第8章

Thelinenmerchantbuys£；3，000worthoflinenfromthemanufacturer。

Thelatterpays，say，£；2，000ofthe£；3，000foryarn。Hebuysthisyarnfromayarndealer。Themoneywhichthemanufacturerpaystotheyarndealerisnotthelinendealer’smoney，forthelatterhasreceivedcommoditiestothisamount。Itisthemoney-formofthemanufacturer’sowncapital。Nowinthehandsoftheyarndealerthese£；2，000appearasreturnedmoney-capital。Buttowhatextentaretheythatasdistinctfromthe£；2，000representingthediscardedmoney-formofthelinenandtheassumedmoney-formoftheyarn？Iftheyarndealerboughtoncreditandsoldforcashbeforetheexpirationofhistermofpayment，thenthese£；2，000donotcontainonepennyofmerchant’scapitalasdistinctfromthemoney-formwhichtheindustrialcapitalitselfassumesinthecourseofitscircuit。Insofarascommercialcapitalisnot，therefore，justaformofindustrialcapitalinthemerchant’shandsascommodity-

ormoney-capital，itisnothingbutthatportionofmoney-capitalwhichbelongsdirectlytothemerchantandcirculatesinthepurchaseandsaleofcommodities。Onareducedscalethisportionrepresentsthatpartofcapitaladvancedforproductionwhichshouldalwayshavetobeinthehandsoftheindustrialistasmoneyreserveandmeansofpurchase，andwhichshouldalwayshavetocirculateashismoney-capital。Thisportion，onareducedscale，isnowinthehandsofmerchantcapitalistsandperformsitsfunctionsassuchintheprocessofcirculation。Itisthatportionofthetotalcapitalwhich，asidefromwhatisexpendedasrevenue，mustcontinuallycirculateonthemarketasameansofpurchaseinordertomaintainthecontinuityoftheprocessofreproduction。Themorerapidtheprocessofreproduction，andthemoredevelopedthefunctionofmoneyasameansofpayment，i。e。，themoredevelopedthecreditsystem，[1]thesmallerthatportionisinrelationtothetotalcapital。

Merchant’scapitalissimplycapitalfunctioninginthesphereofcirculation。

Theprocessofcirculationisaphaseofthetotalprocessofreproduction。

Butnovalueisproducedintheprocessofcirculation，and，therefore，nosurplus-value。Onlychangesofformofthesamemassofvaluetakeplace。

Infact，nothingoccursthereoutsidethemetamorphosisofcommodities，andthishasnothingtodoassucheitherwiththecreationorchangeofvalues。Ifasurplus-valueisrealisedinthesaleofproducedcommodities，thenthisisonlybecauseitalreadyexistedinthem。Inthesecondact，there-exchangeofmoney-capitalagainstcommodities(elementsofproduction)，thebuyerthereforedoesnotrealiseanysurplus-valueeither。Hemerelyinitiatestheproductionofsurplus-valuethroughexchanginghismoneyformeansofproductionandlabour-power。Butsofarasthesemetamorphosesrequirecirculationtime——timeduringwhichcapitaldoesnotproduceatall，leastofallsurplus-value——itrestrictsthecreationofvalues，andthesurplus-valueexpressesitselfthroughtherateofprofitininverseratiotothedurationofthecirculationperiod。Merchant’scapital，therefore，doesnotcreateeithervalueorsurplus-value，atleastnotdirectly。Insofarasitcontributestoshorteningthetimeofcirculation，itmayhelpindirectlytoincreasethesurplus-valueproducedbytheindustrialcapitalists。Insofarasithelpstoexpandthemarketandeffectsthedivisionoflabourbetweencapitals，henceenablingcapitaltooperateonalargerscale，itsfunctionpromotestheproductivityofindustrialcapital，anditsaccumulation。Insofarasitshortenscirculationtime，itraisestheratioofsurplus-valuetoadvancedcapital，hencetherateofprofit。Andtotheextentthatitconfinesasmallerportionofcapitaltothesphereofcirculationintheformofmoney-capital，itincreasesthatportionofcapitalwhichisengageddirectlyinproduction。

FOOTNOTES[1]Tobeabletoclassifymerchant’scapitalasproductivecapital，Ramsayconfoundsitwiththetransportationindustryandcallscommerce”thetransportofcommoditiesfromoneplacetoanother。”(AnEssayontheDistributionofWealth，p。19。)ThesameconfusionbyVerri(MeditazionisullaEconomiaPolitica，§；4[In:Scrittoriclassiciitaltantdieconomiapolitica。Partemoderna，t。XV，p。32——Ed。])andbySay(Traité；d’é；conomiepolitique，I，14，15)。InhisElementsofPoliticalEconomy(AndoverandNewYork，1835)S。P。

Newmansays:”Intheexistingeconomicalarrangementsofsociety，theveryact，whichisperformedbythemerchant，ofstandingbetweentheproducerandtheconsumer，advancingtotheformercapitalandreceivingproductsinreturn，andthenhandingovertheseproductstothelatter，receivingbackcapitalinreturn，isatransactionwhichbothfacilitatestheeconomicalprocessesofthecommunity，andaddsvaluetotheproductsinrelationtowhichitisperformed”(p。174)。Producerandconsumerthussavetimeandmoneythroughtheinterventionofthemerchant。Thisservicerequiresanadvanceofcapitalandlabour，andmustberewarded，”sinceitaddsvaluetoproducts，forthesameproductsinthehandsofconsumersareworthmorethaninthehandsofproducers。”Andsocommerceappearstohim，asitdoestoM。Say，as”strictlyanactofproduction”(p。175)。

ThisNewman’sviewisfundamentallywrong。Theuse-valueofacommodityisgreaterinthehandsoftheconsumerthaninthoseoftheproducer，becauseitisfirstrealisedbytheconsumer。Fortheuse-valueofacommoditydoesnotserveItsend，doesnotbegintofunctionuntilthecommodityentersthesphereofconsumption。Solongasitisinthehandsoftheproducer，itexistsonlyinpotentialform。Butonedoesnotpaytwiceforacommodity——firstforitsexchange-value，andthenforitsuse-value。

Bypayingforitsexchange-value，IappropriateItsuse-value。Anditsexchange-valueisnotintheleastaugmentedbytransferringthecommodityfromtheproducerormiddlemantotheconsumer。

Capital，Vol。3，Chapter17KarlMarxCAPITALVol。III

THEPROCESSOF

CAPITALISTPRODUCTIONASAWHOLEPartIV

CONVERSIONOFCOMMODITY-CAPITALANDMONEY-CAPITAL

INTOCOMMERCIALCAPITALANDMONEY-DEALINGCAPITAL

(MERCHANT’SCAPITAL)CHAPTER17

CommercialProfitWehaveseeninBookIIthatthepurefunctionsofcapitainthesphereofcirculation-theoperationswhichtheindustrialcapitalistmustperform，first，torealisethevalueofhiscommodities，andsecond，toreconvertthisvalueintoelementsofproduction，operationseffectingthemetamorphosisofcommodity——capital，C’——M——C，hencetheactsofsellingandbuying-produceneithervaluenorsurplus-value。Itwasratherseenthatthetimerequiredforthispurpose，objectivelyinregardtocommoditiesandsubjectivelyinregardtothecapitalist，setsthelimittotheproductionofvalueandsurplus-value。Whatistrueofthemetamorphosisofcommodity-capitalingeneral，is，ofcourse，notintheleastalteredbythefactthatapartofitmayassumetheshapeofcommercialcapital，orthattheoperations，effectingthemetamorphosisofcommodity-capital，appearasthespecialconcernofaspecialgroupofcapitalists，orastheexclusivefunctionofaportionofthemoney-capital。Ifsellingandbuyingcommodities-andthatiswhatthemetamorphosisofcommodity-capitalC’——M——Camountsto-byindustrialcapitaliststhemselvesarenotoperationswhichcreatevalueorsurplus-value，theywillcertainlynotcreateeitherofthesewhencarriedoutbypersonsotherthantheindustrialcapitalists。Furthermore，ifthatportionofthetotalsocialcapital，whichmustcontinuallybeonhandasmoney-capital，inorderthattheprocessofreproductionisnotinterruptedbytheprocessofcirculationandproceedscontinuously-ifthismoney-capitalcreatesneithervaluenorsurplus-value，itcannotacquirethepropertiesofcreatingthembybeingcontinuallythrownintocirculationbysomesectionofcapitalistsotherthantheindustrialcapitalists，toperformthesamefunction。Wehavealreadyindicatedtowhatextentmerchant’scapitalmaybeindirectlyproductive，andweshalllaterdiscussthispointatgreaterlength。

Commercialcapital，therefore——strippedofallheterogeneousfunctions，suchasstoring，expressing，transporting，distributing，retailing，whichmaybeconnectedwithit，andconfinedtoitstruefunctionofbuyinginordertosell——createsneithervaluenorsurplus-value，butactsasmiddlemanintheirrealisationandtherebysimultaneouslyintheactualexchangeofcommodities，i。e。，intheirtransferfromhandtohand，inthesocialmetabolism。Nevertheless，sincethecirculationphaseofindustrialcapitalisjustasmuchaphaseofthereproductionprocessasproductionis，thecapitaloperatingindependentlyintheprocessofcirculationmustyieldtheaverageannualprofitjustaswellascapitaloperatinginthevariousbranchesofproduction。Shouldmerchant’scapitalyieldahigherpercentageofaverageprofitthanindustrialcapital，thenaportionofthelatterwouldtransformitselfintomerchant’scapital。Shouldityieldaloweraverageprofit，thentheconversewouldresult。Aportionofthemerchant’scapitalwouldthenbetransformedintoindustrialcapital。Nospeciesofcapitalchangesitspurpose，orfunction，withgreatereasethanmerchant’scapital。

