第13章

Wefoundinourstudyofthesimplecirculationofcommodities(BuchI，Kap。III，2)[Englishedition:Ch。III——Ed。]that，thoughthemoney-formofanydefinitequantityofcommoditiesisonlytransientwithinthesphereofcirculation，stillthemoneytransientlyinthehandsofonemanduringthemetamorphosisofacertaincommoditynecessarilypassesintothehandsofanother，sothatinthefirstinstancecommoditiesarenotonlyexchangedallsidedly，orreplaceoneanother，butthisreplacementispromotedandaccompaniedbyanall-sidedprecipitationofmoney。”Whenonecommodityreplacesanother，themoney-commodityalwaysstickstothehandsofsomethirdperson。Circulationsweatsmoneyfromeverypore。”

(BuchI，S。92。)[Englishedition:p。113——Ed。]Thesameidenticalfactisexpressed，onthebasisofthecapitalistproductionofcommodities，byaportionofcapitalconstantlyexistingintheformofmoney-capital，andaportionofsurplus-valueconstantlybeingfoundinthehandsofitsowners，likewiseintheformofmoney。

Apartfromthis，thecircuitofmoney——thatis，thereturnofmoneytoitspointofdeparture——beingaphaseoftheturnoverofcapital，isaphenomenonentirelydifferentlyfrom，andeventheoppositeof，thecurrencyofmoney，[33]whichexpressesitssteadydeparturefromthestarting-pointbychanginghandsagainandagain。(BuchI，S。94。)[Englishedition:pp。114-15——Ed。]Nevertheless，anacceleratedturnoverimplieseoipsoanacceleratedcurrency。

Firstconcerningthevariablecapital:Ifacertainmoney-capitalof，say，£；500isturnedovertheformofvariablecapitaltentimesayear，itisevidentthatthisaliquotpartofthequantityofmoneyincirculationcirculatestentimesitsvalue，or£；5，000。Itcirculatestentimesayearbetweenthecapitalistandthelabourer。Thelabourerispaid，andpays，tentimesayearwiththesamealiquotpartofthecirculatingquantityofmoney。Ifthesamevariablecapitalwereturnedoveronlyonceayear，thescaleofproductionremainingthesame，therewouldbeonlyonecapitalturnoverof£；5，000。

Furthermore:Lettheconstantportionofthecirculatingcapitalbeequalto£；1，000。Ifthecapitalisturnedovertentimes，thecapitalistsellshiscommodity，andthereforealsotheconstantcirculatingportionofitsvalue，tentimesayear。Thesamealiquotpartofthecirculatingquantityofmoney(equalto£；1，000)passestentimesperannumfromthehandsofitsownersintothoseofthecapitalist。Thismoneychangeshandstentimes。Secondly，thecapitalistbuysmeansofproductiontentimesayear。Thisagainmakestencirculationsofmoneyfromonehandintoanother。Withasumofmoneyamountingto£；1，000，theindustrialcapitalistsells£；10，000worthofcommodities，andagainbuys£；10，000

worthofcommodities。Bymeansof20circulationsof£；1，000inmoneyacommodity-supplyof£；20，000iscirculated。

Finally，withanaccelerationoftheturnover，theportionofmoneywithrealisesthesurplus-valuealsocirculatesfaster。

But，conversely，anaccelerationofmoney-circulationdoesnotnecessarilyimplyamorerapidturnoverofcapital，andthereforeofmoney；

thatis，itdoesnotnecessarilyimplyacontractionandmorerapidrenewalofthereproductionprocess。

Amorerapidcirculationofmoneytakesplacewheneveralargernumberoftransactionsareperformedwiththesameamountofmoney。Thismayalsotakeplaceunderthesameperiodsofcapitalreproductionasaresultofchangesinthetechnicalfacilitiesforthecirculationofmoney。

Furthermore，theremaybeanincreaseinthenumberoftransactionsinwhichmoneycirculateswithoutrepresentingactualexchangesofcommodities(marginaltransactionsonthestock-exchange，etc。)。Ontheotherhandsomecirculationsofmoneymaybeentirelyeliminated，asforinstancewheretheagriculturistishimselfalandowner，thereisnocirculationofmoneybetweenthefarmerandthelandlord；wheretheindustrialcapitalistishimselftheownerofthecapital，thereisnocirculationofmoneybetweenhimandthecreditors。

Asfortheprimitiveformationofamoney-hoardinacountry，anditsappropriationbyafew，itisunnecessarytodiscussitindetailatthispoint。

Thecapitalistmodeofproduction——itsbasisbeingwage-labour，thepaymentofthelabourerinmoney，andingeneralthetransformationofpaymentsinkindintomoneypayments——canassumegreaterdimensionsandachievegreaterperfectiononlywherethereisavailableinthecountryaquantityofmoneysufficientforcirculationandtheformationofahoard(reservefund，etc。)promotedbyit。Thisisthehistoricalpremise，althoughitisnottobetakentomeanthatfirstasufficienthoardisformedandthencapitalistproductionbegins。Itdevelopssimultaneouslywiththedevelopmentoftheconditionsnecessaryforit，andoneoftheseconditionsisasufficientsupplyofpreciousmetals。Hencetheincreasedsupplyofpreciousmetalssincethesixteenthcenturyisanessentialelementinthehistoryofthedevelopmentofcapitalistproduction。Butsofarasthenecessaryfurthersupplyofmoneymaterialonthebasisofcapitalistproductionisconcerned，weseesurplus-valueincorporatedinproductsthrownintocirculationwithoutthemoneyrequiredfortheirconversionintomoney，ontheonehand，andontheothersurplus-valueintheformofgoldwithoutprevioustransformationofproductsintomoney。

Theadditionalcommoditiestobeconvertedintomoneyfindthenecessaryamountofmoneyathand，becauseontheothersideadditionalgold(andsilver)intendedforconversionintocommoditiesisthrownintocirculation，notbymeansofexchange，butbyproductionitself。

II。ACCUMULATIONANDREPRODUCTIONONANEXTENDEDSCALE

Sinceaccumulationtakesplaceintheformofextendedreproduction，itisevidentthatitdoesnotofferanynewproblemwithregardtomoney-circulation。

Inthefirstplace，asfarastheadditionalmoney-capitalrequiredforthefunctioningoftheincreasingproductivecapitalisconcerned，thatissuppliedbytheportionoftherealisedsurplus-valuethrownintocirculationbythecapitalistsasmoney-capital，notasthemoney-formoftherevenue。Themoneyisalreadyinthehandsofthecapitalists。Onlyitsemploymentisdifferent。

Nowhoweverinconsequenceoftheadditionalproductivecapital，itsproduct，anadditionalmassofcommoditiesisthrownintocirculation。

Togetherwiththisadditionalquantityofcommodities，apartoftheadditionalmoneyneededforitsrealisationisthrownintocirculation，inasmuchasthevalueofthismassofcommoditiesisequaltothatoftheproductivecapitalconsumedintheirproduction。Thisadditionalamountofmoneyhasbeenadvancedpreciselyasadditionalmoney-capital，andthereforereturnstothecapitalistthroughtheturnoverofhiscapital。Herethesamequestionasabovere-appears。Wheredoestheadditionalmoneycomefromwithwhichtorealisetheadditionalsurplus-valuenowcontainedintheformofcommodities？

Thegeneralreplyisagainthesame。Thesumtotalofthepricesofthecirculatingcommoditieshasbeenincreased，notbecausethepricesofagivenquantityofcommoditieshaverisen，butbecausethemassofcommoditiesnowcirculatingisgreaterthanthatofthepreviouslycirculatingcommodities，withoutitbeingoffsetbyafallinprices。Theadditionalmoneyrequiredforthecirculationofthisgreaterquantityofcommoditiesofgreatervaluemustbesecuredeitherbygreatereconomyintheuseofthecirculatingquantityofmoney——whetherbybalancingthepayments，etc。，bymeasureswhichacceleratethecirculationofthesamecoins——

orbythetransformationofmoneyfromtheformofahoardintothatofacirculatingmedium。Thelatterdoesnotonlyimplythatidlemoney-capitalbeginstofunctionasameansofpurchaseorpayment，orthatmoney-capitalalreadyfunctioningasareservefundwhileperformingthisfunctionforitsowner，activelycirculatesforsociety(asisthecasewithbankdepositswhicharecontinuallylent)，thusperformingadoublefunction。Italsoimpliesthatthestagnatingreservefundsofcoinsareeconomised。”Inorderthatmoneyshouldflowcontinuouslyascoin，coinmustconstantlycoagulateasmoney。Thecontinualcurrencyofcoindependsonitscontinualstagnation，ingreaterorsmallerquantities，inreservefundsofcoinwhichspringupthroughoutthesphereofcirculationandalsonecessitateit；theformation，distribution，dissolution，andre-formationofthesereservefundsareconstantlyalternating，theirexistenceconstantlydisappears，theirdisappearanceconstantlyexists。AdamSmithex-pressedthisnever-ceasingtransformationofcoinintomoneyandofmoneyintocoinbysayingthateveryownerofcommoditiesmustalwayskeepinsupply，asidefromtheparticularcommoditywhichhesells，acertainquantityoftheuniversalcommoditywithwhichhebuys。WesawthatinthecirculationC——M——CthesecondmemberM——Csplitsupconstantlyintoaseriesofpurchaseswhichdonottakeplaceatoncebutatsuccessiveintervalsoftime，sothatonepartofMiscurrentascoinwhiletheotherrestsasmoney。Asamatteroffactmoneyisinthatcaseonlysuspendedcoinandtheseparatepartsofthecurrentmassofcoinscontinuouslyappearnowintheoneform，andnowintheother，alternatingconstantly。Thisfirsttransformationofthemediumofcirculationintomoneyrepresents，therefore，butatechnicalaspectofmoney-circulationitself。”(KarlMarx，ZurKritikderPolitischenOekonomie，1859，SS。105，106。)(”Coin”asdistinguishedfrommoneyishereemployedtoindicatemoneyinitsfunctionofameremediumofcirculationincontrastwithitsotherfunctions。)

