As the previous post shows, in order to enter into a purchase/sale transaction, i.e. an ACT OF EXCHANGE in the market, the seller must have some of his goods and the buyer must have the necessary money to pay. In turn, once the transaction is concluded, the goods change hands, which is undeniable proof that they both considered them EQUAL at the TIME AND PLACE of this transaction. Hence, the logical conclusion is that no one received ANYTHING as a result of this transaction. However, this conclusion must not be interpreted as a thesis that nothing arrives for those who engage in the business of trading. This is because this one is an extended PROCESS involving the conclusion of successive repeated acts of exchange.
However, before I explain what follows from the distinction between the ACT of exchange and the PROCESS that is the commercial activity of a merchant-entrepreneur, I want to remind and explicitly stipulate that all deliberations and analysis here are and will be conducted from the point of view of a HUMAN PERSON. Therefore, when using the terms “merchant”, “seller”, entrepreneur” or “business owner” here, I will always mean a HUMAN OR GROUP OF PEOPLE who are the FACTUAL owners of a commodity or business regardless of its legal form. When it is any company (civil, limited partnership, limited liability company or joint-stock company), then of course ALL its SHAREHOLDERS ARE THE OWNER. The same applies to terms such as “buyer,” “purchaser,” etc.; these, too, are people who need the goods they buy to satisfy either their personal needs or the needs of the enterprise they own. On the other hand, any so-called COLLECTIVE BEINGS, whether or not they are granted so-called legal personality, are merely a LEGAL FICTION, behind which are always CONCRETE PEOPLE, who in such a legal form pursue some of their PERSONAL OBJECTIVES.
Moving on to the main thread, I would first like to ask if there is anything unusual about the fact that when ordering any goods over the Internet, we usually pay the price of the goods INCLUDED by shipping costs. These costs are nothing more than paying for the SERVICE of delivering the ordered goods to your home or to a parcel machine. Such a service is provided either by private delivery companies or the state-owned Post Office. In doing so, it is clear that the goods accepted from the seller ARE NOT THE PROPERTY OF THE CURIER COMPANY, but belong to the buyer. Also, the courier company DOES NOT bear any RISK associated with these goods, because even if the buyer decides to return them, the seller will bear the consequences. In short, the courier company provides a CLEAN SERVICE of transporting the goods from place A to place B in a professional and safe manner. The shipping costs added to the price of the goods are therefore the PRICE of the SERVICE provided by the courier company, or, to put it another way, the REMUNERATION FOR THIS SERVICE. Those who do not want to pay this price can collect the ordered goods in person from the seller. Nota bene, usually the buyer has the opportunity to choose from several methods of delivery that differ in price and does not always choose the cheapest offer.
Well, now we can return to the consideration of mercantile activity, about which K. Marx wrote in his “Capital” something like this: “If I buy 2,000 pounds of cotton for 100 pounds sterling and resell that 2,000 pounds of cotton for 110 pounds sterling, I have essentially exchanged 100 pounds sterling for 110 pounds sterling, money for money”
Isn’t it an easy profit? And let no one downplay the fact that it’s only a £10 profit, or about 50 zlotys today, because at the time when this philosopher wrote this, that is, in the second half of the 19th century, the salary of an unskilled laborer was about £10-20 ANNUALLY.
So let’s consider the case of this cotton merchant (although Marx writes in the first person, as if he were the merchant in question) and try to determine what he got rich on so easily. The cotton used in Marx’s example was certainly not grown in Britain, where this masterpiece of his was created in the silence of London’s British Library. Well, so this merchant must have been buying it either in some Far Eastern country or in one of the Americas, paying those 100 pounds sterling for 2,000 pounds of cotton. And he probably sold it to spinning mills in Britain, inking 110 pounds sterling.
And now some questions. Did the cotton move to Britain immediately and spontaneously, without cost or risk?
Didn’t the merchant have to make efforts and sell the cotton in batches over several months in order to sell that sample 2,000 pounds of cotton?
During the time between the purchase transaction and the transaction or multiple sales transactions, didn’t the merchant incur costs other than transportation and freight insurance, such as interest costs on the loan, the cost of his employees’ salaries and other costs of operating his business, didn’t he have to pay taxes?
Didn’t he and his family have to live off of something during this time?
And the last question: what is the TECHNICAL-ORGANIZATIONAL difference between the described example of a courier service and what the considered cotton trader had to do?
The courier provides the service of DELIVERING the entrusted goods to the buyer AT THE TIME AND PLACE WHERE HE IS.
And didn’t the cotton trader do exactly the same thing?
What, then, if not the PAYMENT for the SERVICE of delivering the cotton to the buyer at the time and place he wants the goods, is that exemplary 10 pounds sterling profit?
There is only one difference between a courier and any merchant. The courier, as I wrote above, neither IS THE OWNER of the shipment, nor does he bear ANY RISK associated with the entrusted goods. The merchant, on the other hand, must PAY for the merchandise purchased and must bear ALL of the resulting RISKS until he succeeds in selling the merchandise.
Well, then, what does the merchant get rich on? Isn’t it the EFFECT of HIS WORK and the RISKS he incurs in his business, which is a PROCESS stretched over time? This PROCESS is all that happens between TWO TRANSACTIONS concluded at different times and in different places, that is, between TWO ACTS OF EXCHANGE in which EQUIVALENTS are exchanged. The first is the ACT of BUYING the 2,000 pounds of cotton from Marx’s example, e.g., in China for 100 pounds sterling at SOME TIME AND PLACE, which can be recorded from the buyer’s point of view as a Money-Commodity (M – C) transaction. Whereas the other, AT ANOTHER TIME AND IN ANOTHER PLACE, is one or many ACTS OF RE-SALE at a profit of that cotton to ANOTHER PURCHASER for £110, which can be recorded as a C – M+ transaction(s). In doing so, one must remember that this plus at the symbol M, or £10, is NOT the merchant’s NET PROFIT, but a TRADE MARGIN, from which the merchant must cover ALL THE COSTS of his business, including taxes, and only the rest, if any is left over, can be used for the eventual development of the business and for his own needs. And if he would like to ENRICH himself, he must SAVE something else from it. For if he were to blow through his entire income, he would certainly not get rich.
How does Marx’s thesis of exchanging 100 pounds sterling for 110 pounds sterling, money for money, look in this light?