Sincemerchant’scapitaldoesnotitselfproducesurplus-value，itisevidentthatthesurplus-valuewhichitpocketsintheformofaverageprofitmustbeaportionofthesurplus-valueproducedbythetotalproductivecapital。Butnowthequestionarises:Howdoesmerchant’scapitalattractitsshareofthesurplus-valueorprofitproducedbytheproductivecapital？

Itisjustanillusionthatcommercialprofitisamereadditionto，oranominalriseof，thepricesofcommoditiesinexcessoftheirvalue。

Itisplainthatthemerchantcandrawhisprofitonlyoutofthepriceofthecommoditieshesells，andplainerstillthattheprofithemakesinsellinghiscommoditiesmustbeequaltothedifferencebetweenhispurchasepriceandhissellingprice，i。e。，equaltotheexcessofthelatterovertheformer。

Itispossiblethatadditionalcosts(costsofcirculation)mayenterintothecommoditiesaftertheirpurchaseandbeforetheirsale，anditisalsopossiblethatthismaynothappen。Ifsuchcostsshouldoccur，itisplainthattheexcessofthesellingpriceoverthepurchasepricewouldnotbeallprofit。Tosimplifytheanalysis，weshallassumeatthispointthatnosuchcostsoccur。

Fortheindustrialcapitalistthedifferencebetweenthesellingpriceandthepurchasepriceofhiscommoditiesisequaltothedifferencebetweentheirpriceofproductionandtheircost-price，or，fromthestandpointofthetotalsocialcapital，equaltothedifferencebetweenthevalueofthecommoditiesandtheircost-priceforthecapitalists，whichagaincomesdowntothedifferencebetweenthetotalquantityoflabourandthequantityofpaidlabourincorporatedinthem。Beforethecommoditiesboughtbytheindustrialcapitalistarethrownbackonthemarketassaleablecommodities，theypassthroughtheprocessofproduction，inwhichalonetheportionoftheirpricetoberealisedasprofitiscreated。Butitisdifferentwiththemerchant。Thecommoditiesareinhishandsonlysolongastheyareintheprocessofcirculation。Hemerelycontinuestheirsale，therealisationoftheirpricewhichwasbegunbytheproductivecapitalist，andthereforedoesnotcausethemtopassthroughanyintermediateprocessinwhichtheycouldagainabsorbsurplus-value。Whiletheindustrialcapitalistmerelyrealisesthepreviouslyproducedsurplus-value，orprofit，intheprocessofcirculation，themerchanthasnotonlytorealisehisprofitduringandthroughcirculation，butmustfirstmakeit。Thereappearstobenootherwayofdoingthisoutsideofsellingthecommoditiesboughtbyhimfromtheindustrialcapitalistattheirpricesofproduction，or，fromthestandpointofthetotalcommodity-capital，attheirvaluesinexcessoftheirpricesofproduction，makinganominalextrachargetotheirprices，hence，sellingthem，fromthestandpointofthetotalcommodity-capital，abovetheirvalue，andpocketingthisexcessoftheirnominalvalueovertheirrealvalue；inshort，sellingthemformorethantheyareworth。

Thismethodofaddinganextrachargeiseasytograsp。Forinstance，oneyardoflinencosts2s。IfIwanttomakea10%profitinresellingit，Imustadd1/10totheprice，henceselltheyardat2s。22/5d。

Thedifferencebetweenitsactualpriceofproductionanditssellingpriceisthen=22/5d。，andthisrepresentsaprofitof10%on2s。Thisamountstomysellingtheyardtothebuyeratapricewhichisinrealitythepriceof11/10yard。Or，whatamountstothesame，itisasthoughIsoldtothebuyeronly10/11ofayardfor2s。andkept1/11ofayardformyself。InfactIcanbuyback1/11ofayardfor22/5d。atthepriceof2s。22/5d。

peryard。Thiswould，therefore，bejustaroundaboutwayofsharinginthesurplus-valueandsurplus-productbyanominalriseinthepriceofcommodities。

Thisisrealisationofcommercialprofitbyraisingtheprice’ofcommodities，asitappearsatfirstglance。And，indeed，thiswholenotionthatprofitoriginatesfromanominalriseinthepriceofcommodities，orfromtheirsaleabovetheirvalue，springsfromtheobservationsofcommercialcapital。

Butitisquicklyapparentoncloserinspectionthatthisismereillusion。

Assumingcapitalistproductiontobepredominant，commercialprofitcannotberealisedinthismanner。(Itisherealwaysaquestion。ofaverages，notofisolatedcases。)Whydoweassumethatthemerchantcanrealiseaprofitofnomorethan，say，10%onhiscommoditiesbysellingthem10%

abovetheirpriceofproduction？Becauseweassumethattheproducerofthesecommodities，theindustrialcapitalist(whoappearsastheproducerbeforetheoutsideworld，beingthepersonificationofindustrialcapital)，hadsoldthemtothedealerattheirpricesofproduction。Ifthepurchasepriceofcommoditiespaidbythedealerisequaltotheirpriceofproduction，or，inthelastinstance，equaltotheirvalue，sothatthepriceofproductionor，inthelastinstance，thevalue，representthemerchant’scost-price，then，indeed，theexcessofhissellingpriceoverhispurchaseprice——

andthisdifferencealoneisthesourceofhisprofit——mustbeanexcessoftheircommercialpriceovertheirpriceofproduction，sothatinthefinalanalysisthemerchantsellsallcommoditiesabovetheirvalues。Butwhywasitassumedthattheindustrialcapitalistsellshiscommoditiestothemerchantattheirpricesofproduction？Orrather，whatwastakenforgrantedinthatassumption？Itwasthatmerchant’scapitaldidnotgointoformingthegeneralrateofprofit(wearedealingwithitasyetonlyinitscapacityofcommercialcapital)。Weproceedednecessarilyfromthispremiseindiscussingthegeneralrateofprofit，first，becausemerchant’scapitalassuchdidnotexistforusatthetime，and，second，becauseaverageprofit，andhencethegeneralrateofprofit，hadfirsttobedevelopedasalevellingofprofitsorsurplus-valuesactuallyproducedbytheindustrialcapitalsinthedifferentspheresofproduction。Butinthecaseofmerchant’scapitalwearedealingwithacapitalwhichsharesintheprofitwithoutparticipatinginitsproduction。Hence，itisnownecessarytosupplementourearlierexposition。

Suppose，thetotalindustrialcapitaladvancedinthecourseoftheyear=720c+180v=900(saymillion£；)，andthats’=100%。Theproducttherefore=720c+180v+180s。Letuscallthisproductortheproducedcommodity-capital，C，whosevalue，orpriceofproduction(sincebothareidenticalforthetotalityofcommodities)=1，080，andtherateofprofitforthetotalsocialcapitalof900=20%。These20%

are，accordingtoourearlieranalyses，theaveragerateofprofit，sincethesurplus-valueisnotcalculatedhereonthisorthatcapitalofanyparticularcomposition，butonthetotalindustrialcapitalofaveragecomposition。Thus，C=1，080，andtherateofprofit=20%。Letusnowassume，however，thatasidefromthese£；900ofindustrialcapital，therearestill£；100ofmerchant’scapital，whichsharesintheprofitproratatoitsmagnitudejustastheformer。Accordingtoourassumption，itis1/10ofthetotalcapitalof1，000。Therefore，itparticipatestotheextentof1/10inthetotalsurplus-valueof180，andthussecuresaprofitof18%。Actually，then，theprofittobedistributedamongtheother1/10ofthetotalcapitalisonly=162，oronthecapitalof900

likewise=18%。Hence，thepriceatwhichCissoldbytheownersoftheindustrialcapitalof900tothemerchants=720c+180v+162s=1，062。

Ifthedealerthenaddstheaverageprofitof18%tohiscapitalof100，hesellsthecommoditiesat1，062+18=1，080，i。e。，attheirpriceofproduction，or，fromthestandpointofthetotalcommodity-capital，attheirvalue，althoughhemakeshisprofitonlyduringandthroughthecirculationprocess，andonlyfromanexcessofhissellingpriceoverhispurchaseprice。Yethedoesnotsellthecommoditiesabovetheirvalue，orabovetheirpriceofproduction，preciselybecausehehasboughtthemfromtheindustrialcapitalistbelowtheirvalue，orbelowtheirpriceofproduction。

Thus，merchant’scapitalenterstheformationofthegeneralrateofprofitasadeterminantproratatoitspartinthetotalcapital。

Hence，ifwesayinthegivencasethattheaveragerateofprofit=18%，itwould=20%，ifitwerenotthat1/10ofthetotalcapitalwasmerchant’scapitalandthegeneralrateofprofittherebyloweredby1/10Thisleadstoacloserandmorecomprehensivedefinitionofthepriceofproduction。

Bypriceofproductionwemean，justasbefore，thepriceofacommodity=itscosts(thevalueoftheconstant+variablecapitalcontainedinit)+theaverageprofit。Butthisaverageprofitisnowdetermineddifferently。

Itisdeterminedbythetotalprofitproducedbythetotalproductivecapital；

butnotascalculatedonthetotalproductivecapitalalone，sothatifthis=900，asassumedabove，andtheprofit=180，thentheaveragerateofprofit=180/900=20%。But，rather，ascalculatedonthetotalproductive+merchant’scapital，sothatwith900productiveand100merchant’scapital，theaveragerateofprofit=180/1，000=18%。Thepriceofproductionis，therefore=k(thecosts)+18，insteadofk+20。Theshareofthetotalprofitfallingtomerchant’scapitalisthusincludedintheaveragerateofprofit。Theactualvalue，orpriceofproduction，ofthetotalcommodity-capitalistherefore=k+p+m(wheremiscommercialprofit)。Thepriceofproduction，orthepriceatwhichtheindustrialcapitalistassuchsellshiscommodities，isthussmallerthantheactualpriceofproductionofthecommodity；orintermsofallcommoditiestakentogether，thepricesatwhichtheclassofindustrialcapitalistsselltheircommoditiesarelowerthantheirvalue。

