Abstract: The Logical Emergence of Banking Capital from the Circuit of Industrial Capital: A Modern Unoist Approach

 

The circuit of industrial capital consists of two disparate process —production and circulation — , which leads to the emergence of different forms of capitals. Production is certain whereas circulation is uncertain and unpredictable. For industrial capital to continue production at a constant pace using fixed capital, idle money inevitably arises within its circuit. To utilize excessive idle money, various operations and types of capital specializing in circulation emerge. This paper examines money lending, commercial credit and commercial capital.

Traditionally, following Marx’s description in Capital, capital engaged in circulation W’-G’-G-W is called merchant capital, and is, in terms of form, divided into commercial capital W’-G’ and money dealing capital G’-G. In contrast, Unoist scholars emphasized the uncertainty of circulation and argued profit-seeking behavior leads to the differentiation and emergence of specialized operations and forms of capital. 

This paper develops the Unoist approach and traces the evolution from idle money within industrial capital into commercial credit, money-dealing operation, and commercial capital, while suggesting further development toward banking capital.

In the financialization and neoliberal deregulation, various forms of financial operations and institutions have continued to emerge. By deepening the analysis of the motive of industrial capital in confronting the uncertainty of circulation, this paper provides systematic views on modern finance from the principle of Marxian economics.