{
    "title": "this is a reproduction of a library book that was digitized",
    "sections": [
        "this is a reproduction of a library book that was digitized by google as part of an ongoing effort to preserve the information in books and make it universally accessible. https://books.google.com",
        "b 357685",
        "property of the university of michigan libraries 1817 artes scientia veritas",
        "property of the universityof michigan libraries 1817 artes scientia veritas",
        "",
        "capital acritique of political economy by karl marx volume il the process of circulation of capital edited by frederick engels translated from the second german edition by ernest untermann chicago charles h. kerr &company 1913",
        "storage undergraduate library hb 501 m392 e5 1912 v. 2 copyright ,1907 . by charles h.kerr &company . john f.higgins printer and binder trackinaw council80 376-382 monroe street chicago ,illinois",
        "morage undergraduate library preface translator's notecontents . the circulation of capital .page 7 30 part 1. the metamorphoses ofcapital and their cycles chapter 1.-the circulation ofmoney -capital .. 31 section i.-first stage m-c.... 32 section ii.-second stage ,functions ofproductive capital .. 41 section iv.-reserve funds chapter iii.-the circulation ofcommodity -capital ..section iii.-third stage ,c'-m'. section iv.-the rotation asawhole .. chapter ii.-the rotation ofproductive capital .. section i.-simple reproduction section ii.-accumulation and reproduction onanenlarged scale . section iii.-accumulation ofmoney .. chapter iv.-the three diagrams oftheprocess ofcirculation . chapter v.-the time ofcirculation ....46 58 72 73 89 93 96 98 114 138 chapter vi.-the expenses ofcirculation .. section i.-genuine expenses ofcirculation ..147 147 1.the time ofpurchase and sale. 2.bookkeeping 3.money section ii.-expenses ofstorage ... 1.general formation ofsupply . 2.the commodity -supply inparticular . section iii.-expenses oftransportation .... part ii. the turn -over ofcapital147 151 153 154 155 162 169 chapter vii.-the period and number ofturn -overs .. 173 chapter viii .-fixed capital and circulating capital .. 178 section i.-distinctions ofform ...... 178 section ii.-composition ,reproduction ,repair ,and accumulation of fixed capital 192 chapter ix.-the total turn -over ofadvanced capital ,cycles of turn -over 208 chapter x.-theories offixed andcirculating capital ,the physiocrats andadam smith .... 215 chapter xi.-theories offixed and circulating capital ,ricardo . 245 chapter xii.-theworking period ... 260 chapter xiii .-the time ofproduction . 272 chapter xiv .-the time ofcirculation ... 284 ofanadvance ofcapital .....chapter xv.-influence ofthetime ofcirculation onthe magnitude section 1.-the working period equal totheperiod ofcirculation .... 305 section ii.-theworking period greater than theperiod ofcirculation 310 section iii.-theworking period smaller than theperiod ofcirculation 315 5294 3951",
        "6 contents section iv.-conclusions section v.-the effect ofachange ofprices .. chapter xvi .-the turn -over ofthevariable capital .. section i.-the annual rate ofsurplus -value .. section ii.-the turn -over ofthe individual variable capital .. section iii.-the turn -over ofthevariable capital considered from thepoint ofview ofsociety ..... chapter xvii .-the circulation ofsurplus value .. section i.-simple reproduction ..... section ii.-accumulation and reproduction onanenlarged scale . part iii.page 319 326 336 336 354 359 367 373 397 the reproduction and circulation ofthe aggregate social capital chapter xviii .-introduction 404 section i.-the object ofthe analysis .. section ii.-the role ofmoney -capital ... section i.-the physiocrats404 407 chapter xix .-former discussions ofthe subject . 414 414 section ii.-adam smith 417 1.the general point ofview ofadam smith . 417 2.smith resolves exchange -value into v-|-s. 427 3.the constant portion ofcapital .... 430 4.capital and revenue inadam smith . 5.recapitulation436 444 section iii.-the economists after smith . chapter xx.-simple reproduction450 453 section i.-the formulation ofthe question .. 453 section ii.-the two departments ofsocial production . section iii.-the transactions between the two departments ... section iv.-transactions within department ii;necessities oflife and articles ofluxury457 460 465 section v.-the promotion ofthe transactions bythecirculation of money 477 489 section vi.-the constant capital ofdepartment i...... section vii.-variable capital and surplus -value inboth departments 493 section viii .-the constant capital inboth departments .. section ix.-aretrospect onadam smith ,storch and ramsay . section x.-capital and revenue ,variable capital and wages .. section xi.-reproduction ofthe fixed capital ..... 1.the reproduction ofthevalue oftheworn -out part inthe form ofmoney ........... 498 504 508 ....... 522 526 2.the reproduction offixed capital initsnatural form 532 section xii.-the reproduction ofthe money -supply .... section xiii .-destutt detracy's theory ofreproduction ... chapter xxi .-accumulation and reproduction onanenlarged scale ..571 section i.-accumulation indepartment i.....547 560 574 1.the formation ofahoard ... 2.the additional constant capital . 3.the additional variable capital . section ii.-accumulation indepartment ii. section iii.-diagramatic presentation ofaccumulation . 1.first illustration 2.second illustration 3.exchange ofiicunder accumulation section iv.concluding remarks574 579 585 586 591 593 600 607 610",
        "preface . itwas noeasy task toprepare the second volume of\"cap- ital \"for the printer insuch away that itshould make a connected and complete work and represent exclusively the ideas ofitsauthor ,not ofitspublisher .the great number of available manuscripts ,and their fragmentary character ,ad- ded tothe difficulties ofthis task .at best one single manu- script (no. 4)had been revised throughout and made ready forthe printer .and while ittreated itssubject -matter fully , the greater part had become obsolete through subsequent re- vision .the bulk ofthe material was not polished astolan- guage ,even ifthe subject -matter was for the greater part fully worked out .the language was that inwhich marx used tomake his outlines ,that istosay his style was careless ,full ofcolloquial ,often rough and humorous ,expressions and phrases ,interspersed with english and french technical terms ,orwith whole sentences orpages ofenglish .the thoughts were jotted down asthey developed inthe brain of the author .some parts ofthe argument would be fully treated ,others of equal importance only indicated .the material tobeused for the illustration offacts would becol- lected ,but barely arranged ,much less worked out.at the conclusion ofthe chapters there would beonly afew inco- herent sentences asmile -stones ofthe incomplete deductions , showing the haste ofthe author inpassing ontothe next chapter .and finally ,there was the well -known handwriting which marx himself was sometimes unable todecipher . ihave been content tointerpret these manuscripts aslit- erally aspossible ,changing the style only inplaces where marx would have changed ithimself and interpolating ex- planatory sentences orconnecting statements only where this was indispensable ,and where the meaning was soclear that there could benodoubt ofthe correctness ofmy interpreta- 7",
        "8 preface . tion .sentences which seemed inthe least ambiguous were preferably reprinted literally .the passages which ihave re- modeled orinterpolated cover barely ten pages inprint ,and concern mainly matters ofform . the mere enumeration ofthe manuscripts left by marx asabasis for volume iiproves the unparalleled conscien- tiousness and strict self -criticism which he practiced inhis endeavor tofully elaborate his great economic discoveries before hepublished them .this self -criticism rarely permit- ted him toadapt his presentation ofthe subject ,incontent aswell asinform ,tohis ever widening horizon ,which he enlarged by incessant study . the material for this second volume consists ofthe fol- lowing parts :first ,amanuscript entitled \"acontribution to the critique of political economy ,\"containing 1472 quarto pages in 23 divisions ,written inthe time from august ,1861 ,tojune ,1863. itisacontinuation ofthe work ofthe same title ,the first volume ofwhich appeared in berlin ,in 1859. ittreats on pages 1-220 ,and again pages 1159-1472 ,ofthe subject analyzed in volume iof \"capital ,\"beginning with the transformation ofmoney into capital and continuing tothe end ofthe volume ,and isthe first draft for this subject .pages 973-1158 deal with capital and profit ,rate of profit ,merchant's capital and money capital ,that istosay with subjects which have been farther developed inthe manuscript for volume iii.the questions belonging tovolume iiand many ofthose which are part ofvolume iii are not arranged bythemselves in this manuscript .they are merely treated inpassing ,espe- cially inthe section which makes up the main body ofthe manuscript ,viz.:pages 220-972 ,entitled \"theories ofsur- plus value .\" this section contains an exhaustive critical history ofthe main point ofpolitical economy ,the theory ofsurplus value ,and develops atthe same time ,inpolemic remarks against the position ofthe predecessors ofmarx ,most ofthe points which he has later on discussed individually and intheir logical connection involume iiand iii.ire-",
        "preface .9 serve formyself the privilege ofpublishing the critical part ofthis manuscript ,after the elimination ofthe numerous parts covered byvolumes iiand iii ,inthe form ofvolume iv.this manuscript ,valuable though itis,could not be used inthe present edition ofvolume ii. the manuscript next following inthe order oftime isthat ofvolume iii.itwas written for the greater part in1864 and 1865. after this manuscript had been completed inits essential parts ,marx undertook the elaboration ofvolume i,which was published in1867. iam now preparing this manuscript ofvolume iii for the printer . the period after the publication ofvolume i,which is next inorder ,isrepresented by acollection offour manu- scripts for volume ii,marked i-iv bymarx himself .man- uscript i(150 pages ),presumably written in1865 or1867 , isthe first independent ,but more orless fragmentary ,elab- oration ofthe questions now contained involume ii.this manuscript islikewise unsuited for this edition .manuscript iiispartly acompilation ofquotations and references tothe manuscripts containing marx's extracts and comments ,most ofthem relating tothe first section ofvolume ii,partly an elaboration ofspecial points ,particularly acritique ofadam smith's statements astofixed and circulating capital and the source ofprofits ;furthermore ,adiscussion ofthe rela- tion ofthe rate ofsurplus value tothe rate ofprofit ,which belongs involume iii.the references furnished little that was new ,while the elaborations for volumes ii and iii were rendered valueless through subsequent revisions and had toberuled out for the greater part .manuscript iv is anelaboration ,ready for printing ,ofthe first section and the first chapters ofthe second section ofvolume ii,and has been used initsproper place .although itwas found that this manuscript had been written earlier than manu- script ii,yet itwas far more finished in form and could beused with advantage for the corresponding part ofthis volume .ihad toadd only afew supplementary parts ofmanuscript ii.this last manuscript isthe only fairly",
        "10 preface . complete elaboration of volume ii and dates from the year 1870. the notes for the final revision ,which ishall mention immediately ,say explicitly :\"the second elab- oration must be used asabasis .\" there isanother interruption after 1870 ,due mainly to ill health .marx employed this time in his customary way ,that isto say he studied agronomics ,agricultural conditions in america and especially russia ,the money market and banking institutions ,and finally natural sci- ences ,such as geology and physiology .independent mathematical studies also form alarge part ofthe numer- ous manuscripts ofthis period .inthe beginning of1877 , marx had recovered sufficiently toresume once more his chosen life's work .the beginning of1877 ismarked by references and notes from the above -named four manu- scripts intended for anew elaboration ofvolume ii,the beginning of which isrepresented by manuscript v (56 pages infolio ).itcomprises the first four chapters and is not very fully worked out.essential points are treated in foot notes .the material israther collected than sifted ,but itisthe last complete presentation ofthis most important first section .apreliminary attempt toprepare this part for the printer was made inmanuscript vi (after october , 1877 ,and before july ,1878 ),embracing 17 quarto pages , the greater part ofthe first chapter .asecond and last at- tempt was made in manuscript vii ,dated july 2,1878 , and consisting of7pages infolio . about this time marx seems tohave realized that hewould never beable tocomplete the second and third volume in amanner satisfactory tohimself ,unless acomplete revolution inhis health took place .manuscripts v-viii show traces ofhard struggles against depressing physical conditions far too frequently tobeignored .the most difficult part ofthe first section had been worked over inmanuscript v. the remainder ofthe first ,and the entire second section ,with the exception ofchapter 17,presented no great theoretical diffi- culties .but the third section ,dealing with the reproduction",
        "preface .11 and circulation ofsocial capital ,seemed tobevery much in need ofrevision .manuscript ii,itmust bepointed out,had first treated ofthis reproduction without regard tothe circu- lation which isinstrumental ineffecting it,and then taken upthe same question with regard tocirculation .itwas the intention ofmarx toeliminate this section and toreconstruct itinsuch away that itwould conform tohis wider grasp ofthe subject .this gave rise tomanuscript viii ,contain- ing only 70 pages in quarto .acomparison with section . iii,asprinted after deducting the paragraphs inserted out ofmanuscript ii,shows the amount ofmatter compressed by marx into this space . manuscript viii islikewise merely apreliminary pre- sentation ofthe subject ,and itsmain object was toascertain and develop the new points ofview not set forth inmanu- script ii,while those points were ignored about which there was nothing new tosay .an essential part ofchapter xvii , section ii,which ismore orless relevant tosection iii,was atthe same time drawn into this discussion and expanded . the logical sequence was frequently interrupted ,the treat- ment ofthe subject was incomplete invarious places ,and especially the conclusion was very fragmentary .but marx expressed asnearly aspossible what he intended tosay on the subject . this isthe material for volume ii,out ofwhich iwas supposed \"tomake something ,\"asmarx said tohis daughter eleanor shortly before his death .ihave interpreted this request initsmost literal meaning .so far asthis was pos- sible ,ihave confined my work toamere selection ofthe various revised parts .and ialways based my work on the last revised manuscript and compared this with the preced- ing ones .only the first and third section offered any real difficulties ,ofmore than atechnical nature ,and these were indeed considerable .ihave endeavored tosolve them ex- clusively inthe spirit ofthe author ofthis work . for volume iii,the following manuscripts were avail- able ,apart from the corresponding sections ofthe above-t",
        "12 preface . named manuscript ,entitled \"acontribution tothe crit- ique of political economy ,\"from the sections in manu- script iii likewise mentioned above ,and from afew occa- sional notes scattered through various extracts :the folio manuscript of1864-65 ,referred topreviously ,which isabout asfully elaborated asmanuscript iiofvolume ii;further- more ,amanuscript dated 1875 and entitled \"the relation ofthe rate ofsurplus value tothe rate ofprofit ,\"which treats the subject inmathematical equations .the prepara- tion ofvolume iii for the printer isproceeding rapidly . so far asiam enabled tojudge atpresent ,itwill present mainly technical difficulties ,with the exception of afew very important sections . iavail myself ofthis opportunity to refute acertain charge which has been raised against marx ,first indistinctly and atvarious intervals ,but more recently ,after the death ofmarx ,asastatement offact by the german state and university socialists .itisclaimed that marx plagiarized the work of rodbertus .ihave already expressed myself onthe main issue inmy preface tothe german edition of marx's \"poverty of philosophy \"(1885 ),but iwill now produce the most convincing testimony for the refutation ofthis charge. to my knowledge this charge ismade for the first time in r. meyer's \"emancipationskampf des vierten standes \" (struggles for the emancipation ofthe fourth estate ), page 43:\"itcan bedemonstrated that marx has gathered the greater part ofhis critique from these publications \"- meaning the works of rodbertus dating back tothe last half ofthe thirties ofthis century .imay well assume , until such time aswill produce further proof ,that the \"demonstration \"ofthis assertion rests on astatement made by rodbertus tomr. meyer .furthermore ,rodbertus him- self appears on the stage in 1879 and writes toj.zeller 1inthepreface to\"thepoverty ofphilosophy .\"areply toproudhon's \"philoso- phyofpoverty ,\"bykarl marx ,translated intogerman bye.bernstein andk.kautsky , stuttgart ,1885.",
        "preface .13 (zeitschrift fr die gesammte staatswissenschaft ,tbin- gen ,1879 ,page 219 ),with reference tohis work \"zur er- kenntniss unserer staatswirthschaftlichen zustnde \"(a contribution tothe understanding of our political and economic conditions ),1842 ,asfollows :\"you will find that this line ofthought has been very nicely used . by marx ,without ,however ,giving me credit for it.\" the pub- lisher ofrodbertus posthumous works ,th.kozak ,repeats his insinuation without further ceremony . (das kapital von rodbertus .berlin ,1884. introduction ,page xv .) finally inthe \"briefe und sozialpolitische aufsatze von dr. rodbertus -jagetzow ,\"(letters and essays onpolitical econ- omy by dr. rodbertus -jagetzow ),published by r.meyer in 1881 ,rodbertus says directly :\"to-day ifind that iam robbed by schffle and marx without having my name men- tioned \"(letter no. 60,page 134 ).and inanother place , the claim ofrodbertus assumes amore definite form :\"in my third letter on political economy ,ihave shown prac- tically in the same way as marx ,only more briefly and clearly ,the source ofthe surplus value ofthe capitalists .\" (letter no. 48,page 111. ) marx never heard anything definite about any ofthese charges ofplagiarism .in his copy ofthe \"emancipations- kampf \"only that part had been opened with aknife which related tothe international .the remaining pages were not opened until icut them myself after his death .the \"zeit- schrift \"oftbingen was never read by him .the \"let- ters ,\"etc. ,tor.meyer likewise remained unknown tohim , and idid not learn ofthe passage referring tothe \"robbery \" ofwhich rodbertus was supposed tobethe victim until mr. meyer himself called my attention toit.however ,marx was familiar with letter no. 48. mr. meyer had been kind enough topresent the original tothe youngest daughter of marx .some ofthe mysterious whispering about the secret source of his critique and his connection with rodbertus having reached the ear ofmarx ,he showed me this letter with the remark that he had atlast discovered authentic",
        "14 preface . information astowhat rodbertus claimed for himself ;if that was all rodbertus wanted ,he marx ,had no objection , and hecould well afford tolet rodbertus enjoy the pleasure ofconsidering his own version the briefer and clearer one . in fact ,marx considered the matter settled by this letter of rodbertus . he could somuch the more afford this ,asiknow posi- tively that hewas not inthe least acquainted with the liter- ary activity ofrodbertus until about 1859 ,when his own. critique ofpolitical economy had been completed ,not only initsfundamental outlines ,but also inits more important details .marx began his economic studies inparis ,in1843 , starting with the prominent englishmen and frenchmen . of german economists he knew only rau and list ,and he did not want any more ofthem .neither marx nor iheard aword ofrodbertus 'existence ,until we had tocriticise ,in the \"neue rheinische zeitung ,\"1848 ,the speeches hemade asthe representative ofberlin and asminister ofcommerce . we were both ofussoignorant that wehad toask the rhen- ish representatives who this rodbertus was that had become aminister sosuddenly .but these representatives could not tell usanything about the economic writings ofrodbertus . on the other hand ,marx showed that he knew even then , without the help ofrodbertus ,whence came \"the surplus value ofthe capitalists ,\"and heshowed furthermore how it was produced ,asmay be seen inhis \"poverty ofphilos- phy ,\"1847 ,and inhis lectures on wage labor and capital , delivered inbrussels in1847 ,and published innos .264-69 ofthe \"neue rheinische zeitung ,\"1849. marx did not learn that an economist rodbertus existed ,until lassalle called his attention tothe fact in1859 ,and thereupon marx looked up the \"third letter on political economy \"inthe british museum . this isthe actual condition ofthings .and now letussee what there istothe content ofrodbertus which marx is charged with appropriating by \"robbery .\"says rodbertus : \"inmy third letter onpolitical economy ,ihave shown prac-",
        "preface .15 tically inthe same way as marx ,only more briefly and clearly ,the source ofthe surplus -value ofthe capitalists .\" this ,then ,isthe disputed point :the theory ofsurplus value .and indeed ,itwould be difficult tosay what else there isinrodbertus which marx might have found worth appropriating .rodbertus here claims tobethe real origin- ator ofthe theory ofsurplus -value ofwhich marx issup- posed tohave robbed him . and what has this third letter onpolitical economy tosay inregard tothe origin ofsurplus -value ? simply this :that the \"rent ,\"ashe terms the sum ofground rent and profit , does not consist ofan \"addition tothe value \"ofacommod- ity,but isobtained \"by means ofadeduction ofvalue from thewages oflabor ,inother words ,the wages represent only a part ofthe value ofacertain product ,\"and provided that labor issufficiently productive ,wages need not be\"equal to the natural exchange value ofthe product oflabor inorder toleave enough ofitfor the replacing ofcapital and for rent .\"we are not informed ,however ,what sort ofa\"nat- ural exchange value \"ofaproduct itisthat leaves nothing forthe \"replacing \"ofcapital ,orinother words ,isuppose , forthe replacing ofraw material and the wear and tear of tools . iam happy tosay that we are enabled toascertain what impression was produced on marx by this stupendous dis- covery ofrodbertus .inthe manuscript entitled \"acontri- bution tothe critique of political economy ,\"section x, pages 445 and following ,we find ,\"adeviation .mr. rod- bertus .anew theory ofground rent .\" this isthe only point ofview from which marx there looks upon the third letter onpolitical economy .the rodbertian theory ofsur- plus value isdismissed with the ironical remark :\"mr. rod- bertus first analyzes what happens inacountry where prop- erty inland and property incapital are not separated ,and then hearrives atthe important discovery that rent -mean- ing the entire surplus -value -isonly equal tothe unpaid",
        "16preface . labor ortothe quantity ofproducts in which itisem- bodied .\" now itisafact ,that capitalist humanity has been pro- ducing surplus -value for several hundred years ,and has in the course ofthis time also arrived atthe point where peo- ple began toponder over the origin ofsurplus -value .the first explanation for this phenomenon grew out ofthe prac- tice ofcommerce and was tothe effect that surplus -value arose byraising the value ofthe product .this idea was cur- rent among the mercantilists .but james steuart already saw that in that case the one would lose what the other would gain .nevertheless ,this idea persists for along time after him ,especially inthe heads ofthe \"socialists .\" but itiscrowded out ofclassical science by adam smith . he says in \"wealth ofnations ,\"vol .i,ch.vi:,\"as soon asstock has accumulated inthe hands ofparticular persons ,some ofthem will naturally employ itinsetting to work industrious people ,whom they will supply with materials and subsistence ,inorder tomake aprofit by the sale oftheir work ,or,by what their labor adds tothe value ofthe materials ....the value which the workmen add tothe materials ,therefore ,resolves itself inthis case into two parts ,ofwhich the one pays their wages ,the other the profits oftheir employer upon the whole stock ofmaterials and wages which headvanced .\"and alittle farther on he says :\"as soon asthe land ofany country has all become private property ,the landlords ,like all other men ,love to reap where they never sowed ,and demand arent even for its natural produce ....the laborer ... must give up tothe landlord aportion ofwhat his labor either collects orproduces .this portion ,orwhat comes tothe same thing , the price ofthis portion ,constitutes the rent ofland .\" marx comments onthis passage inthe above -named man- uscript ,entitled ,\"acontribution ,etc. ,\"page 253 :\"adam smith ,then ,regards surplus -value ,that istosay the surplus labor ,the surplus oflabor performed and embodied inits product over and above the paid labor ,over and above that",
        "preface .17 labor which has received itsequivalent inwages ,asthe gen- eral category ,and profit and ground rent merely asitsram- ifications .\" adam smith says ,furthermore ,vol .i,chap .viii :\"as soon asland becomes private property ,the landlord demands ashare ofalmost allthe produce which the laborer can either raise orcollect from it.his rent makes the first deduction from the produce oflabor which isemployed upon land .it seldom happens that the person who tills the ground has wherewithal tomaintain himself till he reaps the harvest . his maintenance isgenerally advanced tohim from the stock ofamaster ,the farmer who employs him ,and who would have nointerest toemploy him ,unless hewas toshare inthe produce ofhis labor ,orunless his stock was tobere- placed by him with aprofit .this profit makes asecond deduction from the produce ofthe labor which isemployed upon land .the produce ofalmost all other labor isliable tothe like deduction ofprofit .inallarts and manufactures the greater part ofthe workmen stand inneed ofamaster to advance them the materials for their work ,and their wages and maintenance till itbecompleted .he shares inthe prod- uce of their labor ,or inthe value which itadds tothe materials upon which itisbestowed ;and inthis share con- sists his profit .\" the comment ofmarx on this passage (on page 256 of his manuscript )isasfollows :\"here adam smith declares insomany words that ground rent and profit ofcapital are simply deductions from the product ofthe laborer ,orfrom the value ofhis product ,and equal tothe additional labor expended onthe raw material .but this deduction ,asadam smith himself has previously explained ,can consist only ofthat part oflabor which the laborer expends over and above the quantity ofwork which pays for his wages and furnishes the equivalent of wages ;in other words ,this deduction consists ofthe surplus labor ,the unpaid part of his labor .\" itistherefore evident that even adam smith knew \"the",
        "18 preface . source ofthe surplus -value ofthe capitalists ,\"and further- more also that ofthe surplus -value ofthe landlords .marx acknowledged this asearly as1861 ,while rodbertus and the swarming mass ofhis admirers ,who grew like mush- rooms under the warm summer showers ofstate socialism , seem tohave forgotten all about that . \"nevertheless ,\"continues marx ,\"smith did not separate surplus -value proper asaseparate category from the special form which itassumes inprofit and ground rent .hence there ismuch error and incompleteness inhis investigation , and still more inthat ofricardo .\"this statement literally fits rodbertus .his \"rent \"issimply the sum ofground rent plus profit .he builds up an entirely erroneous theory of ground rent ,and hetakes surplus -value without any critical reservation just ashis predecessors hand itover tohim .on the other hand ,marx's surplus -value represents the general form ofthe sum ofvalues appropriated without any equiva- lent return by the owners ofthe means ofproduction ,and this form isthen seen totransform itself into profit and ground rent by very particular laws which marx was the first todiscover .these laws are traced involume iii.we shall see there how many intermediate links are required for the passage from anunderstanding ofsurplus -value ingen- eral tothat ofits transformation into profits and ground rent ;in other words ,for the understanding ofthe laws of the distribution ofsurplus -value within the capitalist class . ricardo goes considerably farther than adam smith .he bases his conception ofsurplus -value on anew theory of value which iscontained inthe germ inadam smith ,but which isgenerally forgotten when itcomes toapplying it. this theory ofvalue became the starting point ofall subse- quent economic science .ricardo starts out with the deter- mination ofthe value ofcommodities by the quantity of labor embodied inthem ,and from this premise he derives his theory ofthe distribution ,between laborers and capital- ists,ofthe quantity ofvalue added by labor tothe raw materials ,this value being divided into wages and profit",
        "preface .19 (meaning surplus -value ).he shows that the value ofthe commodities remains the same ,no matter what may bethe proportion ofthese two parts ,and he claims that this law has only afew exceptions .he even formulates afew funda- mental laws relative tothe mutual relations ofwages and surplus -value (the latter considered by him asprofit ),al- though his statements are too general (see marx ,capital , vol .i,chap .xvii ,1),and heshows that ground rent isa quantity realized under certain conditions over and above profit .rodbertus did not improve onricardo inany ofthese respects .he either remained unfamiliar with the internal contradictions which caused the downfall ofthe ricardian theory and school ,orthey misled him into utopian de- mands instead ofenabling him tosolve economic problems (see his \"zur erkenntniss ,etc. ,\"page 130 ). but the ricardian theory ofvalue and surplus -value did not have towait for rodbertus '\"zur erkenntniss \"inorder tobeutilized for socialist purposes .on page 609 ofthe sec- ond edition ofthe german original of\"capital ,\"vol .i, wefind the following quotation :\"the possessors ofsurplus produce orcapital .\"this quotation istaken from apamph- letentitled \"the source and remedy ofthe national diffi- culties .aletter tolord john russell .london ,1821. \" inthis pamphlet ,the importance ofwhich should have been recognized on account ofthe terms surplus produce orcap- ital,and which marx saved from being forgotten ,we read the following statements : \"whatever may bedue tothe capitalist \"(from the cap- italist standpoint )\"he can never appropriate more than the surplus labor ofthe laborer ,for the laborer must live \"(page 23).as for the way inwhich the laborer lives and for the quantity ofthe surplus value appropriated by the capitalist , these are very relative things .-\"if capital does not de- crease in value inproportion asitincreases involume ,the capitalist will squeeze out ofthe laborer the product of every hour oflabor above the minimum on which the laborer can live ....the capitalist can ultimately say to",
        "20preface . the laborer :you shall not eat bread ,for you can live on beets and potatoes ;and this iswhat wehave tocome to\"(page 24).\"ifthe laborer can bereduced toliving on potatoes , instead ofbread ,itisundoubtedly true that more can be gotten out ofhis labor ;that istosay ,if,inorder tolive on bread ,he was compelled ,for his own subsistence and that ofhis family ,tokeep for himself the labor ofmonday and tuesday ,hewill ,when living onpotatoes ,keep only half of monday's labor for himself ;and the other half ofmonday , and all oftuesday ,are set free ,either for the benefit ofthe state orfor the capitalist .\"(page 26.) \"itisadmitted that the sums ofinterest paid tothe capitalist ,either inthe form ofrent ,money -interest ,orcommercial profit ,are paid from the labor ofothers .\"(page 23.) here we have the same idea of\"rent \"which rodbertus has ,only the writer says \"interest \"instead ofrent . marx makes the following comment (manuscript of\"a contribution ,etc. ,\"page 852 ):\"the little known pamph- let-published atatime when the 'incredible cobbler 'mac- culloch began tobe talked about -represents an essential advance over ricardo .itdirectly designates surplus -value or 'profit 'inthe language ofricardo (sometimes surplus produce ),orinterest ,asthe author ofthis pamphlet calls it,assurplus labor ,which the laborer performs gratuitously , which he performs inexcess ofthat quantity oflabor re- quired for the reproduction ofhis labor -power ,the equiva- lent ofhis wages .itwas nomore important toreduce value down tolabor than itistoreduce surplus -value ,represented bysurplus -produce ,tosurplus -labor .this had already been stated byadam smith ,and forms amain factor inthe analy sisofricardo .but neither ofthem said soanywhere clearly and frankly insuch away that itcould not be misunder- stood .\" we read furthermore ,on page 859 ofthis manu- script :\"moreover ,the author islimited by the economic theories which hefinds athand and which heaccepts .just asthe confounding of surplus -value and profit misleads ricardo into irreconcilable contradictions ,so this author",
        "preface . 21 *fares bybaptizing surplus -value with the name of'interest of capital .'itistrue ,he advances beyond ricardo by reduc- ing all surplus -value tosurplus -labor .and furthermore ,in calling surplus -value 'interest ofcapital ,'heemphasizes that he isreferring bythis term tothe general form ofsurplus- labor asdistinguished from its special forms ,rent ,money interest ,and commercial profit .but yet he chooses the name ofone ofthese special forms ,interest ,atthe same time for the general form .and this causes his relapse into the economic slang .\" this last passage fits rodbertus just asifitwere made toorder for him .he,too,islimited bythe economic cate- gories which hefinds athand .he,too,applies the name of one ofthe minor categories tosurplus -value ,and hemakes it quite indefinite atthat by calling it\"rent .\" the result of these two mistakes isthat herelapses into the economic slang , that he makes no attempt to follow up his advance over ricardo by acritical analysis ,and that he ismisled into using his imperfect theory ,even before ithas gotten rid of itsegg -shells ,asabasis for autopia which isinevery respect too late .the above -named pamphlet appeared in1821 and anticipated completely rodbertus \"rent \"of1842 . this pamphlet isbut the farthest outpost ofan entire lit- erature which the ricardian theories ofvalue and surplus- value directed against capitalist production in the interest ofthe proletariat ,fighting the bourgeoisie with its own weapons .the entire communism ofowen ,sofar asitplays arole ineconomics and politics ,isbased onricardo .apart from him ,there are still numerous other writers ,some of whom marx quoted asearly as1847 inhis \"poverty of philosophy \" against proudhon ,such as edmonds , thompson ,hodgskin ,etc.,etc. ,\"and four more pages of etcetera .\"iselect from among this large number ofwrit- ings the following by arandom choice :\"an inquiry into the principles ofthe distribution ofwealth ,most conducive tohuman happiness ,by william thompson ;anew edi- tion .london ,1850. \"this work ,written in1822 ,first ap-",
        "22preface . peared in 1827. it likewise regards the wealth ap- propriated bythe non -producing classes asadeduction from the product ofthe laborer ,and uses pretty strong terms in referring toit.the author says that the ceaseless endeavor ofthat which we call society consisted ininducing ,byfraud orpersuasion ,by intimidation orcompulsion ,the produc- tive laborer toperform his labors inreturn for the minimum ofhis own product .he asks why the laborer should not be entitled tothe full product ofhis labor .he declares that the compensations ,which the capitalists filch from the pro- ductive laborer under the name ofground rent orprofit , are claimed inreturn for the use ofland orother things . according tohim ,all physical substances ,by means of which the propertiless productive laborer who has no other means ofexistence but the capacity ofproducing things , can make use ofhis faculties ,are inthe possession ofothers with opposite material interests ,the consent ofthese isre- quired inorder that the laborer may find work ;under these circumstances ,he says ,itdepends on the good will ofthe capitalists how much ofthe fruit ofhis own labor the laborer shall receive .and he speaks of\"these defalcations \"and of their relation tothe unpaid product ,whether this iscalled taxes ,profit ,ortheft ,etc. imust admit that idonot write these lines without acer- tain mortification .iwill not make somuch ofthe fact that the anti -capitalist literature ofengland ofthe 20's and 30's issolittle known ingermany ,inspite ofthe fact that marx referred toiteven inhis \"poverty of philosophy ,\" and quoted from it,asfor instance that pamphlet of1821 ,or ravenstone ,hodgskin ,etc. ,involume iof\"capital .\" but itisaproof ofthe degradation into which official political economy has fallen ,that not only the vulgar economist ,who clings desperately tothe coat tails ofrodbertus and really has not learned anything ,but also the duly installed profes- sor,who boasts ofhis wisdom ,have forgotten their classical economy tosuch an extent that they seriously charge marx",
        "preface .23 with having robbed rodbertus ofthings which may be found even inadam smith and ricardo . but what isthere that isnew about marx's statements on surplus -value ? how isitthat marx's theory of surplus- value struck home like athunderbolt out ofaclear sky ,in all modern countries ,while the theories ofall his socialist predecessors ,including rodbertus ,remained ineffective ? the history ofchemistry offers an illustration which ex- plains this : until late inthe 18th century ,the phlogistic theory was accepted .itassumed that inthe process ofburning ,acer- tain hypothetical substance ,an absolute combustible ,named phlogiston ,separated from the burning bodies .this theory sufficed for the explanation ofmost ofthe chemical phenom- ena then known ,although ithad tobeconsiderably twisted insome cases .but in1774 ,priestley discovered acertain kind ofair which was sopure ,orsofree from phlogiston , that common air seemed adulterated incomparison toit.he called it\"dephlogisticized air.\" shortly after him ,scheele obtained the same kind ofair insweden ,and demonstrated itsexistence inthe atmosphere .he also found that this air disappeared ,whenever some body was burned initorinthe open air,and therefore hecalled it\"fire-air.\" \"from these facts he drew the conclusion that the combination arising from the union ofphlogiston with one ofthe elements of the atmosphere \"(that istosay by combustion )\"was noth- ing but fire orheat which escaped through the glass .\"\"2 priestley and scheele had produced oxygen ,without knowing what they had discovered .they remained \"lim- ited bythe phlogistic categories which they found athand .\" the element ,which was destined toabolish all phlogistic ideas and torevolutionize chemistry ,remained barren in their hands .but priestley had immediately communicated his discovery to lavoisier in paris ,and lavoisier ,by means ofthis discovery ,now analyzed the entire phlogistic chemistry and came tothe conclusion that this new air was 2roscoe -schorlemmer ,ausuehrliches lehrbuch der chemie .braunsch- weig ,1877 ,i,p.13,18.",
        "24preface . anew chemical element ,that itwas not the mysterious phlo- giston which departed from aburning body ,but that this new element combined with the burning body .thus he placed chemistry ,which had solong stood on its head , squarely on its feet .and although he did not obtain the oxygen simultaneously and independently ofthe other two scientists ,ashe claimed later on,henevertheless isthe real discoverer ofoxygen ascompared tothe others who had pro- duced itwithout knowing what they had found . marx stands inthe same relation tohis predecessors in the theory ofsurplus -value that lavoisier maintains to priestley and scheele .the existence ofthose parts ofthe value ofproducts ,which wenow call surplus -value ,had been ascertained long before marx .ithad also been stated with more orless precision that itconsisted ofthat part ofthe laborer's product for which its appropriator does not give any equivalent .but there the economists halted .some ofthem ,for instance the classical bourgeois economists in- vestigated ,perhaps ,the proportion in which the product oflabor was divided among the laborer and the owner of the means of production .others ,the socialists ,declared that this division was unjust and looked for utopian means of abolishing this injustice .they remained limited by the economic categories which they found athand . now marx appeared .and he took an entirely opposite view from all his predecessors .what they had regarded asasolution ,heconsidered aproblem .he saw that hehad todeal neither with dephlogisticized air,nor with fire-air, but with oxygen .he understood that itwas not simply a matter ofstating an economic fact ,orofpointing out the conflict ofthis fact with \"eternal justice and true morals ,\" but ofexplaining afact which was destined torevolutionize the entire political economy ,and which offered akey for the understanding ofthe entire capitalist production ,pro- vided you knew how touse it.with this fact for astart- ing point marx analyzed allthe economic categories which he found athand ,just aslavoisier had analyzed the cate-",
        "preface .25 gories ofthe phlogistic chemistry which he found athand . inorder tounderstand what surplus -value is,marx had to find out what value is.therefore he had above all toan- alyze critically the ricardian theory ofvalue .marx also analyzed labor astoits capacity for producing value ,and hewas the first toascertain what kind oflabor itwas that produced value ,and why itdid so,and by what means it accomplished this .he found that value was nothing but crystallized labor ofthis kind ,and this isapoint which rodbertus never grasped tohis dying day .marx then ana- lyzed the relation ofcommodities tomoney and demonstrated how ,and why ,thanks tothe immanent character ofvalue , commodities and the exchange of commodities must pro- duce the opposition ofmoney and commodities .his the- ory ofmoney ,founded on this basis ,isthe first exhaustive treatment ofthis subject ,and itistacitly accepted every- where . he analyzed the transformation of money into capital and demonstrated that this transformation isbased onthe purchase and sale oflabor -power .by substituting labor -power ,asavalue -producing quality ,for labor hesolved with one stroke one ofthe difficulties which caused the down- fall ofthe ricardian school ,viz.:the impossibility ofhar- monizing the mutual exchange ofcapital and labor with the ricardian law ofdetermining value by labor .by as- certaining the distinction between constant and variable capital ,he was enabled totrace the process ofthe forma- tion ofsurplus -value inits details and thus toexplain it, afeat which none ofhis predecessors had accomplished .in other words ,he found adistinction inside ofcapital itself with which neither rodbertus nor the capitalist economists know what todo,but which nevertheless furnished akey for the solution ofthe most complicated economic problems , asisproved by this volume ii and will be proved still more by volume iii.he furthermore analyzed surplus- value and found its two forms ,absolute and relative sur- plus -value .and heshowed that both ofthem had played adifferent ,and each time adecisive role ,inthe historical",
        "26preface . development ofcapitalist production .on the basis ofthis surplus -value hedeveloped the first rational theory ofwages which we have ,and drew for the first time an outline of the history of capitalist accumulation and asketch ofits historical tendencies . and rodbertus ?after he has read all that ,he regards itas\"anassault onsociety ,\"and finds that hehas said much more briefly and clearly by what means surplus -value is originated ,and finally declares that all this does indeed ap- ply to\"the present form ofcapital ,\"that istosay tocapi- tal asitexists historically ,but not tothe \"conception of capital ,\"that istosay,not tothe utopian idea which rod- bertus has ofcapital .he isjust like old priestley ,who stood by phlogiston tothe end and refused tohave anything to do with oxygen .there isonly this difference :priestley had actually produced oxygen ,while rodbertus had merely rediscovered acommon -place inhis surplus -value ,orrather his \"rent ;\"and marx declined toact like lavoisier and to claim that hewas the first todiscover the fact ofthe exist- ence ofsurplus -value . the other economic feats ofrodbertus were performed on about the same plane .his elaboration ofsurplus -value into autopia has already been inadvertently criticized by marx inhis \"poverty of philosophy .\"what may be said about this point inother respects ,ihave said in my preface tothe german edition ofthat work .rodbertus ' explanation ofcommercial crises out ofthe underconsump- tion ofthe working class has been stated before him by sis- mondi inhis \"nouveaux principes del'economie politique ,\" liv.iv,ch.iv. however ,sismondi always had the world- market inmind ,while the horizon ofrodbertus does not extend beyond prussia .his speculations asto whether wages are derived from capital orfrom income belong to the domain ofscholasticism and are definitely settled bythe 3\"thus theconcentration ofwealth intothehands ofasmall number ofproprietors narrows thehome market more andmore ,andindustry ismore andmore compelled to open upforeign markets ,where stillgreater revolutions await it\"(namely ,thecrisis of 1817,which isimmediately described ).nouveaux principes ,edition of1819,i.,p.336.",
        "preface .27 third part ofthis second volume of\"capital .\" his the- ory ofrent has remained his exclusive property and may rest in peace ,until the manuscript ofmarx criticising it will be published .finally his suggestions for the eman- cipation ofthe old prussian landlords from the oppression ofcapital are entirely utopian ;for they avoid the only prac- tical question ,which has tobesolved ,viz.:how can the old prussian landlord have ayearly income of,say,20,000 marks and ayearly expense of,say,30,000 marks ,without running into debt ? the ricardian school failed about the year 1830 ,being unable tosolve the riddle ofsurplus -value .and what was impossible for this school ,remained still more insoluble for itssuccessor ,vulgar economy .the two points which caused itsfailure were these : 1.labor isthe measure ofvalue .however ,actual labor inits exchange with capital has alower value than labor embodied inthe commodities for which actual labor isex- changed .wages ,the value ofadefinite quantity ofactual labor ,are always lower than the value ofthe commodity produced by this same quantity oflabor and inwhich it isembodied .the question isindeed insoluble ,ifput in this form .ithas been correctly formulated by marx and then answered .itisnot labor which has any value .as an activity which creates values itcan no more have any special value in itself than gravity can have any special weight ,heat any special temperature ,electricity any special strength ofcurrent .itisnot labor which isbought and sold asacommodity ,but labor -power .as soon aslabor- power becomes acommodity ,itsvalue isdetermined bythe labor embodied inthis commodity asasocial product .this value isequal tothe social labor required for the produc- tion and reproduction ofthis commodity .hence the pur- chase and sale oflabor -power onthe basis ofthis value does not contradict the economic law ofvalue . 2.according tothe ricardian law ofvalue ,two capitals employing the same and equally paid labor ,all other con-",
        "28 preface . ditions being equal ,produce the same value and surplus- value ,orprofit ,inthe same time .but ifthey employ un- equal quantities ofactual labor ,they cannot produce equal surplus -values ,or,asthe ricardians say,equal profits .now in reality ,the exact opposite takes place .as amatter of fact ,equal capitals ,regardless ofthe quantity ofactual labor employed by them ,produce equal average profits inequal times .here wehave ,therefore ,aclash with the law ofvalue , which had been noticed by ricardo himself ,but which his school was unable to reconcile .rodbertus likewise could not but note this contradiction .but instead ofsolving it, hemade itastarting point ofhis utopia (zur erkenntniss , etc. ).marx had solved this contradiction even inhis manu- script for his \"critique of political ecomony .\" according tothe plan of\"capital ,\"this solution will be made public involume iii .several months will pass before this can be published .hence those economists ,who claim tohave discovered that rodbertus isthe secret source and the superior predecessor ofmarx ,have now an opportunity todemonstrate what the economics ofrodbertus can accom- plish .ifthey can show in which way an equal average rate ofprofit can and must come about ,not only without a violation ofthe law ofvalue ,but by means ofit,iam willing todiscuss the matter further with them .inthe mean- time ,they had better make haste .the brilliant analyses of this volume iiand its entirely new conclusions on an al- most untilled ground are but the initial statements prepar- ing the way for the contents ofvolume iii,which develops the final conclusions ofmarx's analysis ofthe social process ofreproduction on acapitalist basis .when this volume iii will appear ,little mention will be made ofacertain economist called rodbertus . the second and third volumes of\"capital \"were tobe dedicated ,asmarx stated repeatedly ,tohis wife . friedrich engels . london ,onmarx's birthday ,may 5,1885 .",
        "preface .29 the present second edition is,inthe main ,afaithful reprint ofthe first .typographical errors have been cor- rected ,afew inconsistencies ofstyle eliminated ,and afew short passages containing repetitions struck out. the third volume ,which presented quite unforeseen diffi- culties ,islikewise almost ready for the printer .if my health holds out,itwill beready for the press this fall . friedrich engels . london ,july 15,1893 .",
        "30preface . translator's note . the conditions and the location ofthe place in which itranslated volumes iiand iii ofthis work made itim- possible for me toget access tothe original works ofthe authors quoted by marx .iwas compelled ,under these circumstances ,to retranslate many quotations from eng- lish authors from the german translation ,without an op- portunity tocompare my retranslated version with the eng- lish original .but whatever may bethe difference inthe wording ofthe originals and ofmy retranslation from the german ,itdoes not affect the substance ofthe quotations inthe least .the meaning ofthe originals will befound to bethe same asthat ofmy retranslation .the interpretation given by marx tothe various quotations from other authors , and the conclusions drawn byhim from them ,are not altered in the least by any deviation ,which my translation may show from the original texts .ifany one should beinclined toturn these statements ofmine toany controversial advan- tage ,he should remember that he cannot use them against marx ,but only against me. ernest untermann .",
        "book ii the circulation of capital part i the metamorphoses of capital and their cycles chapter i. the circulation of money -capital . the circulation process of capital takes place inthree stages ,which ,according tothe presentation ofthe matter involume i,form the following series : first stage :the capitalist appears as abuyer on the commodity and labor market ;his money istransformed into commodities ,oritgoes through the circulation pro- cess m-c. second stage :productive consumption ofthe purchased commodities by the capitalist .he acts inthe capacity of acapitalist producer of commodities ;his capital passes through the process ofproduction .the result isacom- modity ofmore value than that ofthe elements compos- ing it. third stage :the capitalist returns tothe market asa seller ;his commodities are exchanged for money ,orthey pass through the circulation process c-m. 'from manuscript ii. 31",
        "32capital . hence the formula for the circulation process ofmoney capital is:m-c...p...c'-m',the dots indicating the points where the process ofcirculation was interrupted ,and c'and m'designating cand mincreased by surplus value . the first and third stages were discussed involume ionly insofar asitwas required for an understanding ofthe sec- ond stage ,the process ofproduction ofcapital .for this reason ,the various forms which capital assumes inits dif- ferent stages ,and which iteither retains ordiscards inthe repetition ofthe circulation process ,were not considered . these forms are now the first objects ofour study . in order toconceive ofthese forms intheir purest state , we must first ofall abstract from all factors which have nothing todo directly with the discarding oradopting of any ofthese forms .itistherefore taken for granted at this point that the commodities are sold attheir value and that this takes place under the same conditions through- out .abstraction islikewise made ofany changes ofvalue which might occur during the process ofcirculation . i. first stage .m-c.2 m-crepresents the exchange ofasum ofmoney for a sum of commodities ;the purchaser exchanges his money for commodities ,the sellers exchange their commodities for money .itisnot somuch the form ofthis act ofexchange which renders itsimultaneously apart ofthe general circu- lation ofcommodities and adefinite organic section inthe independent circulation ofsome individual capital ,asits substance ,that istosay the specific use-values ofthe com- modities which are exchanged for money .these commodi- ties represent on the one hand means ofproduction ,on the other labor -power ,and these objective and personal factors inthe production ofcommodities must naturally correspond in their peculiarities tothe special kind ofarticles tobe manufactured .ifwe call labor -power l,and the means ofproduction pm ,the sum ofcommodities tobepurchased is c=l+pm ,ormore briefly c{m.m-c,considered astoits substance ,istherefore represented by m-cpm ,that isto say m-ciscomposed of m-land m-pm .the sum of 2beginning ofmanuscript vii,started july 2,1878 .",
        "the circulation ofmoney -capital . 33 money misseparated into two parts ,one ofwhich buys labor -power ,the other means ofproduction .these two series ofpurchases belong toentirely different markets ,the one tothe commodity -market proper ,the other tothe labor- market . aside from this qualitative division ofthe sum ofcom- modities into which mistransformed ,the formula m-c{m also represents avery characteristic quantitative relation . we know that the value ,orprice ,oflabor -power ispaid toits owner ,who offers itfor sale asacommodity ,inthe form ofwages ,that istosay itisthe price ofasum oflabor containing surplus -value .for instance ,ifthe daily value of labor -power isequal tothe product offive hours 'labor val- ued atthree shillings ,this sum figures inthe contract be- tween the buyer and seller oflabor power asthe price ,or wages ,for say,ten hours oflabor time .ifsuch acontract ismade ,for instance ,with 50 laborers ,they are supposed to work 500 hours per day for their purchaser ,and one- half ofthis time ,or250 hours equal to25 days oflabor of10hours each ,represent nothing but surplus -value .the quantity and the volume ofthe commodities to be pur- chased must be sufficient for the utilization ofthis labor- power . m-c ,then ,does not merely express the qualitative relation represented by the exchange ofacertain sum of money ,say 422 pounds sterling ,for acorresponding sum ofmeans ofproduction and labor -power ,but also aquanti- tative relation between certain parts ofthat same money spent for the labor -power land the means ofproduction pm . this relation isdetermined atthe outset by the quantity ofsurplus -labor tobeexpended by acertain number ofla- borers . if,for instance ,acertain manufacturer pays aweekly wage of50 pounds sterling to50 laborers ,he must spend 372 pounds sterling for means ofproduction ,ifthis isthe value ofthe means ofproduction which aweekly labor of3,000 hours ,1,500 ofwhich are surplus -labor ,transforms into factory products . itisimmaterial for the point under discussion ,how much additional value inthe form ofmeans ofproduction isre-",
        "84capital . quired inthe various lines ofindustry by the utilization ofsurplus -labor .we merely emphasize the fact that the amount ofmoney mspent for means ofproduction inthe exchange m-pm must buy aproportional quantity ofthem . the quantity ofmeans ofproduction must suffice for the absorption ofthe amount of labor which istotransform them into products .ifthe means ofproduction were in- sufficient ,the surplus -labor available for the purchaser would not beutilized ,and he could not dispose ofit.on the other hand ,ifthere were more means ofproduction than available labor ,they would not besaturated with labor and would not betransformed into products . as soon asthe process m-cm has been completed ,the purchaser has more than simply the means ofproduction and labor -power required for the manufacture ofsome use- ful article .he has also athis disposal agreater supply of labor -power ,oragreater quantity oflabor ,than isneces- sary for the reproduction ofthe value ofthis labor -power , and he has atthe same time the means ofproduction re- quired for the materialization ofthis quantity oflabor .in other words ,he has athis disposal the elements required for the production ofarticles ofagreater value than these elements ,he has amass of commodities containing sur- plus -value .the value advanced by him inthe form of money has then assumed anatural form inwhich itcan be incarnated asavalue generating more value .in brief , value exists then inthe form ofproductive capital which has the faculty ofcreating value and surplus -value .let us call capital inthis form p. now the value ofpisequal tothat ofl+pm ,itisequal tomexchanged for land pm .misthe same capital -value asp,only ithas adifferent form ofexistence ,itiscapital value inthe form ofmoney -money -capital . m-cp ,orthe more general formula m-c,asum of purchases ofcommodities ,aprocess within the general cir- culation of commodities ,istherefore at the same time , seeing that itisastage inthe independent circulation of capital ,aprocess of transforming capital -value from its money form into itsproductive form .itisthe transforma- tion ofmoney -capital into productive capital .inthe diagram",
        "the circulation ofmoney -capital . 85 ofthe circulation which we are here discussing ,money ap- pears asthe first bearer ofcapital -value ,and money -capital therefore represents the form inwhich capital isadvanced . money inthe form ofmoney -capital finds itself employed inthe functions ofamedium ofexchange ,inthe present case itperforms the service ofageneral purchasing medium and general paying medium .the last -named service isre- quired inasmuch aslabor -power ,though first bought isnot paid until ithas been utilized .ifthe means ofproduction are not found ready on the market ,but have tobe ordered , money inthe process m-pm likewise serves as apaying medium .these functions are not due tothe fact that money -capital iscapital ,but that itismoney . on the other hand ,money -capital ,orcapital -value inthe form ofmoney ,cannot perform any other service but that of money .this service appears asafunction ofcapital simply because itplays acertain role inthe movements of capital .the stage inwhich this function isperformed is interrelated with other stages ofthe circulation ofmoney- capital .take ,for instance ,the case with which we are here dealing .money ishere exchanged for commodities which represent the natural form of productive capital , and this form contains inthe germ the phenomena ofthe process ofcapitalist production . apart ofthe money performing the function ofmoney- capital inthe process m-c{m assumes ,in the course ofthis circulation ,afunction inwhich itloses its capital character but preserves its money character .the circula- tion of money -capital misdivided into the stages m-pm and m-l,into the purchase ofmeans ofproduction and of labor -power . let us consider the last -named stage by itself .m-listhe purchase of labor -power by the capitalist .itis also the sale of labor -power ,orwe may say oflabor ,since we have assumed the existence ofwages ,by the laborer who owns it.what ism-c,orinthis case m-l,from the standpoint ofthe buyer ,ishere ,asinevery other transaction ofthis kind ,c-m from the standpoint ofthe seller ,l-mfrom the standpoint of the laborer .itisthe sale oflabor -power by the laborer . this isthe first stage ofcirculation ,orthe",
        "36capital . first metamorphosis ,of commodities (vol .i,chap .iii, sect .2a).itisfor the seller oflabor -power atransforma- tion ofhis commodity into the money -form .the laborer spends the money soobtained gradually for anumber of commodities required for the satisfaction ofhis needs ,for articles ofconsumption .the complete circulation of his commodity therefore appears asl-m-c,that istosay first as l-m,orc-m,second asm-c,which isthe general form of the simple circulation of commodities ,c-m-c.money is inthis case merely apassing circulation -medium ,amere mediator inthe exchange ofone commodity for another . m-listhe typical stage ofthe transformation ofmoney- capital into productive capital .itisthe essential condition for the transformation ofvalue advanced inthe form of money into capital ,that istosay into avalue producing surplus -value .m-pm isnecessary only for the purpose of realizing the quantity oflabor bought inthe process m-l. this process was discussed from this point ofview invol . i,part ii,under the head of\"transformation ofmoney into capital .\"but atthis point ,we shall have toconsider italso from another side ,relating especially tomoney -capi tal asaform ofcapital . m-lisregarded asageneral characteristic ofthe capital . ist mode ofproduction .but inthis case we are doing so, not so much because the purchase oflabor -power repre- sents acontract which stipulates the delivery ofacertain quantity oflabor -power for the reproduction ofthe price of labor -power ,orofwages ,not somuch for the reason that itmeans the delivery ofsurplus -labor which isthe funda- mental condition for the capitalization ofthe value ad- vanced ,orfor the production ofsurplus -value ;but we do sorather on account ofits money form ,because wages in the form ofmoney buy labor -power ,and this isthe charac- teristic mark ofthe money system . nor isitthe irrational feature ofthe money form which we shall note asthe characteristic part .we shall overlook the irrationalities .the irrationality consists in the fact that labor itself asavalue -creating element cannot have any value which could be expressed inits price ,and that , therefore ,acertain quantity of labor cannot have any",
        "the circulation ofmoney -capital . 37 equivalent inacertain quantity ofmoney .but we know that wages are but adisguised form inwhich ,for instance , the price ofone day's labor -power isseen tobethe price of the quantity oflabor materialized bythis labor -power inone day .the value produced by this labor -power insix hours oflabor isthen expressed asthe value oftwelve hours of itslabor . m-lisregarded asthe characteristic signature ofthe so- called money system ,because labor there appears asthe com- modity ofits owner ,and money asthe buyer .in other words ,itisthe money relation inthe sale and purchase of human activity which isconsidered .itisafact ,however , that money appears atanearly stage asabuyer ofso-called services ,without the transformation of minto money- capital ,and without any change inthe general character of the economic system . itmakes no difference tomoney into what sort ofcom- modities itistransformed .itisthe general equivalent of all commodities ,which show by their prices that they rep- resent inan abstract way acertain sum ofmoney and an- ticipate their exchange for money .they donot assume the form inwhich they may be translated into use-values for their owners ,until they change places with money .once that labor power has come into the market asthe commod- ity ofitsowner ,tobesold for wages inreturn for labor ,its sale and purchase isno more startling than the sale and purchase ofany other commodity .the peculiar character- istic isnot that the commodity labor -power issalable ,but that labor -power appears inthe shape ofacommodity . by means ofm-c ,that istosay bythe transformation ofmoney -capital into productive capital ,the capitalist ac- complishes the combination ofthe objective and personal factors ofproduction sofar asthey consist ofcommodities . ifmoney istransformed into productive capital for the first time ,orifitperforms for the first time the function ofmoney -capital for its owner ,he must begin by buying means ofproduction ,such asbuildings ,machinery ,etc. ,be- fore he buys any labor -power .for assoon aslabor -power passes into his control ,he must have means ofproduction for it,in order toutilize it.",
        "88capital . this isthe capitalist's point ofview . the laborer ,on the other hand ,looks atthis question in the following light :the productive application ofhis la- bor -power isnot possible ,until he has sold itand brought itinto contact with means ofproduction .before its sale , itexists inastate ofseparation from the means ofproduc- tion which itrequires for itsmaterialization .solong asit remains inthis state ,itcannot be used either for the pro- duction ofuse-values for itsowner ,orfor the production of commodities ,by the sale of which he might live .but from the moment that itisbrought into touch with means ofproduction ,itforms part ofthe productive capital ofits purchaser ,the same asthe means ofproduction . owner .itistrue ,that inthe act m-lthe owner ofmoney and the owner oflabor -power enter into the relation ofbuyer and seller ,ofmoney -owner and commodity -owner .to this extent they enter into amoney relation .but atthe same time the buyer also appears in the role of an owner of means ofproduction ,which are the material conditions for the productive expenditure oflabor -power onthe part ofits the means ofproduction ,then ,meet the owner of labor -power inthe form ofthe property ofanother .on the other hand ,the seller oflabor meets itsbuyer inthe form of the labor -power ofanother and itmust pass into the buyer's possession ,itmust become apart ofhis capital ,inorder that itmay become productive capital .the class relation be- tween the capitalist and the wage laborer istherefore es- tablished from the moment that they meet inthe act m-l, which signifies l-mfrom the standpoint ofthe laborer .it isindeed asale and apurchase ,amoney relation ,but itis asale and apurchase inwhich the buyer isacapitalist and the seller awage -laborer .and this relation arises out of the fact that the conditions required for the materializa- tion oflabor -power ,viz.:means ofsubsistence and means of production ,are separated from the owner oflabor -power and are the property ofanother . we are not here concerned inthe origin ofthis separa- tion .itisafact ,assoon asthe act m-lcan beperformed . the thing which interests ushere isthat m-ldoes not be- come afunction ofmoney -capital for the sole reason that",
        "the circulation ofmoney -capital . 39 itisameans ofpaying for auseful human activity orserv- ice.the function ofmoney asapaying medium isnot the main object ofour attention .money can be expended inthis form only because labor -power finds itself separated from itsmeans ofproduction ,including the means ofsub- sistence required for its reproduction ;because this separa- tion can beovercome only bythe sale ofthe labor -power to the owner ofthe means ofproduction ;because the ma- terialization oflabor -power ,which isby no means limited tothe quantity oflabor required for the reproduction of its own price ,islikewise inthe control ofits buyer .the capital relation during the process ofproduction arises only because itisinherent inthe process ofcirculation based on the different economic conditions ,the class distinctions be- tween the buyer and the seller oflabor -power .itisnot money which by itsnature creates this relation ;itisrather the existence ofthis relation which permits ofthe trans- formation of amere money -function into acapital -func- tion . in the conception ofmoney -capital ,sofar asitrelates to the special function which we are discussing ,two errors run parallel to one another or cross each other .in the first place ,the functions performed by capital -value in its ca- pacity ofmoney -capital ,which are due toits money form , are erroneously derived from its character ascapital .but they are due only tothe money form ofcapital -value .in the second and reverse case ,the specific nature of the money -function ,which renders itsimultaneously acapi- tal-function ,isattributed toits money nature .money is here confounded with capital ,while the specific nature of the money -function isconditioned on social relations such asare indicated by the act m-l,and these conditions do not exist inthe mere circulation ofcommodities and money . the sale and purchase ofslaves isformally also asale and purchase ofcommodities .but money cannot perform this function without the existence ofslavery .ifslavery exists , then money can beinvested inthe purchase ofslaves .on the other hand ,the mere possession ofmoney cannot make slavery possible . in order that the sale ofhis labor -power by the laborer ,",
        "40 capital . inthe form ofthe sale oflabor for wages ,may take place as aresult ofsocial conditions which make itthe basis ofthe production ofcommodities ,inorder that itmay not bean isolated instance ,sothat money -capital may perform ,on asocial scale ,the function inthe process m-c{m,definite historical processes are required ,by which the original con- nection ofthe means ofproduction with labor -power isdis- solved .these processes must have resulted in opposing the mass ofthe people ,the laborers ,aspropertiless tothe idle owners ofthe means ofproduction .itmakes no dif- ference inthis case ,whether the connection between the la- bor-power and the means of production before its disso- lution was such that the laborer belonged tothe means of production and was apart ofthem ,orwhether hewas their owner . pm the fact which lies back ofthe process m-c{misdis- tribution ;not distribution inthe ordinary meaning ofa distribution of articles of consumption ,but the distribu- tion ofthe elements ofproduction themselves .these con- sist ofthe objective things which are concentrated on one side ,and labor -power which isisolated on the other . the means ofproduction ,the objective things of pro- ductive capital ,must therefore stand opposed tothe la- borer ascapital ,before the process m-lcan become auni- versal ,social one . we have seen on previous occasions that capitalist pro- duction ,once itisestablished ,does not only reproduce inits further development this separation ,but extends its scope more and more ,until itbecomes the prevailing social con- dition .however ,there isstill another side tothis ques- tion .in order that capital may be able toarise and take control ofproduction ,adefinite stage inthe development ofcommerce must precede .this includes the circulation ofcommodities ,and therefore also the production ofcom- modities ;for no articles can enter circulation inthe form of commodities ,unless they are manufactured for sale , and intended for commerce .but the production ofcom- modities does not become the normal mode ofproduction , until itfinds asitsbasis the capitalist system ofproduction . the russian landowners ,who are compelled tocarry on",
        "the circulation ofmoney -capital . 41 agriculture by the help of wage -laborers instead ofserfs , since the so-called emancipation ofthe serfs ,complain about two things .they wail inthe first place about the lack of money -capital .they say,for instance ,that large sums must be paid towage -laborers ,before the crops can be sold ,and there isadearth ofready cash .capital in the form of money must always beavailable for the payment ofwages , before production on acapitalist scale can be carried on. but the landowners may take hope .in due time the in- dustrial capitalist will have athis disposal ,not alone his own money ,but also that ofothers . the second complaint ismore characteristic .itistothe effect that even ifmoney isavailable ,there are not enough laborers athand atany time .the reason isthat the rus- sian farm laborer ,owing tothe communal property inland , has not been fully separated from his means ofproduction , and hence isnot yet a\"free wage -worker \"inthe full capi- talist meaning ofthe word .but the existence of\"free \" wage -workers isthe indispensable condition for the reali- zation ofthe act m-c,the exchange ofmoney for commodi- ties ,the transformation of money -capital into productive capital . as amatter ofcourse ,the formula m-c...p...c'-m'does not represent the normal form ofthe circulation ofmoney- capital ,until capitalist production isfully developed ,be- cause itisconditioned on the existence ofasocial class of wage -laborers . we have seen that capitalist production does not only create commodities and surplus -values ,but also gives rise toan ever growing class ofwage -laborers , either by propagation orbythe transformation ofindepend- ent producers into proletarians . since the first condition for the realization ofthe act m-c...p...c'-m'isthe permanent existence ofaclass of wage -workers ,capital inthe form ofproductive capital and she circulation ofproductive capital must precede it. ii.second stage .functions ofproductive capital . the circulation ofcapital which we have here considered begins with the actofcirculation represented bythe formula m-c,the transformation of money into commodities ,or",
        "42capital . purchase .circulation must therefore be supplemented by the reverse metamorphosis c-m,the transformation ofcom- modities into money ,orsale .but the immediate result of m-c isthe interruption ofthe circulation ofthe capital advanced inthe form ofmoney .by the transformation of money -capital into productive capital the value of capital has assumed anatural form inwhich itcannot continue to circulate ,but must enter into consumption ,more accurately into productive consumption . the application oflabor -power ,labor ,can not becarried into effect anywhere but inthe labor process .the capitalist cannot sell the laborer along with the commodities ,because the wage -worker isnot achattel slave and the capitalist does not buy anything from the laborer but the privilege of utilizing the labor -power purchased in the person ofthe laborer for acertain time .on the other hand ,the capitalist cannot use this labor -power inany other way than byusing itup intransforming ,by its help ,means of production into commodities .the result ofthe first stage ofthe circu- lation ofmoney -capital istherefore its entrance into the second stage ,that ofproductive capital . this movement isrepresented by the formula m-c{pm, p,inwhich the dots indicate the place where the circulation ofcapital isinterrupted ,while its rotation continues ,since itpasses from the sphere ofthe circulation ofcommodities into that ofproduction .the first stage ,the transformation ofmoney -capital into productive capital ,istherefore merely the harbinger ofthe second ,the productive stage ofcapi- tal. the act mpm presupposes that the person performing itnot only has athis orher disposal values ofsome useful form ,but also that he or she has them inthe form of money . and the act consists precisely in giving away money .aman can ,therefore ,remain the owner ofmoney only on the condition ,that the giving away ofmoney at the same time implies areturn ofmoney .but money can return only through the sale ofcommodities .hence the above formula assumes the owner ofmoney tobe apro- ducer of commodities . now let uslook atthe formula m-l.the wage worker",
        "the circulation ofmoney -capital . 43 lives only bythe sale ofhis labor -power .the preservation ofthis power ,equivalent tothe self -preservation ofthe la- borer ,requires adaily consumption .hence the payment ofwages must becontinually repeated atshort intervals ,in order that the wage laborer may be able torepeat acts l-morc-m-c,by means ofwhich heisenabled topurchase the articles required for his self -preservation .for this reason the capitalist must stand opposed tothe wage worker in the capacity ofamoney -capitalist ,and his capital must be money -capital .on the other hand ,ifthe wage labor- ers,the mass ofdirect producers ,are toperform the act l-m-c,the means ofsubsistence required for itmust be present in the form of purchasable commodities .this state ofaffairs necessitates ahigh degree ofdevelopment ofthe circulation ofproducts inthe form ofcommodities , and this again must bepreceded by acorresponding exten- sion ofthe production ofcommodities .as soon aspro- duction by means ofwage labor has become universal ,the production of commodities must be the typical form of production .ifthis mode ofproduction isgeneral ,itcar- ries inits wake an ever increasing division oflabor ,that istosay anever growing differentiation inthe special nature ofthe products which are manufactured in the form of commodities by the various capitalists ,an ever greater di- vision ofsupplementary processes ofproduction into inde- pendent specialties .tothe extent that m-ldevelops ,m-pm also develops ,that istosay the production ofmeans ofpro- duction tothat extent differentiates from the production of commodities with those means .the means ofproduc- tion then stand opposed ascommodities toevery producer ofcommodities and he must buy those means in order to be able tocarry on his special line ofcommodity produc- tion .they are derived from branches ofproduction which are entirely divorced from his own and enter into his own branch ascommodities which he must buy .the objective materials ofcommodity production assume more and more the character ofproducts ofother commodity manufactur- ers which hemust purchase .and tothe same extent the capitalist must become amoney -capitalist ,in the same",
        "44 capital . 1ratio his capital must assume the functions ofmoney -capi- tal. on the other hand ,the same conditions which are the cause ofthe fundamental constitution ofcapitalist produc- tion ,especially the existence of aclass ofwage laborers , also demand the transition of all commodity production into the capitalist mode of commodity production .in proportion asthe capitalist mode of production develops , ithas adisintegrating effect on all older forms ofproduc- tion ,which were mainly adjusted tothe individual needs and transformed only the surplus over and above those needs into commodities .capitalist production makes of the sale of products the main incentive ,without atfirst apparently affecting the mode ofproduction itself .such was ,for instance ,the first effect ofcapitalist world commerce on such nations asthe chinese ,indians ,arabs ,etc. but wherever ittakes root ,there itdestroys all forms ofcom- modity production which are either based on the self -em- ployment ofthe producers ,ormerely on the sale ofthe surplus product .the production of commodities isfirst made general and then transformed by degrees into the capitalist mode ofcommodity production. whatever may bethe social form ofproduction ,laborers and means ofproduction always remain itsmain elements . but either ofthese factors can become effective only when they unite .the special manner in which this union is accomplished distinguishes the different economic epochs from one another .in the present case ,the separation of the so-called free laborer from his means ofproduction is the starting point ,and we have observed the way and the conditions in which these two elements are united inthe hands ofthe capitalist ,asthe productive mode ofexistence ofhis capital .the actual process which combines the per- sonal and objective materials ofcommodity production un- der these conditions ,the process ofproduction ,thus becomes initsturn afunction ofcapital ,acapitalist process ofpro- duction ,the nature ofwhich has been fully analyzed inthe first volume of this work .every process of commodity production atthe same time becomes aprocess ofexploiting end ofmanuscript vii.beginning ofmanuscript vi.",
        "the circulation ofmoney -capital .45 labor -power .but itisnot until the capitalist production ofcommodities isestablished that this mode ofexploitation becomes universal and typical ,and revolutionizes in the course ofitshistorical development ,through the organiza- tion ofthe labor process and the enormous improvement of technique ,the entire economic structure ofsociety ,in a manner eclipsing all former epochs . the means ofproduction and labor -power insofar as they are forms of existence of advanced capital values , are distinguished by the different roles assumed by them inthe production ofvalue ,hence also ofsurplus -value ,and known under the names ofconstant and variable capital . as different parts ofproductive capital they are further- more distinguished bythe fact that the means ofproduction inthe possession ofthe capitalist remain his capital even outside ofthe process ofproduction ,while labor -power exists inthe form ofindividual capital only within this process . while labor -power isacommodity only inthe hands ofits seller ,the wage worker ,itbecomes capital only inthe hands ofits buyer ,the capitalist who uses ittemporarily .and the means ofproduction do not become objective parts of productive capital ,until labor -power ,the personal form of productive capital ,isembodied inthem .human labor- power isoriginally no more capital than are the means of production .they assume this specific social character only under definite historically developed conditions ,and the same character isimpregnated upon precious metals ,and still more upon money ,by the same circumstances . productive capital ,inperforming itsfunctions ,consumes its own component parts for the purpose oftransforming them into amass ofproducts ofahigher value .seeing that labor -power acts likewise merely asan organ ofpro- ductive capital ,the surplus -value produced by its surplus- labor over and above the value ofits component elements isalso gathered by capital .the surplus -labor of labor- power isthe inexpensive labor ofcapital and thus forms surplus -value for the capitalist ,avalue which costs him no equivalent return .the product is,therefore ,not only a commodity ,but acommodity pregnant with surplus -value . its value isequal top+s,that istosay equal tothe value",
        "46capital . ofthe productive capital consumed initsmanufacture plus the surplus -value screated byit.assuming that this product were represented by 10,000 pounds of yarn ,let us say that means ofproduction valued at372 pounds sterling and labor -power valued at50 pounds sterling were con- sumed inthe production ofthis quantity ofyarn .during the process ofspinning ,the spinners transferred the value ofthe means ofproduction tothe amount of372 pounds sterling tothe yarn ,and atthe same time they created ,by means oftheir labor -power ,new values tothe amount of 128 pounds sterling .the 10,000 pounds ofyarn there- fore represent avalue of500 pounds sterling . iii.third stage .c-m'. commodities become commodity -capital by springing into existence asadirect result ofcommodity -production , embodying inanew form the capital values already utilized . ifthe production ofcommodities were carried on ascapi- talist production inall spheres ofsociety ,all commodities would be elements ofcommodity -capital from the outset , whether they would be composed of crude iron ,brussels laces ,sulphuric acid ,orcigars .the problem astowhat class ofcommodities isdestined by its nature to rank as capital and what class toserve asgeneral commodities ,is one ofthe self -prepared ills ofthe scholastic economists . in the form ofcommodities ,capital has toperform the functions ofcommodities .the articles ofwhich commod- ity capital iscomposed are produced for sale and must be exchanged for money ,must go through the process c-m. the commodities ofthe capitalist may consist of10,000 pounds ofyarn .if372 pounds sterling represent the value ofthe means ofproduction consumed inthe spinning pro- cess ,and new values tothe amount of128 pounds sterling have been created ,the yarn has avalue of 500 pounds sterling ,which isexpressed initsprice ofthe same amount . this price isrealized by the sale c-m.what isitthat makes ofthis simple process ofall commodity circulation atthe same time acapital function ?itisnot any change that takes place inside ofit.neither the use-value ofthe",
        "the circulation ofmoney -capital . 47 product has been changed ,for itpasses into the hands of the buyer asan object ofuse,nor has anything been al- tered in its exchange -value ,for this value has not ex- perienced any change ofmagnitude ,but only ofform .it first existed asyarn ,while now itexists asmoney .thus a plain distinction isevident between the first stage c-m,and the last stage c-m'.there the advanced money serves asmoney -capital ,because itistransformed ,by means ofthe circulation ofcommodities ,into articles ofaspecific use- value .here ,on the other hand ,the commodities can only serve ascapital ,since they brought this character with them from the process ofproduction before their circulation be- gan .during the spinning process ,the spinners created new values tothe amount of128 pounds sterling inthe shape of yarn .ofthis sum ,say 50pounds sterling are regarded bythe capitalist merely asan equivalent for wages advanced for labor -power ,while 78 pounds sterling -representing an ex- ploitation of156 per cent -are his surplus -value . the value ofthe 10,000 pounds ofyarn therefore embodies first the value ofthe consumed productive capital p,which consists ofaconstant capital of372 pounds sterling and a variable capital of50 pounds sterling ,their sum being 422 pounds sterling ,equal to8,440 pounds ofyarn .now the value ofthe productive capital pisequal toc,the value of the elements constituting itwhich the capitalist found to beinthe hands oftheir sellers inthe stage m-c.inthe second place ,the value ofthe yarn embodies asurplus -value of78pounds sterling ,equal to1,560 pounds ofyarn .cas anexpression ofthe value of10,000 pounds ofyarn isthere- fore equal tocplus surplus c,orcplus an increment ofc worth 78pounds sterling ,which we shall call c,since itex- ists inthe same commodity form asthat now assumed by the original value c. the value ofthe 10,000 pounds of yarn ,equal to500 pounds sterling ,istherefore represented bythe formula c+c-c'.what changes c,the value ofthe 10,000 pounds ofyarn ,into c'isnot its absolute value of 500 pounds sterling ,for itisdetermined ,the same asc standing for the expression ofthe value ofany other sum of commodities ,by the quantity oflabor embodied init.it israther itsrelative value ,itsvalue ascompared tothat of",
        "48capital . the productive capital pconsumed initsproduction ,which isthe essential thing .this value iscontained initplus the surplus -value created through the productive capital . its value exceeds that ofthe capital by the surplus -value c. the 10,000 pounds ofyarn are the bearers ofthe consumed capital value increased by this surplus -value ,and they are soby virtue ofthe capitalist process ofproduction .c'ex- presses the relation ofthe value ofthe commodities tothat ofthe capital advanced initsproduction ,inother words the composition of the value of the commodities ,of capital value and surplus -value .the 10,000 pounds ofyarn repre- sent acommodity -capital c'only because they are analtered form ofthe productive capital p,and this relation exists originally by virtue ofthe circulation ofthis individual capital ,itapplies primarily tothe capitalist who produced the yarn by the help ofhis capital .itis,sotosay,an in- ternal ,not an external relation which makes acommodity capital ofthe 10,000 pounds ofyarn intheir capacity of representatives ofvalue .they are bearing the imprint of capital not inthe absolute magnitude oftheir value ,but in its relative magnitude ,inthe proportion oftheir value to that ofproductive capital embodied inthem before they became commodities .if,then ,these 10,000 pounds ofyarn are sold attheir value of500 pounds sterling ,this act of circulation ,considered by itself ,isidentical with c-m,a mere transformation ofthe same value from the form ofa commodity into that ofmoney .but asaspecial stage in the circulation ofacertain individual capital ,the same act isalso arealization ofthe capital value ,embodied inthe commodity ,tothe amount of422 pounds sterling plus the surplus -value ,likewise embodied init,of78 pounds ster- ling .that istosay,italso represents c'-m',the trans- formation of the commodity -capital from its commodity form into that ofmoney .* the function ofc'isnow that ofall commodities ,viz.: totransform itself into money ,tobe sold ,togo through the circulation stage c-m.so long asthe capital utilized sofar remains inthe form ofcommodity -capital and stays end ofmanuscript vi.beginning ofmanuscript v.",
        "the circulation ofmoney -capital . 49 on the market ,the process ofproduction rests .the com- modity -capital serves then neither asacreator ofvalue nor of products .in proportion to the degree ofspeed with which capital throws off the commodity -form and assumes that ofmoney ,inother words ,inproportion tothe rapidity ofthe sale ,the same capital -value will serve inwidely dif- ferent degrees asacreator ofproducts orofvalues ,and the scale ofreproduction will be extended orabridged .ithas been shown involume ithat the effectiveness ofany given capital isconditioned on factors inthe productive process which are toacertain extent independent ofthe magnitude ofits own value .here we see that the process ofcirculation sets in motion new factors which are independent ofthe value ofthe capital ,its effectiveness ,its expansion orcon- traction . the mass ofcommodities c',being the embodiment of the consumed capital ,must furthermore pass in its entire volume through the metamorphosis c'-m'.the quantity sold ishere the main determinant .the individual com- modity figures only asan integral part ofthe total mass . the 500 pounds sterling are embodied in 10,000 pounds ofyarn .ifthe capitalist succeeds in selling only 7,440 pounds ofyarn attheir value of372 pounds sterling ,he has recovered only the value ofhis constant capital ,the value expended by him for means ofproduction .ifhe sells 8,440 pounds ofyarn ,he recovers only the value of his total capital .he must sell more ,inorder toobtain some surplus -value ,and he must sell the entire 10,000 pounds inorder toget the entire surplus -value of78 pounds ster- ling (1,560 pounds ofyarn ).in 500 pounds sterling he receives merely an equivalent for the commodity sold .his transaction within the process ofcirculation issimply c-m. ifhe had paid his laborers 64 pounds sterling instead of 50 pounds sterling ,his surplus -value would be only 64 pounds sterling instead of78,and the degree ofexploita- tion would have been only 100 per cent instead of150. but the value ofthe yarn would remain the same ;only the relation ofits component parts would be changed .the circulation -act c-mwould still represent the sale of10,000 pounds ofyarn for 500 pounds sterling ,which istheir value .",
        "50capital . c'isequal toc+c(or422 plus 78pounds st.).cequals the value ofp,the productive capital ,and this equals the value ofm,the money advanced inthe act m-c,the purchase of the elements ofproduction ,amounting to422 pounds ster- ling inour example .ifthe mass ofcommodities issold at itsvalue ,then cequals 422 pounds sterling ,and c,the value ofthe surplus product of 1,560 pounds of yarn ,equals 78 pounds sterling .ifwe call c,expressed inmoney ,m, then c'-m'=(c+c)-(m+m),and the cycle m-c...p...c'-m', initsexpanded form ,isrepresented by m-c{...p...(c+c)- (m+m). inthe first stage ,the capitalist takes articles ofuse out of the commodity -market proper and the labor -market .and inthe third stage he throws commodities back ,but only into one market ,the commodity -market proper .but the fact that heextracts from the market ,bymeans ofhis com- modities ,agreater value than hethrew upon itoriginally ,is due only tothe circumstance that hethrows more commodity- values back upon itthan hefirst drew out ofit.he threw the value minto itand drew out ofitthe equivalent c; he throws the value c+cback into it,and draws out ofit the equivalent m+m. mwas inour example equal tothe value of8,440 pounds ofyarn .but he throws 10,000 pounds ofyarn into the market ,he returns agreater value than he drew out ofit. on the other hand ,he threw this increased value into it only by virtue ofthe fact that he obtained asurplus -value through the exploitation oflabor -power (this value being expressed by an aliquot part ofthe product ).the mass ofcommodities becomes acommodity -capital only by virtue ofthis process ,itisthe impersonation ofthe used -up capi- tal value only through it.by the act c'-m'the advanced capital -value isrecovered aswell asthe surplus -value .the realization ofboth coincides with that series of sales ,or with that one sale ,ofthe entire mass ofcommodities ,which isexpressed by c-m'.but this same act ofcirculation is different for capital -value and surplus -value ,because itex- presses for cach one ofthese two values adifferent stage of their circulation ,adifferent section ofthe series ofmeta- morphoses through which each ofthem passes inits circu-",
        "the circulation ofmoney -capital . 51 lation .the surplus -value cdid not come into the world until the process ofproduction began .itappeared for the first time on the commodity -market inthe form ofcommodities . this isits first form ofcirculation ,hence the act c-mis its first circulation act,orits first metamorphosis ,which remains tobesupplemented by the reverse circulation ,or the opposite metamorphosis ,m-c. it isdifferent with the circulation which the capital- value cperforms inthe same circulation act c'-m',and which constitutes for itthe circulation act c-m,inwhich cisequal top,the moriginally advanced .itopened its circulation inthe form ofm,money -capital ,and returns through the act c-mtothe same form .in other words , ithas now passed through the two opposite stages ofthe circulation ,first m-c,second c-m,and finds itself once more in the form in which itcan begin its cycle anew .what constitutes for surplus -value the first transformation ofthe commodity -form into that ofmoney ,constitutes for capi- tal-value its return ,or retransformation ,into its original money -form . by means ofm-c{ money -capital istransformed into an equivalent mass ofcommodities ,land pm .these com- modities no longer perform the function ofcommodities ,of articles ofsale .their value now exists inthe hands of the capitalist who bought them ,they represent the value of his productive capital p. and inthe function p,pro- ductive consumption ,they are transformed into commodi- ties substantially different from the means ofproduction , into yarn ,in which their value isnot only preserved but increased ,rising from 422 pounds sterling to500 pounds sterling .by means ofthis metamorphosis ,the commodities taken from the market inthe first stage ,m-c,are replaced by commodities ofadifferent substance and value ,which now perform the function ofcommodities ,being exchanged for money and sold .the process ofproduction ,therefore , appears tous asan interruption ofthe process ofcircula- 5this istrue,nomatter how weseparate capital -value and surplus- value .10,000 lbs.ofyarn contain 1,560 lbs.,or78pounds sterling ,sur- plus -value ;but one lb.,orone shilling ,likewise contains 2.496 ounces ,or 1,728 pence ofsurplus -value .",
        "52capital . tion ofcapital -value ,since up toproduction ithas passed only through the phase m-c.itpasses through the sec- ond and concluding phase ,c-m,after chas been altered in substance and value .but sofar ascapital -value ,considered by itself ,isconcerned ,ithas merely gone through atrans- formation ofits use-form inthe process ofproduction .it 'existed inthe form of422 pounds sterling's worth ofl and pm ,while now itexists inthe form of8,440 pounds of yarn valued at422 pounds sterling .ifwe consider merely the two circulation phases ofcapital -value ,apart from its surplus -value ,we find that itpasses through the stages m-c and c-m,inwhich the second crepresents adifferent use- value ,but the same exchange -value asthe first c. and the process m-c-mis,therefore ,acycle which requires the re- turn ofthe value advanced in money toits money -form , because the commodity here changes places twice and in the opposite direction ,the first change being from the money to the commodity -form ,the second from the commodity tothe money -form . capital -value is retransformed into money . the same circulation act c'-m',which constituted the second and concluding metamorphosis ,areturn tothe mon- ey-form ,for capital -value ,represents for the surplus -value simultaneously embodied inthe commodity -capital ,and rea- lized by itsexchange for money ,itsfirst metamorphosis ,its transformation from the commodity to the money -form , c-m,itsfirst circulation phase . we have ,then ,two observations tomake .first ,the final return ofcapital -value toitsoriginal money -form isafunc- tion ofcommodity -capital .second ,this function includes the first transformation ofsurplus -value from its original commodity -form tothat ofmoney .the money -form ,then , plays adouble role here .on the one hand ,itisareturn ofavalue ,originally advanced inmoney ,to its old form , areturn tothat form ofvalue which opened the process . on the other hand ,itisthe first metamorphosis ofavalue which originally enters the circulation inthe form ofacom- modity .ifthe commodities composing the commodity- capital are sold attheir value ,aswe assume ,then cplus cis transformed into mplus m,its equivalent .the sold com-",
        "the circulation ofmoney -capital .53 modity -capital now exists inthe hands ofthe capitalist in the form ofmplus m(422 pounds sterling plus 78pounds sterling ,equal to500 pounds sterling ).capital -value and surplus -value are now present inthe form ofmoney ,the form ofthe general equivalent . atthe conclusion ofthe process ,capital -value has re- sumed the form inwhich itentered ,and can now open a new cycle ofthe same kind ,inthe form ofmoney -capital , and gothrough it.just because the opening and conclud- ing form ofthis process isthat ofmoney -capital ,m,we call this form ofthe circulation process the circulation ofmoney- capital .itisnot the form ,but merely the magnitude of the advanced value which ischanged inthe end . mplus misasum ofmoney ofadefinite magnitude , inthis case 500 pounds sterling .as aresult ofthe circu- lation ofcapital ,ofthe sale ofcommodity -capital ,this sum ofmoney contains the capital -value and the surplus -value . and these values are now no longer organically connected , asthey were inthe yarn ,they are now arranged side by side .their sale has given both ofthem an independent money form ;211-250th ofthis money represent the capi- tal value of422 pounds sterling ,and 39-250th constitute the surplus -value of78pounds sterling .this separation of capital -value and surplus -value ,which results from the sale ofthe commodity -capital ,has not only the formal meaning towhich we shall refer presently .itbecomes important in the process ofthe reproduction of capital ,according to whether misentirely ,orpartially ,ornot atall,lumped together with m,that istosay according towhether ornot itcontinues toperform the functions ofcapital -value .both mand mmay also pass through widely different cycles ofcirculation . inm',capital has returned toitsoriginal form m,toits money -form .but itthen has aform ,inwhich itismate- rialized capital . there isinthe first place adifference ofquantity .it was m,422 pounds sterling .itisnow m',500 pounds sterl- ing,and this difference isexpressed by the quantitatively different points m...m'ofthe cycle ,the movement ofwhich isindicated bythe dots .m'isgreater than m,and m'-m",
        "54capital . isequal tothe surplus -value s.but asaresult ofthis cycle m....m'itisonly m'which exists now ;itisthe product which marks the close ofthe process offormation ofmoney- capital .m'now exists independently of the movement which itstarted .this movement iscompleted ,and m'exists initsplace . but m',being mplus m,orinthis case 500 pounds ster- ling ,composed of422 pounds sterling advanced capital plus an increment of78pounds sterling ,represents atthe same time aqualitative relation .itistrue that this qualitative re- lation does not exist outside ofthe quantitative relation ofthe parts ofone and the same sum .m,the advanced capital , which isnow once more present inits original form (422 pounds sterling ),exists asthe realization ofcapital .ithas not only preserved itself ,but also realized its own capital- form ,distinguished from m(78pounds sterling ),towhich itstands inthe relation ofcreator ,mbeing its fruit ,an increment born by it.ithas realized its capital -form ,be- cause itisavalue which has created more value .m'exists asacapital relation .mnolonger appears asmere money , but itisexplicitly used asmoney -capital ,asavalue which has utilized itself by creating ahigher value than itself . macts ascapital by virtue ofitsrelation toanother part of m',which ithas created .thus m'appears asasum of values expressing the capital relation ,being differentiated into functionally different parts . but this expresses only aresult ,without showing the in- termediate process which caused it. parts ofvalue assuch are not qualitatively different from one another ,except insofar asthey are values ofdifferent articles ,ofconcrete things ,embodied indifferent use-values . they are values ofdifferent commodities ,and this difference isnot due totheir character asexchange -values .in money , all differences ofcommodities are extinguished ,because it isan equivalent form common toall ofthem .asum of money of500 pounds sterling consists ofequal elements of one pounds sterling each .since the intermediate links of descent are extinguished inthe simple form ofthis sum of money ,and all traces ofthe specific differences ofthe in- dividual parts ofcapital inthe productive process have dis-",
        "the circulation ofmoney -capital . 55 appeared ,there exists only the mental distinction between the main sum of422 pounds sterling ,which was the capi- tal advanced ,and asurplus sum of 78 pounds sterling . or,again ,letm'beequal to110 pounds sterling ,ofwhich 100 may beequal tothe main sum mand 10 equal tothe surplus -values .there isan absolute homogeneity ,an ab- sence ofdistinctions ,between the two constituent parts of the sum of 110 pounds sterling .any 10 pounds ofthis sum always constitute 1-11th ofthe sum of110 pounds re- gardless ofthe fact that they are also 1-10th ofthe advanced main sum of100 pounds ,orthe excess of10pounds above it.main sum and surplus sum (capital and surplus -value ), may simply beexpressed asfractional parts ofthe total sum . in our illustration ,10-11th form the main sum ,and 1-11th the surplus sum .materialized capital ,atthe end ofits cycle ,therefore appears asanundifferentiated expression ,the money expression ,ofthe capital relation . true ,this applies also toc'(cplus c).but there isthis difference ,that c',ofwhich cand care also proportional parts ofthe same homogeneous mass ofcommodities ,indi- cates itsorigin p,the immediate product ofwhich itis,while in m',aform derived immediately from circulation ,the direct relation topisobliterated . the undifferentiated distinction between the main sum and the surplus sum ,which are contained inm',sofar as this expresses the result ofthe movement m...m',disap- pears assoon asitperforms its active function ofmoney- capital and isnot preserved asafixed expression ofmate- rialized industrial capital .the circulation ofmoney -capi- tal can never begin with m'(although m'now performs the function of m).it can begin only with m,that isto say,itcan never begin asan expression ofthe capital rela- tion ,but only asanadvance ofcapital -value .assoon asthe 500 pounds sterling are once more advanced ascapital ,in order tobe again utilized ,they constitute apoint ofde- parture ,not one of conclusion .instead of acapital of 422 pounds sterling ,acapital of500 pounds sterling isnow advanced .itismore money than before ,more capital -value , but the relation between its two constituent parts has dis-",
        "56capital . appeared .in fact ,asum of500 pounds sterling might have served instead ofthe 422 pounds sterling asthe origi- nal capital . itisnot an active function ofmoney -capital to mate- rialize inthe form ofm';this israther afunction ofc'. even inthe simple circulation ofcommodities ,first inc-m, then in m-c2,money mdoes not figure actively until in the second movement ,m-c.2 its embodiment inthe form ofmisthe result ofthe first act,by virtue ofwhich itbe- comes atransformation ofc. the capital relation con- tained in m',the relation ofits constituent parts inthe form of capital -value and surplus -value ,assumes afunc- tional importance only in so far as the repeated cycle m...m'splits m'into two circulations ,one ofthem acir- culation ofcapital ,the other ofsurplus -value .inthis case these two parts perform not only quantitatively ,but also qualitatively different functions ,m others than m.but considered by itself ,m...m'does not include the consump- tion ofthe capitalist ,but emphatically only the self -utiliza- tion and accumulation ofmoney -capital ,the latter function expressing itself atthe outset asaperiodical augmentation ofever renewed advances ofmoney -capital . although m'(mplus m)isthe undifferentiated form of capital ,itisatthe same time amaterialization ofmoney- capital ,itismoney which has generated more money .but this isdifferent from the role played by money -capital in the first stage ,m-c{m in this first stage ,mcirculates asmoney .itassumes the functions ofmoney -capital only because itcannot serve asmoney unless itassumes the form ofmoney ,because itcannot transform itself inany other way into the component parts ofp,land pm ,which stand opposed toitinthe form ofcommodities .in this circula- tion act itserves asmoney .but asthis act isthe first stage inthe circulation ofcapital -value ,itisalso afunction of money -capital ,byvirtue ofthe specific use-value ofthe com- modities land pm which are bought byit.m',onthe other hand ,composed ofm,the capital -value ,and m,the surplus- value created bym,stands for materialized capital -value ,ex- presses the purpose and the outcome ,the function ofthe",
        "the circulation ofmoney -capital . 57 total process ofcirculation ofcapital .the fact that itex- presses this outcome inthe form ofmoney ,ofmaterialized money -capital ,isdue tothe capital -character ofmoney -capi- tal,nottoitsmoney -character ;for capital opened the proc- ess ofcirculation inthe form ofan advance ofmoney .its return tothemoney -form ,aswe have seen ,isafunction of c',not ofmoney -capital .as for the difference between m and m',itissimply m,the money -form ofc,the increment ofc. for m'iscomposed ofmplus monly because c'was composed ofcplus c.in c',this difference and the rela- tion ofcapital -value toitsproduct ,surplus -value ,isalready present and expressed ,before both ofthem are transformed into m'.and inthis form ,these two values appear independ- ently side byside and may ,therefore ,beemployed insepa rate and distinct functions . m'isthe outcome ofthe materialization ofc. both m' and c'are different forms ofutilized capital -value ,one of them the commodity ,the other the money -form .both of them share the quality ofbeing utilized capital -value .both ofthem are materialized capital ,because capital -value here exists simultaneously with its product ,surplus -value ,al- though itistrue that this relation isexpressed inthe un- differentiated form ofthe proportion oftwo parts ofone and the same sum ofmoney orcommodity -value .but as expressions ofcapital ,and indistinction from the surplus- value produced by it,m'and c'are the same and express the same thing ,only indifferent forms .in sofar asthey represent utilized value ,capital acting initsown role ,they express the result ofthe function ofproductive capital ,the only function inwhich capital -value generates more value . what iscommon toboth ofthem ,isthat money -capital as well ascommodity -capital are different modes ofexistence of capital .their distinctive and specific functions cannot , therefore ,beanything else but the difference between the functions ofmoney and ofcommodities .commodity -capi- tal,the direct product of the capitalist process of pro- duction ,indicates its capitalist origin and is,therefore ,to that extent more rational and less difficult tounderstand than money -capital ,inwhich every trace of this process has",
        "58capital . disappeared .in general ,all special use-forms ofcommodi- ties disappear inmoney . itisonly when m'itself figures ascommodity -capital , when itisthe direct outcome ofaproductive process ,in- stead ofbeing atransformed product ofthis process ,that itloses itsbizarre form ,that istosay,inthe production of money itself .in the production ofgold ,for instance ,the formula would bem-c{m,...p...m (mplus m),and m' would here figure asacommodity ,because pfurnishes more gold than had been advanced for the elements ofproduction contained inthe first money -capital m. in this case ,the irrational nature ofthe formula m...m'(mplus m)disap- pears .here apart ofacertain sum ofmoney appears as the mother ofanother part ofthe same sum ofmoney . iv.the rotation asawhole . we have seen that the process of circulation isinter- rupted atthe end ofits first phase ,m-c{m,by p,which makes the commodities land pm parts ofthe substance and value ofproductive capital and consumes them .the result ofthis productive consumption isanew commodity c',which isofdifferent composition and value than the commodities land pm .the interrupted process ofcirculation ,c-m, must be completed by m-c.the basis ofthis second and concluding phase ofcirculation isc',acommodity ofdif- ferent composition and value than c. the process ofcir- culation therefore appears first asm-c,then asc2-m',the c2inthis second phase representing agreater value and a different use-value than c,due tothe interruption caused by the function ofpwhich isthe production ofc'from elements ofc,embodied inthe productive capital p. the first form assumed by capital (vol.i,chap .iv),viz., m-c-m',orextended first m-c,second c-m',shows the same commodity twice .itisthe same commodity which isex- changed for money inthe first phase and again exchanged for more money inthe second phase .in spite ofthis es- sential difference ,these two modes ofcirculation share the peculiarity oftransforming intheir first phase money into commodities ,and inthe second phase commodities into money ,sothat the money spent inthe first phase returns in",
        "the circulation ofmoney -capital . 59 the second .on the one hand ,both have incommon this return ofmoney toitsstarting point ,onthe other hand the excess ofthe returned money over the money first advanced . to this extent ,the formula m-c...c'-m'isapparently con- tained inthe general formula m-c-m'. itfollows furthermore that equal quantities ofsimultan- eously existing values are placed inopposition toone another and exchanged inthe two metamorphoses ofcirculation rep- resented by m-cand c'-m'.the change ofvalue isdue ex- clusively tothe metamorphosis p,the process ofproduc- tion ,which thus appears asanatural metamorphosis ofcapi- tal,ascompared tothe merely formal metamorphosis ofcir- culation . let usnow consider the total movement ,m-c...p...c'-m', oritsmore explicit form ,m-c{..p...c'(c+c)-m'(m+m). capital here appears asavalue which goes through aseries ofconnected metamorphoses conditioned onone another and representing somany phases ofthe total process .two of these phases belong tothe sphere ofcirculation ,one ofthem tothat ofproduction .in each one ofthese phases ,capi- tal-value has adifferent form corresponding toadifferent , special ,function . within this cycle ,value does not only maintain itself atthe magnitude inwhich itwas originally advanced ,but itincreases .finally ,inthe concluding stage , itreturns tothe same form which ithad atthe beginning ofthe cycle .this total movement constitutes the process ofrotation asawhole . the two forms assumed bycapital -value are that ofmoney- capital and commodity -capital .inthe stage ofproduction ,its form isthat ofproductive capital .the capital which assumes these different forms inthe course ofitstotal process ofro- tation ,discards them one after the other ,and performs a special function ineach one ofthem ,isindustrial capital . the term industrial applies toevery branch ofindustry run onacapitalist basis . money -capital ,commodity -capital ,productive capital are not,therefore ,terms indicating independent classes ofcapital , nor are their functions processes ofindependent and sepa- rate branches ofindustry .they are here used only toindi-",
        "60capital . cate special functions ofindustrial capital ,assumed by it seriatim . the circulation ofcapital proceeds normally only solong asitsvarious phases flow uninterruptedly one into the other . ifcapital stops short in its first phase m-c,money -capital assumes the rigid form ofahoard ;ifitstops inthe phase ofproduction ,the means ofproduction remain lifeless onone side ,while labor -power remains unemployed on the other ; and ifcapital stops short inits last phase c'-m',masses of unsold commodities accumulate and clog the flow ofrota- tion . at the same time ,itisamatter ofcourse that the rota- tion ofcapital includes the stopping ofcapital for acertain length oftime inthe various sections ofitscycle .ineach of these sections ,industrial capital ispoured into adefinite mold ,being either money -capital ,productive capital ,or commodity -capital .itdoes not assume aform inwhich it may enter anew metamorphosis ,until ithas gone through the function corresponding tothe form preceding the new metamorphosis .in order tomake this plain ,we have as- sumed inour illustration ,that the capital -value ofthe mass ofcommodities created inthe phase ofproduction isequal tothe total sum ofvalues originally advanced inthe form ofmoney ,or,inother words ,that the entire capital -value advanced inthe form ofmoney enters undivided from one stage into the next .now we have seen (vol.i,chap .iv) that apart ofthe constant capital ,the means ofproduction proper ,such asmachinery ,always serve repeatedly ,for a greater orsmaller number oftimes ,inthe same processes ofproduction ,sothat they transfer their values piece -meal tothe products .we shall see later ,towhat extent this cir- cumstance modifies the process ofrotation ofcapital .for the present ,itsuffices tosay this :in our illustration ,the value ofthe productive capital of422 pounds sterling con- tained only the average wear and tear ofbuildings ,machin- ery,etc. ,that istosay only that part ofvalue which they transferred inthe transformation of10,600 pounds ofcot- ton to10,000 pounds ofyarn ,which represents the product ofone week's spinning ,orof60 hours .in the means of production ,into which the advanced constant capital of372",
        "the circulation ofmoney -capital .61 pounds sterling istransformed ,the instruments oflabor , buildings ,machinery ,etc.,figure only as would ob- jects which were rented in the market for aweekly rate .but this does not change the problem in any way . we have but tomultiply the quantity ofyarn produced in one week ,or 10,000 pounds ofyarn ,with the number of weeks contained inacertain number ofyears ,inorder to transfer the entire value ofthe means ofproduction bought and consumed during this period .itisthen plain that the advanced money -capital must first betransformed into these means ofproduction ,must first have gone through the phase m-c,before itcan beused asproductive capital ,p. and it islikewise plain that ,inour illustration ,the capital value of 422 pounds sterling ,embodied inthe yarn during the proc- ess ofproduction ,cannot become apart ofthe value ofthe 10,000 pounds ofyarn and enter the circulation phase c'-m', until ithas been produced .the yarn cannot besold ,until ithas been spun . in the general formula ,the product ofpisregarded as amaterial thing different from the elements ofthe produc- tive capital ,asan object existing apart from the process of production and having adifferent use-value than the ele- ments ofproduction .and ifthe fruit ofproduction as- sumes the form ofsuch an object ,italways corresponds to this description ,even ifapart ofitshould re-enter pro- . duction asone ofits elements .grain ,for instance ,serves asseed for its own reproduction ,but the final product is always grain and has adifferent composition than the ele- ments used in its production ,such aslabor -power ,imple- ments ,and fertilizer .but there are certain independent branches ofindustry ,inwhich the result ofthe productive process isnot anew material product ,not acommodity . among these ,only the industries representing communica- tion ,such astransportation proper for commodities and hu- man beings ,and the transmission ofcommunications ,let- ters ,telegrams ,etc. ,are economically important . a. cuprov says onthis score :\"the manufacturer may first produce articles and then look for consumers \"(his a. cuprov :zeleznodoroznoje chostjajstvo ,moskva ,1875 ,pg.75and 76.",
        "62capital . product ,having been completed inthe process ofproduc- tion ,istransferred tothe process ofcirculation asaseparate commodity ).\"production and consumption thus appear as two acts distinct from one another inspace and time .inthe transportation industry ,which does not create any new prod ucts ,but merely transfers men and things ,these two acts coincide ;its services (change ofplace )must be consumed atthe same time that they are produced .for this reason the distance ,within which railroads can find customers ,extends atbest 50verst (53kilometers orabout 30miles )on either side oftheir tracks .\" the result inthe transportation ofeither men orcom- modities isachange ofplace .yarn ,for instance ,isthus transferred from england ,where itwas produced ,to in- dia. now transportation ,asan industry ,sells this change of location .this utility isinseparably connected with the process oftransportation ,which isthe productive process of transportation .men and commodities travel by the help ofthe means oftransportation ,and this traveling ,this change oflocation ,constitutes the production inwhich these means oftransportation are consumed .the utility oftrans- portation can be consumed only inthis process ofproduc- tion .itdoes not exist asause-value apart from this proc- ess,itdoes not ,like other commodities ,serve as acom- modity which circulates after its process ofproduction . the exchange value ofthis utility isdetermined ,like that of any other commodity ,by the value of the elements ofproduction (labor -power and means ofproduc- tion )plus the surplus -value created by the surplus -labor ofthe laborers employed intransportation .this utility also entertains the same relations toconsumption that all other commodities do.ifitisconsumed individually ,itsvalue is used up inconsumption ;ifitisconsumed productively by entering into the process ofproduction ofthe transported commodities ,its value isadded tothat ofthe commodity . the formula for the transportation industry would ,there- fore ,bem-c ...p-m',since itisthe process ofproduction itself which ispaid for and consumed ,not aproduct dis- tinct and separate from it.this formula has almost the",
        "the circulation ofmoney -capital .63 same form asthat ofthe precious metals ,only with the dif- ference ,that inthis case m'represents the changed form of the utility resulting during the process ofproduction ,while in the case ofthe precious metals itrepresents the natural form ofthe gold orsilver obtained inthis process and trans- ferred from ittoother stages . industrial capital isthe only form ofexistence ofcapital , inwhich not only the appropriation ofsurplus value orsur- plus product ,but also its creation isafunction ofcapital . therefore itgives toproduction itscapitalist character .its existence includes that ofclass antagonisms between capital- ists and laborers .to the extent that itassumes control over social production ,the technique and social organization of the labor process are revolutionized and with them the eco- nomic and historical type ofsociety .the other classes of capital ,which appear before industrial capital amid past or declining conditions ofsocial production ,are not only sub- ordinated toitand suffer changes inthe mechanism oftheir functions corresponding toit,but move onitasabasis ,live and die,stand and fall with this basis .money -capital and commodity -capital ,sofar asthey still persist asindependent branches ofindustry along with industrial capital ,are noth- ing but modes ofexistence ofdifferent functional forms either assumed ordiscarded by industrial capital inthe sphere of circulation ,made independent and developed one -sidedly bythe social division oflabor . the cycle m...m'onone side intermingles with the general circulation ofcommodities ,proceeds from itand flows back into it,isapart ofit.on the other hand ,itisfor the indi- vidual capitalist an independent movement ofhis capital value ,taking place partly within the general circulation of commodities ,partly outside ofit,but always preserving its independent character .for inthe first place ,itstwo phases taking place inthe sphere ofcirculation ,m-cand c'-m', have functionally different characters asfunctions ofcapital circulation .inm-c,the commodity ciscomposed oflabor- power and means ofproduction ;inc'-m',capital value is realized plus surplus -value .inthe second place ,the process ofproduction ,p,includes productive consumption .inthe",
        "64capital . third place ,the return ofmoney toitsstarting point makes of the cycle m...m'aprocess ofcirculation complete initself . every individual capital istherefore ,onthe one hand ,in itstwo phases m-cand c'-m',an active element in the general circulation of commodities ,with which itiscon- nected either asmoney orasacommodity .thus itforms a link inthe general chain ofmetamorphoses inthe world of commodities .on the other hand ,itgoes through its own independent circulation within the general circulation .its independent circulation passes through the sphere ofproduc- tion and returns toits starting point inthe same form in which itleft that point .within itsown circulation ,which includes itsnatural metamorphosis inthe process ofproduc- tion ,itchanges atthe same time its value .itreturns not only asthe same money -value ,but asan increased money- value . let usfinally consider m-c...p...c'-m'asaspecial form of the process ofcirculation ofcapital ,apart from the other forms which we shall analyze later .itisdistinguished by the following points : 1. itappears asthe circulation ofmoney -capital ,because industrial capital initsmoney form ,asmoney -capital ,forms the starting and terminal point ofits total process .the formula itself expresses the fact that money isnot expended asmoney atthis stage ,but advanced asthe money -form of capital .itexpresses furthermore that exchange -value ,not use-value ,isthe determining aim ofthis movement .just because the money -form ofthis value isitstangible and inde- pendent form ,the compelling motive ofcapitalist produc- tion ,the making ofmoney ,ismost fittingly expressed bythe circulation formula m...m.'the process of production appears merely asan indispensable and intermediate link , asanecessary evil ofmoney -making .all nations with a capitalist mode ofproduction are seized periodically by a feverish attempt tomake money without the mediation of the process ofproduction . 2. the stage ofproduction ,the function ofp,represents aninterruption ofthe two phases ofcirculation m-c...c'-m', which intheir turn represent links inthe simple circulation m-c-m'.the process ofproduction appears formally and",
        "the circulation ofmoney -capital .65 essentially incirculation asthat which istypical ofcapitalist production ,that istosay asamere means ofutilizing pre- viously advanced values .the accumulation ofwealth isthe purpose ofproduction . 3. since the series ofphases isopened bym-c,the second link ofthe circulation isc'-m.'in other words ,the start- ing point ism,orthe money -capital tobeutilized ,the ter- minal point m',orthe utilized money -capital mplus m, inwhich mfigures together with itsoffspring m.this dis- tinguishes the circulation ofmfrom that ofthe two other cycles pand c',intwo ways .on one side ,itstwo extremes are represented by the money -form .and money isthe tangible form ofvalue ,the value ofthe product initsinde- pendent form ,inwhich every trace ofthe use-value ofthe commodities has been extinguished .on the other side ,the formula p...pisnot necessarily transformed into p...p'(p plus p,)and inthe form c-c',nodifference invalue isvisi- ble between the two extremes .itis,therefore ,characteristic for the formula m-m'that capital value isitsstarting point , and utilized capital value itsterminal point ,sothat advanced capital value appears asthe means ,and utilized capital value asthe end ofthe entire operation .and furthermore ,this relation isexpressed inthe form ofmoney ,inthe form of independent value ,sothat money -capital ismoney genera- ting more money .the generation ofsurplus -value byvalue isnot only expressed asthe alpha and omega ofthe process , but more explicitly inthe form ofglittering money . 4. since m',the money -capital realized asaresult of c'-m',the supplementary and concluding form ofm-c,has absolutely the same form inwhich itbegan itsfirst circula- tion ,itcan immediately begin the same circulation over again asanincreased (accumulated )money -capital ,orasm' equal tomplus m.and itisnot expressed inthe formula m-m'that ,inthe repetition ofthe cycle ,the circulation ofm separates from that ofm. considered initscomplete form , the circulation ofmoney capital expresses simply the process ofutilization and accumulation .the consumption initispro- ductive consumption ,asshown by the formula m-c {m. and itisonly this which isincluded in this circulation ofindividual capital .m-lmeans l-m,orc-m,onthe part",
        "66capital . ofthe laborer .itistherefore the first phase ofcirculation which promotes his individual consumption ,thus :l-m-c (means ofsubsistence ).the second phase ,m-c,no longer falls within the circulation ofindividual capital ,but itisini- tiated by individual capital and an indispensable premise for it,since the laborer must above all live and maintain himself byindividual consumption ,inorder tobealways on the market for exploitation bythe capitalist .but this con- sumption ishere only assumed asthe indispensable condition for the productive consumption oflabor power by capital , and itis,therefore ,considered only insofar asitpreserves and reproduces his labor power by means ofhis individual consumption .but the means ofproduction pm ,the com- modities proper which enter into the circulation ofcapital , are only material feeding the productive consumption .the act l-mpromotes the individual consumption ofthe laborer , the transformation ofmeans ofsubsistence into flesh and blood .itistrue ,that the capitalist must also be present , must also live and consume inorder toperform the function ofacapitalist .to this end ,hehas ,indeed ,but toconsume inthe same way asthe laborer ,and this isallthat isassumed inthis form ofthe circulation process .but itisnot for mally expressed ,since the term m'concludes the formula and indicates that itmay atonce re-enter on itsfunction ofin- creased money -capital . inthe formula c'-m',the sale ofc'isdirectly indicated ; but this sale c'-m'onthe part ofone ism-c,orthe purchase ofcommodities ,onthe part ofanother ,and inthe last analy- sisacommodity isbought only for itsuse-value ,inorder to enter (leaving intermediate sales out ofconsideration )into the process ofconsumption ,and this may beeither produc- tive orindividual consumption ,according tothe nature of the commodity .but this consumption does not enter into the circulation ofindividual capital ,the product ofwhich is c'.this product iseliminated from this circulation from the moment that itissold .c'isexplicitly produced for con- sumption by others .for this reason we note that certain spokesmen ofthe mercantile system (which isbased onthe formula m-c...p...c'-m')deliver lengthy sermons tothe effect that the individual capitalist should consume only in his",
        "the circulation ofmoney -capital .67 capacity asaworker ,that capitalist nations should let other and less intelligent nations consume their own and other commodities ,and that acapitalist nation should devote itself for life tothe productive consumption ofcommodities . these sermons frequently remind usinform and content of analogous ascetic exhortations ofthe fathers ofthe church . the rotation process ofcapital istherefore acombination ofcirculation and production ,itincludes both .insofar as the two phases m-cand c'-m'are processes ofcirculation ,the rotation ofcapital isapart ofthe general circulation ofcom- modities .but insofar asthey are definite sections perform- ingapeculiar function inthe rotation ofcapital ,which com- bines the spheres ofcirculation and production ,capital goes through itsown circulation inthe general circulation ofcom- modities .the general circulation of commodities serves capital initsfirst stage asameans ofassuming that form in which itcan perform the function ofproductive capital ;in itssecond stage ,itserves toeliminate the commodity func- tion inwhich capital cannot renew its circulation ;atthe same time itenables capital toseparate its own circulation from that ofthe surplus -value created byit. the circulation ofmoney -capital istherefore the most one- sided ,and thus the most convincing and typical form ofthe circulation ofindustrial capital .its aim and compelling motive ,the utilization ofvalue ,the making and accumula- tion ofmoney ,isthus most clearly revealed .buying in order tosell dearer isits slogan .the first phase m-calso indicates the origin ofthe elements ofproductive capital in the commodity market ,ormore generally ,the dependence ofthe capitalist mode ofproduction on circulation ,on com- merce .the circulation ofmoney -capital isnot merely the production ofcommodities ;itisitself possible only through circulation ofcommodities and based on it.this isplain from the fact that the term mbelongs tocirculation and represents the first and most typical form ofadvanced capi- tal-value .this isnot the case inthe other two forms ofcir- culation .",
        "68capital . the circulation ofmoney -capital always remains the gen- eral expression ofindustrial capital ,because italways implies the utilization ofthe advanced value .inp...p,the money- character ofcapital isshown only inthe price ofthe ele- ments ofproduction asavalue expressed in money -terms for the purpose ofcalculation and book -keeping . m...m'becomes aspecial form ofthe circulation ofindus- trial capital when new capital isfirst advanced inthe form ofmoney and then returned inthe same form ,either inpass- ing from one branch ofindustry toanother ,orinthe case that industrial capital retires from business .this includes the capital function ofthe surplus -value first advanced in the form ofmoney ,and becomes most evident when surplus- value performs afunction insome other business than the one inwhich itoriginated .m...m'may bethe first circula- tion ofacertain capital ;itmay bethe last ;itmay be re- garded asthe form ofthe total social capital ;itisthat form ofcapital which isnewly invested ,either asarecently accu- mulated capital inthe form ofmoney ,orassome old capi- talwhich isentirely transformed into money for the purpose oftransfer from one branch ofindustry toanother . being aform always contained inall circulations ,money- capital performs this circulation precisely for that part of capital which produces surplus -value ,viz.,variable capital . the normal form ofan advance inwages ispayment in money ;this process must berenewed inshort intervals ,be- cause the laborer lives from hand tomouth .inhis relation tothe laborer ,the capitalist must therefore always be a money -capitalist ,and his capital must be money -capital . there can beno direct orindirect balancing ofaccounts in this case ,such aswefind inthe purchase ofmeans ofproduc- tion orinthe sale ofproductive commodities ,where the greater part ofthe money capital really exists inthe form of commodities ,while the money ismainly used for purposes ofcalculation and figures incash only inthe balancing of accounts .on the other hand ,apart ofthe surplus -value arising out ofvariable capital isspent by the capitalist for his individual consumption ,which isapart ofthe retail trade ,and this surplus -value isinthe last analysis always",
        "the circulation ofmoney -capital . 69 expended inthe form ofmoney .itdoes not matter how large orsmall may bethis part ofsurplus -value .variable capital always appears anew asmoney -capital invested in wages (m-l)and massurplus -value which may beexpended for the individual consumption ofthe capitalist .so that m,capital advanced for wages ,and m,its increment ,are necessarily held and spent inthe form ofmoney . the formula m-c...p...c'-m',with itsresult m'equal tom plus m,is,inacertain sense ,deceptive ,owing tothe exist- ence ofthe advanced and surplus -value inthe form ofthe general equivalent ,money .the emphasis inthis formula isnot onthe utilization ofvalue ,but onthe money -form of this process ,on the fact that more money -value isfinally drawn out of the circulation than had originally been advanced ;inother words ,the emphasis isonthe multiplica- tion ofthe amount ofgold and silver belonging tothe capi- talist .the so-called monetary system ismerely the expres- sion ofthe abstract formula m-c-m',amovement which takes place exclusively inthe circulation .and this system can- not explain the two phases m-cand c-m'inany other way than bydeclaring that cissold above itsvalue inthe second phase and thus draws more money out ofthe circulation than was put into itinitspurchase .but ifm-c...p...c'-m' becomes the exclusive form ofcirculation ,itisthe basis ofa more highly developed mercantile system ,in which not only the circulation ofcommodities ,but also their produc- tion ,isrecognized asanecessary element . the illusive character ofm-c...p...c'-m'and the resulting illusive interpretation always appear ,whenever this form is considered asrigid ,not asaflowing and ever renewed move- ment ;inother words ,they appear whenever this formula is considered not asone section ofcirculation ,but asthe exclu- sive form ofcirculation .but ititself points toward other forms . inthe first place ,this entire circulation isconditioned on the capitalist character ofthe process ofproduction ,and con- siders itand the specific social conditions created byitasthe basis .m-cisequal tom-c{m;but m-lassumes the exist- ence ofthe wage laborer ,and regards the means ofproduc-",
        "70capital . tion asparts ofproductive capital .itassumes ,therefore , that the process oflabor and ofutilization ,the process ofpro- duction ,isafunction ofcapital . inthe second place ,ifm...m'isrepeated ,the return tothe money -form isjust astransient asthe money -form inthe first phase .m-cdisappears and makes room for p. the re- current advance ofmoney -capital and itsequally persistent return in the form of money appear merely aspassing moments inthe general circulation . inthe third place ;the repeated formula has this form : m-c...p...c'-m'.m-c...p...c'-m'.m-c...p...etc. beginning with the second repetition ofthe circulation , the cycle p...c'-m'.m -c...p appears ,before the second circulation ofmiscompleted ,and all other cycles may be considered under the form ofp...c'-m-c...p,so that the first phase of the first circulation ismerely the passing introduction for the constantly repeated circulation ofthe productive capital .and this isindeed the case for the first time inthe investment ofindustrial capital inthe form of money . on the other hand ,before the second circulation ofpis completed ,the first circulation ,that ofthe commodity -capi- tal,asshown inthe formula c'-m'.m-c...p...c'(orabridged c'...c')has preceded .thus the first form already con- tains the other two ,and the money -form disappears ,sofar as itisageneral equivalent and not merely an expression of value used for calculation . finally ,ifwe consider some newly invested capital going for the first time through the circulation m-c...p...c'-m', then m-cisthe introductory phase ,the preparation for the first process ofproduction undertaken bythis capital .this phase m-cisnot considered asexisting ,but iscaused bythe requirements ofthe process ofproduction .but this applies only tothis individual capital .the general form ofthe circulation ofindustrial capital isthe circulation ofmoney- capital ,whenever the capitalist mode ofproduction exists and with itthe social conditions corresponding toit.itisthere- fore the capitalist mode ofproduction which isthe first con- dition for the circulation ofmoney -capital ,and ifitisnot assumed for the first phase ofanewly invested industrial",
        "the circulation ofmoney capital .71 capital ,itiscertainly assumed for all others .the continu- ous movement ofthis process ofproduction requires the per- sistent renewal ofthe cycle p...p.even the first stage , m-c reveals this basic condition .for itrequires on one side the existence ofthe wage -working class .on the other side,that which ism-cfor the buyer ofmeans ofpro- duction ,isc-m'for their seller .hence c'presupposes the existence ofcommodity -capital ,and thus ofcommodities as the result ofcapitalist production ,and this implies the func- tion ofproductive capital .",
        "72capital . chapter ii. the rotation ofproductive capital . the rotation ofproductive capital has the general formula p...c'-m'-c...p.itsignifies the periodical renewal ofthe function ofproductive capital ,inother words its reproduc- tion ,orits process ofproduction asareproductive process generating surplus -value .itisnot only production ,but aperiodical reproduction ofsurplus -value ;itisthe function ofindustrial capital initsproductive form ,and this function isnot performed merely once ,but periodically sothat the terminal point ofone cycle isthe starting point ofanother . aportion ofc'may re-enter directly into the same labor pro- cess asmeans ofproduction out ofwhich itcame inthe form ofcommodities (for instance ,invarious branches of investment ofindustrial capital ).this merely does away with the transformation ofitsvalue into money proper ,or token -money ,orelse itfinds an independent expression merely incalculation .this part ofvalue does not enter into the circulation .thus itisthat values enter into the process ofproduction which do not enter into circulation .the same isalso true ofthat part ofc'which isconsumed bythe capitalist ,and which represents surplus -value inthe form of means ofconsumption ,intheir natural state .but this is inconsiderable for capitalist production .itdeserves con- sideration ,ifatall,only inagriculture . two things are atonce apparent inthis form . inthe first place ,while inthe first form ,m...m',the pro- cess ofproduction ,afunction ofp,interrupts the circulation ofmoney -capital and acts only asamediator between itstwo phase m-cand c'-m',itisthe entire circulation process of industrial capital ,itsentire movement within the sphere of circulation ,which intervenes here and forms the connecting link between productive capitals ,which begin the circulation atone extreme and close itatanother ,only tomake this last extreme the starting point of anew cycle .circulation",
        "the rotation ofproductive capital . 73133 proper appears but asaninstrument promoting the periodic renewal ,and thus the continuous reproduction ,ofproductive capital . inthe second place ,the entire circulation assumes aform which isthe reverse ofthat which ithas inthe circulation of money -capital .while the circulation ofmoney -capital pro- ceeds after the formula m-c-m(m-c.c-m),making exception ofthe determination ofvalue ,itproceeds inthe case ofproductive capital ,making the same exception ,after the formula c-m-c(c-m.m-c).which isthe form of the simple circulation ofcommodities . i. simple reproduction . let us first consider the process c'--m'--c,which takes place between the two extremes p...p. the starting point ofthis circulation isthe commodity- capital c',equal tocplus c,orequal topplus c.the func tion ofcommodity -capital c'-m'has been considered inthe first form ofthe circulation .itconsisted inthe realization ofthe capital -value p,contained init,which now exists as apart ofthe commodity c,and likewise inthe realization of the surplus -value contained init,which now exists asapart ofthe same mass ofcommodities cand has the value ofc. but in the former case ,this function formed the second phase ofthe interrupted circulation and the concluding phase ofthe entire cycle .inthe present case ,itforms the second phase ofthe cycle ,but the first phase ofthe circula- tion .the first cycle ends with m',and since m'aswell as the original mmay again open the second cycle asmoney- capital ,itwas not necessary for the moment to analyze whether the parts ofm',viz.,mand m(surplus -value )con- tinue intheir course together ,orwhether each one ofthem pursues its own course .this would only have been neces- sary ,ifwe had followed up the first cycle in its renewed course .but instudying the cycles ofproductive capital , this point must bedecided ,because the determination ofits very first cycle depends onit,and because c'-m'appears in itasthe first phase ofcirculation which has tobe supple-",
        "74 capital . mented by m-c.itdepends onthe outcome ofthis deci- sion ,whether our formula represents the simple reproduc- tion ,orreproduction onanenlarged scale .the character of the cycle changes according tothis decision . let us,then ,take first the simple reproduction ofproduc tive capital ,assuming that the conditions are the same as those taken for abasis inthe first chapter ,and that the com- modities are bought and sold attheir value .under these conditions ,the entire surplus -value enters into the individual consumption ofthe capitalist .as soon asthe transforma- tion ofthe commodity -capital c'into money has taken place , that part ofthe money which represents the capital -value continues inthe cycle ofindustrial capital ;the other part , which represents surplus -value inthe form ofgold ,enters into the general circulation ofcommodities asacirculation ofmoney emanating from the capitalist but taking place outside ofthe circulation ofhis individual capital . in our illustration ,we had acommodity -capital c'of 10,000 pounds ofyarn ,valued at500 pounds sterling ;422 pounds sterling ofthis represent the value of productive capital and continue ,asthe money -form of8,440 pounds of yarn ,the capital circulation begun by c',while the surplus- value of 78 pounds sterling ,asthe money -form of 1,560 pounds ofyarn ,the surplus -product ,leaves this circulation and describes itsown separate course within the general cir- culation ofcommodities . c (+)' ..m +.c m ..c the formula m-crepresents aseries of purchases by means ofmoney which the capitalist spends either incom- modities proper orfor personal services tohis cherished self orfamily .these purchases are made piece -meal atvarious times .money ,therefore ,exists temporarily inthe form of asupply ,orhoard ,ofmoney destined for gradual consump- tion ,for money interrupted in its circulation partakes of the nature ofahoard .its function asacirculating medium , including that ofatemporary hoard ,does not share inthei",
        "the rotation ofproductive capital .75 circulation ofcapital having the form ofmoney m. this money isnot advanced ,but spent . we have assumed that the advanced total capital always passed entirely from one ofits phases into the other .in this case ,we,therefore ,assume that the mass ofcommodities produced by prepresents the total value ofthe productive capital p,or422 pounds sterling plus 78pounds sterling of surplus -value created inthe process ofproduction .in our illustration ,which deals with an easily analyzed commodity , the surplus -value exists inthe form of 1,560 pounds of yarn ;ifcomputed on the basis ofone pound ofyarn ,it would exist inthe form of2.496 ounces .but ifthe com- modity were ,for instance ,amachine valued at500 pounds sterling and representing the same division ofvalues ,one part ofthe value ofthis machine would indeed be repre- sented by 78 pounds sterling ofsurplus -value ,but these 78 pounds sterling would exist only inthe machine asawhole . this machine cannot bedivided into capital -value and sur- plus -value without breaking ittopieces and thus destroy- ing,with its use-value ,also its exchange -value .for this reason the two parts ofvalue can berepresented only ideally asportions ofamass ofcommodities ,not asindependent elements ofthe commodity c',such aswe are able todis- tinguish ineach pound ofyarn inthe 10,000 pounds ofour illustration .in the case ofthe machine ,the total com- modity representing the commodity -capital must be sold before mcan enter into itsindependent circulation .on the other hand ,when the capitalist has sold 8,440 pounds of yarn ,the sale ofthe remaining 1,560 pounds ofyarn would represent anentirely separate circulation ofthe surplus -value inthe form ofc(1,560 pounds ofyarn )-m (78 pounds sterling )equal toc(articles ofconsumption ).but the ele- ments ofvalue ofeach individual portion ofyarn inthe 10,000 pounds may beindividually separated and valuated the same asthe total quantity ofyarn .just asthe entire 10,000 pounds ofyarn may bedivided into the value ofthe constant capital c(7,440 pounds ofyarn worth 372 pounds sterling ),variable capital v(1,000 pounds ofyarn worth 50 pounds sterling ,and surplus -value s(1,560 pounds of yarn worth 78 pounds sterling ),soevery pound ofyarn",
        "76capital . may bedivided into c(11.904 ounces ofyarn worth 8.929 d.),v(1.600 ounces ofyarn worth 1.200 d.),and s(2.496 ounces ofyarn worth 1.872 d.).the capitalist might also sell various portions ofthe 10,000 pounds ofyarn succes- sively and consume the different portions ofsurplus -value contained inthem inthe same way ,thus realizing gradu- ally the sum ofcplus v.but this operation likewise re- quires the final sale ofthe entire lot,sothat the value of cplus vwould be made good by the sale of8,440 pounds ofyarn (vol.i,chap ix,2). however that may be,bythe movement c'-m',both the capital -value and surplus -value contained in c'secure a separate existence inseparate sums ofmoney .inboth cases , mand mare actually transformed values ,which had orig- inally only an ideal existence incasprices ofcommodities . the formula c-m-crepresents the simple circulation of commodities ,the first phase ofwhich ,c-m,isincluded in the circulation ofthe commodity -capital c'-m',inshort , included inthe cycle ofcapital ;while its supplementary phase m-cfalls outside ofthis cycle and isaseparate proc- ess inthe general circulation ofcommodities .the circula- tion ofcand c,ofcapital -value and surplus -value ,isdif- ferentiated after the transformation ofc'into m'.hence itfollows : first ,by the realization onthe commodity -capital inthe process c'-m',orc'-(m+m),the courses ofcapital -value and surplus -value ,which are united solong asthey are both embodied inthe same mass ofcommodities inc'-m',are separated ,for both ofthem henceforth appear intwo inde- pendent sums ofmoney . second ,after this separation has taken place ,mbeing spent asthe income ofthe capitalist ,while mcontinues its way asafunctional form ofcapital -value inacourse deter- mined by this cycle ,the movement c'-m'in connection with the subsequent movements m-cand m-c,may be represented inthe form oftwo different circulations ,viz.: c-m-cand c-m-c,and both ofthese ,sofar astheir general form isconcerned ,belong tothe general circulation ofcommodities .",
        "the rotation ofproductive capital .43 by the way ,inthe case ofcommodities which cannot be cut up into their constituent parts ,itisamatter ofpractice toisolate their different portions ofvalue and surplus -value ideally .inthe building -business oflondon ,for instance , which iscarried on mainly on credit ,the contractor re- ceives advances inproportion tothe different stages inwhich the construction ofahouse proceeds .none ofthese stages isahouse ,but only an actually existing fraction ofthe growing house ;inspite ofits actuality ,each stage isbut an ideal portion ofthe entire house ,but itisreal enough toserve assecurity for an additional advance .(see onthis point chapter xii ,vol.ii.) third ,ifthe movement ofcapital -value and surplus -value , which proceeds unitedly solong asthey are inthe form of cand m,isseparated only inpart (sothat aportion ofthe surplus -value isnot spent asincome ),orisnot separated atall,achange takes place inthe capital -value itself within its own cycle ,before itiscompleted .in our illustration the value ofthe productive capital was equal to422 pounds sterling .ifitcontinues its cycle m-c,for instance as480 pounds sterling or500 pounds sterling ,then itgoes through the further stages ofitscycle with anincrease of58pounds sterling or78 pounds sterling over itsoriginal value .this change may also go hand in hand with achange inthe proportion ofits component parts . c-m',the second stage ofthe circulation and the final stage ofcycle i(m...m'),isthe second stage in our cycle and the first inthe circulation ofcommodities .so far as the circulation isconcerned ,this stage must besupplemented by m'-c'.but c'-m'has not only passed the process of utilization (inthis case the function ofp,the first stage ), but has also realized asits result the commodity c'.the process ofutilization ofcapital ,and the realization on the commodities which are itsproduct ,are therefore completed inc'-m'. we have started out with simple reproduction and assumed that m-cseparates entirely from m-c.since both cir- culations ,c-m-caswell asc-m-c,belong tothe cir- culation ofcommodities ,sofar astheir general form iscon- cerned (and do not show ,for this reason ,any difference",
        "78capital . inthe value oftheir extremes ),itiseasy toconceive of the process of capitalist production ,after the manner of vulgar economy ,asamere production ofcommodities ,of use-value destined for consumption ofsome sort ,which the capitalist produces for no other purpose than that ofget- ting intheir place commodities with different use-values ,or exchanging them ,asvulgar economy erroneously states . c'appears from the very outset ascommodity -capital ,and the purpose ofthe entire process ,the accumulation ofwealth , does not exclude an increasing consumption on the part of the capitalist inproportion ashis surplus -value (and thus his capital )increases ;onthe contrary ,itpromotes such an increasing consumption . indeed ,inthe circulation ofthe income ofthe capitalist , the produced commodity c,orthe ideal fraction ofthe com- modity ccorresponding toit,serves merely for itstransfor- mation ,first into money ,and from money into anumber of other commodities required for individual consumption .but we must not ,atthis point ,overlook the trifling circumstance that cisthat part ofthe commodity -value which did not cost the capitalist anything ,since itisthe embodiment of surplus -labor and steps originally onthe stage asapart of the commodity -capital c'.this cis,by the varying nature ofits existence ,bound tothe cycle ofcirculating capital- value ,and ifthis cycle isclogged ,orotherwise disturbed , not only the consumption ofcisrestricted orentirely ar- rested ,but also the disposal ofthat series ofcommodities which are totake the place ofc.the same istrue inthe case that the movement c'-m'isafailure ,orthat only a part ofc'issold . we have seen that c-m-c,asrepresenting the circula- tion ofthe revenue ofthe capitalist ,enters into the circula- tion ofcapital only solong ascisapart ofthe value ofc', ofthe commodity -capital ;but that ,assoon asitmaterializes inthe form ofm-c,that istosay ,assoon asitcompletes the entire cycle c-m-c,itdoes not enter into the movements ofthe capital advanced by the capitalist ,although this ad- vance isits cause .itisconnected with the movements of capital only insofar asthe existence ofcapital presupposes",
        "the rotation ofproductive capital .79 the existence ofthe capitalist ,and this isconditioned onthe consumption ofsurplus -value by the capitalist . within the general circulation ,c',for instance yarn , passes only asacommodity ;but asan element inthe cir- culation ofcapital itperforms the function ofcommodity- capital ,and capital -value alternately assumes and discards this form .after the sale ofthe yarn toamerchant ,ithas passed out ofthe circulation ofthe capital which produced it,but nevertheless ,asacommodity ,itmoves always inthe cycle ofthe general circulation .the circulation ofone and the same mass ofcommodities continues ,although itmay have ceased tobe an element in the independent cycle of the capital ofthe manufacturer .hence the actual and final metamorphosis ofthe mass ofcommodities thrown into cir- culation by the capitalist by means of c-m,their final elimination inconsumption ,may beseparated inspace and time from that metamorphosis in which this same mass ofcommodities performs the function ofcommodity -capi- tal.the same metamorphosis which has been completed in the circulation ofcapital still remains tobeaccomplished in the sphere ofthe general circulation . this state ofthings isnot changed bythe transfer ofthis yarn tothe cycle ofsome other industrial capital .the general circulation comprises asmuch the interrelations of the various independent fractions ofsocial capital ,inother words ,the totality ofthe individual capitals ,asthe circu- lation ofthose values which are not thrown on the market ascapital ,but enter into individual consumption . the different relations inthe cycle ofcapital ,according towhether itisapart ofthe general circulation ,orforms certain links in the independent cycles ofcapital ,may be further understood when we consider the circulation ofm', orofmplus m.masmoney -capital ,continues the cycle ofcapital .on the other hand m,spent asrevenue inthe act m-c,enters into the general circulation ,but iselimi- nated from the cycle ofcapital .only that part enters the capital cycle which performs the function of additional money -capital .in c-m-c,money serves only as coin , and the purpose ofthis circulation isthe individual con- sumption ofthe capitalist .itissignificant for the idiocy of",
        "80 capital . vulgar economy that itpretends toregard this circulation , which does not enter into the circulation ofcapital but is merely the circulation ofthat part ofthe surplus -product which isconsumed asrevenue ,asthe characteristic cycle of capital . in itssecond phase ,m-c,the capital -value m (which is equal top,the value ofthe productive capital that atthis point re-opens the cycle ofindustrial capital )isagain pres- ent,delivered ofits surplus -value .therefore ithas once more the same magnitude which ithad inthe first stage of the cycle ofmoney -capital ,m-c.inspite ofthe different place atwhich we now find it,the function ofmoney -capi- tal,into which form the commodity -capital has now been transformed ,isthe same : transformation into pm and l,into means ofproduction and labor -power . simultaneously with c-m,capital -value inthe function ofcommodity -capital (c'-m')has also gone through the phase c-m,and enters now into the supplementary phase m-c . its complete circulation is,therefore ,c-m-c pm . first :money -capital mappeared incycle i(m...m')as the original form in which capital -value isadvanced ;it appears atthe very outset asapart ofthat sum ofmoney into which commodity -capital transformed itself inthe first phase ofcirculation ,c-m'.itisfrom the beginning the transformation ofpby means ofthe sale ofcommodities into the money -form .money -capital exists here asthat form ofcapital -value which isneither its original nor its final one ,since the phase m-c,which supplements the phase c-m,can only becompleted by again discarding the mon- ey-form .therefore ,that part ofm-cwhich isatthe same time m-lappears now no longer asamere advance of money inthe purchase oflabor -power ,but also asanadvance by means ofwhich the same 1,000 pounds ofyarn ,valued at50 pounds ,which form apart ofthe commodity -value created by labor -power ,are given tothe laborer inthe form of money .the money thus advanced tothe laborer is merely atransformed equivalent ofafraction ofthe value ofthe commodities produced byhimself .and for this very reason ,the act m-c,sofar asitmeans m-l,isby no",
        "the rotation ofproductive capital .81 means simply areplacement ofacommodity inthe form ofmoney by acommodity inthe form ofause-value ,but itincludes other elements which are inaway independent ofthe general circulation ofcommodities . m'appears asachanged form ofc',which isitself aprod- uct ofaprevious function ofp,ofthe process ofproduction . the entire sum ofmoney mistherefore amoney -expression ofpast labor .in our illustration ,10,000 pounds ofyarn (worth 500 pounds sterling ),are the product ofthe spinning process .of this quantity ,7,440 pounds represent the ad- vanced constant capital c(worth 372 pounds sterling );1,000 pounds represent the advanced variable capital v(worth 50 pounds sterling );and 1,560 pounds represent the surplus- values (worth 78 pounds sterling ).ifin m',only the original capital of422 pounds sterling isagain advanced , other conditions remaining the same ,then the laborer re- ceives next week ,inm-l,only apart ofthe 10,000 pounds ofyarn produced inthis week (the money -value of1,000 pounds ofyarn ).as aresult ofc-m,money isalways the expression ofpast labor .ifthe supplementary act m-c takes place at once on the commodity -market and mis given in return for commodities existing inthis market , then this act isagain atransformation ofpast labor from the money -form into the commodity -form .but m-cdif- fers inthe matter oftime from c-m.true ,these two acts may exceptionally take place atthe same time ,for instance when the capitalist who performs the act m-cand the other capitalist for whom this act signifies c-mmutually ship their commodities atthe same time and misused only tosquare the balance . the difference in time between the performance ofc-mand m-cmay beconsiderable or insignificant .although m,asthe result ofc-m,repre- sents past labor ,itmay ,inthe act m-c,represent the changed form ofcommodities which are not asyet onthe market ,but will be thrown upon itin the future ,since m-cneed not take place until chas been produced anew mmay also stand for commodities which are produced sim- ultaneously with the cwhose money -expression mis;for instance ,inthe movement m-c(purchase ofmeans ofpro- duction ),coal may be bought before ithas been mined .",
        "82 capital . insofar asmrepresents an accumulation ofmoney which isnot spent asrevenue ,itmay stand for cotton which will not beproduced until next year .the same holds good of the revenue ofthe capitalist represented by m-c.italso applies towages ,inthis case tolequal to50 pounds ster- ling ;this money isnot only the money -form ofthe past labor ofthe laborers ,but atthe same time adraft onsimul- taneously performed labor oron future labor .the laborer may buy for his wages acoat which will not bemade until next week .this applies especially tothe vast number of necessary means ofsubsistence which must beconsumed al- . most assoon asthey have been produced ,toprevent their being spoiled .thus the laborer receives inthe money which represents his wages the changed form ofhis own future labor orthat ofothers .by means ofapart ofthe laborer's past labor ,the capitalist gives him adraft on his own future labor .itisthe laborer's simultaneous orfuture labor which represents the not yet existing supply that will pay for his past labor .inthis case ,the idea ofthe formation ofasup- ply disappears altogether . pm second :inthe circulation c-m-c{ the same money changes places twice ;the capitalist first receives itas a seller and gives itaway asabuyer ;the transformation of commodities into the money -form serves only for the purpose of retransforming itfrom money into commodities ;the money -form of capital ,its existence as money -capital ,is therefore only apassing factor inthis movement ;or,so far asthe movement proceeds ,money -capital appears only as acirculating medium when itserves tobuy things ;on the other hand ,money -capital performs the function ofapay- ing medium when capitalists buy mutually from one an- other and square only the balance oftheir accounts . third :the function ofmoney -capital ,whether itisa mere circulating medium or apaying medium ,mediates only the renewal ofcby land pm ,that istosay,the renewal ofthe commodities produced byproductive capital , such as yarn (after deducting the surplus -value used as revenue ),out ofits constituent elements ,in other words , the retransformation ofcapital -value from its commodity- form into the elements constituting this commodity .inthe",
        "the rotation ofproductive capital . 83 last analysis ,the function ofmoney -capital mediates only the retransformation ofcommodity -capital into productive capital . in order that the cycle may be completed normally ,c' must besold atitsvalue and completely .furthermore ,c m-cdoes not signify merely the replacing ofone com- modity byanother ,but also the replacing ofthe same rela- tive values .we assume that this takes place here .as a matter offact ,however ,the values ofthe means ofproduc- tion vary ;itisprecisely capitalist production which has for itscharacteristic acontinuous change ofvalue -relations ,and this isconditioned on the ever changing productivity of labor ,which isanother characteristic ofcapitalist produc- tion .this change inthe value ofthe factors ofproduc- tion will be discussed later on,and we merely refer toit here .the transformation ofthe elements ofproduction into commodity -products ,ofpinto c',takes place inthe sphere ofproduction ,while their retransformation from c' into ptakes place inthe sphere of circulation ;itisac- complished by way ofthe simple metamorphosis ofcom- modities ,but itscontent isaphase inthe process ofrepro- duction ,regarded asawhole .c-m-c,considered asa form ofthe circulation ofcapital ,includes achange ofsub- stance due tothis function .the process c-m-crequires that cshould beidentical with the elements ofproduction of the quantity ofcommodities c',and that these elements maintain their relative proportions toward one another .it is,therefore ,understood that the commodities are not only bought attheir value ,but also that they donot undergo any change ofvalue during their circulation .otherwise this process cannot run normally . in m...m',the factor mrepresents the original form of capital -value ,which isdiscarded only tobe resumed .in p...cm'c...p,the factor mrepresents aform which is only assumed inthis process and which isdiscarded before this process isover with .the money -form appears here only asapassing independent form ofcapital -value .capital is just asanxious toassume this form inc'asitistodiscard itinm'after barely assuming it,inorder toagain transform itself into productive capital .so long asitremains inthe",
        "84capital . money -form ,itdoes not perform the function ofcapital and does not,therefore ,generate new values ;itthen lies fal- low .mserves here asacirculating medium ,but asacircu- lating medium ofcapital .the semblance ofindependence , which the money -form ofcapital -value possesses inthe first form ofthe circulation ofmoney -capital ,disappears inthis second form ,which ,therefore ,isthe negation ofthe first form and reduces ittoaconcrete form .ifthe second meta- morphosis m-cmeets with any obstacles -for instance ,if there are no means ofproduction inthe market -the unin- terrupted flow ofthe process ofreproduction isarrested ,quite asmuch asitiswhen capital inthe form ofcommodity- capital isheld fast .but there isthis difference :itcan re- main longer inthe money -form than inthat ofcommodi- ties .itdoes not cease tobemoney ,ifitdoes not perform the functions ofmoney -capital ;but itdoes cease tobe a commodity ,oreven ause-value ,ifitisinterrupted too long in its functions ofcommodity -capital .furthermore ,itis capable inits money -form ,ofassuming another form in- stead ofitsoriginal one ofproductive capital ,while itdoes not change places atall ifheld inthe form ofc'. c-m'-cincludes processes ofcirculation only for c, and they are phases initsreproduction ,but the actual repro- duction ofc,into which c'istransformed ,isnecessary for the completion ofc'-m'-c.this ,however ,isconditioned on aprocess ofreproduction which lies outside ofthe process ofreproduction ofthe individual capital represented byc'. inthe first form ,m-cpm prepares only the first trans- formation ofmoney -capital into productive capital ;inthe second form ,itprepares the retransformation ofcommodity- capital into productive capital ;that istosay,sofar asthe investment ofindustrial capital remains the same ,the com- modity -capital isretransformed into the same elements of production out ofwhich itoriginated .here aswell asin the first form ,the process ofproduction isinapreparatory stage ,but itisareturn toitand itsrenewal ,itisfor the pur- pose ofrepeating the process ofself -utilization . itmust benoted ,once more ,that m-lisnot merely the exchange ofcommodities ,but the purchase ofacommodity l,which istoserve for the production ofsurplus -value ,just",
        "the rotation ofproductive capital .85 asm-pm isaprocess which isindispensable for the same end . when m-c{ has been completed ,mhas been retrans- formed into productive capital p,and the cycle begins anew . the elaborated form ofp...c'-m'-c...pis c p... +.... .... m .c{ml. +p the transformation of money -capital into productive capital isthe purchase ofcommodities for the purpose of producing commodities .consumption falls within the cycle ofcapital only insofar asitisproductive consumption ;its premise isthat surplus -value isproduced by means ofthe commodities soconsumed .and this isquite different from aproduction ,even though itbeaproduction ofcommodi- ties ,which has for itsend the existence ofthe producer .a replacing ofone commodity by another for the purpose of producing surplus -value isadifferent matter than the ex- change ofproducts which isperfected merely by means of money .but some economists use this sort ofexchange asa proof that there can beno overproduction . apart from the productive consumption ofm,which is transformed into land pm ,this cycle contains the first phase m-l,which signifies ,from the standpoint ofthe laborer l-m,or c-m. in the laborer's circulation , l-m-c,which includes his individual consumption ,only the first factor falls within the cycle ofcapital by means of l-m.the second act,m-c,does not fall within the circulation ofindividual capital ,although itisconditioned on it.but the continuous existence ofthe laboring class is necessary for the capitalist class ,and this requires the indi- vidual consumption ofthe laborer ,made possible by m-c. the act c-m'requires only that c'betransformed into money ,that itbesold ,inorder that capital -value may con- tinue itscycles and surplus -value beconsumed by the capi- talist .of course ,c'isbought only because the article isa use -value and serviceable for individual orproductive con- sumption .but ifc'continues tocirculate ,for instance ,in the hand ofthe merchant who has bought the yarn ,this",
        "86capital . does not interfere with the continuation ofthe cycle ofindi- vidual capital which produced the yarn and sold ittothe merchant .the entire process proceeds uninterruptedly and simultaneously with the individual consumption ofthe capi- talist and the laborer .this point isimportant inadiscus- sion ofcommercial crises . assoon asc'has been sold for money ,itmay re-enter into the material elements ofthe labor process ,and thus ofthe reproductive process .whether c'isbought by the final consumer orby amerchant ,does not alter the case .the quantity ofcommodities produced by capitalist production depends on the scale ofproduction and onthe continual necessity for expansion following from this production .it does not depend on apredestined circle ofsupply and de- mand ,nor oncertain wants tobesupplied .production ona large scale can have no other buyer ,apart from other indus- trial capitalists ,than the wholesale merchant . within certain limits ,the process ofreproduction may take place onthe same oronanincreased scale ,although the commodi- ties taken out ofitmay not have gone into individual or productive consumption .the consumption ofcommodities isnot included inthe cycle ofthe capital which produced them .for instance ,assoon asthe yarn has been sold ,the cycle ofthe capital -value contained inthe yarn may begin anew ,regardless ofwhat may become ofthe sold yarn .so long asthe product issold ,everything isgoing its regular course from the standpoint ofthe capitalist producer .the cycle ofhis capital -value isnot interrupted .and ifthis process isexpanded -including an increased productive con- sumption ofthe means ofproduction -this reproduction of capital may beaccompanied byanincreased individual con- sumption (demand )onthe part ofthe laborers ,since this individual consumption isinitiated and mediated byproduc- tive consumption .thus the production ofsurplus -value , and with itthe individual consumption ofthe capitalist ,may increase ,the entire process ofreproduction may beinaflour- ishing condition ,and yet alarge part ofthe commodities may have entered into consumption only apparently ,while inreality they may still remain unsold inthe hands ofdeal-",
        "the rotation ofproductive capital . 87 ers,inother words ,they may still beactually inthe market . now one stream ofcommodities follows another ,and finally itbecomes obvious that the previous stream had been only apparently absorbed by consumption .the commodity -cap- itals compete with one another for aplace on the market . the succeeding ones ,inorder tobeable tosell ,dosobelow price .the former streams have not yet been utilized ,when the payment for them isdue .their owners must declare their insolvency ,orthey sell atany price inorder tofulfill their obligations .this sale has nothing whatever to do with the actual condition ofthe demand .itismerely a question ofademand for payment ,ofthe pressing necessity oftransforming commodities into money .then acrisis itbecomes noticeable ,not inthe direct decrease of consumptive dmand ,not inthe demand for individual con- sumption ,but inthe decrease ofexchanges ofcapital for cap- ital,ofthe reproductive process ofcapital .comes . ifthe commodities pm and l,into which mistrans- formed inthe performance ofitsfunction ofmoney -capital , initscapacity ascapital -value destined for retransformation into productive capital ,if,isay,those commodities are tobe bought orpaid atdifferent dates ,sothat m-crepresents a series ofsuccessive purchases orpayments ,then apart ofm performs the act m-c,while another part persists inthe form ofmoney ,and does not serve inthe performance of simultaneous orsuccessive acts m-c,until the conditions of this process itself demand it.this part ofmistemporarily withheld from circulation ,inorder toperform itsfunction at the proper moment .this storing ofmfor acertain time is afunction conditioned on its circulation and intended for circulation .its existence asafund for purchase and pay- ment ,the suspension ofits movement ,the condition ofits interrupted circulation ,are conditions inwhich money per- forms one ofits functions asmoney -capital .isay money- capital ;for inthis case the money remaining temporarily at rest isitself apart ofmoney -capital m(ofm'-mequal to m),ofthat part ofcommodity -capital which isequal top,of that value ofproductive capital from which the cycle pro- ceeds .on the other hand ,all money withdrawn from cir- culation has the form ofahoard .inthe form ofahoard ,",
        "88capital . money isthus likewise afunction ofmoney -capital ,just as the function ofmoney inm-casamedium ofpurchase or payment becomes afunction ofmoney -capital .for capital- value here exists inthe form ofmoney ,the money -form is acondition ofindustrial capital inone ofits stages ,pre- scribed by the interrelations ofprocesses within the cycle . at the same time itishere once more obvious ,that money- capital performs no other functions than those ofmoney within the cycle ofindustrial capital ,and that these func- tions assume the significance ofcapital functions only by virtue oftheir interrelations with the other stages ofthis cycle . the representation ofm'asarelation ofmtom,asa capital relation ,isnot somuch afunction ofmoney -capital , asofcommodity -capital c',which inits turn ,asarelation ofctoc,expresses but the result ofthe process ofproduction , ofthe self -utilization ofcapital which took place init. ifthe movement ofthe process ofcirculation meets with obstacles ,sothat m must suspend its function m-con account ofexternal conditions ,such asthe condition ofthe market ,etc. ,and ifittherefore remains for ashorter or longer time in its money -form ,then we have once more money inthe form ofahoard which itmay also assume in the simple circulation ofcommodities ,assoon asthe transi- tion from c-mtom-cisinterrupted by external condi- tions .itisan involuntary formation ofahoard .in the present case ,money has the form offallow ,latent ,money- capital .but we will not discuss this point any further for the present . inboth cases ,the suspension ofmoney -capital inthe form ofmoney isthe result ofan interruption ofitsmovements , no matter whether this isadvantageous orharmful ,volun- tary orinvoluntary ,inaccord with itsfunctions orcontrary tothem .",
        "the rotation ofproductive capital .89 ii.accumulation and reproduction on an enlarged scale . since the proportions ofthe expansion ofthe productive process are not arbitrary ,but determined bytechnical condi- tions ,the produced surplus -value ,though intended for capi- talization ,frequently does not attain asize sufficient for its function asadditional capital ,for itsentrance into the cycle ofcirculating capital -value ,until several cycles have been repeated sothat itmust be accumulated until that time . surplus -value thus assures the rigid form ofahoard and is, then ,latent capital .itislatent ,because itcannot function ascapital solong asitpersists inthe money -form . the formation ofahoard thus appears asaphenomenon included inthe process ofcapitalist accumulation ,accompanying it, but nevertheless essentially different from it.for the proc- ess ofreproduction isnot expanded by latent capital .on the contrary ,latent money -capital ishere formed ,because the capitalist producer cannot atonce expand the scale ofhis production .ifhe sells his surplus -product toaproducer ofgold orsilver ,or,what amounts tothe same thing ,toa merchant who imports additional gold orsilver from foreign countries for apart ofthe national surplus -product ,then his latent money -capital forms an increment of the national gold orsilver hoard .in all other cases ,the surplus -value , for instance the 78pounds sterling ,which were acirculating medium inthe hand ofthe purchaser ,have only assumed the form ofahoard inthe hands ofthe capitalist .in other words ,adifferent repartition ofthe national gold orsilver hoard has taken place ,that isall. ifthe money serves inthe transactions ofour capitalist as ameans ofpayment ,insuch away that the commodities are tobepaid for bythe buyer on long orshort terms ,then the surplus -product intended for capitalization isnot trans- formed into money ,but into creditor's claims ,into titles of 6athe term \"latent \"isborrowed from the idea oflatent heat in physics ,which has now been almost replaced bythe theory ofthe trans- formation ofenergy .marx therefore uses inthe third part ,which isof later date ,another term borrowed from the idea ofpotential energy , viz.:\"potential ,\"or,analogous tothe virtual velocities ofd'alembert , \"virtual capital .\"-f.e,",
