InterestandProfitofEnterpriseInterest，aswehaveseeninthetwoprecedingchapters，appearsoriginally，isoriginally，andremainsinfactmerelyaportionoftheprofit，i。e。，ofthesurplus-value，whichthefunctioningcapitalist，industrialistormerchanthastopaytotheownerandlenderofmoney-capitalwheneverheusesloanedcapitalinsteadofhisown。Ifheemploysonlyhisowncapital，nosuchdivisionofprofittakesplace；thelatteristhenentirelyhis。
Indeed，aslongastheownersofthecapitalemployitontheirowninthereproductionprocess，theydonotcompeteindeterminingtherateofinterest。Thisaloneshowsthatthecategoryofinterest——impossiblewithoutdeterminingtherateofinterest——isalientothemovementsofindustrialcapitalassuch。”Therateofinterestmaybedefinedtobethatproportionalsumwhichthelenderiscontenttoreceive，andtheborrowertopay，annually，orforanylongerorshorterperiod，fortheuseofacertainamountofmoneyedcapital……Whentheownerofacapitalemploysitactivelyinreproduction，hedoesnotcomeundertheheadofthosecapitalists，theproportionofwhom，tothenumberofborrowers，determinestherateofinterest。”Th。
Tooke，HistoryofPrices，London，1838，II，pp。355-56。Itisindeedonlytheseparationofcapitalistsintomoney-capitalistsandindustrialcapitaliststhattransformsaportionoftheprofitintointerest，thatgenerallycreatesthecategoryofinterest；anditisonlythecompetitionbetweenthesetwokindsofcapitalistswhichcreatestherateofinterest。
Aslongascapitalfunctionsintheprocessofreproduction-assumingthatitevenbelongstotheindustrialcapitalistandhehasnoneedofpayingitbacktoalender——thecapitalist，asaprivateindividual，doesnothaveathisdisposalthiscapitalitself，butonlytheprofit，whichhemayspendasrevenue。Aslongashiscapitalfunctionsascapital，itbelongstotheprocessofreproduction，istiedupinit。Heis，indeed，itsowner，butthisownershipdoesnotenablehimtodisposeofitinanyotherway，solongasheusesitascapitalfortheexploitationoflabour。
Thesameistrueofthemoney-capitalist。Solongashiscapitalisloanedoutandtherebyservesasmoney-capital，itbringshiminterest，aportionoftheprofit，buthecannotdisposeoftheprincipal。Thisisevidentwheneverheloansouthiscapitalfor，say，ayear，ormore，andreceivesinterestatcertainstipulatedtimeswithoutthereturnofhisprincipal。
Buteventhereturnoftheprincipalmakesnodifferencehere。Ifhegetsitback，hemustalwaysloanitoutagain，solongasitistofunctionforhimascapital——hereasmoney-capital。Aslongashekeepsitinhisownhands，itdoesnotcollectinterestanddoesnotactascapital；
andaslongasitdoesgatherinterestandserveascapital，itisoutofhishands。Hencethepossibilityofloaningoutcapitalforalltime。
ThefollowingremarksbyTookedirectedagainstBosanquetare，therefore，entirelywrong。HequotesBosanquetMetallic，PaperandCreditCurrency，London，1842，p。73:”Weretherateofinterestreducedaslowas1%，capitalborrowedwouldbeplacednearlyonaparwithcapitalpossessed。”
TothisTookeaddsthefollowingmarginalnote:”Thatacapitalborrowedatthat，orevenalowerrate，shouldbeconsiderednearlyonaparwithcapitalpossessed，isapropositionsostrangeashardlytowarrantseriousnoticewereitnotadvancedbyawritersointelligent，and，onsomepointsofthesubject，sowellinformed。Hasheoverlookedthecircumstance，ordoesheconsideritoflittleconsequence，thattheremust，bythesupposition，beaconditionofrepayment？”Th。Tooke，AnInquiryintotheCurrencyPrinciple，2nded。，London，1844，p。80。Ifinterestwere=0，theindustrialcapitalistoperatingonborrowedcapitalwouldstandonaparwithacapitalistusinghisowncapital。Bothwouldpocketthesameaverageprofit，andcapital，whetherborrowedorowned，servesascapitalonlyaslongasitproducesprofit。Theconditionofreturnpaymentwouldalternothing。Thenearertherateofinterestapproacheszero，falling，forinstance，to1%，thenearerborrowedcapitalistobeingonaparwithowner’scapital。Solongasmoney-capitalistoexistasmoney-capital，itmustalwaysbeloanedout，andindeedattheprevailingrateofinterest，sayof1%，andalwaystothesameclassofindustrialandcommercialcapitalists。
Solongasthesefunctionascapitalists，thesoledifferencebetweentheoneworkingwithborrowedcapitalandtheotherwithhisownisthattheformermustpayinterestandthelattermustnot；theonepocketstheentireprofitp，andtheotherp杋，theprofitminustheinterest。Thenearerinterestapproacheszero，thenearerp杋approachesp，andhencethenearerthetwocapitalsaretobeingonapar。Theonemustpaybackthecapitalandborrowanew；yettheothermustlikewiseadvanceitagainandagaintotheproductionprocess，solongashiscapitalistofunction，andcannotdisposeofitfreely，independentofthisprocess。Thesoleremainingdifferencebetweenthetwoistheobviousdifferencethatoneistheownerofhiscapital，andtheotherisnot。
Thequestionwhichnowarisesisthis。Howdoesthispurelyquantitativedivisionofprofitintonetprofitandinterestturnintoaqualitativeone？Inotherwords，howisitthatacapitalistwhoemployssolelyhisown，notborrowedcapital，classifiesaportionofhisgrossprofitunderthespecificcategoryofinterestandassuchcalculatesitseparately？
And，furthermore，howisitthatallcapital，whetherborrowedornot，isdifferentiatedasinterest-bearingcapitalfromitselfascapitalproducinganetprofit？
Itisunderstoodthatnoteveryaccidentalquantitativedivisionofprofitturnsinthismannerintoaqualitativeone。Forinstance，someindustrialcapitalistsjoinhandstooperateabusinessandthendividetheprofitamongthemselvesinaccordancewithsomelegalagreement。Othersdotheirbusiness，eachonhisown，withoutanypartners。Theselastdonotcalculatetheirprofitundertwoheads——onepartasindividualprofit，andtheotherascompanyprofitfortheirnon-existentpartners。Inthiscasethequantitativedivisionthereforedoesnotbecomeaqualitativeone。Thisoccurswheneverownershiphappenstobevestedinseveraljuridicalpersons。Itdoesnotoccurwheneverthisisnotthecase。
Inordertoanswerthisquestion，wemustdwellsomewhatlongerontheactualpointofdepartureintheformationofinterest；thatis，wemustproceedfromtheassumptionthatthemoney-capitalistandindustrialcapitalistreallyconfrontoneanothernotjustaslegallydifferentpersons，butaspersonsplayingentirelydifferentrolesinthereproductionprocess，oraspersonsinwhosehandsthesamecapitalreallyperformsatwo-foldandwhollydifferentmovement。Theonemerelyloansit，theotheremploysitproductively。
Fortheproductivecapitalistwhoworksonborrowedcapital，thegrossprofitfallsintotwoparts——theinterest，whichheistopaythelender，andthesurplusoverandabovetheinterest，whichmakesuphisownshareoftheprofitIfthegeneralrateofprofitisgiven，thislatterportionisdeterminedbytherateofinterest；andiftherateofinterestisgiven，thenbythegeneralrateofprofit。Andfurthermore:howeverthegrossprofit，theactualvalueofthetotalprofit，maydivergeineachindividualcasefromtheaverageprofit，theportionbelongingtothefunctioningcapitalistisdeterminedbytheinterest，sincethisisfixedbythegeneralrateofinterestleavingasideanyspeciallegalstipulationsandassumedtobegivenbeforehand，beforetheprocessofproductionbegins，hencebeforeitsresult，thegrossprofit，isachieved。Wehaveseenthattheactualspecificproductofcapitalissurplus-value，or，moreprecisely，profit。Butforthecapitalistworkingonborrowedcapitalitisnotprofit，butprofitminusinterest，thatportionofprofitwhichremainstohimafterpayinginterest。Thisportionoftheprofit，therefore，necessarilyappearstohimtobetheproductofacapitalaslongasitisoperative；
