The capitalists would accomplish the same end if they paid the laborers in the first place only 80 p. st.. in wages and gave them only 80 p. st.'s worth of commodities in ex- change. This seems to be the normal way for the class of capitalists as a whole, for according to Destutt the laboring class must "receive sufficient wages" (page 219), since their wages must be at least sufficient to maintain them alive and working, "to gain the barest subsistence" (page 180). If the laborers do not receive such sufficient wages, then that means according to the same Destutt "the death of industry" (page 208), which does not seem to be a way by which the 564 Capital.
capitalists can get richer. But whatever may be the scale of wages, paid by the capitalists to the laborers, they have a certain value, for instance, 80 p. st. If the capitalist class pays the laborers 80 p. st., then it has to supply them with commodities worth 80 p. st. in exchange for these wages, and the reflux of this sum does not make the capitalists any richer. If the capitalists pay the laborers 100 p. st- in wages, and supply them in exchange for 100 p. st. only with 80 p. st.'s worth of commodities, then they pay 20% above the normal scale in wages and supply on the other hand 20% less in commodities.
In other words, the fund from which the capitalist class would derive its profits, would be made up of deductions from the normal scale of wages of the laborers, by paying less than its value for labor-power, in other words, less than the value of the necessities of life required for the normal reproduction of the laborer. If the normal scale of wages were paid, which is supposed to be the case according to Destutt, there can be no fund for profits, neither for the industrial nor for the idle capitalists.
Hence Destutt should have reduced the entire secret of how the capitalist class get richer, to these words: A deduc- tion from the wages of the laborers. In that case the other sources of surplus- value, which he mentions under (1) and (3), would not exist.
Under these conditions all the countries, in which the money paid to the laborers in wages is reduced to the value of the articles of consumption required for the subsistence of the working class, would not have any fund for the con- sumption, of capitalists, nor any fund for the accumulation of capital. In other words, there would be no fund permit- ting a capitalist class to live, and therefore no capitalist class- And according to Destutt this would be the case in all wealthy and developed countries with an old civilization. for in them, "in our deeprooted old societies, the fund from which wages are paid * * * * is an almost constant magni- tude" (page 202).
Even with a deduction from the wages, the capitalist does not enrich himself by first paying the laborer 100 p. st. in Simple Reproduction. 565 wages and then supplying him with 80 p. st.'s worth of commodities for 100 p. st. of wages, in other words, by cir- culating 80 p. st.'s worth of commodities by means of 100 p. st., an excess of 20%. The capitalist gets richer by appropriating, aside from the surplus-value — that portion of the product in which surplus-value is incorporated — 20% of that portion of the product which the laborer should receive in exchange for his wages: The capitalist class would not gain anything by the silly method which Destutt assumes. They pay 100 p. st. for wages and give to the laborer for these 100 p. st. a part of his own product valued at 80 p. st- But in the next transaction they must again advance 100 p. st. for the same purpose. They would thus indulge in the useless sport of advancing 100 p. st. in money and giving in exchange therefor 80 p. st. in commodities, instead of paying 80 p. st. and exchanging it for 80 p. st. in commodities. That is to say, they would be continually advancing a money-capital which is 20% in excess of the normal required for the circulation of their variable capital. That is a very peculiar method to get rich.
(3) The capitalist class, finally, sells "to the idle capital- ists, whom they pay with a portion of their revenue which they have not spent for the wages of the laborers employed by them directly; so that the entire rent, which they pay them annually, flows back to them in this way."
We have seen a while ago that the industrial capitalists pay with a portion of their profits "the entire share of their consumption, intended for the satisfaction of their needs." Take it, then, that their profits amount to 200 p. st. And let them consume 100 p. st. of this in their individual con- sumption. But the other half, or 100 p. st., does not belong to them. It belongs to the "idle" capitalists, that is to say, to those who take ground rent and lend money on in- terest. In other words, they have to pay 100 p. st. to this gentry. Let us assume that this gentry use 80 p. st. for their individual consumption, and 20 p- st. for the purchase of servants, etc. They buy with those 80 p. st. articles of con- sumption from the industrial capitalists. These capitalists, then give up commodities valued at 80 p. st. and receive in 566 Capital.