        "90capital . ownership ofacertain equivalent ,which the buyer may either have inhis possession ,orwhich hemay expect topos- sess .itdoes not enter into the reproductive process ofthe cycle any more than money which isinvested ininterest- bearing papers ,although itmay enter into the cycles ofother individual industrial capitals . the entire character ofcapitalist production isdetermined bythe utilization ofthe advanced capital -value ,that istosay, inthe first instance bythe production ofasmuch surplus- value aspossible ;inthe second place ,by the production of capital ,in other words ,by the transformation ofsurplus- value into capital (see vol.i,chap .xxiv ).but ,aswe have seen involume i,the further development makes ita necessity for every individual capitalist toaccumulate ,orto produce on an enlarged scale ,inorder toproduce more and more surplus -value ,and this appears asapersonal motive of the capitalist for his own enrichment .the preservation of his capital isconditioned on its continuous enlargement . but we donot revert any further toour previous analysis . we considered first simple reproduction ,and we assumed that the entire surplus -value was spent asrevenue .but in reality and under normal conditions ,only apart ofthe sur- plus -value can bespent asrevenue ,and another part must be capitalized .and itisquite immaterial ,whether acertain surplus -value ,produced within acertain period ,isentirely consumed orentirely capitalized .inthe average movement -and the general formula cannot represent any other- both cases occur .but inorder not tocomplicate the form- ula,itisbetter toassume that the entire surplus -value is accumulated .the formula p...c'-m'-c' ...pstands for productive capital ,which isreproduced on an enlarged scale and with enlarged values ,and which begins itssecond cycle asenlarged productive capital ,or,what amounts tothe same ,which renews its first cycle .as soon asthis second cycle isbegun ,wehave once more pasastarting point ;only pisalarger productive capital than the first pwas .hence , ifthe second cycle begins with m'inthe formula m-m', this m'functions asm,asan advanced capital ofadefinite size .itisalarger money -capital than the one with which the first cycle was opened ;but all relations toitsgrowth bythe",
        "the rotation ofproductive capital .91 capitalization ofsurplus -value have disappeared ,assoon asit appears inthe function ofadvanced money -capital .this origin isextinguished in its form ofmoney -capital which begins its cycle .this also applies to p',as soon as it becomes the starting point ofanew cycle . if we compare p...p'with m...m',or with the first cycle ,we find that they have not the same significance . m...m',taken by itself asan individual cycle ,expresses only that m,money -capital ,orindustrial capital initscycle asmoney -capital ,ismoney generating more money ,value generating more value ,inother words ,producing surplus- value .but inthe cycle ofp,the process ofutilization is completed assoon asthe first stage ,the process ofproduc- tion ,isover with ,and after going through the second stage (the first stage ofthe circulation ),c'-m',the capital -value plus surplus -value exists already asmaterialized money -cap- ital,asm',which appeared asthe last extreme in the first cycle .the fact that surplus -value has been produced is registered inthe first considered formula p...pby c-m-c (see expanded formula previously given ).this ,initssec- ond stage ,falls outside ofthe circulation of capital and represents the circulation ofsurplus -value asrevenue .in this form ,where the entire movement isrepresented by p...pand where there isno difference invalue between the two extremes ,the utilization ofthe advanced value ,orthe production ofsurplus -value ,isrepresented inthe same way asinm...m',only the act c'-m',which appears asthe last stage inm-m',and asthe second stage ofthe cycle ,appears asthe first stage ofthe circulation p...p. in p...p',the term p'does not express the fact that sur- plus -value has been produced ,but that the produced surplus- value has been capitalized ,that capital has been accumulated , and that p'asdistinguished from pconsists ofthe original capital -value plus the value ofcapital accumulated by its movements . m',asthe closing link ofm...m',and c',asitappears within allthese cycles ,donot express the movement ,but its result ,iftaken by themselves :they represent the result ,in the form ofmoney orcommodities ofthe utilization ofcapi- tal-value ,and capital -value therefore appears asmplus m,or",
        "92capital . cplus c,asarelation ofcapital -value toits surplus -value , itsoffspring .but whether this result appears inthe form of m'orc',itisnot afunction ofeither money -capital orcom- modity -capital .as special and different forms correspond- ing tospecial functions ofindustrial capital ,money -capital can perform only money functions ,and commodity -capital only commodity functions .their difference ismerely that ofmoney and commodity .industrial capital ,inits capac- ity ofproductive capital ,can likewise consist only ofthe same elements asthose ofany other process oflabor which creates products :onone side objective means ofproduction , on the other labor -power asthe productive element .just asindustrial capital can exist within the process ofproduc- tion only inacomposition which corresponds tothe require ments ofall production ,even ifitisnot capitalist production soitcan exist inthe sphere ofcirculation only inthe two forms corresponding toit,viz.,that ofacommodity orof money .now the sum ofthe elements ofproduction reveals its character ofproductive capital atthe outside bythe fact that the labor -power belongs toanother from whom the cap- italist purchases it,just ashe purchases his means ofpro- duction from others who own them ,sothat the process of production itself appears asaproductive function ofindus- trial capital .in the same way money and commodities appear asforms ofcirculation ofthe same industrial capital , hence their functions asthose ofthe circulation ofthis capi- tal,which either introduce the function ofproductive capital ororiginate from it.the money function and the commod- ity function become atthe same time functions ofmoney -cap- ital and commodity -capital for noother reason than that they enter into relationship with the functional forms through which industrial capital passes inthe different stages ofits process ofcirculation .itis,therefore ,amistake toattempt toderive the specific characters ofmoney and commodities , and their specific functions assuch ,from their capital -char- acter ,and itislikewise amistake toderive the qualities of productive capital from itsexistence inmeans ofproduction . as soon asm'orc'have become fixed inthe relation of mplus m,orcplus c,inother words ,assoon asthey become parts ofthe relation between capital -value and its offspring",
        "the rotation ofproductive capital . 93 surplus -value ,they give expression tothis relation either in the form ofmoney orofcommodities ,without changing the nature ofthe relation itself .this relation isnot due toany qualities orfunctions ofeither money orcommodities as such .in both cases the characteristic quality ofcapital , that ofbeing avalue generating more value ,isexpressed only asaresult .c'isalways the product ofthe function of p,and m'isalways merely aform ofc'changed inthe cycle ofindustrial capital .as soon asthe realized money -capi- talbegins itsspecial function asmoney -capital anew ,itceases toexpress the capital -relation conveyed by the formula m' equal tomplus m.after m...m'has been completed and m'begins the cycle anew ,itnolonger figures asm'but asm, even ifthe entire capital -value contained inm'iscapitalized . the second cycle begins inour case with amoney -capital of 500 pounds sterling ,instead of422 pounds inthe first cycle . the money -capital ,which opens the cycle ,islarger by 78 pounds sterling than before ;this difference exists inthe com- parison ofone cycle with another ,but itdoes not exist within each cycle .the 500 pounds sterling advanced asmoney- capital ,78 pounds ofwhich formerly existed assurplus- value ,do not play any different role than some other 500 pounds sterling by which another capitalist opens his first cycle .the increased p'opens anew cycle asp,just asp did inthe simple reproduction p...p. inthe stage m'-c'{,the increased magnitude isindi- cated only by c,but not by l'and pm '.since cisthe sum ofland pm ,the term c'indicates sufficiently that the sum ofthe land pm contained initisgreater than the orig- inal p. inthe second place ,the terms l'and pm 'would be incorrect ,because weknow that the growth ofcapital implies achange inthe relative proportions ofthe values composing it,and that ,with the progressive changing ofthis proportion , the value ofpm increases ,while that oflalways decreases relatively ,ifnot absolutely . iii.accumulation ofmoney whether or not m,the surplus -value transformed into gold ,isimmediately combined with the circulating capital- value and isthus enabled toenter into the cycle together",
        "94capital . with the capital minthe magnitude ofm',depends on cir- cumstances which are independent ofthe mere existence of m.ifmistoserve asmoney -capital inasecond independ- ent business ,toberun bythe side ofthe first ,itisevident that itcannot beused for this purpose ,unless itisofthe mini- mum size required for it.and ifitisintended touse itfor the extension ofthe original business ,the condition ofthe substances composing pand their relative values likewise demand aminimum magnitude for m.all the means of production employed inthis business have not only aquali- tative ,but also adefinite quantitative relation toward one another .these proportions ofthe substances and oftheir values entering into the productive capital determine the minimum magnitude required for m,inorder tobecapable oftransformation into additional means ofproduction and labor -power ,oronly into means ofproduction asan addi- tion tothe productive capital .for instance ,the owner ofa spinning loom cannot increase the number ofhis spindles without atthe same time purchasing acorresponding num- ber of carders and preparatory looms ,apart from the increased expense for cotton and wages ,which such an ex- tension ofhis business demands .inorder tocarry this out, the surplus -value must have reached aconsiderable figure (one pound sterling per spindle isgenerally assumed for new installations ).so long asmdoes not reach this figure ,the cycle ofthe original capital must berepeated several times , until the sum ofthe successively produced surplus -values m can take part in the functions ofm,inthe process m'-c' {m. even mere changes ofdetail ,for instance ,inthe spin- ning machinery ,made for the purpose ofmaking itmore productive ,require greater expenditures for spinning mate- rial ,preparatory looms ,etc. inthe meantime ,misaccumu- lated ,and itsaccumulation isnot its own function ,but the result ofrepeated cycles ofp...p.itsown function consists inpersisting inthe form ofmoney ,until ithas received suffi- cient additions from the outside bymeans ofsuccessive cycles ofutilization ofcapital tohave acquired the minimum mag- nitude necessary for itsactive function .only when ithas reached this magnitude ,can itactually serve asmoney -capi- tal and eventually take part inthe functions ofthe active",
        "the rotation ofproductive capital .95 money -capital masits accumulated part .but until that time itisaccumulated and exists only inthe form ofahoard in aprocess of gradual growth . the accumulation of money ,the formation ofahoard ,appears here asaprocess which accompanies temporarily the accumulation by which industrial capital expands the scale ofitsproductive action . this isatemporary phenomenon ,for solong asthe hoard remains inthis condition ,itdoes not perform the function of capital ,does not take part inthe process ofutilization ,and remains asum ofmoney which grows only by virtue ofthe fact that other money ,existing without the initiative ofthe hoard ,isthrown into the same safe . the form ofahoard issimply the form ofmoney not in circulation .itismoney interrupted inits circulation and stored up inthe form ofmoney .as for the process of forming ahoard ,itisfound inall systems ofcommodity- production ,and itplays arole asan end initself only in the undeveloped ,precapitalist forms ofthis production .in the present case ,the hoard assumes the form ofmoney -capi- tal,and goes through the process offorming ahoard asa temporary corollary ofthe accumulation ofcapital ,merely because the money here figures aslatent money -capital ,and because the formation ofahoard aswell asthe surplus -value hoarded inthe form ofmoney represent afunctionally pre- scribed and preliminary stage required for the transforma- tion ofsurplus -value into capital actually performing its functions .itisthis end which gives itthe character of latent money -capital .hence the volume ,which itmust have acquired before itcan take part inthe process ofcapi- tal,isdetermined ineach case by the values ofwhich the productive capital iscomposed .but solong asitremains inthe condition ofahoard ,itdoes not perform the func- tions ofmoney -capital ,but ismerely sterile money -capital ; itsfunctions have not been interrupted ,asinaprevious case , but itisasyet incapable ofperforming them . we are here discussing the accumulation ofmoney inits original and real form ofan actual hoard ofmoney .but itmay also exist inthe form ofmere outstanding money ,of credits granted byacapitalist who has sold c'.as concerns",
        "96capital . itsother forms ,where this latent money -capital exists inthe meantime inthe shape ofmoney breeding more money , such asinterest -bearing deposits inabank ,indrafts ,orin bonds ofsome sort ,these do not fall within the discussion atthis point .surplus -value realized inthe form ofmoney then performs special capital -functions outside ofthat cycle ofindustrial capital which originated it.inthe first place , these functions have nothing todowith that cycle ofindus- trial capital assuch ,inthe second place they represent capi- tal-functions which are tobe distinguished from the func- tions ofindustrial capital and which are not yet developed atthis stage . iv.reserve funds . in the case which we have just discussed ,surplus -value in the form of ahoard represents accumulated funds ,a money -form temporarily assumed by the accumulation of capital and tothat extent acondition ofthis accumulation . however ,such accumulated funds may also perform special services ofasubordinate nature ,that istosay they may enter into the circulation -process ofcapital ,even ifthis process has not assumed the form ofp-p',inother words ,with- out an expansion ofcapitalist reproduction . ifthe process c-m'isprolonged beyond itsnormal size , sothat commodity -capital meets with abnormal obstacles dur- ing itstransformation into the money -form ,orif,after the completion ofthis transformation ,the price ofthe means of production into which the money -capital istobetransformed has risen above the level occupied by itinthe beginning of the cycle ,the hoard held asaccumulated funds may beused inthe place ofmoney -capital ,orofapart ofsuch capital . in that case ,the accumulated funds of money serve as reserve funds for the purpose ofcounterbalancing disturb- ances ofthe circulation . when inuse assuch areserve fund ,accumulated money differs from the fund ofpurchase orpaying media discussed inthe cycle p-p'.these media are apart ofmoney -capi- tal performing itsfunctions ,they are forms ofexistence of apart ofcapital -value ingeneral going through the process ofitscirculation ,and itsdifferent parts perform their func- tions successively atdifferent times .in the continuous",
        "the rotation ofproductive capital .97 process ofproduction ,money -capital in reserve isalways formed ,obligations being incurred today which will not be paid until later ,and large quantities ofcommodities being sold today ,while other large quantities are not tobebought until some other day .in these intervals ,apart ofthe cir- culating capital exists continuously inthe form ofmoney . areserve fund ,onthe other hand ,isnot apart ofmoney- capital inthe performance ofitsfunctions . itisrather a part ofcapital inapreliminary stage ofitsaccumulation ,of surplus -value not yet transformed into active capital . of course ,itrequires no explanation ,that the capitalist , when pressed for funds ,does not concern himself about the definite functions ofthe money inhis hands .he simply employs whatever money hehas for the purpose ofkeeping the circulation -process ofhis capital in motion .for in- stance ,inour illustration ,misequal to422 pounds sterling , m'to500 pounds sterling .ifapart ofthe capital of422 pounds sterling exists inthe form ofmoney asafund for paying orbuying ,itisintended that all ofitshould enter into circulation ,conditions remaining the same ,and that it issufficient for this purpose .the reserve fund ,onthe other hand ,isapart ofthe 78 pounds sterling ofsurplus -value . itcannot enter the circulation process ofthe capital of422 pounds sterling ,unless this circulation takes place under changed conditions ;for itisapart ofthe accumulated funds ,and figures here under conditions ,where the scale ofthe reproduction has not been enlarged . accumulated money -funds represent latent money -capi- tal,orthe transformation ofmoney into money -capital . the following isthe general formula for the cycle ofpro- ductive capital ,combining simple reproduction and repro- duction on an enlarged scale : p...c-m'.m-c{...p(p'). ifpequals p,then min2)isequal tom'-m;ifpequals p',then min 2)isgreater than m'-m,that istosay ,m has been completely orpartially transformed into money- capital . the cycle ofproductive capital isthat form ,under which classical political economy discusses the rotation process of industrial capital .",
        "98capital . chapter iii. the circulation ofcommodity -capital . is:the general formula for the cycle ofcommodity -capital c-m'-c...p...c'. c'appears not alone asthe product ,but also asthe premise ofthe two previous cycles ,since m-cincludes for one capi- tal that which c'-m'includes for the other ,atleast inso far asapart ofthe means ofproduction represents the com- modity -product ofother individual capitals going through their circulation process .in our case ,for instance ,coal , machinery ,etc. ,represent the commodity -capital ofthe mine- owner ,ofthe capitalist machine -manufacturer ,etc. fur- thermore ,we have shown in chapter i,iv,that not only the cycle p...p,but also the cycle c'...c'isassumed even in the first repetition of m...m',before this second cycle of money -capital iscompleted . ifreproduction takes place on anenlarged scale ,then the final c'isgreater than the initial c'and we shall then call the final one c\". the difference between the third form and the first two is onthe one hand ,that inthis case the total circulation opens the cycle with its two opposite phases ,while inform ithe circulation isinterrupted by the process ofproduction ,and inform iithe total circulation with its two complementary phases appears asaconnecting link for the process ofrepro- duction ,intervening as amediating movement between p...p.inthe case ofm...m',the cycle has the form m-c ...c-m'-m-c-m.inthe case ofp...pithas the op- posite form ,namely ,c-m'.m-c-c-m-c.inthe case ofc'-c',itlikewise has this last form . on the other hand ,when the cycles iand iiare repeated , even ifthe final points m'and p'are atthe same time the starting points ofthe renewed cycle ,the form inwhich they",
        "the circulation ofcommodity -capital .99 were originally generated disappears .m'=mplus m,and p'=pplus p,begin the new cycle asmand p. but inform iii,the starting point cmust be designated asc',also in the case ofthe renewal ofthe cycle on the same scale ,for the following reason .as soon asm'assuch opens anew cycle inthe form i,itperforms the functions ofmoney- capital m,asan advance inthe form ofmoney ofthe capi- tal value tobe utilized .the size ofthe advanced money- capital ,increased by the accumulation resulting from the first cycle ,isgreater .but whether the size ofthe advanced money -capital is422 pounds sterling or500 pounds sterling , itnevertheless appears merely asacapital -value . m'no longer exists as autilized capital pregnant with surplus- value ,for itisstill tobe utilized .the same istrue of p...p',for p'must always perform the functions ofp,of capital -value used for the generation ofsurplus -value ,and must renew its cycle for this purpose . now the circulation ofcommodity -capital does not open with capital -value ,but with augmented capital -value inthe form ofcommodities .itincludes from the start not only the cycle ofcapital -value represented by commodities ,but also ofsurplus -value .hence ,ifsimple reproduction takes place inthis form ,c'atthe starting point isequal toc' atthe closing point .ifapart ofthe surplus -value enters into the circulation ofcapital ,c\",an enlarged c',appears atthe close ,but the succeeding cycle isonce more opened byc'.this ismerely alarger c'than that ofthe preceding cycle ,and itbegins itsnew cycle with aproportionately in- creased accumulation ofcapital -value ,which includes apro- portionate increase of newly produced surplus -value .in every case ,c'always opens the cycle asacommodity -capi- tal which isequal tocapital -value plus surplus -value . c'ascdoes not appear inthe circulation ofsome individu- alindustrial capital asaform ofthis capital ,but asaform of some other industrial capital ,sofar asthe means ofpro- duction are its products .what ism-c(orm-pm )for the first capital ,isc'-m'for this second capital . pm in the circulation act m-c the factors land pm have identical relations ,insofar asthey are commodities",
        "100 capital . inthe hands ofthose who sell them ;on the one hand the laborers who sell their labor -power ,on the other hand the owners ofthe means ofproduction ,who sell these .for the purchaser ,whose money here performs the functions of money -capital ,land pm represent merely commodities ,so long ashe has not bought them ,solong asthey confront his money -capital inthe form ofcommodities owned by others .pm and lhere differ only inthis respect that pm may bec',orcapital ,inthe hands ofitsowner ,ifpm isthe commodity -form ofhis capital ,while lisalways nothing else but acommodity for the laborer ,and does not become capital ,until itismade apart of pin the hand ofits purchaser . for this reason ,c'can never open any cycle asamere commodity -form ofcapital -value .as commodity -capital it isalways the representative oftwo things .from the point ofview ofuse-value itisthe product ofthe function ofp, inthe present case yarn ,whose elements land pm ,coming from the circulation ,have been active increating this prod- uct.and from the point ofview ofexchange -value ,com- modity -capital isthe capital -value pplus the surplus -value mproduced by the function ofp. itisonly inthe circulation ofc'itself that cequal to p,and equal tothe capital -value ,can and must separate from that part ofc'inwhich surplus -value iscontained ,from the surplus -product representing the surplus -value .itdoes not matter ,whether these two parts can beactually separated , asinthe case ofyarn ,orwhether they cannot beseparated , asinthe case ofamachine .they may always be sepa- rated ,assoon asc'istransformed into m'. ifthe entire commodity -product isseparable into inde- pendent homogeneous parts ,asisthe case in our 10,000 lbs.ofyarn ,sothat the act c'm 'isperformed by means ofanumber ofsuccessive sales ,then capital -value inthe form ofcommodities can perform the functions ofcand can be separated from c',before the surplus -value ,orthe entire value ofc',has been realized . in the 10,000 lbs.ofyarn at500 pounds sterling ,the value of8,440 lbs.,equal to422 pounds sterling ,issepa- rated from the surplus -value .ifthe capitalist sells first",
        "the circulation ofcommodity -capital . 101 8,440 lbs.at422 pounds sterling ,then these 8,440 lbs.ofyarn represent c,orthe capital -value ,inthe form ofcommodi- ties .the surplus -product of1,560 lbs.ofyarn ,likewise con- tained inc',and valued at78pounds sterling ,does not cir- culate until later .the capitalist may accomplish c-m-c- { before the surplus product c-m-ccirculates . or,ifhesells 7,440 lbs.ofyarn at372 pounds sterling , and then 1,000 lbs.ofyarn at50pounds sterling ,hemight replace the means ofproduction (the constant capital c)with the first part ofcand the variable capital v,the labor -power , with the second part ofc,and then proceed asbefore . but ifsuch successive sales take place ,and the condi- tions ofthe cycle permit it,the capitalist ,instead ofseparat- ing c'into cplus vplus s,may make such aseparation also inthe case ofaliquot parts ofc'. for instance ,7,440 lbs.ofyarn ,valued at372 pounds ster- ling ,representing aconstant capital asparts ofc',namely of10,000 lbs.ofyarn valued at500 pounds sterling ,may be separated into 5,535 lbs.of yarn valued at 276.768 pounds sterling ,which replace the constant part ,the value ofthe means ofproduction used up in producing 7,440 lbs.ofyarn ;744 lbs.ofyarn valued at37.200 pounds sterling ,which replace only the variable capital ;and 1,160- .640 lbs.ofyarn valued at58.032 pounds sterling ,which are the surplus -product and represent surplus -value .ifhe sells his 7,440 lbs.ofyarn ,he can replace the capital -value contained inthem after the sale of6,279.360 lbs.ofyarn at313.968 pounds sterling ,and hecan spend ashis revenue the value ofthe surplus -product of 1,160.640 pounds ,or 58.032 pounds sterling . in the same way ,he may separate 1,000 lbs.ofyarn , valued at50 pounds sterling ,orequal tothe variable capi- tal-value ,into itsaliquot parts and sell them successively ,as follows :744 lbs.ofyarn at37.200 pounds sterling ,for the constant capital -value of1,000 lbs.ofyarn ;100 lbs.ofyarn at5pounds sterling ,for the variable capital -value ;orto- gether 844 lbs.ofyarn at42.2 pounds sterling ,for replac- ing the capital -value contained in1,000 lbs.ofyarn ;finally , 156 lbs.of yarn at7.8 pounds sterling ,representing the",
        "102capital . surplus -product contained in1,000 lbs.ofyarn ,which may bespent assuch . finally ,the capitalist may divide the remaining 1,560 lbs.ofyarn ,valued at78pounds sterling ,provided hesuc- ceeds inselling them ,insuch away that the sale of1,160 lbs.ofyarn ,valued at58.032 pounds sterling ,replaces the value ofthe means ofproduction contained inthose 1,560 lbs.ofyarn ,and 156 lbs.ofyarn ,valued at7.8 pounds ster- ling ,replaces the variable capital -value ;oratotal of1,316- .640 lbs.ofyarn ,valued at65.832 pounds sterling ,for re- placing the total capital -value ;finally ,the surplus -product of243.360 lbs.,valued at12.168 pounds sterling ,remains , tobespent asrevenue . just asall the elements ofc,v,and s,contained inthe yarn ,are divisible into the same component parts ,somay every individual pound ofyarn ,valued at1sh.,or12d.,be divided . c=0.744 lbs.ofyarn =8.928 d. v=0.100 lbs.ofyarn = s=0.156 lbs.ofyarn =1.200 d. 1.872 d. =12.00 d. c+v+s=1.00 lb. ofyarn ifwe add the results ofthe three above partial sales ,we obtain the same result aswe should when selling the entire 10,000 lbs.atone time . we have the following parts ofconstant capital : inthe first lot 5,535.360 lbs.ofyarn at276.768 . inthe second lot 744.000 lbs.ofyarn at37.200 . inthe third lot 1,160.640 lbs.ofyarn at58.032 . total .... .7,440.000 lbs.ofyarn at372.000 . furthermore ,the following parts ofvariable capital : inthe first lot of744.000 lbs.ofyarn at37.200 . inthe second lot 100.000 lbs.ofyarn at5.000 . in the third lot 156,000 lbs.ofyarn at7.800 . 1,000.000 lbs.ofyarn at50.000 .total .....",
        "the circulation ofcommodity -capital . 103 finally ,the following parts ofsurplus -value : inthe first lot 1,160.740 lbs.ofyarn at58.032 . inthe second lot 156.000 lbs.ofyarn at7.800 . inthe third lot 343.360 lbs.ofyarn at12.168 . total .... 1,560.000 lbs.ofyarn at78.000 . grand total : constant capital . variable capital . surplus -value . total .......... ...7,450 lbs.ofyarn at372 . .1,000 lbs.ofyarn at50. ...1,560 lbs.ofyarn at78. .10,000 lbs.ofyarn at500 . c-m'stands initself merely for the sale of10,000 lbs.of yarn .these 10,000 lbs.ofyarn are acommodity like all other yarn .the purchaser isinterested inthe price of1sh. per lb.,or500 pounds sterling for 10,000 lbs.ifhe ana- lyzes during the negotiations the different values ofwhich this lotiscomposed ,hedoes sosimply with the malignant in- tention ofproving that itcan besold atless than 1sh.per pound and still leave afair profit tothe seller .but the quantity purchased by him depends on his own require- ments .ifhe is,for instance ,the owner ofacloth -factory , the amount ofhis purchase depends onthe composition of his own capital invested inthis plant ,not on that ofthe owner ofthe yarn from whom he buys .the conditions , inwhich c'has toreplace on one side the capital used up inits production (orthe component parts ofthis capital ), and onthe other toserve asasurplus -product for the spend- ing ofsurplus -value orfor the accumulation ofcapital ,exist only inthe cycle ofthat capital ,which exists asacom- modity capital inthe form of10,000 lbs.ofyarn .these conditions have nothing todo with the sale itself .inthe present case we have also assumed that c'issold atits value ,sothat itisonly aquestion ofitstransformation from the commodity -form into that ofmoney .of course ,itis essential for c',when performing afunction inthe cycle of this individual capital by which the productive capital isto be replaced ,that itshould be known towhat extent ,ifat",
        "104capital . all,the price and the value vary inthe sale .but this does not concern ushere inthe discussion ofthe distinctions of form . inform i,orm...m',the process ofproduction intervenes midway between the two complementary and opposite phases ofthe circulation ofcapital ,and ispast before the concluding phase c'm'begins .money has been advanced ascapital , transformed into means ofproduction and labor power ,trans- ferred from these tothe commodity -product ,and this inits turn changed into money .itisacomplete cycle ofbusiness , which results inmoney ,the universal medium .the renewal ofthe cycle isthen possible ,but not necessary .m...p...m' may either be the last cycle ,concluding the function of some individual capital withdrawn from business ,orthe first cycle ofsome new capital beginning itsactive function . the general movement ishere m...m',from money tomore money . in form ii,orp...c'-m'-c...p(p'),the entire circula- tion process follows after the first pand takes place before the second p;but ittakes place inthe opposite direction from that ofform i. the first pisthe productive capital , and itsfunction isthe productive process ,onwhich the suc- ceeding circulation process isconditioned .the concluding p,on the other hand ,does not stand for the productive process ;itisonly the return ofthe industrial capital toits form ofproductive capital .and ithas that form by virtue ofthe last phase ofcirculation ,inwhich the transforma- tion ofcapital -value into lplus pm was accomplished ,those subjective and objective factors which combine toform the productive capital .the capital ,whether itbeporp',isin the end once more present inaform inwhich itmay again perform the function ofproductive capital ,inwhich itmust go through the productive process .the general form of the movement p...p'(p)isthat ofreproduction and does not indicate that capital istobeincreased bynew values ,asdoes m...m'.this enables classic political economy toignore so much easier the capitalistic form ofthe process ofproduc- tion and topretend that production itself isthe purpose of this process ;just asthough itwere only aquestion ofpro- ducing asmuch aspossible ,ascheaply aspossible ,and of",
        "the circulation ofcommodity -capital .105 exchanging the product for the greatest variety of other products ,either for the renewal ofthe production (mc),or for consumption (m-c).itisthen quite likely that the peculiarities ofmoney and money -capital may be over- looked ,for mand mappear here merely aspassing media ofcirculation .the entire process seems so simple and natural ,but natural inthe sense ofashallow rationalism .in the same way ,the profit isoccasionally overlooked inthe commodity -capital and itismentioned merely asacommod- itywhen discussing the productive circulation asawhole .but assoon asthe question ofthe values composing itcomes up for discussion ,itisspoken ofascommodity -capital .ac- cumulation ,ofcourse ,isseen inthe same light asproduction . in form iii,or c'-m'-c...p...c',the two phases of the circulation process open the cycle ,inthe same order which obtains in form ii,orp...p;next follows pwith itsfunction ,the productive process ,the same asinform i; the cycle closes with the result ofthe process ofproduction , c'.while form iicloses with p,the return ofproductive capital toitsmere form ,soform iii closes with c',the re- turn ofcommodity -capital toitsform .just asinform ii the capital ,initsconcluding form ofp,must renew itscycle bybeginning with the process ofproduction ,sointhis case , where the industrial capital re-appears inthe form ofcom- modity -capital ,the cycle isre-opened by the circulation- phase c-m'.both forms ofthe cycle are incomplete ,be- cause they do not close with m',that istosay with capital- value retransformed into money and utilized .both cycles must ,therefore ,becontinued and include the reproduction . the total cycle ofform iii isrepresented by c'...c'. the third form isdistinguished from the two first bythe fact that itisthe only one inwhich the utilized capital- value appears asthe starting point ofitsutilization ,instead ofthe original value which istobeutilized .c'asacapital- relation isthe starting point and has adetermining influ- ence onthe entire cycle ,for itincludes the cycle ofcapital- value aswell asthat ofsurplus -value initsfirst phase ,and the surplus -value iscompelled toact partly asrevenue by going through the circulation c-m-c,partly toperform",
        "106capital . the function ofan element ofcapital accumulation ,atleast inthe average ofthe cycles ,ifnot inallofthem . in the form c'...c'the consumption ofthe entire com- modity -product isassumed asthe condition ofthe normal course ofthe cycles ofcapital itself .the individual con- sumption ofthe laborer and the individual consumption of the unaccumulated part ofthe surplus -product comprise the entire individual consumption .hence the consumption in its totality -individual aswell asproductive consumption -are conditional factors inthe cycle c'.productive con- sumption ,which includes the individual consumption of the laborer asacorollary ,since labor -power isacontinuous product of the laborer's individual consumption ,within certain limits ,isperformed by every individual capital it- self .individual consumption ,insofar asitisnot required for the existence ofthe individual capitalist ,ishere only regarded asasocial act,not asanact ofthe individual capi- talist . informs iand ii,the aggregate movement appears asa movement ofadvanced capital -value .inform iii,the util- ized capital ,inthe shape ofthe total commodity -product , isthe starting point and has the nature ofmoving capital , commodity -capital . not until the transformation into money has been accomplished ,does this movement sep- arate into movements of capital and revenue .the dis- tribution ofthe total social product aswell asthe special distribution ofthe product ofevery individual capital for purposes ofindividual consumption orfor reproduction ,is included inthe cycle ofcapital under this form . inm...m',the possible expansion ofthe cycle isincluded , and depends on the volume ofmentering into the renewed cycle . in p...p,the new cycle may be started by pwith the same ,oreven with asmaller ,value ,and yet may represent areproduction on an enlarged scale ,for instance inthe case where certain elements ofcommodities become cheaper by increased productivity of labor . on the other hand , aproductive capital which has increased invalue may ,in the opposite case ,represent areproduction on adecreased scale with less raw material ,for instance ,ifsome elements",
        "the circulation ofcommodity -capital . 107 ofproduction have become dearer .the same istrue of c'...c'. in c'...c'capital inthe form ofcommodities isthe prem- ise ofproduction .itre-appears asapremise within this cycle inthe second c. ifthis chas not yet been produced orreproduced ,the cycle isarrested inits course .this c must bereproduced ,for the greater part asc'ofsome other industrial capital .in this cycle ,c'isfound asthe point ofdeparture ,oftransit ,and ofconclusion ;itisalways there . itisapermanent condition ofthe process ofreproduction . c'...c'isdistinguished from forms iand iiby still an- other feature .all three cycles have this incommon ,that capital begins itscourse inthe same form inwhich itends the cycle ,and thus re-assumes the original form whenever itrenews the same cycle .the initial form m,p,c',is always the one inwhich capital -value (iniii together with itsincrement ofsurplus -value )isadvanced ,inother words always the original starting form ofthis cycle .the con- cluding form m',p,c',on the other hand ,isalways a changed form ofafunctional one ,which preceded the final form inthe circulation and isnot the original one . thus m'iniisachanged form ofc',the final piniiisa changed form of m,and this transformation isaccom- plished iniand iiby asimple transaction inthe circula- tion ofcommodities ,by aformal change ofposition ofcom- modity and money ;iniii,c'isachanged form ofthe pro- ductive capital p. but here ,in iii,the transformation does not merely concern the functional form ofcapital ,but also itsmagnitude asavalue ;and inthe second place ,the transformation isnot the result of aformal change of position pertaining tothe circulation process ,but of an actual modification experienced by the use-form and value ofthe commodity parts ofproductive capital inthe process ofproduction . the forms m,p,c',atthe starting end ,always precede every one ofthe cycles i,ii,iii.the return ofthese forms atthe terminal end isconditioned on the series of metamorphoses inthe cycle itself .c',asthe terminal prod- uct ofan individual cycle ofindustrial capital ,presupposes only that form pofthe industrial capital which does not",
        "108 capital . belong tothe circulation ,m',since the terminal point of} representing the changed form ofc'(c'm'),presuppose i the existence ofminthe hand ofthe buyer ,that istosay outside ofthe cycle m...m',but drawn into itand made it its terminal form by the sale ofc'.inthe same way ,the final pin iipresupposes the existence ofland pm (c) outside ofii,but incorporated asits final form by means ofm-c. but apart from this last extreme ,neither the cycle ofindividual money -capital presupposes the existence ofmoney -capital ingeneral ,nor the cycle ofindividual pro- ductive capital that ofproductive capital ,in these cycles . ini,mmay bethe first money -capital ;inii,pmay bethe first productive capital appearing on the historical scene . but iniii, c'm.... c .... p.... c' c.:m m.... c c..... lpmcispresupposed twice outside ofthe cycle .the first time , itisassumed toexist inthe cycle c'-m'-c{ the c inthis formula ,sofar asitconsists ofpm ,isacommodity inthe hands ofthe seller ;itisitself acommodity -capital , insofar asitisthe product ofacapitalist process ofproduc- tion ;and even ifitisnot ,itappears asacommodity -capital inthe hands ofthe merchant .the second time itisas- sumed inc,inthe formula c-m-c,where itmust likewise be athand inthe form ofacommodity ,in order tobe available for purchase .at any rate ,whether they are com- modity -capital ornot ,land pm are commodities aswell as c'and maintain towards one another the relation ofcom- modities .the same istrue ofthe second cinthe formula c-m-c.inasmuch asc'isequal toc(lplus pm ),it iscomposed ofcommodities and must bereplaced by equal commodities inthe circulation .inthe same way ,the sec- ond cinc-m-cmust bereplaced by equal commodities inthe circulation . with the capitalist mode ofproduction for abasis ,asthe prevailing mode ,all commodities inthe hands ofthe seller must becommodity -capital .and they retain this character inthe hand ofthe merchant ,orassume it,ifthey did not",
        "the circulation ofcommodity -capital .109 have itbefore .or they would have tobe commodities , such asimported articles ,which replace some original com- modity -capital by bestowing upon itanother form ofex- istence . the commodity -elements land pm ,ofwhich the pro- ductive capital iscomposed ,do not possess the same form asmodes ofexistence ofp,which they have onthe various commodity -markets where they are gathered .they are now combined ,and socombined they can perform the func- tions ofproductive capital . cappears asthe premise ofcwithin the cycle iii,because capital incommodity -form isitsstarting point .the cycle isopened by the transformation ofc'(insofar asitper- forms the functions ofcapital -value ,whether increased by surplus -value or not )into those commodities which are its elements ofproduction .and this transformation com- prises the entire process ofcirculation ,c-m-c(equal to lplus pm ),and isits result .chere stands atboth ex- tremes ,but the second extreme ,which receives its form cby means ofm-cfrom the commodity -market on the outside ,isnot the last extreme ofthe cycle ,but only ofits two first stages comprising the process ofcirculation .its result isp,which then performs itsfunction ,the process of production .itisonly asthe result ofthis process ,not as that ofthe circulation ,that c'appears asthe terminal point ofthe cycle and inthe same form asthe starting point ,c'. on the other hand ,inm...m'and p...p,the final extremes m'and pare the immediate results ofthe process ofcircula- tion .inthese instances ,itisonly m'and pwhich are sup- posed toexist atthe end inthe hands ofanother .so far asthe process of circulation takes place between the ex- tremes ,neither minthe hands ofanother asmoney ,nor pasthe productive process ofanother ,are the premises of these cycles .but c...c'requires the existence ofc(equal tolplus pm )ascommodities inthe hands ofothers who are their owners .these commodities are drawn into the cycle by the introductory process ofcirculation and trans- formed into productive capital ,and asaresult ofthe func- tions ofthis capital ,c'once more appears atthe end ofthe cycle .",
        "110capital . but just because the cycle c'...c'presupposes for itsreal- ization the existence ofsome other industrial capital inthe form ofc(equal tolplus pm )and pm comprises various other capitals ,in our case machinery ,coal ,oil,etc.,it demands ofitself that itbe considered not merely asthe general form ofthe cycle ,that istosay asasocial form common toevery industrial capital (except when itisfirst invested ).itisnot merely acommon mobile form ofall industrial capitals ,but also the sum of all industrial capitals in action . it is amovement of the aggre- gate capital ofthe capitalist class ,inwhich every individual capital appears only asapart whose movements intermingle with those ofthe others and are conditioned onthem ,for instance ,ifwe regard the aggregate ofcommodities annual- ly produced inacertain country ,and analyze the move- ments by which apart ofthis aggregate product replaces the productive capital in all individual businesses ,while another part enters into the individual consumption ofthe various classes ,then we consider c'...c'asthe formula indi- cating the movements ofsocial capital aswell asofthe sur- plus -value ,or surplus -product ,generated by it.the fact that the social capital isequal tothe sum ofthe individual capitals (including the stocks and state capital ,sofar as governments employ productive wage -labor in mining , railroading ,etc. ,and perform the function ofcapitalists ), and that the aggregate movement ofsocial capital isequal tothe algebraic sum ofthe movements ofindividual capi- tals ,does not militate against the possibility that this move- ment ,seen asthe movement of some individual capital , may present other phenomena than the same movement studied asapart ofthe aggregate movement ofsocial capital . inthe latter case ,when studied inconnection with all its parts ,the movement simultaneously solves problems ,the solution ofwhich does not follow from the study ofthe cycles ofsome individual capital ,but must be taken for granted . c'...c'isthe only cycle ,inwhich the originally advanced capital -value constitutes only apart ofthe value opening the movement atone extreme ,and inwhich the movement thus reveals itself atthe outset asthe total movement ofthe in-",
        "the circulation ofcommodity -capital .111 dustrial capital .itincludes that part ofthe product which replaces the productive capital aswell asthat part which creates asurplus -product and which ison an average either spent asrevenue oremployed asan element ofaccumula- tion .in so far asthe expenditure of surplus -value in the form ofrevenue isincluded inthis cycle ,the individual consumption islikewise included . the latter isfurther- more included for the reason ,that the starting point c,com- modity ,exists inthe form ofsome article ofuse ;but every article produced by capitalist methods isacommodity -capi- tal,no matter whether itsuse-form destines itfor productive orfor individual consumption ,orfor both .m...m'indi- cates only the quality ofvalue ,the utilization ofthe ad- vanced capital -value for the purposes ofthe entire process ; p...p(p')indicates the process ofproduction ofcapital in the form ofaprocess ofreproduction with aproductive capi- tal ofthe same orofincreased value (accumulation );c'...c', while itindicates atthe outset that itisapart ofthe capi- talist production ofcommodities ,comprises productive and individual consumption from the start ,and productive con- sumption with itsimplied generation ofmore value appears only asone branch ofitsmovement .finally ,since c'may have ause-value which cannot enter any more into any proc- essofproduction ,itfollows asamatter ofcourse ,that the dif- ferent elements ofvalue ofc'expressed byparts ofthe prod- uct must occupy adifferent position ,according towhether c...c'isregarded asthe formula for the movement ofthe total social capital ,or for the independent movement of some individual industrial capital .all these peculiarities point tothe fact that this cycle implies more than the mere cycle ofsome individual capital . inthe formula c...c',the movement ofthe commodity- capital ,that istosay ofthe total product created by capital- ist methods ,appears simultaneously asthe premise ofthe independent cycle ofindividual capital and asits effect . ifthis formula isgrasped inits peculiarities ,then itisno longer sufficient tobecontent with the knowledge that the metamorphoses c-m'and m-care on the one hand functionally defined sections inthe metamorphoses ofcapi- tal,onthe other links inthe general circulation ofcommodi-",
        "112capital . ties .itbecomes necessary to follow the ramifications of the metamorphoses ofone industrial capital among those ofother individual capitals and with that part ofthe total product which isintended for individual consumption .in the analysis ofan individual industrial capital ,we there- fore base our studies mainly on the two first formulas . the cycle c...c'appears asthe movement ofan indi- vidual and independent capital inthe case ofagriculture , where calculations are made from crop tocrop .in figure ii,the sowing isthe starting point ,infigure iii the harvest , or,tospeak with the physiocrats ,figure iistarts out with the avances ,and figure iii with the reprises .the move- ment ofcapital -value iniii appears from the outset only asapart ofthe movement ofthe general mass ofproducts , while iniand iithe movement ofc'isonly apart ofthe movement ofsome individual capital . infigure iii,the commodities onthe market are the con- tinuous premise ofthe processes ofproduction and repro- duction .ifthis formula isregarded asfixed ,all elements of the process ofproduction seem tooriginate inthe circula- tion ofcommodities and to consist only of commodities . this one -sided conception overlooks those elements ofthe processes ofproduction ,which are independent ofthe com- modity -elements . since c...c'has for its starting point the total product (total value ),itfollows that (making exception offoreign trade )reproduction on an enlarged scale ,productivity re- maining otherwise the same ,can take place only when the part ofthe surplus -product tobe capitalized already con- tains the material elements ofthe additional productive capi- tal;sothat asurplus -product isatonce produced inthat form which enables ittoperform the functions ofadditional capital ,sofar asthe production ofone year can serve asthe basis ofnext year's production ,orinsofar asthis can take place simultaneously with the simple process ofreproduc- tion inthe same year .increase productivity can increase only the substance ofcapital ,but not itsvalue ;ofcourse ,it",
        "the circulation ofcommodity -capital . 113 creates additional material for the generation ofmore value . c'...c'isthe basis ofquesnay's tableau economique ,and itshows great discrimination on his part that he selected this form instead ofp...pasopposed tom...m'(which is the isolated formula retained by the mercantilists ).",
        "114capital . chapter iv. the three diagrams ofthe process ofcirculation . the three diagrams may beformulated inthe following manner ,using the sign tc for \"total process ofcirculation \": m-c...p...c'-m' i. ii.p...tc...p iii.tc...p(c'). ifwe take all three diagrams together ,all premises of the process appear asitseffects ,aspremises produced by it- self .every element appears asapoint ofdeparture ,transit , and return tothe starting point .the total process appears asthe unity ofthe processes ofproduction and circulation . the process ofproduction mediates the process ofcircula- tion ,and vice versa . all three cycles have the following point in common : the creation of more value asthe compelling motive . diagram iexpresses this by its form .diagram iibegins with p,the process of creating surplus -values .diagram iii begins the cycle with the utilized value and closes with renewed utilized value ,even ifthe movement isrepeated onthe same scale . sofar asc-mmeans m-cfrom the point ofview ofthe buyer ,and m-cmeans c-mfrom the point ofview of the seller ,the circulation ofcapital presents only the fea- tures ofthe ordinary metamorphosis ofcommodities ,subject tothe laws relative tothe amount ofmoney incirculation , asanalyzed involume i,chap .iii,2. but ifwe do not cling tothis formal aspect ,but rather consider the actual connection ofthe metamorphoses ofthe various individual capitals ,inother words ,ifwe study the interrelation ofthe cycles of individual capitals aspartial movements ofthe process ofreproduction ofthe total social capital ,then the mere change ofform between money and commodities does not explain matters . in acontinuously revolving circle ,every point issimul- taneously apoint of departure and point of return .if",
        "diagrams ofthe process ofcirculation . 115 we interrupt the rotation ,not every point ofdeparture is apoint ofreturn .we have seen ,for instance ,that not only does every individual cycle imply the existence ofthe others , but also that the repetition ofone cycle inacertain form necessitates the rotation ofthis cycle through itsother forms . the entire difference thus assumes aformal aspect ,itappears asamere subjective difference made for the convenience of the observer . insofar asevery one ofthese cycles isstudied asaspecial form ofmovement through which various individual indus- trial capitals are passing ,their differences have but an in- dividual nature .but inreality every individual industrial capital iscontained simultaneously inallthree cycles .these three cycles ,the forms ofreproduction assumed bythe three modes ofcapital ,rotate continuously side by side .for in- stance ,one part ofcapital value which now performs the function ofcommodity -capital ,istransformed into money- capital ,but atthe same time another part leaves the process ofproduction and enters the circulation asanew commodi- ty-capital .the cycle c'...c'isthus continuously rotating , and soare the two other forms .the reproduction ofcapi- tal ineach one ofitsforms and stages isjust ascontinuous asthe metamorphoses ofthese forms and their successive transition through the three stages .the entire circulation isthus actually aunit with these three forms . we assumed in our analysis that the entire volume of capital -value acts either asmoney -capital ,productive capital , or commodity -capital .for instance ,we had those 422 pounds sterling first inthe role ofmoney -capital ,then we transformed them entirely into productive capital ,and final- lyinto commodity -capital ,into yarn valued at500 pounds sterling and containing 78pounds sterling ofsurplus -value . here the various stages are somany interruptions .solong as, for instance ,those 422 pounds sterling retain the form of money ,that istosay until the purchases m-c(lplus pm ) have been made ,the entire capital exists only inthe form of money -capital and performs its functions .but assoon as itistransformed into productive capital ,itperforms neither the functions ofmoney -capital nor of commodity -capital . its entire process ofcirculation isinterrupted ,just asonthe",
        "116capital . other hand its entire process ofproduction isinterrupted , assoon asitperforms any functions inone ofitstwo cir- culation stages ,either asmorasc. from this point of view ,the cycle p...pwould not only present aperiodical renewal ofthe productive capital ,but also the interruption ofits function ,the process ofproduction ,up tothe time when the process of circulation iscompleted .instead of proceeding continuously ,production took place injumps and was renewed only in periods of uncertain duration , according towhether the two stages ofthe process ofcircula- tion were completed fast orslowly .this would apply ,for instance ,toachinese artisan ,who works only for private customers and whose process ofproduction isinterrupted , until hereceives anew order . this istrue ofevery individual part ofcapital inprocess ofcirculation ,and all parts ofcapital pass through this cir- culation insuccession .for instance ,the 10,000 lbs.ofyarn are the weekly product ofsome spinner .these 10,000 lbs. ofyarn leave the sphere ofproduction intheir entirety and enter the sphere ofcirculation .the capital -value contained inthem must all be converted into money -capital ,,and so long asitretains the form ofmoney -capital ,itcannot return into the process ofproduction .itmust first gointo circu- lation and be reconverted into the elements ofproductive capital ,lplus pm .the process ofrotation ofcapital isa succession ofinterruptions ,leaving one stage and entering the next ,discarding one form and assuming another .every one ofthese stages not only causes the next ,but also excludes it. but continuity isthe characteristic mark ofcapitalist pro- duction ,conditioned on its technical basis ,although not absolutely attainable .let ussee,then ,what passes inreal- ity.while the 10,000 lbs.ofyarn appear onthe market as commodity -capital and are transformed into money (re- gardless ofwhether itisapaying ,purchasing ,orcalculating medium ),new cotton ,coal ,etc. ,take the place ofthe yarn inthe process ofproduction ,having been reconverted from the form ofmoney and commodities into that ofproductive capital and performing its functions .at the time when these 10,000 lbs.ofyarn are converted into money ,the pre-",
        "diagrams ofthe process ofcirculation .117 ceding 10,000 lbs.are going through the second stage of circulation and are reconverted from money into the ele- ments ofproductive capital .all parts ofcapital pass suc- cessively through the process ofrotation and are simultane- ously in its different stages .the industrial capital thus exists simultaneously inallthe successive stages ofitsrota- tion and inthe various forms corresponding toitsfunctions . that part ofindustrial capital ,which isfor the first time converted from commodity -capital into money ,begins the cycle c'...c',while industrial capital asarotating body of aggregates ,has passed through it.one hand advances money , the other receives it.the inauguration ofthe cycle m...m' atone place coincides with itsreturn tothe starting point of another .the same istrue ofproductive capital . the actual rotation ofindustrial capital initscontinuity istherefore not alone the unity ofthe processes ofproduc- tion and circulation ,but also the unity ofits three cycles . but itcan besuch aunity only ,ifevery individual part of capital can gosuccessively through the various stages ofthe rotation ,pass from one phase and from one functional form toanother ,sothat the industrial capital ,being the aggregate ofall these parts ,isfound simultaneously in its various phases and functions and describes all three cycles atthe same time .the succession ofthese parts isconditioned on their simultaneous existence side by side ,that istosay,on the division ofcapital .in asystematized manufacture ,the product isasmuch ubiquitous inthe various stages ofits process offormation ,asitisinthe transition from one phase ofproduction toanother .asthe individual industrial capi- tal has adefinite volume which does not merely depend on the means ofthe capitalist and which has aminimum mag- nitude for every branch ofproduction ,itfollows that its division must proceed according todefinite proportions .the magnitude ofthe available capital determines the volume of the process ofproduction ,and this ,again ,determines the size ofthe commodity -capital and money -capital which per- form their functions simultaneously with the process ofpro- duction .the simultaneous functions ,which enable the pro- duction toproceed continuously ,are only due tothe rota-",
        "118capital . tion ofthe various parts ofcapital which pass successively through their different stages .the simultaneousness ismere- lythe result ofthe succession .for ifthe rotation ofone phase ,for instance ofc'-m',isinterrupted for one ofthe parts ofcapital ,ifthe commodity cannot besold ,then the cycle ofthis part isbroken and the reproduction ofitsele- ments ofproduction cannot take place ;the succeeding parts , which come out ofthe process ofproduction inthe shape of c',find the conversion oftheir function blocked by their predecessors .ifthis iscontinued for some time ,production isrestricted and the entire process arrested .every stop of the succession carries disorder into the simultaneousness of the cycles ,every obstruction ofone stage causes more orless obstruction inthe entire rotation ,not only ofthe obstructed part ofcapital ,but ofthe total individual capital . the next form ,in which the process presents itself ,is that ofasuccession ofphases ,sothat the transition ofcapi- tal into anew phase isconditioned on its departure from another .every special cycle has therefore one ofthe func- tional forms ofcapital for itspoint ofdeparture orreturn . on the other hand ,the aggregate process isindeed the unity ofits three cycles ,which are the different forms inwhich the continuity ofthe process expresses itself :the total rota- tion appears asitsown specific cycle toevery functional form ofcapital ,and every one ofthese cycles contributes tothe continuity ofthe process .the rotation ofone functional form requires that ofthe others .this isthe inevitable re- quirement for the aggregate process ofproduction ,especially for the social capital ,that itisatthe same time aprocess ofreproduction ,and thus arotation ofeach one ofits ele- ments .different aliquot parts ofcapital pass successively through the various stages and functional forms .by this means ,every functional form passes simultaneously with the others through itsown cycles ,although other parts ofcapi- tal are continuously presented by each form .one part of capital ,continually changing ,continually reproduced ,exists asacommodity -capital which isconverted into money ;an- other as money -capital converted into productive capital ; and athird asproductive capital converted into commodity- capital . the continuous existence ofall three forms is",
        "diagrams ofthe process ofcirculation .119 brought about bythe rotation ofthe aggregate cycle through these three phases . capital asawhole ,then ,exists simultaneously side by side inits different phases .but every part passes continu- ously and successively from one phase and functional form into the next one and performs afunction inall ofthem . its forms are fluid and their simultaneousness isbrought about bytheir succession .every form follows and precedes another ,sothat the return ofone capital part toacertain form isconditioned onthe return ofanother part tosome other form .every part describes continuously its own cycle ,but itisalways another part which assumes acertain form ,and these special cycles are simultaneous and succes- sive parts ofthe aggregate rotation . the continuity ofthe aggregate process isrealized only by the unity ofthe three cycles ,and would beimpossible with the above -mentioned interruptions .the social capital always has this continuity and itsprocess always rests onthe unity ofthe three cycles . the continuity ofthe reproduction ismore orless inter- rupted sofar asthe individual capitals are concerned .in the first place ,the masses ofvalue are frequently distributed atvarious periods and inunequal portions over the various stages and functional forms .inthe second place ,these por- tions may bedifferently distributed ,according tothe charac- ter ofthe commodity ,which istobeproduced .inthe third place ,the continuity may be more orless interrupted in those branches ofproduction ,which are dependent on the seasons ,either on account ofnatural causes ,such asagricul- ture ,fishing ,etc. ,oronaccount ofconventional circumstance such asthe so-called season -work .the process proceeds most regularly and uniformly inthe factories and inmining .but this difference ofthe various branches ofproduction does not cause any difference inthe general forms ofthe proc- essofrotation . capital ,asavalue creating more value ,isnot merely con- ditioned on class -relations ,on adefinite social system rest- ing onthe existence oflabor inthe form ofwage -labor .it isalso amovement ,arotation through various stages ,com- prising three different cycles .therefore itcan beunderstood",
        "120capital . only asathing inmotion ,not asathing atrest .those who look upon the self -development ofvalue asamere abstraction forget that the movement ofindustrial capital isthe realiza- tion ofthis abstraction .value here passes through various forms in which itmaintains itself and atthe same time increases itsvalue .aswe are here concerned inthe form of this movement ,we shall not take into consideration the revolutions ,which capital -value may undergo during its ro- tation .but itisclear that capitalist production can only exist and endure ,inspite ofthe revolutions ofcapital -value , solong asthis value creates more value ,that istosay,so long asitgoes through itscycles asaself -developing value , orsolong asthe revolutions invalue can beovercome and balanced insome way .the movements ofcapital appear asthe actions ofsome individual industrial capitalist who performs the functions ofabuyer oflabor -power ,aseller of commodities ,and an owner ofproductive capital ,and who brings about the process ofrotation byhis activity .ifsocial capital -value experiences arevolution invalue ,itmay hap- pen ,that the capital ofthe individual capitalist succumbs and fails ,because itcannot adapt itself tothe conditions ofthis conversion ofvalues .to the extent that such revolutions in value become acute and frequent ,the automatic nature of self -developing value makes itself felt with the force of elementary powers against the foresight and calculations of the individual capitalist ,the course of normal production becomes subject toabnormal speculation ,and the existence ofindividual capitals isendangered .these periodical revo- lutions invalue ,therefore ,prove that which they are alleged torefute ,namely ,the independent nature ofvalue inthe form ofcapital and itsincreasing independence inthe course ofits development . this succession ofthe metamorphoses ofrotating capital includes the continuous comparison ofthe changes ofvalue brought about by rotation with the original magnitude of capital .when the growing independence ofvalue ascom- pared tothe power ofcreating value ,oflabor -power ,has been inaugurated bythe act m-l(purchase oflabor -power ) and isrealized during the process ofproduction asan ex- ploitation oflabor -power ,this rise ofindependence onthe",
        "diagrams ofthe process ofcirculation .121 part ofvalue does not re-appear inthat cycle ,in which money ,commodities ,and elements ofproduction are merely passing forms ofrotating capital value ,and inwhich the former magnitude ofvalue compares itself tothe present changed value ofcapital . \"value ,\"says bailey ,in opposition tothe idea ofthe growing independence of value characteristic ofcapitalist production ,which he regards as an illusion of certain economists ,\"value isarelation between contemporary com- modities ,because such only admit ofbeing exchanged with each other .\"this criticism isdirected against the compari- son ofcommodity -values ofdifferent periods oftime ,which amounts tothe comparison ofthe expenditure ofproductive labor required for the manufacture ofequal commodities at different periods ,once that the value ofmoney for every period has been fixed .his opposition isdue tohis general misunderstanding ,for hethinks that exchange -value isvalue itself ,that the form ofvalue isidentical with the volume ofvalue ;sothat values ofcommodities cannot becompared , solong asthey do not perform active service asexchange values and are not actually exchanged for each other .he has not the least inkling ofthe fact that value performs only the functions ofcapital ,insofar asitremains identical with itself and iscompared with itself inthose different phases of itsrotation ,which are not atall contemporary ,but succeed one another . in order tostudy the formula ofthis rotation initspuri- ty,itisnot sufficient toassume that the commodities are sold attheir value ,but that this takes place under con- ditions which are otherwise equal .take ,for instance ,the cycle p...pand make abstraction ofall technical revolutions within the process ofproduction ,by which the productive capital ofacertain individual capitalist might be depreci- ated ;make abstraction furthermore ofall reactions ,which achange inthe elements ofvalue ofproductive capital might cause inthe value ofthe existing commodity -capital ,which might beincreased orlowered ,ifastock ofitwere kept on hand .take italso ,that c',or10,000 lbs.ofyarn ,have been sold attheir value of500 pounds sterling ;8,440 lbs.,equal to422 pounds sterling ,reproduce the capital -value contained",
        "122capital inc'.but ifthe prices ofcotton ,coal ,etc. ,have increased (we do not consider mere fluctuations inprice ),these 422 pounds sterling may not suffice for the full reproduction of the elements ofproductive capital ;inthat case ,additional money -capital isrequired and money -value istied up.the opposite takes place ,ifthose prices fall ,and money -capital isset free .the process takes anormal course only solong as the values remain constant ;itproceeds practically normal , solong asthe disturbances during the repetition ofthe proc- ess balance one another .but tothe extent that these dis- turbances increase involume ,the industrial capitalist must have athis disposal agreater money -capital ,inorder totide himself over the period ofcompensation ;and asthe scale of each individual process ofproduction and thus the mini- mum size ofthe capital tobeadvanced increase inthe proc- ess ofcapitalist production ,we have here another circum- stance toadd tothose others which transform the functions ofthe industrial capitalist more and more into amonopoly ofgreat money -capitalists ,who may beindividuals orasso- ciations . we remark incidentally that adifference inthe form of m...m'onone side ,and ofp...pand c'...c'onthe other ap- pears ,ifachange inthe value ofthe elements ofproduc- tion occurs . inthe cycle m...m',the formula ofnewly invested capital , which for the first time appears inthe role ofmoney -capi- tal,afall inthe value ofelements ofproduction ,such as raw materials ,auxiliary materials ,etc. ,will require a smaller investment ofmoney -capital than would have been necessary before this fall for the purpose ofstarting abusi- ness ofadefinite size ,because the scale ofthe process ofpro- duction depends onthe mass and volume ofthe means of production (provided the productivity remains unchanged ), which agiven quantity oflabor -power can assimilate ;but it does not depend on the value ofthese means ofproduction nor onthat ofthe labor -power (the latter has an influence only onthe creation ofmore value ).take the opposite case . ifthe value ofthe elements ofproduction ofcertain com- modities isincreased ,which are required aselements ofa",
        "diagrams ofthe process ofcirculation . 123 certain productive capital ,then more money -capital isre- quired for the establishment ofabusiness ofdefinite pro- portions .inboth cases itisonly the quantity ofthe money- capital required for investment which isaffected .in the former case ,money -capital isset free ,inthe latter itistied up,provided the advent ofnew industrial capitals proceeds normally inagiven branch ofproduction . lthe cycles p...pand c'...c'assume the character ofm...m' only tothe extent that the movement ofpand c'isatthe same time accumulation ,sothat additional m,money ,is converted into money -capital .apart from this case ,they are differently affected than m...m'by achange ofvalue of the elements ofproduction ;here ,too,we do not take into consideration the reaction ofsuch changes invalue onthose parts ofcapitals which are engaged inthe process ofpro- duction .itisnot the original investment ,which ishere directly affected ,not acapital engaged inits first rotation , but one inaprocess ofreproduction ;inother words ,c'...c{m. the reconversion of commodity -capital into its elements ofproduction ,sofar asthey are composed ofcommodities . inareduction ofvalue (orprice ),three cases are possible : the process ofreproduction iscontinued onthe same scale ; inthat case apart ofthe available money -capital isset free and money -capital isaccumulated ,although no actual ac- cumulation (production onanenlarged scale ),orthe trans- formation ofm(surplus -value )into funds for accumulation initiating and accompanying it,has previously taken place . or,the process ofreproduction isrenewed onamore enlarged scale than would have been ordinarily the case ,provided the technical proportions admit it.or,finally ,alarger stock ofraw materials ,etc. ,islaid in. the opposite takes place ifthe value ofthe elements of reproduction ofacommodity -capital increases .inthat case , reproduction does not take place on its normal scale (work isdone inashorter time ,for instance );oradditional money- capital must beemployed inorder tomaintain the old scale (money -capital istied up);orthe money -fund ofthe ac- cumulation ,ifavailable ,isentirely orpartially employed for the enlargement ofthe process ofreproduction toits old scale .this isalso tying up money -capital ,only the ad-1",
        "124capital . ditional money -capital does not come from the outside ,from the money -market ,but out ofthe pockets ofthe industrial capitalist himself . however ,there may bemodifying circumstances inp...p and c'...c'.ifour cotton spinner has alarge stock ofcotton (alarge proportion ofhis productive capital inthe form of astock ofcotton ),apart ofhis productive capital isde- preciated byafall inthe price ofcotton ;but ifthis price has risen ,this part ofhis productive capital isenhanced invalue . on the other hand ,ifhehad tied up alarge part ofhis capi- tal inthe form ofcommodity -capital ,for instance in cot- ton yarn ,apart ofhis commodity capital ,orfor that matter ofany ofhis rotating capital ,isdepreciated by afall inthe price ofcotton ,orenhanced byarise inthat price .finally take the process c'-m-c{.ifc'-m,the realization on the commodity -capital ,has taken place before achange in the value ofthe elements ofc,then capital isaffected only inthe way indicated inthe first case ,that istosay,inthe second act ofcirculation ,m-c ;but ifsuch achange has occurred before the realization ofc'-m,then ,other conditions remaining equal ,afall inthe price ofthe cotton causes acorresponding fall inthe price ofyarn ,and arise inthe price ofcotton arise inthe price ofyarn .the effect on the various individual capitals inthe same branch of production may differ widely according tothe circumstances in which they find themselves . money -capital may also beset free ortied up by differences inthe duration ofthe process ofcirculation ,inother words ,bythe pace ofthe cir- culation .but this belongs inthe discussion ofthe periods ofturn -over .at this point ,we are only interested inthe real difference arising from changes ofvalues inthe elements ofproductive capital between m...m'and the other two cycles ofthe process ofrotation . inthe section ofcirculation indicated by m-c{m,ata period ofdeveloped and prevailing capitalist modes ofpro- duction ,alarge portion ofthe commodities composing pm , means ofproduction ,will berotating commodity -capital of some one else .from the standpoint ofthe seller ,therefore , the transaction isc-m',the transformation ofcommodity- capital into money -capital .but this does not apply absolutely .",
        "diagrams ofthe process ofcirculation .125 in the opposite case ,inthose sections ofitsprocess ofrota- tion ,where industrial capital performs either the functions ofmoney orofcommodities ,the cycle ofindustrial capi- tal,whether asmoney -capital orascommodity -capital ,crosses the circulation of commodities ofthe most varied social modes ofproduction ,sofar asthey produce commodities .no matter whether acommodity isthe product ofslavery ,of peasants (chinese ,indian ryots ),of communes (dutch east indies ),orofstate enterprise (such asexisted informer epochs ofrussian history onthe basis ofserfdom ),orofhalf- savage hunting tribes ,etc. ,commodities and money ofsuch modes ofproduction ,when coming incontact with commodi- ties and money representing industrial capital ,enter asmuch into its rotation asinto that ofsurplus -values embodied in the commodity -capital ,provided the surplus -value isspent asrevenue .they enter into both ofthe cycles ofcircula- tion ofcommodity -capital .the character ofthe process of production from which they emanate isimmaterial .they perform the function ofcommodities on the market ,and enter into the cycles ofindustrial capital aswell asinto those ofthe surplus -value carried by it.itisthe universal character ofthe commodities ,the world character ofthe market ,which distinguishes the process ofrotation ofthe industrial capital .what istrue offoreign commodities ,is also true offoreign money .just ascommodity -capital has only the character ofcommodities in contact with foreign money ,sothis money has only the character ofmoney in contact with commodity -capital .money here performs the functions ofworld -money . however ,two points must benoted here . first .as soon asthe transaction m-pm iscompleted , the commodities (pm )cease tobesuch and become one of the modes ofexistence ofindustrial capital inits function ofproductive capital .henceforth their origin isobliterated . they exist only asforms ofindustrial capital and are em- bodied in it.but itstill remains necessary toreproduce them ,iftheir places are tobe filled ,and tothis extent the capitalist mode ofproduction isconditioned on other modes ofproduction outside ofitsown stage ofdevelopment .but itisthe tendency ofcapitalist production totransform all",
        "126capital . production asmuch aspossible into aproduction ofcom- modities .the mainspring ,by which this isaccomplished , isthe implication ofother modes ofproduction into the cir- culation process of capitalist production .and developed commodity -production iscapitalist production .the inter- vention ofindustrial capital promotes this transformation everywhere ,and simultaneously with italso the transforma- tion ofall direct producers into wage laborers . second .the commodities entering into the process ofcir- culation (including the means ofexistence necessary for the reproduction ofthe labor -power ofthe laborer ,who receives variable capital inthe form ofwages ),regardless oftheir origin and ofthe social form ofthe productive process by which they were created ,entertain the relation ofcommodity- capital ,inthe form ofmerchandise ormerchant's capital , toward industrial capital .merchant's capital ,by its very nature ,includes commodities ofall modes ofproduction . capitalist production does not only imply production on alarge scale ,but also necessarily sale on alarge scale ,in other words ,sale tothe dealer ,not tothe individual con- sumer .ofcourse ,sofar asaconsumer ishimself aproduc- tive consumer ,anindustrial capitalist ,whose industrial capi- tal produces means ofproduction for some other branch of industry ,adirect sale ofone industrial capitalist's product tomany other capitalists takes place (orders ,etc).to this extent ,every industrial capitalist isadirect seller and his own dealer ,also ,when he sells tothe merchant . trading incommodities asafunction ofmerchant's capi- tal isthe premise ofcapitalist production and develops more and more inthe course ofdevelopment ofthis mode ofpro- duction .therefore we use itoccasionally for the illustra- tion ofvarious aspects ofthe process ofcapitalist circula- tion ;but inthe general analysis ofthis process ,we assume that commodities are sold directly without the intervention of the merchant ,because this intervention obscures various points ofthe movement . see ,for instance ,sismondi ,who presents the matter some- what naively ,inthe following words :\"commerce employs considerable capital ,which atfirst sight does not seem tobe apart ofthat capital whose movements we have just de-",
        "diagrams ofthe process ofcirculation .127 scribed .the value ofthe cloth inthe stores ofthe cloth- merchant seems atfirst tobeentirely foreign tothat part of the annual production which the rich give tothe poor as wages inorder tomake them work .however ,this capital has simply replaced the other ofwhich we have spoken . for the purpose ofclearly understanding the progress of wealth ,we have begun with its creation and followed its movements totheir conclusion .we have then seen that the capital employed inmanufacture ,for instance inthe manu- facture ofcloth ,was always the same ;and when itwas ex- changed for the income ofthe consumer ,itwas merely divided into two parts ;one ofthem serving asrevenue for the capitalist inthe form ofthe product ,the other serving as revenue tothe laborers inthe form ofwages while they were manufacturing new cloth . but itwas soon found that itwould betothe advantage of alltoreplace the different parts ofthis capital one byanother and ,if10,000 dollars were sufficient for the entire circula- tion between the manufacturer and the consumer ,todivide them equally between the manufacturer ,the wholesale dealer , and the retail merchant .the first then did the same work with only one -third ofthis capital which he had formerly done with the entire capital ,because ,assoon ashis work of manufacturing was completed ,hefound that the merchant bought from him much more readily than he could have found the consumer .on the other hand ,the capital ofthe wholesale dealer was much sooner replaced by that ofthe retail merchant ....the difference between the sums ad- vanced for wages and the purchase price paid bythe last con- sumer was considered the profit ofthose capitals .itwas divided between the manufacturer ,the wholesale dealer ,and the retail merchant ,from the moment that they had divided their functions ,and the work accomplished was the same , although ithad required three persons and three parts of capital instead ofone (nouveaux principes ,i,pages 159 , 160 ).all the merchants contributed indirectly toproduc- tion ;for having consumption for itsobject ,production can- not beregarded ascompleted ,until the product isplaced into the reach ofthe consumer (ibidem ,page 157 ).\"...",
        "128capital . we operate inthe discussion ofthe general forms ofthe rotation ,inshort inthe entire second volume ,with money asmetallic money ,tothe exclusion ofsymbolic money ,of mere tokens ofvalue ,which are the specialties ofcertain states ,and ofcredit -money ,which isnot yet developed .in the first place ,this isthe historical order ;credit -money plays only avery minor role ,ornone atall,during the first epoch ofcapitalist production .inthe second place ,the necessity ofthis order isdemonstrated theoretically by the fact ,that everything which tooke and others have hitherto produced ofacritical nature inregard tothe circulation ofcredit- money was compelled tohark back tothe question ,what would bethe aspect ofthe matter ifnothing but metal -money were in circulation .but itmust not be forgotten ,that metal -money may serve asapurchase medium and asapay- ing medium .for the sake ofsimplicity ,we consider itin this second volume generally only initsfirst functional form . the process ofcirculation ofindustrial capital ,which is only apart ofitsindividual process ofrotation ,isdetermined bythe general laws outlined involume i,chapter iii,inso far asitisaseries oftransactions within the general circula- tion ofcommodities .the same mass ofmoney ,for instance 500 pounds sterling ,starts successively somany more indus trial capitals oreventually individual capitals inthe form ofcommodity -capitals )incirculation ,the greater the velo- city ofrotation ofmoney is,and the more rapidly therefore every individual capital passes through the metamorphoses ofcommodities ormoney .one and the same volume ofcap- ital-value therefore requires somuch less money for itscir- culation ,the more this money performs the functions ofa paying medium ;the more ,for instance ,inthe reproduction ofsome commodity -capital by its corresponding means of production ,nothing but balances have tobe squared ;and the shorter the time ofthe payments is,for instance inpay- ing wages .on the other hand ,assuming that the velocity ofthe circulation and all other conditions remain the same , the volume ofmoney required for the circulation ofmoney- capital isdetermined bythe sum ofthe prices ofcommodi ties (price multiplied by the volume ofcommodities ),or,",
        "diagrams ofthe process ofcirculation .129 ifthe volume and value ofthe commodities are given ,by the value ofmoney itself . but the laws ofthe general circulation ofcommodities apply only tothe extent that the process ofcirculation of capital consists ofaseries ofsimple transactions incircula- tion ;they donot apply tothe extent that such transactions are definite functional sections inthe rotation ofindividual industrial capitals . in order tomake this plain ,itisbest tostudy the process of circulation in its uninterrupted and connected form , such asitappears inthe following two formulas : ii)p..c '{-m' iii c' -m'm-c{..p(p) m- m-c..p..c ' m as aseries oftransaction ,in circulation ,the process of circulation ,whether inthe form ofc-m-corofm-c- m,represents merely the two opposite lines ofmetamorphoses ofcommodities ,and every individual metamorphosis inits turn includes its opposite on the part ofthe commodity ormoney inthe hands ofanother . c-monthe part ofthe owner ofsome commodity means m-con the part ofits buyer ;the first metamorphosis of the commodity inc-misthe second metamorphosis ofthe commodity appearing inthe form ofm;the opposite applies tom-c.the statements concerning the intermingling of the metamorphosis ofacertain commodity in one stage with that ofanother inanother stage apply tothe circula- tion ofcapital tothe extent that the capitalist performs the functions ofabuyer and seller ofcommodities ,sothat his capital in the form of money meets the commodities of another ,or in the form of commodities the money of another .but this intermingling isnot identical with the intermingling ofthe metamorphoses ofcapitals . inthe first place ,m-c(pm ),aswehave seen ,may repre- sent an intermingling ofthe metamorphoses of different",
        "130capital . individual capitals .for instance ,the commodity -capital of the cotton -spinner ,yarn ,ispartly replaced by coal .one part ofhis capital isinthe form ofmoney and istrans- formed into commodities ,while the capital ofthe capitalist producer ofcoal exists inthe form ofcommodities and is therefore transformed into money ;the same transaction ofcirculation inthis case represents opposite metamor- phoses oftwo industrial capitals in different departments ofproduction ,the series ofmetamorphoses ofthese capitals intermingles init.but we have also seen ,that the pm into which mistransformed need not becommodity -capital in the strictest sense ,that istosay need not be afunctional form ofindustrial capital ,need not beproduced by acapi- talist .itisalways aquestion ofm-con one side ,and c-mon the other ,but not always ofintermingling meta- morphoses of capitals .furthermore m-l,the purchase oflabor -power ,never intermingles with any metamorphoses ofcapital ,for labor -power ,though acommodity from the point ofview ofthe laborer ,does not become capital until itissold tothe capitalist .on the other hand ,inthe process c'-m',itisnot necessary that m'should represent trans- formed commodity -capital ;itmay bethe money -equivalent oflabor -power (wages ),orofthe product ofsome independ- ent laborer ,some slave ,serf ,orsome commune . inthe second place ,adefinite functional role played by every metamorphosis ofsome individual capital within the process ofcirculation ,need not represent acorresponding opposite metamorphosis inthe rotation ofthe other capital , provided we assume that the entire production ofthe world- market iscarried on capitalistically .for instance ,inthe cycle p...p,the m'which pays for c'may be merely the money -form ofthe surplus -value ofthe buyer ,incase that the commodity isanarticle for consumption ;or,inm'c'{m where accumulated capital isconcerned ,itmay simply replace the advanced capital ofthe seller ofpm ,oritmay not return into the rotation ofhis capital atall by being side -tracked into expenditures asrevenue . this shows that the manner inwhich the different com- ponent parts ofthe aggregate social capital ,ofwhich individ- ual capitals are merely components performing independent",
        "diagrams ofthe process ofcirculation .131 functions ,mutually replace one another inthe process of circulation (inregard tocapital aswell assurplus -value ),is not apparent from the simple intermingling ofthe meta- morphoses inthe circulation ofcommodities .such inter- mingling occurs inthe transactions ofcapital circulation as itdoes inallother circulation ofcommodities ,but itrequires adifferent method ofanalysis .hitherto nothing but gen- eral phrases have been employed by economists for his pur- pose ,and ifwe test those phrases ,they contain .nothing but indefinite ideas borrowed from the intermingling ofmeta- morphoses common toall circulations ofcommodities . one ofthe most obvious peculiarities ofthe process ofrota- tion ofindustrial capital ,and therefore ofcapitalist produc- tion ,isthe fact that onthe one side ,the component elements ofproductive capital are derived from the commodity -mar- ket,are continually renewed out ofit,and are sold ascom- modities ;that ,on the other side ,the product ofthe labor- process comes forth from itasacommodity and must be continually sold over and over as acommodity .com- pare ,for instance ,amodern tenant oflower scotland with anold-fashioned small farmer onthe continent .the form- ersells his entire product and has therefore toreproduce all its elements ,even his seeds ,by means ofthe market ;the latter consumes the greater part ofhis product directly ,buys and sells aslittle aspossible ,fashions tools ,clothing ,etc. ,so far aspossible himself . such comparisons have led tothe classification ofproduc- tion into natural economy ,the money -system ,and the credit -system ,as being the three characteristic stages of economy inthe development ofsocial production . but inthe first place ,these three forms donot represent any equivalent phases ofdevelopment .the so-called credit- system isitself merely amodification ofthe money -system , sofar as both terms express transactions between the pro- ducers themselves .inthe developed capitalist production , the money -system appears only asthe basis ofthe credit- system .the money -system and credit -system thus corre-",
        "132capital . spond only todifferent stages inthe development ofcapital- istproduction ,but they are bynomeans independent modes ofeconomy ascompared to natural economy .with the same justification ,one might place the various forms of natural economy asequivalents bythe side ofthose two sys- tems . in the second place ,itisnot the process ofproduction itself which isemphasized asthe distinguishing mark ofthe two systems of that classification ,the money -system ,the credit -system ,but rather the mode oftransaction between the various producers under those systems .then the same should apply tothe natural economy ,which should inthat case be classified asthe exchange -system .acompletely rounded system ofnatural economy ,such asthe state ofthe inkas inperu ,would not fall under any ofthese classifica- tions . in the third place ,the money -system iscommon toall production ofcommodities ,and the product appears asa commodity inthe most varied organisms ofsocial produc- tion .the characteristic mark of capitalist production would then beonly the extent towhich the product ismanu- factured for purposes oftrade ,asacommodity ,and the extent towhich itsown elements offormation enter ascom- modities into the economy which creates that product . itistrue ,that capitalist production has for its general form the production ofcommodities .but itissoand be- comes more soinitsdevelopment ,only because labor itself here appears asacommodity ,because the laborer sells labor , that isto say the function of his labor -power ,and our assumption isthat hesells itatavalue determined by its cost of reproduction .to the extent that labor becomes wage -labor ,the producer becomes an industrial capitalist . for this reason capitalist production (and the production of commodities )does not reach itsfull scope ,until the agricul- tural laborer becomes awage -laborer .inthe relation ofcap- italist and wage -laborer ,the relation between the buyer and the seller ,the money -relation ,becomes animminent relation ofproduction .and this relation has itsfoundation inthe social character ofproduction ,not ofcirculation .the char- acter ofthe circulation rather depends onthat ofproduction .",
        "diagrams ofthe process ofcirculation .133 itis,however ,quite characteristic ofthe bourgeois horizon , which isentirely bounded by the craze for making money , not tosee inthe character ofthe mode ofproduction the basis ofthe corresponding mode of circulation ,but vice versa .? the capitalist throws less value inthe form ofmoney into the circulation than he draws out ofit,because he throws into itmore value inthe form ofcommodities than hehad withdrawn from it.to the extent that heissimply aper- sonification of capital ,an industrial capitalist ,his supply ofcommodity -value isalways larger than his demand for that value .the equality of his supply and demand in this respect would indicate that his capital had not produced any surplus -value ;itwould not have performed the func- tions of productive capital ;the productive capital would have been converted into commodity -capital which would not be impregnated with surplus -value ;itwould not have drawn any surplus -value incommodity -form out oflabor- power during the process ofproduction ,itwould not have performed any capital -functions atall.the capitalist must indeed \"sell dearer than he has bought ,\"but he succeeds only indoing so,because the capitalist process ofproduction enables him totransform the cheaper commodity ,which con- tains less value ,into adearer commodity with increased value .he sells dearer ,not because he gets more than the value ofhis commodity ,but because his commodity contains agreater value than that contained inthe natural elements ofitsproduction . the rate atwhich value isadded tothe capital ofthe cap- italist increases inproportion tothe difference between his supply and his demand ,that istosay inproportion asthe surplus ofthe commodities which he places on the market exceeds the value ofthe commodities which he has taken from it.his aim isnot toequalize his supply and demand , but tomake the difference between them asmuch aspossible infavor ofhis supply . end ofmanuscript v. what follows tothe end ofthe chapter isa note found inamanuscript of1877 or1878 amid extracts from other works .",
        "134capital . what istrue ofthe individual capital ,also applies to the capitalist class . in sofar asthe capitalist personifies but his industrial capital ,his own demand isonly for means ofproduction and labor -power .his demand for pm ,expressed invalue , issmaller than his advanced capital ;hebuys means ofpro- duction ofavalue smaller than his capital ,and therefore much smaller than the value ofthe commodity -capital which hetakes back tothe market . as regards his demand for labor -power ,itsvalue isdeter- mined by the proportion ofhis variable capital tohis total capital ,asexpressed by vc.its proportion incapitalist production decreases continually more than his demand for means ofproduction .his purchases ofpm steadily increase over his purchases ofl. inasmuch asthe laborer generally converts his wages into means ofexistence ,and for the overwhelmingly larger part necessities oflife ,the demand ofthe capitalist for labor- power isindirectly also ademand for the articles ofconsump- tion assimilated by the working class .but this demand is equal tovand not one atom greater .ifthe laborer saves a part ofhis wages -wedonot consider any questions ofcredit atall-heconverts apart ofhis wages into ahoard and does not perform the functions ofapurchaser tothat extent .the limit ofthe maximum demand ofthe capitalist isc,equal tocplus v,but his supply for the market iscplus vplus s. ifthe composition ofhis commodity -capital is80c +20v + 20s,his demand isequal to80c +20v ,orone fifth smaller in value than his supply .his demand ascompared tohis sup- ply decreases inproportion asthe percentage ofthe mass of surplus -value produced by him (his rate ofprofit )increases . although the demand ofthe capitalist for labor -power ,and thus indirectly for necessities oflife ,decreases continually compared tohis demand for means ofproduction inthe further development ofproduction ,itmust not beforgotten that day by day his demand for pm isalways smaller than his capital .his demand for means ofproduction must , therefore ,bealways smaller invalue than the commodity- product ofthe capitalist who ,working with acapital ofequal value and conditions like his,furnishes him with those",
        "diagrams ofthe process ofcirculation . 135 means ofproduction .itdoes not alter the case ,ifmany capitalists instead ofone furnish him with means ofproduc- tion .take itthat his capital is1,000 pounds sterling ,and itsconstant part 800 pounds sterling ;then his demand on all the capitalists supplying him isequal invalue to800 pounds sterling .together they supply for each 1,000 pounds sterling means ofproduction valued at1,200 pounds sterling ,assuming that the rate ofprofit isthe same for all ofthem ,regardless ofthe rate atwhich they share inthe 1,000 and ofthe proportion which the share ofeach one may represent inhis total capital .the demand ofthe buy- ing capitalist covers only two -thirds ofthe supply ofthe sellers ,while his total demand equals only four -fifths ofthe value ofhis own supply tothe market . itstill remains toanticipate the analysis ofthe problem ofturn -over .let the total capital ofthe capitalist be5,000 pounds sterling ,ofwhich 4,000 pounds isfixed and 1,000 pounds circulating capital ;these 1,000 pounds sterling are composed of 800 cplus 200 v,asassumed before .his circulating capital must beturned over five times per year in order that his fixed capital may beturned over once . commodity -product isthen equal invalue to6,000 pounds sterling ,itisvalued at1,000 pounds sterling more than his advanced capital ,sothat the same proportion ofsurplus- value isobtained as before : 5,000 c1,000 s=100 (c+v)20s.his this turn -over does not change anything inthe proportion ofthe total demand ofthe capitalist tohis total supply .the former remains one -fifth smaller than the latter . take itthat his fixed capital must bereproduced in10 years .hence hesinks every year one tenth ,or400 pounds sterling ,sothat he has only avalue of3,600 pounds of fixed capital left plus 400 pounds inmoney .inasmuch as repairs are necessary which do not exceed the average ,they represent nothing but capital invested later .we may look atthe matter from the standpoint that hehas allowed for the expenses for repairs when calculating the value ofhis invest- ment ,sofar asthis enters into the annual commodity -pro- duct ,sothat they are included inthat one tenth ofsinking fund .ifthe repairs cost less than the average heissomuch",
        "134capital . what istrue ofthe individual capital ,also applies to the capitalist class . in so far asthe capitalist personifies but his industrial capital ,his own demand isonly for means ofproduction and labor -power .his demand for pm ,expressed invalue , issmaller than his advanced capital ;hebuys means ofpro- duction ofavalue smaller than his capital ,and therefore much smaller than the value ofthe commodity -capital which hetakes back tothe market . as regards his demand for labor -power ,itsvalue isdeter- mined by the proportion ofhis variable capital tohis total capital ,asexpressed by vc.its proportion incapitalist production decreases continually more than his demand for means ofproduction .his purchases ofpm steadily increase over his purchases ofl. inasmuch asthe laborer generally converts his wages into means ofexistence ,and for the overwhelmingly larger part necessities oflife ,the demand ofthe capitalist for labor- power isindirectly also ademand for the articles ofconsump- tion assimilated bythe working class .but this demand is equal tovand not one atom greater .ifthe laborer saves a part ofhis wages -wedonot consider any questions ofcredit atall-heconverts apart ofhis wages into ahoard and does not perform the functions ofapurchaser tothat extent .the limit ofthe maximum demand ofthe capitalist isc,equal tocplus v,but his supply for the market iscplus vplus s. ifthe composition ofhis commodity -capital is80c +20v + 20s,his demand isequal to80c +20v ,orone fifth smaller in value than his supply .his demand ascompared tohis sup- ply decreases inproportion asthe percentage ofthe mass of surplus -value produced by him (his rate ofprofit )increases . although the demand ofthe capitalist for labor -power ,and thus indirectly for necessities oflife ,decreases continually compared tohis demand for means ofproduction inthe further development ofproduction ,itmust not beforgotten that day by day his demand for pm isalways smaller than his capital .his demand for means ofproduction must , therefore ,be always smaller invalue than the commodity- product ofthe capitalist who ,working with acapital ofequal value and conditions like his,furnishes him with those",
        "diagrams ofthe process ofcirculation . 135 means ofproduction .itdoes not alter the case ,ifmany capitalists instead ofone furnish him with means ofproduc- tion .take itthat his capital is1,000 pounds sterling ,and itsconstant part 800 pounds sterling ;then his demand on allthe capitalists supplying him isequal invalue to800 pounds sterling .together they supply for each 1,000 pounds sterling means ofproduction valued at1,200 pounds sterling ,assuming that the rate ofprofit isthe same for all ofthem ,regardless ofthe rate atwhich they share inthe 1,000 and ofthe proportion which the share ofeach one may represent inhis total capital .the demand ofthe buy- ing capitalist covers only two -thirds ofthe supply ofthe sellers ,while his total demand equals only four -fifths ofthe value ofhis own supply tothe market . itstill remains toanticipate the analysis ofthe problem ofturn -over .let the total capital ofthe capitalist be5,000 pounds sterling ,ofwhich 4,000 pounds isfixed and 1,000 pounds circulating capital ;these 1,000 pounds sterling are composed of 800 cplus 200 v,asassumed before .his circulating capital must beturned over five times per year in order that his fixed capital may beturned over once .his commodity -product isthen equal invalue to6,000 pounds sterling ,itisvalued at1,000 pounds sterling more than his advanced capital ,sothat the same proportion ofsurplus- value isobtained as before : 5,000 c1,000 s=100 (c+v)20s. this turn -over does not change anything inthe proportion ofthe total demand ofthe capitalist tohis total supply .the former remains one -fifth smaller than the latter . take itthat his fixed capital must be reproduced in10 years .hence hesinks every year one tenth ,or400 pounds sterling ,sothat he has only avalue of3,600 pounds of fixed capital left plus 400 pounds inmoney .inasmuch as repairs are necessary which donot exceed the average ,they represent nothing but capital invested later .we may look atthe matter from the standpoint that hehas allowed for the expenses for repairs when calculating the value ofhis invest- ment ,sofar asthis enters into the annual commodity -pro- duct ,sothat they are included inthat one tenth ofsinking fund .ifthe repairs cost less than the average heissomuch",
        "136 capital . money inpocket ,and inthe reverse case he loses it.at any rate ,although his demand ,after his total capital has been turned over once ayear ,still remains at5,000 pounds sterling which was the value ofthe original capital advanced , itincreases sofar asthe circulating part ofthis capital is concerned ,while itdecreases sofar asthe fixed part iscon- cerned . we now come tothe question ofreproduction .take it that the capitalist consumes the entire surplus -value com- posed ofmoney mand reconverts only the original capital- value cinto productive capital .then the demand ofthe capitalist isequal tohis supply ;but this does not refer tothe movements ofhis capital .as acapitalist ,his demand is only for four -fifths ofthe value ofhis supply .he consumes one -fifth asanon -capitalist ;heconsumes it,not inthe per- formance ofhis function ascapitalist ,but for his private re- quirements orpleasure . his calculation ,expressed inpercentages ,stands asfollows : demand ascapitalist .. ... 100 ,supply 120 . demand asman ofthe world .20,supply 0. 120 ,supply 120 . total demand .. this assumption amounts toanon -existence ofcapitalist production ,and thus the non -existence ofthe industrial capitalist himself .for capitalism isdestroyed inits very foundation ,ifweassume that itscompelling motive isenjoy- ment instead ofthe accumulation ofwealth . but such an assumption isalso technically impossible . the capitalist must not only form areserve -capital asapro- tection against fluctuations ofvalue and asafund enabling him towait for favorable conditions ofthe market for sale and purchase ;he must also accumulate capital ,inorder to extend his production and embody the progress oftechnique inhis productive organization . in order toaccumulate capital ,he must first withdraw a apart ofthe surplus -value from circulation which he ob- tained from that circulation inthe form ofmoney ,and must hoard ituntil ithas increased sufficiently for the extension ofhis old business orthe opening ofaside -line .so long as",
        "diagrams ofthe process ofcirculation . 137 the formation ofthe hoard continues ,itdoes not increase the demand ofthe capitalist .the money isthen inactive . itdoes not withdraw from the commodity -market any equivalent incommodities for the money -equivalent which itwithdrew for commodities supplied toit. credit isnot considered here .and credit includes the depositing ,on the part ofthe capitalist ,ofaccumulating money inabank onpayment ofinterest asshown byarun- ning account .",
        "136 capital . money inpocket ,and inthe reverse case he loses it.at any rate ,although his demand ,after his total capital has been turned over once ayear ,still remains at5,000 pounds sterling which was the value ofthe original capital advanced , itincreases sofar asthe circulating part ofthis capital is concerned ,while itdecreases sofar asthe fixed part iscon- cerned . we now come tothe question ofreproduction .take it that the capitalist consumes the entire surplus -value com- posed ofmoney mand reconverts only the original capital- value cinto productive capital .then the demand ofthe capitalist isequal tohis supply ;but this does not refer tothe movements ofhis capital .as acapitalist ,his demand is only for four -fifths ofthe value ofhis supply .he consumes one -fifth asanon -capitalist ;he consumes it,not inthe per- formance ofhis function ascapitalist ,but for his private re- quirements orpleasure . his calculation ,expressed inpercentages ,stands asfollows : demand ascapitalist ........ 100 ,supply 120 . demand asman ofthe world .20,supply 0. total demand ....... .120 ,supply 120 . this assumption amounts toanon -existence ofcapitalist production ,and thus the non -existence ofthe industrial capitalist himself .for capitalism isdestroyed inits very foundation ,ifweassume that itscompelling motive isenjoy- ment instead ofthe accumulation ofwealth . but such an assumption isalso technically impossible . the capitalist must not only form areserve -capital asapro- tection against fluctuations ofvalue and asafund enabling him towait for favorable conditions ofthe market for sale and purchase ;hemust also accumulate capital ,inorder to extend his production and embody the progress oftechnique inhis productive organization . in order toaccumulate capital ,hemust first withdraw a apart ofthe surplus -value from circulation which he ob- tained from that circulation inthe form ofmoney ,and must hoard ituntil ithas increased sufficiently for the extension ofhis old business orthe opening ofaside -line .solong as",
        "diagrams ofthe process ofcirculation . 137 the formation ofthe hoard continues ,itdoes not increase the demand ofthe capitalist .the money isthen inactive . itdoes not withdraw from the commodity -market any equivalent incommodities for the money -equivalent which itwithdrew for commodities supplied toit. credit isnot considered here .and credit includes the depositing ,on the part ofthe capitalist ,ofaccumulating money inabank onpayment ofinterest asshown byarun- ning account .",
        "138capital . chapter v. the time ofcirculation.8 we have seen that the movement ofcapital through the sphere of production and the two phases of circulation takes place in asuccession oftime .the duration ofits sojourn inthe sphere ofproduction isits time ofproduc- tion ,that ofitsstay inthe sphere ofcirculation itstime of circulation . the time ofproduction naturally includes the period of the labor -process ,but isnot comprised init.we must first remember that apart ofthe constant capital exists inthe form of instruments of production ,such as machinery , buildings ,etc. ,which serve for the repeated labor -processes until they are worn out .periodical interruptions ofthe la- bor-process by night ,etc. ,interrupt the function ofthese instruments ofproduction ,but not their location on the place ofproduction .they belong tothis place when they are not infunction aswell aswhen they are.on the other hand ,the capitalist must have adefinite supply of raw material and auxiliary substances in readiness ,in order that the process ofproduction may take place for alonger orshorter time on apreviously determined scale ,without being dependent on the accidents ofadaily supply from the market .this supply ofraw material ,etc. ,isconsumed productively by degrees .there is,therefore ,adifference between its time ofproduction and its time offunction . the time ofproduction ofthe means ofproduction ingen- eral comprises ,therefore ,first the time during which they serve asmeans ofproduction by taking part inthe produc- tive process ;second ,the stops during which acertain pro- cess ofproduction ,and thus the function ofthe means of 8beginning ofmanuscript iv. time ofproduction ofthemeans ofproduction does notmean ,inthis case ,the time required fortheir production ,but the time during which they take part intheprocess ofproduction ofacertain commodity .-f.e.",
        "the time ofcirculation .139 production embodied init,isinterrupted ;third ,the time during which the means ofproduction are held inreadiness asrequirements for the process ofproduction ,during which they represent productive capital ,without having entered into the process ofproduction . the difference sofar discussed isalways the difference between the time which the productive capital passes inthe sphere ofproduction and that inthe process ofproduction . but the process ofproduction itself may require interrup- tions ofthe labor -process ,and thus ofthe labor time ,and during such pauses the object oflabor isexposed tothe influence ofphysical processes without the intervention of human labor .the process of production ,and thus the function ofthe means ofproduction ,continue inthis case , although the labor -process ,and thus the function ofthe means ofproduction asinstruments oflabor ,have been in- terrupted .this applies ,for instance ,tothe grain ,after it has been sowed ,the wine fermenting inthe cellar ,the la- bor-material of many manufacturers ,such as tanneries , where the material isgiven over tochemical processes .the time ofproduction isthen greater than the labor -time .the difference between the two consists inan excess ofthe time of production over the labor -time . this excess always arises by the latent existence ofproductive capital inthe sphere ofproduction ,without performing its function in the process ofproduction itself ,orbythe performance ofits function inthe productive process without taking part in the labor -process . that part ofthe latent productive capital ,which isheld in readiness asarequirement for the productive process , such ascotton ,coal ,etc. ,in aspinnery ,produces neither products nor value .itisfallow capital ,although itsfallow condition isarequirement for the uninterrupted flow of the process ofproduction .the buildings ,apparatus ,etc. , necessary for the storage ofthe productive supply (latent capital )are requirements of the productive process and therefore component parts ofthe advanced productive capi- tal.they perform their function as conservators ofthe elements ofproduction inapreliminary stage .inasmuch aslabor -processes are required inthis stage ,they add to",
        "140capital . the cost ofthe raw material ,etc. ,but they are productive labor and produce surplus -value ,because apart ofthis la- bor ,like all wage -labor ,isnot paid .the normal inter- ruptions ofthe entire process ofproduction ,the pauses in which the productive capital does not perform any func- tions ,create neither value nor surplus -value .hence the tendency tokeep the work going atnight (volume i,chap- ter x,4).the intervals in the labor -time ,which the object oflabor must endure inthe process ofproduction itself ,create neither value nor surplus -value .but they ad- vance the product ,form apart ofitslife,aprocess through which itmust necessarily pass .the value ofthe apparatus , etc. ,istransferred tothe product inproportion tothe entire time ,during which they perform their function ;the prod- uct isbrought tothis stage by labor itself ,and the em- ployment ofthese apparatus isasmuch arequirement of production asthe wasting ofapart ofthe cotton which does not enter into the product ,but nevertheless transfers its value tothat product .the other parts oflatent capital ,such asbuildings ,machinery ,etc. ,that istosay those instru- ments oflabor whose function isinterrupted only by the regular pauses ofthe productive process (irregular inter- ruptions caused by the restriction ofproduction ,crises ,etc. , are total losses )create additional values without entering into the creation ofthe product .the total value which this part ofcapital adds tothe product ,isdetermined by the average time which itlasts ,for its own value ,being use-value ,diminishes during the time that itperforms its functions aswell asduring that inwhich itdoes not . finally ,the value ofthe constant part ofcapital ,which continues in the productive process although the labor- process isinterrupted ,re-appears inthe result ofthe produc- tive process .labor itself has here placed the means of production inacondition ,where they pass without further assistance through certain useful processes ,the result of which isadefinite advantage orachange inthe form ofthe use-values .labor always transfers the value ofthe means ofproduction tothe product ,tothe extent that itreally con- sumes them togood effect asmeans ofproduction .and itdoes not change the case ,whether labor has tobeexerted",
        "the time ofcirculation . 141 continually on its object inorder toproduce this effect ,or whether itmerely gives the first impulse for itby placing the means ofproduction in acondition wherein they un- dergo the intended transformation through the influence of natural processes ,without further assistance from labor . whatever may bethe reason for the excess ofthe time of production over the labor -time -whether itisthat the means ofproduction are still latent capital inastage pre- liminary tothe actual productive process ,orthat their func- tion isinterrupted within the process ofproduction by its pauses ,orthat the process ofproduction itself requires an interruption ofthe labor -process -in none ofthese cases do the means ofproduction assimilate any labor .and if they do not assimilate any labor ,they do not imbibe any surplus -labor .hence the productive capital does not in- crease itsvalue ,solong asitremains inthat part ofitstime ofproduction which exceeds the labor -time ,no matter how indispensable these pauses may befor the realization ofthe process ofincreasing value .itisplain ,that the productiv- ity and increment ofagiven productive capital inagiven time are somuch greater ,the more nearly the time ofpro- duction and labor -time are equal .hence we have the ten- dency ofcapitalist production toreduce the excess ofthe time ofproduction over the labor -time asmuch aspossible . but although the time ofproduction ofacertain capital may exceed itslabor -time ,italways includes the latter ,and itsexcess isalogical condition ofthe process ofproduction . the time ofproduction ,then ,isalways that time inwhich a capital produces use-values and surplus -values ,and in which itperforms the functions ofproductive capital ,al- though itincludes time inwhich itiseither latent orpro- duces without creating surplus -values . within the sphere ofcirculation ,capital abides ascom- modity -capital and money -capital .its two processes ofcir- culation consist inits transformation from the commodity- form into that ofmoney ,and from the money -form into that ofcommodities .itdoes not alter the character ofthese pro- cesses astransactions in circulation ,of processes inthe simple metamorphosis of commodities ,that this transfor- mation ofcommodities into money isatthe same time are-",
        "142capital . alization ofthe surplus -values embodied inthe commodities , and that the transformation of money into commodities isatthe same time atransformation orreconversion ofcap- ital -value into the forms ofitselements ofproduction . the time ofcirculation and time ofproduction mutually exclude one another .during itstime ofcirculation ,capital does not perform the functions of productive capital and therefore produces neither commodities nor surplus -value . ifwe study the cycle initssimplest form ,sothat the entire capital -value passes inone bulk from one phase into the other ,we can plainly see that the process ofproduction is interrupted and therefore also the production of surplus- value ,solong asits time ofcirculation lasts ,and that the renewal ofthe process ofproduction will take place prompt- lyorslowly ,according tothe length ofthe time ofcircula- tion .but ifthe various parts ofcapital pass through the cycle successively ,sothat the rotation ofthe entire capital- value proceeds successively bythe rotation ofitscomponent parts ,then itisevident that the part performing continu- ally the function ofproductive capital must be somuch smaller ,the longer the aliquot parts ofcapital -value remain inthe sphere ofcirculation .the expansion and contrac- tion ofthe time ofcirculation are therefore acheck on the contraction orexpansion ofthe time ofproduction orof the volume which agiven capital can assume for itsproduc- tive function .to the extent that the metamorphoses of circulation ofacertain capital are reduced ,tothe extent that the time ofcirculation approaches zero ,itsproductivity and increment ofsurplus -value will increase .for instance ,if acapitalist executes an order ,so that he receives pay- ment for his goods ondelivery ,and ifthis payment ismade inhis own elements ofproduction ,the time ofcirculation ofhis capital approaches zero . in short ,the time ofcirculation ofacertain capital lim- itsitstime ofproduction and the process ofcreating surplus- value .and this limitation isproportional tothe duration ofthe time ofcirculation .seeing that this time may in- crease ordecrease indifferent ratios ,itmay limit the time ofproduction in various degrees .but political economy sees only the seeming effect ,that istosay the effect ofthe",
        "the time ofcirculation . 148 time ofcirculation onthe creation ofsurplus -values ingen- eral .ittakes this negative effect for apositive one ,because its results are positive .itclings somuch the more tothis semblance ,asthis seems toprove that capital has amystic source from which surplus -value flows toward itthrough the circulation ,independently ofits process ofproduction and the exploitation oflabor .we shall see later ,that even sci- entific political economy has been deceived by this appear- ance ofthings .various phenomena contribute tothis de- ception :1. the capitalist method ofcalculating profit ,in which the negative cause figures asapositive one ,seeing that with capitals in different spheres ofinvestment ,with different times ofcirculation only ,alonger time ofcircula- tion tends toward an increase ofprices ,inshort serves as one ofthe causes which bring about an equalization of profits .2. the time ofcirculation isbut afactor inthe period ofturn -over ;and this period includes both the time of production and reproduction .what isreally due to the period ofturn -over ,seems tobedue tothe time ofcircu- lation .3. the conversion of commodities into variable capital (wages )isconditioned on their previous conversion into money .inthe accumulation ofcapital ,the conversion into additional variable capital takes place in circulation , orduring the time ofcirculation .itthus appears asthough this accumulation were due tothe time ofcirculation . within the sphere ofcirculation ,capital passes through the two opposite phases ofc-mand m-c,no matter in what succession .hence its time ofcirculation islikewise divided into two parts ,viz.:the time required for its con- version from money into commodities ,and that required for its conversion from commodities into money .we have already learned from the analysis ofthe simple circulation . of commodities (vol .i,chap .iii),that c-m,the sale , isthe most difficult part of its metamorphosis and that , therefore ,under ordinary conditions ,ittakes up the greater part of its time ofcirculation .as money ,value exists in its ever convertible form .but asacommodity ,value must . first be transformed into money inorder toassume such a directly convertible form of continual readiness . how- ever ,in the process ofcirculation ofcapital ,itsphase c-m",
        "142 capital . alization ofthe surplus -values embodied inthe commodities , and that the transformation of money into commodities isatthe same time atransformation orreconversion ofcap- ital -value into the forms ofitselements ofproduction . the time ofcirculation and time ofproduction mutually exclude one another .during itstime ofcirculation ,capital does not perform the functions of productive capital and therefore produces neither commodities nor surplus -value . ifwe study the cycle initssimplest form ,sothat the entire capital -value passes inone bulk from one phase into the other ,we can plainly see that the process ofproduction is interrupted and therefore also the production of surplus- value ,solong asits time ofcirculation lasts ,and that the renewal ofthe process ofproduction will take place prompt- lyorslowly ,according tothe length ofthe time ofcircula- tion .but ifthe various parts ofcapital pass through the cycle successively ,sothat the rotation ofthe entire capital- value proceeds successively by the rotation ofitscomponent parts ,then itisevident that the part performing continu- ally the function of.productive capital must be somuch smaller ,the longer the aliquot parts ofcapital -value remain inthe sphere ofcirculation .the expansion and contrac- tion ofthe time ofcirculation are therefore acheck onthe contraction or expansion ofthe time ofproduction orof the volume which agiven capital can assume for itsproduc- tive function .to the extent that the metamorphoses of circulation ofacertain capital are reduced ,tothe extent that the time ofcirculation approaches zero ,itsproductivity and increment ofsurplus -value will increase .for instance ,if acapitalist executes an order ,so that he receives pay- ment for his goods ondelivery ,and ifthis payment ismade inhis own elements ofproduction ,the time ofcirculation ofhis capital approaches zero . in short ,the time ofcirculation ofacertain capital lim- itsitstime ofproduction and the process ofcreating surplus- value .and this limitation isproportional tothe duration ofthe time ofcirculation .seeing that this time may in- crease ordecrease indifferent ratios ,itmay limit the time ofproduction in various degrees .but political economy sees only the seeming effect ,that istosay the effect ofthe",
        "the time ofcirculation .148 time ofcirculation onthe creation ofsurplus -values ingen- eral .ittakes this negative effect for apositive one ,because itsresults are positive .itclings somuch the more tothis semblance ,asthis seems toprove that capital has amystic source from which surplus -value flows toward itthrough the circulation ,independently ofits process ofproduction and the exploitation oflabor .we shall see later ,that even sci- entific political economy has been deceived by this appear- ance ofthings .various phenomena contribute tothis de- ception :1.the capitalist method ofcalculating profit ,in which the negative cause figures asapositive one ,seeing that with capitals in different spheres ofinvestment ,with different times ofcirculation only ,alonger time ofcircula- tion tends toward an increase ofprices ,inshort serves as one ofthe causes which bring about an equalization of profits .2. the time ofcirculation isbut afactor inthe period ofturn -over ;and this period includes both the time ofproduction and reproduction .what isreally due to theperiod ofturn -over ,seems tobedue tothe time ofcircu- lation .3. the conversion of commodities into variable capital (wages )isconditioned on their previous conversion into money .inthe accumulation ofcapital ,the conversion into additional variable capital takes place in circulation , orduring the time ofcirculation .itthus appears asthough this accumulation were due tothe time ofcirculation . within the sphere ofcirculation ,capital passes through thetwo opposite phases ofc-mand m-c,no matter in what succession .hence its time ofcirculation islikewise divided into two parts ,viz.:the time required for its con- version from money into commodities ,and that required foritsconversion from commodities into money .we have already learned from the analysis ofthe simple circulation ofcommodities (vol .i,chap .iii),that c-m,the sale , isthe most difficult part of its metamorphosis and that , therefore ,under ordinary conditions ,ittakes up the greater part ofitstime ofcirculation .as money ,value exists in itsever convertible form .but asacommodity ,value must first betransformed into money inorder toassume such a directly convertible form of continual readiness . how- ever ,inthe process ofcirculation ofcapital ,itsphase c-m",
        "144 capital . deals with commodities which constitute definite elements ofproductive capital inacertain investment .the means ofproduction may not beon the market and must first be produced ,orthey must be ordered from distant markets , ortheir ordinary supply isinterrupted ,orprices change ,etc. , inshort there are amultitude ofcircumstances which are not visible inthe simple change ofform from mtoc,but which nevertheless require more orless time for this part ofthe phase of circulation .c-m and m-cmay not only beseparate intime ,but also inspace ,the selling and the buying market may be located apart .in the case of factories ,for instance ,the buyer and seller are frequently different persons .inthe production ofcommodities ,circu- lation isasnecessary asproduction itself ,sothat agents are just asmuch needed incirculation asinproduction .the process ofreproduction includes both functions ofcapital , therefore italso includes the necessity ofhaving representa- tives for both ofthem ,either inthe person ofthe capital- istorofwage -workers ,ashis agents .but this isno more a good reason for mistaking the agents in circulation for those inproduction ,than itistoconfound the functions of commodity -capital and money -capital with those ofproduc- tive capital .the agents ofcirculation must bepaid bythe agents ofproduction .and since capitalists who mutually sell and buy donot create either values orproducts by these transactions ,this state of affairs isnot changed ,ifthey are enabled orcompelled bythe expansion oftheir business tocharge others with those transactions . insome businesses ,the buyers and sellers get their wages inthe form ofpercentages on the profits .itdoes not alter the matter touse the phrase that they are paid bythe con- sumer .the consumers can pay only inasmuch asthey are themselves instrumental inproducing anequivalent incom- modities asagents ofproduction orappropriate itout ofthe product ofother agents in production ,whether itbe by means oflegal titles orofpersonal services . there isadifference between c-m and m-c,which has nothing todo with the different forms ofcommodities and money ,but arises from the capitalist character ofpro- duction .intrinsically .c-maswell asm-cismerely a",
        "the time ofcirculation .145 conversion ofagiven value out ofone form into another . but c-m'isatthe same time arealization ofthe surplus- value contained in c.'not som-c.for this reason the sale ismore important than the purchase .m-cis under normal conditions anecessary act for the creation of more value by means ofthe value contained init,but itis not the realization ofsurplus -value ;itisthe intimation of its production ,not its after -effect . the form inwhich acommodity exists ,the form ofits use-value ,prescribes definite limits for the circulation of commodity -capital c'-m'.use -values are naturally perish- able .hence ,ifthey are not productively orindividually consumed within acertain time ,inother words ,ifthey are not sold within acertain period ,they spoil and thus lose with their use-value also the faculty ofbeing bearers ofsur- plus -value .the capital -value ,or eventually the surplus- value ,contained inthem islost .the use-values do not remain the bearers ofperennial capital -value increasing by the addition ofsurplus -value ,unless they are continually reproduced and replaced by new use-values ofthe same or ofsome other order .the sale ofthe use-values inthe form offinished commodities ,their transfer tothe productive or individual consumption by means ofthis sale ,isthe ever recurring requirement for their reproduction .they must change their old use-form within acertain time ,inorder to continue their existence in anew form .exchange- value maintains itself only bymeans ofthis constant renewal of its substance .the use-values of certain commodities spoil sooner or later ;the time between their production and consumption may therefore belong orshort ;they may retain the form ofcommodity -capital inphase c-mofthe circulation for ashorter or longer term and endure a shorter oralonger time ofcirculation .the limit ofthe time ofcirculation ofacertain commodity -capital imposed by the spoiling ofthe substance ofthe commodity isthe absolute limit ofthis part ofthe time ofcirculation ,orof the time ofcirculation ofcommodity -capital assuch .to the extent that acommodity isperishable ,tothe extent that itmust be sold and consumed assoon aspossible after its production ,its capacity for removal from its place ofpro-",
        "146capital . duction isrestricted ,the sphere of its circulation isnar- rowed ,its selling market islocalized .for this reason a commodity issomuch less suited for capitalist production asitisperishable ,asitsphysical composition limits itstime of circulation .itisavailable for this purpose only in thickly populated districts ,ortothe extent that the im- provement oftransportation brings places closer together . but the concentration ofthe production ofsuch articles into afew hands and inapopulous district may create a relatively large market even for them ,for instance ,such asthe product oflarge beer -breweries ,dairies ,etc.",
        "the expenses ofcirculation .147 chapter vi. the expenses ofcirculation . i.genuine expenses ofcirculation . 1.the time ofpurchase and sale . the transformations of capital from commodities into money and from money into commodities are atthe same time transactions ofthe capitalist ,acts ofpurchase and sale . the time inwhich these transformations take place consti- tutes from the personal standpoint ofthe capitalist apurchase and selling time ,itisthe time during which he performs the functions ofabuyer and seller onthe market .just as the time of circulation of capital isanecessary part of itstime ofreproduction ,sothe time inwhich the capitalist buys and sells and remains inthe market isanecessary part ofthe time inwhich heperforms the functions ofacapitalist , inwhich hepersonifies capital .itisapart ofhis business time . asince wehave assumed that commodities are bought and sold attheir values ,these transformations constitute merely aconversion ofthe same value from one form into another , from the form ofcommodities into that ofmoney orvice versa ,achange ofcomposition insubstance .ifcommodi- ties are sold attheir values ,then the magnitude in the hands ofthe buyer and seller remains unchanged .only the form ofits existence ischanged .ifthe commodities are not sold attheir values ,then the sum ofthe con- verted values remains the same ;the plus on one side isoff- set by aminus onthe other . the metamorphoses c-m and m-care transactions between buyers and sellers ;they require time toperfect the trade ,the more soasthis represents astruggle in which each seeks toget the best ofthe other ;for tobusiness men applies the statement :\"when greek meets greek ,then 9afrom here to10are statements taken from anote atthe end of manuscript viii .",
        "148capital . comes the tug ofwar .\" the conversion ofacommodity costs time and labor -power ,not for the purpose ofcreating values ,but in order toaccomplish the conversion ofvalue from one form into another .the mutual attempt toap- propriate an extra share of this value ,changes nothing fundamentally .this work ,increased by the evil designs 'on either side ,does not create value any more than the work done in acivil process increases the value ofthe ob- ject ofcontention .itiswith this labor ,which isaneces- sary part ofthe totality ofthe capitalist process ofproduc- tion ,including the circulation orincluded by it,asitis with the labor ofcombustion ofsome element used for the generation of heat .this labor of combustion does not generate any heat ,although itisanecessary part inthe process of combustion .in order to employ coal asfuel , itmust combine with oxygen ,and for this purpose coal must be brought tothe condition of carbonic acid gas ; inother words ,aphysical change ofform must take place . the separation ofcarbon molecules ,which are united into a solid mass ,and the breaking up ofthese molecules into their atoms ,must precede the new combination ,and this requires acertain effort ,which isnot transformed into heat ,but taken from it.ifthe owners ofcommodities are not capitalists ,but direct producers ,the time required for buying and selling issomuch loss oflabor time ,and for this reason such trans- actions were deferred in ancient and medieval times to holidays . of course ,the dimensions acquired by the business in commodities inthe hands ofthe capitalists cannot transform this labor ,which does not create any values and promotes merely changes ofform ,into labor productive ofsurplus- value .nor can this miracle oftranssubstantiation beaccom- plished by unloading this work of\"combustion \"from the shoulders ofthe industrial capitalists tothose ofpaid em- ployees who attend toitexclusively .these employees will not tender their services out ofpure love for the capitalists . the collector ofsome real -estate owner orthe messenger of some bank isindifferent tothe fact that their labor does not add any value tothe rent ortothe money carried tothe bank inbags.10 10see explanation 9.",
        "the expenses ofcirculation .149 for the capitalist who has others working for him ,selling and buying become primary functions .seeing that he ap- propriates the products ofmany on alarge social scale ,he must sell on the same scale and then reconvert the money into elements ofproduction .but still neither the sale nor the purchase create any values .an illusion ishere cre- ated bythe function ofmerchant's capital .but without en- tering atthis point into adetailed discussion ofthis fact ,we can plainly see this much :ifafunction ,which isunproduc- tive initself ,although anecessary link inreproduction ,is transformed by adivision oflabor from an incidental occu- pation ofmany into an exclusive occupation ofafew ,the character ofthis function isnot changed thereby .one mer- chant ,asan agent promoting the transformation ofcom- modities by assuming the role ofamere buyer and seller , may abbreviate by his operations the time ofsale and pur- chase for many producers .to that extent he may be re- garded asamachine which reduces auseless expenditure of energy orhelps toset free some time ofproduction.11 in order tosimplify the matter ,seeing that we shall not discuss the merchant asacapitalist and his capital asmer- chant's capital until later ,we shall assume that this buying and selling agent isaman who sells his labor -power .he expends his labor -power and labor -time inthe operations cmand mc.and he makes his living that way ,just asanother does by spinning orby making pills .he per- forms anecessary function ,because the process ofreproduc- tion itself includes an unproductive function .he works as well asany other man ,but intrinsically his labor creates 11\"the expenses ofcommerce ,although necessary ,must beregarded asaburden .\" (quesnay ,analyse dutableau economique ,indaire . physiocrates ,part i,paris ,1846 ,page 71.)according toquesnay ,the \"profit ,\"which the competition between merchants produces ,and which hesees inthe fact that competition compels them \"tofigure adiscount ontheir loss orgain .....isreally nothing but aprevention ofloss forthe seller atfirst hand orforthe consuming buyer .now ,apre- vention ofloss onthe expenses ofcommerce isnot areal product or anincrease ofwealth through commerce ,considering itsimply asan exchange ,whether with orwithout the cost oftransportation .\"(pages 145 and 146. )\"the expenses ofcommerce are always paid bythose who sell the products and who would enjoy the full prices paid for them bythe buyers ,ifthere were noincidental expenses .\"(page 163,ibidem .) the \"proprietaires \"and \"producteurs \"are\"salariants ,\"themerchants are \"salaries .\" (page 164,quesnay ,problemes economiques ,indaire , physiocrates ,part i,paris ,1846. )",
        "150capital . neither products nor values .he belongs himself tothe un- productive expenses ofproduction .his services donot trans- form an unproductive function into aproductive one ,nor unproductive into productive labor .itwould beamiracle , ifsuch atransformation could beaccomplished by amere transfer ofafunction .his usefulness consists rather inthe fact that asmall part ofthe labor -power and labor -time of society istied upinthis unproductive function .we shall as- sume that heisawage -worker ,even though better paid than others .whatever may behis wages ,inthe role ofawage- worker healways works apart ofhis time for nothing .he may receive inwages the value ofthe product ofeight work- ing hours ,when he performs his functions for ten hours . but his two hours ofsurplus -labor do not produce any sur- plus -values any more than his eight hours ofnecessary labor , although by means ofthese eight hours ofnecessary labor apart ofthe social product istransferred tohim .inthe first place ,looking atitfrom the standpoint ofsociety ,his labor- power isused upfor ten hours inamere function ofcircula- tion .itcannot beused otherwise ,for productive labor .in the second place ,society does not pay for those two hours of surplus -labor ,although they are expended bythe man who worked during that time .society does not appropriate any surplus -product orvalue through them .but the expenses of circulation ,which herepresents ,are thereby reduced byone- fifth ,from ten hours toeight .society does not pay any equivalent for this fifth ofthis actual time ofcirculation , ofwhich heisthe agent .but ifthis man isemployed by acapitalist ,then the non -payment ofthese two hours re- duces the expenses ofcirculation ofhis capital ,which rep- resent adeduction from his income .for the capitalist this isapositive gain ,because the negative limit for the utiliza- tion ofhis capital isthereby reduced .solong assmall inde- pendent producers ofcommodities spend apart oftheir own time inselling and buying ,this shows itself either astime spent during the intervals oftheir productive function ,or asareduction oftheir time ofproduction . at all events ,the time required for this purpose isan expense ofcirculation ,which does not add any increment to the converted values .itisthe expense which isrequired in",
        "the expenses ofcirculation .151 order toconvert them from commodities into money .inas- much asthe capitalist producer ofcommodities appears as anagent ofcirculation ,hediffers from the direct producers ofcommodities only by the fact that he buys and sells on alarger scale and therefore isagreater factor incircula- tion .and ifthe expansion ofhis business compels oren- ables him tohire his own wage -laborers asagents ofcircu- lation ,the nature ofthis phenomenon isnot changed in any way .acertain amount oflabor -power and labor -time must beexpended inthe process ofcirculation ,sofar asitis merely achange ofform .but this now appears asan addi- tional expenditure ofcapital .apart ofthe variable capi- tal must beexpended inthe purchase ofthese labor -powers active only incirculation .this advance ofcapital creates neither products nor values .itreduces tothat extent the volume ofthe productive function ofcapital .itisasthough one part ofthe product were transformed into amachine , which buys orsells the rest ofthe product .this machine deducts somuch from the product .itdoes not participate inthe productive process ,although itcan reduce the labor- power required for the circulation .itconstitutes simply a part ofthe expenses ofcirculation . 2. bookkeeping . apart from the actual selling and buying ,labor -time is expended inbookkeeping ,which assimilates more mate- rialized labor ,such aspens ,ink ,paper ,desks ,office -expenses . this function ,therefore ,requires labor -power and materials . itisthe same condition ofthings which we observed inthe case ofthe time ofsale and purchase . as aprinciple ofunity within its cycles ,asavalue in process ofrotation ,whether itbeinthe sphere ofproduction orinboth phases ofthe sphere ofcirculation ,capital exists ideally only inthe form ofaccounting money ,principally inthe mind ofthe producer ofcommodities ,more espe- cially the capitalist producer ofcommodities .this move- ment isfixed and controlled bybookkeeping ,which includes also the determination ofprices ,orthe calculation ofthe prices ofcommodities .the movement ofproduction ,espe-",
        "152capital . cially ofthe production ofvalues -inwhich the commodities figure asbearers ofvalue ,asmere names ofthings ,the ideal existence ofwhich asvalues iscrystallized in accounting money -thus issymbolically reflected inimagination .so long asthe individual producer ofcommodities keeps ac- count only inhis head (for instance afarmer ;abookkeep- ing tenant isnot known until capitalist production intro- duces him ),orincidentally ,outside ofhis time ofproduc- tion ,makes anote ofhis expenses ,receipts ,instalment days , etc.,just solong does itappear intelligible that this func- tion ,and the materials consumed by it,such aspaper ,etc. , require an additional expenditure oflabor -time and mate- rials ,which isnecessary ,but constitutes adeduction from the time available for productive consumption and from the materials which are used inthe actual process ofproduction and are embodied inthe creation ofproducts and values.12 the nature ofthe function itself isnot changed .the vol- ume which itassumes byitsconcentration inthe hands ofthe capitalist producer ofcommodities ,who transforms itfrom a function ofmany small producers into that ofone single capi- talist within aprocess oflarge scale production does not alter the case ,neither isitsnature affected by itsseparation from those productive functions ,which it accompanied inci- dentally ,nor by itsmodification into an independent func- tion ofagents exclusively entrusted with it. the division oflabor ,the assuming ofindependence ,does not make afunction productive ,ifitwas not sobefore it became independent .ifacapitalist invests his capital anew , then hemust invest apart ofitinhiring abookkeeper ,etc. , and materials for bookkeeping .ifhis capital isalready in active operation ,inthe process ofcontinual reproduction , 12inthe middle ages ,we find bookkeeping for agriculture only in the convents .but wehave seen invol.i,that abookkeeper was in- stalled foragriculture asearly asthe primitive indian communes .book- keeping isthen made anindependent function ofacommunal officer . this division oflabor saves time ,pains ,and expenses ,but production and bookkeeping forproduction remain asmuch two different things as acargo ofaship and the way-bill.inthe person ofthe bookkeeper , apart ofthelabor -power ofthe commune iswithdrawn from production , and the cost ofhisfunction isnot reproduced byhisown labor ,but by adeduction from the communal product .what istrue ofthe book- keeper ofanindian commune ,istrue under changed circumstances ofthe bookkeeper ofthe capitalists .(from manuscript ii.)",
        "the expenses ofcirculation .153 then hemust continually reconvert apart ofhis commodity- product by means ofitstransformation into money ,into a bookkeeper ,salesman ,etc. this part ofhis capital iswith- drawn from production and belongs tothe expenses ofcir- culation ,deductions from the total product (including the labor -power itself ,which isexpended wholly for this func- tion ). but there isacertain difference between the expenses incidental tobookkeeping ,orthe unproductive expenditure oflabor -time onone side ,and that ofmere selling and buying time on the other .the latter arise only from the definite social form ofthe process ofproduction ,they are due to the fact that itisaproduction ofcommodities .bookkeep- ing ,for the control and ideal survey ofthe process ,becomes necessary tothe extent that the process assumes asocial scale and loses its purely individual character .itis,therefore , more necessary in capitalist production than in scattered handicraft and agricultural production ,and still more nec- essary in co-operative than in capitalist production .but the expenses ofbookkeeping are reduced tothe extent that production isconcentrated and becomes social bookkeeping . we are here concerned only about the general character ofthe expenses ofcirculation ,which arise out ofthe general metamorphoses .itissuperfluous todiscuss all its details . to what extent phenomena ,which are mere incidents in changes ofform due tothe social character ofthe process of production ,may deceive the eyes when they cease tobeim- perceptible and incidental accompaniments ofindividual pro- duction ,we may observe inthe case ofthe mere handling ofmoney ,when itisconcentrated into anexclusive function ofbanks on alarge scale ,orofacashier inindividual busi- but itmust be remembered ,that these expenses ofcirculation do not change their character by changing their form .nesses . 3. money . whether aproduct isintended for acommodity ornot,it isalways amaterialized form ofwealth ,ause-value tobepro- ductively orindividually consumed .ifitisacommodity ,",
        "154capital . its value isideally expressed inits price ,which does not change itsactual use-value .but the fact that certain com- modities ,such asgold and silver ,may perform the function ofmoney and assuch reside exclusively inthe process of circulation (even inthe form ofahoard ,areserve fund ,etc. , they remain inthe sphere ofcirculation ,although latent ), isdue tothe definite social form ofthe process ofproduction , which isaproduction ofcommodities .since capitalist pro- duction gives toall itsproducts the general form ofcom- modities ,and since the overwhelming mass ofproducts are produced for sale and must therefore assume the form of money ,and since the commodity -part ofthe social wealth grows continually inproportion ,itfollows that the quantity ofgold and silver employed asmeans ofcirculation ,paying medium ,reserve fund ,etc. ,must likewise increase .these commodities performing the function ofmoney donot enter either into productive orinto individual consumption .they represent social labor fixed inaform inwhich itmay serve asamere machine incirculation .apart from the fact that apart ofthe social wealth istied up inthis unproductive form ,the wearing out ofthe money constantly requires its reproduction ,orthe conversion ofmore social labor ,inthe form ofproducts ,into more gold and silver .these expenses ofreproduction are considerable incapitalistically developed nations ,because there isalarge part ofthe wealth tied up inthe form ofmoney .gold and silver asmoney -commodi- ties represent social expenses ofcirculation ,due tothe social form ofproduction .they are dead expenses ofcommodity- production ingeneral ,and they increase with the develop- ment ofthis production ,especially when capitalized .they represent apart ofthe social wealth ,which must besacrificed inthe process ofcirculation.13 ii.expenses of storage . expenses ofcirculation ,which are due toamere change 13\"the money circulating inacountry isacertain portion ofthe capital ofthe country ,absolutely withdrawn from productive purposes , inorder tofacilitate orincrease the productiveness ofthe remainder ; acertain amount ofwealth is,therefore ,asnecessary inorder toadopt gold asacirculating medium ,asitistomake amachine ,inorder to facilitate any other production .\"(economist ,vol.v,page 519. )",
        "the expenses ofcirculation . 155 ofform incirculation ,ideally speaking ,do not enter into the value ofthe commodities .the capital parts expended for them are deductions from the productively expended capital ,sofar asthe capitalist isconcerned .not sothe ex- penses ofcirculation which we shall consider now .they may arise from processes ofproduction ,which are continued only in circulation ,the productive character ofwhich is merely concealed by the form ofthe circulation .or,on the other hand ,they may represent from the standpoint of society mere unproductive expenses ofsubjective ormate- rialized labor ,while for this very reason they may become productive ofvalue for the individual capitalist ,by making an addition tothe price ofhis commodities .this follows from the simple fact that these expenses are different in different spheres ofproduction ,oreven for different indi- vidual capitalists inthe same sphere ofproduction .when added tothe prices ofcommodities ,they are divided inpro- portion asthey fall upon the shoulders ofthe various in- dividual capitalists .but all labor which adds value can also add surplus -value ,and will always dosounder capitalist production ,the value created byitdepending onthe amount ofthe labor ,the surplus -value added depending on the amount which the capitalist pays for it.in other words , expenses which increase the price ofacommodity without adding anything toits value ,which therefore are dead ex- penses sofar associety isconcerned ,may be asource of profit for the individual capitalist .on the other hand ,in sofar asthe addition tothe price ofcommodities merely distributes these expenses ofcirculation equally ,the unpro- ductive character ofthis expenditure isnot changed .for instance ,insurance companies divide the losses ofindividual capitalists among the capitalist class .but this does not alter the fact that these equalized losses are losses sofar asthe aggregate social capital isconcerned . 1. general formation ofsupply . during its existence ascommodity -capital ,oritsstay on the market ,inother words ,inthe interval between the proc- ess ofproduction from which itoriginates and the process",
        "156 capital . ofconsumption into which itenters ,the product forms a supply ofcommodities .as acommodity on the market , and therefore inthe form ofasupply ,the commodity -prod- uct figures twice ineach cycle :the first time asthe com- modity -product ofthat rotating capital whose cycle isbeing considered ;the second time asthe commodity -product of another capital ,which must befound ready onthe market , inorder tobe bought and converted into productive capi- tal.itis,indeed ,possible that this last -named commodity- capital isnot produced until ordered .inthat case ,an in- terruption occurs until ithas been produced .but the flow ofthe process ofproduction and reproduction requires that acertain mass ofcommodities (means ofproduction )should bealways on the market ,that there should beasupply of them .in the same way ,productive capital comprises the purchase oflabor -power ,and the money -form ishere only that form ofthe value ofmeans of existence which the laborer must find athand on the market ,for the greater part .we shall discuss this more indetail inashort while ; suffice ittomake this point atpresent . from the standpoint ofthe rotating capital -value ,which has been transformed into acommodity -product and must now be sold orreconverted into money ,which ,therefore , has for the moment the function ofcommodity -capital on the market ,the condition in which itforms asupply is contrary toits intentions and itsstay onthe market isin- voluntary .the sooner the sale iseffected ,the smoother runs the process ofreproduction .the delay inthe phase c'-m' prevents the actual change ofsubstance which must take place inthe rotation ofcapital and obstructs itsfurther func- tion asproductive capital .on the other hand ,sofar as m-cisconcerned ,the constant presence ofasupply of commodities on the market isarequirement for the flow of the process ofreproduction and ofthe investment ofnew or additional capital . the demurrage ofthe commodity -capital asasupply on the market requires buildings ,stores ,storage places ,ware- houses ,inother words ,an expenditure ofconstant capital ; furthermore the payment oflabor -power for storing the com-",
        "the expenses ofcirculation . 157 modities .finally ,the commodities spoil and are exposed toinjurious elementary influences .additional capital is required toprotect them ,and this capital must beinvested inmaterialized labor aswell asinlabor -power.14 we see,then ,that the sojourn ofcommodity -capital asa supply onthe market causes expenses ,which belong tothe expenses ofcirculation ,since they do not fall within the sphere ofproduction .these expenses ofcirculation differ from those mentioned under i,bythe fact that they enter in part into the value ofthe commodities ,inother words ,that they increase the price ofcommodities .under all circum- stances the capital and labor -power required for the con- servation and storage ofthe commodity -supply ,are with- drawn from the direct process ofproduction .on the other hand ,the capitals thus employed ,including their labor- power ,must bereproduced bythe social product .their ex- penditure ,therefore ,reduces the productivity oflabor -power tothat extent ,sothat agreater amount ofcapital and labor isneeded toobtain acertain intended effect .they are dead expenses . inasmuch asthe expenses of circulation arising out of the formation ofasupply ofcommodities are due merely tothe time required for the transformation ofexisting com- modity -values into money ,inother words ,inasmuch asthey are due tothe prevailing social form ofproduction ,which makes the production ofcommodities and their transforma- tion into money imperative ,they share the character ofthe expenses ofcirculation enumerated under i. on the other hand ,the value ofthe commodities ishere preserved orin- creased ,because the use-value ,the product itself ,isplaced in conditions which require an outlay ofcapital .the com- 14corbet calculates ,in1841 ,that thecost ofstoring wheat foraseason ofnine months amounts toaloss of12 per cent inquantity ,3per cent forinterest onthe price ofwheat ,2per cent for warehouse rental ,1 per cent for sifting and drayage ,per cent for delivery ,together 7 per cent ,or3sh.6d.onaprice of50sh.per quarter .(th.corbet , an inquiry into the causes and modes ofthe wealth ofindividuals , etc.,london ,1841. )according tothe testimony ofliverpool merchants before therailroad commission ,thenetexpenses ofgrain storage in1865 amounted to2d.permonth per quarter ,or9to10d.per ton.(royal commission onrailways ,1867. evidence ,page 19,nr.331. )",
        "158capital . modities are submitted tooperations ,which expend addi- tional labor onthe use-values .but the computation ofthe values ofcommodities ,the bookkeeping incidental tothis process ,the transactions ofsale and purchase ,do not influ- ence the use-values inwhich the exchange -values ofthe com- modities are embodied .these transactions concern merely the form ofthe values .although ,inthe present case ,the expenses ofkeeping asupply (which isdone involuntarily ) arise only from adelay ofthe metamorphosis and from its necessity ,these expenses differ from those mentioned under i,inthat they are not made for the purpose ofeffecting achange ofform ,but for the purpose ofpreserving the value embodied inthe commodity asause-value ,which can- not be preserved inany other way than by preserving the use-value ,the product ,itself .the use-value isneither in- creased nor raised invalue ,on the contrary ,itdiminishes . but itsdiminution isrestricted and itispreserved .neither isthe advanced value contained inthe commodity increased , although new materialized and subjective labor isadded . we have now toinvestigate furthermore ,towhat extent these expenses arise from the peculiar nature ofthe produc- tion ofcommodities ingeneral and from the prevailing abso- lute form ofthis mode ofproduction ,its capitalistic form ; and towhat extent they are common toallsocial production and merely assume apeculiar form and mode ofexpression incapitalist production . adam smith has expressed the strange opinion ,that the formation ofasupply isaphenomenon peculiar tocapital- istproduction alone.15 more recent economists ,for instance lalor ,insist on the other hand ,that itdeclines with the development of capitalist production .sismondi even re- gards this asone ofthe drawbacks ofthis mode ofproduc- tion . as amatter offact ,the supply exists inthree forms :in the form ofproductive capital ,inthe form ofafund for individual consumption ,and inthe form ofacommodity- supply orcommodity -capital .the supply inone form de- 15wealth ofnations ,book ii,introduction .",
        "the expenses ofcirculation .159 creases relatively ,when itincreases inanother ,although it may increase absolutely inall three forms simultaneously . itisplain from the outset ,that wherever production is carried on for direct consumption on the part ofthe pro- ducer ,and only toaminor extent for exchange or sale , where the social product does not assume the character of commodities atall,oronly toasmall degree ,there the sup- ply inthe form ofcommodities can be only asmall and insignificant part ofthe social wealth .on the other hand , the supply for consumption isrelatively large ,especially that ofthe means ofexistence .we have but totake alook atancient agriculture ,in order tounderstand this .the overwhelming part ofthe product there constitutes directly asupply ofmeans ofproduction and means ofexistence , without becoming asupply ofcommodities ,because itre- mains inthe hands ofits producers and owners .itdoes not assume the form ofasupply ofcommodities ,and for this reason adam smith declares that there isno supply at all in societies based on this form of production . he confounds the form ofthe supply with the supply itself and believes that society hitherto lived from hand tomouth ortrusted tothe luck ofthe next day . this isanaive misunderstanding . asupply inthe form ofproductive capital exists inthe shape ofmeans ofproduction ,which are either inoperation inthe process ofproduction ,oratleast inthe hands ofthe producer ,sothat they are latent inthe process ofproduc- 16instead ofasupply arising from theconversion oftheproduct into a commodity ,and ofthe supply ofarticles ofconsumption into commodi- ties,asadam smith thinks ,this transformation ,onthe contrary ,causes violent crises inthe economy ofthe producer during the transition from production for use toproduction for sale.inindia ,for instance ,the custom ofstoring uplarge quantities ofgrain inyears ofsuperfluity , when little could begotten forit,was observed until very recent times . (return .bengal and orissa famine .h.ofc.,1867 ,i,page 230,nr. 74.)the sudden increase inthe demand for cotton ,jute,etc.,ledin many parts ofindia toarestriction ofrice culture ,arise inthe price ofrice,and asale ofoldsupplies ofthe producers .then followed the unexampled export ofrice toaustralia ,madagascar ,etc.,in1864-66 . this accounts forthe acute character ofthe famine of1866 ,which cost the lives ofmore than amillion inhabitants inthe district oforissa alone (1.c.174,175,213,214,and iii.papers relating tothe famine inbehar ,pages 32,33,where the \"drain oftheoldstock \"isemphasized asone ofthe causes ofthe famine ).-from manuscript ii,",
        "160capital . tion .we have seen previously ,that with the devel pment ofthe productivity oflabor ,and therefore with the develop- ment ofthe capitalist mode ofproduction ,which develops the socially productive power oflabor more than all previ- ous modes ofproduction ,there isasteady increase ofthe mass ofmeans ofproduction ,which are permanently em- bodied inthe productive process asinstruments oflabor and perform their function initfor alonger orshorter time at repeated intervals (buildings ,machinery ,etc. );also , that this increase isatthe same time the premise and result ofthe development ofthe productivity ofsocial labor .it isespecially capitalist production ,which ischaracterized byrelative aswell asabsolute growth ofthis sort ofwealth . the material forms of existence of constant capital ,the means ofproduction ,do not consist merely ofsuch instru- ments oflabor ,but also ofraw material invarious stages of finish and ofauxiliary substances ,with the enlargement of the scale ofproduction and the increase inthe productivity oflabor by co-operation ,division ,machinery ,etc. ,the mass ofraw materials and auxiliary substances used inthe daily process of reproduction ,grows likewise .these elements must be ready athand inthe shop .the volume ofthis form ofproductive capital increases absolutely .in order that the process may flow along smoothly -apart from the fact whether this supply may berenewed daily oronly atfixed intervals -there must always bemore raw material , etc. ,accumulated atthe place ofproduction than isused up,say,daily orweekly .the continuity ofthe process re- quires that the fulfillment ofits conditions should neither depend on itspossible interruption by daily purchases ,nor onthe daily orweekly sale ofthe product ,sothat the regu- larity of its reconversion into its elements of production may not bebroken .but itisevident ,that the productive capital may belatent ,orform asupply ,indifferent propor- tions . there is,for instance ,quite adifference ,whether aspinner must have on hand asupply ofcotton orcoal for three months or for one .plainly this supply may decrease relatively ,while itmay atthe same time increase absolutely .",
        "the expenses ofcirculation .161 this depends on various conditions ,all ofwhich practi- cally amount tothe requirement that there shall beagreat- errapidity ,regularity ,and security infurnishing the neces- sary amount ofraw material always in such away ,that there may be no interruption .to the extent that these conditions are not fulfilled ,tothe extent that there isnorapid- ity,regularity ,and security ofsupply ,the latent part of the productive capital inthe hands ofthe producer ,that is tosay the supply ofraw materials waiting tobeused ,must increase in size .these conditions are inversely propor- tional tothe degree ofdevelopment ofcapitalist production , and thus tothe productive power ofsocial labor .the same applies tothe supply inthis form . however ,that which appears asadecrease ofthe supply , for instance ,tolalor ,isinpart merely adecrease ofthe supply inthe form ofcommodity -capital ,orofthe actual commodity -supply ;itisonly achange ofform ofthe same supply .if,for instance ,the mass ofcoal daily produced in acertain country ,and therefore the scale and energy ofthe coal -industry ,are great ,the spinner does not need alarge store ofcoal inorder toinsure the continuity ofhis produc- tion .the security ofthe continuous reproduction ofthe coal supply makes this unnecessary .in the second place , the rapidity with which the product ofone process may be transferred asmeans ofproduction toanother process depends onthe development ofthe means oftransportation and communication .the cheapness oftransportation plays agreat role inthis question .the continually renewed transport ,for instance ,ofcoal from the mine tothe spin- nery ,would be more expensive than the storing up ofa large supply for along time when the price oftransporta- tion isrelatively cheap .these two circumstances are due tothe process ofproduction itself .inthe third place ,the development ofthe credit -system exerts aninfluence onthis question .the less the spinner isdependent onthe immedi- ate sale ofhis yarn for the renewal ofhis supply ofcotton , coal ,etc. , and this dependence will be somuch smaller , the more the credit -system isdeveloped the smaller can bethe relative size ofthese supplies ,inorder toinsure inde--",
        "162capital . pendence from the hazards ofthe sale ofyarn for the con- tinuous production ofyarn on agiven scale .inthe fourth place ,many raw materials ,and half -finished products ,etc. , require long periods oftime for their production ,and this applies especially toall raw materials furnished by agricul- ture . ifno interruption ofthe process ofproduction istotake place ,there must beacertain amount ofraw materials on hand for the entire period ,inwhich no new products can take the places ofthe old.ifthis supply decreases inthe hands ofthe capitalist ,itproves merely that itincreases inthe hands ofthe merchant inthe form ofasupply of commodities .the development oftransportation ,for in- stance ,makes itpossible toconvey the cotton stored inthe import warehouses ofliverpool rapidly to manchester ,so that the manufacturer can renew his supply insmall por- tions according tohis needs .but inthat case ,the cotton remains inso much larger quantities as acommodity- supply inthe hands ofthe merchants inliverpool .itis therefore merely aquestion ofachange ofform ,and lalor and others have overlooked this .and from the standpoint ofsocial capital ,the same quantity ofproducts still remains inthe form ofasupply .the quantity ofthe supply re- quired for,say,awhole nation during the period ofone year decreases tothe extent that the means oftransporta- tion are developed .ifalarge number ofsailing vessels trade between america and england ,the opportunities of england for the renewal ofits supply of cotton are in- creased and the quantity ofthe cotton supply tobeheld in storage on an average decreases .the same effect ispro- duced bythe development ofthe world -market and thus of the multiplication ofthe sources ofsupply ofthe same arti- cles .various quantities ofthis supply are carried tothe market from different countries and atdifferent intervals . the commodity -supply inparticular . we have already seen that the product assumes the gen- eral form ofcommodities onthe basis ofcapitalist produc- tion ,and tothe extent that the scale and scope ofthis pro-",
        "the expenses ofcirculation .163 duction increase ,this character becomes prevalent .even if production retains the same scale ,there will still be afar greater proportion ofthe product inthe form ofcommodi- ties,compared toother modes ofproduction .and all com- modities ,and therefore all commodity -capital ,which isbut another expression for commodities inthe form ofcapital- value ,constitute anelement ofthe commodity -supply ,unless they pass immediately from the sphere ofproduction into productive or individual consumption ,instead ofremain- ing on the market inthe interval between production and consumption .ifthe scale ofproduction remains the same , the commodity -supply ,that istosay,the individualization and fixation ofthe commodity -form ofthe product ,grows therefore with the development ofcapitalist production .we have seen ,furthermore ,that this ismerely achange of form onthe part ofthe supply ,that istosay the supply in the form ofcommodities increases onone side ,while onthe other the supply inthe form ofdirect means ofproduction for consumption decreases .itismerely aquestion ofa changed form ofthe social supply .the fact that itis not only the relative size ofthe commodity -supply com- pared tothe aggregate social product which increases ,but also its absolute size ,isdue tothe growth ofthe aggregate product with the advance ofcapitalist production . with the development ofcapitalist production ,the scale ofproduction becomes less and less dependent on the im- mediate demand for the product and falls more and more under the determining influence ofthe amount ofcapital available inthe hands ofthe individual capitalist ,ofthe instinct for the creation ofmore value inherent incapital , ofthe need for the continuity and expansion ofitsprocesses ofproduction .this necessarily increases the mass ofprod ucts required ineach branch ofproduction inthe shape of commodities .the amount ofcapital fixed for alonger or shorter period inthe form ofcommodity -capital grows pro- portionately .in short ,the commodity -supply increases . finally ,the majority ofthe members ofhuman society are transformed into wage workers ,into people who live from hand tomouth ,who receive their wages weekly and spend them daily ,who therefore must find asupply ofthe",
        "164capital . necessities oflife ready athand .although the individual elements ofthis supply may beincontinuous flow ,apart of them must always suffer delay inorder that the supply may be ever renewed . all these characteristics are due tothe form ofcapitalist production and tothe metamorphoses incidental to it, which the product must undergo inthe process ofcircula- tion . whatever may bethe social form ofthe supply ofprod- ucts ,itspreservation requires an outlay for buildings ,stor- age facilities ,etc. ,which protect the product ;furthermore for means ofproduction and labor ,more orless ofwhich must beexpended ,according tothe nature ofthe product ,in order topreserve itagainst injurious influences .the more the supply issocially concentrated ,the smaller are the rela- tive expenses .these expenses always consume apart of the social labor ,either inamaterialized orinasubjective form ;they require anoutlay ofcapital which does not enter into the productive process itself and thus diminish the product .they constitute the cost ofpreserving the social wealth ,and are,therefore ,necessary expenses ,without re- gard tothe fact whether the existence ofthe social product inthe form ofacommodity -supply isdue merely tothe so- cial form of production ,tothe commodity -form and its metamorphoses ,orwhether we regard the commodity -sup- ply merely asaspecial form ofthe supply ofproducts ,a supply common toall societies ,though not always inthe form ofacommodity -supply ,which isaform ofthe sup- ply ofproducts belonging tothe process ofcirculation . the question isnow ,towhat extent these expenses enter into the value ofthe commodities . ifthe capitalist has converted the capital advanced by him for means ofproduction and labor -power into aprod- uct,into amass ofcommodities ready for sale ,and these commodities remain instock unsold ,then itisnot only the creation ofvalues by means ofhis capital which isinter- rupted .the expenses required for the conservation and storage ofthis supply inbuildings ,etc. ,and for additional labor ,signify apositive loss for him .the final buyer would laugh inhis face ,ifhe were tosay tohim :\"my articles",
        "the expenses ofcirculation .165 99were unsalable for six months ,and their preservation dur- ing that period did not only make soand somuch ofmy capital unproductive ,but also cost me so much extra -ex- penses . \"so much the worse for you ,\"would the buyer say.\"here isanother seller ,whose articles were completed the day before yesterday .your articles are old and proba- bly more orless injured bythe ravages oftime .therefore you will have tosell cheaper than your rival .\" itdoes not alter the life-processes ofacommodity ,wheth- eritsproducer isadirect producer oracapitalist producer , who ismerely arepresentative ofthe actual producer .the product must be converted into money .the expenses caused by the fixation ofthe product inthe form ofcom- modities are apart ofthe individual adventures ofthe seller , and the buyer does not concern himself about them .the buyer does not pay for the time ofcirculation ofthe com- modities .even ifthe capitalist holds his goods back inten- tionally ,in times of an actual orexpected revolution of values ,itdepends onthe materialization ofthis revolution ofvalues ,on the correctness orincorrectness ofthe seller's speculation ,whether hewill recover his outlay ornot.in- asmuch ,therefore ,asthe formation ofasupply involves a delay inthe circulation ,the expenses caused thereby donot add anything tothe value ofthe commodities .on the other hand ,there cannot beany supply without asojourn ofthe commodities incirculation ,without the stay ofcapi- tal for alonger orshorter time inthe form ofacommod- ity;hence there cannot beany supply without adelay of the circulation .itisthe same with money ,which cannot circulate without the formation ofamoney -reserve .hence there cannot be any circulation ofcommodities without a supply ofcommodities .ifthis necessity does not confront the capitalist inc'-m',itwill dosoinm-c;not sofar ashis own commodity -capital isconcerned ,but that of other capitalists ,who produce means ofproduction for him and necessities oflife for his laborers . itappears that the nature ofthe case isnot altered , whether the formation ofasupply isvoluntary orinvolun- tary ,that istosay whether the producer accumulates asup-",
        "166 capital . ply intentionally orwhether his product forms asupply in consequence ofthe resistance offered toits sale by the con- ditions ofthe process ofcirculation .but itisuseful for the solution ofthis question toknow what distinguishes the voluntary from the involuntary formation ofasupply .the involuntary formation ofasupply arises from ,orisidentical with ,an interruption ofthe circulation ,which isindepend- ent ofthe knowledge ofthe producer ofcommodities and thwarts his will .and what characterizes the voluntary formation ofasupply ?the seller seeks toget rid ofhis commodity asmuch asever .he always offers his product asacommodity .ifhe were towithdraw itfrom sale ,it would beonly alatent ,not an effective organ ofthe com- modity -supply .the commodity assuch isstill asmuch asever abearer ofexchange -value and can become effective only by discarding the commodity -form and assuming the money -form . the commodity -supply must have acertain size ,inorder tosatisfy the demand during agiven period .the contin- ual extension ofthe circle ofbuyers isone ofthe factors in the calculation .for instance ,inorder tolast toacertain day ,apart ofthe commodities onthe market must retain the form ofcommodities while the remainder continue in flow and are converted into money .the part which isde- layed while the rest keep moving decreases continually ,to the extent that the size ofthe entire supply decreases ,until itisall sold .the delay ofthe commodities isthus calcu- lated on asanecessary requirement oftheir sale .the size ofthe supply must be larger than the average sale orthe average extent ofthe demand .otherwise the excess over this average could not be satisfied .at the same time ,the supply must be continually renewed ,because itiscontin- ually dissolved .this renewal cannot come from anywhere inthe last instance than from production ,from anew sup- ply ofcommodities .whether this comes from abroad or not ,does not alter the case .the renewal depends on the periods required bythe commodities for their reproduction . the commodity -supply must last during these periods .the fact that itdoes not remain inthe hands ofthe original producer ,but passes through various stores from the whole-",
        "the expenses ofcirculation .167 saler tothe retailer ,changes merely the aspect ,not the na- ture ofthe thing .from the point ofview ofsociety ,apart ofcapital still retains the form ofacommodity -supply ,so long asthe commodities have not been consumed produc- tively orindividually .the producer tries tokeep asupply corresponding tohis average demand ,inorder tobesome- what independent ofthe process ofproduction and toinsure for himself asteady circle ofcustomers .corresponding to the periods ofproduction ,terms ofsale are formed and the commodities form asupply for alonger orshorter time , until they can bereplaced by new commodities ofthe same kind .the continuity and regularity ofthe process ofcir- culation ,and therefore ofthe process ofreproduction ,which includes the circulation ,issafeguarded only by the forma- tion ofasupply . itmust beremembered that c-m'may have been trans- acted for the producer ofc,although cmay still beonthe market .ifthe producer were tokeep his own commodities until they are sold tothe last consumer ,he would have to invest two capitals ,one asaproducer and one asamerchant . for the commodity itself ,whether we look upon itasanin- dividual commodity orasapart ofsocial capital ,itisim- material whether the expenses ofthe formation ofasupply fall onthe shoulders ofitsproducer oron those ofaseries ofmerchants from atoz. in sofar asthe commodity -supply isnothing but the commodity -form ofthe supply which would exist atagiven scale ofsocial production either asaproductive supply or asasupply ofmeans ofconsumption ,ifitdid not have the form ofacommodity -supply ,the expenses required for its conservation and formation ,that istosay the expenses for materialized and subjective labor ,are merely converted ex- penses for maintaining either the social fund for production orthe social fund for consumption .the increase ofthe value ofcommodities caused by them distributes these expenses simply pro rata tothe different commodities ,since the cost isdifferent for different kinds ofcommodities .and the expenses for the formation ofthe supply are asmuch as ever deductions from the social wealth ,although they are one ofitsrequirements .",
        "166 capital . ply intentionally orwhether his product forms asupply in consequence ofthe resistance offered toits sale by the con- ditions ofthe process ofcirculation .but itisuseful for the solution ofthis question toknow what distinguishes the voluntary from the involuntary formation ofasupply .the involuntary formation ofasupply arises from ,orisidentical with ,an interruption ofthe circulation ,which isindepend- ent ofthe knowledge ofthe producer ofcommodities and thwarts his will .and what characterizes the voluntary formation ofasupply ?the seller seeks toget rid ofhis commodity asmuch asever .he always offers his product asacommodity .ifhe were towithdraw itfrom sale ,it would be only alatent ,not an effective organ ofthe com- modity -supply .the commodity assuch isstill asmuch asever abearer ofexchange -value and can become effective only by discarding the commodity -form and assuming the money -form . the commodity -supply must have acertain size ,inorder tosatisfy the demand during agiven period .the contin- ual extension ofthe circle ofbuyers isone ofthe factors in the calculation .for instance ,inorder tolast toacertain day ,apart ofthe commodities on the market must retain the form ofcommodities while the remainder continue in flow and are converted into money .the part which isde- layed while the rest keep moving decreases continually ,to the extent that the size ofthe entire supply decreases ,until itisall sold .the delay ofthe commodities isthus calcu- lated on asanecessary requirement oftheir sale .the size ofthe supply must be larger than the average sale orthe average extent ofthe demand .otherwise the excess over this average could not besatisfied .at the same time ,the supply must be continually renewed ,because itiscontin- ually dissolved .this renewal cannot come from anywhere inthe last instance than from production ,from anew sup- ply ofcommodities .whether this comes from abroad or not,does not alter the case .the renewal depends on the periods required bythe commodities for their reproduction . the commodity -supply must last during these periods .the fact that itdoes not remain inthe hands ofthe original producer ,but passes through various stores from the whole-",
