The aggregate laborer of I has sold his labor-power to the aggregate capitalist of I for 1000; he receives this value in money as his wages. With this money, he buys from II articles of consumption of the same value. The capitalist ot II meets him only in the role of a seller of commodities, nothing else, even if the laborer buys from his own capital- ist, as he does in the exchange of 500 II v, as we have seen above. The form of circulation through which his com- modity, labor-power, passes, is that of the simple circulation of commodities for the mere purpose of consumption in the satisfaction of needs, the form C (labor-power) — M — C (articles of consumption). The result of this transaction in circulation is that the laborer maintains himself as a labor-power for a capitalist, and in order to continue main- taining himself as such, he must continually renew the transaction L (C) — M — C. His wages are realized in ar« Simple Reproduction. 513 tides of consumption, they are spent as revenue, and, taking the working class as a whole, are again and again spent as a revenue.
Now let us look at the same transaction, the exchange of I v for II c, from the point of view of the capitalist. The entire commodity-product of II consists of articles of consumption, of things intended for annual consumption, serving in the realization of revenue for some one, in the present case for the aggregate laborer of I- But so far as the aggregate capitalist of II is concerned, one portion ef his commodity-product, equal to 2000, is now the form of the constant portion of the value of his productive capital converted into commodities. It must be reconverted from the iorm of commodities into its natural form, in which it may serve again as the constant portion of a productive capital. What the capitalist of II has accomplished so far is that he has reconverted one half (1000) of the constant portion of his capital, which had been reproduced in the shape of commodities, into the form of money by means of sale to the laborers of I. Hence it is not the variable capi* tal I v, which has been exchanged for this first half of the value of the constant capital of II, but simply the money which served I as money-capital in the exchange for labor- power has thus been transferred to the possession of the seller of labor-power, and for him it did not represent any capital, but merely revenue in the form of money, which is to be expended in the purchase of articles of consumption. The money to the amount of 1000, on the other hand, which has come into the hands of the capitalists of TT by means of the transaction with the laborers of I, cannot as yet serve as the constant element of the productive capital of II. For the present it is but the money-form of the commodity-capital of II, to be commuted into fixed or cir- culating portions of constant capital. Department II now buys with the money received from the laborers of I, the buyers of its commodities, means of production from I to the amount of 1000. By this means the constant value of the capital of II is renewed to the extent of one half of its total amount in its natural form, in which it can serve 514 Capital.
once more as an element of the productive capital of II. The circulation in this instance took the course C — M — C, that is to say, articles of consumption to the amount of 1000 — money to the amount of 1000 — means of production to the amount of 1000.
But C — M — C represents here the movement of capital. C, when sold to the laborers, is converted into M, and this M is converted into means of production. It is the recon- version of commodities into the material elements of which this commodity is made. On the other hand, just as the capitalist of II plays only the role of a buyer of com- modities with regard to I, so the capitalist of I acts only as a seller of commodities with regard to II. Department I bought originally labor-power valued at 1000 with that amount of money intended for service as variable capital. It has therefore received an equivalent for the 1000 v which it expended in money. This money now belongs to the laborers, who spend it in purchases from II. Department I cannot recover this money from II unless it secures the amount by the sale of commodities of the same value to II.
Department I first had a certain sum of money amount- ing to 1000 and destined to serve as variable capital. The money performs this service by its exchange for labor-power to the same amount. The laborer in his turn supplied as a result of the process of production a quantity of com- modities (means of production) to the amount of 6000, of which one sixth, or 1000, are equivalent in value to the variable portion of capital advanced in money. This vari- able portion of value no more serves as variable capital so long as it retains the form of commodities than it did while in the form of money. It serves as variable capital only after its conversion into living labor-power, and only so long as this labor-power serves in the process of production. So long as this value was incorporated in money, it repre- sented only potential variable capital. But it had at least a form, in which it was immediately convertible into labor- power. But in the form of commodities, the same variable value is but potential money, it must first assume the form of money by means of the sale of commodities, in the Simple Reproduction. 5J5 present instance by the sale of 1000 in value of com- modities of I to department II. The movement of the cir- culation passes here through the form 1000 v (money) — 1000 c (labor-power) — 1000 c (commodities equivalent in value to the variable capital) — 1000 v (money); in other words, M— C...C— M ( identical with M— L...C— M ). The process of production intervening between C...C does not belong to the sphere of circulation. It does not figure in the mutual exchange of the various elements of annual reproduction, although this exchange includes the re- production of all the elements of productive capital, the constant as well as the variable element (labor-power). All the participants in this exchange appear either as buyers, or as sellers, or as both. The laborers appear only as buyers of commodities. The capitalists act alternately as buyers and sellers, and within certain limits only on one side, either as buyers of commodities or as sellers of commodities.
