduced

Now that I have loaned you this (100 guilders), you have caused me to suffer two-fold damage, since I cannot pay on the one hand and cannot buy on the other, but must suffer a loss on both counts, and this is called duplex interesse, damni emergentis et lucri cessantis [a double damage, both from the loss caused and from the profit missed] ... On hearing that Hans has suffered a loss with the 100 guilders he lent, and demands just compensation for this, they rush in and charge double on each 100 guilders, a double reimbursement, i.e. for the cost of the payment, and the inability to buy the garden, just as if the 100 guilders had had these two losses grown on to it naturally [Marx’s emphasis], so that wherever they have 100 guilders, they put it out and count two losses of this kind on top of it, even though they have not suffered them . .. This is why you are a usurer, taking damages from your neighbour’s money for a supposed loss which in fact no one caused you, and which you can neither prove nor reckon. Damages of this kind the lawyers call non verum sed phantasticum interesse [not actual damages, but imagined damages]. A loss which each conjures up for himself... it is no good to say: that the losses might have been incurred, because I was not able to pay or buy. That would be a case of ex contingente necessarium, making something out of a thing that is not, and making what is uncertain into something completely sure. Surely usury of this kind would devour the whole world in a few years . . . If the lender meets with an unhappy accident, and he needs to recover from it, then he may demand damages, but in trade it is different, and just the opposite. There they scheme to profit at the cost of their needy neighbours, seeking to accumulate wealth and get rich, to be lazy and idle and live in luxury on the labour of other people, without care, danger or loss. To sit by my stove and let my 100 guilders gather wealth for me in the country, and yet keep it in my pocket because it is only a loan, without any danger or risk — my dear friend, who would not like that?’ (Martin Luther, An die Pfarrherrn wider den Wucher zu predigen, etc., Wittenberg, 1540.)

Luther's own words, quoted

Kap. 24

Dr Price's Compound Interest, Its Limit in the Total Working Day, and the Consummated Conception of the Capital Fetish

The conception of capital as value that reproduces itself and increases in reproduction, by virtue of its innate property as ever persisting and growing value — i.e. by virtue of the scholastics’ ‘hidden quality’ — is behind Dr Price’s amazing fancies, which leave far behind the fantasies of the alchemists; fancies which Pitt took quite seriously, and which he made the basis of his financial policy in his bills setting up the sinking fund.

where price's fantasies come from

Money bearing compound interest increases at first slowly. But, the rate of increase being continually accelerated, it becomes in some time so rapid, as to mock all the powers of the imagination. One penny, put out at our Saviour’s birth to 5 per cent compound interest, would, before this time, have increased to a greater sum, than would be contained in a hundred and fifty millions of earths, all solid gold. But if put out to simple interest, it would, in the same time, have amounted to no more than seven shillings and four pence half-penny. Our government has hitherto chosen to improve money in the last, rather than the first of these ways.’ ⁸⁰

price's own calculation, quoted

He flies still higher in his Observations on Reversionary Payments, etc., London, 1772: ‘A shilling put out to 6 per cent compound interest at our Saviour’s birth’ (presumably in the Temple of Jerusalem) ‘would... . have increased to a greater sum than the whole solar system could hold, supposing it a sphere equal in diameter to the diameter of Saturn’s orbit.’ ‘A state need never therefore be under any difficulties; for with the smallest savings it may in as little time as its interest can require pay off the largest debts’ (pp. xiii, xiv).

still higher, a second claim

He flies still higher in his Observations on Reversionary Payments, etc., London 1772:

English joined this paragraph

the shilling outgrows the solar system

What a charming theoretical introduction for the English national debt!

an ironic aside

What a charming theoretical send-off for the English national debt!

Price was simply dazzled by the incredible figures that arise from geometric progression. Since he viewed capital as a self-acting automaton, without regard to the conditions of reproduction and labour, as a mere number that increases by itself (just as Malthus saw people in his own geometric progression), he could imagine he had found the law of its growth in the formula s = c(1 + i)ⁿ", where s = sum of capital + compound interest, c = the capital advanced, i = the rate of interest (expressed in aliquot parts of 100), and n = the number of years for which the process continues.

the diagnosis: capital as automaton

Pitt took Dr Price’s mystification quite seriously. In 1786 the House of Commons resolved that £1,000,000 should be raised for public purposes. According to Price, whom Pitt believed, nothing could be better than to tax the people with a view to ‘accumulating’ the sum raised, and thus spiriting away the national debt by the mystery of compound interest. That resolution of the House of Commons was soon followed by a bill drawn up by Pitt, which provided for the accumulation of £250,000, ‘until, with the expired annuities, the fund should have grown to £4,000,000 annually’ (Act 26, George III, Chapter XXXII).

pitt takes it seriously

In a speech of 1792, in which Pitt proposed to increase the sum devoted to the sinking fund, he adduced machines, credit, etc., among the reasons for England’s commercial supremacy, but as the most widespread and enduring cause, that of accumulation’. This principle, he said, was completely developed in the work of Adam Smith, that genius... and this accumulation, he continued, was accomplished by laying aside at least a portion of the annual profit for the purpose of increasing the principal, which was to be employed in the same manner the following year, and which thus yielded a continual profit. By way of Dr Price, therefore, Pitt transformed Adam Smith’s theory of accumulation into the enrichment of a nation by accumulation of debts, and thus arrived at the comforting progress towards an infinity of loans — loans to pay loans with.

