Or, again, let M' be equal to 110 pounds sterling, of which 100 may be equal to the main sum M and 10 equal to the surplus-value s. There is an absolute homogeneity, an ab- sence of distinctions, between the two constituent parts of the sum of 110 pounds sterling. Any 10 pounds of thi.a sum always constitute 1-llth of the sum of 110 pounds re- gardless of the fact that they are also l-10th of the advanced main sum of 100 pound's, or the excess of 10 pounds above it. Main sum and surplus sum (capital and surplus-value), may simply be expressed as fractional parts of the total sum. In our illustration, 10-llth form the main sum, and 1-llth the surplus sum. Materialized capital, at the end of its cycle, therefore appears as an undifferentiated expression, the money expression, of the capital relation.
True, this applies also to C (C plus c). But there is this difference, that C, of which C and c are also proportional parts of the same homogeneous mass of commodities, indi- cates its. origin P, the immediate product of which it is, while in M', a form derived immediately from circulation, the direct relation to P is obliterated.
The undifferentiated distinction between the main sum and the surplus sum, which are contained in M', so far as this expresses the result of the movement M...M', disap- pears as soon as it performs its active function of money- capital and is not preserved as a fixed expression of mate- rialized industrial capital. The circulation of money-capi- tal can never begin with M' (although M' now performs the function of M). It can begin only with M, that is to say, it can never begin as an expression of the capital rela- tion, but only as an advance of capital- value. As soon as the 500 pounds sterling are once more advanced as capital, in order to be again utilized, they constitute a point of de- parture, not one of conclusion. Instead of a capital of 422 pounds sterling, a capital of 500 pounds sterling is now advanced. It is more money than before, more capital-value, but the relation between its two constituent parts has dis- 56 Capital.
56 Capital.
appeared. In fact, a sum of 500 pounds sterling might have served instead of the 422 pounds sterling as the origi- nal capital.
It is not an active function of money-capital to mate- rialize in the form of M'; this is rather a function of C\ Even in the simple circulation of commodities, first in C-M, then in M-O, money M does not figure actively until in the second movement, M-C.2 Its embodiment in the form of M is the result of the first act, by virtue of which it be- comes a transfoimation of C.1 The capital relation con- tained in M', the relation of its constituent parts in the form of capital-value and surplus-value, assumes a func- tional importance only in so far as the repeated cycle M...M' splits M' into two circulations, one of them a cir- culation of capital, the other of surplus-value. In this 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 of the capitalist, but emphatically only the self-utiliza- tion and accumulation of money-capital, the latter function expressing itself at the outset as a periodical augmentation of ever renewed advances of money-capital.
Although M' (M plus m) is the undifferentiated form of capital, it is at the same time a materialization of money- capital, it is money which has generated more money. But this is different from the role played by money-capital in the first stage, M-C {£m. In this first stage, M circulates as money. It assumes the functions of money-capital only because it cannot serve as money unless it assumes the form of money, because it cannot transform itself in any other way into the component parts of P, L and Pm, which stand opposed to it in the form of commodities. In this circula- tion act it serves as money. But as this act is the first stage in the circulation of capital-value, it is also a function of money-capital, by virtue of the specific use-value of the com- modities L and Pm which are bought by it. M', on the other hand, composed of M, the capital-value, and m, the surplus- value created by M, stands for materialized capital-value, ex- presses the purpose and the outcome, the function of the The Circulation of Money-Capital. 57 total process of circulation of capital. The fact that it ex- presses this outcome in -the form of money, of materialized money-capital, is due to the capital-character of money-capi- tal, not to its money-character; for capital opened the proc- ess of circulation in the form of an advance of money. Its return to the money-form, as we have seen, is a function of C, not of money-capital. As for the difference between M and M', it is simply m, the money-form of c, the increment of C. For M' is composed of M plus m only because C was composed of C plus c. In C, this difference and the rela- tion of capital-value to its product, surplus-value, is already present and expressed, before both of them are transformed into M\ And in this form, these two values appear independ- ently side by side and may, therefore, be employed in sepa- rate and distinct functions.
