Says Marx: 'The circulation of commodities is the starting point of capital: the production of commodities, their circulation, and that more developed form of their circulation called commerce, these form the historical groundwork from which it rises. The modern history of capital dates from the creation in the 16th century of a world-embracing commerce and a world-embracing market.'
The great representative of this circulation is money, which is the first form in which capital appears. In history, money presents itself to us as opposed to land: the merchant is opposed to the landowner; an antithesis which struck people so much at one period that they expressed it by means of a double proverb – 'No land without a lord', and 'Money has no master'. This is, in fact, another way of stating the antithesis between the Mediæval basis of property, viz., status, a recognized position in the great feudal hierarchy, and contract, the commercial basis, on which is built the position of the modern exploiter.
We must now see how capital is born, and the manner in which it works after it has been born.
It is born out of the operation expressed by the formula M – C – M, which we had to take note of in our last chapter. The M in this operation, as we stated before, implies always quantity and not quality; the second M not representing merely the money the operation was begun with, but an increased sum, otherwise the operation would be meaningless. It remains to be seen how this increase has taken place.
It cannot have happened by the mere process of exchange; because that would mean that the whole capitalistic class was living by getting the better of the whole capitalistic class, which is impossible. The increase of money in the capitalistic process must come out of the labouring or productive class.
The modus operandi of this capital-making must now be noted. The labouring class is necessary to the production of capital, and the labouring class in a peculiar condition: the labourer, to be fitted for the purpose of the capitalist, must be submitted to the operation of the free competition of the capitalist in the market; that is, his labour-power must be; for with the man himself of course the capitalist has nothing whatever to do; neither will his own position as capitalist allow him to consider himself as a man; according to the well-known proverb 'Business is business'. This position of the labourer is what is understood by the phrase of a 'free labourer': his labour-power must be bought and sold in the market on the same terms as any other commodity; there must be no interference with his selling it at the price which it will fetch, a high price when the competition among the capitalists is brisk, a low price when it is slack; and as he has no other commodity to sell except his labour-power, he is compelled so to sell it – to be a 'free labourer'.
It is clear that this relation between the capitalist and the labourer is a conventional and not a natural one; nature does not produce men who from the first are possessors of money which it is their business to turn into capital, nor on the other hand does she produce men who are possessors of labour-power which they are compelled to sell in the free and open market to other men. As a consequence this relation is not common to all historical periods; but has developed from many economical revolutions, which have successively extinguished prior forms of social production.
It will be seen, then, that in the fully developed commercial period the capitalist, the reason for whose existence is the turning of money into capital, and who is the owner and the organizer of the whole of production, cannot carry on his business without having ready to his hand a class who are an adjunct of the machinery necessary to his business, and who, on their side, have no other reason for existence, so long as they are duly obedient to the system under which they live, save acting as such portion of this machinery.
We have now come to the subject of surplus-value, from which is derived profit, rent, and interest. This will form the subject of our next chapter.
Commonweal, Volume 3, Number 63, 26 March 1887, p. 101