They also have costs banking profit is simply the difference between the two, income less costs.
Banks are profit-making institutions, who generate income by charging interest on loans. I feel like I’m missing something obvious here, but any feedback is appreciated! “the rate of interest…whether it is the average rate or the market rate of the time, appears as something quite different from the general rate of profit, as a uniform, definite and palpable magnitude.” (C3, p. This is probably a dumb question, but if the interest rate just is the average rate of profit, wouldn’t the borrower be paying the ENTIRETY of his profit back to the lender?Īlso, it seems that empirically (in the 1850s at least) interest rates really were different from the average rate of profit. “Why then should banking capital not enter into profit rate equalisation also, if, at this abstract level, it is only really another application of capital in search of a return?”
I fell I’m not understanding a large part of what’s at stake in the discussion of the relation of interest rate and profit rate. Thanks again for another helpful blog post! Previous post: Chapter 36 : Pre-Capitalist Social Relations More (pdf: 440KB): capital_v3_summary_part5 The failure of the political economists of his time to grasp this distinction evidently infuriates Marx. But money as capital is only capital in virtue of what makes it capital, not in virtue of being money and although capital may take the form of money, not all money is capital. Money as capital – capital in money form – is thus money with the capacity of valorisation. Capital is value whose value is augmented in magnitude, is valorised. Money as money is the independent expression of a sum of value. We first need to be clear as to the distinction between money, on the one hand, and capital on the other. Given the fragmentary nature of this part of the book, it may be useful to take a step back from the text and try to set out the key ideas in Marx’s (and Engels’) presentation in synthetic form. But the credit system is no more emancipated from the monetary system as its basis than Protestantism is from the foundations of Catholicism. Faith in money value as the immanent spirit of commodities, faith in the mode of production and its predestined disposition, faith in the individual agents of production as mere personifications of self-valorising capital. ‘The Scotch hate gold.’ As paper, the monetary existence of commodities has a purely social existence. The monetary system is essentially Catholic, the credit system essentially Protestant.
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