The result is that department I possesses once more the variable part of the value of its capital in the form of money, from which alone it is immediately convertible into labor-power, in other words, department I once more holds its variable capital value in the only form in which it can again be advanced as an actual variable element of its productive capital. On the other hand, the laborer must again act as a seller of commodities, of his labor- power, before he can act as a buyer of commodities.
So far as the variable capital of department II (500 II v) is concerned, the circulation between the capitalists and laborers of the same department takes place without any intermediate transactions, since we look upon it as taking place between the aggregate capitalist and the aggregate laborer of II.
The aggregate capitalist of II advances 500 v for the pur- chase of labor-power to the same amount. In this case, the aggregate capitalist is a buyer, the aggregate laborer a sel- ler. Thereupon the laborer acts as a buyer of a portion of the commodities produced by himself, using the money received for his labor-power. In this case, the capitalist is the seller. The laborer has reproduced for the capitalist 516 Capital.
516 Capital.
the money paid in the purchase of labor-power by means of a portion of the newly produced commodity-capital of II, amounting to 500 v in commodities. The capitalist then holds in the form of commodities the same v, which he had in the form of money before the exchange for labor- power; while the laborer has realized the value of his labor- power in money, and uses this money by spending it as his revenue in the purchase of articles of consumption pro- duced by himself. It is an exchange of the revenue of the laborer in money for a portion of the commodities in which he has himself reproduced 500 of the value of the variable capital of the capitalist employing him. In this way this money returns to the capitalist of II as the money-form of his variable capital An equivalent value of revenue in the form of money thus reproduces variable value of capital in the form of commodities.
The capitalist does not increase his wealth by recovering the money paid by him to the laborer in the purchase of labor-power through the sale of an equivalent quantity of commodities to the laborer. He would really pay the laborer twice, if he were to pay him first 500 in the purchase of labor-power, and then give him in addition thereto a quan- tity of commodities valued at 500, after the laborer had produced them. On the other hand, if the laborer were to produce nothing but an equivalent in commodities valued at 500 for the price of his labor-power of 500, the capitalist would be no better off after the transaction than before it. But the laborer has actually reproduced a product of 3000. He has preserved the constant portion of the value of the product, that is to say, the value of the means of produc- tion incorporated in the product, to the amount of 2000, by converting it into a new product. He has furthermore added to this existing value a value of 1000 (v + s). (The idea that the capitalist grows richer by the return of 500 in money is advanced by Destutt de Tracy, as shown in detail in section XIII of this chapter.)
By the purchase of articles of consumption to the value of 500 on the part of the laborer of II, the capitalist of II recovers the value of 500 II v, which he had just held in Simple Reproduction. hYi the shape of commodities, but which he now holds in the form of money, in which he advances it originally. The immediate result of this transaction, as of any other sale of commodities, is the conversion of a given value from the form of commodities into that of money. Nor is the resulting reflux of the money to its point of departure any- thing specific. If capitalist of II had bought, with 500 of money, commodities from the capitalist of I, and then sold to the capitalist of I commodities valued at 500, he would likewise have recovered 500 in money. This sum of 500 in money would merely have served for the circulation of commodities valued at 1000, and according to a law pre- viously mentioned, the money would have returned to the one starting it into circulation.
