Chapter 5 is an extended discussion of M-C-M, deciphering the contradictions in this inverted order of succession that give rise to the activity of the capitalist. The function of this chapter is to solve a problem: where does M’ come from? Marx concludes the expanded value (M’) cannot originate in exchange, so we must look elsewhere (to labour-power, which is the subject of Chapter 6).
“The inversion of the order of succession does not take us outside the sphere of the simple circulation of commodities, and we must rather look to see whether this simple circulation, by its nature, might permit the valorization of the values entering into it and consequently the formation of surplus-value.” (259)
Money of account
“expresses the values of commodities in their prices, but it does not confront the commodities in a material shape” (259).
“Price… is a precondition of circulation not its result” (260).
Marx suggests that the key to understanding the nature of commodities, beyond seeing their use-value and value, is to understand the distinction between their “natural form and their converted form, between commodities and money” (263).
Marx goes into a long-winded argument with Condillac and the mainstream economists over the origin of surplus value. His argument makes two central claims:
1) that surplus-value cannot be accounted for by a mere fluctuation in price, ie. Sale for more or less than a commodity’s actual value. (263)
2) that in the market producers are confronted with each other (the buyer having sold a product to obtain her/his money) (264). In that sense, the seller is not in a privileged position to raise prices.
3) Circulation does not create value (266).
“If equivalents are exchanged, no surplus value results, and if non-equivalents are exchanged, we still have no surplus value” (266).
Fleshing out Marx’s explanation of the class condition, there can be no class of consumers. That is, everyone, by the very nature of circulation already explained in previous chapters, is also a producer.
We could discuss consumption based campaigns and boycott politics in continuation of this point.
Derivative, pre-modern forms of capital (266):
1) Merchantilist capital – involves sale and purchase with the withdrawal of a greater amount of money than was originally invested (ie. M-C-M’)
2) Usurer’s capital (interest bearers’ capital)– there is no commodity involved, essentially here we are dealing with a loan incurring interest (M-M’).
Cheating and stealing
Marx gives the example of peoples in Asia Minor tricking the Roman invaders into paying more for their goods. Cleaver points out that this example parallels the antagonistic relationship between the working class and the ruling class. So, what does cheating achieve, if it does not create surplus value? Here’s what Harry Cleaver responds to this question:
“No matter how much the working class may cheat capital, either through the exchange LP – M (in which the working class can cheat by failing to provide LP in P) or through M – C(MS) via shoplifting, changing price tags, or what have you, as long as capital achieves some degree of surplus value and reinvestment, it is the working class which is, in the end, been cheated — out of that part of its life realized in surplus value (surplus work), on the one hand, and out of that part of its life lost in the reproduction of labor power as such.”
What modes of cheating occur today? Considering this could lead into a discussion around the everyday ways the class resists capital and how these may be and have been in recent history been powerful tools in the articulation of class struggle.
Valorizing value (self-valorisation) is the process of generating capital.
“This quantity of labour is expressed by the magnitude of the value of his (sic) commodity… The commodity owner can create value by his labour, but he cannot create values which valorize themselves” (268).
The process that Marx outlines means that while a producer can add value by increasing their labour in the production process, but the increased value can only be represented in the process of exchange.
The ‘double result’ is that:
“Capital cannot therefore arise from circulation, and it is equally as impossible for it to arise apart from circulation. It must have its origin both in circulation and not in circulation.” (268).