第11章

InterestandProfitofEnterpriseInterest，aswehaveseeninthetwoprecedingchapters，appearsoriginally，isoriginally，andremainsinfactmerelyaportionoftheprofit，i。e。，ofthesurplus-value，whichthefunctioningcapitalist，industrialistormerchanthastopaytotheownerandlenderofmoney-capitalwheneverheusesloanedcapitalinsteadofhisown。Ifheemploysonlyhisowncapital，nosuchdivisionofprofittakesplace；thelatteristhenentirelyhis。

Indeed，aslongastheownersofthecapitalemployitontheirowninthereproductionprocess，theydonotcompeteindeterminingtherateofinterest。Thisaloneshowsthatthecategoryofinterest——impossiblewithoutdeterminingtherateofinterest——isalientothemovementsofindustrialcapitalassuch。”Therateofinterestmaybedefinedtobethatproportionalsumwhichthelenderiscontenttoreceive，andtheborrowertopay，annually，orforanylongerorshorterperiod，fortheuseofacertainamountofmoneyedcapital……Whentheownerofacapitalemploysitactivelyinreproduction，hedoesnotcomeundertheheadofthosecapitalists，theproportionofwhom，tothenumberofborrowers，determinestherateofinterest。”(Th。

Tooke，HistoryofPrices，London，1838，II，pp。355-56。)Itisindeedonlytheseparationofcapitalistsintomoney-capitalistsandindustrialcapitaliststhattransformsaportionoftheprofitintointerest，thatgenerallycreatesthecategoryofinterest；anditisonlythecompetitionbetweenthesetwokindsofcapitalistswhichcreatestherateofinterest。

Aslongascapitalfunctionsintheprocessofreproduction-assumingthatitevenbelongstotheindustrialcapitalistandhehasnoneedofpayingitbacktoalender——thecapitalist，asaprivateindividual，doesnothaveathisdisposalthiscapitalitself，butonlytheprofit，whichhemayspendasrevenue。Aslongashiscapitalfunctionsascapital，itbelongstotheprocessofreproduction，istiedupinit。Heis，indeed，itsowner，butthisownershipdoesnotenablehimtodisposeofitinanyotherway，solongasheusesitascapitalfortheexploitationoflabour。

Thesameistrueofthemoney-capitalist。Solongashiscapitalisloanedoutandtherebyservesasmoney-capital，itbringshiminterest，aportionoftheprofit，buthecannotdisposeoftheprincipal。Thisisevidentwheneverheloansouthiscapitalfor，say，ayear，ormore，andreceivesinterestatcertainstipulatedtimeswithoutthereturnofhisprincipal。

Buteventhereturnoftheprincipalmakesnodifferencehere。Ifhegetsitback，hemustalwaysloanitoutagain，solongasitistofunctionforhimascapital——hereasmoney-capital。Aslongashekeepsitinhisownhands，itdoesnotcollectinterestanddoesnotactascapital；

andaslongasitdoesgatherinterestandserveascapital，itisoutofhishands。Hencethepossibilityofloaningoutcapitalforalltime。

ThefollowingremarksbyTookedirectedagainstBosanquetare，therefore，entirelywrong。HequotesBosanquet(Metallic，PaperandCreditCurrency，London，1842，p。73):”Weretherateofinterestreducedaslowas1%，capitalborrowedwouldbeplacednearlyonaparwithcapitalpossessed。”

TothisTookeaddsthefollowingmarginalnote:”Thatacapitalborrowedatthat，orevenalowerrate，shouldbeconsiderednearlyonaparwithcapitalpossessed，isapropositionsostrangeashardlytowarrantseriousnoticewereitnotadvancedbyawritersointelligent，and，onsomepointsofthesubject，sowellinformed。Hasheoverlookedthecircumstance，ordoesheconsideritoflittleconsequence，thattheremust，bythesupposition，beaconditionofrepayment？”(Th。Tooke，AnInquiryintotheCurrencyPrinciple，2nded。，London，1844，p。80。)Ifinterestwere=0，theindustrialcapitalistoperatingonborrowedcapitalwouldstandonaparwithacapitalistusinghisowncapital。Bothwouldpocketthesameaverageprofit，andcapital，whetherborrowedorowned，servesascapitalonlyaslongasitproducesprofit。Theconditionofreturnpaymentwouldalternothing。Thenearertherateofinterestapproacheszero，falling，forinstance，to1%，thenearerborrowedcapitalistobeingonaparwithowner’scapital。Solongasmoney-capitalistoexistasmoney-capital，itmustalwaysbeloanedout，andindeedattheprevailingrateofinterest，sayof1%，andalwaystothesameclassofindustrialandcommercialcapitalists。

Solongasthesefunctionascapitalists，thesoledifferencebetweentheoneworkingwithborrowedcapitalandtheotherwithhisownisthattheformermustpayinterestandthelattermustnot；theonepocketstheentireprofitp，andtheotherp杋，theprofitminustheinterest。Thenearerinterestapproacheszero，thenearerp杋approachesp，andhencethenearerthetwocapitalsaretobeingonapar。Theonemustpaybackthecapitalandborrowanew；yettheothermustlikewiseadvanceitagainandagaintotheproductionprocess，solongashiscapitalistofunction，andcannotdisposeofitfreely，independentofthisprocess。Thesoleremainingdifferencebetweenthetwoistheobviousdifferencethatoneistheownerofhiscapital，andtheotherisnot。

Thequestionwhichnowarisesisthis。Howdoesthispurelyquantitativedivisionofprofitintonetprofitandinterestturnintoaqualitativeone？Inotherwords，howisitthatacapitalistwhoemployssolelyhisown，notborrowedcapital，classifiesaportionofhisgrossprofitunderthespecificcategoryofinterestandassuchcalculatesitseparately？

And，furthermore，howisitthatallcapital，whetherborrowedornot，isdifferentiatedasinterest-bearingcapitalfromitselfascapitalproducinganetprofit？

Itisunderstoodthatnoteveryaccidentalquantitativedivisionofprofitturnsinthismannerintoaqualitativeone。Forinstance，someindustrialcapitalistsjoinhandstooperateabusinessandthendividetheprofitamongthemselvesinaccordancewithsomelegalagreement。Othersdotheirbusiness，eachonhisown，withoutanypartners。Theselastdonotcalculatetheirprofitundertwoheads——onepartasindividualprofit，andtheotherascompanyprofitfortheirnon-existentpartners。Inthiscasethequantitativedivisionthereforedoesnotbecomeaqualitativeone。Thisoccurswheneverownershiphappenstobevestedinseveraljuridicalpersons。Itdoesnotoccurwheneverthisisnotthecase。

Inordertoanswerthisquestion，wemustdwellsomewhatlongerontheactualpointofdepartureintheformationofinterest；thatis，wemustproceedfromtheassumptionthatthemoney-capitalistandindustrialcapitalistreallyconfrontoneanothernotjustaslegallydifferentpersons，butaspersonsplayingentirelydifferentrolesinthereproductionprocess，oraspersonsinwhosehandsthesamecapitalreallyperformsatwo-foldandwhollydifferentmovement。Theonemerelyloansit，theotheremploysitproductively。

