50 Years Ago: What is Capital? (1966)

The 50 Years Ago column from the July 1966 issue of the Socialist Standard

We have now to consider money a little further in the form of capital in the process of accumulation, or in other words the phenomenon of “money making money". For money in itself is not necessarily capital. Only when it is used for the purpose of adding to itself does it become so. When the independent producer (peasant or handicraftsman) brought his goods to market he received for them a certain sum of money which sooner or later he expended on articles of a different sort, largely for his own personal use and partly, of course, to buy fresh raw materials, etc. To him the money entering transiently into his possession was not capital, nor were the goods he sold, for he received in exchange goods of equal value. No interest, no profit accrued to him in the transaction.

Otherwise is it with the modern capitalist with a sum of money which is constantly expanding in volume. He buys commodities not for consumption for himself, but in order that in some form or other he may resell these commodities and realise a profit on the transaction. Apart from this profit his activities as a capitalist would be meaningless.

The independent producer bought commodities mainly in order to realise their use value in his own person. The capitalist buys them only to throw them bad into circulation and receive in return an increase in exchange-value. The simplest definition of capital, then, is money thrown into circulation only to be received back with an increase to itself, which increase becomes part of the capital which is again advanced to return with a fresh increase.

This increase or profit, Marx calls surplus value . . . In order to obtain surplus value the capitalist must find in the market not merely ordinary commodities (which are incapable of producing for him more value than they themselves possess) but some commodity which actually produces value, i.e., labour. This commodity he finds in the energies of the modern wage-labourer.

(From the Socialist Standard, July 1916).