cutlery factory of Turner's Falls, Connecticut River, and Mr. Oakman, the treasurer of the company, after telling him that especially American table knives beat the English goods in quality, continues: "But we shall beat England also in the matter of prices, we are ahead of it in quality 604 Capital.
even now, that is acknowledged; but we must have lower prices, and we shall get them as soon as we get our steel cheaper and bring down our labor." (427). A reduction of wages and long hours of labor, that is the essence of the rational and healthy method which is to elevate the laborer to the dignity of a rational consumer, in order that he may create a market for the mass of objects which civilization and the progress of invention have made accessible to him.
To repeat, then, just as department I has to supply the additional constant capital of II out of its surplus-value, so II supplies the additional variable capital for I. Depart- ment II accumulates for itself and for I, so far as the vari- able capital is concerned, by reproducing a greater portion of its total product, especially of its surplus-product, in the shape of necessary articles of consumption.
I (v + s), in the case of production on the basis of in- creasing capital, must be equal to II c plus that portion of the surplus-product which is re-incorporated as capital, plus the additional portion of constant capital required for the expansion of the production of II; and the minimum of this expansion is that without which actual accumulation, that is to say, an actual expansion of the production of I, is impossible.
Reverting now to the case which we examined last, we find that it has the peculiarity that II c is smaller than I (v + % s), smaller than that portion of the product of I which is spent as revenue for articles of consumption, so that a portion of the surplus-product of II, equal to 70, is at once realized for the purpose of disposing of the 1500 I (v + s). As for II c, equal to 1430, it must, other circumstances remaining the same, be reproduced out of an equal amount of I (v+s), in order that simple reproduction may take place, and to that extent we need not pay any more atten- tion to it. It is different with the additional 70 II c. That which is for I merely an exchange of revenue for articles of consumption, is for II more than a mere reconversion of Accumulation and Reproduction. 605 its constant capital from the form of commodity-capital into its natural form, as it is in simple reproduction, for it is a process of direct accumulation, a transformation of a portion of its surplus-product from the form of articles of consumption into that of constant capital. If I buys with 70 p. st. in money (money-reserve for the conversion of surplus-value) the 70 II s, and if II does not buy in ex- change 70 I s, but accumulates the 70 p. st. as money- capital, then this money is indeed always the expression of an additional product (namely the surplus-product of II, the equivalent of which it is), although this is not a product which returns into the production; but in that case this ac- cumulation of money on the part of II would be the evi- dence that 70 I s in means of production are unsaleable. There would be a relative overproduction in I, correspond- ing to a simultaneous break in the reproduction of II.
But apart from this, the following point must be noted: During the time in which the 70 in money, which came from I, have not as yet returned to it, or have but partially done so, by the purchase of 70 I s on the part of II, this 70 in money figures entirely or in part as additional virtual money-capital in the hands of II. This is true of every transaction between I and II, before the mutual replace- ment of their respective commodities has accomplished the reflux of the money to its starting point. But the money, under a normal condition of things, figures here only tem- porarily in this role. In the credit system, however, where all momentarily released money is to be used immediately as an active additional money-capital, such a temporarily released money-capital may be engaged, for instance, in new enterprises of I, while it still would have to liquidate addi- tional products held in other enterprises. It must also be noted that the annexation of 70 I s to the constant capital of II requires at the same time an expansion of the variable capital of II to the extent of 14. This implies, similarly as it did in the direct incorporation of the surplus-product of I s in capital I c, that the reproduction in II is alreadv in process with a view to further capitalization; in other words, it implies the expansion of that portion of the 606 Capital surplus-product, which consists of necessary articles of con- sumption.
The product of 9000, in the second illustration, must be distributed in the following manner for the purpose of re- production, when 500 I s is to be capitalized. We merely consider the commodities in this case and leave aside the circulation of money.
Capitalization takes place in the following manner: In department I, the 500 s, which are capitalized, divide themselves into five-sixths, or 417 c, plus one-sixth, or 83 v. The 83 v draw an equal amount out of II s, which buys ele- ments of constant capital and adds them to II c. An in- crease of II c by 83 implies an increase of II v by one-fifth of 83, or 17. We have, then, after this transaction Total 8399 The capital in I has grown from 6000 to 6500, or by 1-12. That of II has grown from 1715 to 1899, or by nearly 1-9.