Fortheproductivecapitalistwhoworksonborrowedcapital，thegrossprofitfallsintotwoparts——theinterest，whichheistopaythelender，andthesurplusoverandabovetheinterest，whichmakesuphisownshareoftheprofitIfthegeneralrateofprofitisgiven，thislatterportionisdeterminedbytherateofinterest；andiftherateofinterestisgiven，thenbythegeneralrateofprofit。Andfurthermore:howeverthegrossprofit，theactualvalueofthetotalprofit，maydivergeineachindividualcasefromtheaverageprofit，theportionbelongingtothefunctioningcapitalistisdeterminedbytheinterest，sincethisisfixedbythegeneralrateofinterest(leavingasideanyspeciallegalstipulations)andassumedtobegivenbeforehand，beforetheprocessofproductionbegins，hencebeforeitsresult，thegrossprofit，isachieved。Wehaveseenthattheactualspecificproductofcapitalissurplus-value，or，moreprecisely，profit。Butforthecapitalistworkingonborrowedcapitalitisnotprofit，butprofitminusinterest，thatportionofprofitwhichremainstohimafterpayinginterest。Thisportionoftheprofit，therefore，necessarilyappearstohimtobetheproductofacapitalaslongasitisoperative；

andthisitis，asfarasheisconcerned，becauseherepresentscapitalonlyasfunctioningcapital。Heisitspersonificationaslongasitfunctions，anditfunctionsaslongasitisprofitablyinvestedinindustryorcommerceandsuchoperationsareundertakenwithitthroughitsemployerasareprescribedbythebranchofindustryconcerned。Asdistinctfrominterest，whichhehastopaytothelenderoutofthegrossprofit，theportionofprofitwhichfallstohissharenecessarilyassumestheformofindustrialorcommercialprofit，or，touseaGermantermembracingboth，theformofUnternehmergewinn(profitofenterprise)。Ifthegrossprofitequalstheaverageprofit，thesizeoftheprofitofenterpriseisdeterminedexclusivelybytherateofinterest。Ifthegrossprofitdeviatesfromtheaverageprofit，itsdifferencefromtheaverageprofit(afterinterestisdeductedfromboth)isdeterminedbyallthecircumstanceswhichcauseatemporarydeviation，beitoftherateofprofitinanyparticularspherefromthegeneralrateofprofit，ortheprofitofsomeindividualcapitalistinacertainspherefromtheaverageprofitofthissphere。Wehaveseenhoweverthattherateofprofitwithintheproductionprocessitselfdoesnotdependonsurplus-valuealone，butalsoonmanyothercircumstances，suchaspurchasepricesofmeansofproduction，methodsmoreproductivethantheaverage，onsavingsofconstantcapital，etc。Andasidefromthepriceofproduction，itdependsonspecialcircumstances，andineverysinglebusinesstransactiononthegreaterorlessershrewdnessandindustryofthecapitalist，whether，andtowhatextent，hebuysorsellsaboveorbelowthepriceofproductionandthusappropriatesagreaterorsmallerportionofthetotalsurplus-valueintheprocessofcirculation。Inanycase，thequantitativedivisionofthegrossprofitturnshereintoaqualitativeone，andallthemoresobecausethequantitativedivisionitselfdependsonwhatistobedivided，themannerinwhichtheactivecapitalistmanageshiscapital，andwhatgrossprofitityieldstohimasafunctioningcapital，i。e。，inconsequenceofhisfunctionsasanactivecapitalist。Thefunctioningcapitalistishereassumedasanon-ownerofcapital。Ownershipofthecapitalisrepresentedinrelationtohimbythemoney-capitalist，thelender。Theinteresthepaystothelatterthusappearsasthatportionofgrossprofitwhichisduetotheownershipofcapitalassuch。Asdistinctfromthis，thatportionofprofitwhichfallstotheactivecapitalistappearsnowasprofitofenterprise，derivingsolelyfromtheoperations，orfunctions，whichheperformswiththecapitalintheprocessofreproduction，henceparticularlythosefunctionswhichheperformsasentrepreneurinindustryorcommerce。Inrelationtohiminterestappearsthereforeasthemerefruitofowningcapital，ofcapitalassuchabstractedfromthereproductionprocessofcapital，inasmuchasitdoesnot”work，”doesnotfunction；whileprofitofenterpriseappearstohimastheexclusivefruitofthefunctionswhichheperformswiththecapital，asthefruitofthemovementandperformanceofcapital，ofaperformancewhichappearstohimashisownactivity，asopposedtotheinactivity，thenon-participationofthemoney-capitalistintheproductionprocess。Thisqualitativedistinctionbetweenthetwoportionsofgrossprofitthatinterestisthefruitofcapitalassuch，oftheownershipofcapitalirrespectiveoftheproductionprocess，andthatprofitofenterpriseisthefruitofperformingcapital，ofcapitalfunctioningintheproductionprocess，andhenceoftheactiveroleplayedbytheemployerofthecapitalinthereproductionprocess——thisqualitativedistinctionisbynomeansmerelyasubjectivenotionofthemoney-capitalist，ontheonehand，andtheindustrialcapitalist，ontheother。Itrestsuponanobjectivefact，forinterestflowstothemoney-capitalist，tothelender，whoisthemereownerofcapital，hencerepresentsonlyownershipofcapitalbeforetheproductionprocessandoutsideofit；whiletheprofitofenterpriseflowstothefunctioningcapitalistalone，whoisnon-ownerofthecapital。

Themerelyquantitativedivisionofthegrossprofitbetweentwodifferentpersonswhobothhavedifferentlegalclaimstothesamecapital，andhencetotheprofitproducedbyit，thusturnsintoaqualitativedivisionforboththeindustrialcapitalistinsofarasheisoperatingonborrowedcapital，andforthemoney-capitalist，insofarashedoesnothimselfapplyhiscapital。Oneportionoftheprofitappearsnowasfruitdueassuchtocapitalinoneform。，asinterest；theotherportionappearsasaspecificfruitofcapitalinanoppositeform，andthusasprofitofenterprise。Oneappearsexclusivelyasthefruitofoperatingwiththecapital，thefruitofperformingcapital，orofthefunctionsperformedbytheactivecapitalist。Andthisossificationandindividualisationofthetwopartsofthegrossprofitinrespecttooneanother，asthoughtheyoriginatedfromtwoessentiallydifferentsources，nowtakesfirmshapefortheentirecapitalistclassandthetotalcapital。And，indeed，regardlessofwhetherthecapitalemployedbytheactivecapitalistisborrowedornot，andwhetherthecapitalbelongingtothemoney-capitalistisemployedbyhimselfornot。Theprofitofeverycapital，andconsequentlyalsotheaverageprofitestablishedbytheequalisationofcapitals，splits，orisseparated，intotwoqualitativelydifferent，mutuallyindependentandseparatelyindividualisedparts，towit——interestandprofitofenterprise——bothofwhicharedeterminedbyseparatelaws。Thecapitalistoperatingonhisowncapital，liketheoneoperatingonborrowedcapital，dividesthegrossprofitintointerestduetohimselfasowner，ashisownlender，andintoprofitofenterpriseduetohimastoanactivecapitalistperforminghisfunction。Asconcernsthisdivision，therefore，asaqualitativeone，itisimmaterialwhetherthecapitalistreallyhastosharewithanother，ornot。Theemployerofcapital，evenwhenworkingwithhisowncapital，splitsintotwopersonalities——theownerofcapitalandtheemployerofcapital；withreferencetothecategoriesofprofitwhichityields，hiscapitalalsosplitsintocapital-property，capitaloutsidetheproductionprocess，andyieldinginterestofitself，andcapitalintheproductionprocesswhichyieldsaprofitofenterprisethroughitsfunction。

Interest，therefore，becomesfirmlyestablishedinawaythatitnolongerappearsasadivisionofgrossprofitofindifferencetoproduction，whichoccursoccasionallywhentheindustrialcapitalisthappenstooperatewithsomeoneelse’scapital。Hisprofitsplitsintointerestandprofitofenterpriseevenwhenheoperatesonhisowncapital。Amerelyquantitativedivisionthusturnsintoaqualitativeone。Itoccursregardlessofthefortuitouscircumstancewhethertheindustrialcapitalistis，orisnot，theownerofhiscapital。Itisnotonlyamatterofdifferentquotasofprofitassignedtodifferentpersons，buttwodifferentcategoriesofprofitwhicharedifferentlyrelatedtothecapital，hencerelatedtodifferentaspectsofthecapital。

Nowthatthisdivisionofgrossprofitintointerestandprofitofenterprisehasbecomeaqualitativeone，itiseasytodiscoverthereasonswhyitacquiresthischaracterofaqualitativedivisionforthetotalcapitalandtheentireclassofcapitalists。

Firstly，thisfollowsfromthesimpleempiricalcircumstancethatthemajorityofindustrialcapitalists，evenifindifferentnumericalproportions，workwiththeirownandwithborrowedcapital，andthatatdifferenttimestheproportionbetweenone’sownandborrowedcapitalchanges。

Secondly，thetransformationofaportionofthegrossprofitintotheformofinterestconvertsitsotherportionintoprofitofenterprise。

Thelatteris，indeed，buttheoppositeformassumedbytheexcessofgrossprofitoverinterestassoonasthisexistsasanindependentcategory。