Hence，intheabovecase，900(costs)+18%on900，or900+162=1，062。

Itfollows，then，thatinsellingacommodityat118forwhichhepaid100themerchantdoes，indeed，add18%totheprice。Butsincethiscommodity，forwhichhepaid100，isreallyworth118，hedoesnotsellitaboveitsvalue。Weshallhenceforthusethetermpriceofproductioninthis，itsmoreprecise，sense。Itisevident，therefore，thattheprofitoftheindustrialcapitalistequalstheexcessofthepriceofproductionofthecommodityoveritscost-price，andthatcommercialprofit，asdistinctfromthisindustrialprofit，equalstheexcessofthesellingpriceoverthepriceofproductionofthecommoditywhich，forthemerchant，isitspurchaseprice；butthattheactualpriceofthecommodity=itspriceofproduction+thecommercialprofit。Justasindustrialcapitalrealisesonlysuchprofitsasalreadyexistinthevalueofcommoditiesassurplus-value，somerchant’scapitalrealisesprofitsonlybecausetheentiresurplus-value，orprofit，hasnotasyetbeenfullyrealisedinthepricechargedforthecommoditiesbytheindustrialcapitalist。[1]Themerchant’ssellingpricethusexceedsthepurchasepricenotbecausetheformerexceedsthetotalvalue，butbecausethelatterisbelowthisvalue。

Merchant’scapital，therefore，participatesinlevellingsurplus-valuetoaverageprofit，althoughitdoesnottakepartinitsproduction。Thus，thegeneralrateofprofitcontainsadeductionfromsurplus-valueduetomerchant’scapital，henceadeductionfromtheprofitofindustrialcapital。

Itfollowsfromtheforegoing:

1)Thelargerthemerchant’scapitalinproportiontotheindustrialcapital，thesmallertherateofindustrialprofit，andviceversa。

2)Itwasdemonstratedinthefirstpartthattherateofprofitisalwayslowerthantherateoftheactualsurplus-value，i。e。，italwaysunderstatestheintensityofexploitation，asintheabovecase，720c+180v+180s，therateofsurplus-valueof100%andarateofprofitofonly20%。Andthedifferencebecomesstillgreater，inasmuchastheaveragerateofprofitappearssmalleragain，droppingfrom20%

to18%，ifthesharefallingtomerchant’scapitalisalsotakenintoaccount。

Theaveragerateofprofitofthedirectcapitalistexploiter，therefore，expressesarateofprofitsmallerthanitactuallyis。

Assumingallothercircumstancesremainingthesame，therelativevolumeofmerchant’scapital(withtheexceptionofthesmalldealerwhorepresentsahybridform)isininverseproportiontothevelocityofitsturnover，henceininverseproportiontotheenergyoftheprocessofreproductioningeneral。Inthecourseofscientificanalysis，theformationofageneralrateofprofitappearstoresultfromindustrialcapitalsandtheircompetition，andisonlylatercorrected，supplemented，andmodifiedbytheinterventionofmerchant’scapital。Inthecourseofitshistoricaldevelopment，however，theprocessisreallyreversed。Itisthecommercialcapitalwhichfirstdeterminesthepricesofcommoditiesmoreorlessinaccordancewiththeirvalues，anditisthesphereofcirculation，thespherethatpromotestheprocessofreproduction，inwhichageneralrateofprofitinitiallytakesshape。Itisoriginallythecommercialprofitwhichdeterminestheindustrialprofit。Notuntilthecapitalistmodeofproductionhasasserteditselfandtheproducerhimselfhasbecomemerchant，iscommercialprofitreducedtothataliquotpartofthetotalsurplus-valuefallingtotheshareofmerchant’scapitalasanaliquotpartofthetotalcapitalengagedinthesocialprocessofreproduction。

Itwasseeninthesupplementaryequalisationofprofitthroughtheinterventionofmerchant’scapitalthatnoadditionalelemententeredthevalueofcommoditieswiththemerchant’sadvancedmoney-capital，andthattheextrachargetotheprice，wherebythemerchantmakeshisprofit，wasmerelyequaltothatportionofthevalueofthecommodities，whichproductivecapitalhadnotcalculatedinthepriceofproduction，i。e。，hadleftout。Thecaseofthismoney-capitalissimilartothatoftheindustrialcapitalist’sfixedcapital，sinceitisnotconsumedanditsvalue，therefore，doesnotmakeupanelementofthevalueofcommodity。Itisinthepurchasepriceofcommodity-capitalthatthemerchantreplacesitspriceofproduction=M，inmoney。Hisownsellingprice，aspreviouslyshown，is=M+DM，whereDMstandsfortheadditiontothepriceofcommoditiesdeterminedbythegeneralrateofprofit。Oncehesellsthecommodities，hisoriginalmoney-capital，whichheadvancedfortheirpurchase，returnstohimtogetherwiththisDM。

Weseeoncemorethathismoney-capitalisnothingbuttheindustrialcapitalist’scommodity-capitaltransformedintomoney-capital，whichaffectsthemagnitudeofthevalueofthiscommodity-capitalnomorethanwouldadirectsaleofthelattertotheultimateconsumer，insteadoftothemerchant。It，actually，merelyanticipatesthepaymentoftheconsumer。However，thisiscorrectonlyontheconditionhithertoassumed，thatthemerchanthasnooverheadexpenses，orthatasidefromthemoney-capitalwhichhemustadvancetobuycommoditiesfromtheproducerheneednotadvanceanyothercapital，circulatingorfixed，intheprocessofcommoditymetamorphosis。，theprocessofbuyingandselling。Butthisisnotsoinreality，aswehaveseenintheanalysisofthecostsofcirculation(BookII，Chap。VI)。

Thesecostsofcirculationarepartlyexpenseswhichthemerchanthastoreclaimfromotheragentsofcirculation，andpartlyexpensesarisingdirectlyfromhisspecificbusiness。

Nomatterwhatthenatureofthesecostsofcirculation——whethertheyarisefromthepurelycommercialnatureofthemerchant’sestablishmentassuchandhencebelongtothemerchant’sspecificcostsofcirculation，orrepresentitemswhicharechargesforsubsequentprocessesofproductionaddedintheprocessofcirculation，suchasexpressage，transport，storage，etc——theyalwaysrequireofthemerchant，asidefromhismoney-capital，advancedtothepurchaseofcommodities，someadditionalcapitalforthepurchaseandpaymentofsuchmeansofcirculation。Asmuchofthiselementofcostasconsistsofcirculatingcapitalpasseswhollyasanadditionalelementintothesellingpriceofthecommodities；andasmuchofitasconsistsoffixedcapitalonlytotheextentofitswearandtear。Butonlyasanelementwhichformsanominalvalue，evenifasthepurelycommercialcostsofcirculation，itdoesnotaddanyrealvaluetothecommodities。

But。whetherfixedorcirculating，thisentireadditionalcapitalparticipatesinformingthegeneralrateofprofit。

Thepurelycommercialcostsofcirculation(hence，excludingcostsofexpressage，shipping，storage，etc。)resolvethemselvesintocostsrequiredtorealisethevalueofcommodities，totransformitfromcommoditiesintomoney，orfrommoneyintocommodities，toeffecttheirexchange。Weleaveentirelyoutofconsiderationallpossibleprocessesofproductionwhichmaycontinueintheprocessofcirculation，andfromwhichthemerchant’sbusinesscanbealtogetherseparated；as，infact，theactualtransportindustryandexpressagemaybe，andare，industrialbranchesentirelydistinctfromcommercial；andpurchaseableandsaleablecommoditiesmaybestoredindocksorinotherpublicpremises，withtheresultantcostofstoragebeingchargedtothemerchantbythirdpersonsinasmuchashehastoadvanceit。Allthistakesplaceinactualwholesalecommerce，wheremerchant’scapitalappearsinitspurestform，unmixedwithotherfunctions。Theexpresscompanyowner，therailwaydirector，andtheshipowner，arenot”merchants。”

Thecostswhichweconsiderherearethoseofbuyingandselling。Wehavealreadyremarkedearlierthattheseresolvethemselvesintoaccounting，book-keeping，marketing，correspondence，etc。Theconstantcapitalrequiredforthispurposeconsistsofoffices，paper，postage，etc。Theothercostsbreakupintovariablecapitaladvancedfortheemploymentofmercantilewage-workers。(Expressage，transportcosts，advancesforcustomsduties，etc。，maypartlybeconsideredasbeingadvancedbythemerchantinpurchasingcommoditiesandthusenterthepurchasepriceasfarasheisconcerned。)

Allthesecostsarenotincurredinproducingtheuse-valueofcommodities，butinrealisingtheirvalue。Theyarepurecostsofcirculation。Theydonotenterintotheimmediateprocessofproduction，butsincetheyarepartoftheprocessofcirculationtheyarealsopartofthetotalprocessofreproduction。

Theonlyportionofthesecostsofinteresttousatthispointisthatadvancedasvariablecapital。(Thefollowingquestionsshouldalsobeanalysed:

First，howdoesthelawthatonlynecessarylabourentersthevalueofcommoditiesoperateintheprocessofcirculation？Second，howdoesaccumulationobtaininmerchant’scapital？Third，howdoesmerchant’scapitalfunctionintheactualaggregatereproductionprocessofsociety？)