andthisitis，asfarasheisconcerned，becauseherepresentscapitalonlyasfunctioningcapital。Heisitspersonificationaslongasitfunctions，anditfunctionsaslongasitisprofitablyinvestedinindustryorcommerceandsuchoperationsareundertakenwithitthroughitsemployerasareprescribedbythebranchofindustryconcerned。Asdistinctfrominterest，whichhehastopaytothelenderoutofthegrossprofit，theportionofprofitwhichfallstohissharenecessarilyassumestheformofindustrialorcommercialprofit，or，touseaGermantermembracingboth，theformofUnternehmergewinnprofitofenterprise。Ifthegrossprofitequalstheaverageprofit，thesizeoftheprofitofenterpriseisdeterminedexclusivelybytherateofinterest。Ifthegrossprofitdeviatesfromtheaverageprofit，itsdifferencefromtheaverageprofitafterinterestisdeductedfrombothisdeterminedbyallthecircumstanceswhichcauseatemporarydeviation，beitoftherateofprofitinanyparticularspherefromthegeneralrateofprofit，ortheprofitofsomeindividualcapitalistinacertainspherefromtheaverageprofitofthissphere。Wehaveseenhoweverthattherateofprofitwithintheproductionprocessitselfdoesnotdependonsurplus-valuealone，butalsoonmanyothercircumstances，suchaspurchasepricesofmeansofproduction，methodsmoreproductivethantheaverage，onsavingsofconstantcapital，etc。Andasidefromthepriceofproduction，itdependsonspecialcircumstances，andineverysinglebusinesstransactiononthegreaterorlessershrewdnessandindustryofthecapitalist，whether，andtowhatextent，hebuysorsellsaboveorbelowthepriceofproductionandthusappropriatesagreaterorsmallerportionofthetotalsurplus-valueintheprocessofcirculation。Inanycase，thequantitativedivisionofthegrossprofitturnshereintoaqualitativeone，andallthemoresobecausethequantitativedivisionitselfdependsonwhatistobedivided，themannerinwhichtheactivecapitalistmanageshiscapital，andwhatgrossprofitityieldstohimasafunctioningcapital，i。e。，inconsequenceofhisfunctionsasanactivecapitalist。Thefunctioningcapitalistishereassumedasanon-ownerofcapital。Ownershipofthecapitalisrepresentedinrelationtohimbythemoney-capitalist，thelender。Theinteresthepaystothelatterthusappearsasthatportionofgrossprofitwhichisduetotheownershipofcapitalassuch。Asdistinctfromthis，thatportionofprofitwhichfallstotheactivecapitalistappearsnowasprofitofenterprise，derivingsolelyfromtheoperations，orfunctions，whichheperformswiththecapitalintheprocessofreproduction，henceparticularlythosefunctionswhichheperformsasentrepreneurinindustryorcommerce。Inrelationtohiminterestappearsthereforeasthemerefruitofowningcapital，ofcapitalassuchabstractedfromthereproductionprocessofcapital，inasmuchasitdoesnot”work，”doesnotfunction；whileprofitofenterpriseappearstohimastheexclusivefruitofthefunctionswhichheperformswiththecapital，asthefruitofthemovementandperformanceofcapital，ofaperformancewhichappearstohimashisownactivity，asopposedtotheinactivity，thenon-participationofthemoney-capitalistintheproductionprocess。Thisqualitativedistinctionbetweenthetwoportionsofgrossprofitthatinterestisthefruitofcapitalassuch，oftheownershipofcapitalirrespectiveoftheproductionprocess，andthatprofitofenterpriseisthefruitofperformingcapital，ofcapitalfunctioningintheproductionprocess，andhenceoftheactiveroleplayedbytheemployerofthecapitalinthereproductionprocess——thisqualitativedistinctionisbynomeansmerelyasubjectivenotionofthemoney-capitalist，ontheonehand，andtheindustrialcapitalist，ontheother。Itrestsuponanobjectivefact，forinterestflowstothemoney-capitalist，tothelender，whoisthemereownerofcapital，hencerepresentsonlyownershipofcapitalbeforetheproductionprocessandoutsideofit；whiletheprofitofenterpriseflowstothefunctioningcapitalistalone，whoisnon-ownerofthecapital。
Themerelyquantitativedivisionofthegrossprofitbetweentwodifferentpersonswhobothhavedifferentlegalclaimstothesamecapital，andhencetotheprofitproducedbyit，thusturnsintoaqualitativedivisionforboththeindustrialcapitalistinsofarasheisoperatingonborrowedcapital，andforthemoney-capitalist，insofarashedoesnothimselfapplyhiscapital。Oneportionoftheprofitappearsnowasfruitdueassuchtocapitalinoneform。，asinterest；theotherportionappearsasaspecificfruitofcapitalinanoppositeform，andthusasprofitofenterprise。Oneappearsexclusivelyasthefruitofoperatingwiththecapital，thefruitofperformingcapital，orofthefunctionsperformedbytheactivecapitalist。Andthisossificationandindividualisationofthetwopartsofthegrossprofitinrespecttooneanother，asthoughtheyoriginatedfromtwoessentiallydifferentsources，nowtakesfirmshapefortheentirecapitalistclassandthetotalcapital。And，indeed，regardlessofwhetherthecapitalemployedbytheactivecapitalistisborrowedornot，andwhetherthecapitalbelongingtothemoney-capitalistisemployedbyhimselfornot。Theprofitofeverycapital，andconsequentlyalsotheaverageprofitestablishedbytheequalisationofcapitals，splits，orisseparated，intotwoqualitativelydifferent，mutuallyindependentandseparatelyindividualisedparts，towit——interestandprofitofenterprise——bothofwhicharedeterminedbyseparatelaws。Thecapitalistoperatingonhisowncapital，liketheoneoperatingonborrowedcapital，dividesthegrossprofitintointerestduetohimselfasowner，ashisownlender，andintoprofitofenterpriseduetohimastoanactivecapitalistperforminghisfunction。Asconcernsthisdivision，therefore，asaqualitativeone，itisimmaterialwhetherthecapitalistreallyhastosharewithanother，ornot。Theemployerofcapital，evenwhenworkingwithhisowncapital，splitsintotwopersonalities——theownerofcapitalandtheemployerofcapital；withreferencetothecategoriesofprofitwhichityields，hiscapitalalsosplitsintocapital-property，capitaloutsidetheproductionprocess，andyieldinginterestofitself，andcapitalintheproductionprocesswhichyieldsaprofitofenterprisethroughitsfunction。
Interest，therefore，becomesfirmlyestablishedinawaythatitnolongerappearsasadivisionofgrossprofitofindifferencetoproduction，whichoccursoccasionallywhentheindustrialcapitalisthappenstooperatewithsomeoneelse’scapital。Hisprofitsplitsintointerestandprofitofenterpriseevenwhenheoperatesonhisowncapital。Amerelyquantitativedivisionthusturnsintoaqualitativeone。Itoccursregardlessofthefortuitouscircumstancewhethertheindustrialcapitalistis，orisnot，theownerofhiscapital。Itisnotonlyamatterofdifferentquotasofprofitassignedtodifferentpersons，buttwodifferentcategoriesofprofitwhicharedifferentlyrelatedtothecapital，hencerelatedtodifferentaspectsofthecapital。
Nowthatthisdivisionofgrossprofitintointerestandprofitofenterprisehasbecomeaqualitativeone，itiseasytodiscoverthereasonswhyitacquiresthischaracterofaqualitativedivisionforthetotalcapitalandtheentireclassofcapitalists。
Firstly，thisfollowsfromthesimpleempiricalcircumstancethatthemajorityofindustrialcapitalists，evenifindifferentnumericalproportions，workwiththeirownandwithborrowedcapital，andthatatdifferenttimestheproportionbetweenone’sownandborrowedcapitalchanges。
Secondly，thetransformationofaportionofthegrossprofitintotheformofinterestconvertsitsotherportionintoprofitofenterprise。
Thelatteris，indeed，buttheoppositeformassumedbytheexcessofgrossprofitoverinterestassoonasthisexistsasanindependentcategory。