Theentireanalysisoftheproblemhowgrossprofitisdifferentiatedintointerestandprofitofenterprise，resolvesitselfintotheinquiryofhowaportionofthegrossprofitbecomesuniversallyossifiedandindividualisedasinterest。Yethistoricallyinterest-bearingcapitalexistedasacompletedtraditionalform，andhenceinterestasacompletedsub-divisionofsurplus-valueproducedbycapital，longbeforethecapitalistmodeofproductionanditsattendantconceptionsofcapitalandprofit。Thusitisthattothepopularmindmoney-capital，orinterest-bearingcapital，isstillcapitalassuch，ascapitalparexcellence。Thusitis，ontheotherhand，thatuptothetimeofMassiethenotionprevailedthatitismoneyassuchwhichispaidininterest。Thefactthatloanedcapitalyieldsinterestwhetheractuallyemployedascapitalornot——evenwhenborrowedonlyforconsumption——lendsstrengthtotheideathatthisformofcapitalexistsindependently。Thebestproofoftheindependencewhichinterestpossessedduringtheearlyperiodsofthecapitalistmodeofproductioninreferencetoprofit，andwhichinterest-bearingcapitalpossessedinreferencetoindustrialcapital，isthatitwasdiscovered(byMassie[[J。

Massie]AnEssayontheGoverningCausesoftheNaturalRateofInterest，London，1750——Ed。]andafterhimbyHume[D。Hume，”OnInterest。”

In:”EssaysandTreatisesonSeveralSubjects，”Vol。I，London，1764——Ed。])aslateasthemiddleofthe18thcentury，thatinterestisbutaportionofthegrossprofit，andthatsuchadiscoverywasatallnecessary。

Thirdly，whethertheindustrialcapitalistoperatesonhisownoronborrowedcapitaldoesnotalterthefactthattheclassofmoney-capitalistsconfrontshimasaspecialkindofcapitalists，money-capitalasanindependentkindofcapital，andinterestasanindependentformofsurplus-valuepeculiartothisspecificcapital。

Qualitativelyspeaking，interestissurplus-valueyieldedbythemereownershipofcapital；itisyieldedbycapitalassuch，eventhoughitsownerremainsoutsidethereproductionprocess。Henceitissurplus-valuerealisedbycapitaloutsideofitsprocess。

Quantitativelyspeaking，thatportionofprofitwhichformsinterestdoesnotseemtoberelatedtoindustrialorcommercialcapitalassuch，buttomoney-capital，andtherateofthisportionofsurplus-value，therateofinterest，reinforcesthisrelation。Because，inthefirstplace，therateofinterestisindependentlydetermineddespiteitsdependenceuponthegeneralrateofprofit，and，inthesecondplace，likethemarket-priceofcommodities，itappearsincontrasttotheintangiblerateofprofitasafixed，uniform，tangibleandalwaysgivenrelationforallitsvariations。

Ifallcapitalwereinthehandsoftheindustrialcapitaliststherewouldbenosuchthingasinterestandrateofinterest。Theindependentformassumedbythequantitativedivisionofgrossprofitcreatesthequalitativeone。Iftheindustrialcapitalistweretocomparehimselfwiththemoney-capitalist，itwouldbehisprofitofenterprisealone，theexcessofhisgrossprofitovertheaverageinterest——thelatterappearingtobeempiricallygivenbyvirtueoftherateofinterest——thatwoulddistinguishhimfromtheotherperson。If，ontheother。hand，hecompareshimselfwiththeindustrialcapitalistworkingwithhisown，insteadofborrowed，capital，thelatterdiffersfromhimonlyasamoney-capitalistinpocketingtheinterestinsteadofpayingittosomeoneelse。Theportionofgrossprofitdistinguishedfrominterestappearstohimineithercaseasprofitofenterprise，andinterestitselfasasurplus-valueyieldedbycapitalassuch，whichitwouldyieldevenifnotappliedproductively。

Thisiscorrectinthepracticalsensefortheindividualcapitalist。

Hehasthechoiceofmakinguseofhiscapitalbylendingitoutasinterest-bearingcapital，orofexpandingitsvalueonhisownbyusingitasproductivecapital，regardlessofwhetheritexistsasmoney-capitalfromtheveryfirst，orwhetheritstillhastobeconvertedintomoney-capital。Buttoapplyittothetotalcapitalofsociety，assomevulgareconomistsdo，andtogosofarastodefineitasthecauseofprofit，is，ofcourse，preposterous。Theideaofconvertingallthecapitalintomoney-capital，withouttherebeingpeoplewhobuyandputtousemeansofproduction，whichmakeupthetotal。capitaloutsideofarelativelysmallportionofitexistinginmoney，is，ofcourse，sheernonsense。Itwouldbestillmoreabsurdtopresumethatcapitalwouldyieldintereston。thebasisofcapitalistproductionwithoutperforminganyproductivefunction，i。e。，withoutcreatingsurplus-value，ofwhichinterestisjustapart；thatthecapitalistmodeofproductionwouldrunitscoursewithoutcapitalistproduction。Ifanuntowardlylargesectionofcapitalistsweretoconverttheircapitalintomoney-capital，theresultwouldbeafrightfuldepreciationofmoney-capitalandafrightfulfallintherateofinterest；manywouldatoncefacetheimpossibilityoflivingontheirinterest，andwouldhencebecompelledtoreconvertintoindustrialcapitalists。Butwerepeatthatitisafactfortheindividualcapitalist。Forthisreason，evenwhenoperatingwithhisowncapital，henecessarilyconsidersthepartofhisaverageprofitwhichequalstheaverageinterestasfruitofhiscapitalassuch，setapartfromtheprocessofproduction；andasdistinctfromthisportionsingledoutasinterest，heconsidersthesurplusofthegrossprofitasmereprofitofenterprise。

Fourthly，[Ablankinthemanuscript]。

Wehaveseen，therefore，thattheportionofprofitwhichthefunctioningcapitalisthastopaytotheownerofborrowedcapitalistransformedintoanindependentformforaportionoftheprofit，whichallcapitalassuch，whetherborrowedornot，yieldsunderthenameofinterest。Howlargethisportionisdependsontheaveragerateofinterest。Itsoriginisonlystillrevealedinthefactthatthefunctioningcapitalist，whenownerofhiscapital，doesnotcompete——atleastnotactively——indeterminingtheinterestrate。Thepurelyquantitativedivisionoftheprofitbetweentwopersonswhohavedifferentlegaltitlestoithasturnedintoaqualitativedivision，whichseemstospringfromtheverynatureofcapitalandprofit。

Because，aswehaveseen，assoonasaportionofprofituniversallyassumestheformofinterest，thedifferencebetweenaverageprofitandinterest，ortheportionofprofitoverandabovetheinterest，assumesaformoppositetointerest——theformofprofitofenterprise。Thesetwoforms，interestandprofitofenterprise，existonlyasopposites。Hence，theyarenotrelatedtosurplus-value，ofwhichtheyarebutpartsplacedunderdifferentcategories，headsornames，butrathertooneanother。Itisbecauseoneportionofprofitturnsintointerest，thattheotherappearsasprofitofenterprise。

Byprofitweherealwaysmeanaverageprofit，sincevariationsdonotconcernusinthisanalysis，betheyofindividualprofitsorofprofitsindifferentspheres——hencevariationscausedbythecompetitivestruggleandothercircumstancesaffectingthedistributionoftheaverageprofit，orsurplus-value。Thisappliesgenerallytothisentireinquiry。

Interestisthennetprofit，asRamsaycallsit，whichtheownershipofcapitalyieldsassuch，eithersimplytothelender，whoremainsoutsidethereproductionprocess，ortotheownerwhoemployshiscapitalproductively。

Butinthelatter’scase，too，capitalyieldsthisnetprofittohimnotinhiscapacityofproductivecapitalist，butofmoney-capitalist，oflenderofhisowncapitalasinterest-bearingcapitaltohimselfastoafunctioningcapitalist。Justastheconversionofmoney，andofvalueingeneral，intocapitalistheconstantresultofcapitalistproduction，soisitsexistenceascapitalitsconstantprecondition。Byitsabilitytobetransformedintomeansofproductionitcontinuallycommandsunpaidlabourandtherebytransformstheprocessesofproductionandcirculationofcommoditiesintotheproductionofsurplus-valueforitsowner。Interestis，therefore，theexpressionofthefactthatvalueingeneral-materialisedlabourinitsgeneralsocialform-valuewhichassumestheformofmeansofproductionintheactualprocessofproduction，confrontslivinglabour-powerasanindependentpower，andisameansofappropriatingunpaidlabour；andthatitissuchapowerbecauseitconfrontsthelabourerasthepropertyofanother。Butontheotherhand，thisantithesistowage-labourisobliteratedintheformofinterest，becauseinterest-bearingcapitalassuchhasnotwage-labour，butproductivecapitalforitsopposite。Thelendingcapitalistassuchfacesthecapitalistperforminghisactualfunctionintheprocessofreproduction，notthewage-worker，who，preciselyundercapitalistproduction，isexpropriatedofthemeansofproduction。Interest-bearingcapitaliscapitalaspropertyasdistinctfromcapitalasafunction。Butsolongascapitaldoesnotperformitsfunction，itdoesnotexploitlabourersanddoesnotcomeintooppositiontolabour。