        "the expenses ofcirculation .167 saler tothe retailer ,changes merely the aspect ,not the na- ture ofthe thing .from the point ofview ofsociety ,apart ofcapital still retains the form ofacommodity -supply ,so long asthe commodities have not been consumed produc- tively orindividually .the producer tries tokeep asupply corresponding tohis average demand ,inorder tobesome- what independent ofthe process ofproduction and toinsure for himself asteady circle ofcustomers .corresponding to the periods ofproduction ,terms ofsale are formed and the commodities form asupply for alonger orshorter time , until they can bereplaced by new commodities ofthe same kind .the continuity and regularity ofthe process ofcir- culation ,and therefore ofthe process ofreproduction ,which includes the circulation ,issafeguarded only by the forma- tion ofasupply . itmust beremembered that c'-m'may have been trans- acted for the producer ofc,although cmay still beonthe market .ifthe producer were tokeep his own commodities until they are sold tothe last consumer ,he would have to invest two capitals ,one asaproducer and one asamerchant . for the commodity itself ,whether we look upon itasan in- dividual commodity orasapart ofsocial capital ,itisim- material whether the expenses ofthe formation ofasupply fall on the shoulders ofitsproducer oron those ofaseries ofmerchants from ato z. in sofar asthe commodity -supply isnothing but the commodity -form ofthe supply which would exist atagiven scale ofsocial production either asaproductive supply or asasupply ofmeans ofconsumption ,ifitdid not have the form ofacommodity -supply ,the expenses required for its conservation and formation ,that istosay the expenses for materialized and subjective labor ,are merely converted ex- penses for maintaining either the social fund for production orthe social fund for consumption .the increase ofthe value ofcommodities caused by them distributes these expenses simply pro rata tothe different commodities ,since the cost isdifferent for different kinds of commodities .and the expenses for the formation ofthe supply are asmuch as ever deductions from the social wealth ,although they are one ofitsrequirements .",
        "168capital . the circulation ofcommodities isnormal only tothe ex- tent that the formation ofacommodity -supply isitsprem- iseand necessarily arises bymeans ofit,only insofar asthis apparent stagnation isapart ofthe rotation itself ,just as itisinthe case ofthe formation ofamoney -reserve .but assoon asthe commodities resting inthe reservoirs ofcir- culation refuse togive space tothe succeeding wave ofso that the reservoirs are overstocked ,the commodity -sup- ply expands just asthe hoards do,ifthe circulation of money isclogged .itdoes not make any difference ,whether this stop occurs inthe magazines ofthe industrial capital- ist orinthe warehouses ofthe merchant .the supply is inthat case not the premise ofthe uninterrupted sale ,but the result ofthe impossibility ofselling the goods .the expenses remain the same ,but since they now arise entirely out ofthe form ,that istosay,out ofthe necessity ofselling the commodities ,and out ofthe obstacles tothis metamor- phosis into money ,they do not enter into the values ofthe commodities ,but cause deductions ,losses ,from the value toberealized .since the normal and abnormal form ofthe supply cannot be distinguished externally ,and both of them are clogging the circulation ,these phenomena may beconfounded and may deceive the agent inproduction so much easier asthe process ofcirculation ofthe capital of the producer may continue smoothly ,while that ofthe com- modities he has sold tomerchants may bearrested .ifthe size ofproduction and consumption increase ,other condi- tions remaining the same ,then the size ofthe commodity- supply increases likewise .itisrenewed and absorbed just asfast ,but itssize isgreater .hence the growing size ofthe commodity -supply caused by adelay inthe circulation may bemistaken for asymptom ofthe expansion ofthe process of reproduction ,especially when the development ofthe credit -system makes itpossible tomystify the real nature of the movement . the expenses ofthe formation ofthe supply consist (1) ofquantitative losses ofthe mass ofthe product (for in- stance ,inthe case ofasupply offlour );(2)inaspoiling ofthe quality ;(3)inthe materialized and individual labor required for the conservation ofthe supply .",
        "the expenses ofcirculation .169 iii.expenses oftransportation . itisnot necessary toenter atthis place into allthe details ofthe expenses ofcirculation ,such aspacking ,sorting ,etc. the general law isthat all expenses ofcirculation ,which arise only from changes ofform ,do not add any value to the commodities .they are merely expenses required for the realization ofvalue ,orfor itsconversion from one form into another .the capital invested inthose expenses (in- cluding the labor employed by it)belongs tothe dead ex- penses ofcapitalist production .they must bemade up out ofthe surplus -product and are,from the point ofview of the entire capitalist class ,adeduction from the surplus- value orsurplus product ,just asthe labor required for the purchase ofthe necessities oflife islost time for the labor- er.but the expenses oftransportation play atoo prominent role topass them by without afew short remarks . within the rotation ofcapital and the metamorphoses of commodities which are apart ofthat rotation ,the mutation- processes ofsocial labor take place .these mutation -processes may require achange oflocation on the part ofthe prod- ucts ,their transportation from one place toanother .still , acirculation ofcommodities may take place without their change from place toplace ,and atransportation ofprod- ucts without acirculation of commodities ,or even with- out adirect exchange ofproducts .ahouse which issold by atobdoes not wander from one place toanother ,al- though itcirculates asacommodity .movable commodity- values ,such ascotton oriron ore,remain inthe same ware- house atatime when they are passing through dozens of circulation processes ,when they are bought and resold by speculators.17 that which really changes its place here isthe title ofownership ,not the thing itself .on the other hand ,transportation played aprominent role inthe land of the incas ,although the social product did not circulate either asacommodity orby means ofexchange . even though the transportation industry under capital- ist production appears asacause of expenses of circula- 17storch calls this circulation factice .",
        "170capital . tion ,this special form does not alter the nature ofthe prob- lem . quantities ofproducts are not increased by transporta- tion ,neither isthe eventual alteration oftheir natural quali- ties ,with afew exceptions ,the result ofpremeditated action , but an inevitable evil .but the use-value ofthings has no existence except in consumption ,and this may necessitate achange ofplace onthe part ofthe product ,inother words , itmay require the additional process ofproduction ofthe transportation industry .the productive capital invested in this industry adds value tothe transported products ,partly by transferring value from the means of transportation , partly by adding value through the labor -power used in- transportation .this last -named addition ofvalue consists , asitdoes inall capitalist production ,ofareproduction of wages and ofsurplus -value . within each process ofproduction ,the change ofplace ofthe object oflabor and the required instruments oflabor and labor -power -such ascotton which passes from the card- ing tothe spinning room ,orcoal which ishoisted from the shaft tothe surface -play agreat role .the transition of the finished product ,inthe role ofafinished commodity , from one independent place ofproduction to another in adifferent location shows the same phenomenon on alarger scale .the transport ofthe products from one factory to another isfinally succeeded by the passage ofthe finished products from the sphere ofproduction tothat ofconsump- tion .the product isnot ready for consumption until ithas completed these movements . we have shown previously that ageneral law ofthe production of commodities decrees :the productivity of labor and its faculty ofcreating value stand inopposition toone another .this istrue ofthe transportation industry aswell asofany other .the smaller the amount ofmate- rialized and subjective labor required for the transportation ofthe commodities over acertain distance ,the greater is the productivity oflabor ,and vice versa.18 18ricardo quotes say,who considers itone ofthe blessings ofcom- merce that itincreases the price ,orthe value ,ofthe products bytrans- portation .\"commerce ,\"writes say,\"enables ustoobtain acommodity",
        "the expenses ofcirculation .171 the absolute magnitude ofthe value which the trans- portation ofthe commodities adds tothem issmaller in proportion asthe productivity ofthe transportation industry increases ,and vice versa ,and directly proportional tothe distance traveled ,other conditions remaining the same . the relative magnitude ofthe value added tothe prices ofcommodities by the cost oftransportation ,other condi- tions remaining the same ,isdirectly proportional totheir volume and weight .but there are many modifying cir- cumstances .transportation requires ,for instance ,more or less provision for protection against accidents ,and therefore more orless expenditure oflabor and instruments oflabor , according tothe relative fragility ,perishable nature ,explo- siveness ofthe articles .inthis department ,the railroad mag- nates show agreater talent for inventing fantastic species than botanists and zoologists .the classification ofthe arti- cles onenglish railroads fills volumes and rests ingeneral on the tendency oftransforming the many -sided natural quali- ties ofcommodities into somany difficulties oftransportation and inevitable excuses for exploitation .\"glass ,which was formerly valued atthe rate of11pounds sterling per crate , isnow valued atonly 2pounds sterling inconsequence of industrial improvements and the abolition ofthe glass -tax, but the railway rates are ashigh asever and exceed the cost oftransportation by water .formerly glass and glass ware for lead work was carried for 10shillings per ton with- in aradius of50 miles ofbirmingham .now the rates have been raised tothrice that figure onthe pretext ofthe risk involved by the fragility ofthe article .but ifany- thing isbroken ,the railway management does not pay for atitsoriginal place ofproduction and totransport ittoanother place for consumption ;itenables us,therefore ,toincrease the value ofcom- modities bytheentire difference between their price atthe first and that atthe second place .\"ricardo remarks with reference tothis :\"true , but how istheadditional value given toit?byadding tothe cost ofpro- duction ,first ,the expenses ofconveyance ,secondly ,the profit onthe advances ofcapital made bythe merchant .the commodity isonly more valuable ,forthe same reason that every other commodity may become more valuable ,because more labor isexpended onitsproduction and conveyance before itispurchased bythe consumer .this must not be mentioned asone ofthe advantages ofcommerce .\"(ricardo ,principles ofpolitical economy ,3rd ed.,london ,1821 ,pp.309 310. )",
        "172capital . it.\" the fact that the relative magnitude ofthe value added bythe cost oftransportation tothe articles isinversely pro- portional totheir values furnishes aspecial excuse for the railroads totax the articles in direct proportion totheir values .the complaints ofthe industrials and merchants on this score are found on every page ofthe testimony of witnesses given before the royal commission on railways . the capitalist mode ofproduction reduces the cost of transportation for the individual commodities by the de- velopment ofthe means oftransportation and communica- tion ,bytheir concentration ,the scale oftheir traffic ,etc. it increases that part ofthe materialized and subjective social labor ,which isexpended inthe transportation ofcommodi- ties ,first by converting the great majority ofall products into commodities ,secondly ,by substituting distant for local markets . the circulation ,that istosay the actual perambulation ofthe commodities through space ,iscarried on inthe form of transportation .the transportation industry forms on one hand an independent branch ofproduction ,and thus aspecial sphere ofinvestment ofproductive capital .on the other hand ,itisdistinguished from other spheres of production by the fact that itrepresents acontinuation of aprocess ofproduction within the process ofcirculation and for its benefit . 10royal commission ofrailways ,p.31,no. 630.",
        "the period and number ofturn -overs .178 part ii the turn -over ofcapital . chapter vii . the period and number ofturn -overs . we have seen that the entire time ofrotation ofagiven capital isequal tothe sum ofitstime ofcirculation plus its time ofproduction .itisthe period oftime from the mo- ment ofthe advance ofcapital -value inadefinite form to the return ofthe rotating capital -value inthe same form . the compelling motive ofcapitalist production isalways the creation ofvalue by means ofthe advanced value ,no matter whether this value isadvanced in its independent money -form ,orincommodities ,inwhich case its value is only ideally independent inthe price ofthe advanced com- modities .in both cases this capital -value passes through various forms ofexistence during itsrotation .its identity with itself isconfirmed by the books ofthe capitalists ,or inthe ideal form ofcalculating money . no matter whether we consider the formula m...m'orthe formula p...p,both forms imply (1)that the advanced value performs the function ofcapital -value and has created more value ;(2)that ithas returned tothe form inwhich itbegan its rotation ,having completed its cycle .the creation of more value by means ofthe advanced value mand the re- turn of capital tothis money -form isplainly visible in m...m'.but the same takes place inthe second formula . for the starting point ofpisthe existence ofthe elements ofproduction ,ofcommodities having agiven value .the formula includes the creation ofvalue by means ofthe ad-",
        "174capital . vanced value (c'and m')and the return tothe original form ,for inthe second pthe advanced value has again the form ofthe elements ofproduction inwhich itwas originally advanced . we have seen previously :\"ifproduction becapitalistic inform ,so,too,will bereproduction .just asinthe former the labor -process figures but asameans towards the self- expansion ofcapital ,sointhe latter itfigures but asameans ofreproducing ascapital ,i.e.,asself -expanding value ,the value advanced .\"(vol .i,chap .xxiii ,p.620. ) the three formul (i)m...m',(ii)p...p,and (iii) c'...c',present the following distinctions :in formula ii, p...p,the renewal ofthe process bythe process ofreproduc- tion isexpressed asareality ,while itisonly implied asa probability informula i. but both ofthese formul dif- fer from iii by the fact that inthem the advanced capital- value ,either inthe form ofmoney orofmaterial elements ofproduction ,isthe starting and returning point . in m...m',the return tom'means mplus m.ifthe process is renewed on the same scale ,misagain the starting point and mdoes not enter into it,but shows merely that mper- formed the function ofcapital and created surplus -value m, which itthrew off.in the formula p...p,capital -value p advanced inthe form ofmeans ofproduction islikewise the starting point .this form includes the creation ofmore value .ifsimple reproduction takes place ,the same capital- istrenews the same process inthe same form p. ifaccumu- lation takes place ,then p'(equal inmagnitude ofvalue tom'and c')reopens the cycle asan expanded capital- value .but itbegins with the advanced capital -value in itsoriginal form ,although itisofgreater value than before . inform iii,onthe other hand ,capital -value does not begin the process asan advance ,but asan expanded value ,asthe aggregate wealth existing inthe form ofcommodities ,of which the advanced value isbut apart .this last form is important for the third part ofthis volume ,inwhich the movement ofthe individual capitals isdiscussed inconnec- tion with the movements ofthe aggregate social capital .but itisnot available for the discussion ofthe turn -over ofcapi-",
        "the period and number ofturn -overs .175 tal,which always begins with the advance ofcapital -value inthe forms ofmoney orcommodities ,and which always requires the return ofthe rotating capital -value tothe form inwhich ithad been advanced .ofthese cycles iand ii, the former isserviceable inthe study ofthe influence of the turn -over on the formation ofsurplus -value ,the latter inthe study ofitsinfluence onthe formation ofthe prod- uct. economists have not distinguished the different relations ofthe turn -over ofcapital toitscycles any more than they have distinguished between these cycles .they generally con- sider the formula m...m,because itdominates the individual capitalist and serves for abasis ofhis calculations ,even if money isthe starting point ofthis cycle only inthe form ofcalculating money .others start out from the outlay of capital inthe form ofelements ofproduction and follow the cycle tothe point ofreturn ,without alluding tothe form ofthe returns ,bethey commodities ormoney .for instance ,\"the economic cycle ,....the whole course of production ,from the time that outlays are made till returns are received .in agriculture ,seed time isits commence- ment ,and harvesting itsending .\"s.p.newman ,elements ofpolitical economy ,andover and new york ,p.81. others begin with c',the third form .says th.chalmers ,inhis work on \"political economy ,\"2nd ed.,london ,1832 , p.84and following ,insubstance :the world ofthe pro- ductive traffic may beregarded asrotating inacycle ,which wewill call the economic cycle .each cycle iscompleted , whenever the business ,after passing through its successive transactions ,returns toits starting point .the beginning may bemade atthe point where the capitalist gets his re- ceipts ,which return his capital .from this point ,the capi- talist proceeds once more tohire his laborers and parcel out tothem their subsistence ,orrather the means topurchase itwithwages .they manufacture for him the articles which are his specialty .and the capitalist then takes his articles tothe market and brings the cycle ofthis one series of transactions toaclose by selling and receiving inthe price ofhis commodities areturn for his entire investment of capital .",
        "176capital . as soon asthe entire capital -value invested by some in- dividual capitalist in any one branch of production has completed the cycle ofits movements ,itfinds itself once more inthe form inwhich itstarted and isready torepeat the same process .itmust repeat this process ,ifvalue isto perpetuate itself ascapital -value and create more value .the individual cycle isbut afragment inthe life ofcapital ,it isaperiod which iscontinually repeated .at the end of the period m...m'capital has once more the form ofmoney- capital ,which passes anew through that series ofmetamor- phoses in which its process ofreproduction ,orself -expan- sion ,isincluded .at the end ofthe period p...p,capital has resumed the form ofelements ofproduction ,which are the requirement for arenewal ofitscycle .the rotation of capital ,considered asaperiodical process ,not asan indi- vidual event ,constitutes itsturn -over .the duration ofthis turn -over isdetermined by the sum ofits time ofproduc- tion plus itstime ofcirculation .this sum constitutes the time ofturn -over .itmeasures the passing oftime while the entire capital -value goes through the period ofits cycle until itreaches the next one .itcounts the periods inthe life ofcapital ,or,the time ofthe renewal ,repetition ,ofthe process ofself -expansion ,which isthe process ofproduction , ofthe same capital -value . apart from the individual adventures which may ac- celerate orretard the time ofturn -over ofindividual capi- tals ,this time isdifferent according tothe different spheres ofinvestment ofcapitals . just asthe working day isthe natural unit for the func- tion oflabor -power ,sothe year isthe natural unit for the periods ofturn -over ofrotating capital .the natural basis ofthis unit isfound inthe fact that the most important crops ofthe temperate zone ,which isthe mother country of capitalist production ,are annual products . ifwe designate the year asthe unit ofthe time ofturn- over by t,the time ofturn -over ofagiven capital by t, and the number ofitsturn -overs by n,then n= if, for instance ,the time ofturn -over tis3months ,then n isequal to12,or4;inother words ,capital isturned over",
        "the period and number ofturn -overs . 177 =four times per year .iftisequal to18 months ,then n= ,capital completes only two -thirds ofitsturn -over in one year .ifitstime ofturn -over isseveral years ,itiscom- puted inmultiples ofone year . from the point ofview ofthe capitalist ,the time ofturn- over isthe time for which he must advance his capital in order tocreate value with itand have itreturned initsorig- inal form . before we can study the influence ofthe turn -over onthe processes of production and self -expansion ,we must take alook attwo new forms which accrue tocapital from the process of circulation and influence the form ofits turn- over .",
        "178capital . chapter viii . fixed capital and circulating capital . i. distinctions ofform . we have seen invol.i,chap .viii ,that aportion ofthe constant capital retains that form ofthe use-value ,inwhich itentered into the process ofproduction and does not share inthe transfer tothe products toward the creation ofwhich itcontributes .in other words ,itperforms for alonger or shorter period ,inthe ever repeated labor process ,the same function .this applies ,for instance ,tobuildings ,machin- ery,etc. ,inshort toall things which we comprise under the name ofinstruments oflabor .this part ofconstant capital yields value tothe product inproportion asitloses itsown exchange -value with the dwindling ofits use-value . this transfer ofvalue from an instrument ofproduction to the product which ithelps tocreate isdetermined by acal culation ofaverages .itismeasured by the average dura- tion ofits function ,from the moment that the instrument oflabor transfers its parts tothe product tothe moment that itiscompletely spent and must be reproduced ,orre- placed by anew specimen ofthe same kind . this ,then ,isthe peculiarity ofthis part of constant capital ofthe instruments oflabor : acertain part ofcapital has been advanced inthe form ofconstant capital ,ofinstruments oflabor ,which now per- form their function inthe labor -process solong astheir own use-value lasts ,which they bring with them into this process .the finished product ,with the elements itabsorbed from the instruments ofproduction ,ispushed out ofthe process ofproduction and transferred asacommodity tothe sphere ofcirculation .but the instruments oflabor never leave the sphere ofproduction ,once that they have entered",
        "fixed capital and circulating capital .179 it.their function holds them there .acertain portion of the advanced capital -value isfixed inthis form bythe func- tion ofthe instruments oflabor inthe process ofproduc- ion .in the performance ofthis function ,and thus by the wear and tear incidental toit,apart ofthe value of the instruments oflabor istransferred tothe product ,while nother remains fixed inthe instruments oflabor and thus inthe process ofproduction .the value thus fixed decreases constantly ,until the instrument oflabor isworn out,its value having been distributed during ashorter orlonger period ,over amass ofproducts which emanated from a series ofcurrently repeated labor processes .but solong as an instrument oflabor isstill effective and has not been replaced by anew specimen ofthe same kind ,acertain amount ofconstant capital -value remains fixed init,while another part ofthe value originally fixed initistrans- ferred tothe product and circulates asacomponent part of the commodity -supply .the longer aninstrument lasts ,the slower itwears out ,the longer will itsconstant capital -value remain fixed inthis form ofuse-value .but whatever may beitsdurability ,the proportion inwhich ityields itsvalue isalways inverse toitsentire time ofservice .ifoftwo ma- chines ofequal value ,one wears out infive years and the other inten,then the first yields twice asmuch value in the same time asthe second . this value fixed inthe instruments oflabor circulates as well asany other .we have seen that all capital -value is constantly incirculation ,and that inthis sense all capital is circulating capital .but the circulation ofthe portion of capital which we are now studying ispeculiar .inthe first place ,itdoes not circulate initsuse-form ,but itismerely its exchange -value which circulates ,and this takes place gradually and piecemeal ,inproportion asitistransferred tothe product which circulates asacommodity .during the entire period ofitsservice ,aportion ofitsvalue always re- mains fixed in it,independent ofthe commodities which ithelps toproduce .itisthis peculiarity which gives tothis portion ofcapital the character offixed capital . on the",
        "180capital . other hand ,all other substantial parts ofthe capital ad- vanced inthe process ofproduction form the circulating , orfluid ,capital . some portions ofthe means ofproduction do not yield their substance tothe product .such are auxiliary substances , which are consumed bythe instruments oflabor themselves inthe performance oftheir function ,such ascoal consumed by asteam engine ;orsubstances which merely assist inthe operation ,such asgas for lighting ,etc. itisonly their value which forms apart ofthe value ofproducts .in cir- culating its own value ,the product circulates theirs .to this extent they share the fate ofthe fixed capital .but they are entirely consumed in every labor -process which they enter ,and must therefore be replaced by new speci- mens oftheir kind inevery new labor -process .they donot preserve their own use-form while performing their func- tion .hence no portion ofcapital -value remains fixed in their natural use-value during their service .the fact that this portion ofthe auxiliary substances does not pass bodily into the product ,but yields only itsvalue toswell thereby the value ofthe product ,although the function ofthese substances isconfined tothe sphere ofproduction ,has mis- led some economists ,for instance ramsay -who also con- founded fixed capital with constant capital -toclass them among the fixed capital . that part ofthe means ofproduction which yields its substance tothe product ,inother words ,the raw materials , may eventually assume forms which enable ittopass into individual consumption .the instruments oflabor ,prop- erly socalled ,that istosay,the material bearers ofthe fixed capital ,can beconsumed only productively and cannot pass into individual consumption ,because their substance does not enter into the product ,into the use-value ,which they help tocreate ,but they rather retain their independent form until they are completely worn out.the means oftrans- portation are an exception tothis rule .the useful effect which they produce bytheir productive function during their stay inthe sphere ofproduction ,that istosay ,the change oflocation ,passes simultaneously into the individual con-",
        "fixed capital and circulating capital .181 sumption ,for instance into that ofatraveler .he pays for its use in the same way in which he pays for the use of other articles ofconsumption .we have seen that some- times the raw material and auxiliary substances pervade one another ,for instance inthe manufacture ofchemicals .in the same way ,instruments oflabor ,raw material and aux- iliary substances may pervade one another .in agriculture , for instance ,the substances employed for the improvement ofthe soil pass into the plants and help toform the product . on the other hand ,their influence isdistributed over a lengthy period ,say four orfive years .aportion ofthem , therefore ,pass into the product and enhance itsvalue ,while another portion remains fixed in its old use-form and re- tains its value .itpersists asan instrument ofproduction and retains the form offixed capital .an oxisfixed capi- tal,solong asitisabeast oftoil .ifitiseaten ,itdoes not perform the functions ofan instrument ofproduction ,and is,therefore ,not fixed capital . that which determines whether acertain portion ofthe capital -value invested inmeans ofproduction isfixed capi- tal ornot isexclusively the peculiar manner inwhich this value circulates .this peculiar manner ofcirculation arises from the peculiar manner inwhich the means ofproduc- tion yield their value tothe product ,that istosay the man- ner in which the means ofproduction participate inthe creation ofvalues inthe process ofproduction .this ,again , arises from the special nature ofthe function ofthese means ofproduction inthe labor -process . we know that the same use-value ,which comes asaprod- uct from one labor -process ,passes asameans ofproduction into another .itisonly the function of aproduct asa means ofproduction inthe labor -process which stamps it asfixed capital .but tothe extent that itarises itself out of such aprocess ,itisnot fixed capital .for instance ,ama- chine ,asaproduct ,asacommodity ofthe machine manu- facturer ,belongs tohis commodity -capital .itdoes not be- come fixed capital ,until itisemployed productively inthe hands ofits purchaser . all other circumstances being equal ,the degree offixity",
        "182capital . increases with the durability ofthe means ofproduction . this durability determines the magnitude ofthe difference be- tween the capital -value fixed inthe instruments oflabor and between that part ofitsvalue which isyielded tothe prod- uct in successive labor -processes .the slower this value is yielded and some ofitisgiven up inevery repetition of the labor -process -the larger will bethe fixed capital ,and the greater will bethe difference between the capital em- ployed and the capital consumed inthe process ofproduc- tion .assoon asthis difference has disappeared ,the instru- ment oflabor has ceased tolive and lost ,with itsuse-value , also its exchange -value .ithas ceased tobethe bearer of value .since aninstrument oflabor ,the same asevery other material bearer ofconstant capital ,yields value only tothe extent that its use-value isconverted into exchange -value , itisevident that the period inwhich its constant capital- value remains fixed will beso much longer ,the longer it lasts inthe process ofproduction ,the more slowly its use- value islost . ifany one means ofproduction ,which isnot an instru- ment oflabor ,strictly speaking ,such asauxiliary substances , raw material ,partly finished articles ,etc. ,yields and circu- lates itsvalue inthe same way asthe instruments ofproduc- tion ,then itislikewise the material bearer ,the form of existence ,offixed capital .this isthe case with the above- mentioned improvements ofthe soil ,which add chemical substances tothe soil ,the influence ofwhich isdistributed over several periods ofproduction ,oryears .in this case , aportion ofthe value continues toexist independently ofthe product ,itpersists inthe form offixed capital ,while an- other portion has been transferred tothe product and cir- culates with it.and in the latter case ,itisnot alone a portion ofthe value ofthe fixed capital which istransferred tothe product ,but also aportion ofthe use-value ,the sub- stance inwhich this portion ofvalue isembodied . apart from the fundamental mistake -the confounding ofthe categories \"fixed capital and circulating capital \"with the categories \"constant capital and variable capital \"-the confusion ofthe economists inthe matter ofdefinitions is based onthe following points :",
        "fixed capital and circulating capital .183 they make of certain qualities ,embodied inthe sub- stances ofthe instruments oflabor ,direct qualities offixed capital ,for instance ,the physical immobility of ahouse . itisalways easy inthat case toprove that other instruments oflabor ,which are likewise fixed capital ,have an opposite quality ,for instance ,physical mobility ,such asavessel's . or,they confound the definite economic form ,which arises from the circulation ofvalue ,with some quality of the object itself ,asthough things which are not atall cap- ital inthemselves ,but rather become sounder given social conditions ,could be ofthemselves and intrinsically capital insome definite forms ,such asfixed orcirculating capital . we have seen involume ithat the means ofproduction in every labor -process ,regardless ofthe social conditions in which ittakes place ,are divided into instruments oflabor and objects oflabor .but both ofthem donot become capi- tal until the capitalist mode ofproduction isintroduced , and then they become \"productive capital ,\"asshown inthe preceding part .henceforth the distinction between instru- ments and objects oflabor ,based onthe nature ofthe labor- process ,isreflected inthe new distinction between fixed and circulating capital .itisthen only ,that athing which performs the function ofan instrument oflabor ,becomes fixed capital .ifitcan serve also inother capacities ,owing toits material composition ,itmay befixed capital ornot , according tothe functions itperforms .cattle asbeasts of toil are fixed capital ;ifthey are fattened ,they are raw ma- terial which finally enters into circulation ascommodities , in other words ,they are circulating ,not fixed capital . the mere fixation ofsome means ofproduction for acer- tain length oftime inrepeated labor -processes ,which are consecutively connected and form aperiod ofproduction , that istosay,the entire period required tocomplete acer- tain product ,demands advances from the capitalist for a longer orshorter term ,just asfixed capital does ,but this does not give tohis capital the character offixed capital . seeds ,for instance ,are not fixed capital ,but only raw ma- terial which isheld for about ayear inthe process ofpro- duction .all capital isheld inthe process ofproduction ,",
        "184capital . solong asitperforms the function ofproductive capital , and soare,therefore ,all elements of productive capital , whatever may be their substantial composition ,their func- tion and the mode ofcirculation oftheir value .whether the period offixation lasts along orashort time ,according tothe manner ofthe process ofproduction orthe effect aimed at,itdoes not determine the distinction between fixed and circulating capital.20 aportion ofthe instruments oflabor ,which determine the general conditions oflabor ,may be located inafixed place ,assoon asitenters onitsduties inthe process ofpro- duction orisprepared for them ,for instance ,machinery . or itisproduced from the outset inits locally fixed form , such asimprovements ofthe soil ,factory buildings ,kilns , canals ,railroads ,etc. the constant fixation ofthe instru- ment oflabor inthe process ofproduction isinthat case also due toits mode ofmaterial existence .on the other hand ,an instrument oflabor may continually be shifted bodily from place toplace ,may move about ,and neverthe- less becontinually inthe process ofproduction ,for instance , alocomotive ,aship ,beasts ofburden ,etc. neither does im- mobility inthe one case bestow the character offixed capi- tal onthe instrument oflabor ,nor does mobility inthe other case deprive itofthis character .but the fact that some instruments oflabor are attached tothe soil and remain sofixed ,assigns tothis portion offixed capital apeculiar role inthe economy ofnations .they cannot be sent abroad , cannot circulate ascommodities onthe market ofthe world . the titles tothis fixed capital may beexchanged ,itmay be bought and sold ,and tothis extent itmay circulate ideally . these titles of ownership may even circulate on foreign markets ,for instance inthe form ofstocks .but the change ofthe persons ofthe owners ofthis class offixed capital does not alter the relation ofthe immobile ,substantially fixed part ofnational wealth toits circulating part .\" the peculiar circulation offixed capital results inapecu- liar turn -over .that part ofvalue which islost by wear 20onaccount ofthe difficulty ofdetermining what constitutes the dis- tinguishing mark offixed and circulating capital ,mr. lorenz stein thinks that this distinction issuitable only forlighter study . 21end ofmanuscript iv,beginning ofmanuscript ii.",
        "fixed capital and circulating capital . 185 and tear circulates asapart ofthe value ofthe product . the product converts itself by means ofitscirculation from commodities into money ;hence the value ofthe instrument oflabor circulated by the product does the same ,and this value isprecipitated inthe form ofmoney bythe process of circulation inthe same proportion inwhich the instrument oflabor loses its value inthe process ofproduction .this value has then adouble existence .one part ofitremains attached tothe form ofits use-value inthe process ofpro- duction ,another isdetached from the instrument oflabor and becomes money .in the performance ofits function , that part ofthe value ofan instrument oflabor which ex- ists initsnatural form constantly decreases ,while that which istransformed into money constantly increases ,until atlast the instrument isexhausted and its entire value ,detached from its body ,has assumed the form ofmoney .here the peculiarity inthe turn -over ofthis element ofproductive capital becomes apparent .the transformation ofits value into money keeps pace with the like transformation ofthe commodity which isits bearer .but its reconversion from the form ofmoney into that ofause-value separates itself from the reconversion ofthe commodities into their other elements ofproduction and isdetermined by itsown period ofreproduction ,that istosay by the time during which the instrument oflabor has worn out and must bereplaced by another specimen ofthe same kind .if amachine lasts for,say ,aperiod often years ,then the period ofturn -over ofthe value originally advanced for itamounts toten years . itneed not bereplaced until this period has expired ,and performs itsfunction inthis natural form until then .its value circulates inthe meantime piecemeal asapart ofthe value ofthe commodities which itturns out successively , and itisthus gradually transformed into money ,until it has entirely assumed the form ofmoney atthe end often years and isreconverted from money into amachine ,in other words ,has completed its turn -over .until this time arrives ,itsvalue ismeanwhile accumulated inthe form ofa reserve fund of money .",
        "186capital . the other elements ofproductive capital consist partly of those elements ofconstant capital which exist inauxiliary and raw materials ,partly ofvariable capital which isin- vested inlabor -power . the analysis ofthe processes oflabor and self -expansion (vol.i,chap .vii )showed that these different elements be- have differently intheir role ofproducers ofcommodities and values .the value ofthat part ofconstant capital which consists ofauxiliary and raw materials -the same asofthat part which consists ofinstruments oflabor -reappears in the value ofthe product astransferred value ,while labor- power actually adds the equivalent ofitsvalue tothe prod- uct by means ofthe labor -process ,inother words ,actually reproduces itsvalue .furthermore ,apart ofthe auxiliary material ,fuel ,gas,etc. ,isconsumed inthe process oflabor without entering bodily into the product ,while another part ofthem enters bodily into the product and forms a part ofits substance .but all these differences are imma- terial sofar asthe mode ofcirculation and turn -over iscon- cerned .to the extent that auxiliary and raw materials are entirely consumed in the creation ofthe product ,they transfer their value entirely tothe product .hence this value isentirely circulated by the product ,transformed into money and from money back into the elements ofpro- duction ofthe commodity .its turn -over isnot interrupted , asthat offixed capital is,but itrather passes uninterrupted through the entire cycle ofitstransformations ,sothat these elements ofproduction are continually reproduced insub- stance . as for the variable part ofproductive capital ,which is invested in labor -power ,itbuys labor -power for adefinite period oftime .as soon asthe capitalist has bought labor- power and embodied itinhis process ofproduction ,itforms acomponent part of his capital ,definitely speaking ,the variable part ofhis capital .labor -power performs itsfunc- tion daily during aperiod oftime ,inwhich itnot only re- produces itsown daily value ,but also adds asurplus -value inexcess ofittothe product .we donot consider this sur- plus -value for the moment .after labor -power has been bought ,say,for aweek ,and performed its function ,its",
        "fixed capital and circulating capital .187 purchase must be continually renewed within the accus- tomed space oftime .the equivalent ofits value ,which labor -power embodies initsproduct during itsfunction and which istransformed into money by means ofthe circula- tion ofthe product ,must be continually reconverted from money into labor -power ,must continually pass through the complete cycle ofitstransformations ,inother words ,must beturned over ,lest the continuous rotation ofitsproduction beinterrupted . that part ofthe value ofcapital ,then ,which has been advanced for labor -power ,isentirely transferred tothe prod- uct-we still leave the question ofsurplus -value out ofcon- sideration -passes with itthrough the two metamorphoses belonging tothe circulation ,and always remains inthe process ofproduction by means ofthis continual reproduc- tion .whatever may bethe differences by which labor- power isdistinguished ,sofar asthe formation ofvalue is concerned ,from those parts of constant capital which do not represent fixed capital ,itnevertheless has this manner ofturn -over incommon with them ,ascompared tothe fixed capital .itisthese elements ofproductive capital -the val- ues invested in labor -power and inmeans of production which are not fixed capital -that by their common charac- teristics of turn -over constitute the circulating capital as opposed tothe fixed capital . we have already stated that the money which the capital- istpays tothe laborer for the use ofhis labor -power isbut the form ofthe general equivalent for the means ofsubsist- ence required by the laborer .to this extent ,the variable capital consists insubstance ofmeans ofexistence .but in this case ,where weare discussing the turn -over ,itisaques- tion ofform .the capitalist does not buy the means ofthe existence ofthe laborer ,but his labor -power .and that which forms the variable part ofcapital isnot the subsist- ence ofthe laborer ,but his active labor -power .the capital- ist consumes productively inthe labor -process the labor- power ofthe laborer ,not his means ofexistence .itisthe laborer himself who converts the money received for his labor -power into means ofsubsistence ,inorder toreproduce",
        "188capital . his labor -power ,tokeep alive ,just asthe capitalist converts apart ofthe surplus -value realized bythe sale ofcommodi- ties into means of existence for himself ,and yet would not thereby justify the statement ,that the purchaser ofhis commodities pays him with means ofexistence .even if the laborer receives apart ofhis wages inthe form ofmeans ofexistence ,this isstill asecond transaction in our days . he sells his labor -power atacertain price ,with the under- standing that heshall receive apart ofthis price inmeans ofproduction .this changes merely the form ofthe pay- ment ,but not the fact that that which heactually sells ishis labor -power .itisasecond transaction ,which does not take place between the parties intheir capacity aslaborer and capitalist ,but onthe part ofthe laborer asabuyer ofcom- modities and on that ofthe capitalist asaseller ofcommod- ities ;while inthe first transaction ,the laborer isaseller of acommodity (his labor -power )and the capitalist itsbuyer . itisthe same with the capitalist who replaces his commodi- tybyanother ,for instance when hetakes iron for amachine which he sells tosome iron -works .itis,therefore ,not the means ofsubsistence ofthe laborer which determine the character ofcirculating capital asopposed tofixed capi- tal.nor isithis labor -power .itisrather that part ofthe value ofproductive capital which isinvested inlabor -power that receives this character in common with some other parts ofconstant capital by means ofthe manner ofits turn -over . the value ofthe circulating capital -invested inlabor- power and means ofproduction -isadvanced only for the time during which the product isinprocess offormation , inharmony with the scale ofproduction dependent onthe volume ofthe fixed capital .this value enters entirely into the product ,istherefore fully returned by the sale ofthe product inthe circulation ,and can beadvanced anew .the labor -power and means ofproduction carrying the circulat- ing part ofcapital are withdrawn from the circulation tothe extent that isrequired for the formation and sale ofthe finished product ,but they must becontinually replaced and reproduced bypurchasing them back and reconverting them",
        "fixed capital and circulating capital .189 from money into elements ofproduction .they are with- drawn from the market insmaller quantities atatime than the elements offixed capital ,but they must be withdrawn somuch more frequently and the advance ofcapital invest- edinthem must berepeated inshorter periods .this con- tinual reproduction ispromoted by the continuous conver- sion ofthe product which circulates the entire value of these elements .and finally ,they pass through the entire cycle ofmetamorphoses ,not only sofar astheir value iscon- cerned ,but also their material substance .they are con- tinually reconverted from commodities into the elements ofproduction ofthe same commodities . together with its value ,labor -power always adds sur- plus -value tothe product ,and this surplus -value represents unpaid labor .this isjust ascontinuously circulated by the finished product and converted into money asits other elements ofvalue .but inthis instance ,where we are first concerned about the turn -over ofcapital -value ,and not of the surplus -value turned over atthe same time ,we dismiss the latter for the present . from the foregoing ,the following deductions are made : 1. the definite distinctions ofthe forms offixed and circulating capital arise merely from the different turn- overs ofthe capital -value employed inthe process ofproduc- tion ,the productive capital .this difference ofturn -over arises inits turn from the different manner in which the various elements ofproductive capital transfer their value tothe product ;they are not due tothe different participa- tion ofthese elements inthe production ofvalue ,nor totheir characteristic role inthe process ofself -expansion .the dif- ference inthe transfer ofvalue tothe product and there- fore the different manner ofcirculating this value by means ofthe product and renewing itinitsoriginal material form by means ofits metamorphoses -arises from the difference ofthe material forms inwhich the productive capital ex- ists,one portion ofitbeing entirely consumed during the creation ofthe individual product ,and another being used up gradually .hence itisonly the productive capital , which can be divided into fixed and circulating capital .",
        "190capital . but this distinction does not apply tothe other two modes ofexistence ofindustrial capital ,that istosay commodity- capital and money -capital ,nor does itexpress the difference ofthese two capitals ascompared toproductive capital .it applies only toproductive capital and itsinternal processes . no matter how much money -capital and commodity -capital may perform the functions of capital and circulate ,they cannot become circulating capital as distinguished from fixed capital ,until they have been transformed into cir- culating elements ofproductive capital .but because these two forms ofcapital dwell inthe circulation ,the economists since the time ofadam smith ,aswe shall presently see, have been misled into confounding them with the circulat- ing parts ofproductive capital under the head ofcirculating capital .money -capital and commodity -capital are indeed circulation capital asdistinguished from productive capi- tal,but they are not circulating capital asopposed tofixed capital . 2. the turn -over ofthe fixed part ofcapital ,and there- fore also itstime ofturn -over ,comprises several turn -overs ofthe circulating parts ofcapital .in the same time ,in which the fixed capital turns over once ,the circulating capi- tal turns over several times .one ofthe component parts of the value ofproductive capital acquires the definite form offixed capital only inthe case that the instrument ofpro- duction inwhich itisembodied isnot worn out inthe time required for the finishing ofthe product and its removal from the process ofproduction asacommodity .one part ofits value must remain tied up inthe form ofthe old use-value ,while another part iscirculated by the finished product ,and this circulation simultaneously carries with it the entire value ofthe circulating parts ofproductive capi- tal. 3. the value invested inthe fixed part ofproductive capital isadvanced inalump -sum for the entire period of employment ofthat part ofthe instrument oflabor which constitutes the fixed capital .hence this value isthrown into the circulation by the capitalist all atone time .but itiswithdrawn from the circulation only inportions cor-",
        "fixed capital and circulating capital . 191 responding tothe degree inwhich those values are realized which the fixed capital yields successively tothe commodi- ties.on the other hand ,the means ofproduction them- selves ,inwhich aportion ofthe productive capital becomes fixed ,are withdrawn from the circulation inone bulk and embodied inthe process ofcirculation for the entire period which they last .but they do not require reproduction , they need not be replaced by new specimens ofthe same kind ,until this time isgone by.they continue for ashorter orlonger period tocontribute tothe creation ofthe com- modities tobe thrown into circulation ,without withdraw- ing from circulation the elements oftheir own reproduction . hence they do not require from the capitalist arenewal ' ofhis advances during this period .finally ,the capital- value invested infixed capital passes through the cycle ofits transformations ,not initsbodily substance ,but only with itsideal value ,and even this itdoes only insuccessive por- tions and gradually .inother words ,aportion ofitsvalue iscontinually circulated and converted into money asapart ofthe value ofthe commodities ,without reconverting itself from money into its original bodily form .this reconver- sion ofmoney into the natural form ofan instrument of labor does not take place until atthe end ofits period of usefulness ,when the instrument has been completely worn out. 4. the elements ofcirculating capital are ascontinually engaged inthe process ofproduction -provided itistobe uninterrupted asthe elements offixed capital .but the elements of circulating capital held in this condition are continually reproduced intheir natural form (the instru- ments ofproduction by other specimens ofthe same kind , and labor -power by renewed purchases )while inthe case ofthe elements offixed capital ,neither the substance has tobe renewed during their employment ,nor the purchases . there are always raw and auxiliary materials inthe proc- ess of production ,but always new specimens ofthe same kind ,whenever the old elements have been consumed in the creation ofthe finished product .labor -power islike- wise always inthe process ofproduction ,but only by means",
        "192capital . ofever new purchases ,and frequently with changed indi- viduals .but the same identical buildings ,machinery ,etc. , continue their function during repeated turn -overs ofthe circulating capital inthe same repeated processes ofproduc- tion . ii.composition ,reproduction ,repair ,and accu- mulation offixed capital . inthe same investment ofcapital ,the individual elements offixed capital have adifferent life-time ,and therefore differ- ent periods ofturn -over .in arailroad ,for instance ,the rails ,ties ,earthworks ,station -buildings ,bridges ,tunnels , locomotives ,and carriages have different periods of wear and ofreproduction ,hence the capital advanced for them has different periods ofturn -over .for along term ofyears , the buildings ,platforms ,water tanks ,viaducts ,tunnels ,ex- cavations ,dams ,inshort everything called \"works ofart\"in english railroading ,donot require any reproduction .the things which wear out most are the rails ,ties ,and rolling stock . originally ,in the construction of modern railways ,it was the current opinion ,nursed bythe most prominent prac- tical engineers ,that arailroad would last acentury and that the wear and tear ofthe rails was soimperceptible ,that it could be ignored for all financial and practical purposes ; from 100 to150 years was supposed tobe the life-time of good rails .but itwas soon learned that the life -time ofa rail ,which naturally depends onthe velocity ofthe locomo- tives ,the weight and number oftrains ,the diameter ofthe rails themselves ,and onamultitude ofother minor circum- stances ,did not exceed an average of20 years .in some railway -stations ,which are centers ofgreat traffic ,the rails even wear out every year .about 1867 ,the introduction of steel rails began ,which cost about twice asmuch asiron rails but which onthe other hand last more than twice aslong . the life -time ofwooden ties was from 12 to15 years .it was also found ,that freight cars wear out faster than passen- ger cars .the life -time ofalocomotive was calculated in 1867 atabout 10to12years .",
        "fixed capital and circulating capital .193 the wear and tear isfirst ofall aresult ofusage .as a rule ,the rails wear out inproportion tothe number oftrains . (r.c.no. 17,645 .)22 ifthe speed was increased ,the wear and tear increased faster inproportion than the square ofthe velocity ,that istosay ,ifthe speed ofthe trains increased twofold ,the wear and tear increased more than fourfold . (r.c.no. 17,046 .) wear and tear are furthermore caused by the influence ofnatural forces .for instance ,the ties do not only suffer from actual wear ,but also from mold .the cost ofmainte- nance does not depend somuch onthe wear and tear inci- dental tothe railway traffic ,ason the quality ofthe wood , the iron ,the masonry ,which are exposed tothe weather . one single month ofhard winter will injure the track more than awhole year oftraffic . oftraffic .(r.p.williams ,on the main- tenance ofpermanent way .lecture given atthe institute ofcivil engineers ,autumn ,1867. ) finally ,here aseverywhere else in great industry ,the virtual wear and tear plays arole .after the lapse often years ,one can generally buy the same quantity ofcars and locomotives for 30,000 pounds sterling ,which would have cost 40,000 pounds sterling atthe beginning ofthat time . thus one must calculate on adepreciation of25per cent on the market price ofthis material ,even though no deprecia- tion ofits use-value has taken place .(lardner ,railway economy .) tubular bridges intheir present form will not berenewed , writes w. p. adams in his \"roads and rails ,\"london , 1862. ordinary repairs ofthem ,removal and replacing of single parts ,are not practicable .(there are now better forms for such bridges .)the instruments of labor are largely modified by the constant progress of industry . hence they are not replaced intheir original ,but intheir modified form .on the one hand ,the quantity ofthe fixed capital invested in acertain natural form and endowed with acertain average vitality inthat form constitutes one 22the quotations marked r.c.are from the work :royal commis- sion ofrailways .minutes ofevidence taken before the commissioners . presented toboth houses ofparliament ,london ,1867. the questions and answers are numbered ,asindicated above .",
        "194capital . reason for the gradual pace ofthe introduction of new machinery ,etc. ,and therefore an obstacle tothe rapid gen- eral introduction of improved instruments of labor .on the other hand ,competition enforces the introduction of new machinery before the old isworn out,especially inthe case ofimportant modifications .such apremature repro- duction ofthe instruments oflabor onalarge social scale is generally enforced by catastrophes orcrises . by wear and tear (excepting the so-called virtual wear ) ismeant that part ofvalue which isyielded gradually by the fixed capital tothe product incourse ofcreation inpro- portion tothe average degree inwhich itloses itsuse-value . this wear and tear takes place partly insuch away that the fixed capital has acertain average life-time .itisad- vanced for this entire period in one sum .after the lapse ofthis period ,itmust bereplaced .so far asliving instruments oflabor are concerned ,for instance horses ,their reproduction istimed by nature itself .their average life- time asmeans ofproduction isdetermined bylaws ofnature . as soon asthis term has expired ,the worn -out specimens must bereplaced by new ones .ahorse cannot bereplaced piecemeal ,itmust bereplaced by another horse . other elements offixed capital permit ofaperiodical or partial renewal .in this instance ,the partial orperiodical renewal must be distinguished from the gradual extension ofthe business . the fixed capital consists in part of homogeneous ele- ments ,which donot,however ,last the same length oftime , but are renewed from time totime and piecemeal .this is true ,for instance ,ofthe rails inrailway stations ,which must bereplaced more frequently than those ofthe remainder of the track .italso applies tothe ties ,which for instance on the belgian railroads inthe fifties had toberenewed atthe rate of8per cent ,according tolardner ,sothat all the ties were renewed inthe course of12 years .hence we have here the following proposition :acertain sum isadvanced for acertain kind offixed capital for,say,ten years .this expenditure ismade atone time .but acertain part ofthis fixed capital ,the value ofwhich has been transferred tothe",
        "fixed capital and circulating capital .195 value ofthe product and converted with itinto money ,is bodily renewed every year ,while the remainder persists in its original natural form .itisthis advance inone sum and the reproduction in natural form by small degrees , which distinguishes this capital inthe role offixed from circulating capital . other parts ofthe fixed capital consist ofheterogeneous elements ,which wear out in unequal periods oftime and must besoreplaced .this applies particularly tomachines . what we have just said concerning the different life-times ofdifferent parts offixed capital applies inthis case tothe life-time ofdifferent parts ofthe same machine ,which per- forms apart ofthe function ofthis fixed capital . with regard tothe gradual extension ofthe business inthe course ofthe partial renewal ,we make the following re- marks :although we have seen that the fixed capital con- tinues toperform its functions inthe process ofproduction inits natural state ,acertain part ofits value ,proportion- atetothe average wear and tear ,has circulated with the prod- uct,has been converted into money ,and forms an element inthe money reserve fund intended for the renewal ofthe capital pending itsreproduction inthe natural form .this part ofthe value offixed capital transformed into money may serve toextend the business ortomake improvements in machinery with aview toincreasing the efficiency of the latter . thus reproduction takes place in larger or smaller periods oftime ,and this is,from the standpoint of society ,reproduction on an enlarged scale .itisextensive expansion ,ifthe field ofproduction isextended ;itisinten- sive expansion ,ifthe efficiency ofthe instruments ofproduc- tion isincreased .this reproduction on an enlarged scale does not result from accumulation -not from the transform- ation ofsurplus -value into capital -but from the reconver- sion ofthe value which has detached itself inthe form of money from the body ofthe fixed capital and has resumed the form ofadditional ,oratleast ofmore efficient ,fixed capital ofthe same kind .of course ,itdepends partly on the specific nature ofthe business ,towhat extent and in what proportion itiscapable ofsuch expansion ,and towhat",
        "196capital . amount ,therefore ,areserve -fund must becollected ,inorder tobeinvested for this purpose ;also ,what period oftime is required ,before this can bedone .to what extent ,further- more ,improvements inthe details of existing machinery can bemade ,depends ,ofcourse ,onthe nature ofthese im- provements and the construction ofthe machine itself .that- this iswell considered from the very outset inthe construc- tion ofrailroads ,isapparent from astatement ofadams tothe effect that the entire construction should follow the principle ofabeehive ,that istosay,itshould have afaculty for unlimited expansion .all oversolid and preconceived symmetrical structures are impracticable ,because they must be torn down inthe case ofan extension .(page 123 of the above -named work ). this depends largely on the available space .inthe case ofsome buildings ,additional stories may be built ,inthe case ofothers lateral extension and more land are required . within capitalist production ,there ison one side much waste ofwealth ,onthe other much impractical lateral exten- sion ofthis sort (frequently tothe injury oflabor -power )in the expansion ofthe business ,because nothing isunder- taken according tosocial plans ,but everything depends on the infinitely different conditions ,means ,etc. ,with which the individual capitalist operates .this results in agreat waste ofthe productive forces . this piecemeal re-investment ofthe money -reserve fund , that istosay ofthat part offixed capital which has been re- converted into money ,iseasiest inagriculture .afield of production ofagiven space iscapable ofthe greatest possi- ble absorption ofcapital .the same applies also tonatural reproduction ,for instance tostock raising . the fixed capital requires special expenditures for its conservation .apart ofthis conservation isprovided by the labor -process itself ;the fixed capital spoils ,ifitisnot employed inproduction .(see vol.i,chap .viii ;and chap . xv ,on wear and tear ofmachinery when not in use .) the english law therefore explicitly regards itasawaste ,if rented land isnot used according tothe custom ofthe coun- try.(w. a. holdsworth ,barrister atlaw .\"the law of",
        "fixed capital and circulating capital .197 landlord and tenant .\" london ,1857 ,p.96.) the con- servation due to use in the labor -process is anatural and free gift of living labor .and the conservating power oflabor isofatwofold character .on the one hand , itpreserves the value ofthe materials oflabor ,by transfer- ing ittothe product ,on the other hand itpreserves the value ofthe instruments oflabor ,provided itdoes not trans- fer this value inpart tothe product ,bypreserving their use- value by means oftheir activity inthe process ofproduction . the fixed capital requires also apositive expenditure of labor for itsconservation .the machinery must becleaned from time totime .this isadditional labor ,without which the machinery would become useless ;itislabor required to ward off the injurious influences ofthe elements ,which are inseparable from the process ofproduction ;it isexpended for the purpose ofkeeping the machinery inperfect work- ing order .the normal life-time offixed capital is,ofcourse , socalculated that allthe conditions are fulfilled under which itcan perform itsfunctions normally during that time ,just aswe assume inplacing aman's average life at30years that hewill wash himself .nor isithere aquestion ofreproduc- ing the labor contained inthe machine ,but oflabor which must be constantly added inorder tokeep itin working order .itisnot aquestion ofthe labor performed by the machine itself ,but oflabor spent onitinits capacity ofraw material ,not ofan instrument ofproduction .the capital expended for this labor belongs tothe circulating capital , although itdoes not enter into the actual labor -process to which the product owes its existence .this labor must be continually expended inproduction ,hence its value must becontinually replaced bythat ofthe product .the capital invested in itbelongs tothat part of circulating capital , which has tocover the general expenses and isdistributed over the produced values according toan annual average . we have seen that inindustry ,properly so-called ,this labor ofcleaning isperformed gratis bythe working men during pauses ,and thus frequently during the process ofproduction itself ,and many accidents are due tothis custom .this labor isnot counted inthe price ofthe product .the con-",
        "196capital . amount ,therefore ,areserve -fund must becollected ,inorder tobeinvested for this purpose ;also ,what period oftime is required ,before this can bedone .to what extent ,further- more ,improvements inthe details ofexisting machinery can bemade ,depends ,ofcourse ,onthe nature ofthese im- provements and the construction ofthe machine itself .that- this iswell considered from the very outset inthe construc- tion ofrailroads ,isapparent from astatement ofadams tothe effect that the entire construction should follow the principle ofabeehive ,that istosay,itshould have afaculty for unlimited expansion .all oversolid and preconceived symmetrical structures are impracticable ,because they must be torn down inthe case ofan extension .(page 123 of the above -named work ). this depends largely on the available space .inthe case ofsome buildings ,additional stories may be built ,inthe case ofothers lateral extension and more land are required . within capitalist production ,there ison one side much waste ofwealth ,onthe other much impractical lateral exten- sion ofthis sort (frequently tothe injury oflabor -power )in the expansion ofthe business ,because nothing isunder- taken according tosocial plans ,but everything depends on the infinitely different conditions ,means ,etc. ,with which the individual capitalist operates .this results in agreat waste ofthe productive forces . this piecemeal re-investment ofthe money -reserve fund , that istosay ofthat part offixed capital which has been re- converted into money ,iseasiest inagriculture .afield of production ofagiven space iscapable ofthe greatest possi- ble absorption ofcapital .the same applies also tonatural reproduction ,for instance tostock raising . the fixed capital requires special expenditures for its conservation .apart ofthis conservation isprovided by the labor -process itself ;the fixed capital spoils ,ifitisnot employed inproduction .(see vol.i,chap .viii ;and chap . xv ,on wear and tear ofmachinery when not in use.) the english law therefore explicitly regards itasawaste ,if rented land isnot used according tothe custom ofthe coun try.(w. a. holdsworth ,barrister atlaw .\"the law of",
        "fixed capital and circulating capital .197 \"landlord and tenant .\" london ,1857 ,p.96.) the con- servation due to use in the labor -process is anatural and free gift of living labor .and the conservating power oflabor isofatwofold character .on the one hand , itpreserves the value ofthe materials oflabor ,by transfer- ing ittothe product ,on the other hand itpreserves the value ofthe instruments oflabor ,provided itdoes not trans- fer this value inpart tothe product ,bypreserving their use- value by means oftheir activity inthe process ofproduction . the fixed capital requires also apositive expenditure of labor for itsconservation .the machinery must becleaned from time totime .this isadditional labor ,without which the machinery would become useless ;itislabor required to ward off the injurious influences ofthe elements ,which are inseparable from the process ofproduction ;it isexpended for the purpose ofkeeping the machinery inperfect work- ing order .the normal life-time offixed capital is,ofcourse , socalculated that allthe conditions are fulfilled under which itcan perform itsfunctions normally during that time ,just aswe assume inplacing aman's average life at30years that hewill wash himself .nor isithere aquestion ofreproduc- ing the labor contained inthe machine ,but oflabor which must be constantly added inorder tokeep itin working order .itisnot aquestion ofthe labor performed by the machine itself ,but oflabor spent onitinitscapacity ofraw material ,not ofan instrument ofproduction .the capital expended for this labor belongs tothe circulating capital , although itdoes not enter into the actual labor -process to which the product owes its existence .this labor must be continually expended inproduction ,hence its value must be continually replaced bythat ofthe product .the capital invested in itbelongs tothat part ofcirculating capital , which has tocover the general expenses and isdistributed over the produced values according toan annual average . we have seen that inindustry ,properly so-called ,this labor ofcleaning isperformed gratis by the working men during pauses ,and thus frequently during the process ofproduction itself ,and many accidents are due tothis custom .this labor isnot counted inthe price ofthe product .the con-",
        "198capital . sumer receives itfree ofcharge tothis extent .on the other hand ,the capitalist thus receives the conservation ofhis machinery for nothing .the laborer pays this expense in his own person ,and this isone ofthe mysteries ofthe self- preservation ofcapital ,which constitute inpoint offact a legal claim ofthe laborer onthe machinery ,onthe strength ofwhich he isapart -owner ofthe machine even from the legal standpoint ofthe bourgeoisie .however ,in various branches ofproduction ,inwhich the machinery must be taken out ofthe process ofproduction for the purpose of cleaning ,and where this labor ofcleaning cannot be per- formed between pauses ,for instance inthe case oflocomo- tives ,this labor ofconservation counts with the running ex- penses and istherefore anelement ofcirculating capital .a locomotive must betaken tothe shop after amaximum of three days 'work inorder tobecleaned ;the boiler must cool off before itcan be washed out without injury .(r. c., no. 17,823 .) the actual repairs ,the small jobs ,require expenditures ofcapital and labor ,which are not contained inthe origi- nally advanced capital and cannot therefore bereproduced and covered ,inthe majority ofcases ,bythe gradual replace- ment ofthe value offixed capital .for instance ,ifthe value ofthe fixed capital is10,000 pounds sterling ,and its total life -time 10 years ,then these 10,000 pounds ,having been entirely converted into money after the lapse often years , will replace only the value ofthe capital originally invested , but they do not replace the value ofthe capital ,orlabor , added inthe meantime for repairs .this isan element of additional value which isnot advanced all atone time ,but rather whenever occasion arises for it,sothat the terms ofits various advances are accidental from the very nature ofthe conditions .all fixed capital demands such additional and occasional expenditures ofcapital for materials oflabor and labor -power . the injuries towhich individual parts ofthe machinery are exposed are naturally accidental ,and soare therefore the necessary repairs .nevertheless two kinds ofrepairs are to bedistinguished inthe general mass ,which have amore or",
        "fixed capital and circulating capital .199 less fixed character and fall within various periods oflife of the fixed capital .these are the diseases ofchildhood and the far more numerous diseases inthe period following the prime oflife .amachine ,for instance ,may be placed in the process ofproduction inever soperfect acondition ,still the actual work will always reveal shortcomings which must beremedied by additional labor .on the other hand ,the more amachine passes beyond the prime oflife ,when ,there- fore ,the normal wear and tear has accumulated and has ren- dered itsmaterial worn and weak ,the more numerous and considerable will bethe repairs required tokeep itinorder for the remainder ofitsaverage life-time ;itisthe same with an old man ,who needs more medical care tokeep from dying than ayoung and strong man .in spite ofits accidental character ,the labor ofrepairing istherefore unequally dis- tributed over the various periods oflife offixed capital . from the foregoing ,and from the otherwise accidental character ofthe labor ofrepairing ,we make the following deductions . in one respect ,the actual expenditure oflabor -power and labor -material for repairs isasaccidental asthe conditions which cause these repairs ;the amount ofthe necessary re- pairs isdifferently distributed over the various life-periods of fixed capital .in other respects ,itistaken for granted in the calculation ofthe average life offixed capital that itis constantly kept ingood working order ,partly by cleaning (including the cleaning ofthe rooms ),partly byrepairs such asthe occasion may require .the transfer ofvalue through wear and tear offixed capital iscalculated onitsaverage life , but this average life itself isbased onthe assumption that the additional capital required for keeping machine inorder iscontinually advanced . on the other hand itisalso evident that the value added by this extra expenditure of capital and labor cannot be transferred tothe price ofthe products simultaneously asit ismade .for instance ,amanufacturer ofyarn cannot sell his yarn dearer this week than last ,merely because one of his machines broke awheel ortore abelt this week .the general expenses ofthe spinning industry have not been",
        "200capital . changed bythis accident insome individual factory .here asinall determinations ofvalue ,the average decides .ex- perience teaches the average extent ofsuch accidents and of the necessary labors ofconservation and repair during the average life -time ofthe fixed capital invested in agiven branch of industry .this average expense isdistributed over the average life-time .itisadded tothe price ofthe product incorresponding aliquot parts and hence also repro- duced bymeans ofitssale . the extra capital which isthus reproduced belongs tothe circulating capital ,although the manner ofitsexpenditure isirregular .as itishighly important toremedy every in- jury toamachine immediately ,every large factory employs inaddition tothe regular factory hands anumber ofother employees ,such as engineers ,wood -workers ,mechanics , smiths ,etc. the wages ofthese special employees are apart ofthe variable capital ,and the value oftheir labor isdis- tributed over their product .on the other hand ,the ex- penses for means ofproduction are calculated onthe basis of the above -mentioned average ,according towhich they form continually apart ofthe value ofthe product ,although they are actually advanced inirregular periods and therefore transferred inirregular periods tothe product orthe fixed capital .this capital ,invested inregular repairs ,isinmany respects apeculiar capital ,which can beclassed neither with the circulating nor the fixed capital ,but still belongs with more justification tothe former ,since it isapart ofthe running expenses . the manner ofbookkeeping does not ,ofcourse ,change inany way the actual condition ofthe things ofwhich an account iskept .but itisimportant tonote that itisthe custom ofmany businesses toclass the expenses ofrepairing with the actual wear and tear ofthe fixed capital ,inthe fol- lowing manner :take itthat the advanced fixed capital is 10,000 pounds sterling ,its life -time 15 years ;the annual wear and tear 666 and pounds sterling .but the wear and tear iscalculated atonly ten years ,inother words ,1,000 pounds sterling are added annually for wear and tear ofthe fixed capital tothe prices of the produced commodities ,",
        "fixed capital and circulating capital .201 thus 333 and instead of666 and pounds sterling . pounds sterling are reserved for repairs ,etc. (the figures 10and 15are chosen atrandom .) this amount isspent on an average for repairs ,inorder that the fixed capital may last 15years .this calculation does not alter the fact that the fixed capital and the additional capital invested inrepairs belong todifferent categories .on the strength ofthis mode ofcalculation itwas ,for instance ,assumed that the lowest estimate for the conservation and reproduction ofsteamships was 15 per cent ,the time ofreproduction therefore equal to6 years .inthe sixties ,the english government in- demnified the peninsular and oriental co. for itatthe rate of16 per cent ,making the time ofreproduction equal to 6 years . on railroads ,the average life-time ofalocomo- tive is10years ,but the wear and tear including repairs is assumed tobe 12 per cent ,reducing the life-time down to8years .in the case ofpassenger and freight cars ,9 per cent are estimated ,oralife-time of11 years . legislation has everywhere made adistinction ,inthe leases ofhouses and other things ,which represent fixed capi- tal for their owners ,between the normal wear and tear which isthe result oftime ,the influence ofthe elements , and normal use and between those occasional repairs which are required for keeping up the normal life -time ofthe house during itsnormal use.as arule ,the former expenses are borne by the owner ,the latter by the tenant .the re- pairs are further distinguished asordinary and substantial . the last -named are partly arenewal ofthe fixed capital in its natural form ,and they fall likewise on the shoulders ofthe owner ,unless the lease explicitly states the contrary . for instance ,the english law ,according to holdsworth (law oflandlord and tenant ,pages 90and 91),prescribes that atenant from year toyear ismerely obliged tokeep the buildings water -and -wind proof ,solong asthis ispos- sible without substantial repairs ,and toattend only tosuch repairs asare known asordinary .and even inthis respect the age and the general condition ofthe building atthe time when the tenant took possession must be considered , for heisnot obliged toreplace either old orworn -out ma",
        "200capital . changed bythis accident insome individual factory .here asinall determinations ofvalue ,the average decides .ex- perience teaches the average extent ofsuch accidents and of the necessary labors ofconservation and repair during the average life -time ofthe fixed capital invested in agiven branch of industry .this average expense isdistributed over the average life-time .itisadded tothe price ofthe product incorresponding aliquot parts and hence also repro- duced bymeans ofitssale . the extra capital which isthus reproduced belongs tothe circulating capital ,although the manner ofitsexpenditure isirregular .as itishighly important toremedy every in- jury toamachine immediately ,every large factory employs inaddition tothe regular factory hands anumber ofother employees ,such as engineers ,wood -workers ,mechanics , smiths ,etc. the wages ofthese special employees are apart ofthe variable capital ,and the value oftheir labor isdis- tributed over their product .on the other hand ,the ex- penses for means ofproduction are calculated onthe basis of the above -mentioned average ,according towhich they form continually apart ofthe value ofthe product ,although they are actually advanced inirregular periods and therefore transferred inirregular periods tothe product orthe fixed capital .this capital ,invested inregular repairs ,isinmany respects apeculiar capital ,which can beclassed neither with the circulating nor the fixed capital ,but still belongs with more justification tothe former ,since it isapart ofthe running expenses . the manner ofbookkeeping does not ,ofcourse ,change inany way the actual condition ofthe things ofwhich an account iskept .but itisimportant tonote that itisthe custom ofmany businesses toclass the expenses ofrepairing with the actual wear and tear ofthe fixed capital ,inthe fol- lowing manner :take itthat the advanced fixed capital is 10,000 pounds sterling ,its life-time 15 years ;the annual wear and tear 666 and pounds sterling .but the wear and tear iscalculated atonly ten years ,inother words ,1,000 pounds sterling are added annually for wear and tear ofthe fixed capital tothe prices of the produced commodities ,",
        "fixed capital and circulating capital .201 instead of666 and pounds sterling . thus 333 and pounds sterling are reserved for repairs ,etc. (the figures 10and 15are chosen atrandom .) this amount isspent on an average for repairs ,inorder that the fixed capital may last 15years .this calculation does not alter the fact that the fixed capital and the additional capital invested inrepairs belong todifferent categories .on the strength ofthis mode ofcalculation itwas ,for instance ,assumed that the lowest estimate for the conservation and reproduction ofsteamships was 15 per cent ,the time ofreproduction therefore equal to6 years .inthe sixties ,the english government in- demnified the peninsular and oriental co. for itatthe rate of16 per cent ,making the time ofreproduction equal to 61 years . on railroads ,the average life-time ofalocomo- tive is10 years ,but the wear and tear including repairs is assumed tobe 12 per cent ,reducing the life -time down to 8years .in the case ofpassenger and freight cars ,9 per cent are estimated ,oralife-time of11 years . legislation has everywhere made adistinction ,in the leases ofhouses and other things ,which represent fixed capi- tal for their owners ,between the normal wear and tear which isthe result oftime ,the influence ofthe elements , and normal use and between those occasional repairs which are required for keeping up the normal life -time ofthe house during itsnormal use.as arule ,the former expenses are borne by the owner ,the latter by the tenant .the re- pairs are further distinguished asordinary and substantial . the last -named are partly arenewal ofthe fixed capital in its natural form ,and they fall likewise on the shoulders ofthe owner ,unless the lease explicitly states the contrary . for instance ,the english law ,according to holdsworth (law oflandlord and tenant ,pages 90and 91),prescribes that atenant from year toyear ismerely obliged tokeep the buildings water -and -wind proof ,solong asthis ispos- sible without substantial repairs ,and toattend only tosuch repairs asare known asordinary .and even inthis respect the age and the general condition ofthe building atthe time when the tenant took possession must be considered , for heisnot obliged toreplace either old orworn -out ma-",
        "200capital . changed bythis accident insome individual factory .here asinall determinations ofvalue ,the average decides .ex- perience teaches the average extent ofsuch accidents and of the necessary labors ofconservation and repair during the average life-time ofthe fixed capital invested in agiven branch of industry .this average expense isdistributed over the average life-time .itisadded tothe price ofthe product incorresponding aliquot parts and hence also repro- duced by means ofitssale . the extra capital which isthus reproduced belongs tothe circulating capital ,although the manner ofitsexpenditure isirregular .as itishighly important toremedy every in- jury toamachine immediately ,every large factory employs inaddition tothe regular factory hands anumber ofother employees ,such as engineers ,wood -workers ,mechanics , smiths ,etc. the wages ofthese special employees are apart ofthe variable capital ,and the value oftheir labor isdis- tributed over their product .on the other hand ,the ex- penses for means ofproduction are calculated onthe basis of the above -mentioned average ,according towhich they form continually apart ofthe value ofthe product ,although they are actually advanced inirregular periods and therefore transferred inirregular periods tothe product orthe fixed capital .this capital ,invested inregular repairs ,isinmany respects apeculiar capital ,which can beclassed neither with the circulating nor the fixed capital ,but still belongs with more justification tothe former ,since it isapart ofthe running expenses . the manner ofbookkeeping does not,ofcourse ,change inany way the actual condition ofthe things ofwhich an account iskept .but itisimportant tonote that itisthe custom ofmany businesses toclass the expenses ofrepairing with the actual wear and tear ofthe fixed capital ,inthe fol- lowing manner :take itthat the advanced fixed capital is 10,000 pounds sterling ,itslife -time 15 years ;the annual wear and tear 666 and pounds sterling .but the wear and tear iscalculated atonly ten years ,inother words ,1,000 pounds sterling are added annually for wear and tear ofthe fixed capital tothe prices of the produced commodities ,",
        "fixed capital and circulating capital .201 instead of666 and pounds sterling . thus 333 and 1 pounds sterling are reserved for repairs ,etc. (the figures 10and 15are chosen atrandom .) this amount isspent on an average for repairs ,inorder that the fixed capital may last 15years .this calculation does not alter the fact that the fixed capital and the additional capital invested inrepairs belong todifferent categories .on the strength ofthis mode ofcalculation itwas ,for instance ,assumed that the lowest estimate for the conservation and reproduction ofsteamships was 15 per cent ,the time ofreproduction therefore equal to6 years .inthe sixties ,the english government in- demnified the peninsular and oriental co. for itatthe rate of16 per cent ,making the time ofreproduction equal to 61 years . on railroads ,the average life-time ofalocomo- tive is10years ,but the wear and tear including repairs is assumed tobe 12 per cent ,reducing the life -time down to 8years .in the case ofpassenger and freight cars ,9 per cent are estimated ,oralife-time of11 years . legislation has everywhere made adistinction ,in the leases ofhouses and other things ,which represent fixed capi- tal for their owners ,between the normal wear and tear which isthe result oftime ,the influence ofthe elements , and normal use and between those occasional repairs which are required for keeping up the normal life -time ofthe house during itsnormal use.as arule ,the former expenses are borne by the owner ,the latter by the tenant .the re- pairs are further distinguished asordinary and substantial . the last -named are partly arenewal ofthe fixed capital in its natural form ,and they fall likewise on the shoulders ofthe owner ,unless the lease explicitly states the contrary . for instance ,the english law ,according to holdsworth (law oflandlord and tenant ,pages 90and 91),prescribes that atenant from year toyear ismerely obliged tokeep the buildings water -and -wind proof ,solong asthis ispos- sible without substantial repairs ,and toattend only tosuch repairs asare known asordinary .and even inthis respect the age and the general condition ofthe building atthe time when the tenant took possession must be considered , for heisnot obliged toreplace either old orworn -out ma-",
        "202capital . terial by new ,ortomake up for the inevitable deprecia- tion incidental tothe lapse oftime and normal usage . entirely different from the reproduction ofwear and tear and from the work ofpreserving and repairing isthe insur- ance ,which relates todestruction caused by extraordinary phenomena ofnature ,fire,flood ,etc. this must be made good out ofthe surplus -value and isadeduction from it. or,considered from the point ofview ofthe entire society , there must beacontinuous overproduction ,that istosay ,a production on alarger scale than isnecessary for the sim- ple replacement and reproduction ofthe existing wealth , quite apart from an increase ofthe population ,inorder to beable todispose ofthe means ofproduction required for making good the extraordinary destruction caused by acci- dents and natural forces . in point offact ,only the smallest part ofthe capital needed for making good such destruction consists ofthe mon- ey-reserve fund .the most important part consists inthe ex- tension ofthe scale ofproduction itself ,which iseither actual expansion ,orapart ofthe normal scope of the branches ofproduction which manufacture the fixed capi- tal.for instance ,amachine factory ismanaged with a view tothe fact that on the one side the factories ofits customers are annually extended ,and that onthe other hand anumber ofthem will always stand in need oftotal or partial reproduction . inthe determination ofthe wear and tear and ofthe cost ofrepairing ,according tothe social average ,there are nec- essarily great discrepancies ,even for investments of capi- tal ofequal size and inequal conditions ,inthe same branch ofproduction .in practice ,amachine lasts inthe case of one capitalist longer than its average time ,while inthe case ofanother itdoes not last solong .the expenses of the one for repairs are above ,ofthe other below the average , etc. but the addition tothe price ofthe commodities result- ing from wear and tear and from repairs isthe same and is determined by the average .the one therefore gets more out ofthis additional price than he really spent ,the other less .this aswell asother circumstances which produce dif-",
        "fixed capital and circulating capital .203 ferent gains for different capitalists inthe same branch of industry with the same degree ofthe exploitation oflabor- power renders an understanding ofthe true nature ofsur- plus -value difficult . the boundary between regular repairs and replacement , between expenses ofrepairing and expenses ofrenewal ,is more orless shifting .hence we see the continual dispute , for instance inrailroading ,whether certain expenses are for repairs orfor reproduction ,whether they must bepaid from running expenses orfrom the capital itself .atransfer of expenses for repairs tocapital -account instead ofrevenue- account isthe familiar method by which railway manage- ments artificially inflate their dividends .however ,exper- ience has already furnished the most important clues for this .according tolardner ,page 49ofthe previously quoted work ,the additional labor required during the first peri- od oflife ofarailroad isnot counted under the head of repairs ,but must beregarded asan essential factor ofrail- way construction ,and istobe charged ,therefore ,tothe account ofcapital ,since itisnot due towear and tear or tothe normal effect ofthe traffic ,but tothe original and inevitable imperfection ofrailway construction . on the other hand ,itisthe only correct method ,according tocap- tain fitzmaurice (committee ofinquiry ofcaledonian rail- way ,published inmoney market review ,1867 ),tocharge the revenue of each year with the depreciation ,which is the necessary concomitant ofthe transactions by which this revenue has been earned ,regardless ofwhether this sum has been spent ornot. the separation ofthe reproduction and conservation of fixed capital becomes practically impossible and useless in agriculture ,atleast inso far asitdoes not operate with steam .according tokirchhoff (handbuch der landwirth- schaftlichen betriebslehre ,berlin ,1862 ,page 137 ),\"itis the custom toestimate onageneral average the annual wear and tear and conservation ofthe implements ,according to the differences ofexisting conditions ,atfrom 15to20 per cent ofthe purchasing capital ,wherever there isacom- plete ,though not excessive ,supply ofimplements on the farm .\"",
        "204capital . inthe case ofthe rolling stock ofarailroad ,repairs and reproduction cannot beseparated .according tot. gooch , chairman ofthe great western railway co. (r.c.no. 17- 327-29 ),his company maintained itsrolling stock numeri cally .whatever number oflocomotives they might have , would bemaintained .ifone ofthem became worn out in the course oftime ,sothat itwas more profitable tobuild anew one ,itwas built atthe expense ofthe revenue ,in which case the value ofthe material remaining from the old locomotive was credited tothe revenue .there always was agood deal ofmaterial left .the wheels ,the axles ,the boilers ,inshort ,agood part ofthe old locomotive remained . \"to repair means torenew ;for me there isno such word as'replacement '; once that arailway company has bought acar oralocomotive ,they ought tokeep them in such repair that they will run for all eternity (17,784 ).we calculate 82 d.per english freight mile for locomotive ex- penses .out ofthis 82 d.we maintain the locomotives for- ever .we renew our machines .ifyou want tobuy ama- chine new ,you spend more money than isnecessary . you can always find afew wheels ,an axle ,orsome other part ofan old machine incondition tobe used ,and that helps toconstruct cheaply amachine which isjust asgood asanentirely new one (17,790 ).inow produce every week one new locomotive ,that istosay,one that isasgood as new ,for itsboiler ,cylinder ,and frame are new .\" (17,843 .) archibald sturrock ,locomotive superintendent of great northern railway ,inr.c.,1867 . lardner says likewise about cars ,onpage 116 ofhis work , that inthe course oftime ,the supply oflocomotives and cars iscontinually renewed ;atone time new wheels are put on,atanother anew frame isconstructed .those parts onwhich the motion isconditioned and which are most ex- posed towear and tear are gradually renewed ;the machines and cars may then undergo so many repairs that not a trace ofthe old material remains inthem ....even if the old cars and locomotives get sothat they cannot be repaired any more ,pieces ofthem are still worked into others ,sothat they never disappear wholly from the track . the rolling stock istherefore inprocess ofcontinuous re-",
        "fixed capital and circulating capital .205 production ;that which must be done atone time for the track ,takes place for the rolling stock gradually ,from year toyear .its existence isperennial ,itisinprocess ofcontin- uous rejuvenation . this process ,which lardner here describes relative to arailroad ,isnot typical for an individual factory ,but may serve as an illustration of continuous and partial repro- duction offixed capital intermingled with repairs ,within an entire branch ofproduction ,oreven within the aggregate production considered on asocial scale . here isaproof ,towhat extent clever managers may manipulate the terms repairs and replacement for the pur- pose ofmaking dividends .according tothe above quoted lecture of r. b. williams ,various english railway com- panies deducted the following sums from the revenue -ac- count ,asaverages ofaperiod ofyears ,for repairs and main- tenance ofthe track and buildings ,per english mile of track per year : london &north western midland ... london &south western great northern lancashire &yorkshire south eastern brighton manchester &sheffield370 225 257 360 377 263 266 ..200 these differences arise only toaminor degree from dif- ferences inthe actual expenses ;they are due almost ex- clusively todifferent modes of calculation ,according to whether expenses are charged tothe account ofcapital or revenue .williams says insomany words that the lesser charge ismade ,because this isnecessary for agood dividend , and ahigh charge ismade ,because there isagreater reve- nue which can bear it. in certain cases ,the wear and tear ,and therefore its re- placement ,ispractically infinitesimal ,sothat nothing but expenses for repairs have tobecharged .the statements of lardner relative toworks ofart,which are given insub- stance below ,also apply ingeneral toall solid works ,docks , canals ,iron and stone bridges ,etc. according tohim ,pages",
        "204 capital . inthe case ofthe rolling stock ofarailroad ,repairs and reproduction cannot beseparated .according tot. gooch , chairman ofthe great western railway co. (r.c.no. 17. 327-29 ),his company maintained itsrolling stock numeri cally .whatever number oflocomotives they might have . would be maintained .ifone ofthem became worn out in the course oftime ,sothat itwas more profitable tobuild anew one ,itwas built atthe expense ofthe revenue ,in which case the value ofthe material remaining from the old locomotive was credited tothe revenue .there always was agood deal ofmaterial left .the wheels ,the axles ,the boilers ,inshort ,agood part ofthe old locomotive remained . \"to repair means torenew ;for me there isno such word as'replacement ';...once that arailway company has bought acar oralocomotive ,they ought tokeep them in such repair that they will run for all eternity (17,784 ).we calculate 8 d.per english freight mile for locomotive ex- penses .out ofthis 812 d.we maintain the locomotives for- ever .we renew our machines .ifyou want tobuy ama- chine new ,you spend more money than isnecessary . you can always find afew wheels ,an axle ,orsome other part ofan old machine in condition tobe used ,and that helps toconstruct cheaply amachine which isjust asgood asanentirely new one (17,790 ).inow produce every week one new locomotive ,that istosay,one that isasgood as new ,for itsboiler ,cylinder ,and frame are new .\" (17,843 .) archibald sturrock ,locomotive superintendent of great northern railway ,inr.c.,1867 .  lardner says likewise about cars ,onpage 116 ofhis work , that inthe course oftime ,the supply oflocomotives and cars iscontinually renewed ;atone time new wheels are put on,atanother anew frame isconstructed .those parts onwhich the motion isconditioned and which are most ex- posed towear and tear are gradually renewed ;the machines and cars may then undergo so many repairs that not a trace ofthe old material remains inthem .. even if the old cars and locomotives get sothat they cannot be repaired any more ,pieces ofthem are still worked into others ,sothat they never disappear wholly from the track . the rolling stock istherefore inprocess ofcontinuous re-",
        "fixed capital and circulating capital ..205 production ;that which must be done atone time for the track ,takes place for the rolling stock gradually ,from year toyear .its existence isperennial ,itisinprocess ofcontin- uous rejuvenation . this process ,which lardner here describes relative to arailroad ,isnot typical for an individual factory ,but may serve as an illustration of continuous and partial repro- duction offixed capital intermingled with repairs ,within an entire branch ofproduction ,oreven within the aggregate production considered on asocial scale . here isaproof ,towhat extent clever managers may manipulate the terms repairs and replacement for the pur- pose ofmaking dividends .according tothe above quoted lecture ofr. b. williams ,various english railway com- panies deducted the following sums from the revenue -ac- count ,asaverages ofaperiod ofyears ,for repairs and main- tenance ofthe track and buildings ,per english mile of track per year : london &north western midland london &south western great northern ... lancashire &yorkshire south eastern ... brighton manchester &sheffield.. 370 225 257 360 377 263 266 200 these differences arise only toaminor degree from dif- ferences inthe actual expenses ;they are due almost ex- clusively todifferent modes of calculation ,according to whether expenses are charged tothe account ofcapital or revenue .williams says insomany words that the lesser charge ismade ,because this isnecessary for agood dividend , and ahigh charge ismade ,because there isagreater reve- nue which can bear it. in certain cases ,the wear and tear ,and therefore its re- placement ,ispractically infinitesimal ,sothat nothing but expenses for repairs have tobecharged .the statements of lardner relative toworks ofart,which are given in sub- stance below ,also apply ingeneral toall solid works ,docks , canals ,iron and stone bridges ,etc. according tohim ,pages",
        "206capital . 38 and 39 ofhis work ,the wear and tear which isthe re- sult ofthe influence oflong periods oftime onsolid works , isalmost imperceptible inshort spaces oftime ;after the lapse ofalong period ,for instance ofcenturies ,such influ- ences will nevertheless require the partial ortotal renewal ofeven the most solid structures .this imperceptible wear and tear ,compared tothe more perceptible inother parts ofthe railroad ,may belikened tothe secular and periodical inequalities inthe motions ofworld -bodies .the influence oftime onthe more massive structures ofarailroad ,such asbridges ,tunnels ,viaducts ,etc. ,furnishes illustrations of that which might becalled secular wear and tear .the more rapid and perceptible depreciation ,which iscompensated by repairs inshorter periods ,isanalogous tothe periodical in- equalities .the compensation ofthe accidental damages , such asthe outer surface ofeven the most solid structures will suffer from time totime ,islikewise included in the annual expenses for repairs ;but apart from these repairs , age does not pass by such structures without leaving its marks ,and the time must inevitably come ,when their con- dition will require anew structure .from afinancial and economic point ofview ,this time may indeed betoo far off tobe taken into practical consideration . these statements oflardner apply toallsimilar structures ofasecular duration ,inthe case ofwhich the capital ad- vanced for them need not bereproduced according totheir gradual wear and tear ,but only the annual average expenses ofconservation and repairs are tobetransferred tothe prices ofthe products . although ,aswe have seen ,agreater part ofthe money returning for the compensation ofthe wear and tear ofthe fixed capital isannually ,oreven inshorter periods ,recon- verted into itsnatural form ,nevertheless every capitalist re- quires asinking fund for that part ofhis fixed capital ,which becomes mature for complete reproduction only after the lapse ofyears and must then beentirely replaced .acon- siderable part ofthe fixed capital precludes gradual repro- duction by its composition .besides ,incases where the re- production takes place piecemeal insuch away that every now and then new pieces are added in compensation for",
        "fixed capital and circulating capital .207 worn -out ones ,aprevious accumulation ofmoney isneces- sary toagreater orsmaller degree ,according tothe specific character ofthe branch ofproduction ,before replacement can proceed .itisnot any arbitrary sum ofmoney which suffices for this purpose ;asum ofadefinite size isrequired for it. ifwe study this question merely onthe assumption that we have todeal with the simple circulation ofcommodities , without regard tothe credit system ,which we shall treat later ,then the mechanism ofthis movement has the follow- ing aspect :we showed in volume i,chapter iii,3a,that the proportion in which the total mass of money isdis- tributed over ahoard and means ofproduction varies con- tinually ,ifone part ofthe money available insociety lies fallow asahoard ,while another performs the functions of amedium ofcirculation orofanimmediate reserve -fund of the directly circulating money .now ,inthe present case , the money accumulated inthe hands ofagreat capitalist inthe form ofalarge -sized hoard isset free all atonce in circulation for the purchase ofmixed capital .itison its part again distributed over the society asmedium ofcircu- lation and hoard .by means ofthe sinking fund ,through which the value ofthe fixed capital flows back toits start- ing point inproportion toits wear and tear ,apart ofthe circulating money forms again ahoard ,for alonger or shorter period ,inthe hands ofthe same capitalist whose hoard had been transformed into amedium ofcirculation and passed away from him by the purchase offixed capi- tal.itisacontinually changing distribution ofthe hoard existing insociety ,which performs alternately the function ofamedium ofexchange and isagain separated asahoard from the mass ofthe circulating money .with the develop- ment ofthe credit -system ,which necessarily runs parallel with the development ofgreat industries and capitalist pro- duction ,this money no longer serves asahoard ,but as capital ,not inthe hands ofitsowner ,but ofother capitalists who have borrowed it.",
        "208capital . chapter ix. the total turn -over ofadvanced capital . cycles ofturn -over . we have seen that the fixed and circulating parts ofpro- ductive capital turn over indifferent ways and atdifferent periods ,also that the different constitutents ofthe fixed capi- tal ofthe same business have different periods ofturn -over according totheir different durations oflife and ,therefore , oftheir different periods ofreproduction .(as concerns the actual orapparent difference inthe turn -over ofdifferent constituents ofcirculating capital inthe same business ,see the close ofthis chapter ,under no. 6.) 1.the total turn -over ofadvanced capital isthe average turn -over ofits constituent parts ;the mode ofits calcula- tion isgiven later .inasmuch asitismerely aquestion of different periods oftime ,nothing iseasier than tocompute their average .but 2. itisaquestion ,not alone ofaquantitive ,but also ofaqualitative difference . the circulating capital entering into the process ofpro- duction transfers its entire value tothe product and must , therefore ,becontinually reproduced initsnatural form by the sale ofthe product ,ifthe process ofproduction isto proceed without interruption .the fixed capital entering into the process ofproduction transfers only apart ofits value (the wear and tear )tothe product and continues de- spite this wear and tear ,toperform itsfunction inthe proc- ess ofproduction .therefore itneed not bereproduced until after the lapse ofintervals ofvarious duration ,atany rate not asfrequently asthe circulating capital .this necessity of reproduction ,this term ofreproduction ,isnot only quantita- tively different for the various constituent parts offixed capi- tal,but ,aswe have seen ,apart ofthe perennial fixed capi-",
        "total turn -over of advanced capital .209 tal may be replaced annually oratshorter intervals and added innatural form tothe old fixed capital .inthe case offixed capital ofadifferent composition ,the reproduction can take place only all atonce atthe end ofitslife -time . itis,therefore ,necessary toreduce the specific turn -overs ofthe various parts offixed capital toahomogeneous form ofturn -over ,sothat they remain only quantitatively dif- ferent sofar asthe duration oftheir turn -over isconcerned . this quantitative homogeneity does not materialize ,ifwe take for our starting point p...p,the form ofthe continuous process ofproduction .for definite elements ofpmust be continually reproduced intheir natural form ,while others need not tobe.this homogeneity ofturn -over isfound , however ,inthe form m-m'.take ,for instance ,ama- chine valued at 10,000 pounds sterling ,which lasts ten years and one tenth ,or1,000 pounds ofwhich are annually reconverted into money .these 1,000 pounds have been con- verted inthe course ofone year from money -capital into productive capital and commodity -capital ,and then recon- verted into money -capital .they have returned totheir original money -form ,just asdid the circulating capital ,if we study it from this point of view ,and itis im- material whether this money -capital of 1,000 pounds sterling isonce more converted ,atthe end ofthe year ,into the natural form ofamachine ornot .in calculating the total turn -over ofthe advanced productive capital ,we,there- fore ,fix all its elements inthe mold ofmoney ,sothat the return tothe money -form concludes the turn -over . sume that value has always been advanced inmoney ,even inthe continuous process ofproduction ,where this money- form ofvalue exists only ascalculating money .then we are enabled tocompute the average . 3.itfollows that the capital -value turned over during one year may be larger than the total value ofthe advanced capital ,on account ofthe repeated turn -overs ofthe circu- lating capital within the same year ,even ifby far the greater part ofthe advanced productive capital consists of fixed capital ,whose period ofreproduction ,and therefore of turn -over ,comprises acycle ofseveral years .",
        "210 capital . take itthat the fixed capital is80,000 pounds sterling , itsperiod ofreproduction 10years ,sothat 8,000 pounds of this capital annually return totheir money -form ,orcom- plete one -tenth ofitsturn -over .let the circulating capital be20,000 pounds sterling ,and itsperiod ofturn -over befive times per year .the total capital would then be 100,000 pounds sterling .the turned over fixed capital is 8,000 pounds ,the turned -over circulating capital five times 20,- 000 ,or100,000 pounds sterling .then the capital turned over during one year is108,000 pounds sterling ,or8,000 pounds more than the advanced capital .1+2-25 ofthe capital have turned over . 4.the turn -over ofthe values ofthe advanced capital therefore istobe distinguished from its actual time ofre- production ,orfrom the actual time ofturn -over ofits com- ponent parts .take ,for instance ,acapital of4,000 pounds sterling and let itturn over five times per year .the turned over capital isthen five times 4,000 ,or20,000 pounds ster- ling .but that which returns atthe end ofits turn -over and isadvanced anew isthe original capital of4,000 pounds sterling .its magnitude isnot changed by the number of itsperiods ofturn -over ,during which itperforms anew its functions ascapital .(we do not consider the question of surplus -value here .) inthe illustration under no. 3,then ,the sums returned . atthe end ofone year into the hands ofthe capitalist are (a)asum ofvalues inthe form of20,000 pounds sterling , which he invests again inthe circulating parts ofthe capi- tal,and (b)asum of8,000 pounds ,which have been set free by wear and tear from the advanced fixed capital ;at the same time ,this same fixed capital remains inthe process ofproduction ,but with the reduced value of72,000 pounds , instead of80,000 pounds sterling .the process ofproduc- tion ,therefore ,would have tobe continued for nine years longer ,before the advanced fixed capital would have outlived its term and ceased toperform any service asacreator of products and values ,sothat itwould have tobe replaced . the advanced capital -value ,then ,has topass through acycle ofturn -overs ,inthe present case acycle often years ,and",
        "total turn -over of advanced capital . 211 this cycle isdetermined by the life -time ,in other words by the period ofreproduction ,orturn -over ofthe invested fixed capital . to the same extent that the volume ofthe value and the duration ofthe fixed capital develop with the evolution of the capitalist mode ofproduction ,does the life ofindustry and ofindustrial capital develop ineach particular invest- ment into one ofmany years ,say often years onanaverage . ifthe development offixed capital extends the length ofthis life onone side ,itisonthe other side shortened bythe con- tinuous revolution ofthe instruments ofproduction ,which likewise increases incessantly with the development ofcapi- talist production .this implies achange in the instru- ments ofproduction and the necessity ofcontinuous replace- ment onaccount ofvirtual wear and tear ,long before they are worn out physically .one may assume that this life- cycle ,inthe essential branches of great industry ,now averages ten years .however ,itisnot aquestion ofany one definite number here .so much atleast isevident that this cycle comprising anumber ofyears ,through which capital iscompelled topass by its fixed part ,furnishes a material basis for the periodical commercial crises inwhich business goes through successive periods oflassitude ,average activity ,overspeeding ,and crisis .itistrue that the periods inwhich capital isinvested are different intime and place . but acrisis isalways the starting point ofalarge amount ofnew investments .therefore italso constitutes ,from the point ofview ofsociety ,more orless ofanew material basis for the next cycle ofturn -over .22a 5.on the mode ofcalculation ofthe turn -overs ,scrope , an american economist ,says insubstance the following in his work on political economy (published by alonzo pot- ter,new york ,1841 ,pages 141 and 142 ):in some lines ofbusiness the entire capital advanced isturned over ,or circulated ,several times inside ofayear .in some others , one portion isturned over more than once ayear ,another 22a\"municipal production isbound toacycle ofdays ,agricultural production toone ofyears .\" (adam g.mueller ,die elemente der staatskunst .berlin ,1809 ,ii,page ,178. )this isthe naive conception ofindustry and agriculture held bythe romantic school ,",
        "212capital . portion not sooften .itisthe average period required by the entire capital for the purpose ofpassing through the hands ofthe capitalist ,orinorder toturn over once ,which must furnish the basis on which the capitalist figures his profits .take it,that acertain individual engaged inacer tain business has invested half ofhis capital for buildings and machinery ,which are replaced once inevery ten years ; one -quarter for tools ,etc. ,which are replaced intwo years ; and the last quarter ,invested inwages and raw materials , which quarter isturned over twice per year .let his entire capital be$50,000 .then his annual expenditure will be: 50,000-2 ,or$25,000 in10years ,or$2,500 inone year . 50,000-4 ,or$12,500 in 2years ,or $6,250 inone year . 50,000-4 ,or$12,500 in year ,or$25,000 inone year . $33,750 in one year . the average time ,then ,inwhich his capital isturned over once ,is16 months .take another case :one quarter of the entire capital of$50,000 circulates in10years ;another quarter inone year ;the other half twice inone year .the annual expenditure will then be: 12,500-10 12,500 .. 25,000 2 turned over in one year1,250 12,500 50,000 63,750 6. real and apparent differences inthe turn -over ofthe various component parts ofcapital .scrope also says inthe same place that the capital invested by amanufacturer , landlord ,ormerchant inwages circulates most rapidly ,as itisprobably turned over once aweek ,ifhepays his labor- ers weekly ,by the weekly receipts from his sales orfrom paid bills .the capital invested inraw materials and fin- ished supplies does not circulate sofast ;itmay beturned over two orfour times per year ,according tothe time pass- ing between the purchase ofthe one and the sale ofthe other , provided that the capitalist buys and sells on equal terms",
        "total turn -over of advanced capital . 213 of credit .the capital invested in tools and machinery circulates still more slowly ,asitisturned over ,that isto say consumed and circulated ,probably on an average of once infive orten years ;many tools ,however ,are used up inone single series ofmanipulations .the capital invested in buildings ,for instance ,in factories ,stores ,storerooms , barns ,streets ,irrigation works ,etc. ,circulates almost imper- ceptibly .but ofcourse these structures are likewise worn out just the same asthe others ,solong asthey serve in production ,and must be replaced ,in order that the pro- ducer may be able tocontinue his operations .they are merely consumed and reproduced more slowly than the others .the capital invested in them isprobably turned over intwenty orfifty years .sofar scrope.- scrope here confounds the differences inthe flow ofcer- tain parts ofthe circulating capital ,caused by terms of payment and conditions ofcredit sofar asthe individual capitalist isconcerned ,with the turn -overs due tothe nature ofcapital .he says that wages are paid weekly on account ofthe weekly receipts from paid sales orbills .we must note inthe first place ,that certain differences occur relative towages ,according tothe length ofthe term ofpayment , that istosay the length oftime for which the laborer must give credit tothe capitalist ,whether itbeaweek ,amonth , three months ,six months ,etc. inthis case ,the rule stated involume i,chapter iii,3b,page 158 ,holds good ,tothe effect that \"the quantity ofthe means ofpayment required for all periodical payments (inthis case the quantity ofthe money -capital tobeadvanced atone time )isininverse pro- portion tothe length oftheir periods .\" inthe second place ,itisnot only the entire new value added tothe product by means ofone week's labor which enters completely into the weekly product ,but also the value ofthe raw and auxiliary materials consumed bythe weekly product .these values circulate with the product contain- ing them .they assume the form ofmoney bythe sale ofthe product and must bereconverted into the same elements of production .this applies aswell tothe labor -power asto the raw and auxiliary materials .but we have already seen (chapter iv,2,a)that the continuity ofthe produc",
        "214capital . tion requires asupply ofmeans ofproduction ,different for various branches ofindustry ,and different within one and the same branch for the various component parts ofthe cir- culating capital ,for instance ,for coal and cotton .hence , although these materials must be continually replaced in their natural form ,they need not be bought continually . how often new purchases ofthem must be made ,depends on the magnitude ofthe available supply ,on the times it takes touse itup.inthe case ofthe labor -power ,there is no such storing ofasupply .the reconversion into money ofthe capital invested in labor -power goes hand inhand with that ofthe capital invested inraw and auxiliary mate- rials .but the reconversion ofthe money ,on one side into labor -power ,on the other into raw materials ,proceeds sep- arately onaccount ofthe special terms ofpurchase and pay- ment ofthese two constituents ofproductive capital ,one of them being bought asaproductive supply for long terms , the other ,labor -power ,for shorter terms ,for instance ,for terms ofone week .on the other hand ,the capitalist must keep asupply offinished commodities besides asupply of materials for production .apart from the difficulties ofsell- ing ,etc. ,acertain quantity must be produced ,say for in- stance ,on order .while the last portion ofthis quantity isbeing produced ,the finished product iswaiting instorage until the order can be completely filled .other differences inthe turn -over ofcirculation capital arise assoon assome ofits individual elements must stay insome preliminary stage ofthe process ofproduction ,such asthe drying of wood ,etc. ,longer than others . the credit -system ,towhich scrope here refers ,and com- mercial capital ,modify the turn -over for the individual capitalist .they modify the turn -over on asocial scale only insofar asthey do not accelerate merely production ,but also consumption .",
        "theories offixed and circulating capital . 215 chapter x. theories offixed and circulating capital . the physiocrats and adam smith . in quesnay's analysis ,the distinction between fixed and circulating capital assumes the form ofavances primitives and avances annuelles .he correctly represents this dis- tinction asone tobemade with regard toproductive capital , to capital directly engaged in the process of production . but owing tothe fact that heregards the capital invested in agriculture ,the capital ofthe capitalist farmer ,asthe only really productive capital ,hemakes these distinctions only for the capital ofthis farmer .this also accounts for the annual period ofturn -over ofone part ofthe capital ,and the more than annual (decennial )ofthe other part .incidentally itmay benoted ,that inthe course oftheir development the physiocrats applied these distinctions also to other kinds ofcapital ,toindustrial capital ingeneral .the distinction between annual advances and others extending over alonger period retained such lasting value for social science that many economists ,even after adam smith ,returned toit. the distinction between these two kinds ofadvances is not made ,until money has been transformed into the ele- ments ofproductive capital .itisadistinction which ap- plies solely tothe divisions ofproductive capital .quesnay , therefore ,never thinks ofclassing money either among the primitive or the annual advances .in their capacity as advances on production ,these two categories confront on one side the money ,onthe other the commodities existing on the market .furthermore ,the distinction between these two elements of productive capital iscorrectly defined as resting onthe different manner inwhich they enter into the value ofthe finished product ,and this implies the different way inwhich their values are circulated together with those ofthe products .from this ,again ,follows the different method oftheir reproduction ,the value ofthe one being",
        "216capital . }entirely replaced annually ,that ofthe other only partially and inlonger intervals.23 the only progress made by adam smith isthe general- ization ofthe categories .he no longer applies them toone special form ofcapital ,the tenant's capital ,but toevery form ofproductive capital .hence itfollows asamatter offact that the distinction between an annual period ofturn -over and one oflonger duration ,derived from agriculture ,is replaced by the general distinction ofthe different periods ofturn -over ,sothat one turn -over ofthe fixed capital al- ways comprises more than one turn -over ofthe circulating capital ,regardless ofthe periods ofturn -over ofthe circu- lating capital ,whether they beannual ,more than annual , orless .thus adam smith transforms the annual advances into circulating capital ,and the primitive advances into fixed capital .but his progress isconfined tothis generaliza- tion ofthe categories .his analyses are far inferior to those ofquesnay . his unclearness ismanifested atthe very outset by the crudely empirical manner inwhich hebroaches the subject : \"there are two different ways inwhich acapital may be employed soastoyield arevenue orprofit toitsemployer .\" (wealth ofnations .book ii,chap .i,page 189 ,aberdeen edition ,1848. ) as amatter offact ,the ways inwhich value may beem- ployed soastoperform the functions ofcapital and yield 23compare with regard toquesnay the analyse dutableau econom- ique inphysiocrates ,edition ofdaire ,part i,paris ,1846. there we read ,forinstance ,that the annual advances consist ofthe expenses in- curred annually for the work ofcultivation ;these advances must be distinguished from the primitive ones ,which form the funds forthe es- tablishment ofthe farming business .\"(page 59.)inthe works ofthe later physiocrats ,these advances are sometimes termed capital ,for in- stance bydupont denemours inhis origine etprogres d'une science nouvelle ,1767 ,daire edition ,i,page 291,where hespeaks of\"capital oradvances ,\"furthermore byletrosne :\"asaresult ofthe longer or shorter duration ofthe employment ofmanual labor ,anation possesses aconsiderable fund ofwealth independent ofitsannual reproduction , and this fund isacapital accumulated inlong periods and originally paid byproductive acts,which are always continued and increased .\" (daire ,ii,page 928. )turgot employs the term capital more regularly foradvances ,and identifies the advances ofthe manufacturers still more with those ofthetenants ofland .(turgot ,reflexions sur laformation etladistribution des richesses ,1766. )",
        "theories offixed and circulating capital .217 surplus -value toitsowner are asdifferent and varied asthe spheres ofinvestment ofcapital .itisaquestion ofthe dif- ferent spheres ofproduction in which capital may be in- vested .ifput inthis way ,the question implies still more . itincludes the other question ofthe way in which value , even ifitisnot employed asproductive capital ,may per- form the functions ofcapital for itsowner ,for instance ,as interest -bearing capital ,merchants 'capital ,etc. at this point weare already far away from the real object ofthe an- alysis ,that istosay from the question :how does the di- vision ofproductive capital into itsvarious elements affect their periods ofturn -over ,leaving out ofconsideration their different spheres ofinvestment ? adam smith continues immediately :\"first ,itmay be employed inraising ,manufacturing ,orpurchasing goods , and selling them again with aprofit .\" he does not tell usanything else inthis statement than that capital may be employed inagriculture ,manufacture ,and commerce .he speaks only ofthe different spheres ofinvestment ofcapital , including commerce ,inwhich capital isnot directly em- bodied inthe process ofproduction and does not perform the functions ofproductive capital .in sodoing he aban- dons the foundation on which the physiocrats base the dis- tinctions ofthe elements ofproductive capital and their influence on itsperiods ofturn -over .he goes still farther and uses merchants 'capital asan illustration ofaproblem , which concerns exclusively differences ofproductive capital in the process of production and the creation of value , which differences cause those ofitsturn -over and reproduc- tion . he continues :\"the capital employed inthis manner yields no revenue orprofit toits employer ,while iteither remains inhis possession orcontinues inthe same shape .\" the capital employed inthis manner !smith isreferring to capital invested inagriculture ,inindustry ,and he tells us later on that acapital soemployed isdivided into fixed and circulating capital !but the investment ofcapital \"in this manner \"cannot make fixed orcirculating capital ofit. or does he mean tosay that capital employed inthe pro- duction ofcommodities and their sale ataprofit must again",
        "218capital . besold after itstransformation into commodities and must pass inthe first place from the possession ofthe seller into that ofthe buyer ,and inthe second place from its com- modity -form into the money -form ,sothat itisofno use to itsowner solong asitretains the same form inhis hands ? inthat case ,the problem amounts tothis :the same capi- tal-value ,which formerly performed the functions ofpro- ductive capital inaform typical ofthe process ofproduc- tion ,now performs those ofcommodity -capital and money- capital informs typical ofthe process ofcirculation ,where it isnolonger either fixed orcirculating capital .and this ap- plies equally tothose elements ofvalue which are added by means ofraw and auxiliary material ,inother words tocir- culating capital ,and tothose which are added by the con- sumption ofinstruments ofproduction ,ortofixed capital . we do not get any nearer tothe distinction between fixed and circulating capital inthis way . adam smith says furthermore :\"the goods ofthe mer- chant yield him no revenue orprofit till he sells them for money ,and the money yields him aslittle till itisagain ex- changed for goods .his capital iscontinually going from him inone shape ,and returning tohim inanother ,and it isonly bymeans ofsuch circulation ,orsuccessive exchanges , that itcan yield him any profit .such capitals ,therefore , may very properly be called circulating capital .\" that which adam smith here calls circulating capital , isathing which ishall call capital ofcirculation ,that is tosay,capital inaform characteristic ofthe process ofcir- culation ,changes of form due toexchange (achange of substance and ofhands ),inother words ,commodity -capital and money -capital ,asdistinguished from the form ofpro- ductive capital ,which ischaracteristic ofthe process ofpro- duction .these are not special divisions made by the indus- trial capitalist ofhis capital ,but different forms assumed and discarded by the advanced capital -value during its course oflife ,inever renewed cycles .the great backward step ofadam smith ascompared with the physiocrats is that he does not discriminate between these forms and those which arise inthe circulation ofcapital -value through itssuccessive metamorphoses while itexists inthe form of",
        "theories offixed and circulating capital .219 productive capital ,and which are due todifferent ways in which the various elements ofproductive capital take part inthe formation ofvalues and transfer their own value to the products .we shall see the consequences ofconfounding these fundamentals ,productive capital and capital inthe sphere ofcirculation (commodity -capital and money -capital ) onone side ,and fixed and circulating capital on the other . the capital -value advanced infixed capital isasmuch cir- culated by the product asthat which has been advanced inthe circulating capital ,and both are equally transformed into money -capital bythe circulation ofcommodity -capital . the difference arises only from the fact that the value of fixed capital circulates piece -meal and is,therefore ,repro- duced inthe same way inshorter orlonger intervals inits natural form . that adam smith means nothing else by this term of circulating capital inthe above passage but capital ofcir- culation ,that istosay,capital inthe form ofcommodity- capital and money -capital characteristic ofthe process of circulation ,isshown byhis singularly ill-chosen illustration . he selects for this purpose akind ofcapital which does not belong tothe process ofproduction ,but tothe sphere ofcir- culation .this ismerchants 'capital ,which consists only ofcapital ofcirculation . how absurd itistostart out with an illustration ,in which capital does not perform the functions ofproductive capital ,isimmediately shown by himself .\"the capital of amerchant isaltogether acirculating capital .\" but later onwe learn that the difference between circulating and fixed capital arises out ofthe essential differences within the productive capital itself .on one side ,adam smith has the distinction ofthe physiocrats inmind ,onthe other the different forms assumed by capital -value inits cycles . and these things are jumbled together by him without any discrimination . but itisquite incomprehensible how profit should arise by the transformation ofmoney and commodities ,by the mere exchange ofone ofthese forms for the other .and an explanation becomes impossible for adam smith ,because he starts out with merchants 'capital which moves only in",
        "220capital . the sphere of circulation .we shall return tothis later . let usfirst hear what hehas tosay about fixed capital . \"secondly ,it(capital )may beemployed inthe improve- ment ofland ,inthe purchase ofuseful machines and in- struments oftrade ,orinsuch like things asyield arevenue or profit without changing masters ,or circulating any further .such capitals ,therefore ,may very properly be called fixed capitals .different occupations require very dif- ferent proportions between the fixed and circulating capi- tals employed inthem .. some part ofthe capital ofevery master artificer ormanufacturer must be fixed in the instruments ofhis trade .this part ,however ,isvery small insome ,and very great inothers . greater part ofthe capital ofall such master artificers (such astailors ,shoemakers ,weavers )however ,iscirculated ,either inthe wages oftheir workmen ,orinthe price oftheir mate- rials ,and tobe repaid with aprofit by the price ofthe work .\" the far apart from the naive determination ofthe source of profit ,the weakness and confusion ofthese statements be- comes atonce apparent ,when we consider ,e.g.,that ,for amachine manufacturer ,amachine ishis product ,which circulates ascommodity -capital ,orinadam smith's words , \"isparted with ,changes masters ,circulates farther .\" ac- cording tohis own definition ,therefore ,this machine would not befixed ,but circulating capital .this confusion isdue tothe fact that smith confounds the distinction between fixed and circulating capital ,which arises out ofthe differ- ent circulation ofthe various elements ofproductive capital , with differences ofform successively assumed by the same capital when performing the functions ofproductive capi- tal within the sphere ofproduction ,while inthe circulation itbecomes capital ofcirculation ,that istosay commodity- capital and money -capital .according tothe place which the same things occupy inthe life-processes ofcapital ,they may ,inthe opinion ofadam smith ,perform the functions offixed capital (means ofproduction ,elements ofproduc- tive capital ),orof\"circulating \"commodity -capital (prod- ucts transferred from the sphere ofproduction tothat of circulation ).",
        "theories offixed and circulating capital .221 but adam smith suddenly changes the entire basis ofhis division ,and contradicts the statements with which he had opened his analysis afew lines previously .this isdone especially by the statement that \"there are two different ways inwhich acapital may be employed soastoyield a revenue orprofit toitsemployer ,\"that istosay ascirculat- ing orasfixed capital .these two categories would ,therefore , bedifferent methods ofemployment ofdifferent capitals in- dependent ofone another ,some being employed inindus- tries ,others in agriculture .but immediately he says : \"different occupations require very different proportions between the fixed and circulating capitals employed in them .\" here fixed and circulating capital are no longer different independent investments ofdifferent capitals ,but different proportions ofthe same productive capital ,which represent different portions ofthe total value ofthis capital indifferent spheres ofinvestment .they are here differ- ences arising from the appropriate division ofthe productive capital itself and valid only with respect toit.but this is contrary tothe distinction of commercial capital ,which according tohim iscirculating capital ascompared tofixed capital ,when he says :\"the capital ofamerchant isalto- gether acirculating capital .\"itisindeed acapital perform- ing its functions entirely within the sphere ofcirculation , and isfor this reason distinguished from productive capital embodied inthe process ofproduction .but for this very reason itcannot beregarded asaconstituent part ofthe cir- culating portion ofproductive capital ,asdistinguished from its fixed portion . in the illustrations given by adam smith ,he defines the instruments oftrade asfixed capital ,and the portion of productive capital invested inwages and raw materials ,in- cluding auxiliary materials ,ascirculating capital ,\"repaid with aprofit bythe price ofthe work .\" he starts out,then ,from the various constituents ofthe labor -process ,from labor -power (labor )and raw materials on one side ,and instruments oflabor on the other .and these are constituents ofcapital ,because aquantity ofvalues isinvested inthem for the purpose ofperforming the func- tions of capital .",
        "220capital . the sphere of circulation .we shall return tothis later . let usfirst hear what hehas tosay about fixed capital . \"secondly ,it(capital )may beemployed inthe improve- ment ofland ,inthe purchase ofuseful machines and in- struments oftrade ,orinsuch like things asyield arevenue or profit without changing masters ,or circulating any further .such capitals ,therefore ,may very properly be called fixed capitals .different occupations require very dif- ferent proportions between the fixed and circulating capi- tals employed inthem . some part ofthe capital ofevery master artificer ormanufacturer must be fixed in the instruments ofhis trade .this part ,however ,isvery small insome ,and very great inothers .. the far greater part ofthe capital ofall such master artificers (such astailors ,shoemakers ,weavers )however ,iscirculated ,either inthe wages oftheir workmen ,orinthe price oftheir mate- rials ,and tobe repaid with aprofit by the price ofthe work .\" apart from the naive determination ofthe source of profit ,the weakness and confusion ofthese statements be- comes atonce apparent ,when we consider ,e.g.,that ,for amachine manufacturer ,amachine ishis product ,which circulates ascommodity -capital ,orinadam smith's words , \"isparted with ,changes masters ,circulates farther .\" ac- cording tohis own definition ,therefore ,this machine would not befixed ,but circulating capital .this confusion isdue tothe fact that smith confounds the distinction between fixed and circulating capital ,which arises out ofthe differ- ent circulation ofthe various elements ofproductive capital , with differences ofform successively assumed by the same capital when performing the functions ofproductive capi- tal within the sphere ofproduction ,while inthe circulation itbecomes capital ofcirculation ,that istosay commodity- capital and money -capital .according tothe place which the same things occupy inthe life -processes ofcapital ,they may ,inthe opinion ofadam smith ,perform the functions offixed capital (means ofproduction ,elements ofproduc- tive capital ),orof\"circulating \"commodity -capital (prod- ucts transferred from the sphere ofproduction tothat of circulation ).",
        "theories offixed and circulating capital .221 but adam smith suddenly changes the entire basis ofhis division ,and contradicts the statements with which he had opened his analysis afew lines previously .this isdone especially by the statement that \"there are two different ways inwhich acapital may be employed soastoyield a revenue orprofit toitsemployer ,\"that istosay ascirculat- ing orasfixed capital .these two categories would ,therefore , bedifferent methods ofemployment ofdifferent capitals in- dependent ofone another ,some being employed inindus- tries ,others in agriculture .but immediately he says : \"different occupations require very different proportions between the fixed and circulating capitals employed in them .\"here fixed and circulating capital are no longer different independent investments ofdifferent capitals ,but different proportions ofthe same productive capital ,which represent different portions ofthe total value ofthis capital indifferent spheres ofinvestment .they are here differ- ences arising from the appropriate division ofthe productive capital itself and valid only with respect toit.but this is contrary tothe distinction of commercial capital ,which according tohim iscirculating capital ascompared tofixed capital ,when he says :\"the capital ofamerchant isalto- gether acirculating capital .\"itisindeed acapital perform- ing its functions entirely within the sphere ofcirculation , and isfor this reason distinguished from productive capital embodied inthe process ofproduction .but for this very reason itcannot beregarded asaconstituent part ofthe cir- culating portion ofproductive capital ,asdistinguished from its fixed portion . in the illustrations given by adam smith ,he defines the instruments of trade asfixed capital ,and the portion of productive capital invested inwages and raw materials ,in- cluding auxiliary materials ,ascirculating capital ,\"repaid with aprofit bythe price ofthe work .\" he starts out ,then ,from the various constituents ofthe labor -process ,from labor -power (labor )and raw materials on one side ,and instruments oflabor on the other .and these are constituents ofcapital ,because aquantity ofvalues isinvested inthem for the purpose ofperforming the func- tions of capital .",
        "222capital . to this extent they are material elements ,modes ofexist- ence ofproductive capital ,that istosay ,ofcapital serving inthe process ofproduction .but why isone ofthese con- stituents called fixed ?because \"some parts ofthe capital must befixed inthe instruments oftrade .\" but the other parts are also fixed inwages and raw materials .machines , however ,and \"instruments oftrade ....such like things yield arevenue orprofit without changing masters orcirculating any further .such capitals ,therefore ,may very properly becalled fixed capitals .\" take ,for instance ,the mining industry .no raw mate- rial atall isused there ,because the object oflabor ,such as copper ,isthe product ofnature ,which must be obtained first ofall by labor .the copper tobeobtained ,the prod- uct ofthe process ,which circulates later on asacommodity , orcommodity -capital ,does not form an element ofproduc- tive capital .no part ofitsvalue isthus invested .on the other hand ,the other elements ofthe productive process , such aslabor -power ,and auxiliary materials such ascoal , water ,etc. ,donot enter bodily into the product .the coal is entirely consumed and only itsvalue enters into the product , just asapart ofthe value ofthe machine istransferred toit. the laborer ,finally ,remains just asindependent sofar asthe product ,the copper ,isconcerned ,asthe machine .only the value which heproduces by his labor becomes apart ofthe value ofthe copper .but inthis illustration ,not asingle constituent part ofproductive capital changes masters ,nor do any ofthem circulate further ,because none ofthem enter bodily into the product .what becomes ofthe circu- lating capital in this case ? according to adam smith's own definition ,the entire capital employed in mining would consist only offixed capital . on the other hand ,let uslook atsome other industry , which utilizes raw materials that form the substance ofits product ,and auxiliary materials that enter bodily into the product ,instead ofonly sofar astheir value isconcerned , asinthe case ofcoal for fuel .simultaneously with the product ,for instance with the yarn ,the raw material com- posing it,the cotton ,likewise changes masters ,and passes from the process ofproduction tothat ofconsumption .but",
        "theories offixed and circulating capital .223 solong asthe cotton performs the function ofan element ofproductive capital ,itsowner does not sell it,but manip- ulates itfor the purpose ofmaking itinto yarn .he does not take his hand from it.or,touse smith's crudely er- roneous and trivial terms ,he does not make any profit by parting with it,by its changing masters ,orby circulating it.he does not permit his materials tocirculate any more than his machines .they are fixed inthe process ofproduc- tion ,the same asthe spinning machines and the factory- buildings .indeed ,apart ofthe productive capital inthe form ofcoal ,cotton ,etc. ,must bejust ascontinually fixed asthat inthe form ofinstruments oflabor .the difference isonly that the cotton ,coal ,etc. ,required for the process ofproduction ,say,for one week ,isalways entirely con- sumed inthe manufacture ofthe weekly product ,sothat new specimens ofcotton ,coal ,etc. ,must be supplied ;inother words ,these elements ofproductive capital consist contin- ually ofnew specimens ofthe same species ,identical only sofar asthe species isconcerned ,while the same individual spinning machine ,the same individual factory -building , continue their participation inawhole series ofweekly pro- ductions without being replaced by new specimens oftheir kind .all the elements ofproductive capital constituting its parts must becontinually fixed inthe process ofproduc- tion ,for itcannot proceed without them .and all the ele- ments ofproductive capital ,whether fixed or circulating , are equally distinguished asproductive capital from capital , of circulation ,that istosay,commodity -capital and money- capital . itisthe same with labor -power .apart ofthe productive capital must be continually fixed init,and the same iden- tical labor -powers ,just asinthe case ofthe machines ,are everywhere employed for acertain length oftime by the same capitalist .the difference between labor -power and machines inthis case isnot that the machines are bought once for all (which isnot even the case when they are paid for in instalments ),while the laborer isnot .the difference israther that the labor expended bythe laborer enters wholly into the value ofthe product ,while the value ofthe ma- chines enters piecemeal into it.",
        "224capital . smith confounds different definitions ,when he says of circulating capital ascompared tofixed :\"the capital em- ployed inthis manner yields norevenue orprofit toitsem- ployer ,while iteither remains inhis possession orcontinues inthe same shape .\"he places the merely formal metamor- phosis ofthe commodity ,which the product inthe form of commodity -capital ,undergoes in the sphere ofcirculation . and which brings about the change ofmasters ofthe com- modities ,on the same level with the bodily metamorphosis , which the different elements ofproductive capital undergo during the process ofproduction . he unceremoniously jumbles together the transformation of commodities into money ,ofmoney into commodities ,orpurchase and sale , with the transformation of elements of production into products .his illustration for circulating capital ismer- chants 'capital which istransformed from commodities into money and from money into commodities -the metamor- phosis c-m-cbelonging tothe circulation ofcommodi- ties .but this metamorphosis within the circulation signi- fies for the industrial capital in action that the commodi- ties into which the money isretransformed are elements of production (means ofproduction and labor power ),inother words ,that itrenders the function ofindustrial capital con- tinuous ,that itmakes ofthe process ofproduction acontin- uous one ,aprocess ofproduction .this entire metamorphosis takes place incirculation .itisthe process ofcirculation which brings about the bodily transition ofthe commodi- ties from one master toanother .on the other hand ,the metamorphoses experienced by productive capital within the process ofproduction take place inthe labor -process and are necessary for the purpose oftransforming the elements ofproduction into the desired product .adam smith clings tothe fact that apart ofthe means ofproduction (the in- struments of labor ,strictly speaking )serve inthe labor- process (yield aprofit totheir master ,ashe erroneously ex- presses it)without changing their natural form and wear out only by degrees ;while another part ,the materials , change their form and fulfill their duty asmeans ofproduc- tion by virtue ofthis very fact .this difference inthe be- havior ofthe elements ofproductive capital inthe labor-",
        "theories offixed and circulating capital .225 process ,however ,serves only asthe point ofdeparture for the difference between fixed capital and capital which isnot fixed , but itisnot this difference itself .this isevident from the mere fact that this different behavior iscommon to all modes of production ,whether they are capitalist or not . but onthe other hand ,this different behavior ofthe sub- stances isaccompanied by adifferent yield ofvalue tothe product ,and this initsturn corresponds toadifferent re- production ofvalue bythe sale ofthe product .and this is what constitutes the difference inquestion .hence capital isnot fixed capital ,because itisfixed inthe means ofpro- duction ,but because apart ofthe value invested inmeans ofproduction remains fixed inthem ,while another part cir- culates asapart ofthe value ofthe product . \"ifit(the stock )isemployed inprocuring future profit , itmust procure this profit by staying with him (the em- ployer ),orbygoing from him .inthe one case itisafixed , inthe other itisacirculating capital .\" (page 189. ) inthis statement ,itisthe crudely empirical conception of profit derived from the ideas of the ordinary capitalist , which isremarkable ,being contrary tothe better esoteric understanding ofadam smith .not only the price ofthe materials ,but also that ofthe labor -power isreproduced by the price ofthe product ,and soisthat part ofvalue which istransferred bywear and tear from the instruments oflabor to the product .under no circumstances does this repro- duction yield any profits .whether avalue advanced for the production ofacommodity isreproduced entirely orin part ,atone time orgradually ,bythe sale ofthat commodi- ty,cannot change anything except the manner and time of its reproduction .but itcan innoway transform that which iscommon toboth ,the reproduction ofvalue ,into apro- duction of surplus -value .we meet here once more the common idea that surplus -value arises only through sale , inthe circulation ,because itisnot realized until the product issold ,until itcirculates .as amatter offact ,the different genesis ofthe profit isinthis case but amistaken phrase for the truth that the different elements ofproductive capi- tal are differently employed ,and have adifferent effect in the labor -process asdifferent productive elements .in the",
        "226capital . final analysis ,the difference isnot attributed tothe process of production or self -expansion ,not tothe function of productive capital itself ,but itissupposed toapply only sub- jectively tothe individual capitalist ,whom one part ofcapi- tal serves auseful purpose inone way ,while another does inadifferent way . quesnay ,onthe other hand ,had derived this difference from the process ofreproduction and its requirements .in order that this process may becontinuous ,the value ofthe annual advances must be annually reproduced infull by the value ofthe annual product ,while the value ofthe capi- tal stock isreproduced only by degrees ,for instance ,inten years ,and isnot fully worn out tothe point ofreplacement by another specimen ofthe same kind until then .adam smith here falls far below quesnay . nothing remains therefore toadam smith for the deter- mination ofthe fixed capital but the fact that itisrepre- sented by instruments ofproduction which do not change their form inthe process ofproduction and continue to serve in production until they are worn out,as distin- guished from the product ,inthe formation ofwhich they co-operate .he forgets that all elements ofproductive capi- tal are continually confronted intheir natural form (instru- ments oflabor ,materials ,and labor -power )by the product and by the circulating commodity ,and that the difference between the part consisting of materials and labor -power and that consisting ofinstruments oflabor isthis :labor- power isalways purchased afresh ,not bought for good like the instruments oflabor ;the materials manipulated inthe labor -process are not the same identical specimens through- out,but always new specimens ofthe same kind .at the same time the false impression iscreated that the value of the fixed capital does not participate inthe circulation ,al- though adam smith has previously analyzed the wear and tear offixed capital asapart ofthe price ofthe product . in mentioning the circulating capital as distinguished from the fixed ,hedoes not emphasize the fact ,that this dis- tinction rests on the circumstance that circulating capital isthat part ofproductive capital which must befully repro- duced bythe value ofthe product and must therefore fully",
        "theories offixed and circulating capital .227 share inits metamorphoses ,while this isnot sointhe case ofthe fixed capital .on the contrary ,hejumbles ittogether with those forms which capital assumes in its transition from the sphere ofproduction tothat ofcirculation ,that is to say,commodity -capital and money -capital . but both forms ,commodity -capital aswell asmoney -capital ,are bear- ers ofthe value ofthe fixed and the circulating parts of productive capital .both ofthem are capitals ofcirculation , asdistinguished from productive capital ,but they do not represent circulating capital as distinguished from fixed capital . finally ,owing tothe entirely confused idea ofthe mak- ing ofprofit bythe staying ofthe fixed capital inthe process ofproduction ,and the passing from itand circulating of the circulating capital ,the essential difference between the variable capital and the circulating parts ofthe constant capital inthe process ofself -expansion and the formation ofsurplus -value ishidden under the identity ofform ,so that the entire secret ofcapitalist production isobscured still more ;bythe application ofthe common term \"circulat- ing capital \"this essential difference isabolished ;political economy subsequently went still farther by neglecting the distinction between variable and constant capital and dwell- ing on the difference between fixed and circulating capital asthe essential and typical distinction . after adam smith has defined fixed and circulating capital astwo different ways ofinvesting capital ,each of which yields aprofit by itself ,he says :\"no fixed capital can yield any revenue but bymeans ofacirculating capital . the most useful machines and instruments oftrade will produce nothing without the circulating capital which af fords the materials they are employed upon ,and the main- tenance ofthe workmen who employ them .\" (page 188. ) here it becomes apparent what the previously used phrases \"yield arevenue ,make aprofit ,etc. ,\"signify ,viz., that both parts of capital serve inthe formation ofthe product . adam smith then gives the following illustration :\"that part ofthe capital ofthe farmer which isemployed inthe implements ofagriculture isafixed ,that which isemployed",
        "226capital . final analysis ,the difference isnot attributed tothe process of production or self -expansion ,not to the function of productive capital itself ,but itissupposed toapply only sub- jectively tothe individual capitalist ,whom one part ofcapi- tal serves auseful purpose inone way ,while another does inadifferent way . quesnay ,onthe other hand ,had derived this difference from the process ofreproduction and its requirements .in order that this process may be continuous ,the value ofthe annual advances must be annually reproduced in full by the value ofthe annual product ,while the value ofthe capi- tal stock isreproduced only by degrees ,for instance ,inten years ,and isnot fully worn out tothe point ofreplacement by another specimen ofthe same kind until then .adam smith here falls far below quesnay . nothing remains therefore toadam smith for the deter- mination ofthe fixed capital but the fact that itisrepre- sented by instruments ofproduction which do not change their form in the process of production and continue to serve in production until they are worn out,as distin- guished from the product ,inthe formation ofwhich they co-operate .he forgets that all elements ofproductive capi- tal are continually confronted intheir natural form (instru- ments oflabor ,materials ,and labor -power )by the product and by the circulating commodity ,and that the difference between the part consisting of materials and labor -power and that consisting ofinstruments oflabor isthis :labor- power isalways purchased afresh ,not bought for good like the instruments oflabor ;the materials manipulated inthe labor -process are not the same identical specimens through- out,but always new specimens ofthe same kind .at the same time the false impression iscreated that the value of the fixed capital does not participate inthe circulation ,al- though adam smith has previously analyzed the wear and tear offixed capital asapart ofthe price ofthe product . in mentioning the circulating capital as distinguished from the fixed ,hedoes not emphasize the fact ,that this dis- tinction rests on the circumstance that circulating capital isthat part ofproductive capital which must befully repro- duced by the value ofthe product and must therefore fully",
        "theories offixed and circulating capital .227 share initsmetamorphoses ,while this isnot sointhe case ofthe fixed capital .on the contrary ,hejumbles ittogether with those forms which capital assumes in its transition from the sphere ofproduction tothat ofcirculation ,that is tosay,commodity -capital and money -capital . but both forms ,commodity -capital aswell asmoney -capital ,are bear- ers ofthe value ofthe fixed and the circulating parts of productive capital .both ofthem are capitals ofcirculation , asdistinguished from productive capital ,but they do not represent circulating capital as distinguished from fixed capital . finally ,owing tothe entirely confused idea ofthe mak- ing ofprofit bythe staying ofthe fixed capital inthe process ofproduction ,and the passing from itand circulating of the circulating capital ,the essential difference between the variable capital and the circulating parts ofthe constant capital inthe process ofself -expansion and the formation ofsurplus -value ishidden under the identity ofform ,so that the entire secret ofcapitalist production isobscured still more ;bythe application ofthe common term \"circulat- ing capital \"this essential difference isabolished ;political economy subsequently went still farther by neglecting the distinction between variable and constant capital and dwell- ing on the difference between fixed and circulating capital asthe essential and typical distinction . after adam smith has defined fixed and circulating capital astwo different ways ofinvesting capital ,each of which yields aprofit by itself ,he says :\"no fixed capital can yield any revenue but by means ofacirculating capital . the most useful machines and instruments oftrade will produce nothing without the circulating capital which af- fords the materials they are employed upon ,and the main- tenance ofthe workmen who employ them .\" (page 188. ) here itbecomes apparent what the previously used phrases \"yield arevenue ,make aprofit ,etc. ,\"signify ,viz., that both parts of capital serve inthe formation ofthe product . adam smith then gives the following illustration :\"that part ofthe capital ofthe farmer which isemployed inthe implements ofagriculture isafixed ,that which isemployed",
        "228capital . inthe wages and maintenance ofhis laboring servants isa circulating capital .\" (here the difference offixed and cir- culating capital iscorrectly applied as referring tothe different circulation ,the turn -over of different constitu- ent parts of productive capital .) \"he makes aprofit ofthe one by keeping itinhis own possession ,and ofthe other by parting with it. the price or value ofhis la- boring cattle isafixed capital \"(here he isagain correct inthat itisthe value ,not the material substance ,which determines the difference ),\"inthe same manner asthat ofthe instruments ofhusbandry ;their maintenance \"(mean- ing that ofthe laboring cattle )\"isacirculating capital ,in the same way asthat ofthe laboring servants .the farmer makes his profit by keeping the laboring cattle and part- ing with their maintenance .\"(the farmer keeps the fodder ofthe cattle ,hedoes not sell it.he uses ittofeed the cat- tle,while heexploits the cattle themselves asinstruments of labor .the difference isonly this :the feed used for the maintenance ofthe cattle iswholly consumed and must be continually reproduced bynew feed ,either by means ofthe products ofagriculture orby their sale ;while the cattle themselves are reproduced only tothe extent that each speci- men becomes worn out.) \"both the price and the mainte- nance ofthe cattle which are bought inand fattened ,not for labor ,but for sale ,are acirculating capital .the farmer makes his profit by parting with them .\" (every producer ofcommodities ,hence the capitalist producer likewise ,sells his product ,the result ofhis process ofproduction ,but this isnot ameans ofconstituting this product apart ofeither the fixed orthe circulating part ofhis productive capital . the product has now rather that form ,inwhich itisre- leased from the process ofproduction and compelled toper- form the function ofcommodity -capital .the fattened stock serve inthe process ofproduction asraw material ,not as instruments oflabor like the laboring cattle .hence the fat- tened cattle enter bodily into the product ,and their whole value enters into it,just asthat ofthe auxiliary material , the feed ,does .the fattened cattle are,therefore ,acircu- lating part ofthe productive capital ,but they are not so, because the sold product ,these same cattle ,have the same",
        "theories offixed and circulating capital . 229 natural form asthe raw material ,that istosay these cattle when not yet fattened .this isamere coincidence .at the same time adam smith might have seen bythis illus- tration that itisnot the material form ofthe elements of production ,but their function within the process ofproduc- tion ,which determines the value contained inthem asa fixed orcirculating one .)\"the whole value ofthe seed ,too, isafixed capital . though itgoes backwards and for- wards between the ground and the granery ,itnever changes masters ,and therefore itdoes not properly circulate .the farmer makes his profit not by itssale ,but byitsincrease .\" at this point ,the utter thoughtlessness of smith's dis- tinction reveals itself .according tohim ,the seeds would be fixed capital ,ifthere would be no change ofmasters , that istosay,ifthe seeds were directly reproduced out of the annual product by subtracting them from it.on the other hand ,they would be circulating capital ,ifthe entire product were sold and apart ofitsvalue employed for the purchase ofanother's seed .in the one case ,there would beachange ofmasters ,inthe other there would not .smith once more confounds circulating and commodity -capital atthis point .the product isthe material bearer ofthe com- modity -capital ,but of course only that part ofitwhich actually enters into the circulation and does not re-enter directly into the process ofproduction ,from which itcame asaproduct . whether the seed isdirectly subtracted asapart ofthe product ,orwhether the entire product issold and apart of itsvalue converted inthe purchase ofanother man's seed , ineither case itismere reproduction which takes place ,and noprofit isproduced by it.inthe one case ,the seed enters into circulation with the remainder ofthe product asacom- modity ,inthe other itfigures only in bookkeeping asa part ofthe value ofthe advanced capital .but inboth cases , itremains acirculating part ofthe productive capital .it isentirely consumed ingetting the product ready ,and it must be entirely reproduced by means ofit,in order to make self -expansion possible . according toadam smith ,raw and auxiliary materials lose their independent form ,which they carried as use-",
        "230capital . values into the labor -process .not sothe instruments of labor proper .an instrument ,amachine ,afactory -build- ing ,avessel ,etc. ,serve inthe labor -process only solong as they preserve their original form and enter the labor -process to-morrow inthe same form in which they did yesterday . just asthey preserve their independent form ascompared tothe product during life ,inthe labor -process ,sothey do after death .the corpses ofmachines ,shops ,factory -build- ings ,still exist independently ofthe products ,which they helped toform .(book i,chapter viii ,page 227. ) ---these different ways in which means ofproduction are used inthe formation ofthe product ,some ofthem preserv- ing their independent form as compared tothe product , others changing orlosing itentirely ,this difference per- taining tothe labor -process itself ,regardless ofwhether it iscarried on for home use,without exchange ,without any production ofcommodities ,asitwas ,for instance ,inthe patriarchal family ,isfalsified by adam smith ,(1)byviti- ating itwith the irrelevant definition ofprofit ,saying that some ofthe elements ofproduction yield aprofit totheir owner by preserving their form ,while others do soby los- ing it;(2)by jumbling together the changes ofapart of the elements ofproduction in the labor -process with that metamorphosis inthe circulation ofcommodities which con- sists ofthe exchange ,the sale and purchase ,ofproducts and involves achange ofmasters ofthe circulating com- modities . the turn -over presumes the reproduction bythe interven- tion ofthe circulation ,by the sale ofthe product ,by its conversion into money and its reconversion from money into elements ofproduction .but tothe extent that apart ofthe product ofthe capitalist producer serves him directly ashis own means ofproduction ,he figures asits seller to himself ,and this transaction isso entered in his books . this part ofthe reproduction isnot accomplished by the intervention ofthe circulation ,but proceeds directly .but apart ofthe product thus re-employed asmeans ofproduc- tion replaces circulating ,not fixed ,capital ,tothe extent , (1)that its value passes wholly into the product ,and (2) that itisitself wholly reproduced inits natural form by means ofthe new product .",
        "theories offixed and circulating capital .231 adam smith ,however ,tells us what circulating and fixed capital consist of.he enumerates the things ,the ma- terial elements ,which form fixed ,and those which form circulating capital ,just asthough this character were due tothe natural substance ofthose things ,instead oftotheir definite function within the capitalist process ofproduction . and yet inbook ii,chapter i,he makes the remark that although acertain thing ,for instance ,aresidence ,which isreserved for direct consumption ,\"may yield arevenue to itsproprietor ,and thereby serve inthe function ofacapital tohim ,itcannot yield any tothe public ,nor serve inthe function ofacapital toit,and the revenue ofthe whole body ofthe people can never beinthe smallest degree in- creased by it.\" (page 186. ) here ,then ,'adam smith clearly states that the character ofcapital isnot inherent in the things themselves ,but isafunction with which they may ormay not be invested ,according tocircumstances .but what istrue ofcapital ingeneral ,isalso true ofitssubdi- visions . the same things form constituent parts ofthe circulating orfixed capital ,according towhether they perform this or that function inthe labor -process .adomestic animal ,for instance ,asalaboring animal (instrument oflabor ),rep- resents the material mode ofexistence offixed capital ,while asstock for fattening (raw material )itisaconstituent part ofthe circulating capital ofthe farmer .on the other hand , the same things serve either asconstituent parts ofproduc- tive capital ,orbelong tothe fund for direct consumption . ahouse ,for instance ,when performing the function ofa workshop ,isafixed part ofproductive capital ;when serving asaresidence ,itisnot atall aform ofproductive capital . the same instruments oflabor may in many cases serve now as means of reproduction ,now as means of con- sumption . itwas one ofthe errors following from the conception of smith that the capacity offixed and circulating capital was regarded asvested inthe things themselves .the mere an- alysis ofthe labor -process on his part ,inbook i,chapter v,shows that the capacity ofinstruments oflabor ,materials oflabor ,and products changes according tothe different",
        "232capital . role played byone and the same thing inthe process .the determination ofwhat isfixed orcirculating capital ,inits turn ,isbased on the definite roles played by these elements inthe labor -process ,and therefore also inthe process ofthe formation ofvalue . inthe second place ,inenumerating the things ofwhich fixed and circulating capital may consist ,smith plainly dis- closes the fact that he jumbles together the distinction be- tween fixed and circulating capital ,applicable and justified only with reference toproductive capital (capital initspro- ductive form ),with the distinction between productive capi- tal and those ofitsforms which belong tothe process ofcir- culation ,viz.,commodity -capital and money -capital .he says inthe same place (pages 187 ,188 ):\"the circulating cap- ital consists . .ofthe provisions ,materials ,and fin- ished work ofallkinds that are inthe hands oftheir respec- tive dealers ,and ofthe money that isnecessary for circula- ting and distributing them ,etc.\" indeed ,ifwe look closer , we observe that hehas here ,contrary toprevious statements , used circulating capital asbeing equivalent tocommodity- capital and money -capital ,that istosay totwo forms ofcap- ital which donot belong tothe process ofproduction atall, which are not circulating capital asopposed tofixed ,but cap- ital ofcirculation asopposed toproductive capital .itis only in co-ordination with these that those constituents of productive capital ,which are advanced in materials (raw materials orpartly finished products )are actually embodied inthe process ofproduction ,play arole .he says :66the third and last ofthe three portions into which the general stock ofsociety naturally divides itself ,is the circulating capital ,ofwhich the characteristic is,that itaffords arevenue only bycirculating orchanging masters . this iscomposed likewise offour parts :first ,ofthe money .\"(but money isnever aform ofproductive capi- tal,ofcapital performing itsfunction inthe productive pro- cess ;itisalways merely one ofthe forms assumed by cap- ital within its process ofcirculation .) \"secondly , ofthe stock ofprovisions which are inthe possession ofthe butcher ,the grazier ,the farmer and from the  sale ofwhich they expect toderive aprofit .",
        "theories offixed and circulating capital .233 fourthly and lastly ,ofthe work which ismade upand com- pleted ,but which isstill inthe hands ofthe merchant and manufacturer .and ,thirdly ,of the materials ,whether altogether rude ormore orless manufactured ,ofclothes , furniture ,and buildings ,which are not yet made up into any ofthose three shapes but which remain inthe hands of the growers ,the manufacturers ,the mercers and drapers , the timber -merchants ,the carpenters and joiners ,the brick- makers ,etc.\" his second and fourth count contain nothing but prod- ucts ,which have been released bythe process ofproduction and must besold ;inshort ,they are products which now per- form the function of commodities ,or commodity -capital , and which ,therefore ,have aform and occupy aplace inthe process ,inwhich they are not elements ofproductive cap- ital ,no matter what may betheir destination ,whether they answer their final purpose asuse-values inindividual orpro- ductive consumption .the products mentioned under sec- ondly are foodstuffs ,those under fourthly all other finished products ,which intheir turn consist only offinished instru- ments oflabor orfinished articles ofconsumption not in- cluded inthe foodstuffs under count two . the fact that smith atthe same time speaks ofthe mer- chant ,shows his confusion .tothe extent that the producer transfers his product tothe merchant ,itdoes nolonger form any part ofhis capital .from the social point ofview ,itis indeed still acommodity -capital ,although in other hands than those ofits producer ;but for the very reason that itis acommodity -capital ,itisneither acirculating nor afixed capital . under every mode ofproduction not carried onfor direct home -consumption the product must circulate asacommod- ity,that istosay,itmust be sold ,not inorder tomake a profit out ofit,but that the producer may beable tolive at all.under the capitalist mode ofproduction we have the further fact that the surplus -value embodied in acertain commodity isrealized by itssale .initscapacity asacom- modity ,the product leaves the process ofproduction and is, therefore ,neither afixed nor acirculating element ofthis process .",
        "234 capital . by the way ,smith here testifies against himself .the finished products ,whatever may be their material form , their use-value ,their utility ,are all commodity -capital ,that istosay capital inaform typical ofthe process ofcircula- tion .being inthis form ,they are not constituent parts of any productive capital which their owner may have .of course ,this does not argue against the fact that ,after their sale ,they may become constituent parts ofproductive capi- talinthe hands oftheir purchaser ,and then represent either fixed orcirculating capital .this shows that the same things ,which atacertain time appear onthe market ascom- modity -capital distinct from productive capital ,may ormay not perform the function ofproductive capital after they have been removed from the market . the product ofthe cotton spinner ,yarn ,isthe commodity- form ofhis capital ,isacommodity -capital from his point of view .itcannot again perform the function ofsome con- stituent part ofhis productive capital ,neither asraw mater- ial nor asan instrument oflabor .but inthe hands ofthe weaver who buys it,itisembodied inhis productive capital asone ofitscirculating parts .for the spinner ,onthe other hand ,the yarn isthe bearer ofthe value ofhis fixed and cir- culating capital (not considering the surplus -value ).so isamachine ,the product ofamachine maker ,the commod- ity-form ofhis capital ,commodity -capital from his point of view .and solong asitpersists inthis form ,itisneither fixed nor circulating capital .but ifitissold toamanufac- turer for use inhis production ,itbecomes afixed part ofhis productive capital .even ifacertain product re-enters asa use-value for the purpose ofproduction into the same process from which itemanated ,for instance coal inthe production ofcoal ,even then that part ofthe output ofcoal which is intended for sale represents neither fixed nor circulating cap- ital ,but commodity -capital . on the other hand ,the utility -form ofacertain product may besuch that itisincapacitated for service asanelement ofproductive capital ,either asraw material oran instru- ment oflabor .this isthe case ,for instance ,with articles of food .nevertheless itisacommodity -capital for its pro- ducer ,inwhich the value ofhis fixed aswell ashis circulat-",
        "theories offixed and circulating capital . 235 ing capital isincorporated ;and itisthe representative of the value ofeither the one orthe other ofthese two forms according towhether the capital employed initsproduction has tobereproduced infull orpartially ,inother words ,ac- cording towhether this capital transfers its full orits par- tial value tothe product . with smith ,inhis count no. 3,the raw material (raw material ,partly finished product ,auxiliary material ),does not figure asapart embodied inthe productive capital ,but merely asaspecial kind ofuse-values ofwhich the social product generally consists ,amass ofcommodities existing apart from the other material elements ,foodstuffs ,etc. , enumerated under nos .2and 4. on the other hand ,these materials are indeed incorporated inthe productive capital and therefore also classed asitselements inthe hands ofthe producer .the confusion arises from the fact that they are partly regarded asperforming afunction inthe hands ofthe producer (inthe hands ofthe growers ,the manufacturers , etc. ),and partly inthe hands ofmerchants (mercers ,drap- ers,timber -merchants ),where they are merely commodity- capital ,not elements ofproductive capital . indeed ,adam smith forgets here ,inthe enumeration of the elements ofcirculating capital ,allabout the fact that the distinction offixed and circulating capital applies only tothe productive capital .he rather places commodity -capital and money -capital ,the two forms ofcapital typical ofthe pro- cess ofcirculation ,opposite ofthe productive capital ,but quite unconsciously . finally ,itisworthy ofnote that adam smith forgets to mention labor -power asone ofthe elements ofproductive capital .and there are two reasons for this . we have just seen that ,apart from money -capital ,circu- lating capital isonly another name for commodity -capital . but tothe extent that labor -power circulates onthe market , itisnot capital ,not aform ofcommodity -capital .itisnot capital atall;the laborer isnot acapitalist ,although he brings his commodity tomarket ,namely his own skin .not until labor -power has been sold and incorporated inthe pro- cess ofproduction ,inother words ,until ithas ceased tocir- culate asacommodity ,does itbecame anelement ofproduc-",
        "236 capital . tive capital ,variable capital and the source ofsurplus -value , acirculating part ofproductive capital sofar asthe turn- over ofthe capital -value invested initisconcerned .since smith here confounds the circulating capital with commod- ity-capital ,he cannot place labor -power under his category ofcirculating capital .hence the commodity -capital here appears inthe form ofcommodities which the laborer buys with his wages ,that istosay,means ofsubsistence .in this form ,the capital -value invested inwages issupposed to belong tothe circulating capital .that which isincorpo- rated inthe process ofproduction islabor -power ,the laborer himself ,not the means ofsubsistence by which the laborer maintains himself .true ,we have seen involume i,chap- ter xxiii ,that ,from the point ofview ofsociety ,the repro- duction ofthe laborer himself by means ofhis individual consumption belongs tothe process ofreproduction ofsocial capital .but this does not apply tothe individual and iso- lated process of production which we are studying here . the \"acquired and useful abilities \"which smith mentions under the head offixed capital ,are on the contrary ele- ments ofcirculating capital ,when they are abilities ofthe wage -worker and have been sold byhim with his labor . itisagreat mistake onthe part ofsmith todivide the entire social wealth into (1)afund for immediate consump  tion ,(2)fixed capital ,and (3)circulating capital .accord- ing tothis ,wealth would have tobeclassified as(1)afund for consumption ,which would not represent apart ofsocial capital engaged inthe performance ofitsfunctions ,although some parts ofitmay continually assist inthis performance ; and (2)ascapital .in other words ,apart ofthe wealth would beperforming the functions ofcapital ,another those ofnon -capital orafund for consumption .and itseems that itishere an indispensable requirement for all capital tobeeither fixed orcirculating ,about inthe same way that itisanatural necessity for amammal tobeeither male or female .but wehave seen that the distinction ofbeing fixed orcirculating applies solely tothe elements ofproductive capital ,that ,therefore ,there isalso aconsiderable quantity ofcapital -commodity -capital and money -capital -existing inaform which does not permit ofitsbeing either fixed or circulating .",