Theentireanalysisoftheproblemhowgrossprofitisdifferentiatedintointerestandprofitofenterprise，resolvesitselfintotheinquiryofhowaportionofthegrossprofitbecomesuniversallyossifiedandindividualisedasinterest。Yethistoricallyinterest-bearingcapitalexistedasacompletedtraditionalform，andhenceinterestasacompletedsub-divisionofsurplus-valueproducedbycapital，longbeforethecapitalistmodeofproductionanditsattendantconceptionsofcapitalandprofit。Thusitisthattothepopularmindmoney-capital，orinterest-bearingcapital，isstillcapitalassuch，ascapitalparexcellence。Thusitis，ontheotherhand，thatuptothetimeofMassiethenotionprevailedthatitismoneyassuchwhichispaidininterest。Thefactthatloanedcapitalyieldsinterestwhetheractuallyemployedascapitalornot——evenwhenborrowedonlyforconsumption——lendsstrengthtotheideathatthisformofcapitalexistsindependently。Thebestproofoftheindependencewhichinterestpossessedduringtheearlyperiodsofthecapitalistmodeofproductioninreferencetoprofit，andwhichinterest-bearingcapitalpossessedinreferencetoindustrialcapital，isthatitwasdiscoveredbyMassie[[J。
Massie]AnEssayontheGoverningCausesoftheNaturalRateofInterest，London，1750——Ed。]andafterhimbyHume[D。Hume，”OnInterest。”
In:”EssaysandTreatisesonSeveralSubjects，”Vol。I，London，1764——Ed。]aslateasthemiddleofthe18thcentury，thatinterestisbutaportionofthegrossprofit，andthatsuchadiscoverywasatallnecessary。
Thirdly，whethertheindustrialcapitalistoperatesonhisownoronborrowedcapitaldoesnotalterthefactthattheclassofmoney-capitalistsconfrontshimasaspecialkindofcapitalists，money-capitalasanindependentkindofcapital，andinterestasanindependentformofsurplus-valuepeculiartothisspecificcapital。
Qualitativelyspeaking，interestissurplus-valueyieldedbythemereownershipofcapital；itisyieldedbycapitalassuch，eventhoughitsownerremainsoutsidethereproductionprocess。Henceitissurplus-valuerealisedbycapitaloutsideofitsprocess。
Quantitativelyspeaking，thatportionofprofitwhichformsinterestdoesnotseemtoberelatedtoindustrialorcommercialcapitalassuch，buttomoney-capital，andtherateofthisportionofsurplus-value，therateofinterest，reinforcesthisrelation。Because，inthefirstplace，therateofinterestisindependentlydetermineddespiteitsdependenceuponthegeneralrateofprofit，and，inthesecondplace，likethemarket-priceofcommodities，itappearsincontrasttotheintangiblerateofprofitasafixed，uniform，tangibleandalwaysgivenrelationforallitsvariations。
Ifallcapitalwereinthehandsoftheindustrialcapitaliststherewouldbenosuchthingasinterestandrateofinterest。Theindependentformassumedbythequantitativedivisionofgrossprofitcreatesthequalitativeone。Iftheindustrialcapitalistweretocomparehimselfwiththemoney-capitalist，itwouldbehisprofitofenterprisealone，theexcessofhisgrossprofitovertheaverageinterest——thelatterappearingtobeempiricallygivenbyvirtueoftherateofinterest——thatwoulddistinguishhimfromtheotherperson。If，ontheother。hand，hecompareshimselfwiththeindustrialcapitalistworkingwithhisown，insteadofborrowed，capital，thelatterdiffersfromhimonlyasamoney-capitalistinpocketingtheinterestinsteadofpayingittosomeoneelse。Theportionofgrossprofitdistinguishedfrominterestappearstohimineithercaseasprofitofenterprise，andinterestitselfasasurplus-valueyieldedbycapitalassuch，whichitwouldyieldevenifnotappliedproductively。
Thisiscorrectinthepracticalsensefortheindividualcapitalist。
Hehasthechoiceofmakinguseofhiscapitalbylendingitoutasinterest-bearingcapital，orofexpandingitsvalueonhisownbyusingitasproductivecapital，regardlessofwhetheritexistsasmoney-capitalfromtheveryfirst，orwhetheritstillhastobeconvertedintomoney-capital。Buttoapplyittothetotalcapitalofsociety，assomevulgareconomistsdo，andtogosofarastodefineitasthecauseofprofit，is，ofcourse，preposterous。Theideaofconvertingallthecapitalintomoney-capital，withouttherebeingpeoplewhobuyandputtousemeansofproduction，whichmakeupthetotal。capitaloutsideofarelativelysmallportionofitexistinginmoney，is，ofcourse，sheernonsense。Itwouldbestillmoreabsurdtopresumethatcapitalwouldyieldintereston。thebasisofcapitalistproductionwithoutperforminganyproductivefunction，i。e。，withoutcreatingsurplus-value，ofwhichinterestisjustapart；thatthecapitalistmodeofproductionwouldrunitscoursewithoutcapitalistproduction。Ifanuntowardlylargesectionofcapitalistsweretoconverttheircapitalintomoney-capital，theresultwouldbeafrightfuldepreciationofmoney-capitalandafrightfulfallintherateofinterest；manywouldatoncefacetheimpossibilityoflivingontheirinterest，andwouldhencebecompelledtoreconvertintoindustrialcapitalists。Butwerepeatthatitisafactfortheindividualcapitalist。Forthisreason，evenwhenoperatingwithhisowncapital，henecessarilyconsidersthepartofhisaverageprofitwhichequalstheaverageinterestasfruitofhiscapitalassuch，setapartfromtheprocessofproduction；andasdistinctfromthisportionsingledoutasinterest，heconsidersthesurplusofthegrossprofitasmereprofitofenterprise。
Fourthly，[Ablankinthemanuscript]。
Wehaveseen，therefore，thattheportionofprofitwhichthefunctioningcapitalisthastopaytotheownerofborrowedcapitalistransformedintoanindependentformforaportionoftheprofit，whichallcapitalassuch，whetherborrowedornot，yieldsunderthenameofinterest。Howlargethisportionisdependsontheaveragerateofinterest。Itsoriginisonlystillrevealedinthefactthatthefunctioningcapitalist，whenownerofhiscapital，doesnotcompete——atleastnotactively——indeterminingtheinterestrate。Thepurelyquantitativedivisionoftheprofitbetweentwopersonswhohavedifferentlegaltitlestoithasturnedintoaqualitativedivision，whichseemstospringfromtheverynatureofcapitalandprofit。
Because，aswehaveseen，assoonasaportionofprofituniversallyassumestheformofinterest，thedifferencebetweenaverageprofitandinterest，ortheportionofprofitoverandabovetheinterest，assumesaformoppositetointerest——theformofprofitofenterprise。Thesetwoforms，interestandprofitofenterprise，existonlyasopposites。Hence，theyarenotrelatedtosurplus-value，ofwhichtheyarebutpartsplacedunderdifferentcategories，headsornames，butrathertooneanother。Itisbecauseoneportionofprofitturnsintointerest，thattheotherappearsasprofitofenterprise。
Byprofitweherealwaysmeanaverageprofit，sincevariationsdonotconcernusinthisanalysis，betheyofindividualprofitsorofprofitsindifferentspheres——hencevariationscausedbythecompetitivestruggleandothercircumstancesaffectingthedistributionoftheaverageprofit，orsurplus-value。Thisappliesgenerallytothisentireinquiry。
Interestisthennetprofit，asRamsaycallsit，whichtheownershipofcapitalyieldsassuch，eithersimplytothelender，whoremainsoutsidethereproductionprocess，ortotheownerwhoemployshiscapitalproductively。
