The producers news., 1927-03-04
ELEMENTS OF POLITICAL EDUCA-
TON
Continued from last Week.
WHAT is LENDING CAPITAL?

Lending caplIal Is thaC capital (commodldes'
but most often money! the profits from which are
obtained in the form of interest which the capital
ist collects for the commodities or money lent by
him.
AS long capital appears only in the form OF
trading or lending capital so long does it fail to
play a predominating role in social economy and
the whole social economy is not vet capitalistic.
And only when capitalistic relations embrace the
sphere of production when capital comes forward
in the role of productive capital, do we pass over
into the epoch of the capitalist system of econo-
my.
25. WHAT is INDUSTRIAL CAPITAL?
Industrial capital is capital invested in produc
ton and expended in the purchase of a commodi-
ty-abor power-with the aim of extracting sur
plus value by applying the labor power to produc-
ton.
26 WHAT is FINANCE CAPITAL?
Finance capital Cor credit capita) is lending
capital which has developed to its highest form
in capitalist society. The differences between
present day finance capital and the earlier lend
ing capital are
1. The chief borrowers of this capital the
industrial capitalists and not the small producers
2. Trading in somebody eses money collected
through the banks g. Management of industry
on the basis of practical financial and credit re-
lationships.
27. WHAT ARE THE COMPONENT PARTS
OF CAPITAL?
The capital of every enterprise is divisible into
two parts: constant capital and variable capital
Under constant capital we understand that por
tion which is used for the acquisition of mean.
of production, materials fuel and on tn,
construction of buildings-in short constant capi
tai includes all the expenses of production excep
the expenses of hiring labor. This portion of cap
ital does not change its quantity in the process
production and is therefore called constant capi
| tai
Under variable capital we understand that por
tion which is used for the acquisition of labo
power for the payment of labor This portion 0
capital does change its quantity in the process 0
production 1t gives the capitalist a surplus por
tion (value); therefore it is called variable capi
tai Marx called this part also the active part
since it produces surplus value
! %. WHAT is SURPLUS VALUE?
That part Of the value which the capitalist oh
tains as result of prolonging the working da
beyond the necessary working time (necessar
for the replacement of the value of the labo
power) is called surplus value
20. HOW is SURPLUS VALUE FORMED?
Surplus value is formed by the use of labc
power. How does this take place?
Imagine a capitalist with a given sum (
money. With it he erects a factory, buys m;
chimes, materials, fuel auxiliary material
and wants to put the factory in operation. Bl
it does not start. There is stil something lacl
ing. 1t is clear that labor power is lacking Tn
is also bought. Now the factory starts WI;
happens? The factory (the building) on viii,
has been expended say, 1-1O of the capital, do
not increase this expended sum during productio
The raw material does not grow in the process
production but only changes its form The flu
does not grow but is used up, giving motion
light The worker if he would work Just lor
enough to cover the expenses of his maintenan
also gives nothing. The total result would be Z
empty affair for the capitalist But actual
things different. The cost of the buildin
raw materials, and fuel are included in the co
Of the commodity produced. The wages are al
included in the cost of the commodity But Il
; capitalist makes the worker work a greater nur
Der of hours than are necessary to cover h
wages. The worker works these extra hours ge
ting nothing from the capitalist, and produces du
ing these hours given quantity Of commoditie
That portion of the wages which the capital
labor of the worker, but which he keeps for hil
self, forms the surplus value. Thus surplus val
Is obtained from the extra labor of the worker a.
is created in the process of production <
@Fere it is necessary to note however that pl
perly speaking, when buying labor power. the ca
italist may pay for it in full l. pay the full mari
cost of the labor and nevertheless get surpl
value. This clever capitalistic mechanism was d
covered by Marx and in this was his greatest mel
d He showed quite clearly that there is differer
between the value of labor which the capital
gets and the value of the labor power which
worker gets and which corresponds to the price
the products necessary for his maintenance.
d Labor power is not only a result of the labor
pended on its production i. e., the production
the food, etc, for the worker and his family,
also source of labor These quantities e
quantity of labor expended the production of
labor power and the quantity of labor which the
d Dor power gives, generally do not coincide Th
" Tor example, hours day may be used for
production of labor power, but the labor power it's
may be active for u hours day In this way
II capitalists having paid in full for the labor DOW
h nevertheless have at their disposal hours of ,
e paid labor which is what gives them surplus val
; 80. WHAT is THE RATE OF SURPLl
VALUE?
The relationship between the paid and the
paid labor of the workers, or in other words,
{ relation between the wages and the surplus va
Is called the rate of surplus value This relate
ship shows the degree of exploitation of