I finished Capital V. 1....Huzza!

RedHughs, thanks for the extensive post.

My argument presented above has nothing to do with the activities of a commercial capitalist as a person, but with what commercial capital involved purely in circulation "does" (i.e., including the workers it employs), how it can exist and reproduce itself profitably and where its profit comes from.

The argument also does not depend on what commercial capitalists think they are doing:

OK, but this is not important at all. If an investor buys a bond and expects to sell it dearer two years later, this does not yet mean that anything that either he or the broker firm he buys the bond from does, constitues value or surplus-value. With respect to interest bearing and financial capital, what Marx was trying to say is: it's either a source of a portion of total surplus-value created by industrial capital, or it's a claim on a part of total surplus-value created by industrial capital in the future. To the investor, it may really seem that what is going on is simply M - M', money begetting money out of nothing – without touching living labor at all – but that's exactly the kind of fetishistic thinking that Marx seeks to dispel!

In the case of commercial capital, of course the personal motive of a merchant is to end up with a revenue that is greater than the costs, but that in itself says nothing about where this revenue comes from – and that is the interesting question. For Marx (and I agree with his analysis) it can only come from the unpaid labor of workers employed by industrial capital. What capitalists in general and commercial capitalists in particular may think they're doing to earn their profit is not important at all.

As far as your argument about the merchant capitalist is concerned, please bear in mind that my previous post was not about which particular kinds of economic activities should be considered productive and which shouldn't. I was trying to argue something more humble – that without a distinction between productive and unproductive labor, Marx's analysis of sources of income loses it's basis. The question was whether you at least agree with that (and perhaps then we can discuss how exactly we should employ that distinction, and whether Marx was wrong in how he employed it), or not. In the latter case I'd be curious as to how exactly we then explain commercial profit, interest and rent.

Therefore, I won't o into security guards and transport workers just now.

I have to say I've lost that train of thought by now. I'm not sure what you're arguing for (or against). Let me just point out that it is wrong to say that "the value of the commodities he holds in this model is going to be (1+R)C". The value of commodities in the merchant's warehouse is determined by socially necessary labor time expended in their production, and therefore includes both the original investment (of the industrial capitalist) in variable capital and surplus-value extracted out the workers employed by industrial capital. Moreover, the value of commodities in the merchant's warehouse has nothing to do with either the rate of profit or (in the given situatoin) the constant capital employed by the merchant.

Perhaps what you meant was price of production and not value, but that would still be wrong. Generally, Marx determines the price of production as the sum of cost-price and an average profit (which determined by the rate of profit and the size of the individual capital). For a merchant, the cost-price already includes the costs of buying the commodity from the industrial capitalist who produced it. As I tried to show in the previous post, the retail price (the merchant's "price of production" at which he sells) includes the wholesale price (the industrial capitalist's price of production at which the merchant buys) plus an average profit (RP = WP + R(Cc)). Therefore, the retail price also includes the original production costs (c + v) and the average profit of the industrial capitalist.

In other words, your merchant capitalists would all go out of business. But I still don't see how any of that is relevant to the basic question – whether you agree that the distinction between productive and unproductive labor is fundamental to the explanation of sources of income (the "Trinity Formula").

I can't see how this is relevant to the present debate and it seems to me you are trying to argue by association. Also, I think you're wrong in attributing the B-S approach to Moseley, but that's an altogheter different discussion. If Fred Moseley's revolutionary credentials or walk of life or favorite books are not satisfactory to you, then that's fine, but it says nothing about the validity of the arguments he presents.

Anyway, as far as I can see, Moseley is a firm proponent of the distinction between productive and unproductive labor (one can see that in many of his articles, including the one I quoted previously), if that's what you were aiming at. By quoting Moseley, I wasn't even subscribing to any particular approach apart from Marx's own – the article quoted is basically built around quotes from Volume 3 and Marx's other writings dealing with distribution of surplus-value.

I don't think every question about Marx's theory of value, including important ones, can be answered at that level. Even the author himself seems to have thought that a certain level of complexity and difficulty is necessary if the theory is to be tenable. But I'm not saying all revolutionaries should become experts in Marx.

This "Marx was no economist" perspective is a bunch of hot air.

Marx was, and is best understood as, a revolutionary intellectual -- not an economist. Just because he discussed economic theories, as in Capital, doesn't make him an economist. To think that it does is IMO to misunderstand what Marx is doing in Capital, viz, critiquing capitalism and the political economists -- whose theories stand as an obstacle to seeing capitalism as it is, i.e., to understanding capitalism as a system which deserves to be superseded.

It is the politically motivated normativity involved in Marx's project in Capital that makes it something more than just a better alternative economic theory than those of the classical political economists.