Whenallthesemeasuresdonotsuffice，additionalgoldmustbeproduced，or，whatamountstothesame，apartoftheadditionalproductexchanged，directlyorindirectly，forgold——theproductofcountriesinwhichpreciousmetalsaremined。

Theentireamountoflabour-powerandsocialmeansofproductionexpendedintheannualproductionofgoldandsilverintendedasinstrumentsofcirculationconstitutesabulkyitemofthefauxfraisofthecapitalistmodeofproduction，oftheproductionofcommoditiesingeneral。

Itisanequivalentabstractionfromsocialutilisationofasmanyadditionalmeansofproductionandconsumptionaspossible，i。e。，ofrealwealth。

Totheextentthatthecostsofthisexpensivemachineryofcirculationaredecreased，thegivenscaleofproductionorthegivendegreeofitsextensionremainingconstant，theproductivepowerofsociallabouriseoipsoincreased。Hence，sofarastheexpedienciesdevelopingwiththecreditsystemhavethiseffect，theyincreasecapitalistwealthdirectly，eitherbyperformingalargeportionofthesocialproductionandlabour-powerwithoutanyinterventionofrealmoney，orbyraisingthefunctionalcapacityofthequantityofmoneyreallyfunctioning。

Thisdisposesalsooftheabsurdquestionwhethercapitalistproductioninitspresentvolumewouldbepossiblewithoutthecreditsystem(evenifregardedonlyfromthispointofview)，thatis，withthecirculationofmetalliccoinalone。Evidentlythisisnotthecase。Itwouldratherhaveencounteredbarriersinthevolumeofproductionofpreciousmetals。

Ontheotherhandonemustnotentertainanyfantasticillusionsontheproductivepowerofthecreditsystem，sofarasitsuppliesorsetsinmotionmoney-capital。Afurtheranalysisofthisquestionisoutofplacehere。

Wehavenowtoinvestigatethecaseinwhichtheretakesplacenorealaccumulation，i。e。，nodirectexpansionofthescaleofproduction，butwhereapartoftherealisedsurplus-valueisaccumulatedforalongerorshortertimeasamoney-reservefund，inordertobetransformedlaterintoproductivecapital。

Inasmuchasthemoneysoaccumulatingisadditionalmoney，thematterneedsnoexplanation。Itcanonlybeaportionofthesurplus-goldbroughtfromgold-producingcountries。Inthisconnectionitmustbenotedthatthehomeproduct，inexchangeforwhichthisgoldisimported，isnolongerinthecountryinquestion。Ithasbeenexportedtoforeigncountriesinexchangeforgold。

Butifweassumethatthesameamountofmoneyisstillinthecountryasbefore，thentheaccumulatedandaccumulatingmoneyhasaccruedfromthecirculation。Onlyitsfunctionischanged。Ithasbeenconvertedfrommoneyincurrencyintolatentmoney-capitalgraduallytakingshape。

Themoneywhichisaccumulatedinthiscaseisthemoney-formofsoldcommodities，andmoreoverofthatpartoftheirvaluewhichconstitutessurplus-valuefortheirowner。(Thecreditsystemishereassumedtobenon-existent。)Thecapitalistwhoaccumulatesthismoneyhassoldprotantowithoutbuying。

Ifwelookuponthisprocessmerelyasanindividualphenomenon，thereisnothingtoexplain。Apartofthecapitalistskeepsaportionofthemoneyrealisedbythesaleofitsproductwithoutwithdrawingproductsfromthemarketinreturn。Anotherpartofthemontheotherhandtransformsitsmoneywhollyintoproducts，withtheexceptionoftheconstantlyrecurringmoney-capitalrequiredforrunningthebusiness。Oneportionoftheproductsthrownuponthemarketasvehiclesofsurplus-valueconsistsofmeansofproduction，oroftherealelementsofvariablecapital，thenecessarymeansofsubsistence。Itcanthereforeserveimmediatelyfortheexpansionofproduction。Forithasnotbeenpremisedintheleastthatonepartofthecapitalistsaccumulatesmoney-capital，whiletheotherconsumesitssurplus-valueentirely，butonlythatonepartdoesitsaccumulatingintheshapeofmoney，formslatentmoney-capital，whiletheotherpartaccumulatesgenuinely，thatistosay，enlargesthescaleofproduction，genuinelyexpandsitsproductivecapital。Theavailablequantityofmoneyremainssufficientfortherequirementsofcirculation，evenif，alternately，onepartofthecapitalistsaccumulatesmoney，whiletheotherenlargesthescaleofproduction，andviceversa。Moreover，theaccumulationofmoneyononesidemayproceedevenwithoutcashmoneybythemereaccumulationofoutstandingclaims。

Butthedifficultyariseswhenweassumenotanindividual，butageneralaccumulationofmoney-capitalonthepartofthecapitalistclass。

Apartfromthisclass，accordingtoourassumption——thegeneralandexclusivedominationofcapitalistproduction——thereisnootherclassatallexcepttheworking-class。Allthattheworking-classbuysisequaltothesumtotalofitswages，equaltothesumtotalofthevariablecapitaladvancedbytheentirecapitalistclass。Thismoneyflowsbacktothecapitalistclassbythesaleofitsproducttotheworking-class。Itsvariablecapitalthusresumesitsmoney-form。Letthesumtotalofthevariablecapitalbextimes£；100，i。e。，thesumtotalofthevariablecapitalemployed，notadvanced，duringtheyear。Thequestionnowunderconsiderationisnotaffectedbyhowmuchorhowlittlemoney，dependingonthevelocityoftheturnover，isneededtoadvancethisvariablecapital-valueduringtheyear。Thecapitalistclassbuyswiththesextimes£；100ofcapitalacertainamountoflabour-power，orpayswagestoacertainnumberoflabourers——firsttransaction。Thelabourersbuywiththissamesumacertainquantityofcommoditiesfromthecapitalists，wherebythesumofxtimes£；100flowsbackintothehandsofthecapitalists——secondtransaction。Andthisisconstantlyrepeated。Thisamountofxtimes£；100，therefore，canneverenabletheworking-classtobuythepartoftheproductwhichrepresentstheconstantcapital，nottomentionthepartwhichrepresentsthesurplus-valueofthecapitalistclass。Withthesextimes£；100

thelabourerscanneverbuymorethanapartofthevalueofthesocialproductequaltothatpartofthevaluewhichrepresentsthevalueoftheadvancedvariablecapital。

Apartfromthecaseinwhichthisuniversalaccumulationofmoneyexpressesnothingbutthedistributionofthepreciousmetaladditionallyintroduced，inwhateverproportion，amongthevariousindividualcapitalists，howistheentirecapitalistclassthensupposedtoaccumulatemoney？

Theywouldallhavetosellaportionoftheirproductwithoutbuyinganythinginreturn。Thereisnothingmysteriousaboutthefactthattheyallhaveacertainfundofmoneywhichtheythrowintocirculationasamediumofcirculationfortheirconsumption，andacertainportionofwhichreturnstoeachoneofthemfromthecirculation。Butinthatcasethismoney-fundexistspreciselyasafundforcirculation，asaresultoftheconversionofthesurplus-valueintomoney，anddoesnotbyanymeansexistaslatentmoney-capital。

Ifweviewthematterasittakesplaceinreality，wefindthatthelatentmoney-capital，whichisaccumulatedforfutureuse，consists:

1)Ofdepositsinbanks；anditisacomparativelytriflingsumwhichisreallyatthedisposalofthebank。Money-capitalisaccumulatedhereonlynominally。Whatisactuallyaccumulatedisoutstandingclaimswhichcanbeconvertedintomoney(ifever)onlybecauseacertainbalancearisesbetweenthemoneywithdrawnandthemoneydeposited。Itisonlyarelativelysmallsumthatthebankholdsinitshandsinmoney。

2)Ofgovernmentsecurities。Thesearenotcapitalatall，butmerelyoutstandingclaimsontheannualproductofthenation。

3)Ofstocks。Thosewhicharenotfakesaretitlesofownershipofsomecorporativerealcapitalanddraftsonthesurplus-valueaccruingannuallyfromit。

Thereisnoaccumulationofmoneyinanyofthesecases。Whatappearsontheonesideasanaccumulationofmoney-capitalappearsontheotherasacontinualactualexpenditureofmoney。Itisimmaterialwhetherthemoneyisspentbyhimwhoownsit，orbyothers，hisdebtors。