M' is the outcome of the materialization of C\ Both M' and C are different forms of utilized capital-value, one of them the commodity, the other the money-form. Both of them share the quality of being utilized capital-value. Both of them are materialized capital, because capital-value here exists simultaneously with its product, surplus-value, al- though it is true that this relation is expressed in the un- differentiated form of the proportion of two parts of one and the same sum of money or commodity-value. But as expressions of capital, and in distinction from the surplus- value produced by it, M' and C are the same and express the same thing, only in different forms. In so far as they represent utilized value, capital acting in its own role, they express the result of the function of productive capital, the only function in which capital-value generates more value. What is common to both of them, is that money-capital as well as commodity-capital are different modes of existence of capital. Their distinctive and specific functions cannot, therefore, be anything else but the difference between the functions of money and of commodities. 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 to understand than money-capital, in which every trace of this process has 58 Capital.
disappeared. In general, all special use-forms of commodi- ties disappear in money.
It is only when M' itself figures as commodity-capital, when it is the direct outcome of a productive process, in- stead of being a transformed product of this process, that it loses its bizarre form, that is to say, in the production of money itself. In the production of gold, for instance, the formula would be M-C {£m<...P...M (M plus m), and M' would here figure as a commodity, because P furnishes more gold than had been advanced for the elements of production contained in the first money-capital M. In this case, the irrational nature of the formula M...M' (M plus m) disap- pears. Here a part of a certain sum of money appears as the mother of another part of the same sum of money.
IV. The Rotation as a Whole.
We have seen that the process of circulation is inter- rupted at the end of its first phase, M-C |pm> by P, which makes the commodities L and Pm parts of the substance and value of productive capital and consumes them. The result of this productive consumption is a new commodity C, which is of different composition and value than the commodities L and Pm. The interrupted process of circulation, C-M, must be completed by M-C. The basis of this second and concluding phase of circulation is C, a commodity of dif- ferent composition and value than C. The process of cir- culation therefore appears first as M-C,1 then as C 2-M', the C2 in this second phase representing a greater value and a different use-value than C1, due to the 'interruption caused by the function of P which is the production of C from elements of C, embodied in the productive capital P. The first form assumed by capital (vol. I, chap. IV), viz., M-C-M', or extended first M-C,* second O-M', shows the same commodity twice. It is the same commodity which is ex- changed for money in the first phase and again exchanged for more money in the second phase. In spite of this es- sential difference, these two modes of circulation share the peculiarity of transforming in their first phase money into commodities, and in the second phase commodities into money, so that the money spent in the first phase returns in The Circulation of Money-Capital. 59 the second. On the one hand, both have in common this return of money to its starting point, on the other hand the excess of the returned money over the money first advanced. To this extent, the formula M-C.C'-M' is apparently con- tained in the general formula M-C-M'.
It follows furthermore that equal quantities of simultan- eously existing values are placed in opposition to one another and exchanged in the two metamorphoses of circulation rep- resented by M-C anc C'-M'. The change of value is due ex- clusively to the metamorphosis P, the process of produc- tion, which thus appears as a natural metamorphosis of capi- tal, as compared to the merely formal metamorphosis of cir- culation.
Let us now consider the total movement, M-C..P...C'-M', or its more explicit form, M-C {£m..P...C (C+c) -M' (M+m). Capital here appears as a value which goes through a series of connected metamorphoses conditioned on one another and representing so many phases of the total process. Two of these phases belong to the sphere of circulation, one of them to that of production. In each one of these phases, capi- tal-value has a different form corresponding to a different, special, function. Within this cycle, value does not only maintain itself at the magnitude in which it was originally advanced, but it increases. Finally,, in the concluding stage, it returns to the same form which it had at the beginning of the cycle. This total movement constitutes the process of rotation as a whole.
