1. There is no repayment term attached to the savings in capital.
The credit is attached to a repayment term or the exigibility at any time of a total or partial repayment.
2. Excluding cooperatives and mutuals, savings in capital provides ownership or co-ownership of an enterprise.
The only property that credit investment provides is that of a receivable.
3. The income consisting of all or part of an enterprise's profit is attached to the savings in capital.
The payment of interest Interest is attached to credit financingCredit. The price of the loan is likely to be fixed, once concluded. The income from a savings in capital varies according to the enterprise's results and cash flow. Hence the distinction between bonds, securities for investment in credit, and shares, securities for investment in capital.
4. An enterprise's recourse to credit contributes to the reduction of the enterprise 's capital.
Conversely, the use of an enterprise to increase its capital contributes to the reduction of the enterprise's debt.
5. The repayment of the principal of a loan constitutes a cash outflow.
Less credit for more capital reduces cash outflows.
6. A capital increase is a sustainable contribution to the increase in production capacity.
The loan that goes into the financing of an enterprise is a temporary contribution. Surplus value, whether it is obtained by leverage or otherwise, is a transfer and not a creation of purchasing power. I will come back to this point.
7. Only the supply of a new elementary commodity creates exchange value.
Whenever there is a supply of an elementary commodity in exchange for its remuneration, an employee or a saver creates exchange value. The composite commodities that firms buy and sell open up and maintain outlets that feed the demand for elementary commodities and consequently the incessant creation of exchange value in the form of income.
8. Credit and capital investments are not two points of conflict.
What they have in common is that they are financial and speculative. But there are two kinds of financial speculation. They become easy to distinguish when we observe quite carefully a form of sale of a loan for the purchase of something likely to be worth more tomorrow – sur plus value – than what it is worth today.
9. Let's give the floor to a seller of this form of credit.
"Buy this thing, which is worth 100 today, with the loan of 100 that my institution is going to give you. In a year, this thing will be worth 115, while over a year the credit of 100 will cost you 5. You will therefore have enriched yourself by 115 minus 100 minus 5, or 10". In this process, seller V makes to customer C an offer of merchant exchange, credit Credit in return for the payment of interest. But it is by transferring the assumption of the cost to a putative third party, the next buyer of the thing acquired by C by means of V's offer. The financing sold by V does not take part in any creation of market wealth, which creation exists only in the event of the supply of at least one new elementary good (paragraph 7 above). We are in the presence of an unenriching speculation of the entire population.
10. In the provision of permanent or temporary financing to an enterprise, there is a shift in the cost of this supply.
It is on the enterprise's future customers. But the essential difference is that it is through the purchase of new products of work for the enterprise's staff. In this case too, financial speculation intervenes, but it creates exchange value. The income from work and from the investment of savings provided by enterprises is by means of this speculation rewarding.