The reproduction on this basis in the second year brings the capital at the end of that year up to the following figures: And at the end of the third year, we have as a product: If department I then accumulates as before one-half of its surplus-value, we find that I (v + % s), 1173 v + 587 (% s), amount to 1760, more than the entire 1715 II c, namely an excess of 45. This must again be balanced by annexing an equal amount of means of production to II c, which thus grows by 45. This again requires an addition Accumulation and Reproduction. 607 of one-fifth, or 9, to II v. Furthermore, the capitalized 587 I s are divided into five-sixths and one-sixth respectively, that is to say, 489 c and 98 v. These last 98 imply a new addition of 98 to the constant capital of II, and this again an increase of the variable capital of II by one-fifth, or 20. Then we have.
Total capital 9858 In three years of reproduction on an increasing scale the total capital of I has grown from 6000 to 7629, and that of II from 1715 to 2229, or the total social capital from 7715 (3). Exchange of II c Under Accumulation.
In the exchange of I (v+s) with II c we meet with dif- ferent cases.
Under simple reproduction, both of them must be equal and take one another's places, otherwise simple reproduction cannot proceed smoothly, as we have seen.
Under reproduction on an expanded scale, it is above all the rate of accumulation which is important. In the pre- ceding cases we had assumed that the rate of accumulation in department I was equal to one-half of I s, and also that it remained constant from year to year. We changed merely the proportion in which this accumulated capital was divided between variable and constant capital. We then had three cases.
(1) I (v + %s) equal to II c, which is therefore smaller than I (v + s). This must always be the case, otherwise I cannot accumulate.
(2) I (v+Mjs) greater than II c. In this case the ex- change is effected by adding a corresponding portion of II s to II c, so that this becomes equal to I (v + % s). In this case, the transaction in department II is not a simple re- production of its constant capital, but accumulation, an augmentation of its constant capital by that portion of its surplus-product which it exchanges for means of production 608 Capital.
of I. This augmentation implies at the same time a corre- sponding addition to the variable capital of II out of its own surplus-product.
(3) I (v + %s) smaller than lie. In this case depart- ment II had not fully reproduced its constant capital by means of exchange and had to make good the deficit by a purchase from I. But this did not require any further ac- cumulation of variable capital on the part of II, since its constant capital was brought only to its full size by this operation. On the other hand, that portion of the capital- ists of I who accumulate only additional money-capital, had already accomplished a part of this accumulation by this transaction.
The premise of simple reproduction, that I (v + s) is equal to II c, is irreconcilable with capitalist production, although this does not exclude the possibility that a certain year in an industrial cycle of 10 or 11 years may not show a smaller total production than the preceding year, so that there would not have been even a simple reproduction, compared to the preceding year. Indeed, considering the natural growth of population per year, simple reproduction could take place only in so far as a correspondingly larger number of unproductive servants would partake of the 1500 representing the aggregate surplus-product. But accumula- tion of capital, actual capitalist production, would be im- possible under.such circumstances. The fact of capitalist production therefore excludes the possibility of II c being equal to I (v + s). Nevertheless it might occur even under capitalist production that in consequence of the process of accumulation during a preceding number of periods of production II c might not only be equal, but even greater than I(v + s). This would mean an overproduction in II and could not be compensated in any other way than by a great crash, in consequence of which some capital of II would be transferred to I. It does not alter the relations of I (v -f s), if a portion of the constant capital of II re- produces itself, as happens, for instance, in the employment of home raised seeds in agriculture. This portion of II c has no more reference to the exchange between I and II Accumulation and Reproduction. 609 than has I c. Nor does it alter the matter, if a portion of the products of II are of such a nature that they may serve as means of production in I. They are covered by a portion of the means of production supplied in II by I, and this portion must be deducted on both sides at the outset, if we wish to analyze without any obscuring interference the ex- change between the two great departments of social produc- tion, the producers of means of production and the produc- ers of articles of consumption.