566 Capital.
return 80 p. st. in money, or four fifths of the 100 p. st. paid by them to the idle capitalists under the name of rent, in- terest, etc. The servant class, who are the wage workers directly in attendance upon the idle capitalists, have received 20 p. st. from their masters. These servants likewise buy articles of consumption from the industrial capitalists to the amount of 20 p. st. In this way these capitalists recover also the last 20 p. st., or the last fifth, of the 100 p. st., which they have paid to the idle capitalists for rent, interest, etc., while they give up in return commodities valued at 20 p. st.
At the close of this transaction the industrial capitalists have recovered the full 100 p. st., which they paid to the idle capitalists for rent, interest, etc., in money. But one half of their surplus products, valued at 100 p. st., have passed from their hands into the fund for the individual consump^ tion of the idle capitalists.
It is evidently immaterial for the present question, whether the division of the 100 p. st. among the idle capi- talists and their dependent wage workers is drawn into this discussion or not. The matter is simple: Their rent, in- terest, in short, their share in the surplus-value of 200 p. st.. is paid to them by the industrial capitalists in money to thf amount of 100 p. st. With these 100 p. st. they buy directly or indirectly articles of consumption from the industrial capitalists. They return the 100 p. st. in money to them and take from them instead articles of consumption valued at This completes the reflux of the 100 p. st. paid by the in- dustrial capitalists to the idle capitalists. Is this transac- tion a means of making the industrial capitalists any richer, as Destutt imagines? Before this transaction they had values amounting to 200 p. st., 100 being money and 100 articles of consumption. After the transaction they have only one half of the original amount of values. They have once more 100 p. st. in money, but they have lost the ar- ticles of consumption valued at 100 p. st., which have passed into the possession of the idle capitalists. In other words, they have become poorer to the extent of 100 p. st., instead of being richer. If, instead of first choosing the circuitous Simple Reproduction. 567 route of paying out 100 p. st. in money, and then receiving this money back in payment for articles of consumption valued at 100 p. st., they had paid rent, interest, etc., directly in the natural form of commodities, then they would not recover any 100 p. st. in money, because they did not throw that amount of money into the circulation. In the case of a payment in commodities, the transaction would simply have been confined to keeping one-half of the surplus product of 200 p. st. for themselves and giving the other half to the idle capitalists without receiving any equivalent in return. Even Destutt would not have been able to consider this a means of getting richer.
Of course, the land and capital borrowed by the industrial capitalists from the idle capitalists and paid for by a por- tion of their surplus-value in the form of ground rent and interest, etc., are profitable for them, for they constitute one of the conditions for the production of any commodity, and more especially of that portion of the product, which creates surplus-value, or in which surplus-value is incorporated. This profit flows from the use of the borrowed land and capital, not out of the price paid for them. This price rather constitutes a deduction from the profit. Or one would have to contend, that the industrial capitalists do not get richer, but poorer, if they are enabled to keep the other half of their surplus-value, instead of being compelled to give it up. This is the confusion which results from the indiscriminate mix- ing up of such phenomena of circulation as a reflux of money with the distribution of the product, which is merely promoted by this circulation.
And yet the same Destutt is so sharp as to remark: "Whence come the revenues of these idle people? Do they not come out of the rent paid by them out of the profits of those who put the capitals of the former to work, that is to say, who pay with the funds of the former a certain kind of labor which produces more than it costs, in other words, the profits of the industrial capitalists? It is always necessary to revert to them, in order to find the source of wealth. It is they who in reality feed the wage workers em- ployed by the idle capitalists." (Page 246).
568 Capital.
In other words, in this quotation the rent, etc., of the idle capitalists is a deduction from the profit of the industrial capitalists. In former quotations it was a means of enriching them.
But at least one consolation is left for our friend Destutt. These good industrials treat the idle capitalists in the same way that they have treated one another and their laborers. They sell them all commodities too dearly, for instance, at a raise of 20%. Now there are two possibilities. The idle capitalists either have other funds of money aside from the 100 p. st. which they receive from the industrials, or they have not. In the first case, the industrials sell them com- modities valued at 100 p. st. at a price of, say, 120 p. st. In other words, they recover by the sale of their commodities not only the 100 p. st. paid to the idle capitalists, but also 20 p. st. of new values. Now, how stands the account? They have given away 100 p. st. in commodities for nothing, for the 100 p. st. that paid for their commodities were their own money. Their own commodities have been paid with their own money. In other words, they have lost 100 p. st. But they have also received an additional sum of 20 p. st. in the price of their commodities. In other words, 20 p. st. of gain. Balance this against the loss of 100 p. st., and you still have a loss of 80 p. st. Never a plus, always a minus. The advantage taken by the industrials over the idle capitalists has reduced the loss of the industrials, but for all that it has not transformed a reduction of their wealth into an increase of wealth. But this method cannot go on in- definitely, for the idle capitalists cannot pay year after year 120 p. st., if they receive only 100 p. st.