Butinthelatter’scase，too，capitalyieldsthisnetprofittohimnotinhiscapacityofproductivecapitalist，butofmoney-capitalist，oflenderofhisowncapitalasinterest-bearingcapitaltohimselfastoafunctioningcapitalist。Justastheconversionofmoney，andofvalueingeneral，intocapitalistheconstantresultofcapitalistproduction，soisitsexistenceascapitalitsconstantprecondition。Byitsabilitytobetransformedintomeansofproductionitcontinuallycommandsunpaidlabourandtherebytransformstheprocessesofproductionandcirculationofcommoditiesintotheproductionofsurplus-valueforitsowner。Interestis，therefore，theexpressionofthefactthatvalueingeneral-materialisedlabourinitsgeneralsocialform-valuewhichassumestheformofmeansofproductionintheactualprocessofproduction，confrontslivinglabour-powerasanindependentpower，andisameansofappropriatingunpaidlabour；andthatitissuchapowerbecauseitconfrontsthelabourerasthepropertyofanother。Butontheotherhand，thisantithesistowage-labourisobliteratedintheformofinterest，becauseinterest-bearingcapitalassuchhasnotwage-labour，butproductivecapitalforitsopposite。Thelendingcapitalistassuchfacesthecapitalistperforminghisactualfunctionintheprocessofreproduction，notthewage-worker，who，preciselyundercapitalistproduction，isexpropriatedofthemeansofproduction。Interest-bearingcapitaliscapitalaspropertyasdistinctfromcapitalasafunction。Butsolongascapitaldoesnotperformitsfunction，itdoesnotexploitlabourersanddoesnotcomeintooppositiontolabour。
Ontheotherhand，profitofenterpriseisnotrelatedasanoppositetowage-labour，butonlytointerest。
Firstly，assumingtheaverageprofittobegiven，therateoftheprofitofenterpriseisnotdeterminedbywages，butbytherateofinterest。Itishighorlowininverseproportiontoit[1]
Secondly，thefunctioningcapitalistderiveshisclaimtoprofitsofenterprise，hencetheprofitofenterpriseitself，notfromhisownershipofcapital，butfromthefunctionofcapital，asdistinctfromthedefiniteforminwhichitisonlyinertproperty。Thisstandsoutasanimmediatelyapparentcontrastwheneverheoperateswithborrowedcapital，andinterestandprofitofenterprisethereforegotodifferentpersons。Theprofitofenterprisespringsfromthefunctionofcapitalinthereproductionprocess，henceasaresultoftheoperations，theactsbywhichthefunctioningcapitalistpromotesthisfunctionofindustrialandcommercialcapital。
Buttorepresentfunctioningcapitalisnotasinecure，likerepresentinginterest-bearingcapital。Onthebasisofcapitalistproduction，thecapitalistdirectstheprocessofproductionandcirculation。Exploitingproductivelabourentailsexertion，whetherheexploitsithimselforhasitexploitedbysomeoneelseonhisbehalf。Therefore，hisprofitofenterpriseappearstohimasdistinctfrominterest，asindependentoftheownershipofcapital，butratherastheresultofhisfunctionasanon-proprietor——alabourer。
Henecessarilyconceivestheideaforthisreasonthathisprofitofenterprise，farfrombeingcounterposedtowage-labourandfarfrombeingtheunpaidlabourofothers，isitselfratherawageorwagesofsuperintendenceoflabour，higherthanacommonlabourer’s，1becausetheworkisfarmorecomplicated，and2becausehepaysthemtohimself。
Thefactthathisfunctionasacapitalistconsistsincreatingsurplus-value，i。e。，unpaidlabour，andcreatingitunderthemosteconomicalconditions，isentirelylostsightofinthecontrastthatinterestfallstotheshareofthecapitalistevenwhenhedoesnotperformthefunctionofacapitalistandismerelytheownerofcapital；andthat，ontheotherhand，profitofenterprisedoesfalltotheshareofthefunctioningcapitalistevenwhenheisnottheownerofthecapitalonwhichheoperates。Heforgets，duetotheantitheticalformofthetwopartsintowhichprofit，hencesurplus-value，isdivided，thatbotharemerelypartsofthesurplus-value，andthatthisdivisionaltersnothinginthenature，origin，andwayofexistenceofsurplus-value。
Intheprocessofreproductionthefunctioningcapitalistrepresentscapitalasthepropertyofanothervis-à；-visthewage-labourers，andthemoney-capitalist，representedbythefunctioningcapitalist，takesahandinexploitinglabour。Thefactthattheinvestingcapitalistcanperformhisfunctionofmakingthelabourersworkforhim，orofemployingmeansofproductionascapital，onlyasthepersonificationofthemeansofproductionvis-à；-visthelabourers，isforgotteninthecontradictionbetweenthefunctionofcapitalinthereproductionprocessandthemereownershipofcapitaloutsideofthereproductionprocess。
Infact，theformofinterestandprofitofenterpriseassumedbythetwopartsofprofit，i。e。，ofsurplus-value，expressesnorelationtolabour，becausethisrelationexistsonlybetweenlabourandprofit，orratherthesurplus-valueasasum，awhole，theunityofthesetwoparts。
Theproportioninwhichtheprofitisdivided，andthedifferentlegaltitlesbywhichthisdivisionissanctioned，arebasedontheassumptionthatprofitisalreadyinexistence。If，therefore，thecapitalististheownerofthecapitalonwhichheoperates，hepocketsthewholeprofit，orsurplus-value。Itisabsolutelyimmaterialtothelabourerwhetherthecapitalistdoesthis，orwhetherhehastopayapartofittoathirdpersonasitslegalproprietor。Thereasonsfordividingtheprofitamongtwokindsofcapitaliststhusturnimperceptiblyintothereasonsfortheexistenceoftheprofit，thesurplus-value，thatistobedivided，andwhichcapitalassuchderivesfromthereproductionprocessregardlessofanysubsequentdivision。Sinceinterestisopposedtoprofitofenterprise，andprofitofenterprisetointerest，andsincetheyarebothcounterposedtooneanother，butnottolabour，itfollowsthatprofitofenterpriseplusinterest，i。e。，profit，andfurthersurplus-value，arederived——fromwhat？Fromtheantitheticalformofitstwoparts！Butprofitisproducedbeforeitsdivisionisundertaken，andbeforetherecanbeanythoughtofit。
Interest-bearingcapitalremainsassuchonlysolongastheloanedmoneyisactuallyconvertedintocapitalandasurplusisproducedwithit，ofwhichinterestisapart。Butthisdoesnotruleoutthatdrawinginterest，regardlessoftheprocessofproduction，isitsorganicproperty。
Sodoeslabour-powerpreserveitspropertyofproducingvalueonlysolongasitisemployedandmaterialisedinthelabour-process；yetthisdoesnotargueagainstthefactthatitispotentially，asapower，anactivitywhichcreatesvalue，andthatassuchitdoesnotspringfromtheprocessofproduction，butratherantecedesit。Itisboughtassuchacapacityforcreatingvalue。Onemightalsobuyitwithoutsettingittoworkproductively；
forpurelypersonalends，forinstance，forpersonalservices，etc。Thesameappliestocapital。Itistheborrower’saffairwhetherheemploysitascapital，henceactuallysetsinmotionitsinherentpropertyofproducingsurplus-value。Whathepaysfor，isineithercasethepotentialsurplus-valueinherentlycontainedincapitalasacommodity。
Letusnowconsiderprofitofenterpriseingreaterdetail。
Sincethespecificsocialattributeofcapitalundercapitalistproduction——thatofbeingpropertycommandingthelabour-powerofanother-becomesfixed，sothatinterestappearsasapartofsurplus-valueproducedbycapitalinthisinterrelation，theotherpartofsurplus-value——profitofenterprise——mustnecessarilyappearascomingnotfromcapitalassuch，butfromtheprocessofproduction，separatedfromitsspecificsocialattribute，whosedistinctmodeofexistenceisalreadyexpressedbytheterminterestoncapital。Buttheprocessofproduction，separatedfromcapital，issimplyalabour-process。Therefore，theindustrialcapitalist，asdistinctfromtheownerofcapital，doesnotappearasoperatingcapital，butratherasafunctionaryirrespectiveofcapital，or，asasimpleagentofthelabour-processingeneral，asalabourer，andindeedasawage-labourer。
Interestassuchexpressespreciselytheexistenceoftheconditionsoflabourascapital，intheirsocialantithesistolabour，andintheirtransformationintopersonalpowervis-à；-visandoverlabour。Itrepresentstheownershipofcapitalasameansofappropriatingtheproductsofthelabourofothers。Butitrepresentsthischaracteristicofcapitalassomethingwhichbelongstoitoutsidetheproductionprocessandbynomeansistheresultofthespecificallycapitalistattributeofthisproductionprocessitself。Interestrepresentsthischaracteristicnotasdirectlycounterposedtolabour，butratherasunrelatedtolabour，andsimplyasarelationshipofonecapitalisttoanother。Hence，asanattributeoutsideofandirrelevanttotherelationofcapitaltolabour。