        "theories offixed and circulating capital .237 seeing that the entire mass of social products ,under capitalist production ,circulates onthe market ascommodity- capital ,with the exception ofthat part ofthe product which isdirectly consumed by the individual capitalist producers inits natural form asmeans ofproduction without being sold orbought ,itisevident that not only the fixed and circu- lating elements ofproductive capital ,but also all the ele- ments ofthe fund for consumption are derived from the commodity -capital .this isequivalent tosaying that ,on the basis ofcapitalist production ,both means ofproduction and ofconsumption first appear ascommodity -capital ,even though they are intended for later use asmeans ofproduc- tion orconsumption .labor -power itself islikewise found onthe market asacommodity ,ifnot ascommodity -capital . this accounts for the following confusion inadam smith : \"of these four parts \"(meaning circulating capital ,that is tosay capital initsforms ofcommodity -capital and money- capital typical ofthe process ofcirculation ,which adam smith transforms into four parts by making distinctions between the substantial parts ofcommodity -capital )\"three -provisions ,materials ,and finished work ,are either annu- ally orinalonger orshorter period ,regularly withdrawn from it,and placed either inthe fixed capital ,orinthe stock reserved for immediate consumption .every fixed capital isboth originally derived from ,and requires tobecontinu- ally supported by,acirculating capital .all useful ma- chines and instruments oftrade are originally derived from acirculating capital ,which furnishes the materials ofwhich they are made and the maintenance ofthe workmen who make them .they require ,too,acapital ofthe same kind tokeep them inconstant repair .\" (page 188. ) with the exception ofthat part ofthe product which is immediately consumed asmeans ofproduction ,the follow- ing general rule applies tocapitalist production :all prod- ucts are taken tomarket ascommodities and ,therefore ,cir- culate ascapital inthe form ofcommodities ,asthe commo- dity -capital of the capitalist ,regardless of whether these products must ormay serve intheir natural form ,asuse- values ,inthe performance oftheir function aselements of productive capital inthe process ofproduction ,in other",
        "238capital . words ,asmeans ofproduction and ,therefore ,asfixed or circulating parts ofproductive capital ,orwhether they can serve only asmeans ofindividual ,not ofproductive ,con- sumption .all products are thrown upon the market as commodities ;all means ofproduction orconsumption ,all elements ofproductive and individual consumption ,must therefore bereleased from the market bypurchasing them as commodities . of course ,this truism iscorrect .itapplies for this rea- son tothe fixed aswell asthe circulating elements ofpro- ductive capital ,for instruments of labor as well as raw material inall itsforms .(this ,moreover ,isleaving aside the fact that there are certain elements ofproductive cap- ital which are furnished ready by nature and are not prod- ucts .) amachine isbought onthe market aswell ascot- ton .but this implies by no means that every fixed capital comes originally from some circulating capital ;itisonly through the confusion ,onthe part ofsmith ,ofcapital of circulation with circulating capital ,with capital that isnot fixed ,that this erroneous conclusion isreached .and to cap the climax ,smith refutes himself .according tohim , machines ,ascommodities ,form apart ofno. 4,the circu- lating capital .to say that they come from the circulating capital means that they were performing the function of commodity -capital before they performed the func- tion of machines ,but that substantially they are derived from themselves ;soiscotton ,asthe circulating element of some spinner's capital ,derived from the cotton onthe mar- ket.but asfor deriving fixed capital from circulating capi- tal for the reason that labor and raw material are required for the making ofmachines ,asadam smith isdoing inhis further arguments ,we say that inthe first place ,fixed capi- tal isalso required for the making ofmachines ,and inthe second place ,fixed capital ,such asmachinery ,islikewise required for the making ofraw materials ,since the produc- tive capital always includes instruments oflabor ,but not always raw materials .he says himself immediately after- wards :\"lands ,mines ,and fisheries ,require all both afixed and circulating capital tocultivate them ;\"-thus headmits that not only circulating ,but also fixed capital isrequired",
        "theories offixed and circulating capital .239 for the production ofraw materials- \"and \"-renewed con- fusion atthis point \"their produce replaces with aprofit , not only those capitals ,but allthe others insociety .\" (page 188. ) this isentirely wrong .their produce furnishes the raw materials ,auxiliary substances ,etc. ,for all other branches ofindustry .but their value does not reproduce the value ofallother social capitals ;itreproduces merely the value oftheir own capital (plus the surplus -value ).adam smith ishere stampeded by his recollection ofthe physio- crats . socially speaking ,itistrue that that part ofthe commod- ity capital which consists ofproducts available for imme- diate orlater service asinstruments oflabor -unless they are produced uselessly and cannot be sold -must in fact perform this service whenever they cease tobecommodities and become actual elements ofthe productive capital ,in stead ofbeing merely itsprospective ones . but there isadistinction arising from the natural form ofthe product . aspinning machine ,for instance ,has nouse-value ,unless itisconsumed inspinning ,sothat itperforms itsfunction asan element ofproduction and ,from the point ofview of the capitalist ,constitutes afixed part ofhis capital .but a spinning machine ismovable .itmay beexported from the country inwhich itwas produced and sold inaforeign coun- try directly orindirectly ,for raw materials ,etc. ,oreven for champagne .inthat case ithas served only ascommodity- capital inthe country inwhich itwas produced ,but never asfixed capital ,not even after itssale . but products which are localized by being imbedded in the soil ,and therefore can be consumed only locally ,such asfactory buildings ,railroads ,bridges ,tunnels ,wharves ,etc. , improvements ofthe soil ,etc. ,cannot be bodily exported . they are not movable .they are either useless ,orthey must serve as fixed capital ,inthe country that produced them ,assoon asthey have been sold .from the point of view oftheir capitalist producer ,who builds factories or improves land for speculation and sale ,these things are forms of his commodity -capital ,or,according to adam smith ,aform of circulating capital .but from the",
        "238capital . words ,asmeans ofproduction and ,therefore ,asfixed or circulating parts ofproductive capital ,orwhether they can serve only asmeans ofindividual ,not ofproductive ,con- sumption .all products are thrown upon the market as commodities ;all means ofproduction orconsumption ,all elements ofproductive and individual consumption ,must therefore bereleased from the market bypurchasing them as commodities . of course ,this truism iscorrect .itapplies for this rea- son tothe fixed aswell asthe circulating elements ofpro- ductive capital ,for instruments of labor as well as raw material inall itsforms .(this ,moreover ,isleaving aside the fact that there are certain elements ofproductive cap- ital which are furnished ready by nature and are not prod- ucts .) amachine isbought onthe market aswell ascot- ton .but this implies by no means that every fixed capital comes originally from some circulating capital ;itisonly through the confusion ,on the part ofsmith ,ofcapital of circulation with circulating capital ,with capital that isnot fixed ,that this erroneous conclusion isreached .and to cap the climax ,smith refutes himself .according tohim , machines ,ascommodities ,form apart ofno. 4,the circu- lating capital .to say that they come from the circulating capital means that they were performing the function of commodity -capital before they performed the func tion of machines ,but that substantially they are derived from themselves ;soiscotton ,asthe circulating element of some spinner's capital ,derived from the cotton onthe mar- ket.but asfor deriving fixed capital from circulating capi- tal for the reason that labor and raw material are required for the making ofmachines ,asadam smith isdoing inhis further arguments ,we say that inthe first place ,fixed capi- tal isalso required for the making ofmachines ,and inthe second place ,fixed capital ,such asmachinery ,islikewise required for the making ofraw materials ,since the produc- tive capital always includes instruments oflabor ,but not always raw materials .he says himself immediately after- wards :\"lands ,mines ,and fisheries ,require all both afixed and circulating capital tocultivate them ;\"-thus he admits that not only circulating ,but also fixed capital isrequired",
        "theories offixed and circulating capital .239 for the production ofraw materials- \"and \"renewed con- fusion atthis point \"their produce replaces with aprofit , not only those capitals ,but allthe others insociety .\" (page 188. ) this isentirely wrong .their produce furnishes the raw materials ,auxiliary substances ,etc. ,for all other branches ofindustry .but their value does not reproduce the value ofallother social capitals ;itreproduces merely the value oftheir own capital (plus the surplus -value ).adam smith ishere stampeded by his recollection ofthe physio- crats . socially speaking ,itistrue that that part ofthe commod- ity capital which consists ofproducts available for imme- diate orlater service asinstruments oflabor -unless they are produced uselessly and cannot be sold -must in fact perform this service whenever they cease tobecommodities and become actual elements ofthe productive capital ,in stead ofbeing merely itsprospective ones . but there isadistinction arising from the natural form ofthe product . aspinning machine ,for instance ,has nouse-value ,unless itisconsumed inspinning ,sothat itperforms itsfunction asan element ofproduction and ,from the point ofview of the capitalist ,constitutes afixed part ofhis capital .but a spinning machine ismovable .itmay beexported from the country inwhich itwas produced and sold inaforeign coun- try directly orindirectly ,for raw materials ,etc. ,oreven for champagne .in that case ithas served only ascommodity- capital inthe country inwhich itwas produced ,but never asfixed capital ,not even after itssale . but products which are localized by being imbedded in the soil ,and therefore can be consumed only locally ,such asfactory buildings ,railroads ,bridges ,tunnels ,wharves ,etc. , improvements ofthe soil ,etc. ,cannot be bodily exported . they are not movable .they are either useless ,orthey must serve as fixed capital ,inthe country that produced them ,assoon asthey have been sold .from the point of view oftheir capitalist producer ,who builds factories or improves land for speculation and sale ,these things are forms of his commodity -capital ,or,according toadam smith ,aform of circulating capital .but from the",
        "238capital . words ,asmeans ofproduction and ,therefore ,asfixed or circulating parts ofproductive capital ,orwhether they can serve only asmeans ofindividual ,not ofproductive ,con- sumption .all products are thrown upon the market as commodities ;all means ofproduction orconsumption ,all elements ofproductive and individual consumption ,must therefore bereleased from the market bypurchasing them as commodities . of course ,this truism iscorrect .itapplies for this rea- son tothe fixed aswell asthe circulating elements ofpro- ductive capital ,for instruments of labor as well as raw material inall itsforms .(this ,moreover ,isleaving aside the fact that there are certain elements ofproductive cap- ital which are furnished ready by nature and are not prod- ucts .) amachine isbought on the market aswell ascot- ton .but this implies by no means that every fixed capital comes originally from some circulating capital ;itisonly through the confusion ,onthe part ofsmith ,ofcapital of circulation with circulating capital ,with capital that isnot fixed ,that this erroneous conclusion isreached .and to cap the climax ,smith refutes himself .according tohim , machines ,ascommodities ,form apart ofno. 4,the circu- lating capital .to say that they come from the circulating capital means that they were performing the function of commodity -capital before they performed the func- tion of machines ,but that substantially they are derived from themselves ;soiscotton ,asthe circulating element of some spinner's capital ,derived from the cotton onthe mar- ket.but asfor deriving fixed capital from circulating capi- tal for the reason that labor and raw material are required for the making ofmachines ,asadam smith isdoing inhis further arguments ,we say that inthe first place ,fixed capi- tal isalso required for the making ofmachines ,and inthe second place ,fixed capital ,such asmachinery ,islikewise required for the making ofraw materials ,since the produc- tive capital always includes instruments oflabor ,but not always raw materials .he says himself immediately after- wards :\"lands ,mines ,and fisheries ,require all both afixed and circulating capital tocultivate them ;\"-thus he admits that not only circulating ,but also fixed capital isrequired",
        "theories offixed and circulating capital .239 for the production ofraw materials- \"and \"-renewed con- fusion atthis point \"their produce replaces with aprofit , not only those capitals ,but allthe others insociety .\" (page 188. ) this isentirely wrong .their produce furnishes the raw materials ,auxiliary substances ,etc. ,for all other branches ofindustry .but their value does not reproduce the value ofallother social capitals ;itreproduces merely the value oftheir own capital (plus the surplus -value ).adam smith ishere stampeded by his recollection ofthe physio- crats . socially speaking ,itistrue that that part ofthe commod- ity capital which consists ofproducts available for imme- diate orlater service asinstruments oflabor -unless they are produced uselessly and cannot be sold -must in fact perform this service whenever they cease tobecommodities and become actual elements ofthe productive capital ,in stead ofbeing merely itsprospective ones . but there isadistinction arising from the natural form ofthe product . aspinning machine ,for instance ,has nouse-value ,unless itisconsumed inspinning ,sothat itperforms itsfunction asan element ofproduction and ,from the point ofview of the capitalist ,constitutes afixed part ofhis capital .but a spinning machine ismovable .itmay beexported from the country inwhich itwas produced and sold inaforeign coun- try directly orindirectly ,for raw materials ,etc. ,oreven for champagne .in that case ithas served only ascommodity- capital inthe country inwhich itwas produced ,but never asfixed capital ,not even after itssale . but products which are localized by being imbedded in the soil ,and therefore can be consumed only locally ,such asfactory buildings ,railroads ,bridges ,tunnels ,wharves ,etc. , improvements ofthe soil ,etc. ,cannot be bodily exported . they are not movable .they are either useless ,orthey must serve as fixed capital ,inthe country that produced them ,assoon asthey have been sold .from the point of view oftheir capitalist producer ,who builds factories or improves land for speculation and sale ,these things are forms of his commodity -capital ,or,according to adam smith ,aform of circulating capital .but from the",
        "240capital . point of view of society ,these things must finally serve inthe same country asfixed capital insome process of production fixed bytheir own locality ,unless they are tobe useless .this does not imply by any means that immovable things are fixed capital ofthemselves .they may belong to the fund for consumption ,for instance residence houses , and inthat case they donot belong tothe social capital at all,although they are an element ofthe social wealth ,of which capital isonly apart .the producer ofthese things , touse the language ofsmith ,makes aprofit by their sale . in other words ,circulating capital !their user ,their final purchaser ,can use them only by utilizing them inthe pro- cess ofproduction .therefore ,fixed capital ! titles toproperty ,for instance railroad shares ,may change hands every day ,and their owner may even make aprofit by their sale toforeign countries ,sothat the title may be exported ,ifnot the railroad .but nevertheless these things themselves must either lie fallow inthe country that pro- duced them ,orserve asafixed part ofsome productive cap- ital .in the same way the manufacturer amay make a profit bythe sale ofhis factory tothe manufacturer b,but this does not prevent the factory from serving asfixed capi- tal,the same asbefore . however ,itdoes not follow that fixed capital necessarily consists ofimmovable things ,because the locally fixed in- struments oflabor ,which cannot bedetached from the soil , must toall intents and purposes serve atsome time asfixed capital inthe same country ,even though they may serve as commodity -capital for their producer and do not consti- tute any elements ofhis fixed capital ,which ismade up of the instruments oflabor required by him for the building of factories ,railroads ,etc. aship and alocomotive produce their effects only by motion ;yet they serve asfixed capital for the owner who uses them ,although not for him who produced them .on the other hand ,some things which are very decidedly fixed inthe process ofproduction ,which live and die in itand never leave itany more after they have entered it,are circulating parts ofthe productive capi- tal.such are,for instance ,the coal consumed by the ma- chine inthe process ofproduction ,the gas used for light-",
        "theories offixed and circulating capital .241 ing the factory ,etc. they are circulating capital not because they bodily leave the process ofproduction together with the product and circulate ascommodities ,but because their entire value istransferred tothat ofthe product in whose production they assisted ,sothat their value must be entirely reproduced bythe sale ofthe product . inthe last quotation from adam smith ,notice must fur- thermore betaken ofthe following phrase :\"acirculating capital which furnishes the maintenance of the workmen who make them \"(meaning machines ,etc. ). in the works ofthe physiocrats ,that part of capital which isadvanced for wages figures correctly under the avances annuelles asdistinguished from the avances prim- itives .on the other hand itisnot the labor -power used as apart ofthe productive capital ofthe farmer which figures in their accounts ,but the foodstuffs given to the farm laborers (the maintenance ofworkmen ,assmith calls it). this corresponds exactly to their specific doctrine .for according tothem the value added tothe product by labor (like the value added tothe product byraw material ,instru- ments oflabor ,etc. ,inshort by all the substantial parts of constant capital )isequal only tothe value ofthe articles ofconsumption paid tothe laborers and necessary for the maintenance oftheir labor functions .their doctrine stands inthe way oftheir discovering the distinction between con- stant and variable capital .ifitislabor that produces sur- plus -value inaddition tothe reproduction ofitsown price , then itdoes soinindustry aswell asinagriculture .but since ,according totheir system ,surplus -value arises only in one branch ofproduction ,namely ,agriculture ,itdoes not come out oflabor ,but out ofthe special activity (assistance ) ofnature inthis branch .and only for this reason agri- cultural labor isfor them productive labor ,asdistinguished from other kinds oflabor . adam smith classes the maintenance oflaborers among the circulating capital asdistinguished from fixed . 1.because heconfounds circulating capital asdistinguished from fixed with forms ofcapital belonging tothe sphere ofcirculation ,with capital ofcirculation ;this mistake per- sisted after him without being criticized .he therefore con-",
        "242capital . founds the commodity -capital with the circulating part of the productive capital ,and inthat case itisamatter of course that ,whenever the social product assumes the form of commodities ,the maintenance ofthe laborers as well as that ofthe non -laborers ,the materials aswell asthe instru- ments oflabor ,must betaken out ofthe commodity -capital . 2. but the physiocratic conception likewise intermin- gles with the analysis ofsmith ,although itcontradicts the esoteric really scientific -part ofhis own deductions . the advanced capital isuniversally converted into pro- ductive capital ,that istosay itassumes the form ofele- ments ofproduction which are themselves the products of past labor .labor -power isincluded inthem .capital can serve inthe process ofproduction only inthis form .now , ifinstead oflabor -power itself we take the laborer's necessi- ties oflife into which the variable part ofcapital has been converted ,itisevident that these necessities oflife are not essentially different ,so far asthe formation of values is concerned ,from the other elements ofproductive capital , from the raw materials and the food ofthe laboring cattle , with whom smith ,after the manner ofthe physiocrats , places the laborers onthe same level ,inone ofthe passages quoted above .the necessities oflife cannot expand their own value oradd any surplus -value toit.their value ,like that ofthe other elements ,can re-appear only inthat ofthe product .they cannot add any more totheir value than they have themselves .they ,like raw materials ,partly finished articles ,etc. ,differ from fixed capital composed ofinstruments oflabor only inthat they are entirely con- sumed inthe product ofthe capitalist who pays for them and uses them inthe manufacture ofthis product ,sothat their value must be entirely reproduced by this product , while inthe case ofthe fixed capital this takes place gradu- ally and piecemeal .the part of productive capital ad- vanced for labor -power (orfor the laborer's articles ofcon- sumption )differs here only inthe matter ofmaterial from the other material elements ofproductive capital ,not inthe matter ofthe process ofproduction orself -expansion .it differs only insofar asitfalls into the same category ,name- ly,that ofcirculating capital ,with one part ofthe objective elements active inthe formation ofthe product (materials ,",
        "theories offixed and circulating capital .243 adam smith calls them ),while another part ofthese be- longs inthe category offixed capital . the fact that the capital invested inwages belongs tothe circulating part ofproductive capital and shares this circu- lating quality ,asdistinguished from the fixed character of productive capital ,with apart ofthe material objects ,the raw materials ,etc. ,instrumental in creating the product , has nothing whatever todo with the role played by this variable part of capital in the process of self -expansion , asdistinguished from the constant part ofcapital .itrefers merely tothe manner in which this part ofthe invested capital -value isreproduced out ofthe value ofthe product by way ofthe circulation .the purchase and repeated pur- chase oflabor -power belongs inthe process ofcirculation . but itisonly within the process ofproduction that the value invested in labor -power (not for the benefit ofthe laborer ,but that ofthe capitalist )isconverted from adefi- nite constant into avariable magnitude ,and only thus the advanced value isconverted into capital -value ,into self- expanding value .but by classing the value advanced for articles ofconsumption among the circulating elements of productive capital ,assmith does ,instead ofthe value in- vested inlabor -power ,the understanding ofthe difference between variable and constant capital ,and thus the under- standing ofthe capitalist process ofproduction ingeneral , isrendered impossible .the mission ofthis part ofcapital ofbeing variable asdistinguished from the constant capital invested in material objects instrumental inproduction ,is hidden under the mission ofthe capital invested inlabor- power ofserving inthe turn -over asacirculating part of productive capital .and the obscurity ismade complete by enumerating the laborer's maintenance among the ele- ments ofproductive capital ,instead ofhis labor -power .it isimmaterial ,whether the value oflabor -power isadvanced inmoney orimmediately inarticles ofconsumption .how- ever ,under capitalist production ,the last -named eventuality can be but an exception .\" 24towhat extent adam smith has blocked hisown way toanunder- standing ofthe role oflabor -power inthe process ofself-expansion is proven bythe following sentence ,which places thelabor ofhuman labor- ers onthe same level with that oflaboring cattle ,after the manner of the physiocrats .\"not only his (the farmer's )laboring servants ,but his laboring cattle are productive laborers .\"(book ii,chap .v,p.243. )",
        "244capital . by thus emphasizing the role ofthe circulating capital asthe determining element ofthe capital -value invested in labor -power ,by using this physiocratic conception without the fundamental premise ofthe physiocrats ,adam smith haply rendered the understanding ofthe role ofvariable capital asadeterminant ofcapital invested inlabor -power impossible for his followers .the more profound and correct analyses given by him inother places did not survive ,but this mistake ofhis did .other writers after him went even farther .they were not content tomake itthe essential characteristic of capital invested in labor -power tobe cir- culating as distinguished from fixed capital ;they rather made itanessential mark ofcirculating capital tobeinvest- ed in articles ofconsumption for laborers .this resulted naturally inthe doctrine ofalabor fund ofdefinite magni- tude consisting ofrequirements oflife ,which on one side established aphysical limit for the share ofthe laborers in the social product ,and on the other had tobe fully ex- pended inthe purchase oflabor -power .",
        "theories offixed and circulating capital .245 chapter xi. theories offixed and circulating capital .ricardo . ricardo mentions the distinction between fixed and cir- culating capital merely for the purpose ofillustrating the exceptions tothe law ofvalue ,namely ,incases where the rate ofwages affects the prices .the discussion ofthis point isreserved for volume iii. but the original confusion isapparent atthe outset in the following indifferent parallel :\"this difference inthe degree of durability offixed capital ,and this variety in the proportions inwhich the two sorts ofcapital may be combined .\" (principles ,page 25.) and ifwe ask him which two sorts ofcapital heisrefer- ring to,we are told :\"the proportions ,too,inwhich the capital that istosupport labor ,and the capital that isin- vested intools ,machinery ,and buildings ,may bevariously combined .\" (1.c.) in other words ,fixed capital consists ofinstruments oflabor ,and circulating capital issuch as isinvested inlabor .\"capital that istosupport labor \"is asenseless term culled from adam smith .on one hand , the circulating capital ishere confounded with the variable capital ,that istosay,with that part ofproductive capital which isinvested inlabor .on the other hand ,twice con- founded conceptions arise for the reason that the distinction isnot between variable and constant capital and derived from the process of self -expansion ,but from the process ofcirculation repeating the old confusion ofsmith . 1. the difference inthe degree ofdurability offixed capital and the difference inthe proportion inwhich con- stant and variable capital may becombined ,are conceived asbeing ofequal significance .but the last -named differ- ence determines the difference inthe production ofsurplus- value ;the first -named ,on the other hand ,refers merely to the manner inwhich agiven value istransferred from a mean ofproduction tothe product ,insofar asthe process",
        "246capital . ofself -expansion isconcerned ;and asfor the process ofcir- culation ,this difference refers only tothe period ofthe re- production ofthe advanced capital ,or,from arcther point ofview ,the time for which ithas been advanced .ofcourse , ifone looks upon the capitalist process ofproduction inthe light ofacompleted phenomenon ,instead ofseeing through itsinternal machinery ,then these differences coincide .in the distribution ofthe social surplus -value among the vari- ous capitals invested in different lines ofproduction ,the proportions ofthe different periods oftime for which capi- tal has been advanced (for instance ,the different durability offixed capital )and the different organic composition of capital (and therefore also the different circulation of constant and variable capital )contribute equally toward an equalization ofthe general rate ofprofit and the conversion ofvalues into prices ofproduction . 2. from the point ofview ofthe process ofcirculation , we have onone side the instruments oflabor -fixed capital , onthe other the materials oflabor and wages -circulating capital .but from the point ofview ofthe process ofpro duction and self -expansion ,we have on one side means of production (instruments oflabor and raw material )con- stant capital ;on the other ,labor -power -variable capital . itisimmaterial for the organic composition of capital (book i,chap .xxv ,2,page 683 )whether the same quantity ofconstant capital consists ofmany instruments oflabor and little raw material ,orofmuch raw material and few instruments oflabor ,but everything depends on the proportion ofthe capital invested inmeans ofproduc- tion tothat invested inlabor -power .vice versa ,from the point ofview ofthe process ofcirculation ,ofthe difference between fixed and circulating capital ,itisjust asimma- terial in what proportions agiven amount of circulating capital isdivided between raw material and wages .from one ofthese points ofview the raw material isclassed in the same category with the instruments oflabor ,ascom- pared tothe capital -value invested in labor -power ;from the other the capital -value invested in labor -power ranks with that invested in raw material ,as compared to that invested ininstruments oflabor .",
        "theories offixed and circulating capital .247 for this reason ,the capital -value invested in materials oflabor (raw and auxiliary materials )does not appear on either side .itdisappears entirely .for itdoes not agree with the side offixed capital ,because itsmode ofcirculation coincides entirely with that ofthe capital -value invested in labor -power .and onthe other hand ,itmust not beplaced onthe side ofcirculating capital ,because inthat case the identification ofthe distinction between fixed and circulat- ing capital with that ofconstant and variable capital ,which had been carried over from adam smith and tacitly perpet- uated ,would abolish itself .ricardo has too much logical instinct not tofeel this ,and for this reason that part ofcapi- tal disappears entirely for him . itistobe noted atthis point that the capitalist ,touse the language ofpolitical economy ,advances the capital in- vested inwages for different periods ,according towhether hepays these wages weekly ,monthly ,orquarterly .but in reality ,the reverse takes place .the laborer advances his labor tothe capitalist for one week ,one month ,orthree months ,according towhether heispaid bythe week ,bythe month ,orevery three months .ifthe capitalist really were tobuy labor -power ,instead ofonly paying for it,inother words ,ifhe were topay the laborer inadvance for aday , aweek ,amonth ,orthree months ,then he would bejusti- fied inclaiming that headvanced wages for those periods . but since he does not pay until labor has lasted for days , weeks ,ormonths ,instead ofbuying itand paying for the time which itisintended tolast ,we have here aconfusion ofterms on the part ofthe capitalist ,who performs the trick ofconverting an advance oflabor made tothe capital- istbythe laborer into an advance ofmoney made tothe la- borer by the capitalist .itdoes not alter the case that the capitalist may not get any returns from his product byway ofthe circulation inthe shape ofareproduction of his product orofitsvalue (increased bythe surplus value em- bodied init)until after acertain length oftime ,according tothe different periods required for its manufacture ,or for itscirculation .itdoes not concern the seller ofacom- modity what itsbuyer isgoing todo with it.the capital- ist does not get amachine cheaper ,because he must ad-1",
        "248capital . \"vance itsentire value atone time ,while this value returns tohim only gradually and piecemeal by way ofthe circu- lation ;nor does hepay more for cotton ,because itsvalue is assimilated fully bythe product into which itismade over , and istherefore fully recovered atone time by the sale of the product . let usreturn toricardo . 1. the characteristic mark of variable capital isthat acertain given ,and tothat extent constant ,part ofcapital representing agiven sum ofvalues (supposed tobeequal to the value oflabor -power ,although itisimmaterial for this discussion whether wages are equal tothe value oflabor -power orhigher orlower than it)isexchanged for aself -expand- ing power which creates value ,namely ,labor -power ,which not only reproduces the value paid for itby the capitalist , but produces asurplus -value ,avalue not previously ex- isting and not paid for by any equivalent .this character- istic mark ofthe capital -value advanced for wages ,which distinguishes itasavariable capital from constant capital , disappears whenever the capital -value advanced for wages is considered solely from the point ofview ofthe circulation , for then itappears asacirculating capital asdistinguished from the fixed capital invested ininstruments oflabor .this isapparent from the simple fact that itisthen classed under one head ,namely ,under that of circulating capital ,to- gether with apart ofthe constant capital ,namely ,that which isinvested inraw materials ,and thus distinguished from another part ofconstant capital ,namely ,that invested in instruments oflabor .the surplus -value ,the very fact which converts the advanced sum ofvalues into capital ,is entirely ignored under these circumstances .furthermore , the fact isignored that the value added tothe product by the capital invested inwages isnewly produced (and there- fore actually reproduced ),while the value transferred from the raw material tothe product isnot newly produced ,not actually reproduced ,but only preserved inthe value ofthe product and merely reappears asapart ofthe value ofthe product .the distinction ,asseen from the point ofview",
        "theories offixed and circulating capital .249 ofthe contrast between fixed and circulating capital ,con- sists now simply inthis :the value ofthe instruments oflabor used for the production ofacertain commodity istransferred only partially tothe value ofthe commodi- ty and istherefore only partially recovered by its sale , isonly partially and gradually returned .on the other hand ,the value ofthe labor -power and materials oflabor (raw materials ,etc. )used in the production of acer- tain commodity is entirely assimilated by it,and is therefore entirely recovered by its sale .from this stand- point ,and with reference to the process of circulation , one part of capital appears as fixed ,the other as cir- culating .in both cases itisamatter of atransfer of definite advanced values tothe product and oftheir recov- ery by the sale ofthe product .the only difference which isessential atthis point iswhether the transfer ofvalues , and consequently their recovery ,proceeds gradually orin one bulk .by this means the really decisive difference be- tween the variable and constant capital isblotted out,the whole secret ofthe production ofsurplus -value and ofcapi- talist production ,namely ,the circumstances which trans- form certain values and the things inwhich they are con- tained into capital ,are obliterated .all constituent parts ofcapital are then distinguished merely by their mode of circulation (and ,ofcourse ,circulation concerns itself solely with already existing values of definite size ).and the capital invested inwages then shares apeculiar mode ofcir- culation with apart ofcapital invested in raw materials , partly finished articles ,auxiliary substances ,asdistinguished from another part of capital invested in instruments of labor . itis,therefore ,easy to understand why the bourgeois political economy instinctively clung toadam smith's con- fusion ofthe categories of\"constant and variable capital \" with the categories \"fixed and circulating capital ,\"and re- peated itparrotlike from generation to generation for a century .the capital invested inwages isnot inthe least distinguished by bourgeois political economy from capital invested in raw materials ,and differs only formally from constant capital tothe extent that itispartially orinbulk",
        "250capital . circulated bythe product .inthis way the first requirement for an understanding ofthe actual movement ofcapitalist production ,and thus ofcapitalist exploitation ,isburied at one stroke .itishenceforth but aquestion ofthe reap- pearance ofadvanced values . in ricardo the uncritical adoption ofthe smithian con- fusion isannoying ,and not only more sothan inthe later apologetic writers ,inwhom the confusion ofterms israther otherwise than annoying ,but also more than inadam smith himself ,because ricardo iscomparatively more consistent and clear in his analysis ofvalue and surplus -value ,and indeed rescues the esoteric adam smith from the exoteric adam smith . among the physiocrats this confusion isnot found .the distinction between avances annuelles and avances primi- tives refers only tothe different periods ofreproduction of the various parts ofcapital ,especially ofagricultural capi- tal;while their ideas concerning the production ofsurplus- value form apart oftheir theory ,apart from these dis- tinctions ,being upheld bythem asthe salient point ofthis theory .the formation of surplus -value isnot explained out ofcapital assuch ,but only attributed toone special sphere ofproduction ofcapital ,namely ,agriculture . 2. the essential point inthe determination ofvariable capital -and therefore for the conversion ofany sum of values into capital -isthat the capitalist exchanges adefi- nite given ,and tothat extent constant ,magnitude ofvalues for apower which creates values ,amagnitude ofvalues for aproduction ,aself -expansion ,ofvalues .itdoes not alter this essential fact that the capitalist may pay the laborer either in money orin means ofsubsistence .this alters merely the mode ofexistence ofthe value advanced by the capitalist ,seeing that inone case ithas the form ofmoney for which the laborer himself buys his means ofsubsistence onthe market ,inthe other case that ofmeans ofsubsistence which heconsumes directly .adeveloped capitalist produc- tion rests indeed onthe assumption that the laborer ispaid in money and more generally onthe assumption that the proc- essofproduction ispromoted bythe process ofcirculation ,in other words ,bythe monetary system .but the production of",
        "theories offixed and circulating capital .251 surplus -value -and consequently the capitalization ofthe ad- vanced sum ofvalues -has itssource neither inthe money- form ,nor inthe natural form ,ofwages ,orofthe capital invested inthe purchase oflabor power .itarises out of the exchange ofvalue for apower creating value ,the con- version ofaconstant into avariable magnitude . the greater orsmaller fixity ofthe instruments oflabor depends onthe degree oftheir durability ,on their physical properties .according to the degree oftheir durability , other circumstances being equal ,they will wear out fast or slowly ,will serve along orashort time asfixed capital . the raw material in metal factories isjust asdurable as the machines used in manufacturing ,and more durable than many parts ofthese machines ,such asleather ,wood , etc. nevertheless the metal serving asraw material forms apart ofthe circulating capital ,while the instrument of labor ,although probably built ofthe same metal ,isapart ofthe fixed capital ,when inuse.hence itisnot the sub- stantial physical nature ,not its great orsmall durability , towhich the same metal owes itsplace ,now inthe category ofthe fixed ,now ofthe circulating capital .this distinction israther due tothe role played by itinthe process ofpro- duction ,being anobject oflabor inone case ,and an instru- ment oflabor inanother . the function of an instrument oflabor inthe process ofproduction requires generally ,that itshould serve for a longer or shorter period in ever renewed labor processes . its function ,therefore ,determines the greater orlesser dura- bility ofits substance .but itisnot the durability ofthe material ofwhich itismade that gives toitthe character offixed capital .the same material ,ifinthe shape ofraw material ,becomes acirculating capital ,and among those economists who confound the distinction between commodi- ty-capital and productive -capital with that between circu- lating and fixed capital the same material ,the same ma- chine ,are circulating capital asproducts and fixed capital as instruments oflabor . although itisnot the durability ofthe material ofwhich itismade that gives toan instrument oflabor the charac- ter offixed capital ,nevertheless its role assuch an instru-",
        "252capital . ment requires that itshould becomposed ofrelatively dura- ble material .the durability ofits material is,therefore , acondition ofits function asan instrument oflabor ,and consequently the material basis ofthe mode ofcirculation which renders itafixed capital .other circumstances being equal ,the greater orlesser durability ofitsmaterial endows itinahigher orlower degree with the quality offixedness , inother words ,its durability isclosely interwoven with its quality ofbeing afixed capital . ifthe capital -value advanced for labor -power isconsidered exclusively from the point ofview ofcirculating capital ,in distinction from fixed capital ,and ifconsequently the dis- tinction between constant and variable capital isconfounded with that between fixed and circulating capital ,then itis natural toattribute the character ofcirculating capital ,in distinction from fixed capital ,tothe substantial reality of the capital invested inlabor -power ,just asthe substantial reality ofthe instrument oflabor constitutes an essential element ofits character offixed capital ,and todetermine the circulating capital bythe substantial reality ofthe vari able capital . the real substance ofthe capital invested in wages is labor itself ,active ,value creating ,living labor ,which the capitalist trades for dead ,materialized labor and embodies in his capital ,by which means alone the value inhis hands . istransformed into aself -expanding value .but this self- expanding power isnot sold bythe capitalist .itisalways solely aconstituent part ofhis productive capital ,the same ashis instruments oflabor ;itisnever apart ofhis com- modity -capital ,as,for instance ,the finished product which he sells .within the process ofproduction ,asparts ofhis productive capital ,the instruments oflabor are not distin- guished from labor -power asfixed capital any more than the raw materials and auxiliary substances are identified with itascirculating capital .labor confronts both ofthem as apersonal factor ,while they are objective things -speaking from the point ofview ofthe process ofproduction .both ofthem stand opposed tolabor -power ,tovariable capital , asconstant capital -speaking from the point ofview ofthe process ofself -expansion .or,ifmention istobe made",
        "theories offixed and circulating capital . 253 here of adifference in substance ,sofar asitaffects the process ofcirculation ,itisonly this :itfollows from the nature ofvalue which isnothing but materialized labor ,and from the nature ofactive labor -power which isnothing but labor inprocess ofmaterialization ,that labor -power continu- ally creates value and surplus -value during the process of its function ;that the thing which on the part oflabor- power appears asmotion and acreation ofvalue ,appears onthe part ofitsproduct asrest and asacreated value .if the labor -power has performed itsfunction ,then capital no longer consists oflabor -power on one side ,and means of production on the other .the capital value invested in labor isthen value added with asurplus -value tothe prod- uct.in order torepeat the process ,the product must be sold ,and new labor -power must bebought with the money soobtained ,inorder tobeonce more embodied inthe pro- ductive capital .itisthis which then gives tothe capital invested inlabor -power ,and tothat invested inraw mate- rials ,etc. ,the character of circulating capital as distin- guished from the capital remaining fixed in instruments oflabor . but ifthe secondary quality ofthe circulating capital , which itshares with apart ofthe constant capital (raw and auxiliary materials ),ismade the essential mark ofcapital invested inlabor -power ,towit,the transfer ofthe full value invested in ittothe product in whose manufacture itis consumed ,instead ofagradual and successive transfer such astakes place inthe case ofthe fixed capital ,and the conse- quent total reproduction ofthis value by the sale ofthe product ,then the value invested in wages must likewise consist ,not ofactive labor -power ,but ofthe material ele- ments which the laborer buys with his wages ,inother words , itmust consist ofthat part ofthe social commodity -capi- tal which passes into the individual consumption ofthe laborer ,of means ofsubsistence .in that case ,the fixed capital would consist ofthe more durable instruments of labor which are reproduced more slowly ,and the capital invested inlabor -power would consist ofthe means ofsub- sistence ,which must be more rapidly reproduced . however ,the boundaries ofgreater orsmaller durability pass imperceptibly into one another .",
        "254capital . \"the food and clothing consumed by the laborer ,the buildings inwhich heworks ,the implements with which his labor isassisted ,are all ofaperishable nature .there is, however ,avast difference inthe time for which these dif- ferent capitals will endure :asteam -engine will last longer than aship ,aship than the clothing ofthe laborer ,and the clothing ofthe laborer longer than the food which he con- sumes .\"(ricardo ,etc. ,page 27.) ricardo does not mention the house ,inwhich the laborer lives ,his tools ofconsumption ,such asknives ,forks ,dishes , etc. ,all ofwhich have the same quality ofdurability asthe instruments oflabor .the same things ,the same classes ofthings ,appear inone place asmeans ofconsumption ,in another asinstruments oflabor . the difference ,asstated by ricardo ,isthis :\"according ascapital israpidly perishable and requires tobefrequently reproduced orisofslow consumption ,itisclassed under the heads ofcirculating orfixed capital .\" he remarks in addition thereto :\"adivision not essen- tial ,and inwhich the line ofdemarcation cannot be ac- curately drawn .\" thus we have once more arrived among the physiocrats , where the distinction between avances annuelles and avances primitives was one referring tothe period ofconsumption , and consequently also tothe different time ofreproduction ofthe invested capital .only ,that which intheir case con- stitutes aphenomenon important for society and for this reason isassigned inthe tableau economique aplace of interrelation with the process ofcirculation ,becomes here , in ricardo's own words ,asubjective and unessential divi- sion . as soon asthe capital -value invested inlabor -power dif- fers from that invested ininstruments oflabor only by its period ofreproduction and term ofcirculation ,assoon as one part of capital consists of means of subsistence ,an- other ofinstruments oflabor ,sothat these differ from those only by the degree oftheir durability ,which durability is further different for the various kinds ofeach class ,itfol- lows asamatter ofcourse that all specific difference be-",
        "theories of fixed and circulating capital . 255 tween the capital invested inlabor -power and that invested inmeans ofproduction isobliterated . this runs very much counter toricardo's theory ofvalue , likewise tohis theory ofprofit ,which isactually atheory ofsurplus -value .he does not consider the difference between fixed and circulating capital any further than isrequired bythe way inwhich different proportions ofboth ofthem , inequal capitals invested indifferent branches ofproduc- tion ,influence the law ofvalue ,particularly the extent to which an increase ordecrease ofwages in consequence of these conditions affects prices .but even within this re- stricted analysis ,he commits the gravest errors on account ofthe confusion inthe definitions offixed and circulating , constant and variable capital .indeed ,hestarts his analysis on an entirely wrong basis .in the first place ,insofar as the capital -value invested inlabor -power has tobeconsidered under the head ofcirculating capital ,hegives awrong defi- nition of circulating capital and misunderstands particu- larly the circumstances which place the capital -value in- vested in labor -power under this heading .in the second place ,he confounds the definition ,according towhich the capital -value invested in labor -power isavariable capital , with that according to which itiscirculating as distin- guished from fixed capital . itisevident from the beginning that the definition of capital -value invested inlabor -power ascirculating capital is asecondary one ,obliterating its specific difference inthe process of production .for on one hand ,the values in- vested in labor -power are identified inthis definition with those invested inraw materials .aclassification which iden- tifies apart ofthe constant capital with the circulating capi- tal does not appreciate the specific difference of variable from constant capital .on the other hand ,while the values invested inlabor -power are indeed distinguished from those invested in instruments oflabor ,the distinction isbased only onthe fact that the values incorporated inthem are transferred tothe product indifferent periods oftime ,not on the fact that this transfer issignificant for the radically different manner in which either ofthem passes into the production ofvalues .",
        "256capital . in all ofthese cases ,itisaquestion ofthe manner in which agiven value ,invested inthe process ofproduction ofcommodities ,whether the investment be made inwages , inthe price ofraw materials ,orinthat ofinstruments of labor ,istransferred tothe product ,then circulated by it, and returned toitsstarting point by the sale ofthe product , orreproduced .the only difference lies here inthe \"how ,\" inthe particular manner ofthe transfer ,and therefore also inthe circulation ofthis value . whether the price oflabor -power previously agreed upon by contract ineach case ispaid inmoney orinmeans of subsistence ,does not alter inany way the fact that itis afixed price .however ,itisevident inthe case ofwages paid inmoney ,that itisnot the money which passes into the process ofproduction inthe way that the value aswell asthe material ofthe means ofproduction do.but ifthe means ofsubsistence which the laborer buys with his wages are directly classed inthe same category with raw materials , asthe material form of circulating capital distinguished from instruments oflabor ,then the matter assumes adiffer- ent aspect .while the value ofthese things ,the instruments oflabor ,istransferred tothe product inthe process ofpro- duction ,the value ofthose things ,the means ofsubsistence , reappears inthe labor -power that consumes them and is likewise transferred tothe product by the exertion ofthis power .in every one ofthese cases itisaquestion ofthe mere reappearance ofthe values invested in production by means oftransfer tothe product .the physiocrats for this reason took this aspect ofthe matter seriously and de- nied that industrial labor could create any values .this isshown by apreviously quoted passage of wayland ,in which he says that itisimmaterial in which form the capital reappears ,and that the different kinds offood ,cloth- ing ,and shelter which are required for the existence and well -being ofman are likewise changed ,being consumed in the course oftime while their value reappears .(elements ofpolitical economy ,pages 31 and 32.)the capital -val- ues invested inproduction inthe form ofmeans ofproduc- tion and means ofsubsistence both reappear inthe value ofthe product . by this means the transformation ofthe",
        "theories offixed and circulating capital . 257 apitalist process ofproduction into acomplete mystery is appily accomplished and the origin ofthe surplus -value incorporated inthe product isentirely concealed . at the same time ,this perfects the fetishism typical of bourgeois political economy ,which pretends that the social and economic character ofthings ,arising from the proc- ess ofsocial production ,isanatural character due tothe material substance ofthose things .for instance ,instru- ments oflabor are designated asfixed capital ,ascholastic mode ofdefinition which leads tocontradictions and confu- sion .just aswe demonstrated inthe case ofthe process ofproduction (vol .i,chapter vii ),that itdepends onthe role ,the function ,performed by the various material sub- stances in acertain process ofproduction ,whether they served asinstruments oflabor ,raw materials ,orproducts , just sowe now claim that instruments oflabor are fixed capital only in cases where the process ofproduction isa capitalist process ofproduction and the means ofproduc- tion are,therefore ,capital and possess the economic form and social character ofcapital .and inthe second place , they are fixed -capital only when they transfer their value tothe product inacertain peculiar way .unless they doso, they remain instruments oflabor without being fixed -capi- tal.inthe same way ,auxiliary materials ,such asmanure , ifthey transfer their value inthe same peculiar manner asthe greater part ofthe instruments oflabor ,become fixed capital ,although they are not instruments oflabor .itis not the definitions ,which are essential indetermining the character ofthese things .itistheir definite functions which express themselves indefinite categories . ifitisconsidered asone ofthe qualities exhibited by means ofsubsistence under all circumstances tobe capital invested inwages ,then itwill also beaquality ofthis \"cir- culating \"capital \"tosupport labor .\" (ricardo ,page 25.) ifthe means ofsubsistence were not \"capital ,\"then they would not support labor ,according tothis ;while itispre- cisely their character of capital which endows them with the faculty ofsupporting capital by means ofthe labor of others . ifmeans ofsubsistence are ofthemselves capital circulat-",
        "258capital . ing after being converted into wages ,itfollows furthermore that the magnitude ofwages depends onthe proportion of the number oflaborers tothe existing quantity ofcirculat- ing capital -afavorite economic law -while as amatter offact the quantity ofmeans ofsubsistence withdrawn from the market by the laborer ,and the quantity ofmeans of subsistence available for the consumption ofthe capitalist , depend on the proportion ofthe surplus -value tothe price oflabor . ricardo aswell asbarton25 everywhere confound the re- lation between variable and constant capital with that be- tween circulating and fixed capital .we shall see later ,to what extent this vitiates ricardo's analyses concerning the rate ofprofit . ricardo futhermore identifies the distinctions which arise inthe turn -over from other causes than the difference be- tween fixed and circulating capital ,with these same differ- ences :\"itisalso tobeobserved that the circulating capi- tal may circulate ,orbe returned toits employer ,invery unequal times .the wheat bought by afarmer tosow is comparatively afixed capital tothe wheat purchased by a baker tomake into loaves .the one leaves itinthe ground , and can obtain no return for ayear :the other can get it ground into flour ,sell itasbread tohis customers ,and have his capital free ,torenew the same ,orcommence any other employment inaweek .\" (pages 26 and 27.) in this passage ,itischaracteristic that wheat ,although not serving asameans ofsubsistence ,but asraw material when used for sowing ,issupposed inthe first place tobe circulating capital ,because itisin itself afood ,and in the second place acirculating capital ,because its reproduc- tion extends over one year .however ,itisnot somuch the slow orrapid reproduction which makes afixed capital of ameans ofproduction ,but rather the manner in which ittransfers itsvalue tothe product . the confusion caused by adam smith has brought about the following results : 1.the distinction between fixed and circulating capital 25observations on the circumstances which influence the condi- tion ofthe labouring classes ofsociety ,london ,1817 .",
        "theories offixed and circulating capital .259 isconfounded with that between productive capital and commodity -capital .for instance ,amachine issaid tobe circulating capital when onthe market asacommodity ,and fixed capital when incorporated inthe process ofproduc- tion .under these circumstances ,itisimpossible toascer- tain why one kind ofcapital should bemore fixed orcircu- lating than another . 2. all circulating capital isidentified with capital in- vested ,orabout tobeinvested ,inwages .this isthe case with john stewart mill ,and others . 3. the difference between variable and constant capi- tal,which had been previously mistaken by barton ,ri- cardo ,and others ,for that between circulating and fixed capital ,isfinally identified with this last -named difference , for instance by ramsay ,who calls all means ofproduction , raw materials ,etc. ,including instruments of labor ,fixed capital ,and only that which isinvested inwages circulat- ing capital .but onaccount ofthe reduction ofthe problem tothis form ,the real difference between variable and con- stant capital isnot understood . 4.the latest english ,and especially scotch ,economists , who look upon all things from the inexpressibly petty point ofview ofabank clerk ,such asmacleod ,patterson ,and others ,transform the difference between fixed and circulat- ing capital into one ofmoney atcall and money not at call .",
        "260capital . chapter xii . the working period . take two branches of production ,with equal working days ,for instance often hours each ,one ofthem acotton spinnery ,the other alocomotive factory .in one ofthese branches ,adefinite quantity of finished product ,cotton yarn ,iscompleted daily ,orweekly ;inthe other ,the pro- ductive process may have tobe repeated for three months in order that the finished product ,alocomotive ,may be ready .inone case ,the product ismade up ofseparate lots , and the same labor isrepeated daily or weekly .in the other case ,the labor process iscontinuous and extends over aprolonged number ofdaily labor -processes which ,intheir continuity ,result inthe finished product .although the duration ofthe working day isthe same inboth cases ,there isamarked difference inthe duration ofthe productive act, that istosay,inthe duration ofthe repeated labor -processes , which are required inorder tocomplete the finished prod- uct,toget itready for itsrole asacommodity onthe mar- ket,inother words ,toconvert itfrom aproductive into a commodity -capital .the difference between fixed and cir- culating capital has nothing todo with this .the differ- ence just indicated would exist ,even ifthe very same pro- portions offixed and circulating capital were employed in both branches ofproduction . these differences inthe duration ofthe productive acts are found not alone intwo different spheres ofproduction , but also within one and the same sphere ofproduction ,ac- cording tothe volume ofthe intended product .an ordi- nary residence house isbuilt inless time than alarge factory and therefore requires asmaller number of consecutive labor -processes .while the building of alocomotive re- quires three months ,that ofan ironclad requires one year ormore .the production ofgrain extends over nearly a year ,that ofhorned cattle over several years ,and the pro- duction oftimber may require from twelve toone hundred",
        "the working period .261 years .acountry road may becompleted inafew months , while arailroad requires years .an ordinary carpet is made inabout aweek ,while gobelins requires years ,etc.. the differences inthe duration ofthe productive act are, therefore ,infinitely manifold . itisevident that adifference inthe duration ofthe pro- ductive act must beget adifference inthe velocity ofthe turn -over ,even ifthe invested capitals are equal ,inother words ,must make adifference inthe time for which acer- tain capital isadvanced .take itthat acotton spinnery and alocomotive factory employ the same amount of capital ,that the proportion between their constant and variable capital isthe same ,likewise that between fixed and circulating capital ,and that finally their working day is ofequal length and itsdivision between necessary and sur- plus -labor the same .in order toeliminate ,furthermore , all the external circumstances arising out ofthe process of circulation ,we shall assume that both the yarn and the locomotive are made toorder and will bepaid ondelivery of the finished product .at the end ofthe week ,the cotton spinner recovers his outlay for circulating capital (making exception ofsurplus -value ),likewise the wear and tear of fixed capital incorporated inthe value ofthe yarn .he can , therefore ,repeat the same cycle with the same capital .it has completed itsturn -over .the locomotive manufacturer , onthe other hand ,must advance ever new capital for wages and raw material every week for three months insuccession , and itisonly after three months ,after the delivery ofthe locomotive ,that the circulating capital gradually invested inone and the same productive act for the manufacture of one and the same commodity once more returns toaform inwhich itcan renew itscycle .the wear and tear ofhis machinery islikewise covered only atthe end ofthree months .the investment ofthe one ismade for one week , that ofthe other isthe investment ofone week multiplied bytwelve .all other circumstances being assumed asequal , the one must have twelve times more circulating capital at his disposal than the other . itis,however ,an immaterial condition that the capitals advanced weekly should be equal .whatever may bethe",
        "262capital . quantity ofthe invested capital ,itisadvanced for one week in one case ,and for twelve weeks inthe other ,before the same operation can be repeated with it,or another inau- gurated . the difference inthe velocity ofthe turn -over ,orinthe length oftime for which the capital isadvanced before the same capital -value can beemployed inanew process ofpro- duction or self -expansion ,arises here from the following circumstances : take itthat the manufacture ofalocomotive ,orofany other machine ,requires 100 working days .so far asthe laborers employed inthe manufacture ofyarn or ofthe locomotive are concerned ,100 working days constitute in either case adiscontinuous magnitude ,representing ,ac- cording to our assumption ,100 consecutive ,but separate labor -processes often hours each .but with reference to the product -the machine -these 100 working days are a continuous magnitude ,aworking day of 1,000 working hours ,one single connected act ofproduction .icall such aworking day ,which isformed by the succession ofmore orless numerous connected working days ,aworking period . ifwe speak ofaworking day ,we mean the length ofwork- ing time during which the laborer must daily spend his labor -power ,must work day by day .but ifwe speak of aworking period ,then we mean anumber ofconsecutive working days required in acertain branch ofproduction for the completion ofthe finished product .in this case , the product ofevery working day isbut apartial one ,being elaborated from day today and receiving itscomplete form only atthe end ofalonger orshorter period oflabor ,when itisatlast afinished use-value . interruptions ,disturbances ofthe process ofsocial pro- duction ,for instance ,by crises ,therefore have very different effects onlabor products ofadiscontinuous nature and those that require for their completion aprolonged and connected working period .in one case ,today's production ofacer- tain mass ofyarn ,coal ,etc. ,isnot followed by tomorrow's production ofyarn ,coal ,etc. not sointhe case ofships , buildings ,railroads ,etc. itisnot only the work which is interrupted ,but also aconnected working period .ifthe",
        "the working period .263 work isnot continued ,the means ofproduction and labor sofar expended in its manufacture are wasted .even if work isresumed ,adeterioration has taken place inthe meantime . for the entire duration ofthe working period ,the value daily transferred tothe product by the fixed capital accu- mulates successively until the product isfinished .in this way ,the difference between the fixed and circulating capital isrevealed initspractical significance .the fixed capital is invested inthe process ofproduction for along period ,it need not be reproduced until after the expiration of,per- haps ,aperiod ofseveral years .whether asteam -engine transfers itsvalue daily tosome yarn ,which isthe product ofadiscontinuous labor -process ,orfor three months toa locomotive ,which isthe product ofacontinuous process , isimmaterial for the investment ofthe capital required for the purchase ofthe steam -engine .inthe one case ,itsvalue isrecovered in small doses ,for instance ,weekly ,inthe other case inlarger quantities ,for instance ,quarterly .but ineither case ,the reproduction ofthe steam -engine may not take place until after twenty years .so long asevery indi- vidual period which returns apart ofthe value ofthe steam- engine by the sale ofthe product ,isshorter than the life- time ofthis engine ,the same engine continues its service insuccessive working periods ofthe process ofproduction . itisdifferent with the circulating portions ofthe invest- edcapital .the labor -power bought for this week iscon- sumed inthe course ofthe same week and transferred tothe product .itmust bepaid for atthe end ofthis week .and this investment ofcapital inlabor -power isrepeated every week for three months without enabling the capitalist to use the investment ofthis part ofcapital inthis week's labor- power for the purchase ofnext week's .every week ,addi- tional capital must be invested for the payment oflabor- power ,and ,leaving aside the question ofcredit ,the capital- istmust beable toadvance wages for three months ,even if hepays them only inweekly instalments .itisthe same with the other portion ofcirculating capital ,the raw and auxiliary materials .one shift of labor after another is transferred tothe product .itisnot alone the value ofthe",
        "264capital . expended labor -power which iscontinually transferred to the product during the labor -process ,but also surplus -value . this product ,however ,isunfinished ,ithas not yet the form ofafinished commodity ,itcannot yet circulate .this ap- plies likewise tothe capital -value transferred tothe product bythe raw and auxiliary materials . according asthe working period required by the specific nature ofthe product ,orby the useful effect aimed at,is short or long ,acontinuous investment of additional cir- culating capital (wages ,raw ,and auxiliary materials )isre- quired ,none ofitsparts being inaform adapted for cir- culation and for the promotion ofthe repetition ofthe same operation .every one ofthese parts isonthe contrary held by the growing product asone ofitsparts inthe sphere of production ,inthe form ofproductive capital .now ,the time ofturn -over isequal tothe sum ofthe time ofproduc- tion and the time ofcirculation .hence aprolongation of the time ofproduction reduces the velocity ofthe turn -over quite asmuch asthe prolongation ofthe time ofcirculation . in the present case ,the following must be furthermore noted : 1. the prolonged stay inthe sphere ofproduction .the capital invested ,for instance ,inthe labor -power ,raw ,and auxiliary materials ofthe first week ,the same asthe por- tions ofvalue transferred tothe product bythe fixed capital , are held inthe sphere ofproduction for the entire term of three months ,and ,being incorporated inagrowing and as yet unfinished product ,cannot pass into the circulation of commodities . 2.since the working period required for the comple- tion ofthe productive act lasts three months ,and forms one connected labor -process ,anew quantity ofcirculating capi- tal must becontinually added week after week tothe pre- ceding quantity .the amount ofthe successively invested additional capital grows ,therefore ,with the length ofthe working period . we have assumed that equal capitals are invested inthe spinnery and the machine factory ,that these capitals con- tain equal proportions ofconstant and variable ,fixed and circulating capital ,that the working days are equal ,in",
        "the working period .265 short ,that all circumstances are equal with the exception ofthe duration ofthe working period .in the first week , the outlay for both isthe same ,but the product ofthe spin- ner can besold and the returns from the sale employed in the purchase ofnew labor -power and raw materials ,inshort , production can beresumed onthe same scale .the machine manufacturer ,onthe other hand ,cannot reconvert the cir culating capital expended inthe first week into money until atthe end ofthree months ,when his product isfinished and he can begin operations afresh .there is,in other words ,first adifference inthe return ofthe same quantity ofcapital invested .but ,inthe second place ,the same amount ofproductive capital isemployed during the three months in the spinnery and inthe machine factory ,but the magnitude ofthe outlay of capital inthe case ofthe yarn manu- facturer isdifferent from that ofthe machine manufacturer . for inthe one case ,the same capital israpidly renewed and the same operation can berepeated ,while inthe other case ,the capital isrenewed by relatively slow degrees ,so that ever new quantities ofcapital must beadded tothe old uptothe time ofthe completion ofthe term ofitsreproduc- tion .itis,therefore ,not only the time ofreproduction of definite portions ofcapital ,orthe time ofinvestment ,which isdifferent ,but also the quantity ofthe capital tobe ad- vanced according tothe duration ofthe productive process , although the capital employed daily orweekly isthe same . this circumstance isworthy of note for the reason that the time ofinvestment may beprolonged ,aswe shall see in the cases treated inthe next chapter ,without thereby in- creasing the amount ofthe capital tobeinvested inpropor- tion tothis increase intime .the capital must beadvanced for alonger time ,and alarger amount ofcapital isheld inthe form ofproductive capital . in undeveloped stages of capitalist production ,enter- prises requiring along working period ,and hence alarge investment ofcapital for along time ,such asthe building ofstreets ,canals ,etc. ,especially when they can be carried out only on alarge scale ,are either not managed on acapi- talist basis atall,but rather atthe expense ofthe munici- pality orstate (inolder times generally by means offorced",
        "266capital . labor ,sofar aslabor -power was concerned );or,such prod- ucts asrequire along working period are manufactured only for the smaller part by the help ofthe private re- sources ofthe capitalist himself .for instance ,inthe build- ing ofahouse ,the private person for whose account the house isbuilt advances money in instalments tothe con- tractor .the owner thus pays for his house ininstalments tothe extent that his productive process proceeds .but in the developed capitalist era,when onthe one hand masses ofcapital are concentrated inthe hands ofsingle individ- uals ,while on the other hand associations of capitalists (stock companies )appear by the side ofindividual capital- ists and the credit system issimultaneously developed ,a capitalist contractor builds only inexceptional cases for the order ofprivate individuals .he makes ithis business to build rows ofhouses and sections ofcities for the market , just asindividual capitalists make ittheir business tobuild railroads ascontractors . to what extent capitalist production has revolutionized the building ofhouses in london ,isshown by the testi- mony ofacontractor before the banking committee of1857 . when he was young ,he said ,houses were generally built to order and the payments made in instalments tothe contractor when certain stages ofthe building were com- pleted .very little was built on speculation .contractors used toconsent tothis mainly togive their hands regular employment and thus keep them together .inthe last forty years ,all this has changed .very little isnow built for order .ifaman wants ahouse ,heselects one from among those built on speculation orstill in process ofbuilding . the contractor no longer works for his customers ,but for the market .like every other industrial capitalist ,he is compelled tohave finished articles on the market .while fomerly acontractor had perhaps three or four houses atatime building for speculation ,hemust now buy alarge piece ofreal estate (which ,incontinental language means rent itfor ninety -nine years ,asarule ),build from 100 to 200 houses on it,and thus engage inan enterprise which exceeds from twenty tofifty times his resources .the funds are secured by taking up mortgages ,and money isplaced 1",
        "the working period .267 atthe disposal ofthe contractor tothe extent that the build- ing ofthe individual houses isprogressing .then ,ifa crisis comes along and interrupts the payment ofthe ad- vance instalments ,the entire enterprise generally collapses . in the best case ,the houses remain unfinished until the coming ofbetter times ,inthe worst case they are sold at auction at half -price .without building on speculation , and that on alarge scale ,no contractor can get along now- adays .the profit from building itself isextremely small . the main profit ofthe contractor comes from raising the ground rent ,by acareful selection and utilization ofthe building lots .by this method ofspeculation anticipating the demand for houses nearly the whole ofbelgravia and tyburnia ,and the countless thousands ofvillas inthe vi- cinity oflondon have been built .(abbreviated from the report ofthe select committee on bank acts . 1857 ,evidence ,questions 5413-18 ;5535-36 .)part i, the execution ofenterprises with considerably long work- ing periods and on alarge scale does not fall fully within the province ofcapitalist production ,until the concentration ofcapitals isvery pronounced ,and the development ofthe credit system offers ,onthe other hand ,the comfortable ex- pedient ofadvancing another's money instead ofone's own capital and thus risking itsloss .itgoes without saying that the fact whether ornot the capital advanced inproduction belongs tothe one who uses itortosome one else has no in- fluence on the velocity and time ofturn -over . the circumstances which augment the product of the individual working day ,such asco-operation ,division ofla- bor,employment ofmachinery ,shorten atthe same time the working period of connected acts of production .thus machinery shortens the building time ofhouses ,bridges , etc.;amowing and threshing machine ,etc. ,shorten the working period required totransform the ripe grain into a finished product .improved shipbuilding reduces by in- creased speed the time ofturn -over ofcapital invested in navigation .such improvements as shorten the working period and thereby the time for which circulating capital must beadvanced are,however ,generally accompanied by an increased outlay for fixed capital .on the other hand ,",
        "266capital . labor ,sofar aslabor -power was concerned );or,such prod- ucts asrequire along working period are manufactured only for the smaller part by the help ofthe private re- sources ofthe capitalist himself .for instance ,inthe build- ing ofahouse ,the private person for whose account the house isbuilt advances money in instalments tothe con- tractor .the owner thus pays for his house ininstalments tothe extent that his productive process proceeds .but in the developed capitalist era,when onthe one hand masses ofcapital are concentrated inthe hands ofsingle individ- uals ,while on the other hand associations of capitalists (stock companies )appear by the side ofindividual capital- ists and the credit system issimultaneously developed ,a capitalist contractor builds only inexceptional cases for the order ofprivate individuals .he makes ithis business to build rows ofhouses and sections ofcities for the market , just asindividual capitalists make ittheir business tobuild railroads ascontractors . to what extent capitalist production has revolutionized the building ofhouses in london ,isshown by the testi- mony ofacontractor before the banking committee of1857 . when he was young ,he said ,houses were generally built to order and the payments made in instalments tothe contractor when certain stages ofthe building were com- pleted .very little was built on speculation .contractors iused toconsent tothis mainly togive their hands regular employment and thus keep them together .inthe last forty years ,all this has changed .very little isnow built for order .ifaman wants ahouse ,heselects one from among those built on speculation orstill in process ofbuilding . the contractor no longer works for his customers ,but for the market .like every other industrial capitalist ,heis compelled tohave finished articles on the market .while fomerly acontractor had perhaps three or four houses atatime building for speculation ,hemust now buy alarge piece ofreal estate (which ,incontinental language means rent itfor ninety -nine years ,asarule ),build from 100 to 200 houses on it,and thus engage inan enterprise which exceeds from twenty tofifty times his resources .the funds are secured by taking up mortgages ,and money isplaced",
        "the working period .267 atthe disposal ofthe contractor tothe extent that the build- ing ofthe individual houses isprogressing .then ,ifa crisis comes along and interrupts the payment ofthe ad- vance instalments ,the entire enterprise generally collapses . in the best case ,the houses remain unfinished until the coming ofbetter times ,inthe worst case they are sold at auction at half -price .without building on speculation , and that on alarge scale ,no contractor can get along now- adays .the profit from building itself isextremely small . the main profit ofthe contractor comes from raising the ground rent ,by acareful selection and utilization ofthe building lots .by this method ofspeculation anticipating the demand for houses nearly the whole ofbelgravia and tyburnia ,and the countless thousands ofvillas inthe vi- cinity oflondon have been built .(abbreviated from the report ofthe select committee on bank acts .part i, 1857 ,evidence ,questions 5413-18 ;5535-36 .) the execution ofenterprises with considerably long work- ing periods and on alarge scale does not fall fully within the province ofcapitalist production ,until the concentration ofcapitals isvery pronounced ,and the development ofthe credit system offers ,onthe other hand ,the comfortable ex- pedient ofadvancing another's money instead ofone's own capital and thus risking itsloss .itgoes without saying that the fact whether ornot the capital advanced inproduction belongs tothe one who uses itortosome one else has noin- fluence onthe velocity and time ofturn -over . the circumstances which augment the product of the individual working day ,such asco-operation ,division ofla- bor,employment ofmachinery ,shorten atthe same time the working period of connected acts of production .thus machinery shortens the building time of houses ,bridges , etc.;amowing and threshing machine ,etc. ,shorten the working period required totransform the ripe grain into a finished product .improved shipbuilding reduces by in- creased speed the time ofturn -over ofcapital invested in navigation .such improvements as shorten the working period and thereby the time for which circulating capital must be advanced are,however ,generally accompanied by an increased outlay for fixed capital .on the other hand ,",
        "268capital . the working period incertain branches ofproduction may be shortened by the mere extension ofco-operation .the completion ofarailroad ishastened by the employment of huge armies oflaborers and the carrying on ofthe work inmany places atonce .the time ofturn -over isinthat case hastened by an increase ofthe advanced capital .more means ofproduction and more labor -power must be com- bined under the command ofthe capitalist . while the shortening ofthe working period isthus mostly accompanied by an increase of the capital advanced for this shortened time ,sothat the amount ofcapital advanced increases tothe extent that the time for which the advance ismade decreases ,itmust benoted that the essential point , apart from the existing amount ofsocial capital ,isthe de- gree in which the means ofproduction orsubsistence ,or their control ,isscattered orconcentrated inthe hands of individual capitalists ,in other words ,the degree of con- centration of capitals .inasmuch as credit promotes the concentration ofcapital inone hand ,ithastens and inten- sifies by its contribution the shortening ofthe working pe- riod and thereby ofthe time ofturn -over . in branches ofproduction inwhich the working period iscontinually ,oroccasionally ,determined bydefinite natural conditions ,no shortening ofthe working period can take place by the above mentioned means .says walter good , inhis \"political ,agricultural ,and commercial fallacies ,\" (london ,1866 ,page 325 ):\"the expression ,'more rapid turn -over 'cannot be applied tograin crops ,asonly one turn -over per year ispossible .as for cattle ,we will sim- ply ask :how isthe turn -over ofbi- ortri-ennial sheep ,and ofquardrennial and quinquennial oxen tobe hastened ?\" the necessity ofsecuring ready money (for instance ,for the payment offixed tithes ,such astaxes ,groundrent ,etc. ) solves this question by selling orkilling cattle before they have reached the normal economic age ,tothe great detri- ment ofagriculture .this also causes finally arise inthe price ofmeat .we read onpages 12and 13 ofthe above named work that the people who formerly were mainly engaged in the raising ofcattle for the purpose ofsupplying the pastures ofthe midland counties insummer ,and the stables ofthe",
        "the working period . 269 eastern counties inwinter ,have been soreduced bythe fluc- tuations and sinking ofthe corn prices that they are glad to avail themselves ofthe high prices ofbutter and cheese ;they carry the former every week tothe market ,inorder tocover their running expenses ,while they take advance payments onthe cheese from some middleman who calls for itassoon asitcan betransported and who ,ofcourse ,makes his own prices .as aresult ofthis ,agriculture being ruled by the laws ofpolitical economy ,the calves ,which were formerly taken south from the dairy districts tobe raised ,are now sacrificed inmasses ,frequently when they are only eight or ten days old,inthe stock yards ofbirmingham ,manchester , liverpool ,and other neighboring cities .but ifthe malt were untaxed ,the farmers would not only have made more profits and been able tokeep their young cattle until they would have been older and heavier ,but the malt would also have served instead of milk for the raising of calves by those who keep no cows :and the present appalling want of young cattle would have been avoided toalarge extent .if the raising of calves isnow recommended tothose small farmers ,they reply :\"we know very well that itwould pay toraise them on milk ,but inthe first place we should have tolay out money ,and we cannot dothat ,and inthe second place we should have towait long for the return of our money ,while indairying we get returns immediately .\" if the prolongation ofthe turn -over has such conse- quences for the smaller english farmers ,itiseasy tosee what disadvantages itmust produce for the small farmers ofthe continent . to the extent that the working period lasts ,and thus the period required for the completion ofthe commodity ready for circulation ,the value successively yielded by the fixed capital accumulates and the reproduction ofthis value is retarded .but this retardation does not cause arenewed out- lay offixed capital .the machine continues itsfunction in the process ofproduction ,no matter whether the reproduc- tion ofits wear and tear inthe form ofmoney takes place slowly orrapidly .itisdifferent with the circulating capi- tal.not only must capital betied up for alonger time in proportion asthe working period extends ,but new capital",
        "270capital . must also be continually advanced inthe form ofwages , raw and auxiliary materials .aretardation ofthe reproduc- tion has therefore adifferent effect on either capital .no matter whether reproduction proceeds rapidly orslowly ,the fixed capital continues its functions .but the circulating capital becomes unable toperform its functions ,ifthe re- production isretarded ,ifitistied up inthe form ofunsold , orunfinished and asyet unsalable ,products ,and ifno ad- ditional capital isathand for its reproduction innatural form . \"while the farmer isstarving ,his cattle thrive .there had been considerable rain and the grass pasture was luxuriant . the indian farmer will starve alongside ofafat ox.the precepts ofsuperstition seem cruel for the individual ,but they are preserving society ;the preservation ofthe cattle secures the continuation ofagriculture and thereby the sources offuture subsistence and wealth .itmay sound hard and sad,but itisso:in india aman iseasier replaced than an ox.\"(return ,east indian .madras and orissa famine .no. 4,page 4.)compare with the preceding the statement ofmanara -dharma -sestra ,chapter x,page 862 ; \"the sacrifice oflife without any reward ,for the purpose of preserving apriest oracow . can secure the salvation ofthese low -born tribes .\" of course ,itisimpossible todeliver aquinquennial ani- mal before the lapse offive years .but athing that ispos- sible isthe getting ready ofthe animals for their destina- tion bychanged modes oftreatment .this was accomplished particularly by bakewell .formerly ,english sheep ,like the french aslate as1855 ,were not ready for slaughter- ing until after four orfive years .by the bakewell system , even aone year old sheep may befattened ,and inevery case itiscompletely grown before the end ofthe second year . by means ofcareful sexual selection ,bakewell ,afarmer of dishley grange ,reduced the skeleton ofsheep tothe mini- mum required for their existence .his sheep are called the new leicesters .\"the breeder can now supply three sheep for the market inthe same time that he formerly required for one ,and atthat with abroader ,rounder ,and larger development ofthe parts giving the most meat .nearly their",
        "the working period .271 entire weight ispure meat .\" (lavergne ,the rural econo- my ofengland ,etc. ,1855 ,page 22.) the methods which shorten the working periods are ap- plicable to different branches ofindustry only to avery different degree and do not compensate for the differences inthe length oftime ofthe various working periods .to stick to our illustration ,the working period required for the building ofalocomotive may be absolutely shortened by the employment ofnew implement machines .but if atthe same time the finished product turned out daily or weekly by acotton spinnery isstill more rapidly increased , then the length ofthe working period in machine build- ing,compared with that inspinning ,has nevertheless been relatively lengthened .",
        "272capital . chapter xiii . the time ofproduction . the working time isalways the time ofproduction ,that istosay,the time during which capital isheld inthe sphere ofproduction .but vice versa ,not all time during which capital isengaged inthe process ofproduction isneces- sarily aworking time . itisnot inthis case aquestion ofinterruptions ofthe labor -process conditioned on natural limitations of labor- power itself ,although we have seen towhat extent the mere circumstance that fixed capital ,factory buildings ,machin- ery,etc. ,are unemployed during pauses ofthe labor -proc- ess,became one ofthe motives for an unnatural prolonga- tion ofthe labor -process and for day and night work .it israther aquestion ofan interruption independent ofthe length ofthe labor -process and conditioned on the nature and the production ofthe goods themselves ,during which the object oflabor isfor alonger orshorter time subjected to lasting natural processes ,causing physical ,chemical ,or physiological changes and suspending the labor -process en- tirely orpartially . for instance ,grape juice ,after being pressed ,must fer- ment for awhile and then rest for some time ,inorder to reach acertain degree ofperfection .in many branches of industry the product must pass through adrying process , for instance inpottery ,orbeexposed tocertain conditions which change itschemical nature ,for instance inbleaching . winter grain needs about nine months tomature .between the time ofsowing and harvesting the labor -process isal- most entirely suspended .in timber raising ,after the sow- ing and the incidental preliminary work are completed ,the seed may require 100 years inorder tobetransformed into afinished product ,and during all this time itrequires very insignificant contributions of labor . in all these cases ,additional labor iscontributed only occasionally during alarge portion ofthe time ofproduc-",
        "the time ofproduction .273 tion .the condition described inthe previous chapter ,where additional capital and labor must becontributed tothe capi- tal already tied up inthe process ofproduction ,isfound here only inlonger orshorter intervals . in all these cases ,therefore ,the time ofproduction of the advanced capital consists oftwo periods :one period , during which the capital isengaged inthe labor -process ;a second period ,during which its form ofexistence -being that ofan unfinished product -issurrendered tothe influ- ence ofnatural processes ,without being inthe labor -proc- cess .itdoes not alter the case ,that these two periods of time may cross and pervade one another here and there .the working period and the period ofproduction do not coin- cide .the time ofproduction isgreater than the working period .but the product isnot finished until the time of production iscompleted ,only then itismature and can be transformed from aproductive into acommodity -capital . according tothe length ofthe period ofproduction not consisting ofworking time ,the period ofturn -over islike- wise prolonged .in so far asthe time ofproduction in excess ofthe working time isnot once and for all deter- mined by definite natural laws ,such asregulate the matur- ing ofgrain ,the growth ofan oak ,etc. ,the period ofturn- over may be more orless shortened by an artificial reduc- tion ofthe time ofproduction .such instances are the intro- duction ofchemical bleaching instead oflawn bleaching , the improvement ofdrying apparatus indrying processes . or,intanning ,where the penetration ofthe tannic acid into the skins ,by the old method ,required from six to eighteen months ,while the new method ,by means ofthe air-pump ,does itinone and ahalf totwo months .(j.g. courcelle -seneuil ,traite theorique etpratique des entre- prises industrielles ,etc. ,paris ,1857 ,second edition .)the most magnificent illustration ofan artificial abbreviation of the time ofproduction which istaken up with natural proc- esses isfurnished by the history ofthe production ofiron , more especially the conversion ofraw iron into steel dur- ing the last 100 years ,from the puddling process discovered about 1780 tothe modern bessemer process and the latest",
        "274 capital . methods introduced since then .the time ofproduction has been enormously abbreviated ,but the investment of fixed capital has increased accordingly . apeculiar illustration ofthe divergence ofthe time of production from the working time is furnished by the american manufacture ofshoe -lasts .in this case ,acon- siderable part ofthe expense isdue tothe fact that the wood must bestored for drying for asmuch as18 months , inorder that the finished last may not change itsform by warping .during this time ,the wood does not pass through any other labor -process .the period ofturn -over ofthe in- vested capital is,therefore ,not determined solely by the time required for the manufacture ofthe lasts ,but also by the time during which the wood lies unproductive inthe drying process .itisfor 18 months inthe process ofpro- duction before itcan enter into the labor -process proper . this illustration shows atthe same time ,how itisthat the periods ofturn -over ofdifferent parts ofthe total circulating capital may differ in consequence ofconditions ,which do not owe their existence tothe sphere ofcirculation ,but to that ofproduction . the difference between the time ofproduction and the working time becomes especially apparent in agriculture . in our moderate climates ,the.land bears grain once ayear . the abbreviation orprolongation ofthe period ofproduc- tion (for winter grain an average ofnine months )isitself dependent on the change ofgood orbad seasons ,and for this reason itcannot be asaccurately determined before- hand and controlled asinindustry properly socalled .only such by-products asmilk ,cheese ,etc. ,are successively pro- ducible and saleable inshort periods .on the other hand ,the working time meets with the following conditions :\"the number ofworking days inthe various regions ofgermany , with regard tothe climatic and other determining condi- tions ,will permit the assumption ofthe three following main working periods :for the spring period ,from the middle of march orbeginning ofapril tothe middle of may ,about 50to60working days ;for the summer period , from the beginning ofjune tothe end ofaugust ,65 to",
        "the time ofproduction .275 80;and for the fall period ,from the beginning ofseptember tothe end ofoctober ,orthe middle orend ofnovember , 55 to75 working days .for the winter ,only the chores customary for that time ,such asthe hauling ofmanure , wood ,market goods ,and building materials ,are tobenoted .\" (f. kirchhoff ,handbuch der landwirthschaftlichen be- triebslehre .dresden ,1852 ,page 160. ) to the extent that the climate isunfavorable ,the work- ing period ofagriculture ,and thus the outlay for capital and labor ,iscrammed into ashort space oftime .take ,for instance ,russia .in some ofthe northern regions ofthat country agricultural labor ispossible only during 130 to 150 days per year .itmay beimagined what would bethe losses ofrussia ,if50out ofits65 million ofeuropean in- habitants would remain unemployed during six oreight months ofthe winter ,when all field work must stop .apart from the 200,000 farmers ,who work inthe 10,500 factories ofrussia ,local house industries have everywhere developed inthe villages .there are some villages inwhich allfarmers have been for generations weavers ,tanners ,shoemakers , locksmiths ,knifemakers ,etc. this isparticularly the case inthe provinces ofmoscow ,vladimir ,kaluga ,kostroma , and petersburg .by the way ,this house -industry isbeing more and more pressed into the service ofcapitalist produc- tion .the weavers ,for instance ,are supplied with woof and web directly bymerchants ormiddlemen .(abbreviated from the reports by h. m. secretaries ofembassy and legation , onthe manufactures ,commerce ,etc. ,no. 8,1865 ,pages 86 and 87.)we see here that the divergence ofthe period of production from the working period ,the latter being but apart ofthe former ,forms the natural basis for the com- bination ofagriculture with an agricultural side -industry , and that this side -industry ,on the other hand ,offers points ofvantage tothe capitalist ,who intrudes first inthe per- son ofthe merchant .when capitalist production later ac- complishes the separation ofmanufacture and agriculture , the rural laborer becomes ever more dependent onaccidental side -employment and his condition iscorrespondingly low- ered .for the capital ,allthe differences are compensated in the turn -over .not sofor the laborer .",
        "276capital . while in most branches ofindustry proper ,ofmining , transportation ,etc. ,the work proceeds uniformly ,the work- ing time being the same from year toyear ,and the out- lay for the capital passing daily into circulation being uni- formly distributed ,making exception ofsuch abnormal in- terruptions asfluctuations ofprices ,business depressions ,etc.; while furthermore also the recovery ofthe circulating capi- tal,orits reproduction ,isuniformly distributed through- out the year ,provided the conditions ofthe market remain the same -there is,onthe other hand ,the greatest inequality inthe outlay ofcirculating capital insuch investments of capital ,inwhich the working time constitutes only apart ofthe time ofproduction ,while the recovery ofthe capital takes place inbulk atatime determined by natural condi- tions .ifsuch abusiness ismanaged onthe same scale as one with acontinuous working period ,that istosay,ifthe amount ofthe circulating capital tobeadvanced isthe same , itmust beadvanced inlarger doses atatime and for longer periods .the durability ofthe fixed capital differs here considerably from the time inwhich itactually performs a productive function .together with the difference between working time and time ofproduction ,the time ofinvest- ment ofthe employed fixed capital is,ofcourse ,likewise continually interrupted for alonger orshorter time ,for instance ,inagriculture inthe case oflaboring cattle ,im- plements and machines .insofar asthis fixed capital con- sists oflaboring cattle ,itrequires continually the same ,or nearly the same ,amount ofexpenditure for feed ,etc. ,as itdoes during itsworking time .inthe case ofinanimate instruments oflabor ,disuse also implies acertain amount ofdepreciation .hence there isanappreciation ofthe prod- uct ingeneral ,seeing that the transfer ofvalue isnot cal- culated by the time inwhich the fixed capital performs its function ,but by the time inwhich itdepreciates invalue . in such branches ofproduction asthese ,the disuse ofthe fixed capital ,whether combined with current expenses or not ,forms asmuch acondition ofits normal employment as,for instance ,the waste ofacertain quantity ofcotton in spinning ;and inthe same way the labor -power unproduc-",
        "the time ofproduction . 277 tively consumed inany labor -process under normal condi- tions ,and inevitably so,counts asmuch asits productive consumption .every improvement which reduces the un- productive expenditure ofinstruments oflabor ,raw mate- rial ,and labor -power ,also reduces the value ofthe product . in agriculture ,both the longer duration ofthe working period and the great difference between working period and productive period are combined .hodgskin truly says with regard tothis circumstance that the difference inthe time (although he does not here distinguish between working time and productive time )required toget the products of agriculture ready and that required for the products ofother branches ofproduction isthe main cause for the great de- pendence offarmers .they cannot market their goods in less time than one year .during this entire period they must borrow from the shoemaker ,the tailor ,the smith ,the wagonmaker ,and various other producers ,whose articles they need ,and which articles are finished inafew days or weeks .in consequence ofthis natural circumstance ,and asaresult ofthe more rapid increase ofwealth in other branches ofproduction ,the real estate owners who have mo- nopolized the land ofthe entire country ,although they have also appropriated the monopoly oflegislation ,are neverthe- less unable tosave themselves and their servants ,the ten- ants ,from the fate ofbecoming the most dependent people inthe land .(thomas hodgskin ,popular political economy , london ,1827 ,page 147 ,note .) all methods by which partly the expenditures for wages and instruments oflabor inagriculture are distributed more equally over the entire year ,partly the turn -over isshortened by the raising ofvarious products making different harvests possible during the course ofthe year ,require an increase ofthe circulating capital invested inwages ,fertilizers ,seeds , etc. ,and advanced for purposes ofproduction .this isthe case ,for instance ,inthe transition from the three plat sys- tem with fallow land tothe system ofcrop rotation without fallow .itapplies furthermore tothe cultures drobes of flanders .\"the root crops are planted inculture drobe ; the same field yields insuccession first grain ,flax ,rape ,for",
        "278capital . the wants ofman ,and after their harvest root crops are sown for the subsistence ofcattle .this system ,which per- mits the keeping ofhorned cattle inthe stables without in- terruption ,yields aconsiderable amount of manure and thus becomes the fulcrum ofcrop rotation .more than a third ofthe cultivated area insandy districts istaken up with cultures drobes ;itisasthough the cultivated area had been increased by one third .\" apart from root crops , clover and other leguminous crops are likewise used for this purpose .\"agriculture ,being thus carried toapoint where itmerges into horticulture ,naturally requires arelatively considerable investment ofcapital .in england ,afirst in- vestment of250 francs per hectare isassumed .in flanders , our farmers will probably consider afirst investment of500 francs far too low .\"(emile delaveleye ,essais sur l'cono- mie rurale delabelgique ,paris ,1863 ,pages 59,60,63.) take finally timber growing .\"the production oftimber differs from most ofthe other branches ofproduction essen- tially bythe fact that initthe force ofnature isacting in- dependently and does not require the power of man and capital in its natural propagation .even in places where forests are artificially propagated the expenditure ofhuman and capital power isinconsiderable compared tothe action ofnatural forces .besides ,aforest will still thrive insoils and locations where grain does no longer give any yield or where its production does not pay .forestry furthermore requires for its regular economy alarger area than grain culture ,because small plats do not permit asystem offell- ing trees in plats ,prevents the utilization ofby-products , complicates the production ofthe trees ,etc. finally ,the productive process extends over such long periods that it exceeds the aims ofprivate management and even surpasses the age limit ofhuman life incertain cases .the capital invested inthe purchase ofthe real estate \"(inthe case of communal production there isno capital needed for this , the question being simply how much land the community can spare from itscultivated and pasturing area for forestry ) \"will not yield returns until after along period and isturned over gradually ,but completely ,with forests of certain",
        "the time ofproduction .279 kinds ofwood ,only after asmuch as150 years .besides ,a consistent production oftimber demands itself asupply of living wood which exceeds the annual requirements from ten toforty times .unless aman has ,therefore ,still other sources ofincome and owns vast tracts offorest ,he can- not engage inregular forestry .\" (kirchhof ,page 58.) the long time ofproduction (which comprises arelatively small amount ofworking time ),and thus the length ofthe periods ofturn -over ,makes forestry little adapted for pri- vate ,and therefore ,capitalist enterprise ,which isessentially private even ifassociated capitalists take the place ofthe individual capitalist .the development ofcivilization and ofindustry in general has ever shown itself soactive in the destruction of forests ,that everything done by itfor their preservation and production ,compared toitsdestructive effect ,appears infinitesimal . the following statement inthe above quotation from kirchhof isparticularly worthy ofnote :\"besides ,aconsist- ent production oftimber demands itself asupply ofliving wood which exceeds the annual requirements from ten to forty times .\" in other words ,aturn -over occurs once in ten,forty ,ormore years . the same applies tostock raising .apart ofthe herd (supply ofcattle )remains in the process ofproduction , while another part ofthe same issold annually asaproduct . inthis case ,only apart ofthe capital isturned over every year ,just asitisinthe case offixed capital ,machinery , laboring cattle ,etc. although this capital isafixed capital inthe process ofproduction for along time ,and thus pro- longs the turn -over ofthe total capital ,itisnot afixed capital inthe strict definition ofthe term . that which ishere called asupply -acertain amount of living timber or cattle -serves in arelative sense inthe process ofproduction (being simultaneously instruments of labor and raw materials );on account ofthe natural condi- tions of its reproduction under normal circumstances of economy ,aconsiderable part ofthis supply must always be available inthis form . asimilar influence on the turn -over isexerted by an- other kind ofsupply ,which isproductive capital only po-",
        "280capital . tentially ,but which owing tothe nature ofits economy , must beaccumulated inamore orless considerable quantity and advanced for purposes ofproduction for along term , although itisconsumed in the actual process ofproduc- tion only gradually .to this class belongs ,for instance , manure before itishauled tothe field ,furthermore grain , hay ,etc. ,and such supplies ofmeans ofsubsistence asare employed inthe production ofcattle .\"aconsiderable part of the productive capital iscontained inthe supplies ofcer- tain industries .but these may lose more orless oftheir value ,ifthe precautions necessary for their preservation in good condition are not properly observed .lack ofsuper- vision may even result inthe total loss ofapart ofthe sup- plies inthe economy .for this reason ,acareful inspection ofthe barns ,feed and grain lofts ,and cellars ,becomes indis- pensable ,the store rooms must always be well closed ,kept clean ,ventilated ,etc. the grain ,and other crops held in storage ,must bethoroughly turned over from time totime , potatoes and beets must beprotected against frost ,rain ,and fire .\"(kirchhof ,page 292. )\"in calculating one's own re- quirements ,especially for the keeping ofcattle ,and trying toregulate the distribution according tothe nature ofthe product and itsintended use,one must not only take into consideration the covering ofone's demand ,but also see to itthat there isaproportionate reserve for extraordinary cases .ifitisthen found that the demand cannot befully covered by one's own production ,itbecomes necessary tore- flect first whether the missing amount cannot becovered by other products (substitutes ),orby the cheaper purchase of such in place ofthe missing ones .for instance ,ifthere should happen tobe alack ofhay ,this might be covered byroot crops and straw .as ageneral rule ,the natural value and market -price ofthe various crops must bekept inmind insuch cases ,and dispositions for the consumption must be made accordingly .if,for instance ,oats are high ,while pease and rye are relatively low ,itwill pay tosubstitute pease orrye for apart ofthe oats fed tohorses and tosell the oats thus saved .\"(ibidem ,page 300. ) ithas been previously stated ,when discussing the ques- tion ofthe formation ofasupply ,that adefinite ,more or",
        "the time ofproduction .281 less considerable ,quantity ofpotential productive capital is required ,that istosay,ofmeans ofproduction intended for use inproduction ,which must beavailable inproportionate quantities for the purpose ofbeing gradually consumed in the productive process .ithas been incidentally remarked , that ,given acertain business orcapitalist enterprise ofdefi- nite proportions ,the magnitude ofthis productive supply de- pends on the greater orlesser difficulties ofitsreproduction , the relative distance ofthe supplying markets ,the develop- ment ofmeans oftransportation and communication ,etc. all these circumstances influence the minimum ofcapital , which must beavailable inthe form ofaproductive supply , hence they influence also the length oftime for which the investment ofcapital must bemade and the amount ofcapi- tal tobeadvanced atone time .this amount ,which affects also the turn -over ,isdetermined by the longer orshorter time ,during which acirculating capital istied up inthe form ofaproductive supply ,ofmere potential capital .on the other hand ,insofar asthis stagnation depends onthe greater orsmaller possibility ofrapid reproduction ,on mar- ket conditions ,etc. ,itarises itself out ofthe time ofcircu- lation ,out ofcircumstances connected with the circulation . \"furthermore ,all such parts ofthe equipment orauxiliary pieces ,ashand tools ,sieves ,baskets ,ropes ,wagon grease , nails ,etc. ,must besomuch the more available for immedi- ate use,the less the opportunity for their rapid purchase is athand .finally ,the entire supply ofimplements must be carefully overhauled inwinter ,and new purchases orre- pairs found tobenecessary must bemade atonce .whether ornot aman istokeep agreat orsmall supply ofarticles of equipment is mainly determined by local conditions . wherever there are noartisans and stores inthe vicinity ,it isnecessary tokeep larger supplies than in places where these are inthe locality ornear it.but ifthe necessary sup- plies are purchased inlarge quantities atatime ,then ,other circumstances being equal ,one profits asarule by cheap purchases ,provided the right time has been chosen for them . true ,the rotating productive capital isthus curtailed by a somuch larger sum ,which cannot always be well spared inthe business .\"(kirchhof ,page 301. )",
        "282capital . the difference between the time ofproduction and work- ing time admits ofmany variations ,aswe have seen .the circulating capital may be inthe period ofproduction ,be- fore itenters into the working period proper (production of lasts );or,itisstill inthe period ofproduction ,after ithas passed through the working period (wine ,seed grain );or,the period ofproduction isoccasionally interrupted bythe work- ing period (agriculture ,timber raising ).alarge portion ofthe product ,fitfor circulation ,remains incorporated in the active process ofproduction ,while amuch smaller part enters into the annual circulation (timber and cattle rais- ing );the longer orshorter time for which acirculating capital must beinvested inthe form ofpotential productive capital ,hence also the larger orsmaller amount ofthis capi- tal tobeadvanced atone time ,depends partly onthe nature ofthe productive process (agriculture ),and partly on the proximity ofmarkets ,etc. ,in short on circumstances con- nected with the sphere ofcirculation . we shall see later (volume iii),what senseless theories were advanced by macculloch ,james mill ,etc. ,inthe at- tempt ofidentifying the diverging time ofproduction with the working time ,an attempt which isdue toamisinter- pretation ofthe theory ofvalue . the cycle ofturn -over ,which we considered inthe fore- going ,isdetermined by the durability ofthe fixed capital advanced inthe process ofproduction .since this process extends over aseries ofyears ,we have aseries ofannual , orless than annual ,successive turn -overs offixed capital . inagriculture ,such acycle ofturn -over arises out ofthe system ofcrop rotation .\"the duration ofthe lease must certainly not be figured less than the time ofrotation of the adopted system ofcrop succession .for this reason ,one always calculates with 3,6,9,inthe three plat system . inthe three plat system with complete fallow ,afield iscul- tivated only four times insix years ,being planted with both winter and summer grain inthe years ofcultivation ,and , ifthe condition ofthe soil permits it,wheat and rye,barley",
        "the time ofproduction .283 and oats ,are likewise introduced into the rotation .every species ofgrain ,however ,differs in its yields from others onthe same soil ,every one ofthem has adifferent value and issold atadifferent price .for this reason ,the yield of the same field isdifferent inevery year inwhich itisculti- vated ,and different inthe first half ofthe rotation (the first three years )from that ofthe second ,even the average yield ofone period ofrotation isnot equal tothat ofanother , for itsfertility does not depend merely onthe good condition ofthe soil ,but also onthe weather ofthe various seasons , just asprices depend onamultitude ofcircumstances .now , ifone calculates the income from one field on the average ofthe crops for the entire rotation ofsix years and the average prices ofthose years ,one finds the total income ofone year ineither period ofrotation .but this isnot so,ifthe in- come iscalculated only for half ofthe period ofrotation that istosay,for three years ,for then the total yields would beunequal .itfollows from the foregoing that the duration ofalease inasystem ofthree fields must be chosen for at least six years .itwould bestill more desirable for tenants and owners that the duration ofthe lease should beamulti- ple ofthe duration ofthe lease (!),inother words ,that it should be12,18,ormore years instead of6years ,inasys- tem ofthree fields ,and 14,28years instead of7inasystem ofseven fields .\"(kirchhof ,pages 117 ,118. ) (the manuscript atthis place contains the note :\"the english system ofcrop rotation .make anote here .\")",
        "284capital . chapter xiv . the time ofcirculation . all circumstances considered sofar,which stinguish the periods ofrotation ofdifferent capitals invested indifferent branches ofindustry and the periods for which capital must beadvanced ,have their source inthe process ofproduction itself ,such asthe difference between fixed and circulating capital ,the difference inthe working periods ,etc. but the period ofturn -over ofcapital isequal tothe sum ofitstime ofproduction plus itstime ofcirculation .itis,therefore , amatter ofcourse that adifference inthe time ofcircula- tion changes the time ofturn -over and tothat extent the length ofthe period ofturn -over .this becomes most plainly apparent ,either incomparing the different investments of capital inwhich all circumstances modifying the turn -over are equal ,except the time ofcirculation ,orinselecting a given capital with agiven composition offixed and circu- lating parts ,agiven working time ,etc. ,permitting only the time ofcirculation tovary hypothetically . one ofthe sections ofthe time ofcirculation -relatively the most decisive -consists ofthe time ofselling ,the period during which capital has the form ofcommodity -capital .ac- cording tothe relative length ofthis time ,the time ofcircu- lation ,and to that extent the period ofturn -over ,are lengthened orshortened .an additional outlay ofcapital may become necessary asaresult ofexpenses ofstorage .it isevident from the outset that the time required for the sale offinished products may differ considerably for the indi- vidual capitalists inone and the same branch ofindustry ; and this does not refer merely tothe grand totals ofcapital invested inthe various departments ofindustry ,but also tothe different individual capitals ,which are in fact in- dividual parts ofthe aggregate capital invested inthe same department ofproduction .other circumstances remaining equal ,the period ofselling for the same individual capital",
        "the time ofcirculation .285 will vary with the general fluctuations ofthe market condi- tions ,orwith their fluctuations inthat particular business department .we do not tarry over this point any longer . we merely state the simple fact that allcircumstances which produce differences inthe periods ofturn -over ofthe capitals invested in different business departments ,also carry in their train differences inthe turn -over ofthe various indi- vidual capitals existing inthe same departments ,provided these circumstances have any individual effects (for instance , ifone capitalist has anopportunity tosell more rapidly than his competitor ,ifone employs more methods shortening the working periods than the other ,etc. ). one cause which acts continuously indifferentiating the times ofselling ,and thus the periods ofturn -over ingen- eral ,isthe distance ofthe market ,inwhich acommodity is finally sold from itsregular place ofsale .during the entire time ofitstrip tothe market ,capital finds itself fettered in the form ofcommodity -capital .ifgoods are made toorder , this condition lasts up tothe time ofdelivery ;ifthey are not made toorder ,the time ofthe trip tothe market isfur- ther increased by the time during which the goods are on the market waiting tobe sold .the improvement ofthe means ofcommunication and transportation abbreviates the wandering period ofthe commodities absolutely ,but does not abolish the relative difference inthe time ofcirculation ofdifferent commodity -capitals arising from their wander- ings ,nor that ofdifferent portions ofthe same commodity- capital which wander todifferent markets .the improved sailing vessels and steamships ,for instance ,which shorten the wanderings ofcommodities ,do soequally for near and for distant ports .but the relative differences may bealtered bythe development ofthe means oftransportation and com- munication inaway that does not correspond tothe nat- ural distances .for instance ,arailroad ,which leads from place ofproduction toan inland center ofpopulation ,may relatively orabsolutely prolong the distance toanearer point inland not connected with arailroad ,compared tothe one which isnaturally more distant .inthe same way ,the same circumstances may alter the relative distance ofplaces of production from the larger markets ,which explains the",
        "286 capital . running down ofold and the rise ofnew places ofproduction through changes inthe means ofcommunication and trans- portation .(inaddition tothese circumstances ,there isthe greater relative cheapness oftransportation for long than for short distances .)moreover ,itisnot alone the velocity ofthe movement through space ,and the consequent reduc- tion ofdistance inspace ,but also intime ,which isbrought about by the development ofthe means oftransportation . itisnot only the quantity of means of communication which isdeveloped ,sothat ,for instance ,many vessels sail simultaneously for the same port ,orseveral trains travel simultaneously on different railways between the same two points ,but freight vessels may ,for instance ,clear ondifferent successive days ofthe week from liverpool for new york ,or freight trains may start atdifferent times ofthe day from manchester tolondon .itistrue ,that the absolute velocity , orthis part ofthe time ofcirculation ,isnot modified bythis latter circumstance ,acertain definite capacity ofthe means oftransportation being given .but successive quantities of commodities can start ontheir passage inshorter succession oftime and thus reach the market one after another with- out accumulating aspotential commodity -capital inlarge quantities before shipping .hence the return movement likewise isdistributed over shorter successions oftime ,sothat apart iscontinually transformed into money -capital ,while another circulates ascommodity -capital .by means ofthis distribution ofthe return movement over several successive periods the total time ofcirculation isabbreviated and there- by also the turn -over .on one hand ,the greater orlesser frequency ofthe function ofmeans oftransportation ,for in- stance the number ofrailroad trains ,develops first tothe ex- tent that aplace ofproduction produces more and becomes agreater center ofproduction ,and this development tends inthe direction ofthe existing market ,that istosay,toward the great centers ofproduction and population ,export places , etc. but onthe other hand this special facilitation oftraffic and the consequent acceleration ofthe turn -over ofcapital (tothe extent that itisconditioned onthe time ofcircula- tion )give rise toahastened concentration ofthe center of production and ofits market .along with this hastened",
        "the time ofcirculation .287 concentration ofmasses ofmen and capital ,the concentra- tion ofthese masses ofcapital inafew hands likewise ,pro- gresses .simultaneously there isamovement ,which shifts and displaces the center ofcommercial gravity asaresult of changes inthe relative location ofcenters ofproduction and markets caused by transformations inthe means of com- munication .aplace ofproduction which once had aspecial advantage by itsfavored location onsome highway orcanal then finds itself set aside on asingle side -track ,which runs trains only atrelatively long intervals ,while another place , which formerly lay removed from the main roads oftraffic , then finds itself located atthe crossing point ofseveral rail- roads .this second point isbuilt up,the former goes down . atransformation inthe means oftransportation thus causes alocal difference inthe time ofcirculation ofcommodities , the opportunity tobuy ,tosell,etc. ,oran already existing local differentiation isdistributed differently .the signifi- cance ofthis circumstance for the turn -over ofcapital is shown inthe disputes ofthe commercial and industrial rep- resentatives ofthe various places with the railroad man- agers .(see ,for instance ,the above quoted bluebook ofthe railway committee .) all branches ofproduction which are dependent on local consumption by the nature oftheir product ,such asbrew- eries ,are therefore developed togreatest dimensions inthe main centers ofpopulation .the more rapid turn -over of capital compensates inthis case for the eventual increase in the price ofsome elements ofproduction ,such asbuilding lots ,etc. while on one hand ,the development ofthe means of transportation and communication by the progress ofcapi- talist production reduces the time ofcirculation for agiven . quantity of commodities ,the same progress ,on the other hand ,coupled tothe growing possibility ofreaching more distant markets tothe extent that the means oftranspor- tation and communication are improved ,leads tothe neces sity ofproducing for ever more remote markets ,inone word , for the world market .the mass ofcommodities intransit for distant places grows enormously ,and with italso grows absolutely and relatively that part ofsocial capital which",
        "288capital .> remains constantly for longer periods inthe stage ofcom- modity -capital ,within the time of circulation .simultan- eously that portion ofsocial wealth increases ,which ,instead ofserving asdirect means ofproduction ,isinvested inthe fixed and circulating capital required for operating the means oftransportation and communication . the mere relative length ofthe transit ofthe commodi- ties from their place ofproduction totheir market causes adifference ,not only inthe first part ofthe time ofcircu- lation ,the selling time ,but also in its second part ,the reconversion ofmoney into the elements ofproductive capi- tal,the buying time .for instance ,some commodities are shipped toindia .this requires ,say,four months .let us assume that the selling time isequal tozero ,that istosay,the commodities are made toorder and are paid for on delivery tothe agent ofthe producer .the return ofthe money (no matter what may beitsform )requires again four months . thus ittakes eight months ,before the same capital can again serve asproductive capital and renew the same op- erations .the differences inthe turn -over thus caused are one ofthe material bases ofthe various terms of credit . trans -oceanic commerce ingeneral ,for instance invenice and genoa ,isone ofthe sources ofthe credit system -strictly socalled .the london economist ofjuly 16,1866 ,wrote that the crisis of1847 enabled the banking and trading busi- ness ofthat time toreduce the indian and chinese usage (for the running time of checks between those countries and europe )from ten months after sight tosix months ,and the lapse oftwenty years with its acceleration ofthe trip and the institution oftelegraphs renders necessary afurther re- duction from six months after sight tofour months after date asapreliminary step toward four months after sight . the trip ofasailing vessel from calcutta around the cape tolondon lasts on an average less than 90 days .ausage offour months after sight would be equivalent toarun- ning time of150 days ,approximately .the present usage of six months after sight isequivalent toarunning time of210 days .on the other hand ,we read inthe issue ofjune 30, 1866 ,ofthe same paper ,that the brazilian usage isstill fixed attwo and three months after sight ,checks ofantwerp",
        "the time ofcirculation . 289 on london are drawn for three months after date ,and even manchester and bradford draw onlondon for three months and longer dates .by atacit understanding ,the merchant isthus given sufficient opportunity torealize on his goods by the time the checks are due ,ifnot before .for this reason ,the usage ofindian checks isnot excessive .indian products ,which are sold in london generally on three months 'time ,cannot be realized upon in much less than five months ,ifsome time for the sale isallowed ,while another five months pass on an average between the purchase in india and the delivery to an english ware- house .here we have aperiod often months ,while the checks drawn against the goods do not run above seven months .and again ,on july 7,1866 ,we read that ,on july 2,1866 ,five great london banks ,dealing especially with india and china ,and the paris comptoir d'escompte , gave notice that ,beginning with january 1,1867 ,their branch banks and agencies inthe orient would buy and sell only such checks aswere not drawn for more than four months after sight .however ,this reduction miscarried and had tobe revoked .(since then the suez canal has revolutionized all this .) itisamatter ofcourse that with the longer time ofcir- culation the risk ofachange ofprices inthe selling market increases ,since itincreases the period inwhich changes of price may take place . adifference inthe time ofcirculation ,partly individual- lybetween the various individual capitals ofthe same branch ofbusiness ,partly between different branches ofbusiness according todifferent usages ,when payment isnot made inspot cash ,arises from the different dates ofpayment in buying and selling .we do not linger for the present over this point ,which isimportant for the credit business . other differences inthe period ofturn -over arise from the size ofcontracts for the delivery ofgoods ,and their size grows with the extent and scale ofcapitalist production . such acontract ,being atransaction between buyer and seller ,isan operation belonging tothe market ,the sphere ofcirculation .the differences inthe time ofturn -over arising from ithave their source for this reason inthe sphere",
        "290capital . ofcirculation ,but react immediately on the sphere ofpro- duction ,apart from all dates ofpayment and conditions of credit including cash payment .for instance ,coal ,cotton , yarn ,etc. ,are discontinuous products .every day supplies its quantity offinished product .but ifthe spinner orthe mine owner accepts contracts for the delivery oflarge quan- tities ,which require ,say,aperiod offour orsix weeks of successive working days ,then this isthe same ,sofar asthe time of investment of advanced capital isconcerned ,as though acontinuous working period offour orsix weeks had been introduced inthis labor -process .itisofcourse assumed inthis case that the entire quantity ordered istobe delivered inone bulk ,oratleast isonly paid after all ofit has been delivered . individually considered ,every day had furnished itsdefinite quantity offinished product .but this finished product isonly apart ofthe quantity con- tracted for.although the portion finished sofar isno longer inthe process ofproduction ,itisstill inthe ware- house asapotential capital . now letustake up the second epoch ofthe time ofcircu- lation ,the buying time ,orthat epoch inwhich capital is converted from money back into the elements ofproductive capital .during this epoch ,itmust remain for ashorter or longer time in itscondition ofmoney -capital ,sothat acer- tain portion ofthe total capital advanced isall the time in the form of money -capital ,although this portion consists of continually changing elements .for instance ,ofthe total capital advanced in acertain business ,ntimes 100 pounds sterling must be available inthe form ofmoney- capital ,sothat ,while all the constituent parts ofthese n times 100 pounds sterling are continually converted into productive capital ,this sum isnevertheless just ascontinu- ally supplemented by new additions from the circulation , out ofthe realized commodity -capital .adefinite part of the value ofthe advanced capital is,therefore ,continually inthe condition ofmoney -capital ,aform not belonging to itssphere ofproduction ,but toitssphere ofcirculation . we have already seen that the prolongation of time caused by the distance ofthe market ,by which capital is fettered inthe form ofcommodity -capital ,directly retards",
        "the time ofcirculation . 291 . the return movement ofthe money and ,consequently ,the transformation ofcapital from itsmoney into itsproductive form . we have furthermore seen (chapter vi)with reference tothe purchase ofcommodities ,that the time ofbuying , the greater orsmaller distance from the main sources ofthe raw material ,makes itnecessary topurchase raw material for alonger period and keep iton hand inthe form ofa productive supply ,oflatent orpotential productive capital ; inother words ,that itincreases the quantity ofcapital to beadvanced atone time ,and the time for which itmust be advanced ,the scale ofproduction remaining otherwise the same . asimilar effect isproduced invarious businesses bythe longer orshorter periods ,inwhich large quantities ofraw material are thrown on the market .in london ,for in- stance ,great auction sales ofwool take place every three months ,and the wool market iscontrolled by them .the cotton market ,onthe other hand ,isonthe whole restocked continuously ,ifnot uniformly ,from harvest to harvest . such periods determine the principal dates ofbuying for these raw materials and affect especially the speculative purchases requiring longer orshorter advances ofthese ele- ments ofproduction ,just asthe nature ofthe produced commodities exerts an influence onthe premeditated specu- lative retention ofthe product for alonger orshorter term inthe form ofpotential commodity -capital .\"the farmer must also betoacertain extent aspeculator ,and ,therefore , hold back the sale ofhis products according toprevailing conditions . \" here follow afew general rules . however ,inthe sale ofthe products ,success depends mainly on the personality ,the product itself ,and the locality .a man with sufficient business capital ,won by ability and good luck (!),will not be blamed ,ifhe keeps his grain crop stored for ayear when prices happen tobe unusually low .on the other hand ,aman who lacks business capital , orenterprise in general (1),will try to get the average prices and becompelled tosell assoon and asoften asoppor- tunity presents itself .itwill almost always bring losses to keep wool stored longer than ayear ,while grain and rape",
        "290capital . ofcirculation ,but react immediately on the sphere ofpro- duction ,apart from all dates ofpayment and conditions of credit including cash payment .for instance ,coal ,cotton , yarn ,etc. ,are discontinuous products .every day supplies its quantity offinished product .but ifthe spinner orthe mine owner accepts contracts for the delivery oflarge quan- tities ,which require ,say,aperiod offour orsix weeks of successive working days ,then this isthe same ,sofar asthe time of investment of advanced capital isconcerned ,as though acontinuous working period offour orsix weeks had been introduced inthis labor -process .itisofcourse assumed inthis case that the entire quantity ordered istobe delivered inone bulk ,oratleast isonly paid after all ofit has been delivered . individually considered ,every day had furnished itsdefinite quantity offinished product .but this finished product isonly apart ofthe quantity con- tracted for.although the portion finished so far isno longer inthe process ofproduction ,itisstill inthe ware- house asapotential capital . now letustake up the second epoch ofthe time ofcircu- lation ,the buying time ,orthat epoch inwhich capital is converted from money back into the elements ofproductive capital .during this epoch ,itmust remain for ashorter or longer time initscondition ofmoney -capital ,sothat acer- tain portion ofthe total capital advanced isall the time in the form of money -capital ,although this portion consists of continually changing elements .for instance ,ofthe total capital advanced in acertain business ,ntimes 100 pounds sterling must be available inthe form ofmoney- capital ,sothat ,while all the constituent parts ofthese n times 100 pounds sterling are continually converted into productive capital ,this sum isnevertheless just ascontinu- ally supplemented by new additions from the circulation , out ofthe realized commodity -capital .adefinite part of the value ofthe advanced capital is,therefore ,continually inthe condition ofmoney -capital ,aform not belonging to itssphere ofproduction ,but toitssphere ofcirculation . we have already seen that the prolongation of time caused by the distance ofthe market ,by which capital is fettered inthe form ofcommodity -capital ,directly retards",
        "the time ofcirculation .291 . the return movement ofthe money and ,consequently ,the transformation ofcapital from itsmoney into itsproductive form . we have furthermore seen (chapter vi)with reference tothe purchase ofcommodities ,that the time ofbuying , the greater orsmaller distance from the main sources ofthe raw material ,makes itnecessary topurchase raw material for alonger period and keep iton hand inthe form ofa productive supply ,oflatent orpotential productive capital ; inother words ,that itincreases the quantity ofcapital to beadvanced atone time ,and the time for which itmust be advanced ,the scale ofproduction remaining otherwise the same . asimilar effect isproduced invarious businesses bythe longer orshorter periods ,inwhich large quantities ofraw material are thrown on the market .in london ,for in- stance ,great auction sales ofwool take place every three months ,and the wool market iscontrolled by them .the cotton market ,on the other hand ,isonthe whole restocked continuously ,ifnot uniformly ,from harvest to harvest . such periods determine the principal dates ofbuying for these raw materials and affect especially the speculative purchases requiring longer orshorter advances ofthese ele- ments of production ,just asthe nature ofthe produced commodities exerts an influence onthe premeditated specu- lative retention ofthe product for alonger orshorter term inthe form ofpotential commodity -capital .\"the farmer must also betoacertain extent aspeculator ,and ,therefore , hold back the sale ofhis products according toprevailing conditions . here follow afew general rules .\" however ,inthe sale ofthe products ,success depends mainly on the personality ,the product itself ,and the locality .a man with sufficient business capital ,won by ability and good luck (!),will not be blamed ,ifhe keeps his grain crop stored for ayear when prices happen tobeunusually low .on the other hand ,aman who lacks business capital , or enterprise in general (1),will try to get the average prices and becompelled tosell assoon and asoften asoppor- tunity presents itself .itwill almost always bring losses to keep wool stored longer than ayear ,while grain and rape29",
        "290capital . ofcirculation ,but react immediately onthe sphere ofpro- duction ,apart from all dates ofpayment and conditions of credit including cash payment .for instance ,coal ,cotton , yarn ,etc. ,are discontinuous products .every day supplies its quantity offinished product .but ifthe spinner orthe mine owner accepts contracts for the delivery oflarge quan- tities ,which require ,say,aperiod offour orsix weeks of successive working days ,then this isthe same ,sofar asthe time of investment of advanced capital isconcerned ,as though acontinuous working period offour orsix weeks had been introduced inthis labor -process .itisofcourse assumed inthis case that the entire quantity ordered istobe delivered inone bulk ,oratleast isonly paid after all ofit has been delivered . individually considered ,every day had furnished itsdefinite quantity offinished product .but this finished product isonly apart ofthe quantity con- tracted for.although the portion finished so far isno longer inthe process ofproduction ,itisstill inthe ware- house asapotential capital . now let ustake up the second epoch ofthe time ofcircu- lation ,the buying time ,orthat epoch inwhich capital is converted from money back into the elements ofproductive capital .during this epoch ,itmust remain for ashorter or longer time initscondition ofmoney -capital ,sothat acer- tain portion ofthe total capital advanced isallthe time in the form of money -capital ,although this portion consists of continually changing elements .for instance ,of the total capital advanced in acertain business ,ntimes 100 pounds sterling must be available inthe form of money- capital ,sothat ,while all the constituent parts ofthese n times 100 pounds sterling are continually converted into productive capital ,this sum isnevertheless just ascontinu- ally supplemented by new additions from the circulation , out ofthe realized commodity -capital .adefinite part of the value ofthe advanced capital is,therefore ,continually inthe condition ofmoney -capital ,aform not belonging to itssphere ofproduction ,but toitssphere ofcirculation . we have already seen that the prolongation of time caused by the distance ofthe market ,by which capital is fettered inthe form ofcommodity -capital ,directly retards",
        "the time ofcirculation . 291 the return movement ofthe money and ,consequently ,the transformation ofcapital from itsmoney into itsproductive form . we have furthermore seen (chapter vi)with reference tothe purchase ofcommodities ,that the time ofbuying , the greater orsmaller distance from the main sources ofthe raw material ,makes itnecessary topurchase raw material for alonger period and keep iton hand inthe form ofa productive supply ,oflatent orpotential productive capital ; inother words ,that itincreases the quantity ofcapital to beadvanced atone time ,and the time for which itmust be advanced ,the scale ofproduction remaining otherwise the same . asimilar effect isproduced invarious businesses by the longer orshorter periods ,inwhich large quantities ofraw material are thrown on the market .in london ,for in- stance ,great auction sales ofwool take place every three months ,and the wool market iscontrolled by them .the cotton market ,onthe other hand ,isonthe whole restocked continuously ,ifnot uniformly ,from harvest to harvest . such periods determine the principal dates ofbuying for these raw materials and affect especially the speculative purchases requiring longer orshorter advances ofthese ele- ments of production ,just asthe nature ofthe produced commodities exerts an influence onthe premeditated specu- lative retention ofthe product for alonger orshorter term inthe form ofpotential commodity -capital .\"the farmer must also betoacertain extent aspeculator ,and ,therefore , hold back the sale ofhis products according toprevailing conditions . .\" here follow afew general rules .\" however ,inthe sale ofthe products ,success depends mainly on the personality ,the product itself ,and the locality .a man with sufficient business capital ,won by ability and good luck (!),will not be blamed ,ifhe keeps his grain crop stored for ayear when prices happen tobeunusually low .on the other hand ,aman who lacks business capital , orenterprise in general (1),will try to get the average prices and becompelled tosell assoon and asoften asoppor- tunity presents itself .itwill almost always bring losses to keep wool stored longer than ayear ,while grain and rape",
        "292capital . seed may bestored for several years without injury totheir condition and quality .such products asare generally sub- ject toalarge rise and fall inshort intervals ,for instance , rape seed ,hops ,teasel ,etc. ,may betogood advantage stored during the years inwhich the market price isfar below the price ofproduction .itisleast permissible topostpone the sale ofsuch articles as require daily expenses for their preservation ,such as fatted cattle ,or which spoil easily , such asfruit ,potatoes ,etc. in some localities ,acertain product has its lowest average price atacertain season ,its highest at another . for instance ,the average price of grain insome localities islower about august than inthe time between christmas and easter .furthermore ,some products sell well incertain localities only atcertain periods , asisthe case ,for instance ,with wool inthe wool markets ofthose localities ,where the wool trade isdull atother times ,etc. \" (kirchhof ,page 302. ) inthe study ofthe second half ofthe time ofcirculation , inwhich money isreconverted into the elements ofproduc- tive capital ,itisnot only this conversion itself which is important initself ,not only the time inwhich the money flows back according to the distance ofthe market on which the product issold .itisalso above all the volume ofthat part ofthe advanced capital tobeheld always avail- able inthe form ofmoney ,in the condition of money- capital ,which must be considered . making exception ofall speculation ,the volume ofthe purchases ofthose commodities which must always beavail- able asaproductive supply depends onthe time ofthe re- newal ofthis supply ,in other words ,on circumstances which intheir turn depend on market conditions and which are,therefore ,different for different raw materials .in these cases ,money must beadvanced from time totime in larger quantities in one sum .itflows back more orless rapidly ,but always ininstalments ,according tothe turn- over of capital .one portion ,namely that invested in wages ,iscontinually re-expended in short intervals .but another part ,namely that which istobe reconverted into raw material ,etc. ,must be accumulated for long periods , asareserve fund tobe used either for buying orpaying .",
        "the time ofcirculation .293 therefore itexists inthe form ofmoney -capital ,although the volume which ithas assuch changes . we shall see inthe next chapter that other circumstances , whether they arise from the process ofproduction orcircu- lation ,necessitate this existence ofacertain portion ofthe advanced capital in the form of money .in general it must benoted that economists are very prone toforget that apart ofthe capital required for business not only passes alternately through the three stages ofmoney -capital ,pro- ductive capital ,and commodity -capital ,but that different portions ofithave continuously and simultaneously these forms ,although the relative size ofthese portions varies all the time .itisespecially the portion always available asmoney -capital which isforgotten byeconomists ,although this circumstance isvery important for the understanding ofcapitalist economy and makes itsimportance felt inprac- tice .",
        "292capital . seed may bestored for several years without injury totheir condition and quality .such products asare generally sub- ject toalarge rise and fall inshort intervals ,for instance , rape seed ,hops ,teasel ,etc. ,may betogood advantage stored during the years inwhich the market price isfar below the price ofproduction .itisleast permissible topostpone the sale ofsuch articles as require daily expenses for their preservation ,such as fatted cattle ,or which spoil easily , such asfruit ,potatoes ,etc. in some localities ,acertain product has itslowest average price atacertain season ,its highest at another . for instance ,the average price of grain insome localities islower about august than inthe time between christmas and easter .furthermore ,some products sell well incertain localities only atcertain periods , asisthe case ,for instance ,with wool inthe wool markets ofthose localities ,where the wool trade isdull atother times ,etc.\" (kirchhof ,page 302. ) inthe study ofthe second half ofthe time ofcirculation , inwhich money isreconverted into the elements ofproduc- tive capital ,itisnot only this conversion itself which is important initself ,not only the time inwhich the money flows back according to the distance of the market on which the product issold .itisalso above all the volume ofthat part ofthe advanced capital tobeheld always avail- able inthe form ofmoney ,inthe condition of money- capital ,which must beconsidered . making exception ofall speculation ,the volume ofthe purchases ofthose commodities which must always beavail- able asaproductive supply depends onthe time ofthe re- newal ofthis supply ,in other words ,on circumstances which intheir turn depend on market conditions and which are,therefore ,different for different raw materials .in these cases ,money must beadvanced from time totime in larger quantities inone sum .itflows back more orless rapidly ,but always ininstalments ,according tothe turn- over of capital .one portion ,namely that invested in wages ,iscontinually re-expended inshort intervals .but another part ,namely that which istobe reconverted into raw material ,etc. ,must be accumulated for long periods , asareserve fund tobe used either for buying orpaying .",
        "the time ofcirculation .293 therefore itexists inthe form ofmoney -capital ,although the volume which ithas assuch changes . we shall see inthe next chapter that other circumstances , whether they arise from the process ofproduction orcircu- lation ,necessitate this existence ofacertain portion ofthe advanced capital inthe form of money .in general it must benoted that economists are very prone toforget that apart ofthe capital required for business not only passes alternately through the three stages ofmoney -capital ,pro- ductive capital ,and commodity -capital ,but that different portions ofithave continuously and simultaneously these forms ,although the relative size ofthese portions varies all the time .itisespecially the portion always available asmoney -capital which isforgotten byeconomists ,although this circumstance isvery important for the understanding ofcapitalist economy and makes itsimportance felt inprac- tice .",
        "294capital . chapter xv . influence ofthe time of circulation onthe magnitude of anadvance ofcapital . inthis chapter and inthe next we shall treat ofthe in- fluence of the time of circulation on the utilization of capital . take the commodity -capital which isthe product ofa certain working period ,for instance ,ofnine weeks .let us leave aside the question ofthat portion ofvalue which is transferred tothe product by the average wear and tear ofthe fixed capital ,also that ofthe surplus -value added to itduring the process of production .the value ofthis product isthen equal tothat ofthe circulating capital ad- vanced for itsproduction ,that istosay,ofthe wages ,raw and auxiliary materials consumed in its production .let this value be900 pounds sterling ,sothat the weekly outlay is100 pounds sterling .the periodic time ofproduction , which here coincides with the working time ,isnine weeks . itisimmaterial whether itisassumed that this working period produces acontinuous product ,orwhether itisa continuous working period for adiscontinuous product ,so long asthe quantity of discontinuous product ,which is brought tomarket atone time ,costs nine weeks oflabor . let the time ofcirculation bethree weeks .then the entire time ofturn -over istwelve weeks .at the end of nine weeks ,the advanced productive capital isconverted into a commodity -capital ,but now itexists for three weeks inthe period ofcirculation .the new time ofproduction ,there- fore ,cannot commence until the beginning of the thirteenth week ,and production would beatastandstill for three weeks ,orfor aquarter ofthe entire period ofturn- over .itisagain immaterial whether itisassumed that it takes solong on an average tosell the product ,orthat this term isconditioned on the distance ofthe market oron",
        "influence ofthe time ofcirculation .295 the terms of payment for the sold goods .production would beatastandstill for three weeks every three months , orfour times three ,ortwelve weeks ,inayear ,which means three months orone quarter ofthe annual period ofturn- over .hence ,ifproduction istobe continuous and tobe carried along onthe same scale week after week ,there are only two possibilities . either the scale ofproduction must be reduced ,sothat those 900 pounds sterling will suffice tokeep the work go- ing during the working period aswell asduring the time of circulation ofthe first turn -over .asecond working period isthen commenced with the tenth week ,hence also anew period ofturn -over ,before the first period ofturn -over is completed ,for the period ofturn -over istwelve weeks ,the working period nine weeks .asum of900 pounds sterling distributed over twelve weeks makes 75 pounds per week . itisevident inthe first place that such areduced scale of business presupposes changed dimensions ofthe fixed capi- tal,and therefore ageneral reduction ofthe entire business . inthe second place ,itisquestionable whether such areduc- tion can take place atall,for the development ofproduc- tion inthe various businesses establishes anormal mini- mum for the investment ofcapital ,below which an indi- vidual business isunable to sustain competition .this normal minimum grows continually with the advance of capitalist production ,hence itisnot afixed magnitude . there are numerous gradations between the existing normal minimum and the ever increasing normal maximum ,and this intermediate gradation permits ofmany different de- grees of capital investment .within the limits of this intermediate scale ,areduction may take place ,its lowest limit being the normal minimum . in case ofan obstruction ofproduction ,an overstocking ofthe markets ,an increase inthe price ofraw materials , etc. ,there isareduction ofthe normal outlay ofcirculating capital ,compared toagiven scale offixed capital ,bythe re- duction ofthe working time ,work being carried on,say , for only half aday .on the other hand ,intimes ofpros- perity ,the fixed capital ,remaining the same ,there isanab- normal expansion ofthe circulating capital ,partly by the",
        "296capital . prolongation ofthe working time ,partly by its intensifi cation .in businesses which are adjusted from the outset tosuch fluctuations ,recourse iseither taken tothe above- named measures ,oragreater number oflaborers are simul- taneously employed ,combined with an investment of re- serve capital ,such asreserve locomotives ofrailroads ,etc. however ,such abnormal fluctuations are not considered here ,where we assume normal conditions . in order tomake production continuous ,itisnecessary , in the present case ,to distribute the expenditure ofthe same circulating capital over alonger period ,over twelve weeks instead ofnine .in any section oftime ,areduced productive capital istherefore employed .the circulating portion ofthe productive capital isreduced from 100 to 75,orone quarter .the total amount by which the pro- ductive capital serving for aworking period ofnine weeks isreduced is9times 25,or 225 pounds sterling ,orone quarter of900 pounds .but the proportion ofthe time of circulation tothat ofturn -over islikewise three twelfth ,or one quarter .itfollows ,therefore :ifproduction isnot to beinterrupted during the time ofcirculation ofthe produc- tive capital transformed into commodity -capital ,ifitis rather tobe continued parallel with circulation and con- tinuously week after week ,and ifnospecial circulating capi- tal isavailable ,itcan bedone only by curtailing the pro- ductive operations ,reducing the circulating portions ofthe productive capital in service .the portion ofcirculating capital thus set free for production during the time ofcir- culation isproportioned tothe total circulating capital in- vested asthe time ofcirculation istothe time ofturn -over . we repeat ,that this applies only tobranches ofproduction in which the labor -process iscontinued on the same scale week after week ,inother words ,where no different amounts of capital are invested atdifferent working periods asis done ,for instance inagriculture . if,onthe other hand ,we assume that the nature ofthe business excludes the idea ofareduction ofthe scale ofpro- duction and thus ofthe circulating capital tobe invested weekly ,then the continuity ofproduction can be secured only by additional circulating capital ,inthe above -named",
        "influence ofthe time ofcirculation .297 case of300 pounds sterling .during the period ofturn- over oftwelve weeks ,1,200 pounds sterling are successively invested intwelve weeks ,and 300 isone quarter ofthis sum asthree weeks isoftwelve .atthe end ofthe working time ofnine weeks ,the capital -value of900 pounds sterling has been converted from the form ofproductive into that of commodity -capital .its working period isconcluded ,but itcannot bere-opened with the same capital .during the three weeks inwhich itexists inthe sphere ofcirculation , performing the functions ofcommodity -capital ,itisin a condition ,sofar asthe process ofproduction isconcerned , asthough itdid not exist atall.we make exception ,at present ,of all conditions of credit ,and assume that the capitalist operates only with his own money .but while the capital advanced for the first working period ,having completed itsprocess ofproduction ,remains for three weeks inthe process ofcirculation ,an additional capital of300 pounds sterling enters into service ,sothat the continuity of the production isnot interrupted . now ,the following must be noted inthis connection : first :the working period ofthe capital first invested , of900 pounds sterling ,iscompleted atthe close ofnine weeks ,and itdoes not flow back until after three weeks , that istosay,inthe beginning ofthe thirteenth week .but anew working period isimmediately begun with the addi- tional capital of300 pounds .by this means the continuity ofproduction issecured . secondly :the functions ofthe original capital of900 pounds sterling ,and those ofthe additional capital of300 pounds sterling added atthe close ofthe first working period ofnine weeks ,inaugurating the second working period after the conclusion ofthe first ,without any interruption ,are clearly distinguished inthe first period ofturn -over ,orat least they may be,while they cross one another inthe course ofthe second period ofturn -over . let usgive this matter atangible form . first period ofturn -over of 12 weeks :first working period of9weeks ;the turn -over ofthe capital advanced for this iscompleted atthe beginning ofthe 13th week .dur- ing the last 3weeks ,the additional capital of300 pounds .",
        "298 capital . sterling performs its service ,opening up the second work- ing period of9weeks . second period of turn -over .at the beginning ofthe 13th week ,900 pounds sterling have flown back and are able tobegin anew turn -over .but the second working period has already been opened by the additional 300 pounds inthe 10th week .at the commencement ofthe 13th week ,this capital has already completed one third of its working period and 300 pounds sterling have been con- verted from aproductive capital into aproduct .seeing that only 6weeks are required for the completion ofthe second working period ,only two -thirds of the returned capital of900 pounds sterling ,or600 pounds ,can take part inthe productive process ofthe second working period . thus 300 pounds ofthe original 900 are set free and may play the same role ,which the additional capital of300 pounds played inthe first working period .at the close of the 6th week ofthe second period ofturn -over ,the second working period iscompleted .the capital of900 pounds sterling advanced initflows back after 3weeks ,oratthe end the 9th week ofthe second period ofturn -over which comprises 12weeks .during the 3weeks ofitsperiod ofcir- culation ,the free capital of300 pounds sterling comes into action .this begins the third working period ofacapital of900 pounds sterling inthe 7th week ofthe second period ofturn -over ,which isthe 19th running week . third period ofturn -over .atthe close ofthe 9th week ofthe second period ofturn -over ,there isanew reflux of 900 pounds sterling .but the third working period has al- ready commenced inthe 7th week ofthe second period of turnover ,and atthe beginning ofthe third period ofturn- over ,6weeks ofthe third working period have already elapsed .the third working period ,then ,lasts only 3weeks longer .hence only 300 pounds ofthe returned 900 take part inthe productive process ofthe second period ofturn- over ,while the next 300 close the last three weeks ofthe third working period and thus open the first three weeks ofthe third period ofturn -over .the fourth working period fills out the remaining 9weeks ofthis period ofturn -over ,",
        "influence ofthe time ofcirculation . 299 and thus the 37th running week begins simultaneously the fourth period ofturn -over and the fifth working period . inorder tosimplify this case for the calculation ,we shall assume aworking period of5weeks and aperiod ofcircu- lation of5weeks ,making aperiod ofturn -over of10weeks . let the year beone offifty working weeks ,and the capital in- vested per week 100 pounds sterling .aworking period then requires acirculating capital of500 pounds sterling , and the period ofturn -over an additional capital of 500 pounds sterling .the working periods and periods ofturn- over then are asfollows : 1.wrkg .prd.1-5 .week (500 p.stlg.ofgoods ) 2.wrkg .prd.6-10 .week (500 p.stlg.ofgoods ) 3.wrkg .prd.11-15 .week (500 p.stlg.ofgoods ) 4.wrkg .prd.16-20 .week 5.wrkg .prd.21-25 .week(500 p.stlg.ofgoods ) (500 p.stlg.ofgoods ) etc.returned end of10. returned end of15. returned end of20. returned end of25. returned end of30. ifthe time ofcirculation iszero ,sothat the period of turn -over isequal tothe working time ,then the number of turn -overs isequal tothe working periods ofthe year .inthe case ofaworking period of5weeks ,this would make 10 periods ofturn -over per year ,and the value ofthe capital turned over would be500 times 10,or5,000 .inour table , inwhich we have assumed atime ofcirculation of5weeks , the total value ofthe commodities produced per year would also be5,000 pounds sterling ,but one tenth ofthis ,or500 pounds ,would always beinthe form ofcommodity -capital , which would not flow back until after 5weeks .atthe end ofthe year ,the product ofthe tenth working period (the 46th tothe 50th working week )would have completed its period ofturn -over only by half ,because itstime ofcircula- tion would fall within the first five weeks ofthe year . now let us take athird illustration :working period 6 weeks ,time ofcirculation 3weeks ,weekly advance ofcapital 100 pounds sterling . 1. working period :1-6th week .atthe end ofthe 6th week ,acommodity -capital of600 pounds sterling ,returned atthe end ofthe 9th week . 2.working period :7-12th week .during the 7-9th week 300 pounds sterling ofadditional capital isadvanced .",
        "298 capital . sterling performs its service ,opening up the second work- ing period of9weeks . second period ofturn -over .at the beginning ofthe 13th week ,900 pounds sterling have flown back and are able tobegin anew turn -over .but the second working period has already been opened by the additional 300 pounds inthe 10th week .at the commencement ofthe 13th week ,this capital has already completed one third of its working period and 300 pounds sterling have been con- verted from aproductive capital into aproduct .seeing that only 6weeks are required for the completion ofthe second working period ,only two -thirds ofthe returned capital of900 pounds sterling ,or600 pounds ,can take part inthe productive process ofthe second working period . thus 300 pounds ofthe original 900 are set free and may play the same role ,which the additional capital of 300 pounds played inthe first working period .at the close of the 6th week ofthe second period ofturn -over ,the second working period iscompleted .the capital of900 pounds sterling advanced initflows back after 3weeks ,oratthe end the 9th week ofthe second period ofturn -over which comprises 12weeks .during the 3weeks ofitsperiod ofcir- culation ,the free capital of300 pounds sterling comes into action .this begins the third working period ofacapital of900 pounds sterling inthe 7th week ofthe second period ofturn -over ,which isthe 19th running week . third period ofturn -over .at the close ofthe 9th week ofthe second period ofturn -over ,there isanew reflux of 900 pounds sterling .but the third working period has al- ready commenced inthe 7th week ofthe second period of turnover ,and atthe beginning ofthe third period ofturn- over ,6weeks ofthe third working period have already elapsed .the third working period ,then ,lasts only 3weeks longer .hence only 300 pounds ofthe returned 900 take part inthe productive process ofthe second period ofturn- over ,while the next 300 close the last three weeks ofthe third working period and thus open the first three weeks ofthe third period ofturn -over .the fourth working period fills out the remaining 9weeks ofthis period ofturn -over ,",
        "influence ofthe time ofcirculation . 299 and thus the 37th running week begins simultaneously the fourth period ofturn -over and the fifth working period . inorder tosimplify this case for the calculation ,we shall assume aworking period of5weeks and aperiod ofcircu- lation of5weeks ,making aperiod ofturn -over of10weeks . let the year beone offifty working weeks ,and the capital in- vested per week 100 pounds sterling .aworking period then requires acirculating capital of500 pounds sterling , and the period ofturn -over an additional capital of500 pounds sterling .the working periods and periods ofturn- over then are asfollows : 1.wrkg .prd.1-5 .week (500 p.stlg.ofgoods )returned end of10. 2.wrkg .prd.6-10 .week (500 p.stlg.ofgoods )returned end of15. 3.wrkg .prd.11-15 .week (500 p.stlg.ofgoods )returned end of20. 4.wrkg .prd.16-20 .week returned end of25. 5.wrkg .prd.21-25 .week returned end of30.(500 p.stlg.ofgoods ) (500 p.stlg.ofgoods ) etc. ifthe time ofcirculation iszero ,sothat the period of turn -over isequal tothe working time ,then the number of turn -overs isequal tothe working periods ofthe year .inthe case ofaworking period of5weeks ,this would make 10 periods ofturn -over per year ,and the value ofthe capital turned over would be500 times 10,or5,000 .inour table , inwhich we have assumed atime ofcirculation of5weeks , the total value ofthe commodities produced per year would also be5,000 pounds sterling ,but one tenth ofthis ,or500 pounds ,would always beinthe form ofcommodity -capital , which would not flow back until after 5weeks .atthe end ofthe year ,the product ofthe tenth working period (the 46th tothe 50th working week )would have completed its period ofturn -over only byhalf ,because itstime ofcircula- tion would fall within the first five weeks ofthe year . now let ustake athird illustration :working period 6 weeks ,time ofcirculation 3weeks ,weekly advance ofcapital 100 pounds sterling . 1. working period :1-6th week .atthe end ofthe 6th week ,acommodity -capital of600 pounds sterling ,returned atthe end ofthe 9th week . 2.working period :7-12th week .during the 7-9th week 300 pounds sterling ofadditional capital isadvanced .",
        "300capital . atthe end ofthe 9th week ,return of600 pounds sterling . ofthis ,300 pounds sterling are advanced during the 10- 12th week .at the end ofthe 12th week ,therefore ,300 pounds sterling are available ,and 600 pounds sterling are in the form ofcommodity -capital ,returnable atthe end ofthe 15th week . 3.working period :13-18th week .during the 13-15th week ,advance ofabove 300 pounds sterling ,then reflux of 600 pounds ,300 ofwhich are advanced for the 16-18th week .at the end ofthe 18th week ,300 pounds sterling available incash ,600 on hand ascommodity -capital ,which flows back atthe end ofthe 21st week .(see the detailed il- lustration ofthis case under ii,farther along .) in other words ,during 9working periods (54 weeks ) atotal of600 times 9,or5,400 pounds sterling isproduced . at the end ofthe ninth working period ,the capitalist has 300 pounds incash and 600 pounds worth ofcommodities , which have not yet completed their time ofcirculation . acomparison ofthese three illustrations shows first ,that asuccessive release ofcapital iof500 pounds sterling and of additional capital ii oflikewise 500 pounds sterling takes place only inthe second illustration ,sothat these two portions ofcapital move independently ofone another .but this issoonly because we have made the exceptional as sumption that the working time and the time ofcirculation are two equal halves ofthe period ofturn -over .in all other cases ,whatever may bethe difference ofthe two terms ofthe period ofturn -over ,the movements ofthe two capi tals cross one another ,asthey dointhe first and third illus- tration ,beginning with the second period ofturn -over .the additional capital ii,with aportion ofcapital i,then forms the capital serving inthe second period ofturn -over ,while the remainder ofcapital iisset free for the original func- tion ofcapital ii.the capital serving during the time of circulation ofthe commodity -capital isnot identical ,inthis case ,with the capital iioriginally advanced for this pur- pose ,but itisofthe same value and forms the same aliquot portion ofthe advanced total capital . secondly :the capital which served during the working period ,lies fallow during the time ofcirculation .in the",
        "influence ofthe time ofcirculation .301 second illustration ,the capital performs its function dur- ing 5weeks ofthe working period ,and lies fallow during acirculation period of5weeks .the entire time during which capital ihere lies fallow amounts toone -half ofthe year .during this time ,the additional capital iitakes the place ofcapital i,which inits turn lies fallow during the other half ofthe year .but the additional capital required for insuring the continuity ofthe production during the time ofcirculation isnot determined by the aggregate vol- ume ,orthe sum ,ofthe times ofcirculation during the year , but only bythe proportion ofthe time ofcirculation tothe time ofturn -over .(we assume ,of course ,that all the turn -overs take place under the same conditions .)for this reason ,500 pounds sterling are required inthe second illus- tration ,not 2,500 pounds .this issimply due tothe fact that the additional capital enters just aswell into the turn- over asthe capital originally advanced ,and that it,there- fore ,reproduces its volume the same asthe other by the number ofitsturn -overs . thirdly :itdoes not alter the circumstances here de- scribed ,whether or not the time ofproduction islonger than the working time .true ,the aggregate ofthe periods ofturn -over isprolonged thereby ,but this prolongation does not imply any additional capital for the labor -process . the additional capital serves merely the purpose offilling up the fallow places left by the time ofcirculation .its mission issimply toprotect production against interruption bythe time ofcirculation .interruptions arising from the conditions ofproduction itself are compensated for inan- other way ,which we do not discuss atthis point .there are,however ,some businesses ,inwhich work iscarried on only inintervals and toorder ,sothat there may beinter- ruptions inthe working periods .in such cases ,the neces- sity ofadditional capital iseliminated tothat extent .on the other hand ,inmost cases ofseason work ,there isalimit for the time ofreflux .the same work cannot berenewed next year with the same capital ,ifthe time ofcirculation of this capital isnot completed .still ,the time ofcirculation may be shorter than the intervals between two periods of",
        "302capital . production .insuch an eventuality ,capital lies fallow ,un- less itisemployed otherwise inthe meantime . fourthly :the capital advanced for acertain working period ,for instance ,the 600 pounds sterling inthe third illustration ,isinvested partly in raw and auxiliary mate- rials ,in aproductive supply for the working period ,in constant circulating capital ,partly in variable circulating capital ,inthe payment oflabor itself .the portion invest- ed in constant circulating capital may not exist for the same length oftime inthe form ofaproductive supply ,the raw material ,for instance ,may not beon hand for the en- tire working period ,coal may bepurchased only every two weeks .however ,credit being out ofthe question ,accord- ing toour assumption ,this portion ofcapital ,tothe extent that itisnot available inthe form ofaproductive supply , must be kept on hand inthe form ofmoney inorder to be converted into aproductive supply when needed .this does not alter the magnitude ofthe constant circulating capital -value advanced for 6weeks .the wages ,on the other hand ,are generally paid weekly ,making exception of the money supply for unforeseen expenses ,the strict reserve fund for the compensation of disturbances .unless the capitalist ,therefore ,compels the laborer toadvance his labor for alonger time ,the money required for the payment of wages must beon hand .during the reflux ofthe capital ,a portion must ,therefore ,be reserved inthe form ofmoney for the payment oflabor ,while the remaining portion may beconverted into aproductive supply . the additional capital issubdivided exactly like the orig- inal .but itisdistinguished from capital iby the fact that (apart from conditions ofcredit ),in order tobe available for itsown period oflabor ,itmust beadvanced during the entire duration ofthe first working period ofcapital i,in which itdoes not take part .during this time ,itmay be converted into constant circulating capital ,atleast inpart , being advanced for the entire period ofturn -over . what extent itwill assume this form ,orpersist inthe form ofadditional money -capital ,up tothe time where this con- version becomes necessary will depend partly onthe special conditions ofproduction ofdefinite lines ofbusiness ,partly",
        "influence ofthe time ofcirculation .3031 onthe fluctuations inthe prices ofraw material ,etc. look- ing atitfrom the point ofview ofthe aggregate social capi- tal,there will always beamore orless considerable part of this additional capital for arather long time inthe form of money -capital .but as for that portion of capital ii which istobe advanced for wages ,itisalways gradually converted into labor -power tothe extent that small working periods are closed and paid for.this portion ofcapital ii, then ,isavailable inthe form ofmoney -capital for the en- tire working period ,until itisconverted into labor -power and thus takes part inthe function ofproductive capital . the advent ofthe additional capital required for the transformation ofthe time ofcirculation ofcapital iinto atime ofproduction increases not only the magnitude of the advanced capital and length oftime for which the ag- gregate capital must be necessarily advanced ,but italso increases specifically that portion ofthe advanced capital which exists in the form ofamoney -supply ,which per- sists inthe condition ofmoney -capital ,and has the form of potential capital . the same takes also place ,asconcerns both the advance inthe form ofaproductive supply and inthat ofamoney supply ,when the separation of capital into two parts re- quired by the time ofcirculation ,namely ,capital for the first working period and reserve capital for the time ofcir- culation ,isnot caused by the increase ofthe invested capi- tal,but by adecrease ofthe scale ofproduction .in pro- portion tothe scale ofproduction ,the increase ofthe capi- tal tied up inthe form ofmoney isapt togrow still more inthis case . itisthe continuous succession ofthe working periods , the continuous function ofanequal portion ofthe advanced capital asproductive capital ,which isinsured by this sep- aration ofcapital into an original productive and areserve capital . let uslook atthe second illustration .the capital con- tinuously employed inthe process ofproduction amounts to500 pounds sterling .the working period being 5weeks ,it works ten times during aworking year of50weeks .hence",
        "304capital . its product ,apart from surplus -value ,is10 times 500 or 5,000 pounds sterling .from the point ofview ofadirect- ly and uninterruptedly working capital inthe process of production ,acapital -value of500 pounds sterling ,the time of circulation seems entirely eliminated .the period of turn -over coincides with the working period ,the time of circulation being assumed asequal tozero . but ifthe capital of500 pounds sterling were interrupted in its productive activity by regular times of circulation covering 5weeks ,sothat itcould not become productively active until after the close ofthe entire period ofturn -over of10weeks ,we should have 5turn -overs often weeks each in 50 running weeks .these would comprise 5periods of production of5weeks each ,or25productive weeks with a total product of5times 500 ,or2,500 pounds sterling ;and 5times ofcirculation of5weeks each ,oratotal period of circulation of25weeks .ifwe say inthis case that the capi- tal of500 pounds sterling has been turned over 5times in the year ,itisevident and obvious that this capital of500 pounds sterling did not serve atall asaproductive capital during one -half ofeach period ofturn -over ,and that ,tak- ing all in all,itperformed its function only during one half ofthe year ,while itdid not serve atall during the other half . inour illustration ,the reserve capital of500 pounds ster- ling comes tothe rescue during those five periods ofcircula- tion ,and the turn -over isthus expanded from 2,500 to 5,000 pounds .but now the advanced capital is1,000 in- stead of500 pounds sterling .hence there are only five turn -overs instead often.this isindeed the way inwhich people count .but when itissaid that the capital of1,000 pounds has been turned over five times in the year ,the recollection ofthe time ofcirculation disappears inthe hol- low skulls ofthe capitalists ,and aconfused idea isformed that this capital has served continuously inthe process of production during the successive five turn -overs .as amat- ter offact ,ifwe say that the capital of1,000 pounds has been turned over five times inayear ,we include both the time ofcirculation and the time ofproduction .for ,in-",
        "influence ofthe time ofcirculation .805 deed ,if1,000 pounds sterling had actually been continuous- lyactive inthe process ofproduction ,the product would have tobe 10,000 pounds sterling instead of5,000 ,accord- ing toour assumptions .but inorder tohave 1,000 pounds sterling continuously inthe process of production ,2,000 pounds would have tobe advanced .the economists ,who asageneral rule have nothing clear tosay in reference to the mechanism ofthe turn -over ,always overlook this main point ,to-wit,that only apart ofthe industrial capital can actually beengaged inthe process ofproduction ,ifproduc- tion istoproceed uninterruptedly .while one part isbusy inthe process ofproduction ,another must always be en- gaged in the process of circulation .or in other words , one part can perform the functions ofproductive capital only on condition that another part iswithdrawn from production inthe form ofcommodity ormoney -capital .in overlooking this ,the significance and role ofmoney -capital isentirely ignored . we have now toascertain towhat extent differences in the turn -over are caused according towhether the two sec- tions ofthe period ofturn -over ,the working period and the circulating period ,are equal to one another ,or the working period greater or smaller than the circulating period ,and furthermore ,what effect this has on the reten- tion ofcapital inthe form ofmoney -capital . we assume ,that the capital advanced weekly isin all cases 100 pounds sterling ,and the period ofturn -over 9 weeks ,sothat the capital invested ineach period ofturn- over is900 pounds sterling . 1. the working period equal tothe period ofcirculation . although this case occurs in reality only accidentally , asan exception ,itmust serve asour point ofdeparture in this analysis ,because conditions here shape themselves in the simplest and most intelligible way . the two capitals (capital iadvanced for the first working period ,and reserve capital iiadvanced during the time of circulation ofcapital i)relieve one another intheir move- ments without crossing .with the exception ofthe first period ,either ofthe two capitals istherefore advanced only",
        "304capital . its product ,apart from surplus -value ,is10 times 500 or 5,000 pounds sterling .from the point ofview ofadirect- lyand uninterruptedly working capital inthe process of production ,acapital -value of500 pounds sterling ,the time of circulation seems entirely eliminated .the period of turn -over coincides with the working period ,the time of circulation being assumed asequal tozero . but ifthe capital of500 pounds sterling were interrupted in its productive activity by regular times of circulation covering 5weeks ,sothat itcould not become productively active until after the close ofthe entire period ofturn -over of10weeks ,we should have 5turn -overs often weeks each in 50 running weeks .these would comprise 5periods of production of5weeks each ,or25productive weeks with a total product of5times 500 ,or2,500 pounds sterling ;and 5times ofcirculation of5weeks each ,oratotal period of circulation of25weeks .ifwe say inthis case that the capi- tal of500 pounds sterling has been turned over 5times in the year ,itisevident and obvious that this capital of500 pounds sterling did not serve atall asaproductive capital during one -half ofeach period ofturn -over ,and that ,tak- ing all in all,itperformed its function only during one half ofthe year ,while itdid not serve atall during the other half . in our illustration ,the reserve capital of500 pounds ster- ling comes tothe rescue during those five periods ofcircula- tion ,and the turn -over isthus expanded from 2,500 to 5,000 pounds .but now the advanced capital is1,000 in- stead of500 pounds sterling .hence there are only five turn -overs instead often.this isindeed the way inwhich people count .but when itissaid that the capital of1,000 pounds has been turned over five times inthe year ,the recollection ofthe time ofcirculation disappears inthe hol- low skulls ofthe capitalists ,and aconfused idea isformed that this capital has served continuously inthe process of production during the successive five turn -overs .as amat- ter offact ,ifwe say that the capital of1,000 pounds has been turned over five times inayear ,we include both the time ofcirculation and the time ofproduction .for ,in-",