There remains the other possibility. The industrials sell commodities valued at 80 p. st. in exchange for the 100 p. st- paid to the idle capitalists. In this case, they still give away 80 p. st. for nothing, in the form of rent, interest, etc. By means of cheating the industrials have reduced their tribute to the idlers, but it nevertheless is exacted from them the same as ever, and the idlers are enabled, on the same theory, assuming the prices to depend on the free will of the sellers, Simple Reproduction. 569 to demand in the future 120 p. st. instead of 100 p. st. as rent and interest on their land and capital.
This brilliant analysis is quite worthy of that depth of thought which copies on the one hand from Adam Smith that " labor is the source of all wealth" (page 242), that the industrial capitalists "employ their capital for the payment of labor that reproduces it with a profit" (page 246), and which concludes on the other hand that these industrial capitalists "maintain all the other people, are the only ones who increase the public wealth, and create all the means for our enjoyment" (page 242), that it is not the capitalists who are maintained by the laborers, but the laborers who are maintained by the capitalists, for the brilliant reason that the money, with which the laborers are paid, does not remain in their hands, but continually returns to the capi- talists in payment of the commodities produced by the laborers. "They receive only with one hand, and return with the other. Their consumption must therefore be regarded as being due to those who pay their wages." (Page 235).
After this exhaustive analysis of social reproduction and consumption, as promoted by the circulation of money, Destutt continues: "This is what perfects this perpetuum mobile of wealth, this movement which, though ill under- stood" (I should say so!) "yet has justly been named cir- culation. For it is indeed a circulation and always returns to its point of departure. This is the point where produc- tion is accomplished." (Pages 139, 140.)
Destutt, that very distinguished writer, membre de I'ln- stitut de France et de la Societe Philosophique de Phila- delphie, and indeed to a certain extent a beacon light among the vulgar economists, finally requests his readers to admire the wonderful lucidity with which he has presented to them the course of the social process, the flood of light which he has poured over the matter, and he is condescending enough to communicate to his readers, where all this light somes from. This must be read in the original in order to be appreciated.
"On remarquera, j'espere, combien cette maniere de con- 570 Capital.
siderer la consommation de nos richesses est corcordante avec tout oe que nous avons dit a propos de leur production et de leur distribution, et en meme temps quelle clarte elle repand sur toute la marche de la societe. D'ou viennent cet accord et cette luciditef De ce que nous avons ren- contre la verite. Cela rappelle 1' effet de ces miroirs ou les objets se peignent nettement et dans leurs justes propor- tions, quand on est place dans leur vrai point-de-vue, et ou tout parait confus et desuni, quand on est trop pres ou trop loin." (Pages 242, 243). (It will be noted, I hope, how much this manner of viewing the consummation of our wealth is in accord with all we have said concerning its pro- duction and distribution, and also how much light it throws on the entire course of society. Whence come this accord and this lucidity? It is due to the fact that we have met truth face to face. This recalls the effect of those mirrors, in which the objects are reflected clearly and in their true pro- portions, when we are placed in their correct focus, but in which everything appears confused and distorted, when we are too close or too far away from them).
There you have the bourgeois idiocy in all its beatitude!
Accumulation and Reproduction. 571 CHAPTER XXI.51 ACCUMULATION AND REPRODUCTION ON AN ENLARGED SCALE.
It has been shown in Volume I, how accumulation works in the case of the individual capitalist. By the conversion of the commodity-capital into money, the surplus-product, in which the surplus-value is incorporated, is also mone- tized. The capitalist reconverts the surplus-value thus monetized into additional natural elements of his product- ive capital. In the next cycle of production the increased capital furnishes an increased product. But what happens in the case of the individual capital, must also show in the annual reproduction of society as a whole, just as we have seen it done in the case of reproduction on a simple scale, where the successive precipitation of the depreciated ele- ments of fixed capitals in the form of money, accumulated as a hoard, also makes itself felt in the annual reproduc- tion of society.
