Monday, February 24, 2014

The Fictitious Existance and Capitalisation

                While I think that chapter 29 of Volume 3 explains many of the implications capitalism has for the banking industry, I found myself a bit confused when relating this section back to our earlier readings. Like all of Marx’s writings, that we have seen so far, he begins this chapter with a succinct statement of what will come: “money-capital is being confused here with moneyed capital in the sense of interest-bearing capital, while in the former sense, money capital is always merely a transient form of capital.” If money-capital is “transient,” a quick movement – momentary representation- of capital, than how is moneyed capital a distinct, or represented?  Marx does not maintain these particular terms throughout his chapter here, so it is possible that I am expecting a clear-cut difference when there is not, indeed, something so easily cut.

                Marx’s subsequent explanation of collecting of interest by the banks is in fact, to show that the interest is not, exactly, collect rather, assigned to an already designated value in the form of money. When the bank accrues interest on that money, by loaning it to another party, that interest is – in essence – imaginary, it does not represent any money actually being deposited or an exchange. The bank has created the ability to add value to something previously less valuable. Only, this more valuable state is not, necessarily, intended to be converted back into a money form. It has taken on a life of its own a numeric value separate from actual money. Marx describes this as “illusory” or “fictitious capital.” Indeed, the numeric value does live a fictional existence as it is traded from bank to bank, perhaps at times representing a piece of stock or interest value. Its life, its “independent movement of the value of these titles of ownership, not only of government bonds but also of stocks, adds weight to the illusion that they constitute real capital . . . for they become commodities, whose price has its own characteristic movements and is established in its own way.” The numeric value is now assigned a dollar amount by its “anticipated income . . . calculated in advance.” This potential value becomes more important, more powerful, than the original money form – and, indeed, when that numeric value is converted back into a dollar form it loses value.

                This fictional existence of the “independent movement” of “anticipated income” can only be articulated, it seems, as a form of life personified into a transient being that moves between actors/bankers. It is a transient "phantom of the imagination." Perhaps, a very rich phantom living in a penthouse apartment. The phantom is not tangible, and if it were to become tangible, it would be reduced to a lesser value/entity. Marx is clear, though that this is an illusion. Actual “things” are not lost in this process, saying, “Unless this depreciation reflects an actual stoppage of production and of traffic on canals and railways, or a suspension of already initiated enterprises . . . the nation did not grow one cent poorer by the bursting of this soap bubble of nominal money capital.”  Tangible things that have a use value are stull valued for that use. Yet the bubbling illusion of other wealth, in which some individuals/ banks name as their fortune can fall as fictionally as it arose.

                My question from Marx’s observation in this chapter, which is something that he hints to but does not explicitly say; is the fictional existence of the “independent movement” of “anticipated income” a reflection of the social contract needed to represent to money commodity in the first place? Mid-way through this chapter Marx hints more directly at this social contract, saying, “a loan is but a transfer from one person to another without the mediation of a purchase.” Yet, what is distinguishes a loan from a purchase is that once the loan is made interest grows the numeric value of that loan, essentially making it worth more. It is, potentially, the opposite of buying a thing – in which, once something is purchased it tends to lose value. Is “money capital” the best term we have for the fictional existence, and moneyed capital a term for actual/tangible money commodity? I resist using the term commodity here as Marx explains that the “money capital” becomes a commodity, as it is strengthened the more and more that capitol is traded and negotiated through. Have the banks replicated the invention of capital past the first social contract into fetishism and essentially created a higher, perhaps second tier capitalism for their use only? Does it make sense that the money commodity is the intermediary of these two tiers of exchange?

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