        "influence ofthe time ofcirculation .305 deed ,if1,000 pounds sterling had actually been continuous- lyactive inthe process ofproduction ,the product would have tobe 10,000 pounds sterling instead of5,000 ,accord- ing toour assumptions .but inorder tohave 1,000 pounds sterling continuously inthe process of production ,2,000 pounds would have tobe advanced .the economists ,who asageneral rule have nothing clear tosay in reference to the mechanism ofthe turn -over ,always overlook this main point ,to-wit,that only apart ofthe industrial capital can actually beengaged inthe process ofproduction ,ifproduc- tion istoproceed uninterruptedly .while one part isbusy inthe process ofproduction ,another must always be en- gaged inthe process of circulation .or in other words , one part can perform the functions ofproductive capital only on condition that another part iswithdrawn from production inthe form ofcommodity ormoney -capital .in overlooking this ,the significance and role ofmoney -capital isentirely ignored . we have now toascertain towhat extent differences in the turn -over are caused according towhether the two sec- tions ofthe period ofturn -over ,the working period and the circulating period ,are equal to one another ,orthe working period greater or smaller than the circulating period ,and furthermore ,what effect this has on the reten- tion ofcapital inthe form ofmoney -capital . we assume ,that the capital advanced weekly isin all cases 100 pounds sterling ,and the period ofturn -over 9 weeks ,sothat the capital invested ineach period ofturn- over is900 pounds sterling . i. the working period equal tothe period ofcirculation . although this case occurs in reality only accidentally , asan exception ,itmust serve asour point ofdeparture in this analysis ,because conditions here shape themselves in the simplest and most intelligible way . the two capitals (capital iadvanced for the first working period ,and reserve capital iiadvanced during the time of circulation ofcapital i)relieve one another intheir move- ments without crossing .with the exception ofthe first period ,either ofthe two capitals istherefore advanced only",
        "304capital . its product ,apart from surplus -value ,is10 times 500 or 5,000 pounds sterling .from the point ofview ofadirect- lyand uninterruptedly working capital inthe process of production ,acapital -value of500 pounds sterling ,the time of circulation seems entirely eliminated .the period of turn -over coincides with the working period ,the time of circulation being assumed asequal tozero . but ifthe capital of500 pounds sterling were interrupted in its productive activity by regular times of circulation . covering 5weeks ,sothat itcould not become productively active until after the close ofthe entire period ofturn -over of10weeks ,we should have 5turn -overs often weeks each in 50 running weeks .these would comprise 5periods of production of5weeks each ,or25 productive weeks with a total product of5times 500 ,or2,500 pounds sterling ;and 5times ofcirculation of5weeks each ,oratotal period of circulation of25weeks .ifwe say inthis case that the capi- tal of500 pounds sterling has been turned over 5times in the year ,itisevident and obvious that this capital of500 pounds sterling did not serve atall asaproductive capital during one -half ofeach period ofturn -over ,and that ,tak- ing all inall,itperformed its function only during one half ofthe year ,while itdid not serve atall during the other half . inour illustration ,the reserve capital of500 pounds ster- ling comes tothe rescue during those five periods ofcircula- tion ,and the turn -over isthus expanded from 2,500 to 5,000 pounds .but now the advanced capital is1,000 in- stead of500 pounds sterling .hence there are only five turn -overs instead often.this isindeed the way inwhich people count .but when itissaid that the capital of1,000 pounds has been turned over five times in the year ,the recollection ofthe time ofcirculation disappears inthe hol- low skulls ofthe capitalists ,and aconfused idea isformed that this capital has served continuously inthe process of production during the successive five turn -overs .as amat- ter offact ,ifwe say that the capital of1,000 pounds has been turned over five times inayear ,we include both the time ofcirculation and the time ofproduction .for ,in-",
        "influence ofthe time ofcirculation . 805 deed ,if1,000 pounds sterling had actually been continuous- lyactive inthe process ofproduction ,the product would have tobe 10,000 pounds sterling instead of5,000 ,accord- ing toour assumptions .but inorder tohave 1,000 pounds sterling continuously inthe process of production ,2,000 pounds would have tobe advanced .the economists ,who asageneral rule have nothing clear tosay inreference to the mechanism ofthe turn -over ,always overlook this main point ,to-wit,that only apart ofthe industrial capital can actually beengaged inthe process ofproduction ,ifproduc- tion istoproceed uninterruptedly .while one part isbusy inthe process ofproduction ,another must always be en- gaged in the process of circulation .or in other words , one part can perform the functions ofproductive capital only on condition that another part iswithdrawn from production inthe form ofcommodity ormoney -capital .in overlooking this ,the significance and role ofmoney -capital isentirely ignored . we have now toascertain towhat extent differences in the turn -over are caused according towhether the two sec- tions ofthe period ofturn -over ,the working period and the circulating period ,are equal to one another ,orthe working period greater or smaller than the circulating period ,and furthermore ,what effect this has on the reten- tion ofcapital inthe form ofmoney -capital . we assume ,that the capital advanced weekly isin all cases 100 pounds sterling ,and the period ofturn -over 9 weeks ,sothat the capital invested ineach period ofturn- over is900 pounds sterling . 1. the working period equal tothe period ofcirculation . although this case occurs in reality only accidentally , asan exception ,itmust serve asour point ofdeparture in this analysis ,because conditions here shape themselves in the simplest and most intelligible way . the two capitals (capital iadvanced for the first working period ,and reserve capital iiadvanced during the time of circulation ofcapital i)relieve one another intheir move- ments without crossing .with the exception ofthe first period ,either ofthe two capitals istherefore advanced only",
        "304capital . 1its product ,apart from surplus -value ,is10 times 500 or 5,000 pounds sterling .from the point ofview ofadirect- lyand uninterruptedly working capital inthe process of production ,acapital -value of500 pounds sterling ,the time of circulation seems entirely eliminated .the period of turn -over coincides with the working period ,the time of circulation being assumed asequal tozero . but ifthe capital of500 pounds sterling were interrupted in its productive activity by regular times of circulation covering 5weeks ,sothat itcould not become productively active until after the close ofthe entire period ofturn -over of10weeks ,we should have 5turn -overs often weeks each in 50 running weeks .these would comprise 5periods of production of5weeks each ,or25productive weeks with a total product of5times 500 ,or2,500 pounds sterling ;and 5times ofcirculation of5weeks each ,oratotal period of circulation of25weeks .ifwe say inthis case that the capi- tal of500 pounds sterling has been turned over 5times in the year ,itisevident and obvious that this capital of500 pounds sterling did not serve atall asaproductive capital during one -half ofeach period ofturn -over ,and that ,tak- ing all in all,itperformed its function only during one half ofthe year ,while itdid not serve atall during the other half . inour illustration ,the reserve capital of500 pounds ster- ling comes tothe rescue during those five periods ofcircula- tion ,and the turn -over isthus expanded from 2,500 to 5,000 pounds .but now the advanced capital is1,000 in- stead of 500 pounds sterling .hence there are only five turn -overs instead often.this isindeed the way inwhich people count .but when itissaid that the capital of1,000 pounds has been turned over five times inthe year ,the recollection ofthe time ofcirculation disappears inthe hol- low skulls ofthe capitalists ,and aconfused idea isformed that this capital has served continuously inthe process of production during the successive five turn -overs .as amat- ter offact ,ifwe say that the capital of1,000 pounds has been turned over five times inayear ,we include both the time ofcirculation and the time ofproduction .for ,in-",
        "influence ofthe time ofcirculation . 805 deed ,if1,000 pounds sterling had actually been continuous- ly active inthe process ofproduction ,the product would have tobe 10,000 pounds sterling instead of5,000 ,accord- ing toour assumptions .but inorder tohave 1,000 pounds sterling continuously inthe process of production ,2,000 pounds would have tobe advanced .the economists ,who asageneral rule have nothing clear tosay inreference to the mechanism ofthe turn -over ,always overlook this main point ,to-wit,that only apart ofthe industrial capital can actually beengaged inthe process ofproduction ,ifproduc- tion istoproceed uninterruptedly .while one part isbusy inthe process ofproduction ,another must always be en- gaged inthe process of circulation .or in other words , one part can perform the functions ofproductive capital only on condition that another part iswithdrawn from production inthe form ofcommodity ormoney -capital .in overlooking this ,the significance and role ofmoney -capital isentirely ignored . we have now toascertain towhat extent differences in the turn -over are caused according towhether the two sec- tions ofthe period ofturn -over ,the working period and the circulating period ,are equal to one another ,or the working period greater or smaller than the circulating period ,and furthermore ,what effect this has onthe reten- tion ofcapital inthe form ofmoney -capital . we assume ,that the capital advanced weekly isinall cases 100 pounds sterling ,and the period ofturn -over 9 weeks ,sothat the capital invested ineach period ofturn- over is900 pounds sterling . 1. the working period equal tothe period ofcirculation . although this case occurs in reality only accidentally , asan exception ,itmust serve asour point ofdeparture in this analysis ,because conditions here shape themselves in the simplest and most intelligible way . the two capitals (capital iadvanced for the first working period ,and reserve capital iiadvanced during the time of circulation ofcapital i)relieve one another intheir move- ments without crossing .with the exception ofthe first period ,either ofthe two capitals istherefore advanced only",
        "304capital . its product ,apart from surplus -value ,is10 times 500 or 5,000 pounds sterling .from the point ofview ofadirect- lyand uninterruptedly working capital inthe process of production ,acapital -value of500 pounds sterling ,the time of circulation seems entirely eliminated .the period of turn -over coincides with the working period ,the time of circulation being assumed asequal tozero . but ifthe capital of500 pounds sterling were interrupted in its productive activity by regular times of circulation covering 5weeks ,sothat itcould not become productively active until after the close ofthe entire period ofturn -over of10weeks ,we should have 5turn -overs often weeks each in 50 running weeks .these would comprise 5periods of production of5weeks each ,or25 productive weeks with a total product of5times 500 ,or2,500 pounds sterling ;and 5times ofcirculation of5weeks each ,oratotal period of circulation of25weeks .ifwe say inthis case that the capi- tal of500 pounds sterling has been turned over 5times in the year ,itisevident and obvious that this capital of500 pounds sterling did not serve atall asaproductive capital during one -half ofeach period ofturn -over ,and that ,tak- ing all in all,itperformed its function only during one half ofthe year ,while itdid not serve atall during the other half . in our illustration ,the reserve capital of500 pounds ster- ling comes tothe rescue during those five periods ofcircula- tion ,and the turn -over isthus expanded from 2,500 to 5,000 pounds .but now the advanced capital is1,000 in- stead of500 pounds sterling .hence there are only five turn -overs instead often.this isindeed the way inwhich people count .but when itissaid that the capital of1,000 pounds has been turned over five times in the year ,the recollection ofthe time ofcirculation disappears inthe hol- low skulls ofthe capitalists ,and aconfused idea isformed that this capital has served continuously inthe process of production during the successive five turn -overs .as amat- ter offact ,ifwe say that the capital of1,000 pounds has been turned over five times inayear ,we include both the time ofcirculation and the time ofproduction .for ,in-",
        "influence ofthe time ofcirculation . 305 deed ,if1,000 pounds sterling had actually been continuous- lyactive inthe process ofproduction ,the product would have tobe 10,000 pounds sterling instead of5,000 ,accord- ing toour assumptions .but inorder tohave 1,000 pounds sterling continuously inthe process of production ,2,000 pounds would have tobe advanced .the economists ,who asageneral rule have nothing clear tosay inreference to the mechanism ofthe turn -over ,always overlook this main point ,to-wit,that only apart ofthe industrial capital can actually beengaged inthe process ofproduction ,ifproduc- tion istoproceed uninterruptedly .while one part isbusy inthe process ofproduction ,another must always be en- gaged inthe process of circulation .or in other words , one part can perform the functions ofproductive capital only on condition that another part iswithdrawn from production inthe form ofcommodity ormoney -capital .in overlooking this ,the significance and role ofmoney -capital isentirely ignored . we have now toascertain towhat extent differences in the turn -over are caused according towhether the two sec- tions ofthe period ofturn -over ,the working period and the circulating period ,are equal toone another ,orthe working period greater or smaller than the circulating period ,and furthermore ,what effect this has onthe reten- tion ofcapital inthe form ofmoney -capital . we assume ,that the capital advanced weekly isin all cases 100 pounds sterling ,and the period ofturn -over 9 weeks ,sothat the capital invested ineach period ofturn- over is900 pounds sterling . i. the working period equal tothe period ofcirculation . although this case occurs in reality only accidentally , asan exception ,itmust serve asour point ofdeparture in this analysis ,because conditions here shape themselves in the simplest and most intelligible way . the two capitals (capital iadvanced for the first working period ,and reserve capital iiadvanced during the time of circulation ofcapital i)relieve one another intheir move- ments without crossing .with the exception ofthe first period ,either ofthe two capitals istherefore advanced only",
        "306capital . for its own period ofturn -over .let the period ofturn- over be 9weeks ,asindicated inthe two following illustra- tions ,sothat the working period and the time ofcirculation are each ofthem 42 weeks .then we have the following annual diagram : table i. periods of turn -over . i.19. weekcapital i. working periods .advance .periods of circulation . 4.59. week 13.5-18 .14. 5.week 450 ii.10-18 .66 10-13 .5.46 iii.19-27 .6619-22 .5.66p:st. 450 \" 450 \"\"66 22.5-27 .\" iv.28-36 .66 28-31 .5. 450 \"\" 31.5-36 .66 v.37-45 .4637-40 .5. 450 \"\" 40.5-45 .66 46-49 .5.46450 \". 49.5-(54)26vi.46- (54)\" periods of turn -over .capital ii. working period .advance . 4.59. week 450 p:periods of circulation . st.10-13 .5.week6613.5-18 .\"\" 4506419-22 .5.\" 66 6. \"\"22.5-27 .66450 \"1628-31 .5. 31.5-36 .66450 \"\"\"37-40 .5.66 40.5-45 .46450 \"6646-49 .5.66 49.5-(54.)66 66(54-58 .5.)66450 \"i.4.5-13 .5.week ii.13.5-22 .5. iii.22.5-31 .5. iv.31.5-40 .5. v.40.5-49 .5. vi.49.5-(58.5.)\" within the 50 weeks which we here assume tostand for one year ,capital ihas absolved six full working periods , making 6times 450 ,or2,700 pounds sterling ,and capital iimaking infive full working periods 5times 450 ,or2,250 pounds sterling's worth ofcommodities .in addition there- to,capital iihas produced ,within the last one and ahalf weeks ofthe year (middle ofthe 50th tothe end ofthe 51st week )an extra 150 pounds sterling's worth ,making the aggregate product 5,100 pounds sterling .so far asthe di- zect production ofsurplus -value isconcerned ,which ispro- duced only during the working period ,the aggregate capi- tal of 900 pounds sterling would have been turned over 52-3 times (52-3 times 900 equal to5,100 pounds sterling ). but ifwe consider the actual turn -over ,then capital ihas been turned over 52-3 times ,since atthe close ofthe 51st week itstill has toabsolve 3weeks ofits sixth period of turn -over ;52-3 times 450 make 2,550 pounds sterling ;and capital iiturned over 51-6 times ,since ithas completed only 11-2 week ofitssixth period ofturn -over ,sothat 71-2 weeks ofitfall within the next year ;51-6 times 450 make 26the weeks falling within the second year ofturn -over are placed inparentheses .",
        "influence ofthe time ofcirculation .807 2,325 pounds sterling ;actual aggregate turn -over 4,875 pounds sterling . let usregard capital iand capital iiastwo capitals in- dependent ofone another .they are independent intheir movements ;these movements supplement one another merely because their working and circulating periods di- rectly relieve one another .they may be regarded astwo entirely independent capitals belonging to different capi- talists . capital ihas completed five full turn -overs and two -thirds ofits sixth period ofturn -over .atthe end ofthe year it has the form ofcommodity -capital ,which lacks three weeks ofits normal realization .during this time ,itcannot take part inthe process ofproduction .itperforms the function ofcommodity -capital ,itcirculates .ithas completed only two -thirds ofitslast period ofturn -over .this isexpressed in the words :ithas been turned over only two -thirds , only two -thirds ofitstotal value have completed their turn- over .we say that 450 pounds sterling complete their turn- over in9weeks ,hence 300 doin6weeks .but inthis ex- pression ,the organic conditions ofthe two specifically dif- ferent portions ofthe period ofturn -over are neglected .the exact meaning ofthe expression ,that the advanced capital of450 pounds sterling has made 52-3 turn -overs ,ismerely that ithas completed five turn -overs fully and ofthe sixth only two -thirds .on the other hand ,the expression that the turned -over capital isequal to52-3 ofthe advanced capital ,or,inthe above case ,52-3 times 450 pounds ster- ling ,making 2,550 ,iscorrect only insofar asitmeans that unless this capital of 450 pounds sterling were supple- mented by another capital of450 pounds sterling ,one por- tion ofitwould have tobe inthe process ofcirculation while another isinthe process ofproduction .ifthe period ofturn -over istobeexpressed inthe quantity ofthe turned- over capital ,itcan beexpressed only inaquantity ofexist- ing values (embodied inthe finished product ).the fact that the advanced capital isnot inacondition inwhich it may reopen the process ofproduction isdue tothe cir- cumstance that only apart ofitisinacondition suitable for production ,orthat ,inorder tobeinacondition suitable",
        "308capital . for continuous production ,itwould have tobedivided into aportion which would becontinually inthe period ofpro- duction and into another which would becontinually inthe period ofcirculation ,according tothe mutual relation of these periods .itisthe same law which determines the quantity ofthe continually serving productive capital by the proportion ofthe time ofcirculation tothe period of turn -over . asfor capital ii,150 pounds sterling ofitare advanced in the production ofunfinished goods atthe close ofthe 51st running week ,which we regard here asthe last ofthe year . another part exists inthe form ofcirculating constant capi- tal-raw materials ,etc. ,that istosay,inaform ,inwhich itcan serve asproductive capital inthe process ofproduc- tion .but athird part ofitexists inthe form ofmoney , namely atleast the amount ofthe wages for the remainder ofthe working period (3weeks ),which isnot paid ,how- ever ,until the end ofeach week .now ,although this portion ofcapital ,inthe beginning ofanew year ,and ofanew cycle ofturn -over ,isnot inthe condition ofproductive capi- tal,but inthat ofmoney -capital ,inwhich itcannot take part inthe process ofproduction ,there is,nevertheless ,cir- culating variable capital ,namely labor -power ,active inthe process ofproduction atthe opening ofthe new cycle ofturn- over .this isdue tothe fact that labor -power isnot paid until atthe end ofthe week ,although itwas bought atthe beginning ofthe working period ,say,per week ,and socon- sumed .money serves here asameans ofpayment .for this reason ,itisstill inthe hands ofthe capitalist ,while on the other hand labor -power isalready busy inthe process of production .so that the same capital -value here appears twice . ifwe look merely atthe working periods ,then there has been produced : by capital i,52-3 times 450 ,or2,550 pounds sterling , by capital ii,51-3 times 450 ,or2,400 pounds sterling , total ,52-3 times 900 ,or5,100 pounds sterling . hence the advanced capital of900 pounds sterling has",
        "influence ofthe time ofcirculation .309 performed the function ofproductive capital 52-3 times per year .itisimmaterial for the production ofsurplus -value , whether there are always 450 pounds sterling inthe process ofproduction and always 450 pounds sterling inthe process ofcirculation ,orwhether 900 pounds sterling serve 41-2 weeks inthe process ofproduction and 41-2 weeks inthe process ofcirculation . on the other hand ,ifwe consider the periods ofturn- over ,there has been produced : by capital i,52-3 times 450 ,or2,550 pounds sterling , by capital ii,51-6 times 450 ,or2,325 pounds sterling , or,by the aggregate capital ,55-12 times 900 ,or4,875 pounds sterling ,inthe total turn -over .for the turn -over of the total capital isequal tothe sum ofthe quantities turned over by capital iand ii,divided by the sum ofiand ii. itistobenoted ,that capital iand ii,ifthey were inde- pendent ofone another ,would nevertheless be merely dif- ferent independent portions ofthe social capital advanced for the same sphere ofproduction .hence ,ifthe social capi- talwithin this sphere ofproduction were solely composed ofi and ii,the same calculation would apply tothe turn -over ofthe social capital ,which here applies tothe two constitu- ent parts iand ii,ofthe same private capital .in awider generalization ,every portion ofthe entire social capital in- vested inany special sphere ofproduction may besocalcu- lated .but inthe last analysis ,the amount ofthe turn -over ofthe entire social capital isequal tothe sum ofthe capitals turned over inthe various spheres ofproduction ,divided by the sum ofthe capitals advanced inthose spheres . itmust befurther noted that just asthe capitals iand iiinthe same private business have ,strictly speaking ,dif- ferent years ofturn -over (the cycle ofturn -over ofcapital ii beginning 41-2 weeks later than that ofcapital i,sothat the year ofcapital icloses 41-2 weeks earlier than that ofcapi- tal ii),just sothe various private capitals inthe same sphere ofproduction begin their activities attotally different sec- tions oftime and ,therefore ,conclude their years ofturn- over atdifferent times ofthe year .the same calculation of",
        "310capital . averages ,which we employed above for capitals iand ii, suffices also for the reduction ofthe years ofturn -over ofthe various independent portions ofthe social capital toone uniform year ofturn -over . ii.the working period greater than the period of circulation . the working and circulating periods ofcapitals iand ii cross one another instead ofrelieving one another .simul- taneously some capital isset free .this was not sointhe previously considered case . but this does not alter the fact that ,asbefore ,(1)the number ofworking periods ofthe advanced total capital is equal tothe sum ofthe values ofthe annual products ofboth advanced portions ofcapital divided by the advanced total capital ,and (2)the amount turned over bythe total capital isequal tothe sum ofthe two amounts turned over ,divided bythe sum ofthe two advanced capitals .here ,again ,we must regard both portions ofcapital asthough they per- formed movements ofturn -over entirely independent ofone another . we assume once more ,then ,that 100 pounds sterling are advanced weekly inthe working process .let the working period last 6weeks ,requiring every time anadvance of600 pounds sterling (capital i).let the time ofcirculation be 3weeks ,sothat the period ofturn -over is9weeks ,asbefore . let acapital of300 pounds sterling step inasasubstitute during the three weeks ofthe time ofcirculation ofcapital i. considering both capitals asindependent ofone another ,we find the diagram ofthe annual turn -over tobeasfollows : table ii. periods of turn -over . i. ii.1- 9.week 10-18 .working periods .advance . 16. week 600 p.st.\"\" 10-15 . iii.19-27 .\"19-24 .44 iv.28-36 . v. 37-45 . vi.46- (54)4428-33 . 37-42 . 46-51 .6.6capital 1,600 pounds sterling . periods of circulation . 7.-9.week 16.-18.\"\" 25.-27.16 34.-36.16 \"6600 \" 600 \" 600 \" 600 \"44 \" 66 43.-45.66600 \" (52.-54).\"",
        "influence ofthe time ofcirculation .311 periods of turn -over . i.7-15 .week ii.16--24 .additional capital ii,300 pounds sterling .  working periods . 7- 9.week . 16-18 .\"periods of circulation . advance . 300 p.st. 10-15 .week . 300 19-24 . iii.25-33 .46 25-27 .443004428-33 . iv.34-42 .1634-36 . v.43-51 .4642-45 .300 \"\" 300 \"37-42 .6646-51 .\" the process ofproduction continues uninterruptedly all year onthe same scale .the two capitals iand iiremain entirely separate .but inorder torepresent them thus as separate ,we had totear apart their actual interrelations and intersections ,and thus also tochange the amount ofturn- over .for according to the above diagram ,the amounts turned over would be: capital i,22-3 times 600 .. ...or3,400 p.st. capital ii,5times 300 .......... or1,500 p.st. total capital .... 54-9 times 900 ,or4,900 p.st. but this isnot correct ,for we shall see that the actual periods ofproduction and circulation donot absolutely coin- cide with the above diagrams ,inwhich itwas mainly aques- tion ofpresenting capitals iand iiasindependent ofone another . now ,inreality ,capital iihas noworking and circulating periods separate and distinct from capital i.the working period is6weeks ,the circulation period 3weeks .since capital iiamounts toonly 300 pounds sterling ,itcan fill out only apart ofthe working period .this isindeed the case .atthe close ofthe 6th week ,aproduct valued at600 pounds sterling passes into circulation and flows back in money atthe close ofthe 9th week .then capital iibegins itsactivity atthe opening ofthe 7th week and responds to the requirements ofthe next working period for the 7th to 9th week .but according toour assumption ,the working period isonly half completed atthe end ofthe 9th week . hence ,inthe beginning ofthe 10th week ,capital iof600 pounds sterling ,having just returned ,comes once more into activity and advances 300 pounds sterling for the require- ments ofthe 10th to12th week .this completes the second",
        "312capital . working period .products valued at600 pounds sterling are once again incirculation and will return inmoney at the close ofthe 15th week .furthermore ,300 pounds ster- ling are set free ,equal tothe original amount ofcapital ii, and are enabled toserve inthe first half ofthe following working period ,that istosay ,inthe 13th to 15th week . after the lapse ofthese ,the 600 pounds sterling flow back ; 300 ofthem suffice for the remainder ofthe working period , 300 are set free for the following working period . the course ofevents is,therefore ,asfollows : i.period ofturn -over 1-9 .week . 1.working period :1-6 .week .capital i,of600 p.st., performs itsfunction . 1. period ofcirculation :7-9 .week .after the lapse of the 9th week ,600 p.st.flow back inmoney . ii.period ofturn -over :7-15 week . 2.working period :7-12 .week . first half :7-9 .week .capital ii,of300 p.st., performs its function .after the lapse ofthe 9th week ,600 p.st.(capital i)flow back in money . second half :10-12 .week .300 p.st.ofcapital i perform their function .the other 300 p.st.of capital iremain free . 2.period ofcirculation :13-15 .week . after the close ofthe 15. week ,600 p.st.(one half belonging tocapital i,the other tocapital ii)flow back in money . iii.period ofturn -over :13-21 .week . 3.working period :13-18 .week . first half :13-15 .week .the free 300 p.st.perform their function .after the close ofthe 15th week ,600 p.st.flow back in money . second half :16-18 .week ,300 ofthe returned 600 perform their function ,the other 300 again remain free .",
        "influence ofthe time ofcirculation .313 3.period ofcirculation :19-21 .week .after the close ofthe 21st week ,600 p.st.flow back inmoney .in this amount of600 p.st.,capital iand iiare amal- gamated and indistinguishable . inthis way ,there are eight full periods ofturn -over ofa capital of600 p.st.(i:1-9 .week ;ii:7-15 .week ;iii : 13-21 ;iv:19-27 .;v:25-33 .;vi:31-39 .;vii :37 -45 .;viii :43-51 )tothe end ofthe 51st week .but as the 49-51st weeks fall within the eighth period ofcircu- lation ,the 300 p.st.,offree capital must step inand keep production moving .thus the turn -over atthe end ofthe year isasfollows :600 p.st.have completed their cycle eight times ,making 4,800 p.st.inaddition thereto we have the product ofthe last 3weeks (49-51 .),which ,however , has completed but one third ofitscycle of9weeks ,sothat itcounts inthe amount turned over only with one third ofitsvalue ,100 p.st.if,then ,the annual product of51 weeks is5,100 p.st.,the capital actually turned over isonly 4,800 plus 100 ,or4,900 p.st.the advanced total capital of900 p.st.has ,therefore ,been turned over 54-9 times , somewhat more than inthe first case . inthe present example ,we had assumed acase ,inwhich the working time was 2-3,the circulation time 1-3,ofthe period ofturn -over ,sothat the working time was asimple multiple ofthe circulation time .the question isnow , whether capital islikewise set free ,inthe same way asshown before ,when this assumption isnot made . let usassume aworking time of5weeks ,acirculation time of4weeks ,and acapital advance of100 p.st.per week . i.period ofturn -over :1-9 .week . 1.working period :1-5 .week .capital i,of500 p.st., performs itsfunction . 1.circulation period :6-9 .week .after the close ofthe 9th week ,500 p.st.flow back inmoney . ii.period ofturn -over :6-14 .week . 2.working period :6-10 .week .",
        "314capital . first section :6-9 .week .capital ii,of400 p.st., performs its function .after the close ofthe 9th week ,capital i,of500 p.st.,flows back in money . second section :10. week .100 ofthe returned 500 p.st.perform their function .the remaining 400 p.st.are set free for the following working period . 2.circulation period :11-14 .week . after the close ofthe 14. week ,500 p.st.flow back in money . up tothe end ofthe 14th week (11-14 .),the free 400 p.st.perform their function ;400 ofthe 500 p.st.then returned fill the requirements ofthe third working period (1115 .week ),sothat 400 p.st.are once more set free for the fourth working period .the same phenomenon isre- peated in every working period ;inits beginning ,400 p. st.are ready athand ,sufficing for the requirements ofthe first 4weeks .after the close ofthe 4th week ,500 p.st. flow back inmoney ,only 100 ofwhich are needed for the last week ,while the remaining 400 are set free for the next working period . let usfurthermore assume aworking period of7weeks , with acapital iof 700 p.st.;acirculation period of 2 weeks ,with acapital iiof200 p.st. in that case ,the first period ofturn -over lasts from the 1st tothe 9th week ;itsfirst working period from the 1st to the 7th week ,with anadvance of700 p.st.,itsfirst circula- tion period from the 8th tothe 9th week .after the close ofthe 9th week ,700 p.st.flow back inmoney . the second period ofturn -over ,from the 8th tothe 16th week ,contains the second working period ofthe 8th to 14th week .the requirements ofthe 8th and 9th week of this period are covered by capital ii.after the close ofthe 9th week ,the above 700 p.st.flow back .up tothe close of this working period (10-14 .),500 p.st.ofthis sum are used up.200 p.st.remain free for the next working period . the second circulation period lasts from the 15th tothe 16th week .after the close ofthe 16th week ,700 p.st.flow back once more .from now on,the same phenomenon is",
        "influence ofthe time ofcirculation .315 repeated inevery working period .the demand incapital ofthe first two weeks iscovered by the 200 p.st.set free atthe close of the preceding working period ;after the close ofthe second week ,700 p.st.flow back in money ; but the working period lasts only 5weeks longer ,sothat only 500 p.st.can beconsumed ;therefore ,200 p.st.always remain free for the next working period . we find ,then ,that inthis case ,where the working period has been assumed greater than the circulation period ,there isunder all circumstances amoney -capital set free atthe close ofeach working period ,and this money -capital isof the same magnitude ascapital ii,which isadvanced for the circulation time .in our three illustrations ,capital iiwas 300 p.st.,inthe first ,400 p.st.,inthe second ,200 p.st. inthe third example .corresponding thereto ,the capital setfree atthe close ofeach working period was 300 ,400 ,and 200 p.st. iii.the working period smaller than the circulation period . we begin by assuming once more aperiod ofturn -over of9weeks .let the working period be 3weeks ,with an available capital iof300 p.st.let the circulation period be6weeks .for these 6weeks ,an additional capital of600 p.st.isrequired .we may divide this inturn into two por- tions of300 p.st.each ,sothat each portion meets the re- quirements ofone working period .we have ,then ,three capitals of300 p.st.each ,300 ofwhich are always busy in production ,while 600 are circulating . table iii. capital i. periods ofturn -over .working periods .periods ofcirculation . i.19. week . 1-3 .week . ii.10-18 .6610-12 .464-9 .week . 13-18 .44 iii.19-27 .4419-21 .4622-27 .44 iv.28-36 .4428-30 .64 v.37-45 .4637-39 . vi.46-(54.)4446-48 .31-36 . 40-45 . 49-(54.)\" 44",
        "316capital . periods ofturn -over . i.4-12 .week . ii.13-21 .table iii. capital ii. working periods . periods ofcirculation . 46. week . 7-12 .week . 13-15 .6612-21 .66 iii.22-30 . 22-24 .\"16-30 .46 iv.31-39 .6631-33 . 25--39 .44 v.40-48 . vi.49-(57.)40-42 . 49-51 .46 4424-48 . (52-57 .)66 capital iii. i.7-15 .week . 7-9 .week . 10-15 .week . ii.16-24 .4616-18 .4419-24 .44 iii.25-33 . \"6 25-27 . 28-33 .44 iv.34-42 . 34-36 .6637-42 . v.43-51 .4443-45 .6646-51 . we have ,here ,the exact opposite ofcase i,only with the difference that now three capitals relieve one another in- stead oftwo .there isnointersection orintermingling of capitals .each one ofthem can betraced separately tothe end ofthe year .capital isnomore set free inthis instance than incase one ,atthe close ofaworking period .capital iisentirely consumed atthe end ofthe 3rd week ,flows back entirely atthe end of9th ,and resumes itsfunctions in the beginning ofthe 10th week .similarly inthe case of capitals iiand iii.the regular and complete relief ex- cludes any release ofcapital . the total turn -over iscalculated asfollows : capital i,300 times 52-3,or 1,700 p.st. capital ii,300 times 51-2, capital iii,300 times 5or 1,600 p.st. or 1,500 p.st. total capital 900 times 51-3,or4,800 p.st. let usnow choose also an illustration ,inwhich the cir- culation period isnot an exact multiple ofthe working period .for instance ,let the working period be 4weeks , the circulation period 5weeks .the corresponding amounts ofcapital would then be:capital i,400 p.st.;capital ii, 400 p.st.;capital iii,100 p.st.we present only the first three turn -overs .",
        "influence ofthe time ofcirculation . 317 periods ofturn -over . i.19. week . ii.9-17 . iii.17-25 .table iv. capital i. 1-4 .week .working periods . 66 669.10-12 . 17.18-20 .66 i.5-13 .week .66 capital ii.periods ofcirculation . 59. week .13-17 .46 21-25 . 9-13 .week . 58. week . ii.13-21 . iii.21-29 .66 6613. 14-16 . 21.22-29 .66 6617-21 . 25-29 .66 66 ii.17-25 . iii.25-33 .i.9-17 .week .66 66capital iii. 9.week . 17.66 25.6610--17 .week . 17-21 . 26-33 .66 \"\" there isinthis case an intermingling ofcapitals tothe extent that the working period ofcapital iii,which has no independent working period ,because itlasts only for one week ,coincides with the first working period ofcapital i. on the other hand ,anamount of100 p.st.,equal tocapi- taliii,issetfree bycapital iand iiatthe close ofthe work- ing period .for when capital iii fills out the first week ofthe second ,and ofall following working periods ofcapi- tal i,and the entire capital iof400 p.st.flows back atthe close ofthis first week ,then only 3weeks and acorrespond- ing capital of300 p.st.remain for the rest ofthe working period ofcapital i. the 100 p.st.thus set free suffice for the first week ofthe immediately following working period of capital ii;atthe close ofthis week ,the entire capital of400 p.st.then flows back (capital ii).but since the new working period can absorb only 300 p.st.more ,there are once more 100 p.st.disengaged atitsclose .and soforth . there is,then ,asetting free ofcapital atthe close ofawork- ing period ,assoon asthe circulation period isnot asimple multiple ofthe working period .and this released capital isequal tothat portion ofcapital which has tofill out the excess ofthe circulating period over the working period ,or over amultiple ofworking periods . in all cases investigated by usitwas assumed that both the working period and the circulation period remain the same throughout the year inany ofthe businesses selected . this assumption was necessary ,ifwe wished toascertain the",
        "316capital . periods ofturn -over . i.4--12 .week . ii.13-21 . 66table iii. capital ii. working periods . 46. week . 13-15 .66 iii.22-30 . 66 22-24 .66 iv.31-39 . \"\" 31-33 . v.40--48 .6640-42 . vi.49-(57.)6649-51 .periods ofcirculation . 7-12 .week . 12--21 .66 16-30 .66 25--39 .64 24-48 . 66 66 capital iii. 7-9 .week .(52-57 .) i.7-15 .week . 10-15 .week . ii.16-24 .4616-18 .6619-24 .66 iii.25-33 . \"\" iv.34-42 . 44 v.43-51 .4425-27 . \"\" 34-36 . 43-45 .28-33 .\"\" 6637-42 .\"\" 6646-51 .66 we have ,here ,the exact opposite ofcase i,only with the difference that now three capitals relieve one another in- stead oftwo .there isno intersection orintermingling of capitals .each one ofthem can betraced separately tothe end ofthe year .capital isnomore set free inthis instance than incase one ,atthe close ofaworking period .capital iisentirely consumed atthe end ofthe 3rd week ,flows back entirely atthe end of9th ,and resumes itsfunctions in the beginning ofthe 10th week .similarly inthe case of capitals iiand iii.the regular and complete relief ex- cludes any release ofcapital . the total turn -over iscalculated asfollows : capital i,300 times 52-3,or 1,700 p.st. capital ii,300 times 51-2,or 1,600 p.st. capital iii,300 times 5 or 1,500 p.st. \" total capital 900 times 51-3,or4,800 p.st. let usnow choose also an illustration ,inwhich the cir- culation period isnot an exact multiple ofthe working period .for instance ,let the working period be 4weeks , the circulation period 5weeks .the corresponding amounts ofcapital would then be:capital i,400 p.st.;capital ii, 400 p.st.;capital iii,100 p.st.we present only the first three turn -overs .",
        "influence ofthe time ofcirculation . 317 periods ofturn -over . i.19. week .table iv. capital i. 1-4 .week . capital ii.periods ofcirculation . 5-9 .week . 13-17 . 21-25 .66working periods . ii.9-17 .66 iii.17-25 .669.10-12 . 17.18-20 .66 66 i.5-13 .week . 58. week . ii.13-21 .66 iii.21-29 .6613.14-16 . 21.22-29 .66 66 capital iii. ii.17-25 . iii.25-33 .i.9-17 .week .66 \"69.week . 17.66 25.6610--17 .week . 17-21 . 26-33 .66 669-13 .week . 17-21 . 25--29 .66 46 there isinthis case an intermingling ofcapitals tothe extent that the working period ofcapital iii,which has no independent working period ,because itlasts only for one week ,coincides with the first working period ofcapital i. on the other hand ,anamount of100 p.st.,equal tocapi- taliii,issetfree bycapital iand iiatthe close ofthe work- ing period .for when capital iii fills out the first week ofthe second ,and ofall following working periods ofcapi- tali,and the entire capital iof400 p.st.flows back atthe close ofthis first week ,then only 3weeks and acorrespond- ing capital of300 p.st.remain for the rest ofthe working period ofcapital i. the 100 p.st.thus set free suffice for the first week ofthe immediately following working period of capital ii;atthe close ofthis week ,the entire capital of400 p.st.then flows back (capital ii).but since the new working period can absorb only 300 p.st.more ,there are once more 100 p.st.disengaged atitsclose .and soforth . there is,then ,asetting free ofcapital atthe close ofawork- ing period ,assoon asthe circulation period isnot asimple multiple ofthe working period .and this released capital isequal tothat portion ofcapital which has tofill out the excess ofthe circulating period over the working period ,or over amultiple ofworking periods . in all cases investigated by usitwas assumed that both the working period and the circulation period remain the same throughout the year inany ofthe businesses selected . this assumption was necessary ,ifwe wished toascertain the",
        "318capital . influence ofthe time ofcirculation on the turn -over and advance ofcapital .itdoes not alter the matter ,that this assumption isnot borne out unconditionally inreality ,and that itfrequently does not apply atall. in this entire section ,we have discussed only the turn- overs ofthe circulating capital ,not those ofthe fixed .the reason isthat this question has nothing todowith the fixed capital .the means ofproduction employed inthe process ofproduction form fixed capital only tothe extent that their time ofemployment exceeds the period ofturn -over ofcirculating capital ,so long asthe time during which these instruments oflabor continue toserve incontinually repeated labor processes ,isgreater than the period ofturn- over of circulating capital ,in other words ,comprises n periods of turn -over of circulating capital .whether the total time represented by these nperiods ofturn -over of circulating capital ,islong orshort ,that portion ofproduc- tive capital which was advanced for this time infixed capi- tal isnot advanced anew during its course .itcontinues its functions inits old use-form .the difference ismerely this :according tothe different lengths ofthe individual working periods ofeach period ofturn -over ofcirculating capital ,the fixed capital yields agreater orsmaller portion ofitsoriginal value tothe product ofthis working period , and according tothe duration ofthe time ofcirculation of each period ofturn -over ,this value yielded by the fixed capital tothe product flows back inmoney rapidly orslowly . the nature ofthe topic which we discuss inthis section- the turn -over ofthe circulating portion ofproductive capi- tal-isdetermined bythe nature ofthis portion itself .the circulating capital employed in aworking period cannot beinvested inanew working period ,until ithas completed its turn -over ,until ithas been converted into commodity- capital ,then into money -capital ,and then back into produc- tive capital .in order that the first working period may be immediately followed by asecond ,additional capital must beadvanced and converted into the circulating elements of productive capital ,and itsquantity must besufficient tofill out the void left by the circulation ofthe capital advanced",
        "influence ofthe time ofcirculation . 319 for the first working period .this isthe source ofthe in- fluence exerted by the duration ofthe working period of the circulating capital over the scale ofthe process ofpro- duction and the division ofthe advanced capital ,orevent- ually the advance ofnew portions ofcapital .itisprecisely this which we had toexamine inthis section . iv.conclusions . from the preceding analyses ,itfollows that , a. the different portions ,into which capital must be divided inorder that one part ofitmay be continually in the working period while others are inthe period ofcircu- lation ,relieve one another like different independent private capitals ,intwo cases :first ,when the working period is equal tothe period ofcirculation ,sothat the period ofturn- over isdivided into two equal sections ;secondly ,when the period ofcirculation islonger than the working period , but atthe same time represents asimple multiple ofthe working period ,sothat one period ofcirculation isequal tonworking periods ,inwhich case nmust beawhole num- ber .inthese cases ,noportion ofthe successively advanced capital isset free . b. on the other hand ,inall cases inwhich ,(1)the period of circulation islonger than the working period without being asimple multiple ofit,and (2)in which the working period islonger than the circulation period ,a portion ofthe circulating total capital iscontinually set free periodically atthe close ofeach working period ,be- ginning with the second turn -over .this free capital is equal tothat portion ofthe total capital which has been advanced tofill out the time of circulation ,provided the working period islonger than the period ofcirculation ,and equal tothat portion ofcapital which has tofill out the ex- cess ofthe time of circulation over one working period , orover amultiple ofone working period ,provided the time ofcirculation islonger than the working time . c. itfollows that for the aggregate social capital ,sofar asits circulating capital isconcerned ,the setting free of",
        "320 capital . capital must bethe rule ,while the mere relieving ofportions ofcapital following successively inthe process ofproduc- tion must bethe exception .for the equality ofthe period ofwork and circulation ,orthe equality ofthe period ofcir- culation with asimple multiple ofthe working period ,in other words ,asimilar proportion ofthe two portions ofthe period ofturn -over has nothing todowith the nature ofthe case ,and for this reason itcannot befound ingeneral ,but only in rare instances . avery considerable portion ofthe social circulating capi- tal,which isturned over several times per year ,will there- fore exist periodically inthe form ofreleased capital during the annual cycle ofturn -over . itisfurthermore evident that ,all other circumstances being equal ,the magnitude ofthe released capital grows with the volume ofthe labor -process ,orwith the scale of production ,orwith the development ofcapitalist production in general .in the case cited under b(2),this will be so,because the advanced total capital increases ,inb(1), because the length ofthe period ofcirculation grows with the development ofcapitalist production ,hence the period ofturn -over islengthened incases where the working period isextended ,without aregular proportion between the two periods . inthe first case ,for instance ,we had toinvest 100 p.st. per week .this required 600 p.st.for aworking period of6weeks ,300 p.st.for acirculation period of3weeks , together 900 p.st.in that case ,300 p.st.are released con- tinually .on the other hand ,if300 p.st.are invested week- ly,we have 1,800 p.st.for the working period and 900 p. st.for the circulation period .hence 900 instead of300 p.st.are periodically released . d. the total capital ,for instance 900 p.st.,must bedi vided into two portions ,for instance ,600 p.st.for the work- ing period and 300 p.st.for the period ofcirculation .that portion ,which isreally invested inthe labor -process ,isthus reduced by one third ,orfrom 900 to600 p.st.the scale ofproduction isthus reduced by one third .on the other hand ,the 300 p.st.perform their function only tomake",
        "influence ofthe time ofcirculation . 321 the working period continuous ,inorder that 100 p.st.may beinvested every week ofthe year inthe labor -process . abstractly speaking ,itisthe same ,whether 600 p.st. work during 6times 8,or48 weeks (product 4,800 p.st.), orwhether the total capital of900 p.st.isexpended during 6weeks inthe labor -process and then kept fallow during the period ofcirculation of3weeks .inthe latter case ,it would be working ,inthe course ofthe 48 weeks ,51-3 times 6,or32 weeks (product 51-3 times 900 ,or4,800 p. st.),and befallow for 16weeks .but ,apart from the greater decay ofthe fixed capital during the fallow of16 weeks , and apart from the appreciation oflabor ,which must be rapid during the entire year ,although itisemployed only during apart ofit,such aregular interruption ofthe pro- cess ofproduction isirreconcilable with the operations of modern great industry .this continuity isitself aproduc- tive power oflabor . now ,ifwe take acloser look atthe released ,orrather suspended ,capital ,we find that aconsiderable part ofit must always be inthe form ofmoney -capital .let usad- here toour illustration :working period 6weeks ,period ofcirculation 3weeks ,expenditure per week 100 p.st.in the middle of the second working period ,after the close ofthe 9th week ,600 p.st.flow back ,and 300 ofthem must beinvested for the remainder ofthe working period . after the close ofthe second working period ,300 p.st.are then released .in what condition are these 300 p.st.?we will assume that 1-3 isinvested for wages ,2-3 for raw ma- terials and auxiliary substances .then 200 ofthe returned 600 p.st.exist inthe form ofmoney for wages ,and 400 p.st.inthe form ofaproductive supply ,inthe form of elements ofthe constant circulating productive capital .but since only one half ofthis productive supply isrequired for the second half ofthe second working period ,the other half isfor 3weeks inthe form ofasurplus ,that istosay ,ofa productive supply exceeding the requirements ofone work- ing period .the capitalist ,onthe other hand ,knows that heneeds only one -half (200 p.st.)ofthis portion (400 p. st.)ofthe returned capital for the current working period .",
        "320capital . capital must bethe rule ,while the mere relieving ofportions ofcapital following successively inthe process ofproduc- tion must bethe exception .for the equality ofthe period ofwork and circulation ,orthe equality ofthe period ofcir- culation with asimple multiple ofthe working period ,in other words ,asimilar proportion ofthe two portions ofthe period ofturn -over has nothing todowith the nature ofthe case ,and for this reason itcannot befound ingeneral ,but only in rare instances . avery considerable portion ofthe social circulating capi- tal,which isturned over several times per year ,will there- fore exist periodically inthe form ofreleased capital during the annual cycle ofturn -over . itisfurthermore evident that ,all other circumstances being equal ,the magnitude ofthe released capital grows with the volume ofthe labor -process ,orwith the scale of production ,orwith the development ofcapitalist production in general .in the case cited under b (2),this will be so,because the advanced total capital increases ,inb(1), because the length ofthe period ofcirculation grows with the development ofcapitalist production ,hence the period ofturn -over islengthened incases where the working period isextended ,without aregular proportion between the two periods . inthe first case ,for instance ,we had toinvest 100 p.st. per week .this required 600 p.st.for aworking period of6weeks ,300 p.st.for acirculation period of3weeks , together 900 p.st.inthat case ,300 p.st.are released con- tinually .on the other hand ,if300 p.st.are invested week- ly,we have 1,800 p.st.for the working period and 900 p. st.for the circulation period .hence 900 instead of300 p.st.are periodically released . d. the total capital ,for instance 900 p.st.,must bedi vided into two portions ,for instance ,600 p.st.for the work- ing period and 300 p.st.for the period ofcirculation .that portion ,which isreally invested inthe labor -process ,isthus reduced by one third ,orfrom 900 to600 p.st.the scale ofproduction isthus reduced by one third .on the other hand ,the 300 p.st.perform their function only tomake",
        "influence ofthe time ofcirculation . 321 the working period continuous ,inorder that 100 p.st.may beinvested every week ofthe year inthe labor -process . abstractly speaking ,itisthe same ,whether 600 p.st. work during 6times 8,or48 weeks (product 4,800 p.st.), orwhether the total capital of900 p.st.isexpended during 6weeks inthe labor -process and then kept fallow during the period ofcirculation of3weeks .inthe latter case ,it would be working ,inthe course ofthe 48 weeks ,51-3 times 6,or32 weeks (product 51-3 times 900 ,or4,800 p. st.),and befallow for 16weeks .but ,apart from the greater decay ofthe fixed capital during the fallow of 16 weeks , and apart from the appreciation oflabor ,which must be rapid during the entire year ,although itisemployed only during apart ofit,such aregular interruption ofthe pro- cess ofproduction isirreconcilable with the operations of modern great industry .this continuity isitself aproduc- tive power oflabor . now ,ifwe take acloser look atthe released ,orrather suspended ,capital ,we find that aconsiderable part ofit must always beinthe form ofmoney -capital .let usad- here toour illustration :working period 6weeks ,period ofcirculation 3weeks ,expenditure per week 100 p.st.in the middle of the second working period ,after the close ofthe 9th week ,600 p.st.flow back ,and 300 ofthem must be invested for the remainder ofthe working period . after the close ofthe second working period ,300 p.st.are then released .in what condition are these 300 p.st.?we will assume that 1-3 isinvested for wages ,2-3 for raw ma- terials and auxiliary substances .then 200 ofthe returned 600 p.st.exist inthe form ofmoney for wages ,and 400 p.st.inthe form ofaproductive supply ,inthe form of elements ofthe constant circulating productive capital .but since only one half ofthis productive supply isrequired for the second half ofthe second working period ,the other half isfor 3weeks inthe form ofasurplus ,that istosay ,ofa productive supply exceeding the requirements ofone work- ing period .the capitalist ,on the other hand ,knows that he needs only one -half (200 p.st.)ofthis portion (400 p. st.)ofthe returned capital for the current working period .",
        "322capital . itwill ,therefore ,depend on market conditions ,whether he will immediately reconvert these 200 p.st.entirely orpar- tially into asurplus productive supply ,or reserve them entirely orpartially inthe form ofmoney inthe expectation that the conditions ofthe market will improve .itgoes without saying ,that the portion ofcapital tobeused for the payment ofwages (200 p.st.)isreserved in the form of money .the capitalist cannot store labor -power in ware- houses after he has bought it,ashe may dowith the raw material .he must incorporate itinthe process ofproduction and he pays for itatthe end ofthe week .at least these 100 p.st.ofthe released capital of300 p.st.will ,therefore , have the form of money not required for the working period .the capital released inthe form ofmoney -capital must therefore beatleast equal tothe variable portion of capital invested in wages .at amaximum ,itmay com- prise the entire released capital .in reality itfluctuates continually between this minimum and maximum . the money -capital released by the mere mechanism of the movement ofturn -over (together with the successive reflux offixed capital and the money -capital required in every labor -process for variable capital )must play an im- portant role ,assoon asthe credit system develops ,and must atthe same time be one ofits foundations . let usassume that the time ofcirculation inour illus- tration iscontracted from 3weeks to2. this isnot tobea normal change ,but due ,say,toprosperous times ,shortened terms ofpayment ,etc. the capital of600 p.st.,which is expended during the working period ,flows back one week earlier than needed ,itistherefore released for this week . furthermore ,inthe middle ofthe working period ,asbe- fore ,300 p.st.are released (aportion ofthose 600 p.st.), but inthis case for 4weeks instead of3. there are then on the money market 600 p.st.for one week ,and 300 p.st. for 4weeks instead of3. as this concerns not one capitalist alone ,but many ,and occurs atvarious periods indifferent businesses ,itbrings more available money -capital on the market .ifthis condition last for along time ,production will be expanded ,wherever feasible .capitalists working with borrowed money will bring less demand tobear onthe",
        "influence ofthe time ofcirculation .323 money -market ,whereby itisrelieved asmuch asitisby an increased supply .or,finally ,the sums made superfluous by the mechanism are thrown definitely on the money- market . in consequence ofthe contraction ofthe period ofturn- over from 3weeks to2,and thus ofthe period ofturn -over from 9weeks to8,one ninth ofthe advanced total capital becomes superfluous .the working period of6weeks can now bekept going ascontinuously with 800 p.st.asformer- lywith 900. one portion ofthe value ofthe commodity- capital ,equal to100 p.st.,therefore persists inthe form of money -capital without performing any more functions as apart ofthe capital advanced for the process ofproduction . while production iscontinued on the same scale and with other conditions ,such asprices ,etc. ,remaining equal ,the value ofthe advanced capital isreduced from 900 to800 p.st.the remainder ofthe originally advanced value ,to the amount of100 p.st.,isreleased inthe form ofmoney- capital .as such itpasses over into the money -market and forms an additional portion ofthe capitals serving inthat capacity . this shows the way inwhich aplethora ofmoney may arise quite apart from the reason that the supply ofmoney may be greater than the demand for it;this eventuality causes always but arelative plethora ,which occurs ,for in- stance ,inthe \"melancholy period \"opening anew cycle after acommercial crisis .inour case we speak ofaplethora inthe sense that adefinite portion ofthe capital advanced for the promotion ofthe entire process ofsocial reproduc- tion ,including the process of circulation ,becomes super- fluous and is,therefore ,released inthe form of money- capital .this plethora comes about bythe mere contraction ofthe period ofturn -over ,while the scale ofproduction and prices remain the same .the amount ofmoney inthe circulation ,whether great orsmall ,did not exert the least influence on this . let usassume ,onthe other hand ,that the period ofcir- culation isprolonged from 3weeks to5. in that case ,the reflux ofthe advanced capital takes place 2weeks too late atthe very next turn -over .the last part ofthe process",
        "324capital . ofproduction ofthis working period cannot be carried on, the mechanism ofthe turn -over ofthe advanced capital itself interfering .in case ofalonger duration ofthis con- dition ,acontraction ofthe process ofproduction ,areduc-- tion ofits volume ,might take place ,just asan extension did inthe previous case .but inorder tocontinue the proc- ess on the same scale ,the advanced capital would have to beincreased by 2-9,or200 p.st.,for the entire duration of the prolongation ofthe circulation period .this additional capital can be obtained only from the money -market .if, then ,the prolongation ofthe period ofcirculation applies toone ormore great lines ofbusiness ,itmay cause apres- sure onthe money -market ,unless this effect iscompensated bysome counter -effect from some other direction .inthis case likewise itisevident and obvious that such apressure is not inthe least due toachange inthe prices ofthe com- modities nor tothe quantity ofthe existing means ofcir- culation . (the preparation ofthis chapter for publication has given me no small amount ofdifficulties .expert asmarx was in algebra ,the handling offigures inarithmetic nevertheless gave him agreat deal oftrouble and he lacked especially the practice of commercial calculation ,although he left behind aponderous volume ofcomputations in which he had practiced by many examples the entire variety ofcom- mercial reckoning .but aknowledge ofthe various modes ofcalculation and apractice inthe daily practical calcula- tions ofthe merchant are by no means the same .conse- quently marx entangled himself tosuch an extent in his computation ofturn -overs ,that the result ,sofar ashe com- pleted his work ,contained various errors and contradic- tions .inthe diagrams given above ,ihave preserved only the simplest and arithmetically correct data ,and my rea- son for so doing was mainly the following : the indefinite results ofthis tedious calculation have led marx to attribute an undeserved importance toacircum- stance ,which ,in my opinion ,has actually little signifi- cance .irefer tothat which hecalls the \"release \"ofmoney- capital .the actual state of affairs ,based on the above premises ,isthis :",
        "influence ofthe time ofcirculation . 325 no matter what may bethe proportion inthe magnitude ofthe working and circulation periods ,orofcapital iand ii,there isreturned tothe capitalist ,inthe form ofmoney , atthe end ofthe first turn -over ,inregular intervals ofthe duration ofone working period ,the capital required for each working period ,asum equal tocapital i. ifthe working period is5weeks ,the circulation period 4weeks ,and capital i500 p.st.,then asum ofmoney equal to500 p.st.flows back periodically atthe end ofthe 9th ,14th ,19th ,24th ,29th ,etc. ,week . ifthe working period is6weeks ,the circulation period 3 weeks ,and capital i600 p.st.,then 600 p.st.flow back peri- odically atthe end ofthe 9th ,15th ,21st ,27th ,33rd ,etc., week . finally ,ifthe working period is4weeks ,the circula- tion period 5weeks ,and capital i400 p.st.,then 400 p.st. are periodically returned atthe end ofthe 9th ,13th ,17th , 21st ,25th ,etc. ,week . whether any ofthis returned money issuperfluous ,and thus released ,for the current working period ,and how much ofit,makes no difference .itisassumed that production continues uninterruptedly onthe same scale ,and inorder that this may bepossible ,money must beavailable and must , therefore ,flow back ,whether \"released \"ornot.ifproduc- tion isinterrupted ,release stops likewise . in other words :there isindeed arelease ofmoney ,a formation oflatent ,ormerely potential ,capital inthe form ofmoney .but ittakes place under all circumstances ,and not only under the conditions enumerated especially inthe above analysis ;and ittakes place onalarger scale than that assumed there .so far ascirculating capital iisconcerned , the industrial capitalist ,atthe end ofeach turn -over ,isin the same situation asatthe establishment ofhis business : hehas all ofitinhis hands inone bulk ,while he can con- vert itonly gradually back into productive capital . the essential point inthe above analysis isthe demon- stration that ,on one hand ,aconsiderable portion ofthe industrial capital must always be available inthe form of money ,and ,on the other hand ,astill more considerable",
        "324 capital . ofproduction ofthis working period cannot becarried on, the mechanism ofthe turn -over ofthe advanced capital itself interfering .in case ofalonger duration ofthis con- dition ,acontraction ofthe process ofproduction ,areduc-- tion ofits volume ,might take place ,just asan extension did inthe previous case .but inorder tocontinue the proc- ess on the same scale ,the advanced capital would have to beincreased by 2-9,or200 p.st.,for the entire duration of the prolongation ofthe circulation period .this additional capital can be obtained only from the money -market .if, then ,the prolongation ofthe period ofcirculation applies toone ormore great lines ofbusiness ,itmay cause apres- sure onthe money -market ,unless this effect iscompensated bysome counter -effect from some other direction .inthis case likewise itisevident and obvious that such apressure is not inthe least due toachange inthe prices ofthe com- modities nor tothe quantity ofthe existing means ofcir- culation . (the preparation ofthis chapter for publication has given me no small amount ofdifficulties .expert asmarx was in algebra ,the handling offigures inarithmetic nevertheless gave him agreat deal oftrouble and he lacked especially the practice of commercial calculation ,although he left behind aponderous volume ofcomputations in which he had practiced by many examples the entire variety ofcom- mercial reckoning .but aknowledge ofthe various modes ofcalculation and apractice inthe daily practical calcula- tions ofthe merchant are by no means the same .conse- quently marx entangled himself tosuch an extent in his computation ofturn -overs ,that the result ,sofar ashe com- pleted his work ,contained various errors and contradic- tions .inthe diagrams given above ,ihave preserved only the simplest and arithmetically correct data ,and my rea- son for so doing was mainly the following : the indefinite results ofthis tedious calculation have led marx toattribute an undeserved importance toacircum- stance ,which ,in my opinion ,has actually little signifi- cance .irefer tothat which hecalls the \"release \"ofmoney- capital .the actual state of affairs ,based on the above premises ,isthis :",
        "influence ofthe time ofcirculation . 325 no matter what may bethe proportion inthe magnitude ofthe working and circulation periods ,orofcapital iand ii,there isreturned tothe capitalist ,inthe form ofmoney , atthe end ofthe first turn -over ,inregular intervals ofthe duration ofone working period ,the capital required for each working period ,asum equal tocapital i. ifthe working period is5weeks ,the circulation period 4weeks ,and capital i500 p.st.,then asum of money equal to500 p.st.flows back periodically atthe end ofthe 9th ,14th ,19th ,24th ,29th ,etc. ,week . ifthe working period is6weeks ,the circulation period 3 weeks ,and capital i600 p.st.,then 600 p.st.flow back peri- odically atthe end ofthe 9th ,15th ,21st ,27th ,33rd ,etc. , week . finally ,ifthe working period is4weeks ,the circula- tion period 5weeks ,and capital i400 p.st.,then 400 p.st. are periodically returned atthe end ofthe 9th ,13th ,17th , 21st ,25th ,etc. ,week . whether any ofthis returned money issuperfluous ,and thus released ,for the current working period ,and how much ofit,makes no difference .itisassumed that production continues uninterruptedly on the same scale ,and inorder that this may bepossible ,money must beavailable and must , therefore ,flow back ,whether \"released \"ornot .ifproduc- tion isinterrupted ,release stops likewise . in other words :there isindeed arelease of money ,a formation oflatent ,ormerely potential ,capital inthe form ofmoney .but ittakes place under all circumstances ,and not only under the conditions enumerated especially inthe above analysis ;and ittakes place onalarger scale than that assumed there .so far ascirculating capital iisconcerned , the industrial capitalist ,atthe end ofeach turn -over ,isin the same situation asatthe establishment ofhis business : hehas all ofitinhis hands inone bulk ,while hecan con- vert itonly gradually back into productive capital . the essential point inthe above analysis isthe demon- stration that ,on one hand ,aconsiderable portion ofthe industrial capital must always be available inthe form of money ,and ,on the other hand ,astill more considerable",
        "324capital . ofproduction ofthis working period cannot becarried on, the mechanism ofthe turn -over ofthe advanced capital itself interfering .in case ofalonger duration ofthis con- dition ,acontraction ofthe process ofproduction ,areduc- tion ofits volume ,might take place ,just asan extension did inthe previous case .but inorder tocontinue the proc- ess onthe same scale ,the advanced capital would have to beincreased by 2-9,or200 p.st.,for the entire duration of the prolongation ofthe circulation period .this additional capital can be obtained only from the money -market .if, then ,the prolongation ofthe period ofcirculation applies toone ormore great lines ofbusiness ,itmay cause apres- sure onthe money -market ,unless this effect iscompensated bysome counter -effect from some other direction .inthis case likewise itisevident and obvious that such apressure is not inthe least due toachange inthe prices ofthe com- modities nor tothe quantity ofthe existing means ofcir- culation . (the preparation ofthis chapter for publication has given me no small amount ofdifficulties .expert asmarx was in algebra ,the handling offigures inarithmetic nevertheless gave him agreat deal oftrouble and he lacked especially the practice of commercial calculation ,although he left behind aponderous volume ofcomputations in which he had practiced by many examples the entire variety ofcom- mercial reckoning .but aknowledge ofthe various modes ofcalculation and apractice inthe daily practical calcula- tions ofthe merchant are by no means the same .conse- quently marx entangled himself tosuch an extent in his computation ofturn -overs ,that the result ,sofar ashe com- pleted his work ,contained various errors and contradic- tions .inthe diagrams given above ,ihave preserved only the simplest and arithmetically correct data ,and my rea- son for so doing was mainly the following : the indefinite results ofthis tedious calculation have led marx to attribute an undeserved importance toacircum- stance ,which ,in my opinion ,has actually little signifi- cance .irefer tothat which hecalls the \"release \"ofmoney- capital .the actual state of affairs ,based on the above premises ,isthis :",
        "influence ofthe time ofcirculation . 325 no matter what may bethe proportion inthe magnitude ofthe working and circulation periods ,orofcapital iand ii,there isreturned tothe capitalist ,inthe form ofmoney , atthe end ofthe first turn -over ,inregular intervals ofthe duration ofone working period ,the capital required for each working period ,asum equal tocapital i. ifthe working period is5weeks ,the circulation period 4weeks ,and capital i500 p.st.,then asum ofmoney equal to500 p.st.flows back periodically atthe end ofthe 9th ,14th ,19th ,24th ,29th ,etc. ,week . ifthe working period is6weeks ,the circulation period 3 weeks ,and capital i600 p.st.,then 600 p.st.flow back peri- odically atthe end ofthe 9th ,15th ,21st ,27th ,33rd ,etc. , week . finally ,ifthe working period is4weeks ,the circula- tion period 5weeks ,and capital i400 p.st.,then 400 p.st. are periodically returned atthe end ofthe 9th ,13th ,17th , 21st ,25th ,etc. ,week . whether any ofthis returned money issuperfluous ,and thus released ,for the current working period ,and how much ofit,makes no difference .itisassumed that production continues uninterruptedly on the same scale ,and inorder that this may bepossible ,money must beavailable and must , therefore ,flow back ,whether \"released \"ornot .ifproduc- tion isinterrupted ,release stops likewise . in other words :there isindeed arelease of money ,a formation oflatent ,ormerely potential ,capital inthe form ofmoney .but ittakes place under all circumstances ,and not only under the conditions enumerated especially inthe above analysis ;and ittakes place onalarger scale than that assumed there .so far ascirculating capital iisconcerned , the industrial capitalist ,atthe end ofeach turn -over ,isin the same situation asatthe establishment ofhis business : hehas all ofitinhis hands inone bulk ,while hecan con- vert itonly gradually back into productive capital . the essential point inthe above analysis isthe demon- stration that ,on one hand ,aconsiderable portion ofthe industrial capital must always beavailable inthe form of money ,and ,on the other hand ,astill more considerable",
        "326capital . portion must temporarily assume the form ofmoney .this proof is,ifanything ,still more emphasized by these addi- tional remarks ofmine.-f. e.) v.the effect ofachange ofprices we had assumed that prices remained the same and the scale ofproduction remained unaltered ,while ,onthe other hand ,the time ofcirculation was either contracted orex- panded .now let usassume ,onthe contrary ,that the period ofturn -over remains the same ,likewise the scale ofproduc- tion ,while prices change ,that istosay,either the prices ofthe raw materials ,auxiliaries ,and labor -power rise or fall ,orthose ofthe two first -named elements alone .take it,that the price ofraw materials ,auxiliaries ,and labor- power falls by one half .in that case ,the capital tobead- vanced inour above examples would be50 instead of100 p.st.per week ,and that for the period ofturn -over of9 weeks ,450 p.st.,instead of900. asum of450 p.st.ofthe advanced capital isreleased inthe form ofmoney -capital , but the process ofproduction continues on the same scale and with the same period ofturn -over ,and with the same sub -division asbefore .the quantity ofthe annual product likewise remains the same ,but its value has fallen by one half .this change ,which isatthe same time accompanied by achange inthe demand and supply ofmoney -capital , isdue neither toan acceleration ofthe turn -over ,nor toa change inthe quantity ofmoney in circulation .on the contrary .afall inthe value ,orprice ,ofthe elements of productive capital by one half would first have the effect ofreducing by one half the capital -value tobe advanced for the continuation ofthe business ofxinthe same scale , sothat only one half ofthe money would have tobethrown onthe market by the business ofx,since the business of xadvances this capital -value first inthe form ofmoney ,of money -capital .the amount ofmoney thrown into circu- lation would have decreased ,because the prices ofthe ele- ments ofproduction had fallen .this would bethe first effect . inthe second place ,one half ofthe originally advanced",
        "influence ofthe time ofcirculation .327 capital of900 p.st.or450 p.st.,which (a)passed alter- nately through the forms ofmoney -capital ,productive capi- tal,and commodity -capital ,and (b)existed simultaneously and continuously side byside partly inthe form ofmoney- capital ,partly inthe form ofproductive capital ,partly in the form ofcommodity -capital ,would be eliminated from the rotation ofthe business ofx,and thus come into the money market asan additional capital ,affecting itassuch . these released 450 p.st.serve asmoney -capital ,not because they have become superfluous for the operation ofthe busi- ness ofx,but because they were aconstituent portion ofthe original capital -value ,sothat they are intended for further service ascapital ,not asmere means ofcirculation .the next form inwhich they may serve ascapital isthat of money onthe money -market .or,the scale ofproduction (apart from fixed capital )might bedoubled .in that case aproductive process ofdouble the previous volume would becarried onwith acapital of900 p.st. if,on the other hand ,the prices ofthe circulating ele- ments ofproductive capital were toincrease by one half ,it would require 150 p.st.per week instead of100 p.st.,or 1,350 instead of900 p.st.an additional capital of450 p. st.would be needed tocarry on production on the same scale ,and this would exert apressure tothat extent ,accord- ing tothe condition ofthe money -market ,onthe quotations ofmoney .ifall the capital available onthis market were then engaged ,there would bean increased competition for available capital .ifaportion ofitwere unemployed ,it would tothat extent be called into action . but ,inthe third place ,given acertain scale ofproduction , the velocity ofthe turn -over and the prices for the circu- lating elements ofproductive capital remaining the same , the price ofthe product ofthe business ofxmay rise or fall .ifthe price ofthe commodities supplied by the busi- ness ofxfalls ,the price ofhis commodity -capital of600 p.st.,which itthrew continually into circulation ,sinks ,for instance ,to500 p.st.inthat case ,one sixth ofthe value ofthe advanced capital does not flow back from the process ofcirculation ,(the surplus -value contained inthe commod-",
        "328capital . ity-capital isnot considered here ),and itislost incircula- tion .but since the value ,orprice ,ofthe elements ofpro- duction remains the same ,this reflux of500 p.st.suffices only toreplace 5-6 ofthe capital of600 p.st.engaged inthe process ofproduction .itrequires therefore an addition of 100 p.st.ofmoney -capital tocontinue production on the same scale . vice versa ,ifthe price ofthe product ofthe business of xwere torise ,then the price ofthe commodity -capital of 600 p.st.would beincreased ,say to700 p.st.one seventh ofthis price ,or100 p.st.,does not come from the process ofproduction ,has not been advanced init,but flows from the process ofcirculation .but only 600 p.st.are needed toreplace the elements ofproduction .therefore 100 p. st.are set free . itdoes not fall within the scope ofthe present analysis toascertain why ,inthe first case ,the period ofturn -over is abbreviated or prolonged ,why ,in the second case ,the prices ofraw materials and auxiliaries ,inthe third case , those ofthe products supplied by the business ,rise orfall . but the following points fall under this analysis : i.case .achange inthe period ofcirculation ,and thus of turn -over ,while the scale of produc- tion ,and the prices of the elements of produc- tion and ofproducts remain the same . according tothe assumptions ofour example ,one ninth less ofthe advanced total capital isneeded after the contrac- tion ofthe period ofcirculation ,sothat the total capital isreduced from 900 to800 p.st.and 100 p.st.ofmoney- capital are released . the business ofxsupplies the same asever asix weeks ' product ofthe same value of600 p.st.,and aswork con- tinues without interruption during the entire year ,the same quantity ofproducts ,valued at5,100 p.st.,issupplied in 51 weeks .there is,then ,no change sofar asthe quan- tity and price ofthe product thrown into circulation by this business are concerned ,nor inthe terms oftime in which itthrows itsproduct on the market .but 100 p.st.",
        "influence ofthe time ofcirculation .329 are released ,because the requirements ofthe productive process are satisfied with 800 instead of900 p.st.,after the contraction ofthe period ofcirculation .the released 100 p.st.ofcapital exist inthe form ofmoney -capital .but they do not by any means represent that portion ofthe advanced capital ,which would have toserve continually in the form of money -capital .let us assume that 4-5,or 480 p.st.ofthe advanced circulating capital are continually invested in material elements of production ,and 1-5,or 120 p.st.,in labor -power .then the weekly investment inmaterials ofproduction would be80p.st.,and inlabor- power 20 p.st.of course ,capital ii,of300 p.st.,must also bedivided into 4-5,or240 p.st.,for materials ofpro- duction ,and 1-5,or60 p.st.,for wages .the capital in- vested in wages must always be advanced inthe form of money .as soon asthe commodity -product tothe amount of600 p.st.has been reconverted into money ,480 p.st. ofitmay betransformed into materials ofproduction (pro- ductive supply ),but 120 p.st.retain their money -form ,in order toserve inthe payment ofwages for six weeks .these 120 p.st.are the minimum ofthe returning capital of600 p.st.,which must always berenewed inthe form ofmoney- capital and soreplaced ,and therefore this minimum must always be kept on hand asthat portion ofthe advanced capital which serves inits money -form . now ,if100 p.st.ofthe capital of300 p.st.periodically released for three weeks ,and likewise divided into 240 p. st.ofaproductive supply and 60p.st.ofwages ,are entirely eliminated inthe form ofmoney -capital by the contraction ofthe circulation time ,ifthey are completely removed from the mechanism ofthe turn -over ,where does the money for these 100 p.st.ofmoney -capital come from ?this amount consists only one fifth ofmoney -capital periodically released within the turn -overs .but four fifths ,or80p.st.,are al- ready replaced by an additional productive supply ofthe same value .in what manner isthis additional productive supply converted into money ,and whence comes the money for this conversion ? ifthe contraction ofthe period ofcirculation has become afact ,then only 400 p.st.ofthe above 600 ,instead of480 ,",
        "330capital . are reconverted into aproductive supply .the other 80 p.st.are retained in their money -form and constitute , together with the above 20 p.st.for wages ,the 100 p.st. eliminated from the process .although these 100 p.st. come from the circulation by means ofthe purchase ofthe 600 p.st.of commodity -capital and are now withdrawn from it,because they are not re-invested inwages and ma- terials ofproduction ,yet itmust not be forgotten that ,in their money -form ,they are once more in that form in which they were originally thrown into circulation .in the beginning 900 p.st.were invested inaproductive supply and wages .now only 800 p.st.are required inorder tocarry along the same productive process .the 100 p.st.thus withdrawn in money now form anew money -capital seek- ing investment ,anew constituent part ofthe money -mar- ket.true ,they were previously periodically inthe form ofreleased money -capital and ofadditional productive capi- tal,but these latent forms were the conditions for the pro- motion and continuity ofthe process ofproduction .now they are no longer needed for this purpose ,and for this reason they form anew money -capital and aconstituent part ofthe money -market ,although they are neither an additional element ofthe existing social money -supply (for they existed atthe beginning ofthe business and were thrown byitinto the circulation ),nor anewly accumulated hoard . these 100 p.st.are now indeed withdrawn from circula- tion inasmuch asthey are aportion ofthe advanced money- capital and are no longer employed inthe same business . but this withdrawal is possible only because the con- version ofthe commodity -capital into money ,and ofthis money into productive capital ,in the metamorphosis c'-m-c,isaccelerated by one week ,sothat the circula- tion ofthe money engaged inthis process islikewise has- tened .this sum iswithdrawn from circulation ,because it isno longer needed for the turn -over ofthe capital ofx. ithas been assumed here ,that the capital belongs tohim who invests it.but ifhe had borrowed it,nothing would bealtered inthese conditions .with the contraction ofthe",
        "influence ofthe time ofcirculation . 331 period ofcirculation ,he would need only 800 p.st.ofbor- rowed money instead of900. this sum of100 p.st.,ifre- turned tothe lender ,forms nevertheless 100 p.st.ofnew money -capital ,only inthe hands ofyinstead ofx. if the capitalist xreceives his materials ofproduction tothe amount of480 p.st.on credit ,sothat he has only toad- vance 120 p.st.for wages out ofhis own pocket ,then he would now have topurchase 80p.st.'s worth ofgoods less on credit ,sothat this sum would constitute an excess of commodity -capital for the capitalist giving iton credit , while the capitalist xwould have released 20 p.st.ofhis money . the additional supply for production isnow reduced by one -third .itconsisted of240 p.st.'s worth ofgoods ,con- stituting four -fifths ofadditional capital ii of300 p.st., but now itconsists only of160 p.st.'s worth ofgoods .it isan additional productive supply for 2instead of3weeks . itisnow renewed every 2weeks ,instead ofevery 3,but only for the next 2instead ofthe next 3weeks .the pur- chases ,for instance ,onthe cotton market ,are repeated more frequently and insmaller portions .the same portion of cotton iswithdrawn from the market ,for the quantity of the product remains the same .but the withdrawal isdis- tributed differently intime ,extending over alonger period . take itthat itisaquestion of3months or2. ifthe an- nual consumption of cotton amounts to 1,200 bales ,the sales inthe first case will be: january 1,300 bales ,remaining instorage 900 bales . april 1,300 bales ,remaining instorage 600 bales . july 1,300 bales ,remaining instorage 300 bales . october 1,300 bales ,remaining instorage obales . but inthe second case ,the situation would be: january march 800 bales . 600 bales .1,sold 200 ,remaining in storage 1,000 bales . 1,sold 200 ,remaining instorage may 1,sold 200 ,remaining in storage july 1,sold 200 ,remaining in storage september 1,sold 200 ,remaining in storage november 1,sold 200 ,remaining in storage400 bales . 200 bales . obales . in other words ,the money invested incotton flows back completely one month later ,innovember instead ofocto-",
        "332capital . ber.if,therefore ,one -ninth ofthe advanced capital ,or 100 p.st.,iseliminated inthe form ofmoney bythe con- traction ofthe period ofcirculation ,and ifthese 100 p.st. are composed of20 p.st.ofperiodically released money- capital for the payment ofwages ,and of80 p.st.existing periodically asareleased productive supply for one week , then the reduction ofthe productive supply inthe hands ofthe manufacturer ,sofar asthese 80p.st.are concerned , corresponds toanincrease ofthe cotton supply inthe hands ofthe cotton dealer .the same cotton retains as much longer inhis warehouse the form ofacommodity asitstays ashorter time inthe hands ofthe manufacturer under the form ofaproductive supply . hitherto we assumed that the contraction ofthe time of circulation was due tothe fact that xsold his articles more rapidly ,received his money for them inashorter time ,or, inthe case ofcredit ,that his time ofpayment was reduced . in that case ,the contraction was attributed tothe sale of the commodities ,tothe conversion of commodity -capital into money -capital ,c'-m,the first phase ofthe process ofcirculation .but itmight also bedue tothe second phase , m-c,and hence toasimultaneous change ,either inthe working period ,orinthe time ofcirculation ofthe capitals y,z,etc. ,which supply the capitalist xwith the elements ofproduction ofhis circulating capital . for instance ,ifcotton ,coal ,etc. ,with the old methods of transportation ,are three weeks intransit from their place ofproduction orstorage tothe location ofthe factory ofthe capitalist x,then the minimum supply ofxup tothe ar- rival ofnew transports must last for three weeks .solong ascotton and coal are intransit ,they cannot serve asmeans ofproduction .they are then rather an object oflabor in the transportation industry and ofthe capital invested init, they represent for the producer ofcoal orthe dealer incot- ton acommodity -capital in process of circulation .now let improvements intransportation reduce the transit totwo weeks .then the productive supply can be transformed from athree -weekly into afortnightly supply .this re- leases the additional capital of80 p.st.set aside for the",
        "influence ofthe time ofcirculation . 333 purchase ofthe weekly supply ,and likewise the 20 p.st. for wages ,because the turned -over capital of 600 p.st. returns one week earlier . on the other hand ,ifthe working period ofthe capi- tal invested in raw materials iscontracted (examples of this case were given in the preceding chapter ),so that the possibility of renewing the productive supply in a shorter time isgiven ,then the productive supply may be reduced ,the interval between the periods ofrenewal being shortened . if,vice versa ,the time ofcirculation and thus the period ofturn -over are prolonged ,then advance ofadditional capital isnecessary .this must come out ofthe pockets ofthe capi- talist himself ,provided hehas any additional capital .ifhe has ,itwill be invested in some way ,insome portion of the money -market .in order tomake itavailable ,itmust be detached from its old form ,for instance ,stocks must be sold ,deposits withdrawn ,sothat there isindirectly an effect on the money -market ,also in this case .or,he must borrow it.as for that portion ofthe additional capi- tal which istobeinvested inwages ,itmust under normal conditions always beadvanced inthe form ofmoney ,and the capitalist xexerts tothat extent his share ofadirect pressure on the money -market .but sofar asthat portion isconcerned which must beinvested inmaterials ofproduc- tion ,money isindispensable only ifhe must pay for them incash .ifhe can get them on credit ,this does not exert any direct influence onthe money -market ,because the ad- ditional capital then isdirectly advanced inthe form of aproductive supply ,not inthe first instance in money . but ifthe lender throws the note received from xdirectly onthe market and discounts it,this would tothat extent in- fluence the money -market indirectly . ii.case .achange inthe price ofmaterials ofpro- duction ,all other circumstances remaining the same . we just assumed that the total capital of900 p.st.was four -fifths invested inmaterials ofproduction (720 p.st.) and one -fifth inwages (180 p.st.).",
        "334capital . ifthe price ofthe materials ofproduction drops by one- half ,then aworking period of6weeks requires only 240 p.st.instead of480 for their purchase ,and an additional capital ofonly 120 p.st.instead of240 p.st.capital iis then reduced from 600 p.st.to240 plus 120 ,or360 p.st., and capital iifrom 300 to120 plus 60,or180 p.st.the total capital of900 istherefore reduced to360 plus 180 ,or540 p.st.asum of360 p.st.iseliminated . this eliminated and now unemployed capital ,which seeks investment inthe money -market ,isnothing but a portion ofthe originally advanced capital of900 p.st.this portion has become superfluous bythe fall inthe price of the materials ofproduction ,solong asthe business iscarried along onthe same scale and not expanded .ifthis fall in prices isnot due toaccidental circumstances ,such asarich harvest ,over -supply ,etc. ,but toan increase ofproductive power inthe line which supplies the raw materials ,then this money -capital isan absolute addition tothe money- market ,oringeneral tothe capital available inthe form ofmoney -capital ,because itno longer constitutes an inte- gral portion ofthe capital already invested . iii.case .-achange in the market price of the products themselves . in this case ,afall inprices means aloss ofaportion ofcapital ,which must be made good by anew advance of additional money -capital .this loss ofthe seller may be recovered bythe buyer .itisrecovered bythe buyer direct- ly,ifthe market price ofthe product has fallen merely through an accidental fluctuation ofthe market and rises once more toits normal level .itisrecovered indirectly , ifthe change ofprices iscaused by achange ofvalue react- ing onthe product ,and ifthis product passes asan element ofproduction into another sphere ofproduction and there releases capital tothat extent .in either case ,the capital lost by x,for the replacement ofwhich he touches the money -market ,may be introduced by his business friends asanew additional capital .then there isasimple transfer ofcapital .",
        "influence ofthe time ofcirculation .335 if,onthe other hand ,the price ofthe product rises ,then aportion ofthe capital which was not advanced istaken away from the circulation .this isnot an organic portion ofthe capital advanced inthis process ofproduction and constitutes ,therefore ,eliminated money -capital ,unless pro- duction isexpanded .as we assumed that the prices of the elements ofproduction were fixed before the product came upon the market ,an actual change ofvalue might have caused the rise ofprices tothe extent that itisretroac- tive ,causing asubsequent rise inthe price ofraw material . in such an eventuality ,the capitalist xwould realize a gain on his product circulating asacommodity -capital and on his available productive supply .this gain would give him an additional capital ,which would be needed for the continuation ofhis business with the new and higher prices ofthe elements ofproduction . or,the rise ofprices isbut temporary .to the extent that additional capital isthen needed on the side ofthe capitalist x,the same amount isreleased on another side , inasmuch ashis product isan element ofproduction for other lines ofbusiness .what the one has lost ,the other wins .",
        "336capital . chapter xvi . the turn -over ofthe variable capital . i. the annual rate of surplus -value . we start out with acirculating capital of2500 p.st.,four- fifths ofwhich ,or 2000 p.st.,are constant capital (ma- terials ofproduction ),and one -fifth ofwhich ,or500 p.st., isvariable capital invested inwages . let the period ofturn -over be5weeks ;the working pe- riod 4weeks ,the period ofcirculation 1week .then capital iis2000 p.st.,consisting of1600 p.st.ofconstant capital and 400 p.st.ofvariable capital ;capital iiis500 p.st., 400 of which are constant and 100 variable .in every working week ,acapital of500 p.st.isinvested .in ayear of50 weeks an annual product of50 times 500 ,or25,000 p.st.,ismanufactured .the capital i,continuously invested in one working period and amounting to 2000 p.st.,is turned over 12 times .12 times 2000 make 25,000 p. st.of this sum of25,000 p.st.,four -fifths ,or20,000 p. st.,are constant capital invested inmaterials ofproduction , and one -fifth ,or5000 p.st.,isvariable capital invested in wages .the total capital of2500 p.st.isturned over 10 times ,which is25,000 divided by 2500 . the variable circulating capital expended in production can serve afresh inthe process ofcirculation only tothe extent that the product inwhich itsvalue isreproduced is sold ,converted from acommodity -capital into amoney- capital ,inorder tobeonce more expended inthe payment oflabor -power .but the same istrue ofthe constant circu- lating capital invested inproduction for materials ,the valua ofwhich reappears asaportion ofthe value ofthe product . that which iscommon tothese two portions ofthe circula- ting capital ,the variable and constant capital ,and which dis- tinguishes them from the fixed capital ,isnot that the value transferred from them tothe product iscirculated by the commodity -capital ,circulated asacommodity through the",
        "the turn -over ofthe variable capital . 337 circulation ofthe product .for one portion ofthe value ofthe product ,and thus ofthe product circulating asa commodity ,the commodity -capital ,always consists ofthe wear ofthe fixed capital ,that istosay,ofthat portion ofthe value ofthe fixed capital which istransferred tothe product during the process ofproduction .the difference israther this :the fixed capital continues toserve inthe process of production inits old natural form for alonger orshorter cycle ofperiods ofturn -over ofthe circulating capital (which consists of constant circulating plus variable circulating capital ),while every single turn -over isconditioned onthe reproduction ofthe entire circulating capital passing from the sphere ofproduction inthe form ofcommodity -capital into the sphere ofcirculation .the constant and variable cir- culating capital both have incommon the first phase ofthe circulation ,c-m'.but inthe second phase they separate . the money ,into which the commodity isreconverted ,isin part transformed into aproductive supply (constant cir- culating capital ).according tothe different terms ofpur- chase ofthis material ,aportion may be sooner ,another later ,converted from money into materials ofproduction , but finally itiswholly consumed that way .another por- tion ofthe money realized bythe sale ofthe commodity is held inthe form ofamoney -supply ,in order tobegradual- lyexpanded inthe payment oflabor -power incorporated in the process of production .this portion constitutes the variable circulating capital .nevertheless the entire repro- duction ofeither portion isdue tothe turn -over ofthe cap- ital ,totheir conversion into aproduct ,from aproduct into acommodity ,from acommodity into money .this isthe reason why ,inthe preceding chapter ,the turn -over ofthe circulating constant and variable capital was discussed sep- arately and simultaneously without any regard tothe fixed capital . for the purposes ofthe question which we have todis- cuss now ,we must goastep farther and proceed with the variable portion ofthe circulating capital asthough itcon- stituted the circulating capital by itself .in other words ,",
        "338capital . weleave out ofconsideration the constant circulating capital which isturned over together with it. asum of2500 p.st.has been advanced ,and the value ofthe annual product is25,000 p.st.but the variable por- tion ofthe circulating capital is500 p.st.the variable capital contained in25,000 p.st.therefore amounts to25,- 000 divided by 5,or5000 p.st.ifwe divide these 5000 p.st.by 500 ,we find that 10 isthe number ofturn -overs , just asitisinthe case ofthe total capital of2500 p.st. here ,where itisonly aquestion ofthe production ofsur- plus -value ,itisquite correct tomake this average calcula- tion ,according towhich the value ofthe annual product isdivided bythe value ofthe advanced capital ,not by the value ofthat portion ofthis capital which isemployed con- tinually inone working period (inthe present case not by 400 ,but by 500 ,not by capital i,but by capital iplus ii). we shall see later ,that ,from another point ofview ,this is not quite exact .in other words ,this calculation serves well enough for the practical purposes ofthe capitalist ,but it does not express exactly orappropriately allthe real circum- stances ofthe turn -over . we have hitherto ignored one portion ofthe commodity- capital ,namely the surplus -value contained init,which was produced during the process ofproduction and incorporated inthe product .we have now todirect our attention tothis . take it,that the variable capital of100 p.st.expended weekly produces asurplus -value of 100 %,or 100 p. st.,then the variable capital of500 p.st.,advanced for a period ofturn -over of5weeks ,produces 500 p.st.ofsurplus- value ,inother words ,one -half ofthe working day consists ofsurplus -labor . if500 p.st.ofvariable capital produce asurplus -value of 500 p.st.,then 5000 p.st.produce ten times 500 ,or5000 p.st.ofsurplus -value .the proportion ofthe total quanti- ty ofsurplus -value produced during one year tothe val- ue ofthe advanced variable capital iswhat we call the an- nual rate ofsurplus -value .in the present case ,this isas 5000 to 500 ,or 1000 %.if we analyze this rate more closely ,we find that itisequal tothe rate ofsurplus -value",
        "the turn -over ofthe variable capital . 339 produced by the advanced variable capital during one peri- od ofturn -over ,multiplied by the number ofturn -overs ofthe variable capital (which coincides with the number ofturn -overs ofthe entire circulating capital ). the variable capital advanced inthe present case for one period ofturn -over is500 p.st.the surplus -value pro- duced during this period islikewise 500 p.st.the rate of surplus -value for one period ofturn -over is,therefore ,as 500 sto500 v,or100 %.this 100 %,multiplied by 10,the number ofturn -overs inone year ,makes 1000 %,arate of 5000 to500 . this applies tothe annual rate ofsurplus -value .as for the quantity of surplus -value obtained during acertain period ofturn -over ,itisequal tothe value ofthe variable capital advanced for this period ,inthe present case 500 p. st.,multiplied by the rate ofsurplus -value ,inthe present case ,therefore ,500 times 100-100 ,or500 times 1,or500 p. st.ifthe advanced variable capital were 1500 p.st.,with the same rate ofsurplus -value ,then the quantity ofsurplus- value would be1500 times 100-100 ,or1500 p.st. the variable capital of500 p.st.,which isturned over ten times per year ,producing asurplus -value of 5000 p.st., and thus having arate of surplus -value amounting to 1000 %,shall be called capital a. now let us assume that another variable capital ,b,of 5000 p.st.,isadvanced for one whole year (that istosay for 50 working weeks ),sothat itisturned over only once a year .we assume furthermore that ,atthe end ofthe year , the product ispaid for onthe same day that itisfinished , sothat the money -capital ,into which itisconverted ,flows back on the same day .the circulation time isthen zero , the period ofturn -over equal tothe working period ,that istosay,one year .asinthe preceding case ,sothere isnow inthe labor -process ofeach week avariable capital of100 p.st.,orof5000 p.st.in50weeks .let the rate ofsurplus- value belikewise the same ,or100 %,that istosay,one -half ofthe working day ofthe same length asbefore consists of surplus -labor .ifwe study aperiod of5weeks ,then the ad- vanced variable capital is500 p.st.,the rate ofsurplus -value",
        "340capital . 100 %,the quantity ofsurplus -value produced in 5weeks likewise 500 p.st.the quantity oflabor -power ,which is here exploited ,and the intensity ofits exploitation ,are as- sumed tobethe same asthose ofcapital a. in each week ,the invested variable capital of100 p.st. produces asurplus -value of100 p.st.,hence in50weeks the total invested capital produces asurplus -value of50 times 100 ,or5000 p.st.the quantity ofthe surplus -value pro- duced per year isthe same asinthe previous case ,5000 p. st.,but the annual rate ofsurplus -value isentirely different . itisequal tothe surplus -value produced inone year ,di- vided by the advanced variable capital ,that istosay itis as5000 sto5000 v,or100 %,while inthe case ofcapital aitwas 1000 %. in the case ofboth capitals aand b,we have invested avariable capital of100 p.st.per week .the rate ofsur- plus -value per week ,orthe intensity ofself -expansion ,is likewise the same ,100 %,soisthe magnitude ofthe vari- able capital the same ,100 p.st.the same quantity oflabor- power isexploited ,the volume and intensity ofexploitation are equal inboth cases ,the working days are the same and subdivided inthe same way innecessary labor and surplus- labor .the quantity ofvariable capital employed inthe course ofthe year is5000 p.st.ineither case ,sets the same amount oflabor inmotion ,and extracts the same amount of surplus -value from the labor power set inmotion by these two equal capitals ,namely 5000 p.st.nevertheless ,there is adifference of900 %inthe annual rate ofsurplus -value of the two capitals aand b. this phenomenon makes indeed the impression asthough the rate ofsurplus -value were not only dependent on the quantity and intensity ofexploitation ofthe labor -power set inmotion by the variable capital ,but also on inexplica- ble influences arising from the process ofcirculation .ithas actually been sointerpreted ,and has completely routed the ricardian school since the beginning ofthe twenties ofthe 19th century ,atleast initsmore complicated and disguised form ,that ofthe annual rate ofprofit ,ifnot inthe simple and natural form indicated above . the strangeness ofthis phenomenon disappears atonce ,",
        "the turn -over ofthe variable capital .341 when we place capital aand binexactly the same con- ditions ,not seemingly ,but actually .these equal circum- stances are present only when the variable capital bisex- pended inthe payment oflabor -power initsentire volume and inthe same period oftime ascapital a. in that case ,the 5000 p.st.ofcapital bare invested for 5weeks .1000 p.st.per week makes aninvestment of50,000 p.st.per year .the surplus -value isthen likewise 50,000 p. st.,according toour assumption .the turned -over capital of 50,000 p.st.,divided bythe advanced capital of5000 p.st., makes the number ofturn -overs 10. the rate ofsurplus- value ,5000 to5000 ,or100 %,multiplied by the number ofturn -overs ,10,makes the annual rate ofsurplus -value as 50,000 to5000 ,or10to1,or1000 %.now the annual rates ofsurplus -value for aand bare alike ,namely 1000 %, but the quantities ofsurplus -value are 50,000 p.st.inthe case ofb,and 5000 p.st.inthe case ofa. the quantities ofthe produced surplus -values now are proportioned toone another asthe advanced capital -values ofband a,to-wit : as50,000 to5000 ,or10to1. but atthe same time ,cap- ital bhas set inmotion ten times asmuch labor -power as capital ahas inthe same time . itisonly the capital actually invested inthe working process which produces any surplus -value and for which all laws relating to surplus -value are in force including for instance the law according towhich the quantity ofsur- plus -value isdetermined by the relative magnitude ofthe variable capital ifthe rate ofsurplus -value isgiven . the labor -process itself isdetermined bythe time .ifthe length ofthe working period isgiven (asitishere ,where we assume all circumstances relating toaand btobeequal , in order toelucidate the difference in the annual rate of surplus -value ),the working week consists ofacertain num- ber ofworking days .or,we may consider any working period ,for instance this working period of5weeks ,asone single working day of300 hours ,ifthe working day has 10hours and the working week 6days .we must further multiply this number with the number of laborers who are employed every day simultaneously inthe same labor-",
        "342capital . process .ifthere were 10laborers ,there would be60times 10,or600 working hours inone week ,and aworking period of5weeks would have 600 times 5,or3000 working hours . variable capitals of equal magnitude are,therefore ,em- ployed ,the rate ofsurplus -value and the working days being the same ifequal quantities oflabor -power are set inmotion inthe same time (alabor -power ofthe same price multiplied with the same number ). let usnow return toour original illustrations .in both cases ,aand b,equal variable capitals ,of100 p.st.per week ,are invested every week during the year .the invested variable capitals actually serving inthe labor -process are, therefore ,equal ,but the advanced variable capitals are very unequal .for a,500 p.st.are advanced for every 5weeks , and 100 p.st.ofthis are consumed every week .inthe case ofb,5000 p.st.must beadvanced for first period of5weeks , but only 100 p.st.per week ,or500 in5weeks ,orone -tenth ofthe advanced capital isemployed .inthe second period of5weeks ,4500 p.st.must be advanced ,but only 500 of this isemployed ,etc. the variable capital advanced for acer- tain period oftime isconverted into employed ,actually serving and active ,variable capital only tothe extent that itactually steps into the period oftime taken up by the labor -process ,tothe extent that itactually takes part init. in the intermediate time inwhich acertain portion ofthis capital isadvanced ,with aview tobeing employed ata later time ,this portion ispractically non -existing for the labor -process and has ,therefore ,no influence onthe forma- tion ofeither value orsurplus -value .take ,for instance , capital a,of500 p.st.itisadvanced for 5weeks ,but only 100 p.st.enter successively week after week into the labor process .in the first week ,one -fifth ofthis capital isem- ployed ;four -fifths are advanced without being employed , although they must be available ,and therefore advanced , for the labor -processes ofthe following 4weeks . the circumstances which differentiate the relations ofthe advanced tothe employed capital ,influence the production of surplus -value -the rate ofsurplus -value being given- only tothe extent that they differentiate the quantity of",
        "the turn -over cfthe variable capital .343 variable capital which can beactually employed inacertain period oftime ,for instance inone week ,5weeks ,etc. the advanced variable capital serves asvariable capital only for the time that itisactually employed ,not for the time in which itisheld available without being employed .but all the circumstances which differentiate the relations between the advanced and the employed variable capital ,are com-  prised inthe difference ofthe periods ofturn -over (de- termined by the difference inthe working period ,the cir- culation period orboth ).the law ofthe production of surplus -value decrees that equal quantities ofemployed var- iable capital produce equal quantities ofsurplus -value ,if the rate ofsurplus -value isthe same .if,then ,equal quan  tities ofvariable capitals are employed bythe capitals aand bin equal periods oftime with an equal rate ofsurplus- value ,they must produce equal quantities ofsurplus -value inequal periods oftime ,no matter what may bethe pro- portion ofthis variable capital ,employed during definite periods oftime tothe variable capital advanced for the same time and no matter ,therefore ,what may bethe proportion ofthe quantities ofsurplus -value produced ,not tothe em- ployed ,but tothe total advanced variable capital ingeneral . the difference ofthis proportion ,sofar from contradicting the laws ofthe production ofsurplus -value demonstrated byus,rather corroborates them and isone oftheir inevitable consequences . let usconsider the first productive section of5weeks of capital b. at the end ofthe fifth week ,500 p.st.have been employed and consumed .the value ofthe product is100 p.st.,hence the rate as500 sto500 vor 1100 %, the same asinthe case ofcapital a. the fact that ,in the case ofcapital a,the surplus -value isrealized together with the advanced capital ,while inthe case ofbitisnot , does not concern ushere ,where itismerely aquestion of the production ofsurplus -value and ofitsproportion tothe variable capital advanced during its production .but if we calculate the proportion ofsurplus -value in b,not as compared tothat portion ofthe advanced capital of5000 p.st.which has been employed and consumed initsproduc-",
        "342capital . process .ifthere were 10laborers ,there would be60times 10,or600 working hours inone week ,and aworking period of5weeks would have 600 times 5,or3000 working hours . variable capitals of equal magnitude are,therefore ,em- ployed ,the rate ofsurplus -value and the working days being the same ifequal quantities oflabor -power are set inmotion inthe same time (alabor -power ofthe same price multiplied with the same number ). let usnow return toour original illustrations .in both cases ,aand b,equal variable capitals ,of100 p.st.per week ,are invested every week during the year .the invested variable capitals actually serving inthe labor -process are, therefore ,equal ,but the advanced variable capitals are very unequal .for a,500 p.st.are advanced for every 5weeks , and 100 p.st.ofthis are consumed every week .inthe case ofb,5000 p.st.must beadvanced for first period of5weeks , but only 100 p.st.per week ,or500 in5weeks ,orone -tenth ofthe advanced capital isemployed .inthe second period of5weeks ,4500 p.st.must be advanced ,but only 500 of this isemployed ,etc. the variable capital advanced for acer- tain period oftime isconverted into employed ,actually serving and active ,variable capital only tothe extent that itactually steps into the period oftime taken up by the labor -process ,tothe extent that itactually takes part init- inthe intermediate time inwhich acertain portion ofthis capital isadvanced ,with aview tobeing employed ata later time ,this portion ispractically non -existing for the labor -process and has ,therefore ,no influence onthe forma- tion ofeither value orsurplus -value .take ,for instance , capital a,of500 p.st.itisadvanced for 5weeks ,but only 100 p.st.enter successively week after week into the labor process .in the first week ,one -fifth ofthis capital isem- ployed ;four -fifths are advanced without being employed , although they must be available ,and therefore advanced , for the labor -processes ofthe following 4weeks . the circumstances which differentiate the relations ofthe advanced tothe employed capital ,influence the production of surplus -value -the rate ofsurplus -value being given- only tothe extent that they differentiate the quantity of",
        "the turn -over cfthe variable capital .343 variable capital which can beactually employed inacertain period oftime ,for instance inone week ,5weeks ,etc. the advanced variable capital serves asvariable capital only for the time that itisactually employed ,not for the time in which itisheld available without being employed .but all the circumstances which differentiate the relations between the advanced and the employed variable capital ,are com- prised in the difference ofthe periods ofturn -over (de- termined by the difference inthe working period ,the cir- culation period orboth ).the law ofthe production of surplus -value decrees that equal quantities ofemployed var- iable capital produce equal quantities ofsurplus -value ,if the rate ofsurplus -value isthe same .if,then ,equal quan tities ofvariable capitals are employed bythe capitals aand binequal periods oftime with an equal rate ofsurplus- value ,they must produce equal quantities ofsurplus -value inequal periods oftime ,no matter what may bethe pro- portion ofthis variable capital ,employed during definite periods oftime tothe variable capital advanced for the same time and no matter ,therefore ,what may bethe proportion ofthe quantities ofsurplus -value produced ,not tothe em- ployed ,but tothe total advanced variable capital ingeneral . the difference ofthis proportion ,sofar from contradicting the laws ofthe production ofsurplus -value demonstrated byus,rather corroborates them and isone oftheir inevitable consequences . let usconsider the first productive section of5weeks of capital b. at the end ofthe fifth week ,500 p.st.have been employed and consumed .the value ofthe product is100 p.st.,hence the rate as500 sto500 vor1100 %, the same asinthe case ofcapital a. the fact that ,in the case ofcapital a,the surplus -value isrealized together with the advanced capital ,while inthe case ofbitisnot, does not concern ushere ,where itismerely aquestion of the production ofsurplus -value and ofitsproportion tothe variable capital advanced during its production .but if we calculate the proportion ofsurplus -value in b,not as compared tothat portion ofthe advanced capital of5000 p.st.which has been employed and consumed initsproduc-",
        "344 capital . tion ,but tothis total advanced capital itself ,wefind that itis as500 sto5000 v,oras1to10,or10%.inother words ,itis 10%for capital band 100 %for capital a,ten times more . ifany one were tosay that this difference inthe rate of surplus -value for equal capitals ,setting in motion equal quantities oflabor which isequally divided into paid and unpaid labor ,iscontrary tothe laws ofthe production of surplus -value ,then the answer would besimple and prompt- edbythe mere inspection ofthe actual conditions :inthe case ofa,the actual rate ofsurplus -value isexpressed ,that istosay,the proportion ofasurplus -value of500 p.st., toavariable capital of500 p.st.,which produced itin 5 weeks .inthe case ofb,onthe other hand ,we are dealing with acalculation which has nothing todoeither with the production ofsurplus -value ,orwith the determination of its corresponding rate ofsurplus -value .for the 500 p.st. ofsurplus -value produced by avariable capital of500 p. st.are not calculated with reference tothe 500 p.st.ofvari- able capital advanced intheir production ,but with reference toacapital of5000 p.st.,nine -tenths ofwhich ,or4500 p.st.,have nothing whatever todo with the production of this surplus -value of500 p.st.,but are rather intended for gradual service inthe following 45 weeks ,sothat they do not exist atall sofar asthe production ofthe first 5weeks isconcerned ,which isalone significant inthis instance .un- der these circumstances ,the difference inthe rate ofsurplus- value ofaand bisnoproblem atall. let usnow compare the annual rates ofsurplus -value for capitals aand b. for bitisas5000 sto5000 v,or100 %; for aitisas5000 sto500 v,or1000 %.but the proportion ofthe rates ofsurplus -value toward one another isthe same asbefore .there we had rate of surplus -value of capital b rate ofsurplus -value ofcapital a now we have= annual rate ofsurplus -value ofcapital b annual rate ofsurplus -value ofcapital a10% 100 % 100 % = 1000 %",
        "the turn -over ofthe variable capital . 345 but 10%isto100 %as100 %isto1000 %,sothat the ratio isthe same . but now the problem isreversed .the annual rate of capital bisas5000 sto5000 v,or100 %,offering not the slightest deviation ,nor even the semblance ofadeviation , from the laws ofproduction known tous and the rate of surplus -value corresponding tothis production .5000 vhave been advanced and consumed productively during the year , and they have produced 5000 s.the rate ofsurplus -value is, therefore the same asshown inthe above proportion ,5000 8to5000 v,or100 %.the annual rate agrees with the ac- tual rate ofsurplus -value .in this case ,itisnot capital b, but capital a,which presents an anomaly that istobeex- plained . in the case ofa,we have the rate ofsurplus -value as 5000 sto500 v,or1000 %.but while inthe case ofb,a surplus -value of500 p.st.,the product of5weeks ,was cal- culated with reference toan advanced capital of5000 p.st., nine -tenths ofwhich were not employed inits production , we have now asurplus -value of5000 scalculated on avari- able capital of500 v,that istosay,ononly one -tenth ofthe variable capital of5000 p.st.actually employed inthe pro- duction of5000 s.for the 5000 sare the product ofavari- able capital of 5000 v,productively consumed during 50 weeks ,not that ofacapital of500 p.st.productively con- sumed in one working period of5weeks .inthe former case ,the surplus -value produced in5weeks had been cal- culated for acapital advanced for 50 weeks ,acapital ten times larger than the one consumed during the 5weeks . inthe present case ,the surplus -value produced in50 weeks iscalculated for acapital advanced for only 5weeks ,a capital ten times smaller than the one consumed in 50 weeks . capital a,of500 p.st.,isnever advanced for more than 5weeks .atthe end ofthis time ithas flown back and may repeat the same process inthe course ofthe year ten times , byten turn -overs .two conclusions follow from this : first .the capital advanced inthe case ofaisonly five times larger than that portion ofcapital which iscon-",
        "846capital . tinually employed inthe productive process ofone week . capital b,on the other hand ,which isturned over only once in50 weeks ,isfifty times larger than that one ofits portions which can be used only incontinuous successions ofone week .the turn -over ,therefore ,modifies the rela- tions ofthe capital advanced during the year for the process ofproduction tothe capital employed continuously for a certain period ofproduction ,say,for one week .and this is illustrated by the first case ,inwhich the surplus -value of5weeks isnot calculated for the capital employed during these 5weeks ,but for acapital ten times larger and em- ployed for 50weeks . second .the period ofturn -over of5weeks ofcapital a comprises only one -tenth ofthe year ,sothat one year con- tains ten such periods ofturn -over ,inwhich capital aof 500 p.st.issuccessively reinvested .the employed capital ishere equal tothe capital advanced for 5weeks ,multiplied bythe number ofperiods ofturn -over per year .the capital employed during the year is500 times 10,or5000 p.st. the capital advanced during the year is5000 divided by 10, or500 p.st.indeed ,although the 500 p.st.are always re- employed ,the sum advanced for 5weeks never exceeds these same 500 p.st.on the other hand ,inthe case of capital b,itistrue that only 500 p.st.are employed for 5 weeks and advanced for these 5weeks .but asthe period ofturn -over isinthis case 50 weeks ,the capital employed inone year isequal tothe capital advanced for 50 weeks , not tothat advanced for every 5weeks .but the annual quantity ofsurplus -value depends ,given the rate ofsurplus- value ,onthe capital employed during the year ,not on the capital advanced for the year .hence itisnot larger for this capital of5000 p.st.,which isturned over once ayear , than itisfor the capital of500 p.st.,which isturned over ten times per year .and ithas this size only because the capital turned over once ayear isten times larger than the capital turned over ten times per year . the variable capital turned over during one year and hence that portion ofthe annual product ,orofthe annual expenditure ,which isequal tothat portion -isthe variable",
        "the turn -over ofthe variable capital .347 capital employed and productively consumed during the year .itfollows that ,assuming the variable capital aturned over annually and the variable capital bturned over an- nually tobe equal ,and tobe employed under equal con- ditions ofinvestment ,sothat the rate ofsurplus -value isthe same for both ofthem ,the quantity ofsurplus -value pro- duced annually must likewise bethe same for both ofthem . hence the annual rate ofsurplus -value must also be the same for them sofar asitisexpressed bythe formula quantity ofsurplus -value produced annually variable capital turned -over annually . or,generally speaking : whatever may be the relative magnitude ofthe turned over variable capitals ,the rate of the surplus -value produced by them inthe course ofthe year isdetermined bythe rate ofsurplus -value atwhich the respective capitals have been employed in average periods (for instance the average ofaweek oraday ). this isthe only result following from the laws ofthe production ofsurplus -value and the determination ofthe rate ofsurplus -value . let usnow consider what isexpressed bythe ratio ofthe capital turned -over annually capital advanced taking into account ,aswe have said before ,only the vari- able capital .the division shows the number ofturn -overs made by the capital advanced inone year . inthe case ofcapital a,wehave : 5000 p.st.ofcapital turned -over annually 500 p.st.ofcapital advanced inthe case ofcapital b,we have : 5000 p.st.ofcapital turned over annually 5000 p.st.ofcapital advanced",
        "348capital . in both ratios ,the numerator expresses the capital ad- vanced multiplied bythe number ofturn -overs ,inthe case ofa,500 times 10,inthe case ofb5000 times 1. or,it may be multiplied bythe inverted time ofturn -over calcu- lated for one year .the time ofturn -over for ais1-10 year ;the inverted time ofturn -over is10-1 year ,hence we have 500 times 10-1 ,or5000. inthe case ofb,5000 times 1-1.the denominator expresses the turned over capital multiplied by the inverted number ofturn -overs ;in the case ofa,5000 times 1-10 ,inthe case ofb,5000 times 1-1. the respective quantities oflabor (the sum ofthe paid and unpaid labor ),which isset inmotion by the two vari- able capitals turned over annually ,are equal inthis case , because the turned -over capitals themselves are equal and their rate ofself -expansion islikewise equal . the ratio ofthe variable capital turned over annually tothe variable capital advanced indicates (1)the ratio of the capital intended for investment tothe variable capital employed during adefinite working period .ifthe number ofturn -overs is10,asinthe case ofa,and the year isas- sumed tohave 50 working weeks ,then the period ofturn- over is5weeks .for these 5weeks ,variable capital must be advanced ,and the capital advanced for 5weeks must be5times aslarge asthe variable capital employed during one week .that istosay,only one -fifth ofthe advanced capital (inthis case of500 p.st.)can beemployed inthe course ofone week . on the other hand ,inthe case of capital b,where the number ofturn -overs is1-1,the time of turn -over is1year of50weeks .the ratio ofthe advanced capital tothe capital employed weekly is,therefore ,as50 to1.ifmatters were the same for basthey are for a, then bwould have toinvest 1000 p.st.per week instead of 100. (2). itfollows ,that bhas employed ten times as much capital (5000 p.st.)asa,inorder toset inmotion the same quantity ofvariable capital and ,the rate ofsur- plus -value being the same ,of labor (paid and unpaid ), and thus to produce the same quantity of surplus -value during one year .the current rate of surplus -value ex-",
        "the turn -over ofthe variable capital . 349 presses nothing but the ratio ofthe variable capital em- ployed during acertain period tothe surplus -value produced inthe same time ;or,the quantity ofunpaid labor set in motion by the variable capital employed during this time . ithas absolutely nothing to do with that portion ofthe variable capital which isadvanced for atime inwhich itis not employed .hence ithas nothing todo,inthe case of different capitals ,with the ratio ,determined and differ- entiated by the period ofturn -over ,ofthat portion ofcapi- tal which isadvanced for adefinite time and that portion which isemployed inthe same time . the essential result ofthe preceding analysis isthat the annual rate ofsurplus -value coincides only in one single case with the current rate ofsurplus -value which expresses the intensity ofexploitation ,namely inthe case that the advanced capital isturned over only once ayear ,sothat the capital advanced isequal tothe capital turned over inthe course ofthe year ,sothat the ratio ofthe quantity ofsur- plus -value produced during the year tothe capital employed during the year inthis production coincides with and is identical with the ratio ofthe quantity of surplus -value produced during the year tothe capital advanced during the year . (a)the annual rate ofsurplus -value isequal to the quantity ofsurplus -value produced during the year variable capital advanced but the quantity ofthe surplus -value produced during the year isequal tothe current rate ofsurplus -value multiplied by the variable capital employed inits production .the capital employed inthe production ofthe annual quantity ofsurplus -value isequal tothe advanced capital multiplied bythe number ofitsturn -overs ,which we shall call ninthe present case .substituting these terms informula (a)we obtain : (b)the annual rate ofsurplus -value isequal tothe",
        "350capital . cur .rate ofsurpl.val .mltpl.b .the var.cap .adv .mltpl .bn var .cap .adv . for instance ,inthe case ofcapital b,we should have 100 times 5000 times 1 5000?or 100 %. only when nisequal to1,that istosay when the variable capital advanced isturned over once ayear ,sothat itis equal tothe capital employed orturned over ,the annual rate ofsurplus -value isequal tothe current rate ofsurplus- value . let us call the annual rate ofsurplus -value s',the cur- rent rate ofsurplus -value s',the advanced variable capital v,the number ofturn -overs n. s'isequal tothen s'vn ?ors'n. in other words ,s'isequal tos'n,and itisequal tos'only when nis1,sothat then s'iss'times 1,ors'. itfollows furthermore that the annual rate ofsurplus- value isalways equal tos'n,that istosay,always equal to the current rate ofsurplus -value produced inone period of turn -over by the variable capital consumed during that period multiplied bythe number ofturn -overs ofthis vari- able capital during one year ,or,what amounts tothe same , multiplied with itsinverted time ofturn -over calculated for one year .(ifthe variable capital isturned over ten times per year ,then itstime ofturn -over is1-10 year ,itsinverted time ofturn -over therefore 10-1 year ,or10 years .) we have seen that s'isequal tos',when nis1. s'is greater than s',when nisgreater than 1,that istosay,when the advanced capital isturned over more than once ayear , orthe turned over capital isgreater than the capital advanced . finally ,s'issmaller than s',when nissmaller than 1,that istosay,when the capital turned over during one",
        "the turn -over ofthe variable capital .351 year isonly apart ofthe advanced capital ,sothat the period ofturn -over islonger than one year . let uslinger amoment over this last case . we retain all the premises of our former illustration , only the period ofturn -over istobe 55 weeks instead of 50 weeks .the labor -process requires avariable capital of 100 p.st.per week ,sothat 5500 p.st.are needed for the period ofturn -over ,and every week 100 sisproduced ,s' is,therefore ,smaller than 100 %.indeed ,ifthe annual rate 50turn -overs ,n,isthen . because the time ofturn- or5510  over is1plus 1-10 year (of50 weeks ),or11-10 year . s'isequal to 100 %times 5500 times 10-11 5500 equal to 100 times 10-11 ,or1000-11 ,or90 10-11 %.it is,therefore ,smaller than 100 %.indeed ,ifthe annual rate ofsurplus -value were 100 %,then 5500 vwould have topro- duce 5500 s,while 11-10 years are required for that .the 5500 vproduce only 5000 sduring one year ,therefore the annual rate of surplus -value is5000 s 5500 v10-11 %.\"or 10-11 ,or 90 the annual rate ofsurplus -value ,orthe comparison be- tween the surplus -value produced during one year and the variable capital advanced (asdistinguished from the vari- able capital turned over during one year ),istherefore not merely asubjective matter ,but the actual movement ofcap- ital causes this juxtaposition .sofar asthe owner ofcapital aisconcerned ,his advanced variable capital of500 has re- turned tohim atthe end ofthe year ,and ithas produced 5000 p.st.ofsurplus -value inaddition .itisnot the quan- tity ofcapital employed by him during the year ,but the quantity returning tohim periodically ,that expresses the magnitude ofhis advanced capital .itisimmaterial for the present question ,whether the capital exists atthe end ofthe year partly inthe form ofaproductive supply ,or partly inthat ofmoney orcommodity -capital ,and what may bethe proportions ofthese different parts .on the",
        "352capital . other hand ,sofar asthe owner ofcapital bisconcerned , his advanced capital of5000 p.st.has returned tohim , with an additional surplus -value of5000 p.st.and asfor the owner of capital c(the last mentioned 5500 p.st.), surplus -value tothe amount of5000 p.st.has been produced for him (advanced 5000 p.st.,rate ofsurplus -value 100 %), but his advanced capital has not yet returned tohim nor has he pocketed his surplus -value . the formula s'equal tos'n indicates that the rate of surplus -value in force for the employed variable capital , towit, quantity ofs.-v. produced inone period oft.-o. var .cap .employed inone period oft.-o. must bemultiplied with the number ofperiods ofturn -over , orofthe periods ofreproduction ofthe advanced variable capital ,that number ofperiods inwhich itrenews itscycle . we have seen already involume i,chapter iv (the trans- formation ofmoney into capital ),and furthermore invol- ume i,chapter xxiii (simple reproduction ),that the cap- ital value isnot all spent ,but advanced ,asthis value ,hav- ing passed through the various phases ofits cycle ,returns toits point ofdeparture ,enriched by surplus -value .this fact shows that ithas been merely advanced .the time con- sumed from the moment ofitsdeparture tothe moment of itsreturn isthe one for which itwas advanced .the entire rotation of capital -value ,measured by the time from its advance toitsreturn ,constitutes itsturn -over ,and the dura- tion ofthis turn -over isaperiod ofturn -over .when this period has elapsed and the cycle iscompleted ,the same cap- ital -value can renew the same rotation ,can expand itself some more ,create some more surplus -value .ifthe variable capital isturned over ten times inone year ,asinthe case of capital a,then the same advance ofcapital creates inthe course ofone year ,ten times the quantity ofsurplus -value created inone period ofturn -over . one must come toaclear conception ofthe nature ofthis advance from the standpoint ofcapitalist society . capital a,which isturned over ten times inone year ,is",
        "the turn -over ofthe variable capital .353 advanced ten times during one year .itisadvanced anew for every new period ofturn -over .but atthe same time ,a never advances more than this same capital -value of500 p.st.,and disposes never ofmore than these 500 p.st.for the productive process considered by us.as soon asthese 500 p.st.have completed one cycle ,astarts them once more on the same cycle .inshort ,capital by itsvery nature pre- serves its character ascapital only by means ofcontinued service insuccessive processes ofproduction .inthe present case ,itwas never advanced for more than 5weeks .ifthe turn -over lasts longer ,this capital isinadequate .ifthe turn -over iscontracted ,aportion ofthis capital isreleased . not ten capitals of500 p.st.are advanced ,but one capital of500 p.st.isadvanced ten times insuccessive intervals . the annual rate ofsurplus -value is,therefore ,not calculated onten advances ofacapital of500 p.st.,not on 5000 p.st., but on one advance ofacapital of500 p.st.itisthe same inthe case ofone dollar which circulates ten times and yet represents never more than one single dollar incirculation , although itperforms the function of10 dollars .but in the hand ,which holds itafter each change ofhands ,itre- mains the same value ofone dollar asbefore . just sothe capital aindicates ateach successive return , and likewise atits return atthe end ofthe year that its owner has operated always with the same capital -value of 500 p.st.hence only 500 p.st.flow back into his hand at each turn -over .his advanced capital isnever more than 500 p.st.hence the advanced capital represents the de- nominator ofthe fraction which expresses the annual rate ofsurplus -value .we had for itthe formula s'equal tos'vn ors'n. as the current rate ofsurplus -value ,s',isequal to ,equal tothe quantity of surplus -value divided by the variable capital which produced it,we may substitute the value of s'ins'n,that istosay ,inour formula ,thus making it s'equal tosn. but by its tenfold turn -over ,and thus the tenfold re-",
        "354capital . newal ofits advance ,the capital of500 p.st.performs the function ofaten times larger capital ,ofacapital of5000 p.st.,just as500 dollar coins ,which circulate ten times per year ,perform the same function as1000 dollar coins which circulate once ayear . ii.the turn -over ofthe individual variable capital . \"whatever the form ofthe process ofproduction in a society ,itmust be acontinuous process ,must continue to goperiodically through the same phases ...when viewed , therefore ,asaconnected whole ,and asflowing on with in- cessant renewal ,every social process ofproduction is,atthe same time ,aprocess ofreproduction ...as aperiodic in- crement ofthe capital advanced ,orperiodic fruit ofcapital in process ,surplus -value acquires the form of arevenue flowing out ofcapital .\" (volume i,chapter xxiii ,pages 619 ,620. ) inthe case ofcapital a,we have 10periods ofturn -over of5weeks each .inthe first period ofturn -over ,500 p. st.ofvariable capital are advanced ,that istosay ,100 p.st. are converted into labor -power every week ,so that 500 p.st.,have been converted into labor power atthe end ofthe first period ofturn -over .these 500 p.st.,originally apart ofthe total capital advanced ,have then ceased tobe capital .they are paid out inwages .the laborers intheir turn pay them out inthe purchase ofmeans ofsubsistence , consuming subsistence tothe amount of500 p.st.aquant- ity of commodities ofthat value istherefore annihilated (what the laborer may save up inmoney ,etc. ,isnot capi- tal).this quantity ofcommodities has been consumed un- productively from the standpoint ofthe laborer ,except inso far asitpreserves his labor -power ,an indispensable instru- ment ofthe capitalist .inthe second place ,these 500 p. st.have been converted ,from the standpoint ofthe capital- ist,into labor -power ofthe same value (orprice ).labor- power isconsumed byhim productively inthe labor -process . at the end of5weeks ,aproduct valued at1,000 p.st.has been created .half ofthis ,or500 p.st.,isthe reproduced value ofthe variable capital paid out for wages .the other",
        "the turn -over ofthe variable capital . 355 half ,or500 p.st.,isnewly produced surplus -value .but 5weeks oflabor -power ,by the consumption ofwhich a portion ofacapital was transformed into variable capital , islikewise expended ,consumed ,although productively .the labor which was active yesterday isnot the one which is active today .its value ,together with that ofthe surplus- value created by it,exists now asthe value ofathing sep- arate from labor -power ,towit,aproduct .but by converting the product into money ,that portion ofit,which isequal tothe value ofthe variable capital advanced ,may once more be transformed into labor -power and thus perform again the functions ofvariable capital .itisimmaterial that the same laborers ,that istosay,the same bearers ofthe labor -power may beemployed not only with the reproduced , but also with the reconverted capital -value inthe form of money .itmight bepossible that the capitalist might hire different laborers for the second period ofturn -over . itis,therefore ,afact that acapital of5,000 ,and not of 500 p.st.,ispaid out for labor -power inthe ten periods of turn -over of5weeks each .the capital of5,000 p.st.so advanced isconsumed .itdoes not exist any more .on the other hand ,labor -power tothe value of5,000 ,not of500 , p.st.isincorporated successively inthe productive process and reproduces not only itsown value of5,000 p.st.,but also asurplus value of5,000 p.st.over and above itsvalue .the variable capital of500 p.st.,which isadvanced for the sec- ond period ofturn -over ,isnot the identical capital of500 p.st.,which had been advanced for the first period ofturn- over .this has been consumed ,expended in labor -power . but itisreplaced bynew variable capital of500 p.st.,which was produced inthe first period ofturn -over inthe form of commodities and reconverted into money .this new money- capital is,therefore ,the money -form ofthe quantity ofcom- modities newly produced inthe first period ofturn -over . the fact that an identical sum of500 p.st.isagain inthe hands ofthe capitalist ,apart from the surplus -value ,asum equal tothe one which he had originally advanced ,dis- guises the circumstance that he now operates with anewly produced capital .(as for the other constituents ofvalue",
        "354 capital . newal ofitsadvance ,the capital of500 p.st.performs the function ofaten times larger capital ,ofacapital of5000 p.st.,just as500 dollar coins ,which circulate ten times per year ,perform the same function as1000 dollar coins which circulate once ayear . ii.the turn -over ofthe individual variable capital . \"whatever the form ofthe process ofproduction in a society ,itmust be acontinuous process ,must continue to go periodically through the same phases ...when viewed , therefore ,asaconnected whole ,and asflowing on with in- cessant renewal ,every social process ofproduction is,atthe same time ,aprocess ofreproduction ...as aperiodic in- crement ofthe capital advanced ,orperiodic fruit ofcapital in process ,surplus -value acquires the form of arevenue flowing out ofcapital .\" (volume i,chapter xxiii ,pages 619 ,620. ) inthe case ofcapital a,we have 10periods ofturn -over of5weeks each .inthe first period ofturn -over ,500 p. st.ofvariable capital are advanced ,that istosay,100 p.st. are converted into labor -power every week ,so that 500 p.st.,have been converted into labor power atthe end ofthe first period ofturn -over .these 500 p.st.,originally apart ofthe total capital advanced ,have then ceased tobe capital .they are paid out inwages .the laborers intheir turn pay them out inthe purchase ofmeans ofsubsistence , consuming subsistence tothe amount of500 p.st.aquant- ity of commodities ofthat value istherefore annihilated (what the laborer may save up inmoney ,etc. ,isnot capi- tal).this quantity ofcommodities has been consumed un- productively from the standpoint ofthe laborer ,except inso far asitpreserves his labor -power ,an indispensable instru- ment ofthe capitalist .inthe second place ,these 500 p. st.have been converted ,from the standpoint ofthe capital- ist,into labor -power ofthe same value (orprice ).labor- power isconsumed byhim productively inthe labor -process . atthe end of5weeks ,aproduct valued at1,000 p.st.has been created .half ofthis ,or500 p.st.,isthe reproduced value ofthe variable capital paid out for wages .the other",
        "the turn -over ofthe variable capital . 355 half ,or500 p.st.,isnewly produced surplus -value .but 5weeks oflabor -power ,by the consumption of which a portion ofacapital was transformed into variable capital , islikewise expended ,consumed ,although productively .the labor which was active yesterday isnot the one which is active today .its value ,together with that ofthe surplus- value created by it,exists now asthe value ofathing sep- arate from labor -power ,towit,aproduct .but by converting the product into money ,that portion ofit,which isequal tothe value ofthe variable capital advanced ,may once more be transformed into labor -power and thus perform again the functions ofvariable capital .itisimmaterial that the same laborers ,that istosay,the same bearers ofthe labor -power may beemployed not only with the reproduced , but also with the reconverted capital -value inthe form of money .itmight bepossible that the capitalist might hire different laborers for the second period ofturn -over . itis,therefore ,afact that acapital of5,000 ,and not of 500 p.st.,ispaid out for labor -power inthe ten periods of turn -over of5weeks each .the capital of5,000 p.st.so advanced isconsumed .itdoes not exist any more .on the other hand ,labor -power tothe value of5,000 ,not of500 , p.st.isincorporated successively inthe productive process and reproduces not only itsown value of5,000 p.st.,but also asurplus value of5,000 p.st.over and above itsvalue .the variable capital of500 p.st.,which isadvanced for the sec- ond period ofturn -over ,isnot the identical capital of500 p.st.,which had been advanced for the first period ofturn- over .this has been consumed ,expended in labor -power . but itisreplaced bynew variable capital of500 p.st.,which was produced inthe first period ofturn -over inthe form of commodities and reconverted into money .this new money- capital is,therefore ,the money -form ofthe quantity ofcom- modities newly produced inthe first period ofturn -over . the fact that an identical sum of500 p.st.isagain inthe hands ofthe capitalist ,apart from the surplus -value ,asum equal tothe one which he had originally advanced ,dis- guises the circumstance that he now operates with anewly produced capital .(as for the other constituents ofvalue",
        "356capital . ofthe commodity -capital ,which replace the constant parts ofcapital ,their value isnot newly produced ,but only the form ischanged inwhich this value exists .) let ustake the third period ofturn -over .here itisevident that the capital of500 p.st.,advanced for athird time ,isnot an old,but anewly produced capital ,for itisthe money -form ofthe quantity ofcommodities produced inthe second ,not inthe first ,period ofturn -over that istosay,ofthat portion ofthis quantity ofcommodities ,whose value isequal tothat ofthe advanced variable capital .the quantity ofcommodi- ties produced inthe first period ofturn -over issold .its value ,tothe extent that itwas equal tothe variable portion ofthe value ofthe advanced capital ,was transformed into the new labor -power ofthe second period ofturn -over and produced anew quantity ofcommodities ,which were sold intheir turn and aportion ofwhose value constitutes the capital of500 p.st.advanced for the third period ofturn- over . and soforth during the ten periods ofturn -over .inthe course ofthese ,newly produced quantities ofcommodities are thrown upon the market every 5weeks ,inorder toincor- porate ever new labor -power inthe progress ofproduction . (the value ofthese commodities ,tothe extent that itreplaces variable capital ,islikewise newly produced ,and does not merely appear so,asinthe case ofthe constant circulating capital .) that which isaccomplished by the tenfold turn -over of the advanced variable capital of500 p.st.,isnot that this capital can beproductively consumed ten times ,nor that a capital lasting for 5weeks can be employed for 50 weeks . ten times 500 p.st.ofvariable capital are rather employed inthose 50weeks ,and the capital of500 p.st.lasts only for 5weeks atatime and must bereplaced atthe end ofthe 5 weeks by anewly produced capital of500 p.st.this ap- plies equally tocapital aand b. but atthis point ,the difference begins . atthe end ofthe first period of5weeks ,avariable capi- tal of500 p.st.has been advanced and expended by both capitalists aand b. both band ahave transformed its",
        "the turn -over ofthe variable capital . 357 value into labor -power and replaced itbythat portion ofthe value ofthe new product created bythis labor -power which isequal tothe value ofthe advanced variable capital of500 p.st.and for both band a,the labor -power has not only reproduced the value ofthe expended variable capital of500 p.st.by anew value ofthe same amount ,but also added a surplus -value ,which ,according toour assumption ,isofthe same magnitude . but inthe case ofb,the product which replaces the ad- vanced variable capital and adds asurplus -value toit,isnot inthe form inwhich itcan serve once more asaproductive , oravariable ,capital .on the other hand ,itisinsuch a form inthe case ofa. b,however ,does not possess the variable capital consumed inthe first 5and every subsequent 5weeks up tothe end ofthe year ,although ithas been reproduced by newly created value with asuperadded sur- plus -value ,inthe form inwhich itmay once more perform the function ofproductive ,orvariable ,capital .its value is indeed replaced ,orreproduced ,by new value ,but the form ofits value (inthis case the absolute form of value ,its money -form )isnot reproduced . for the second period of 5weeks (and so forth for every succeeding 5weeks ofthe year ),500 p.st.must again be available ,the same asfor the first period .making ex- ception ofthe conditions ofcredit ,5,000 p.st.must ,there- fore ,be available atthe beginning ofthe year asalatent advanced capital ,although they are expended only gradu- ally for labor -power inthe course ofthe year . but inthe case ofa,the cycle ,the turn -over ofthe ad- vanced capital ,being completed ,the reproduced value is after the lapse of5weeks inthe precise form inwhich it may set new labor -power inmotion for another term of5 weeks ,inits original money -form . both aand bconsume new labor -power inthe second period of5weeks and expend anew capital of500 p.st.for the payment ofthis labor -power .the means ofsubsistence of the laborer paid with the first 500 p.st.are gone ,their value has inevery case disappeared from the hands ofthe capi- talist .with the second 500 p.st.,new labor -power isbought ,",
        "358capital . new means ofsubsistence withdrawn from the market .in short ,itisanew capital of500 p.st.which isexpended , not the old.but inthe case ofa,this new capital of500 p.st.isthe money -form ofthe newly produced substitute for the value ofthe formerly expended 500 p.st.;while in the case ofb,this substitute isinaform ,inwhich itcannot serve asvariable capital .itisthere but not inthe form of variable capital .for the continuation ofthe process of production for the next 5weeks ,an additional capital of 500 p.st.must ,therefore ,beavailable inthe form ofmoney , which isindispensable inthis case ,and must be advanced . thus both aand bexpend an equal amount ofvariable capital ,pay for and consume an equal quantity oflabor- power ,during 50weeks .only ,bmust pay for itwith an advanced capital equal toitstotal value of5,000 p.st.,while apays for itsuccessively by the ever renewed money -form ofthe substitute produced inevery 5weeks for the capital of500 p.st.advanced for every 5weeks .inno case more capital isadvanced by athan isrequired for 5weeks ,that istosay ,500 p.st.these 500 p.st.last for the entire year .itis,therefore ,evident that ,the intensity ofexploita- tion and the current rate ofsurplus -value being the same for the two capitals ,the annual rates ofaand bmust hold an inverse ratio toone another than the magnitudes ofthe variable money -capitals ,which had tobeadvanced inorder toset in motion the same quantity oflabor -power during the year .the rate ofaisas5,000 sto500 v,or1,000 %; that ofbisas5,000 sto5,000 v,or100 %.but 500 visto 5,000 vas1to10,oras100 %to1,000 %. the difference isdue tothe difference ofthe periods of turnover ,that istosay,tothe period inwhich the substi- tute for the value ofacertain variable capital employed for acertain time can renew itsfunction ofcapital ,can serve as anew capital .inthe case ofboth band a,the same repro- duction ofvalue ofthe variable capital employed during the same periods take place .there isalso the same increment ofsurplus -value during the same periods .but inthe case ofb,while there isevery 5weeks areproduction ofthe value of500 p.st.and asurplus -value of500 p.st.,these",
        "the turn -over ofthe variable capital .359 values donot yet make anew capital ,because they are not inthe form ofmoney .inthe case ofa,onthe other hand , the value ofthe old capital isnot only reproduced by a new value ,but itisrehabilitated initsmoney -form ,sothat itmay atonce assume the functions ofanew capital . so far asthe mere production ofsurplus -value iscon- cerned ,the rapid orslow transformation ofthe substitute for the value advanced into money ,and thus into the form inwhich the variable capital isadvanced ,isan insignificant circumstance .this production depends on the magnitude ofthe employed variable capital and the intensity ofex- ploitation .but the more orless rapid transformation re- ferred todoes modify the magnitude ofthe money -capital which must beadvanced inorder toset adefinite quantity oflabor -power in motion during the year ,and therefore itdetermines the annual rate ofsurplus -value . iii.the turn -over of the variable capital ,consid- ered from the point of view of society . let uslook for amoment atthis matter from the point ofview ofsociety .let the wages ofone laborer be1p.st. per week ,the working day 10 hours .both aand bem- ploy 100 laborers per week (100 p.st.for 100 laborers per week ,or500 p.st.for 5weeks ,or5,000 p.st.for 50weeks ), and each one ofthem works 60 hours per week of6days . then 100 laborers work 6,000 hours per week ,and 300,000 hours in50 weeks .this labor -power isengaged by aand b,and cannot be expended by society for anything else . to this extent ,the matter isthe same socially that itisin the case ofaand b. furthermore :both aand bpay their respective 100 laborers 5,000 p.st.inwages per year (or together for 200 laborers 10,000 p.st.)and withdraw from society means of subsistence tothat amount .so far,the matter issocially likewise the same asinthe case ofaand b. since the laborers ineither case are paid by the week , they weekly withdraw their means ofsubsistence from so- ciety and throw ineither case aweekly equivalent inmoney into the circulation .but here the difference begins .",
        "360capital . first .the money ,which the laborer ofathrows into the circulation ,isnot only ,asitisfor the laborer ofb,the money -form for the value ofthe labor -power (an actual payment for labor already performed );itisalso ,beginning with the second period ofturn -over since the opening of the business ,the money form ofthe value ofhis own pro- duct (price oflabor -power plus surplus -value )created dur- ing the first period ofturn -over ,bywhich his labor during the second period ofturn -over ispaid .this isnot the case with the laborer ofb. the money ishere indeed a medium ofpayment for labor already performed by the laborer ,but this labor isnot paid for with its own product turned into money (the money -form ofthe value produced by itself ).this cannot bedone until the beginning ofthe second year ,when the laborer ofbispaid with the money- form ofthe value ofhis product ofthe preceding year . the shorter the period ofturn -over ofcapital -the shorter , therefore ,the intervals inwhich the periods ofreproduction are renewed -the quicker isthe variable portion ofthe capital ,advanced by the capitalist inthe form ofmoney , transformed into the money -form ofthe product (including surplus -value )created by the laborer inplace ofthe varia- ble capital ;the shorter isthe time for which the capitalist must advance money out ofhis own funds ,the smaller is the capital advanced by him compared tothe given scale ofproduction ;and the greater isthe proportionate quantity ofsurplus -value which he realizes with agiven rate ofsur- plus -value during the year ,because he can buy the laborer so much more frequently with the money -form of the product created by the labor ofthat laborer and set his labor into motion . given the scale ofproduction ,the absolute magnitude of the advanced variable capital (and ofthe circulating capi- tal ingeneral )decreases inproportion asthe period ofturn- over isshortened ,and sodoes the annual rate ofsurplus- value increase .given the magnitude ofthe advanced cap- ital ,and the rate ofsurplus -value ,the scale ofproduction and the absolute quantity ofsurplus -value created in one period ofturnover increases simultaneously with the rise",
        "the turn -over ofthe variable capital . 361 inthe annual rate ofsurplus -value due tothe contraction ofthe periods ofreproduction .itfollows ingeneral from the preceding analysis that ,according tothe different length ofthe periods ofturn -over ,money -capital ofconsiderably different quantity must beadvanced ,inorder toset inmotion the same quantity of productive circulating capital and the same quantity oflabor -power with the same intensity ofexploitation . second .itisdue tothe first difference ,that the laborers ofband apay for the means ofsubsistence which they buy with the variable capital that has been transformed into amedium ofcirculation intheir hands .for instance ,they do not only withdraw wheat from the market ,but also leave inits place an equivalent inmoney .but since the money ,with which the laborer ofbpays for his means of subsistence and draws them from the market isnot the money -form ofthe value ofaproduct which hehas thrown on the market during the year ,asitisinthe case ofthe laborer ofa,he supplies the seller ofhis means ofsub- sistence only with money ,but not with products -be they materials of production or means of subsistence -which this seller might buy with the money received from the laborer ,as he may in the case of the laborer of a. the market istherefore stripped of labor -power , means ofsubsistence for this labor -power ,fixed capital ,in the form ofinstruments ofproduction used by b,and ma- terials ofproduction ,and an equivalent inmoney isthrown on the market intheir place ,but no product isthrown on the market during the year by which the material elements ofproductive capital withdrawn from itmight bereplaced . ifwe assumed that society were not capitalistic ,but com- munistic ,then the money -capital would be entirely elim- inated ,and with itthe disguises which itcarries into the transactions .the question isthen simply reduced tothe problem that society must calculate beforehand how much labor ,means ofproduction ,and means ofsubsistence itcan utilize without injury for such lines ofactivity as,for in- stance ,the building ofrailroads ,which do not furnish any means ofproduction orsubsistence ,orany useful thing ,for",
        "362capital . along time ,ayear ormore ,while they require labor ,and means ofproduction and subsistence out ofthe annual so- cial production .but incapitalist society ,where social in- telligence does not act until after the fact ,great disturbances will and must occur under these circumstances .on one hand there isapressure onthe money -market ,while onthe other an easy money -market creates just such enterprises inmass ,that bring about the very circumstances by which apressure islater on exerted on the market .apressure is exerted on the money -market ,since an advance ofmoney- capital for long terms isalways required on alarge scale . and this issoquite apart from the fact that industrials and merchants invest the money -capital needed for the carrying on oftheir business in railroad speculation ,etc. ,and re- imburse themselves by borrowing in the money -market . on the other hand ,there isapressure on the available productive capital ofsociety .since elements ofproductive capital are continually withdrawn from the market and only an equivalent inmoney isthrown on the market intheir place ,the demand ofcash payers for products increases with- out supplying any elements for purchase .hence arise in prices ,ofmeans ofproduction and ofsubsistence .to make matters worse ,swindling operations are always carried on atthis time ,involving atransfer ofgreat capitals .aband of speculators ,contractors ,engineers ,lawyers ,etc. ,enrich themselves .they create astrong demand for consumption on the market ,wages rising atthe same time .so far as means ofsubsistence are concerned ,itistrue that agriculture isthus stimulated .but asthese means ofsubsistence can- not be suddenly increased within the year ,their importa- tion increases ,asdoes the importation ofexotic food stuffs , such ascoffee ,sugar ,wine ,and articles ofluxury .hence we then have asurplus importation and speculation inthis line ofimports .furthermore ,inthose lines ofbusiness in which production may berapidly increased ,such asmanu- facture proper ,mining ,etc. ,the rise inprices causes asud- den expansion ,which issoon followed by acollapse .the same effect isproduced on the labor -market ,where large numbers ofthe latent relative over -population ,and even of the employed laborers ,are attracted toward the new lines",
        "the turn -over ofthe variable capital . 368 ofbusiness .in general ,such enterprises on alarge scale asrailroad building withdraw acertain quantity oflabor- powers from the labor -market ,which can come only from such lines ofbusiness asagriculture ,etc. ,where strong men are needed .this still continues even after the new enter- prises have become established lines ofbusiness and the wandering class oflaborers needed for them has already been formed .acase inpoint isthe temporary increase in the scale ofbusiness ofrailroads beyond the normal .a portion ofthe reserve army oflaborers who kept wages down isabsorbed .wages rise everywhere ,even inthe hitherto engaged parts ofthe labor -market .this lasts until the in- evitable crash throws the reserve army oflabor out ofwork , and wages are once more depressed totheir minimum orbe- low it.27 to the extent that the greater orsmaller length ofthe period ofturn -over depends on the working period ,strictly socalled ,that istosay onthe period which isrequired to get the product ready for the market ,itrests on the exist ing material conditions of production ofthe various in- vestments ofcapital .in agriculture ,they partake more of the character ofnatural conditions ofproduction ,inmanu- facture and the greater part ofthe extractive industry they vary with the social development ofthe process ofproduction itself . furthermore ,tothe extent that the length ofthe working period isconditioned onthe size ofthe orders (the quanti- tative volume inwhich the product isgenerally thrown upon the market ),this point depends on conventions .but con- 27inthe manuscript ,the following note ishere inserted for future elaboration :\"contradiction inthe capitalist mode ofproduction ;the laborers asbuyers ofcommodities are important for the market .but assellers oftheir own commodity -labor -power -capitalist society tends todepress them tothe lowest price .further contradiction :the epochs inwhich capitalist production exerts allitsforces are always periods of overproduction ,because the forces ofproduction can never beutilized tosuch adegree that more value isnot only produced but also realized ; but the sale ofcommodities ,the realization onthe commodity -capital , and thus onsurplus -value ,islimited ,not bythe consumptive demand ofsociety ingeneral ,but bythe consumptive demand ofasociety in which the majority are poor and must always remain poor .however , this belongs into the next part.\"",
        "864capital . vention itself depends for its material basis on the scale of production ,and itisaccidental only when considered in- dividually . finally ,sofar asthe length ofthe period ofturn -over depends on that ofthe period ofcirculation ,the latter is, indeed ,conditioned onthe incessant change ofmarket com- binations ,the greater orsmaller ease ofselling ,and the resulting necessity tothrow apart ofthe product tomore orless remote markets .apart from the volume ofthe gen- eral demand ,the movement ofprices plays here one ofthe main roles ,since sales are intentionally restricted when prices are falling ,while production proceeds ;vice versa , production and sale keep step ,when prices are rising ,and sales may even bemade inadvance .but we must consider the actual distance ofthe place of production from the market asthe real material basis . for instance ,english cotton goods oryarn are sold to india .the export merchant may pay the english cotton manufacturer .(the export merchant does sowillingly only when the money -market stands well .ifthe manufacturer replaces his money -capital by operating credit on his own part ,matters are already inabad state ).the exporter sells his cotton goods later inthe indian market ,whence his advanced capital isreturned tohim .until the time ofthis return the case isidentical with the one in which the length ofthe working period necessitates the advance ofnew money -capital ,inorder tomaintain the process ofproduc- tion on acertain scale .the money -capital with which the manufacturer pays his laborers and renews the other ele- ments ofhis circulating capital ,isnot the money -form of the yarn produced by him .this cannot bethe case until the value ofthis yarn has returned toengland inthe form ofmoney orproducts .itisadditional capital asbefore . the difference isonly that itisadvanced by the merchant instead of the manufacturer ,and that it reaches the merchant by means ofmanipulations ofcredit .further- more ,before this money isthrown onthe market ,orsimul- taneously with it,no additional product has been thrown on the english market ,tobebought with this money and",
        "the turn -over ofthe variable capital . 385 tobe consumed productively orindividually .ifthis con- dition occurs for along period onalarge scale ,itmust cause the same effects asaprolongation ofthe working period , previously mentioned . now itmay be that the yarn issold even inindia on credit .with this credit ,products are bough in india and sent back to england ,ordrafts are remitted tothis amount .ifthis condition isprolonged ,there isapressure on the indian money -market ,and its reaction may cause acrisis inengland .this crisis ,even ifcombined with an export ofprecious metals toindia ,causes anew crisis in that country on account ofthe bankruptcy ofenglish busi- ness houses and their indian branch houses ,who had re- ceived credit from the indian banks .thus acrisis occurs simultaneously on the market which iscredited with the balance oftrade and onthe one which ischarged with it. this phenomenon may bestill more complicated .take it, for instance that england has sent silver ingots toindia , but the english creditors ofindia now collect their debts inthat country ,and india will soon after have reshipped its silver ingots toengland . itispossible that the export trade toindia and the im- port trade from india might approximately balance one another ,although the imports (with the exception ofpe- culiar circumstances ,such asarise inthe price ofcotton ), will bedetermined astotheir volume and stimulated bythe export trade .the balance oftrade between england and india may seem tobe squared ,or may show but slight fluctuations oneither side .but assoon asthe crisis appears in england itisseen that unsold cotton goods are stored inindia (and have not been transformed from commodity- capital into money -capital -an overproduction tothis ex- tent ),and that ,on the other hand ,there are inengland not only unsold supplies ofindian goods ,but that acon- siderable portion ofthe sold and consumed goods isnot yet paid for.hence ,that which appears asacrisis onthe money -market ,isinreality an expression ofabnormal con- ditions inthe process ofproduction and reproduction . third .so far asthe employed circulating capital (con- stant and variable )isconcerned ,the length ofthe period",
        "366 capital . ofturn -over ,tothe extent that itisdue tothe working pe- riod ,makes this difference :in the case of several turn- overs during one year ,anelement ofthe variable orconstant circulating capital may besupplied by itsown product ,for instance inthe production ofcoal ,the tailoring business , etc. otherwise ,this cannot take place ,atleast not within the same year .",
        "the circulation ofsurplus -value .367 chapter xvii . the circulation ofsurplus -value . we have just seen that adifference inthe period ofturn- over causes adifference inthe annual rate ofsurplus -value , even ifthe quantity ofthe annually produced surplus- value isthe same . but there isfurthermore necessarily adifference inthe capitalization ofsurplus -value ,the accumulation ,and tothat extent also inthe quantity ofsurplus -value produced during the year ,while the rate ofsurplus -value remains the same . to begin with ,we remark that capital a(inthe illustra- tion ofthe preceding chapter )has acurrent periodical rev- enue ,sothat with the exception ofthe period ofturn -over beginning the business ,itpays for its own consumption within the year out ofitsproduction ofsurplus -value ,and need not cover itby advances out ofitsown funds .but b has todo this .while he produces asmuch surplus -value inthe same time asa,he does not realize on itand cannot consume iteither productively orindividually .so far as individual consumption isconcerned ,the surplus -value is discounted in advance .funds for that purpose must be advanced . one portion ofthe productive capital ,which isdifficult toclassify ,namely the additional capital required for the re- pair and maintenance ofthe fixed capital ,isnow likewise seen inanew light . in the case ofa,this portion ofcapital -infull orfor the greater part -isnot advanced at the beginning ofpro- duction .itneed not beavailable ,oreven inexistence .it comes out ofthe business itself by adirect transformation ofsurplus -value into capital by its direct employment as capital .one portion ofthe surplus -value which isnot only periodically produced but also realized may cover the ex- penditures required for repairs ,etc. aportion ofthe capi- tal needed for carrying onthe business on itsoriginal scale",
        "868capital . isthus produced inthe course ofbusiness by the business itself by means of capitalization ofaportion ofsurplus- value .this isimpossible for the capitalist b. this portion ofcapital must inhis case form apart ofthe capital origin- ally advanced .in both cases this portion will figure in the books ofthe capitalists asan advanced capital ,which itreally is,since according toour assumption itisapart ofthe productive capital required for maintaining the busi- ness on acertain scale .but itmakes agreat difference out ofwhich funds itisadvanced .inthe case ofb,itis actually apart of the capital tobe originally advanced orheld available .on the other hand ,inthe case ofa,it isapart ofthe surplus -value ,ifused ascapital .this last case shows that not only the accumulated capital ,but also aportion ofthe orginally advanced capital ,may becapital- ized surplus -value . as soon asthe development ofcredit interferes ,the rela- tion between originally advanced capital and capitalized surplus -value isstill more complicated .for instance ,abor- rows aportion ofthe productive capital ,with which hestarts his business and continues itduring the year ,from banker c,not having sufficient capital ofhis own for this purpose . banker clends him the required sum ,which consists only of surplus -value deposited with the banker by capitalists d,e,f,etc. from the standpoint ofa,there isasyet no question ofany accumulated surplus -value .but from the point ofview ofd,e,f,etc.,aismerely their agent capi- talizing surplus -value appropriated by them . we have seen involume i,chapter xxiv ,that accumu- lation ,the conversion ofsurplus -value into capital ,issub- stantially aprocess ofreproduction on an enlarged scale , no matter whether this expansion isexpressed extensively inthe form ofan addition ofnew factories tothe old ones , or intensively by the expansion ofthe existing scale of production . the expansion ofthe scale of production may proceed in small portions ,apart ofthe surplus -value being used for improvements which either increase simply the pro- ductive power ofthe labor employed ,or ofthe labor employed ,orpermit atthe same time ofitsmore intensive exploitation .or,inplaces where",
        "the circulation ofsurplus -value .369 the working day isnot legally restricted ,an additional ex- penditure ofcirculating capital (inmaterials ofproduction and wages )suffices to expand production without an ex- tension ofthe fixed capital ,whose daily time ofemployment isthus merely lengthened ,while its period ofturn -over is correspondingly abbreviated .or,capitalized surplus -value may ,under favorable market combinations ,permit ofspec- ulation inraw materials ,anoperation for which the capital originally advanced would not have been sufficient ,etc. however ,itisevident that in cases ,where the greater number ofthe periods ofturn -over carries with itamore frequent realization ofsurplus -value within the year ,there will beperiods ,inwhich there can be neither aprolonga- tion ofthe working day ,nor an introduction ofimprove- ments indetails ,while ,onthe other hand ,there isonly a limited scope inwhich itispossible toexpand the entire business on aproportional scale ,partly ,by areorganization ofthe entire plan ofbusiness ,buildings ,etc. ,partly by an expansion ofthe funds for labor ,asinagriculture ,and a volume ofadditional capital isrequired ,such ascan besup- plied only byseveral years ofaccumulation ofsurplus -value . along with the actual accumulation ,orconversion ofsur- plus -value into productive capital ,(and acorresponding reproduction onanenlarged scale ),there is,then ,anaccum- ulation ofmoney ,ahoarding ofaportion ofthe surplus- value inthe form oflatent money -capital ,which isnot in- tended for service as additional productive capital until later . this isthe aspect ofthe matter from the point ofview ofthe individual capitalist .but simultaneously with the development ofcapitalist production ,the credit system also develops .the money -capital ,which the capitalist cannot asyet employ inhis own business ,isemployed by others , who pay him an interest for its use.itserves for him as money -capital inits specific meaning ,that istosay asa kind ofcapital distinguished from productive .but itserves ascapital in another's hands .itisplain ,that ,with the more frequent realization ofsurplus -value and the rising scale onwhich itisproduced ,there must also beanincrease inthe proportion ofnew money -capital ,ormoney inthe",
        "370capital . form ofcapital ,thrown upon the money -market and with- drawn from itfor the purpose ofexpanding production . the simplest form ,inwhich the additional latent money- capital may berepresented ,isthat ofahoard .itmay be that this hoard isadditional money orsilver ,secured di- rectly orindirectly in exchange with countries producing precious metals .and only inthis manner does the hoarded money inacountry grow absolutely .on the other hand , itmay be and issointhe majority ofcases that this hoard isnothing but money withdrawn from inland cir- culation and has assumed the form ofahoard inthe hands of individual capitalists .itisfurthermore possible that this latent money -capital consists only oftokens ofvalue -we ignore credit money atthis point -orofmere claims . (titles )onthird persons conferred by legal documents .in all such cases ,whatever may bethe form ofthis additional money -capital ,itrepresents ,sofar asitisprospective capi- tal,nothing but additional and reserved legal titles ofcapi- talists on future additional products ofsociety . \"the mass of the actually accumulated wealth ,con- sidered astomagnitude ,...isabsolutely insignificant com- pared tothe productive forces ofsociety towhich itbelongs , whatever may beitsstage ofcivilization ;oreven compared tothe actual consumption ofthis same society inthe course ofbut afew years ;soinsignificant ,that the attention ofthe legislators and political economists should be mainly di- rected tothe forces ofproduction and their free develop- ment inthe future ,not,asheretofore ,tothe mere accumu- lated wealth which strikes the eye.by far the greater part ofthe so-called accumulated wealth isonly nominal and does not consist of actual objects ,such as ships ,houses , cotton goods ,real estate improvements ,but ofmere legal titles ,claims on the future annual productive forces ofso- ciety titles generated and perpetuated by the devices orin- stitutions ofinsecurity ...the use ofsuch articles (accumu- lations ofphysical things ,oractual wealth )asamere means ofappropriating for their owners awealth which the future productive forces ofsociety are asyet tocreate ,this use would begradually withdrawn from them without any force",
        "the circulation ofsurplus -value .371 by the natural laws ofdistribution ;with the assistance of co-operative labor ,itwould bewithdrawn from them within afew years .\"(william thompson ,inquiry into the prin- ciples ofthe distribution ofwealth ,london ,1850 ,page this book appeared for the first time in 1827. ) 453 . \"itislittle understood ,nor even suspected by most people , what an utterly insignificant portion ,whether itbe in quantity oreffectiveness ,the actual accumulations ofsociety constitute ofthe human productive forces ,yea ,even ofthe ordinary consumption ofasingle generation ofmen during afew years .the reason for this isobvious ,but the effect isvery injurious .the wealth which isconsumed annually , disappears asitisbeing used ;itstands before the eye only for amoment ,and makes animpression only while itisen- joyed orconsumed .but the slowly consumable portion of wealth ,furniture ,machines ,buildings ,from our childhood toour age they are standing before our eyes ,lasting monu- ments ofhuman exertion .by virtue ofthe ownership of this fixed ,lasting ,slowly consumed portion ofpublic wealth -of the soil and the raw materials onwhich ,the instruments with which ,work isdone ,the houses which give shelter while the work isbeing done by virtue ofthis ownership the owners ofthese objects control for their own advantage the annual productive forces ofallreally productive laborers ofsociety ,insignificant asthose objects may beinpropor- tion tothe ever recurring products ofthis labor .the popula- tion ofgreat britain and ireland is20millions ;the average consumption ofevery man ,woman ,and child isabout 20 p.st.,making atotal wealth of 400 million p.st.,the product oflabor annually consumed .the total amount of the accumulated capital ofthose countries does not exceed , according toestimates ,1,200 million p.st.,orthrice the an- nual product oflabor ;ifequally divided ,60 p.st.ofcapi- tal per capita .we have here todeal more with the propor- tion than with the more orless inaccurate absolute amounts ofthese estimated sums .the interest on this total capital would suffice tomaintain the total population initspresent style ofliving for about two months ofone year ,and the en- tire accumulated capital (ifbuyers could be found for it)",
        "372capital . .would maintain them without labor for awhole three years ! at the end ofwhich time ,without houses ,clothing ,and food ,they would have tostarve ,orbecome the slaves ofthose who have maintained them during these three years .as three years are tothe life time ofone healthy generation , say to40years ,sothe magnitude and importance ofthe ac- tual wealth ,the accumulated capital of even the richest country ,istoitsproductive forces ,tothe productive forces ofasingle human generation ;not towhat they might really produce under intelligent institutions ofequal security ,and especially with co-operative labor ,but towhat they are ac- tually producing under the imperfect and discouraging makeshifts ofinsecurity and in order tomaintain this apparently tremendous mass of existing capital ,or rather the control and monopoly ofthe annual product of labor in its present condition of compulsory division this entire machinery the vices ,the crimes ,the sufferings ofin- security ,are tobeperpetuated .nothing can beaccumulated , unless the necessary wants are first satisfied ,and the great current ofhuman desires flows after enjoyment ;hence the comparatively insignificant amount ofactual wealth ofso- ciety atany given moment .itisan eternal circulation of production and consumption .inthis immense mass ofan- nual production and consumption ,the handful of actual accumulation would hardly bemissed ,and yet attention has been mainly directed ,not tothat mass ofproductive forces , but tothis handful ofaccumulation .but this handful has been appropriated byafew ,and transformed into aninstru- ment for the appropriation ofthe ever recurring annual products ofthe labor ofthe great masses .hence the vital importance ofsuch an instrument for these few .... about one -third ofthe annual national product isnow taken from the producers under the name ofpublic taxes ,and un- productively consumed by people that do not give any equivalent for it,that istosay ,none that isaccepted as such by the producer ....the eye ofthe crowd looks with astonishment upon the accumulated masses ,especially when they are concentrated inthe hands ofafew .but the an- nually produced masses ,like the eternal and innumerable",