Onthebasisofcapitalistproductiontheformationofahoardassuchisneveranendinitselfbuttheresulteitherofastagnationofthecirculation——largeramountsofmoneythanisgenerallythecaseassumingtheformofahoard——orofaccumulationsnecessitatedbytheturnover；or，finally，thehoardismerelythecreationofmoney-capitalexistingtemporarilyinlatentformandintendedtofunctionasproductivecapital。

Ifthereforeontheonehandaportionofthesurplus-valuerealisedinmoneyiswithdrawnfromcirculationandaccumulatedasahoard，anotherpartofthesurplus-valueisatthesametimecontinuallyconvertedintoproductivecapital。Withtheexceptionofthedistributionofadditionalpreciousmetalsamongthemembersofthecapitalistclass，accumulationsintheformofmoneynevertakesplacesimultaneouslyatallpoints。

Whatistrueoftheportionoftheannualproductwhichrepresentssurplus-valueintheformofcommodities，isalsotrueoftheotherportionofit。Acertainsumofmoneyisrequiredforitscirculation。Thissumofmoneybelongstothecapitalistclassquiteasmuchastheannuallyproducedquantityofcommoditieswhichrepresentssurplus-value。Itisoriginallythrownintocirculationbythecapitalistclassitself。Itisconstantlyredistributedamongitsmembersbymeansofthecirculationitself。Justasinthecaseofcirculationofcoiningeneral，aportionofthissumstagnatesatevervaryingpoints，whileanotherportioncontinuallycirculates。Whetherapartofthisaccumulationisintentional，forthepurposeofformingmoney-capital，ornot，doesnotalterthings。

Nonoticehasbeentakenhereofthoseadventuresofcirculationinwhichonecapitalistgraspsaportionofthesurplus-value，orevenofthecapital，ofanother，therebybringingaboutone-sidedaccumulationandcentralisationofmoney-capitalaswellasofproductivecapital。Forinstanceapartofthesnatchedsurplus-valueaccumulatedbyAasmoney-capitalmaybeapartofthesurplus-valueofBwhichdoesnotreturntohim。

NOTES

[33]Althoughthephysiocratsstillconfusethesetwophenomena，theywerethefirsttoemphasisetherefluxofmoneytoitsstarting-pointastheessentialformofcirculationofcapital，asthatformofcirculationwhichpromotesreproduction。”CastaglanceattheTableauEconomiqueandyouwillseethattheproductiveclassprovidesthemoneywithwhichtheotherclassesbuyproductsfromit，andthattheyreturnthismoneytoitwhentheycomebacknextyeartomakethesamepurchases……Yousee，then，noothercircleherebutthatofexpenditurefollowedbyreproduction，andofreproductionfollowedbyexpenditure，acircledescribedbythecirculationofmoney，whichmeasuresexpenditureandreproduction。”(Quesnay，DialoguessurleCommerceetsurlesTravauxdesArtisans，Daireedition，Physiocrats，I，pp。208，209。)”Itisthiscontinualadvanceandreturnofcapitalswhichshouldbecalledthecirculationofmoney，thisusefulandfertilecirculationwhichgiveslifetoallthelaboursofsociety，whichmaintainstheactivityandlifeofthebodypolitic，andwhichisquiterightlycomparedtothecirculationofbloodintheanimalbody。”(Turgot，Reflexions，etc。，Oeuvres，Daireedition，I，p。45。)

1885:CapitalII——Chapter18

partIII

THEREPRODUCTIONANDCIRCULATION

OFTHEAGGREGATESOCIALCAPITAL

CHAPTERXVIII

INTRODUCTIONI。THESUBJECTINVESTIGATED

Thedirectprocessoftheproductionofcapitalisitslabourandself-expansionprocess，theprocesswhoseresultisthecommodity-productandwhosecompellingmotiveistheproductionofsurplus-value。

Theprocessofreproductionofcapitalcomprisesthisdirectprocessofproductionaswellasthetwophasesofthecirculationprocessproper，i。e。，theentirecircuitwhich，asaperiodicprocess——aprocesswhichconstantlyrepeatsitselfindefiniteperiods——constitutestheturnoverofcapital。

WhetherwestudythecircuitintheformofM……M’orthatofP……P’，thedirectprocessofproductionPitselfalwaysformsbutonelinkinthiscircuit。Intheoneformitappearsasapromoteroftheprocessofcirculation；intheothertheprocessofcirculationappearsasitspromoter。Itscontinuousrenewal，thecontinuousre-appearanceofcapitalasproductivecapital，isineithercasedeterminedbyitstransformationsintheprocessofcirculation。Ontheotherhandthecontinuouslyrenewedprocessofproductionistheconditionofthetransformationswhichthecapitalundergoeseveranewinthesphereofcirculation，ofitsalternateappearanceasmoney-capitalandcommodity-capital。

Everyindividualcapitalforms，however，butanindividualisedfraction，afractionendowedwithindividuallife，asitwere，oftheaggregatesocialcapital，justaseveryindividualcapitalistisbutanindividualelementofthecapitalistclass。Themovementofthesocialcapitalconsistsofthetotalityofthemovementsofitsindividualisedfractionalparts，theturnoversoftheindividualcapitals。Justasthemetamorphosisoftheindividualcommodityisalinkintheseriesofmetamorphosesofthecommodity-world——thecirculationofcommodities——sothemetamorphosisoftheindividualcapital，itsturnover，isalinkinthecircuitdescribedbysocialcapital。

Thistotalprocesscomprisesboththeproductiveconsumption(thedirectprocessofproduction)togetherwiththeconversionsofform(materiallyconsidered，exchanges)whichbringitabout，andtheindividualconsumptiontogetherwiththeconversionsofformorexchangesbywhichitisbroughtabout。Itincludesontheonehandtheconversionofvariablecapitalintolabour-power，andthereforetheincorporationoflabour-powerintheprocessofcapitalistproduction。Herethelaboureractsasthesellerofhiscommodity，labour-power，andthecapitalistasitsbuyer。Butontheotherhandthesaleofthecommoditiesembracesalsotheirpurchasebytheworking-classappearsasbuyerandthecapitalistsassellersofcommoditiestothelabourers。

Thecirculationofthecommodity-capitalincludesthecirculationofsurplus-value，hencealsothepurchasesandsalesbywhichthecapitalisteffecttheirindividualconsumption，theconsumptionofsurplus-value。

Thecircuitoftheindividualcapitalsintheiraggregateassocialcapital，henceconsideredinitstotality，comprisesnotonlythecirculationofcapitalbutalsothegeneralcirculationofcommodities。Thelattercanoriginallyconsistofonlytwocomponents:1)Thecircuitofcapitalproperand2)thecircuitofthecommoditieswhichenterintoindividualconsumption，consequentlyofthecommoditiesforwhichthelabourerexpendshiswagesandthecapitalisthissurplus-value(orapartofit)。Atanyrate，thecircuitofcapitalcomprisesalsothecirculationofthesurplus-value，sincethelatterisapartofthecommoditycapital，andlikewisetheconversionofthevariablecapitalintolabour-power，thepaymentofwages。Buttheexpenditureofthissurplus-valueandwagesforcommoditiesdoesnotformalinkinthecirculationofcapital，althoughatleasttheexpenditureofwagesisessentialforthiscirculation。

InBookItheprocessofcapitalistproductionwasanalysedasanindividualactaswellasaprocessofreproduction:theproductionofsurplus-valueandtheproductionofcapitalitself。Thechangesofformandsubstanceexperiencedbycapitalinthesphereofcirculationwereassumedwithoutdwellinguponthem。Itwaspresupposedthatontheonehandthecapitalistsellstheproductatitsvalueandontheotherthathefindswithinthesphereofcirculationtheobjectivemeansofproductionforrestartingorcontinuingtheprocess。Theonlyactwithinthesphereofcirculationonwhichwehavedweltwasthepurchaseandsaleoflabour-powerasthefundamentalconditionofcapitalistproduction。

InthefirstpartofthisBookII，thevariousformswereconsideredwhichcapitalassumesitscircularmovement，andthevariousformsofthismovementitself。ThecirculationtimemustnowbeaddedtotheworkingtimesdiscussedinBookI。

InthesecondPart，thecircuitwasstudiedasbeingperiodic，i。e。，asaturnover。Itwasshownontheonehandinwhatmannerthevariousconstituentsofcapital(fixedandcirculating)accomplishthecircuitofformsindifferentperiodsoftimeandindifferentways’ontheotherhandthecircumstanceswereexaminedbywhichthedifferentlengthsoftheworkingperiodandcirculationperiodareconditioned。Theinfluencewasshownwhichtheperiodofthecircuitandthedifferentproportionsofitscomponentpartsexertuponthedimensionsoftheproductionprocessitselfandupontheannualrateofsurplus-value。Indeed，whileitwasthesuccessiveformscontinuallyassumedanddiscardedbycapitalinitscircuitthatwerestudiedinPartI，itwasshowninPartIIhowacapitalofagivenmagnitudeissimultaneously，thoughinvaryingproportions，divided，withinthisflowandsuccessionofforms，intodifferentforms:

productivecapital，money-capital，andcommodity-capital，sothattheynotonlyalternatewithoneanother，butdifferentportionsofthetotalcapital-valueareconstantlysidebysideandfunctioninthesedifferentstates。Especiallymoney-capitalcameforwardwithdistinctivefeaturesnotshowninBookI。Certainlawswerefoundaccordingtowhichdiverselargecomponentsofagivencapitalmustbecontinuallyadvancedandrenewed——dependingontheconditionsoftheturnover——intheformofmoney-capitalinordertokeepaproductivecapitalofagivensizeconstantlyfunctioning。