Ontheotherhand，profitofenterpriseisnotrelatedasanoppositetowage-labour，butonlytointerest。

Firstly，assumingtheaverageprofittobegiven，therateoftheprofitofenterpriseisnotdeterminedbywages，butbytherateofinterest。Itishighorlowininverseproportiontoit[1]

Secondly，thefunctioningcapitalistderiveshisclaimtoprofitsofenterprise，hencetheprofitofenterpriseitself，notfromhisownershipofcapital，butfromthefunctionofcapital，asdistinctfromthedefiniteforminwhichitisonlyinertproperty。Thisstandsoutasanimmediatelyapparentcontrastwheneverheoperateswithborrowedcapital，andinterestandprofitofenterprisethereforegotodifferentpersons。Theprofitofenterprisespringsfromthefunctionofcapitalinthereproductionprocess，henceasaresultoftheoperations，theactsbywhichthefunctioningcapitalistpromotesthisfunctionofindustrialandcommercialcapital。

Buttorepresentfunctioningcapitalisnotasinecure，likerepresentinginterest-bearingcapital。Onthebasisofcapitalistproduction，thecapitalistdirectstheprocessofproductionandcirculation。Exploitingproductivelabourentailsexertion，whetherheexploitsithimselforhasitexploitedbysomeoneelseonhisbehalf。Therefore，hisprofitofenterpriseappearstohimasdistinctfrominterest，asindependentoftheownershipofcapital，butratherastheresultofhisfunctionasanon-proprietor——alabourer。

Henecessarilyconceivestheideaforthisreasonthathisprofitofenterprise，farfrombeingcounterposedtowage-labourandfarfrombeingtheunpaidlabourofothers，isitselfratherawageorwagesofsuperintendenceoflabour，higherthanacommonlabourer’s，1)becausetheworkisfarmorecomplicated，and2)becausehepaysthemtohimself。

Thefactthathisfunctionasacapitalistconsistsincreatingsurplus-value，i。e。，unpaidlabour，andcreatingitunderthemosteconomicalconditions，isentirelylostsightofinthecontrastthatinterestfallstotheshareofthecapitalistevenwhenhedoesnotperformthefunctionofacapitalistandismerelytheownerofcapital；andthat，ontheotherhand，profitofenterprisedoesfalltotheshareofthefunctioningcapitalistevenwhenheisnottheownerofthecapitalonwhichheoperates。Heforgets，duetotheantitheticalformofthetwopartsintowhichprofit，hencesurplus-value，isdivided，thatbotharemerelypartsofthesurplus-value，andthatthisdivisionaltersnothinginthenature，origin，andwayofexistenceofsurplus-value。

Intheprocessofreproductionthefunctioningcapitalistrepresentscapitalasthepropertyofanothervis-à；-visthewage-labourers，andthemoney-capitalist，representedbythefunctioningcapitalist，takesahandinexploitinglabour。Thefactthattheinvestingcapitalistcanperformhisfunctionofmakingthelabourersworkforhim，orofemployingmeansofproductionascapital，onlyasthepersonificationofthemeansofproductionvis-à；-visthelabourers，isforgotteninthecontradictionbetweenthefunctionofcapitalinthereproductionprocessandthemereownershipofcapitaloutsideofthereproductionprocess。

Infact，theformofinterestandprofitofenterpriseassumedbythetwopartsofprofit，i。e。，ofsurplus-value，expressesnorelationtolabour，becausethisrelationexistsonlybetweenlabourandprofit，orratherthesurplus-valueasasum，awhole，theunityofthesetwoparts。

Theproportioninwhichtheprofitisdivided，andthedifferentlegaltitlesbywhichthisdivisionissanctioned，arebasedontheassumptionthatprofitisalreadyinexistence。If，therefore，thecapitalististheownerofthecapitalonwhichheoperates，hepocketsthewholeprofit，orsurplus-value。Itisabsolutelyimmaterialtothelabourerwhetherthecapitalistdoesthis，orwhetherhehastopayapartofittoathirdpersonasitslegalproprietor。Thereasonsfordividingtheprofitamongtwokindsofcapitaliststhusturnimperceptiblyintothereasonsfortheexistenceoftheprofit，thesurplus-value，thatistobedivided，andwhichcapitalassuchderivesfromthereproductionprocessregardlessofanysubsequentdivision。Sinceinterestisopposedtoprofitofenterprise，andprofitofenterprisetointerest，andsincetheyarebothcounterposedtooneanother，butnottolabour，itfollowsthatprofitofenterpriseplusinterest，i。e。，profit，andfurthersurplus-value，arederived——fromwhat？Fromtheantitheticalformofitstwoparts！Butprofitisproducedbeforeitsdivisionisundertaken，andbeforetherecanbeanythoughtofit。

Interest-bearingcapitalremainsassuchonlysolongastheloanedmoneyisactuallyconvertedintocapitalandasurplusisproducedwithit，ofwhichinterestisapart。Butthisdoesnotruleoutthatdrawinginterest，regardlessoftheprocessofproduction，isitsorganicproperty。

Sodoeslabour-powerpreserveitspropertyofproducingvalueonlysolongasitisemployedandmaterialisedinthelabour-process；yetthisdoesnotargueagainstthefactthatitispotentially，asapower，anactivitywhichcreatesvalue，andthatassuchitdoesnotspringfromtheprocessofproduction，butratherantecedesit。Itisboughtassuchacapacityforcreatingvalue。Onemightalsobuyitwithoutsettingittoworkproductively；

forpurelypersonalends，forinstance，forpersonalservices，etc。Thesameappliestocapital。Itistheborrower’saffairwhetherheemploysitascapital，henceactuallysetsinmotionitsinherentpropertyofproducingsurplus-value。Whathepaysfor，isineithercasethepotentialsurplus-valueinherentlycontainedincapitalasacommodity。

Letusnowconsiderprofitofenterpriseingreaterdetail。

Sincethespecificsocialattributeofcapitalundercapitalistproduction——thatofbeingpropertycommandingthelabour-powerofanother-becomesfixed，sothatinterestappearsasapartofsurplus-valueproducedbycapitalinthisinterrelation，theotherpartofsurplus-value——profitofenterprise——mustnecessarilyappearascomingnotfromcapitalassuch，butfromtheprocessofproduction，separatedfromitsspecificsocialattribute，whosedistinctmodeofexistenceisalreadyexpressedbytheterminterestoncapital。Buttheprocessofproduction，separatedfromcapital，issimplyalabour-process。Therefore，theindustrialcapitalist，asdistinctfromtheownerofcapital，doesnotappearasoperatingcapital，butratherasafunctionaryirrespectiveofcapital，or，asasimpleagentofthelabour-processingeneral，asalabourer，andindeedasawage-labourer。

Interestassuchexpressespreciselytheexistenceoftheconditionsoflabourascapital，intheirsocialantithesistolabour，andintheirtransformationintopersonalpowervis-à；-visandoverlabour。Itrepresentstheownershipofcapitalasameansofappropriatingtheproductsofthelabourofothers。Butitrepresentsthischaracteristicofcapitalassomethingwhichbelongstoitoutsidetheproductionprocessandbynomeansistheresultofthespecificallycapitalistattributeofthisproductionprocessitself。Interestrepresentsthischaracteristicnotasdirectlycounterposedtolabour，butratherasunrelatedtolabour，andsimplyasarelationshipofonecapitalisttoanother。Hence，asanattributeoutsideofandirrelevanttotherelationofcapitaltolabour。

