I'm interested in interest theory (fwd)
wpc at clyder.gn.apc.org
Thu Aug 10 12:52:08 MDT 1995
Steve quotes Marx as saying:
"What, now, is the use-value which the money-capitalist gives
up for the period of the loan and relinquishes to the productive
capitalist--the borrower? it is the use-value which the money
acquires by being capable of becoming capital, of performing the
functions of capital, and creating a definite surplus-value...
In the case of other commodities the use-value is ultimately
consumed. In contrast, the commodity-capital is peculiar in that
its value and use-value not only remain intact, but also
increase, through consumption of its use-value..."
How realistic is this. Is a bank weighing up the alternatives
of setting up in the production of shoes itself when it
extends overdraft facilities to a shoe company?
That leads to a problem; how can a product have a price (value)
which is not its value? [This again points to the discussion
Carrol initiated some time ago, on the distinction between
value and exchange-value; here the issue apparently confuses
Marx too, to some extent. What he should have said was "how
can a product have a price (exchange-value) which is not
The problem is even worse. Commodity prices have dimension
m/u where m is money and u is some natural unit of the commodities
use value - litres of wine, litres of oil etc.
Interest has the dimension 1/t where t is time. Thus to apply
the category price to it does violence to any rigorous system
of conceptual categories.
Beyond this, credit is not a product, it is a pure social relation,
as such it has no 'supply'.
an economy-wide level). However, the supply of and demand for
credit are far from independent: the supply will be high when
the demand is high, and vice versa, because both are determined
by shared expectations of profit.
I am doubtful about this whole approach, which seems to be overly
subjective. The volume of debt created per year is adequately
determined if we can
a) partition the set of juridical subjects into two disjoint subsets
such that one set are net lenders the others net borrowers.
b) determine the processes which determine the extend to which the
incomes of net lenders exceed their outgoings on commodity purchases
and forced transfers.
In part this is a class phenomenon - the rentier class constituting
the most significant part of the set of lenders.
In part it is a result of a polarisation of industrial capitals into
those with positive and negative gearing ratios.
It is how the accumulation process gives rise to these objective
system wide processes that we must explain, rather than focusing,
as I am afraid Marx still did, on how these phenomena appear to
the economic agents.
I think that Marx's explanations were still at the level of 'credit
fetishism', though he could see that thinking about it in these
terms was irrational.
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