ButinboththefirstandthesecondPartsitwasalwaysonlyaquestionofsomeindividualcapital，ofthemovementofsomeindividualisedpartofsocialcapital。

Howeverthecircuitsoftheindividualcapitalsintertwine，presupposeandnecessitateoneanother，andform，preciselyinthisinterlacing，themovementofthetotalsocialcapital。Justasinthesimplecirculationofcommoditiesthetotalmetamorphosisofacommodityappearedasalinkintheseriesofmetamorphosesoftheworldofcommodities，sonowthemetamorphosisoftheindividualcapitalappearsasalinkintheseriesofmetamorphosesofthesocialcapital。Butwhilesimplecommoditycirculationbynomeansnecessarilycomprisesthecirculationofcapital——sinceitmaytakeplaceonthebasisofnon-capitalistproduction——thecircuitoftheaggregatesocialcapital，aswasnoted，comprisesalsothecommoditycirculationlyingoutsidethecircuitofindividualcapital，i。e。，thecirculationofcommoditieswhichdonotrepresentcapital。

Wehavenowtostudytheprocessofcirculation(whichinitsentiretyisaformoftheprocessofreproduction)oftheindividualcapitalsascomponentsoftheaggregatesocialcapital，thatistosay，theprocessofcirculationofthisaggregatesocialcapital。II。THEROLEOFMONEY-CAPITAL

[AlthoughthefollowingbelongsinalatersectionofthisPart，weshallanalyseitimmediately，namely，themoney-capitalconsideredasaconstituentpartoftheaggregatesocialcapital。]

Inthestudyoftheturnoveroftheindividualcapitalmoney-capitalrevealedtwoaspects。

Inthefirstplaceitconstitutestheforminwhicheveryindividualcapitalappearsuponthesceneandopensitsprocessascapital。Itthereforeappearsastheprimusmotor，lendingimpetustotheentireprocess。

Inthesecondplace，thatportionoftheadvancedcapital-valuewhichmustbecontinuallyadvancedandrenewedintheformofmoneydiffersinitsratiototheproductivecapitalwhichitsetsinmotion，i。e。，initsratiotothecontinuousscaleofproduction，dependingontheparticularlengthoftheperiodofturnoverandtheparticularratiobetweenitstwocomponentparts——theworkingperiodandtheperiodofcirculation。Butwhateverthisratiomaybe，theportionofthecapital-valueinprocesswhichcancontinuallyfunctionasproductivecapitalislimitedinanyeventbythatportionoftheadvancedcapital-valuewhichmustalwaysexistbesidetheproductivecapitalintheformofmoney。Itisheremerelyaquestionofthenormalturnover，anabstractaverage。Additionalmoney-capitalrequiredtocompensateforinterruptionsofthecirculationisexcepted。

Astothefirstpoint:commodityproductionpresupposescommoditycirculation，andcommoditycirculationpresupposestheexpressionofcommoditiesinmoney，thecirculationofmoney；thesplittingofacommodityintocommodityandmoneyislawoftheexpressionoftheproductasacommodity。Similarlythecapitalistproductionofcommodities——whetherconsideredsociallyorindividually——presupposescapitalintheformofmoney，ormoney-capital，bothastheprimusmotorofeveryincipientbusiness，andasitscontinualmotor。Thecirculatingcapitalespeciallyimpliesthatthemoney-capitalactswithconstantrepetitionatshortintervalsasamotor。Theentireadvancedcapital-value，thatistosay，alltheelementsofcapital，consistingofcommodities，labour-power，instrumentsoflabour，andmaterialsofproduction，mustbeboughtoverandoveragainwithmoney。Whatistruehereoftheindividualcapitalisalsotrueofthesocialcapital，whichfunctionsonlyintheformofmanyindividualcapitals。ButasweshowedinBookI，itdoesnotatallfollowfromthisthatcapital’sfieldofoperation，thescaleofproduction，depends——evenonacapitalistbasis——foritsabsolutelimitsontheamountoffunctioningmoney-capital。

Incorporatedincapitalareelementsofproductionwhoseexpansionwithincertainlimitsisindependentofthemagnitudeoftheadvancedmoney-capital。

Thoughpaymentoflabour-powerbethesame，itcanbeexploitedmoreorlessextensivelyorintensively。Ifthemoney-capitalisincreasedwiththisgreaterexploitation(thatis，ifwagesareraised)，itisnotincreasedproportionately，hencenotatallprotanto。

Theproductivelyexploitednature-givenmaterials——thesoil，theseas，ores，forests，etc——whichdonotconstituteelementsofcapital-value，aremoreintensivelyorextensivelyexploitedwithagreaterexertionofthesameamountoflabour-power，withoutanincreasedadvanceofmoney-capital。

Therealelementsofproductivecapitalarethusmultipliedwithoutrequiringanadditionalmoney-capital。Butsofarassuchanadditionbecomesnecessaryforadditionalauxiliarymaterials，themoney-capitalinwhichthecapital-valueisadvancedisnotincreasedproportionatelytotheaugmentedeffectivenessoftheproductivecapital，henceisprotantonotatallincreased。

Thesameinstrumentsoflabour，andthusthesamefixedcapital，canbeusedmoreeffectivelybyanextensionofthetimetheyaredailyusedandbyagreaterintensityofemployment，withoutanadditionaloutlayofmoneyforfixedcapital。Thereis，inthatcase，onlyamorerapidturnoverofthefixedcapital，butthentheelementsofitsreproductionaresuppliedmorerapidly。

Apartfromthenaturalsubstances，itispossibletoincorporateintheproductiveprocessnaturalforces，whichdonotcostanything，toactasagentswithmoreorlessheightenedeffect。Thedegreeoftheireffectivenessdependsonmethodsandscientificdevelopmentswhichcostthecapitalistnothing。

Thesameistrueofthesocialcombinationoflabour-powerintheprocessofproductionandoftheaccumulatedskilloftheindividuallabourers。Careycalculatesthatthelandownerneverreceivesenough，becauseheisnotpaidforallthecapitalorlabourputintothesoilsincetimeimmemorialinordertogiveititspresentproductivity。(Ofcourse，nomentionismadeoftheproductivityofwhichthesoilisrobbed。)Accordingtothateachindividuallabourerwouldhavetopaidaccordingtotheworkwhichitcosttheentirehumanracetoevolveamodernmechanicoutofasavage。Onthecontraryoneshouldthinkthatifalltheunpaidlabourputintothesoilandconvertedintomoneybythelandownerandcapitalististotalledup，allthecapitaleverinvestedinthissoilhasbeenpaidbackoverandoveragainwithusuriousinterest，sothatsocietyhaslongagoredeemedlandedpropertyoverandoveragain。

Trueenough，theincreaseintheproductivepoweroflabour，sofarasitdoesnotimplyanadditionalinvestmentofcapital-value，augmentsinthefirstinstanceonlythequantityoftheproduct，notitsvalue，exceptinsofarastimakesitpossibletoreproducemoreconstantcapitalwiththesamelabourandthustopreserveitsvalue。Butitformsatthesametimenewmaterialforcapital，hencethebasisofincreasedaccumulationofcapital。

Sofarastheorganisationofsociallabouritself，andthustheincreaseinthesocialproductivepoweroflabour，requireslarge-scaleproductionandthereforetheadvanceoflargequantitiesofmoney-capitalbyindividualcapitalists，wehaveshowninBookI[FromManuscriptII——

F。E。]thatthisisaccomplishedinpartbythecentralisationofcapitalsinafewhands，withoutnecessitatinganabsoluteincreaseinthemagnitudeofthefunctioningcapital-values，andconsequentlyalsointhemagnitudeofthemoney-capitalinwhichtheyareadvanced。Themagnitudeoftheindividualcapitalscanincreasebycentralisationinthehandsofafewwithoutagrowthoftheirsocialsumtotal。Itisonlyachangeddistributionoftheindividualcapitals。

Finally，wehaveshownintheprecedingPartthatashorteningoftheperiodofturnoverpermitsofsettinginmotioneitherthesameproductivecapitalwithlessmoney-capitalormoreproductivecapitalwiththesamemoney-capital。[Englishedition:Vol。I，pp。624-28，761-64——Ed。]

Butevidentlyallthishasnothingtodowiththequestionofmoney-capitalitself。Itshowsonlythattheadvancedcapital——agivensumofvaluesconsistinginitsfreeform，initsvalue-form，ofacertainsumofmoney——includes，afteritsconversionintoproductivecapital，productivepowerswhoselimitsarenotsetbythelimitsofitsvalue，butwhichonthecontrarymayoperatewithincertainboundswithdifferingdegreesofextensivenessorintensiveness。Ifthepricesoftheelementsofproduction——themeansofproductionandlabour-power——aregiven，themagnitudeofthemoney-capitalrequiredforthepurchaseofadefinitequantityoftheseelementsofproductionexistingascommoditiesisdetermined。

Orthemagnitudeofvalueofthecapitaltobeadvancedisdetermined。

Buttheextenttowhichthiscapitalactsasacreatorofvaluesandproductsiselasticandvariable。