Ininterest，therefore，inthatspecificformofprofitinwhichtheantitheticalcharacterofcapitalassumesanindependentform，thisisdoneinsuchawaythattheantithesisiscompletelyobliteratedandabstracted。Interestisarelationshipbetweentwocapitalists，notbetweencapitalistandlabourer。

Ontheotherhand，thisformofinterestlendstheotherportionofprofitthequalitativeformofprofitofenterprise，andfurtherofwagesofsuperintendence。Thespecificfunctionswhichthecapitalistassuchhastoperform，andwhichfalltohimasdistinctfromandopposedtothelabourer，arepresentedasmerefunctionsoflabour。Hecreatessurplus-valuenotbecauseheworksasacapitalist，butbecausehealsoworks，regardlessofhiscapacityofcapitalist。Thisportionofsurplus-valueisthusnolongersurplus-value，butitsopposite，anequivalentforlabourperformed。Duetothealienatedcharacterofcapital，itsantithesistolabour，beingrelegatedtoaplaceoutsidetheactualprocessofexploitation，namelytotheinterest-bearingcapital，thisprocessofexploitationitselfappearsasasimplelabour-processinwhichthefunctioningcapitalistmerelyperformsadifferentkindoflabourthanthelabourer。Sothatthelabourofexploitingandtheexploitedlabourbothappearidenticalaslabour。Thelabourofexploitingisjustasmuchlabourasexploitedlabour。

Thesocialformofcapitalfallstointerest，butexpressedinaneutralandindifferentform。Theeconomicfunctionofcapitalfallstoprofitofenterprise，butabstractedfromthespecificcapitalistcharacterofthisfunction。

ThesamethingpassesthroughthemindofthecapitalistinthiscaseasinthecaseofthereasonsindicatedinPartIIofthisbookforcompensationintheequalisationtoaverageprofit。Thesereasonsforcompensationwhichenterthedistributionofsurplus-valueasdeterminantsaredistortedinacapitalist’smindtoappearasbasesoforiginandthe(subjective)justificationsofprofititself。

Theconceptionofprofitofenterpriseasthewagesofsupervisinglabour，arisingfromtheantithesisofprofitofenterprisetointerest，isfurtherstrengthenedbythefactthataportionofprofitmay，indeed，beseparated，andisseparatedinreality，aswages，orratherthereverse，thataportionofwagesappearsundercapitalistproductionasintegralpartofprofit。

Thisportion，asAdamSmithcorrectlydeduced，presentsitselfinpureform，independentlyandwhollyseparatedfromprofit(asthesumofinterestandprofitofenterprise)，ontheonehand，andontheother，fromthatportionofprofitwhichremains，afterinterestisdeducted，asprofitofenterpriseinthesalaryofmanagementofthosebranchesofbusinesswhosesize，etc。，permitsofasufficientdivisionoflabourtojustifyaspecialsalaryforamanager。

Thelabourofsupervisionandmanagementisnaturallyrequiredwhereverthedirectprocessofproductionassumestheformofacombinedsocialprocess，andnotoftheisolatedlabourofindependentproducers。[2]However，ithasadoublenature。

Ontheonehand，alllabourinwhichmanyindividualsco-operatenecessarilyrequiresacommandingwilltoco-ordinateandunifytheprocess，andfunctionswhichapplynottopartialoperationsbuttothetotalactivityoftheworkshop，muchasthatofanorchestraconductor。Thisisaproductivejob，whichmustbeperformedineverycombinedmodeofproduction。

Ontheotherhand——quiteapartfromanycommercialdepartment——thissupervisionworknecessarilyarisesinallmodesofproductionbasedontheantithesisbetweenthelabourer，asthedirectproducer，andtheownerofthemeansofproduction。Thegreaterthisantagonism，thegreatertheroleplayedbysupervision。Henceitreachesitspeakintheslavesystem。[3]Butitisindispensablealsointhecapitalistmodeofproduction，sincetheproductionprocessinitissimultaneouslyaprocessbywhichthecapitalistconsumeslabour-power。Justasindespoticstates，supervisionandall-roundinterferencebythegovernmentinvolvesboththeperformanceofcommonactivitiesarisingfromthenatureofallcommunities，andthespecificfunctionsarisingfromtheantithesisbetweenthegovernmentandthemassofthepeople。

Intheworksofancientwriters，whohadtheslavesystembeforethem，bothsidesoftheworkofsupervisionareasinseparablycombinedintheoryastheywereinpractice。Likewiseintheworksofmoderneconomists，whoregardthecapitalistmodeofproductionasabsolute。Ontheotherhand，asIshallpresentlyillustratewithanexample，theapologistsofthemodernslavesystemutilisetheworkofsupervisionquiteasmuchasajustificationofslavery，astheothereconomistsdotojustifythewagesystem。

ThevillicusinCato’stime:”Attheheadoftheestatewithslaveeconomy(familiarustica)standsthemanager(villicus，derivedfromvilla)，whoreceivesandexpends，buysandsells，takesinstructionsfromthemaster，inwhoseabsencehegivesordersandmetesoutpunishment……Themanagernaturallyhadmorefreedomofactionthantheotherslaves；theMagonianbooksadvisethathebepermittedtomarry，raisechildren，andhavehisownfunds，andCatorecommendsthathebemarriedtothefemalemanager；healoneprobablyhadtheprospectofwinninghisfreedomfromthemasterintheeventofgoodbehaviour。

Asfortherest，allformedacommonhousehold……Everyslave，includingthemanagerhimself，wassuppliedhisnecessitiesathismaster’sexpenseatdefiniteintervalsandfixedrates，andhadtogetalongonthem……

Thequantityvariedinaccordancewithlabour，whichiswhythemanager，forexample，whoseworkwaslighterthantheotherslaves’，receivedasmallerrationthanthey。”(Mommsen，Rö；mischeGeschichte，2nded。，1856，1，pp。809-10。)

Aristotle:’”Ogardespothzoucenktasqaitouzdoulouz，allentwcrhqaiuoulouz。”(”Forthemaster”——thecapitalist——”proveshimselfsuchnotbyobtainingslaves”——ownershipofcapitalwhichgiveshimpowertobuylabour-power——”butinemployingslaves”——

usinglabourers，nowadayswage-labourers，intheproductionprocess。)”Estideauthhepisthmhoudenmegaecousaoudesemnon。”

(”Butthereisnothinggreatorsublimeaboutthisscience。”)”agartondoulonepistasqaideipoieineceinondeitautaepistasqaiepitattein。””Butwhatevertheslavemustbeabletoperform，themastermustbeabletoorder。”)”Dioosoizexousiamhautouzcacopaqeinepistopozlambaneitau-thnthntimhn，autoidepoliteuontaihfilosofosin。”

(”Wheneverthemastersarenotcompelledtoplaguethemselveswithsupervision，themanagerassumesthishonour，whilethemastersattendtoaffairsofstateorstudyphilosophy。”)(Aristotle，Derepublica，Bekkeredition，BookI，7。)

Aristotlesaysinjustsomanywordsthatsupremacyinthepoliticalandeconomicfieldsimposesthefunctionsofgovernmentupontherulingpowers，andhencethattheymust，intheeconomicfield，knowtheartofconsuminglabour-power。Andheaddsthatthissupervisoryworkisnotamatterofgreatmomentandthatforthisreasonthemasterleavesthe”honour”

ofthisdrudgerytoanoverseerassoonashecanaffordit。

Theworkofmanagementandsupervision——sofarasitisnotaspecialfunctiondeterminedbythenatureofallcombinedsociallabour，butratherbytheantithesisbetweentheownerofmeansofproductionandtheownerofmerelabour-power，regardlessofwhetherthislabour-powerispurchasedbybuyingthelabourerhimself，asitisundertheslavesystem，orwhetherthelabourerhimselfsellshislabour-power，sothattheproductionprocessalsoappearsasaprocessbywhichcapitalconsumeshislabour——thisfunctionarisingoutoftheservitudeofthedirectproducershasalltoooftenbeenquotedtojustifythisrelationship。Andexploitation，theappropriationoftheunpaidlabourofothers，hasquiteasoftenbeenrepresentedastherewardjustlyduetotheownerofcapitalforhiswork；butneverbetterthanbyachampionofslaveryintheUnitedStates，alawyernamedO’Connor，atameetingheldinNewYorkonDecember19，1859，underthesloganof”JusticefortheSouth。””Now，gentlemen，”hesaidamidthunderousapplause，”tothatconditionofbondagetheNegroisassignedbyNature……Hehasstrength，andhasthepowertolabour；buttheNaturewhichcreatedthepowerdeniedtohimeithertheintellecttogovern，orwillingnesstowork。”(Applause。)”Bothweredeniedtohim。AndthatNaturewhichdeprivedhimofthewilltolabour，gavehimamastertocoercethatwill，andtomakehimauseful……

servantintheclimeinwhichhewascapableoflivingusefulforhimselfandforthemasterwhogovernshim……ImaintainthatitisnotinjusticetoleavetheNegrointheconditioninwhichNatureplacedhim，togivehimamastertogovernhim……norisitdeprivinghimofanyofhisrightstocompelhimtolabourinreturn，andaffordtothatmasterjustcompensationforthelabourandtalentemployedingoverninghimandrenderinghimusefultohimselfandtothesociety。”[NewYorkDailyTribune，November20，1859，pp。7-8——Ed]