Thesecostsariseduetotheproducthavingtheeconomicformofacommodity。

Ifthelabour-timewhichtheindustrialcapitaliststhemselveslosewhiledirectlysellingcommoditiestooneanother——hence，speakingobjectively，thecirculationtimeofthecommodities-doesnotaddvaluetothesecommodities，itisevidentthatthislabour-timedoesnotchangeitsnatureintheleastbyfallingtothemerchantinsteadoftheindustrialcapitalist。Theconversionofcommodities(products)intomoney，andofmoneyintocommodities(meansofproduction)isanecessaryfunctionofindustrialcapitaland，therefore，anecessaryoperationofthecapitalist——whoisactuallybutpersonifiedcapitalendowedwithaconsciousnessofitsownandawill。Butthesefunctionsneithercreatevalue，norproducesurplus-value。Byperformingtheseoperationsandcarryingonthefunctionsofcapitalinthesphereofcirculationaftertheproductivecapitalisthasceasedtobeinvolvedthemerchantmerelytakestheplaceoftheindustrialcapitalist。Thelabour-timerequiredintheseoperationsisdevotedtocertainnecessaryoperationsofthereproductionprocessofcapital，butyieldsnoadditionalvalue。Ifthemerchantdidnotperformtheseoperations(hence，didnotexpendthelabour-timeentailed)，hewouldnotbeapplyinghiscapitalasacirculationagentofindustrialcapital；hewouldnotthenbecontinuingtheinterruptedfunctionoftheindustrialcapitalist，andconsequentlycouldnotparticipateasacapitalistproratatohisadvancedcapital，inthemassofprofitproducedbyindustrialcapitalists。Inordertoshareinthemassofsurplus-value，toexpandthevalueofhisadvanceascapital，thecommercialcapitalistneednotemploywage-workers。Ifhisbusinessandcapitalaresmall，hemaybetheonlyworkerinit。Heispaidwiththatportionoftheprofitwhichfallstohimthroughthedifferencebetweenthepurchasepricepaidbyhimforcommoditiesandtheiractualpriceofproduction。

But，ontheotherhand，theprofitrealisedbythemerchantonasmallamountofadvancedcapitalmaybenolarger，ormayevenbesmaller，thanthewagesofoneofthebetter-paidskilledwage-workers。Infact，hebrushesshoulderswithmanydirectcommercialagentsoftheproductivecapitalist，suchasbuyers，sellers，travellers，whoenjoythesameorahigherincomeeitherintheformofwages，orintheformofashareintheprofit(percentages，bonuses)madefromeachsale。Inthefirstcase，themerchantpocketsthemercantileprofitasanindependentcapitalist；intheother，thesalesman，theindustrialcapitalist’swage-labourer，receivesaportionoftheprofiteitherintheformofwages，orasaproportionalshareintheprofitoftheindustrialcapitalist，whosedirectagentheis，whilehisemployerpocketsboththeindustrialandthecommercialprofit。Butinallthesecases，althoughhisincomemayappeartothecirculationagentasanordinarywage，aspaymentforworkperformed，andalthough，whereitdoesnotsoappear，theprofitmaybenolargerthanthewageofabetter-paidlabourer，hisincomeisderivedsolelyfromthemercantileprofit。Thisfollowsfromhislabournotbeinglabourwhichproducesvalue。

Thelengtheningoftheactofcirculationrepresentsfortheindustrialcapitalist1)apersonallossoftime，sinceitpreventshimfromperforminginpersonhisfunctionasmanageroftheproductiveprocess；2)alongerstayofhisproductinmoney-orcommodity-form，inthecirculationprocess，henceinaprocesswhereitdoesnotexpandvalueandwherethedirectproductionprocessisinterrupted。Ifthisprocessisnottobeinterrupted，productionmusteitherbecurtailed，ormoremoney-capitalmustbeadvancedtomaintaintheprocessofproductiononthesamescale。Thismeansthateachtimeeitherasmallerprofitismadeonthecapitalhithertoinvested，orthatadditionalmoney-capitalmustbeadvancedtomakethepreviousprofit。Allthisremainsunchangedwhenthemerchanttakestheplaceoftheindustrialcapitalist。Insteadoftheindustrialcapitalistdevotingmoretimetotheprocessofcirculation，itisthemerchantwhoissoengaged；

insteadoftheindustrialcapitalistitisthemerchantwhoadvancesadditionalcapitalforcirculation；or，whatamountstothesamething，insteadofalargeportionoftheindustrialcapitalbeingcontinuallydivertedintotheprocessofcirculation，itisthemerchant’scapitalwhichiswhollytiedupinit；andinsteadofmakingasmallerprofit，theindustrialcapitalistmustyieldaportionofhisprofitwhollytothemerchant。Solongasmerchant’scapitalremainswithintheboundsinwhichitisnecessary，theonlydifferenceisthatthisdivisionofthefunctionsofcapitalreducesthetimeexclusivelyusedupintheprocessofcirculation，thatlessadditionalcapitalisadvancedforthispurpose，andthatthelossintotalprofit，representedbymercantileprofit，issmallerthanitwouldotherwisehavebeen。Ifintheaboveexample，720c+180v+180s，assistedbyamerchant’scapitalof100，producesaprofitof162，or18%，fortheindustrialcapitalist，henceimplyingadeductionof18，then，butforthisindependentmerchant’scapital，theadditionalcapitalrequiredwouldprobablybe200，andweshouldhaveatotaladvancebytheindustrialcapitalistof1，100insteadof900，which，baseduponasurplus-valueof180，wouldyieldarateofprofitof。only164/11%。

Iftheindustrialcapitalistwhoactsashisownmerchantadvancesnotonlytheadditionalcapitaltobuynewcommoditiesbeforehisproductintheprocessofcirculationhasbeenreconvertedintomoney，butalsocapital(officeexpensesandwagesforcommercialemployees)torealisethevalueofhiscommodity-capital，or，inotherwords，fortheprocessofcirculation，thenthesesupplementsformadditionalcapital，butdonotcreatesurplus-value。

Theymustbemadegoodoutofthevalueofthecommodities，becauseaportionofthevalueofthesecommoditiesmustbereconvertedintothesecirculationcosts。Butnoadditionalsurplus-valueiscreatedthereby。Sofarasthisconcernsthetotalcapitalofsociety，itmeansinfactthataportionofitmustbesetasideforsecondaryoperationswhicharenopartoftheself-expansionprocess，andthatthisportionofthesocialcapitalmustbecontinuallyreproducedforthispurpose。Thisreducestherateofprofitfortheindividualcapitalistandfortheentireclassofindustrialcapitalists，aneffectarisingfromeverynewinvestmentofadditionalcapitalwheneversuchcapitalisrequiredtosetinmotionthesamemassofvariablecapital。

Insofarastheseadditionalcostsconnectedwiththebusinessofcirculationaretransferredfromtheindustrialtothecommercialcapitalist，theretakesplaceasimilarreductionintherateofprofit，buttoalesserdegreeandinadifferentway。Itnowdevelopsthatthemerchantadvancesmorecapitalthanwouldbenecessaryifthesecostsdidnotexist，andthattheprofitonthisadditionalcapitalincreasestheamountofthecommercialprofit，sothatmoreofthemerchant’scapitaljoinsindustrialcapitalinlevellingtheaveragerateofprofitandtherebytheaverageprofitfalls。Ifinouraboveexampleanadditionalcapitalof50isadvancedbesidesthemerchant’scapitalof100tocoverthecostsinquestion，thenthetotalsurplus-valueof180isdistributedwithrespecttoaproductivecapitalof900plusamerchant’scapitalof150，together=1，050。Theaveragerateofprofit，therefore，sinksto171/7%

Theindustrialcapitalistsellshiscommoditiestothemerchantat900

+1542/7=1，05421/7，andthemerchantsellsthemat1，130(1，080+50forcostswhichhemustrecover)。

Moreover，itmustbeadmittedthatthedivisionbetweenmerchant’sandindustrialcapitalisaccompaniedbyacentralisationofthecommercialexpensesand，consequently，bytheirreduction。

Thequestionnowarises:Whataboutthecommercialwage-workersemployedbythecommercialcapitalist，herethemerchant？

Inonerespect，suchacommercialemployeeisawage-workerlikeanyother。Inthefirstplace，hislabour-powerisboughtwiththevariablecapitalofthemerchant，notwithmoneyexpendedasrevenue，andconsequentlyitisnotboughtforprivateservice，butforthepurposeofexpandingthevalueofthecapitaladvancedforit。Inthesecondplace，thevalueofhislabour-power，andthushiswages，aredeterminedasthoseofotherwage-workers，i。e。，bythecostofproductionandreproductionofhisspecificlabour-power，notbytheproductofhislabour。

However，wemustmakethesamedistinctionbetweenhimandthewage-workersdirectlyemployedbyindustrialcapitalwhichexistsbetweenindustrialcapitalandmerchant’scapital，andthusbetweentheindustrialcapitalistandthemerchant。Sincethemerchant，asamereagentofcirculation，producesneithervaluenorsurplus-value(fortheadditionalvaluewhichheaddstothecommoditiesthroughhisexpensesresolvesitselfintoanadditionofpreviouslyexistingvalues，althoughthequestionhereposesitself，howhepreservesthisvalueofhisconstantcapital？)itfollowsthatthemercantileworkersemployedbyhiminthesesamefunctionscannotdirectlycreatesurplus-valueforhim。Here，asinthecaseofproductivelabourers，weassumethatwagesaredeterminedbythevalueofthelabour-power，andthat，hence，themerchantdoesnotenrichhimselfbydepressingwages，sothathedoesnotenterintohiscostaccountanadvanceforlabourwhichhehaspaidonlyinpart；inotherwords，thathedoesnotenrichhimselfthroughcheatinghisclerks，etc。

Thedifficultyasconcernsmercantilewage-workersisbynomeanstoexplainhowtheyproducedirectprofitsfortheiremployerwithoutcreatinganydirectsurplus-value(ofwhichprofitisbutatransmutedform)。Thisquestionhas，indeed，alreadybeensolvedinthegeneralanalysisofcommercialprofits。Justasindustrialcapitalmakesprofitbysellinglabourembodiedandrealisedincommodities，forwhichithasnotpaidanyequivalent，somerchant’scapitalderivesprofitfromnotpayinginfulltoproductivecapitalforalltheunpaidlabourcontainedinthecommodities(incommodities，insofarascapitalinvestedintheirproductionfunctionsasanaliquotpartofthetotalindustrialcapital)，andbydemandingpaymentforthisunpaidportionstillcontainedinthecommoditieswhenmakingasale。Therelationofmerchant’scapitaltosurplus-valueisdifferentfromthatofindustrialcapital。Thelatterproducessurplus-valuebydirectlyappropriatingtheunpaidlabourofothers。Theformerappropriatesaportionofthissurplus-valuebyhavingthisportiontransferredfromindustrialcapitaltoitself。