Astothesecondpoint:itisself-evidentthatpartofthesociallabourandmeansofproductionwhichmustbeannuallyexpendedfortheproductionorpurchaseofmoneyinordertoreplaceworn-offcoinisprotantoadiminutionofthevolumeofsocialproduction。Butasforthemoney-valuewhichfunctionspartlyasamediumofcirculation，partlyasahoard，itissimplythere，acquired，presentalongsidethelabour-power，theproducedmeansofproduction，andthenaturalsourcesofwealth。Itcannotberegardedasalimitsettothesethings。Byitstransformationintoelementsofproduction，byitsexchangewithothernations，thescaleofproductionmightbeextended。Thispresupposes，however，thatmoneyplaysitsroleofworld-moneythesameasever。

Tosettheproductivecapitalinmotionrequiresmoreorlessmoney-capital，dependingonthelengthoftheperiodofturnover。Wehavealsoseenthatthedivisionoftheperiodofturnoverintoworkingtimeandcirculationtimerequiresanincreaseofthecapitallatentorsuspendedintheformofmoney。

Inasmuchastheperiodofturnoverisdeterminedbythelengthoftheworkingperiod，itisdetermined，otherconditionsremainingequal，bythematerialnatureoftheprocessofproduction，hencenotbythespecificsocialcharacterofthisprocessofproduction。However，onthebasisofcapitalistproduction，moreextensiveoperationsofcomparativelylongdurationnecessitatelargeadvancesofmoney-capitalforaratherlongtime。Productioninsuchspheresdependsthereforeonthemagnitudeofthemoney-capitalwhichtheindividualcapitalisthasathisdisposal。

Thisbarrierisbrokendownbythecreditsystemandtheassociationsconnectedwithit，e。g。，thestockcompanies。Disturbancesinthemoney-marketthereforeputsuchestablishmentsoutofbusiness，whilethesesameestablishments，intheirturn，producedisturbancesinthemoney-market。

Onthebasisofsocialisedproductionthescalemustbeascertainedonwhichthoseoperations——whichwithdrawlabour-powerandmeansofproductionforalongtimewithoutsupplyinganyproductasausefuleffectintheinterim——canbecarriedonwithoutinjuringbranchesofproductionwhichnotonlywithdrawlabour-powerandmeansofproductioncontinually，orseveraltimesayear，butalsosupplymeansofsubsistenceandofproduction。

Undersocialisedaswellascapitalistproduction，thelabourersinbranchesofbusinesswithshorterworkingperiodswillasbeforewithdrawproductsonlyforashorttimewithoutgivinganyproductsinreturn；whilebranchesofbusinesswithlongworkingperiodscontinuallywithdrawproductsforalongertimebeforetheyreturnanything。Thiscircumstance，then，arisesfromthematerialcharacteroftheparticularlabour-process，notfromitssocialform。Inthecaseofsocialisedproductionthemoney-capitaliseliminated。Societydistributeslabour-powerandmeansofproductiontothedifferentbranchesofproduction。Theproducersmay，forallitmatters，receivepapervouchersentitlingthemtowithdrawfromthesocialsuppliesofconsumergoodsaquantitycorrespondingtotheirlabour-time。

Thesevouchersarenotmoney。Theydonotcirculate。

Weseethatinasmuchastheneedformoney-capitaloriginatesinthelengthoftheworkingperiod，itisconditionedbytwothings:First，thatmoneyingeneralistheforminwhicheveryindividualcapital(apartfromcredit)mustmakeitsappearanceinordertotransformitselfintoproductivecapital；thisfollowsfromthenatureofcapitalistproductionandcommodity-productioningeneral。Second，themagnitudeoftherequiredmoneyadvanceisduetothecircumstancethatlabour-powerandmeansofproductionarecontinuallywithdrawnfromsocietyforacomparativelylongtimewithoutanyreturntoit，duringthatperiod，ofproductsconvertibleintomoney。Thefirstcondition，thatthecapitaltobeadvancedmustbeadvancedintheformofmoney，isnoteliminatedbytheformofthismoneyitself，whetheritismetal-money，credit-money，token-money，etc。Thesecondconditionisinnowayaffectedbywhatmoney-mediumorinwhatformofproductionlabour，meansofsubsistence，andmeansofproductionarewithdrawnwithoutthereturnofsomeequivalenttothecirculation。

1885:CapitalII——Chapter19

partIII

THEREPRODUCTIONANDCIRCULATION

OFTHEAGGREGATESOCIALCAPITAL

CHAPTERXIX[35]

FORMERPRESENTATIONSOFTHESUBJECTI。THEPHYSIOCRATS

Quesnay’sTableauEconomiqueshowsinafewbroadoutlineshowtheannualresultofthenationalproduction，representingadefinitevalue，isdistributedbymeansofthecirculationinsuchawaythat，otherthingsbeingequal，simplereproduction，i。e。，reproductiononthesamescale，cantakeplace。Thestarting-pointoftheperiodofproductionisproperlytheprecedingyear’sharvest。Theinnumerableindividualactsofcirculationareatoncebroughttogetherintheircharacteristicsocialmassmovement——thecirculationbetweengreatfunctionallydeterminedeconomicclassesofsociety。Wearehereinterestedinthefollowing:Aportionofthetotalproduct——being，likeeveryotherportionofit，ause-object，itisanewresultoflastyear’slabour——isatthesametimeonlythedepositoryofoldcapital-valuere-appearinginthesamebodilyform。Itdoesnotcirculatebutremainsinthehandsofitsproducers，theclassoffarmers，inordertoresumethereitsserviceascapital。Inthisportionoftheyear’sproduct，theconstantcapital，Quesnayincludesimpertinentelements，buthestrikesuponthemainthing，thankstothelimitationsofhishorizon，withinwhichagricultureistheonlysphereofinvestmentofhumanlabourproducingsurplus-value，hencetheonlyreallyproductiveonefromthecapitalistpointofview。Theeconomicprocessofreproduction，whatevermaybeitsspecificsocialcharacter，alwaysbecomesintertwinedinthissphere(agriculture)withanaturalprocessofreproduction。Theobviousconditionsofthelatterthrowlightonthoseoftheformer，andkeepoffaconfusionofthoughwhichiscalledforthbythemirageofcirculation。

Thelabelofasystemdiffersfromthatofotherarticles，amongotherthings，bythefactthatitcheatsnotonlythebuyerbutoftenalsotheseller。Quesnayhimselfandhisimmediatedisciplesbelievedintheirfeudalshop-sign。Sodoourgrammarianseventhisdayandhour。Butasamatteroffactthesystemofthephysiocratsisthefirstsystematicconceptionofcapitalistproduction。Therepresentativeofindustrialcapital——theclassoftenants——directstheentireeconomicmovement。Agricultureiscarriedoncapitalistically，thatistosay，itistheenterpriseofacapitalistfarmeronalargescale；thedirectcultivatorofthesoilisthewage-labourer。Productioncreatesnotonlyarticlesofusebutalsotheirvalue；itscompellingmotiveistheprocurementofsurplus-value，whosebirth-placeisthesphereofproduction，notofcirculation。Amongthethreeclasseswhichfigureasthevehiclesofthesocialprocessofreproductionbroughtaboutbythecirculation，theimmediateexploiter”productive”labour，theproducerofsurplus-value，[MarxanalysesQuesnay’sTableauEconomiqueingreaterdetailinhisTheoriesofSurplus-Value(seeEnglishedition:KarlMarx，TheoriesofSurplus-Value[VolumeIVofCapital]，PartI，Moscow，1963，pp。299-333and367-69)——Ed。]

thecapitalistfarmer，isdistinguishedfromthosewhomerelyappropriatethesurplus-value。

Thecapitalistcharacterofthephysiocraticsystemexcitedoppositionevenduringitsflorescence:ontheonesideitwaschallengedbyLinguetandMably，ontheotherbythechampionsofthesmallfreeholders。