Now，thewage-labourer，liketheslave，musthaveamasterwhoputshimtoworkandrulesoverhim。Andassumingtheexistenceofthisrelationshipoflordshipandservitude，itisquitepropertocompelthewage-labourertoproducehisownwagesandalsothewagesofsupervision，ascompensationforthelabourofrulingandsupervisinghim，or”justcompensationforthelabourandtalentemployedingoverninghimandrenderinghimusefultohimselfandtothesociety。”

Thelabourofsupervisionandmanagement，arisingasitdoesoutofanantithesis，outofthesupremacyofcapitaloverlabour，andbeingthereforecommontoallmodesofproductionbasedonclasscontradictionslikethecapitalistmode，isdirectlyandinseparablyconnected，alsounderthecapitalistsystem，withproductivefunctionswhichallcombinedsociallabourassignstoindividualsastheirspecialtasks。Thewagesofanepitropos，orré；gisseur，ashewascalledinfeudalFrance，areentirelydivorcedfromprofitandassumetheformofwagesforskilledlabourwheneverthebusinessisoperatedonasufficientlylargescaletowarrantpayingforsuchamanager，although，forallthat，ourindustrialcapitalistsarefarfrom”attendingtoaffairsofstateorstudyingphilosophy。”

IthasalreadybeenremarkedbyMr。Ure[4]thatitisnottheindustrialcapitalists，buttheindustrialmanagerswhoare”thesoulofourindustrialsystem。”Whateverconcernsthecommercialpartofanestablishmentwehavealreadysaidallthatisnecessaryintheprecedingpart。

Thecapitalistmodeofproductionhasbroughtmatterstoapointwheretheworkofsupervision，entirelydivorcedfromtheownershipofcapital，isalwaysreadilyobtainable。Ithas，therefore，cometobeuselessforthecapitalisttoperformithimself。Anorchestraconductorneednotowntheinstrumentsofhisorchestra，norisitwithinthescopeofhisdutiesasconductortohaveanythingtodowiththe”wages”oftheothermusicians。

Co-operativefactoriesfurnishproofthatthecapitalisthasbecomenolessredundantasafunctionaryinproductionashehimself，lookingdownfromhishighperch，findsthebiglandownerredundant。Inasmuchasthecapitalist’sworkdoesnotoriginateinthepurelycapitalisticprocessofproduction，andhencedoesnotceaseonitsownwhencapitalceases；

inasmuchasitdoesnotconfineitselfsolelytothefunctionofexploitingthelabourofothers；inasmuchasitthereforeoriginatesfromthesocialformofthelabour-process，fromcombinationandco-operationofmanyinpursuanceofacommonresult，itisjustasindependentofcapitalasthatformitselfassoonasithasburstitscapitalisticshell。Tosaythatthislabourisnecessaryascapitalisticlabour，orasafunctionofthecapitalist，onlymeansthatthevulgusisunabletoconceivetheformsdevelopedinthelapofcapitalistproduction，separateandfreefromtheirantitheticalcapitalistcharacter。Theindustrialcapitalistisaworker，comparedtothemoney-capitalist，butaworkerinthesenseofcapitalist，i。e。，anexploiterofthelabourofothers。Thewagewhichheclaimsandpocketsforthislabourisexactlyequaltotheappropriatedquantityofanother’slabouranddependsdirectlyupontherateofexploitationofthislabour，insofarasheundertakestheeffortrequiredforexploitation；

itdoesnot，however，dependonthedegreeofexertionthatsuchexploitationdemands，andwhichhecanshifttoamanagerformoderatepay。Aftereverycrisisthereareenoughex-manufacturersintheEnglishfactorydistrictswhowillsupervise，forlowwages，whatworeformerlytheirownfactoriesinthecapacityofmanagersofthenewowners，whoarefrequentlytheircreditors。[5]

Thewagesofmanagementbothforthecommercialandindustrialmanagerarecompletelyisolatedfromtheprofitsofenterpriseintheco-operativefactoriesoflabourers，aswellasincapitaliststockcompanies。Theseparationofwagesofmanagementfromprofitsofenterprise，purelyaccidentalatothertimes，ishereconstant。Inaco-operativefactorytheantagonisticnatureofthelabourofsupervisiondisappears，becausethemanagerispaidbythelabourersinsteadofrepresentingcapitalcounterposedtothem。

Stockcompaniesingeneral——developedwiththecreditsystem——haveanincreasingtendencytoseparatethisworkofmanagementasafunctionfromtheownershipofcapital，beitself-ownedorborrowed。Justasthedevelopmentofbourgeoissocietywitnessedaseparationofthefunctionsofjudgesandadministratorsfromland-ownership，whoseattributestheywereinfeudaltimes。Butsince，ontheonehand，themereownerofcapital，themoney-capitalist，hastofacethefunctioningcapitalist，whilemoney-capitalitselfassumesasocialcharacterwiththeadvanceofcredit，beingconcentratedinbanksandloanedoutbytheminsteadofitsoriginalowners，andsince，ontheotherhand，themeremanagerwhohasnotitlewhatevertothecapital，whetherthroughborrowingitorotherwise，performsalltherealfunctionspertainingtothefunctioningcapitalistassuch，onlythefunctionaryremainsandthecapitalistdisappearsassuperfluousfromtheproductionprocess。

Itismanifestfromthepublicaccountsoftheco-operativefactoriesinEngland[6]that——afterdeductingthemanager’swages，whichformapartoftheinvestedvariablecapitalmuchthesameaswagesofotherlabourers——theprofitwashigherthantheaverageprofit，althoughattimestheypaidamuchhigherinterestthandidprivatemanufacturers。Thesourceofgreaterprofitsinallthesecaseswasgreatereconomyintheapplicationofconstantcapital。

Whatinterestsusinthis，however，isthefactthatheretheaverageprofit(=interest+profitofenterprise)presentsitselfactuallyandpalpablyasamagnitudewhollyindependentofthewagesofmanagement。Sincetheprofitwashigherherethanaverageprofit，theprofitofenterprisewasalsohigherthanusual。

Thesamesituationisobservedinrelationtosomecapitaliststockcompanies，suchasjoint-stockbanks。TheLondonandWestminsterBankpaidanannualdividendof30%in1863，whiletheUnionBankofLondonandotherspaid15%。Asidefromthedirectors’salarytheinterestpaidfordepositsisheredeductedfromgrossprofit。Thehighprofitistobeexplainedherebythemoderateproportionofpaid-incapitaltodeposits。Forinstance，inthecaseoftheLondonandWestminsterBank，in1863:paid-incapital，£；1，000，000；deposits，£；14，540，275。AsfortheUnionBankofLondon，in1863:paid-incapital，£；600，000；deposits，£；12，384，173。