        "the circulation ofsurplus -value . 373 waves afamighty stream ,roll by and are lost inthe for- gotten ocean of consumption .and yet this eternal con- sumption determines not alone all enjoyments ,but the very existence ofthe human race .the quantity and distribution ofthis annual product should above all bemade the object of study .the actual accumulation isofsecondary im- portance ,and receives even this importance almost exclu- sively by its influence on the distribution ofthe annual product ...the actual accumulation and distribution ishere (inthompson's work )always considered inreference and subordination tothe productive forces .in almost all other systems ,the productive forces have been considered with reference and insubordination toaccumulation and tothe perpetuation ofexisting mode ofdistribution .compared with the conservation ofthis existing mode ofdistribution ,the ever recurring suffering orwelfare ofthe entire human race is not considered worthy ofaglance .to perpetuate the re- sults offorce ,offraud ,and ofaccident ,this has been called security ,and for conservation ofthis lying security ,all the forces ofproduction ofthe human race have been merci- lessly sacrificed .\"(ibidem ,pages ,440-443 .) for the reproduction ,only two normal cases are possible , apart from disturbances ,which interfere with reproduction even on agiven scale . there iseither reproduction onasimple scale . or,there isacapitalization ofasurplus -value ,accumu- lation . i.simple reproduction . in the case of simple reproduction ,the surplus -value produced orrealized annually ,orby several turn -overs dur- ing the year ,isconsumed individually ,that istosay un- productively ,by itsowner ,the capitalist . the fact that the value ofthe product consists inpart ofsurplus -value ,inpart ofthat portion ofvalue which is formed by the variable capital reproduced through itplus the constant capital consumed byit,does not alter anything ,",
        "374capital . either inthe quantity ,orinthe value ofthe total product , which continually passes into circulation and isjust as continually withdrawn from it,inorder topass into produc- tive orindividual consumption ,that istosay ,toserve as means ofproduction orconsumption .making exception of the constant capital ,only the distribution ofthe annual product between the laborers and the capitalists isthereby affected . even ifsimple reproduction isassumed ,aportion ofthe surplus -value must ,therefore ,always exist inthe form of money ,not ofproducts ,because itcould otherwise not be converted for purposes ofconsumption from money into products .this conversion ofthe surplus -value from its original commodity -form into money must be further an- alyzed atthis place .in order tosimplify the matter ,we assume the most elementary form ofthe problem ,namely the exclusive circulation ofmetal coin ,ofmoney which is areal equivalent . according tothe laws ofthe simple circulation ofcom- modities (developed in volume i,chapter iii),the mass ofthe metal coin existing inacountry must not only be sufficient for the circulation ofthe commodities ,but must also suffice for the fluctuations ofthe circulation ofmoney , which arise partly from fluctuations inthe velocity ofthe circulation ,partly from achange inthe prices ofcommodi- ties ,partly from the various and varying proportions in which the money serves asamedium ofpayment orasthe typical medium ofcirculation .the proportion inwhich the existing quantity of money isdivided into ahoard and money in circulation ,varies continually ,but the quantity ofmoney isalways equal tothe sum ofthe money hoarded and the money circulating .this quantity ofmoney (quant- ity ofprecious metal )isagradually accumulated hoard of society .to the extent that aportion ofthis hoard iscon- sumed by wear ,itmust bereplaced annually ,the same as any other product .this takes place inreality by adirect orindirect exchange ofapart ofthe annual product ofa country for the product ofcountries producing gold and silver .however ,this international character ofthe trans-",
        "the circulation ofsurplus -value .375 in order toreduce the action disguises its simple course . problem to its simplest and most transparent expression , itmust be assumed that the production ofgold and silver takes place inthe same country inwhich the other products are created ,sothat the production ofgold and silver con- stitutes apart ofthe total social production within every country . apart from the gold and silver produced for articles of luxury ,the medium oftheir annual production must be equal tothe wear ofmetal coin annually occasioned bythe circulation of money .furthermore ,ifthe value ofthe annually produced and circulating quantity ofcommodities increases ,the annual production ofgold and silver must likewise increase ,unless the growth ofthe value ofthe cir- culating commodities and the quantity ofmoney required for their circulation (and the corresponding formation ofa hoard )isaccompanied by agreater velocity inthe circu- lation ofmoney and amore extensive function ofmoney as amedium ofpayment ,that istosay,by agreater mutual balancing ofpurchases and sales without the intervention ofactual money . aportion of the social labor power and aportion of the social means ofproduction must ,therefore ,beexpended annually inthe production ofgold and silver . the capitalists ,who are engaged inthe production of gold and silver ,and who ,according toour assumption of simple reproduction ,carry ontheir production only within . the limits ofthe annual average wear and the resulting average consumption ofgold and silver ,throw their surplus- value ,which they consume annually ,according toour as- sumption ,without capitalizing any ofit,directly into circu- lation inthe form ofmoney ,which isthe natural form for them ,not,asinthe case ofthe other capitalists ,the con- verted form oftheir product . furthermore ,asconcerns wages ,the money form inwhich the variable capital isadvanced ,itisnot replaced inthis case bythe sale ofthe product ,by aconversion into money , but byaproduct whose natural form isfrom the outset that ofmoney .",
        "376capital . finally ,the same applies also tothat portion of the product inprecious metals which isequal tothe value ofthe periodically consumed constant capital ,both the constant circulating and the constant fixed capital consumed during the year . let usstudy the rotation ,orthe turn -over ,ofthe capital invested inthe production ofprecious metals first inthe form ofm-c-p-m'.sofar asthe cinm-cdoes not only consist of labor -power and materials of production , but also offixed capital ,only apart ofwhose value iscon- sumed by p,itisevident that the product ,m',isasum of money equal tothe variable capital invested inwages plus the circulating constant capital invested in materials of production plus aportion ofthe value ofthe fixed constant capital plus asurplus -value .ifthe sum were smaller ,the general value ofgold remaining the same ,then the mine would beunproductive ,or,ifthis isgenerally the case ,the value ofgold ,compared with the value ofcommodities that remains unchanged ,would rise ;that istosay,the prices of commodities would fall ,sothat henceforth the amount of money invested inm-cwould besmaller . ifwe consider atfirst only the circulating portion of capital advanced inm,the starting point ofm--c...p...m', we find that itisacertain sum ofmoney advanced and thrown into circulation for the payment oflabor -power and the purchase ofmaterials ofproduction .but this sum is not withdrawn from circulation ,by the rotation ofthis capital ,in order tobethrown into itanew .the product ismoney even initsnatural form ,there isnoneed oftrans- forming itinto money by means ofexchange ,by aprocess ofcirculation .itpasses from the process ofproduction into the process ofcirculation ,not inthe form ofcommodity- capital which has tobe converted into money -capital ,but asamoney -capital which istobereconverted into productive capital ,which istobe fresh labor -power and materials of production .the money -form ofthe circulating capital con- sumed inlabor -power and materials ofproduction isreplaced , not bythe sale ofthe product ,but bythe natural form ofthe product itself ;not by once more withdrawing itsvalue from",
        "the circulation ofsurplus -value . 377 circulation inthe form ofmoney ,but by additional ,newly produced money . let usassume that this circulating capital is500 p.st., the period ofturn -over is5weeks ,the working period 4weeks ,the period ofcirculation only 1week .from the outset ,money must bepartly advanced for aproductive sup- ply,partly available ,for 5weeks ,inorder tobe paid out gradually for wages .at the beginning ofthe 6th week , 400 p.st.have flown back and 100 p.st.have been released . this iscontinually repeated .here ,asin previous cases , 100 p.st.will always find themselves released during acer- tain time ofthe turn -over .but they consist ofadditional , newly produced ,money ,the same asthe other 400 p.st. we have inthis case 10turn -overs per year and the annual product is5,000 p.st.ingold .(the period ofcirculation does not arise ,inthis case ,from the time required for the conversion of commodities into money ,but for the con- version ofmoney into the elements ofproduction .) inthe case ofevery other capital of500 p.st.,turned over under the same conditions ,itisthe ever renewed money- form which isexchanged for the produced commodity capital and thrown into the circulation every 4weeks and which resumes this form inevery new interval by sale , that istosay,byaperiodical withdrawal ofthe quantity of money which entered originally into the process .but here anew additional quantity ofmoney tothe amount of500 p.st.isthrown into circulation bythe process ofproduction itself ,in order towithdraw from itcontinually materials ofproduction and labor -power .this money thrown into circulation isnot withdrawn from itby the rotation of this capital ,but rather continually increased by newly pro- duced quantities ofgold . let us look atthe variable portion ofthis circulating capital ,and assume that itis,asbefore ,100 p.st.then these 100 p.st.would besufficient inthe ordinary produc- tion ofcommodities ,with 10turn -overs ,topay continually for the required labor -power .here ,inthe production of money ,the same amount islikewise sufficient .but the 100 p.st.ofthe reflux ,with which the labor -power ispaid every 5",
        "878capital . weeks are not aconverted form ofitsproduct ,but aportion ofthis ever renewed product itself .the producer ofgold pays his laborers directly with aportion ofthe gold pro- duced bythem .thus the 1,000 p.st.invested annually in labor -power and thrown bythe laborers into the circulation do not return by the way ofthis circulation totheir start- ing point . furthermore ,sofar asthe fixed capital isconcerned ,it requires the investment of alarge money -capital atthe opening ofthe business ,and this capital isthus thrown into the circulation .like all fixed capital itflows back only piece by piece inthe course ofyears .but itflows back asan immediate portion ofthe product ,ofthe gold ,not by the sale ofthe product and its consequent monetization . in other words ,itreceives gradually its money -form ,not by awithdrawal ofmoney from circulation ,but by an ac- cumulation ofacorresponding portion ofthe product .the money -capital soreplaced isnot aquantity ofmoney grad- ually withdrawn from circulation for acompensation ofthe sum originally thrown into itfor fixed capital .itisan additional sum ofnew money . finally ,asconcerns the surplus -value ,itislikewise equal toacertain portion ofthe new product ofgold ,which is thrown into circulation in every period of turn -over in order tobe unproductively consumed according toour as- sumption ,inmeans ofsubsistence and articles ofluxury . but according toour assumption ,the entire annual pro- duction ofgold -which continually withdraws labor -power and materials ofproduction ,but no money ,from the mar- ket,while adding fresh quantities ofmoney toit-replaces only the money worn out during the year ,keeps only the quantity ofsocial money complete which exists continually , although itconsists invarying portions ofthe two forms , hoarded money and money in circulation . according tothe law ofthe circulation ofcommodities , the quantity ofmoney must beequal tothe amount ofmoney required for circulation plus acertain amount held inthe form ofahoard ,which increases ordecreases according to the contraction orexpansion ofcirculation and serves es-",
        "the circulation ofsurplus -value .879 pecially for the formation ofthe reserve funds required as means ofpayment .that which must bepaid ingold -to the extent that there isno balancing ofaccounts -isthe value ofthe commodities .the fact that aportion ofthese commodities represents asurplus value ,that istosay,did not cost the seller anything ,does not alter the matter inany way .take itthat the producers are all independent own- ers oftheir means ofproduction ,sothat circulation takes place between the immediate producers themselves .apart from the constant portion of their capital ,their annual surplus -product might then bedivided into two parts ,anal- ogous with capitalist conditions :part a,replacing the nec- essary means ofsubsistence ,and part b,consumed partly for articles ofluxury ,partly for an expansion ofproduction . part athen plays the role ofthe variable capital ,part b that ofthe surplus -value .but this division would remain without influence on the magnitude ofthe sum ofmoney required for the circulation ofthe total product .other circumstances remaining equal ,the value ofthe circulating mass ofcommodities would bethe same ,and thus also the amount ofmoney required for itscirculation .the capital- ists would also have tokeep on hand the same money re- serve ,the division ofthe periods ofturn -over remaining the same that istosay,the same portion oftheir capital would have tobe held inthe form ofmoney ,because their pro- duction ,according toour assumption ,would be aproduc- tion ofcommodities ,the same asbefore .hence the fact that aportion ofthe value ofthe commodities consists of surplus -value ,would change absolutely nothing in the quantity ofthe money required for the running ofthe business . an opponent of tooke ,who clings to the formula m-c-m',asks him how the capitalist manages toalways withdraw more money from circulation than hethrew into it.mark well !itisnot here aquestion ofthe formation ofsurplus -value .this ,the only secret ,isamatter ofcourse from the capitalist standpoint .the quantity ofvalue em- ployed would not be capital ,ifitdid not secure an incre- ment ofsurplus -value .but asitiscapital ,according toour",
        "380 capital . assumption ,there must be surplus -value asamatter of course . the question ,then ,isnot-where does the surplus -value come from ? itisrather :whence comes the money for which itisexchanged ? but inbourgeois political economy ,the existence ofsur- plus -value isself -understood .itisnot only assumed ,but also connected with the assumption that aportion ofthe commodities thrown into circulation isasurplus product , which was not thrown into circulation together with the cap- ital ofthe capitalist .inother words ,itisassumed by bour- geois political economists ,that the capitalist throws asur- plus over and above his capital into the circulation with his product ,and that he recovers this surplus from it. the commodity -capital ,which the capitalist throws into the circulation ,has agreater value than the productive capi- tal which hewithdrew from the circulation inthe form of labor -power and means ofproduction (itisneither explained nor understood bythe bourgeois economists where this great- ervalue comes from ,but itisconsidered by them asan ac- complished fact ).on the basis ofthis assumption itis evident by what means not only the capitalist a,but also b,c,d,etc. ,manage toalways withdraw more value from the circulation by means ofthe exchange oftheir com- modities than the value ofthe capital originally and re- peatedly advanced bythem .a,b,c,d,continually throw agreater value into the circulation inthe form ofcommodi- ty-capital ,than they withdraw from itinthe form ofpro- ductive capital -this operation isasmanysided asthe various independent capitals inaction .hence they have continually todivide among themselves asum ofvalues (that istosay, every one withdaws from circulation aproductive capital ) equal tothe sum ofvalues oftheir respective productive capitals ;and they furthermore divide among themselves just ascontinually asum ofvalues which they allthrow into circulation inthe form of commodities ,representing the excess ofthe commodity -capital over itselements ofproduc tion . but the commodity -capital must be monetized before its",
        "the circulation ofsurplus -value . 381 conversion into productive capital ,orbefore the surplus- value contained initcan bespent .where does the money for this purpose come from ?this question seems difficult atthe first glance ,and neither tooke nor any one else has answered itsofar. the circulating capital of500 p.st.advanced inthe form ofmoney -capital ,whatever may beits period ofturn -over , may now stand for the total capital ofsociety ,that isto say,ofthe capitalist class .let the surplus -value be 100 p. st.how can the entire capitalist class manage todraw con- tinually 600 p.st.out ofthe circulation ,when they con- tinually throw only 500 p.st.into it? after the money -capital of500 p.sthas been converted into productive capital ,ittransforms itself ,within the pro- cess ofproduction ,into commodities worth 600 p.st.and throws into circulation ,not only commodities valued at500 p.st.,equal tothe money -capital originally advanced ,but also anewly produced surplus -value of100 p.st. this additional surplus -value of100 p.st.isthrown into circulation inthe form ofcommodities .there isno doubt about that .but this same operation does not by any means supply the additional money for the circulation ofthis new additional value . itshould not be attempted to evade this difficulty by plausible subterfuges . for instance :so far asthe constant circulating capital isconcerned ,itisobvious that not all invest itsimultan- eously .while the capitalist asells his commodities ,so that his advanced capital assumes the form ofmoney ,there ison the other hand ,the available money -capital ofthe buyer bwhich assumes the form ofhis means ofproduc- tion which aisjust producing .the same transaction , which restores that ofbtoits productive form ,transforms itfrom money into materials ofproduction and labor -power ; the same amount ofmoney serves inthe twosided process asin every simple purchase c-m.on the other hand , when areconverts his money into means ofproduction , he buys from c,and this man pays bwith it,etc. ,and thus the transaction would be explained .",
        "882capital . but none ofthe laws referring tothe quantity ofthe circulating money ,which have been analyzed inthe circu- lation ofcommodities (volume i,chapter iii),are inany way changed by the capitalist character ofthe process of production . hence ,when we have said that the circulating capital of society ,tobe advanced inthe form ofmoney ,amounts to 500 p.st.,we have already accounted for the fact that this isonthe one hand the sum simultaneously advanced ,and that ,onthe other hand ,itsets inmotion more productive capital than 500 p.st.,because itserves alternately asthe money fund ofdifferent productive capitals .this mode ofexplanation ,then ,assumes that money asexisting whose existence itiscalled upon toexplain . itmight be furthermore said :capitalist aproduces ar- ticles which capitalist bconsumes unproductively ,individu- ally .the money ofbtherefore monetizes the commodity- capital of a,and thus the same amount serves for the monetization ofthe surplus -value ofband the circulating constant capital ofa. but inthat case ,the solution ofthe question to be solved isstill .more directly assumed ,the question :whence does bget the money for the payment of his revenue ?how did he himself monetize this surplus portion ofhis product ? itmight also be answered that that portion of the circulating variable capital ,which acontinually advances to his laborers ,flows back to him continually from the circulation ,and only an alternating part stays continu- ally tied up for the payment ofwages .but acertain time elapses between the expenditure and the reflux ,and mean- while the money paid out for wages might ,among other uses ,serve for the monetization ofsurplus -value .but we know ,inthe first place ,that ,the greater the time ,the great- ermust bethe supply ofmoney which the capitalist amust keep continually inreserve .inthe second place ,the laborer spends the money ,buys commodities for it,and thus mone- tizes tothat extent the surplus -value contained inthem . without penetrating any further into the question atthis point ,itissufficient tosay that the consumption ofthe",
        "the circulation ofsurplus -value . 383 entire capitalist class ,and ofthe unproductive persons de- pendent upon it,keeps step with that ofthe laboring class ; sothat ,simultaneously with the money thrown into cir- culation by the laboring class ,the capitalists must throw money into it,inorder tospend their surplus -value asrev- enue .hence money must be withdrawn from circulation for it.this explanation would merely reduce the quantity ofmoney required ,but not doaway with it. finally ,itmight besaid :alarge amount ofmoney is continually thrown into circulation when fixed capital is first invested ,and itisnot recovered from the circulation until after the lapse ofyears ,by him who threw itinto circulation .may not this sum suffice tomonetize the sur- plus -value ? the answer tothis isthat the employment asfixed capital ,ifnot byhim who threw itinto circulation , then by some one else ,isprobably implied inthe sum of 500 p.st.(which includes the formation ofahoard for needed reserve funds ).besides ,itisalready assumed inthe amount expended for the purchase ofproducts serving as fixed capital ,that the surplus -value contained inthem is also paid ,and the question isprecisely ,where the money for this purpose came from . the general reply has already been given :when amass ofcommodities valued atxtimes 1,000 p.st.has tocirculate , itchanges absolutely nothing inthe quantity ofthe money required for this circulation ,whether this mass of com- modities contains any surplus -value or not,and whether this mass ofcommodities has been produced capitalistically ornot .in other words ,the problem itself does not exist . all other conditions being given ,such asvelocity ofcircula- tion ofmoney ,etc. ,adefinite sum ofmoney isrequired in order tocirculate the value ofcommodities worth xtimes 1,000 p.st.,quite independently ofthe fact how much or how little ofthis value falls tothe share ofthe direct pro- ducers ofthese commodities .so far asany problem exists here ,itcoincides with the general problem :where does all the money required for the circulation ofthe commodities ofacertain country come from ? however ,from the point ofview ofcapitalist production ,",
        "384capital . the semblance ofaspecial problem does indeed exist .itis inthe present case the capitalist who appears asthe point of departure ,who throws money into circulation . the money ,which the laborer expends for the payment ofhis means ofsubsistence ,exists previously asthe money form ofthe variable capital and is,therefore ,thrown originally into circulation by the capitalist asamedium ofbuying labor -power and paying for it.the capitalist furthermore throws into circulation the money which constitutes origin- ally the money -form ofhis constant ,fixed and circulating , capital ;heexpends itasamedium ofpurchase ,orpayment , for materials ofproduction and instruments oflabor .but beyond this ,the capitalist nolonger appears asthe starting point ofthe quantity ofmoney incirculation .now ,there are only two points ofdeparture :the capitalist and the laborer .all third classes of persons must either receive money for their services from these two classes ,or,tothe extent that they receive itwithout any equivalent services , they are joint owners ofthe surplus -value inthe form of rent ,interest ,etc. the fact that the surplus -value does not all stay inthe pocket ofthe industrial capitalist ,but must beshared byhim with other persons ,has nothing todowith the present question .the question is:how does hemone- tize his surplus -value ,not ,how does he divide the money later after hehas secured it?for the present case ,the capi- talist may aswell beregarded asthe sole owner ofhis sur- plus -value .as for the laborer ,ithas already been said that he isbut the secondary point ofdeparture ,while the capi- talist isthe primary starting point ofthe money thrown` by the laborer into circulation .the money first advanced asvariable capital isgoing through itssecond circulation , when the laborer spends itfor the payment ofmeans of subsistence . the capitalist class ,then ,remains the sole point ofde- parture ofthe circulation ofmoney .ifthey need 400 p.st. for the payment ofmeans ofproduction ,and 100 p.st.for the payment of labor -power ,they throw 500 p.st.into circulation .but the surplus -value incorporated inthe pro- duct ,with arate ofsurplus -value of100 %,isequal tothe",
        "the circulation ofsurplus -value . 385 value of100 p.st.how can they continually draw 600 p.st.out ofcirculation ,when they continually throw only 500 p.st.into it? from nothing comes nothing .the capitalist class asawhole cannot draw out ofcirculation what was not previously init. exception ishere made ofthe fact that the sum of400 p. st.may ,perhaps ,suffice ,when turned over ten times ,to circulate means ofproduction valued at4,000 p.st.and labor -power valued at1,000 p.st.,and that the other 100 p.st.may likewise suffice for the circulation of1,000 p.st. ofsurplus -value .the proportion ofthe sum ofmoney to the value ofthe commodities circulated byitdoes not mat- ter here .the problem remains the same .unless the same pieces ofmoney circulate several times ,acapital of5,000 p.st.must bethrown into circulation ,and 1,000 p.st.would berequired tomonetize the surplus -value .the question is, where this money comes from ,whether itbe1,000 or100 p. st.there isnodoubt that itisinexcess ofthe money ,capi- tal thrown into the circulation . indeed ,paradoxical asitmay appear atfirst sight ,it isthe capitalist class itself that throws the money into circu- lation which serves for the realization ofthe surplus -value incorporated inthe commodities .but ,mark well ,itisnot thrown into circulation asadvanced money ,not ascapital . the capitalist class spends itfor their individual consump- tion .the money isnot advanced bythem ,although they are the point ofdeparture ofitscirculation . take some individual capitalist ,who opens his business , for instance ,acapitalist farmer .during the first year ,he advances amoney -capital of,say,5,000 p.st.,paying 4,000 p.st.for means ofproduction ,and 1,000 p.st.for labor- power .let the rate ofsurplus -value be100 %,the amount ofsurplus -value appropriated byhim 1,000 p.st.the above 5,000 p.st.comprise allthe money advanced by him .but the man must also live ,and he does not get any receipts until the end ofthe year .take itthat his consumption amounts to1,000 p.st.these hemust have inhis possession . he may say tohimself that he has toadvance these 1,000 p.st.during the first year .but this advance has only a",
        "386capital . subjective meaning ,for itsignifies that hemust pay for his individual consumption during the first year out ofhis own pocket ,instead ofgetting the money for itout ofthe unpaid labor ofhis employes .he does not advance this money as capital .he spends it,pays itout as an equivalent for means ofsubsistence which he consumes .this value is spent by him asmoney ,thrown assuch into circulation and withdrawn from itascommodities .he has consumed commodities ofthat amount .he has thus ceased tobein any way related totheir value .the money with which hepaid for this value isnow an element ofthe circulating money .but he has withdrawn the value ofthis money from circulation inthe form ofproducts ,and this value isdestroyed with the commodities inwhich itwas incorpor- ated .ithas disappeared .but atthe end ofthe year he throws commodities worth 6,000 p.st.into circulation and sells them .by this means he recovers :(1)his advanced money -capital of5,000 p.st.;(2)the monetized surplus- value of1,000 p.st.he had thrown 5,000 p.st.into circu- lation when he advanced capital ,and hewithdraws from it 6,000 p.st.,5,000 p.st.ofwhich cover his capital ,and 1,000 p.st.,his surplus -value .the last 1,000 p.st.are monetized with the money which he had himself thrown into circula tion ,not asacapitalist ,but asaconsumer ,not advanced , but spent .they now flow back tohim asthe money -form of the surplus -value produced by him .and henceforth this operation isrepeated every year .but beginning with the second year ,the 1,000 p.st.which hespends are contin- ually the converted form ,the money -form ofsurplus -value produced by him .he spends itannually and itflows back annually . ifhis capital were turned over more frequently in one year ,itwould not alter this condition ofthings ,except so far asthe time isconcerned ,and thus the size ofthe amount which he would have tothrow into circulation ,over and above his advanced money -capital ,for his individual con- sumption . this money isnot thrown into circulation by the capi- talist asmoney .itisrather inherent inthe character ofa",
        "the circulation ofsurplus -value .387 capitalist tobeable tolive on means inhis possession until some surplus -value flows back tohim . in the present case we had assumed ,that the sum of money ,which the capitalist throws into circulation until the first surplus -value flows back tohim ,isexactly equal to the surplus -value which heisgoing toproduce and monetize . this isobviously an arbitrary assumption ,sofar asthe in- dividual capitalist isconcerned .but itmust be correct when applied tothe entire capitalist class ,when simple re- production isassumed .itexpresses the same thing that this assumption does ,namely ,that the entire surplus -value isconsumed unproductively ,but itonly ,not any portion ofthe original capital stock . ithad been previously assumed ,that the entire production ofprecious metals (500 p.st.)sufficed only for the wear and tear ofthe money . the capitalists producing gold possess their entire product ingold ,that portion which replaces constant capital aswell asthat which replaces variable capital and that consisting of surplus -value .aportion of the social surplus -value , therefore ,consists ofgold ,not ofaproduct which ismone- tized by means ofcirculation .itconsists from the outset of gold and isthrown into circulation in order todraw products out ofit.the same applies inthis case towages , tovariable capital ,and tothe part replacing the advanced constant capital .hence ,while apart ofthe capitalist class throws into circulation commodities greater in value ,(by the amount ofthe surplus -value )than the money -capital advanced bythem ,another part ofthe capitalist class throws into circulation money ofgreater value (by the amount ofthe surplus -value )than the commodities which they continually withdraw from circulation for the production ofgold .while one part ofthe capitalist class pumps con- tinually more gold out ofthe circulation than they throw into it,another part ofthem who produce gold pump con- tinually more gold into itthan they take out inmeans of production . although apart ofthis product of500 p.st.ingold is surplus -value ofthe gold -producers ,still the entire sum is",
        "388capital . intended only toreplace the money worn out inthe circula- tion ofcommodities .itisimmaterial for this purpose ,how much ofthis gold monetizes the surplus -value incorporated inthe commodities ,and how much oftheir other constitu- ents . by transferring the production ofgold from one country toanother ,nothing ischanged inthe fundamental condi- tion ofthe matter .one part ofthe social labor -power and the social means ofproduction ofthe country aisconverted into aproduct ,for instance ,linen ,valued at500 p.st.,which isexported tothe country binorder tobethere traded for gold .the productive capital employed for this purpose by the country athrows no more commodities ,asdistinguish- ed from money ,upon the market ofthis country than it would ifitwere directly engaged inthe production ofgold . this product ofaisrepresented by 500 p.st.ingold ,and enters into the circulation ofthis country only in money . that portion ofthe social surplus -value which iscontained inthis product exists directly inthe form ofmoney ,and never in any other form for the country a. although , from the point ofview ofthe capitalist ,only apart ofthe product represents surplus -value ,and another part replaces capital ,still the question astohow much ofthis gold re- places constant ,and how much variable capital ,and how much of itrepresents surplus -value ,depends exclusively onthe respective proportions which wages and surplus -value constitute ofthe value ofthe circulating commodities .that portion which represents surplus -value isdistributed among the various members ofthe capitalist class .although this surplus -value iscontinually spent by them for individual consumption and recovered by the sale ofnew products- itisprecisely this purchase and sale which circulates the money required for the monetization ofthe surplus -value among them -there isnevertheless aportion ofthe social surplus -value ,inthe form ofmoney ,invarying proportions , inthe pockets ofthe capitalists ,just asaportion ofthe wages stays during acertain part ofthe week inthe pockets ofthe laborers inthe form ofmoney .and this portion isnot limited by that portion ofthe money -product which forms",
        "the circulation ofsurplus -value .389 originally the surplus -value ofthe capitalists producing gold , but ,aswe have said ,bythe proportion inwhich the above product of500 p.st.isgenerally distributed between capi- talists and laborers ,and inwhich the commodity -supply to be circulated consists ofsurplus -value and other constitu- ents ofvalue . however ,that portion ofsurplus -value ,which does not exist inother commodities ,but outside ofthem inthe form ofmoney ,consists ofaportion ofthe annually produced gold only tothe extent that aportion ofthe annual produc- tion ofgold circulates for the realization ofsurplus -value . the other portion ofmoney ,which iscontinually inthe hands ofthe capitalists ,in varying portions ,being the money -form oftheir surplus -value ,isnot an element ofthe annually produced gold ,but ofthe masses ofmoney prev- iously accumulated inthe country . according toour assumption ,the annual production of gold just covers the annual wear ofmoney ,tothe amount of500 p.st.ifwe keep inmind these 500 p.st.,and make abstraction ofthat portion ofthe annually produced mass ofcommodities which iscirculated by means ofpreviously accumulated money ,then the surplus -value incorporated in the commodities will find money for its monetization in circulation for the simple reason that surplus -value is annually produced inthe form ofgold on the other side . the same applies tothe other parts ofthe gold product which replace the advanced money -capital . now ,two things are tobe noted here . in the first place ,itfollows that the surplus -value spent bythe capitalists asmoney ,aswell asthe variable and other productive capital advanced by them in money isactually aproduct ofthe laborers ,namely ofthose engaged inthe pro- duction ofgold .they produce anew not only that portion ofgold which is\"advanced \"tothem aswages ,but also that portion ofgold inwhich the surplus -value ofthe capitalist gold producers isdirectly embodied .as for that portion of the gold product ,which replaces only the constant capital- value advanced for itsproduction ,itre-appears inthe form ofmoney (oraproduct ingeneral )only through the annu-",
        "890capital . allabor ofthe working men .inthe beginning ofthe busi ness ,itwas originally expended inmoney bythe capitalists , and this money was not newly produced ,but formed apart ofthe circulating mass ofsocial money .but tothe extent that itisreplaced by anew product ,by additional money , itisthe annual product ofthe laborer .the advance onthe part ofthe capitalist appears here likewise merely asaform , which owes itsexistence tothe fact that the laborer isneither the owner ofhis own means ofproduction ,nor able to command ,during his production ,the means ofsubsistence produced byother laborers . inthe second place ,asconcerns that mass ofmoney which exists independently ofthis annual reproduction of500 p. st.,either inthe form ofahoard ,orofcirculating money , things must be,orrather must have been originally just asthey still are with reference tothese 500 p.st.annually . we shall return tothis point atthe close ofthis section . for the present ,we wish tomake afew other remarks . we have seen during our study ofthe turn -over ,that , other circumstances remaining equal ,achange inthe length ofthe periods ofturn -over requires different amounts of money -capital ,inorder tocarry on production on the same scale .the elasticity ofthe money -circulation must ,there- fore be sufficient toadapt itself tothis fluctuation ofex- pansion and contraction . ifwe furthermore assume other circumstances asequal- the length ,intensity ,and productivity ofthe working day also remaining unchanged -but adifferent division ofthe value ofthe product ,between wages and surplus -value ,so that either the former rise and the latter fall ,orvice versa , the mass ofthe circulating money isnot touched thereby . this change can take place without any expansion orcon- traction ofthe mass ofmoney incirculation .let uscon- sider particularly the case inwhich there would beageneral rise inwages ,sothat ,under the given assumptions ,there would be ageneral fall inthe rate ofsurplus -value ,while there would not beany change ,also according toour assump-",
        "the circulation ofsurplus -value . 391 tion ,inthe mass ofcirculating commodities .in this case , there should be indeed an increase ofthe money -capital which must beadvanced asvariable capital inthe quantity ofmoney which serves for this purpose .but tothe exact extent that the amount ofmoney required for the function ofvariable capital grows ,does the surplus -value decrease , and thus the amount ofmoney required for itsrealization . the amount ofmoney required for the realization ofthe values ofthe commodities isnot affected thereby ,any more than this value itself .the cost price ofthe commodity rises for the individual capitalist ,but itssocial price ofpro- duction remains unchanged .that which ischanged isthe proportion ,in which ,apart from the constant portion of itsvalue ,the price ofproduction stands towages and profits . but ,itisargued ,agreater outlay ofvariable capital (the value ofthe money is,of course ,considered the same ) means alarger amount ofmoney inthe hands ofthe labor- this causes agreater demand for commodities on the part ofthe laborer .this ,inturn ,leads toarise inthe price ofcommodities .or,itissaid :ifwages rise ,the capitalists raise the prices oftheir commodities .in either case ,the general rise in wages causes arise inthe prices of commodities . hence agreater amount of money is needed for the circulation ofcommodities ,nomatter whether the rise inprices isexplained inthis orthat way .er. reply tothe first argument :in consequence ofarise in wages ,especially the demand ofthe laborers for the neces- sities oflife will rise .in alesser degree their demand for articles ofluxury will increase ,orthe demand will be de- veloped for things which did not generally belong tothe scope oftheir consumption .the sudden and increased demand for the necessities oflife will doubtless raise their prices momentarily .as aresult ,agreater portion ofthe social capital will beinvested inthe production ofthe neces- sities oflife ,and asmaller portion inthe production of articles ofluxury ,since these fall inprice on account of the decrease insurplus -value and the consequent decrease in the demand ofthe capitalists for these articles .and tothe extent that the laborers themselves buy articles ofluxury ,",
        "892capital . the rise intheir wages -tothis degree -does not promote an increase inthe prices ofnecessities oflife ,but simply fills the place ofthe buyers ofluxuries .more luxuries than before are consumed by laborers ,and relatively fewer by capitalists .that isall.after some fluctuations ,the value ofthe circulating commodities isthe same asbefore .as for the momentary fluctuations ,they will not have any other effect than tothrow unemployed money -capital into the in- land circulation ,capital which sofar had sought employ- ment inspeculative enterprises atthe stock exchange orin foreign countries . reply tothe second argument :ifitwere inthe power ofthe capitalist producers toraise the prices oftheir com- modities atwill ,they could and would do sowithout wait- ing for arise inwages .wages would never rise while the prices ofcommodities were going down .the capitalist class would never resist the trades unions ,since the capitalists could always and under all circumstances dowhat they are now doing exceptionally under definite peculiar ,one might say local ,circumstances ,towit,toavail themselves ofevery rise inwages toraise prices much higher and thus pocket greater profits . the claim that the capitalists can raise the prices ofar- ticles ofluxury ,because the demand for them decreases (in consequence ofthe reduced demand ofthe capitalists whose spending money has decreased )would be avery unique application ofthe law ofsupply and demand .the prices ofarticles ofluxury fall inconsequence ofreduced demand tothe extent that capitalist buyers are not replaced by la- boring buyers ,and sofar asthis replacement takes effect , the demand ofthe laborers does not result inarise ofthe prices ofnecessities ,for the laborers cannot spend that por- tion oftheir increased wages for necessities which they spend for luxuries .consequently capital iswithdrawn from the production ofluxuries ,until their supply inthe market is reduced tothe measure which corresponds totheir altered role inthe process ofsocial production .with their pro- duction thus reduced ,they rise inprice ,provided their value isotherwise unchanged ,totheir normal level .so long as this contraction ,orthis process ofcompensation ,takes place ,",
        "the circulation ofsurplus -value . 393 there isjust asconstantly ,with rising prices ofnecessities , amigration ofcapital into the production ofthese tothe degree that itiswithdrawn from the other line ofbusiness , until the demand issatisfied .then the balance isrestored , and the end ofthe whole process isthat the social capital , including the money -capital ,isdivided inadifferent propor- tion between the production ofnecessary means ofsubsis- tence and that ofluxuries . the entire objection isascarecrow set up by the capi- talists and their apologists ineconomics . the facts ,which furnish the material for this scarecrow , are ofthree kinds : (1).itisthe general law ofthe circulation ofmoney that the quantity of circulating money increases ifthe total price ofthe circulating commodities increases ,other circumstances remaining the same ,regardless of whether this increase ofthe totality ofprices applies tothe same quantity ofcommodities ,ortoagreater quantity .the ef- fect isthen taken for the cause .wages rise (although rarely and only exceptionally inproportion )with the in- creasing price ofthe necessities oflife .this rise inwages isaresult ,not acause ,ofthe rise inthe prices ofcommodi- ties . (2).inthe case ofapartial ,orlocal ,rise ofwages that istosay,arise only insome lines ofproduction -alocal rise inthe prices ofthe products ofthis line may follow .but even this depends onmany circumstances ,for instance ,that wages had not been abnormally depressed previously ,so that the rate ofprofits was abnormally high ,that the mar- ket isnot narrowed by arise inprices (sothat acontraction ofits supply previous tothe raising ofits prices will not benecessary ),etc. (3)in the case ofageneral rise ofwages ,the price ofthe produced commodities rises inlines ofbusiness where the variable capital preponderates ,but falls ,on the other hand ,inlines where the constant ,oreventually the fixed , capital preponderates . we found inour study ofthe simple circulation ofcom- modities (volume i,chapter iii,2),that ,even though the",
        "394 money -form ofany definite quantity ofcommodities isin- finitesimal within itscirculation ,still the money inthe hand ofone man disappears during the transformation ofacer- tain commodity and takes its place inthe hands of an- other ,sothat commodities are not only exchanged ,orreplaced by one another ,but this mutual exchange ofplaces isalso promoted and accompanied by auniversal precipitation of money .\"when one commodity replaces another ,the money commodity sticks tothe hands ofsome third person .cir- culation sweats money from every pore .\" (vol .i,page 127. )the same fact isexpressed ,onthe basis ofcapitalist . production ,ofcommodities ,by the continual existence ofa portion ofcapital inthe form of money -capital ,and by the retention ofaportion ofsurplus -value inthe hands of itsowners ,likewise inthe form ofmoney . aside from this ,the rotation ofmoney -that istosay, the return ofmoney toits point ofdeparture -sofar asit isan element inthe turn -over ofcapital ,isaphenomenon entirely different from ,oreven the reverse of,the circulation ofmoney ,2which expresses its removal from the point of departure through anumber ofhands .(vol .i.page 129. ) nevertheless an accelerated turn -over implies naturally an acceleration ofthe circulation . as for the variable capital ,ifacertain money -capital , say 500 p.st.,isturned over ten times inayear ,inthe form ofavariable capital ,itisevident that this aliquot part ofthe 28although the physiocrats still intermingle these two phenomena in- discriminately ,they are nevertheless the first who emphasize the reflux ofmoney toitsstarting point asthe essential form ofcirculation of capital ,asthat form ofcirculation which promotes reproduction .\"throw aglance atthe tableau economique ,and you will see that the pro- ductive class gives the money with which theother classes buy products from it,and that they return this money toitwhen they come back next year tomake the same purchases . you see,then ,that there isinthis instance noother cycle but that ofexpenditure followed by reproduction ,and ofreproduction followed byexpenditure .and this cycle isdescribed bythe circulation ofmoney ,which isthe measure of expenditure and reproduction .\"-quesnay ,problemes economiques ,daire edition ,physiocrats ,i,pages 208,209. )\"itisthis continual advance and return ofcapitals which must becalled the circulation ofmoney , this useful and fertile circulation ,which gives life toallthe labors of society ,which maintains the activity and life ofthe social body ,and which iswith good justification compared tothe circulation ofblood in the animal body .\"(turgot ,reflexions ,etc.,daire edition ,i,page 45.)",
        "the circulation ofsurplus -value . 395 quantity of money in circulation circulates ten times its value ,or5,000 p.st.itcirculates ten times per year be- tween the capitalist and the laborer .the laborer ispaid , and pays ,ten times per year with the same aliquot amount ofmoney .ifthe same variable capital were turned over only once ayear ,the scale ofproduction remaining the same ,there would beonly one turn -over ofcapital per year . furthermore :the constant portion ofthe circulating capital may be,say,1,000 p.st.ifthe capital isturned over ten times ,the capitalist sells his commodity ,and there- fore also the constant circulating portion ofits value ,ten times per year .the same aliquot part ofthe circulating quantity ofmoney (1,000 p.st.)passes ten times from the hands of itsowners into those ofthe capitalist .this means ten changes ofplace on the part ofthis money from one hand into another .inthe second place ,the capitalist buys means ofproduction ten times per year .this again implies ten turn -overs ofthe money from one hand into another . with regard tothe amount of1,000 p.st.,commodities val- ued at10,000 p.st.have been sold by the industrial capi- talist ,and then commodities valued at 10,000 p.st.pur- chased .by means of20circulations of1,000 p.st.inmoney acommodity supply of20,000 p.st.has been circulated . finally ,with an acceleration ofthe turn -over ,also that portion ofmoney circulates faster ,which realizes the sur- plus -value . but ,onthe other hand ,anacceleration inthe circulation ofmoney does not necessarily imply amore rapid turn- over ofcapital ,and thus ofmoney ,that istosay ,itdoes not necessarily imply acontraction and more rapid renewal of the process ofreproduction . amore rapid circulation ofmoney takes place whenever alarger number oftransactions are carried onwith the same amount ofmoney .this may take place also with the same periods ofreproduction ofcapital ,asaresult ofchanges in the technical appliances ofthe circulation ofmoney .fur- thermore ,there may beanincrease inthe number oftrans- actions inwhich money circulates without expressing actual exchanges ,ofcommodities (marginal business atthe stock-",
        "396capital . exchange ,etc. ).on the other hand ,some circulations of money may beentirely dispensed with .for instance ,where the farmer ishimself areal estate owner ,there isno circu- lation ofmoney between the capitalist farmer and the real es- tate owner ;where the industrial capitalist ishimself the owner ofthe capital ,there isno circulation ofmoney be- tween him and the creditor . as for the primitive formation ofahoard ofmoney ina certain country ,and its appropriation by afew ,itisun- necessary todiscuss itatthis point . the capitalist mode ofproduction -itsbasis being wage- labor aswell asthe payment ofthe laborer inmoney and in general the transformation ofof services for natural products into services for money -cannot develop a larger extension and agreater systematization ,unless there isavailable in this country aquantity of money sufficient for the circulation and the corresponding formation ofahoard (reserve fund ,etc. ).this isthe historical pre- mise .however ,this must not be interpreted inthe sense that asufficient hoard must first beformed ,before capitalist production can begin .itrather develops simultaneously with the evolution ofitsfoundations and one ofthese foun- dations isasufficient supply ofprecious metals .hence the increased supply ofprecious metals since the 16th century isan essential factor inthe history ofthe development of capitalist production .but sofar asthe necessary further supply ofmoney material onthe basis ofcapitalist produc- tion isconcerned ,surplus -value incorporated inproducts is onthe one hand thrown into circulation without the money required for itsmonetization ,and onthe other hand surplus- value inthe form ofgold without the previous transforma- tion ofproducts into gold . the additional commodities which are tobe converted into money find the necessary amount ofmoney athand , because on the other side additional gold (and silver )in- tended for conversion into commodities isthrown into cir- culation ,not by means ofexchange ,but by production it- self .",
        "the circulation ofsurplus -value . 397 ii.accumulation and reproduction on an enlarged scale . to the extent that accumulation takes place inthe form ofreproduction on an enlarged scale ,itisevident that it does not offer any new problem inmatters ofthe circulation ofmoney . in the first place ,the additional money -capital required for the function ofthe increasing productive capital issup- plied by that portion ofthe realized surplus -value ,which isthrown into circulation by the capitalists asmoney -capi- tal,not asthe money -form oftheir revenue .the money isalready present inthe hands ofthe capitalists .only its employment isdifferent . now ,by means ofthe additional productive capital ,its product ,an additional quantity ofcommodities ,isthrown into circulation .together with this additional quantity of commodities ,aportion ofthe additional money required for itscirculation isthrown into circulation ,sofar asthe value ofthis mass ofcommodities isequal tothat ofthe productive capital consumed in their production . this additional quantity ofmoney has precisely been advanced asan addi- tional money -capital ,and therefore itflows back tothe capi- talist through the turn -over ofhis capital .here the same question reappears ,which we met previously .where does the additional money come from ,by which the additional surplus -value now contained inthe form of commodities istobe realized ? the general reply isagain the same .the sum total of the prices ofthe commodities has been increased ,not be- cause the prices ofagiven quantity ofcommodities have risen ,but because the mass ofthe commodities now cir- culating isgreater than that ofthe previously circulating commodities ,and because this increase has not been offset by afall inprices .the additional money required for the circulation ofthis greater quantity ofcommodities ofgreat- ervalue must besecured ,either by greater economy inthe circulating quantity ofmoney -whether by means ofbal- ancing payments ,etc. ,orbysome measure which accelerates the circulation ofthe same coins -or,bythe transformation",
        "398capital . ofmoney from the form ofahoard into that ofacircu- lating medium .this does not merely imply that barren money -capital becomes active as ameans of purchase or payment ,orthat money -capital which isalready actually circulating for the benefit ofthe society while representing areserve fund for its owner isthus performing adouble service (such asdeposits inbanks which are continually balanced ).italso implies that the stagnating reserve funds ofmoney are economized . \"in order that money should flow continuously ascoin , coin must constantly coagulate asmoney .the continuous flow ofcoin depends on its constant accumulation inthe form ofreserve funds ofcoin which spring up throughout the sphere ofcirculation and form sources ofsupply ;the formation ,distribution ,disappearance ,and reformation of these reserve funds isconstantly changing ,their existence constantly disappears ,their disappearance constantly exists , adam smith expressed this never -ceasing transformation of coin into money and ofmoney into coin by saying that every owner ofcommodities must always keep in supply , aside from the particular commodity which hesells ,acertain quantity ofthe universal commodity with which he buys . we saw ,that inthe process c-m-cthe second member m-csplits up into aseries ofpurchases which donot take place atonce ,but atintervals oftime ,sothat one part of mcirculates ascoin while the other rests asmoney .money isinthat case only suspended coin and the separate parts of the circulating mass ofcoins appear now inone form ,now inanother ,constantly changing .this first transformation ofthe medium ofcirculation into money represents ,there- fore ,but atechnical aspect of money -circulation .\"(karl marx ,\"acontribution tothe critique ofpolitical economy ,\" .1859 ,page 167-168 .)(\"coin \"asdistinguished from money ishere employed toindicate the function ofmoney asa mere medium ofcirculation ascompared toits other func- tions .) when all these measures do not suffice ,an additional production ofgold must take place ,or,what amounts tothe same ,one portion ofthe additional product isdirectly or",
        "the circulation ofsurplus -value . 399 indirectly exchanged for gold -the product ofcountries in which precious metals are mined . the entire amount oflabor -power and social means of production expended in the annual production of gold and silver ,so far as they serve as instru- ments of circulation ,constitutes abulky item of the dead expense ofthe capitalist mode ofproduction ,orofthe production of commodities in general .itdeprives social economy ofacorresponding amount ofpotential additional means ofproduction and consumption ,that istosay,of actual wealth .to the extent that the cost ofthis expensive machinery of circulation isdecreased atagiven scale of circulation oragiven scale ofits extension ,the productive power ofsociety isincreased .hence ,sofar asthe auxiliary means developed with the credit system have any influence in that direction ,they increase the social wealth directly , either by running alarge portion ofthe social labor -process without intervention of actual money ,or by raising the capacities ofthe money already incirculation . this disposes also ofthe absurd question ,whether capital- istproduction initspresent volume would bepossible with- out the credit system (even ifanalyzed only from this point ofview ),that istosay,ifitwere possible with the circula- tion ofmetallic coin alone .evidently this isnot the case . itwould have found the barriers ofthe limited production ofprecious metals initsway .on the other hand ,one must not entertain any myths astothe productive power ofthe credit system ,sofar asitsupplies orreleases money -capital . the further analysis ofthis question isout ofplace here . we have now tostudy the case ,inwhich no actual ac- cumulation ,that istosay,no immediate expansion ofthe scale ofproduction ,takes place ,but aportion ofthe rea- lized surplus -value isaccumulated for alonger orshorter time asamoney reserve ,inorder tobeemployed later on asproductive capital . to the extent that money soaccumulating isadditional money ,the matter needs no explanation .itcan only bea portion ofthe surplus -gold imported from gold producing",
        "398 capital . ofmoney from the form ofahoard into that ofacircu- lating medium .this does not merely imply that barren money -capital becomes active asameans of purchase or payment ,orthat money -capital which isalready actually circulating for the benefit ofthe society while representing areserve fund for its owner isthus performing adouble service (such asdeposits in banks which are continually balanced ).italso implies that the stagnating reserve funds ofmoney are economized . \"in order that money should flow continuously ascoin , coin must constantly coagulate asmoney .the continuous flow ofcoin depends on its constant accumulation in the form ofreserve funds ofcoin which spring up throughout the sphere ofcirculation and form sources ofsupply ;the formation ,distribution ,disappearance ,and reformation of these reserve funds isconstantly changing ,their existence constantly disappears ,their disappearance constantly exists . adam smith expressed this never -ceasing transformation of coin into money and ofmoney into coin by saying that every owner ofcommodities must always keep in supply , aside from the particular commodity which hesells ,acertain quantity ofthe universal commodity with which he buys , we saw ,that inthe process c-m-cthe second member m-csplits up into aseries ofpurchases which donot take place atonce ,but atintervals oftime ,sothat one part of mcirculates ascoin while the other rests asmoney .money isinthat case only suspended coin and the separate parts of the circulating mass ofcoins appear now inone form ,now inanother ,constantly changing .this first transformation ofthe medium ofcirculation into money represents ,there- fore ,but atechnical aspect of money -circulation .\"(karl marx ,\"acontribution tothe critique ofpolitical economy ,\" .1859 ,page 167-168 .)(\"coin \"asdistinguished from money ishere employed toindicate the function ofmoney asa mere medium ofcirculation ascompared toits other func- tions .) when all these measures do not suffice ,an additional production ofgold must take place ,or,what amounts tothe same ,one portion ofthe additional product isdirectly or",
        "the circulation ofsurplus -value . 399 indirectly exchanged for gold -the product ofcountries in which precious metals are mined . the entire amount oflabor -power and social means of production expended in the annual production of gold and silver ,so far as they serve as instru- ments of circulation ,constitutes abulky item of the dead expense ofthe capitalist mode ofproduction ,orofthe production of commodities in general .itdeprives social economy ofacorresponding amount ofpotential additional means ofproduction and consumption ,that istosay,of actual wealth .to the extent that the cost ofthis expensive machinery of circulation isdecreased atagiven scale of circulation oragiven scale ofits extension ,the productive power ofsociety isincreased .hence ,sofar asthe auxiliary means developed with the credit system have any influence , in that direction ,they increase the social wealth directly , either by running alarge portion ofthe social labor -process without intervention of actual money ,orby raising the capacities ofthe money already incirculation . this disposes also ofthe absurd question ,whether capital- istproduction initspresent volume would bepossible with- out the credit system (even ifanalyzed only from this point ofview ),that istosay,ifitwere possible with the circula- tion ofmetallic coin alone .evidently this isnot the case . itwould have found the barriers ofthe limited production ofprecious metals initsway .on the other hand ,one must not entertain any myths astothe productive power ofthe credit system ,sofar asitsupplies orreleases money -capital . the further analysis ofthis question isout ofplace here . we have now tostudy the case ,inwhich no actual ac- cumulation ,that istosay,no immediate expansion ofthe scale ofproduction ,takes place ,but aportion ofthe rea- lized surplus -value isaccumulated for alonger orshorter time asamoney reserve ,inorder tobe employed later on asproductive capital . to the extent that money soaccumulating isadditional money ,the matter needs no explanation .itcan only bea portion ofthe surplus -gold imported from gold producing",
        "400capital . countries .in this connection itmust beremembered that the national product ,in exchange for which this gold is imported ,isnolonger inthis country .ithas been exported toforeign countries inexchange for gold . but ifwe assume that the same amount ofmoney isstill inthe country the same asbefore ,then the accumulated and accumulating money has accrued from the circulation .only its function ischanged .itisconverted from circulating money into agradually accruing latent money capital . the money which isaccumulated inthis case isthe money- form ofsold commodities ,and represents that portion of itsvalue which constitutes surplus -value for itsowner .(the credit system isnot supposed toexist inthis case .) the capitalist who accumulates this money has sold tothat ex- tent without buying . ifwe look upon this transaction merely as alimited phenomenon ,there isnothing toexplain .apart ofthe capitalists keep the money realized bythe sale oftheir prod- ucts without drawing products out ofthe market inreturn for it.another part ofthem ,onthe other hand ,transform alltheir money into products ,with the exception ofthe con- stantly recurring money -capital required for the promotion ofproduction .one portion ofthe products thrown upon the market asbearers ofsurplus -value consists ofmeans of production ,or ofthe actual elements ofvariable capital , the necessary means ofsubsistence .itcan serve immediate ly for the expansion ofproduction .for ithas not been assumed that one part ofthe capitalists accumulates capi- tal,while the other consumes itssurplus -value entirely ,but only that one part isengaged inthe accumulation ofmoney , inthe formation oflatent money -capital ,while the other part accumulates actually ,that istosay,expands the scale ofproduction ,really adds toits productive capital .the available quantity ofmoney remains sufficient for the re- quirements ofcirculation ,even ifone part ofthe capitalists accumulates money ,while another expands production ,and vice versa .moreover ,the accumulation ofmoney on one side may proceed without cash money by the mere accumu- lation ofoutstanding claims . but the difficulty arises when we assume ,not apartial ,",
        "the circulation ofsurplus -value . 401 but ageneral accumulation ofmoney -capital onthe part of the capitalist class .apart from this class ,there is,according toor assumption -the general and exclusive domination of capitalist production -no other class but the working class .all that the working class buys isequal tothe sum total ofits wages ,equal tothe sum total ofthe variable capital advanced bythe entire capitalist class .this money flows back tothe capitalist class bythe sale oftheir product tothe working class .the variable capital thus resumes its money -form .let the sum total ofthe variable capital bextimes 100 p.st.,that istosay,the sum total ofthe vari- able capital actually employed ,not merely advanced for the current year .itdoes not alter the question fundamentally , whether we know how much orhow little money isactually advanced inthis variable capital -value during the year ,ac- cording tothe velocity ofthe turn -over .the capitalist buys with these xtimes 100 p.st.acertain amount oflabor power ,orpays wages toacertain number oflaborers -first transaction .the laborers buy with this same amount a certain quantity ofcommodities from the capitalists ,where- bythe same xtimes 100 p.st.flow back into the hands of the capitalist class -second transaction .and this iscon- tinually repeated .this amount ofxtimes 100 p.st.,then , can never enable the working class tobuy that portion of itsproduct inwhich the constant capital isembodied ,much less that inwhich the surplus -value ofthe capitalist class is incorporated .the laborers can never buy more with these xtimes 100 p.st.than aportion ofthe social product ,and the value ofthis portion isequal tothat value ofthe social product inwhich the advanced variable capital isembodied . apart from the case ,inwhich this universal accumulation ofmoney expresses nothing but the distribution ofthe ad- ditional incoming precious metal ,in whatever proportion , among the various individual capitalists ,how can the entire capitalist class accumulate money under such circumstances ? they would all have tosell aportion oftheir product without buying anything in return .itisnot atall mys- terious that they should all have acertain fund ofmoney which they throw into circulation for their consumption ,",
        "402capital . and acertain portion ofwhich flows back toeach one of them .but this fund ofmoney ,asafund for circulation , arises precisely through the monetization ofsurplus -value and isnot by any means latent money -capital . ifwe view the matter asittakes place inreality ,we find that the latent money -capital ,which isaccumulated for future use,consists : (1).of deposits inbanks ;and itisacomparatively in- significant sum which isreally atthe disposal ofthe bank . money -capital isbut nominally accumulated there .what is actually accumulated are outstanding claims on money which can bemonetized (sofar asthey are really monetized ) only because there isacertain balance between the money drawn and the money deposited .itisarelatively small sum that isinthe hands ofthe banker asmoney . (2).of public bonds .these are not capital atall,but mere claims onthe annual product ofthe nation . (3).of stocks .so far asthey are not bogus ,they are titles ofownership ofsome actual capital belonging tosome corporation and drafts on the surplus -value flowing from it. there isnoaccumulation ofmoney inany ofthese cases . what appears onthe one side asanaccumulation ofmoney- capital ,appears on the other asacontinual and actual ex- penditure ofmoney .itdoes not alter the case ,whether the money isexpended by itsowner ,orby others who are his debtors . on the basis of capitalist production ,the formation of ahoard isnever an end initself ,but the result ,either ofa clogging ofthe circulation -larger amounts ofmoney than isgenerally the case assuming the form ofahoard -orof accumulations conditioned onthe turn -over ;or,finally ,the hoard ismerely aformation oflatent money -capital held temporarily and intended for future employment aspro- ductive capital . hence ,while aportion ofthe money realized insurplus- value ison the one hand always withdrawn from circu- lation and accumulated as ahoard ,another part ofthe surplus -value isatthe same time continually converted into",
        "the circulation ofsurplus -value .403 productive capital .with the exception ofthe distribution ofadditional precious metals among the members ofthe capitalist class ,accumulation inthe form ofmoney never takes place simultaneously atall points . that which istrue ofthe other portion ofthe annual product ,isalso true ofthat portion ofitwhich represents surplus -value inthe form ofcommodities .acertain sum of money isrequired for its circulation .this sum ofmoney belongs tothe capitalist class quite asmuch asthe annually produced quantity ofcommodities which represent surplus- value .itisoriginally thrown into circulation by the capi- talist class itself .itisconstantly redistributed among them by means ofcirculation itself .just asinthe case ofthe circulation ofcoin in general ,soisthere aclogging ofa portion ofthis mass atever varying points ,while another portion iscontinually circulating .whether apart ofthis accumulation ismade intentionally for the purpose ofform- ing money -capital ,ornot ,does not alter the matter . exception has been made here ofthose adventures ofcir- culation by which one capitalist grasps aportion ofthe surplus -value ,or even ofthe capital ,of another ,thereby causing aonesided accumulation and centralization of money -capital aswell asofproductive capital .for instance , aportion ofthe appropriated surplus -value accumulated by aasmoney -capital may beaportion ofthe surplus -value of bwhich does not flow back tohim .",
        "404capital . part iii . the reproduction and circulation ofthe aggregate social capital . chapter xviii.20 introduction . i.the object ofthe analysis . the immediate process of production of capital isits labor process and self -expansion ,the process whose result is the commodity -product ,and whose compelling motive isthe production ofsurplus -value . the process ofreproduction ofcapital comprises this im- mediate process ofproduction aswell asthe two phases of the process ofcirculation ,strictly socalled ,inother words , itcomprises the entire cycle ,which ,asaperiodic process , constantly repeated atdefinite intervals ,constitutes the turn- over ofcapital . no matter whether we study the rotation in the form of m-m'or that of p-p,the immediate process of pitself always forms but one link inthe chain ofthis ro- tation .in the one form itappears asapromoter ofthe process ofcirculation ,inthe other the process ofcirculation appears asitspromoter .its continual renewal ,the continual rehabilitation ofcapital asproductive capital ,isineither case conditioned on itsmetamorphoses inthe process ofcir- culation .on the other hand ,the continually renewed process ofproduction isthe condition ofthe metamorphoses which the capital traverses ever anew inthe sphere ofcirculation , its alternate incarnation asmoney -capital and commodity- capital . 29from manuscript ii.",
        "introduction . 405 however ,every individual capital forms but an individ- ual fraction ,endowed with individual life ,asitwere ,ofthe aggregate social capital ,just asevery individual capitalist isbut an individual element ofthe capitalist class .the movement ofthe social capital consists ofthe totality ofthe movements ofits individualized fractional parts ,the turn- overs ofthe individual capitals .just asthe metamorphosis ofthe individual commodity isalink inthe series ofmeta- morphoses ofthe commodity -world -the circulation ofcom- modities sothe metamorphosis ofthe individual capital , itsturn -over ,isalink inthe rotation ofthe social capital . this total process comprises both the productive consump- tion (the immediate process ofproduction )together with the metamorphoses (materially considered ,exchanges )which promote it,and the individual consumption together with its corresponding metamorphoses ,or exchanges .itin- cludes on the one hand the conversion ofvariable capital into labor -power ,and thus the incorporation oflabor -power inthe process ofcapitalist production .here the laborer appears asthe seller ofhis commodity ,labor -power ,and the capitalist asitsbuyer . but on the other hand the sale of the commodities implies their purchase bythe working class , in other words ,their individual consumption .here the working class appear asbuyers and the capitalists assellers ofcommodities tothe laborers . the circulation ofthe commodity -capital implies the cir- culation ofsurplus -value ,hence also the purchases and sales , by which the capitalists promote their individual consump- tion ,the consumption ofsurplus -value . the rotation of individual capitals ,then ,in their ag- gregation associal capital ,but intheir totality ,comprises not only the circulation ofcapital ,but also the general cir- culation of commodities .the last named can originally consist ofonly two parts :(1) the rotation ofthe capi- tal itself ,and (2)the rotation ofthe commodities which pass into individual consumption ,the commodities for which the laborer expends his wages and the capitalist his surplus -value (orapart ofit).true ,the rotation of capital comprises also the circulation of surplus -value ,so far asitisapart ofthe commodities ,and likewise the con-",
        "406capital . version ofthe variable capital into labor -power ,the payment ofwages .but the expenditure ofthis surplus -value and wage for commodities does not form alink inthe circula- tion ofcapital ,although atleast the expenditure ofwages isarequirement for this circulation . involume ithe process ofcapitalist production was ana- lyzed asan individual transaction aswell asaprocess of reproduction ,the production of surplus -value as well as the production ofcapital .the changes ofform and sub- stance experienced by capital inthe sphere ofcirculation were assumed without lingering over them .itwas assumed that ,onone hand ,the capitalist sells the product atitsvalue , and onthe other ,that he finds within the sphere ofcircu- lation the material means ofproduction required for the renewal orcontinuation ofthe process .the only transac- tion within the sphere ofcirculation over which we had lingered inthe first volume was the sale and purchase of labor -power asthe fundamental condition ofthe capitalist mode ofproduction . in the first part ofvolume ii,the various forms were considered which capital assumes in its rotation ,and the various forms ofthis rotation itself . inthe second part ofthis volume ,the rotation ofcapital was studied asaperiodical process ,asaturn -over .itwas shown on one side ,inwhat manner the various constituent parts ofcapital (fixed and circulating )accomplish the ro- tation offorms in different periods oftime and different ways ;and ,on the other side ,the circumstances were ana- lyzed on which the different duration of the working period and the period ofcirculation isconditioned .we observed the influence ofthe period ofturn -over and ofthe different proportions ofitscomponent parts upon the volume ofthe process ofproduction and upon the annual rate of surplus -value .indeed ,while itwas the successive forms continually assumed and discarded by capital initsrotation which were studied inpart iofvolume ii,itwas shown inpart iiofthis volume ,how acapital ofagiven magnitude issimultaneously divided ,within this flow and succession , into the different forms ofproductive capital ,money -capi-",
        "introduction . 407 tal,and commodity -capital ,invarying proportions ,sothat they do not only relieve one another ,but that different por- tions ofthe total capital -value are continually side by side and serve inthese different forms .especially money -capi- tal was revealed in its peculiarities ,which had not been shown in volume i. certain laws were found ,according towhich certain portions ofdifferent size ofagiven capital must be continually advanced and renewed inthe form of money -capital ,according tothe conditions ofthe turn -over , in order to maintain inservice aproductive capital ofa certain volume . but inboth the first and second parts ofthis volume ,it was only aquestion of some individual capital ,of the movement ofsome individualized part ofsocial capital . however ,the turn -overs ofindividual capitals intermingle , are mutually conditioned on one another ,are their mutual premises ,and form precisely inthis interrelation the move- ment ofsocial capital .just asinthe simple circulation ofcommodities the total metamorphosis ofacertain com- modity appeared asalink inthe series ofmetamorphoses ofthe world of commodities ,so now the metamorphosis ofindividual capital appears asalink inthe series ofa metamorphoses ofthe aggregate social capital .but while the simple circulation ofcommodities did not necessarily imply the rotation ofcapital -since itmay take place on the basis ofnon -capitalist production -the rotation ofthe aggregate social capital ,aswe have seen ,implies also the cir- culation of commodities not belonging tothe rotation of some individual capital ,inother words ,the circulation of commodities which do not represent any capital . we have now tostudy the process ofcirculation ofin- dividual capitals intheir capacity ascomponent parts ofthe aggregate social capital (which circulation constitutes in itsentirety the process ofreproduction ),that istosay,the process ofrotation ofthis aggregate social capital . ii.the role of money -capital . (although the following belongs in alater part ofthis section ,weshall analyze itimmediately ,namely ,the money-",
        "408capital . capital considered asaconstituent part ofthe aggregate social capital .) in the study ofthe turn -over ofthe individual capital , the money -capital revealed two sides . inthe first place ,itisthe form inwhich every individual capital appears upon the scene and opens its process as capital .ittherefore appears asthe prime promoter ,giving the first impetus tothe entire process . in the second place ,according tothe different durations ofthe periods ofturn -over and the different proportion of its two parts -the working period and the period of cir- culation that portion ofthe advanced capital -value which must be continually advanced and renewed inthe form of money maintains adifferent proportion tothe productive capital which itsets in motion ,orinother words ,tothe continuous scale ofproduction .but whatever may bethis proportion ,that portion ofthe active capital -value which can continually serve asproductive capital islimited under any circumstances by that portion ofthe advanced capital- value which must exist continually beside the productive capital inthe form ofmoney .itishere merely aquestion ofanormal turn -over ,an abstract average . exception is made ofthe additional money -capital required for the com- pensation ofthe interruptions ofthe circulation . in regard tothe first point ,we have seen that the pro- duction ofcommodities implies the circulation ofcommodi- ties ,and the circulation of commodities implies the ma- terialization of commodities in money ,the circulation of money ;the duplication ofcommodities incommodities and money isalaw ofthe transformation ofproducts into com- modities .the capitalist production ofcommodities likewise implies whether considered socially orindividually that capital inthe form ofmoney ,ormoney -capital ,isthe prime motor ofevery new business and its continual motor .es- pecially the circulating capital implies the continuous re- appearance ofmoney -capital inshort intervals asamotor . the entire advanced capital -value ,that istosay ,all the ele- ments ofcapital composed ofcommodities ,labor -power ,in- struments and materials ofproduction ,must becontinually",
        "introduction . 409 bought with money and again bought with money .what istrue ofthe individual capital ,isalso true ofthe social capital which functions only inthe form ofmany individual capitals .but ,aswe showed involume i,this does not im- ply that the field ofactivity ofcapital ,the scale ofproduc- tion ,even on acapitalist basis ,depends absolutely for its extension onthe amount ofthe money -capital inservice . elements ofproduction are incorporated in the capital whose expansion within certain limits isindependent ofthe magnitude ofthe advanced money -capital .the payment oflabor -power remaining the same ,itcan yet be exploited more orless extensively orintensively .ifthe money -capi- tal isincreased with this greater exploitation ,that istosay, ifwages are raised ,itisnot proportionately ,or,inother words ,they are not actually raised . the productively exploited materials ofnature -the soil , the seas ,ore,forests ,etc.-which do not constitute an ele- ment inthe value ofcapital ,are intensively orextensively better exploited with an increasing exertion ofthe same labor -power ,without requiring an additional advance of money -capital .the actual elements ofproductive capital are thus multiplied without requiring agreater advance ofmoney- capital .but sofar assuch an advance isrequired for ad- ditional auxiliary materials ,the money -capital ,in which the capital -value isadvanced ,isnot increased proportionate- lytothe augmented effectiveness ofthe productive capital , sothat inreality itisnot increased . the same instruments oflabor ,and thus the same fixed capital ,may be more effectively used by aprolongation of their daily use and bygreater intensity ofemployment ,with- out an additional investment of money for fixed capital . there is,inthat case ,only amore rapid turn -over ofthe fixed capital ,but the elements ofits reproduction are also supplied more rapidly . apart from materials ofnature ,itispossible toincor- porate natural forces which do not cost anything asagents ofthe productive progress with more orless heightened effect . the degree oftheir effectiveness depends onthe methods and scientific progress which donot cost the capitalist anything .",
        "410capital . the same istrue ofthe social combination of labor- power inthe process ofproduction and ofthe accumulated skill ofthe individual laborers .carey calculates that the real estate owner never receives enough ,because he isnot paid for allthe capital orlabor which have been put into the soil since time immemorial in order togive itits present productivity .(of course ,no mention ismade ofthe pro- ductivity ofwhich the soil isrobbed .)according tothis argument ,the laborer would have tobe paid according to the work which had tobedone by the entire human race inorder todevelop asavage into amodern mechanic .one should rather think :ifall the unpaid labor embodied in the soil and appropriated by the real estate owner is counted ,then all the capital ever invested inthis soil has been paid over and over with usury ,sothat society has long ago bought the real estate over and over . the increase inthe productive powers oflabor ,sofar as itdoes not imply an additional investment ofcapital -value , augments inthe first analysis indeed only the quantity of the product ,not its value ,except the extent towhich itis enabled to produce more constant capital with the same labor and thus topreserve its value .but itforms atthe same time new material for capital ,hence the basis for an increased accumulation ofcapital . so far asthe organization ofsocial labor itself ,and thus the increase in the social productivity oflabor ,requires a production on alarge scale and thus the advance oflarge quantities ofmoney -capital on the part ofindividual capi- talists ,we have shown involume ithat this isaccomplished in part by the centralization ofcapitals in afew hands , without necessarily implying an increase inthe volume of the actively engaged capital -values ,and consequently inthe volume ofthe money -capital ,inwhich they are advanced . finally ,we have shown inthe preceding part that acon- traction ofthe period ofturn -over permits ofsetting in motion the same productive capital with less money -capital , ortoset inmotion more productive capital with the same money -capital . but evidently all this has nothing todo with the real",
        "introduction . 411 question ofmoney capital .itshows only that the advanced capital ,agiven sum ofvalues consisting inits free form , initsvalue -form ,ofacertain sum ofmoney after itsconver- sion into productive capital ,includes productive potentiali- ties whose limits are confined within those ofitsvalues ,but which may exert themselves extensively orintensively with- in acertain playroom .ifthe prices ofthe elements of production -the materials ofproduction and labor -power- are given ,the magnitude ofthe money -capital required for the purchase of adefinite quantity ofthese elements of production inthe form ofcommodities isdetermined .or, the magnitude ofthe value ofthe capital tobe advanced isdetermined .but the extent towhich this capital acts as acreator ofvalues and products iselastic and variable . now wecome tothe second point .itisamatter ofcourse , that that portion ofthe social labor and means ofproduc- tion ,which must beannually expended for the production orpurchase ofmoney ,inorder tomake up for the wear and tear ofcoin ,istothat extent areduction ofthe volume of social production .but asfor the money -value which func- tions partly asamedium ofcirculation ,partly asahoard , itexists ,having once been acquired ,itispresent apart from the labor -power ,the finished means ofproduction ,and the na- tural sources ofwealth .itcannot beregarded asabarrier ofproduction .by itstransformation into elements ofpro- duction ,by its exchange with other nations ,the scale of production might beextended .this implies ,however ,that the money plays itsrole asinternational money the same as ever . according tothe duration ofthe period ofturn -over ,a greater orsmaller amount ofmoney -capital isrequired in order toset the productive capital in motion .we have also seen that the division ofthe period ofturn -over into aworking period and aperiod ofcirculation requires an increase ofthe capital latent orsuspended inthe form of money . sofar asthe period ofturn -over isdetermined bythe dura- tion ofthe working period ,itisdetermined ,other con- ditions remaining equal ,by the material nature ofthe pro-",
        "412capital . cess ofproduction ,not bythe specific social character ofthis process ofproduction .however ,on the basis ofcapitalist production ,extensive operations ofalong duration require large advances ofmoney -capital for along time .produc- tion insuch spheres is,therefore ,dependent on the limits within which the individual capitalist has money -capital at his disposal .this barrier isbroken down by the credit system and associations ,connected with it,for instance ,stock companies .disturbances inthe money -market ,therefore , set such businesses out ofaction ,while they ,on the other hand cause disturbances inthe money -market themselves . on the basis ofcapitalist production ,itmust be ascer- tained ,onwhat scale those operations which withdraw labor and means ofproduction from itfor along time without furnishing inreturn any useful product ,can be carried on without injuring those lines ofproduction which donot only withdraw continually ,or atseveral intervals ,labor -power and means ofproduction from it,but also supply itwith means ofsubsistence and ofproduction .under social or capitalist production ,the laborers inlines with short work- ing periods will always withdraw products only for ashort time without giving any products inreturn ;while lines of business with long working periods withdraw products for along time without any returns .this circumstance ,then , isdue tothe material conditions ofthe respective labor process ,not to its social form .in the case of socialized production ,the money -capital iseliminated .society dis- tributes labor -power and means ofproduction tothe dif- ferent lines ofoccupation .the producers may eventually receive paper checks ,by means ofwhich they withdraw from the social supply ofmeans ofconsumption ashare corresponding totheir labor -time .these checks are not money .they donot circulate . we see,then ,that ,sofar asthe need ofmoney -capital is due tothe length ofthe working period ,itisdetermined bytwo things :first ,that money isthe general form inwhich every individual capital (apart from credit )must make its entry inorder totransform itself into productive capital ; this follows from the nature ofcapitalist production ,orof",
        "introduction . 413 commodity -production ingeneral .second :the magnitude ofthe required money advance isdue tothe fact that labor- power and means ofproduction must continually be with- drawn from society for along time without any return of products convertible into money .the first requirement , namely that capital must beadvanced inthe form ofmoney , isnot suspended by the form ofthis money itself ,regard- less ofwhether itismetal -money ,credit -money ,token -money , etc. the second circumstance isinno way affected bythe money -medium orthe form of production by means of which labor ,means ofsubsistence ,and means ofproduction are withdrawn ,without the return ofsome equivalent into the circulation .",
        "414capital . chapter xix .30 former discussions ofthe subject . i.the physiocrats . quesnay's tableau economique shows in afew broad outlines ,how the result ofnational production inacertain year ,amounting tosome definite value ,isdistributed by means ofthe circulation in such away ,that ,other cir- cumstances remaining the same ,simple reproduction can take place ,that istosay,reproduction on the same scale . the starting point ofthis period ofproduction isfittingly last years's crop .the innumerable individual acts ofcircu- lation are atonce viewed intheir characteristic social mass movement -the circulation between great social classes dis- tinguished by their economic functions .we are especially interested inthe fact that aportion ofthe total product- which ,like every other portion ofitisanew result oflast year's labor and intended for use isatthe same time the bearer of old capital -values re-appearing in their natural form .itdoes not circulate ,but remains inthe hands of itsproducers ,the class ofcapitalist farmers ,inorder tobe- gin itsservice ascapital once more for them .inthis con- stant portion ofthe capital ofone year's product ,quesnay includes also some elements that do not belong toit,but hesees the main thing ,thanks tothe limits ofhis horizon , in which agriculture isthe only productive sphere ofin- vestment where human labor produces surplus -value ,hence the only productive one from the capitalist point ofview . the economic process ofreproduction whatever may be its specific social character ,intermingles inthis sphere ofagri- culture always with anatural process ofreproduction .the obvious conditions ofthe latter throw light on those ofthe former ,and keep off aconfusion ofthought ,which isdue only tothe witchery ofcirculation . 30beginning ofmanuscript viii .",
        "former discussions ofthe subject . 415 the label ofasystem differs from that ofother articles , among other things ,bythe fact that itcheats not only the buyer ,but often also the seller .quesnay himself and his immediate disciples believed intheir feudal shop sign .so did our school scientists tothis day .but asamatter of fact ,the system ofthe physiocrats isthe first systematic con- ception ofcapitalist production .the representative ofcapi- talist production ,the class ofcapitalist farmers ,directs the entire economic movement .agriculture iscarried on capi- talistically ,that istosay,itisthe enterprise ofacapitalist farmer on alarge scale ;the immediate cultivator ofthe soil isthe wage laborer .production creates not only articles of use,but also their value ;its compelling motive isthe pro- duction ofsurplus -value ,whose birth -place isthe sphere of production ,not that ofcirculation .among the three class- eswhich figure asthe bearers ofthe process ofreproduction promoted bythe circulation the immediate exploiter of\"pro- ductive \"labor ,the producer ofsurplus -value ,the capitalist farmer ,isdistinguished from those who merely appropriate surplus -value . the capitalist character ofthe system ofthe physiocrats excited opposition even during itsflourishing period ,onone side onthe part oflinguet and mably ,onthe other that of the champions ofthe freeholders ofsmall farms . the retrogression ofadam smith inthe analysis ofthe process ofreproduction issomuch more remarkable ,ashe manipulates other correct analyses ofquesnay ,for instance , by generalizing the \"avances primitives \"and \"avances an- nuelles \"into \"fixed \"and \"circulating \"capital ,32and even 31\"capital ,\"volume i,page 647,footnote . 82some physiocrats had paved the way forhim even here ,especially turgot .this author uses more frequently than quesnay and the other physiocrats the term capital instead ofavances and identifies still more the avances orcapital ofthe manufacturers with those ofthe capitalist farmers .for instance :\"like these (the manufacturing entrepreneurs ), the capitalist farmers must secure ,over and above the return oftheir capitals ,etc.\"(turgot ,oeuvres ,daire edition ,paris ,1844 ,vol.i,page 40.)",
        "416 capital . relapses entirely into physiocratic errors insome places .for instance ,inorder todemonstrate that the capitalist farmer produces more value than any other class ofcapitalists ,he says :\"no other capital sets agreater quantity ofproductive labor in motion than that ofthe capitalist farmer .not only his laboring servants ,but also his laboring cattle ,con- sist ofproductive laborers .\"(fine compliment for the la- boring servants !) \"in agriculture ,nature works aswell ashuman beings ;and although its labor does not require any expense ,itsproduct nevertheless has avalue ,the same asthat ofthe most expensive laborer .the most important operations ofagriculture seem toaim ,not somuch to in- crease the fertility ofnature -although they dothat ,too astodirect ittoward the production ofthe plants most use- ful to mankind .afield grown up in thorns and weeds often enough furnishes aslarge aquantity ofplant growth asthe best tilled vineyard or corn field .planting and cultivation serve frequently more toregulate than tostim- ulate the active fertility of nature ;and after those have exhausted all their labors ,there still remains agreat deal ofwork todo for the latter .the laborer and the laboring cattle (1)employed inagriculture ,therefore ,do not only effect ,like the laborers inthe manufactures ,the reproduc- tion ofavalue which isequal totheir own consumption and the capital employing them together with the profit ofthe capitalist ,but that ofafar greater value .over and above the capital ofthe farmer and all his profits they effect regu- larly the reproduction ofthe rent ofthe land owner .the rent may beregarded asthe product ofthe forces ofnature , the use ofwhich the land owner lends tothe farmer .it islarger orsmaller according tothe estimated degree ofthese forces ,in other words ,according tothe estimated natural orartificially insured fertility ofthe soil .itisthe work ofnature which remains after deducting or replacing all that which may beregarded asthe work ofman .itisrare- ly less than one quarter and frequently more than one third ofthe total product .no other equal quantity oflabor , employed inmanufacture ,can ever effect solarge arepro- duction .in manufacture nature does nothing ,man every-",
        "former discussions ofthe subject . 417 thing ;and reproduction must always beproportional tothe strength ofthe agencies that carry iton.therefore the capi- tal invested in agriculture does not only set in motion a greater quantity ofproductive labor than any equal capital employed inmanufacture ;but italso adds ,inproportion to the quantity ofproductive labor employed byit,afar great- ervalue tothe annual product ofthe soil and tothe labor ofacertain country ,tothe actual wealth and income ofits inhabitants .\"(book ii,chapter 5,page 242. ) adam smith says inbook i,chapter 6,page 42:\"in value ofthe sowings islikewise afixed capital inthe proper meaning ofthe word .\" here ,then ,capital isthe same as capital -value ;itexists in a\"fixed \"form .\"although the seed passes back and forth between the soil and the barn , yet itnever changes owners and therefore does not circu- late in reality .the farmer does not make his profit by its sale ,but by its increase .\"(page 186. )the absurdity lies here inthe fact that smith does not,like quesnay be- fore him ,notice the reappearance ofthe value ofconstant capital inanew form ,an important element ofthe process of reproduction ,but merely another illustration ,and a wrong one atthat ,ofhis distinction between circulating and fixed capital .in smith's translation of \"avances primi- tives \"and \"avances annuelles \"into \"fixed capital \"and \"circulating capital ,\"the progress consists inthe term \"capi- tal,\"whose meaning isgeneralized and made independent ofthe special consideration for the \"agricultural \"applica- tion ofthe physiocrats ;the retrogression consists inthe fact that the terms \"fixed \"and circulating \"are regarded asthe fundamental distinction and somaintained . ii.adam smith . (1.)the general point ofview ofadam smith adam smith says in book i,chapter 6,page 42:\"in every society the price ofevery commodity finally dissolves",
        "418capital . into one orthe other ofthese three parts (wages ,profit , ground rent ),orinto all three ofthem ;and inevery ad- vanced society all three ofthem pass more orless ascom- ponent parts into the price ofby far the greater part of the commodities .\"33or,ashecontinues ,page 63:\"wages , profit ,and ground rent are the three final sources ofall in- come aswell asofall exchange value .\" we shall discuss further along this doctrine ofsmith concerning the \"com- ponent parts ofthe prices ofcommodities ,\"orof\"all ex- change value .\" he says furthermore :\"as this istrue of every single commodity individually ,itmust also be true ofall com- modities asawhole ,constituting the entire annual product ofthe soil and the labor ofevery country .the total price orexchange -value ofthis annual product must dissolve into the same three parts ,and be distributed among the differ- ent inhabitants ofthe land ,either aswages oftheir labor , orasprofit oftheir capital ,orasrent oftheir real estate .\" (book ii,chapter 2,page 190. ) after adam smith has thus dissolved the price ofallcom- modities individually aswell as\"the total price orexchange- value ....ofthe annual product ofthe soil and the labor ofevery country \"into three sources ofrevenue for wage- workers ,capitalists ,and real estate owners ,he must needs smuggle afourth element into the problem by acircuitous route ,namely the element ofcapital .this isaccomplished bythe distinction between agross and anet income .\"the gross income ofall inhabitants ofalarge country comprises the entire annual product oftheir soil and their labor ;the net income that portion which remains attheir disposal after deducting the cost ofmaintenance ,first offixed ,and second ,oftheir circulating capital ;orthat portion which 33inorder that the reader may not beindoubt astothe meaning of the phrase \"the price ofbyfarthe greater part ofthe commodities ,\" the following lines may show how adam smith himself explains it. for instance ,norent passes into the price ofsea fish,only wages and profit ;only wages pass into the price ofscotch pebbles .he says :\"in some parts ofscotland poor people make ittheir business togather onthe sea shore the varicolored pebbles ,known asscotch pebbles .the price which the stone cutters pay forthem consists only oftheir wages , asneither ground rent nor profit constitute any part ofit.\"",
        "former discussions ofthe subject . 419 they can place intheir supply for consumption ,orexpend for their maintenance ,comfort ,and pleasure ,without touching their capital .their actual wealth likewise ispro- portional ,not to their gross ,but to their net income .\" (ibidem ,page 190. ) we make the following comment : (1).adam smith expressly deals here only with simple reproduction ,not reproduction on an enlarged scale ,orac- cumulation .he speaks only ofexpenses for maintaining the capital inprocess .the \"net\"income isequal tothat .portion ofthe annual product ,whether ofsociety ,orofthe individual capitalist ,which can pass into the \"fund for con- sumption ,\"but the size ofthis fund must not encroach upon capital inprocess .one portion ofthe value ofboth the individual and social product ,then ,isdissolved neither inwages ,nor inprofit ,nor inground rent ,but incapital . (2).adam smith flees from his own theory by means ofaword play ,the distinction between agross and net revenue .the individual capitalist as well asthe entire capitalist class ,orthe so-called nation ,receive inplace ofthe consumed capital aquantity ofcommodities ,whose value represented by the proportional parts ofthis product -re- places onone hand the invested capital -value and thus forms an income ,orrevenue ,but ,mark well ,acapital revenue ; onthe other hand ,portions ofvalue which are \"distributed among the different inhabitants ofthe land ,either aswages oftheir labor ,orasprofits oftheir capital ,orasrent oftheir real estate ,\"athing commonly called income .hence the value ofthe entire product ,whether ofthe individual capi- talist ,orofthe whole country ,yields an income for some- body ;but itison one hand an income ofcapital ,on the other a\"revenue \"different from it.in other words ,the thing which iseliminated bythe analysis ofthe commodity initscomponent parts isbrought back through aside door , the ambiguity ofthe term \"revenue .\" but only such por- tions ofthe value ofaproduct can betaken inaspreviously existed init.ifthe capital istocome inasrevenue ,capital must first have been expended . adam smith says furthermore :\"the lowest ordinary rate ofprofits must always amount toalittle more than issuffici-",
        "420capital . ent tomake good the losses incidental toevery investment ofcapital .itisthis surplus alone which represents the clear ,or net,profit .\" (which capitalist understands by profit necessary investment of capital ?) \"that which people call gross profit comprises frequently not only this surplus ,but also the portion retained for such extraordinary losses .\" (book i,chapter 9,page 72.)this means nothing else but that aportion ofthe surplus -value ,considered as apart ofthe gross profit ,must form an insurance fund for the production .this insurance fund iscreated by aportion ofthe surplus -labor ,which tothat extent produces capital directly ,that istosay,the fund intended for reproduction . as regards the expense for the \"maintenance \"ofthe fixed capital (see the above quotations ),the replacement ofthe consumed fixed capital byanew one isnot anew investment of capital ,but only arenewal ofthe value of the old capital .and as far as the repair ofthe fixed capital is concerned ,which adam smith counts likewise among the cost ofmaintenance ,this expense belongs tothe price ofthe capital advanced .the fact that the capitalist ,instead of investing this all atone time ,invests itgradually according tothe requirements during the process ofcapital inservice , and that he may invest itout ofprofits already pocketed , does not change the source ofthis profit .the portion of value ofwhich itconsists proves only that the laborer pro- duces surplus -value ,for the insurance fund aswell asfor the repairing fund . adam smith then tells usthat he excludes from the net revenue ,that istosay,from the revenue initsspecific mean- ing ,the entire fixed capital ,furthermore that entire por tion ofthe circulating capital which isrequired for the main- tenance and repair ofthe fixed capital ,and for itsrenewal ; asamatter offact ,all capital not inthe natural form in- tended for the fund for consumption . \"the entire expenditure for the maintenance ofthe fixed capital must evidently be excluded from the net revenue ofsociety .neither the raw materials by means ofwhich the machines and tools ofindustry must be kept incondi- tion nor the product ofthe labor required for the transforma-",
        "former discussions ofthe subject .421 tion ofthese raw materials into their intended form can ever constitute aportion ofthis revenue .the price ofthis labor may indeed form aportion ofthat revenue ,asthe labor- ers soemployed may invest the entire value oftheir wages in their immediate fund for consumption .but in other kinds oflabor the price \"(that istosay ,the wages paid for this labor )\"aswell asthe product \"(inwhich this la- bor isincorporated )\"enter into the fund for consumption ; the price into that ofthe laborers ,the product into that of other people ,whose subsistence ,comfort ,and pleasure are increased by the labor ofthese workmen .\"(book ii, chapter 2,page 190 ,191. ) adam smith here comes upon avery important distinc- tion between the laborers employed inthe immediate pro- duction ofmeans ofproduction and those employed inthe immediate production of articles of consumption .the value ofthe commodities produced by the first -named con- tains apart which isequal tothe sum ofthe wages ,that is tosay,equal tothe value ofthe amount ofcapital invested in the purchase oflabor -power .this value exists bodily asacertain share ofthe means ofproduction produced by these laborers .the money received by them aswages is their revenue ,but their labor has not produced any goods which are consumable ,either for them orfor others .hence these products are not an element ofthat portion ofthe annual product which isintended for asocial fund for consumption ,inwhich a\"net revenue \"can alone berealized . adam smith forgets toadd here that the same thing which applies towages isalso true for that portion ofthe value ofthe means ofproduction ,which forms the revenue (in the first hand )ofthe industrial capitalist under the cate- gories ofprofit and rent .these portions ofvalue likewise exist inmeans ofproduction ,articles which cannot be con- sumed .they cannot secure out ofthe articles ofconsump- tion produced by the second kind oflaborers aquantity corresponding totheir price until they have been sold ;only then can they transfer those articles tothe individual fund for consumption oftheir owner .but somuch more adam smith should have seen that this excludes the value ofthe",
        "422 capital . means ofproduction serving within the sphere ofproduc tion -the means of production which produce means of production -aportion ofvalue equal tothe value ofthe constant capital employed inthis sphere and excluded from the portions ofvalue forming arevenue ,not only by the natural form in which itexists ,but also by its function ascapital . the statements of adam smith regarding the second kind oflaborers -who produce immediately articles ofcon- sumption are not quite exact .he says that inthis kind oflabor ,both the price oflabor and the product gotothe fund for immediate consumption ,\"the price \"(that isto say,the money received in wages )\"tothe stock for the consumption ofthe laborers ,and the product to that of other people ,whose subsistence ,comfort ,and pleasure are increased bythe labor ofthese workmen .\"but the laborer cannot consume the \"price \"ofhis labor directly ,the money inwhich his wages are paid ;he makes use ofitby buying articles ofconsumption with it.these may inpart consist of classes ofcommodities produced by himself .on the other hand ,his own produce may besuch asgoes only into the consumption ofthe exploiters oflabor . after adam smith has thus entirely excluded the fixed capital from the \"net revenue \"ofacertain country ,he continues : \"while the entire expense for maintaining the fixed capi- tal isthus necessarily excluded from the net revenue of society ,the same isnot the case with the expense ofmain- taining the circulating capital .ofthe four parts which go tomake up this last named capital ,money ,means ofsub- sistence ,raw materials ,and finished products ,the last three , aswe have said ,are regularly taken out ofitand trans- ferred either tothe fixed capital ofsociety ,ortothe fund intended for immediate consumption .that portion ofthe consumable articles which isnot employed for the main- tenance ofthe former \"(the fixed capital )\"passes wholly into the latter \"(the fund for immediate consumption ) \"and forms apart ofthe net revenue ofsociety .hence the maintenance ofthese three parts ofthe circulating capital",
        "former discussions ofthe subject . 423 does not diminish the net revenue ofsociety by any other portion ofthe annual product than that required for main- taining the fixed capital .\" (book ii,chapter 2,page 192. ) this isbut atautology ,tothe effect that that portion of the circulating capital ,which does not serve for the pro- duction ofmeans ofproduction ,passes into that ofmeans ofconsumption ,inother words ,passes into that part ofthe annual product ,which istoserve asafund for the social consumption .however ,the immediately following passage isimportant : \"the circulating capital ofsociety isdifferent inthis re- spect from that ofan individual .that ofan individual iswholly excluded from his net revenue ,and can never form apart ofit;itcan consist only ofhis profit .but although the circulating capital ofeach individual goes tomake up a portion ofthe circulating capital ofthe society towhich he belongs ,itisnevertheless not absolutely excluded for this reason from the net revenue ofsociety ,and may form a part ofit.while all the commodities inthe store ofsome small dealer must not byany means beplaced inthe supply for his own immediate consumption ,still they may be- long inthe fund for consumption ofother people ,who , by means ofarevenue secured by other funds ,may regular- lymake good for him their value together with his profit , without thereby causing areduction ofeither his ortheir capital .\" (ibidem .) we learn ,then ,the following facts from him : (1).just asthe fixed capital ,and the circulating capi- tal required for its reproduction (he forgets the function ) and maintenance ,are absolutely excluded from the net reve- nue ofthe individual capitalist which can consist only ofhis profit ,soisalso the circulating capital employed in the production ofmeans ofconsumption .hence that por- tion ofhis commodity -product which reproduces his capital cannot bedissolved into portions ofvalue which yield any revenue for him . (2).the circulating capital ofeach individual capitalist constitutes apart ofthe circulating capital ofsociety ,the same asevery individual's fixed capital .",
        "424capital . (3).the circulating capital ofsociety ,while represent- ing only the sum ofthe individual circulating capitals ,has adifferent character than the circulating capital ofevery individual capitalist .the circulating capital ofthe individ- ual capitalist can never be apart ofhis own revenue ;but aportion ofthe circulating capital ofsociety (namely ,that consisting ofmeans ofconsumption )may atthe same time beaportion ofthe revenue ofsociety ,or,asheexpressed it inthe preceding quotation ,itmust not necessarily reduce the net revenue ofsociety byaportion ofthe annual product . indeed ,that which adam smith here calls circulating capi- tal,consists inthe annually produced commodity -capital , which isthrown into circulation annually by the capitalists producing it.this entire annual commodity -product of theirs consists ofconsumable articles and ,therefore ,forms the fund in which the net revenue ofsociety (including wages )isrealized orexpended .instead ofchoosing for his illustration the commodities inthe store ofthe small dealer , adam smith should have selected the masses ofcommodi- ties stored away inthe warehouses ofthe industrial capi- talists . now ifadam smith had summed up the snatches of thought which forced themselves upon him ,first inthe study ofthe reproduction ofthat which he calls fixed ,then ofthat which he calls circulating capital ,he would have arrived atthe following result : i. the annual product ofsociety consists oftwo divisions ; one ofthem comprises the means ofproduction ,the other the means ofconsumption .both must betreated separately . ii.the aggregate value ofthe annual product consisting ofmeans ofproduction isdivided asfollows :one portion ofthe value represents but the value ofthe means ofpro- duction consumed inthe creation ofthese means ofproduc- tion ;itisbut capital -value reappearing inarenewed form ; another portion isequal tothe value ofthe capital invested inlabor -power ,orequal tothe sum ofthe wages paid bythe capitalists ofthis sphere ofproduction .athird portion of value ,finally isthe source ofprofits ,including ground rent , ofthe industrial capitalists in this sphere .",
        "former discussions ofthe subject . 425 the first portion of value ,according to adam smith the reproduced portion ofthe fixed capital ofall the in- dividual capitals employed inthis first section ,is\"evidently excluded and can never form apart ofthe net revenue ,\" either ofthe individual capitalist orofsociety .italways serves ascapital ,never asarevenue .to that extent the \"fixed capital \"ofeach individual capitalist isin no way different from the fixed capital ofsociety .but the other por- tions ofthe annual product ofsociety consisting ofmeans ofproduction ,-portions ofvalue which also exist inthe aliquot parts ofthis mass ofmeans ofproduction -form indeed revenues for all agents engaged inthis production , yielding wages for the laborers ,profits and ground rent for the capitalists .but sofar associety isconcerned ,they are capital ,not revenue ,although the annual product ofsociety consists only ofthe sums ofthe products ofthe individual capitalists belonging toit.these things are generally fit only for service asmeans ofproduction by their very na- ture ,and even those which may eventually serve asmeans ofconsumption are intended for service asraw orauxili- ary materials ofnew production .but they serve assuch ascapital -not inthe hands oftheir producers ,but inthose oftheir purchasers ,namely , iii.the capitalists ofthe second category ,the direct producers ofmeans ofconsumption .these things reproduce for these capitalists the capital consumed inthe production ofmeans ofconsumption (sofar asthis capital isnot con- verted into labor -power ,sothat itconsists inthe sum ofthe wages ofthe laborers ofthis second class ),while this con- sumed capital ,which now exists inthe form ofmeans of consumption inthe hands ofthe capitalists producing them , constitutes initsturn -from the point ofview ofsociety- the fund intended for consumption ,inwhich the capitalists and laborers ofthe first category realize their revenue . ifadam smith had continued his analysis tothis point , then he would have lacked but little for the complete so- lution ofthe problem .he was almost onthe point ofsolv- ing it,for he had already observed ,that certain values of one kind (means ofproduction )ofthe commodity -capitals",
        "426 capital . constituting the total product of society yield indeed a revenue for the laborers and capitalists engaged inproduc- tion ,but do not contribute anything toward the revenue of society ;while another part ofvalue of another kind (means ofconsumption ),although itiscapital for its in- dividual owners ,that istosay,for the capitalists engaged in this sphere ,isonly apart ofthe social revenue . so much isevident from the foregoing : first :although the social capital isbut made up of the sum ofthe individual capitals ,and for this reason the annual product incommodities (orthe commodity -capital ) equal tothe sum ofcommodities produced by these indi- vidual capitals ;and although the analysis ofthe value of commodities into its component parts ,applicable toevery individual commodity -capital ,must also apply tothe entire social con modity -capital ,and actually does soresult inthe end ,nevertheless the forms which these different component parts assume ,when incorporated inthe aggregate process ofsocial production ,differ . second :even onthe basis ofsimple reproduction ,there isnot merely aproduction ofwages (variable capital )and surplus -value ,but adirect production ofnew constant capi- tal,although the working day consists only oftwo parts , one in which the laborer reproduces the variable capital , an equivalent for the purchase price of his labor -power , and another in which he produces surplus -value (profit , rent ,etc. ).for the daily labor ,which isexpended inthe reproduction ofmeans ofproduction -and whose value is composed ofwages and surplus -value -realizes itself innew means ofproduction that take the places ofthe constant parts ofcapital consumed inthe production ofmeans of consumption . the main difficulties ,the greater part ofwhich has been solved inthe preceding analyses ,are not offered by astudy ofaccumulation ,but by that ofsimple reproduction .for this reason ,adam smith (book ii)aswell as quesnay (tableau economique )take their departure from simple reproduction ,whenever itisaquestion ofthe movements ofthe annual product ofsociety and ofitsreproduction by means ofcirculation .",
        "former discussions ofthe subject . 427 ii.smith resolves exchange -value into vplus s. the dogma ofadam smith ,tothe effect that exchange- able value ,orthe price ofany commodity -and therefore ofall commodities constituting the annual product ofso- ciety (since he justly assumes everywhere the existence of capitalist production )is made upofthree component parts , orresolves itself into wages ,profit ,and rent ,may be re- duced tothe fact that the value ofacommodity isequal tovplus s,that istosay,equal tothe value ofthe advanced variable capital plus the surplus -value .and we may un- dertake this reduction ofprofit and rent toacommon unit called swith the expressed permission ofadam smith ,as shown by the following quotations ,inwhich we leave aside all minor points ,especially any actual orapparent devia- tion from his dogma that the.value ofthe commodities re- solves itself exclusively into those elements which we call vplus s. inmanufacture :\"the value which the laborers add tothe material resolves itself ...into two parts ,one ofwhich pays their wages ,and the other the profit oftheir employer on the entire capital advanced by him in materials and wages .\"(book i,chapter 6,page 41.) \"although the manufacturist gets his wages advanced byhis master ,hedoes not cost the latter anything inreality ,since asarule the value ofthese wages ispreserved together with aprofit ,in the increased value ofthe object towhich the labor was ap- plied .\" (book ii,chapter 3,page 221 ).that portion of the stock which isinvested \"inthe maintenance ofproduc- tive labor ... after ithas served him (the employer )inthe function ofacapital ...forms arevenue for them \"(the laborers ).(book ii,chapter 3,page 223. ) ....... adam smith says explicitly inthe chapter just quoted : \"the entire annual product ofthe soil and the labor of each country naturally resolves itself into two parts . one ofthem ,and frequently the greater ,isintended pri- marily to replace capital and toreproduce the means of subsistence ,raw materials and finished products obtained from some capital ;the other isintended toform arevenue either for the owner ofthis capital ,asaprofit onhis capital ,",
        "428capital . orfor some one else ,asarent ofhis real estate .\"(page 222. ) only aportion ofthe capital ,soadam smith informed us just awhile ago ,also forms arevenue for some one ,namely that which isinvested inthe purchase ofproductive labor . this portion -the variable capital -performs first \"the func- tion ofcapital \"for itsemployer and inhis hands ,and then it\"forms arevenue \"for the productive laborer himself . the capitalist transforms aportion ofthe value ofhis capi- tal into labor -power and thereby into variable capital ;it isonly due tothis transformation that not alone this portion ofcapital ,but his entire capital ,serve asindustrial capital . the laborer -the seller ofhis own labor -power -receives its value inthe form ofwages .in his hands ,labor -power isbut asaleable commodity ,acommodity whose sale keeps him alive ,which isthe sole source ofhis revenue ;labor- power serves asavariable capital only inthe hands ofits buyer ,the capitalist ,and the capitalist advances itspurchase price only apparently ,since its value has been previously supplied tohim bythe laborer . after adam smith has thus shown that the value ofa product in manufacture isequal tovplus s(sstanding for the profit ofthe capitalist ),he tells us that ,in agri- culture ,the laborers effect ,aside from \"the reproduction of avalue which isequal totheir own consumption and the (variable )capital employing them plus the profit ofthe capitalist ,\"furthermore ,\"over and above the capital ofthe farmer and all his profit regularly the reproduction ofthe rent ofthe owner ofthe real estate .\"(book ii,chapter 5, page 243. )the fact that the rent passes into the hands of the real estate owner ,isimmaterial for the question under consideration .before itcan pass into his hands ,itmust be inthose ofthe farmer ,that istosay ,ofthe industrial capitalist .itmust form apart ofthe value ofthe product , before itcan become arevenue for any one .rent aswell asprofit are but component parts ofsurplus -value ,even in the opinion ofadam smith himself ,and the productive laborer reproduces them continually together with his own wages ,that istosay,with the value ofthe variable capital . hence rent and profit are parts ofthe surplus -value s,and",
        "former discussions ofthe subject . 429 thus ,with adam smith ,the price ofall commodities re- solves itself into vplus s. the dogma ,that the price ofall commodities (also ofthe annual product in commodities )resolves itself into wages plus profit ,plus ground rent ,assumes inthe interspersed esoteric portion ofsmith's work quite naturally the form that the value ofevery commodity ,hence also that ofthe annual social product incommodities ,isequal tovplus s, orequal tothe value ofthe capital invested inlabor -power and continually reproduced by the capitalist plus the sur- plus -value added bythe labor ofthe laborers . this outcome ofthe analysis ofadam smith reveals at the same time see farther along the source ofthis one- sided analysis ofthe component parts into which the value ofacommodity resolves itself .but the determination of the magnitude ofthese component parts and ofthe limit oftheir value has no bearing onthe circumstance that they are atthe same time different sources ofrevenue for different classes engaged in production . various inconsistencies are jumbled together when adam smith says :\"wages ,profit ,and ground rent are the three primary sources ofall revenue aswell asall exchange -value . every other revenue isderived ,inthe last instance ,from one ofthese .\" (book i,chapter 6,page 48.) (1).all members ofsociety not directly engaged in reproduction ,with orwithout labor ,can obtain their share ofthe annual product ofcommodities -inother words ,their articles ofconsumption -primarily only out ofthe hands ofthose classes who are the first tohandle the product ,that istosay,productive laborers ,industrial capitalists ,and real estate owners .to that extent their revenues are substan- tially derived from wages (of the productive laborers ), profit ,and ground rent ,and appear asindirect derivations when compared tothese primary sources ofrevenue .but , on the other hand ,the recipients ofthese revenues ,thus indirectly derived ,draw them by grace oftheir social func- tions ,for instance that ofaking ,priest ,professor ,prosti- tute ,soldier ,etc. ,and they may regard these functions as the primary sources oftheir revenue .",
        "430 capital . (2).here the ridiculous mistake ofadam smith reaches its climax .after having taken his departure from acor- rect determination ofthe component parts ofthe value of commodities and the sum ofvalues ofthe product incor- porated inthem ,and having demonstrated that these com- ponent parts form somany different sources ofrevenue ;s after having inthis way deducted the revenues from the value ,he proceeds inthe opposite way -and this remains the ruling conception with him and makes ofthe revenues \"primary sources ofall exchange -value \"instead of\"com- ponent parts ,\"thereby throwing the doors wide open to vulgar economy .(see ,for instance ,our roscher .) iii.the constant portion of capital . let usnow see,how adam smith tries tospirit away the constant portion ofthe value ofcommodities . \"in the price ofcorn ,for instance ,one portion pays the rent ofthe land owner .\" the origin ofthis portion of value has no more todo with the circumstance that itis paid tothe land owner and forms for him arevenue inthe shape ofrent than the origin ofthe other portions ofvalue has todowith the fact that they constitute sources ofrevenue asprofit and wages . \"another portion pays the wages and subsistence ofthe laborers \"(and ofthe laboring cattle ,asheadds )\"employed in its production ,and the third portion pays the profit of the capitalist farmer .these three portions seem \"(they seem indeed )\"toconstitute either directly ,orinthe last in- stance ,the entire price ofcorn .\"35 this entire price ,that 34ireproduce this sentence verbatim from the manuscript ,although itseems tocontradict ,initspresent connection ,both the preceding and the following statements .this apparent contradiction issolved farther along in(4).capital and revenue inadam smith .-f.e. 35we donot make anything ofthe fact that adam smith was here particularly unlucky inthe choice ofhis example .the value ofthe corn resolves itself into wages ,profit ,and rent only ,because the food consumed bythe laboring cattle isregarded aswages ,and the laboring cattle aslaborers ,sothat ,onthe other hand ,the wage laborer also appears inthe role ofthe laboring cattle .(note added from manu- script ii.)",
        "former discussions ofthe subject . 431 istosay,the determination ofits magnitude ,isabsolutely independent ofitsdistribution among three kinds ofpeople . \"afourth portion may seem necessary inorder toreproduce the capital ofthe farmer ,orthe wear ofhis laboring cattle and ofhis other implements .but itmust be considered that the price ofany agricultural implement ,for instance ofalaboring horse ,isin itsturn composed ofthe above three parts :the rent ofthe land on which itisbred ,the labor ofbreeding ,and the profit ofthe farmer who ad- vances both the rent ofthis land and the wages ofthis labor .hence ,although the price ofthe corn may reproduce the price aswell asthe cost ofmaintenance ofthe horse ,the entire price still resolves itself ,directly orin the last in- stance ,into the same three parts :ground rent ,labor ,\"(he means wages )\"and profit .\"(book i,chapter 6,page 42.) this isverbatim all that adam smith has tosay insup- port ofhis surprising doctrine .his proof consists simply inthe repetition ofthe same contention .he admits ,for instance ,that the price ofcorn does not only consist ofv plus s,but contains also the price ofthe means ofproduc- tion consumed inthe production ofcorn ,inother words , the value ofacapital not invested inlabor -power by the farmer .but ,says he,the prices ofall these means ofpro- duction likewise resolve themselves into vplus s,the same asthe price ofcorn .he forgets ,however ,toadd inthis case ,that they also contain the prices ofthe means ofpro- duction consumed intheir production .he refers usfrom one line ofproduction toanother ,and from that toathird . the contention that the entire price ofcommodities resolves itself \"immediately \"or\"ultimately \"into vplus swould not beaspecious subterfuge inthe sole case that he could dem- onstrate that the product incommodities ,the price ofwhich resolves itself immediately into c(price ofconsumed means of production )plus vplus s,isultimately compensated by products which reproduce those \"consumed means of production \"completely and which are themselves produced by the investment ofmere variable capital ,by amere in- vestment ofcapital inlabor -power .the price ofthese last products would then bevplus s.and inthat case the price",
        "432capital . ofthe first products ,represented by cplus vplus s,where cstands for the constant portion ofcapital ,could be ulti- mately resolved into vplus s.adam smith himself did not believe that he had furnished such aproof by his example ofthe collectors ofscotch pebbles ,who ,according tohim , do not produce any surplus -value ,but produce only their own wages ,and who ,inthe second place ,do not employ any means ofproduction (they do,however ,employ them , such as baskets ,sacks ,and other means of carrying the stones ). we have already seen that adam smith later on throws his own theory over ,without ,however ,being conscious of his contradictions .but the source ofthese isfound pre- cisely inhis scientific premises .the capital converted into labor produces agreater value than its own .how does it dothat ?itisdue ,says adam smith ,tothe laborers ,who impregnate ,during the process ofproduction ,the things on which they work with avalue which forms not only an equivalent for their own purchase price ,but also asurplus- value ,appropriated ,not by them ,but by their employers (profit and rent ). that isallthey accomplish ,and allthat they can accomplish .and what istrue ofthe industrial labor ofone day ,istrue ofthe labor set inmotion bythe entire capitalist class during one year .hence the aggregate mass ofthe annual social product invalues can resolve itself only into vplus s,into an equivalent by which the laborers reproduce the value ofthe capital expended for the purchase oftheir labor -power ,and into an additional value which they must deliver over and above their own value totheir employers .these two elements ofvalue form atthe same time sources ofrevenue for the various classes engaged in reproduction :the first isthe source ofwages ,the revenue ofthe laborers ;the second that ofsurplus -value ,aportion of which isretained by the industrial capitalist inthe form of profit ,while another isgiven upbyhim asrent ,the revenue ofthe real estate owners .whence ,then ,should come an- other element ofvalue ,since the value ofthe annual product contains no other elements but vplus s?we are working on the basis ofsimple reproduction .since the entire",
        "former discussions ofthe subject . 433 quantity ofannual labor resolves itself into labor required for the reproduction ofthe value ofthe capital invested in labor -power ,and labor required for the creation ofsurplus- value ,where would the labor required for the production of the value ofacapital not invested inlabor -power come from ? the situation isasfollows : (1).adam smith determines the value ofacommodity by the quantity oflabor which the wage worker adds tothe object oflabor .he calls itmaterials oflabor ,since he is dealing with manufacture ,which isworking up products ofother labor .but this does not alter the matter .the value which the laborer adds toathing (and this \"adds \"isan expression ofadam smith )isentirely independent ofthe fact whether ornot this thing ,towhich value isadded ,had itself any value before this addition took place .the laborer creates aproduct ofvalue inthe form ofacommodity ;this , according toadam smith ,ispartly an equivalent for his wages ,and this part ,then ,isdetermined bythe value ofhis wages ;according towhether his wages are high orlow ,he has toadd more orless value inorder toproduce orreproduce anequivalent for his wages .on the other hand ,the laborer adds more labor over and above the limit sodrawn ,and this constitutes the surplus value for the capitalist who employs him .whether this surplus -value remains entirely inthe hands ofthe capitalist orisyielded by him inportions to third persons ,does not alter the qualitative fact that the ad- ditional labor ofthe laborer issurplus -value ,not the quan- tity ofthis additional value .itisvalue the same asany other portion ofthe value ofthe product ,but itdiffers from other portions by the fact that the laborer has not received any equivalent for it,nor will receive any later on,because itisappropriated by the capitalist without any equivalent . the total value ofacommodity isdetermined bythe quanti- tyoflabor expended by the laborer inits production ;one portion ofthis total value isdetermined by the fact that it isequal tothe value ofthe wages ,an equivalent for them . the second portion ,the surplus -value ,is,therefore ,likewise determined ,for itisequal tothe total value ofthe product . minus that portion which isequivalent tothe wages ;itis",
        "432capital . ofthe first products ,represented by cplus vplus s,where cstands for the constant portion ofcapital ,could be ulti- mately resolved into vplus s.adam smith himself did not believe that hehad furnished such aproof by his example ofthe collectors ofscotch pebbles ,who ,according tohim , do not produce any surplus -value ,but produce only their own wages ,and who ,inthe second place ,do not employ any means ofproduction (they do,however ,employ them , such asbaskets ,sacks ,and other means of carrying the stones ). we have already seen that adam smith later on throws his own theory over ,without ,however ,being conscious of his contradictions .but the source ofthese isfound pre- cisely inhis scientific premises .the capital converted into labor produces agreater value than its own .how does it dothat ?itisdue ,says adam smith ,tothe laborers ,who impregnate ,during the process ofproduction ,the things on which they work with avalue which forms not only an equivalent for their own purchase price ,but also asurplus- value ,appropriated ,not by them ,but by their employers (profit and rent ). that isallthey accomplish ,and allthat they can accomplish .and what istrue ofthe industrial labor ofone day ,istrue ofthe labor set inmotion by the entire capitalist class during one year .hence the aggregate mass ofthe annual social product invalues can resolve itself only into vplus s,into an equivalent by which the laborers reproduce the value ofthe capital expended for the purchase oftheir labor -power ,and into an additional value which they must deliver over and above their own value totheir employers .these two elements ofvalue form atthe same time sources ofrevenue for the various classes engaged in reproduction :the first isthe source ofwages ,the revenue ofthe laborers ;the second that ofsurplus -value ,aportion of which isretained by the industrial capitalist inthe form of profit ,while another isgiven upbyhim asrent ,the revenue ofthe real estate owners .whence ,then ,should come an- other element ofvalue ,since the value ofthe annual product contains no other elements but vplus s?we are working on the basis ofsimple reproduction .since the entire",
        "former discussions ofthe subject . 433 quantity ofannual labor resolves itself into labor required for the reproduction ofthe value ofthe capital invested in labor -power ,and labor required for the creation ofsurplus- value ,where would the labor required for the production of the value ofacapital not invested inlabor -power come from ? the situation isasfollows : (1).adam smith determines the value ofacommodity bythe quantity oflabor which the wage worker adds tothe object oflabor .he calls itmaterials oflabor ,since he is dealing with manufacture ,which isworking up products ofother labor .but this does not alter the matter .the value which the laborer adds toathing (and this \"adds \"isan expression ofadam smith )isentirely independent ofthe fact whether ornot this thing ,towhich value isadded ,had itself any value before this addition took place .the laborer creates aproduct ofvalue inthe form ofacommodity ;this , according toadam smith ,ispartly an equivalent for his wages ,and this part ,then ,isdetermined bythe value ofhis wages ;according towhether his wages are high orlow ,he has toadd more orless value inorder toproduce orreproduce anequivalent for his wages .on the other hand ,the laborer adds more labor over and above the limit sodrawn ,and this constitutes the surplus value for the capitalist who employs him .whether this surplus -value remains entirely inthe hands ofthe capitalist orisyielded by him inportions to third persons ,does not alter the qualitative fact that the ad- ditional labor ofthe laborer issurplus -value ,not the quan- tity ofthis additional value .itisvalue the same asany other portion ofthe value ofthe product ,but itdiffers from other portions by the fact that the laborer has not received any equivalent for it,nor will receive any later on,because itisappropriated by the capitalist without any equivalent . the total value ofacommodity isdetermined bythe quanti- tyoflabor expended by the laborer inits production ;one portion ofthis total value isdetermined by the fact that it isequal tothe value ofthe wages ,an equivalent for them . the second portion ,the surplus -value ,is,therefore ,likewise determined ,for itisequal tothe total value ofthe product . minus that portion which isequivalent tothe wages ;itis",
        "434capital . equal tothe excess ofthe value created inthe manufacture ofthe product over that portion which isan equivalent for the wages . (2).that which istrue ofacommodity produced in some individual industrial establishment by any individual laborer istrue ofthe annual product ofall lines ofbusi- ness together .that which istrue ofthe day's work of some individual productive laborer istrue of the entire year's work realized bythe entire class ofproductive labor- ers.it\"fixes \"(expression ofadam smith )inthe annual product atotal value determined by the quantity ofthe annual labor expended ,and this total value resolves itself into one portion determined by that part ofthe annual labor which reproduces the equivalent of its annual wages ,or these wages themselves ;and into another portion determined by the additional labor by which the laboring class creates surplus -value for the capi- talist class . the value contained in the annual product then consists of but two elements ,namely the equivalent ofthe wages received by the laboring class , and the surplus -value annually created for the capitalist class .now ,the annual wages are the revenue ofthe work- ing class ,and the annual quantity ofsurplus -value the reve- nue ofthe capitalist class ;both ofthem represent the rela- tive shares inthe annual fund for consumption (this view iscorrect when simple reproduction isthe premise )and are realized init.there is,then ,no room left anywhere for the value ofthe constant capital ,for the reproduction of the capital serving inthe form ofmeans ofproduction .and adam smith states explicitly inthe introduction ofhis work that all portions ofthe value ofcommodities which serve asrevenue coincide with the annual product oflabor in- tended for asocial fund for consumption :\"in what the revenue ofthe people consisted generally ,orwhat was the nature ofthe fund ,which ...supplied their annual con- sumption ,toexplain this isthe purpose ofthese first four books .\"(page 12.) and inthe very first sentence ofthe introduction we read :\"the annual labor ofevery nation is the fund ,which supplies them originally with all the sub-",
        "former discussions ofthe subject . 435 sistence which they consume inthe course ofthe year ,and which always consist either ofthe immediate product of this labor ,orinarticles bought with this product from other nations .\"(page 11.) the first mistake ofadam smith consists inidentifying the value ofthe annual product with the annual product invalues .the latter isonly the product oflabor ofthe current year ,the former includes furthermore all elements ofvalue consumed inthe making ofthe annual product , but which have been produced inthe preceding oreven in earlier years ,means ofproduction whose value merely re-appears ,but which have been neither produced nor re- produced by the labor expended inthe current year .by this mistake ,adam smith spirits away the constant portion ofthe value ofthe annual product .his mistake rests on another error inhis fundamental conception :he does not distinguish the two -fold nature oflabor itself ,oflabor which creates exchange -value by the expenditure oflabor -power , and labor which creates articles ofuse (use-values )asa concrete ,useful ,activity .the total quantity ofthe com- modities made annually ,in other words ,the total annual product ,isthe product ofthe useful labor active during the the past year ;all these commodities exist only because so- cially employed labor has been spent inasystematized net- work ofmany kinds ofuseful labor ;itisdue tothis fact alone that the value ofthe means ofproduction consumed in their production ,re-appearing in anew natural form , iscontained intheir total value .the total annual product , then ,isthe result ofthe useful labor expended during the year ;but only aportion ofthe value ofthe annual product has been created during the year ;this portion isthe annual product in values ,in which the quantity oflabor set in motion during the year itself isrepresented . hence ,ifadam smith says inthe just cited passage :\"the annual labor ofevery nation isthe fund ,which supplies them originally with all the subsistence which they con- sume inthe course ofthe year ,etc. ,\"heplaces himself one- sidedly upon the standpoint of mere useful labor ,which has indeed given all these means ofsubsistence their con-",
        "436capital . sumable form .but he forgets that this was impossible without the assistance ofinstruments and materials oflabor supplied by former years ,and that ,therefore ,the \"annual labor ,\"sofar asithas created any values ,did not create all the value ofthe products finished by it;that the product invalues issmaller than the value ofthe products . while we cannot reproach adam smith for going inthis analysis no farther than all his successors (although astep toward acorrect solution isalready found among the physi- ocrats ),heloses himself ,onthe other hand ,inachaos fur- ther along ,mainly because his \"esoteric \"conception ofthe value ofcommodities ingeneral isconstantly vitiated by exoteric ideas ,which onthe whole prevail with him ,while his scientific instinct permits his esoteric conception tore- appear from time totime . iv.capital and revenue inadam smith . that portion of the value of every commodity (and therefore also ofthe annual product )which isbut an equiv- alent ofthe wages isequal tothe capital advanced by the capitalist for labor -power ,inother words ,equal tothe vari- able portion ofthe total capital advanced .the capitalist recovers this portion ofthe value ofhis advanced capital through aportion ofthe value ofacommodity newly sup- plied bythe wage laborer .whether the variable capital isad- vanced insuch away that the capitalist pays the laborer his share inaproduct which isnot yet ready for sale ,orwhich , though ready ,has not yet been sold by the capitalist ,or whether he pays him with money obtained by the sale of commodities previously supplied by the laborer ,or whether he has drawn this money in advance by means ofcredit -inall these cases the capitalist expends variable capital ,which passes into the hands ofthe laborer inthe form of money ,and atthe same time he possesses the equivalent ofthis value ofhis capital inthat portion of the value ofhis commodities by which the laborer repro- duces his share ofitstotal value ,inother words ,bywhich he reproduces his own wages .instead ofgiving him this por-",
        "former discussions ofthe subject . 437 tion ofthe value initsnatural form ,that ofhis own product , the capitalist pays him in money .the capitalist then holds the variable portion ofhis advanced capital inthe form of commodities ,while the laborer has received the equivalent for his sold labor -power inthe form ofmoney . now while that portion ofthe capital advanced by the capitalists ,which has been converted by the purchase of labor -power into variable capital ,serves inthe process of production itself aslaboring power and isproduced asa new value ,or reproduced ,by the expenditure of this force ,inthe form ofcommodities ,hence areproduction , ornew production ofcapital -the laborer spends the value orprice ofhis sold labor -power inmeans ofsubsistence ,in means for the reproduction ofhis labor -power .aquantity ofmoney equal tothe variable capital forms his revenue , which lasts only solong ashecan sell his labor- power tothe capitalist . the commodity of the wage laborer -his labor -power -serves asacommodity only tothe extent that itisincor- porated inthe capital ofthe capitalist and acts ascapital ; on the other hand ,the capital expended by the capitalist as money -capital in the purchase oflabor -power serves asa revenue inthe hands ofthe seller oflabor -power ,the wage laborer . various processes of circulation and production inter- mingle here ,which adam smith does not clearly distinguish . first :processes belonging to circulation .the laborer sells his commodity -labor -power -to the capitalist ;the money with which the capitalist buys itisfrom his point ofview money invested for gain ,in other words ,money- capital ;itisnot spent ,but advanced . (this isthe real meaning of\"advance \"-avance inthe language ofthe physi- ocrats nomatter where the capitalist gets the money .every value which the capitalist pays out for the purposes ofthe productive process ,isadvanced from his point ofview ,re- gardless of whether this takes place before or after the fact ;itisadvanced for the process ofproduction .) the same takes place here asinevery other sale ofcommodi- ties :the seller gives away ause-value (inthis case his",
        "438capital . labor -power )and receives its value (realizes its price )in money ;the buyer gives away his money and receives in turn the commodity itself -inthis case labor -power . secondly :in the process ofproduction ,the purchased labor -power now forms apart ofthe acting capital ,and the laborer himself serves here merely asone particular natural form ofthis capital ,distinguished from the elements ex- isting inthe natural form ofmeans ofproduction .during the process ,the laborer adds value tothe means ofproduc- tion which he converts into products ,by expending labor- power tothe amount ofhis wages (without surplus -value ); he reproduces for the capitalist that portion ofhis capital inthe form ofcommodities which has been ,orhas tobe, advanced for wages ;hence he produces for the capitalist that capital which hecan \"advance \"once more for the pur- chase oflabor -power . thirdly :inthe sale ofthe commodities ,one portion oftheir selling price reproduces the variable capital ad- vanced bythe capitalist ,whereby he,onthe one hand ,isen- abled to buy more labor -power ,and the laborer ,on the other hand ,tosell more . in all purchases and sales of commodities -so far as these transactions are merely regarded by themselves ,-it isquite immaterial what becomes ofthe money in the hands ofthe seller received for his commodities ,and what becomes ofthe article ofuse inthe hands ofthe buyer re- ceived in exchange for this money .hence ,sofar asthe mere process of circulation isconcerned ,itisquite im- material that the labor -power bought by the capitalist re- produces the value ofcapital for him ,and that ,onthe other hand ,the money received bythe laborer asapurchase -price ofhis labor -power serves ashis revenue .the magnitude ofthe value ofthe commodity ofthe laborer ,his labor- power ,isnot affected either by serving asarevenue for him orby reproducing ,through itsuse,onthe part ofthe buyer ,the value ofthe capital ofthe buyer . since the value ofthe labor -power -that istosay,the ade- quate selling price ofthis commodity -isdetermined bythe quantity oflabor required for its reproduction ,and this",
        "former discussions ofthe subject . 439 quantity oflabor itself ishere determined by that required for the necessary subsistence ofthe laborer ,the wages be- come arevenue on which the laborer has tolive . itisentirely wrong ,when adam smith says (page 223 ): \"that portion ofcapital which isinvested inthe mainte- nance ofproductive labor ....after ithas served him \" (the capitalist )\"inthe function ofacapital ....forms arevenue for them \"(the laborers ).the money with which the capitalist pays for the labor -power purchased by him , \"serves him inthe function ofacapital ,\"tothe extent that hethereby incorporates labor -power inthe material elements ofhis capital and thus enables his capital toserve aspro- ductive capital .we make this distinction :the labor -power isacommodity ,not acapital ,inthe hands ofthe laborer , and itconstitutes for him arevenue ,solong ashe can repeat its sale ;itserves as capital ,after its sale ,inthe hands ofthe capitalist ,during the process ofproduction it- self .that which here serves twice islabor -power ;as a commodity which issold atits value ,inthe hands ofthe laborer ;asapower creating exchange -values and use-values , inthe hands ofthe capitalist who has bought it.but the money which the laborer receives from the capitalist isnot given tohim until after hehas given the capitalist the use ofhis labor -power ,after ithas already been realized inthe value ofthe product oflabor .the capitalist holds this value inhis hands ,before he pays for it.hence itisnot the money which serves twice here ;first ,asthe money -form ofthe variable capital ,and then aswages .itislabor -power which has served twice ;first ,asacommodity inthe sale of labor -power (instipulating the amount ofwages tobepaid , the money serves merely asan ideal measure ofvalue and need not even beinthe hands ofthe capitalist );secondly , inthe process ofproduction ,inwhich itserves ascapital , in other words ,asan element inthe hands ofthe capi- talist creating exchange -value and use-values .labor -power first supplies ,inthe form of commodities ,the equivalent which istobe paid tothe laborer ,and then only isitpaid by the capitalist tothe laborer inmoney .in other words , the laborer himself creates the fund out ofwhich the capi- talist pays him .but this isnot all.",
        "440 capital . the money ,which the laborer receives ,isspent by him. for the maintenance ofhis labor -power ,or-looking upon the capitalist class and working class asan aggregate mass -is spent topreserve for the capitalist an instrument by means ofwhich alone he can remain acapitalist . the continuous purchase and sale oflabor -power ,then , perpetuates on one hand labor -power asan element ofcapi- tal,by the the grace ofwhich itappears asthe creator of commodities ,use-values having anexchange -value ,by means ofwhich ,furthermore ,that portion ofcapital which buys labor -power iscontinually reproduced by its own product , sothat the laborer himself creates the fund ofcapital out ofwhich heispaid .on the other hand ,the sale oflabor- power becomes the ever renewed source for the maintenance ofthe laborer and makes ofhis labor -power that faculty through which he secures his revenue ,by which he lives . revenue inthis case signifies nothing else but an appropri- ation ofvalues by means ofever repeated sales ofacom- modity (labor -power ),these values serving merely for the continual reproduction ofthe commodity tobesold .and tothis extent smith isright when hesays that that portion ofthe value ofthe laborer's product ,for which the capi- talist pays him an equivalent inthe form ofwages ,becomes asource ofrevenue for the laborer .but this does not alter the nature or magnitude ofthis portion ofvalue ofthe commodity any more than the value ofthe means ofpro- duction ischanged by the fact that they serve ascapital- values ,orthe nature and magnitude ofastraight line are changed by the fact that itserves asabasis for some tri- angle orasadiameter ofsome ellipse .the value oflabor- power remains quite asindependent asthat ofthose means ofproduction .this portion ofthe value ofacommodity neither consists ofarevenue asone ofitsindependent con- stituent factors ,nor does itresolve itself into revenue .be- cause this value ,ever renewed by the laborer ,constitutes a source ofrevenue for him ,that isnoreason why his revenue , on the other hand ,should bean element ofthe new values produced by him .the magnitude ofhis share inthe new value created by him determines the volume ofthe value",
        "former discussions ofthe subject . 441 ofhis revenue ,not vice versa .the fact that this portion ofthe new value forms arevenue for him indicates merely what becomes ofit,shows the character ofitsemployment , and has no more todo with its formation than with that ofany other value .the fact that my receipts are ten dol- lars aweek changes nothing inthe nature ofthe value of the ten dollars nor inthe magnitude oftheir value .as in the case of every other commodity so in that oflabor- power its value isdetermined by the labor necessary for its reproduction ;that the quantity ofthis labor isdeterm- ined bythe value ofthe necessary subsistence ofthe laborer , inother words ,that itisequal tothe labor required for the reproduction of his own life's conditions ,ispeculiar for this commodity (labor -power ),but no more peculiar than the fact that the value oflaboring cattle isdetermined by the subsistence necessary toproduce this subsistence . but itisthis category of\"revenue \"which istoblame for all the confusion inadam smith over this question .the various kinds of revenue constitute with him the \"com- ponent parts \"ofthe annually produced new values ofcom- modities ,while ,vice versa ,the two portions into which these values resolve themselves for the capitalist form sources ofrevenue -namely the equivalent ofhis variable capital advanced for the purchase oflabor -power and the other portion of value ,the surplus -value ,which likewise belongs tohim but did not cost him anything .the equiva- lent ofthe variable capital isonce more advanced for labor- power and tothat extent forms arevenue for the laborer inthe shape ofwages ;the other portion ,the surplus -value , which does not reproduce any advance of capital for the capitalist ,may bespent by him inarticles ofconsumption (whether necessary orluxuries ),itmay be consumed by him asarevenue ,instead offorming capital -value ofsome kind .the first condition ofthis revenue isthe value of the commodities itself ,and itscomponent parts differ from the point ofview ofthe capitalist only tothe extent that they are an equivalent for,oran excess over the variable portion ofthe value ofthe capital advanced by him .both ofthem consist of nothing but labor expended and ma-",
        "442capital . terialized during the production ofcommodities .they con- sist ofan expenditure ,not ofan income orrevenue -an expenditure oflabor . after this reversion offacts ,by which arevenue becomes the source ofthe value ofcommodities instead ofthe value ofcommodities being the source ofrevenue ,the value of commodities has the appearance ofbeing \"composed \"of various kinds of revenue ;these revenues are determined . independently ofone another ,and the total value ofcommod- ities isdetermined bythe addition ofthe values ofthese reve- nues .but now the question is:how isthe value ofeach of these revenues determined ,which are supposed tobethe sources ofthe values ofcommodities ?inthe case ofwages it isdone ,for wages are the value ofthe commodity labor- power ,and this isdetermined (the same asthat ofall other commodities )by the labor required for itsreproduction .but surplus -value ,orasadam smith has it,profit and ground rent ,how are they determined ? here adam smith has but empty phrases tooffer .he either represents wages and surplus -value (orwages and profit )ascomponent parts of the value ,orprice ,ofcommodities ,or,sometimes inthe same breath ,ascomponent parts into which the price of commodities resolves itself ;but this means precisely the reverse ofhis contention and makes ofthe value ofcom- modities the primary thing ,different parts ofwhich fall asdifferent revenues tothe share ofdifferent persons en- gaged inthe productive process .this isby no means identical with the composition ofvalue ofthese three \"com- ponent parts .\"ifidetermine the magnitude ofthree dif- ferent straight lines independently and then form afourth straight line out ofthese three lines as\"component parts \" equal totheir sum ,itisby no means the same process asif ihave some given straight line before me and \"resolve \"it, sotosay,into three different parts for some purpose .in the first case ,the magnitude ofthe line changes throughout with the magnitude ofthe three lines whose sum itis;in the second case ,the magnitude ofthree parts ofthe line isfrom the outset limited by the fact that they are parts ofaline ofgiven magnitude .",
        "former discussions ofthe subject .443 however ,ifwe keep inmind that part ofthe analysis of smith which iscorrect ,namely ,that the value newly created by the annual labor and contained inthe annual social pro- duct incommodities (the same asinevery individual com- modity ,orevery daily ,weekly ,etc. ,product )isequal to the value ofthe variable capital advanced (inother words , equal tothe value intended for the purchase ofnew labor- power )plus the surplus -value which the capitalist can realize in means of his individual consumption -simple reproduction being assumed ,and other circumstances re- maining the same ,ifwe keep furthermore in mind that adam smith confounds labor which creates values and is an expenditure of labor -power with labor which creates articles of use and isexpended in auseful ,appropriate , manner ,then the entire conception amounts tothis :the value ofevery commodity isthe product oflabor ;hence this isalso true ofthe value ofthe product ofannual labor ,or ofthe value ofthe annual product ofsociety incommodi- ties .but since all labor resolves itself ,(1),into necessary labor time ,in which the laborer reproduces merely an equivalent for the capital advanced inthe purchase ofhis labor -power ,and ,(2),into surplus -labor ,by which he sup- plies the capitalist with avalue for which the latter does not give any equivalent ,in other words ,asurplus -value , itfollows that all value ofcommodities can resolve itself only into these two component parts ,sothat ultimately itforms arevenue for the laboring class in the form of wages ,and for the capitalist class inthe form ofsurplus- value .as for the constant value ofthe capital ,inother words ,the value ofthe means ofproduction consumed inthe production ofthe annual product ,itcannot be explained how this value gets into that ofthe new product (unless we accept the phrase that the capitalist charges the buyer with itinthe sale ofhis goods ),but ultimately ,seeing that the means ofproduction are themselves products oflabor , this portion ofvalue can consist only ofan equivalent for variable capital and surplus -value ,ofaproduct ofnecessary labor and surplus -labor .the fact that the values ofthese means ofproduction serve inthe hands oftheir employers",
        "444 capital . ascapital -values does not prevent them from resolving them- selves \"originally ,\"even though insome other hands ,if we gotothe bottom ofthe matter ,and atsome previous time ,into the same two portions ofvalue ,hence into two different sources ofrevenue . one point iscorrect inthis conception ,namely ,that the matter has adifferent aspect from the point of view of the movement ofsocial capital ,inother words ,ofthe totali- ty ofindividual capitals ,that ithas from the standpoint ofthe individual capital ,considered by itself ,orfrom the standpoint of each individual capitalist .for these ,the value of commodities resolves itself ,(1),into aconstant element (afourth one ,asadam smith says ),and (2), into the sum ofwages and surplus -value ,orwages ,profit , and ground rent .but from the point ofview ofsociety , the fourth element ofadam smith ,the constant value of capital ,disappears . (5).recapitulation . the absurd formula that the three revenues ,wages ,profit , and ground rent ,form the three \"component parts \"ofthe value ofcommodities ,isdue inthe case ofadam smith to the more plausible idea that the value ofcommodities re- solves itself into these three parts .however ,this islike- wise incorrect ,even granted that the value ofcommodities isonly divisible into an equivalent ofthe consumed labor- power and surplus -value created by it.but the mistake rests here again on adeeper and truer basis .the capitalist mode ofproduction isconditioned onthe fact that the pro- ductive laborer sells his own labor -power ,asacommodity , tothe capitalist ,in whose hands itthen serves merely as an element of his productive capital .this transaction , taking place inthe circulation ,the sale and purchase of labor -power -does not only inaugurate the process ofpro- duction ,but also determines implicitly itsspecific character . the production ofause-value ,and even that ofacommodi- ty (for this can bedone eventually by independent produc- tive laborers ),ishere only ameans ofproducing absolute",
        "former discussions ofthe subject . 445 or relative surplus -value for acapitalist .for this reason we have seen inthe analysis ofthe process ofproduction , that the production ofabsolute and relative surplus -value determines ,(1),the duration ofthe daily labor -process ,(2), the entire social and technical formation ofthe capitalist process ofproduction .within this process ,there isrealized the distinction between the mere conservation ofvalue (the value ofthe constant capital ),the actual reproduction of advanced value (an equivalent of labor -power ),and the production ofsurplus -value ,that istosay,ofvalue for which the capitalist has neither advanced an equivalent nor will advance one subsequently . the appropriation ofsurplus -value -avalue inexcess of the equivalent advanced by the capitalist although itis inaugurated by the purchase and sale oflabor -power ,isa transaction taking place within the process of production itself ,and forms an essential part ofit. the introductory transaction taking place inthe circu- lation ,the purchase and sale oflabor -power ,isitself con- ditioned on adistribution ofthe elements ofproduction , which isthe premise and prelude ofthe distribution ofthe social products ,and implies the separation oflabor -power , asacommodity ofthe laborer ,from the means ofproduc- tion ,asthe property ofnon -laborers . however ,this appropriation ofsurplus -value ,orthis sepa- ration ofthe production ofvalues into areproduction of advanced values and aproduction ofnew values (surplus- values )which do not offset any equivalent ,does not alter inany way the substance ofvalue itself nor the nature of the production ofvalues .the substance ofvalue isand remains nothing but expended labor -power -labor inde- pendent ofthe specific ,useful ,character ofthis labor and the production ofvalues isnothing but the process ofthis expenditure .aserf ,for instance ,expends his labor -power for six days ,labors for six days ,and the fact ofthis expendi- ture isnot altered by the circumstances ,that he may be working three days for himself ,on his own field ,and three days for his lord ,onthe field ofthe latter .both his volun- tary labor for himself and his compulsory labor for his lord",
        "446 capital . are equally labor ;sofar asthis labor isconsidered with reference tothe values ,oreven the useful articles ,created by it,there isno difference inhis six days oflabor .the difference refers merely tothe distinct conditions by which the expenditure ofhis labor -power during each half ofhis labor -time ofsix days isaffected .the same applies tothe necessary and surplus -labor ofthe wage worker . the process ofproduction ends in acommodity .the fact that labor -power has been expended initscreation now ismanifest in its attribute of value ;the magnitude of this value ismeasured bythe quantity oflabor expended in it;the value of acommodity resolves itself into nothing else and isnot composed ofanything else .ifihave drawn astraight line of definite length ,ihave \"produced \"a straight line (true ,only symbolically ,as iknow before- hand )by means ofacertain mode ofdrawing which is determined by certain laws independent of myself .ifi divide this line into three sections (which may correspond toacertain problem ),every one ofthese sections remains astraight line ,and the entire line ,whose sections they are, does not resolve itself ,bythis division ,into anything differ- ent from astraight line ,for instance ,acurve ofsome kind . neither can idivide aline ofagiven magnitude insuch a way ,that the sum ofits divisions isgreater than the un- divided line itself ;hence the magnitude ofthe undivided line isnot determined by any arbitrary division ofitsparts . vice versa ,the relative magnitudes ofthese divisions are limited from the outset bythe size ofthe line whose parts they are. acommodity produced by acapitalist does not differ in itself from that produced by an independent laborer ,orby alaboring commune ,orby slaves .but inthe present case , the entire product oflabor aswell asits value belong to the capitalist .like every other producer ,hehas toconvert his commodity by sale into money ,before he can manipu- late itfurther ;he must convert itinto the form ofthe universal equivalent . let us look atthe product in commodities before itis converted into money .itbelongs wholly tothe capitalist .",
        "former discussions ofthe subject . 447 on the other hand ,asauseful product oflabor ,ause-value , itisentirely the product ofapast labor -process .not so its value .one portion ofthis value isbut the value of means ofproduction consumed inthe production ofthe commodities and re-appearing inanew form ;this value has not been produced during the process ofproduction of this commodity ;for the means ofproduction possessed this value before this process ofproduction ,independently of it;they entered into this process asthe bearers oftheir value ;itisonly the external form ofthis value which has been renewed and changed .this portion ofthe value of the commodity serves the capitalist asan equivalent ofthe constant value ofthe capital advanced by him and con- sumed in the production ofthe commodity .it existed previously inthe form ofmeans ofproduction ;itexists now asacomponent part ofthe value ofthe newly -produced commodity .as soon asthis commodity has been turned into money ,the value then existing inthe form ofmoney must bereconverted into means ofproduction ,into itsorigi- nal form determined by the process ofproduction and its function init.nothing isaltered inthe character ofthe value of acommodity by the function of this value as capital . asecond portion ofthe value ofacommodity isthe value ofthe labor -power which the wage -worker sells tothe capi- talist .itisdetermined ,the same asthat ofthe means of production ,independently ofthe process ofproduction into which labor -power istoenter ,and itisfixed inatransaction ofthe circulation ,the purchase and sale oflabor -power ,be- fore itgoes tothe process ofproduction .by means ofhis function -the expenditure oflabor -power -the wage -laborer produces avalue ofthe commodity equal tothe value which the capitalist has topay him for the use ofhis labor -power . he gives this value tothe capitalist incommodities ,and is paid for itin money .the fact that this portion ofthe value ofcommodities isfor the capitalist but an equivalent for the capital which he has toadvance inwages does not alter inany way the truth that itisavalue ofcommodities",
        "448 capital . newly created during the process ofproduction and consist- ing ofnothing but past expenditure oflabor ,the same as the surplus -value .neither isthis truth affected bythe fact that the value paid bythe capitalist tothe laborer assumes the form ofarevenue for the laborer ,and that not only labor -power iscontinually reproduced thereby ,but also the class ofwage -laborers itself ,and thus the basis ofthe entire capitalist production . however ,the sum ofthese two portions ofvalue does not constitute allthere istothe value ofcommodities .there re- mains anexcess over both ofthem ,the surplus -value .this , like that portion ofvalue which reproduces the variable cap- ital advanced inwages ,isavalue newly created bythe labor- erduring the process ofproduction -materialized labor .but itdoes not cost the owner ofthe entire product ,the capitalist , anything .this circumstance permits the capitalist tocon- sume the surplus -value entirely ashis revenue ,unless hehas togive up some portions ofittoother claimants -such as ground rent toland owners ,in which case such portions constitute arevenue ofthird persons .this same circum- stance was also the compelling motive ,which induced the capitalist toengage inthe first place inthe manufacture of commodities .but neither his original benevolent intention ofsecuring some surplus -value ,nor itssubsequent expendi- ture asrevenue ,byhim orothers ,affect the surplus -value as such .they donot impair the fact that itiscoagulated ,un- paid ,labor ,nor the magnitude ofthis surplus -value ,things which are determined by entirely different conditions . however ,ifadam smith wanted tooccupy himself ,ashe did,with an analysis ofthe role of different constituent parts ofvalue inthe total process of reproduction ,even while hewas investigating the question ofthe value ofcom- modities ,then itwas evident that ,while some particular portions ofvalue served asarevenue ,others served just as continually ascapital -and ,according tohis logic ,these would likewise have toberegarded asconstituent parts ofthe value ofcommodities ,orparts into which this value resolves itself . adam smith identifies the production ofcommodities in",
        "former discussions ofthe subject . 449 general with capitalist production ;the means ofproduction are tohim from the outset \"capital ,\"labor iswage -labor , and therefore \"the number ofthe useful and productive la- borers isalways .....proportional tothe quantity ofcapital stock which isemployed insetting them towork .\" (intro- duction ,page 12.) in short ,the various elements .ofthe productive process -both objective and subjective ones -ap- pear from the first with the masks characteristic ofthe pro- cess ofcapitalist production .the analysis ofthe value of commodities ,therefore ,coincides with the reflection ,towhat extent this value is,onthe one hand ,amere equivalent for invested capital ,and ,onthe other ,towhat extent itforms \"free \"value ,that istosay ,value not reproducing any ad- vance ofcapital ,orsurplus -value .the proportions ofvalue compared from this point of view transform themselves clandestinely into its independent \"component parts ,\"and finally into the \"sources ofall value .\" afurther conse- quence ofthis method isthe alternate composition ordisso- lution ofthe value ofcommodities into revenues ofvarious kinds ,sothat the revenues do not consist ofvalues ofcom- modities ,but rather the value of commodities consists of revenues .but the fact that the value ofacommodity may serve asarevenue for this orthat man does not change the nature ofvalue assuch any more than the fact that the value ofacommodity assuch ,orofmoney assuch ,may serve as capital changes their nature .the commodity with which adam smith isdealing represents from the outset acom- modity -capital (which consists ofthe value ofthe capital consumed inproduction plus asurplus -value ),itisacom- modity produced by capitalist methods ,aresult ofthe capi- talist process ofproduction .itwould have been necessary , then ,toanalyze first this process ,and this would have im- plied an analysis ofthe process ofself -expansion and ofthe formation ofvalue ,which itincludes .since this process is initsturn conditioned onthe circulation ofcommodities , its description requires also aprevious and independent analysis ofacommodity .however ,even where adam smith hits \"esoterically \"upon the correct thing inahaphazard way ,herefers tothe formation ofvalues only inthe analy-",
        "450capital . sis of commodities ,that isto say,in the analysis of commodity -capital . iii.the economists after smith.38 ricardo reproduces the theory ofsmith almost verbatim : \"itisagreed that all products ofacertain country are con- sumed ,but itmakes the greatest imaginable difference , whether they are consumed bythose who reproduce another value ,orbythose who donot .when wesay that revenue is saved up and added tothe capital ,we mean that the portion ofrevenue added tothe capital isconsumed by productive laborers ,instead ofunproductive ones .\"(principles ,page 163. ) in fact ,ricardo fully accepted the theory ofadam smith concerning the separation ofthe price ofcommodities into wages and surplus -value (orvariable capital and sur- plus -value ).the points inwhich hediffers from him are,1) the composition ofthe surplus -value ;ricardo eliminates ground rent asone ofits necessary elements ;2),ricardo starts out from the price ofcommodities and dissects itinto these component parts .in other words ,the magnitude of value ishis point ofdeparture .the sum ofitsparts isas- sumed asgiven ,itisthe starting point ,while adam smith frequently subverts this order and proceeds contrary tohis deeper insight ,by producing the quantity ofvalue subse- quently by an addition ofits component parts . ramsay makes the following remark against ricardo : \"ricardo forgets that the total product isnot only divided into wages and profits ,but that aportion isalso required for the reproduction ofthe fixed capital .\" (an essay on the distribution ofwealth .edinburgh ,1836 ,page 174. ) ramsay means byfixed capital the same thing which icall constant capital ,for he says on page 53:\"fixed capital exists inaform inwhich itcontributes toward the produc- tion ofthe commodity in process offormation ,but not toward the maintenance oflaborers .\" 36from here tothe end ofthe chapter ,anextract from manuscript iiispresented .",
        "former discussions ofthe subject . 451 adam smith refuses toaccept the logical outcome ofhis dissolution ofthe value ofcommodities ,and therefore ofthe value ofthe annual product ofsocial labor ,into wages and surplus -value ,orinto mere revenue .this logical outcome would bethat the entire annual product might beconsumed inthat case .itisnever the original thinkers that draw the ebsurd conclusions .they leave that tothe says and mac- cullochs . say takes the matter indeed easy enough .that which is an advance ofcapital for one ,is,orwas ,arevenue and net product for another .the difference between the gross and the net product ispurely subjective ,\"and thus the total value ofall products in asociety isdivided asrevenue .\" (say ,trait d'economie politique ,1817 ,ii,page 69.) \"the total value ofevery product iscomposed ofthe profits ofthe land owners ,the capitalists ,and the industrious peo- ple (wages figure here asprofits des industrieux !)who have contributed toward itsproduction .this makes the revenue ofsociety equal tothe gross value produced ,not equal to the net products ofthe soil ,aswas claimed by asect of economists \"(the physiocrats ).(page 63.) among others ,proudhon has appropriated this discovery ofsay . storch ,however ,who likewise accepts the doctrine of smith inprinciple ,finds that say's application ofitdoes not hold water .\"ifitisadmitted ,that the revenue ofanation isequal toitsgross product ,sothat no capital \"(that isto say,no constant capital )\"istobe deducted ,then itmust also be admitted that this nation may consume unproduc- tively the entire value ofitsannual product ,without inthe least reducing its future revenue . the products which represent the \"(constant )\"capital ofanation are not consumable .\"(storch ,considrations sur lanature du rev- enu national .paris ,1824 ,page 150. ) however ,storch forgot totell ushow the existence ofthis constant portion ofcapital agrees with the analysis ofprices by smith ,which he has accepted ,and according towhich the value ofcommodities consists only ofwages and surplus- value ,but not ofany constant capital .he realizes only",
        "452 capital . through say that this analysis ofprices leads toabsurd re- sults ,and his own opinion ofitis\"that itisimpossible to dissolve the necessary price into its simplest elements .\" (cours d'economie politique ,petersburg ,1815 ,ii,page 140. ) sismondi ,who occupies himself especially with the rela- tion ofcapital and revenue ,and makes the peculiar formu- lation ofthis relation the specific difference ofhis nouveaux principes ,did not say one scientific word ,did not contrib- ute one atom toward aclarification ofthis problem . barton ,ramsay and cherbuliez attempted tosurpass the formulation ofsmith .they failed ,because they conceive the problem in aonesided way ,by not making clear the distinction of constant and variable capital -value from fixed and circulating capital . john stuart mill likewise reproduces ,with his usual pom- posity ,the doctrine handed down by adam smith tohis followers . as aresult ,the smithian confusion ofthought persists to this hour ,and his dogma isone ofthe orthodox articles of faith ofpolitical economy .",
        "simple reproduction .453 chapter xx . simple reproduction . i.the formulation ofthe question . ifwe study the annual function ofsocial capital \" ofthe total capital whose fractional parts are the individual capi- tals ,the movements ofwhich are simultaneously their indi- vidual movements and links inthe movements ofthe total capital -and itsresults ,that istosay,ifwe study the prod- uct in commodities put forth by society during the year , then itmust become apparent how the process ofreproduc- tion ofthe social capital proceeds ,what characteristics dis- tinguish this process ofreproduction from that ofan indi- vidual capital ,and what characteristics are common toboth . the annual product includes those portions ofthe social product which reproduce capital ,the social reproduction ,as well asthose which gotothe fund for consumption ,which are consumed by capitalists and laborers ,in other words , productive and individual consumption .itcomprises the reproduction (maintenance )ofthe capitalist and working classes ,and thus the reproduction ofthe capitalist character ofthe entire process ofproduction . itisevidently the circulation formula m-c..p..c ' c'{mm-c which we have toanalyze ,and the consumption necessarily plays arole init.for the point ofdeparture ,c'equal to cplus c,the commodity -capital ,comprises the constant and variable capital aswell asthe surplus -value .its movements , therefore ,include both the individual and productive con- sumption .in the cycles m-c...p...c'-m',and p...c'-m' -c ...p,the movement ofthe capital isthe starting and fin- ishing point .and this implies consumption ,for the com- modity ,the product ,must be sold .when these premises 37from manuscript ii.",