The two forms assumed by capital-value are that of money- capital and commodity-capital. In the stage of production, its form is that of productive capital. The capital which assumes these different forms in the course of its total process of ro- tation, discards them one after the other, and performs a special function in each one of them, is industrial capital. The term industrial applies to every branch of industry run on a capitalist basis.
Money-capital, commodity-capital, productive capital are not, therefore, terms indicating independent classes of capital, nor are their functions processes of independent and sepa- rate branches of industry. They are here used only to indi- 60 Capital.
cate special functions of industrial capital, assumed by it seriatim.
The circulation of capital proceeds normally only so long as its various phases flow uninterruptedly one into the other. If capital stops short in its first phase M-C, money-capital assumes the rigid form of a hoard; if it stops in the phase of production, the means of production remain lifeless on one side, while labor-power remains unemployed on the other; and if capital stops short in its last phase C'-M', masses of unsold commodities accumulate and clog the flow of rota- tion.
At the same time, it is a matter of course that the rota- tion of capital includes the stopping of capital for a certain length of time in the various sections of its cycle. In each of these sections, industrial capital is poured into a definite mold, being either money-capital, productive capital, or commodity-capital. It does not assume a form in which it may enter a new metamorphosis, until it has gone through the function corresponding to the form preceding the new metamorphosis. In order to make this plain, we have as- sumed in our illustration, that the capital-value of the mass of commodities created in the phase of production is equal to the total sum of values originally advanced in the form of money, or, in other words, that the entire capital-value advanced in the form of money enters undivided from one stage into the next. Now we have seen (vol. I, chap. IV) that a part of the constant capital, the means of production proper, such as machinery, always serve repeatedly, for a greater or smaller number of times, in the same processes of production, so that they transfer their values piece-meal to the products. We shall see later, to what extent this cir- cumstance modifies the process of rotation of capital. For the present, it suffices to say this: In our illustration, the value of the productive capital of 422 pounds sterling con- tained only the average wear and tear of buildings, machin- ery, etc., that is to say only that part of value which they transferred in the transformation of 10,600 pounds of cot- ton to 10,000 pounds of yarn, which represents the product of one week's spinning, or of 60 hours. In the means of production, into which the advanced constant capital of 372 The Circulation of Money-Capital. 61 pounds sterling is transformed, <the instruments of labor, buildings, machinery, etc., figure only as would ob- jects which were rented in the market for a weekly rate. But this does not change the problem in any way. We have but to multiply the quantity of yarn produced in one week, or 10,000 pounds of yarn, with the number of weeks contained in a certain number of years, in order to transfer the entire value of the means of production bought and consumed during this period. It is then plain that the advanced money-capital must first be transformed into these means of production, must first have gone through the phase M-C, before it can be used as productive capital, P. And it is likewise plain that, in our illustration, the capital value of 422 pounds sterling, embodied in the yarn during the proc- ess of production, cannot become a part of the value of the 10,000 pounds of yarn and enter the circulation phase C'-M', until it has been produced. The yarn cannot be sold, until it has been spun.
In the general formula, the product of P is regarded as a material thing different from the elements of the produc- tive capital, as an object existing apart from the process of production and having a different use-value than the ele- ments of production. And if the fruit of production as- sumes the form of such an object, it always corresponds to this description, even if a part of it should re-enter pro- duction as one of its elements. Grain, for instance, serves as seed for its own reproduction, but the final product is always grain and has a different composition than the ele- ments used in its production, such as labor-power, imple- ments, and fertilizer. But there are certain independent branches of industry, in which the result of the productive process is not a new material product, not a commodity. Among these, only the industries representing communica- tion, such as transportation proper for commodities and hu- man beings, and the transmission of communications, let- ters, telegrams, etc., are economically important.