To repeat, then, under capitalist production I (v + s) cannot be equal to II c, in other words, the two cannot bal- ance. On the other hand, naming I s-x that portion of I s which is spent by the capitalists as revenue, we see that I (v + s-x) may be equal to, greater or smaller than, II c. But I (v + s-x) must always be smaller than II (c + s), namely, as much smaller as that portion of II s which must be consumed under all circumstances by the capitalist class of II.
It must be noted that in this presentation of accumula- tion the value of the constant capital, so far as it is a portion of the value of the commodity-capital, which it helped to produce, is not exactly represented. The fixed portion of the newly accumulated constant capital is transferred to the commodity-capital only gradually and periodically accord- ing to the different nature of these fixed elements. Where- ever raw materials and halfwrought articles are employed in large quantities for the production of commodities, the commodity-capital therefore consists overwhelmingly of ob- jects replacing circulating constant elements and variable capital. (On account of the turn-over of the circulating elements this method may nevertheless be adopted. It is then assumed that the circulating portion together with that portion of value which the fixed capital has transfer- red to it is turned so often during the year that the aggre- gate sum of the commodities supplied is equal in value to all the capital invested in the annual production.) But wherever only auxiliary materials are used for machine work, and no raw material, there v, the labor element, must reappear in the commodity-capital as its largest factor.
610 Capital.
610 Capital.
While in the calculation of the rate of profit the surplus- value is figured on the total capital, regardless of whether the fixed elements transfer periodically much or little value to the product, the fixed portion of constant capital is in- cluded in the calculation of the value of any periodically created commodity-capital only to the extent that it yieldf a certain average of value to the product.
IV. CONCLUDING REMARKS.
The original source for the money of II is v + s of the gold producers in department I, exchanged for a portion of II c. Only to the extent that the gold producer accumu- lates surplus-value or converts it into means of production of I, in other words, to the extent that he expands his pro- duction, does his v + s stay out of department II. On the other hand, to the extent that the accumulation of gold on the part of the gold producer himself leads ultimately to an expansion of production, a portion of the surplus-value of gold production not spent as revenue passes into depart- ment II as additional variable capital of the gold producers, promotes the accumulation of new hoards in II and sup- plies it with means by which to buy from I without having to sell to it immediately. From this money derived from I (v -f s) of gold production must be deducted that portion of gold which is employed by certain lines of II as raw ma- terial, etc., in short as an element for building up their con- stant capital. An element of preliminary reproduction, for the purpose of future expanded production, is created for either I or II under the following conditions: For I only when a portion of I s is sold onesidedly, without a balancing purchase, to II and serves there as additional constant capital; for II, when the same case occurs on the part of I with reference to the variable capital; furthermore when a portion of the surplus-value spent by I as revenue is not covered by II c, so that a portion of II s is bought with it and thus converted into money. If I (v + s-x) is Accumulation and Reproduction. 611 greater than II c, then II c need not for its simple repro- duction make up in commodities of I what I has taken out of II s. The question is, to what extent hoarding may take place within the exchange of the capitalists of II among themselves, an exchange which can consist only of a mutual crossing of II s. "We know that direct accumulation takes place within II by means of direct conversion of a portion of II s into variable capital (just as department I con- verts a portion of I s directly into constant capital). In the various stages of accumulation within the different lines of business of II, and for the individual capitalists of these lines, the matter explains itself, with the self-under- stood modifications, in the same way as in I. One side is still engaged in hoarding and sells without buying, the other is on the point of actual expansion of reproduction and buys without selling. The additional variable money- capital is first advanced for additional labor-power, but this, in its turn, buys articles of consumption from the hoarding owners of the additional articles of consumption used by the laborers. To the extent that these owners hoard the money, it does not return to its point of depart- ure.
END OP VOLUME TWO.
INDEX.
Accumulated Wealth, insignificant compared to productive forces, 370.
Accumulation, of additional capital, its diagramatic presentation, 591.
Additional Capital, in production of precious metals not withdrawn in money, but increased by production of more precious metals, 377.
