Fictitious Capital and Speculation

The amount of money the national debt comprises is more than 30 trillion dollars according to the National Debt Clock website. This money carries interest, and it is this process which is what is referred to below.

“… fictitious capital, the object of gambling on the stock exchange, which is actually nothing but the selling and buying of entitlement of a certain part of the annual tax revenue.”

Karl Marx Theories of Surplus Value volume 3 p. 111

“ By fictitious capital Marx here means the capital of the National Debt which is brought into being by loans (of the bourgeois or bourgeois landowner state) and never intended to be invested as capital and on which the creditors are paid interest on the taxes, imposed on the people. “

Footnote in Prometheus books edition #40

“U.S. Budget Deficit & The National Debt. The National Debt is the total amount of money owed to all external parties by the US government. Most of that debt is in the form of outstanding government securities such as treasury bills, notes, and bonds that the government has issued.

Mar 22, 2022

Google search “is the national debt paid for with bonds or stocks?” 8 10 2022

The state’s money comes from profit, taxes are a subdivision of this profit. You have to first have a profit before the capitalist state can pay taxes, and the state’s money is not investment, at least it makes no profit. Rather it is revenue, and revenue refers to money spent that does not create surplus value, the object of capitalist production.

All production is carried out to create surplus value, if there is state production it is something needed by capitalists they cannot produce and make a profit doing so, but is essential, like city buses, the passenger train, the highway system, etc. so the worker can, for instance, get to work in the factory on time.

The bond market is speculation on the state’s taxation in the future. It is an investment on something that has not yet been created; there is no commodity 10 years from now when the bond matures that will be sold. It is pure speculation on the income of taxes, gambling in the stock exchange on the states debts.

Marx calls this “fictitious capital”, as it creates no real surplus value, rather is speculation on the annual tax money. If it was capital it would make a profit. The company is not run firstly to pay taxes, then to make profit, rather the opposite, to make a profit then to subdivide this into taxes. Industrial capital and agricultural capital create the surplus value, it is the unpaid section of the workday. The state does not create surplus value, it is an expenditure of capitalists, and claimed by them as revenue.

We are somehow supposed to feel that we have some say over taxes, as if the amount of taxes displayed on the paycheck would be the property of the worker if it did not have to be paid by the bourgeois.

Being privy to his tax expenditures is sort of interesting, perhaps we should have the whole profit printed on the paycheck? If you want to hear the capitalists cry bloody murder, try bringing a vote on that. If the taxes did not have to be paid, there is no reason to assume the capitalist would not simply pay the worker the same, and keep the money. It’s not like the worker is buying into something, an investment of sorts. This money is directly from the profit, the worker does not choose how much he wants to give, and when liberal progressive bourgeoisie soften a little, and use the taxes for ecology or more worker friendly things, there is usually a corresponding retrogression.

This type of speculation indicates fictitious capital is still alive and real, just as it was in 1863 when Marx wrote Theories of Surplus Value. The bond market is still large, and if it carries interest, the amounts of which are a sizable sum of money. Have we ever seen taxes go down, under either party? In the real world, not the Ivory towers, life is a different experience.

Taxes do come from the worker, it is part of the unpaid section of the workday, the surplus value. When it is paid directly by the worker it is calculated for beforehand by the employer as a part of his wages..

We thus see a society that is still functioning the same 167 years after being described by Marx in Theories of Surplus Value Volume 3.

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic