a brief look at merchants capitalism

Right across the world some of the biggest well known brand names including Nike, Apple, Benetton, Gap and others have huge power now with allot of them acting under a merchant capitalist mode of production. What I mean is that the likes of Nike and Apple do not produce anything at all. They do not produce any surplus value to speak of the sub contract all their work out to companies in Asia or Central America where the rate of exploitation is huge. This means that the merchant capitalist such as Nike does not have to enter into labour negotiations rather rather it is the sub contractor who deals with labour negotiations which usually means not recognising unions and making their workers work in some of the worst conditions known to man on the planet all in the pursuit of profit for themselves but also Nike or whoever is the merchant capital putting their capital into circulation in the homeland. It is a quite strange thing to say thing to say when you say Apple doesn’t actually produce anything at all but it is the case all of their products are made in China with the likes of Foxcom who saw huge workplace riots just last year due to Apples drive for lower wages and harder and harder rates of exploitation. Due to the huge demand for their commodities their products in other words in the western world their workers who are sub contracted not actually employed by Apple as such but Apple do extract the mass of surplus value or a cut of that value for their own profitable ends. As Karl Marx wrote in capital volume 3 “Hitherto we have considered merchant's capital merely from the standpoint, and within the limits, of the capitalist mode of production. However, not commerce alone, but also merchant's capital, is older than the capitalist mode of production, is, in fact, historically the oldest free state of existence of capital.” “Since merchant's capital is penned in the sphere of circulation, and since its function consists exclusively of promoting the exchange of commodities, it requires no other conditions for its existence — aside from the undeveloped forms arising from direct barter — outside those necessary for the simple circulation of commodities and money. Or rather, the latter is the condition of its existence. No matter what the basis on which products are produced, which are thrown into circulation as commodities — whether the basis of the primitive community, of slave production, of small peasant and petty bourgeois, or the capitalist basis, the character of products as commodities is not altered, and as commodities they must pass through the process of exchange and its attendant changes of form. The extremes between which merchant's capital acts as mediator exist for it as given, just as they are given for money and for its movements. The only necessary thing is that these extremes should be on hand as commodities, regardless of whether production is wholly a production of commodities, or whether only the surplus of the independent producers' immediate needs, satisfied by their own production, and is thrown on the market. Merchant's capital promotes only the movements of these extremes, of these commodities, which are preconditions of its own existence.” Understanding merchant’s capitalism is quite important as I believe and as I’ve understood laid the basis for capitalism to develop on a larger scale. It is the point in which capital is put into motion by those financial capitalists with the capital to invest in new areas of industry to socialise more labour power to then convert this into greater and greater surplus value. Being such an old system it is interesting to look into the ways merchant capital progressed. Merchant capitalism is a term used by economic historians to refer to the earliest phase in the development of capitalism as an economic and social system. Early forms of merchant capitalism were developed in the medieval Islamic world from the 9th century, and in medieval Europe from the 12th century. In Europe, merchant capitalism became a significant economic force in the 16th century, depending on point of view. The mercantile era drew to a close around 1800, giving way to industrial capitalism. However, merchant capitalism remained entrenched in some parts of the West well into the 19th century, most notably the Southern United States, where the plantation system constrained the development of industrial capitalism (limiting markets for consumer goods) whose political manifestations prevented Northern legislators from passing broad economic packages (e.g. monetary and banking reform, a transcontinental railroad, and incentives for settlement of the American west) to integrate the states' economies and spur the growth of industrial capitalism.[4] Merchant capitalism is distinguished from the mature variety by the lack of industrialization and commercial finance. Merchant houses were backed by relatively small private financiers acting as intermediaries between simple commodity producers and by exchanging debt with each other. Thus, merchant capitalism preceded the capitalist mode of production as a form of capital accumulation. The transformation of merchant capitalism into industrial capitalism necessitated, according to Karl Marx, a process of primitive accumulation of capital, upon which commercial finance operations could be based and making application of mass wage labor and industrialization possible. This period was also more commonly known as Mercantilism a primititive stage in capitalist production. With extracts from Wickepedia and Karl Mars’s volume 3 by penguin books.