But the 500 in money, which have returned to the capi- talist of II, represent at the same time a renewed potential variable capital. Why is this so? Money, and money-capital, is a potential variable capital only to the extent that it is convertible into labor-power. The return of 500 p. st in money to the capitalist of II is accompanied by the return of the labor-power of II to the market. The return of both of these at opposite poles — and to this extent the re- appearance of 500 in money not merely in the capacity of money, but of variable capital in the form of money — is conditioned on one and the same process. The money of 500 returns to the capitalist of II, because he sold to the laborers of II articles of consumption valued at 500, for which the laborer spent his wages, in order to maintain him- self and his family and thus his labor-power. In order to be able to live on and act again as a buyer of commodities he must again sell his labor-power. The return of 500 in money to the capitalist of II is therefore at the same time a return, or a staying, of labor-power in the capacity of a commodity purchasable with 500 in money, and thereby a return of 500 in money to its capacity of potential vari- able capital.
As for the v of department II b, which produces articles of luxury, this (II b)v is treated the same as I v. The money which renews the variable capital of the capitalists 518 Capital.
of II b in the form of money returns to them in a round- about way through the hands of the capitalists of II a. But it makes nevertheless a difference, whether the laborers buy their articles of consumption by direct purchase from the same capitalist producers to whom they sell their labor- power, or whether they buy from capitalists of another de- partment, through whose hands the money returns indirectly to the capitalists of their own department. Since the work- ing class live from hand to mouth, they buy just as long as they have the means. It is different with the capitalists, for instance in the transaction between 1000 II c and 1000 I v. The capitalist does not live from hand to mouth. His compelling motive is the utmost self-expansion of his capi- tal. Now, if circumstances seem to promise greater ad- vantages to the capitalist of II by holding on to his money for a while, instead of immediately renewing his constant capital, then the return of 1000 II c in money to I is re- tarded. This implies a retardation in the return of 1000 I v to the form of money, and in that case the capitalist of I cannot continue his business on the same scale, unless he can draw on some reserve capital. Generally speaking, reserve capital in the form of money is always necessary, in order to be able to work without interruption, regardless of the rapid or slow reflux of the variable portion of capital- value in money- If the transactions of the various elements of the current annual reproduction are to be investigated, the results of the labor of the preceding year, which has come to a close, must also be taken into consideration. The process of pro- duction which resulted in the product of the present year, is past and incorporated in its products, and so much more is this the case with the process of circulation preceding the process of production or running parallel with it, by which potential variable capital is transformed into actual vari- able capital, in other words, the sale and purchase of labor- power. The labor-market is not a part of the commodity- market which concerns us here. For the laborer has not only disposed of his labor-power before this, but also sup- plied an equivalent of the price of his labor-power in the Simple Reproduction. 519 shape of commodities, aside from the surplus-value created by him. He has furthermore his wages in his pocket and figures during the present transactions only as a buyer of commodities (articles of consumption). On the other hand, the annual product must contain all the elements of re- production, must renew all the elements of productive capi- tal, above all its most important element, the variable capi- tal. And we have seen, indeed, that the result of the present transactions, so far as the variable capital is concerned, is this: The laborer as a buyer of commodities, by means of the expenditure of his wages, and the consumption of the purchased commodities, reproduces his labor-power, this being the only commodity which he has to sell. Just as the money advanced in the purchase of this labor-power by the capitalists returns to them, so labor-power returns to the market to be once more exchanged for this money. The result in the special case of 1000 I v is that the capitalists of I hold 1000 v in money and the laborers of I offer them 1000 in labor-power, so that the entire process of reproduc- tion of I can be renewed. This is one result of the process of circulation.
On the other hand, the expenditure of the wages of the laborers of I drew on II for articles of consumption to the amount of 1000 II c, transforming them from commodities into money. Department II reconverted them into the natural form of its constant capital, by purchasing from I commodities valued at 1000 v and thus restoring to I the value of its variable capital in money.
The variable capital of I passes through three metamor- phoses, which are only indicated in the circulation of the annual product or do not appear at all in it.
(1) The first form is 1000 I v in money, which is con- verted into labor-nower of the same value. This transaction does not itself appear in the exchange of commodities be- tween I and II, but its result is seen in the fact that the working class of I approach the capitalist seller of com- modities of II with 1000 in money, just as the working class of II approach the capitalist of II with 500 in money in order to buy his 500 II v of commodities.
