Capital

In social theory, the concept of capital is mainly used in reference to one of the central categories of Marx's critique of political economy. In recent years, there have been discussions about different types of capital, especially about the sources and dynamics of “social capital.” Economic and social sciences initially adopted the word capital from the language of merchants. Latin in origin, capitale meant live-stock, counted per heads (caput). Since in early times, cattle was the commodity by which all other commodities were valued, later on, capitale was used to mean “money” or “investment of money.”

In the nineteenth century, “capital” became the epitome of a conception of economy and society that assigned the leading role to the rapidly growing industrial production. Even before, the Physiocrats and, above all, Adam Smith, had emancipated the term capital from “money capital” and used it indiscriminately for money and other objects. For Smith, the concept served as classification term of the entire stock of goods. In contrast to stocks of goods for immediate consumption, by capital, he understood all requirements of production—except natural forces, but including means of subsistence for productive labor—necessary to realize income. Part of these requirements and therefore of capital was the amount of acquired and useable skills of men, anticipating later conceptions such as “human capital” or “intellectual capital.”

The classical bourgeois economists, following especially Ricardo, saw capital as accumulated labor, the product of the previous production efforts. Taking it up, socialist authors turned this idea against bourgeois interests and capital itself. Marx postulated a reciprocal logical relation of subsumption between capital and labor. Capital as accumulated, objectified, or dead labor, he called “constant capital” and distinguished it from the “variable capital” of the living labor. This conceptual subsumption of capital under labor had a critical aim. Essentially, capital was not only a “factor of production,” but a genuine social relation: “[C]apital is not a thing, but rather a definite social production relation, belonging to a definite historical formation of society, which is manifested in a thing and lends this thing a specific social character” (Marx [1865] 1981:953). To the subsumption of capital under labor, which made the mediation of dead and living labor transparent, corresponded the subsumption of labor under capital. It referred to the real social power of the capital owners to control and use labor power. Capital marked therefore a relation of domination, and the subsumption of labor under capital meant the real subordination of the forms, conditions, and products of labor under the dominant interest of capital accumulation.

Marx's general formula for the circulation of capital was M-C-M': Purchase of commodities is only a means to realize more (‘) money; the goal is not use-value, but (more) exchange-value. Capital in this generic sense is old; merchants’ and usurers' capital, where the function is mediation, not control of production, were already common in early societies. Only the generalization of commodity production and of wage-labor brought the transition to capital in the modern sense. Capital took over the production process itself and transformed it into a direct means of capital expansion. And capital, in the singular, became capitals, in the plural: the reciprocal action of capitals upon each other as competition and constant seeking for profit and ever more profit. The character and the limits of this competition (e.g., the tendency toward “monopoly capital”) and also its nexus with other institutional factors and dimensions shape global and national socioeconomic developments and the class structure of modern society.

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