Profitofenterpriseandwagesofsupervision，ormanagement，wereconfusedoriginallyduototheantagonisticformassumedinrespecttointerestbythesurplusofprofit。Thiswasfurtherpromotedbytheapologeticaimofrepresentingprofitnotasasurplus-valuederivedfromunpaidlabour，butasthecapitalist’swagesforworkperformedbyhim。Thiswasmetonthepartofsocialistsbyademandtoreduceprofitactuallytowhatitpretendedtobetheoretically，namely，merewagesofsupervision。Andthisdemandwasallthemoreobnoxioustotheoreticalembellishment，themorethesewagesofsupervision，likeanyotherwage，foundtheirdefinitelevelanddefinitemarket-price，ontheonehand，withthedevelopmentofanumerousclassofindustrialandcommercialmanagers，[7]andthemoretheyfell，ontheother，likeallwagesforskilledlabour，withthegeneraldevelopmentwhichreducesthecostofproductionofspeciallytrainedlabour-power。[8]Withthedevelopmentofco-operationonthepartofthelabourers，andofstockenterprisesonthepartofthebourgeoisie，eventhelastpretextfortheconfusionofprofitofenterpriseandwagesofmanagementwasremoved，andprofitappearedalsoinpracticeasitundeniablyappearedintheory，asmeresurplus-value，avalueforwhichnoequivalentwaspaid，asrealisedunpaidlabour。Itwasthenseenthatthefunctioningcapitalistreallyexploitslabour，andthatthefruitofhisexploitation，whenworkingwithborrowedcapital，wasdividedintointerestandprofitofenterprise，asurplusofprofitoverinterest。

Onthebasisofcapitalistproductionanewswindledevelopsinstockenterpriseswithrespecttowagesofmanagement，inthatboardsofnumerousmanagersordirectorsareplacedabovetheactualdirector，forwhomsupervisionandmanagementserveonlyasapretexttoplunderthestockholdersandamasswealth。VerycuriousdetailsconcerningthisaretobefoundinTheCityorthePhysiologyofLondonBusiness；withSketchesonChange，andtheCoffeeHouses，London，1845。”Whatbankersandmerchantsgainbythedirectionofeightorninedifferentcompanies，maybeseenfromthefollowingillustration:TheprivatebalancesheetofMr。TimothyAbrahamCurtis，presentedtotheCourtofBankruptcywhenthatgentlemanfailed，exhibitedasampleoftheincomenettedfromdirectorship……between£；800

and£；900ayear。Mr。CurtishavingbeenassociatedwiththeCourtsoftheBankofEngland，andtheEastIndiaHouse，itwasconsideredquiteaplumforapubliccompanytoacquirehisservicesintheboardroom”(pp。

81，82)。Theremunerationofthedirectorsofsuchcompaniesforeachweeklymeetingisatleastoneguinea。TheproceedingsoftheCourtofBankruptcyshowthatthesewagesofsupervisionwere，asarule，inverselyproportionaltotheactualsupervisionperformedbythesenominaldirectors。

FOOTNOTES[1]”Theprofitsofenterprisedependuponthenetprofitsofcapital，notthelatterupontheformer。”(Ramsay，EssayontheDistributionofWealth，p。214。ForRamsaynetprofitsalwaysmeaninterest。)

[2]”Superintendenceishere”(inthecaseofthefarmowner)”completelydispensedwith。”(J。E。Cairnes，TheSlavePower，London，1862，p。48。)

[3]”Ifthenatureoftheworkrequiresthattheworkmen”(viz。，theslaves)”shouldbedispersedoveranextendedarea，thenumberofoverseers，and，therefore，thecostofthelabourwhichrequiresthissupervision，willbeproportionatelyincreased。”(Cairnes，1。c。，p。44。)

[4]A。Ure，PhilosophyofManufactures，Frenchtranslation，1836，I，p。67，wherethisPindarofthemanufacturersatthesametimetestifiesthatmostmanufacturershavenottheslightestunderstandingofthemechanismwhichtheysetinmotion。

[5]Inacaseknowntome，followingthecrisisof1868，abankruptmanufacturerbecamethepaidwage-labourerofhisownformerlabourers。Thefactorywasoperatedafterthebankruptcyofitsownerbyalabourers’co-operative，anditsformerownerwasemployedasmanager——F。E。

[6]Theaccountsquotedheregonofurtherthan1864，sincetheabovewaswrittenin1865——F。E。

[7]”Mastersarelabourersaswellastheirjourneymen。Inthischaractertheirinterestispreciselythesameasthatoftheirmen。Buttheyarealsoeithercapitalists，ortheagentsofthecapitalists，andinthisrespecttheirinterestisdecidedlyopposedtotheinterestsoftheworkmen。”(p。

27)。”Thewidespreadofeducationamongthejourneymenmechanicsofthiscountrydiminishesdailythevalueofthelabourandskillofalmostallmastersandemployersbyincreasingthenumberofpersonswhopossesstheirpeculiarknowledge”(p。30，Hodgskin，LabourDefendedAgainsttheClaimsofCapital，etc。，London，1825)。

[8]”Thegeneralrelaxationofconventionalbarriers，theincreasedfacilitiesofeducationtendtobringdownthewagesofskilledlabourinsteadofraisingthoseoftheunskilled。”(J。St。Mill，PrinciplesofPoliticalEconomy，2nded。，London，1849，I，p。479。)

Capital，Vol。3，Chapter24KarlMarxCAPITALVol。III

THEPROCESSOF

CAPITALISTPRODUCTIONASAWHOLEPartV

DIVISIONOFPROFITINTOINTERESTANDPROFIT

OFENTERPRISE。

INTEREST-BEARINGCAPITALCHAPTER24

ExternalizationoftheRelationsofCapitalintheFormofInterest-BearingCapitalTherelationsofcapitalassumetheirmostexternalisedandmostfetish-likeformininterest-bearingcapital。WehavehereM——M’，moneycreatingmoremoney，self-expandingvalue，withouttheprocessthateffectuatesthesetwoextremes。Inmerchant’scapital，M——C——M’，thereisatleastthegeneralformofthecapitalisticmovement，althoughitconfinesitselfsolelytothesphereofcirculation，sothatprofitappearsmerelyasprofitderivedfromalienation；butitisatleastseentobetheproductofasocialrelation，nottheproductofamerething。Theformofmerchant’scapitalatleastpresentsaprocess，aunityofopposingphases，amovementthatbreaksupintotwooppositeactions——thepurchaseandthesaleofcommodities。ThisisobliteratedinM——M’，theformofinterest-bearingcapital。Forinstance，if£；1，000areloanedoutbyacapitalistatarateofinterestof5%，thevalueof£；1，000

asacapitalforoneyear=C+Ci’，whereCisthecapitalandi’therateofinterest。Hence，5%=5/100=1/20，and1，000+1，000x1/20=£；1，050。

Thevalueof£；1，000ascapital=£；1，050，i。e。，capitalisnotasimplemagnitude。Itisarelationshipofmagnitudes，arelationshipoftheprincipalsumasagivenvaluetoitselfasaself-expandingvalue，asaprincipalsumwhichhasproducedasurplus-value。Andcapitalassuch，aswehaveseen，assumesthisformofadirectlyself-expandingvalueforallactivecapitalists，whethertheyoperateontheirownorborrowedcapital。

M——M’。Wehaveheretheoriginalstarting-pointofcapital，moneyintheformulaM——C——M’reducedtoitstwoextremesM——M’，inwhichM’=M+DM，moneycreatingmoremoney。Itistheprimaryandgeneralformulaofcapitalreducedtoameaninglesscondensation。Itisreadycapital，aunityoftheprocessofproductionandtheprocessofcirculation，andhencecapitalyieldingadefinitesurplus-valueinaparticularperiodoftime。Intheformofinterest-bearingcapitalthisappearsdirectly，unassistedbytheprocessesofproductionandcirculation。Capitalappearsasamysteriousandself-creatingsourceofinterest——thesourceofitsownincrease。Thething(money，commodity，value)isnowcapitalevenasamerething，andcapitalappearsasamerething。Theresultoftheentireprocessofreproductionappearsasapropertyinherentinthethingitself。Itdependsontheownerofthemoney，i。e。，ofthecommodityinitscontinuallyexchangeableform，whetherhewantstospenditasmoneyorloanitoutascapital。

Ininterest-bearingcapital，therefore，thisautomaticfetish，self-expandingvalue，moneygeneratingmoney，arebroughtoutintheirpurestateandinthisformitnolongerbearsthebirth-marksofitsorigin，Thesocialrelationisconsummatedintherelationofathing，ofmoney，toitself。

Insteadoftheactualtransformationofmoneyintocapital，weseehereonlyformwithoutcontent。Asinthecaseoflabour-power，theuse-valueofmoneyhereisitscapacityofcreatingvalue——avaluegreaterthanitcontains。Moneyasmoneyispotentiallyself-expandingvalueandisloanedoutassuch——whichistheformofsaleforthissingularcommodity。