Ininterest，therefore，inthatspecificformofprofitinwhichtheantitheticalcharacterofcapitalassumesanindependentform，thisisdoneinsuchawaythattheantithesisiscompletelyobliteratedandabstracted。Interestisarelationshipbetweentwocapitalists，notbetweencapitalistandlabourer。
Ontheotherhand，thisformofinterestlendstheotherportionofprofitthequalitativeformofprofitofenterprise，andfurtherofwagesofsuperintendence。Thespecificfunctionswhichthecapitalistassuchhastoperform，andwhichfalltohimasdistinctfromandopposedtothelabourer，arepresentedasmerefunctionsoflabour。Hecreatessurplus-valuenotbecauseheworksasacapitalist，butbecausehealsoworks，regardlessofhiscapacityofcapitalist。Thisportionofsurplus-valueisthusnolongersurplus-value，butitsopposite，anequivalentforlabourperformed。Duetothealienatedcharacterofcapital，itsantithesistolabour，beingrelegatedtoaplaceoutsidetheactualprocessofexploitation，namelytotheinterest-bearingcapital，thisprocessofexploitationitselfappearsasasimplelabour-processinwhichthefunctioningcapitalistmerelyperformsadifferentkindoflabourthanthelabourer。Sothatthelabourofexploitingandtheexploitedlabourbothappearidenticalaslabour。Thelabourofexploitingisjustasmuchlabourasexploitedlabour。
Thesocialformofcapitalfallstointerest，butexpressedinaneutralandindifferentform。Theeconomicfunctionofcapitalfallstoprofitofenterprise，butabstractedfromthespecificcapitalistcharacterofthisfunction。
ThesamethingpassesthroughthemindofthecapitalistinthiscaseasinthecaseofthereasonsindicatedinPartIIofthisbookforcompensationintheequalisationtoaverageprofit。Thesereasonsforcompensationwhichenterthedistributionofsurplus-valueasdeterminantsaredistortedinacapitalist’smindtoappearasbasesoforiginandthesubjectivejustificationsofprofititself。
Theconceptionofprofitofenterpriseasthewagesofsupervisinglabour，arisingfromtheantithesisofprofitofenterprisetointerest，isfurtherstrengthenedbythefactthataportionofprofitmay，indeed，beseparated，andisseparatedinreality，aswages，orratherthereverse，thataportionofwagesappearsundercapitalistproductionasintegralpartofprofit。
Thisportion，asAdamSmithcorrectlydeduced，presentsitselfinpureform，independentlyandwhollyseparatedfromprofitasthesumofinterestandprofitofenterprise，ontheonehand，andontheother，fromthatportionofprofitwhichremains，afterinterestisdeducted，asprofitofenterpriseinthesalaryofmanagementofthosebranchesofbusinesswhosesize，etc。，permitsofasufficientdivisionoflabourtojustifyaspecialsalaryforamanager。
Thelabourofsupervisionandmanagementisnaturallyrequiredwhereverthedirectprocessofproductionassumestheformofacombinedsocialprocess，andnotoftheisolatedlabourofindependentproducers。[2]However，ithasadoublenature。
Ontheonehand，alllabourinwhichmanyindividualsco-operatenecessarilyrequiresacommandingwilltoco-ordinateandunifytheprocess，andfunctionswhichapplynottopartialoperationsbuttothetotalactivityoftheworkshop，muchasthatofanorchestraconductor。Thisisaproductivejob，whichmustbeperformedineverycombinedmodeofproduction。
Ontheotherhand——quiteapartfromanycommercialdepartment——thissupervisionworknecessarilyarisesinallmodesofproductionbasedontheantithesisbetweenthelabourer，asthedirectproducer，andtheownerofthemeansofproduction。Thegreaterthisantagonism，thegreatertheroleplayedbysupervision。Henceitreachesitspeakintheslavesystem。[3]Butitisindispensablealsointhecapitalistmodeofproduction，sincetheproductionprocessinitissimultaneouslyaprocessbywhichthecapitalistconsumeslabour-power。Justasindespoticstates，supervisionandall-roundinterferencebythegovernmentinvolvesboththeperformanceofcommonactivitiesarisingfromthenatureofallcommunities，andthespecificfunctionsarisingfromtheantithesisbetweenthegovernmentandthemassofthepeople。
Intheworksofancientwriters，whohadtheslavesystembeforethem，bothsidesoftheworkofsupervisionareasinseparablycombinedintheoryastheywereinpractice。Likewiseintheworksofmoderneconomists，whoregardthecapitalistmodeofproductionasabsolute。Ontheotherhand，asIshallpresentlyillustratewithanexample，theapologistsofthemodernslavesystemutilisetheworkofsupervisionquiteasmuchasajustificationofslavery，astheothereconomistsdotojustifythewagesystem。
ThevillicusinCato’stime:”Attheheadoftheestatewithslaveeconomyfamiliarusticastandsthemanagervillicus，derivedfromvilla，whoreceivesandexpends，buysandsells，takesinstructionsfromthemaster，inwhoseabsencehegivesordersandmetesoutpunishment……Themanagernaturallyhadmorefreedomofactionthantheotherslaves；theMagonianbooksadvisethathebepermittedtomarry，raisechildren，andhavehisownfunds，andCatorecommendsthathebemarriedtothefemalemanager；healoneprobablyhadtheprospectofwinninghisfreedomfromthemasterintheeventofgoodbehaviour。
Asfortherest，allformedacommonhousehold……Everyslave，includingthemanagerhimself，wassuppliedhisnecessitiesathismaster’sexpenseatdefiniteintervalsandfixedrates，andhadtogetalongonthem……
Thequantityvariedinaccordancewithlabour，whichiswhythemanager，forexample，whoseworkwaslighterthantheotherslaves’，receivedasmallerrationthanthey。”Mommsen，Rö；mischeGeschichte，2nded。，1856，1，pp。809-10。
Aristotle:’”Ogardespothzoucenktasqaitouzdoulouz，allentwcrhqaiuoulouz。””Forthemaster”——thecapitalist——”proveshimselfsuchnotbyobtainingslaves”——ownershipofcapitalwhichgiveshimpowertobuylabour-power——”butinemployingslaves”——
usinglabourers，nowadayswage-labourers，intheproductionprocess。”Estideauthhepisthmhoudenmegaecousaoudesemnon。”
”Butthereisnothinggreatorsublimeaboutthisscience。””agartondoulonepistasqaideipoieineceinondeitautaepistasqaiepitattein。””Butwhatevertheslavemustbeabletoperform，themastermustbeabletoorder。””Dioosoizexousiamhautouzcacopaqeinepistopozlambaneitau-thnthntimhn，autoidepoliteuontaihfilosofosin。”
”Wheneverthemastersarenotcompelledtoplaguethemselveswithsupervision，themanagerassumesthishonour，whilethemastersattendtoaffairsofstateorstudyphilosophy。”Aristotle，Derepublica，Bekkeredition，BookI，7。
Aristotlesaysinjustsomanywordsthatsupremacyinthepoliticalandeconomicfieldsimposesthefunctionsofgovernmentupontherulingpowers，andhencethattheymust，intheeconomicfield，knowtheartofconsuminglabour-power。Andheaddsthatthissupervisoryworkisnotamatterofgreatmomentandthatforthisreasonthemasterleavesthe”honour”
ofthisdrudgerytoanoverseerassoonashecanaffordit。