pitt's speech on accumulation

English joined this paragraph

smith's theory turned into debt

Already with Josiah Child, the father of modern banking, we find that ‘£100 put out at 10 per cent for seventy years, at compound interest would produce £102,400’ (Traité sur le commerce, etc., par J. Child, French translation, Amsterdam and Berlin, 1754, p. 115. Written in 1669).

child anticipated the arithmetic

How far Dr Price’s conception has unwittingly been taken over by modern economics is shown by the following quotation from The Economist: ‘Capital, with compound interest on every portion of capital saved, is so all-engrossing that all the wealth in the world from which income is derived, has long ago become the interest of capital ... All rent is now the payment of interest on capital previously invested in the land’ (The Economist, 19 July 1851). All wealth that can ever be produced belongs to capital in its capacity as interest-bearing capital, and everything that it has received up till now is only a first instalment for its ‘all-engrossing’ appetite. By its own inherent laws, all surplus labour that the human race can supply belongs to it. Moloch.

the economist's unwitting echo

How thoughtlessly Dr Price's way of seeing things has crept into modern economics is shown by the following passage from the Economist:

English joined this paragraph

the economist's claim, reported

English joined this paragraph

capital's claim on all wealth

Finally, the following hodge-podge by the ‘Romantic’ Müller: Dr Price’s tremendous growth of compound interest, or of the self-accelerating forces of human beings, presupposes an undivided or uninterrupted and uniform arrangement for several centuries, if it is to produce these tremendous effects. As soon as capital is broken up into individual branches, which start to grow independently, the entire accumulation of forces begins afresh. Nature has distributed over a career of some twenty to twenty-five years the progression of force that is the average lot of each individual worker (!). After this period has elapsed, the worker abandons his career and must now transfer the capital obtained through compound interest on labour to a new worker, in most cases dividing it among several workers or children. The latter must first learn to activate and apply the capital that falls to them before they can actually draw compound interest from it. Moreover, a tremendous amount of the capital bourgeois society obtains, even in the most energetic communities, is accumulated only gradually over long years, and not directly applied to the expansion of labour. Rather, once a certain sum has been collected, it is transferred to another individual, a worker, a bank or the state, in the form of a loan. The recipient of this, then, in so far as it is he who actually puts the capital in motion, draws compound interest from it, and can easily require the lender to content himself with simple interest. Finally, the law of consumption, greed and waste reacts against that tremendous progression in which the forces of men and their products might increase, if the law of production or thrift alone prevailed’ (A. Müller, op. cit., III, pp. 147-9).

müller's garbled version

Finally, one more piece of gibberish, from the 'romantic' Müller:

English joined this paragraph

müller's passage, quoted

It would be impossible to drivel out a more hair-raising absurdity than this in so few lines. Not to mention the comic confusion of worker with capitalist, the value of labour-power with interest on capital, etc. - the receipt of compound interest is simply explained by saying that capital is lent out and then brings in compound interest. Our Müller’s procedure is characteristic of the Romantics in every detail. Its content is formed out of everyday prejudices, skimmed from the most superficial appearance of things. This false and trivial content is then supposedly ‘elevated’ and rendered poetic by a mystifying mode of expression.

the verdict: hair-raising nonsense

The accumulation process of capital may be conceived as an accumulation of compound interest, in so far as the part of profit (surplus-value) that is transformed back into capital, i.e. which serves to absorb new labour, may be called interest. However:

the narrow concession

1. Apart from all the accidental circumstances, a large part of the existing capital is always being more or less devalued in the course of the reproduction process, since the value of commodities is determined not by the labour-time originally taken by their production, but rather by the labour-time that their reproduction takes, and this steadily decreases as the social productivity of labour develops. At a higher level of development of social productivity, therefore, all existing capital, instead of appearing as the result of a long process of capital accumulation, appears as the result of a relatively short reproduction period.⁸¹

first limit: capital keeps losing value

2. As was shown in Part Three of this volume, the profit rate decreases in proportion to the growing accumulation of capital and the accompanying rise in the productivity of social labour, this being expressed precisely in the relative decrease of variable capital vis-à-vis constant. In order to produce the same rate of profit, therefore, if the constant capital set in motion by a worker increases ten-fold, the surplus labour-time would have to increase ten-fold as well, and very soon the total labour-time, or even the full twenty-four hours of the day, would not be sufficient, even if it were entirely appropriated by capital. Price’s progression depends on the idea that the rate of profit does not decline, as does every idea of this ‘all-engrossing capital at compound interest’.⁸²

second limit: profit rate falls

The identity of surplus-value and surplus labour sets a qualitative limit to the accumulation of capital: the total working day, the present development of the productive forces and population, which limits the number of working days that can be simultaneously exploited. But if surplus-value is conceived in the irrational form of interest, the limit is only quantitative, and beggars all fantasy.

the real limit: the working day

Interest-bearing capital, however, displays the conception of the capital fetish in its consummate form, the idea that ascribes to the accumulated product of labour, in the fixed form of money at that, the power of producing surplus-value in geometric progression by way of an inherent secret quality, as a pure automaton, so that this accumulated product of labour, as The Economist believes, has long since discounted the whole world’s wealth for all time, as belonging to it by right and rightfully coming its way. The product of past labour, and past labour itself, is seen as pregnant in and of itself with a portion of present or future living surplus labour. We know however that in actual fact the preservation and thus also the reproduction of the value of products of past labour is only the result of their contact with living labour; and secondly, that the command that the products of past labour exercise over living surplus labour lasts only as long as the capital relation, the specific social relation in which past labour confronts living labour as independent and superior.

the fetish completed, then corrected