Financialization and Macroeconomics

4 Interest-bearing capital vs industrial capital

DOI: 10.4324/9781003223221-5

Money capital and productive capital

According to Marx, as we know, the circuit of capital, in its pure state,¹ comprises three fundamental stages: M–C–M′, where M is the initial value of money capital, C is the value of commodities in which M is transformed by means of a simply act of commodities circulation and M′ denotes an increase in money capital value as the result of acquiring surplus value in the form of unpaid labour.

In this formula, money is the independent expression of a sum of value that, on the basis of capitalist production, can be transformed into capital – i.e. “self-valorising value capable of increasing itself” (Marx, 1894/1991, p. 459). This ...