If a certain individual capital amounts to 400 c + 100 v, with an annual surplus-value of 100 s, then the product in commodities amounts to 400 c + 100 v + 100 s. This amount of 600 is converted into money. Of this money, again, 400 c are converted into the natural form of con- stant capital, 100 v into labor-power, and — provided that the entire surplus-value is accumulated — 100 s are converted into additional constant capital by their transformation into natural elements of productive capital. The following as- sumptions go with this case: (1) That this amount is suf- ficient under the given technical conditions either to expand the existing constant capital, or to establish a new indus- trial business. But it may also happen that surplus-value must be converted into money and this money hoarded for 51 From here to the end manuscript VIII.
572 Capital.
a much longer time, before these steps may be taken, before actual accumulation, or expansion of production, can take place. (2) It is furthermore assumed that production on an enlarged scale has actually been in process previously. For in order that the money (the surplus-value hoarded as money) may be converted into elements of productive capi- tal, these elements must be available on the market as com- modities. It makes no difference whether they are bought as finished products, or made to order. They are not paid for until they are finished, and at any rate, until actual re- production on an enlarged scale, an expansion of hitherto normal production, has taken place so far as they are con- cerned. They had to be present potentially, that is to say, in their elements, for it required only an impulse in the form of an order, that is to say, a purchase preceding their actual existence and anticipating their sale, in order to stimulate their production. The money on one side in that case calls forth expanded reproduction on the other, be- cause the possibility for it exists without the money. For money in itself is not an element of actual reproduction.
For instance, capitalist A, who sells during one year, or during a number of successive years, certain quantities of commodities produced by him, thereby converts that por- tion of the commodities, which bears surplus-value, the surplus-product, or, in other words, the surplus-value pro- duced by himself, successively into money, accumulates it gradually, and thus makes for himself a new potential money-capital. It is potential money-capital on account of its capacity and destination of being converted into the elements of productive capital. But practically he merely accumulates a simple hoard, which is not an element of actual production. His activity for the time being consists only in withdrawing circulating money out of circulation. Of course, it is not impossible that the circulating money thus laid away by him was itself, before it entered into cir- culation, a portion of some other hoard. This hoard of A, which is potentially a new money-capital, is not an addi- tion to the social wealth, any more than it would be if it Accumulation and Reproduction. 573 were spent in articles of consumption. But money, when withdrawn from circulation, having previously circulated, may have been held somewhere as a hoard, or may have been the money-form of wages, may have monetized means of production or other commodities, may have circulated portions of constant capital or of the revenue of some capi- talist. It is no more new wealth than money, considered from the standpoint of the simple circulation of commodi- ties, is the bearer, not only of its simple value, but also of its tenfold value, because it may have been turned over ten times a day and realized ten different values of commodi- ties. The commodities exist without it, and it remains what it is (or becomes even less by depreciation) whether in one turn-over or in ten. Only in the production of gold — to the extent that the output of gold contains a surplus- product and is the bearer of surplus-value — is new value created (potential money), and the new output of gold in- creases the money-material of potential new money-capitals only to the extent that it enters entirely into the circula- tion.
Although the surplus-value hoarded in the form of money is not an addition to the social wealth, it represents an ad- dition to the potential money-capital, on account of the func- tion for which it is hoarded. (We shall see later that new money-capital may arise in still another way than by th( gradual monetization of surplus-value.)
Money is withdrawn from circulation and accumulated as a hoard by the sale of commodities without a subsequent purchase. If this operation is conceived as one taking place universally, then it seems inexplicable where the buyers are to come from, since in that case everybody would want to sell in order to hoard, and none would want to buy. And it must be so conceived, since every individual capital may be in process of accumulation.
If we were to conceive of the process of circulation as one taking place in a straight line between the various di- visions of annual reproduction — which would be incorrect, as it consists with a few exceptions of mutually retroact- 574 Capital.