Itbecomesapropertyofmoneytogeneratevalueandyieldinterest，muchasitisanattributeofpear-treestobearpears。Andthemoney-lendersellshismoneyasjustsuchaninterest-bearingthing。Butthatisnotall。Theactuallyfunctioningcapital，aswehaveseen，presentsitselfinsuchalight，thatitseemstoyieldinterestnotasafunctioningcapital，butascapitalinitself，asmoney-capital。

This，too，becomesdistorted。Whileinterestisonlyaportionoftheprofit，i。e。，ofthesurplus-value，whichthefunctioningcapitalistsqueezesoutofthelabourer，itappearsnow，onthecontrary，asthoughinterestwerethetypicalproductofcapital，theprimarymatter，andprofit，intheshapeofprofitofenterprise，wereamereaccessoryandby-productoftheprocessofreproduction。Thuswegetthefetishformofcapitalandtheconceptionoffetishcapital。InM——M’wehavethemeaninglessformofcapital，theperversionandobjectificationofproductionrelationsintheirhighestdegree，theinterest-bearingform，thesimpleformofcapital，inwhichitantecedesitsownprocessofreproduction。Itisthecapacityofmoney，orofacommodity，toexpanditsownvalueindependentlyofreproduction——whichisamystificationofcapitalinitsmostflagrantform。

Forvulgarpoliticaleconomy，whichseekstorepresentcapitalasanindependentsourceofvalue，ofvaluecreation，thisformisnaturallyaveritablefind，aforminwhichthesourceofprofitisnolongerdiscernible，andinwhichtheresultofthecapitalistprocessofproduction——divorcedfromtheprocess——acquiresanindependentexistence。

Itisnotuntilcapitalismoney-capitalthatitbecomesacommodity，whosecapacityforself-expansionhasadefinitepricequotedeverytimeineveryprevailingrateofinterest。

Asinterest-bearingcapital，andparticularlyinitsdirectformofinterest-bearingmoney-capital(theotherformsofinterest-bearingcapital，whichdonotconcernushere，arederivativesofthisformandpresupposeitsexistence)，capitalassumesitspurefetishform，M——M’beingthesubject，thesaleablething。Firstly，throughitscontinualexistenceasmoney，aform，inwhichallitsspecificattributesareobliteratedanditsrealelementsinvisible。Formoneyispreciselythatforminwhichthedistinctivefeaturesofcommoditiesasuse-valuesareobscured，andhencealsothedistinctivefeaturesoftheindustrialcapitalswhichconsistofthesecommoditiesandconditionsoftheirproduction。Itisthatform，inwhichvalue-inthiscasecapital-existsasanindependentexchange-value。

Inthereproductionprocessofcapital，themoney-formisbuttransient-amerepointoftransit。Butinthemoney-marketcapitalalwaysexistsinthisform。Secondly，thesurplus-valueproducedbyit，hereagainintheformofmoney，appearsasaninherentpartofit。Asthegrowingprocessistotrees，sogeneratingmoney(tocoz)

appearsinnateincapitalinitsformofmoney-capital。

Ininterest-bearingcapitalthemovementofcapitaliscontracted。Theinterveningprocessisomitted。Inthisway，acapital=1，000isfixedasathing，whichinitself=1，400，andwhichistransformedafteracertainperiodinto1，100justaswinestoredinacellarimprovesitsuse-valueafteracertainperiod。Capitalisnowathing，butasathingitiscapital。

Moneyisnowpregnant。[Goethe，Faust，PartI，Scene5——Ed]Assoonasitisloanedout，orinvestedinthereproductionprocess(inasmuchasityieldsinteresttothefunctioningcapitalistasitsowner，separatefromprofitofenterprise)，interestonitgrows，nomatterwhetheritisawakeorasleep，isathomeorabroad，bydayorbynight。Thusinterest-bearingmoney-capital(andallcapitalismoney-capitalintermsofitsvalue，orisconsideredastheexpressionofmoney-capital)fulfilsthemostferventwishofthehoarder。

Itisthisingrownexistenceofinterestinmoney-capitalasinathing(thisishowtheproductionofsurplus-valuethroughcapitalappearshere)，whichoccupiesLuther’sattentionsothoroughlyinhisnaiveonslaughtagainstusury。Afterdemonstratingthatinterestmaybedemandedifthefailuretorepayaloanonadefinitedatetoalenderwhohimselfrequiredittomakesomepayment，causedalosstohim，orresultedinhismissinganopportunitytomakeaprofitonabargain，forinstance，inbuyingagarden，Luthercontinues:”NowthatIhaveloanedyouthem(100gulden)，youcausemeadoublelossduetomynotbeingabletopayontheonehandnorbuyontheother，sothatIhavetoloseonbothsides，andthisiscalledduplexinteresse，damniemergentisetlucricessantis……OnhearingthatJohnsustainedlossesonhisloanof100guldenanddemandsjustdamages，theyrushinandchargedoubleonevery100gulden，suchdoublereimbursement，namely，forthelossduetonon-paymentandtoinabilitytomakeaprofitonabargain，justasthoughthese100guldenhadthedoublelossgrownontothem，sothatwhenevertheyhave100gulden，theyloanthemoutandchargefortwolosses，whichtheyhavenotatallsustained……Thereforeyouareausurer，whotakesdamagesoutofhisneighbour’smoneyforanimaginarylossthatyoudidnotsustainatall，andwhichyoucanneitherprovenorcalculate。Thissortoflossiscalledbythejuristsnonverum，sedphantasticuminteresse。Itisalosswhicheachconjuresupforhimself……Itwillnotdotosay，therefore，thattherecouldhavebeenlossesbecauseIcouldnothavebeenabletopayorbuy。Elseitwouldmeanexcontingentenecessarium，whichismakingsomethingoutofathingthatisnot，andathingthatisuncertainintoathingthatisabsolutelysure。Wouldnotsuchusurydevourtheworldinafewyears？……Ifanunhappyaccidentbefallshimagainsthiswill，andhemustrecoverfromit，hemaydemanddamagesforit，butitisdifferentintradeandjustthereverse。Theretheyschemetoprofitattheexpenseoftheirneedyneighbours，howtoamasswealthandgetrich，tobelazyandidleandliveinluxuryonthelabourofothers，withoutanycare，danger，andloss。Tositbythestoveandletmy100guldengatherwealthformeinthecountryandyetkeeptheminmypocket，becausetheyareonlyloaned，withoutanydangerorrisk-myfriend，whowouldnotlikethat？”

(MartinLuther，AndiePfarherrnwiderdenWucherzupredigen，etc。，Wittenberg，1540。)

Theconceptionofcapitalasaself-reproducingandself-expandingvalue，lastingandgrowingeternallybyvirtueofitsinnateproperties——hencebyvirtueofthehiddenqualityofscholasticists——hasledtothefabulousfanciesofDr。Price，whichoutdobyfarthefantasiesofthealchemists；

fancies，inwhichPittbelievedinallearnest，andwhichheusedaspillarsofhisfinancialadministrationinhislawsconcerningthesinkingfund。”Moneybearingcompoundinterestincreasesatfirstslowly。But，therateofincreasebeingcontinuallyaccelerated，itbecomesinsometimesorapid，astomockallthepowersoftheimagination。Onepenny，putoutatourSaviour’sbirthto5percentcompoundinterest，would，beforethistime，haveincreasedtoagreatersum，thanwouldbecontainedinahundredandfiftymillionsofearths，allsolidgold。Butifputouttosimpleinterest，itwould，inthesametime，haveamountedtonomorethansevenshillingsandfourpencehalf-penny。Ourgovernmenthashithertochosentoimprovemoneyinthelast，ratherthanthefirstoftheseways。”[1]

HisfancyfliesstillhigherinhisObservationsonReversionaryPayments，etc。，London，1772。Thereweread:”Ashillingputoutto6%compoundinterestatourSavioursbirth”(presumablyintheTempleofJerusalem)”would……haveincreasedtoagreatersumthanthewholesolarsystemcouldhold，supposingitasphereequalindiametertothediameterofSaturn’sorbit。””Astateneedneverthereforebeunderanydifficulties；

forwiththesmallestsavingsitmayinaslittletimeasitsinterestcanrequirepayoffthelargestdebts”(pp。XIII，XIV)。WhataprettytheoreticalintroductiontothenationaldebtofEngland！