Itisonlythroughitsfunctionofrealisingvaluesthatmerchant’scapitalactsascapitalintheprocessofreproduction，andhencedrawsonthesurplus-valueproducedbythetotalcapital。Themassoftheindividualmerchant’sprofitsdependsonthemassofcapitalthathecanapplyinthisprocess，andhecanapplysomuchmoreofitinbuyingandselling，themoretheunpaidlabourofhisclerks。Theveryfunction，byvirtueofwhichthemerchant’smoneybecomescapital，islargelydonethroughhisemployees。Theunpaidlabouroftheseclerks，whileitdoesnotcreatesurplus-value，enableshimtoappropriatesurplus-value，which，ineffect，amountstothesamethingwithrespecttohiscapital。Itis，therefore，asourceofprofitforhim。Otherwisecommercecouldneverbeconductedonalargescale，capitalistically。

Justasthelabourer’sunpaidlabourdirectlycreatessurplus-valueforproductivecapital，sotheunpaidlabourofthecommercialwage-workersecuresashareofthissurplus-valueformerchant’scapital。

Thedifficultylieshere:Sincethemerchant’slabour-timeandlabourdonotcreatevalue，althoughtheysecureforhimashareofalreadyproducedsurplus-value，howdoesthematterstandwiththevariablecapitalwhichhelaysoutinpurchasingcommerciallabour-power？Isthisvariablecapitaltobeincludedinthecostoutlaysoftheadvancedmerchant’scapital？

Ifnot，thisappearstoconflictwiththelawofequalisationoftherateofprofit；whatcapitalistwouldadvance150ifhecouldchargeonly100

toadvancedcapital？Ifso，itseemstoconflictwiththenatureofmerchant’scapital，sincethiskindofcapitaldoesnotactascapitalbysettinginmotionthelabourofothers，asindustrialcapitaldoes，butratherbydoingitsownwork，i。e。，performingthefunctionsofbuyingandselling，thisbeingpreciselythemeansandthereasonwhyitreceivesaportionofthesurplus-valueproducedbytheindustrialcapital。

(Wemustthereforeanalysethefollowingpoints:themerchant’svariablecapital；thelawofnecessarylabourinthesphereofcirculation；howthemerchant’slabourmaintainsthevalueofhisconstantcapital；thepartplayedbymerchant’scapitalintheprocessofreproductionasawhole；

and，finally，theduplicationincommodity-capitalandmoney-capital，ontheonehand，andincommercialcapitalandmoney-dealingcapitalontheother。)

Ifeverymerchanthadonlyasmuchcapitalashehimselfwereabletoturnoverbyhisownlabour，therewouldbeinfinitefragmentationofmerchant’scapital。Thisfragmentationwouldincreaseinthesameproportionasproductivecapitalraisedproductionandoperatedwithgreatermassesintheforwardmarchofthecapitalistmodeofproduction。Hence，anincreasingdisproportionofthetwo。Capitalinthesphereofcirculationwouldbecomedecentralisedinthesameproportionasitbecamecentralisedinthesphereofproduction。

Thepurelycommercialbusinessoftheindustrialcapitalist，andthushispurelycommercialexpenses，wouldexpandinfinitelythereby，forhewouldhavetodealwith，say，1，000merchants，insteadof100。Thus，theadvantagesofindependentlyoperatingmerchant’scapitalwouldlargelybelost。Andnotthepurelycommercialexpensesalone，butalsotheothercostsofcirculation，suchassorting，expressage，etc。，wouldgrow。This，asfarastheindustrialcapitalisconcerned。Nowletusconsidermerchant’scapital。Firstly，thepurelycommercialoperations。Itdoesnottakemoretimetodealwithlargefiguresthanwithsmallones。Ittakestentimesasmuchtimetomake10purchasesat£；100eachasitdoestomakeonepurchaseat£；1，000。Ittakestentimesasmuchcorrespondence，paper，andpostage，tocorrespondwith10smallmerchantsasitdoeswithonelargemerchant。Theclearlydefineddivisionoflabourinacommercialoffice，inwhichonekeepsthebooks，anotherlooksaftermoneymatters，athirdhaschargeofcorrespondence，onebuys，anothersells，athirdtravels，etc。，savesimmensequantitiesoflabour-time，sothatthenumberofworkersemployedinwholesalecommerceareinnowayrelatedtothecomparativesizeoftheestablishment。Thisisso，becauseincommercemuchmorethaninindustrythesamefunctionrequiresthesamelabour-time，whetherperformedonalargeorasmallscale。Thisisthereasonwhyconcentrationappearsearlierhistoricallyinthemerchant’sbusinessthanintheindustrialworkshop。Further，regardingoutlaysinconstantcapital。Onehundredsmallofficescostincomparablymorethanonelargeoffice，100smallwarehousesmorethanalargeone，etc。Thecostsoftransport，whichentertheaccountsofacommercialestablishmentatleastascoststobeadvanced，growwiththefragmentation。

Theindustrialcapitalistwouldhavetolayoutmoreinlabourandincirculationcostsinthecommercialpartofhisbusiness。Thesamemerchant’scapital，whendividedamongmanysmallcapitalists，would，owingtothisfragmentation，requiremorelabourerstoperformitsfunctions，andmoremerchant’scapitalwould，furthermore，beneededtoturnoverthesamecommodity-capital。

SupposeBistheentiremerchant’scapitaldirectlyappliedinbuyingandsellingcommodities，andbthecorrespondingvariablecapitalpaidoutinwagestothecommercialemployees。ThenB+bissmallerthanthetotalmerchant’scapital，B，wouldbeifeverymerchanthadtogetalongwithoutassistants，hencewouldinvestnothinginb。However，wehavenotyetovercomethedifficulty。

Thesellingpriceofthecommoditiesmustsuffice1)topaytheaverageprofitonB+b。ThisisexplainedifonlybythefactthatB+bisgenerallyareductionoftheoriginalB，representingasmallermerchant’scapitalthanwouldberequiredwithoutb。Butthissellingpricemustsuffice2)

tocovernotonlytheadditionalprofitonb，buttoreplacealsothepaidwages，themerchant’svariablecapital=b。Thislastconsiderationgivesrisetothedifficulty。Doesbrepresentanewconstituentoftheprice，orisitmerelyapartoftheprofitmadebymeansofB+b，whichappearsaswagesonlysofarasthemercantilewage-workerisconcerned，andasconcernsthemerchantsimplyreplacesvariablecapital？Inthelattercase，themerchant’sprofitonhisadvancedcapitalB+bwouldjustequaltheprofitduetoBbyvirtueofthegeneralrate，plusb，whichhepaysoutintheformofwages，butwhichdoesnotitselfyieldaprofit。

Thecruxofthematteris，indeed，tofindthelimits(mathematicallyspeaking)ofb。Letusfirstaccuratelydefinetheproblem。LetBstandforcapitalinvesteddirectlyinbuyingandsellingcommodities，Kfortheconstantcapital(actualhandlingcosts)consumedinthisfunction，andbforthevariablecapitalinvestedbythemerchant。

RecoveringBoffersnodifficultiesatall。Forthemerchantitissimplytherealisedpurchaseprice，andthepriceofproductionforthemanufacturer。

Itisthepricepaidbythemerchant，andinresellingherecoversBaspartofhissellingprice；inadditiontothisB，hemakesaprofitonB，aspreviouslyexplained。Forexample，letthecommoditycost£；100。

Supposetheprofitis10%。Inthatcase，thecommodityissoldat110。

Thecommoditypreviouslycost100，andthemerchant’scapitalof100merelyadds10toit。

NowifwelookatK，itisatmostaslargeas，butinfactsmallerthan，theportionofconstantcapitalwhichtheproducerwoulduseupinbuyingandselling，butthenitwouldformanadditiontotheconstantcapitalherequiresdirectlyinproduction。Thisportion，nonetheless，mustbecontinuallyrecoveredinthepriceofthecommodity，or，whatamountstothesame，acorrespondingportionofthecommoditymustbecontinuallyexpendedinthisform，or，fromthestandpointofthetotalcapitalofsociety，mustbecontinuallyreproducedinthisform。Thisportionoftheadvancedconstantcapitalwouldhavealimitingeffectontherateofprofit，justastheentiremassofitdirectlyinvestedinproduction。Insofarastheindustrialcapitalistleavesthecommercialpartofhisbusinesstothemerchant，heneednotadvancethispartofthecapital。Themerchantadvancesitinhisstead。Inaway，hedoesthisbutnominally，sinceamerchantneitherproduces，norreproduces，theconstantcapitalconsumedbyhim(theactualhandlingcosts)。Itsproductionappearsaseparatebusiness，oratleastapartofthebusiness，ofsomeindustrialcapitalistswhothusplayarolesimilartothosewhosupplyconstantcapitaltoproducersofnecessitiesoflife。First，therefore，themerchanthasthisconstantcapitalrecoveredforhimand，secondly，receiveshisprofitonit。Throughbothofthese，therefore，theindustrialcapitalist’sprofitisreduced。

Butowingtoeconomisingandconcentrationwhichareboundupwithdivisionoflabour，itshrinkslessthanitwouldifhehimselfhadtoadvancethiscapital。Thereductionintherateofprofitisless，becausethecapitalthusadvancedisless。

Sofar，then，thesellingpriceismadeupofB+K+theprofitonB+K。Thisportionofitoffersnofurtherdifficulties。Butnowb，thevariablecapitaladvancedbythemerchant，entersintoit。

