Abstract

This contribution summarises the critical notes on the theory of interest provided by Marx in Volume III of his Theories of Surplus Value and, subsequently, in Volume III of Capital. The discussion in Theories of Surplus Value established industrial capitalist finance as distinct from the usury of mercantile capitalism, with industrial finance organised around interest-bearing capital. Volume III of Capital reveals that Marx also absorbed from Mill and Tooke some criticism of the classical, Ricardian, theory of interest, according to which the rate of interest is determined by the rate of profit. This led him to conclude that the average or long-term rate of interest is more important for modern capitalism than any current money rate of interest, and that monetary innovation leads to growing concentration of money capital, producing downward pressure on the rate of interest. Finally, Marx emphasised the two aspects of the capitalist as owner of money and as a ‘functioning’ capitalist producing goods. This suggests a purely monetary circulation of interest among capitalists, marking the final emancipation of interest from real factors such as the rate of profit.