        "454capital . are accepted ,itisimmaterial for the movement ofthe indi- vidual capitals ,what becomes ofthese commodities subse- quently .on the other hand ,inthe movement ofc'...c'the conditions ofsocial reproduction are precisely different in this point ,since itmust be shown what becomes ofevery portion ofvalue ofthis total product ofc'.inthis case ,the total process of reproduction includes the process ofcon- sumption by way ofthe circulation quite asmuch asthe process ofreproduction ofthe capital itself . this process ofreproduction ,now ,must beconsidered for the purposes ofour study both from the point ofview ofthe reproduction ofthe value and ofthe substance ofthe indi- vidual component parts ofc'.we cannot rest satisfied any longer ,aswe did inthe analysis ofthe value ofthe product ofthe individual capital ,with the assumption that the indi- vidual capitalist must first convert the component parts of his capital into money bythe sale ofhis commodities ,before heisable toreconvert itinto productive capital by renewed purchase ofthe elements ofproduction inthe commodity market .those elements ofproduction ,sofar asthey consist ofthings ,constitute asmuch aportion ofthe social capital asthe individual finished product ,which isexchanged for them and reproduced by them .on the other hand ,the movement ofthat portion ofthe social product incommodi- ties ,which isconsumed bythe laborer inthe expenditure of his labor -power ,and by the capitalist inspending his sur- plus -value ,does not only form an integral part ofthe move- ment ofthe total product ,but also intermingles with the movements ofthe individual capitals ,and this process can- not be explained by merely assuming it. the question which we have toface immediately ,isthis : how isthe value ofthe capital consumed inproduction re- produced out ofthe annual product ,and how does the move- ment ofthis reproduction intermingle with the consumption ofsurplus -value bythe capitalists and ofwages bythe labor- ers?we are dealing ,then ,first with reproduction onasim- ple scale .itisfurthermore assumed that products are ex- changed attheir value ,and that no revolution inthe value ofthe elements ofproductive capital takes place .should",
        "simple reproduction .455 there beany divergence ofprices from values ,this would not exert any influence onthe movements ofsocial capital .on the whole ,there isthe same exchange ofthe same quantity of products ,although the individual capitalists would be taking shares initwhich would nolonger beproportional to their respective advances and tothe quantities ofvalue pro- duced by each one .as for revolutions ofvalue ,they do not alter anything inthe proportions ofthe elements of value ofthe various component parts ofthe total annual product ,provided they are universally and uniformly dis- tributed .to the extent that they are limited and unevenly distributed ,they are disturbances ,which ,inthe first place , can be understood only asdivergences from equal propor- tions ofvalue ;and ,inthe second place ,given the law ac- cording towhich one portion ofthe annual product repro- duces constant ,and another variable capital ,arevolution either inthe value ofthe constant orvariable capital would not alter this law .itwould change merely the relative mag- nitude ofthe portions ofvalue which serve inthe one orthe other capacity ,seeing that other values would have taken the places ofthe original ones . so long aswe looked upon the production ofvalue and the value ofproducts from the point ofview ofindividual capital ,itwas immaterial for the analysis which was the natural form ofthe product incommodities ,whether itwas , for instance that of amachine ,of corn ,or of looking glasses .itwas always but amatter ofillustration ,and any line ofproduction could serve that purpose .what we had toconsider was the immediate process ofproduction itself , which presented itself atevery point asthe process ofsome individual capital .sofar asreproduction was concerned ,it was sufficient toassume that that portion ofthe product in commodities ,which represented capital inthe sphere ofcir- culation ,found an opportunity toreconvert itself into its elements ofproduction and thus into itsform ofproductive capital .itlikewise sufficed toassume that both the laborer and the capitalist found inthe market those commodities for which they spend their wages and surplus -value .this merely formal manner ofpresentation does not suffice inthe",
        "456capital . study ofthe total social capital and ofthe value ofitsprod- ucts .the reconversion ofone portion ofthe value ofthe product into capital ,the passing ofanother portion into the individual consumption of the capitalist and working classes ,form amovement within the value ofthe product itself which iscreated by the total capital ;and this move- ment isnot only areproduction ofvalue ,but also ofmate- rial ,and is,therefore ,asmuch conditioned onthe relative proportions ofthe elements ofvalue ofthe total social prod- uct ason itsuse-value ,its material substance.38 simple reproduction onthe same scale appears asan ab- straction ,inasmuch asthe absence ofall accumulation or reproduction on an enlarged scale isan irrelevant assump- tion incapitalist society ,and ,onthe other hand ,conditions ofproduction do not remain exactly the same indifferent years (aswas assumed ).the assumption isthat asocial capital ofagiven magnitude produces the same quantity of value incommodities this year aslast ,and supplies the same quantity ofwants ,although the forms ofthe commodities may be changed inthe process ofreproduction .however , while accumulation does take place ,simple reproduction is always apart ofitand may ,therefore ,bestudied initself , being an actual factor inaccumulation .the value ofthe annual product may decrease ,although the quantity ofuse- values may remain the same ;or,the value may remain the same ,although the quantity ofthe use-values may decrease ; or,the quantity ofvalue and ofuse-values may decrease simultaneously .all this amounts tosaying that reproduc- tion takes place either under more favorable conditions than before ,orunder more difficult ones ,which may result inan imperfect reproduction .but all this can refer only tothe quantitative side ofthe various elements ofreproduction , not tothe role which they are playing asareproducing capi- tal,orasareproduced revenue ,inthe entire process . 38from manuscript viii .",
        "simple reproduction .457 ii.the two departments of social production.39 the total product ,and therefore the total production ,of society ,isdivided into two great sections : 1. means ofproduction ,commodities having aform in which they must ,oratleast may ,pass over into productive consumption . ii.means ofconsumption ,commodities having aform inwhich they pass into the individual consumption ofthe capitalist and working classes . ineach ofthese two departments ,all the various lines of production belonging tothem form one single great line of production ,the one that ofthe means ofproduction ,the other that ofarticles ofconsumption .the aggregate capital invested ineach ofthese two departments ofproduction con- stitutes aseparate section ofthe entire social capital . ineach department ,the capital consists oftwo parts : (1)variable capital .this capital ,sofar asits value is concerned ,isequal tothe value ofthe social labor -power employed inthis line ofproduction ,inother words equal to the sum ofthe wages paid for this labor -power .sofar asits substance isconcerned ,itconsists ofthe active labor -power itself ,that istosay,ofthe living labor set inmotion bythis value ofcapital . (2)constant capital .this isthe value ofall the means ofproduction employed inthis line .these ,again ,are di- vided into fixed capital ,such asmachines ,instruments of labor ,buildings ,laboring animals ,etc. ,and circulating capital ,such asmaterials ofproduction ,raw and auxiliary materials ,half -wrought articles ,etc. the value ofthe total annual product created with the capital ofeach ofthe two great departments ofproduction consists ofone portion representing the constant capital c consumed inthe process ofproduction and transferred tothe product ,and ofanother portion added bythe entire labor of the year .this latter portion ,again ,consists ofone part re- producing the advanced variable capital v,and ofanother 39mainly taken from manuscript ii;the diagrams from manuscript viii .",
        "458capital . representing an excess over the variable capital ,the surplus- value s.and just asthe value ofevery individual commod- ity,sothat ofthe entire annual product ofeach department consists ofcplus vplus s. the portion cofthe value ,representing the constant capi- tal consumed inproduction ,isnot identical with the value ofthe constant capital invested inproduction .itistrue that the materials ofproduction are entirely consumed and their values completely transferred tothe product .but ofthe in- vested fixed capital ,only aportion isconsumed and itsvalue transferred tothe product .another portion ofthe fixed capital ,such asmachines ,buildings ,etc. ,continues toexist and serve the same asbefore ,merely depreciating tothe extent ofthe annual wear and tear .this persistent portion ofthe fixed capital does not exist for us,when we consider the value ofthe product .itisaportion ofthe value ofcapi- tal existing independently beside the new value in com- modities produced by this capital .this was shown previ- ously inthe analysis ofthe value ofthe product ofsome in- dividual capital (volume i,chapter vi).however ,for the present we must leave aside the method of analysis em- ployed there .we saw inthe study ofthe value ofthe prod- uct ofindividual capital that the value withdrawn from the fixed capital bywear and tear was transferred tothe product incommodities created during the time ofwear ,no matter whether any portion ofthis fixed capital isreproduced in its natural form out ofthe value thus transferred ornot. atthis point ,however ,inthe study ofthe social product as awhole and ofitsvalue ,we must for the present leave out ofconsideration that portion ofvalue which istransferred from the fixed capital tothe annual product by wear and tear ,unless this fixed capital isreproduced innatura during the year .inone ofthe following sections ofthis chapter we shall return tothis point . we shall base our analysis ofsimple reproduction onthe following diagram ,inwhich cstands for constant capital ,",
        "simple reproduction .459 vfor variable capital ,and sfor surplus -value ,the rate of surplus -value between vand sbeing assumed at100 per cent . the figures may indicate millions offrancs ,marks ,pounds sterling ,ordollars . i. production ofmeans ofproduction . capital ...... .4000 c+1000 v=5000 . product incommodities ..4000 c+1000 v+1000 s=6000 . these exist inthe form ofmeans ofproduction . ii.production ofmeans ofconsumption . -capital ..... ...2000 c+500 v=2500 . product incommodities..2000 c+500 v+500 s=3000 . these exist inarticles ofconsumption . recapitulation :total annual product incommodities : i.4000 c+1000 v+1000 s=6000 means ofproduction . ii.2000 c+500 v+500 s=3000 articles ofconsumption . total value 9000 ,exclusive ofthe fixed capital persisting in its natural form ,according toour assumption . now ,ifwe examine the transactions required onthe basis ofsimple reproduction ,where the entire surplus -value isun- productively consumed ,leaving aside for the present the me- diation ofthe money circulation ,we obtain atthe outset three great points ofvantage . (1)the 500 v,representing wages ofthe laborers ,and 500 s,representing surplus -value ofthe capitalists ,indepart- ment ii,must be spent for articles ofconsumption .but their value exists in the articles of consumption tothe amount of1000 ,held by the capitalists ofdepartment ii, which reproduce the 500 vand represent the 500 s.the wages and surplus -value of department ii,then ,are ex- changed within this department for products ofthis same department .by this means ,aquantity ofarticles ofcon- sumption equal to1000 (500 vplus 500 s)disappear out of the total product ofdepartment ii. (2)the 1000 vand 1000 sofdepartment imust likewise be spent for articles ofconsumption ,in other words ,for some ofthe products ofdepartment ii.hence they must be exchanged for the remaining 2000 cofconstant value ,which isequal inamount tothem .department iireceives inre-",
        "460capital . turn an equal quantity ofmeans ofproduction ,the product ofi,inwhich the value of1000 vand 1000 sofiisin- corporated .by this means ,2000 cofiiand (1000 v+ 1000 s)ofidisappear out ofthe calculation . (3)nothing remains now but 4000 cofi.these consist ofmeans ofproduction which can beused up only inde- partment i.they serve for the reproduction ofitsconsumed constant capital ,and are disposed ofbythe mutual exchange between the individual capitalists ofi,just asare the (500 v+500 s)in iiby an exchange between the capitalists and laborers ,orbetween the individual capitalists ,ofii. this may serve for the present torender easier the under- standing ofthe following statements . iii.the transactions between the two departments.40 i(v+8)versus iic. we begin with the great exchange between the two de- partments .the values of(1000 v+1000 s),consisting of the natural form ofmeans ofproduction inthe hands of their producers ,are exchanged for 2000 cof ii,for values consisting of articles of consumption in their natural form . the capitalist class of ii thereby recon- verts itsconstant capital of2000 from the form ofarticles of consumption into that ofmeans ofproduction ofarticles of consumption .inthis form itmay serve once more asafac- tor inthe labor -process asthe value ofconstant capital inthe process ofself -expansion .on the other hand ,the equiva- lent ofthe labor -power ofi(1000 v)and ofthe surplus- value ofthe capitalists ofi(1000 s)isrealized inarticles ofconsumption ;both ofthem are converted from their nat- ural form ofmeans ofproduction into anatural form in which they may beconsumed asrevenue . now ,this mutual transaction isaccomplished by means ofacirculation ofmoney ,which facilitates itasmuch asit renders its understanding difficult ,but which isoffunda- 40here manuscript viii isresumed .",
        "simple reproduction .461 mental importance ,because the variable portion ofcapital must ever resume the form ofmoney ,ofmoney -capital con- verting itself from the form of money into labor -power . the variable capital must be advanced in the form of money in all lines of production carried on simul- taneously ,regardless of whether they belong to depart- ment ior ii.the capitalist buys the labor -power before itenters into the process of production ,but does not pay for itexcept at stipulated terms ,after ithas been expended in the production ofuse-values .he owns , with the remainder ofthe value ofthe product ,also that portion ofitwhich isanequivalent for the money expended inthe payment oflabor -power ,inother words ,that portion ofthe value ofthe product which represents variable capital . by this portion ofvalue the laborer has supplied the capital- istwith the equivalent for his own wages .but itisthe recon- version ofcommodities into money by their sale which re- stores tothe capitalist his variable capital inthe form of money -capital ,which he may advance once more for the purchase oflabor -power . in department i,then ,the aggregate capitalist has paid 1000 pounds sterling (iuse the term pounds sterling merely toindicate that itisvalue inthe form ofmoney ),equal to 1000 v,for the v-portion ofthe already existing value of product i,that istosay,ofthe means ofproduction created by him .the laborers buy with these 1000 pounds sterling articles ofconsumption ofthe same value from the capital- ists ii,thereby converting one -half ofthe constant capital ii into money ;the capitalists ii,intheir turn ,buy with these 1000 pounds sterling means ofproduction ,valued at1000 , from the capitalists i;the variable capital -value of1000 v, which consisted ,inthe natural form ofthe product ofcapi- talists i,ofmeans ofproduction ,isthus reconverted for them into money and may serve anew intheir hands asmoney- capital ,which istransformed into labor -power ,the most es- sential element ofproductive capital .in this way ,their variable capital returns tothem inthe form ofmoney ,asa result ofthe realization onsome oftheir commodity -capital .",
        "482capital . as for the money which isrequired for the exchange of the sportion ofcommodity -capital ifor the second half of constant capital ii,itmay beadvanced invarious ways .in reality ,this circulation implies innumerable small purchases and sales ofthe individual capitals ofboth departments ,the money coming under all circumstances from these capital- ists,since we have already disposed ofthe money thrown into circulation by the laborers .itmay bethat one ofthe capitalists ofdepartment iibuys ,with the money -capital he has aside from his productive capital ,means ofproduction from capitalists ofdepartment i,orthat ,vice versa ,one of the capitalists ofdepartment ibuys ,with funds reserved for individual expenses ,not for capital investment ,articles of consumption from capitalists ofdepartment ii.acertain supply ofmoney ,tobeused either for investment ascapital orfor expenditure asrevenue ,must beassumed toexist be- side the productive capital inthe hands ofthe capitalists , under all circumstances ,aswe have shown insection iand ii.let usassume -itisimmaterial what proportion we se- lect for our purpose -that one -half ofthe money isadvanced bythe capitalists ofdepartment iiinthe purchase ofmeans ofproduction intended for the reproduction oftheir constant capital ,while the other half isspent bythe capitalists ofde- partment ifor articles ofconsumption .for instance ,let department iiadvance 500 pounds sterling for the purchase ofmeans ofproduction from department i,thereby repro- ducing (inclusive ofthe 1000 pounds sterling coming from the laborers ofdepartment i)three -quarters ofitsconstant capital initsnatural form ;department ibuys with the 500 pounds sterling soobtained articles ofconsumption from ii, thus completing for one -half ofthe s-portion ofitscommod- ity-capital the circulation c-m-cand realizing onitsprod- uct inasupply ofarticles ofconsumption .by means ofthis second transaction ,the 500 pounds sterling return tothe hands ofthe capitalists ofdepartment ii,inthe form of money -capital existing beside itsproductive capital .on the other hand ,department iexpends money tothe amount of 500 pounds sterling ,inanticipation ofthe realization onthe other half ofthe s-portion ofits still unsold commodity-",
        "simple reproduction .463 =capital ,for the purchase ofarticles ofconsumption from de- partment ii.with the same 500 pounds sterling ,depart- ment iibuys from imeans ofproduction ,thereby reproduc- ing innatural form itsentire constant capital (1000 +500 +500 2000 ),while irealizes itsentire surplus -value in articles ofconsumption .the entire transaction would rep- resent atransfer ofcommodities valued at4000 pounds ster- ling with acirculation of2000 pounds sterling inmoney . this last amount issufficient only because we have assumed that the entire annual product issold inbulk inafew large transactions .the important point ishere that department iihas not only reconverted itsconstant capital ,which had been reproduced inthe form of articles of consumption , into the form ofmeans ofproduction ,but has also recovered the 500 pounds sterling which ithad thrown into circula tion for the purchase ofmeans ofproduction ;and that in the same way department ipossesses once more not only its variable capital ,which ithad produced inthe form of means ofproduction ,inthe form ofmoney -capital ,readily convertible into labor -power ,but also the 500 pounds ster- ling expended inthe purchase ofarticles ofconsumption previously tothe sale ofthe s-portion ofitscapital inantic- ipation ofitsrealization .itrecovers these 500 pounds ster- ling ,not by this expenditure ,but by the subsequent sale ofone -half ofthe s-portion ofitscommodity -capital . in both cases ,itisnot merely the constant capital of department iiwhich isreconverted from the form ofapro- duct into the natural form ofmeans ofproduction ,inwhich itcan alone serve ascapital ;nor isitmerely the variable portion ofthe capital of iwhich isreconverted into its money -form ,nor the surplus -portion ofthe means ofpro- duction ofiwhich istransformed into itsconsumable form of revenue .itisalso the 500 pounds sterling ofmoney -capital , advanced by department ii inthe purchase ofmeans of production previously tothe sale ofthe corresponding por- tion ofthe value ofits constant capital ,which return to i;and the 500 pounds sterling expended by ifor means ofconsumption previously tothe realization ofitssurplus-",
        "464 capital . value .the fact that the money advanced by iiatthe ex- pense ofthe constant portion ofits commodities ,and by i atthe expense ofthe surplus -portion ofits commodities , returns tothem isdue tothe circumstance that one class ofcapitalists throws 500 pounds sterling into circulation over and above the constant capital existing inthe form ofcommodities indepartment ii,and another class alike amount over and above the surplus -value existing inthe form ofcommodities indepartment i. inthe last analysis , the two departments have mutually paid one another in full by the exchange ofequivalents inthe form oftheir respective commodities .the money thrown into circula- tion by each department in excess ofthe value oftheir commodities ,asameans of transacting the exchange of these commodities ,returns toeach one ofthem out ofthe circulation atthe same rate inwhich they had contributed toit.neither has grown any richer thereby .department ii possessed aconstant capital of 2000 in the form of articles of consumption plus 500 pounds sterling in money ;now itpossesses 2000 in means of production plus 500 pounds sterling in money ,the same asbefore ; in the same way ,department ipossesses ,as before ,a surplus -value of 1000 (consisting of commodities in the form of means of production ,now converted into a supply of articles of consumption )plus 500 pounds sterling .the general conclusion isthis :the money which the industrial capitalists throw into circulation for the purpose of accomplishing the mutual exchange oftheir commodities ,either inaccount with the constant value ofthe commodities ,orinaccount with the surplus- value existing inthe commodities ,tothe extent that itis spent asrevenue ,returns into the hands ofthe respective capitalists inproportion tothe amount advanced by them for the circulation ofmoney . as for the reconversion ofthe variable capital ofdepart- ment iinto the form ofmoney ,this capital exists ,after the capitalists ofihave invested itinwages ,first inthe form ofthe commodities produced by the laborers .the capital- ists have paid this capital inthe form ofmoney tothese",
        "simple reproduction .465 laborers asthe price oftheir labor -power .the capitalists have tothis extent pait for that portion ofthe value of their commodities ,which isequal tothe variable capital ex- pended inthe form ofmoney .they are,for this reason , the owners ofthis portion ofthe commodity -product .but that portion ofthe working class which isemployed by them does not buy the means ofproduction created by it; these laborers buy articles ofconsumption produced by de- partment ii.hence the variable capital advanced by the capitalists ofiinthe payment oflabor -power does not re- turn tothese capitalists directly .itpasses by means ofthe purchases ofthe laborers ofiinto the hands ofthe capital- ist producers ofthe requirements oflife ofthe laborer ,or ofother commodities accessible tothem ;inother words ,it passes into the hands ofcapitalists ofii.and not until these expend this money inthe purchase ofmeans ofpro- duction does itreturn bythis circuitous route into the hands ofthe capitalists ofdepartment i. itfollows that ,onthe basis ofsimple reproduction ,the sum ofthe values ofvplus softhe commodity -capital ofi (and therefore acorresponding proportional part of the total product in commodities ofi)must be equal tothe constant capital cofdepartment ii,which islikewise dis- posed ofasaproportional part ofthe entire product incom- modities ofdepartment ii;ori(v+s)=iic. iv.transactions within department ii.necessities of life and articles of luxury . itremains for ustoanalyze the portion vplus softhe value ofthe commodities ofdepartment ii.this analysis has nothing todowith the most important question which occupies our attention inthis chapter ,namely the question , towhat extent the separation ofthe value ofevery individ- ual capitalist product in commodities into cplus vplus s applies also tothe value ofthe entire annual product incom- modities ,even though this separation may bebased on dif-",
        "466 capital . ferent forms .this question issolved by the transaction between i(v+s)and iic,and ,onthe other hand ,bythe analysis ofthe reproduction oficinthe annual product incommodities ofi,tobeanalyzed later on. since ii(vs )exists inthe natural form ofarticles of consumption ;since ,furthermore ,the variable capital ad- vanced inthe payment ofthe labor -power ofthe laborers ismostly spent by them for articles ofconsumption ;and since ,finally ,the s-portion ofthe value ofcommodities ,on the basis ofsimple reproduction ,ispractically spent asrev- enue for articles ofconsumption ,itisevident atthe first glance that the laborers ofiibuy back ,with the money received aswages from the capitalists ofii,aportion of their own product ,corresponding invalue tothe money- value represented by these wages .the capitalist class ofii thereby reconvert the money -capital advanced by them in the payment oflabor -power into the form ofmoney .itis asthough they had paid the laborers in mere checks on commodities .as soon as the laborers realize on these checks by the purchase of aportion ofthe commodi- ties produced by them ,but belonging to the capital- ists,these checks return into the hands of the capital- ists .only ,these checks donot merely represent value ,but they are actually embodied ingold orsilver .we shall ana- lyze later onthis sort ofreflux ofvariable capital by means ofaprocess inwhich the laborer appears asapurchaser and the capitalist asaseller .here ,however ,itisaquestion of adifferent point ,which must bediscussed on the occasion ofthe return ofthis variable capital toitspoint ofdeparture . department iiofthe annual production ofcommodities consists ofagreat variety oflines ofproduction ,which may , however ,be divided into two great subdivisions according totheir products . (a)articles ofconsumption required for the mainten- ance ofthe laboring class ,and tothe extent that they are material requirements oflife ,also forming aportion ofthe consumption ofthe capitalist class ,although they are fre- quently different inquality and value .we may ,for our purposes ,comprise this entire subdivision under the name of",
        "simple reproduction .467 necessary articles ofconsumption ,regardless ofwhether a product ofthis class ,such astobacco ,isreally anecessary article ofconsumption from the physiological standpoint or not .itissufficient that itmay behabitually indemand . (b)articles ofluxury ,which are consumed only bythe capitalist class ,being purchased only with the surplus -value , which never falls tothe share ofthe laborer . itisobvious that the variable capital advanced inthe production ofthe commodities ofthe class (a)must flow back directly tothat portion ofthe capitalist class ofii(inother words the capitalists ofiia )who have produced these mater- ial requirements oflife .they sell them totheir own labor- ers tothe amount ofthe variable capital paid tothem in wages .this reflux takes place inadirect way ,sofar asthis entire subdivision (a)ofthe capitalist class ofdepartment ii isconcerned ,no matter how numerous may bethe transac- tions between the capitalists ofthe various lines ofindustry interested inthis department ,bymeans ofwhich the return- ing variable capital isdistributed pro rata .these transac- tions are processes ofcirculation ,whose means ofcirculation are supplied directly bythe money expended by the labor- ers.itisdifferent with subdivision iib .the entire por- tion ofthe values produced inthis subdivision ,iib (v+s), exists inthe natural form ofarticles ofluxury ;that isto say,articles which the laborer can buy no more than the value ofthe commodities ivexisting inthe form ofmeans ofproduction ,notwithstanding the fact that both articles ofluxury and means ofproduction are the products ofthe working class .hence the reflux by which the variable cap- ital advanced inthis subdivision restores tothe capitalist pro- ducers its value inthe form ofmoney cannot take place directly ,but must bepromoted indirectly ,similarly asinthe case ofiv. let usassume ,for instance ,that vstands for 500 and s also for 500 ,asthey did inthe case ofthe entire class ii; but letthe division ofthe variable capital and ofthe corre- sponding surplus -value be asfollows : (subdivision a)necessities oflife :vequal to400 and s",
        "468 capital . equal to400 ;hence atotal quantity ofnecessities oflife valued at400 vplus 400 s,equal to800 ,inother words ,iia (400 v+400 s). (subdivision b)articles ofluxury :valued at100 v plus 100 s,equal to200 ,oriib (100 v+100 s). the laborers ofiib have received 100 in money aspay- ment oftheir labor -power ,orsay 100 pounds sterling .they buy with this money articles ofconsumption from the cap- italists ofiia tothe same amount .this class ofcapitalists buys with the same money 100 p.st.worth ofthe commod- ities ofiib ,thereby returning tothe capitalists ofiib their variable capital inthe form ofmoney . in iia there are available once more 400 vinmoney ,in the hands ofthe capitalists ,obtained by exchange with their laborers .furthermore ,the fourth part ofthe product rep- resenting surplus -value has been transferred tothe laborers ofiib ,and iib (100v )have been purchased inthe form ofarticles ofluxury . now ,assuming that the capitalists ofiia and iib divide the expenditure oftheir revenue inthe same proportion be- tween necessities oflife and luxuries -for instance ,three- fifths for necessities and two -fifths for luxuries -the capital- ists ofiia will spend their revenue from surplus -value , amounting to400 s,three -fifths ,or240 ,for their own pro- duct ofnecessities oflife ,and two -fifths ,or160 ,for articles ofluxury .the capitalists of subdivision iib will divide their surplus -value of100 sinthe same way :three -fifths ,or 60,for necessities ,and two -fifths ,or40,for articles oflux- ury ,these being produced and exchanged intheir own sub- division . the 160 inarticles ofluxury received by iia for itssur- plus -value ,pass into the hands ofthe capitalists ofiia inthe following manner :ofthe 400 sofiia,we have seen that 100 were exchanged inthe form ofnecessities oflife for an equal amount ofarticles ofluxury ofiib,and furthermore 60,consisting ofnecessities oflife ,for 60 sofiib ,consist- ing ofluxuries .the total calculation then stands asfol- lows :",
        "simple reproduction .469 iia :400 vplus 400 s;iib :100 vplus 100 s. (1)400 vof(a)are consumed bythe laborers ofiia,apart ofwhose product isrepresented by that amount innecessi- ties oflife ;the laborers buy these necessities from the cap- italist producers oftheir own subdivision .these capitalists thereby recover 400 p.st.,inmoney ,which isthe value of the variable capital paid by them tothese same laborers . they can now buy more labor -power with it. (2)one portion ofthe 400 sof(a),equal tothe 100 vof (b);inother words ,one -quarter ofthe surplus -value of(a) isexchanged for luxuries inthe following way :the laborers of(b)received from the capitalists oftheir subdivision 100 p.st.inwages .with this amount these laborers bought one- quarter ofthe surplus -value of(a),inother words ,commod- ities consisting ofnecessities oflife .the capitalists of (a) buy with this same money articles ofluxury tothe same amount ,which equals 100 vof(b),orone -half ofthe entire product inluxuries of(b).in this way the capitalists of (b)recover their variable capital inthe form ofmoney and are enabled toresume reproduction after having invested this amount once more inlabor -power ,since the entire con- stant capital ofthe whole department iihas been reproduced bythe exchange between i(v+s)and iic.the labor -power ofthe laborers ofiib ,the producers ofarticles ofluxury ,is under these circumstances ,only saleable because the product created bythem asanequivalent for their own wages iscon- sumed by the capitalists ofiia.(the same applies tothe sale ofthe labor -power ofi,since the iic for which i(v+ s)isexchanged ,consists ofboth articles ofluxury and neces- sities oflife ,and that which isreproduced by means ofi (vs )consists ofthe means ofproduction ofboth luxuries and necessities .) (3)we now come tothe exchange between aand b,tothe extent that itismerely atransaction between the capitalists ofthese two subdivisions .so far we have disposed ofthe variable capital (400 )vand ofone portion ofthe surplus- value (100 )sin (a),and ofthe variable capital (100 )vin (b).we had furthermore assumed that the average propor",
        "470capital . tion ofthe expenditure ofthe capitalist revenue was inboth classes two -fifths for luxuries and three -fifths for necessities . apart from the 100 thus expended for luxuries ,the entire department therefore still has tospend 60for luxuries in(a) and the same proportion ,or40,in (b). (iia )isthen divided into 240 for necessities and 160 for luxuries ,or240 +160 =400 s(iia). (iib )sisdivided into 60for necessities and 40for lux- uries ;60+40=100s (iib ).the last 40 are consumed bythis class out ofitsown product (two -fifths ofitssurplus- value );the 60 for necessities are obtained by this class through the exchange of60ofitssurplus -value for 60sofa. we have ,then ,for the entire capitalist class ofii,the fol- lowing situation (vplus sinsubdivision (a)consisting of necessities ,insubdivision (b)ofluxuries ): iia (400 v+400 s)+iib (100 v+100 s)=1000 ;by this transaction there isrealized 500 v(a+b)+500 s (a+b)=1000 ;the first member inthis equation being realized in400 vof(a)and 100 sof(b),the second in300 s of(a)plus 100 vof(b)plus 100 sof(b). considering aand b,each by itself ,we have the transac- tion : a) v 8 +400 v(a) 240 s(a)+100 v(b)+60s(b) b) v 8+100 s(a) 60s(a)+40s(b)=800 200= 1000 ifwe retain ,for the sake ofsimplicity ,the same propor- tion between the variable and constant capital ofeach sub- division (which ,bythe way ,isnot atallnecessary ),we ob- tain for 400 v(a)aconstant capital of1600 ,and for 100 v (b)aconstant capital of400 ,and we have the following two subdivisions aand bindepartment ii: (iia )1600 c+400 v+400 s=2400 (iib ) 400 c+100 v+100 s= 600 making together 2000 c+500 v+500 s=3000 . accordingly ,1600 ofthe 2000 iic inarticles ofconsump-",
        "simple reproduction .471 tion ,which are exchanged for 2000 i(v+s),are disposed of for means ofproduction ofnecessities oflife,and 400 for means ofproduction ofluxuries . the 2000 i(v+s),then ,would bedivided into (800 v +800 s)i,for the 1600 means ofproduction ofnecessities oflife insection a,and (200 v+200 s)i,for the 400 means ofproduction ofluxuries inb. aconsiderable part ofthe instruments oflabor ,strictly socalled ,aswell asofthe raw and auxiliary materials , etc. ,ishomogeneous for both departments .but sofar as the transaction ofthe exchanges ofthe various portions of value ofthe total product i(v+s)are concerned ,such a division would beimmaterial .both the above named 800 v ofiand 200 vofiare realized bythe spending ofwages for articles ofconsumption 1000 cofii,and the money -capital advanced for this purpose isuniformly distributed ,onitsre- turn ,among the capitalist producers of i,reproducing their variable capital in money atthe rate advanced by them .on the other hand ,sofar asthe realization ofthe 1000 sofiisconcerned ,the capitalists will likewise draw uniformly ,in proportion tothe magnitude oftheir sur- plus -value ,600 iia and 400 iib out ofthe entire second half ofiic,equal to1000 ;inother words ,those who make up for the constant capital ofiia will draw 480 ,orthree- fifths ,out of600 cofiia,and 320 ,ortwo -fifths ,out of400 cofiib ,atotal of800 ;while those who make up for the constant capital ofiib will draw 120 ,orthree -fifths out of 600 cofiia and 80,ortwo -fifths out of400 cofiib ,atotal of200. grand total ,1000 . that which isarbitrary inthis case isthe proportion of the variable tothe constant capital ofboth iand iiand soisthe uniformity ofthis proportion for iand iiand their subdivisions .as for this uniformity ,ithas been as- sumed merely for the sake ofsimplifying the matter ,and itwould not alter inany way the fundamental conditions ofthe problem and itssolution ,ifwe had assumed different proportions .however ,the necessary result ofallthis ,onthe basis ofsimple reproduction ,isthe following :",
        "472capital . (1)that the new product invalues created bythe labor ofone year inthe natural form ofmeans ofproduction , divisible into vplus s,must be equal tothe value ofthe constant capital cofthe product invalues created by the other part ofannual labor ,reproduced inthe form ofarti- cles ofconsumption .ifitwere smaller than iic,itwould be impossible for iitoreproduce its entire constant cap- ital ;ifitwere greater ,asurplus would remain unused .in either case ,the assumption ofsimple reproduction would beviolated . (2)that inthe case ofannual product which isrepro- duced inthe form ofarticles ofconsumption ,the variable capital vadvanced inthe form ofmoney can be realized by its recipients ,tothe extent that they are laborers pro- ducing luxuries ,only inthat portion ofthe necessities of life which embodies for its capitalist producers primarily their surplus -value ;sothat v,invested inthe production ofluxuries ,isequal invalue toacorresponding portion of sproduced inthe form ofnecessities ,and must besmaller than the whole ofthis s,which issofiia ;and that ,finally , the variable capital ofthe capitalist producers ofluxuries returns tothem inthe form ofmoney only by means ofthe realization ofthat vinthis portion ofs.this phenom- enon isquite analogous tothe realization ofi(v+s)in iic ;only that inthe second case ,itisthe vofiib which isrealized inaportion ofsofiia ofthe same value .these conditions determine the proportions ofthe various quan- tities in every distribution ofthe total annual product ,to the extent that itactually enters into the process ofthe an- nual reproduction promoted by circulation .i(v+s)can berealized only iniic,and iic can renew its function asa component part ofproductive capital only by means ofthis realization ;inthe same way ,the vofiib can be realized only inaportion ofsofiia,and vofiib can only thus be reconverted into the form ofmoney -capital .of course ,all this applies only tothe extent that itisaresult ofthe proc- ess ofreproduction itself ,sothat the capitalists ofiib do not,for instance ,take up money -capital for v by",
        "simple reproduction .473 credit from others .so far asmere quantity isconcerned , the transactions for the exchange ofthe various portions of the annual product can take place only inthe way indicated above ,solong asthe scale and the conditions determining value remain stationary ,and solong asthese strict condi- tions are not altered by the commerce with foreign countries . now ,ifwe were tosay after the manner ofadam smith that i(vs )resolves itself in iic,and iic resolves itself into i(v+s),or,ashesays more frequently and more ab- surdly ,i(vs )constitutes the component parts ofthe price (orvalue inexchange ,ashe has it)ofiic,and iic consti- tutes the entire component part ofthe value ofi(v+s), then we could and should say that the vofiib resolves itself into sofiia,orthe sofiia into the vofiib ,orthe vofiib forms acomponent part ofthe sofiia,or,vice versa ,the surplus -value thus resolves itself into wages ,orinto variable capital ,and the variable capital forms acomponent part ofthe surplus -value .this absurdity isindeed found in adam smith ,since according tohim wages are determined by the value ofthe necessities oflife ,and the values of these commodities intheir turn by the value ofthe wages (variable capital )and surplus -value contained in them . he issoabsorbed inthe fractional parts ,into which the product invalues ofone working day isdivided onthe basis of capitalist production namely into vplus sthat he quite forgets that itisimmaterial inthe simple exchange of commodities ,whether the equivalents existing in various natural forms consist ofpaid orunpaid labor ,since their production costs ineither case the same amount oflabor ; and that itisalso immaterial ,whether the commodity ofa isameans ofproduction and that ofban article ofcon- sumption ,and whether one commodity has toserve asa component part ofcapital after itssale ,while another passes into the fund for consumption and isconsumed ,according toadam ,asrevenue .the use towhich the buyer puts his commodity does not fall within the scope ofthe exchange ofcommodities ,does not concern the circulation ,and does",
        "474capital . not affect the value ofthe commodity .this fact isnot in the least affected by the truth that ,inthe analysis ofthe circulation ofthe annual social product asawhole ,the definite use for which itisintended ,the mode ofconsump- tion ofthe various component parts ofthat product ,must betaken into consideration . inmentioning the fact that the conversion ofthe vofiib into aportion ofthe sofiia ofthe same value ,and the further transactions between the sofiia and the sofiib, itisby no means assumed that either the individual capi- talists ofiia and iib ortheir respective totalities divide their surplus -value inthe same proportion between necessities of life and articles ofluxury .the one may spend more inthis consumption ,the other more inthat .on the basis ofsim- ple reproduction we have merely assumed that asum of values equal tothe entire surplus -value isrealized inafund for consumption .the limits are thus given .within each department ,the one may domore ina,the other inb.but this may compensate itself mutually ,sothat the capitalist classes ofaand b,each taken asawhole ,each participate inthe same proportion inboth ofthem .the proportions of value the proportional share ofthe two classes of pro- ducers ,aand b,inthe total value ofthe product ofii and with them adefinite quantitative proportion between the departments of production supplying those products , are necessarily given inany concrete case ;only aproportion chosen asan illustration isahypothetical one .itdoes not alter the qualitative elements ofthe proposition ,ifwe select another illustration ;only the quantitative determinations would bealtered .but ifany circumstances cause an actual change inthe proportional magnitude ofaand b,then the conditions ofsimple reproduction would likewise bechanged correspondingly . since the vofiib isrealized inan equivalent portion of the sofiia,itfollows that tothe extent that the portion ofthe annual product consisting ofluxuries grows ,absorb- ing anincreasing share ofthe labor -power inthe production",
        "simple reproduction .475 ofluxuries ,tothe same extent isthe reconversion ofvariable capital advanced by iib into money conditioned on the prodigality ofthe capitalist class ,who spend aconsiderable portion oftheir surplus -value inarticles ofluxury .itisby this means that the reconversion ofthis variable capital into money ispromoted ,and thereby the existence and reproduc- tion ofthe laborers employed iniib,by supplying them with the articles ofconsumption necessary for their life . every crisis momentarily lessens the consumption oflux- uries .itretards and checks the reconversion ofthe vof iib into money -capital ,permitting itonly partially and thus throwing acertain number ofthe laborers employed in the production ofluxuries out ofemployment ,while iton the other hand clogs bythis means the sale ofthe necessary articles ofconsumption and reduces it.and there are,be- sides ,the unproductive laborers who are dismissed atthe same time ,laborers who receive for their services aportion ofthe funds spent by the capitalists for luxuries (these laborers are themselves luxuries ),and who take part toa very considerable extent inthe consumption ofnecessities oflife ,etc. the reverse takes place inperiods ofprosperity , particularly during the times ofbogus prosperity ,inwhich the relative value ofmoney ,expressed incommodities ,de- creases primarily for other reasons (without any other actual revolution invalues ),sothat the price ofcommodities rises independently oftheir own value .itisnot alone the con- sumption ofnecessities oflife which increases atsuch times . the working class ,actively re-inforced by itsentire reserve army ,also enjoys momentarily articles ofluxury ordinarily out ofitsreach ,articles which atother times constitute for the greater part \"necessities \"only for the capitalist class . this contributes toarise inprices from this quarter . itispurely atautology tosay that crises are caused by the scarcity ofsolvent consumers ,orofapaying consump- tion .the capitalist system does not know any other modes ofconsumption but apaying one ,except that ofthe pauper orofthe \"thief .\"ifany commodities are unsaleable ,it means that nosolvent purchasers have been found for them ,",
        "476 capital . inother words ,consumers (whether commodities are bought inthe last instance for productive orindividual consump- tion ).but ifone were toattempt toclothe this tautology with asemblance ofaprofounder justification by saying that the working class receive too small aportion oftheir own product ,and the evil would be remedied by giving them alarger share ofit,orraising their wages ,we should reply that crises are precisely always preceded by aperiod in which wages rise generally and the working class actually get alarger share ofthe annual product intended for con- sumption .from the point ofview ofthe advocates of\"sim- ple\"(!)common sense ,such aperiod should rather remove acrisis .itseems ,then ,that capitalist production comprises certain conditions which are independent ofgood orbad will and permit the working class toenjoy that relative prosper- ity only momentarily ,and atthat always asaharbinger of acoming crisis .\"1 we saw awhile ago that the proportion between the pro- duction ofnecessities oflife and that ofluxuries requires the division ofii(v+s)into iia and iib,and thus ofiic into (iia)cand (iib )c.hence this division touches the char- acter and the quantitative conditions ofproduction totheir very roots ,and isanessential factor initsgeneral conforma- tion . simple reproduction isessentially directed toward con- sumption asan end ,although the securing ofsurplus -value appears asthe compelling motive ofthe individual capital- ists ;but surplus -value inthis case ,whatever may beitspro- portional magnitude ,issupposed toserve merely for the in- dividual consumption ofthe capitalist . sofar assimple reproduction isapart ,and the most im- portant one atthat ,ofannual reproduction on an enlarged scale ,consumption remains asamotive accompanying the accumulation ofwealth asanend and distinguished from it. in reality ,the matter appears more complicated ,because some partners inthe loot ,the surplus -value ofthe capitalist , figure asconsumers independently ofhim . 41advocates ofthetheory ofcrises ofrodbertus are requested tomake anote ofthis.",
        "simple reproduction .477 v.the promotion ofthe transactions by the circula- tion of money . so far aswe have analyzed circulation up tothe present , itproceeded between the various classes ofproducers asindi- cated inthe following diagrams : (1)between class iand class ii: i.4000 c+1000 v+1000 s. ii. .... 2000 c...... +500 v+500 s. this disposes ofthe circulation ofiic (2000 ),which is exchanged for i(1000 v+1000 s). leaving aside for the present the 4000 cofi,there still remains the circulation ofvs within class ii.now ii (vs )issubdivided between the subclasses iia and iib in the following manner : (2)ii.500 v+500 s=a(400 v+400 s)+b(100 v+ 100 s). the 400 vofacirculate within their own subclass ;the laborers paid with these wages buy with them articles ofcon- sumption ,produced by themselves ,from their employers , the capitalists ofiia. since the capitalists ofboth subclasses spend three -fifths oftheir surplus -value inproducts ofiia (necessities )and two -fifths inproducts ofiib (luxuries ),the three -fifths of the surplus -value ofa,or240 ,are consumed within the sub- class iia itself ;likewise two -fifths ofthe surplus -value ofb (produced inthe form ofarticles ofluxury and existing as such )within the subclass iib . there remains tobeexchanged between iia and iib :on the side ofiia :160 s;onthe side ofiib :100 v+60s.these compensate one another .the laborers ofiib buy with their 100 inthe form ofmoney necessities oflife tothat amount from iia.the capitalists of iib likewise buy necessities from iia tothe amount ofthree -fifths ,or60,oftheir sur- plus -value .the capitalists ofiia thus obtain the money re- quired for investing ,asabove assumed ,two -fifths oftheir sur- plus -value ,or160 s,inluxuries produced byiib (100 vheld by the capitalists ofiib asaproduct reimbursing them for",
        "478capital . the wages paid by them ,and 60 s).the diagram for this transaction is 3)iia.[400 v]+[240 s]+ b......160 s .100 v+60s+[40s], the brackets indicating the amounts circulated and con- sumed within their own subclass . the direct reflux ofthe money -capital advanced invari- able capital ,which takes place only inthe case ofthe capital- ist class ofiia who produce necessities oflife ,isbut an ex- pression ,modified by special conditions ,ofthe previously mentioned general law ,that money advanced tothe circula- tion by producers ofcommodities returns tothem inthe normal circulation of commodities .consequently ,if a money capitalist stands behind the producer ofcommodities and advances tothe industrial capitalist money -capital (using this term initsstrictest meaning ,that istosay,capital -value inthe form ofmoney ),the final point ofreflux for this money isthe pocket ofthis money -capitalist .in this way the mass ofthe circulating money belongs tothat depart- ment ofmoney -capital which isconcentrated and organized inthe form ofbanks ,etc. ,although the money circulates more orless through all hands .the way inwhich this de- partment advances its capital necessitates continually the final reflux toitinthe form ofmoney ,although this takes place by way ofthe reconversion ofthe industrial capital into money -capital . the circulation of commodities always requires two things :commodities which are thrown into circulation ,and money which islikewise thrown into it.\"the process of circulation .does not,like direct barter ofpro- ducts ,become extinguished upon the use-values changing places and hands .the money does not vanish ondropping out ofthe circuit ofthe metamorphosis ofagiven commod- ity.itisconstantly being precipitated into new places in the arena ofcirculation vacated by other commodities ,\"etc. (volume i,chapter iii,page 126. ) for instance ,inthe circulation between iic and i(v+s) we assumed that 500 pounds sterling ingold had been ad- vanced for it.inthe innumerable processes ofcirculation ,",
        "simple reproduction .479 into which the circulation between great social groups re- solves itself ,now this ,now that producer will first appear in one orthe other group asabuyer ,throwing money into cir- culation .quite aside from individual circumstances ,this isconditioned onthe difference ofthe periods ofproduction and thus ofthe turn -overs ofthe various commodity -capitals . now iibuys with these 500 pounds sterling means ofpro- duction ofthe same value from i,and ibuys from iiarti- cles ofconsumption valued at500 pounds sterling .hence the money flows back toii,but this department does not in any way increase its wealth by this reflux .ithad thrown 500 pounds sterling inmoney into circulation and drew the same amount out ofitin commodities ;then itsells 500 pounds sterling worth ofcommodities and draws out ofcir- culation the same amount inmoney ;thus the 500 pounds sterling flow back toit.as amatter offact ,iihas thrown into circulation 500 pounds sterling in money and 500 pounds sterling incommodities ,atotal of 1000 pounds sterling .it draws out ofthe circulation 500 pounds sterling incommodities and 500 pounds sterling in money .the circulation requires for the handling of500 pounds sterling incommodities ofiand 500 pounds sterling incommodities ofiionly 500 pounds sterling inmoney ; and whoever has first advanced money inthe purchase of commodities from other producers ,recovers itwhen selling his own .hence ,ifdepartment ihad been the first tobuy commodities from iifor 500 pounds sterling ,and tosell later on toiicommodities valued at500 pounds sterling , these 500 pounds sterling would have returned toiinstead ofii. in class i,the money invested inwages ,inother words , the variable capital advanced inthe form ofmoney ,does not return directly inthis form ,but indirectly by adetour . but inii,the 500 pounds sterling return directly from the laborers tothe capitalists ,and this return isalways direct inthe case where purchase and sale takes place repeatedly between the same persons insuch away that they are acting alternately asbuyers and sellers ofcommodities .the cap- italist ofiipays for the labor -power inmoney ;hethereby",
        "480capital . incorporates his labor -power in his capital and assumes the role of an industrial capitalist over his laborers aswage earners only bymeans ofthis transaction incircula- tion ,which isfor him merely aconversion ofmoney -capital into productive capital .thereupon the laborer ,who isin the first instance aseller ofhis own labor -power ,assumes inthe second instance the role ofabuyer ,apossessor of money ,while the capitalist acts now asaseller ofcommod- ities .inthis way the capitalist recovers the money invested by him inwages .unless this sale ofhis commodities im- plies cheating ,etc. ,and remains but an exchange ofequiv- alents in money and commodities ,itisnot aprocess by which the capitalist enriches himself .he does not pay the laborer twice ,first inmoney ,and then incommodities .his money returns tohim assoon asthe laborer exchanges itfor his commodities . now ,the money -capital converted into variable capital , the money advanced for wages ,plays aprominent role in the circulation ofmoney itself .for the laborer must live from hand tomouth and cannot give the industrial capital- ists any credit for long periods .hence variable capital in the form ofmoney must beadvanced simultaneously atin- numerable localities inthe social production incertain short intervals ,such asweeks ,etc. ,whatever may bethe various periods ofturn -over ofthe capitals inthe different lines of industry .these intervals succeed one another with relative rapidity ,and the shorter they are,the smaller isrelatively the total amount ofmoney thrown into circulation through this channel .inevery country with acapitalist production the money -capital soadvanced constitutes aproportionately influential share ofthe total circulation ,somuch more so asthe same money ,before itsreturn toits point ofdepart- ure ,roams through many channels and serves asame- dium ofcirculation for innumerable other businesses . now let usconsider the circulation between i(vs )and iic from adifferent point ofview . the capitalists ofiadvance 1000 pounds sterling inthe",
        "simple reproduction . 481 payment ofwages .the laborers buy with this money 1000 pounds sterling's worth ofcommodities from the capitalists ofii.these inturn buy with the same money means of production from the capitalists ofi. these capitalists ofi thereby recover their variable capital inthe form ofmoney , while the capitalists ofiihave reconverted one -half oftheir constant capital from the form ofcommodities into that of productive capital .the capitalists ofiiadvance 500 pounds sterling more for the purchase ofmeans ofproduction from the capitalists ofi. the capitalists ofispend this money in articles ofconsumption ofii.these 500 pounds ster- ling thus return tothe capitalists ofii.they advance this amount again ,inorder toreconvert the last quarter oftheir constant capital ,existing inthe form ofcommodities ,into means ofproduction ofi,itsnatural productive form .this money flows back toi,and once more withdraws from ii articles ofconsumption tothe same amount ,returning 500 pounds sterling toii.the capitalists ofiiare then once more in possession of500 pounds sterling in money and 2000 pounds sterling ofconstant capital ,the latter having been reconverted from the form ofcommodity -capital into that ofproductive capital .by means of1500 pounds ster- ling ,aquantity ofcommodities valued at5000 pounds ster- ling has been circulated .(1)ipaid 1000 pounds sterling tohis laborers for their labor -power ofthe same value ;(2) the laborers bought with these same 1000 pounds sterling articles ofconsumption from ii;(3)iibought with the same money means ofproduction from i,thereby restoring toiitsvariable capital of1000 pounds sterling inthe form of money ;(4)ii buys 500 pounds sterling's worth of means ofproduction from i;(5)ibuys with the same 500 pounds sterling articles of consumption from ii;(6)ii buys with the same 500 pounds sterling means ofproduc- tion from i;(7)ibuys with the same 500 pounds sterling articles ofconsumption from ii.thus 500 pounds ster- ling have returned toii,which ithad thrown into circula- tion aside from its2000 pounds sterling incommodities and",
        "482capital . for which itdid not withdraw any equivalent from circula- tion.2 the exchange ,therefore ,follows this course : (1)ipays 1000 pounds sterling inmoney for labor -power , or,inshort ,commodities at1000 pounds sterling . (2)the laborers buy with their wages amounting to 1000 pounds sterling articles ofconsumption from ii; therefore we have again commodities at1000 pounds ster- ling . (3)iibuys with the 1000 pounds sterling received from the laborers means of production tothe same amount ; hence ,once more ,commodities at1000 pounds sterling . by this transaction the 1000 pounds sterling have re- turned toiinthe money -form ofitsvariable capital . (4)iibuys 500 pounds worth ofmeans ofproduction from i,or,commodities at500 pounds sterling . (5)ibuys with the same 500 pounds sterling articles of consumption from ii;or,commodities at500 pounds sterl- ing . (6)iibuys with the same 500 pounds sterling means of production from i;or,commodities at500 pounds sterling . (7)ibuys with the same 500 pounds sterling articles of consumption from ii;or,commodities at500 pounds ster- ling . total amount of value of commodities converted :500 pounds sterling . the 500 pounds sterling advanced by iiinitsfirst addi- tional purchase have returned toit. this ,then ,isthe result : (1)ipossesses variable capital inthe form ofmoney to the amount of1000 pounds sterling ,which ithad originally advanced tothe circulation .ithas furthermore expended 1000 pounds sterling for itsindividual consumption ,inthe shape ofitsproduct incommodities ;that istosay ,has spent 42this presentation differs somewhat from that given inanother place ofthis section farther along .there ithrows likewise anadditional amount of500 p.st.into circulation .here iialone supplies the addi- tional money for the circulation .but this does not alter the final result .-f.e.",
        "simple reproduction .483 money which ithad originally received for the sale of means ofproduction tothe amount of1000 pounds sterling . on the other hand ,the natural form in which variable capital existing inthe form ofmoney must beincorporated in order tobe preserved ,in other words ,labor -power ,has been maintained by consumption ,and having been repro- duced exists once more asthe sole commodity which itsown- ers have for sale inorder tomake aliving .the relation of wage workers and capitalists ,then ,has likewise been repro- duced . (2)the constant capital ofiiisreproduced inits nat- ural form ,and the 500 p.st.advanced bythe same depart- ment tothe circulation have likewise returned toitshands . so far asthe laborers ofiare concerned ,the circulation takes place according tothe simple schedule c-m-c. labor -power c-1000 p.st.asthe money -form of the variable capital of i;m-necessities of life to the amount of 1000 p.st.;c-these 1000 p.st.monetize to the same amount the constant capital ofiiexisting inthe form ofcommodities ,ofnecessities oflife . from the point ofview ofthe capitalists ofii,the pro- cess isc-m,the transformation ofaportion oftheir pro- duct into money ,from which itisreconverted into the ele- ments ofproductive capital ,namely into aportion ofthe means ofproduction required by them . inthe case ofthe advance ofmoney of500 p.st.,made bythe capitalists ofiiinthe purchase ofanadditional por- tion ofmeans ofproduction ,the money -form ofthat por- tion ofiic which exists asyet inthe form ofcommodities , ofarticles ofconsumption ,isanticipated ,inthe transaction m-c,inwhich iibuys with m,and cissold by i,the money (ii)isconverted into aportion ofproductive cap- ital ,while c(i)passes through the transaction c-m, changes itself into money ,which ,however ,does not repre- sent any component part ofproductive capital for i,but merely monetized surplus -value expended solely for articles ofconsumption . inthe circulation m-c..p..c -m,the first act,m-c , isthat ofone capitalist ,the last c-m,ofanother (orat",
        "484capital . least inpart );whether this c,by which misconverted into productive capital ,represents anelement ofconstant capital , variable capital ,orsurplus -value for the seller ofc(who exchanges this cfor money ),isimmaterial for the circula- tion ofcommodities itself . class i,sofar asconcerns the portion vplus sofitspro- duct incommodities ,draws more money out ofcirculation than itthrew in.in the first place ,its 1000 p.st.ofvari- able capital are restored toit;inthe second place ,itsells means ofproduction valued at500 p.st.(see above trans- action no. 4);one -half ofits surplus -value isthus mon- etized ;then itsells once more 500 p.st.'s worth ofmeans ofproduction (transaction no. 6),the second half ofitssur- plus -value ,and thus its entire surplus -value iswithdrawn from circulation inthe shape of money .the successive transactions ,then ,have been (1)areconversion ofvariable capital into money ,tothe amount of1000 p.st.;(2)a monetization ofone -half ofthe surplus -value ,tothe amount of500 p.st.;(3)amonetization ofthe other half ofthe surplus -value ,tothe amount of500 p.st.,altogether 1000 vplus 1000 sthat have been monetized ,or 2000 p.st. although department ithrew only 1000 p.st.into circula- tion (aside from those transactions which promote the re- production ofic,and which we shall analyze later ),ithas withdrawn double that amount from it.of course ,the surplus -value passes into another hand ,that ofii,assoon asithas been converted into money ,bybeing spent for arti- cles ofconsumption .the capitalists ofiwithdrew only as much value inmoney asthey threw into circulation inthe form ofcommodities ;the fact that this value issurplus- value ,that istosay,that itdoes not cost the capitalists any- thing ,does not alter the value ofthese commodities inany way ;sofar asthe exchange ofvalues incirculation iscon- cerned ,that fact isentirely irrelevant .the monetization of surplus -value is,ofcourse ,atransient act,the same asall other phases through which the advanced capital passes in itsmetamorphoses .itlasts no longer than the interval be- tween the conversion ofthe commodities ofiinto money and the subsequent conversion ofthe money ofiinto com- modities ofii.",
        "simple reproduction .485 ifthe turn -overs had been assumed tobe shorter -or, from the point ofview ofthe simple circulation ofcommod- ities ,the number ofturn -overs ofthe circulating money more rapid -even less money would berequired for the cir- culation of the exchanged values of commodities ;the amount isalways determined -ifthe number ofsuccessive transactions isgiven -bythe sum ofthe prices ,orthe sum ofvalues ,ofthe circulating commodities .itisimmaterial for this question what proportion ofthis sum ofvalues con- sists ofsurplus -value orofcapital -value . ifthe wages of i,in our illustration ,were paid four times per year ,we should have 4times 250 ,or1000. in other words ,250 p.st.would suffice for the circulation be- tween ivand ofiic,and for that between the variable capital ofiand the labor -power ofthe same department . furthermore ,ifthe circulation between isand iic were to take place infour turn -overs ,itwould require only 250 p.st. inmoney ,orinthe aggregate asum ofmoney ,oramoney- capital ,or 500 p.st.for the circulation of commodities worth 5000 p.st.inthat case ,the surplus -value would be converted into money by four successive transactions ,mone- tizing one -fourth each time ,instead oftwo transactions of one -half each time . ifdepartment iinstead ofii,should assume the role of buyer intransaction no. 4by expending 500 p.st.for arti- cles ofconsumption ofthe same value ,iiwould buy means ofproduction with the same 500 p.st.intransaction no. 5, iwould then buy articles ofconsumption with the same 500 p.st.intransaction no. 6;iiwould then buy means ofproduction with the same 500 p.st.intransaction no. 7;sothat the 500 p.st.would finally return toi,the same athey did inour previous illustration toii.the surplus- value isconverted into money ,inthis second case ,by means ofan expenditure ofmoney for articles ofindividual con- sumption on the part ofits capitalist producer ,and this expenditure ofmoney discounts beforehand the revenue to bederived from the monetization ofthe surplus -value still contained in the unsold commodities .the surplus -value isnot monetized by the reflux ofthe 500 p.st.;for aside",
        "486capital . from 1000 p.st.inthe form ofcommodities ofiv,depart- ment ithrew 500 p.st.inmoney into circulation atthe close oftransaction no. 4,and this was additional money , sofar aswe know ,not money obtained by the sale ofcom- modities .in recovering this money ,department imerely pockets once more the additional money advanced by it. ithas not monetized itssurplus -value by this means .the monetization ofthe surplus -value ofitakes place only by the sale ofthe commodities ofis,inwhich itisincorpor- ated ,and lasts only solong asthe money obtained by the sale ofthe commodities isnot expended inthe purchase of new articles ofconsumption . department ibuys with an additional amount of500 p. st.inmoney articles ofconsumption from ii;after spend- ing this money ,iholds its equivalent incommodities of ii;the money returns for the first time by the purchase , onthe part ofii,ofcommodities tothe amount of500 p.st. from i;inother words ,itreturns asthe equivalent ofthe commodities sold by i,but these commodities do not cost ianything ,they constitute surplus -value for i,and thus the money thrown into circulation by this very department monetizes itsown surplus -value .on buying for the second time ,intransaction no. 6,ihas likewise obtained itsequiv- alent incommodities ofii.take it,now ,that iiwould not buy means ofproduction from i. inthat case ,iwould have actually paid 1000 p.st.for articles ofconsumption , itwould have consumed itsentire surplus -value asrevenue , namely 500 initsown commodities (means ofproduction ) and 500 inmoney ;onthe other hand ,itwould still have 500 p.st.incommodities (means ofproduction )instock , and would have gotten rid of500 p.st.inmoney . department ii,again ,would have reconverted three- fourths ofitsconstant capital from the form ofcommodity- capital into that ofproductive capital ;but one -fourth ,or 500 p.st.,would be held by itin money ,which ,having interrupted its function and waiting for conversion ,would be unproductive for the time being .ifthis condition of things should last for any length oftime ,iiwould have to cut down itsscale ofreproduction by one -fourth .",
        "simple reproduction .487 however ,the 500 inmeans ofproduction ,which ihas on itshands ,are not surplus -value existing inthe form ofcom- modities ;they occupy the place ofthe 500 p.st.advanced inmoney ,which ipossessed aside from its 1000 p.st.in commodities .inthe form ofmoney ,they would bealways convertible ,ascommodities they are momentarily unsal- able .so much isevident ,that simple reproduction in which every element ofproductive capital must be repro- duced inboth iiand i-remains possible inthis case only , ifthe 500 golden birds ,which ifirst sent flying ,return toit. if acapitalist (we have only industrial capitalists to deal with here ,who are the representatives ofall others ) spends money for articles ofconsumption ,itpasses out of his life ,itgoes the way ofthe flesh .ifitreturns tohim , itcan do so only tothe extent that he draws itout of circulation by means ofhis commodity -capital .the value ofhis entire annual product in commodities (which rep- resents his commodity -capital )the same asthat ofevery one ofits elements ,that istosay,ofevery individual com- modity ,resolves itself ,from his point ofview ,into constant capital ,variable capital ,and surplus -value . the mone- tization ofevery individual commodity (each constituting an element ofthe product in commodities )isatthe same time amonetization ofacertain portion ofthe surplus -value contained inthe entire product .in the cited case ,then , itisliterally true that the capitalist himself threw the very money into circulation by which his surplus -value is monetized ,and he did so in the purchase of articles of consumption .of course ,itisnot aquestion ofthe identical pieces ofmoney ,but rather ofacertain amount ofgenuine money equal tothe one (oran equal portion ofthe one ) which he had previously thrown into circulation tosatisfy his own individual wants . in practice this isdone in two ways :ifthe business has been opened inthe current year ,itwill take quite a while before the capitalist will be enabled touse any por- tion ofthe receipts ofhis business for the satisfaction ofhis individual consumption .but hedoes not suspend his con- sumption for all that for asingle moment .he advances",
        "488 capital . tohimself (immaterial whether out ofhis own pocket or by means ofcredit from others )money inanticipation of surplus -value tobe realized by him .ifthe businesss has been running regularly for aperiod longer than the cur- rent year ,payments and receipts are distributed over differ- ent terms ofthe year .but one thing continues uninter- ruptedly ,namely the consumption ofthe capitalist ,which anticipates adefinite portion ofthe customary orestimated revenue and iscalculated on acertain proportion of it. with every portion ofcommodities sold ,aportion ofthe annually produced surplus -value isalso realized .but if only asmuch ofthe produced commodities were sold dur- ing the entire year asisrequired toreproduce the values contained inthe constant and variable capitals ,orifprices were tofall to such an extent that only the value ofthe capital contained initshould berealized bythe sale ofthe entire annual product in commodities ,then the anticipa- tory character ofthe expenditure ofmoney inexpectation offuture surplus -value would be clearly revealed .ifour capitalist fails ,then his creditors and the court investigate whether his anticipated private expenditures were reason- ably proportionate tothe volume ofhis business and tothe receipts of surplus -value usually or normally correspond- ing toit. so far asthe entire capitalist class are concerned ,the statement that they must themselves throw into circulation the money required for the realization oftheir surplus- value (eventually for the circulation oftheir constant and variable capital )isnot only no paradox ,but isthe neces- sary premise ofthe entire mechanism .for there are only two classes in this case ,the working class disposing of their labor -power ,and the capitalist class owning the social means ofproduction and the money .itwould rather bea paradox ifthe working class were toadvance inthe first instance out of its own pockets the money required for the realization ofthe surplus -value contained inthe com- modities .but the individual capitalist makes this ad- vance only by acting asabuyer ,expending money inthe purchase ofarticles ofconsumption ,oradvancing money",
        "simple reproduction .489 inthe purchase ofelements ofhis productive capital .he never parts with his money unless hegets an equivalent for it.he advances money tothe circulation only inthe same way that he advances commodities toit.he acts inboth instances asthe point ofdeparture oftheir circulation . the actual transaction isobscured by two circumstances : (1) the fact that merchant's capital (the first form of which isalways money ,since the merchant assuch does not create any \"product \"or \"commodity \")and money- capital are manipulated by aspecial class ofcapitalists in the process ofcirculation ofindustrial capital . (2) the division ofsurplus -value -which must always be first in the hands of the industrial capitalist -into various categories ,represented ,aside from industrial capi- talists ,by the land owner (for ground rent ),the usurer (for interest ),etc. ,furthermore by the government and its officials ,by people living ontheir income ,etc. this gentry appear asbuyers ascompared tothe industrial capitalist , and tothat extent asmonetizers ofhis commodities ;they likewise throw \"money \"into circulation ontheir part and the industrial gets itfrom them .but inthat case ,itis always forgotten from what source they derived itorigi- nally ,and continue deriving itever anew . vi.the constant capital ofdepartment 1.43 itremains for ustoanalyze the constant capital ofde- partment i,amounting to4000 c.this value isequal to that ofthe means ofproduction consumed inthe creation ofthe commodity -product ofiand incorporated init.this re-appearing value ,which was not produced inthe process ofproduction ofi,but entered into itduring the preceding year inthe form ofconstant capital ,representing the defi- nite value ofhis means ofproduction ,exists now inthe entire quantity ofcommodities not absorbed by department ii.and the value ofthis quantity ofcommodities thus 48manuscript iiresumed here .",
        "490 capital . left inthe hands ofthe capitalists ofiequals two -thirds ofthe value oftheir entire annual commodity -product .in the case ofthe individual capitalist producing some par- ticular means ofproduction ,we were enabled tosay :he sells his commodity -product ;heconverts itinto money .by converting itinto money ,hehas also reconverted into money the constant portion ofthe value ofhis product .with this portion ofvalue ,thus converted into money ,hethen buys his means ofproduction once more from other sellers ofcom- modities ,ortransforms the constant portion ofthe value ofhis product into itsnatural form ,inwhich itcan resume its function ofproductive constant capital .but now this supposition becomes impossible .the capitalist class ofi comprises allthe capitalists producing means ofproduction . besides ,the commodity -product of4000 ,which isleft on their hands ,isaportion ofthe social product which can- not be exchanged for any other portion ,because no other portion ofthe annual product remains .with the exception ofthese 4000 ,allthe remainder ofthe product has been dis- posed of.one portion has been absorbed by the social fund for consumption ,and another portion has toreproduce the constant capital ofdepartment ii,which has already bargained for everything which itcan exchange with i. the difficulty issolved very easily ,when we remember that the entire product ofiinits natural form consists of means ofproduction ,that istosay,ofmaterial elements of the constant capital itself .we meet here the same phe- nomenon which we witnessed under ii,only under adiffer- ent aspect .inthe case ofii,the entire product consisted of articles ofconsumption .hence one portion ofit,measured by the wages plus surplus -value contained inthis product ,could beconsumed by itsown producers .here ,inthe case ofi, the entire product consists of means ofproduction ,such asbuildings ,machinery ,tanks ,raw and auxiliary materials , etc. one portion ofthem ,namely that reproducing the constant capital employed inthis sphere ,can ,therefore ,be immediately set towork inits natural form toserve once more asan element ofproductive capital .sofar asitgoes into circulation ,itcirculates within department i. while",
        "simple reproduction .491 aportion ofthe commodity -product ofii isindividually consumed initsnatural form byitsown producers ,aportion ofthe commodity -product ofiisproductively consumed inits natural form by itscapitalist producers . in these 4000c ofthe commodity -product ofi,the con- stant capital -value consumed inthis category re-appears in its natural form in which itcan immediately resume its services asaproductive constant capital .indepartment ii, that portion ofthe commodity -product of3000 whose value isequal tothe wages plus the surplus -value of1000 ,passes directly into the individual consumption ofthe capitalists and laborers ofii,while ,on the other hand ,the constant value ofthis commodity -product ,equal to2000 ,cannot re- enter into the productive consumption ofthe capitalists of ii,but must bereproduced by exchange with i. but indepartment i,that portion ofits commodity -pro- duct of6000 ,whose value isequal tothe wages plus the surplus -value ,or 2000 ,does not pass into the individual consumption ofitsproducers ,and could not on account of its natural form .itmust first be exchanged with depart- ment ii.on the other hand ,the constant portion ofthe value ofthis product ,or4000 ,exists inanatural form ,in which itcan immediately resume itsservices asthe constant capital ofthe capitalist class ofi,taking this class asan aggregate .inother words ,the entire product ofdepartment iconsists ofuse-values which ,on account oftheir natural form ,can serve only aselements ofconstant capital ,in a capitalist system ofproduction .one third ofthis product of 6000 ,then ,reproduces the constant capital of depart- ment ii,or2000 ,and the other two thirds the constant capital ofdepartment i. the constant capital oficonsists ofanumber ofdif- ferent groups of capital invested inthe various lines of production ofmeans ofproduction ,somuch iniron works , somuch incoal mines ,etc. every one ofthese groups of capital ,orevery one ofthese social capital groups ,isin its turn composed ofalarger orsmaller number ofinde- pendently functioning individual capitals .inthe first place , the capital ofsociety ,for instance 7500 (millions ,orany",
        "492capital . other denomination )iscomposed ofvarious groups ofcap- ital ;the social capital of7500 isdivided into separate parts , every one ofwhich isinvested inaspecial line ofproduction , each portion invested insome particular line ofproduction consists ,sofar asitsnatural composition isconcerned ,partly ofmeans ofproduction required inthat special sphere ofpro- duction ,partly ofthe labor -power employed inthat business and adapted toitsrequirements .this labor -power ismodi- fied by division oflabor ,according tothe specific labor to beperformed ineach individual sphere ofproduction .each portion ofsocial capital invested inany particular line of production initsturn consists ofthe sum ofall individual capitals invested init.this ,ofcourse ,applies equally to departments iand ii. as for the value ofthe constant capital re-appearing in the form ofthe commodity -product ofi,itre-enters inpart asmeans ofproduction into the particular sphere whose product itis(or even into the individual business ),for instance ,corn into the production ofcorn ,coal into the pro- duction ofcoal ,iron inthe form ofmachines into the pro- duction ofiron ,etc. however ,the partial products constituting the value of the constant capital ofi,sofar asthey donot return directly to their particular or individual sphere of production , merely change their place .they pass in their natural form tosome other sphere ofproduction ofdepartment i, while the product of other spheres of production of de- partment ireplaces them in their natural state .it is merely achange ofplace ofthe products .all ofthem be- come once more the elements inthe reproduction ofconstant capital ofi,only inanother group ofiinstead ofthe same one .to the extent that an exchange takes place between the individual capitalists of i,itisan exchange of one natural form ofconstant capital for another ,one kind of means ofproduction for another .itisan exchange ofthe different individual constant parts of capital ofiamong themselves .unless the products serve directly asmeans of production in their own line ,they are transferred to another line and thus naturally replace one another .in",
        "simple reproduction .493 other words (similarly towhat we saw inthe case ofthe surplus value ii),every capitalist ofidraws on this con- stant capital of4000 ,ofwhich he ispart owner ,tothe extent ofhis share ,in means ofproduction required by him .ifproduction were socialized ,instead ofcapitalistic , itisevident that these products ofdepartment iwould just asregularly be redistributed asmeans ofproduction tothe various lines ofproduction ofthis department ,for purposes ofreproduction ,one portion remaining directly in that sphere ofproduction which created it,another passing over toother lines ofproduction ofthe same department , thereby entertaining aconstant mutual exchange between the various lines ofproduction ofthis department . vii.variable capital and surplus -value in both de- partments . the total value ofthe articles ofconsumption annually produced isequal tothe value ofthe variable capital ofii produced during the year plus the newly created surplus- value ofii (inother words ,equal tothe value newly pro- duced byiiduring the year )plus the value ofthe variable capital of ireproduced during the year and the newly produced surplus -value ofi(inother words ,plus the value created by iduring the year ). on the assumption of simple reproduction ,then ,the total value ofthe annually produced articles ofconsumption isequal tothe annual product invalues ,inother words , equal tothe total value produced during that year by social labor .and itmust beso,for the reason that this entire value isconsumed ,onthe basis ofsimple reproduction . the total social working day isdivided into two parts : (1)necessary labor ,which creates inthe course ofthe year avalue of1500 v;(2),surplus labor ,which creates an ad- ditional value ,orsurplus -value ,of1500 s.the sum ofthese values ,3000 ,isequal tothe value ofthe annually produced articles ofconsumption of3000. the total value ofarticles ofconsumption produced during the year istherefore equal tothe total value produced bythe social working day dur-",
        "494capital . ing the year ,equal tothe value ofthe variable social capital plus the social surplus -value ,equal tothe total new product ofthe year . but we know that the total value ofthe commodities of ii,the articles of consumption ,isnot produced in this department ofsocial production ,although these two classes of value are identical .they are identical ,because the value ofthe constant capital re-appearing in department iiisequal tothe value newly produced by i(value ofvari- able capital plus surplus value );so that i(v+s)can buy that portion ofthe product ofiiwhich represents the value ofthe constant capital ofthe producers indepartment ii.this shows why the value ofthe product ofthe capitalists ofii,from the point ofview ofsociety ,may be resolved into v+s,although from their standpoint itisdivided into c+v+s.itisbecause iic isequal toi(v+s),and because these two elements ofthe social product are mutually exchanged intheir natural forms ,sothat after this exchange iic exists once more inmeans ofproduction ,and i(v+s) inarticles ofconsumption . and itisthis circumstance which induced adam smith toclaim that the value ofthe annual product resolves itself into v+s.but this isnot true ,inthe first place ,except for that part ofthe annual product which consists ofar- ticles ofconsumption ;and inthe second place ,itdoes not apply inthe sense that this total value isentirely pro- duced bydepartment ii,sothat itsvalue inproducts would be equal tothe variable capital advanced by ii plus the surplus -value produced by ii.itistrue only inthe sense that ii(c+v+s)isequal to ii(v+s)+i(v+s),or be- cause iic isequal toi(v+s). itfollows ,furthermore : although the social working day (that isto say,the labor expended bythe entire working class during the whole year ),like every individual working day ,isdivided only intwo parts ,namely into necessary labor and surplus -labor , and although the value produced bythis working day like- wise resolves itself into but two parts ,namely into the value ofvariable capital ,orthat portion with which the laborer",
        "simple reproduction .495 buys his own means ofreproduction ,and the surplus -value which the capitalist may spend for his own individual con- sumption ,nevertheless ,from the point ofview ofsociety , one portion ofthe social working day isexclusively devoted tothe production ofnew constant capital ,namely ofpro- ducts exclusively intended for service asmeans ofproduc- tion inthe labor -process and thus as constant capital in the accompanying process ofself -expansion .according to our assumption ,the total social working day isrepresented byamoney -value of3000 ,only one third ofwhich ,or1000 , isproduced indepartment ii,which manufactures articles ofconsumption ,that istosay ,commodities inwhich the entire value ofthe variable capital and the entire surplus- value ofsociety isfinally realized .according tothis as- sumption ,two thirds ofthe social working day are em- ployed inthe production ofnew constant capital .although , from the standpoint of the individual capitalists and laborers of department i,these two thirds of the social working day serve merely for the production ofvariable capital plus surplus -value ,the same as the last third of the social working day in department ii,neverthe- less ,from the point ofview ofsociety ,and ofthe use-value ofthe product ,these two thirds ofthe social working day serve only for the reproduction ofconstant capital inpro- cess of productive consumption or already so consumed . from the individual point ofview ,these two thirds ofthe working day ,while producing atotal value equal only to the value ofthe variable capital plus surplus -value ,sofar asits producer isconcerned ,nevertheless do not produce any use-values ofthe kind onwhich wages orsurplus -value could be expended ;for their products are means ofpro- duction . itmust benoted ,inthe first place ,that noportion ofthe social working day ,whether in iorin ii,serves for the production ofthe value ofthe constant capital employed and serving inthese two great spheres ofproduction .they produce only additional value ,namely 2000 i(v+s)+ constant capital ,represented by 4000 ic+2000 iic.the 1000 ii(v+s),an addition tothe existing value ofthe",
        "496capital . new value produced inthe form ofmeans ofproduction isnot yet constant capital .itmerely isintended tobe used assuch inthe future . the entire product of ii,the articles of consumption , viewed concretely asause-value ,in its natural form ,isa creation ofthe one third ofthe social working day con- tributed by ii.itisthe product oflabor in its concrete form ,such asthe labor ofweaving ,baking ,etc. ,performed inthis department asthe subjective element ofthe labor process .but the constant portion ofthe value ofthis pro- duct of iire-appears only in anew use-value ,in anew natural form ,namely that ofarticles ofconsumption ,while itexisted previously inthe form ofmeans ofproduction . its value has been transferred bythe labor -process from its old natural form toits new natural form .but this value ofthese two thirds ofthe product ,or2000 ,has not been produced inthis year's productive process ofii. just as,from the point ofview ofthe labor -process ,the product ofii isthe result ofthe function ofnew living labor and means ofproduction previously given toit,which are the material objects inwhich itincorporates itself ,so, from the point ofview ofthe process ofreproduction ,the value ofthe product ofii,or3000 ,iscomposed ofthe new value (500 v+500 s=1000 )produced by the newly added one third ofthe social working day and ofaconstant value , inwhich two thirds ofaprevious social working day are embodied ,which passed away before the present process ofproduction ofii.this portion ofthe value ofthe pro- duct ofiiismaterialized inaportion ofthe product itself . itexists in aquantity ofarticles ofconsumption valued at2000 ,ortwo thirds ofasocial working day .this isthe new use-form in which itre-appears .the exchange ofa portion ofthe articles ofconsumption of2000 iic for means ofproduction ofiequal toi(1000 v+1000 s)represents , therefore ,indeed an exchange oftwo thirds of asocial working day which do not constitute any portion ofthis year's labor ,but passed away previously tothis year ,for two thirds ofthe social working day newly added this year . two thirds of this year's social working day could not",
        "simple reproduction .497 serve inthe production ofconstant capital and yet atthe same time constitute variable capital plus surplus -value for their own producers ,unless they were compelled to ex- change with aportion ofthe value ofthe annually con- sumed articles of consumption ,inwhich two thirds ofa working day spent and realized ,not this year ,but pre- viously ,are incorporated .itisan exchange oftwo thirds ofthis year's working day with two thirds ofapreceding working day ,an exchange ofthis year's labor with that of aprevious year .this ,then explains the riddle ,how itisthat the product invalues ofan entire social working day may resolve itself into variable capital plus surplus- value ,although two thirds ofthis working day were not expended inthe production ofarticles ,in which variable capital orsurplus -value can be realized ,but rather inthe production ofmeans ofproduction for the replacement of capital consumed during this year .the explanation is simply that two thirds ofthe value ofthe product ofii, inwhich the capitalists and laborers ofirealize the value ofthe variable capital and surplus -value produced by them (and which constitute two thirds ofthe value ofthe entire annual product ),are,sofar astheir value isconcerned , the product oftwo thirds ofasocial working day passed previously tothis year . the sum ofthe social product ofiand ii,comprising means of production and articles of consumption ,so far asits concrete use-value inits natural form isconcerned , isindeed the result ofthis year's labor ,but only tothe extent that this labor isregarded asuseful and concrete , not asan expenditure oflabor -power and creator ofvalues . and even so,itisconcrete labor only inthe sense that the means ofproduction have transformed themselves into this year's new product by dint ofthe living labor operating on them .on the other hand ,itisalso true that this year's labor could not have transformed itself into products with- out the help ofmeans ofproduction ,ofinstruments ofpro- duction and materials ,which existed independently ofit.",
        "498 capital . viii .the constant capital inboth departments . the analysis ofthe total value ofthe product of 9000 , and ofthe categories into which itisdivided ,does not pre- sent any greater difficulties than that ofthe value produced by some individual capital .itisrather identical with it. inthe present instance ,the entire social product ofthis year contains three social working days ,each ofone year . the value represented by each one ofthese working days is3000 ,sothat the value ofthe total product is3x3000 , or9000 . furthermore ,the following portions ofthis working time belong toaperiod previous tothat ofthe process ofpro- duction which we now analyze :in department i,four thirds ofaworking day (with aproduct valued at4000 ), and indepartment ii,two thirds ofaworking day (with aproduct valued at2000 ),making atotal oftwo social working days with aproduct valued at6000. for this reason ,4000 ic+2000 iic =6000 cfigure asthe value of the means ofproduction ,orvalue ofthe constant capital , re-appearing inthe total product ofsociety . furthermore ,one third ofthe social working day ofone year newly added by department iisnecessary labor ,or labor reproducing the value ofthe variable capital of1000 iv and paying the price ofthe labor employed by i. in the same way ,one sixth ofthe social working day ofiiis necessary labor valued at500. hence we have 1000 iv+ 500 iiv=1500 v,expressing the value ofone half ofthe social working day ,the value ofthe first half ofthe work- ing day added this year and consisting ofnecessary labor . finally ,indepartment i,one third ofthe social working day ofthis year ,with aproduct valued at1000 ,issurplus- labor ,and one sixth ofone working day indepartment ii, with aproduct valued at 500 ,islikewise surplus -labor . together they constitute the other half ofthe newly added social working day ,with atotal value of surplus -labor amounting to1000 is+500 iis=1500 s.",
        "simple reproduction .499 this ,then ,isthe situation : constant portion ofcapital interms ofthe value ofthe social product (c):two working days expended previously tothe present process ofproduction ,worth 6000 invalue . necessary labor (v)expended during the present year : one half ofone working day expended during the present year ,worth 1500 invalue . surplus -labor (s)expended during the present year :one- half ofone working day expended during the present year , worth 1500 invalue . product invalues ofannual labor (v+s),3000 . total value ofproduct (c+v+s),9000 . the difficulty ,then ,does not consist inthe analysis of the social product invalues .itarises inthe comparison ofthe component parts ofthe value ofthe social product with its material elements . the constant ,merely re-appearing ,portion ofvalue is equal tothe value ofthat part ofthis product which con- sists ofmeans ofproduction ,and itisincorporated inthat part . the product invalues ofthe current year ,equal tov+s, isequal tothe value ofthat part ofthis product ,which consists ofarticles ofconsumption ,and isincorporated in it. but with the exception ofcases immaterial for this analy- sis,means of production and articles of consumption are vastly different kinds ofcommodities ,products ofwidely different natural forms and use-value ,and ,therefore ,pro- ducts ofradically different classes ofconcrete labor .the labor which employs machinery inthe production ofneces- sities oflife isvastly different from the labor which makes machinery .the entire working day ofthe current year , which is3000 interms ofvalue ,figures asan expenditure inthe production ofarticles ofconsumption valued at3000 , inwhich noportion ofany constant value re-appears ,since these 3000 ,equal to1500 v+1500 s,resolve themselves only into variable capital -value and surplus -value .on the other hand ,the constant capital -value of6000 re-appears in aclass ofproducts quite different from articles ofconsump-",
        "500capital . tion ,namely inmeans ofproduction ,while asamatter of fact no portion ofthe present annual working day figures asan expenditure inthe production ofthese new products . itappears rather that this entire working day consists only ofclasses oflabor which do not result inmeans ofproduc- tion ,but in articles of consumption .we have already 'solved this mystery .the product in values ofthe labor ofthe present year isequal tothe value ofthe products of department ii,the total value ofthe newly produced ar- ticles of consumption .but the value ofthese products isgreater by two thirds than that portion ofthe annual labor which has been expended inthe production ofarticles ofconsumption (department ii).only one third ofthe annual labor has been expended intheir production .two thirds ofthis annual labor have been expended in the production ofmeans ofproduction ,that istosay ,in de- partment i. the value ofthe product created during this time ini,equal tothe variable capital -value plus surplus- value produced ini,isequal tothe constant capital -value of ii re-appearing in articles ofconsumption ofii.hence they may be mutually exchanged and take one another's place intheir natural form .the total value ofthe articles ofconsumption ofiiis,therefore ,equal tothe sum ofthe new product invalues ofiand ii,or ii(c+v+s)isequal to 1(v+s)+ii(v+s),in other words ,equal tothe sum ofthe new values produced bythe labor ofthe current year inthe form ofvs. on the other hand ,the total value ofthe means ofpro- duction ofiisequal tothe sum ofthe constant capital- values re-appearing inthe form ofmeans ofproduction of iand in that ofarticles of consumption of ii,in other words ,equal tothe sum ofthe constant capital -values re- appearing inthe total product ofsociety .this total value isequal interms ofvalue tofour thirds ofaworking day preceding the process ofproduction ofiand two thirds ofa working day preceding the process ofproduction ofii,inall equal totwo annual working days . the difficulty inthe analysis ofthe annual social pro- duct arises ,therefore ,from the fact that the constant por-",
        "simple reproduction . 501 tion ofvalue isrepresented by adifferent class ofproducts (means ofproduction )than the new portion ofvalue (v+ s)added tothis constant portion and represented byarticles ofconsumption .thus the appearance iscreated ,sofar as the question ofvalues isconcerned ,asthough two thirds ofthe consumed mass ofproducts were reproduced inanew form ,without any labor having been expended by society in their production .this isnot so in the case of an individual capital . every individual capitalist employs some particular concrete class oflabor ,which transforms the means ofproduction peculiar toitinto products .for instance ,the capitalist may beamanufacturer ofmachines , the constant capital expended by him during the current year may be6000 c,the variable capital 1500 v,the surplus- value 1500s ,the product 9000 ,represented ,say,by 18 machines of500 each .the entire product inthis instance consists ofthe same form ,ofmachines .ifhe produces various kinds ,each one iscalculated separately .the entire product incommodities isthe result ofthe labor expended during the current year in machine manufacture by a combination ofthe same concrete labor with the same kind ofmeans ofproduction .the various portions ofthe value ofthe product therefore present themselves inthe same natural form :12 machines represent 6000 c,3machines 1500 v,and 3machines 1500 s.itisevident that the value ofthe 12 machines isequal to6000 c,not merely because there isincorporated in these machines labor performed previously tothe manufacture ofthese machines and not expended intheir making .the value ofthe means ofpro- duction for 18 machines did not transform itself into ma- chines ofitsown doing ,but the value ofthese 12machines (consisting itself of4000 c+1000 v+1000 s)isequal to the total value ofthe constant capital -value contained inthe 18 machines .the machine manufacturer must ,therefore , sell 12ofthe 18machines ,inorder torecover his expended constant capital ,which he requires for the reproduction of 18 new machines .on the other hand ,the thing would be inexplicable ,ifthe result ofthe labor expended solely inthe manufacture ofmachines ,were tobe:on the one hand ,6",
        "502capital . machines of 1500 v+1500 s,on the other iron ,copper , screws ,belts ,etc. ,tothe amount of6000 s,inother words , the natural means of production ofthe machines which the individual machine -building capitalist does not produce himself ,but must secure by way ofthe process ofcircula- tion .and yet itseemed atthe first glance asthough the reproduction ofthe annual product ofsociety took place in this absurd way . the product ofan individual capital ,that istosay,of every aliquot part ofthe social capital endowed with alife ofitsown and acting independently ,has some natural form . the only condition isthat this product must have acertain use-value ,which endows itwith the character ofamember ofthe world ofcommodities fitfor circulation .itisim- material and amatter ofhazard ,whether ornot itcan go back as ameans ofproduction into the same process of production from which itcame asaproduct ,inother words , whether that portion ofits value asaproduct ,in which the constant capital isincorporated ,has anatural form , inwhich itcan actually serve again asconstant capital .if ithas not,then this portion ofthe value ofthe product isreconverted into the form of its material elements by means ofsale and purchase ,and thus the constant capital isreproduced inthe natural form adapted toits function . itisdifferent with the product ofthe total social capital . all the material elements ofreproduction intheir natural form must be apart ofthis product .the consumed con- stant portion of capital can be reproduced by the pro- duction asawhole only tothe extent that the entire re- appearing constant capital isrepresented in the product by the natural form ofnew means ofproduction ,which can actually serve asconstant capital .simple reproduction being assumed ,the value ofthat portion ofthe product which consists ofmeans ofproduction must beequal tothe constant portion ofthe value ofsocial capital . furthermore :individually considered ,the capitalist pro- duces inthe value ofhis product by means ofthe newly added labor only his variable capital plus surplus -value ,",
        "simple reproduction .503 while the constant value istransferred bythe concrete form ofthe newly added labor tothe product . socially considered ,that portion ofthe social working day which produces means ofproduction ,adding new value tothem and transferring tothem atthe same time the value ofthe means ofproduction consumed intheir manufacture , creates nothing but new constant capital ,which isintended toreplace that consumed inthe shape ofthe old means of production ,that istosay ofthe constant capital consumed in department iand ii.itcreates only product intended for productive consumption .the entire value ofthis pro- duct ,then ,isavalue which can serve only asanew con- stant capital ,which can buy back only constant capital initsnatural form ,and which ,for this reason ,resolves itself neither into variable capital nor surplus -value ,looking at itfrom the social point ofview .on the other hand ,ifthat portion ofthe social working day which produces articles ofconsumption does not create any portion ofthe social capital intended for reproduction ,itcreates only products intended ,intheir natural form ,torealize the value ofthe variable capital and surplus -value ofdepartments iand ii. speaking oflooking atthings from the point ofview of society asawhole ,inthis instance atthe aggregate product ofsociety ,which comprises both the reproduction ofsocial capital and individual consumption ,we must not follow the manner copied by proudhon from bourgeois economy , which looks upon this matter asthough asociety with a capitalist mode of production would lose its specific his- torical and economic characteristics by being taken asa unit .not atall.we have ,inthat case ,todeal with the aggregate capitalist .the aggregate capital appears asthe capital stock ofall individual capitalists combined .this stock company shares with many other stock companies the peculiarity that every one knows what he puts in,but not what he will get out ofit.",
        "504capital . ix.aretrospect on adam smith ,storch ,and ramsay . the total value ofthe social product amounts to9000 equal to 6000 c+1500 v+1500 c,in other words ,6000 represent the value ofthe means ofproduction ,and 3000 that ofthe articles ofconsumption .the value ofthe social revenue (vs ),then ,amounts toonly one third ofthe value ofthe total product ,and the totality ofthe con- sumers ,laborers aswell ascapitalists ,can draw on the total social product for commodities only tothe amount ofthis third ,for the purpose ofindividual consumption .on the other hand ,6000 ,ortwo thirds ,ofthe value ofthe product , are the value ofthe constant capital which must be repro- duced initsnatural form .means ofproduction tothis amount must again beincorporated inthe productive fund .storch recognizes this without being able toprove it:\"itisclear that the value ofthe annual product isdistributed partly tocapital and partly toprofits ,and that each one ofthese portions ofthe value ofthe annual product isregularly employed in buying the products which the nation needs both for the maintenance ofitscapital and for stocking its fund for consumption .**** the products which con- stitute the capital ofanation are not consumable .\"(storch , considrations sur la nature du revenu national .paris , 1824 ,page 150. ) adam smith ,however ,has promulgated this strange dogma ,which isbelieved tothis day ,not only inthe pre- viously mentioned form ,according towhich the entire value ofthe social product resolves itself into revenue ,that is tosay ,into wages plus surplus -value ,or,ashe expresses it, into wages plus profit (interest )plus ground rent ,but also inthe still more popular form ,according to which the consumers must ultimately pay tothe producers the entire value ofthe product .this istothis day one ofthe best established commonplaces ,orrather ofthe eternal truths ofthe so-called science ofpolitical economy .this isillus trated inthe following plausible manner :take any article , for instance linen shirts .first ,the spinner oflinen yarn",
        "simple reproduction .505 has topay the flax grower the entire value ofthe flax ,in other words the value offlax seed ,fertilizers ,cattle feed , etc. ,plus the value transferred tothe product from the fixed capital ofthe flax grower ,such asbuildings ,agricultural im- plements ,etc.;furthermore the wages paid inthe produc- tion ofthe flax ;the surplus -value incorporated inthe flax (profit ,ground rent );finally the cost oftransportation ofthe flax from its place ofproduction tothe spinnery . next ,the weaver has not only toreimburse the spinner for linen yarn ,for the price ofthe flax ,but also for that por- tion ofthe value ofmachinery ,buildings ,etc. ,inshort of the fixed capital ,which istransferred tothe yarn ,further- more all the auxiliary materials consumed inthe spinning process ,the wages ofthe spinners ,the surplus -value ,etc. , and soforth inthe case ofthe bleaching process ,the trans- portation ofthe finished linen ,and finally the shirtmaker , who has topay the entire price ofall preceding producers , who supplied him only with his raw material .there is now afurther addition ofvalue by his hands ,either by means ofconstant capital which isconsumed inthe shape ofmaterials oflabor ,auxiliary materials ,etc.,used inthe making ofshirts ,orbymeans oflabor expended init,which adds the value ofthe wages ofthe shirtmakers plus the surplus -value ofthe shirt manufacturer .now letthis entire product inshirts cost ultimately 100 p.st.,and let this be the aliquot part ofthe total annual value inproducts ex- pended by society in shirts .the consumers of the shirts pay these 100 p.st.,that isto say the value of all the means of production ,and of the wages plus surplus -value ofthe flax grower ,spinner ,weaver , bleacher ,shirtmaker ,and all carriers .this isquite true . indeed ,every child can see that .but now they continue : the same istrue ofthe value ofall other commodities .it should rather besaid that this istrue ofthe value ofall articles ofconsumption ,ofthe value ofthat portion ofthe social product which passes into consumption ,in other words ,that portion ofthe value ofthe social product which may be expended asrevenue .itistrue that the sum of the value ofall these commodities isequal tothe value",
        "506 capital . ofallthe means ofproduction (constant portions ofcapital ) consumed intheir creation ,plus the value added bythe last labor expended onthem (wages plus surplus -value ).hence the totality ofthe consumers can pay for this entire sum ofvalues ,because ,although the value ofeach individual commodity ismade up by c+v+s,nevertheless the sum ofthe values ofall commodities passing into consumption , taken atits maximum ,can be equal only tothat portion ofthe value ofthe social product ,which resolves itself into vs ,inother words ,equal tothat value which the labor expended during the current year has added tothe existing means ofproduction representing the value ofthe constant capital .as for the value ofthe constant capital ,we have seen that itisreproduced out ofthe mass ofsocial products inatwofold way .first ,by an exchange ofthe capitalists ofii,who produce articles ofconsumption ,with the cap- italists ofi,who produce the means ofproduction .and here isthe source ofthe phrase that what iscapital for one isrevenue for the other .but this isnot the actual state of affairs .the 2000 iic,existing inthe shape ofarticles of consumption valued at2000 ,constitute aconstant capital- value for the capitalists ofclass ii.they cannot consume itthemselves ,although the product must be consumed on account ofits natural form .on the other hand ,the 2000 i(vs )are wages plus surplus -value produced by the capitalist and working classes of i. they exist in the natural form ofmeans ofproduction ,ofthings inashape inwhich their own value cannot be consumed .we have here ,then ,values tothe amount of4000 ,only one half of which ,either before orafter the change ,reproduce constant capital ,while the other half form revenue .in the second place ,the constant capital ofiisreproduced inits natural form ,partly by exchange among the capitalists ofi,partly by reproduction inanatural form ineach individual busi- ness . the phrase that the entire annual value inproducts must be ultimately paid by the consumer would be correct only inthe case that we were toinclude inthe term consumer two vastly different classes ,namely individual consumers",
        "simple reproduction .507 and productive consumers .but to say that one portion ofthe product must be consumed productively isprecisely tosay that itmust serve ascapital and cannot beconsumed asrevenue . on the other hand ,ifwedivide the total value ofthe entire product ,equal to9000 ,into 6000 c+1500 v+1500 s,and look upon the 3000 (v+s)inthe light ofarevenue ,then the variable capital seems to disappear and capital ,socially speaking ,seems toconsist only ofconstant capital .for that which appeared originally as1500 vhas resolved itself into aportion ofthe social revenue ,into wages ,the revenue ofthe working class ,and has thus lost its character of capital .this conclusion isactually drawn by ramsay .ac- cording tohim ,capital ,socially considered ,consists only offixed capital ,but hemeans by fixed capital the constant capital ,that quantity ofvalues which consists ofmeans of production ,whether these are instruments ormaterials of labor ,such asraw materials ,partly finished products ,aux- iliary materials ,etc. he calls the variable capital acir- . culating capital :\"circulating capital consists only ofsub- sistence and other necessaries advanced tothe workmen previously tothe completion ofthe produce oftheir labor . **** fixed capital alone ,not circulating ,isproperly speaking asource ofnational wealth .**** circulating capital isnot an immediate agent in production ,nor es- sential toitatall,but merely aconvenience rendered neces- sary by the deplorable poverty ofthe mass ofthe people . **** fixed capital alone constitutes an element ofcost ofproduction inanational point ofview .\"(ramsay ,1,c., pages 23to26,selected .)ramsay defines fixed capital ,by which hemeans constant capital ,more closely inthe follow- ing words :\"the length oftime during which any portion ofthe product ofthat labor \"(namely labor bestowed on any commodity )\"has existed asfixed capital i.e.,inaform inwhich ,though assisting toraise the future commodity , itdoes not maintain laborers .\"(page 59.) here we see once more the confusion created by adam smith by drowning the distinction between constant and variable capital in that of fixed capital and circulating",
        "508capital . capital .the constant capital oframsay consists ofmeans ofproduction ,his circulating capital ofarticles ofconsump- tion .both ofthem are commodities ofagiven value .the one can no more create any surplus -value than the other . x.capital and revenue :variable capital and wages.44 the entire annual production ,the entire product ofa year ,isthe product ofthe useful labor ofthat year .but the value ofthis total product isgreater than that portion ofitinwhich the labor -power expended on production dur- ing the last year isincorporated .the product invalues ofthis year ,the new value created initscourse inthe form ofcommodities ,issmaller than the value ofthe product , that isto say,the total value of the com- modities finished during the entire year . the difference obtained by deducting from the total value ofthe annual product that portion of value which was added by the labor ofthe last year ,isnot anactually repro- duced value ,but merely one re-appearing inadifferent form ofexistence .itisvalue transferred tothe annual product from previously existing value ,which may beofan earlier orlater date ,according tothe wear ofthe constant portions of capital which have participated inthat year's annual labor -process ,avalue which may be derived from some means ofproduction which were first created during the year before last orinyears even previous tothat .itisunder all circumstances avalue transferred from means ofpro- duction offormer years tothe product ofthe year under discussion . take our formula .we then have after the exchange of the elements ,hitherto considered ,between iand ii,and within ii: (i)4000 c+1000 v+1000 s(these last realized inarticles ofconsumption ofiic)=6000 . 44the following isfrom manuscript viii .",
        "simple reproduction .509 (ii)2000 c(reproduced by exchange with i[v+s])+ 500 v+500 s=3000 . sum ofvalues 9000 . value newly produced during the year isincorporated only invand s.the sum ofthe product invalues ofthis year istherefore equal tothe sum ofv+s,that istosay, 2000 i(v+s)+1000 ii(v+s)=3000. all other portions ofvalue inthe products ofthis year are merely transferred values ,derived from the value of means of production . previously produced and consumed inthe annual production . aside from the value of3000 ,the current annual labor has not produced anything in the way ofvalues .that 3000 represents itsentire annual product invalues . now ,we have seen that the 2000 i(v+s)ofdepartment ii replace its 2000 iicinthe natural form ofmeans of production .two thirds ofthe annual labor ,then ,expended indepartment i,have newly produced the constant capital ofii,both asregards itsvalue and itsnatural form .socially speaking ,two thirds ofthe labor expended during the entire year have created anew constant capital -value ,which is realized in anatural form meeting the requirements of department ii.the greater portion ofthe annual labor ofsociety ,then ,has been spent inthe production ofnew constant capital (means ofproduction representing capital- value )inorder toreplace the value ofthe constant capital expended in the production of articles of consumption . that which distinguishes inthis case capitalist society from asociety ofsavages isnot,as senior thinks ,that itis aprivilege and peculiarity ofasavage toexpend his labor during acertain time which does not secure for him any revenue convertible into articles of consumption ,but the distinction isthe following :45 (a)capitalist society employs more of its available annual labor in the production of means of production 45\"when asavage manufactures bows ,hecarries onanindustry ,but hedoes not practice any abstinence .\"(senior ,principes foundamentaux del'economie politique ,traduction arrivabene ,paris ,1836 ,page 308. ) \"the more society advances ,the more abstinence itrequires .\"(ibidem , page 342. )compare \"capital ,\"volume i,chapter xxiv ,3,page 608.",
        "510capital . (and thus ofconstant capital )which are not convertible into revenue in the form ofwages orsurplus -value ,but can serve only ascapital . (b)when asavage makes bows ,arrows ,stone hammers , axes ,baskets ,etc. ,he knows very well that he did not spend the time soemployed inthe production ofarticles ofconsumption ,but that he has simply stocked his supply of means ofproduction ,and nothing else .furthermore , asavage commits agrave economic sin by his utter indif- ference so far aswaste oftime isconcerned ,for tyler tells us ofhim that he takes sometimes awhole month to make one arrow . the current conception ,by which some political econom- ists seek toget rid ofthe theoretical difficulty ,inother words , ofthe understanding ofthe real state ofaffairs ,the con- ception that athing may be capital for one and revenue for another ,and vice versa ,isonly partially true ,and it becomes wholly wrong ,when itismade general ,since it then implies acomplete misunderstanding ofthe entire pro- cess oftransactions taking place inannual reproduction and atthe same time amisunderstanding ofthe actual basis of the partial truth . we now review the actual conditions ,on which the par- tial correctness ofthis conception rests ,and we shall atthe same time expose the wrong conception ofthese conditions . (1)the variable capital serves ascapital inthe hands ofthe capitalist and asrevenue inthe hands ofthe wage worker . the variable capital exists first inthe hands ofthe capi- talist as money -capital ;and itperforms the function of money -capital ,when hebuys labor -power with it.so long asitpersists in the form of money in his hands ,itis nothing but agiven value existing inthe form ofmoney , in other words ,aconstant and not avariable magnitude . itisonly apotential variable capital ,owing toits con- vertibility into labor power .itbecomes actually avariable capital only after divesting itself ofitsmoney -form and as- 46e.b.tyler ,forschungen ueber die urgeschichte der menschheit , translated byh.mueller .leipsic ,nodate ,page 240.",
        "simple reproduction .511 suming the form oflabor -power serving asan element of productive capital inthe capitalist process . the money which first served in the function ofthe money -form ofthe variable capital for the capitalist ,now serves inthe hands ofthe laborer asthe money -form ofhis revenue ,which he derives from the ever repeated sale of his labor -power . we have here but the simple fact that the money inthe hands ofthe buyer ,inthis case the capitalist ,passes from these hands into those ofthe seller ,inthis case aseller oflabor -power ,the wage -worker .itisnot the variable capital which serves twice ,first ascapital for the capitalist and then asrevenue for the laborer .itismerely the same money ,which exists first inthe hands ofthe capitalist as the money -form ofhis variable capital representing apoten- tial variable capital ,and which serves inthe hands ofthe laborer asan equivalent for sold labor -power ,assoon asthe capitalist has converted itinto labor -power .but the fact that the same money serves another useful purpose inthe hands ofthe buyer than inthose ofthe seller isapeculiar- ity ofthe sale and purchase ofall commodities . apologists inpolitical economy present the matter ina wrong light ,aswe can see best when we keep our eye ex- clusively ,without taking any notice ofthe following trans- actions ,on the transaction in circulation indicated by m-l(avariation of m-c),the conversion of money into labor -power on the part ofthe capitalist buyer ,which isl-m (c-m),aconversion ofthe commodity labor- power into money ,on the part ofthe seller ,the laborer . they say :\"the same money realizes inthis instance two capitals ;the buyer -the capitalist -converts his money- capital into living labor -power ,which he incorporates in his productive capital ;on the other hand ,the seller ,the laborer ,converts his commodity ,his labor -power ,into money ,which he spends ashis revenue ,and this enables him to resell his labor -power in ever repeated turns and thereby tomaintain it.his labor -power ,then ,represents his capital inthe form ofacommodity ,which yields him acontinuous revenue .\" labor -power isindeed his wealth",
        "512capital . (ever self -renewing and reproductive ),not his capital .it isthe only commodity which he must and can sell con- tinually ,inorder tolive ,and which does not serve ascapi- tal until itreaches the hands ofthe capitalist .the fact that aman iscontinually compelled tosell his labor -power (himself )toanother man proves tothose apologetic econ- omists that he isacapitalist ,for lo!heiscontinually sell- ing his \"commodity ,\"himself .in that case ,aslave isalso acapitalist ,although heissold by another for once and all asacommodity ,for the nature ofthis commodity ,alabor- ing slave ,has the peculiarity that its buyer does not only make itwork every new day ,but also provides itwith the food which enables ittodo ever new work- (compare on this point the remarks ofsismondi and say intheir letters tomalthus .) (2)in the exchange of1000 iv +1000 is for 2000 iic,wesee that what isconstant capital for one (2000 iic) isvariable capital and surplus -value ,orinshort ,revenue for others ;and what isvariable capital and surplus -value (2000 i(v+s),or in short ,revenue for one ,becomes constant capital for another . let usfirst look atthe exchange ofivfor iic,beginning with the point ofview ofthe laborer . the aggregate laborer ofihas sold his labor -power tothe aggregate capitalist ofifor 1000 ;he receives this value in money ashis wages .with this money ,he buys from ii articles ofconsumption ofthe same value .the capitalist ofiimeets him only inthe role ofaseller ofcommodities , nothing else ,even ifthe laborer buys from his own capital- ist,ashedoes inthe exchange of500 iiv,aswe have seen above .the form of circulation through which his com- modity ,labor -power ,passes ,isthat ofthe simple circulation of commodities for the mere purpose of consumption in the satisfaction ofneeds ,the form c(labor -power )-m -c (articles ofconsumption ).the result ofthis transaction in circulation isthat the laborer maintains himself asa labor -power for acapitalist ,and inorder tocontinue main- taining himself assuch ,he must continually renew the transaction l(c)-m -c.his wages are realized in ar-",
        "simple reproduction .513 ticles ofconsumption ,they are spent asrevenue ,and ,taking the working class asawhole ,are again and again spent as arevenue . now let us look atthe same transaction ,the exchange of iv for iic,from the point ofview ofthe capitalist . the entire commodity -product ofiiconsists ofarticles of consumption ,ofthings intended for annual consumption , serving inthe realization ofrevenue for some one ,inthe present case for the aggregate laborer ofi.but so far as the aggregate capitalist ofiiisconcerned ,one portion of his commodity -product ,equal to2000 ,isnow the form of the constant portion ofthe value ofhis productive capital converted into commodities .itmust be reconverted from the form ofcommodities into its natural form ,inwhich itmay serve again asthe constant portion ofaproductive capital .what the capitalist ofiihas accomplished sofar isthat he has reconverted one half (1000 )ofthe constant portion ofhis capital ,which had been reproduced inthe shape ofcommodities ,into the form ofmoney by means of sale tothe laborers ofi. hence itisnot the variable capi tal iv,which has been exchanged for this first half ofthe value ofthe constant capital ofii,but simply the money which served iasmoney -capital inthe exchange for labor- power has thus been transferred tothe possession ofthe seller oflabor -power ,and for him itdid not represent any capital ,but merely revenue inthe form ofmoney ,which is tobeexpended inthe purchase ofarticles ofconsumption . the money tothe amount of 1000 ,on the other hand , which has come into the hands ofthe capitalists ofiiby means ofthe transaction with the laborers ofi,cannot as yet serve asthe constant element ofthe productive capital ofii.for the present itisbut the money -form ofthe commodity -capital ofii,tobecommuted into fixed orcir- culating portions ofconstant capital .department iinow buys with the money received from the laborers ofi,the buyers ofits commodities ,means ofproduction from ito the amount of 1000. by this means the constant value ofthe capital ofiiisrenewed tothe extent ofone half of itstotal amount initsnatural form ,inwhich itcan serve",
        "514capital . once more asan element ofthe productive capital ofii. the circulation inthis instance took the course c-m-c, that isto say,articles of consumption tothe amount of 1000 -money tothe amount of1000 -means ofproduction tothe amount of1000 . but c-m-crepresents here the movement ofcapital . c,when sold tothe laborers ,isconverted into m,and this misconverted into means ofproduction .itisthe recon- version ofcommodities into the material elements ofwhich this commodity ismade .on the other hand ,just asthe capitalist of ii plays only the role of abuyer of com- modities with regard toi,sothe capitalist ofiacts only as aseller ofcommodities with regard toii.department i bought originally labor -power valued at 1000 with that amount ofmoney intended for service asvariable capital . ithas therefore received an equivalent for the 1000 vwhich itexpended in money .this money now belongs tothe laborers ,who spend itinpurchases from ii.department i cannot recover this money from ii unless itsecures the amount bythe sale ofcommodities ofthe same value toii. department ifirst had acertain sum ofmoney amount- ing to1000 and destined toserve asvariable capital .the money performs this service byitsexchange for labor -power tothe same amount .the laborer inhis turn supplied as aresult ofthe process ofproduction aquantity of com- modities (means ofproduction )tothe amount of 6000 , ofwhich one sixth ,or1000 ,are equivalent invalue tothe variable portion ofcapital advanced inmoney .this vari able portion ofvalue no more serves asvariable capital so long asitretains the form ofcommodities than itdid while inthe form ofmoney .itserves asvariable capital only after its conversion into living labor -power ,and only so long asthis labor -power serves inthe process ofproduction . so long asthis value was incorporated inmoney ,itrepre- sented only potential variable capital .but ithad atleast a form ,inwhich itwas immediately convertible into labor- power .but inthe form ofcommodities ,the same variable value isbut potential money ,itmust first assume the form of money by means ofthe sale of commodities ,in the",
        "simple reproduction .515 present instance by the sale of 1000 in value of com- modities ofitodepartment ii.the movement ofthe cir- culation passes here through the form 1000 v(money )- 1000 c(labor -power )-1000 c(commodities equivalent in value tothe variable capital )1000 v(money );inother words ,m-c...c-m (identical with m-l... cm). the process ofproduction intervening between c...cdoes not belong tothe sphere ofcirculation .itdoes not figure inthe mutual exchange ofthe various elements ofannual reproduction ,although this exchange includes the re- production of all the elements of productive capital ,the constant aswell asthe variable element (labor -power ).all the participants inthis exchange appear either asbuyers , orassellers ,orasboth .the laborers appear only asbuyers of commodities .the capitalists act alternately asbuyers and sellers ,and within certain limits only on one side , either asbuyers ofcommodities orassellers ofcommodities . the result isthat department ipossesses once more the variable part of the value of its capital inthe form of money ,from which alone itisimmediately convertible into labor -power ,inother words ,department ionce more holds its variable capital value inthe only form inwhich itcan again be advanced as an actual variable element ofits productive capital .on the other hand ,the laborer must again act as aseller ofcommodities ,of his labor- power ,before he can act asabuyer ofcommodities . sofar asthe variable capital ofdepartment ii(500 iiv) isconcerned ,the circulation between the capitalists and laborers ofthe same department takes place without any intermediate transactions ,since we look upon itastaking place between the aggregate capitalist and the aggregate laborer ofii. the aggregate capitalist ofiiadvances 500 vfor the pur- chase oflabor -power tothe same amount .inthis case ,the aggregate capitalist isabuyer ,the aggregate laborer asel- ler.thereupon the laborer acts asabuyer ofaportion ofthe commodities produced by himself ,using the money received for his labor -power .in this case ,the capitalist isthe seller .the laborer has reproduced for the capitalist1",
        "516capital . the money paid inthe purchase oflabor -power by means ofaportion ofthe newly produced commodity -capital ofii, amounting to500 vincommodities . the capitalist then holds inthe form ofcommodities the same v,which he had inthe form ofmoney before the exchange for labor- power ;while the laborer has realized the value ofhis labor- power in money ,and uses this money by spending itas his revenue inthe purchase ofarticles ofconsumption pro- duced by himself .itisan exchange ofthe revenue ofthe laborer inmoney for aportion ofthe commodities inwhich he has himself reproduced 500 ofthe value ofthe variable capital ofthe capitalist employing him .inthis way this money returns tothe capitalist ofiiasthe money -form of his variable capital .an equivalent value ofrevenue in the form ofmoney thus reproduces variable value ofcapital inthe form ofcommodities . the capitalist does not increase his wealth by recovering the money paid by him tothe laborer inthe purchase of labor -power through the sale ofan equivalent quantity of commodities tothe laborer .he would really pay the laborer twice ,ifhe were topay him first 500 inthe purchase of labor -power ,and then give him inaddition thereto aquan- tity ofcommodities valued at500 ,after the laborer had produced them .on the other hand ,ifthe laborer were to produce nothing but an equivalent incommodities valued at500 for the price ofhis labor -power of500 ,the capitalist would be no better off after the transaction than before it. but the laborer has actually reproduced aproduct of3000 . he has preserved the constant portion ofthe value ofthe product ,that istosay,the value ofthe means ofproduc- tion incorporated inthe product ,tothe amount of2000 ,by converting itinto anew product .he has furthermore added tothis existing value avalue of1000 (v+s).(the idea that the capitalist grows richer by the return of500 in money isadvanced by destutt de tracy ,asshown in detail insection xiii ofthis chapter .) by the purchase ofarticles ofconsumption tothe value of 500 on the part ofthe laborer ofii,the capitalist ofii recovers the value of500 iiv,which he had just held in",
        "simple reproduction . 517 the shape ofcommodities ,but which he now holds inthe form ofmoney ,inwhich he advances itoriginally .the immediate result ofthis transaction ,asofany other sale of commodities ,isthe conversion of agiven value from the form ofcommodities into that ofmoney .nor isthe resulting reflux ofthe money toitspoint ofdeparture any- thing specific .ifcapitalist ofiihad bought ,with 500 of money ,commodities from the capitalist ofi,and then sold tothe capitalist oficommodities valued at500 ,he would likewise have recovered 500 inmoney .this sum of500 in money would merely have served for the circulation of commodities valued at1000 ,and according toalaw pre- viously mentioned ,the money would have returned tothe one starting itinto circulation . but the 500 inmoney ,which have returned tothe capi- talist ofii,represent atthe same time arenewed potential variable capital .why isthis so?money , this so?money ,and money -capital , isapotential variable capital only tothe extent that itis convertible into labor -power .the return of500 p.st.in money tothe capitalist ofiiisaccompanied bythe return ofthe labor -power of iitothe market .the return of both ofthese atopposite poles -and tothis extent the re- appearance of500 inmoney not merely inthe capacity of money ,but ofvariable capital inthe form ofmoney -is conditioned on one and the same process .the money of 500 returns tothe capitalist ofii,because he sold tothe laborers ofii articles of consumption valued at500 ,for which the laborer spent his wages ,inorder tomaintain him- self and his family and thus his labor -power .in order to beable tolive on and act again asabuyer ofcommodities he must again sell his labor -power .the return of500 in money tothe capitalist ofiiistherefore atthe same time areturn ,orastaying ,oflabor -power inthe capacity ofa commodity purchasable with 500 in money ,and thereby areturn of500 inmoney toits capacity ofpotential vari- able capital . as for the vofdepartment iib,which produces articles ofluxury ,this (iib)vistreated the same asiv.the money which renews the variable capital ofthe capitalists",
        "518capital . ofiibinthe form ofmoney returns tothem inaround- about way through the hands ofthe capitalists ofiia.but itmakes nevertheless adifference ,whether the laborers buy their articles ofconsumption by direct purchase from the same capitalist producers to whom they sell their labor- power ,orwhether they buy from capitalists ofanother de- partment ,through whose hands the money returns indirectly tothe capitalists oftheir own department .since the work- ing class live from hand tomouth ,they buy just aslong as they have the means .itisdifferent with the capitalists , for instance inthe transaction between 1000 iicand 1000 iv.the capitalist does not live from hand tomouth .his compelling motive isthe utmost self -expansion ofhis capi- tal.now ,ifcircumstances seem to promise greater ad- vantages tothe capitalist ofiiby holding ontohis money for awhile ,instead ofimmediately renewing his constant capital ,then the return of1000 iicinmoney toiisre- tarded .this implies aretardation inthe return of1000 iv tothe form ofmoney ,and inthat case the capitalist oficannot continue his business onthe same scale ,unless he can draw on some reserve capital .generally speaking , reserve capital inthe form ofmoney isalways necessary , inorder tobeable towork without interruption ,regardless ofthe rapid orslow reflux ofthe variable portion ofcapital- value in money . ifthe transactions ofthe various elements ofthe current annual reproduction are tobe investigated ,the results of the labor ofthe preceding year ,which has come toaclose , must also betaken into consideration .the process ofpro- duction which resulted inthe product ofthe present year , ispast and incorporated inits products ,and somuch more isthis the case with the process ofcirculation preceding the process ofproduction orrunning parallel with it,by which potential variable capital istransformed into actual vari- able capital ,inother words ,the sale and purchase oflabor- power .the labor -market isnot apart ofthe commodity- market which concerns ushere .for the laborer has not only disposed ofhis labor -power before this ,but also sup- plied an equivalent ofthe price ofhis labor -power inthe",
        "simple reproduction .519 shape ofcommodities ,aside from the surplus -value created by him .he has furthermore his wages inhis pocket and figures during the present transactions only asabuyer of commodities (articles ofconsumption ).on the other hand , the annual product must contain all the elements ofre- production ,must renew all the elements ofproductive capi- tal,above all itsmost important element ,the variable capi- tal.and wehave seen ,indeed ,that the result ofthe present transactions ,sofar asthe variable capital isconcerned ,is this :the laborer asabuyer ofcommodities ,by means of the expenditure ofhis wages ,and the consumption ofthe purchased commodities ,reproduces his labor -power ,this being the only commodity which hehas tosell.just asthe money advanced inthe purchase ofthis labor -power by the capitalists returns tothem ,so labor -power returns tothe market tobe once more exchanged for this money .the result inthe special case of1000 iv isthat the capitalists ofihold 1000 vinmoney and the laborers ofioffer them 1000 inlabor -power ,sothat the entire process ofreproduc- tion ofican berenewed .this isone result ofthe process ofcirculation . on the other hand ,the expenditure ofthe wages ofthe laborers ofidrew on iifor articles ofconsumption tothe amount of1000 iic,transforming them from commodities into money . department ii reconverted them into the natural form ofits constant capital ,by purchasing from i commodities valued at1000 vand thus restoring toithe value ofitsvariable capital inmoney . the variable capital ofipasses through three metamor- phoses ,which are only indicated inthe circulation ofthe annual product ordo not appear atall init. (1)the first form is1000 iv inmoney ,which iscon- verted into labor -power ofthe same value .this transaction does not itself appear inthe exchange ofcommodities be- tween iand ii,but its result isseen inthe fact that the working class of iapproach the capitalist seller of com- modities ofiiwith 1000 in money ,just asthe working class ofiiapproach the capitalist ofiiwith 500 inmoney in order tobuy his 500 iivofcommodities .",
        "520capital . (2)the second form isthe only one inwhich variable capital actually varies and serves asvariable capital .in this form ,apower which creates values takes the place of given values offered in exchange for it.itbelongs ex- clusively tothe process ofproduction which ispast . (3)the third form ,inwhich the variable capital assuch performs its function inthe process ofproduction ,isthe annual product invalues ,which inthe case ofiamounts to1000 vplus 1000 s,or2000 i(v+s).inthe place ofits original value of1000 inmoney we have avalue ofdouble this amount ,or2000 ,incommodities .the variable capital- value of1000 istherefore only one half ofthe product in values created by itasan element ofproductive capital . the 1000 iv incommodities are an exact equivalent ofthe variable part ofcapital originally advanced inmoney .but inthe form ofcommodities they are but potential money (they do not become money until they are sold ),sothat they are still less directly money -capital .they finally be- come money -capital by the sale ofthe commodities of1000 ivtoiic,and bythe hurried reappearance oflabor -power asapurchasable commodity ,asamaterial for which 1000 v inmoney may beexchanged . during all these transactions the capitalist oficontin- ually holds the variable capital inhis hands ;(1)originally asmoney -capital ;(2)then asanelement ofhis productive capital ;(3)still later asaportion ofthe value ofhis com- modity -capital ,inthe form ofthe value ofcommodities ; (4)finally once more inmoney which seeks the company oflabor -power for the purpose of exchange .during the process ofproduction ,the capitalist has the variable capital inhis control asalabor -power creating values ,but not as avalue ofagiven magnitude .but since he never pays the laborer until the laborer's power has been applied for a certain length oftime ,he always holds in his hands the value created by labor for its own reproduction and the surplus -value inexcess ofthis ,before hepays him . seeing that the variable capital always stays inthe hands ofthe capitalist ,itcannot beclaimed inany way that it converts itself into revenue for any one .on the contrary ,",
        "simple reproduction .521 1000 ivconverts itself into money by itssale toii,whose constant capital itreproduces tothe extent ofone half inits natural form . that which resolves itself into revenue isnot the variable capital ofi,represented by 1000 vinmoney .this money has ceased toserve asthe money -form ofthe variable capital ofiassoon asithas converted itself into labor -power ,just asthe money ofany other seller ofcommodities ceases to represent any ofhis property assoon ashe has exchanged itfor commodities ofsome other seller .the transactions which the money paid aswages makes inthe hands ofthe working class are not transactions ofvariable capital ,but of the value oftheir labor -power converted into money .so are the transactions ofthe product invalues (2000 i(v+s)), created bythe working class ,only transactions ofcommod- ities belonging tothe capitalists ,which do not concern the laborers .however ,the capitalist ,and still more his theoret- ical interpreter ,the political economist ,can rid himself only with the greatest difficulty ofthe idea that the money paid tothe laborer isstill the capitalist's money .ifthe capitalist isaproducer ofmoney ,then the variable portion ofvalue -in other words ,the equivalent incommodities which re- produces for him the price ofthe labor -power bought by him -appears immediately inthe form ofmoney ,sothat itcan serve again asvariable money -capital without the circuitous route ofareflux .but sofar asthe laborer ofii isconcerned -aside from the laborer who produces articles ofluxury -500 vexists in the form of commodities in- tended for the consumption ofthe laborer ,which he,the aggregate laborer ,buys by direct purchase from the same aggregate capitalist towhom he had sold his labor -power . the variable portion ofthe capital ofii,sofar asitsnatural form isconcerned ,consists ofarticles ofconsumption ,the greater portion ofwhich are intended for the consumption ofthe laboring class .but itisnot the variable capital which isspent inthis form by the laborer .itisthe wages ,the money ofthe laborer ,which by its realization in these articles ofconsumption restores tothe capitalist the vari- able capital 500 iivinitsmoney -form .the variable capi-",
        "522capital . tal iivisreproduced inarticles ofconsumption ,the same asthe constant capital 2000 iic.the one resolves itself no more into revenue than the other does .in either case itisthe wages which resolve themselves into revenue itisaweighty fact inthe circulation ofthe annual pro- duction that the expenditure ofwages restores both the con- stant and variable capital to the form of money -capital , inthe one case 1000 iic,inthe other 1000 ivand 500 iiv (in the case ofthe variable capital either by means ofa direct orindirect reflux ). xi.reproduction of the fixed capital . agreat difficulty inthe analysis ofthe transactions in annual reproduction isthe following .take the simplest form inwhich the matter may bepresented ,asfollows : (i.) 4000 c+1000 v+1000 s+ (ii.)2000 c+ 500 v+ 500 s=9000 . this resolves itself finally into 4000 ic +2000 iic+1000 iv +500 iiv+1000 is +500 iis=6000 c+1500 v+1500 s=9000 . one portion ofthe value ofthe constant capital ,tothe extent that itconsists ofinstruments ofproduction inthe strict meaning ofthe term (asadistinct section ofthe means ofproduction )istransferred from the instruments of labor tothe product oflabor (commodities );these instru- ments oflabor continue toserve aselements ofproductive capital intheir old natural form .itistheir wear and tear , the loss invalue experienced by them after acertain period ofservice ,which re-appears asan element ofvalue inthe commodities produced by means ofthem ,which istrans- ferred from the instruments oflabor tothe product oflabor . in aquestion ofannual reproduction ,therefore ,only those elements offixed capital demand consideration ,which last longer than one year .ifthey are completely worn out within one year ,then they must be completely reproduced bythe annual reproduction ,and the point ofissue does not concern them atall.itmay happen inthe case ofmachines",
        "simple reproduction .523 and other lasting forms offixed capital -and itfrequently does happen -that certain parts ofthem must becompletely reproduced within one year ,although the organism ofthe building ormachine asawhole lasts amuch longer time . these partial organs belong inthe same category with the elements offixed capital which must bereproduced within one year . this element ofthe value ofcommodities must not becon- founded with the cost ofrepairs .ifacommodity issold , this element isturned into money ,the same asall others . but after ithas been turned into money ,itsdifference from allother elements becomes apparent .the raw and auxiliary materials consumed inthe production ofcommodities must be replaced intheir natural form ,inorder that the repro- duction ofcommodities may begin anew (orthat the pro- duction ofcommodities ingeneral may becontinuous ).the labor -power embodied inthem must also berenewed byfresh labor -power .for this reason ,the money realized on the commodities must becontinually reconverted into these ele- ments ofproductive capital ,aconversion ofmoney into com- modities .itdoes not alter the matter that raw and auxiliary materials ,for instance ,are bought inlarge quantities incer- tain intervals ,sothat they constitute aproductive supply , and need not be secured by new purchases during those intervals .nor does itmatter that the money coming in through the sale of commodities ,tothe extent that itis intended for the purchase ofthose means ofproduction , may accumulate while they last ,sothat this portion ofcon- stant capital appears temporarily inthe role ofmoney -capi- tal suspended from itsactive function .itisnot arevenue- capital .itisproductive capital suspended inthe form of money .the renewal ofthe means ofproduction must con- tinue all the time ,but the form oftheir renewal -with reference tothe circulation -may vary .the new purchases , the transactions inthe circulation by which they are re- newed ,may take place inmore orless prolonged intervals , and alarge amount may beinvested atone stroke inacor- respondingly large supply of means of production .or, the intervals between purchases may besmall ,and inthat",
        "524capital . case small amounts ofmoney are invested in correspond- ingly small supplies ofmeans ofproduction .but this does not alter the matter itself .the same applies to labor- power .wherever production iscarried on continuously throughout the year onthe same scale ,there the consumed labor -power must be continuously replaced by new labor- power .where work depends onseasons ,ordifferent portions ofthe work are done atdifferent periods ,asinagriculture , there the purchases oflabor -power are relatively smaller . but the money received through the sale ofcommodities , sofar asitrepresents the value ofthe wear and tear of fixed capital ,isnot reconverted into that component part ofproductive capital whose loss invalue itmakes good .it settles down beside the productive capital and retains the form ofmoney .this precipitation ofmoney isrepeated , until the period ofreproduction ,consisting ofasmall or great length oftime has elapsed ,during which the fixed element ofconstant capital continues toperform its func- tion inthe process ofproduction initsold natural form .as soon asthe fixed element ,such asbuildings ,machinery , etc. ,has been worn out and can nolonger serve inthe pro- cess ofproduction ,its value exists fully inmoney ,inthe sum ofmoney precipitated by the values which had been gradually transferred by the fixed capital tothe commod- ities inwhose production itassisted ,and which had been converted into money by the sale ofthese commodities . this money then serves toreplace the fixed capital (orits elements ,since its various elements have adifferent dur- ability )in its natural form and thus to renew this part ofthe productive capital inreality .this money is,there- fore ,the money -form ofapart ofthe value ofthe pro- ductive capital ,namely ofitsfixed part .the formation of this hoard isthus afactor inthe capitalist process ofrepro- duction ,itisthe reproduction and storage ,inthe form ofmoney ,ofthe value ofthe fixed capital ,oritsindividual elements ,until such time asthe fixed capital ,shall beworn out,until itshall have transferred its entire value tothe commodities produced and must be reproduced in its natural form .and this money does not lose the form of",
        "simple reproduction . -525 ahoard and resume its activity inthe process ofreproduc- tion ofcapital promoted by the circulation ,until itisre- converted into new elements of fixed capital which will replace the worn -out elements . the transactions disposing ofthe annual product incom- modities can no more be dissolved into mere direct ex- change ofits individual elements than the simple circula- tion of commodities can be regarded asidentical with a simple exchange ofcommodities .money plays aspecific role inthis circulation ,which isparticularly marked by the manner inwhich the value ofthe fixed capital isre- produced .(itisleft toalater analysis to ascertain how the matter would present itself ,ifproduction were collective and no longer aproduction ofcommodities .) let us now return toour fundamental diagram ,which showed in department ii the formula 2000 c+500 v+ 500 s.all the articles of consumption produced in the course ofthe year are in that case valued at3000. and every one ofthe different elements ofthe commodities com- posing the total quantity ofthe product consists ,sofar as its value isconcerned ,of 2-3 c+1-6 v+1-6 s,or in per- centages ,66 2-3 c+162-3 v+162-3 s.the various kinds ofcommodities ofdepartment iimay contain different pro- portions of constant capital .the fixed portion oftheir constant capitals may be different .the duration ofthis fixed portion ,its wear and tear and therefore that portion ofvalue which ittransfers by degrees tothe commodities , produced by its assistance ,may also differ .but that isim- material .so far asthe process ofsocial reproduction is concerned ,itisonly aquestion oftransactions between de- partments iiand i.these two departments are here con- fronted by each other only associal masses .hence the proportional magnitude ofthe portion cofthe value ofthe commodity -product ofii (which isthe only essential one inthe settlement ofthe present question )gives the average proportion ,ifall the branches ofproduction classed under iiare taken asawhole . every kind ofcommodities (and they are largely the same kinds )classed under 2000 c+500 v+500 sthus",
        "526capital . shares uniformly inthe value tothe extent of662-3 %e+ 162-3 %v+16 2-3 %s.this applies equally toevery 100 ofthe commodities classed under c,orv,ors. the commodities in which the 2000 are incorporated may befurther divided into (1)1333 1-3 c+333 1-3 v+333 1-3 s=2000 c. those under 500 vmay be divided into (2)333 1-3 c+831-3 v+831-3 s=500 v. those under 500 smay be divided into (3)333 1-3 c+831-3 v+831-3 s=500 s. now ,ifwe add these three formulae ,we have 1333 1-3 c +333 1-3 c+333 1-3 c=2000 c.furthermore 333 1-3 v +83 1-3 v+831-3 v=500 v.and the same inthe case ofs.the addition gives the same total value of3000 as above . the entire constant capital -value contained inthe quan- tity ofcommodities ofiirepresented by 3000 istherefore incorporated in2000 c,and neither 500 vnor 500 scontain an atom ofit.the same istrue ofvand sinthe case of 500 vand 500 s. in other words ,the entire quantity ofconstant capital- value ,embodied inthe commodities ofiiand reconvertible either into its natural orits money -form ,exists in2000 c. everything referring to the conversion of the constant value ofthe commodities of ii istherefore dealing only with the movements of2000 cofii.and these transactions can be made only with 1000 v+1000 sofi. inthe same way ,all remarks made with reference tothe transactions ofthe constant capital -value ofdepartment i are confined toaconsideration of4000 ic. (1) the reproduction ofthe value ofthe worn -out part inthe form ofmoney . let usfirst consider the diagram i.4000 c+1000 v+1000 s ii. .2000 c+500 +500 s the exchange ofthe commodities represented by 2000 ii cfor commodities ofiofthe same value (1000 v+ 1000 s)isconditioned on the assumption that the entire",
        "simple reproduction .527 2000 iicare reconverted from their natural form into that ofthe elements ofthe constant capital ofii,produced byi. but the value ofthe commodities of2000 c,ofwhich the constant capital ofiiconsists ,contains an element making good the loss inthe value offixed capital ,which isnot tobe immediately reproduced inits natural form ,but converted into money and accumulated until such time asshall re- quire the natural reproduction ofthe fixed capital on ac- count ofitshaving been completely worn out .every year registers the finish ofsome fixed capital which must bere- newed inthis orthat individual business ,orthis orthat line ofindustry .inthe case ofone and the same individual capital ,this orthat portion ofitsfixed capital must bere- newed ,since its elements have adifferent durability .in examining annual reproduction ,even on asimple scale , that istosay,disregarding all accumulation ,we do not be- gin atthe very beginning ofthings .the year which we study isone inthe flow ofmany ,itisnot the year ofthe first birth of capitalist production .the various capitals invested inthe numerous lines of production of depart- ment ii are,therefore ,ofdifferent age .just asagreat many persons die annually inthe service ofthese lines of production ,so scores offixed capitals expire annually in the same service and must berestored intheir natural form by means ofthe accumulated fund ofmoney .to that ex- tent the exchange of2000 iicfor 2000 i(v+s)implies aconversion of2000 iicfrom the form ofcommodities (articles ofconsumption )into that ofnatural elements of constant capital ,which consist not only ofraw and auxili- ary materials ,but also ofnatural elements offixed capital , such asmachinery ,tools ,buildings ,etc. the wear and tear , which must bereproduced inmoney inthe value of2000 iic,by no means corresponds tothe volume ofthe actively engaged fixed capital ,since aportion ofthis must berepro- duced every year initsnatural form .the necessary prepa- ration for this reproduction isan accumulation of money inpreceding years onthe part ofthe capitalists ofii.and the same condition holds good for the current year aswell asfor the preceding ones .",
        "528capital . inthe transaction ofi(1000 v+1000 s)itmust benoted that the magnitude i(v+s)does not contain any elements ofconstant capital ,sothat none ofitimplies areproduc- tion ofwear and tear ,that istosay,ofelements transferred from the fixed portion ofsome constant capital tothe com- modities which represent the natural form ofv+s.on the other hand ,such elements do exist iniicand consti- tute that portion ofvalue due tofixed capital which isnot immediately converted from money into its natural form , but first accumulated inthe form ofmoney .the exchange between i(1000 v+1000 s)and 2000 iic,therefore ,pre- sents the difficulty ,that the means ofproduction ofi,which are the natural form of (1000 v+1000 s),are tobe ex- changed tothe full value of2000 for articles ofconsump- tion ofii,while the 2000 iicofarticles ofconsumption cannot be offered entirely in exchange for i(1000 v+ 1000 s),because aportion ofthem ,corresponding invalue tothe wear and tear ofthe fixed capital ,must beaccumu- lated inthe form ofmoney and do not serve asamedium ofcirculation during the current period ofannual repro- duction which we are examining .but the money paying for this element ofwear and tear incorporated inthe value of2000 iiccan come only from department i,since ii cannot pay for its own articles ,but must secure pay- ment for them by selling them ,and since we have assumed that i(1000 v+1000 s)buys the full amount ofcommodi- ties of 2000 iic.hence department imust supply the money tocover that wear and tear ofiic.now ,according tothe rules previously determined ,money advanced tothe circulation returns tothat capitalist producer who later on throws an equal amount ofcommodities into the circula- tion .it is evident that department i,inbuying iic, cannot transfer commodities worth 2000 to department ii and yield up to itevery time an additional amount of money ,without any equivalent returning by way ofthe circulation .otherwise department iwould buy the com- modities iicataprice exceeding their value .ifdepart- ment ii actually exchanges its 2000 cfor i(1000 v+",
        "simple reproduction .529 1000 s),then ithas no further claims on department i, and the money circulating inthis transaction returns either toiortoii,according towhether ioriiacted first asa buyer .and inthat case department iiwould have recon- verted the entire value ofits commodity -capital into the natural form ofmeans ofproduction ,contrary toour as- sumption that itwould not reconvert an aliquot portion dur- ing the current period ofannual reproduction into the nat- ural form offixed elements ofits constant capital .depart- ment iicould not secure abalance ofmoney initsfavor ,un- less itsold avalue of2000 todepartment iand bought less than that from department i,for instance ,only 1800. in that case department iwould have tomake good the bal- ance of200 inmoney ,which would not return toit,be- cause itwould not have recovered this amount by an equiv- alent surrender of commodities tothe circulation .only then could iihave afund ofmoney which itcould place to the credit ofthe wear and tear ofits fixed capital .but then we should also have an overproduction ofmeans of production tothe amount of200 onthe part ofdepartment i,and the basis ofour diagram would bedestroyed ,which assumed reproduction onthe same scale ,inother words ,a complete proportionality between the various systems of production .we should have done away with one difficulty and created another ,which would be still worse . as this problem offers peculiar difficulties and has never been mentioned by political economy ,we shall consider one by one all possible solutions (atleast apparent solutions ), orrather all possible formulations ofthe problem . in the first place ,we had just assumed that department iisells commodities valued at2000 to department i,but buys from itonly 1800 worth .the value ofthe commodi- ties of2000 ccontains 200 for wear and tear offixed capi- tal,which must be accumulated asmoney .the value of 2000 cwould therefore bedissolved into 1800 ,which would be exchanged for means ofproduction ofi,and 200 for the reproduction ofworn -out elements offixed capital ,which would beheld inthe form ofmoney after the sale of2000",
        "530capital . iictodepartment i.expressed interms ofvalue ,this would be2000 iic=1800 c+200 w,this wstanding for wear and tear . we should then bestudying the transaction i. 1000 v+1000 s ii. 1800 c 200 w. department ibuys with 1000 p.st.,which the laborers have received aswages inpayment for their labor -power , 1000 iicofarticles ofconsumption .department iibuys with the same 1000 p.st.means ofproduction from depart- ment ifrom the lot 1000 v.the capitalists ofithus re- cover their variable capital inthe form ofmoney and can employ itnext year inthe purchase oflabor -power tothe same amount ,that istosay,they can reproduce the variable portion oftheir productive capital in its natural form. department iifurthermore advances 400 p.st.and buys means ofproduction from the lot is,and department is buys with the same 400 p.st.articles ofconsumption from iic.the 400 p.st.advanced bythe capitalists ofiihave thus returned tothem ,but only asan equivalent for sold commodities .department inow buys from iiarticles of consumption tothe amount of400 p.st.;iibuys from i400 worth ofmeans ofproduction ,thereby returning the 400 p. st.todepartment i. sofar,then ,we have the following calculation :depart- ment ibthrows into circulation 1000 v+800 sincommodi- ties ;italso throws into circulation ,in money ,1000 p.st. ofwages and 400 p.st.,thus facilitating itstransaction with ii.after the transaction isclosed ,department ihas 1000 vin money ,800 sexchanged for articles ofconsumption from 800 iic,and 400 p.st.inmoney . department ii throws into circulation 1800 cin com- modities (articles ofconsumption )and 400 p.st.inmoney . at the close ofthe transaction ithas 1800 incommodities . (means ofproduction from department i)and 400 p.st. in money . there still remain on the side ofdepartment i200 sin means ofproduction ,and on the side ofii200 c(w)in articles of consumption .",
        "simple reproduction .531 1according to our assumption department ibuys with 200 p.st.the articles ofconsumption iiw,valued atthe same amount .but iiholds these 200 p.st.,since 200 w represents wear and tear and isnot immediately recon- verted into means ofproduction .therefore 200 is cannot be sold .one -tenth ofthe surplus -value oficannot be re- alized by any exchange ,cannot be converted from the nat- ural form ofmeans ofproduction into that ofarticles of consumption . this does not only contradict our assumption ofrepro- duction on asimple scale ,but itisnot even ahypothesis which would explain the payment of200 iiwinmoney . itisanother way ofsaying that itcannot be explained . since itcannot bedemonstrated inwhat manner 200 wis converted into money ,itisassumed that department iis obliging enough tosupply the money ,just because itisnot able toconvert itsown remainder of200 sinto money .this isasmuch alegitimate method ofanalysis asthe assump- tion that 200 p.st.fall every year from the clouds inorder to convert 200 ii winto money . but the absurdity ofsuch anassumption does not become evident atonce ,ifis,instead ofappearing ,asitdoes inthis case ,initsprimitive mode ofexistence that istosay asan element ofthe value ofmeans ofproduction ,asan element ofthe value ofcommodities which must be converted into money by their capitalist producers -appears inthe hands ofcapitalist stockholders ,for instance asground rent inthe hands ofland owners ,orasinterest inthe hands ofmoney- lenders .now ,ifthat portion ofthe surplus -value ofcom- modities ,which the industrial capitalist yields inthe form ofground rent orinterest toother shareholders inthe sur- plus -value ,cannot beinthe long run converted into money by the sale ofthe commodities ,then there isan end tothe payment ofrent and interest ,and the land owners orrecipi- ents ofinterest can nolonger serve inthe role ofmiraculous interlopers ,who convert aliquot portions ofthe annual re- production into money byspending their revenue .the same istrue ofthe expenditures ofall so-called unproductive la- borers ,state officials ,physicians ,lawyers ,etc. ,and others",
        "530capital . iictodepartment i.expressed interms ofvalue ,this would be2000 iic=1800 c+200 w,this wstanding for wear and tear . we should then bestudying the transaction i. 1000 v+1000 s ii. 1800 c 200 w. department ibuys with 1000 p.st.,which the laborers have received aswages inpayment for their labor -power , 1000 iicofarticles ofconsumption .department iibuys with the same 1000 p.st.means ofproduction from depart- ment ifrom the lot 1000 v.the capitalists ofithus re- cover their variable capital inthe form ofmoney and can employ itnext year inthe purchase oflabor -power tothe same amount ,that istosay,they can reproduce the variable portion oftheir productive capital in its natural form. department iifurthermore advances 400 p.st.and buys means ofproduction from the lot is,and department is buys with the same 400 p.st.articles ofconsumption from iic.the 400 p.st.advanced by the capitalists ofiihave thus returned tothem ,but only asan equivalent for sold commodities .department inow buys from iiarticles of consumption tothe amount of400 p.st.;iibuys from i400 worth ofmeans ofproduction ,thereby returning the 400 p. st.todepartment i. so far,then ,we have the following calculation :depart- ment ibthrows into circulation 1000 v+800 sincommodi- ties ;italso throws into circulation ,in money ,1000 p.st. ofwages and 400 p.st.,thus facilitating itstransaction with ii.after the transaction isclosed ,department ihas 1000 vin money ,800 sexchanged for articles ofconsumption from 800 iic,and 400 p.st.inmoney . department ii throws into circulation 1800 cin com- modities (articles ofconsumption )and 400 p.st.inmoney . atthe close ofthe transaction ithas 1800 incommodities (means ofproduction from department i)and 400 p.st. inmoney . there still remain onthe side ofdepartment i200 sin means ofproduction ,and on the side ofii200 c(w)in articles of consumption .",
        "simple reproduction .531 according to our assumption department ibuys with 200 p.st.the articles ofconsumption iiw,valued atthe same amount .but iiholds these 200 p.st.,since 200 w represents wear and tear and isnot immediately recon- verted into means ofproduction .therefore 200 iscannot besold .one -tenth ofthe surplus -value oficannot be re- alized by any exchange ,cannot beconverted from the nat- ural form ofmeans ofproduction into that ofarticles of consumption . this does not only contradict our assumption ofrepro- duction on asimple scale ,but itisnot even ahypothesis which would explain the payment of200 iiwinmoney . itisanother way ofsaying that itcannot be explained . since itcannot bedemonstrated inwhat manner 200 wis converted into money ,itisassumed that department iis obliging enough tosupply the money ,just because itisnot able toconvert itsown remainder of200 sinto money .this isasmuch alegitimate method ofanalysis asthe assump- tion that 200 p.st.fall every year from the clouds inorder to convert 200 ii winto money . but the absurdity ofsuch anassumption does not become evident atonce ,ifis,instead ofappearing ,asitdoes inthis case ,initsprimitive mode ofexistence -that istosay asan element ofthe value ofmeans ofproduction ,asan element ofthe value ofcommodities which must be converted into money by their capitalist producers -appears inthe hands . ofcapitalist stockholders ,for instance asground rent inthe hands ofland owners ,orasinterest inthe hands ofmoney- lenders .now ,ifthat portion ofthe surplus -value ofcom- modities ,which the industrial capitalist yields inthe form ofground rent orinterest toother shareholders inthe sur- plus -value ,cannot beinthe long run converted into money by the sale ofthe commodities ,then there isan end tothe payment ofrent and interest ,and the land owners orrecipi- ents ofinterest can nolonger serve inthe role ofmiraculous interlopers ,who convert aliquot portions ofthe annual re- production into money byspending their revenue .the same istrue ofthe expenditures ofall so-called unproductive la- borers ,state officials ,physicians ,lawyers ,etc. ,and others",
        "530capital . iictodepartment i.expressed interms ofvalue ,this would be2000 iic=1800 c+200 w,this wstanding for wear and tear . we should then bestudying the transaction i. 1000 v+1000 s ii. 1800 c 200 w. department ibuys with 1000 p.st.,which the laborers have received aswages in payment for their labor -power , 1000 iicofarticles ofconsumption .department iibuys with the same 1000 p.st.means ofproduction from depart- ment ifrom the lot 1000 v.the capitalists ofithus re- cover their variable capital inthe form ofmoney and can employ itnext year inthe purchase oflabor -power tothe same amount ,that istosay,they can reproduce the variable portion oftheir productive capital in its natural form. department iifurthermore advances 400 p.st.and buys means ofproduction from the lot is,and department is buys with the same 400 p.st.articles ofconsumption from iic.the 400 p.st.advanced by the capitalists ofiihave thus returned tothem ,but only asan equivalent for sold commodities .department inow buys from iiarticles of consumption tothe amount of400 p.st.;iibuys from i400 worth ofmeans ofproduction ,thereby returning the 400 p. st.todepartment i. sofar,then ,we have the following calculation :depart- ment ibthrows into circulation 1000 v+800 sincommodi- ties ;italso throws into circulation ,inmoney ,1000 p.st. ofwages and 400 p.st.,thus facilitating itstransaction with ii.after the transaction isclosed ,department ihas 1000 vin money ,800 sexchanged for articles ofconsumption from 800 iic,and 400 p.st.inmoney . department ii throws into circulation 1800 cin com- modities (articles ofconsumption )and 400 p.st.inmoney . atthe close ofthe transaction ithas 1800 incommodities (means ofproduction from department i)and 400 p.st. inmoney . there still remain on the side ofdepartment i200 sin means ofproduction ,and on the side ofii200 c(w)in articles of consumption .",
        "simple reproduction .531 according to our assumption department ibuys with 200 p.st.the articles ofconsumption iiw,valued atthe same amount .but iiholds these 200 p.st.,since 200 w represents wear and tear and isnot immediately recon- verted into means ofproduction .therefore 200 is cannot besold .one -tenth ofthe surplus -value oficannot be re- alized by any exchange ,cannot beconverted from the nat- ural form ofmeans ofproduction into that ofarticles of consumption . this does not only contradict our assumption ofrepro- duction on asimple scale ,but itisnot even ahypothesis which would explain the payment of200 iiwinmoney . itisanother way ofsaying that itcannot be explained . since itcannot bedemonstrated inwhat manner 200 wis converted into money ,itisassumed that department iis obliging enough tosupply the money ,just because itisnot able toconvert itsown remainder of200 sinto money .this isasmuch alegitimate method ofanalysis asthe assump- tion that 200 p.st.fall every year from the clouds inorder to convert 200 ii winto money . but the absurdity ofsuch anassumption does not become evident atonce ,ifis,instead ofappearing ,asitdoes inthis case ,initsprimitive mode ofexistence that istosay asan element ofthe value ofmeans ofproduction ,asan element ofthe value ofcommodities which must be converted into money by their capitalist producers -appears inthe hands ofcapitalist stockholders ,for instance asground rent inthe hands ofland owners ,orasinterest inthe hands ofmoney- lenders .now ,ifthat portion ofthe surplus -value ofcom- modities ,which the industrial capitalist yields inthe form ofground rent orinterest toother shareholders inthe sur- plus -value ,cannot beinthe long run converted into money by the sale ofthe commodities ,then there isan end tothe payment ofrent and interest ,and the land owners orrecipi- ents ofinterest can nolonger serve inthe role ofmiraculous interlopers ,who convert aliquot portions ofthe annual re- production into money byspending their revenue .the same istrue ofthe expenditures ofall so-called unproductive la- borers ,state officials ,physicians ,lawyers ,etc.,and others",
        "532capital . who serve economists asan excuse for explaining inexplic- able things ,inthe role ofthe \"general public .\" nor does itimprove the matter ,ifthe direct transaction between departments iand ii,the two great departments ofcapitalist producers ,iscircumvented and the merchant isdragged inasamediator ,inorder toovercome all diffi- culties with his \"money .\"inthe present case ,for instance , 200 is must ultimately besold tothe industrial capitalists ofii.itmay pass through the hands ofanumber ofmer- chants ,but the last ofthem will find himself inthe same predicament ,inwhich the capitalists ofiwere atthe out- set,that istosay hecannot sell the 200 istothe capitalists ofii.and this amount ,being arrested initscourse ,cannot renew the same process with department i. we see,then ,that ,aside from our ultimate purpose ,itis quite necessary toview the process ofreproduction in its fundamental simplicity ,inorder toget rid ofall obscuring interference and dispose ofthe false subterfuges ,which as- sume the semblance ofscientific analysis ,but which cannot beremoved solong asthe process ofsocial reproduction is immediately analyzed inits concrete and complicated form . the law that under normal conditions ofreproduction- whether itbe on asimple or on an enlarged scale -the money advanced by the capitalist producer tothe circula- tion must return toitspoint ofdeparture (nomatter wheth- erthe money ishis own orborrowed )excludes decidedly the hypotheses that 200 iiwcan beconverted into money byan advance ofmoney onthe part ofdepartment i. (2)the reproduction offixed capital initsnatural form . having disposed ofthe above hypothesis ,only such hy- potheses remain asassume the possibility ofareproduction ofthe worn -out fixed capital partly inmoney and partly inits natural form . we had assumed inthe preceding case (a)that 1000 p.st.had been paid inwages by depart- ment iand spent by the laborers for articles ofconsump- tion ofiictothe same amount . itisasimple affirmation offact that these 1000 p.st.are",
        "simple reproduction .533 advanced by i in money .wages must be paid inmoney bythe various capitalist producers .this money is then spent by the laborers for articles of con- sumption and serves the sellers of articles of con- sumption in their turn as amedium ofcirculation in the conversion oftheir constant capital from acommodity- capital into aproductive capital .itpasses indeed through many channels (store keepers ,house owners ,tax collectors , unproductive laborers ,such asphysicians ,etc. ,who are needed by the laborer himself )and therefore itflows only in part directly from the hands ofthe laborer ofiinto those ofthe capitalist ofii.its flow may beretarded more orless and the capitalist may therefore require more re- serve funds ofmoney .but allthis isruled out ofthe analy- sis ofthe simplest fundamental form . (b)we had furthermore assumed that department iad- vances atacertain time 400 p.st.inmoney for the pur- chase ofarticles from iiand that this money returns to it,while atsome other time department iiadvances also 400 p.st.for the purchase ofcommodities from iand like- wise recovers this money .this assumption must begranted , for itwould be arbitrary tothink that only the capitalist class ofi,oronly that ofii,should advance the money re- quired for the exchange oftheir commodities .now ,since we have shown (under 1)that itwould beabsurd tothink that department ishould throw money into circulation in order topromote the conversion of200 iiwinto money , there would remain only the seemingly still more absurd hypothesis that department ii itself should advance this money ,by which that portion ofthe value ofitscommodi- ties which makes good the depreciation ofitsfixed capital through wear and tear isconverted into money .for in- stance ,that portion ofvalue which islost bythe spinning machine ofmr. x. inthe process ofproduction re-appears asaportion ofthe value ofthe yarn .that which his spinning machine loses onthe one hand through wear and tear ,issupposed on the other hand tobe accumulated by him inmoney .now take itthat x.buys 200 p.st.'s worth ofcotton from y. and advances 200 p.st.in money for",
        "534capital . this purpose .ythen buys from him 200 p.st.'s worth of yarn ,and x.now accumulates this money asafund for the reproduction ofthe worn -out portion ofhis machine .this would simply amount tothe statement that x.,aside from his production ,its product ,and the sale ofthis product , keeps 200 p.st.inreserve ,inorder tomake good tohim- self the depreciation ofhis machine ,inother words ,that he not only loses 200 p.st.by the depreciation ofhis ma- chine ,but must also put up 200 p.st.additional every year out ofhis own pocket inorder tobefinally able tobuy a new spinning machine . this looks only seemingly absurd .for the producers ofdepartment ii are capitalists whose fixed capital isin various stages ofits reproduction .inthe case ofsome of them ithas arrived atthe stage where itmust be entirely renewed inits natural form .inthe case ofthe others it ismore orless removed from this stage .all the capital- ists ofthese last named stages have this in common ,that their fixed capital isnot actually reproduced ,that istosay, not actually renewed initsnatural form by anew specimen ofthe same kind ,but that itsvalue issuccessively accumu- lated inmoney .the first class ofthe capitalists ofiiare inthe same (oralmost the same )position asthey were at the establishment oftheir business ,when they came onthe market with their money -capital in order toconvert this money partly into constant (fixed and circulating )capital , partly into labor -power (variable capital ).they have once more toadvance this money tothe circulation ,the value offixed constant capital aswell asthat ofcirculating con- stant and variable capital . hence ,ifwe assume that half ofthe 400 p.st.thrown into circulation by the capitalist class ofiifor the purpose oftransacting business with department icomes from those capitalists ofiiwho have toreproduce by means of the sale oftheir commodities not only their means ofpro- duction so far asthey are circulating capital ,but also to buy with money new fixed capital in its natural form , while the other half ofthe capitalists ofiireproduce with their money only the circulating portion oftheir constant",
        "simple reproduction .535 capital initsnatural form ,but not the fixed portion ,then there isno contradiction inthe statement that these 400 p. st.,when returned by department iinexchange for articles ofconsumption ,are variously distributed among these two classes ofdepartment ii.they return todepartment ii, but they donot return into the same hands .they are dis- tributed within this department and pass from one ofits sections to another . one section ofiihas secured means ofproduction whose value iscovered by their commodities ,and has furthermore converted 200 p.st.ofmoney into natural elements ofnew fixed capital .the money thus spent does not return tothis section by way ofthe circulation until after asuccession ofyears and isgradually accumulated by the sale ofpro- ducts created by this fixed capital and bearing the value of its worn -out portion . did not purchase any com- but the other section ofii modities from ifor 200 p.st.that section israther paid with the money which the first section ofiispent for ele- ments ofits fixed capital .the first section ofii has its fixed capital -value once more inanatural form ,while the second section isstill engaged inaccumulating money for the purpose ofrenewing itsfixed capital later on. the basis on which we now have towork ,after the pre- vious transactions have been closed ,isthe remainder ofthe commodities still tobeexchanged bythe two departments ; 400 sonthe part ofi,and 400 conthe part ofii.\" we assume that ii advances 400 p.st.in money for the ex- change ofcommodities aggregating 800 invalue .one -half , or200 p.st.,must beadvanced under all circumstances by that section ofiic which has accumulated 200 in money for making good the depreciation by wear and tear and which has to reconvert this fund into the natural form ofits fixed capital . just asconstant capital -value ,variable capital -value ,and 47these figures donot coincide with those previously assumed .but this does not alter the substance ofthe argument ,since itismerely a question ofproportions .-f.e.",