TheresultantsellingpriceisB+K+b+theprofitonB+K+theprofitonb。

BmerelyrecoversthepurchasepriceandaddsnothingtoitbuttheprofitonB。KaddstheprofitonK，andKitself；butK+theprofitonK，thepartofthecirculationcostsadvancedintheformofconstantcapital+thecorrespondingaverageprofit，wouldbelargerinthehandsoftheindustrialcapitalistthaninthemerchant’s。TheshrinkingoftheaverageprofitappearsintheformofthefullaverageprofitcalculatedafterdeductingB+Kfromtheadvancedindustrialcapital，withthedeductionfromtheaverageprofitonB+Kpaidtothemerchant，sothatthisdeductionappearsastheprofitofaspecificcapital，merchant’scapital。

Butthesituationisdifferentwithrespecttob+theprofitonb，or，inthepresentcase，wheretherateofprofitisassumed=10%，withb+1/10b。Andtherealdifficultylieshere。

Whatthemerchantbuyswithbis，accordingtoourassumption，nothingbutcommerciallabour，hencelabourrequiredtoperformthefunctionsofcirculatingcapital，C——MandM——C。Butcommerciallabouristhelabourgenerallynecessaryforacapitaltooperateasmerchant’scapital，tohelpconvertcommoditiesintomoneyandmoneyintocommodities。Itislabourwhichrealises，butdoesnotcreate，values。Andonlyinsofarasacapitalperformsthesefunctions——henceacapitalistperformstheseoperations，orthisworkwithhiscapital——doesitserveasmerchant’scapitalandparticipateinregulatingthegeneralrateofprofit，i。e。，drawitsdividendsoutofthetotalprofit。But(b+theprofitonb)appearstoinclude，first，paymentforlabour(foritmakesnodifferencewhethertheindustrialcapitalistpaysthemerchantforhisownlabour，orthelabouroftheclerkspaidbythemerchant)，and，secondly，theprofitonthepaymentforthislabour，whichthemerchantwouldhavetoperforminperson。First，merchant’scapitalgetsitsbrefunded，and，secondly，hemakestheprofitonit。Thisarisesfromthefact，therefore，that，first，itrequirespaymentfortheworkwherebyitoperatesasmerchant’scapital，andthat，secondly，itdemandstheprofit，becauseitoperatesascapital，i。e。，becauseitperformsworkforwhichprofitispaidtoitasfunctioningcapital。Thisis，therefore，thequestiontobesolved。

LetusassumethatB=100，b=10，andtherateofprofit=10%。WetakeitthatK=0，inordertoleaveoutofconsiderationthiselementofthepurchaseprice，whichdoesnotbelonghereandhasalreadybeenaccountedfor。Hence，thesellingpricewould=B+p+b+p(=B+Bp’

+b+bp’；wherepstandsfortherateofprofit)=100+40+10+1=

121。

Butifbwerenotinvestedbythemerchantinwages——sincebispaidonlyforcommerciallabour，hencelabourrequired，torealisethevalueofthecommodity——capitalthrownonthemarketbyindustrialcapital——thematterwouldstandasfollows:tobuyorsellforB=100，themerchantwoulddevotehistime，andwewishtoassumethatthisistheonlytimeathisdisposal。Thecommerciallabourrepresentedbyb，or10，ifpaidforbyprofitinsteadofwages，wouldpresupposeanothermerchant’scapital=100，sinceat10%thismakesb=10。ThissecondB=100wouldnotadditionallygointothepriceofcommodities，butthe10%would。Therewould，hence，betwooperationsat100=200，thatwouldbuycommoditiesat200+20

=220。

Sincemerchant’scapitalisabsolutelynothingbutanindividualisedformofaportionofindustrialcapitalengagedintheprocessofcirculation，allquestionsreferringtoitmusthesolvedbyrepresentingtheproblemprimarilyinaform；inwhichthephenomenapeculiartomerchant’scapitaldonotyetappearindependently，butstillindirectconnectionwithindustrialcapital，asabranchofit。Asanoffice，distinctfromaworkshop，mercantilecapitaloperatescontinuallyinthecirculationprocess。Itishere——

intheofficeoftheindustrialcapitalisthimself——thatwemustfirstanalysethebnowunderconsideration。

Theofficeisfromtheoutsetalwaysinfinitesimallysmallcomparedtotheindustrialworkshop。Asfortherest，itisclearthatasthescaleofproductionisextended，commercialoperationsrequiredconstantlyforthecirculationofindustrialcapital，inordertoselltheproductexistingascommodity-capital，toreconvertthemoneysoreceivedintomeansofproduction，andtokeepaccountofthewholeprocess，multiplyaccordingly。

Calculationofprices，book-keeping，managingfunds，correspondence-allbelongunderthishead。Themoredevelopedthescaleofproduction，thegreater，evenifnotproportionatelygreater，thecommercialoperationsoftheindustrialcapital，andconsequentlythelabourandothercostsofcirculationinvolved。inrealisingvalueandsurplus-value。Thisnecessitatestheemploymentofcommercialwage-workerswhomakeuptheactualofficestaff。Theoutlayforthese，althoughmadeintheformofwages，differsfromthevariablecapitallaidoutinpurchasingproductivelabour。Itincreasestheoutlayoftheindustrialcapitalist，themassofthecapitaltobeadvanced，withoutdirectlyincreasingsurplus-value。Becauseitisanoutlayforlabouremployedsolelyinrealisingvaluealreadycreated。

Likeeveryotheroutlayofthiskind，itreducestherateofprofitbe-causetheadvancedcapitalincreases，butnotthesurplus-value。Ifsurplus-valuesremainsconstantwhileadvancedcapitalCincreasestoC+DC，thentherateofprofits/Cisreplacedbythesmallerrateofprofits/C

+DC。Theindustrialcapitalistendeavours，therefore，tocuttheseexpensesofcirculationdowntoaminimum，justashisexpensesforconstantcapital。Hence，industrialcapitaldoesnotmaintainthesameattitudetoitscommercialwage-labourersasitdoestoitsproductivewage-labourers。Themoreproductivewage-labourersitemploysunderotherwiseequalcircumstances，thegreatertheoutput，andthegreaterthesurplus-value，orprofit。Conversely，however，thelargerthescaleofproduction，thegreaterthequantityofvalueandsurplus-valuetoberealised，thegreatertheproducedcommodity-capital，thegreateraretheabsolute，ifnotrelative，officecosts，givingrisetoakindofdivisionoflabour。Towhatextentprofitisthepreconditionfortheseoutlays，isseen，amongotherthings，fromthefactthatwiththeincreaseofcommercialsalaries，apartofthemisfrequentlypaidbyashareintheprofit。Itisinthenatureofthingsthatlabourconsistingmerelyofintermediateoperationsconnectedpartlywithcalculatingvalues，partlywithrealisingthem，andpartlywithreconvertingtherealisedmoneyintomeansofproduction，isalabourwhosemagnitudethereforedependsonthequantityoftheproducedvaluesthathavetoherealised，anddoesnotactasthecause，likedirectlyproductivelabour，butratherasaneffect，oftherespectivemagnitudesandmassesofthesevalues。Thesameappliestotheothercostsofcirculation。To。domuchmeasuring，weighing，packing，andtransporting，muchmustheonhand。Theamountofpacking，transporting，etc。，dependsonthequantityofcommoditieswhicharetheobjectsofthisactivity，notviceversa。

Thecommercialworkerproducesnosurplus-valuedirectly。Butthepriceofhislabourisdeterminedbythevalueofhislabour-power，hencebyitscostsofproduction，whiletheapplicationofthislabour-power，itsexertion，expenditureofenergy，andwearandtear，isasintheeaseofeveryotherwage-labourerbynomeanslimitedbyitsvalue。Hiswage，therefore，isnotnecessarilyproportionatetothemassofprofitwhichhehelpsthecapitalisttorealise。Whathecoststhecapitalistandwhathebringsinforhim，aretwodifferentthings。Hecreatesnodirectsurplus-value，butaddstothecapitalist’sincomebyhelpinghimtoreducethecostofrealisingsurplus-value，inasmuchasheperformspartlyunpaidlabour。

Thecommercialworker，inthestrictsenseoftheterm，belongstothebetter-paidclassofwage-workers——tothosewhoselabourisclassedasskilledandstandsaboveaveragelabour。Yetthewagetendstofall，eveninrelationtoaveragelabour，withtheadvanceofthecapitalistmodeofproduction。Thisisduepartlytothedivisionoflabourintheoffice，implyingaone-sideddevelopmentofthelabourcapacity，thecostofwhichdoesnotfallentirelyonthecapitalist，sincethelabourer’sskilldevelopsbyitselfthroughtheexerciseofhisfunction，andallthemorerapidlyasdivisionoflabourmakesitmoreone-sided。Secondly，becausethenecessarytraining，knowledgeofcommercialpractices，languages，etc。，ismoreandmorerapidly，easily，universallyandcheaplyreproducedwiththeprogressofscienceandpubliceducationthemorethecapitalistmodeofproductiondirectsteachingmethods，etc。，towardspracticalpurposes。Theuniversalityofpubliceducationenablescapitaliststorecruitsuchlabourersfromclassesthatformerlyhadnoaccesstosuchtradesandwereaccustomedtoalowerstandardofliving。Moreover，thisincreasessupply，andhencecompetition。Withfewexceptions，thelabour-powerofthesepeopleisthereforedevaluatedwiththeprogressofcapitalistproduction。Theirwagefalls，whiletheirlabourcapacityincreases。Thecapitalistincreasesthenumberoftheselabourerswheneverhehasmorevalueandprofitstorealise。Theincreaseofthislabourisalwaysaresult，neveracauseofmoresurplus-value。[2]

Thereisduplication，therefore。Ontheonehand，thefunctionsascommodity-capitalandmoney-capital(hencefurtherdesignatedasmerchant’scapital)aregeneraldefiniteformsassumedbyindustrialcapital。Ontheotherhand，specificcapitals，andthereforespecificgroupsofcapitalists，areexclusivelydevotedtothesefunctions；andthesefunctionsthusdevelopintospecificspheresofself-expansionofcapital。

