Money-Capital

Capital in the form of money. It is a functional form of capital which is essential in the first stage of the circuit of industrial capital, i.e., the stage of purchase. Its function is to prepare for the production of surplus-value by purchasing means of production and labor-power for transformation into productive capital.

Money-capital exists in the form of money, which, on the surface, does not differ from money in general, but the means of production and labor-power purchased by money-capital can engender surplus-value. The circuit from the existence of capital in the form of money, through the stage of purchase, the productive stage and the stage of sale, back to the money-form (expanded money-form) is called the circuit of money capital and is expressed by the formula: M–C...P...C’–M’.

In the slave and feudal societies, money-capital had existed in the form of merchant’s capital and usurer’s capital. It was in the capitalist society that money-capital is transformed into a form of industrial capital, performing the function of purchasing the means of production and labor-power for the production of surplus-value in the circuit of industrial capital. In addition to the existence as a functional form of industrial capital, there exists an independent form of money-capital, i.e., loan capital. But it is subordinate to industrial capital and participates in the division of surplus-value.