Theworkofmanagementandsupervision——sofarasitisnotaspecialfunctiondeterminedbythenatureofallcombinedsociallabour，butratherbytheantithesisbetweentheownerofmeansofproductionandtheownerofmerelabour-power，regardlessofwhetherthislabour-powerispurchasedbybuyingthelabourerhimself，asitisundertheslavesystem，orwhetherthelabourerhimselfsellshislabour-power，sothattheproductionprocessalsoappearsasaprocessbywhichcapitalconsumeshislabour——thisfunctionarisingoutoftheservitudeofthedirectproducershasalltoooftenbeenquotedtojustifythisrelationship。Andexploitation，theappropriationoftheunpaidlabourofothers，hasquiteasoftenbeenrepresentedastherewardjustlyduetotheownerofcapitalforhiswork；butneverbetterthanbyachampionofslaveryintheUnitedStates，alawyernamedO’Connor，atameetingheldinNewYorkonDecember19，1859，underthesloganof”JusticefortheSouth。””Now，gentlemen，”hesaidamidthunderousapplause，”tothatconditionofbondagetheNegroisassignedbyNature……Hehasstrength，andhasthepowertolabour；buttheNaturewhichcreatedthepowerdeniedtohimeithertheintellecttogovern，orwillingnesstowork。”Applause。”Bothweredeniedtohim。AndthatNaturewhichdeprivedhimofthewilltolabour，gavehimamastertocoercethatwill，andtomakehimauseful……
servantintheclimeinwhichhewascapableoflivingusefulforhimselfandforthemasterwhogovernshim……ImaintainthatitisnotinjusticetoleavetheNegrointheconditioninwhichNatureplacedhim，togivehimamastertogovernhim……norisitdeprivinghimofanyofhisrightstocompelhimtolabourinreturn，andaffordtothatmasterjustcompensationforthelabourandtalentemployedingoverninghimandrenderinghimusefultohimselfandtothesociety。”[NewYorkDailyTribune，November20，1859，pp。7-8——Ed]
Now，thewage-labourer，liketheslave，musthaveamasterwhoputshimtoworkandrulesoverhim。Andassumingtheexistenceofthisrelationshipoflordshipandservitude，itisquitepropertocompelthewage-labourertoproducehisownwagesandalsothewagesofsupervision，ascompensationforthelabourofrulingandsupervisinghim，or”justcompensationforthelabourandtalentemployedingoverninghimandrenderinghimusefultohimselfandtothesociety。”
Thelabourofsupervisionandmanagement，arisingasitdoesoutofanantithesis，outofthesupremacyofcapitaloverlabour，andbeingthereforecommontoallmodesofproductionbasedonclasscontradictionslikethecapitalistmode，isdirectlyandinseparablyconnected，alsounderthecapitalistsystem，withproductivefunctionswhichallcombinedsociallabourassignstoindividualsastheirspecialtasks。Thewagesofanepitropos，orré；gisseur，ashewascalledinfeudalFrance，areentirelydivorcedfromprofitandassumetheformofwagesforskilledlabourwheneverthebusinessisoperatedonasufficientlylargescaletowarrantpayingforsuchamanager，although，forallthat，ourindustrialcapitalistsarefarfrom”attendingtoaffairsofstateorstudyingphilosophy。”
IthasalreadybeenremarkedbyMr。Ure[4]thatitisnottheindustrialcapitalists，buttheindustrialmanagerswhoare”thesoulofourindustrialsystem。”Whateverconcernsthecommercialpartofanestablishmentwehavealreadysaidallthatisnecessaryintheprecedingpart。
Thecapitalistmodeofproductionhasbroughtmatterstoapointwheretheworkofsupervision，entirelydivorcedfromtheownershipofcapital，isalwaysreadilyobtainable。Ithas，therefore，cometobeuselessforthecapitalisttoperformithimself。Anorchestraconductorneednotowntheinstrumentsofhisorchestra，norisitwithinthescopeofhisdutiesasconductortohaveanythingtodowiththe”wages”oftheothermusicians。
Co-operativefactoriesfurnishproofthatthecapitalisthasbecomenolessredundantasafunctionaryinproductionashehimself，lookingdownfromhishighperch，findsthebiglandownerredundant。Inasmuchasthecapitalist’sworkdoesnotoriginateinthepurelycapitalisticprocessofproduction，andhencedoesnotceaseonitsownwhencapitalceases；
inasmuchasitdoesnotconfineitselfsolelytothefunctionofexploitingthelabourofothers；inasmuchasitthereforeoriginatesfromthesocialformofthelabour-process，fromcombinationandco-operationofmanyinpursuanceofacommonresult，itisjustasindependentofcapitalasthatformitselfassoonasithasburstitscapitalisticshell。Tosaythatthislabourisnecessaryascapitalisticlabour，orasafunctionofthecapitalist，onlymeansthatthevulgusisunabletoconceivetheformsdevelopedinthelapofcapitalistproduction，separateandfreefromtheirantitheticalcapitalistcharacter。Theindustrialcapitalistisaworker，comparedtothemoney-capitalist，butaworkerinthesenseofcapitalist，i。e。，anexploiterofthelabourofothers。Thewagewhichheclaimsandpocketsforthislabourisexactlyequaltotheappropriatedquantityofanother’slabouranddependsdirectlyupontherateofexploitationofthislabour，insofarasheundertakestheeffortrequiredforexploitation；
itdoesnot，however，dependonthedegreeofexertionthatsuchexploitationdemands，andwhichhecanshifttoamanagerformoderatepay。Aftereverycrisisthereareenoughex-manufacturersintheEnglishfactorydistrictswhowillsupervise，forlowwages，whatworeformerlytheirownfactoriesinthecapacityofmanagersofthenewowners，whoarefrequentlytheircreditors。[5]
Thewagesofmanagementbothforthecommercialandindustrialmanagerarecompletelyisolatedfromtheprofitsofenterpriseintheco-operativefactoriesoflabourers，aswellasincapitaliststockcompanies。Theseparationofwagesofmanagementfromprofitsofenterprise，purelyaccidentalatothertimes，ishereconstant。Inaco-operativefactorytheantagonisticnatureofthelabourofsupervisiondisappears，becausethemanagerispaidbythelabourersinsteadofrepresentingcapitalcounterposedtothem。
Stockcompaniesingeneral——developedwiththecreditsystem——haveanincreasingtendencytoseparatethisworkofmanagementasafunctionfromtheownershipofcapital，beitself-ownedorborrowed。Justasthedevelopmentofbourgeoissocietywitnessedaseparationofthefunctionsofjudgesandadministratorsfromland-ownership，whoseattributestheywereinfeudaltimes。Butsince，ontheonehand，themereownerofcapital，themoney-capitalist，hastofacethefunctioningcapitalist，whilemoney-capitalitselfassumesasocialcharacterwiththeadvanceofcredit，beingconcentratedinbanksandloanedoutbytheminsteadofitsoriginalowners，andsince，ontheotherhand，themeremanagerwhohasnotitlewhatevertothecapital，whetherthroughborrowingitorotherwise，performsalltherealfunctionspertainingtothefunctioningcapitalistassuch，onlythefunctionaryremainsandthecapitalistdisappearsassuperfluousfromtheproductionprocess。
Itismanifestfromthepublicaccountsoftheco-operativefactoriesinEngland[6]that——afterdeductingthemanager’swages，whichformapartoftheinvestedvariablecapitalmuchthesameaswagesofotherlabourers——theprofitwashigherthantheaverageprofit，althoughattimestheypaidamuchhigherinterestthandidprivatemanufacturers。Thesourceofgreaterprofitsinallthesecaseswasgreatereconomyintheapplicationofconstantcapital。
Whatinterestsusinthis，however，isthefactthatheretheaverageprofit=interestprofitofenterprisepresentsitselfactuallyandpalpablyasamagnitudewhollyindependentofthewagesofmanagement。Sincetheprofitwashigherherethanaverageprofit，theprofitofenterprisewasalsohigherthanusual。
Thesamesituationisobservedinrelationtosomecapitaliststockcompanies，suchasjoint-stockbanks。TheLondonandWestminsterBankpaidanannualdividendof30%in1863，whiletheUnionBankofLondonandotherspaid15%。Asidefromthedirectors’salarytheinterestpaidfordepositsisheredeductedfromgrossprofit。Thehighprofitistobeexplainedherebythemoderateproportionofpaid-incapitaltodeposits。Forinstance，inthecaseoftheLondonandWestminsterBank，in1863:paid-incapital，£；1，000，000；deposits，£；14，540，275。AsfortheUnionBankofLondon，in1863:paid-incapital，£；600，000；deposits，£；12，384，173。