Inthecaseofmercantilecapital，thecommercialfunctionsandcirculationcostsarefoundonlyinindividualisedform。Thatsideofindustrialcapitalwhichisdevotedtocirculation，continuouslyexistsnotonlyintheshapeofcommodity-capitalandmoney-capital，butalsointheofficealongsidetheworkshop。Butitbecomesindependentinthecaseofmercantilecapital。

Inthelatter’scase，theofficeisitsonlyworkshop。Theportionofcapitalemployedintheformofcirculationcostsappearsmuchlargerinthecaseofthebigmerchantthaninthatoftheindustrialist，becausebesidestheirownofficesconnectedwitheveryindustrialworkshop，thatpartofcapitalwhichwouldhavetobesoappliedbytheentireclassofindustrialcapitalistsisconcentratedinthehandsofafewmerchants，whoincarryingoutthefunctionsofcirculationalsoprovideforthegrowingexpensesincidentaltotheircontinuation。

Toindustrialcapitalthecostsofcirculationappearasunproductiveexpenses，andsotheyare。Tothemerchanttheyappearasasourceofhisprofit，proportional，giventhegeneralrateofprofit，totheirsize。

Theoutlaytobemadeforthesecirculationcostsis，therefore，aproductiveinvestmentformercantilecapital。Andforthisreason，thecommerciallabourwhichitbuysislikewiseimmediatelyproductiveforit。

FOOTNOTES[1]JohnBellers[EssaysaboutthePoor，Manufactures，Trade，Plantations，andImmorality，London，1699，p。10——Ed。]。

[2]Howwellthisforecastofthefateofthecommercialproletariat，writtenin1865，hasstoodthetestoftimecanbecorroboratedbyhundredsofGermanclerks，whoaretrainedinallcommercialoperationsandacquaintedwiththreeorfourlanguages，andoffertheirservicesinvaininLondonCityat25shillingsperweek，whichisfarbelowthewagesofagoodmachine。

Ablankoftwopagesinthemanuscriptindicatesthatthispointwastohavebeentreatedatgreaterlength。Fortherest，wereferthereadertoBookII(Kap。VI。)(”TheCostsofCirculation”)[Englishedition:Vol。

II，Ch。VI——Ed。]，wherevariousmattersbelongingunderthisheadhavealreadybeendiscussed——F。E。

Capital，Vol。3，Chapter18KarlMarxCAPITALVol。III

THEPROCESSOF

CAPITALISTPRODUCTIONASAWHOLEPartIV

CONVERSIONOFCOMMODITY-CAPITALANDMONEY-CAPITAL

INTOCOMMERCIALCAPITALANDMONEY-DEALINGCAPITAL

(MERCHANT’SCAPITAL)CHAPTER18

TheTurnoverofMerchant’sCapital。Prices。

Theturnoverofindustrialcapitalisacombinationofitsperiodofproductionandtimeofcirculation，andthereforeembracestheentireprocessofproduction。Theturnoverofmerchant’scapital，ontheotherhand，beinginrealitynothingbutanalienatedmovementofcommodity-capital，representsonlythefirstphaseinthemetamorphosisofacommodity，C——M，astherefluentmovementofaspecificcapital；M——C，C——M，is，fromthemercantilepointofview，theturnoverofmerchant’scapital。Themerchantbuys，convertinghismoneyintocommodities，thensells，convertingthelatterbackintomoney，andsoforthinconstantrepetition。Withincirculation，themetamorphosisofindustrialcapitalalwayspresentsitselfintheformofC1——M——C2；themoneyrealisedbythesaleoftheproducedcommodityC1isusedtopurchasenewmeansofproduction，C2。ThisamountstoapracticalexchangeofC1forC2，andthesamemoneythuschangeshandstwice。Itsmovementmediatestheexchangeoftwodifferentkindsofcommodities，C1andC2。

Butinthecaseofthemerchant，itis，conversely，thesamecommoditywhichchangeshandstwiceinM——C——M’。Itmerelypromotestherefluxofhismoney。

If，forexample，acertainmerchant’scapitalis£；100，andforthese£；100themerchantbuyscommoditiesandsellsthemfor£；110，thenhiscapitalof£；100hascompletedoneturnover，andthenumberofsuchturnoversperyeardependsonthenumberoftimesthismovementM——C——M’isrepeated。

Wehereleaveentirelyoutofconsiderationthecostswhichmaybeconcealedinthedifferencebetweenthepurchasepriceandthesellingprice，sincethesedonotalterinanywaytheform，whichwearenowanalysing。

Thenumberofturnoversofagivenmerchant’scapital，therefore，isanalogousinthiscasetotherepeatedcyclesofmoneyasameremediumofcirculation。Justasthesamethalerbuystentimesitsvalueincommoditiesinmakingtencycles，sothesamemoney-capitalofthemerchant，whenturnedovertentimes，buystentimesitsvalueincommodities，orrealisesatotalcommodity-capitaloftentimesitsvalue；amerchant’scapitalof100，forinstance，aten-foldvalue=1，000。Butthereisthisdifference:

Inthecycleofmoneyasamediumofcirculationitisthesamepieceofmoneythatpassesthroughdifferenthands，thusrepeatedlyperformingthesamefunctionandhencemakingupforthemassofthecirculatingpiecesofmoneybyitsvelocity。Butinthemerchant’scaseitisthesamemoneycapital，thesamemoney-value，regardlessofwhatpiecesofmoneyitmaybecomposed，whichrepeatedlybuysandsellscommodity-capitaltotheamountofitsvalueandwhichthereforereturnstothesamehands，thesamepointofdepartureasM+DM，i。e。，valueplussurplus-value。Thischaracterisesitsturnoverasacapitalturnover。Italwayswithdrawsmoremoneyfromcirculationthanitthrowsin。Itisself-evident，atanyrate，thatanacceleratedturnoverofmerchant’scapital(givenadevelopedcreditsystem，thefunctionofmoneyasameansofpaymentpredominates)impliesamorerapidcirculationofthesamequantityofmoney。

Arepeatedturnoverofcommercialcapital，however，neverconnotesmorethanrepeatedbuyingandselling；whilearepeatedturnoverofindustrialcapitalconnotestheperiodicityandrenovationoftheentirereproductionprocess(whichincludestheprocessofconsumption)。Formerchant’scapitalthisappearsmerelyasanexternalcondition。Industrialcapitalmustcontinuallybringcommoditiestothemarketandwithdrawthemfromit，inorderthatrapidturnoverofmerchant’scapitalmayremainpossible。Iftheprocessofreproductionisslow，thensoistheturnoverofmerchant’scapital。

True，merchant’scapitalpromotestheturnoverofproductivecapital，butonlyinsofarasitshortensitstimeofcirculation。Ithasnodirectinfluenceonthetimeofproduction，whichisalsoabarriertotheperiodofturnoverofindustrialcapital。Thisisthefirstbarrierfortheturnoverofmerchant’scapital。Secondly，asidefromthebarrierformedbyreproductiveconsumption，theturnoverofmerchant’scapitalisultimatelylimitedbythevelocityandvolumeofthetotalindividualconsumption，sinceallthecommodity-capitalwhichispartoftheconsumption-funddependsonit。

However(asidefromtheturnoversintheworldofcommerce，inwhichonemerchantalwayssellsthesamecommoditytoanother，andthissortofcirculationmayappearhighlyprosperousintimesofspeculation)，themerchant’scapital，inthefirstplace，curtailsphaseC——Mforproductivecapital。Secondly，underthemoderncreditsystemitdisposesofalargeportionofthetotalsocialmoney-capital，sothatitcanrepeatitspurchasesevenbeforeithasdefinitelysoldwhathas。previouslybeenpurchased。

Anditisimmaterialinthiscase，whetherourmerchantsellsdirectlytotheultimateconsumer，orthereareadozenotherintermediatemerchantsbetweenthem。Owingtotheimmenseelasticityofthereproductionprocess，whichmayalwaysbepushedbeyondanygivenbounds，itdoesnotencounteranyobstacleinproductionitself，oratbestaveryelasticone。AsidefromtheseparationofC——MandM——C，whichfollowsfromthenatureofthecommodities，afictitiousdemandisthencreated。Inspiteofitsindependentstatus，themovementofmerchant’scapitalisnevermorethanthemovementofindustrialcapitalwithinthesphereofcirculation。Butbyvirtueofitsindependentstatusitmoves，withincertainlimits，independentlyoftheboundsofthereproductionprocessandtherebyevendrivesthelatterbeyonditsbounds。Thisinternaldependenceandexternalindependencepushmerchant’scapitaltoapointwheretheinternalconnectionisviolentlyrestoredthroughacrisis。

Hencethephenomenonthatcrisesdonotcometothesurface，donotbreakout，intheretailbusinessfirst，whichdealswithdirectconsumption，butinthespheresofwholesaletrade，andofbanking，whichplacesthemoney-capitalofsocietyatthedisposaloftheformer。

Themanufacturermayactuallyselltotheexporter，andtheexporter，inhisturn，tohisforeigncustomer；theimportermaysellhisrawmaterialstothemanufacturer，andthelattermaysellhisproductstothewholesalemerchant，etc。Butatsomeparticularimperceptiblepointthegoodslieunsold，orelse，again，allproducersandmiddlemenmaygraduallybecomeoverstocked。Consumptionisthengenerallyatitshighest，eitherbecauseoneindustrialcapitalistsetsasuccessionofothersinmotion；orbecausethelabourersemployedbythemarefullyemployedandhavemoretospendthanusual。Thecapitalists’expendituresincreasetogetherwiththeirgrowingincome。Besides，aswehaveseen(BookII，PartIII)，continuouscirculationtakesplacebetweenconstantcapitalandconstantcapital(evenregardlessofacceleratedaccumulation)。Itisatfirstindependentofindividualconsumptionbecauseitneverentersthelatter。Butthisconsumptiondefinitelylimitsitnevertheless，sinceconstantcapitalisneverproducedforitsownsakebutsolelybecausemoreofitisneededinspheresofproductionwhoseproductsgointoindividualconsumption。However，thismaygoonundisturbedforsometime，stimulatedbyprospectivedemand，andinsuchbranches，therefore，thebusinessofmerchantsandindustrialistsgoesbrisklyforth。Thecrisisoccurswhenthereturnsofmerchantswhosellindistantmarkets(orwhosesupplieshavealsoaccumulatedonthehomemarket)becomesoslowandmeagrethatthebankspressforpayment，orpromissorynotesforpurchasedcommoditiesbecomeduebeforethelatterhavebeenresold。Thenforcedsalestakeplace，salesinordertomeetpayments。Thencomesthecrash，whichbringstheillusoryprosperitytoanabruptend。