AdamSmith’sretrogression[36]intheanalysisoftheprocessofreproductionissomuchthemoreremarkablebecausehenotonlyelaboratesuponQuesnay’scorrectanalyses，generalisinghis”avancesprimitives”and”avancesannuelles”forinstanceandcallingthemrespectively”fixed”and”circulating”capital[37]，butevenrelapsesinspotsentirelyintophysiocraticerrors。Forinstanceinordertodemonstratethatthefarmerproducesmorevaluethananyothersortofcapitalist，hesays:”Noequalcapitalputsintomotionagreaterquantityofproductivelabourthanthatofthefarmer。Notonlyhislabouringservants，buthislabouringcattleareproductivelabourers。”(Finecomplimentforthelabouringservants！)”Inagriculturetoonaturelaboursalongwithman；andthoughherlabourcostsnoexpense，itsproducehasitsvalue，aswellasthatofthemostexpensiveworkmen。Themostimportantoperationsofagricultureseemintendednotsomuchtoincrease，thoughtheydothattoo，astodirectthefertilityofnaturetowardstheproductionoftheplantsmostprofitabletoman。Afieldovergrownwithbriarsandbramblesmayfrequentlyproduceasgreataquantityofvegetablesasthebestcultivatedvineyardorcornfield。Plantingandtillagefrequentlyregulatemorethantheyanimatetheactivefertilityofnature；andafteralltheirlabour，agreatpartoftheworkalwaysremainstobedonebyher。Thelabourersandlabouringcattle(sic！)，therefore，employedinagriculture，notonlyoccasion，liketheworkmeninmanufactures，thereproductionofavalueequaltotheirownconsumption，ortothecapitalwhichemploysthem，togetherwithitsowners’profits；butofamuchgreatervalue。Overandabovethecapitalofthefarmerandallitsprofits，theyregularlyoccasionthereproductionoftherentofthelandlord。Thisrentmaybeconsideredastheproduceofthosepowersofnaturetheuseofwhichthelandlordlendstothefarmer。Itisgreaterorsmalleraccordingtothesupposedextentofthosepowers，or，inotherwords，accordingtothesupposednaturalorimprovedfertilityoftheland。Itistheworkofnaturewhichremainsafterdeductingorcompensatingeverythingwhichcanberegardedastheworkofman。Itisseldomlessthanafourth，andfrequentlymorethanathirdofthewholeproduce。Noequalquantityofproductivelabouremployedinmanufacturescaneveroccasionsogreatareproduction。Inthemnaturedoesnothing；mandoesall；andthereproductionmustalwaysbeinproportiontothestrengthoftheagentsthatoccasionit。Thecapitalemployedinagriculture，therefore，notonlyputsintomotionagreaterquantityofproductivelabourthananyequalcapitalemployedinmanufactures，butinproportiontootothequantityofproductivelabourwhichitemploys，itaddsamuchgreatervaluetotheannualproduceofthelandandlabourofthecountry，totherealwealthandrevenueofitsinhabitants。”(BookII，Ch。5，p。242。)

AdamSmithsaysinBookII，Ch。1:”Thewholevalueoftheseed，too，isproperlyafixedcapital。”Here，then，capitalequalscapital-value；

itexistsina”fixed”form。”Thoughit(theseed)goesbackwardsandforwardsbetweenthegroundandthegranary，itneverchangesmasters，andthereforedoesnotproperlycirculate。Thefarmermakeshisprofit，notbyitssale，butbyitsincrease。”(P。186。)TheabsurdityofthethinglieshereinthefactthatSmithdoesnot，likeQuesnaybeforehim，seethere-appearanceofthevalueofconstantcapitalinarenewedform，andhencefailstoseeanimportantelementoftheprocessofreproduction，butmerelyoffersonemoreillustration，andawrongoneatthat，ofhisdistinctionsbetweencirculatingandfixedcapital。InSmith’stranslationof”avancesprimitives”

and”avancesannuelles”as”fixedcapital”and”circulatingcapital，”

theprogressconsistsintheterm”capital，”theconceptofwhichisgeneralised，andbecomesindependentofthespecialconsiderationforthe”agricultural”

sphereofapplicationofthephysiocrats；theretrogressionconsistsinthefactthat”fixed”and”circulating”areregardedastheoverridingdistinction，andaresomaintained。

II。ADAMSMITH1。Smith’sGeneralPointsofViewAdamSmithsaysinBookI，Ch。6，page42:”Ineverysocietythepriceofeverycommodityfinallyresolvesitselfintosomeoneorother，orallofthosethreeparts(wages，profit，rent)；andineveryimprovedsociety，allthethreeentermoreorless，ascomponentparts，intothepriceofthefargreaterpartofcommodities。”[38]Or，ashecontinues，page63:”Wages，profit，andrent，arethethreeoriginalsourcesofallrevenueaswellasofallexchangeablevalue。”

BelowweshalldiscussingreaterdetailthisdoctrineofAdamSmithconcerning”thecomponentpartsofthepriceofcommodities，”orof”allexchangeablevalue。”

Hesaysfurthermore:”Sincethisisthecase，ithasbeenobserved，withregardtoeveryparticularcommodity，takenseparately；itmustbesowithregardtoallthecommoditieswhichcomposethewholeannualproduceofthelandandlabourofeverycountry，takencomplexly。Thewholepriceorexchangeablevalueofthatannualproduce，mustresolveitselfintothesamethreeparts，andbeparcelledoutamongthedifferentinhabitantsofthecountry，eitherasthewagesoftheirlabour，theprofitsoftheirstock，ortherentoftheirland。(BookII，Ch。2，p。190。)

AfterAdamSmithhasthusresolvedthepriceofallcommoditiesindividually，aswellas”thewholepriceorexchangeablevalue……oftheannualproduceofthelandandlabourofeverycountry，”intowages，profitandrent，thethreesourcesofrevenueforwage-labourers，capitalists，andlandowners，hemustneedssmuggleinafourthelementbycircuitousroute，namelytheelementofcapital。Thisisaccomplishedbydrawingadistinctionbetweengrossandnetrevenue:”Thegrossrevenueofalltheinhabitantsofagreatcountrycomprehendsthewholeannualproduceoftheirlandandlabour；theneatrevenue，whatremainsfreetothemafterdeductingtheexpenseofmaintaining；first，theirfixed；andsecondly，theircirculatingcapital；orwhat，withoutencroachingupontheircapital，theycanplaceintheirstockreservedforimmediateconsumption，orspendupontheirsubsistence，conveniences，andamusements。

Theirrealwealthtooisinproportion，nottotheirgross，buttotheirneatrevenue。”(Ibid。，p。190。)

Onthiswecommentasfollows:

1)AdamSmithexpresslydealshereonlywithsimplereproduction，notreproductiononanextendedscale，oraccumulation。Hespeaksonlyofexpensesfor”maintaining”thecapitalinoperation。The”neat”incomeisequaltothatportionoftheannualproduct，whetherofsocietyoroftheindividualcapitalist，whichcanpassintothe”fundforconsumption，”butthesizeofthisfundmustnot”encroachuponcapital”inoperation。Oneportionofthevalueofboththeindividualandthesocialproduct，then，isresolvedneitherintowagesnorintoprofitnorintorent，butintocapital。

2)AdamSmithfleesfromhisowntheorybymeansofaplayuponwords，thedistinctionbetween”grossandneatrevenue。”Theindividualcapitalistaswellastheentirecapitalistclass，ortheso-callednation，receiveinplaceofthecapitalconsumedinproductionacommodity-productwhosevalue——itcanberepresentedbytheproportionalpartsofthisproduct——replacesontheonehandtheexpendedcapital-valueandthusformsanincome，orstillmoreliterally，revenue(revenue，pp。ofrevenir——tocomeback)，but，notabene，arevenueuponcapital，orincomeuponcapital；ontheotherhandcomponentsofvaluewhichare”parcelledoutamongthedifferentinhabitantsofthecountry，eitherasthewagesoftheirlabour，theprofitsoftheirstock，ortherentoftheirland”

athingcommonlycalledincome。Hencethevalueoftheentireproductconstitutessomebody’sincome——eitheroftheindividualcapitalistorofthewholecountry，butitisontheonehandanincomeuponcapital，andontheothera”revenue”differentfromthelatter。Consequently，thethingwhichiseliminatedintheanalysisofthevalueofthecommodityintoitscomponentpartsisbroughtbackthroughasidedoor——theambiguityoftheword”revenue。”Butonlysuchvalueconstituentsoftheproductcanbe”takenin”asalreadyexistinit。Ifthecapitalistocomeinasrevenue，capitalmustfirsthavebeenexpended。

AdamSmithsaysfurthermore:”Thelowestordinaryrateofprofitmustalwaysbesomethingmorethanwhatissufficienttocompensatetheoccasionallossestowhicheveryemploymentofstockisexposed。Itisthissurplusonlywhichisneatorclearprofit。”[Whatcapitalistunderstandsbyprofit，necessaryexpenditureofcapital？]”Whatiscalledgrossprofitcomprehendsfrequently，notonlythissurplus，butwhatisretainedforcompensatingsuchextraordinarylosses。”(BookI，Ch。9，p。72。)Thismeansnothingelsethanthatapartofthesurplus-value，consideredasapartofthegrossprofit，mustformaninsurance-fundfortheproduction。Thisinsurance-fundiscreatedbyaportionofthesurplus-labour，whichtothatextentproducescapitaldirectly，thatistosay，thefundintendedforreproduction。Asregardstheexpensefor”maintaining”thefixedcapital，etc。(seetheabovequotations)，thereplacementoftheconsumedfixedcapitalbyanewoneisnotanewoutlayofcapital，butonlyarenewaloftheoldcapital-valueinnewform。Andasfarastherepairofthefixedcapitalisconcerned，whichAdamSmithcountslikewiseamongthecostsofmaintenance，thisexpensegoesinwiththepriceofthecapitaladvance。Thefactthatthecapitalist，insteadofhavingtoinvestthisallatonetimeinvestsitgradually，asrequired，duringthefunctioningofthecapital，andcaninvestitoutofprofitsalreadypocketed，doesnotchangethesourceofthisprofit。

Thevalueconstituentofwhichitconsistsprovesonlythatthelabourerdeliverssurplus-labourfortheinsurance-fundaswellasfortherepairfund。