A. Cuprov6 says on this score: "The manufacturer may first produce articles and then look for consumers" (his 6 A. Cuprov: Zeleznodoroznoje chostjajstvo, Moskva, 1875, pg. 75 62 Capital.
product, having been completed in the process of produc-, tion, is transferred to the process of circulation as a separate commodity). "Production and consumption thus appear as two acts distinct from one another in space and time. In the transportation industry, which does not create any new prod- ucts, but merely transfers men and things, these two acts coincide; its services (change. of place) must be consumed at the same time that they are produced. For this reason the distance, within which railroads can find customers, extends at best 50 verst (53 kilometers or about 30 miles) on either side of their tracks."
The result in the transportation of either men or com- modities is a change of place. Yarn, for instance, is thus transferred from England, where it was produced, to In- dia.
Now transportation, as an industry, sells this change of location. This utility is inseparably connected with the process of transportation, which is the productive process of transportation. Men and commodities travel by the help of the means of transportation, and this traveling, this change of location, constitutes the production in which these means of transportation are consumed. The utility of trans- portation can be consumed only in this process of produc- tion. It does not exist as a use-value apart from this proc- ess, it does not, like other commodities, serve as a com- modity which circulates after its process of production. The exchange value of this utility is determined, like that of any other commodity, by the value of the elements of production (labor-power and means of produc- tion) plus the surplus-value created by the surplus-labor of the laborers employed in transportation. This utility also entertains the same relations to consumption that all other commodities do. If it is consumed individually, its value is used up in consumption; if it is consumed productively by entering into the process of production of the transported commodities, its value is added to that of the commodity. The formula for the transportation industry would, therefore, be M-C \p...P-M', since it is the process of production itself which is paid for and consumed, not a product dis- tinct and separate from it. This formula has almost the The Circulation of Money-Capital. 63 same form as that of the precious metals, only with the dif- ference, that in this case M' represents the changed form of the utility resulting during the process of production, while in the case of the precious metals it represents the natural form of the gold or silver obtained in this process and trans- ferred from it to other stages.
Industrial capital is the only form of existence of capital, in which not only the appropriation of surplus value or sur- plus product, but also its creation is a function of capital. Therefore it gives to production its capitalist character. Its existence includes that of class antagonisms between capital- ists and laborers. To the extent that it assumes control over social production, the technique and social organization of the labor process are revolutionized and with them the eco- nomic and historical type of society. The other classes of capital, which appear before industrial capital amid past or declining conditions of social production, are not only sub- ordinated to it and suffer changes in the mechanism of their functions corresponding to it, but move on it as a basis, live and die, stand and fall with this basis. Money-capital and commodity-capital, so far as they still persist as independent branches of industry along with industrial capital, are noth- ing but modes of existence of different functional forms either assumed or discarded by industrial capital in the sphere of circulation, made independent and developed one-sidedly by the social division of labor.
The cycle M...M' on one side intermingles with the general circulation of commodities, proceeds from it and flows back into it, is a part of it. On the other hand, it is for the indi- vidual capitalist an independent movement of his capital value, taking place partly within the general circulation of commodities, partly outside of it, but always preserving its independent character. For in the first place, its two phases taking place in the sphere of circulation, M-C and C'-M', have functionally different characters as functions of capital circulation. In M-C, the commodity C is composed of labor- power and means of production; in C'-M', capital value is realized plus surplus-value. In the second place, the process of production, P, includes productive consumption. In the 64 Capital.
third place, the return of money to its starting point makes of the cycle M...M' a process of circulation complete in itself.
Every individual capital is therefore, on the one hand, in its two phases M-C and C'-M', an active element in the general circulation of commodities, with which it is con- nected either as money or as a commodity. Thus it forms a link in the general chain of metamorphoses in the world of commodities. On the other hand, it goes through its own independent circulation within the general circulation. Its independent circulation passes through the sphere of produc- tion and returns to its starting point in the same form in which it left that point. Within its own circulation, which includes its natural metamorphosis in the process of produc- tion, it changes at the same time its value. It returns not only as the same money-value, but as an increased money- value.