        "536 capital . surplus -value being the elements ofthe value ofthe com- modity -capital ofiiand imay berepresented by propor- tional quantities ofthe commodities ofiiand i,sothat por- tion ofthe value ofthe constant capital which isnot tobe converted into the natural form of fixed capital for the present ,but rather tobeaccumulated inmoney ,may like- wise berepresented .acertain quantity ofcommodities of ii (inthe present case one -half ofthe remainder of400 , or200 )isasyet the bearer ofthe value ofthis deprecia- tion ,which has tobeconverted into money by sale .(the first section ofthe capitalists ofii,who renew their fixed capital inits natural form ,may have done sowith apor- tion ofits depreciation by means ofacorresponding por- tion ofthe remaining commodities ,but they still have to realize 200 in money .) the second 200 ofthe 400 thrown into circulation by iiinthis remaining transaction buy circulating elements ofconstant capital from i. aportion ofthese 200 p.st. may be thrown into circulation by both sections ofii,or only bythe one not renewing itsfixed capital initsnatural form . department i,then ,secures with these 400 p.st.in the first place commodities valued at200 p.st.,consisting only ofelements offixed capital ;inthe second place ,com- modities valued at200 p.st.,reproducing only natural ele- ments ofthe circulating portion ofthe constant capital of ii.department ihas then sold its entire annual product incommodities ,sofar asitissold todepartment ii.and the value ofone -fifth ,or400 p.st.,isnow held initshands inthe form ofmoney .this money ismonetized surplus- value which must bespent asrevenue for articles ofcon- sumption .department ihaving bought with its 400 p. st.the entire stock ofdepartment ii,valued at400 ,this money flows back toii. now we may assume three possibilities .let us name those capitalists ofii,who renew their fixed capital in its natural form ,section 1,and those ,who accumulate the equivalent for the depreciation offixed capital ,section 2. the three possibilities are:(a)that the 400 still remain-",
        "simple reproduction .537 ing inthe shape ofcommodities ofiimay make good cer- tain portions ofthe circulating part ofthe constant capital ofboth section 1and section 2(perhaps one -half for each ); (b)that section 1has already sold all its commodities ,so that section 2has for sale all ofthe 400 ;(c)that section 2has sold all but the 200 which are the bearers ofthe value ofdepreciation . then we have the following distributions : (a)of the value ofthe commodities still inthe hands of department ii,namely 400 c,section 1holds 100 ,and section 2holds 300 ;200 out ofthe 300 represent deprecia- tion .inthat case section 1originally advanced 300 ofthe 400 in money returned by department ifor commodities of ii,namely 200 inmoney ,for which itsecured elements offixed capital from i,and 100 inmoney for the promotion ofitstransaction with i. section 2,onthe other hand ,ad- vanced only 100 ofthe 400 ,likewise for the promotion of its exchange with i. remember ,then ,that section 1advanced 300 ,and sec- tion 2advanced 100 ofthe 400 . now these 400 return inthe following manner :sec- tion 1recovers only one -third ofthe money advanced by it, or100. but ithas inplace ofthe other 200 arenewed fixed capital .section 1has given money todepartment ifor these elements of fixed capital ,but sold no more com- modities .so far asthis money isconcerned ,section 1has met department ifor the purpose ofbuying ,but not of selling later on.this money cannot return tosection 1, otherwise itwould receive the elements offixed capital from iasagift .sofar asthe last third ofitsadvanced money is concerned ,section 1first acted asabuyer ofcirculating ele- ments ofits constant capital .the same money serves de- partment ifor the purchase ofthe remainder ofthe com- modities ofsection 1,valued at100. this money ,then ,re- turns tosection 1ofdepartment ii,because itacts asaseller ofcommodities soon after having acted asabuyer .ifthis money did not return ,then section 1ofdepartment iiwould have given todepartment iasum of100 inmoney for com- modities ofthe same value and inaddition thereto 100 in",
        "538capital . commodities ,inother words ,itwould have given away its commodities asapresent . on the other hand ,section 2receives 300 inmoney back , while ithas advanced only 100 inmoney .as abuyer it first threw 100 inmoney into circulation ,and these itre- ceives back when acting asaseller .and itreceives 200 more ,because itacts only asaseller ofcommodities tothat amount ,but not inturn asabuyer .hence the money can- not return todepartment i. the value ofthe depreciation ofthe fixed capital isthus balanced by the money thrown into circulation by section 1ofdepartment iiinthe pur- chase ofelements offixed capital .but itreaches the hands ofsection 2,not asmoney ofsection 1,but asmoney of department i. (b)under these conditions the remainder ofiic isdis- tributed sothat section 1has 200 inmoney ,and section 2 has 400 in commodities . section 1has sold allofitscommodities ,but 200 inmoney , are achanged form ofthe fixed elements ofits constant capital which ithas torenew intheir natural form .itacts only asabuyer inthe present case and receives inexchange for itsmoney the same value incommodities ofdepartment ihaving the natural form ofelements ofits fixed capital . section 2has to throw 200 p.st.into circulation ,at a maximum (ifdepartment idoes not advance any money for the transaction between iand ii),since itistothe ex- tent ofone -half ofthe value ofitscommodities only aseller toi,not abuyer from i. itrecovers from the circulation 400 p.st.itgets 200 , because ithas advanced them asabuyer and recovers them asaseller ofcommodities ofthe same value .itreceives an- other 200 ,because itsells commodities ofthat value to i without buying an equivalent from i. (c)section 1has 200 inmoney and 200c incommodities . section 2has 200c (w)incommodities . section 2has not any advance ofmoney tomake under these circumstances ,because itdoes not act any more in the role ofabuyer from i,but only asaseller ,sothat it must wait till some one wants tobuy from it.",
        "simple reproduction .539 section 1advances 400 p.st.inmoney ,ofwhich 200 serve for amutual exchange with department i,while 200 are used tobuy from i. the last 200 serve inthe purchase of the elements offixed capital . department ibuys from section 1commodities tothe value of200 with 200 p.st.inmoney ,sothat section 1thus recovers the money ithad advanced for itstransaction with i. and ibuys with the other 200 p.st.,which ithas like- wise received from section 1,commodities valued at200 from section 2,which thus recovers the value ofthe depreciation ofitsfixed capital . the matter would not bealtered bythe assumption that , inthe case of(c),department iiinstead ofsection 1ofthis department should advance the 200 inmoney required for the exchange ofthe existing commodities .ifibuys inthat case first 200 incommodities from section 2ofdepartment ii-assuming that this section has only this much left to sell then the 200 p.st.donot return toi,since section 2 ofdepartment iino longer acts inthe role ofbuyer .but section 1ofdepartment iihas inthat case 200 p.st.to spend inbuying and 200 incommodities tooffer for sale , making atotal of400 which ithas totrade with depart- ment i. 200 p.st.inmoney then return todepartment i from section 1ofdepartment ii.when ispends them again inthe purchase of200 incommodities from section 1of department ii,then they return todepartment iassoon as section 1ofdepartment iibuys the second half ofthe 400 incommodities from i. section 1ofdepartment iihas spent 200 p.st.inthe purchase ofelements offixed capital ,with- out selling anything inreturn .therefore this money does not return toit,but serves tomonetize the remaining 200 cof commodities ofsection 2ofdepartment ii,while the 200 p. st.inmoney advanced byifor the promotion ofthe transac- tions return toitby way ofsection 1ofdepartment ii,not section 2. in the place ofits commodities of400 ithas secured anequivalent ,and the 200 p.st.inmoney advanced by itfor transacting business tothe extent of800 incom- modities have likewise returned toit.everything isthere- fore settled .",
        "540capital . the difficulty encountered in the transaction between i(1000 v+1000 s)and ii2000 cwas reduced tothe diffi- culty ofbalancing accounts between i400 sand ii(section 1)200 inmoney plus 200 cin commodities plus (section 2)200 cincommodities .or,tomake the matter still clearer , 1(200 s+200 s)against ii(200 inmoney ofsection 1plus 200 cincommodities ofsection 1plus 200 cincommodities ofsection 2). since section iofdepartment iiexchanges 200c for com- modities ofdepartment irepresenting 200s ,and since all the money circulating inthis exchange of400 commodities between iand iireturns tohim who first advances it,be he iorii,this money promoting the exchange between i and iiisnot an element ofthe problem which troubles us here .or,toexpress itdifferently ,ifwe assume that the money used inthe transaction between 200 is (commodities ) and 200 iic (commodities ofsection 1,department ii)serves only asamedium ofpayment ,not asamedium ofpur- chase and therefore not asa\"medium ofcirculation ,\"strictly speaking ,itisevident that the means ofproduction valued at200 are exchanged for articles ofconsumption valued at 200 ,because the commodities of200 isand 200 iic (sec- tion 1)are equivalent invalue ,that therefore the money serves here merely ideally ,and that neither side has to advance any money tothe circulation for the payment of any balance .hence the problem does not show itself inits clearest form ,until we eliminate the commodities of200 is and their equivalent ,the commodities of200 iic (section 1),from both sides . after the elimination ofthese two amounts ofcommod- ities ofequal value ,which balance one another iniand ii, the remainder ofthe transaction shows the problem clearly , namely i200s incommodities against ii(200c inmoney of section 1plus 200c incommodities ofsection 2). itisevident that section 1ofdepartment iibuys with 200 in money the elements of its fixed capital from 200 is.the fixed capital ofsection 1,department ii,isthere- by renewed initsnatural form ,and the surplus -value ofi, tothe amount of200 ,isconverted from the form ofcommod-",
        "simple reproduction .541 ities (means ofproduction representing elements offixed capital )into that ofmoney .department ibuys with this money articles ofconsumption from section 2,department ii,and the result for iiisthat section 1has renewed afixed element ofitsconstant capital initsnatural form ;and that section 2has stored up another element inmoney which is destined tomake good the depreciation ofitsfixed capital . and this continues every year ,until this last element isalso renewed initsnatural form . the first condition ishere evidently that this fixed ele- ment ofconstant capital ii,which must annually berecon- verted into money tothe full extent ofitsvalue and ,there- fore ,entirely reproduced inits natural form (section 1), should beequal tothe annual depreciation ofthe other fixed element ofconstant capital ii,which continues itsfunction initsold natural form and whose depreciation ,represented by the value transferred by ittothe commodities produced byit,isfirst accumulated inmoney .such abalance ofvalue would seem tobealaw ofreproduction onthe same scale . this isequivalent tosaying that the proportional division oflabor indepartment i,which puts out means ofproduc- tion ,must remain unchanged ,tothe extent that itproduces partly circulating ,partly fixed portions ofthe constant capi- tal ofdepartment ii. before we analyze this more closely ,we must first see how the matter looks ,ifthe remaining amount ofiic(1)isnot equal tothe remainder ofiic(2).itmay belarger or smaller .let usstudy either case . i.200 s.first case . ii.(1)220 cinmoney plus (2)200 cincommodities . inthis case iic(1)buys with 200 p.st.the commodities of200 is,and ibuys with the same money the commod- ities of200 iic(2),inother words ,that portion ofthe fixed capital which has tobe accumulated inmoney .this por tion isthus converted into money .but 20iic(1)cannot bereconverted into the natural form offixed capital . itseems that wemight remedy this inconvenience bymak-",
        "542capital . ing the remainder ofis220 instead of200 ,sothat only 1780 instead of1800 ofthe 2000 iwould bedisposed ofby former transactions .then we should have : i.220 s. ii.(1)220 cinmoney plus (2)200 cincommodities . section 1ofiicbuys with 220 p.st.inmoney the 220 is, and ibuys with 200 p.st.the 200 iic(2)ofcommodities . but now 20p.st.inmoney remain onthe side ofi,apor- tion ofsurplus -value which itcan hold only inmoney ,with- out being able tospend itinarticles ofconsumption .the difficulty isthus merely transferred from section 1,depart- ment iic,tois. let usnow assume ,onthe other hand ,that section 1,ii c,issmaller than section 2,iic,then we have : second case . i.200 sincommodities . ii.(1)180 cinmoney plus (2)200 cincommodities . section 1,department ii,buys with 180 p.st.inmoney the commodities of180 is.department ibuys with the same money commodities ofthe same value from section 2, department ii,that istosay,180 iic(2).there remain 20is unsaleable onone side ,and 20 iicofsection 2onthe other .in other words ,commodities valued at40 remain unsaleable . itwould not help usany tomake the remainder ofiequal to180. itistrue ,there would not beany surplus iniunder these circumstances ,but the same surplus of20 would re- main unsaleable in section 2ofdepartment iiand could not beconverted into money . inthe first case ,where section 1ofdepartment iiisgreater than section 2ofdepartment ii,there remains asurplus of money insection 1ofdepartment iiand cannot beconverted into fixed capital ;or,ifthe remainder inis isassumed to be equal toiic(1),the same surplus in money remains inconvertible into articles ofconsumption inis. in the second case ,where iic(1)issmaller than ii c (2),there remains adeficit ofmoney onthe side of200 is and iic(2),and an equal surplus ofcommodities on both",
        "simple reproduction . 543 sides ,or,ifthe remainder ofisisassumed tobeequal to iic(2),there remains adeficit ofmoney and asurplus of commodities iniic(2). ifwe assume the remainder ofistobe always equal to iic(1)seeing that production isdetermined by demand , and reproduction isnot altered bythe fact that there may be agreater output offixed elements ofcapital this year ,and a greater output ofcirculating elements ofconstant capitals iand iinext year -then iscould not bereconverted into articles ofconsumption inthe first case ,unless ibrought with itaportion ofthe surplus -value ofiiand accumulated itin money instead ofconsuming it;inthe second case there would beno other way out but an expenditure ofthe money onthe part ofiitself ,an assumption which we have already rejected . ifiic(1)isgreater than iic(2),then the importation offoreign commodities isrequired for the employment ofthe money -surplus inis.ifiic(1)issmaller than iic(2), then an exportation ofcommodities (articles ofconsump- tion )isrequired for the realization ofthe value ofthe de- preciation ofiicinmeans ofproduction .in either case , foreign trade isnecessary . even assuming that ,onthe basis ofsimple reproduction on the same scale ,the productivity ofall lines ofindustry , and thus the proportional relation ofthe value oftheir com- modities ,would remain unchanged ,there would neverthe- less beanincentive for production onanenlarged scale when- ever the two last named cases may occur ,inwhich iic(1)is greater orsmaller than iic(2). (3)results . with reference tothe reproduction ofthe fixed capital , the following general remarks may be made : expires ifalarger portion ofthe fixed element ofii this year than last and must be reproduced inits natural form -allother circumstances remaining the same ,that isto say ,not only the scale ofproduction ,but also the productiv- ity oflabor ,etc. -then that portion ofthe fixed capital , which isasyet only declining and must betemporarily ac-",
        "544 capital . cumulated in money until its term ofexpiration arrives , must decline inthe same proportion ,since we have assumed that the sum ofthe fixed capital serving inii(also the sum ofitsvalues )remains unchanged .this implies the follow- ing consequences :ifagreater portion ofthe commodity- capital oficonsists ofelements ofthe fixed capital ofiic, then acorrespondingly smaller portion consists ofcirculat- ing elements ofiic,because the total production ofi-for iicremains unchanged .ifone ofthese portions increases , then the other decreases ,and vice versa .on the other hand , the total production ofiialso retains the same volume .but how isthis possible ,ifthe production ofits raw materials , half -wrought products ,and auxiliary materials (the circulat- ing elements ofthe constant capital ofii)decreases ? in the second place ,agreater portion offixed capital ofii c, restored toitsmoney -form ,flows into department i,inorder tobereconverted from itsmoney -form into itsnatural form . inother words ,there isagreater flow ofmoney into depart- ment i,aside from the money circulating between iand ii merely for the transaction oftheir business ,more money which does not merely serve asamedium for the mutual exchange oftheir commodities ,but acts onesidedly inpur- chase without acorresponding sale .at the same time the quantity ofcommodities ofiic,the bearers ofthe value of the depreciation of fixed capital ,would have decreased proportionately .this is that quantity of commodities of ii which is not exchanged for commodities of i, but must be converted into money of i. more money would have flown from ii into ifor onesided purchase , and there would be fewer commodities ofiiwhich would stand only inthe relation ofabuyer toward i. under these circumstances agreat portion ofis-for ivhas already been converted into commodities ofii-would not beconvertible into commodities ofii,but would be held inthe form of money . the opposite case ,inwhich the reproduction ofexpired fixed capitals ofacertain year exceeds that ofthe deprecia- tion ,need not bediscussed indetail after the preceding state- ments .",
        "simple reproduction .545 the result would be acrisis -acrisis in production- in spite ofthe fact that reproduction had taken place on the same scale . in short ,unless aconstant proportion between expiring (and about toberenewed )fixed capital and still continuing (merely transferring the value of its depreciation to its product )fixed capital isassumed ,solong asreproduction takes place onasimple scale under the same conditions ,such asproductivity ,volume ,intensity oflabor ,the mass ofcir- culating elements tobereproduced inone case would remain the same while the mass offixed elements tobereproduced would have been increased .therefore the aggregate produc- tion ofiwould have toincrease ,or,there would beadeficit inthe reproduction ,even aside from money matters . in the other case ,ifthe proportional magnitude ofthe fixed capital ofii,tobe reproduced in its natural form , should decrease and the elements ofthe fixed capital ofii, which must be merely accumulated in money ,should in- crease inthe same ratio ,then the quantity ofthe circulat- ing elements ofthe constant capital ofii,reproduced by i, would remain unchanged ,while that ofthe fixed elements about tobereproduced would have decreased .hence there would beeither adecrease inthe aggregate production ofi, orasurplus (the same aspreviously adeficit )which could not beconverted into money . itistrue that the same labor may ,inthe first case ,sup- ply agreater product with an increase inits productivity , extension ,orintensity ,and sothe deficit could becovered in the first case .but such achange could not take place with- out atransfer ofcapital and labor from one line ofproduc- tion ofdepartment itoanother ,and every transfer would cause monetary disturbances .furthermore ,tothe extent that an expansion and intensification oflabor would in- crease ,department iwould have toexchange more ofits value for less value ofii.in other words ,there would be adepreciation ofthe product ofi. the reverse would take place inthe second case ,where i must contract its production ,which implies acrisis for its laborers and capitalists ,orproduce asurplus ,which implies",
        "546capital . another crisis .such asurplus isnot an evil initself ,but itisan evil under the capitalist system ofproduction . foreign trade could relieve the pressure ineither case .in the first case itwould convert products ofiheld inthe form ofmoney into articles ofconsumption ,inthe second case itwould dispose ofthe surplus ofcommodities .but foreign trade ,sofar asitdoes not merely reproduce certain elements ofproduction ,only transfers these contradictions toawider sphere and gives them agreater latitude . once that the capitalist mode ofproduction isabolished , the problem resolves itself into the simple proposition that the magnitude ofthe expiring portion offixed capital ,which must bereproduced inits natural form every year (which served inour illustration for the production of articles of consumption ),varies insuccessive years .ifitisvery large inacertain year (inexcess ofthe average mortality ,the same asamong men ),then itissomuch smaller inthe next year . the quantity ofraw materials ,half wrought articles ,and auxiliary materials required for the annual production of the articles ofconsumption -other circumstances remaining the same does not decrease inconsequence .hence the ag- gregate production ofmeans of production would have to increase inthe one case and decrease inthe other .this can beremedied only by acontinuous relative overproduction . there must beon the one hand acertain quantity offixed capital inexcess ofthat which isimmediately required ;on the other hand there must be above all asupply of raw materials ,etc. ,inexcess ofthe actual requirements ofannual production (this applies particularly toarticles ofconsump- tion ).this sort ofreproduction may take place when soci- ety controls the material requirements ofitsown reproduc- tion .but incapitalist society itisanelement ofanarchy . this illustration offixed capital ,onthe basis ofan un- changed scale ofreproduction ,isconvincing .adispropor- tion ofthe production offixed and circulating capital isone ofthe favorite arguments ofpolitical economists inexplain- ing productive crises .that such adisproportion can and must arise even when the fixed capital ismerely preserved by renewal isnew tothem .and yet,itcan and must arise",
        "simple reproduction .547 even onthe assumption ofan ideal and normal production on the basis ofasimple reproduction ofthe already existing capital ofsociety . xii.the reproduction ofthe money supply . one element has sofar been entirely disregarded ,namely the annual reproduction ofgold and silver .to the extent that these metals serve asmaterial for articles ofluxury , gilding ,etc. ,they do not deserve any special mention ,any more than any other products .but they play an important role asmoney -material ,aspotential money .for the sake ofsimplicity ,we regard only gold asmaterial for money . according toolder statements ,the entire annual produc- tion ofgold amounts toabout 8-900,000 lbs.,equal toabout 1100 to1250 million marks (264 to392.5 million dollars ). but according tosoetbeers itamounts toonly 170,675 kilo- grams ,valued atabout 476 million marks onan average of the years 1871 to1875. ofthis amount ,australia supplied about 167 ,the united states 166 ,russia 93million marks . the remainder isdistributed over various countries insums ofless than 10million marks each .the annual production ofsilver ,during the same period ,amounted tosomewhat less than 2million kilograms ,valued at354.5 million marks . of this amount ,mexico supplied about 108 ,the united states 102 ,south america about 67,germany about 26mil- lion ,etc. among the countries with predominating capitalist pro- duction only the united states are producers ofgold and silver .the capitalist countries ofeurope obtain almost all their gold and by far the greater part oftheir silver from australia ,the united states ,mexico ,south america ,and russia . but wetransfer the gold mines into the country with capi- talist production whose annual reproduction we are analyz- ing ,for the following reasons : 48ad.soetbeer ,edelmetall -produktion .gotha ,1875 ,",
        "548capital . capitalist production does not exist atall without for- eign commerce .but when we assume annual reproduction on agiven scale ,we also assume that foreign commerce re- places home products only by articles ofother use-value ,or natural form ,without affecting the relations ofvalue ,such asthose ofthe two categories known asmeans ofproduction and articles ofconsumption and their transactions ,nor the relations ofconstant capital ,variable capital ,and surplus- value ,into which the value ofthe products ofeach ofthese categories may be dissolved .the introduction offoreign commerce into the analysis ofthe annually reproduced value ofproducts can ,therefore ,produce only confusion ,without furnishing any new point inthe aspect orsolution ofthe problem .for this reason we leave itaside .and conse- quently gold asadirect element ofannual reproduction is not regarded asacommodity imported from aforeign coun- try. the production ofgold ,like that ofmetals generally ,be- longs todepartment i,which occupies itself with means of production .let usassume that the annual production of gold amounts to30 (from reasons ofexpediency ,although itisfar too high compared tothe other figures ofour dia- grams ).let this value be resolved into 20 c+5v+5s; 20 cistobeexchanged for other elements ofdepartment i c,and this istobestudied later ;but the 5v+5sare tobe exchanged for elements ofiic,namely ,articles ofconsump- tion . as for the 5v,every gold producing business begins by buying labor -power .this isdone ,not with money pro- duced by this particular business ,but with aportion of the money existing inthe land .the laborers buy with this 5v articlesarticles of consumption from ii,and this department buys with the same money means of pro- duction from i. let us say that ii buys from igold for elements ofitscommodities (elements ofconstant capi- tal)tothe value of2,then 2vflow back tothe gold pro- ducers of 1in money which was formerly in circulation . ifiidoes not buy any more material from i,then ibuys from iiby throwing itsgold into circulation ,for gold can",
        "simple reproduction .549 buy any commodity .the difference isonly that idoes not act asaseller ,but asabuyer ,inthat case .the gold pro- ducers ofican always get rid oftheir product ,for itis always inaform which may be directly exchanged . take itthat some producer ofyarn has paid 5vtohis laborers ,who create for him inreturn -aside from asur- plus -product -yarn tothe amount of5. the laborers buy values worth 5from ii c,and iicbuys with the same 5inmoney yarn from i,and this 5inmoney flows back tothe producer ofyarn .now we had assumed that ig (meaning the producer ofgold )advanced tohis laborers 5vinmoney which had previously belonged tothe circula- tion .the laborers spend itfor articles of consumption , but only 2ofthe 5return from iito ig.however ,ig can begin his process ofreproduction anew ,just aswell as the producer ofyarn .for his laborers have supplied him with 5ingold ,2ofwhich he sold ,and 3ofwhich hestill has ,sothat hehas but tocoin it,\"orexchange itfor bank notes ,inorder that his entire variable capital may beim- mediately inhis hands ,without the intervention ofii. even this very first process ofannual reproduction has wrought achange inthe quantity ofmoney actually or virtually incirculation .we assumed that iicbought 2v from ig for material ,and that iginvested 3iniiasthe money -form ofitsvariable capital .inother words ,3ofthe amount of money supplied by the new gold production remained within department iiand did not return toi. according toour assumption iihas satisfied its needs for gold material .the 3remain inits hands asahoard of gold .since they cannot constitute any elements ofitscon- stant capital ,and since iihad previously enough money- capital for the purchase oflabor -power ;since ,furthermore , these additional 3g,with the exception ofthe element making good the loss through depreciation ,have no func- tion toperform within iic,for aportion ofwhich they 49\"aconsiderable quantity ofgold bullion istaken by the gold diggers directly tothe mint insan francisco .\"-reports ofh.m. secretaries ofembassy and legation .1879. part iii,p.337.",
        "550capital . were exchanged (they could only serve tocover ashortage inthe element making good loss through depreciation ,in the case that section 1ofdepartment iishould besmaller than section 2ofdepartment ii,which would beaccidental ); and since ,on the other hand ,the entire commodity -pro- duct of iic,with the exception ofthe element making up for depreciation ,must be exchanged for means ofpro- duction of i(v+s);therefore this money must been- tirely transferred from iictoiis,no matter whether it exists in necessities oflife orarticles ofluxury ,and vice versa ,acorresponding value ofcommodities must betrans- ferred from iis toiic.result :aportion ofthe surplus- value isaccumulated asahoard ofmoney . in the second year ofreproduction ,when the same pro- portion of annually produced gold continues tobeused asmaterial ,2will again flow back toig,and 3will bere- produced inits natural form ,that istosay,itwill beset. aside indepartment iiasahoard ,etc. with reference tothe variable capital ingeneral ,itmay be said that the capitalist ofig must continually advance money for the purchase oflabor -power ,the same asevery other capitalist .but sofar asthese wages are concerned , itisnot he,but his laborers who buy from ii.he can never appear asabuyer ,transferring gold toii,without the initiative ofii.but tothe extent that iibuys material from him for the purpose ofconverting its constant capital iicinto agold supply ,aportion ofthe vofigflows back toitfrom iiinthe same way that itdoes toother capitalists ofi. and sofar asthis isnot the case ,he reproduces his vingold direct from his product .but tothe extent that the vadvanced by him inmoney does not flow back tohim from ii,aportion ofthe existing medium of circulation (received from iand not returned toit)isconverted byii into ahoard and aportion ofits surplus -value isnot con- verted into articles ofconsumption .since new gold mines are continually opened or old ones re-opened ,acertain proportion ofthe money invested by ig in visalways money existing previously tothe new gold production ,and passing from ig by way ofitslaborers into ii,where itbe",
        "simple reproduction . 551 comes an element inthe formation ofahoard ,orasmuch ofitasisnot returned from iitoig. but asfor (ig)s,department igcan always act asa buyer inthis case .itthrows itssinthe shape ofgold into circulation and withdraws from itinreturn articles ofcon- sumption ofiic.the gold isthere used inpart asmaterial , and thus serves asareal element ofthe constant portions cofproductive capital ii.and any portion ofthe gold not so employed becomes once more an element inthe formation ofahoard inthe role ofthat part ofiis which retains the shape ofmoney .we see,then ,-aside from ic which we reserve for alater analysis -that even simple re- production ,excluding accumulation strictly so called , namely reproduction ,on an enlarged scale ,inevitably in- cludes the accumulation ,orhoarding ,ofmoney . and asthis isannually repeated ,it explains the assumption from which we started inthe analysis ofcapitalist produc- tion ,namely that asupply ofmoney corresponding tothe exchange ofcommodities isinthe hands ofthe capitalists ofdepartments iand iiatthe beginning ofthe reproduc- tion .such anaccumulation takes place even after deducting the amount ofgold lost by the depreciation ofmoney in circulation .50 itisamatter of course ,that the quantity of money accumulated on all sides increases inproportion tothe ad- vancing age ofcapitalist production ,and that the quantity annually added totl.is hoard by the production ofnew gold decreases proportionately ,although the absolute quan- tity thus added may beconsiderable .we revert once more in general terms tothe objection raised against tooke and contained in the question :how isitpossible that every capitalist draws asurplus -value inmoney out ofthe circula- tion ,inother words ,draws more money out ofthe circula- tion than hethrows into it,seeing that the capitalist class must bethe ultimate source which throws all money into circulation ? 50the analysis ofthe exchange ofnewly produced gold within the constant capital ofdepartment iisnot contained inthe manuscript.- f.e.",
        "552capital . we reply bysummarizing the statements made previously (inchapter xvii ): (1)the only essential assumption ,namely ,that there is money enough available for the exchange ofthe various elements ofannual reproduction ,isnot touched bythe fact that aportion ofthe value ofcommodities consists ofsur- plus -value .take itthat the entire production belonged to the laborers ,sothat their surplus -labor were done for them- selves ,not for the capitalists ,then the quantity ofcirculat- ing commodity -values would be the same and ,other cir- cumstances remaining equal ,would require the same amount ofmoney for circulation .the question ineither case istherefore only :where does the money come from which serves asamedium ofexchange for this quantity of commodity -values ?itisnot atall:where does the money come from which monetizes the surplus -value ? itistrue ,torepeat itonce more ,that every individual commodity consists ofc+v+s,and the circulation ofthe entire quantity ofcommodities therefore requires acertain quantity ofmoney for the circulation ofthe capital c+v, and another for the circulation ofs,the revenue ofthe capitalists .for the individual capitalist aswell asfor the entire capitalist class ,the money in which they advance capital isdistinct from the money inwhich they spend their revenue .where does this last money come from ?simply from the entire quantity ofmoney available insociety ,a portion ofwhich circulates asthe revenue ofthe capitalists . we have already seen inprevious instances that every capi- talist establishing anew business recovers the money which hespent for his maintenance inthe purchase ofarticles of consumption ,by the process ofconverting his surplus -value into money ,once that his business isfairly under way . but generally speaking the difficulty isdue totwo sources : inthe first place ,ifwe analyze only the circulation and the turn -over ofcapital ,regarding the capitalist merely as apersonification ofcapital ,not asacapitalist consumer and sport ,then we see indeed that he iscontinually throwing surplus -value into circulation asapart ofhis commodity- capital ,but we never see money asaform ofrevenue inhis",
        "simple reproduction .553 hands .we never see him throwing money into circulation for the consumption ofhis surplus -value . inthe second place ,ifthe capitalist class throw acertain amount ofmoney into circulation inthe shape ofrevenue , itseems asthough they were paying an equivalent for this portion ofthe total annual product ,sothat this portion is then no longer surplus -value .but the surplus product in which the surplus value isincorporated does not cost the capi- talist anything .as aclass ,they possess and enjoy itgratu- itously ,and the circulation ofmoney cannot alter this fact . the alteration due tothis circulation consists merely inthe fact that every capitalist ,instead ofconsuming his surplus- product inits natural form ,athing which isgenerally im- possible ,draws commodities ofall sorts up tothe amount ofhis surplus -value out ofthe general stock ofthe annual surplus -product of society and appropriates them for his own use.but the mechanism ofthe circulation has shown that the capitalist class ,while throwing money into the circulation for the purpose ofspending their revenue ,also recover this money from the circulation ,sothat they can continue the same process over and over ;sothat ,asaclass of capitalists ,they always remain in possession of the amount ofmoney necessary for the monetization oftheir surplus -value .hence ,seeing that the capitalist does not only withdraw his surplus -value from the market in the form ofcommodities for his individual consumption ,but also the money which he has paid for these commodities , itisevident that hesecures the commodities without paying an equivalent for them .they do not cost him anything , although he pays money for them .ifibuy commodities for one pound sterling and recover this money from the seller bymeans ofasurplus product which igot for nothing , itisobvious that ihave received the commodities gratis . the continual repetition ofthis transaction does not alter the fact that icontinually secure commodities and con- tinually remain in possession of my pound sterling ,al- though irelease ittemporarily inthe purchase ofthe com- modities .the capitalist continually retains this money as",
        "554capital . an equivalent ofsurplus -value that has not cost him any- thing . we have seen that with adam smith the entire value of the social product resolves itself into revenue ,into v+s, sothat the constant capital -value isset down aszero .it follows necessarily that the money required for the circula- tion ofthe yearly revenue must also suffice for the circula- tion ofthe entire annual product ,sothat ,inour illustra- tion ,the money of3000 required for the circulation of the articles ofconsumption ofthe same value must also suf- fice for the circulation ofthe entire annual product valued at 9000. this isindeed the opinion ofadam smith ,and it isrepeated by th.tooke .this erroneous conception of the ratio ofthe quantity ofmoney required for the realiza- tion ofthe revenue tothe quantity ofmoney required for the circulation ofthe entire social product isanecessary result of misapprehending ,thoughtlessly conceiving the manner inwhich the various elements ofmaterial and value ofthe total annual product are reproduced and annually re- newed .ithas already been refuted byus. let uslisten tosmith and tooke themselves . smith says inbook ii,chapter 2:\"the circulation of every country may bedivided into two parts :the circulation ofthe merchants among themselves and the circulation be- tween merchants and consumers .although the same pieces ofmoney ,paper ormetal ,may beused now inthe one ,now inthe other circulation ,both ofthem nevertheless take place continually side by side ,and each one ofthem requires therefore acertain quantity ofmoney ofthis orthat kind in order tokeep moving .the value ofthe commodities circulating among the various merchants can never exceed the value ofthe commodities circulating between merchants and consumers ;for whatever the merchants may buy must be sold ultimately tothe consumers .as the circulation between the merchants iswholesale ,itgenerally requires arather large sum for every exchange .the circulation between merchants and consumers ,on the other hand ,is mostly retail and requires often but very small sums of money :one shilling ,oreven half penny ,suffices sometimes .",
        "simple reproduction .555 but small sums circulate much more rapidly than large ones .**** although the annual purchases ofall con- sumers are therefore atleast \"this atleast isrich \"equal in value tothose ofthe merchants ,they may nevertheless be effected ,as arule ,with amuch smaller quantity of money ,\"etc. th.tooke remarks tothis passage ofadam smith (in \"an inquiry into the currency principle ,\"london ,1844 , pages 34 to 36):\"there cannot be any doubt that the distinction here made isessentially correct .**** the ex- change between merchants and consumers includes also the payment ofwages ,which are the principal means ofthe con- sumers .**** all transactions between merchant and mer- chant ,that istosay,allsales from the producer orimporter , through all gradations ofintermediate processes ofmanu- facture ,etc. ,down tothe retail merchant or export mer- chant ,may bedissolved into movements transferring capital . but transfers ofcapital donot necessarily imply ,nor indeed carry actually with them ,inthe great number ofexchanges , areal cession ofbank notes orcoin -imean asubstantial , not afictitious ,cession -atthe time oftransfer .**** the total amount of exchanges between merchants and mer- chants must inthe last instance bedetermined and limited by the amount ofexchanges between merchants and con- sumers .\" ifthis last sentence stood by itself ,one might think that tooke stated simply the fact of aratio between the ex- changes of merchants and merchants and those of mer- chants and consumers ,inother words ,aratio between the value ofthe total annual revenue and the value ofthe capital with which itisproduced .but this isnot the case . he explicitly endorses the view ofadam smith .aspecial criticism of his theory of circulation istherefore super- fluous . (2)every industrial capital ,when beginning itscareer , throws atone single investment enough money into circula- tion tocover itsentire fixed element ,which itrecovers but gradually inthe course ofyears by the sale ofits annual products .thus itthrows atfirst more money into circula-",
        "556capital . tion than itrecovers from it.this isrepeated atevery re newal ofitsentire capital inanatural form .itisrepeated every year inacertain number ofenterprises whose fixed capital must be renewed inits natural form .itisrepeated infragments atevery repair ,every partial renewal offixed capital .while more money isonthe one hand withdrawn from circulation than isthrown into it,the opposite takes place on the other hand . in all lines ofindustry whose period ofproduction as distinguished from the working period -extends over along term ,money iscontinually thrown into circulation during this period by the capitalist producers ,either inpayment for labor -power employed ,orinthe purchase ofmeans of production tobe consumed .means ofproduction are thus directly withdrawn from the commodity market ,and articles ofconsumption ither indirectly by the laborers spending their wages ,ordirectly bythe capitalists ,who donot by any means stop consuming ,although they do not immediately throw any equivalent onthe market ,inthe shape ofcom- modities .during this period ,the money thrown by them into circulation serves for the conversion ofthe value ofcom- modities ,including the surplus value embodied inthem , into money .this element becomes very important in an advanced stage ofcapitalist production inthe case oflengthy enterprises ,such asare undertaken by stock companies ,for instance the construction ofrailways ,canals ,docks ,large municipal buildings ,iron ships ,drainage ofland onalarge scale ,etc. (3)while the other capitalists ,aside from the invest- ment offixed capital ,draw more money out ofthe circula- tion than they threw into itinthe purchase oflabor -power and the circulating elements ofcapital ,the gold and silver producing capitalists ,onthe other hand throw only money into the circulation ,aside from the precious metals which serve asraw material ,while they withdraw only commod- ities from it.the constant capital ,with the exception of the depreciated portion ,furthermore the greater portion of the variable capital and the entire surplus -value ,with the exception ofthe hoard which iseventually accumulated in",
        "simple reproduction .557 the hands ofthese capitalists ,isthrown into the circulation asmoney . (4)on one side ,various things circulate ascommodities which were not produced during the current year ,such as real estate ,houses ,etc. ,furthermore products whose period ofproduction extends over more than one year ,such as cattle ,wood ,wine ,etc. itisimportant toemphasize inthis respect that aside from the quantity ofmoney required for the immediate circulation ,there isalways acertain quantity in alatent state which may enter into service when sore- quired .furthermore ,the value ofsuch products circulates often infractions and gradually ,for instance ,the value of houses inthe rents ofanumber ofyears . on the other hand ,not all movements ofthe process of reproduction are promoted by the circulation of money . the entire process ofproduction ,once that itselements have been purchased ,isexcluded from it.furthermore all prod- ucts ,which the producer consumed directly in his own individual orproductive consumption .under this head be- longs also the board ofagricultural laborers . the quantity ofmoney ,then ,which circulates the annual product ,exists in society ,having been gradually accumu- lated .itdoes not belong tothe values produced during the current year ,with the exception ofthe gold used for making good the loss ofdepreciated money . this presentation ofthe matter assumes the exclusive circulation ofprecious metals asmoney ,and the simplest form ofcash purchases and sales ,although even plain met- als,asabasis ofcirculation ,may serve asmoney ,and have actually soserved inhistory and have been the fundament for the development ofacredit system and ofcertain por- tions ofits mechanism . this assumption isnot made from mere considerations ofmethod ,although these are important enough ,asdemon- strated by the fact that tooke and his school aswell ashis adversaries were continually compelled intheir controversies concerning the circulation ofbank notes torevert tothe hypothesis ofapurely metallic circulation .they were com- pelled todo sosubsequently ,and did sovery superficially ,",
        "558capital . because they thus reduced toanincidental point what should have been the point ofdeparture oftheir analysis . but the simplest study ofthe circulation ofmoney inits primitive form ,which isthe immanent factor ofthe pro- cess ofannual reproduction ,demonstrates : (a)assuming capitalist production tobe developed to the point where the wage system predominates ,money -cap- ital evidently plays aprominent role ,seeing that itisthe form inwhich the variable capital isadvanced .to the ex- tent that the wage system develops ,all products are con- verted into commodities and must ,therefore ,pass through the stage ofmoney asone phase oftheir metamorphoses , with afew important exceptions .the quantity ofcirculat- ing money must suffice for this conversion ofcommodities into money ,and the greater part ofthis quantity isfur- nished inthe form ofwages ,in that money ,which isthe money -form ofthe variable capital advanced by the in- dustrial capitalists inpayment for labor -power ,and which serves inthe hands ofthe laborers overwhelmingly as a medium ofcirculation (ofpurchase ).itisquite the reverse under asystem ofnatural economy such aswas predom- inant under every form ofvassalage (including serfdom ), and still more in more or less primitive communities , whether they are infected by conditions of vassalage or slavery ,ornot. inaslave system ,the money -capital invested inthe pur- chase ofslaves plays the role ofthe fixed capital inmoney- form ,which isbut gradually replaced after the expiration ofthe active life period ofthe slaves .among the athenians , therefore ,the gain realized by aslave owner through the industrial employment ofhis slaves ,orindirectly by hiring them out toother industrial employers (for instance mine owners ),was regarded merely asan interest (with sinking fund )onthe advanced money -capital ,just asthe industrial capitalist under capitalist production places aportion ofthe surplus -value plus the depreciation ofhis fixed capital to the account ofinterest and renewal ofhis fixed capital .this isalso the rule inthe case ofcapitalists offering fixed capital , such ashouses ,machinery ,etc.,for rent .mere household",
        "simple reproduction .519 slaves ,who perform the necessary services or are kept as luxuries are not considered here .they correspond to the modern servant class .but the slave system so long as it isthe dominant form of productive labor in agriculture ,manufacture ,navigation ,etc. ,as itwas in the advanced states of greece and rome- preserves anelement ofnatural economy .the slave market maintains itssupply oflabor -power by war ,piracy ,etc. ,and this rape isnot promoted by aprocess ofcirculation ,but by the natural appropriation ofthe labor -power ofothers by physical force .even inthe united states ,after the con- version ofthe neutral territory between the wage labor states ofthe north and the slave labor states ofthe south into aslave breeding region for the south ,where the slave thus raised for the market had become anelement ofannual reproduction ,this method did not suffice for along time , sothat the african slave trade was continued aslong as possible for the purpose ofsupplying the market . (b)the natural flux and reflux ofmoney by the ex- change ofthe annual products onthe basis ofcapitalist pro- duction ;the advances offixed capital inone bulk tothe full value and the gradual and prolonged recovery ofthis outlay from the circulation inthe course ofsuccessive years , inother words ,the gradual reconstitution offixed capital inmoney bythe annual formation ofahoard ,which isdif- ferent from the simultaneous accumulation ofahoard based on the annual production ofnew gold ;the different length oftime inwhich money isadvanced according tothe dura- tion ofthe periods ofreproduction ofcommodities ,and in which money must ,therefore ,beaccumulated anew ,before itcan berecovered from the circulation bythe sale ofcom- modities ;the different length oftime for which money must be advanced ,resulting even from the different dis- tances ofthe places ofproduction from their selling market ; furthermore the differences in the magnitude and period ofthe reflux according tothe relative size orcondition of the productive supplies inthe various lines ofbusiness and inthe individual businesses ofthe same line ,and with them the terms atwhich the elements of constant capital are",
        "560capital . bought all this taking place during the year ofreproduc- tion ,itwas necessary that all these different factors should benoted and brought home by experience inorder togive rise toasystematization ofthe mechanical aids ofthe credit- system and toan actual discovery ofwhatever capital was available for lending . this isfurther complicated by adifference between lines ofbusiness whose production proceeds continuously under normal conditions on the same scale ,and those which are carried on atdifferent scales atdifferent periods ofthe year , such asagriculture . xiii .destutt de tracy's theory ofreproduction . as an illustration ofthe confused and atthe same time boastful thoughtlessness of political economists analyzing social reproduction ,the great logician destutt detracy may serve (compare volume i,page 181 ,footnote 1),whom even ricardo took seriously ,calling him avery distinguished writer . this distinguished writer makes the following revelations concerning the entire process of social reproduction and circulation : \"one may ask me how these industrial capitalists can make such large profits and out ofwhom they can draw them .ireply that they dosoby selling everything which they produce for more than ithas cost toproduce ;and that they sell (1)toone another tothe extent ofthe entire share of their consumption ,intended for the satisfaction of their needs ,which they pay with aportion oftheir profits ; (2)tothe wage workers ,both those whom they pay and those whom the idle capitalists pay ;from these wage workers they recover the entire wages inthis way ,except what little they may save ; (3)tothe idle capitalist ,whom they pay with apor- tion oftheir revenue which they have not spent for the wages ofthe laborers employed bythem directly ;sothat the",
        "simple reproduction .561 entire rent ,which they pay them annually ,flows back to them in this way .\"(destutt de tracy ,trait de la volont etdeses effets .paris ,1821. page 239. ) in other words ,the capitalists enrich themselves by mutually getting the best ofone another inthe exchange ofthat portion oftheir surplus -value which they reserve for their individual consumption ,orconsume asrevenue . for instance ,ifthis portion oftheir surplus -value ,orof their profits ,is400 p.st.,this sum issupposed tobeincreased to,say,500 p.st.by mutually selling their respective shares atan excess of25% over the normal .but ifall do the same ,the result will bejust what itwould have been ifthey had mutually sold their shares attheir normal values .they merely need inthat case 500 p.st.inmoney for the circula- tion ofcommodities valued at400 p.st.,and this would seem tobe rather amethod ofimpoverishing than ofen- riching themselves ,since itmeans that they are compelled toreserve alarge portion oftheir total wealth unproduc- tively in the state ofamedium ofcirculation .the out- come issimply that the capitalist class can divide only 400 p.st.'s worth of commodities among themselves for their individual consumption ,after nominally raising prices all around ,but that they do one another the favor ofcirculat- ing 400 p.st.'s worth ofcommodities bymeans ofaquantity ofmoney which would just aswell circulate 500 p.st.'s worth ofcommodities . and this issaying nothing about the fact that the as- sumption deals here only with a\"portion oftheir profits ,\" or any supply of commodities representing profits .but destutt undertook precisely to tell us where these profits come from .the quantity ofmoney required tocirculate itrepresents avery subordinate question .itseems that the quantity ofcommodities ,inwhich the profit isincorporated , isproduced by the circumstance that the capitalists do not only sell these commodities toone another (an assumption which isquite fine and profound ),but also mutually sell them too dearly .thus we are acquainted with the secret ofthe wealth ofthe capitalists .itison apar with the",
        "562capital . secret ofreuter's funny \"inspector braesig \"who discovered that the great poverty isdue tothe great \"pauvret .\" (2)the same capitalists ,furthermore ,sell \"tothe wage workers ,both those whom they pay and those whom the idle capitalists pay ;from these wage workers they recover the entire wages inthis way ,except what little they may save .\" according todestutt ,then ,the reflux ofthe money -capi- tal advanced tothe laborers aswages ,isthe second source ofthe wealth ofthe capitalists . for instance ,ifthe capitalists have paid 100 p.st.totheir laborers aswages ,and ifthese same laborers buy from the same capitalists commodities ofthis same value of100 p.st., sothat what the capitalists have advanced tothe laborers aswages returns tothe capitalists when the laborers spend itfor commodities ,then the capitalists get richer .acom- mon mortal would think that the capitalists recover only their 100 p.st.,which they possessed before this transac- tion .atthe beginning ofthe transaction they have 100 p. st.they buy labor -power valued at100 p.st.this labor- power ,sobought ,produces commodities ofacertain value , which ,sofar aswe know ,amounts to100 p.st.by selling these commodities for 100 p.st.totheir laborers ,the capital- ists recover 100 p.st.inmoney .the capitalists then have once more 100 p.st.,the same asbefore ,and the laborers have 100 p.st.'s worth ofcommodities which they have themselves produced .itishard to understand how that can make the capitalists any richer .ifthey did not recover the 100 p.st.,then they would have topay first 100 p.st. tothe laborers inwages and then togive them their product for nothing ,although itisalso worth 100 p.st.the reflux ofthis money might therefore atbest explain ,why the capitalists do not get any poorer by this transaction ,but not,why they get richer by it. itisanother question ,how the capitalists got possession ofthe 100 p.st.,and why the laborers ,instead ofworking for their own account ,are compelled to exchange their labor -power for this money .but this isafact which isself- explanatory for athinker ofdestutt's caliber .",
        "simple reproduction .563 however ,destutt himself isnot quite satisfied with his solution .he did not simply tell usthat the capitalists get richer by spending asum of100 p.st.inmoney and then recovering the same amount .he had not plainly spoken ofareflux of100 p.st.which merely explains why this money isnot lost .he had told usthat the capitalists get richer \"by selling everything which they produce for more than ithas cost toproduce .\" consequently the capitalists must also get richer by their transaction with the laborers by selling too dearly tothem . very well !\"they pay wages ****and all this flows back tothem by the expenditures ofall these people who pay them more \"(for the products )\"than they cost the capital- ists inwages .\"(page 240. )in other words ,the capitalists pay 100 p.st.inwages tothe laborers ,and then they sell tothese laborers their own product at120 p.st.,sothat they not only recover their 100 p.st.,but also gain 20p.st.that isimpossible .the laborers can pay for the commodities only with the money which they receive inthe form of wages .ifthey get only 100 p.st.inwages ,they can buy only 100 p.st.'s worth ,not 120 p.st.'s worth .this isthere- fore impracticable .but there isstill another way .the laborers buy from the capitalists commodities for 100 p.st., but receive only 80p.st.'s worth .they are cheated out of 20p.st.then the capitalists have certainly gained 20p.st., because he practically pays 20%less than the actual value for labor -power .this isequivalent tocutting wages 20% by acircuitous route . the capitalists would accomplish the same end ifthey paid the laborers inthe first place only 80 p.st.inwages and gave them only 80p.st.'s worth ofcommodities inex- change .this seems tobethe normal way for the class of capitalists asawhole ,for according todestutt the laboring class must \"receive sufficient wages \"(page 219 ),since their wages must beatleast sufficient tomaintain them alive and working ,\"togain the barest subsistence \"(page 180 ).if the laborers do not receive such sufficient wages ,then that means according tothe same destutt \"the death ofindustry \" (page 208 ),which does not seem tobeaway by which the",
        "564capital . capitalists can get richer .but whatever may bethe scale of wages ,paid by the capitalists tothe laborers ,they have a certain value ,for instance ,80 p.st.ifthe capitalist class pays the laborers 80p.st.,then ithas tosupply them with commodities worth 80 p.st.inexchange for these wages , and the reflux ofthis sum does not make the capitalists any richer .ifthe capitalists pay the laborers 100 p.st.inwages , and supply them in exchange for 100 p.st.only with 80p.st.'s worth ofcommodities ,then they pay 20%above the normal scale inwages and supply onthe other hand 20%less incommodities . in other words ,the fund from which the capitalist class would derive its profits ,would be made up ofdeductions from the normal scale ofwages ofthe laborers ,by paying less than itsvalue for labor -power ,inother words ,less than the value ofthe necessities oflife required for the normal reproduction ofthe laborer .ifthe normal scale ofwages were paid ,which issupposed tobethe case according to destutt ,there can be no fund for profits ,neither for the industrial nor for the idle capitalists . hence destutt should have reduced the entire secret of how the capitalist class get richer ,tothese words :adeduc- tion from the wages ofthe laborers .inthat case the other sources ofsurplus -value ,which hementions under (1)and (3),would not exist . under these conditions all the countries ,in which the money paid tothe laborers inwages isreduced tothe value ofthe articles ofconsumption required for the subsistence ofthe working class ,would not have any fund for the con- sumption ofcapitalists ,nor any fund for the accumulation ofcapital .in other words ,there would beno fund permit- ting acapitalist class to live ,and therefore no capitalist class .and according todestutt this would bethe case in allwealthy and developed countries with anold civilization , for inthem ,\"inour deeprooted old societies ,the fund from which wages are paid * *isanalmost constant magni- tude \"(page 202 ). even with adeduction from the wages ,the capitalist does not enrich himself by first paying the laborer 100 p.st.in",
        "simple reproduction .565 wages and then supplying him with 80 p.st.'s worth of commodities for 100 p.st.ofwages ,inother words ,by cir- culating 80 p.st.'s worth of commodities by means of100 p.st.,an excess of20%.the capitalist gets richer byappropriating ,aside from the surplus -value that portion ofthe product inwhich surplus -value isincorporated -20% ofthat portion ofthe product which the laborer should receive in exchange for his wages :the capitalist class would not gain anything bythe silly method which destutt assumes .they pay 100 p.st.for wages and give tothe laborer for these 100 p.st.apart ofhis own product valued at80 p.st.but inthe next transaction they must again advance 100 p.st.for the same purpose .they would thus indulge inthe useless sport ofadvancing 100 p.st.inmoney and giving inexchange therefor 80 p.st.incommodities , instead ofpaying 80 p.st.and exchanging itfor 80 p.st. incommodities .that istosay,they would becontinually advancing amoney -capital which is20%in excess ofthe normal required for the circulation oftheir variable capital . that isavery peculiar method toget rich . (3)the capitalist class ,finally ,sells \"tothe idle capital- ists,whom they pay with aportion oftheir revenue which they have not spent for the wages ofthe laborers employed by them directly ;sothat the entire rent ,which they pay them annually ,flows back tothem inthis way .\" we have seen awhile ago that the industrial capitalists pay with aportion oftheir profits \"the entire share oftheir consumption ,intended for the satisfaction oftheir needs .\" take it,then ,that their profits amount to200 p.st.and let them consume 100 p.st.ofthis intheir individual con- sumption .but the other half ,or100 p.st.,does not belong to them .itbelongs to.the \"idle \"capitalists ,that isto say ,tothose who take ground rent and lend money on in- terest .in other words ,they have topay 100 p.st.tothis gentry .let usassume that this gentry use 80p.st.for their individual consumption ,and 20 p.st.for the purchase of servants ,etc. they buy with those 80p.st.articles ofcon- sumption from the industrial capitalists .these capitalists , then give up commodities valued at80p.st.and receive in",
        "566capital . return 80p.st.inmoney ,orfour fifths ofthe 100 p.st.paid by them tothe idle capitalists under the name ofrent ,in- terest ,etc. the servant class ,who are the wage workers directly inattendance upon the idle capitalists ,have received 20 p.st.from their masters .these servants likewise buy articles ofconsumption from the industrial capitalists tothe amount of20 p.st.in this way these capitalists recover also the last 20p.st.,orthe last fifth ,ofthe 100 p.st.,which they have paid tothe idle capitalists for rent ,interest ,etc. , while they give up inreturn commodities valued at20p.st. at the close ofthis transaction the industrial capitalists have recovered the full 100 p.st.,which they paid tothe idle capitalists for rent ,interest ,etc. ,inmoney .but one half of their surplus products ,valued at100 p.st.,have passed from their hands into the fund for the individual consump tion ofthe idle capitalists . it is evidently immaterial for the present question , whether the division ofthe 100 p.st.among the idle capi- talists and their dependent wage workers isdrawn into thi discussion ornot .the matter issimple :their rent ,in terest ,inshort ,their share inthe surplus -value of200 p.st., ispaid tothem bythe industrial capitalists inmoney tothe amount of100 p.st.with these 100 p.st.they buy directly or indirectly articles of consumption from the industrial capitalists .they return the 100 p.st.inmoney tothem and take from them instead articles ofconsumption valued at 100 p.st. this completes the reflux ofthe 100 p.st.paid bythe in- dustrial capitalists tothe idle capitalists .isthis transac- tion ameans ofmaking the industrial capitalists any richer , as destutt imagines ?before this transaction they had values amounting to200 p.st.,100 being money and 100 articles of consumption .after the transaction they have only one half ofthe original amount ofvalues .they have once more 100 p.st.inmoney ,but they have lost the ar- ticles ofconsumption valued at100 p.st.,which have passed into the possession ofthe idle capitalists .in other words , they have become poorer tothe extent of100 p.st.,instead ofbeing richer .if,instead offirst choosing the circuitous",
        "simple reproduction .567 route ofpaying out 100 p.st.inmoney ,and then receiving this money back in payment for articles ofconsumption valued at100 p.st.,they had paid rent ,interest ,etc. ,directly inthe natural form ofcommodities ,then they would not recover any 100 p.st.inmoney ,because they did not throw that amount ofmoney into the circulation .inthe case ofa payment incommodities ,the transaction would simply have , been confined tokeeping one -half ofthe surplus product of200 p.st.for themselves and giving the other half tothe idle capitalists without receiving any equivalent inreturn . even destutt would not have been able toconsider this a means ofgetting richer . ofcourse ,the land and capital borrowed bythe industrial capitalists from the idle capitalists and paid for by apor- tion oftheir surplus -value inthe form ofground rent and interest ,etc. ,are profitable for them ,for they constitute one ofthe conditions for the production ofany commodity ,and more especially ofthat portion ofthe product ,which creates surplus -value ,or in which surplus -value isincorporated . this profit flows from the use ofthe borrowed land and capital ,not out ofthe price paid for them .this price rather constitutes adeduction from the profit .or one would have tocontend ,that the industrial capitalists do not get richer , but poorer ,ifthey are enabled tokeep the other half oftheir surplus -value ,instead ofbeing compelled togive itup.this isthe confusion which results from the indiscriminate mix- ing up ofsuch phenomena ofcirculation as areflux of money with the distribution ofthe product ,which ismerely promoted by this circulation . and yet the same destutt isso sharp asto remark : \"whence come the revenues ofthese idle people ?do they not come out ofthe rent paid by them out ofthe profits ofthose who put the capitals ofthe former towork ,that is to say,who pay with the funds ofthe former acertain kind oflabor which produces more than itcosts ,inother words ,the profits ofthe industrial capitalists ?itisalways necessary torevert tothem ,inorder tofind the source of wealth .itisthey who inreality feed the wage workers em- ployed bythe idle capitalists .\"(page 246 ).",
        "568capital . inother words ,inthis quotation the rent ,etc. ,ofthe idle capitalists isadeduction from the profit ofthe industrial capitalists .informer quotations itwas ameans ofenriching them . but atleast one consolation isleft for our friend destutt . these good industrials treat the idle capitalists inthe same way that they have treated one another and their laborers . they sell them all commodities too dearly ,for instance ,at araise of20%.now there are two possibilities .the idle capitalists either have other funds ofmoney aside from the 100 p.st.which they receive from the industrials ,orthey have not .in the first case ,the industrials sell them com- modities valued at100 p.st.ataprice of,say,120 p.st.in other words ,they recover bythe sale oftheir commodities not only the 100 p.st.paid tothe idle capitalists ,but also 20p.st.ofnew values .now ,how stands the account ?they have given away 100 p.st.incommodities for nothing ,for the 100 p.st.that paid for their commodities were their own money .their own commodities have been paid with their own money .in other words ,they have lost 100 p.st. but they have also received an additional sum of20 p.st. inthe price oftheir commodities .inother words ,20 p.st. ofgain .balance this against the loss of100 p.st.,and you still have aloss of80 p.st.never aplus ,always aminus . the advantage taken bythe industrials over the idle capital- ists has reduced the loss ofthe industrials ,but for all that it has not transformed areduction oftheir wealth into an increase of wealth .but this method cannot go on in- definitely ,for the idle capitalists cannot pay year after year 120 p.st.,ifthey receive only 100 p.st. there remains the other possibility .the industrials sell commodities valued at80p.st.inexchange for the 100 p.st.- paid tothe idle capitalists .inthis case ,they still give away 80p.st.for nothing ,inthe form ofrent ,interest ,etc. by means ofcheating the industrials have reduced their tribute tothe idlers ,but itnevertheless isexacted from them the same asever ,and the idlers are enabled ,onthe same theory , assuming the prices todepend onthe free will ofthe sellers ,",
        "simple reproduction .569 todemand inthe future 120 p.st.instead of100 p.st.as rent and interest ontheir land and capital . this brilliant analysis isquite worthy ofthat depth of thought which copies on the one hand from adam smith that \"labor isthe source ofallwealth \"(page 242 ),that the industrial capitalists \"employ their capital for the payment oflabor that reproduces itwith aprofit \"(page 246 ),and which concludes on the other hand that these industrial capitalists \"maintain all the other people ,are the only ones who increase the public wealth ,and create all the means for our enjoyment \"(page 242 ),that itisnot the capitalists who are maintained by the laborers ,but the laborers who are maintained by the capitalists ,for the brilliant reason that the money ,with which the laborers are paid ,does not remain intheir hands ,but continually returns tothe capi- talists in payment ofthe commodities produced by the laborers .\"they receive only with one hand ,and return with the other .their consumption must therefore be regarded asbeing due tothose who pay their wages .\"(page 235 ). after this exhaustive analysis ofsocial reproduction and consumption ,as promoted by the circulation of money , destutt continues :\"this iswhat perfects this perpetuum mobile ofwealth ,this movement which ,though illunder- stood \"(ishould say so!)\"yet has justly been named cir- culation .for itisindeed acirculation and always returns toits point ofdeparture .this isthe point where produc- tion isaccomplished .\"(pages 139 ,140. ) destutt ,that very distinguished writer ,membre del'in- stitut de france etde lasocite philosophique de phila- delphie ,and indeed to acertain extent abeacon light among the vulgar economists ,finally requests his readers to admire the wonderful lucidity with which hehas presented to them the course ofthe social process ,the flood oflight which he has poured over the matter ,and he iscondescending enough tocommunicate tohis readers ,where all this light comes from .this must beread inthe original inorder to be appreciated . \"on remarquera ,j'espere ,combien cette maniere de con-",
        "570capital . sidrer laconsommation de nos richesses est corcordante avec tout ceque nous avons dit apropos deleur production etdeleur distribution ,etenmeme temps quelle clart elle rpand sur toute lamarche de lasocit .d'ou viennent cet accord etcette lucidit ? de ce que nous avons ren- contr lavrit .cela rappelle l'effet deces miroirs oules objets sepeignent nettement etdans leurs justes propor- tions ,quand on est plac dans leur vrai point -de-vue ,etou tout parait confus etdesuni ,quand on est trop prs ou trop loin .\"(pages 242 ,243 ).(itwill be noted ,ihope , how much this manner ofviewing the consummation ofour wealth isinaccord with allwe have said concerning itspro- duction and distribution ,and also how much light itthrows on the entire course ofsociety .whence come this accord and this lucidity ?itisdue tothe fact that wehave met truth face to face .this recalls the effect ofthose mirrors ,in which the objects are reflected clearly and intheir true pro- portions ,when we are placed intheir correct focus ,but in which everything appears confused and distorted ,when we are too close ortoo far away from them ). there you have the bourgeois idiocy inall itsbeatitude !",
        "accumulation and reproduction .571 chapter xxi.51 accumulation and reproduction onanenlarged scale . ithas been shown involume i,how accumulation works inthe case ofthe individual capitalist .by the conversion ofthe commodity -capital into money ,the surplus -product , in which the surplus -value isincorporated ,isalso mone- tized .the capitalist reconverts the surplus -value thus monetized into additional natural elements ofhis product- ive capital .in the next cycle ofproduction the increased capital furnishes an increased product .but what happens inthe case ofthe individual capital ,must also show inthe annual reproduction ofsociety asawhole ,just aswe have seen itdone inthe case ofreproduction on asimple scale , where the successive precipitation ofthe depreciated ele- ments offixed capitals inthe form ofmoney ,accumulated asahoard ,also makes itself felt inthe annual reproduc- tion ofsociety . ifacertain individual capital amounts to400 c+100 v,with an annual surplus -value of100 s,then the product incommodities amounts to400 c+100 v+100 s.this amount of600 isconverted into money .of this money , again ,400 care converted into the natural form ofcon- stant capital ,100 vinto labor -power ,and -provided that the entire surplus -value isaccumulated -100 sare converted into additional constant capital by their transformation into natural elements ofproductive capital .the following as- sumptions gowith this case :(1)that this amount issuf- ficient under the given technical conditions either toexpand the existing constant capital ,ortoestablish anew indus- trial business .but itmay also happen that surplus -value must beconverted into money and this money hoarded for 51from here tothe end manuscript viii .",
        "572capital . amuch longer time ,before these steps may betaken ,before actual accumulation ,orexpansion ofproduction ,can take place .(2)itisfurthermore assumed that production on an enlarged scale has actually been inprocess previously . for inorder that the money (the surplus -value hoarded as money )may beconverted into elements ofproductive capi- tal,these elements must beavailable onthe market ascom- modities .itmakes no difference whether they are bought asfinished products ,ormade toorder .they are not paid for until they are finished ,and atany rate ,until actual re- production on an enlarged scale ,an expansion ofhitherto normal production ,has taken place sofar asthey are con- cerned .they had tobe present potentially ,that istosay , intheir elements ,for itrequired only an impulse inthe form ofan order ,that istosay,apurchase preceding their actual existence and anticipating their sale ,in order to stimulate their production .the money onone side inthat case calls forth expanded reproduction on the other ,be- cause the possibility for itexists without the money .for money initself isnot anelement ofactual reproduction . for instance ,capitalist a,who sells during one year ,or during anumber ofsuccessive years ,certain quantities of commodities produced by him ,thereby converts that por- tion ofthe commodities ,which bears surplus -value ,the surplus -product ,or,inother words ,the surplus -value pro- duced by himself ,successively into money ,accumulates it gradually ,and thus makes for himself anew potential money -capital .itispotential money -capital on account of its capacity and destination of being converted into the elements ofproductive capital .but practically he merely accumulates asimple hoard ,which isnot an element of actual production .his activity for the time being consists only in withdrawing circulating money out ofcirculation . of course ,itisnot impossible that the circulating money thus laid away by him was itself ,before itentered into cir- culation ,aportion ofsome other hoard .this hoard ofa, which ispotentially anew money -capital ,isnot an addi- tion tothe social wealth ,any more than itwould beifit",
        "accumulation and reproduction .573 were spent inarticles ofconsumption .but money ,when withdrawn from circulation ,having previously circulated , may have been held somewhere asahoard ,ormay have been the money -form ofwages ,may have monetized means ofproduction orother commodities ,may have circulated portions ofconstant capital orofthe revenue ofsome capi- talist .itisno more new wealth than money ,considered from the standpoint ofthe simple circulation ofcommodi- tics ,isthe bearer ,not only ofitssimple value ,but also ofits tenfold value ,because itmay have been turned over ten times aday and realized ten different values ofcommodi- ties .the commodities exist without it,and itremains what itis(orbecomes even less by depreciation )whether inone turn -over orinten.only inthe production ofgold -to the extent that the output ofgold contains asurplus- product and isthe bearer ofsurplus -value -isnew value created (potential money ),and the new output ofgold in- creases the money -material ofpotential new money -capitals only tothe extent that itenters entirely into the circula- tion . although the surplus -value hoarded inthe form ofmoney isnot an addition tothe social wealth ,itrepresents an ad- dition tothe potential money -capital ,onaccount ofthe func- tion for which itishoarded .(we shall see later that new money -capital may arise instill another way than by the gradual monetization ofsurplus -value .) money iswithdrawn from circulation and accumulated asahoard bythe sale ofcommodities without asubsequent purchase .ifthis operation isconceived asone taking place universally ,then itseems inexplicable where the buyers are tocome from ,since inthat case everybody would want to sell inorder tohoard ,and none would want tobuy .and itmust besoconceived ,since every individual capital may beinprocess ofaccumulation . ifwe were toconceive ofthe process of circulation as one taking place inastraight line between the various di-\" visions ofannual reproduction -which would beincorrect , asitconsists with afew exceptions of mutually retroact-",
        "574capital . ive movements -then we should have tostart out from the producer ofgold (orsilver )who buys without selling ,and to assume that all others sell tothem .in that case the entire social surplus -product ofthe current year would pass into his hands ,representing the entire surplus -value ofthe year ,and all the other capitalists would distribute among themselves their relative shares in his surplus -product , which consists naturally ofmoney ,gold being the natural form ofhis surplus -value . for that portion ofthe product ofthe gold producer ,which has to make good his active capital ,isalready tied up and disposed of.the surplus- value ofthe gold producer ,inthe form ofgold ,would then be the only fund from which all other capitalists would have toderive the material for the conversion oftheir an- nual surplus -product into gold .the magnitude ofitsvalue would then have tobe equal tothe entire annual surplus- value ofsociety ,which must first assume the guise of a hoard .absurd asthis assumption would be,itwould ac- complish nothing more than toexplain the possibility ofa universal formation of ahoard atthe same period .it would not further reproduction itself ,except on the part ofthe gold producer ,one single step . before we solve this seeming difficulty ,we must distin- guish between the accumulation indepartment i(produc- tion ofmeans ofproduction )and indepartment ii (pro- duction ofarticles ofconsumption ).we start out from i. i. accumulation in department i. (1).the formation ofahoard . itisevident that both the investments ofcapital inthe numerous lines ofindustry constituting department i,and the different individual investments ofcapital within each ofthese lines ofindustry ,according totheir age ,that is tosay,the space oftime during which they have served , quite aside from their volume ,technical conditions ,market conditions ,etc. ,must be indifferent stages ofthe process",
        "accumulation and reproduction .575 ofsuccessive transformation from surplus -value into poten- tial money -capital .itisimmaterial whether this money- capital istoserve for the expansion ofthe active capital , orfor the establishment ofnew industrial enterprises ,which constitute the two forms ofexpansion ofproduction .one portion ofthe capitalists ,then ,iscontinually converting its potential capital ,when grown toasufficient size ,into pro- ductive capital ,that istosay ,they buy with the money hoarded bythe monetization ofsurplus -value means ofpro- duction ,additional elements ofconstant capital .another portion ofthe capitalists ismeanwhile still engaged inac- cumulating potential money -capital .capitalists belonging tothese two categories meet asbuyers and sellers ,each one ofthem exclusively inone ofthese roles . for instance ,let asell 600 ,representing 400 c+100 v +100 s,tob,who may represent more than one buyer . asells 600 in commodities for 600 in money ,ofwhich 100 are surplus -value which he withdraws from circulation and hoards inthe form ofmoney .but these 100 inmoney are but the money -form ofthe surplus -product inwhich a value of100 was incorporated .the formation ofahoard , then ,isnot aproduction ,nor isitan increment ofpro- duction .the action ofthe capitalist consists merely in withdrawing from circulation 100 obtained by the sale of his surplus -product ,inholding and hoarding this amount . this operation iscarried on,not alone on the part ofa, but atnumerous points ofthe periphery ofcirculation by other capitalists ,named a',a\",a\",all ofwhom work bus- ily atthis sort ofaccumulation .these numerous points at which money iswithdrawn from circulation and accumu- lated in numerous individual hoards appear asso many obstacles ofcirculation ,because they stop the movement of money and deprive itofits capacity tocirculate for acer- tain length oftime .but itmust beremembered that hoard- ing takes place inthe simple circulation of commodities long before itisbased onthe capitalist mode ofproduction . the quantity ofmoney existing insociety isalways greater than the amount inactual circulation ,although this varies",
        "576capital . according tocircumstances .we meet the same hoards ,and the same accumulation ofhoards ,atthis stage ,but now it isafactor immanent inthe capitalist process ofproduction . one can understand the pleasure felt by some men when all these potential capitals ,by their concentration in the hands ofbankers ,etc. ,by means ofthe credit system ,be- come disposable ,\"loanable capital ,\"money -capital ,which isno longer merely passive and adream ofthe future ,but active usury -capital ,self -expanding capital . however ,aaccomplishes the formation ofahoard only tothe extent that he acts asaseller ,sofar ashis surplus- product isconcerned ,not asabuyer .his successive pro- duction ofsurplus -products ,the bearers ofhis surplus -value convertible into money ,istherefore apromise for the for- mation ofhis hoard .in the present case ,where we are dealing only with the circulation within department i,the natural form ofthe surplus -product ,and ofthe total pro- duct ofwhich itisapart ,isthat ofan element ofcon- stant capital ofi,that istosay,itbelongs tothe category of ameans ofproduction creating means ofproduction .we shall see presently what becomes ofit,what function it performs ,inthe hands ofthe buyers such asb,b',b\",etc. itmust beparticularly noted atthis point that a,while withdrawing money from circulation and hoarding it,on the other hand throws commodities into itwithout with- drawing other commodities in return .the capitalists b, b',b\",etc. ,are thereby enabled tothrow only money into itand withdraw only commodities from it.in the present case ,these commodities ,according totheir natural form and destination ,become afixed orcirculating element of the constant capital ofb,b',etc. we shall hear more about this anon ,when we shall deal with the buyer ofthe surplus -product ,with b,b',etc. we remark by the way :once more we find here ,as we did inthe case ofsimple reproduction ,that the disposal of the various elements ofannual reproduction ,that isto say , their circulation which must comprise the reproduction of",
        "accumulation and reproduction . 577 the capital tothe point ofreplacing its various elements , such asconstant ,variable ,fixed ,circulating ,money and commodity -capital ,isnot conditioned onthe mere purchase ofcommodities followed by acorresponding sale ,oramere sale followed by acorresponding purchase ,so that there would actually be abare exchange ofcommodity for com- modity ,asthe political economists assume ,especially the free trade school from the time ofthe physiocrats and adam smith .we know that the fixed capital ,once that its in- vestment ismade ,isnot replaced during the entire period ofitsfunction ,but serves initsold form ,until itsvalue is gradually precipitated inthe form ofmoney .now we have seen that the periodical renewal ofthe fixed capital ofiic [the entire value ofthe capital ofiic being converted into elements ofivalued at(v+s)]pre-supposes onthe one hand the mere purchase ofthe fixed portion ofiic,which isreconverted from the form of money into its natural form ,and towhich corresponds the mere sale ofis;and presupposes on the other hand the mere sale onthe part of iic,the sale ofitsfixed (depreciating )value ,which ispre- cipitated inmoney and towhich corresponds the mere pur- chase ofis.in order that the transaction may take place normally inthis case ,itmust be assumed that the mere purchase on the part ofiicisequal invalue tothe mere sale onthe part ofiic,and that inthe same way the mere sale ofis toiic,section 1,isequal invalue tothe mere purchase from department iic,section 2. otherwise simple reproduction isinterrupted .the mere sale on one side. must be offset by amere purchase on the other .itmust likewise beassumed that the mere sale ofthat portion ofis, which forms the hoards ofa,a',a\"isbalanced by the mere purchase ofthat portion ofis,which converts the hoards ofb,b',b\",into elements ofadditional productive capital . sofar asthe balance isrestored bythe fact that the buyer acts later on asaseller tothe same amount ,and vice versa , the money returns tothe side that has advanced itinthe first place ,which sold first before itbought again .but the",
        "578capital . actual balance ,sofar asthe exchange ofcommodities itself isconcerned ,that ittosay,the disposal ofthe various por- tions ofthe annual product ,isconditioned on the equal value ofthe commodities exchanged for one another . but tothe extent that only one -sided exchanges are made , anumber ofmere purchases on one hand ,anumber of mere sales onthe other -and we have seen that the normal disposal ofthe annual product on the basis ofcapitalist production requires such onesided metamorphoses -the balance can bemaintained only onthe assumption that the value ofthe onesided purchases and onesided sales isthe same .the fact that the production ofcommodities isthe general form ofcapitalist production implies the role which money isplaying not only asamedium ofcirculation ,but also asmoney -capital ,and creates conditions peculiar for the normal transaction of exchange under this mode of production ,and therefore peculiar for the normal course ofreproduction ,whether itbe on asimple ,oron an ex- panded scale .these conditions become somany causes of abnormal movements ,implying the possibility of crises , since abalance isan accident under the crude conditions of this production . we have also seen that there isindeed ,inthe exchange ofivfor acorresponding value ofiic,anultimate renewal ofthe value ofthe commodities ofiiby an equivalent value ofcommodities ofi,sothat the sale ofthe commodi- ties ofthe aggregate capitalist ofiiisbalanced subsequently bythe purchase ofcommodities from itothe same amount . this restitution takes place .but itisnot an exchange which takes place between the capitalists ofiand iiinthe disposal oftheir relative commodities .iicsells its com- modities tothe working class ofi. this class meets itone- sidedly inthe role ofabuyer ofcommodities ,and itmeets that class onesidedly asaseller ofcommodities .with the money soobtained iicmeets the aggregate capitalist ofi onesidedly asabuyer of commodities ,and the aggregate capitalist ofimeets itonesidedly asaseller ofcommodi- ties tothe extent ofiv.itisonly by means ofthis sale",
        "accumulation and reproduction .579 of commodities that department ifinally reproduces its variable capital inthe form ofmoney -capital .just asone- sidedly asthe capitalist class ofifaces that ofiiinthe role ofaseller ofcommodities tothe extent ofiv,sodoes that class face its working class inthe role ofabuyer ofcom- modities ,abuyer oflabor -power .and just asone -sidedly asthat working class faces the capitalists ofiiinthe role ofabuyer ofcommodities (namely ofarticles ofconsump- tion ),soitfaces the capitalists ofiasaseller ofcommodi- ties ,namely ,aseller ofitslabor -power . the continual offer oflabor -power on the part ofthe working class ofi,the reconversion ofaportion ofthe commodity -capital of iinto the money -form of variable capital ,the renewal ofaportion ofthe commodity -capital ofiiby natural elements ofthe constant capital ofiic- all these are necessary premises dovetailing into one an- other ,but they are promoted by avery complicated process including three processes ofcirculation which occur inde- pendently ofone another ,but intermingle .the complicated- ness ofthis process presents somany opportunities for ab- normal deviations . (2).the additional constant capital . the surplus -product ,the bearer of surplus -value ,does not cost its appropriators ,the capitalists of i,anything . they are innoway obliged toadvance any money orcom- modities inorder tosecure it.an advance means even in the writings ofthe physiocrats the general form ofvalue materialized inelements ofproductive capital .hence what they advance isnothing but their constant and variable capital .the laborer preserves by his labor not only their constant capital ;he reproduces not only the value oftheir variable capital by creating corresponding qualities ofnew values ;hesupplies them also by his surplus -labor with sur- plus -values inthe form ofsurplus -products .by the suc- cessive sale ofthis surplus -product ,they accumulate ahoard , additional potential money -capital .inthe present case ,this surplus -product consists atthe outset ofmeans ofproduc-",
        "580capital . tion used inthe creation ofmeans ofproduction .itisnot until itreaches the hands ofb,b',b\",etc. (i),that this surplus -product serves asadditional constant capital .but itisvirtually that even inthe hands ofthe accumulators ofhoards ,the capitalists a,a',a\",(i),before itissold . ifwe consider merely the volume ofvalues ofthe repro- duction on the part ofi,then we are still moving within the limits ofsimple reproduction ,for no additional capital has been set inmotion for the purpose ofcreating this vir- tual additional constant capital (the surplus -product ),nor has any greater amount of surplus -labor been performed than that done on the basis ofsimple reproduction .the difference ishere only one ofthe form ofthe surplus -labor performed ,ofthe concrete nature ofitsparticularly useful service .itisexpended inmeans ofproduction for depart- ment icinstead ofiic,inmeans ofproduction ofmeans ofproduction instead ofmeans ofproduction ofarticles of consumption .in the case ofsimple reproduction ithad been assumed that the entire surplus -value was spent asreve- nue incommodities ofii.hence itconsisted only ofsuch means ofproduction asrestore the constant capital ofiiein itsnatural form .inorder that the transition from simple to expanded reproduction may take place ,the production in department imust beenabled tocreate fewer elements for the constant capital ofii and more for that ofi. this transition ,which will not always take place without difficul- ties ,isfacilitated by the fact that some ofthe products of imay serve asmeans ofproduction ineither department . considering the matter merely from the point ofview of the volume ofvalues ,itfollows ,then ,that the material re- quirements ofexpanded reproduction are produced within simple reproduction .itissimply aquestion ofthe expen- diture ofthe surplus -labor ofthe working class ofifor the production ofmeans ofproduction ,the creation ofvir- tual additional capital ofi. the virtual additional money- capital ,created on the part ofa,a',a\",by the successive sale oftheir surplus -product ,which was formed without any capitalist expenditure ofmoney ,isinthis case simply the",
        "accumulation and reproduction .581 money -form ofthe additional means ofproduction made byi. the production ofvirtual additional capital expresses in our case (we shall see that itmay also beformed inadif- ferent way )merely the fact that itisaphenomenon of the process ofproduction itself ,the production ofelements ofproductive capital inaparticular form . the production ofvirtual additional money -capital on a large scale ,atnumerous points ofthe periphery ofcircu- lation ,istherefore but aresult and expression ofamulti- farious production of virtual additional productive capi- tal,whose rise does not itself require any additional ex- penditure ofmoney on the part ofthe industrial capital- ists . the successive transformation ofthis virtual additional productive capital into virtual money -capital (hoard )on the part of a,a',a\",etc. ,(i),conditioned on the suc- cessive sale oftheir surplus -product ,which isarepeated onesided sale without acompensating purchase ,isaccom- plished by arepeated withdrawal ofmoney from circula- tion and acorresponding formation of ahoard .this hoarding ,except inthe case ofbuyers who are gold pro- ducers ,does not inany way imply anaddition tothe wealth inprecious metals ,but only achange offunction on the part ofmoney previously circulating .awhile ago itserved asamedium ofcirculation ,now itserves asahoard ,asa virtual additional money -capital in process of formation . in other words ,the formation ofadditional money -capital and the volume ofthe precious metals existing in acer- tain country are not directly connected facts . hence itfollows furthermore :the greater the product- ive capital already serving inacertain country (including the labor -power incorporated initasthe producer ofthe surplus -product ),the more developed the productive power oflabor and atthe same time the technical appliances for the rapid extension ofthe production ofmeans ofproduc- tion ,the greater furthermore the quantity ofthe surplus-",
        "582capital . product both astovalue and mass ,somuch greater is (1)the virtual additional productive capital inthe form ofasurplus -product inthe hands ofa,a',a\",etc. ,and (2)the mass ofthis surplus -product transformed into money ,inother words ,the virtual additional money -capital inthe hands ofa,a',a\".the fact that fullerton ,for in- stance ,will have nothing todowith any overproduction in the ordinary meaning ofthe term ,but only with the over- production ofcapital ,meaning money -capital ,shows how pitifully little even the best bourgeois economists under- stand ofthe mechanism oftheir own system . while the surplus -product ,directly produced and appro- priated by the capitalists a,a',a\"(i),isthe actual basis ofthe accumulation ofcapital ,that istosay,ofexpanded reproduction ,although itdoes not actually serve inthis capacity until itreaches the hands ofthe capitalists b,b', b\",etc. (i),itisquite unproductive inits chrysalis stage ofmoney ,ofahoard representing virtual money -capital in process offormation .itruns parallel with the process of production ,but moves outside ofit.itisadead weight of capitalist production .the desire to utilize this surplus- value ,while accumulating asvirtual money -capital ,for the purpose ofderiving profits orrevenue from it,finds inthe credit system and paper securities its consummation .mon- ey-capital thereby gains inanother form an enormous in- fluence on the course and the stupendous development of the capitalist system ofproduction . the surplus -product converted into virtual money -cap- ital will grow somuch more involume ,the greater the ag- gregate amount ofcapital actually engaged which produced itby its function .with the absolute increase ofthe vol- ume ofthe annually reproduced virtual money -capital its segmentation also becomes easier ,sothat itismore rapidly invested in acertain business ,either inthe hands ofthe same capitalist orinthose ofothers (for instance members ofthe family ,inthe case ofadivision ofinheritances ,etc. ). by segmentation ofmoney -capital imean inthis case that itiswholly detached from the parent capital inorder tobe",
        "accumulation and reproduction .583 invested asanew money capital inanew and independent business . while the sellers ofthe surplus -product ,a,a',a\",etc. , (i),have obtained itasadirect outcome ofthe process of production ,which does not require any additional act of circulation aside from the advance ofconstant and variable capital made even insimple reproduction ;and while they thereby construct the real basis for areproduction on an expanded scale ,seeing that they manufacture virtually ad- ditional capital -the attitude ofb,b',b\"\",etc. ,(i),is different .(1) the surplus -product ofa,a',a\",etc. ,does not actually serve as additional constant capital until it reaches the hands ofb,b',b\",etc. (we leave out ofcon- sideration for the present the other elements ofproductive capital ,the additional labor -power ,inother words ,the ad- ditional variable capital ).(2)in order that the surplus- product may reach their hands ,they must buy it. in regard topoint 1,itmay be noted that alarge por- tion ofthe surplus -product (virtual additional constant cap- ital )isproduced by a,a',a\",(i),inthe course ofthe current year ,but may not serve asindustrial capital inthe hands ofb,b',b\",(i),until next year ,orstill later .with reference topoint 2,the question is:whence comes the money required for the process ofcirculation ? to the extent that the products created by b,b',b\",etc. , (i),re-enter intheir natural form into their own process , itgoes without saying that acorresponding portion oftheir own surplus -product istransferred directly (without any intervention ofcirculation )totheir productive capital and becomes an element ofadditional constant capital .to the same extent they do not help toconvert any surplus -pro- duct ofa,a',a\",etc. ,(i),into money .aside from this where does the money come from ? we know that they have formed their hoard inthe same way asa,a',etc. ,by the sale oftheir respective surplus -products .now they have arrived atthe point where their accumulated hoard of virtual money -capital istoenter effectually upon its func- tion asadditional money -capital .but this ismerely turn-",
        "584 capital . ing around in acircle .the question still remains :where does the money come from ,which the various b's (1)with- drew from the circulation and accumulated ? now we know from the analysis ofsimple reproduction , that the capitalists ofiand iimust have acertain amount ofready money intheir hands ,inorder tobe able todis- pose oftheir surplus -products .in that case ,the money which served only for the spending ofrevenue in articles ofconsumption returned to the capitalists inthe same measure inwhich they advanced itfor the purpose ofdis- posing oftheir commodities .here the same money re-ap- pears ,but inadifferent function .the a's and b's supply one another alternately with the money for converting their surplus -product into virtual additional capital ,and throw the newly formed money -capital alternately into circulation asamedium ofpurchase . the only assumption made inthis case isthat the amount . ofmoney existing inacertain country (the velocity ofcir- culation ,etc. ,being the same )suffices for both the active circulation and the reserve hoard .itisthe same assump- tion which had tobe made in the case ofthe simple cir- culation ofcommodities ,aswe have seen .only the func- tion ofthe hoards isdifferent inthe present case .further- more ,the existing amount ofmoney must be larger ,first , because all the products (with the exception ofthe newly produced precious metals and the few products consumed . by the producer himself )are produced as commodities under capitalist production and must ,therefore ,pass through the stage ofmoney ;secondly ,because on acapital- ist basis the quantity ofthe commodity -capital and the volume ofitsvalue isnot only absolutely greater ,but also grows with much greater rapidity ;thirdly ,an ever more voluminous variable capital must beconverted into money- capital ;fourthly ,with the extension of production ,the formation ofnew money -capital keeps step ,sothat the ma- terial for itmust beavailable inthe form ofahoard . while this isacommon truism for the first phase ofcapi- talist production ,in which even the credit system isac- companied by aprevalence ofmetallic circulation ,itap",
        "accumulation and reproduction . 585 plies even tothe most developed phase ofthe credit system tothe extent that metallic circulation remains its basis . on the one hand ,the additional production of precious metals may exert adisturbing influence on the prices of commodities according towhether itisabundant orscarce , not only in long ,but also in very short intervals .on the other hand ,the entire mechanism ofcredit iscontinu- ally occupied inreducing the actual metallic circulation to arelatively more and more decreasing minimum by means ofsundry operations ,methods ,and technical devices .to the same extent are the artificiality ofthe entire mechanism and the possibility ofdisturbing itsnormal flow increased .. itmay be that the different b,b',b\",etc. ,(i),whose virtual new capital enters upon its active function ,are compelled tobuy from one another their product (portions oftheir surplus -product )ortosell ittoone another .in that case the money advanced by them for the circulation oftheir surplus -product flows back under normal condi- tions tothe different b's inthe same proportion inwhich they advanced itfor the circulation oftheir respective commodities .ifthe money circulates asamedium ofpay- ment ,then only balances are tobepaid sofar asthe alter- nate purchases and sales do not cover one another .but it isimportant toassume here ,aseverywhere ,metallic circula- tion inits simplest form ,because then the flux and reflux , the balancing ofaccounts ,inshort all elements appearing asconsciously directed processes under the credit system , appear asforms independent ofthe credit system ,show themselves intheir primitive form instead oftheir later , reflected ,one . (3).the additional variable capital . hitherto we have been dealing only with additional con- stant capital .now we must direct our attention toaconsid- eration ofthe additional variable capital . we have explained atgreat length in volume ithat labor -power isalways held available under the capitalist system ofproduction ,and that more labor can be set in",
        "586capital . motion ,if necessary ,without increasing the number of laborers ,orquantity of labor -power ,employed .we need not detail this any further for the present ,but assume with- out ceremony that the portion ofthe newly created money- capital which istobe converted into variable capital will always find asmuch labor -power asitcares totransform . ithas also been explained involume ithat acertain capi- tal may expand itsvolume ofproduction within certain lim- itswithout any accumulation .but now we are dealing with the accumulation of capital inthe strict meaning ofthe term ,sothat the expansion ofproduction isconditioned on the conversion ofsurplus -value into additional capital ,and thus on an expansion ofthe basis ofproductive capital . the gold producer can accumulate aportion ofhis golden surplus -value as avirtual money -capital .as soon as it reaches asufficient volume ,he can transform itdirectly into new variable capital ,without first selling his surplus- product .in the same way he can convert itinto the ele- ments ofconstant capital .but inthis last case ,he must find the material elements ofconstant capital athand .this may be accomplished by having each producer working to stock his supply ,aswas hitherto assumed ,and then bring- ing his finished product onthe market ,orby having them work to fill orders .the actual expansion ofproduction , that istosay,the surplus -product ,isassumed ineither case , inthe one case asactually onhand ,inthe other asvirtually available ,because ordered . ii.accumulation in department 2. we have hitherto assumed that the capitalists a,a',a\", etc. ,(i),sell their surplus -product tothe capitalists b,b', b\",etc. ,who belong tothe same department .but take it now that a(i)converts his surplus -product into gold by selling ittoacapitalist bindepartment ii.this can be done only by the sale ofmeans ofproduction on the part ofa(i)tob(ii)without asubsequent purchase ofarticles ofconsumption ,inother words ,only by aone -sided sale on a's part .now we have seen that iiccannot be converted",
        "accumulation and reproduction .587 into the natural form ofproductive constant capital unless not only iv,but also atleast aportion ofis,isexchanged for aportion ofiic,which iicexists inthe form ofar- ticles ofconsumption .but now that ahas converted his is into gold by making this exchange impossible and with- drawing the money obtained from iicout ofcirculation , instead ofspending itfor articles ofconsumption ofiic, there isindeed on the part ofa(i)aformation ofaddi- tional virtual money -capital ,but onthe other hand there is acorresponding portion ofthe value ofthe constant capital b(ii)held inthe form ofcommodity -capital ,unable to transform itself into natural productive constant capital .in other words ,aportion ofthe commodities ofb(ii),and at that aportion which must besold ifhewishes toreconvert his entire constant capital into itsproductive form ,has become unsaleable .to that extent there isan over production , which clogs reproduction ,even onthe same scale . in this case ,the additional virtual money -capital on the side of a(i)isindeed agilded form of surplus -product (surplus -value ),but the surplus -product (surplus -value )as such isasyet but aphenomenon ofsimple reproduction , not ofreproduction onanexpanded scale .inorder that the reproduction of iicmay take place on the same scale , i(v+s)must ultimately be exchanged for iic,and this applies atall events toaportion ofis.by the sale ofhis surplus -product tob(ii),a(i)has supplied tob(ii)a certain portion ofthe value ofconstant capital initsnatural form .but atthe same time hehas rendered an equal por- tion ofthe value ofthe commodities ofb(ii)unsaleable by withdrawing the money from circulation and not mak- ing acompensating purchase .hence ,ifwe view the entire social reproduction ,which comprises both the capitalists of iand ii,then the conversion ofthe surplus -product of a(i)into avirtual money -capital implies the impossibility ofreconverting an equal portion ofthe value ofthe com- modity -capital ofb(ii)into productive (constant )capital , in other words ,not avirtual production on an enlarged scale ,but an obstruction ofsimple reproduction ,adeficit inthe simple reproduction .as the formation and sale of",
        "588capital . the surplus -product ofa(i)are normal phenomena ofsim- ple reproduction ,we have here even onthe basis ofsimple reproduction the following mutually interdependent phe- nomena :the formation ofvirtual additional money -capital in department i(implying underconsumption in depart- ment ii);the stagnation ofcommodities ofdepartment ii which cannot bereconverted into productive capital (imply- ing arelative overproduction indepartment ii);asurplus ofmoney -capital indepartment iand adeficit inthe repro- duction ofdepartment ii. without pausing any longer atthis point ,we simply repeat that we had assumed inthe analysis ofsimple repro- duction that the entire surplus -value ofiand iiisspent as revenue .as amatter offact ,however ,one portion ofthe surplus -value isspent asrevenue ,and another isconverted into capital .actual accumulation can take place only on this condition .that accumulation should take place atthe expense ofconsumption ,is,asageneral assumption ,anillu- sion contradicting the nature ofcapitalist production .for ittakes for granted that the aim and compelling motive of capitalist production isconsumption ,instead ofthe gain of surplus -value and its capitalization ,in other words ,ac- cumulation . let us now take acloser look atthe accumulation in department ii. the first difficulty with reference toiic,that istosay the conversion ofan element ofthe commodity -capital of iiinto the natural form ofconstant capital ofii,concerns simple reproduction . let ustake the formula previously used . (1000 v+1000 s)iare exchanged for 2000 iic. now ,ifone half ofthe surplus -product ofi,or500 s,is reincorporated in department ias constant capital ,then this portion ,being detained in department i,cannot take the place ofany portion ofiic.instead ofbeing converted into articles ofconsumption ,itismade toserve asan addi- tional means ofproduction indepartment iitself (and it",
        "accumulation and reproduction . 589 must be noted that inthis section ofthe circulation be- tween iand iithe exchange isactually mutual ,consisting ofadouble change ofposition ,different from the substitu- tion of1000 iv for 1000 iicbythe laborers ofi).itcan- not perform this function simultaneously iniand ii.the capitalist cannot spend the value ofhis surplus -product for articles ofconsumption ,and atthe same time consume the surplus -product itself productively ,by incorporating itin his productive capital .instead of 2000 i(v+s),only 1500 are exchangeable for 2000 iic,namely 1000 v+500 sofi.but 500 iccannot bereconverted from the form of commodities into productive constant capital ofii.hence there would beanoverproduction indepartment ii,equal involume tothe expansion ofproduction indepartment i.this over- production ofiimight react tosuch an extent on depart- ment ithat even the reflux ofthe 1000 vspent bythe labor- ers ofifor articles ofconsumption ofiimight take place but partially ,sothat these 1000 would not return tothe hands ofthe capitalists ofiinthe form ofvariable money- capital .in that case ,these capitalists would be hampered even inreproduction on asimple scale bythe mere attempt ofexpanding it.and itmust beremembered inthis con- nection that department ihad actually resumed only sim- ple reproduction ,and that only the elements classified in our diagram were differently grouped with aview of ex- panding inthe future ,say,next year . one might attempt tocircumvent this difficulty inthe following way :the 500 iicwhich are held bythe capital- ists ,and cannot be immediately converted into productive capital ,do not by any means represent any overproduction , but are,on the contrary ,anecessary element ofreproduc- tion ,which we have sofar neglected .we have seen that a money supply must beaccumulated atmany points bywith- drawing itfrom circulation ,either for the purpose offacili- tating the formation ofnew money -capital indepartment i,ortothe end oftemporarily holding the gradually de- preciating portion ofthe fixed capital inthe form ofmoney . but since we have placed allthe available money and com- modities exclusively into the hands ofthe capitalists ofi",
        "590capital . and ii,when we made up our diagram ,eliminating mer- chants ,money -changers ,and bankers ,and all merely con- suming and not directly producing classes ,itfollows that the formation ofsupplies ofcommodities inthe hands of their respective producers ishere indispensable inorder to keep the machinery ofreproduction in motion .the 500 iicnow held instock bythe capitalists ofiitherefore rep- resent the supply ofarticles ofconsumption by which the continuity ofthe process ofconsumption included inthe process of reproduction ispromoted .this means in the present case the transition from this year into next .the fund for consumption ,which isasyet inthe hands ofits sellers and producers cannot fall tothe point ofzero and begin with zero next year ,any more than such athing can take place inthe transition from to-day toto-morrow .since new supplies ofcommodities must be continually accumu- lated ,even though their volume may differ ,our capitalist producers of department ii must have areserve capital , which enables them to continue their process ofproduc- tion ,although one portion of their productive capital is temporarily tied up in the shape of commodities .our assumption isall the time that they combine the business ofamerchant with that ofaproducer .hence they must also have attheir disposal an additional money -capital , which would beinthe hands ofmerchants ,ifthe various functions in the process of reproduction were distributed among independent capitalists . but we would reply tothis argument :(1)that the forming ofsuch supplies and the necessity for itapplies to all capitalists ,those ofiaswell asofii.considering them intheir capacity assellers ofcommodities ,they differ only by the fact that they sell different kinds ofcommodities . asupply ofcommodities ofiiimplies aprevious supply ofcommodities ofi.ifwe neglect this supply on one side , we must also dosoonthe other .but ifwe count them inon both sides ,the problem isnot altered inany way .(2)just asthis year closes onthe side ofiiwith asupply ofcom- modities for next year ,soitwas opened by asupply of commodities on the same side ,taken over from last year .",
        "accumulation and reproduction .591 in the analysis ofannual reproduction ,reduced toits ab- stract form ,we must therefore strike itout atboth ends . by leaving this year inpossession ofits entire production , including the supply held for next year ,we take from it the supply ofcommodities transferred from last year ,and thus we have actually todeal with the aggregate product of anaverage year asthe object ofour analysis .(3)the sim- ple circumstance that the difficulty which must beovercome did not show itself inthe analysis ofsimple reproduction proves that itisaspecific phenomenon due merely tothe different arrangement ofthe elements ofdepartment iwith aview toreproduction ,an arrangement without which re- production onan expanded scale cannot take place atall. iii.diagrammatic presentation of accumu- lation . we now study reproduction by means ofthe following diagram : i.4000 c+1000 v+1000 s=6000diagram a)ii.1500 c+ 376 v+376 82252 total ,8252 we note inthe first place that the total volume ofthe annual product issmaller than that ofthe first diagram , being 8252 instead of9000. we might just aswell assume amuch larger sum ,for instance one ten times larger .we have chosen asmaller sum than inour first diagram ,in order to demonstrate ,that reproduction on an enlarged scale (which ishere regarded merely asaproduction car- ried on with alarger investment ofcapital )has nothing to do with the absolute volume ofthe product ,and that itimplies merely adifferent arrangement ,adifferent dis- tribution offunctions tothe various elements ofacertain product ,sothat itisbut asimple reproduction sofar asthe value ofthe product isconcerned .itisnot the quantity , but the destination ofthe given elements ofsimple repro-",
        "592capital . duction which ischanged ,and this change isthe material basis ofasubsequent reproduction on an enlarged scale.52 we might vary the diagram by changing the proportions between the variable and constant capital .for instance this way : i.diagram b)ii.4000 c+875 v+875 s=57501750 c+376 v+376 s=2502 total ,8252 in this case ,the diagram would be arranged for repro- duction on asimple scale ,sothat the surplus -value would be entirely consumed asrevenue ,instead ofbeing accumu- lated .in either case ,that of (a)aswell as(b),we have an annual product ofthe same value .only (b)has the functions ofitselements arranged insuch away that repro- duction isresumed onthe same scale ,while inthe case of (a)the arrangement forms the material basis ofreproduc- tion on an enlarged scale .for inthe case of(b),the fac- tors (875 v+875 s)i,equal to 1750 i(v+s),are ex- changed without any remainder for 1750 iic,while inthe case of (a),the exchange of (1000 v+1000 s)i,equal to 2000 (vs )i,for 1500 iicleaves asurplus of500 is for accumulation in department i. now let us analyze diagram (a)closer .let us assume that both iand iiaccumulate one half oftheir surplus- value ,that istosay,convert itinto an additional element ofcapital instead of spending itas revenue .when one half of1000 is,or500 ,are accumulated inone form oran- other ,that istosay ,invested asadditional money -capital , converted into additional productive capital ,then only (1000 v+500 s)iare spent as revenue .hence 1500 is here inserted asthe normal size ofiic.we need not ex- amine the exchange between 1500 i(v+s)and 1500 iic any more ,because this has already been done under the head ofsimple reproduction .nor does 4000 icrequire any attention ,since its re-arrangement was likewise discussed 52this puts anend,once for all,tothe feud over the accumulation ofcapital between james mill and s.bailey ,which wehave discussed from our point ofview involume i,chapter xxiv ,section 5,foot notes onpages 622 and 623,namely the feud concerning the extensibility of the effects ofindustrial capital without changing its magnitude .we shall revert tothis later .",
        "accumulation and reproduction . 593 under the head ofsimple reproduction ,although this re- arrangement isnow preparing for anew reproduction on an enlarged scale . the only thing which remains for ustoexamine is500 is and (376 v+376 s)ii,both asregards the internal con- ditions ofthe two departments and the movements between them .since we have assumed that department iiislike- wise accumulating one half ofitssurplus -value ,188 are to beconverted into capital ,ofwhich one fourth ,or47,or,to round itoff,48,are variable capital ,sothat 140 remain to beconverted into constant capital . here we come across anew problem ,whose very existence must appear strange tothe current idea that commodities ofone kind are exchanged for commodities ofanother kind , orcommodities for money and the same money for com- modities ofanother kind .the 140 iiccan be converted into productive capital only by exchanging them for com- modities ofis ofthe same value .itisamatter ofcourse that that portion ofis which must be exchanged for iis must consist ofmeans ofproduction ,which may either be fitfor service in the production ofboth iand ii,orex- clusively adapted tothe production ofii.this change of place can be made only by means ofaonesided purchase on the part ofii,asthe entire remaining surplus -product of500 is,which we shall presently examine ,isreserved for accumulation indepartment iand cannot beexchanged for commodities of ii;in other words ,itcannot be simul- taneously accumulated and consumed by i. therefore de- partment iimust buy 140 is for cash without recovering this money by asubsequent sale ofits commodities toi. and this isaprocess which iscontinually repeated inevery new annual production ,sofar asitisreproduction on an enlarged scale .where does iiget the money for this ? itrather seems asthough department iiwere avery un- profitable field for the formation ofnew money -capital ,by means of simple hoarding ,which accompanies actual ac- cumulation and isitsbasis under capitalist production . we have first 376 iiv.the money -capital of376 ,ad- vanced for labor -power ,returns through the purchase of",
        "594capital . commodities of ii continually asvariable capital tothe capitalists ofii.this continually repeated departure from and return tothe starting point ,the pocket ofthe capital- ist,does not add inany way tothe money moving inthis cycle .this ,then ,isnot asource ofthe accumulation of money .nor can this money be withdrawn from circula- tion inorder toform ahoard ,orvirtual new money -capital . but stop !isn't there achance tomake alittle profit ? we must not forget that class iihas the advantage over class ithat its laborers must buy back from itthe com- modities produced bythemselves .department iiisabuyer oflabor -power and atthe same time aseller ofthe com- modities tothe owners ofthe labor -power employed by it. department ii,then ,may do two things . (1)itmay depress the wages below its average level , and this privilege itshares with department i. by this means aportion ofthe money serving inthe function of variable capital isreleased ,and ifthis process iscontinu- ally repeated ,itmay become anormal source ofhoarding , and thus ofvirtual additional money -capital indepartment ii.of course we are not referring toacasual stolen profit here ,since we are speaking ofanormal formation ofcapi- tal.but itmust not be forgotten that the wages actually paid (which determine the magnitude ofthe variable capi tal under normal conditions )donot depend on the benevo- lence ofthe capitalists ,but must bepaid under certain con- ditions .this does away with this expedient asasource of additional money .ifwe assume that 376 visthe variable capital atthe disposal ofdepartment ii,we cannot suddenly substitute the hypothesis that the capitalists pay only 350 v instead of376 v,merely because we are confronted by a new problem . (2)on the other hand ,department ii,taken asawhole , has the above mentioned advantage over ithat itisatthe same time abuyer oflabor -power and aseller ofcommodi- ties toitsown laborers .every industrial country furnishes the most tangible proofs to what extent this may be ex- ploited ,by paying nominally the normal wages ,but grab- bing ,orinplain words ,stealing back alarge portion with-",
        "accumulation and reproduction .595 out acorresponding equivalent inwages ;by accomplishing the same thing either through the truck system ,orthrough afalsification ofthe medium ofcirculation (perhaps in a way that cannot bepunished by law ).england and amer- ica furnish such instances .(illustrate this by some strik- ing examples ).this isthe same operation asunder (1), only disguised and carried out by adetour .therefore it must likewise be rejected asan explanation ofthe present problem .the question ishere of actually paid ,not of nominal wages . we see that some extraordinary disfigurations onthe face ofcapitalism cannot beused inan objective analysis ofthe mechanism of capitalism as an excuse toget over some theoretical difficulties .but strange tosay ,the great major- ity of my bourgeois critics score me as though ihad wronged the capitalists by assuming in volume iofthis work that they really pay labor -power atits value ,athing which they rarely do!(here imay exercise some ofthe magnanimity attributed tome by quoting schaeffle .) in short ,we cannot accomplish anything with 376 iiv for the solution ofthis question . but itseems tobestill more impossible todo anything with 376 iis.here the capitalists ofthe same department are standing face toface ,mutually buying and selling their articles of consumption .the money required for these transactions serves only asamedium of circulation and must flow back tothe interested parties inthe normal course ofthings ,tothe extent that they have advanced ittothe circulation ,inorder topass again and again over the same course . there seem tobe only two ways by which this money can bewithdrawn from circulation for the purpose ofform- ing virtual additional money -capital .either one portion of the capitalists ofiicheats the others and thus robs them of their money .we know that no preliminary expansion of the circulating medium isnecessary for the formation of new money -capital .all that isnecessary isthat money should bewithdrawn from circulation by certain parties and hoarded .itwould not alter the case ,ifthis money were",
        "596 capital . stolen ,sothat the formation ofadditional money -capital on the part ofaportion ofthe capitalists ofiiwould be ac- companied by apositive loss ofmoney on the part ofoth- ers.the cheated capitalists would have tolive alittle less gaily ,that would be all. or,acertain portion ofiis,represented by necessities of life ,might be directly converted into new variable capital ofdepartment ii.how that isdone ,we shall examine at the close ofthis chapter (insection iv). (1)first illustration . a. diagram ofsimple reproduction . i.4000 c+1000 v+1000 s=6000 ii.2000 c+500 +500 s=3000 total ,9000 . b. initial diagram for accumulation on an expanded scale . i.4000 c 1000 v+1000 s ii.1500 c+ 750 v+ 7508 =3000 }total ,9000 . s assuming that indiagram bone half ofthe surplus- value ofi,amounting to500 ,isaccumulated ,we have first to accomplish the change ofplace between (1000 v+500 s)i,or1500 i(v+s),and 1500 iic.department ithen keeps 4000 cand 500 s,the last sum being accumulated . the exchange between (1000 v+1000 s)iand 1500 iicis aprocess ofsimple reproduction ,which has been examined previously . let usnow assume that 400 ofthe 500 is are tobecon- verted into constant capital ,and 100 into variable capital . the transactions within the 400 sofi,which are tobecapi- talized ,have already been discussed .they can beimmedi- ately annexed toic,and inthat case we get in depart- ment i 4400 c+1000 v+100 s(these last to be converted into 100 v). department iibuys from ifor the purpose ofaccumu-",
        "accumulation and reproduction . 597 lation the 100 is (existing inmeans ofproduction ),which thus become additional constant capital indepartment ii, while the 100 inmoney ,which this department pays for them ,are converted into the money -form ofthe additional variable capital ofi.we then have for iacapital of4400 c+1100 v(these last inmoney ),atotal of5500 . department iihas now 1600 cfor its constant capital . in order tobeable tooperate this ,itmust advance 50vin money for the purchase ofnew labor -power ,sothat itsvari- able capital grows from 750 to800. this expansion ofthe constant and variable capital ofiiby atotal of150 issup- plied out ofits surplus -value .hence only 600 ofthe 750 iis remain for the consumption ofthe capitalists of ii, whose annual product isnow distributed asfollows : ii.1600 c+800 v+600 s(fund for consumption ),a total of3000. the 150 s,produced inarticles ofconsump- tion ,which have been converted into (100 c+50v)ii,pass entirely into the consumption ofthe laborers inthis form , 100 being consumed by the laborers ofi(100 iv),and 50 by the laborers ofii(50iiv),asexplained above .depart- ment ii,where the total product isprepared inaform suit- able for accumulation ,must indeed reproduce surplus -value inthe form ofnecessary articles ofconsumption exceeding the other portions by 100. ifreproduction really starts on an expanded scale ,then the 100 ofvariable money -capital ofiflow back toiithrough the hands ofthe laborers ofi, while iitransfers 100 sincommodities toiand atthe same time 50incommodities toitsown laborers . the change made inthe arrangement for the purpose of accumulation now presents the following aspect : i.4400 c+1100 v+500 fund for consumption = 6000 ii.1600 c+ 800 v+600 fund for consumption =3000 total ,asbefore ,9000 ofthese amounts ,the following are capital : i.4400 c1100 v(money )=5500 ii.1600 c+ 800 v(money )=2400}total ,7900",
        "598capital . while production started out with i.4000 c+1000 v=5000 }ii.1500 c+ 750 v=2250 total ,7250 . now ,ifactual accumulation takes place onthis basis ,that istosay,ifreproduction isactually undertaken with this increased capital ,we obtain atthe end ofnext year : i.4400 c+1100 v+1100 s=6600 ii.1600 c+ 800 v+ 800s =3200 }total ,9800 . then letdepartment icontinue accumulation atthe same ratio ,sothat 550 sare spent asrevenue ,and 550 saccumu- lated .in that case ,1100 ivare first replaced by 1100 ic, and 550 is must be realized inan equal amount ofcom- modities ofii,making atotal of1650 i(v+s).but the constant capital ofii,which istobereplaced ,amounts only to1600 ,and the remaining 50must bemade up out of800 iis.leaving aside the money aspect ofthe matter ,we have asaresult ofthis transaction : i.4400 c+550 s(tobe capitalized );furthermore ,real- ized incommodities ofiifor the fund for consumption of the capitalists and laborers ofi,1650 (v+s). ii.1650 c(50 added from iis as indicated above )+ 800 v+750 s(fund for the consumption ofthe capitalists ). but ifthe old proportion ismaintained iniibetween v and c,then 25vadditional must beadvanced for 50c,and these must be taken from 750 s.then we have ii.1650 c+825 v+725 s. indepartment i,550 smust becapitalized .ifthe former proportion ismaintained ,440 ofthis amount form constant capital ,and 110 variable capital .these 110 must beeventu- ally taken out of725 iis,that istosay,articles ofcon- sumption tothe value of110 are consumed by the laborers ofiinstead ofthe capitalists ofii,sothat the latter are compelled tocapitalize these 110 swhich they cannot con- sume .this leaves 615 iisofthe 725 iis.but ifiithus converts these 110 into additional constant capital ,itrequires an additional variable capital of55. this again must be taken out of its surplus value .subtracting this amount from 615 iis,we find that only 560 iisremain for the",
        "accumulation and reproduction .599 consumption ofthe capitalists ofii,and we obtain the fol- lowing values ofcapital after accomplishing all actual and potential transfers : i:(4400c +440c)+(1100v +110v )=4840c +1210v =6050 ii.(1600c +50c+ 110c )+(800v + 25v+ 55v)=1760c +880v=2640 .8690 total .... ifthings are toproceed normally ,accumulation in ii must take place more rapidly than ini,because that por- tion ofi(vs )which must beconverted into commodi- ties ofiic,would otherwise grow more rapidly than iic, for which itcan alone beexchanged . ifreproduction iscontinued onthis basis and with other- wise unchanged conditions ,then we obtain atthe end ofthe following year : i.4840 c+ ii.1760 c+1210 v+1210 s=7260 880 v+ }8803520 total ,10,780 ifthe rate ofdivision ofthe surplus -value remains un- changed ,then the capitalists ofihave first tospend asrev- enue 1210 vand one -half ofs,or605 ,atotal of1815. this revenue fund isagain larger than iicby55. these 55must be taken from 880 s,leaving 825. furthermore ,the con- version of55iisinto iicimplies another deduction from iisfor acorresponding variable capital of27.5 ,leaving for consumption 797.5 iis. department ihas now tocapitalize 605 s.of these 484 are constant ,and 121 variable capital .the last named sum ,deducted from 797.5 iis,leaves 676.5 iis.depart- ment ii,then ,converts another 121 into constant capital and requires another variable capital of60.5 for it,which likewise comes out of676.5 iis,leaving for consumption 616 . then we have the following capitals : i. constant capital :4840 +484 =5824 . variable capital :1210+ 121 =1831 . ii.constant capital :1760 + 55 +121 =1936 . variable capital : 880 27.5 +60.5 = 968 . totals : i. 5324 o+1331 v=6655 ii.1936 +968 v=2904grand total 9559 .",
        "600capital . and atthe end ofthe year the product is i.5324 c+ ii.1936 c+1331 v+1331 s=7996 968 v+968 s=3872 total ,11,858 .968 s= repeating the same calculation and rounding offthe frac- tions ,we get atthe end ofthe following year the product : 1.5856 c+1464 v+1464 s=8784 ii.2129 c+1065 v+1065 =4249 )total ,13,033 . and atthe end ofthe following year : i.6442 c+1610 v+1610 s=9662 ii.2342 c+1172 v+1172 s=4686 total ,14,348 . in the course offour years ofreproduction on an ex- panded scale the aggregate capital ofiand iihas risen from 5400 c+1750 v=7150 to8784 c+2782 v=11,566 , inother words atthe rate of100 :160. the total surplus- value was originally 1750 ,itisnow 2782. the consumed surplus -value was originally 500 for iand 535 for ii,ato- tal of1035. in the last year itwas 732 for iand 985 for ii,atotal of1690. ithas therefore grown atthe rate of 100 :163 . (2).second illustration . now take the annual product of9000 ,which isalto- gether acommodity -capital inthe hands ofthe industrial capitalist class ,aform in which the average ratio ofthe variable tothe constant capital isthat of1 5.this pre- supposes aconsiderable development of capitalist produc- tion and accordingly ofthe productivity ofsocial labor ,a previous expansion ofthe scale ofproduction toaconsid- erable extent ,and finally adevelopment ofall circumstances which bring about arelative overpopulation among the working class .the annual product will then be divided asfollows ,after rounding off the various fractions : i.5000 c+1000 v+1000's =7000 ii.1430 c+285 v+285 s=2000 }total ,9000 . now take itthat the capitalist class oficonsumes one- half ofitssurplus -value ,or500 ,and accumulates the other",
        "accumulation and reproduction . 601 half .inthat case (1000 v+500 s)i,or1500 ,must becon- verted into 1500 iic.since iicamounts toonly 1430 ,it isnecessary totake 70from the surplus -value .subtracting this sum from 285 iisleaves 215 iis.then we have : i.5000 c+500 s(tobecapitalized )+1500 (v+s)in the fund set aside for consumption by capitalists and labor- ers. ii.1430 c+70s(tobecapitalized )+285 v+215 s. as 70iisare directly annexed by iic,avariable capital of70-5 ,or14,isrequired toset this additional constant capi- tal inmotion .these 14must come out ofthe 215 s,sothat only 201 remain ,and we have : ii.(1430 c+70c)+(285 v+14 v)+201 s. the disposal of1500 i(v+s)isaprocess ofsimple reproduction ,and this has been dealt with .however ,a few peculiarities remain tobenoted here ,which arise from the fact that inreproduction on an expanding scale i(v +2 s)isnot made up solely by way ofiic,but by iic plus aportion ofiis. itgoes without saying that assoon aswe assume apro- cess ofaccumulation ,i(v+s)isgreater than iic,not equal toiic,asitisinsimple reproduction .for inthe first place ,department iincorporates aportion ofits own surplus -product inits productive capital ,and converts five- sixths ofitinto constant capital ,sothat itcannot exchange these five -sixths simultaneously for articles of consump- tion ofdepartment ii.inthe second place ,department i has tosupply out of its surplus -product the material for the accumulation ofthe constant capital ofii,just asii has tosupply iwith the material for the variable capital , which sets inmotion aportion ofthe surplus -product ofi used asadditional constant capital .we know that the ac- tual variable capital consists oflabor -power ,and therefore the additional must consist ofthe same thing .itisnot the capitalist ofiwho among other things buys from iiasup- ply ofnecessities oflife for his laborers ,oraccumulates them for this purpose ,asthe slaveholder had todo.itisthe laborers themselves who trade with ii.but this does not prevent the capitalist from regarding the articles ofcon-",
        "602capital . sumption ofhis eventual additional labor -power assomany means ofproduction and maintenance ofthat labor -power , orthe natural form ofhis variable capital .his own imme- diate operation ,inthe present case that ofdepartment i, consists in merely storing up the new money -capital re- quired for the purchase ofadditional labor -power .assoon ashe has incorporated this labor -power in his productive capital ,the money becomes amedium for the purchase of commodities ofiion the part ofthis labor -power ,which must find these articles ofconsumption athand . by the way ,the capitalist and his press are often dis- satisfied with the way in which the laborer spends his money and with the commodities ofiifor which hespends it.on such occasions the capitalist philosophizes ,babbles ofculture ,and dabbles inphilanthropical talk ,for instance after the manner ofmr. drummond ,the secretary ofthe british legation inwashington .according tohim ,\"the nation \"(ajournal )contained onthe last ofoctober ,1879 , an interesting article ,which contained the following pas- sages \"the laborers have not kept step intheir civilization with the progress ofinventions ;amass ofobjects have be- come accessible tothem which they do not know how to make use of,and for which they do not create amarket .\" (every capitalist naturally wants the laborer tobuy his commodities .)\"there isnoreason why the laborer should not desire asmuch comfort asthe clergyman ,the lawyer , and the physician ,who earn the same amount ashe.\" (this class ofclergymen ,lawyers ,and physicians have in- deed tobe satisfied with wishing for agood many com- forts !)\"but he does not doso.the question isstill ,how he may beraised asaconsumer by arational and healthy method ;not an easy question ,since his whole ambition does not reach beyond areduction ofhis hours oflabor ,and the demagogue incites him tothis rather than toelevating his condition by an improvement ofhis intellectual and moral qualities .\"(reports ofh.m.'s secretaries ofembassy and legation on the manufactures ,commerce ,etc. ,ofthe countries inwhich they reside .london ,1879 ,page 404. ) long hours oflabor seem tobethe secret ofthe rational",
        "accumulation and reproduction . 603 and healthy method ,which istoelevate the condition ofthe laborer by an improvement ofhis intellectual and moral faculties and tomake arational consumer ofhim .inorder tobecome arational consumer ofthe commodities ofthe capitalist ,heshould above all begin toletthe capitalist con- sume his labor -power irrationally and unhygienically- but the demagogue prevents him !what the capitalist means by arational consumption ,isevident wherever he iscon- descending enough toengage directly inthe trade with his own laborers ,inthe truck system ,which includes also among other lines the supplying ofhomes tothe laborers , sothat the capitalist isatthe same time alandlord . the same drummond ,whose beautiful soul isenamored ofthe capitalist attempts toelevate the working class ,tells inthe same report among other things ofthe cotton goods manufacture inthe lowell and lawrence mills .the board- ing and lodging houses for the factory girls belong tothe company that owns the factories .the landladies ofthese houses are inthe pay ofthe same company and act ac- cording toits instructions .no girl ispermitted tostay out after 10 p.m. then comes agem :the special police ofthe company patrol the surrounding country ,inorder toprevent aviolation ofthis rule .after 10p.m.,no girl can leave orenter any ofthese houses .no girl can live any- where but onthe land ofthe company ,and every house on this land brings about 10 dollars per week inrent .and now we see the rational consumer inhis full glory :\"but since the omnipresent piano isfound inmany ofthe best lodging houses ofthe working girls ,music ,singing ,and dancing play aprominent role atleast among those ,who after ten hours ofunremitting labor atthe loom need a change after this monotony rather than actual rest .\"(page 412 )but the main secret ofmaking arational consumer ofthe laborer isyet tobetold .mr. drummond visits the cutlery factory ofturner's falls ,connecticut river ,and mr. oakman ,the treasurer ofthe company ,after telling him that especially american table knives beat the english goods in quality ,continues :\"but we shall beat england also inthe matter ofprices ,we are ahead ofitinquality",
        "604capital . even now ,that isacknowledged ;but we must have lower prices ,and we shall get them assoon aswe get our steel cheaper and bring down our labor .\"(427 ).areduction ofwages and long hours oflabor ,that isthe essence ofthe rational and healthy method which istoelevate the laborer tothe dignity ofarational consumer ,inorder that he may create amarket for the mass ofobjects which civilization and the progress ofinvention have made accessible tohim . to repeat ,then ,just asdepartment ihas tosupply the additional constant capital ofiiout ofitssurplus -value ,so iisupplies the additional variable capital for i. depart- ment iiaccumulates for itself and for i,sofar asthe vari- able capital isconcerned ,by reproducing agreater portion ofitstotal product ,especially ofitssurplus -product ,inthe shape ofnecessary articles ofconsumption . i(vs ),inthe case ofproduction on the basis ofin- creasing capital ,must beequal toiicplus that portion of the surplus -product which isre-incorporated ascapital ,plus the additional portion ofconstant capital required for the expansion ofthe production ofii;and the minimum of this expansion isthat without which actual accumulation , that istosay,an actual expansion ofthe production ofi, isimpossible . reverting now tothe case which we examined last ,we find that ithas the peculiarity that iicissmaller than i (v+ s),smaller than that portion ofthe product of iwhich isspent asrevenue for articles ofconsumption ,so that aportion ofthe surplus -product ofii,equal to70,isat once realized for the purpose ofdisposing ofthe 1500 i(v +s).asfor iic,equal to1430 ,itmust ,other circumstances remaining the same ,bereproduced out ofan equal amount ofi(v+s),in order that simple reproduction may take place ,and tothat extent we need not pay any more atten- tion toit.itisdifferent with the additional 70iic.that which isfor imerely an exchange ofrevenue for articles ofconsumption ,isfor iimore than amere reconversion of",
        "accumulation and reproduction .605 its constant capital from the form of commodity -capital into its natural form ,asitisinsimple reproduction ,for it isaprocess ofdirect accumulation ,atransformation ofa portion ofits surplus -product from the form ofarticles of consumption into that ofconstant capital .ifibuys with 70 p.st.in money (money -reserve for the conversion of surplus -value )the 70 iis,and ifiidoes not buy inex- change 70 is,but accumulates the 70 p.st.as money- capital ,then this money isindeed always the expression of an additional product (namely the surplus -product ofii, the equivalent ofwhich itis),although this isnot aproduct which returns into the production ;but inthat case this ac- cumulation ofmoney on the part ofiiwould bethe evi- dence that 70 isin means ofproduction are unsaleable . there would be arelative overproduction ini,correspond- ing toasimultaneous break inthe reproduction ofii. but apart from this ,the following point must benoted : during the time inwhich the 70 in money ,which came from i,have not asyet returned toit,orhave but partially done so,by the purchase of70 isonthe part ofii,this 70inmoney figures entirely orinpart asadditional virtual money -capital inthe hands ofii.this istrue ofevery transaction between iand ii,before the mutual replace- ment oftheir respective commodities has accomplished the reflux ofthe money toitsstarting point .but the money , under anormal condition ofthings ,figures here only tem- porarily inthis role .inthe credit system ,however ,where all momentarily released money istobe used immediately asan active additional money -capital ,such atemporarily released money -capital may beengaged ,for instance ,innew enterprises ofi,while itstill would have toliquidate addi- tional products held inother enterprises .itmust also be noted that the annexation of70istothe constant capital of iirequires atthe same time an expansion ofthe variable capital ofiitothe extent of14. this implies ,similarly asitdid inthe direct incorporation ofthe surplus -product ofis incapital ic,that the reproduction iniiisalready in process with aview to further capitalization ;inother words ,itimplies the expansion of that portion of the",
        "600 capital . surplus -product ,which consists ofnecessary articles ofcon- sumption . the product of9000 ,inthe second illustration ,must be distributed inthe following manner for the purpose ofre- production ,when 500 isistobe capitalized .we merely consider the commodities inthis case and leave aside the circulation ofmoney . i.5000 c+500 s(tobecapitalized )+1500 (v+s)fund for consumption ,atotal of7000 in commodities . ii.1500 c+299 v+201 s,atotal of2000 incommodi- grand total ,9000 incommodities . ties . capitalization takes place inthe following manner : in department i,the 500 s,which are capitalized ,divide themselves into five -sixths ,or417 c,plus one -sixth ,or83v. the 83vdraw anequal amount out ofiis,which buys ele- ments ofconstant capital and adds them toiic.an in- crease ofiicby 83implies an increase ofiivby one-fifth of83,or17. we have ,then ,after this transaction i.(5000 c+417 s)+(1000 v+83s)=5417 c 1083 v=6500 ii.(1500 c+ 83s)+(299 v+17s) 1583 c+316 v=1899 ..8399 total ..= the capital inihas grown from 6000 to6500 ,orby 1-12 . that ofiihas grown from 1715 to1899 ,orby nearly 1-9. the reproduction on this basis inthe second year brings the capital atthe end ofthat year uptothe following figures : 1.(5417 c+452 s)c+(1083 v+90s)v=5869 c+1173 v=7042 . ii.(1583c +42s +90s)c+(316v +8s+18s)v=1715c +342v==2057 . and atthe end ofthe third year ,we have asaproduct : i.5869 c+1173 v+1173 s. ii.1715 c+ 342 v+ 342 s. ifdepartment ithen accumulates asbefore one -half of its surplus -value ,we find that i(v+2s),1173 v+587 (2s),amount to1760 ,more than the entire 1715 iic, namely an excess of45. this must again bebalanced by annexing an equal amount ofmeans ofproduction toiic, which thus grows by 45. this again requires an addition",
        "accumulation and reproduction .607 ofone -fifth ,or9,toiiv.furthermore ,the capitalized 587 isare divided into five -sixths and one -sixth respectively , that istosay,489 cand 98v.these last 98imply anew addition of98tothe constant capital ofii,and this again an increase ofthe variable capital ofiiby one -fifth ,or20. then we have . i.(5869 c+489 8)c+(1173 v+98s)v=6385 c+1271 v= 7629 . ii.(1715 c+45 s+98s)c+(342v+9s+20 s)v=1858 c+371 v=2229 . total capital .. .9858 inthree years ofreproduction on an increasing scale the total capital ofihas grown from 6000 to7629 ,and that of iifrom 1715 to2229 ,orthe total social capital from 7715 to9858 . (3).exchange ofii cunder accumulation . inthe exchange ofi(v+s)with iicwe meet with dif ferent cases . under simple reproduction ,both ofthem must be equal and take one another's places ,otherwise simple reproduction cannot proceed smoothly ,aswe have seen . under reproduction on an expanded scale ,itisabove all the rate ofaccumulation which isimportant .inthe pre- ceding cases we had assumed that the rate ofaccumulation indepartment iwas equal toone -half ofis,and also that itremained constant from year to year .we changed merely the proportion in which this accumulated capital was divided between variable and constant capital .we then had three cases . (1)i(v+28 )equal toiic,which istherefore smaller than i(v+s).this must always bethe case ,otherwise i cannot accumulate . (2)i(v+2s)greater than ii c.in this case the ex- change iseffected by adding acorresponding portion ofii stoiic,sothat this becomes equal toi(v+1/2s).inthis case ,the transaction indepartment iiisnot asimple re- production of its constant capital ,but accumulation ,an augmentation ofits constant capital by that portion ofits surplus -product which itexchanges for means ofproduction",
        "608capital . ofi. this augmentation implies atthe same time acorre- sponding addition tothe variable capital ofiiout ofits own surplus -product . (3)i(v+2s)smaller than iic.in this case depart- ment iihad not fully reproduced its constant capital by means ofexchange and had tomake good the deficit by a purchase from i. but this did not require any further ac- cumulation ofvariable capital on the part ofii,since its constant capital was brought only toits full size by this operation .on the other hand ,that portion ofthe capital- ists ofiwho accumulate only additional money -capital ,had already accomplished apart ofthis accumulation by this transaction . the premise ofsimple reproduction ,that i(v+s)is equal to iic,isirreconcilable with capitalist production , although this does not exclude the possibility that acertain year inanindustrial cycle of10or11years may not show asmaller total production than the preceding year ,sothat there would not have been even asimple reproduction , compared tothe preceding year .indeed ,considering the natural growth ofpopulation per year ,simple reproduction could take place only insofar asacorrespondingly larger number ofunproductive servants would partake ofthe 1500 representing the aggregate surplus -product .but accumula- tion ofcapital ,actual capitalist production ,would be im- possible under such circumstances .the fact ofcapitalist production therefore excludes the possibility ofiicbeing equal toi(v+s).nevertheless itmight occur even under capitalist production that inconsequence ofthe process of accumulation during apreceding number of periods of production iicmight not only beequal ,but even greater than i(vs ).this would mean an overproduction in iiand could not becompensated inany other way than by agreat crash ,in consequence ofwhich some capital ofii would be transferred toi. itdoes not alter the relations ofi(v+s),ifaportion ofthe constant capital ofiire- produces itself ,ashappens ,for instance ,inthe employment ofhome raised seeds in agriculture .this portion ofiic has no more reference tothe exchange between iand ii",
        "accumulation and reproduction .609 than has ic.nor does italter the matter ,ifaportion of the products ofiiare ofsuch anature that they may serve asmeans ofproduction ini. they are covered byaportion ofthe means ofproduction supplied iniiby i,and this portion must bededucted on both sides atthe outset ,ifwe wish toanalyze without any obscuring interference the ex- change between the two great departments ofsocial produc- tion ,the producers ofmeans ofproduction and the produc- ers ofarticles ofconsumption . to repeat ,then ,under capitalist production i(v+s) cannot beequal toiic,inother words ,the two cannot bal- ance .on the other hand ,naming is-xthat portion ofis which isspent by the capitalists asrevenue ,we see that i (v+s-x)may be equal to,greater orsmaller than ,iic. but i(v+s-x)must always besmaller than ii (c+s), namely ,asmuch smaller asthat portion ofiiswhich must beconsumed under all circumstances by the capitalist class ofii. itmust be noted that inthis presentation ofaccumula- tion the value ofthe constant capital ,sofar asitisaportion ofthe value ofthe commodity -capital ,which ithelped to produce ,isnot exactly represented .the fixed portion of the newly accumulated constant capital istransferred tothe commodity -capital only gradually and periodically accord- ing tothe different nature ofthese fixed elements .where- ever raw materials and halfwrought articles are employed inlarge quantities for the production ofcommodities ,the commodity -capital therefore consists overwhelmingly ofob- jects replacing circulating constant elements and variable capital .(on account ofthe turn -over ofthe circulating elements this method may nevertheless be adopted .itis then assumed that the circulating portion together with that portion ofvalue which the fixed capital has transfer- red toitisturned sooften during the year that the aggre- gate sum ofthe commodities supplied isequal invalue to all the capital invested inthe annual production .)but wherever only auxiliary materials are used for machine work ,and noraw material ,there v,the labor element ,must reappear in the commodity -capital as its largest factor .",
        "610capital . while inthe calculation ofthe rate ofprofit the surplus- value isfigured on the total capital ,regardless ofwhether the fixed elements transfer periodically much orlittle value tothe product ,the fixed portion ofconstant capital isin- cluded inthe calculation ofthe value ofany periodically created commodity -capital only tothe extent that ityieldr acertain average ofvalue tothe product . iv.concluding remarks . the original source for the money ofiiisv+softhe gold producers indepartment i,exchanged for aportion of iic.only tothe extent that the gold producer accumu- lates surplus -value orconverts itinto means ofproduction ofi,inother words ,tothe extent that he expands his pro- duction ,does his vs stay out ofdepartment ii.on the other hand ,tothe extent that the accumulation ofgold on the part ofthe gold producer himself leads ultimately to an expansion ofproduction ,aportion ofthe surplus -value ofgold production not spent asrevenue passes into depart- ment iiasadditional variable capital ofthe gold producers , promotes the accumulation ofnew hoards in iiand sup- plies itwith means bywhich tobuy from iwithout having tosell toitimmediately .from this money derived from i(vs )ofgold production must bededucted that portion ofgold which isemployed by certain lines ofiiasraw ma- terial ,etc. ,inshort asanelement for building up their con- stant capital .an element of preliminary reproduction , for the purpose offuture expanded production ,iscreated for either iorii under the following conditions :for i only when aportion ofisissold onesidedly ,without a balancing purchase ,to ii and serves there asadditional constant capital ;for ii,when the same case occurs on the part ofiwith reference tothe variable capital ;furthermore when aportion ofthe surplus -value spent by iasrevenue isnot covered by iic,sothat aportion ofiisisbought with itand thus converted into money .ifi(v+s-x)is",
        "accumulation and reproduction .611 greater than iic,then iicneed not for its simple repro- duction make up in commodities ofiwhat ihas taken out ofiis.the question is,towhat extent hoarding may take place within the exchange ofthe capitalists ofiiamong themselves ,anexchange which can consist only ofamutual crossing ofiis.we know that direct accumulation takes place within iiby means ofdirect conversion ofaportion ofii sinto variable capital (just asdepartment icon- verts aportion of is directly into constant capital ).in the various stages of accumulation within the different lines ofbusiness ofii,and for the individual capitalists of these lines ,the matter explains itself ,with the self -under- stood modifications ,inthe same way asini. one side is still engaged in hoarding and sells without buying ,the other ison the point ofactual expansion ofreproduction and buys without selling .the additional variable money- capital isfirst advanced for additional labor -power ,but this ,in its turn ,buys articles of consumption from the hoarding owners ofthe additional articles ofconsumption used by the laborers .to the extent that these owners hoard the money ,itdoes not return toitspoint ofdepart- ure . end of volume two .",
        "aindex . accumulated wealth ,insignificant compared toproductive forces ,370.accumulation ,ofadditional capital ,its diagramatic presentation ,591. additional capital ,inproduction ofprecious metals not withdrawn in money ,but increased byproductionofmore precious metals ,377. additional capital ,its function indifferences ofturn-over,311. additional capital ,required fornormalconservation offixed capital ,belongs tothecirculating capital ,200. advanced capital ,aclear conceptionofitsnature necessary forunder- standing ofturn-over,352. agricultural capital ,itspeculiar move .ments ,112.auction sales ,their effect onthe market supply ofcommodities ,291.auxiliary materials ,circulate only their value bytransfer tothe pro- duct,likethefixed capital ,180.auxiliary materials ,donot circulatetheir value piecemeal ,like fixed capital ,buttransfer itwholly totheproduct ,like raw materials ,186. auxiliary materials ,mistakenly classifiedbyramsay asfixed capital ,180.auxiliary materials ,some ofthem maytransfer both substance and value to theproduct ,186.average rate ofprofit ,problem offeredbyengels toofficial economists ,28. b bailey ,hisidea ofvalue ,121.bookkeeping ,unproductive expense ofcirculation ,151.  capital ,anexpression oflabor ,81.capital ,distinctive mark ofitscom-modity -form from itsmoney -form ,55.capital ,inafallow state ,139.capital ,industrial defined ,59.(seealso industrial capital ,productive capital ,and agricultural capital .)capital ,its different functions ex- pressed through different forms ,57. capital ,itsindividual and social roleincirculation ,64,110. capital ,itsmoney -form superior toitscommodity -form from acapitalist point ofview,84.capital ,itsforms differ when individ- ually and socially considered ,426. capital ,its release inthe various periods ofturn-over,300. capital ,latent ,must increase inpro-portion asreproduction isirregular ,161. capital ,rotation ofitsdifferent forms ,58.capitalist ,must bemoney -capitalist inhisrelation tothelaborer ,68. capitalist production ,itsdevelopmentincreases commodity -supply ,163. capitalist production ,itsinfluence onbuilding trade ,266. capitalist production ,itsmain ele- ments ,44. circulating capital ,aportion alwaysintheform ofreleased capital ,320.circulating capital ,consists ofrawand auxiliary materials and labor-power ,186. circulating capital ,distinguished fromcapital ofcirculation ,218.circulating capital ,itselements con-tinually reproduced intheir naturalform ,not interruptedly asthose offixed capital ,191.circulating capital ,itsform conceals surplus -value ,248.circulating capital ,not distinguished byeconomists from variable capital ,182. circulation ,agents of,paid byagents ofproduction ,144.circulation ,does not change itsun- productive character bytransfer ,148.circulation ,illusive character ofitstypical formula ,69.circulation ,itsexpenses ,seeexpenses .circulation ,ofcommodities ,itsgen-eral laws donot apply tofunc-tional sections ofcycles ofindivid ualcapital ,129.circulation ,itsrole indetermining themeaning offixed and circulatingcapital ,246.circulation ,its three cycles simul- taneous phases ofindustrial capital ,115. circulation ,itsthree diagrams ,114. circulation ,ofcapitalist commodities ,influence circulation ofother com-modities ,125. circulation ,ofcommodities ,itslaw,378.circulation ,ofmoney ,has for its starting point the capitalist class ,384.circulation ,necessary inprocess ofreproduction ,butitself unproductive ,149. circulation ,time of,138. (see alsotime ofcirculation ).classification ,ofreproduction ,inavague way,131.commercial crisis ,caused byirregularities inthe turn-over ofcapital ,365. commercial crisis ,interferes with smooth flow ofreproduction ,475.commercial crisis ,through lack of balance inproduction ,545.commodities ,formation ofsupply mayrequire productive labor and add value toproduct ,156. 613",
        "614 index . commodities ,formation ofnormal sup-plyanexpense adding value ,167.commodities ,formation ofabnormal supply ,decreases value ,168.commodities ,general formation of supply ,155.commodities ,the ideal and real separation ofthe value ofdifferent kinds ,75.commodities ,their voluntary and in- voluntary supply ,166.commodities ,the typical form ofpro-ducts under capitalism ,43.commodities ,when revenue and when capital ,449.commodity -capital ,itstransformation into money -capital ,48.commodity -capital ,different circula-tion assurplus -value and capital- value ,76.commodity -capital ,general formula ofitscirculation ,98.commodity -capital ,separation ofitsvalue into capital -value and surplus-value ,53,102.complaints ,ofemployers characteristic ofearly stage ofcapitalist develop-ment ,41.concentration ofcapital ,promoted bycredit ,268.consumption ,individual ,ofcapitalist , not included informula ofrepro-duction ofmoney -capital ,56,66.consumption ,individual and produc-tive interrelated ,106.consumption ,not identical with sale,86. consumption ,productive ,apart ofthecycle ofcapital ,85.continuity ,essential tocapitalist re- production ,116,118,119.credit ,complicates relations between originally advanced capital and capi- talized surplus -value ,368.credit ,not analyzed involume ii, (seevolume iii).credit -system ,itsinfluence onindivid- ualand social turn-over ofcapital ,214. crisis ,commercial ,new basis for cycles ofturn-over,211.crisis ,commercial ,duetodecrease in exchange ofcapitals ,87.crop rotation ,itsinfluence onturn- over ofcapital ,282. d demand ,may bedemand forpaymentordemand forconsumption ,87.depreciation ,allowed for incapitalcalculation asnecessary ,203. depreciation offixed capital ,throughdisuse ,adds value toproduct ,276.destutt detracy ,histheory ofre-production criticized ,560.differences ,real andapparent ,inturn-over ofcomponent parts ofcapital ,212. distance ,ofmarkets ,affects turn-over ofcapital ,285.distribution ,itsmeaning incapitalistproduction ,40.division oflabor ,does not make anunproductive function productive ,152. e elements ofproduction ,their differentforms ,45.exchange ,between constant and vari-able capitals ofthe two depart-ments ofreproduction ,462.exchange ,between the two depart-ments ofreproduction ,460.exchange ,within department ii,forreproduction ,465.expansion ofcapital ,intensive andextensive ,195.expenses ofcirculation ,147.expenses of circulation ,due to storage and formation ofsupply ,enter inpart into value ofcommodi-ties,157.expenses ofcirculation ,general rule determining whether they add valueornot,169. expenses ofcirculation ,genuine ,147.expenses ofcirculation ,ifpreservinguse-value ofproduct ,preserve alsoexchange -value ,158.expenses ofstorage ,may add valueand surplus -value tothe product ,155.expenses oftransportation ,add valuetoproduct ,170. f fixed capital ,itspeculiar form ,178.fixed capital ,itscirculation only acirculation ofvalue ,notofsubstance ,179. fixed capital ,difficulty inanalyzingrole ofmoney inreproduction ofwear and tear,529. fixed capital ,itsdistinction from cir- culating capital not due totheirdifferent role inproduction buttotheir different mode ofturn-over,189. fixed capital ,itsdistinction from cir-culating capital refers only toprod-uctive capital ,not tocommodity .capital and money -capital ,190.fixed capital ,its durability deter-mines ratio ofitstransfer ofvalue ,179. fixed capital ,its effectiveness ,in-creased bymore intensive exploitation oflabor without anincrease ofcapital ,409.fixed capital ,itsindividual elements have different periods ofturn-over,192.fetishism ,typical of bourgeois economy ,257.fixed capital ,accumulation ofare-serve fund ofmoney foritsrepro-duction ,185.fixed capital ,distinguished from cir-culating capital bydifferent mode ofturn-over,187. fixed capital ,itspeculiar role intheturn-over ofcapital ,185. fixed capital ,itsreproduction inanatural form ,532.fixed capital ,itsturn-over comprizesseveral turn-overs ofcirculating capital ,190,",
        "index . 615 fixed capital ,itsvalue advanced inonelump sum,butrecovered inin- stallments ,190.fixed capital ,mistaken for constantcapital ,182. fixed capital ,may lose itscharacterassuch under certain circumstances ,181,183. fixed capital ,notnecessarily immov-able,240. fixed capital ,requires periodical in-vestment ofadditional capital for repairs and labor -power ,198. h hoard ,ofmoney ,itsdevelopment intoloanable capital ,576.hoard ,ofmoney ,itsformation under reproduction onanenlarged scale ,574. hoarding ,aphase inthe circulation ofcapital ,60. i industrial capital ,itsfirst and sub-sequent investments ,70.industrial capital ,its individual volume depends onsocial conditions ,117. industrial capital ,makes independent money -capital and commodity -capitalsubordinate toitself ,63. industrial capital ,only apart activelyengaged inprocess ofproduction ,ifproduction istoproceed uninter- ruptedly ,305.interest ,not analyzed involume ii,seevolume iii. irregularities ,intheprocess ofrepro-duction ,130. l labor ,advanced bylaborer tocapi-talist ,247.labor ,resolves itself into necessary andsurplus -labor ,443.labor ,spent inkeeping fixed capital innormal working order isanele- ment ofcirculating capital ,197.laborer ,hispoint ofview concerning andhisrelation tomoney -capital ,38. labor -power ,itsdecreasing proportiontothemeans ofproduction ,134.labor -power ,its quantitative qualitative relation tomoney -capital ,33.labor -power ,itsproductive consump tion,42.labor power ,social ,aportion ofit expended inthe production ofgoldand silver ,375.labor -time ,itsrole intheprocess of production ,141.labor -time ,small compared totimeofproduction intimber raising ,272. latent capital ,itsdifferent forms ,330. latent capital ,notproductive ofsur-plus-value ,342. legislation ,distinguishes between natural wear and tear offixed capi-taland occasional repairs ,201.m machinery ,when fixed capital and when merely commodity -capital ,181.manuscripts ofmarx forvolume ii,8,9,10,11. manuscripts ofmarx ,forvolume iii,12. market combinations ,their effect on theturn-over ofcapital ,364.market -prices ,ofproducts ,may mean loss orgain ofcapital ,334.marx ,karl,histheory ofsurplus -value vindicated ,24.material ,when circulating and whenfixed capital ,251.means ofproduction ,their relation tomoney -capital ,34.mechanism ofcapitalism ,itsabnor-malities are not asound basis fortheoretical analysis of capitalist economics ,595. merchants 'capital ,itsrelation toin- dustrial capital ,126.money ,ahomogeneous medium for measuring the turn-over ofcapital ,209. money ,advanced inexchange ofcom-modities flows back toadvancing capitalist ,478.money ,asareserve fund,96. money ,incirculation ,itsquantity somuch smaller themore frequently itisadvanced ,480.money ,inexcess ofvalue ofcommodi- ties does not increase value incir- culation ,464. money ,itsrelation tomoney -capital ,35. money ,itsrole asahoard ,95.money ,itsrole inthereproduction ofthe wear and tear offixed capital ,526. money ,not consumed productively orindividually ,154.money ,historical order ofitsforms ,128. money ,increased speed ofitscircula-tion does not necessarily mean a more rapid turn-over ofcapital ,395. money ,may becapital inonehand andrevenue inanother ,511. money ,the quantity used forthecir-culation oftheannual product musthave been produced inprevious years ,except the small amount needed tomake upfordepreciation ,557. money ,thetangible form ofvalue ,65.money -capital ,additional ,when re- quired ,122.money -capital ,composition ofvalue ofitselements ,47.money -capital ,its circulation the typical form ofcirculation ofin-dustrial capital ,67.money -capital ,itsown limitations andtheir influence inlimiting social capital ,412.money -capital ,itsthree stages ofcir-culation ,31. money -capital ,itsfirst stage ofcir-culation analyzed ,32.money -capital ,itssecond stage ofcir-culation ,41.",
        "616 index . money -capital ,itsthird stage ofcir-culation ,46. money -capital ,itstransformation into productive capital ,36.money -capital ,latent ,its differentforms ,402. (see also latent andpotential capital ). money -capital ,virtual ,its growththrough hoarded surplus -value ,582. money -capital ,released bymechanismofturn-over,322.money ,reproduction ofitssupply ,547.money -capital ,significance ofitscyclesassurplus -value andcapital -value ,51.money -capital ,two errors ofcon- ception ,39.money -capital ,two observations con- cerning itsmoney -form ,52.money -system ,common toallstages ofcommodity -production ,132.money system ,itscharacteristic \"sig-nature ,37. overproduction ,anecessary con- sequence ofreproduction onanen-larged scale ,202. owen ,richard ,hiscommunism basedupon ricardo's economics ,21.  thiogistic theory ,its analogy to theory ofsurplus -value ,23. 'hysiocrats ,donotconfuse capital ofcirculation with circulating capital ,250. physiocrats ,their theory offixed and circulating capital ,215.physiocrats ,their theory ofreproduc-tion,414.potential capital ,290.prices ,confusion ofcause and effectintheir fluctuations ,393.prices ,effect oftheir change onturn- over ofcapital ,326.prices ,their fall requires additionalmoney -capital tofillupturn-over,327. prices ,their rise releases capital inturn-over,328. production ,seecapitalist production .production ,ofprecious metals ,adeadexpense ofsocial labor -power andmeans ofproduction ,399.production ,ofprecious metals throwsadditional money into circulation ,396. production ,social ,itstwodepartments ,457. production ,social ,itsvolume reduced byproduction ofprecious metals ,411. production ,time of,138. (see alsotime ofproduction .) productive capital ,its function re-quires combination oflabor -power andmeans ofproduction ,109.productive capital ,itsperiodical re-production ,72. productive capital ,itsreproduction onanenlarged scale ,89.productive capital ,itssimple repro-duction ,73.productive industries ,without com-modities ,61.productive supply ,281,302.profit ,average rate of,solution of problem promised involume iii,28.profit ,notanalyzed involume ii,seevolume iii. proportion ,ofquantities and qualitiesofelements ofproduction determinesscale ofreproduction ,94.prosperity ,ofworking class anin-dication ofapproaching crisis ,476. r railroads ,their development shortens turn-over ofcapital ,286.railroads ,their extension builds uptheworld market ,287.recapitulation ,ofwhat has gone be-fore onthe subject ofproduction and circulation involumes iand ii,406. release ofcapital ,does nottake placewhen working ,period equal tocir-culation period ,319.release ,ofcapital ,inthe turn-over,300. released capital ,its amount deter-mined bydifferences ofturn-over,317.released capital ,passes into moneymarket ,323.released capital ,theopinion ofengelsconcerning itssignificance ,324.repairs ,juggling with this term andreproduction ,205.repairs ,notclearly distinguished fromreproduction ,204.reproduction ,comprises productiveand individual consumption ,405.reproduction ,itsentire cycle ,404. reproduction ,itsgeneral formula p-p'does notindicate capitalist characterofproduction asdoes m-m,'104.reproduction ,its scale varied byrapidity oftransformation ofcom-modity -capital into money -capital49. reproduction ,ofthe capitals ofthetwo departments ofproduction ,459.reproduction ,ofsocial capital ,onanenlarged scale ,571.reproduction ,ofvalues and ofsub-stance ,454, reproduction ,onasimple scale ,455.reproduction ,onasimple scale ,foundinreproduction onanenlarged scale,456.reserve fund ,ofmoney ,not apart ofmoney -capital infunction ,97.ricardo ,david ,accepted the theoryofadam smith concerning com- position ofvalue ,450.ricardo ,david ,failure ofhisschool ,27. ricardo ,david ,hisconception ofsur- plus-value criticized ,18,19.ricardo ,david ,hisconfusion offixed ,circulating variable and constant capital criticized ,255.ricardo ,david ,hisdefinition offixedandcirculating capital ,254.ricardo ,david ,hisuseofthetheory offixed and circulating capital ,245.",
        "index . 617 rodbertus ,his charge ofplagiarismrefuted ,12,13,14.rodbertus ,histheory ofground rentanalyzed ,15.rotation ,ofmoney distinguished fromitscirculation ,394. s sale,ofcommodities ,itsamount in-fluences turn,331.savage producer ,indifferent tolabor time,510.sinking fund ,for reproduction fixed capital ,206.of sinking fund ,forfixed capital ,itsrole inthe formation ofamoney -hoard ,207. sismondi ,hisconception ofmerchants ' capital ,127.sismondi ,his theory ofcommercial crises ,26.smith ,adam ,believed that theentire value ofthe social product resolveditself into wages and surplus -value ,504. smith ,adam ,hisanalysis ofcapitalandrevenue ,436. smith ,adam ,hisanalysis ofcapitaland revenue dissected ,437.smith ,adam ,hiscomposition ofvaluecriticized ,419.smith ,adam ,his conception ofthecomposition ofthe value ofcom- modities ,418.smith ,adam ,hisconfusion inthemat- teroffixed and circulating capitaltransmitted toother economists ,227.smith ,adam ,hisconfusion offixed andcirculating capital criticized ,216to244.smith ,adam ,hisidea that thevalueofproducts must bepaid inlastin- stance byconsumers istrue only, ifby\"consumers \"ismeant both in- dividual and productive consumers ,506.smith ,adam ,hisinconsistencies ex- posed ,429.smith ,adam ,hisjuggling with con- stant capital ,430.smith ,adam ,hisprogress and short-comings inthe formulation ofa theory offixed and circulating capi- tal,216,220,221. smith ,adam ,hisretrogression intheanalysis ofreproduction ,415.smith ,adam ,hisshallow conceptionoftheamount ofmoney required for the circulation ofthe annual pro-duct,554. smith ,adam ,histheory ofsurplus- value criticized ,16,17.smith ,adam ,mistakes supply ofuse-values for supply ofcommodities ,159.smith ,adam ,realizes significance of departments ofmeans ofproductionandmeans ofconsumption ,421.smith ,adam ,results ofhisconfusion summed up,258.smith ,adam ,the scientific parts of histheory ofreproduction summed up,424.social plan,notfollowed incapitalist production ,196.speculation ,itsinfluence inthe circulation ofcapital ,362.surplus ,ofproducts ,anevil under capitalism ,546.surplus -value ,apparent tions initslaw,343.contradic- surplus -value ,appropriated inpro-duction ,distributed incirculation ,445.surplus -value ,hoarded as latent money -capital ,369.surplus -value ,insimple reproduction ,374.surplus -value ,influence ofcirculation onitsrate misinterpreted ,340. surplus -value ,influence ofitsaccumu-lation oncirculation ,367. surplus -value ,itsaccumulation ,not itsexpenditure asprivate revenue ,essential in capitalist production ,136. surplus -value ,its capitalizationpressed byformula p-p,'91.surplus -value ,its circulation accumulation ,397.ex- under surplus -value ,itsfunction intheturn- over,338.surplus -value ,itsrate andmass inthe turn-over ofcapital ,339. surplus -value ,itsrealization incom-modity -capital ,50.surplus -value ,itsrole inbuying and selling ,133. surplus -value ,laws relating toitareinforce only forcapital actually in-vested inworking process ,341. surplus -value ,money foritsrealizationthrown into circulation bycapitalistclass ,385.surplus -value ,spent asrevenue ,is eliminated from thecycle ofcapital ,79. surplus -value ,used for reproductionoffixed capital ,itspeculiar role incirculation ,367.suspended capital ,seereleased capi-tal,321. swindling ,itsinfluence inthecircula-tion ofcapital ,362. t time ofcirculation ,itsinfluence on thescale ofproduction ,295. time ofproduction ,greater than work-ingperiod ,273. time ofproduction ,inagriculture ,itsinfluence onhouse industry ,275.time ofproduction ,itsdifference from the working time particularly ap-parent inagriculture ,274. transportation ,its improvement re-duces time ofcirculation ,332.technical revolutions ,their influence onvalues ,121. thompson ,william ,quoted asarep-resentative ofutopian socialists ,21.time ofcirculation ,138.time ofcirculation ,causes concealingitsunproductive character ,143.time ofcirculation ,itsabsolute limit thedurability ofcommodities ,145.time ofcirculation ,limits time of production ,142.time ofcirculation ,notproductive of surplus -value ,142.",
        "818 index . time ofproduction ,includes delays of product inprocess ofproduction ,138.transportation ,itsdevelopment doesnot reduce latent supply ofcom-modities ,but merely changes itsform ,162. transportation ,itspeculiar productivecharacter incirculation ,172.transportation ,produces change oflocation ,62. turn -over ,effect ofitsprolongation onsmall farmers ,269. turn -over ,ofcapital ,itsdifferencesbasis ofterms ofcredit ,288. turn -over ,ofcapital ,differences ofitsthree formulae ,174.turn -over ,ofcapital ,distinguishedfrom reproduction ofitsparts ,210.turn -over ,ofcapital ,inaccuracy ofterms ,307.turn -over ,ofcapital ,influence ofcom-parative length ofitsperiods ofcir-culation and production ondiffer-ences ,305. turn -over ,ofcapital invested incattleraising shortened bynew strains ,270.turn -over ,ofcapital ,itscycles ,208.turn -over ,ofcapital ,itscycles ex-panded or contracted bycapital ,304.reserve turn -over ,ofcapital ,itsinfluence onthe rate ofsurplus -value ,358.turn -over ,ofcapital ,itsrole intheprocess ofcirculation ,135.turn -over ,ofcapital ,itstime deter- mined bysum oftime ofproductionplus time ofcirculation ,176.turn -over ,ofcapital ,itstime fromcapitalist point ofview signifies timeofreturn oforiginal capital ,177.turn -over ofcapital ,means return ofadvanced value toitsoriginal formplus surplus -value ,173.turn -over ,ofcapital ,significance ofdifferent cycles forformation ofsur-plus-value and ofproduct ,175. v value ,additional created by latentcapital ,140.value ,influence ofitsreduction on reproduction ofcapital ,123.value ,itsrevolutions donot changeproportions ofitselements ,455.value ,itsselfdeveloping andautomaticnature ,120.value ,ofannual social product ,diffi-cult toanalyze ,because itsconstantportion consists ofdifferent class of products than itsnew portion ,501.value ,ofcommodities ,dissected ,447.value ,ofproduct ,distinguished from product invalues ,508.value ,ofcommodities ,only tempo-rarily changed by fluctuations in wages ,392.value ,ofpast labor and capital inspecious argument ofcarey ,410.variable capital ,formulae ofitsturn-over,347,348,349.variable capital ,itsindividual rolein theturn-over ,354. variable capital ,itsturn-over coin-cides only with first phase ofturn-over ofcirculating constant capi- tal,337.variable capital ,itsturn-over from asocial point ofview ,359.variable capital ,no revenue for laborer ,520. wage -laborer ,incirculation ,unpro-ductive ,150.wages ,apart ofpast labor used as adraft upon future labor ,82.wages ,their depression below normal level ameans ofreleasing variablecapitable ,594.wear andtear ,defined astransfer of value tothe product and loss ofuse-value ,194. wear and tear ,offixed capital ,cal-culated onitsaverage life-time,199.wear and tear ,offixed capital ,duetouse,natural forces ,condition of material ,193.wear and tear ,virtual ,193. working day,social ,thevalue ofits product always contains apart of thevalue ofpast labor ,497.working period ,acontinuous succes- sion ofproductive periods insured bydivision ofcapital into produc-tive and reserve capital ,303. working period ,itsdifferences causedifference inturn-over and amount ofcapital required ,261.working -period ,its different forms ,260. working -period ,itsprolongation requires additional circulating capital ,264. working period ,shortened byproduc tivity oflabor ,267."
    ]
}