Profitofenterpriseandwagesofsupervision，ormanagement，wereconfusedoriginallyduototheantagonisticformassumedinrespecttointerestbythesurplusofprofit。Thiswasfurtherpromotedbytheapologeticaimofrepresentingprofitnotasasurplus-valuederivedfromunpaidlabour，butasthecapitalist’swagesforworkperformedbyhim。Thiswasmetonthepartofsocialistsbyademandtoreduceprofitactuallytowhatitpretendedtobetheoretically，namely，merewagesofsupervision。Andthisdemandwasallthemoreobnoxioustotheoreticalembellishment，themorethesewagesofsupervision，likeanyotherwage，foundtheirdefinitelevelanddefinitemarket-price，ontheonehand，withthedevelopmentofanumerousclassofindustrialandcommercialmanagers，[7]andthemoretheyfell，ontheother，likeallwagesforskilledlabour，withthegeneraldevelopmentwhichreducesthecostofproductionofspeciallytrainedlabour-power。[8]Withthedevelopmentofco-operationonthepartofthelabourers，andofstockenterprisesonthepartofthebourgeoisie，eventhelastpretextfortheconfusionofprofitofenterpriseandwagesofmanagementwasremoved，andprofitappearedalsoinpracticeasitundeniablyappearedintheory，asmeresurplus-value，avalueforwhichnoequivalentwaspaid，asrealisedunpaidlabour。Itwasthenseenthatthefunctioningcapitalistreallyexploitslabour，andthatthefruitofhisexploitation，whenworkingwithborrowedcapital，wasdividedintointerestandprofitofenterprise，asurplusofprofitoverinterest。
Onthebasisofcapitalistproductionanewswindledevelopsinstockenterpriseswithrespecttowagesofmanagement，inthatboardsofnumerousmanagersordirectorsareplacedabovetheactualdirector，forwhomsupervisionandmanagementserveonlyasapretexttoplunderthestockholdersandamasswealth。VerycuriousdetailsconcerningthisaretobefoundinTheCityorthePhysiologyofLondonBusiness；withSketchesonChange，andtheCoffeeHouses，London，1845。”Whatbankersandmerchantsgainbythedirectionofeightorninedifferentcompanies，maybeseenfromthefollowingillustration:TheprivatebalancesheetofMr。TimothyAbrahamCurtis，presentedtotheCourtofBankruptcywhenthatgentlemanfailed，exhibitedasampleoftheincomenettedfromdirectorship……between£；800
and£；900ayear。Mr。CurtishavingbeenassociatedwiththeCourtsoftheBankofEngland，andtheEastIndiaHouse，itwasconsideredquiteaplumforapubliccompanytoacquirehisservicesintheboardroom”pp。
81，82。Theremunerationofthedirectorsofsuchcompaniesforeachweeklymeetingisatleastoneguinea。TheproceedingsoftheCourtofBankruptcyshowthatthesewagesofsupervisionwere，asarule，inverselyproportionaltotheactualsupervisionperformedbythesenominaldirectors。
FOOTNOTES[1]”Theprofitsofenterprisedependuponthenetprofitsofcapital，notthelatterupontheformer。”Ramsay，EssayontheDistributionofWealth，p。214。ForRamsaynetprofitsalwaysmeaninterest。
[2]”Superintendenceishere”inthecaseofthefarmowner”completelydispensedwith。”J。E。Cairnes，TheSlavePower，London，1862，p。48。
[3]”Ifthenatureoftheworkrequiresthattheworkmen”viz。，theslaves”shouldbedispersedoveranextendedarea，thenumberofoverseers，and，therefore，thecostofthelabourwhichrequiresthissupervision，willbeproportionatelyincreased。”Cairnes，1。c。，p。44。
[4]A。Ure，PhilosophyofManufactures，Frenchtranslation，1836，I，p。67，wherethisPindarofthemanufacturersatthesametimetestifiesthatmostmanufacturershavenottheslightestunderstandingofthemechanismwhichtheysetinmotion。
[5]Inacaseknowntome，followingthecrisisof1868，abankruptmanufacturerbecamethepaidwage-labourerofhisownformerlabourers。Thefactorywasoperatedafterthebankruptcyofitsownerbyalabourers’co-operative，anditsformerownerwasemployedasmanager——F。E。
[6]Theaccountsquotedheregonofurtherthan1864，sincetheabovewaswrittenin1865——F。E。
[7]”Mastersarelabourersaswellastheirjourneymen。Inthischaractertheirinterestispreciselythesameasthatoftheirmen。Buttheyarealsoeithercapitalists，ortheagentsofthecapitalists，andinthisrespecttheirinterestisdecidedlyopposedtotheinterestsoftheworkmen。”p。
27。”Thewidespreadofeducationamongthejourneymenmechanicsofthiscountrydiminishesdailythevalueofthelabourandskillofalmostallmastersandemployersbyincreasingthenumberofpersonswhopossesstheirpeculiarknowledge”p。30，Hodgskin，LabourDefendedAgainsttheClaimsofCapital，etc。，London，1825。
[8]”Thegeneralrelaxationofconventionalbarriers，theincreasedfacilitiesofeducationtendtobringdownthewagesofskilledlabourinsteadofraisingthoseoftheunskilled。”J。St。Mill，PrinciplesofPoliticalEconomy，2nded。，London，1849，I，p。479。
Capital，Vol。3，Chapter24KarlMarxCAPITALVol。III
THEPROCESSOF
CAPITALISTPRODUCTIONASAWHOLEPartV
DIVISIONOFPROFITINTOINTERESTANDPROFIT
OFENTERPRISE。
INTEREST-BEARINGCAPITALCHAPTER24
ExternalizationoftheRelationsofCapitalintheFormofInterest-BearingCapitalTherelationsofcapitalassumetheirmostexternalisedandmostfetish-likeformininterest-bearingcapital。WehavehereM——M’，moneycreatingmoremoney，self-expandingvalue，withouttheprocessthateffectuatesthesetwoextremes。Inmerchant’scapital，M——C——M’，thereisatleastthegeneralformofthecapitalisticmovement，althoughitconfinesitselfsolelytothesphereofcirculation，sothatprofitappearsmerelyasprofitderivedfromalienation；butitisatleastseentobetheproductofasocialrelation，nottheproductofamerething。Theformofmerchant’scapitalatleastpresentsaprocess，aunityofopposingphases，amovementthatbreaksupintotwooppositeactions——thepurchaseandthesaleofcommodities。ThisisobliteratedinM——M’，theformofinterest-bearingcapital。Forinstance，if£；1，000areloanedoutbyacapitalistatarateofinterestof5%，thevalueof£；1，000
asacapitalforoneyear=CCi’，whereCisthecapitalandi’therateofinterest。Hence，5%=5/100=1/20，and1，0001，000x1/20=£；1，050。
Thevalueof£；1，000ascapital=£；1，050，i。e。，capitalisnotasimplemagnitude。Itisarelationshipofmagnitudes，arelationshipoftheprincipalsumasagivenvaluetoitselfasaself-expandingvalue，asaprincipalsumwhichhasproducedasurplus-value。Andcapitalassuch，aswehaveseen，assumesthisformofadirectlyself-expandingvalueforallactivecapitalists，whethertheyoperateontheirownorborrowedcapital。
M——M’。Wehaveheretheoriginalstarting-pointofcapital，moneyintheformulaM——C——M’reducedtoitstwoextremesM——M’，inwhichM’=MDM，moneycreatingmoremoney。Itistheprimaryandgeneralformulaofcapitalreducedtoameaninglesscondensation。Itisreadycapital，aunityoftheprocessofproductionandtheprocessofcirculation，andhencecapitalyieldingadefinitesurplus-valueinaparticularperiodoftime。Intheformofinterest-bearingcapitalthisappearsdirectly，unassistedbytheprocessesofproductionandcirculation。Capitalappearsasamysteriousandself-creatingsourceofinterest——thesourceofitsownincrease。Thethingmoney，commodity，valueisnowcapitalevenasamerething，andcapitalappearsasamerething。Theresultoftheentireprocessofreproductionappearsasapropertyinherentinthethingitself。Itdependsontheownerofthemoney，i。e。，ofthecommodityinitscontinuallyexchangeableform，whetherhewantstospenditasmoneyorloanitoutascapital。
Ininterest-bearingcapital，therefore，thisautomaticfetish，self-expandingvalue，moneygeneratingmoney，arebroughtoutintheirpurestateandinthisformitnolongerbearsthebirth-marksofitsorigin，Thesocialrelationisconsummatedintherelationofathing，ofmoney，toitself。
Insteadoftheactualtransformationofmoneyintocapital，weseehereonlyformwithoutcontent。Asinthecaseoflabour-power，theuse-valueofmoneyhereisitscapacityofcreatingvalue——avaluegreaterthanitcontains。Moneyasmoneyispotentiallyself-expandingvalueandisloanedoutassuch——whichistheformofsaleforthissingularcommodity。