520 Capital.
(2) The second form is the only one in which variable capital actually varies and serves as variable capital. In this form, a power which creates values takes the place of given values offered in exchange for it. It belongs ex- clusively to the process of production which is past.
(3) The third form, in which the variable capital as such performs its function in the process of production, is the annual product in values, which in the case of I amounts to 1000 v plus 1000 s, or 2000 I (v+s). In the place of its original value of 1000 in money we have a value of double this amount, or 2000, in commodities. The variable capital- value of 1000 is therefore only one half of the product in values created by it as an element of productive capital. The 1000 I v in commodities are an exact equivalent of the variable part of capital originally advanced in money. But in the form of commodities they are but potential money (they do not become money until they are sold), so that they are still less directly money-capital. They finally be- come money-capital by the sale of the commodities of 1000 I v to II c, and by the hurried reappearance of labor-power as a purchasable commodity, as a material for which 1000 v in money may be exchanged.
During all these transactions the capitalist of I contin- ually holds the variable capital in his hands; (1) originally as money-capital; (2) then as an element of his productive capital; (3) still later as a portion of the value of his com- modity-capital, in the form of the value of commodities; (4) finally once more in money which seeks the company of labor-power for the purpose of exchange. During the process of production, the capitalist has the variable capital in his control as a labor-power creating values, but not as a value of a given magnitude. But since he never pays the laborer until the laborer's power has been applied for a certain length of time, he always holds in his hands the value created by labor for its own reproduction and the surplus-value in excess of this, before he pays him.
Seeing that the variable capital always stays in the hands of the capitalist, it cannot be claimed in any way that it converts itself into revenue for any one. On the contrary, Simple Reproduction. 521 1000 I v converts itself into money by its sale to II, whose constant capital it reproduces to the extent of one half in its natural form.
That which resolves itself into revenue is not the variable capital of I, represented by 1000 v in money. This money has ceased to serve as the money-form of the variable capital of I as soon as it has converted itself into labor-power, just as the money of any other seller of commodities ceases to represent any of his property as soon as he has exchanged it for commodities of some other seller. The transactions which the money paid as wages makes in the hands of the working class are not transactions of variable capital, but of the value of their labor-power converted into money. So are the transactions of the product in values (2000 I (v+s) ), created by the working class, only transactions of commod- ities belonging to the 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 of the idea that the money paid to the laborer is still the capitalist's money. If the capitalist is a producer of money, then the variable portion of value — in other words, the equivalent in commodities which re- produces for him the price of the labor-power bought by him — appears immediately in the form of money, so that it can serve again as variable money-capital without the circuitous routj of a reflux. But so far as the laborer of II is concerned — aside from the laborer who produces articles of luxury — 500 v exists in the form of commodities in- tended for the consumption of the laborer, which he, the aggregate laborer, buys by direct purchase from the same aggregate capitalist to whom he had sold his labor-power. The variable portion of the capital of II, so far as its natural form is concerned, consists of articles of consumption, the greater portion of which are intended for the consumption of the laboring class. But it is not the variable capital which is spent in this form by the laborer. It is the wages, the money of the laborer, which by its realization in these articles of consumption restores to the capitalist the vari- able capital 500 II v in its money-form. The variable capi- 522 Capital.
tal II v is reproduced in articles of consumption, the same as the constant capital 2000 II c. The one resolves itself no more into revenue than the other does. In either case it is the wages which resolve themselves into revenue- It is a weighty fact in the circulation of the annual pro- duction that the expenditure of wages restores both the con- stant and variable capital to the form of money-capital, in the one case 1000 II c, in the other 1000 I v and 500 II v (In the case of the variable capital either by means of a direct or indirect reflux).