AdamSmiththentellsusthatoneshouldexcludefromthenetrevenue，i。e。，fromtherevenueinitsspecificmeaning，theentirefixedcapital，andalsotheentireportionofthecirculatingcapitalwhichisrequiredforthemaintenanceandrepairofthefixedcapital，andforitsrenewal，infactallcapitalnotinabodilyformintendedfortheconsumption-fund。”Thewholeexpenseofmaintainingthefixedcapital，mustevidentlybeexcludedfromtheneatrevenueofthesociety。Neitherthematerialsnecessaryforsupportingtheirusefulmachinesandinstrumentsoftrade……northeproduceofthelabournecessaryforfashioningthosematerialsintotheproperform，canevermakeapartofit。Thepriceofthatlabourmayindeedmakeapartofit；astheworkmensoemployedmayplacethewholevalueoftheirwagesintheirstockreservedforimmediateconsumption。

Butinothersortsoflabour，boththeprice[i。e。，thewagespaidforthislabour]andtheproduce[inwhichthislabourisincorporated]

gotothisstock，thepricetothatoftheworkmen，theproducetothatofotherpeople，whosesubsistence，conveniences，andamusements，areaugmentedbythelabourofthoseworkmen。”(BookII，Ch。2，pp。190，191。)

AdamSmithcomeshereuponaveryimportantdistinctionbetweenthelabourersemployedintheproductionofmeansofproductionandthoseemployedintheimmediateproductionofarticlesofconsumption。

Thevalueofthecommoditiesproducedbythefirst-namedcontainsaconstituentpartwhichisequaltothesumofthewages，i。e。，equaltothevalueofthepartofcapitalinvestedinthepurchaseoflabour-power。Thispartofvalueexistsbodilyasacertainquotaofthemeansofproductionproducedbythelabourers。Themoneyreceivedbythemaswagesistheirrevenue，buttheirlabourhasnotproducedanygoodswhichareconsumable，eitherforthemselvesorforothers。Hencetheseproductsarenotanelementofthatpartoftheannualproductwhichisintendedtoformasocialconsumption-fund，inwhichalonea”neatrevenue”canberealised。AdamSmithforgetstoaddherethatthesamethingthatappliestowagesisalsotrueofthatconstituentofthevalueofthemeansofproductionwhich，beingsurplus-value，formstherevenues(firstandforemost)oftheindustrialcapitalistunderthecategoriesofprofitandrent。Thesevalue-componentslikewiseexistinmeansofproduction，articleswhichcannotbeconsumed。Theycannotraisearticlesofconsumptionproducedbythesecondkindoflabourersinaquantitycorrespondingtotheirpriceuntiltheyhavebeenconvertedintomoney；onlythencantheytransferthosearticlestotheindividualconsumption-fundoftheirowners。ButsomuchthemoreshouldAdamSmithhaveseenthatthatpartofthevalueoftheannuallybegottenmeansofproductionwhichisequaltothevalueofthemeansofproductionfunctioningwithinthissphereofproduction——themeansofproductionwithwhichmeansofproductionaremade——henceaportionofvalueequaltothevalueoftheconstantcapitalemployedhere，cannotpossiblybeavalueconstituentformingrevenue，notonlyonaccountofthebodilyforminwhichitexists，butalsoonaccountofitsfunctioningascapital。

Withregardtothesecondkindoflabourers——whodirectlyproducearticlesofconsumption——AdamSmith’sdefinitionsarenotquiteexact。

Forhesaysthatinthesekindsoflabour，boththepriceoflabourandtheproduct”goto”thestockreservedforimmediateconsumption，”theprice”(i。e。，themoneyreceivedinwages)”tothatoftheworkmen，theproducetothatofotherpeople，whosesubsistence，conveniencesandamusements，areaugmentedbythelabouroftheseworkmen。”Butthelabourercannotliveonthe”price”ofhislabour，themoneyinwhichhiswagesarepaid；herealisesthismoneybybuyingarticlesofconsumptionwithit。Thesemayinpartconsistofclassesofcommoditiesproducedbyhimself。Ontheotherhandhisownproductmaybesuchasgoesonlyintotheconsumptionoftheexploitersoflabour。

AfterAdamSmithhasthusentirelyexcludedthefixedcapitalfromthe”netrevenue”ofacountry，hecontinues:”Butthoughthewholeexpenseofmaintainingthefixedcapitalisthusnecessarilyexcludedfromtheneatrevenueofthesociety，itisnotthesamecasewiththatofmaintainingthecirculatingcapital。Ofthefourpartsofwhichthislattercapitaliscomposed，money，provisions，materials，andfinishedwork，thethreelast，ithasalreadybeenobserved，areregularlywithdrawnfromit，andplacedeitherinthefixedcapitalofthesociety，orintheirstockreservedforimmediateconsumption。Whateverportionofthoseconsumablegoodsisnotemployedinmaintainingtheformer”[thefixedcapital]”goesalltothelatter”[thefundforimmediateconsumption]，”andmakesapartoftheneatrevenueofthesociety。Themaintenanceofthosethreepartsofthecirculatingcapital，therefore，withdrawsnoportionoftheannualproducefromtheneatrevenueofthesociety，besideswhatisnecessaryformaintainingthefixedcapital。”BookII，Ch。2，p。192。)

Itissheertautologytosaythatthatportionofthecirculatingcapitalwhichdoesnotservefortheproductionofmeansofproductiongoesintothatofarticlesofconsumption，inotherwords，intothatpartoftheannualproductwhichisintendedtoformsociety’sconsumption-fund。However，theimmediatelyfollowingpassageisimportant:”Thecirculatingcapitalofasocietyisinthisrespectdifferentfromthatofanindividual。Thatofanindividualistotallyexcludedfrommakinganypartofhisneatrevenues，whichmustconsistaltogetherinhisprofits。

Butthoughthecirculatingcapitalofeveryindividualmakesapartofthatofthesocietytowhichhebelongs，itisnotuponthataccounttotallyexcludedfrommakingapartlikewiseoftheirneatrevenue。Thoughthewholegoodsinamerchant’sshopmustbynomeansbeplacedinhisownstockreservedforimmediateconsumption，theymayinthatofotherpeople，who，fromarevenuederivedformotherfunds，mayregularlyreplacetheirvaluetohim，togetherwithitsprofits，withoutoccasioninganydiminutioneitherofhiscapitaloroftheirs。(Ibid。)

Andsowelearnhearthat:

1)Justasthefixedcapital，andthecirculatingcapitalrequiredforitsreproduction(heforgetsthefunction)andmaintenance，aretotallyexcludedfromthenetrevenueofeveryindividualcapitalist，whichcanconsistonlyofhisprofit，soisthecirculatingcapitalemployedintheproductionofarticlesofconsumption。Hencethatportionofhiscommodity-productwhichreplaceshiscapitalcannotresolveitselfintoconstituentsofvaluewhichformanyrevenueforhim。

2)Thecirculatingcapitalofeachindividualcapitalistconstitutesapartofsociety’scirculatingcapitalthesameaseveryindividualfixedcapital。

3)Thecirculatingcapitalofsociety，whilerepresentingonlythesumoftheindividualcirculatingcapitals，hasacharacterdifferentfromthatofthecirculatingcapitalofeveryindividualcapitalist。Thelattercirculatingcapitalcanneverformapartofhisownrevenue；howeveraportionofthefirst-namedcirculatingcapital(namelythatconsistingofconsumablegoods)mayatthesametimeformaportionoftherevenueofsocietyor，ashehadexpresseditabove，itmustnotnecessarilyreducethenetrevenueofsocietybyaportionoftheannualproduct。Indeed，thatwhichAdamSmithherecallscirculatingcapitalconsistsoftheannuallyproducedcommodity-capital，whichisthrownintocirculationannuallybythecapitalistsproducingarticlesofconsumption。Thisentireannualcommodityproductoftheirsconsistsofconsumablegoodsandthereforeformsthefundinwhichthenetrevenuesofsociety(includingwages)arerealisedorexpended。Insteadofchoosingforhisillustrationthegoodsinamerchant’sshop，AdamSmithshouldhaveselectedthemassesofgoodsstoredawayinthewarehousesoftheindustrialcapitalists。

NowifAdamSmithhadweldedtogetherthesnatchesofthoughtwhichforcedthemselvesuponhimatfirstinthestudyofthereproductionofthatwhichhecallsfixed，andnowofthatwhichhecallscirculatingcapital，hewouldhavearrivedatthefollowingresult:

I。Theannualproductofsocietyconsistsoftwodepartments:oneofthemcomprisesthemeansofproduction，theotherthearticlesofconsumption。

Eachmustbetreatedseparately。

II。Theaggregatevalueofthatpartoftheannualproductwhichconsistsofmeansofproductionisdividedasfollows:Oneportionofthevaluerepresentsonlythevalueofthemeansofproductionconsumedinthefabricationofthesemeansofproduction；itisbutcapital-valuere-appearinginarenewedform；anotherportionisequaltothevalueofthecapitallaidoutinlabour-power，orequaltothesumofwagespaidbythecapitalistsinthissphereofproduction。Finally，athirdportionofvalueisthesourceofprofits，includingground-rent，oftheindustrialcapitalistsinthiscategory。