Itbecomesapropertyofmoneytogeneratevalueandyieldinterest，muchasitisanattributeofpear-treestobearpears。Andthemoney-lendersellshismoneyasjustsuchaninterest-bearingthing。Butthatisnotall。Theactuallyfunctioningcapital，aswehaveseen，presentsitselfinsuchalight，thatitseemstoyieldinterestnotasafunctioningcapital，butascapitalinitself，asmoney-capital。
This，too，becomesdistorted。Whileinterestisonlyaportionoftheprofit，i。e。，ofthesurplus-value，whichthefunctioningcapitalistsqueezesoutofthelabourer，itappearsnow，onthecontrary，asthoughinterestwerethetypicalproductofcapital，theprimarymatter，andprofit，intheshapeofprofitofenterprise，wereamereaccessoryandby-productoftheprocessofreproduction。Thuswegetthefetishformofcapitalandtheconceptionoffetishcapital。InM——M’wehavethemeaninglessformofcapital，theperversionandobjectificationofproductionrelationsintheirhighestdegree，theinterest-bearingform，thesimpleformofcapital，inwhichitantecedesitsownprocessofreproduction。Itisthecapacityofmoney，orofacommodity，toexpanditsownvalueindependentlyofreproduction——whichisamystificationofcapitalinitsmostflagrantform。
Forvulgarpoliticaleconomy，whichseekstorepresentcapitalasanindependentsourceofvalue，ofvaluecreation，thisformisnaturallyaveritablefind，aforminwhichthesourceofprofitisnolongerdiscernible，andinwhichtheresultofthecapitalistprocessofproduction——divorcedfromtheprocess——acquiresanindependentexistence。
Itisnotuntilcapitalismoney-capitalthatitbecomesacommodity，whosecapacityforself-expansionhasadefinitepricequotedeverytimeineveryprevailingrateofinterest。
Asinterest-bearingcapital，andparticularlyinitsdirectformofinterest-bearingmoney-capitaltheotherformsofinterest-bearingcapital，whichdonotconcernushere，arederivativesofthisformandpresupposeitsexistence，capitalassumesitspurefetishform，M——M’beingthesubject，thesaleablething。Firstly，throughitscontinualexistenceasmoney，aform，inwhichallitsspecificattributesareobliteratedanditsrealelementsinvisible。Formoneyispreciselythatforminwhichthedistinctivefeaturesofcommoditiesasuse-valuesareobscured，andhencealsothedistinctivefeaturesoftheindustrialcapitalswhichconsistofthesecommoditiesandconditionsoftheirproduction。Itisthatform，inwhichvalue-inthiscasecapital-existsasanindependentexchange-value。
Inthereproductionprocessofcapital，themoney-formisbuttransient-amerepointoftransit。Butinthemoney-marketcapitalalwaysexistsinthisform。Secondly，thesurplus-valueproducedbyit，hereagainintheformofmoney，appearsasaninherentpartofit。Asthegrowingprocessistotrees，sogeneratingmoneytocoz
appearsinnateincapitalinitsformofmoney-capital。
Ininterest-bearingcapitalthemovementofcapitaliscontracted。Theinterveningprocessisomitted。Inthisway，acapital=1，000isfixedasathing，whichinitself=1，400，andwhichistransformedafteracertainperiodinto1，100justaswinestoredinacellarimprovesitsuse-valueafteracertainperiod。Capitalisnowathing，butasathingitiscapital。
Moneyisnowpregnant。[Goethe，Faust，PartI，Scene5——Ed]Assoonasitisloanedout，orinvestedinthereproductionprocessinasmuchasityieldsinteresttothefunctioningcapitalistasitsowner，separatefromprofitofenterprise，interestonitgrows，nomatterwhetheritisawakeorasleep，isathomeorabroad，bydayorbynight。Thusinterest-bearingmoney-capitalandallcapitalismoney-capitalintermsofitsvalue，orisconsideredastheexpressionofmoney-capitalfulfilsthemostferventwishofthehoarder。
Itisthisingrownexistenceofinterestinmoney-capitalasinathingthisishowtheproductionofsurplus-valuethroughcapitalappearshere，whichoccupiesLuther’sattentionsothoroughlyinhisnaiveonslaughtagainstusury。Afterdemonstratingthatinterestmaybedemandedifthefailuretorepayaloanonadefinitedatetoalenderwhohimselfrequiredittomakesomepayment，causedalosstohim，orresultedinhismissinganopportunitytomakeaprofitonabargain，forinstance，inbuyingagarden，Luthercontinues:”NowthatIhaveloanedyouthem100gulden，youcausemeadoublelossduetomynotbeingabletopayontheonehandnorbuyontheother，sothatIhavetoloseonbothsides，andthisiscalledduplexinteresse，damniemergentisetlucricessantis……OnhearingthatJohnsustainedlossesonhisloanof100guldenanddemandsjustdamages，theyrushinandchargedoubleonevery100gulden，suchdoublereimbursement，namely，forthelossduetonon-paymentandtoinabilitytomakeaprofitonabargain，justasthoughthese100guldenhadthedoublelossgrownontothem，sothatwhenevertheyhave100gulden，theyloanthemoutandchargefortwolosses，whichtheyhavenotatallsustained……Thereforeyouareausurer，whotakesdamagesoutofhisneighbour’smoneyforanimaginarylossthatyoudidnotsustainatall，andwhichyoucanneitherprovenorcalculate。Thissortoflossiscalledbythejuristsnonverum，sedphantasticuminteresse。Itisalosswhicheachconjuresupforhimself……Itwillnotdotosay，therefore，thattherecouldhavebeenlossesbecauseIcouldnothavebeenabletopayorbuy。Elseitwouldmeanexcontingentenecessarium，whichismakingsomethingoutofathingthatisnot，andathingthatisuncertainintoathingthatisabsolutelysure。Wouldnotsuchusurydevourtheworldinafewyears？……Ifanunhappyaccidentbefallshimagainsthiswill，andhemustrecoverfromit，hemaydemanddamagesforit，butitisdifferentintradeandjustthereverse。Theretheyschemetoprofitattheexpenseoftheirneedyneighbours，howtoamasswealthandgetrich，tobelazyandidleandliveinluxuryonthelabourofothers，withoutanycare，danger，andloss。Tositbythestoveandletmy100guldengatherwealthformeinthecountryandyetkeeptheminmypocket，becausetheyareonlyloaned，withoutanydangerorrisk-myfriend，whowouldnotlikethat？”
MartinLuther，AndiePfarherrnwiderdenWucherzupredigen，etc。，Wittenberg，1540。
Theconceptionofcapitalasaself-reproducingandself-expandingvalue，lastingandgrowingeternallybyvirtueofitsinnateproperties——hencebyvirtueofthehiddenqualityofscholasticists——hasledtothefabulousfanciesofDr。Price，whichoutdobyfarthefantasiesofthealchemists；
fancies，inwhichPittbelievedinallearnest，andwhichheusedaspillarsofhisfinancialadministrationinhislawsconcerningthesinkingfund。”Moneybearingcompoundinterestincreasesatfirstslowly。But，therateofincreasebeingcontinuallyaccelerated，itbecomesinsometimesorapid，astomockallthepowersoftheimagination。Onepenny，putoutatourSaviour’sbirthto5percentcompoundinterest，would，beforethistime，haveincreasedtoagreatersum，thanwouldbecontainedinahundredandfiftymillionsofearths，allsolidgold。Butifputouttosimpleinterest，itwould，inthesametime，haveamountedtonomorethansevenshillingsandfourpencehalf-penny。Ourgovernmenthashithertochosentoimprovemoneyinthelast，ratherthanthefirstoftheseways。”[1]
HisfancyfliesstillhigherinhisObservationsonReversionaryPayments，etc。，London，1772。Thereweread:”Ashillingputoutto6%compoundinterestatourSavioursbirth”presumablyintheTempleofJerusalem”would……haveincreasedtoagreatersumthanthewholesolarsystemcouldhold，supposingitasphereequalindiametertothediameterofSaturn’sorbit。””Astateneedneverthereforebeunderanydifficulties；
forwiththesmallestsavingsitmayinaslittletimeasitsinterestcanrequirepayoffthelargestdebts”pp。XIII，XIV。WhataprettytheoreticalintroductiontothenationaldebtofEngland！