Butthesuperficialityandmeaninglessnessoftheturnoverofmerchant’scapitalarestillgreater，becausetheturnoverofoneandthesamemerchant’scapitalmaysimultaneouslyorsuccessivelypromotetheturnoversofseveralproductivecapitals。

Theturnoverofmerchant’scapitaldoesnotjustpromotetheturnoversofseveralindustrialcapitals，itcanalsoexpeditetheoppositephasesofthemetamorphosisofcommodity-capital。Forinstance，themerchantbuyslinenfromthemanufacturerandsellsittothebleacher。Inthiscase，thereforetheturnoverofthesamemerchant’scapital-infact，thesameC——M，arealisationofthelinen-representstwooppositephasesfortwodifferentindustrialcapitals。Inasmuchasthemerchantsellsforproductiveconsumption，hisC——MisalwaysM——Cforoneindustrialcapitalist，andhisM——CalwaysC——Mforanotherindustrialcapitalist。

IfweleaveoutK，thecirculationcosts，aswedointhischapter，if，inotherwords，weleaveasidethatportionofcapitalwhichthemerchantadvancesalongwiththemoneyrequiredtopurchasecommodities，itfollowsthatwealsoomitDK，theadditionalprofitmadeonthisadditionalcapital。Thisisthusthestrictlylogicalandmathematicallycorrectmodeofanalysisifwewanttoseehowprofitandturnoverofmerchant’scapitalaffectprices。

Ifthepriceofproductionof1lb。ofsugarwere£；1，themerchantcouldbuy100lbs。ofsugarwith£；400。Ifhebuysandsellsthisquantityinthecourseoftheyear，andiftheaverageannualrateofprofitis15%，hewouldadd£；15tothe£；100，and3s。to£；1，thepriceofproductionof1lb。ofsugar。Thatis，hewouldsell1lb。

ofsugarat£；1。3s。Butifthepriceofproductionof1lb。ofsugarshouldfallto1s。，themerchantcouldbuy2，000lbs。ofsugarwith£；100，andsellthesugarat1s。14/5d。perlb。Theannualprofitoncapitalinvestedinthesugarbusinesswouldstillbe£；15

oneach£；100。Butthemerchanthastosell100lbs。inthefirstcase，and2，000lbs。inthesecond。Thehighorlowlevelofthepriceofproductionhasnothingtodowiththerateofprofit。Butitwouldgreatlyanddecisivelyaffectthataliquotpartofthesellingpriceofeachlb。

ofsugar，whichresolvesitselfinmercantileprofit，i。e。，theadditiontothepricewhichthemerchantmakesonacertainquantityofcommoditiesorproducts。Ifthepriceofproductionofacommodityissmall，so，too，theamountthemerchantadvancesinitspurchaseprice，i。e。，foracertainquantityofit。Hence，withagivenrateofprofit，theamountofprofithemakesonthisquantityofcheapcommoditiesissmallaswell。

Or，whatamountstothesame，hecanthenbuywithacertainamountofcapital，say，400，alargerquantityofthesecheapcommodities，andthetotalprofitof15，whichhemakesper100，breaksupintosmallfractionsovereachindividualpieceorportionbelongingtothismassofcommodities。

Iftheoppositetakesplace，thenthereverseistrue。Thisdependsentirelyonthegreaterorsmallerproductivityoftheindustrialcapitalinwhoseproductshetrades。Ifweexceptthecasesinwhichthemerchantisamonopolistandsimultaneouslymonopolisesproduction，asdidtheDutchEastIndiaCompanyinitsday，nothingcanbemoreridiculousthanthecurrentideathatitdependsonthemerchantwhetherhesellsmanycommoditiesatasmallprofitorfewcommoditiesatalargeprofitoneachindividualpieceofthecommodities。Thetwolimitsofhissellingpriceare:ontheonehand，thepriceofproductionofthecommodities，overwhichhehasnocontrol；ontheotherhand，theaveragerateofprofit，overwhichhehasjustaslittlecontrol。Theonlythinguptohimtodecideiswhetherhewantstodealindearorincheapcommodities，andevenherethesizeofhisavailablecapitalandothercircumstancesalsohavetheireffect。Therefore，itdependswhollyonthedegreeofdevelopmentofthecapitalistmodeofproduction，notonthemerchant’sgoodwill，whatcourseheshallfollow。

ApurelycommercialcompanyliketheoldDutchEastIndiaCompany，whichhadamonopolyofproduction，couldfancythatitcouldcontinueamethodadaptedatbesttothebeginningsofcapitalistproduction，underentirelychangedconditions。[1]

Thefollowingcircumstances，amongothers，helptomaintainthatpopularprejudice，which，likeallfalseconceptionsofprofit，etc。，arisesfromtheobservationofpurecommerceandmerchants’prejudice:

First:phenomenaofcompetition，which，however，applymerelytothedistributionofmercantileprofitamongindividualmerchants，theshareholdersofthetotalmerchant’scapital；ifone，forexample，sellscheaper，inordertodrivehiscompetitorsoffthefield。

Secondly:aneconomistofthecalibreofProfessorRoschermaystillimagineinLeipzigthatitwas”commonsenseandhumanitarian”[Roscher，DieGrundlagenderNationalö；konomie，3。Auflage，1858，S。192——

Ed。]grounds，whichproducedthechangeinsellingprices，andthatitwasnotaresultofarevolutionisedmodeofproduction。

Thirdly:ifproductionpricesfallduetogreaterproductivityoflabour，andsellingpricesfallforthesamereason，thedemand，andwithitthemarket-prices，oftenriseevenfasterthanthesupply，sothatsellingpricesyieldmorethantheaverageprofit。

Fourthly:amerchantmayreducehissellingprice(whichisnevermorethanareductionoftheusualprofitthatheaddstotheprice)soastoturnoveralargercapitalmorerapidly。Allthesearemattersthatonlyconcerncompetitionbetweenthemerchantsthemselves。

WehavealreadyshowninBookI[Englishedition:Vol。1，pp。519-20——

Ed]。thathighorlowcommodity-pricesdonotdetermineeitherthemassofsurplus-valueproducedbyagivencapital，ortherateofsurplus-value；

althoughthepriceofacommodity，andwithittheshareofsurplus-valueinthisprice，aregreaterorsmaller，dependingontherelativequantityofcommoditiesproducedbyagivenquantityoflabour。Thepricesofeveryspecifiedquantityofacommodityare，sofarastheycorrespondtothevalues，determinedbythetotalquantityoflabourincorporatedinthiscommodity。Iflittlelabourisincorporatedinmuchcommodity，theunitpriceofthecommodityislowandthesurplus-valueinitissmall。Howthislabourincorporatedinacommoditybreaksupintopaidandunpaidlabourandwhatportionofitsprice，therefore，representssurplus-value，hasnothingtodowiththistotalquantityoflabour，nor，consequently，withthepriceofthecommodity。Buttherateofsurplus-valuedoesnotdependontheabsolutemagnitudeofthesurplus-valuecontainedintheunitpriceofthecommodity。Itdependsonitsrelativemagnitude，itsproportiontothewagescontainedinthesamecommodity。Therateofsurplus-valuemaythereforebelarge，whiletheabsolutemagnitudeofsurplus-valueineachunitofthecommodityissmall。Thisabsolutemagnitudeofsurplus-valueineachpieceofthecommoditydependsprimarilyontheproductivityoflabour，andonlysecondarilyonitsdivisionintopaidandunpaidlabour。

Now，inthecaseofthecommercialsellingprice，thepriceofproductionisagivenexternalprecondition。

Thehighcommercialcommodity-pricesinformertimesweredue1)tothehighpricesofproduction，i。e。，theunproductivenessoflabour；

2)totheabsenceofageneralrateofprofit，withmerchant’scapitalabsorbingamuchlargerquotaofsurplus-valuethanwouldhavefallentoitsshareifcapitalsenjoyedgreatergeneralmobility。Theendingofthissituation，inbothitsaspects，isthereforetheresultofthedevelopmentofthecapitalistmodeofproduction。

Theturnoversofmerchant’scapitalvaryinduration，theirannualnumberconsequentlybeinggreaterorsmaller，indifferentbranchesofcommerce。

Withinthesamebranchtheturnoverismoreorlessrapidinthedifferentphasesoftheeconomiccycle。Yetthereisanaveragenumberofturnovers，determinedbyexperience。

Wehavealreadyseenthattheturnoverofmerchant’scapitaldiffersfromthatofindustrialcapital。Thisisinthenatureofthings。Onesinglephaseintheturnoverofindustrialcapitalappearsasacompleteturnoverofanindependentlyconstitutedmerchant’scapital，oryetofitspart。

Italsostandsinadifferentrelationtoprofitandpricedetermination。

Inthecaseofindustrialcapital，itsturnoverexpresses，ontheonehand，theperiodicityofreproduction，and，therefore，themassofcommoditiesthrownonthemarketinacertainperioddependsonit。Ontheotherhand，itstimeofcirculationcreatesabarrier，anextensibleone，andexertsmoreorlessofarestraintonthecreationofvalueandsurplus-value，becauseitaffectsthevolumeoftheproductionprocess。Theturnover，therefore，actsasadeterminingelementonthemassofannuallyproducedsurplus-value，andhenceontheformationofthegeneralrateofprofit，butitactsasalimiting，ratherthanpositive，element。Formerchant’scapital，onthecontrary，theaveragerateofprofitisagivenmagnitude。