When money is invested for more money then that money is called capital. That is, the money that is invested to earn more money with profit is called capital. Now the question is where does the first capital come from? Because if there is capital it is possible to make profit. But it is not possible to form capital from profits. It is said that the first capital comes by seizing the property of others.
A developing country cannot export high quality industrial products. But for special geographical reasons some particular goods or services may be exported. For example, due to geography, Singapore has an ideal port for which it earns foreign exchange by providing port services and invests the earned foreign exchange to develop the country. Similarly, the Gulf Arab countries have oil that can be extracted at a low cost to control the world market, and the countries have developed by exporting that oil and earning foreign exchange. But only a few countries have sufficient mineral resources or port services relative to their population. So most of the countries do not get this benefit. Therefore, in most countries there is no option but to confiscate others' property.
Capital development has several stages.
First, the initial capital must be accumulated by looting. Either the property of the minority or the weak nation is looted by the majority or the powerful nation, or the possession of the landlord's property by the peasants, or the upliftment of the landlord by the force of the landlord. The first step is to raise initial capital through these three methods or any one or two of these three methods. This is how looting capital is first created. (O-M)
After the initial capital comes in, that capital is invested mainly in trade and thus trade capital develops. (M-M')
By increasing capital and experience through trade, capital begins to invest in production. Thus productive capital is formed. (M'-C-M'')
The wages of labor fail to rise at the same rate as the profit from productive capital rises,at the same rate. This is because the large production capital outcompetes the small production capitalist and forces him to become worker. At the same time, efforts were made to keep the demand for labor low by increasing the continuous automation of production, i.e. increasing the capital-labour ratio. As a result, the growth rate of workers' wages is lower than the growth rate of profits. Again the workers are the consumers of the market and wages are their income. The income of the laborer lags behind the profit i.e. the ability to produce. The result is a dire overproduction crisis where supply is high and demand is low. Surplus capital is then created which cannot be profitably invested due to lack of demand. Surplus capital is then created which cannot be profitably invested due to lack of demand. This surplus capital is either unprofitably invested by the labor-driven or dominated state to increase demand to equalize supply or, in the case of a capital-driven state, the surplus capital is profitably invested in the business of buying and selling property assets. Asset trading is profitable if the continuous supply of debt keeps increasing the value of the property. This is how speculative capital was born. (M-D-M')
Whether or not speculative capital earns a decent profit depends on the borrowing capacity of the state. The borrowing power of a state depends on the power of that state's currency. And the power of the currency depends on the production capacity and military power of the country. Needless to say, there is only one country that can give a decent profit to crack capital at present and that is the United States of America. Other developed countries such as Western Europe and Japan are also facing the crisis of surplus capital but due to lack of strong military power they are unable to pay off capital and hence their economy is slowly going towards destruction. China is also in crisis of surplus capital but being a socialist country (state power is in the hands of the working class) China is investing surplus capital unprofitably to create demand and rely on advanced technology.
However, when there is free flow of speculative capital, innovative ventures benefit partly because the innovative ventures receive a part of speculative capital investment. However, very little of the loans go to innovative enterprises, and most of them go to shares or stocks of established enterprises or to land, metal, etc.
Today in the small economy homogeneous nations like Bangladesh, the struggle between plunder capital-trading capital on one hand and productive capital-labour on the other is going on. In multi national countries like Pakistan (small economy) or India (large economy), particular nations are also looting the property of other nations and making profit from trade and production as well. The liberation struggle of other nations against the particular nation is also going on and along with it the efforts of other nations to accumulate seed capital. USA, Japan, Western Europe, South Korea, China are now at the level of surplus capital crisis. The US state is able to make profits for the speculative capital, thanks to the massive production and military power. China, being a labor-driven nation, is investing surplus capital unprofitably to increase demand and catch up with the US in technology. The rest can do neither and are gradually becoming weak economies.
Now the question is whether the US economy will be defeated by excess debt while trying to keep the speculative capital profitable? Or whether China's unprofitable investment will be able to make China's productive power equal to that of the US' productive power? And even China will be able to overtake the US? The development of the United States began in 1776 while in China in 1949. That is, the US economy has been on the path of development since 173 years before China started. This struggle will continue for the next 2025-2035 and will determine the future of humanity. China's foreign earnings are increasing, which means that China's ability to make unprofitable investments is increasing. The US has not been able to reduce China's foreign earnings through trade wars and technology wars. Now the question is whether the United States will be able to keep its debt supply intact with its military power? Or will there be more successful innovation ventures per unit debt or more successful innovation ventures per unit non-profit investment?