XI. REPRODUCTION OF THE FIXED CAPITAL.
A great difficulty in the analysis of the transactions in annual reproduction is the following. Take the simplest form in which the matter may be presented, as follows: This resolves itself finally into One portion of the value of the constant capital, to the extent that it consists of instruments of production in the strict meaning of the term (as a distinct section of the means of production) is transferred from the instruments of labor to the product of labor (commodities); these instru- ments of labor continue to serve as elements of productive capital in their old natural form- It is their wear and tear, the loss in value experienced by them after a certain period of service, which re-appears as an element of value in the commodities produced by means of them, which is trans- ferred from the instruments of labor to the product of labor. In a question of annual reproduction, therefore, only those elements of fixed capital demand consideration, which last longer than one year. If they are completely worn out within one year, then they must be completely reproduced by the annual reproduction, and the point of issue does not concern them at all. It may happen in the case of machines Simple Reproduction. 523 and other lasting forms of fixed capital — and it frequently does happen — that certain parts of them must be completely reproduced within one year, although the organism of the building or machine as a whole lasts a much longer time. These partial organs belong in the same category with the elements of fixed capital which must be reproduced within one year.
This element of the value of commodities must not be con- founded with the cost of repairs. If a commodity is sold, this element is turned into money, the same as all others. But after it lias been turned into money, its difference from all other elements becomes apparent. The raw and auxiliary materials consumed in the production of commodities must be replaced in their natural form, in order that the repro- duction of commodities may begin anew (or that the pro- duction of commodities in general may be continuous). The labor-power embodied in them must also be renewed by fresh labor-power. For this reason, the money realized on the commodities must be continually reconverted into- these ele- ments of productive capital, a conversion of money into com- modities. It does not alter the matter that raw and auxiliary materials, for instance, are bought in large quantities in cer- tain intervals, so that they constitute a productive supply, and need not be secured by new purchases during those intervals. Nor does it matter that the money coming in through the sale of commodities, to the extent that it is intended for the purchase of those means of production, may accumulate while they last, so that this portion of con- stant capital appears temporarily in the role of money-capital suspended from its active function. It is not a revenue- capital. It is productive capital suspended in the form of money- The renewal of the means of production must con- tinue all the time, but the form of their renewal — with reference to the circulation — may vary. The new purchases, the transactions in the circulation by which they are re- newed, may take place in more or less prolonged intervals, and a large amount may be invested at one stroke in a cor- respondingly large supply of means of production. Or, the intervals between purchases may be small, and in that.
524 Capital.
case small amounts of money are invested in correspond- ingly small supplies of means of production. But this does not alter the matter itself. The same applies to labor- power. Wherever production is carried on continuously throughout the year on the same scale, there the consumed labor-power must be continuously replaced by new labor- power. Where work depends on seasons, or different portions of the work are done at different periods, as in agriculture, there the purchases of labor-power are relatively smaller. But the money received through the sale of commodities, so far as it represents the value of the wear and tear of fixed capital, is not reconverted into that component part of productive capital whose loss in value it makes good. It settles down beside the productive capital and retains the form of money. This precipitation of money is repeated, until the period of reproduction, consisting of a small or great length of time has elapsed, during which the fixed element of constant capital continues to perform its func- tion in the process of production in its old natural form. As soon as the fixed element, such as buildings, machinery, etc., has been worn out and can no longer serve in the pro- cess of production, its value exists fully in money, in the sum of money precipitated by the values which had been gradually transferred by the fixed capital to the commod- ities in whose production it assisted, and which had been converted into money by the sale of these commodities. This money then serves to replace the fixed capital (or its elements, since its various elements have a different dur- ability) in its natural form and thus to renew this part of the productive capital in reality. This money is, there- fore, the money-form of a part of the value of the pro- ductive capital, namely of its fixed part. The formation of this hoard is thus a factor in the capitalist process of repro- duction, it is the reproduction and storage, in the form of money, of the value of the fixed capital, or its individual elements, until such time as the fixed capital, shall be worn out, until it shall have transferred its entire value to the commodities produced and must be reproduced in its natural form. And this money does not lose the form of Simple Reproduction. 525 a hoard and resume its activity in the process of reproduc- tion of capital promoted by the circulation, until it is re- converted into new elements of fixed capital which will replace the worn-out elements- The transactions disposing of the annual product in com- modities can no more be dissolved into a mere direct ex- change of its individual elements than the simple circula- tion of commodities can be regarded as identical with a simple exchange of commodities. Money plays a specific role in this circulation, which is particularly marked by the manner in which the value of the fixed capital is re- produced. (It is left to a later analysis to ascertain how the matter would present itself, if production were collective and no longer a production of commodities.)