574 Capital.
ive movements — then we should have to start out from the producer of gold (or silver) who buys without selling, and to assume that all others sell to them. In that case the entire social surplus-product of the current year would pass into his hands, representing the entire surplus-value of the year, and all the other capitalists would distribute among themselves their relative shares in his surplus-product, which consists naturally of money, gold being the natural form of his surplus-value. For that portion of the product of the gold producer, which has to make good his active capital, is already tied up and disposed of. The surplus- value of the gold producer, in the form of gold, would then be the only fund from which all other capitalists would have to derive the material for the conversion of their an- nual surplus-product into gold. The magnitude of its value would then have to be equal to the entire annual surplus- value of society, which must first assume the guise of a hoard. Absurd as this assumption would be, it would ac- complish nothing more than to explain the possibility of a universal formation of a hoard at the same period. It would not further reproduction itself, except on the part of the gold producer, one single step.
Before we solve this seeming difficulty, we must distin- guish between the accumulation in department I (produc- tion of means of production) and in department II (pro- duction of articles of consumption). We start out from I.
I. ACCUMULATION IN DEPARTMENT I.
(1). The Formation of a Hoard.
It is evident that both the investments of capital in the numerous lines of industry constituting department I, and the different individual investments of capital within each of these lines of industry, according to their age, that is to say, the space of time during which they have served, quite aside from their volume, technical conditions, market conditions, etc., must be in different stages of the process Accumulation and Reproduction. 575 of successive transformation from surplus-value into poten- tial money-capital. It is immaterial whether this money- capital is to serve for the expansion of the active capital, or for the establishment of new industrial enterprises, which constitute the two forms of expansion of production. One portion of the capitalists, then, is continually converting its potential capital, when grown to a sufficient size, into pro- ductive capital, that is to say, they buy with the money hoarded by the monetization of surplus-value means of pro- duction, additional elements of constant capital. Another portion of the capitalists is meanwhile still engaged in ac- cumulating potential money-capital. Capitalists belonging to these two categories meet as buyers and sellers, each one of them exclusively in one of these roles.
For instance, let A sell 600, representing 400 c + 100 v + 100 s, to B, who may represent more than one buyer. A sells 600 in commodities for 600 in money, of which 100 are surplus-value which he withdraws from circulation and hoards in the form of money. But these 100 in money are but the money-form of the surplus-product in which a value of 100 was incorporated. The formation of a hoard, then, is not a production, nor is it an increment of pro- duction. The action of the capitalist consists merely in withdrawing from circulation 100 obtained by the sale of his surplus-product, in holding and hoarding this amount. This operation is carried on, not alone on the part of A, but at numerous points of the periphery of circulation by other capitalists, named A', A", A"', all of whom work bus- ily at this sort of accumulation. These numerous points at which money is withdrawn from circulation and accumu- lated in numerous individual hoards appear as so many obstacles of circulation, because they stop the movement of money and deprive it of its capacity to circulate for a cer- tain length of time. But it must be remembered that hoard- ing takes place in the simple circulation of commodities long before it is based on the capitalist mode of production.
The quantity of money existing in society is always greater than the amount in actual circulation, although this varies 576 Capital.
according to circumstances. We meet the same hoards, and the same accumulation of hoards, at this stage, but now it is a factor immanent in the capitalist process of production.
One can understand the pleasure felt by some men when all these potential capitals, by their concentration in the hands of bankers, etc., by means of the credit system, be- come disposable, "loanable capital," money-capital, which is no longer merely passive and a dream of the future, but active usury-capital, self-expanding capital.
However, A accomplishes the formation of a hoard only to the extent that he acts as a seller, so far as his surplus- product is concerned, not as a buyer. His successive pro- duction of surplus-products, the bearers of his surplus-value convertible into money, is therefore a promise for the for- mation of his hoard. In the present case, where we are dealing only with the circulation within department I, the natural form of the surplus-product, and of the total pro- duct of which it is a part, is that of an element of con- stant capital of I, that is to say, it belongs to the category of a means of production creating means of production. We shall see presently what becomes of it, what function it performs, in the hands of the buyers such as B, B', B", etc.
It must be particularly noted at this point that A, while withdrawing money from circulation and hoarding it, on the other hand throws commodities into it without with- drawing other commodities in return. The capitalists B, B', B", etc., are thereby enabled to throw only money into it and withdraw only commodities from it. In the present case, these commodities, according to their natural form and destination, become a fixed or circulating element of the constant capital of B, B', etc. We shall hear more about this anon, when we shall deal with the buyer of the surplus-product, with B, B', etc.
We remark by the way: Once more we find here, as we did in the case of simple reproduction, that the disposal of the various elements of annual reproduction, that is to say, their circulation which must comprise the reproduction of Accumulation and Reproduction. 57T