Thefirstconstituentpart，accordingtoAdamSmiththereproducedportionofthefixedcapitalofalltheindividualcapitalistsemployedinthisfirstsection，is”totallyexcludedfrommakinganypartofthe”neatrevenue，”

eitheroftheindividualcapitalistorofsociety。Italwaysfunctionsascapital，neverasrevenue。Tothatextentthe”fixedcapital”ofeveryindividualcapitalistisinnowaydifferentfromthefixedcapitalofsociety。Buttheotherportionsofvalueoftheannualproductofsocietyconsistingofmeansofproduction——portionsofvaluewhichthereforeexistinaliquotpartsofthisaggregatequantityofmeansofproduction——formindeedsimultaneouslyrevenuesforallagentsengagedinthisproduction，wagesforthelabourers，profitsandground-rentsforthecapitalists。Buttheyformcapital，notrevenue，forsociety，althoughtheannualproductofsocietyconsistsonlyofthesumsoftheproductsoftheindividualcapitalistswhobelongtothatsociety。Bynaturetheyaregenerallyfittofunctiononlyasmeansofproduction，andeventhosewhich，ifneedbe，mightbeabletofunctionasarticlesofconsumptionareintendedforserviceasraworauxiliarymaterialsofnewproduction。

Buttheyserveassuch——henceascapital——notinthehandsoftheirproducers，butinthoseoftheirusers，namely:

III。Thecapitalistsoftheseconddepartment，thedirectproducersofarticlesofconsumption。Theyreplaceforthesecapitaliststhecapitalconsumedintheproductionofarticlesofconsumption(sofarasthiscapitalisnotconvertedintolabour-power，andhenceisnotthesumofthewagesofthelabourersofthisseconddepartment)，whilethisconsumedcapital，whichnowexistsintheformofarticlesoftheconsumptioninthehandsofthecapitalistproducingthem——sociallyspeaking——initsturnformstheconsumption-fundinwhichthecapitalistsandlabourersofthefirstdepartmentrealisetheirrevenue。

IfAdamSmithhadcontinuedhisanalysistothispoint，butlittlewouldhavebeenlackingforthesolutionofthewholeproblem。Healmosthitthenailonthehead，forhehadalreadyobservedthatcertainvalue-partsofonekind(meansofproduction)ofthecommodity-capitalsconstitutingthetotalannualproductofsocietyindeedformrevenuefortheindividuallabourersandcapitalistsengagedintheirproduction，butdonotformaconstituentpartoftherevenueofsociety；whileavalue-partoftheotherkind(articlesofconsumption)，althoughrepresentingcapital-valueforitsindividualowners，thecapitalistsengagedinthissphereofinvestment，isonlyapartofthesocialrevenue。

Butthismuchisevidentfromtheforegoing:

First:Althoughthesocialcapitalisonlyequaltothesumoftheindividualcapitalsandforthisreasontheannualcommodity-product(orcommodity-capital)ofsocietyisequaltothesumofcommodity-productsoftheseindividualcapitals；andalthoughthereforetheanalysisofthevalueofthecommoditiesintoitscomponentparts，validforeveryindividualcommodity-capital，mustalsobevalidforthecommodity-capitalofallsociety——andactuallyprovesvalidintheend——theformofappearancewhichthesecomponentpartsassumeintheaggregatesocialprocessofreproductionisdifferent。

Second:Evenonthebasisofsimplereproductiontheretakesplacenotmerelyaproductionofwages(variablecapital)andsurplus-value，butdirectproductionofnewconstantcapital-value，althoughtheworking-dayconsistsofonlytwoparts，oneinwhichthelabourerreplacesthevariablecapital，infactproducinganequivalentforthepurchaseofhislabour-power，andanotherinwhichheproducessurplus-value(profit，rent，etc。)。

Thedailylabourwhichisexpendedinthereproductionofmeansofproduction——andwhosevalueiscomposedofwagesandsurplus-value——realisesitselfinnewmeansofproductionwhichreplacetheconstantpartofcapitallaidoutintheproductionofarticlesofconsumption。

Themaindifficulties，thegreaterpartofwhichhasbeensolvedintheprecedingtext，arenotencounteredinstudyingaccumulationbutsimplereproduction。Forthisreason，AdamSmith(BookII)andQuesnay(TableauEconomique)beforehimmakesimplereproductiontheirstarting-point，wheneveritisaquestionofthemovementoftheannualproductofsocietyanditsreproductionthroughcirculation。2。AdamSmithResolvesExchangeValueintov+sAdamSmith’sdogmathattheprice，or”exchangeablevalue，”ofanysinglecommodity——andthereforeofallcommoditiesintheaggregateconstitutingtheannualproductofsociety(herightlyassumescapitalistproductioneverywhere)——ismadeupofthree”componentparts，”or”resolvesitselfinto”wages，profit，andrent，canbereducedtothis:thatthecommodity-valueisequaltov+s，i。e。，equaltothevalueoftheadvancedvariablecapitalplusthesurplus-value。AndwemayundertakethisreductionofprofitandrenttoacommonunitcalledswiththeexpresspermissionofAdamSmith，asshownbythefollowingquotations，inwhichweatfirstleaveasideallminorpoints，i。e。，anyapparentorrealdeviationfromthedogmathatcommodity-valueconsistsexclusivelyofthoseelementswhichwecallv+s。

Inmanufacture:”Thevaluewhichtheworkmenaddtothematerials……resolvesitself……intotwoparts，ofwhichtheonepaystheirwages，theothertheprofitsoftheiremployeruponthewholestockofmaterialsandwageswhichheadvanced。”(BookI，Ch。6，p。41。)”Thoughthemanufacturerhashiswagesadvancedtohimbyhismaster，he，inreality，costshimnoexpense，thevalueofthosewagesbeinggenerallyrestored，togetherwithaprofit，intheimprovedvalueofthesubjectuponwhichhislabourisbestowed。”(BookII，Ch。3，p。221。)Thatportionofthestockwhichislaidout”inmaintainingproductivehands……afterhavingservedinthefunctionofacapitaltohim(theemployer)……constitutesarevenuetothem”(thelabourers)。(BookII，Ch。3p。223。)

AdamSmithsaysexplicitlyinthechapterjustquoted:”Thewholeannualproduceofthelandandlabourofeverycountry……naturallydividesitselfintotwoparts。Oneofthem，andfrequentlythelargest，isinthefirstplace，destinedforreplacingacapital，orforrenewingtheprovisions，materials，andfinishedwork，whichhadbeenwithdrawnfromacapital；theotherforconstitutingarevenueeithertotheownerofthiscapital，astheprofitofhisstock；ortosomeotherperson，astherentofhisland。”(P。222。)Onlyonepartofthecapital，soAdamSmithjustinformedus，formsatthesametimearevenueforsomebody，namelythatwhichisinvestedinthepurchaseofproductivehands。Thisportion——thevariablecapital——first”servesinthefunctionofacapital”inthehandsofitsemployerandforhimandthenit”constitutesarevenue”fortheproductivelabourerhimself。

Thecapitalisttransformsaportionofhiscapital-valueintolabour-powerandpreciselytherebyintovariablecapital；itisonlyduetothistransformationthatnotalonethisportionofcapitalbuthisentirecapitalfunctionsasindustrialcapital。Thelabourer——theselleroflabour-power——receivesitsvalueintheformofwages。Inhishandslabour-powerisbutasaleablecommodity，acommoditybythesaleofwhichhelives，whichthereforeisthesolesourceofhisrevenue；labour-powerfunctionsasavariablecapitalonlyinthehandsofitsbuyer，thecapitalist，andthecapitalistadvancesitspurchasepriceonlyapparently，sinceitsvaluehasbeenpreviouslysuppliedtohimbythelabourer。

AfterAdamSmithhasthusshownthatthevalueofaproductinmanufactureisequaltov+s(sstandingfortheprofitofthecapitalist)，hetellsusthatinagriculturethelabourersbesides”thereproductionofavalueequaltotheirownconsumption，ortothe[variable]capitalwhichemploysthem，togetherwithitsowners’profits……”——furthermore，”overandabovethecapitalofthefarmerandallitsprofitsregularlyoccasionthereproductionoftherentofthelandlord。”(BookII，Ch。5，p。243。)Thefactthattherentpassesintothehandsofthelandlordiswhollyimmaterialforthequestionunderconsideration。Beforeitcanpassintohishands，itmustbeinthoseofthefarmer，i。e。，oftheindustrialcapitalist。Itmustformacomponentpartofthevalueoftheproductbeforeitbecomesarevenueforanyone。Rentaswellasprofitaretherefore，accordingtoAdamSmithhimself，butcomponentpartsofsurplus-valueandthesetheproductivelabourerreproducescontinuallytogetherwithhisownwages，i。e。，withthevalueofthevariablecapital。Hencerentandprofitarepartsofthesurplus-values，andthus，withAdamSmith，thepriceofallcommoditiesresolvesitselfintov+s。

Thedogmathatthepriceofallcommodities(hencealsooftheannualcommodity-product)resolvesitselfintowagesplusprofitplusground-rent，assumesevenintheintermittentesotericconstituentsofSmith’sworktheformthatthevalueofeverycommodity，hencealsothatofsociety’sannualcommodity-product，isequaltov+s，orequaltothecapital-valuelaidoutinlabour-powerandcontinuallyreproducedbythelabourers，plusthesurplus-valueaddedbythelabourersthroughtheirwork。

ThisfinalresultofAdamSmithrevealstousatthesametime——seefurtherdown——thesourceofhisone-sidedanalysisofthecomponentpartsintowhichthevalueofacommodityresolvessourcesofrevenuefordifferentclassesengagedinproductionhasnothingtodowiththedeterminationofthemagnitudeofeachofthesecomponentpartsandofthesumoftheirvalues。