Let us finally consider M-C...P...C-M' as a special form of the process of circulation of capital, apart from the other forms which we shall analyze later. It is distinguished by the following points: 1. It appears as the circulation of money-capital, because industrial capital in its money form, as money-capital, forms the starting and terminal point of its total process. The formula itself expresses the fact that money is not expended as money at this stage, but advanced as the money-form of capital. It expresses furthermore that exchange-value, not use-value, is the determining aim of this movement. Just because the money-form of this value is its tangible and inde- pendent form, the compelling motive of capitalist produc- tion, the making of money, is most fittingly expressed by the circulation formula M...M.' The process of production appears merely as an indispensable and intermediate link, as a necessary evil of money-making. All nations with a capitalist mode of production are seized periodically by a feverish attempt to make money without the mediation of the process of production.
2. The stage of production, the function of P, represents an interruption of the two phases of circulation M-C...C'-M', which in their turn represent links in the simple circulation M-C-M'. The process of production appears formally and The Circulation of Money-Capital. 65 essentially in circulation as that which is typical of capitalist production, that is to say as a mere means of utilizing pre- viously advanced values. The accumulation of wealth is the purpose of production.
3. Since the series of phases is opened by M-C, the second link of the circulation is C'-M.' In other words, the start- ing point is M, or the money-capital to be utilized, the ter- minal point M', or the utilized money-capital M plus m, in which M figures together with its offspring m. This dis- tinguishes the circulation of M from that of the two other cycles P and C, in two ways. On one side, its two extremes are represented by the money-form. And money is the tangible form of value, the value of the product in its inde- pendent form, in which every trace of the use-value of the commodities has been extinguished. On the other side, the formula P...P is not necessarily transformed into P...P' (P plus p,) and in the form C-C, no difference in value is visi- ble between the two extremes. It is, therefore, characteristic for the formula M-M' that capital value is its starting point, and utilized capital value its terminal point, so that advanced capital value appears as the means, and utilized capital value as the end of the entire operation. And furthermore, this relation is expressed in the form of money, in the form of independent value, so that money-capital is money genera- ting more money. The generation of surplus-value by value is not only expressed as the Alpha and Omega of the process, but more explicitly in the form of glittering money.
4. Since M', the money-capital realized as a result of C'-M', the supplementary and concluding form of M-C, has absolutely the same form in which it began its first circula- tion, it can immediately begin the same circulation over again as an increased (accumulated) money-capital, or as M' equal to M plus m. And it is not expressed in the formula M-M' that, in the repetition of the cycle, the circulation of m separates from that of M. Considered in its complete form, the circulation of money capital expresses simply the process of utilization and accumulation. The consumption in it is pro- ductive consumption, as shown by the formula M-C { pm< and it is only this which is included in this circulation of individual capital. M-L means L-M, or C-M, on the part of the laborer. It is therefore the first phase of circulation which promotes his individual consumption, thus: L-M-C (means of subsistence). The second phase, M-C, no longer falls within the circulation of individual capital, but it is ini- tiated by individual capital and an indispensable premise for it, since the laborer must above all live and maintain himself by individual consumption, in order to be always on the market for exploitation by the capitalist. But this con- sumption is here only assumed as the indispensable condition for the productive consumption of labor power by capital, and it is, therefore, considered only in so far as it preserves and reproduces his labor power by means of his individual consumption. But the means of production Pm, the com- modities proper which enter into the circulation of capital, are only material feeding 'the productive consumption. The act L-M promotes the individual consumption of the laborer, the transformation of means of subsistence into flesh and blood. It is true, that the capitalist must also be present, must also live and consume in order to perform the function of a capitalist. To this end, he has, indeed, but to consume in the same way as the laborer, and this is all that is assumed