Additional Capital, its function in differences of turn-over, 311.
Additional Capital, required for normal conservation of fixed capital, belongs to the circulating capital, 200.
Advanced Capital, a clear conception of its nature necessary for under- standing of turn-over, 352.
Agricultural Capital, its peculiar move- ments, 112.
Auction Sales, their effect on the market supply of commodities, 291.
Auxiliary Materials, circulate only their value by transfer to the pro- duct, like the fixed capital, 180.
Auxiliary Materials, do not circulate their value piecemeal, like fixed capital, but transfer it wholly to the product, like raw materials, 186.
Auxiliary Materials, mistakenly classi- fied by Ramsay as fixed capital, 180.
Auxiliary Materials, some of them may transfer both substance and value to the product, 186.
Average Rate of Profit, problem offered by Engels to official economists, 28.
B Bailey, his idea of value, 121. Bookkeeping, unproductive expense of circulation, 151.
Capital, an expression of labor, 81.
Capital, distinctive mark of its com- modity-form from its money-form, 55.
Capital, in a fallow state, 139.
Capital, industrial defined, 59. (See also Industrial Capital, Productive Capital, and Agricultural Capital.)
Capital, its different functions ex- pressed through different forms, 57.
Capital, its individual and social role in circulation, 64, 110.
Capital, its money-form superior to its commodity-form from a capitalist point of view, 84.
Capital, its forms differ when individ- ually and socially considered, 426.
Capital, its release in the various periods of turn-over, 300.
Capital, latent, must increase in pro- portion as reproduction is irregular, Capital, rotation of its different forms, Capitalist, must be money-capitalist in his relation to the laborer, 68.
Capitalist Production, its development increases commodity-supply, 163.
Capitalist Production, its influence on building trade, 266.
Capitalist Production, its main ele- ments, 44.
Circulating Capital, a portion always in the form of released capital, 320.
Circulating Capital, consists of raw and auxiliary • materials and labor- Circulating Capital, distinguished from capital of circulation, 218.
Circulating Capital, its elements con- tinually reproduced in their natural form, not interruptedly as those of fixed capital, 191.
Circulating Capital, its form conceals surplus-value, 248.
Circulating Capital, not distinguished by economists from variable capital, Circulation, agents of, paid by agents of production, 144.
Circulation, does not change its un- productive character by transfer, 148.
Circulation, illusive character of its typical formula, 69.
Circulation, its expenses, see expenses.
Circulation, of commodities, its gen- eral laws do not apply to func- tional sections of cycles of individ- ual capital, 129.
Circulation, its role in determining the meaning of fixed and circulating capital, 246.
Circulation, its three cycles simul- taneous phases of industrial capital, Circulation, its three diagrams, 114.
Circulation, of capitalist commodities, influence circulation of other com- modities, 125.
Circulation, of commodities, its law, Circulation, of money, has for its starting point the capitalist class, Circulation, necessary in process of reproduction, but itself unproductive, Circulation, time _ of, 138. (See also time of circulation).
Classification, of reproduction, in a vague way, 131.
Commercial Crisis, caused by irregu- larities in the turn-over of capital, Commercial Crisis, interferes with smooth flow of reproduction, 475.
Commercial Crisis, through lack of balance in production, 545.
Commodities, formation of supply may require productive labor and add value to product, 156.
Index.
Commodities, formation of normal sup- ply an expense adding value, 167.
Commodities, formation of abnormal supply, decreases value, 168.
Commodities, general formation of supply, 155.
Commodities, the ideal and real separation of the value of different kinds, 75.
Commodities, their voluntary and in- voluntary supply, 166.
Commodities, the typical form of pro- ducts under capitalism, 43.
Commodities, when revenue and when capital, 449.
Commodity-Capital, its transformation into Money-Capital, 48.
Commodity-Capital, different circula- tion as surplus-value and capital- value, 76.
Commodity-Capital, general formula of its circulation, 98.
Commodity-Capital, separation of its value into capital-value and surplus- Complaints, of employers characteristic of early stage of capitalist develop- Concentration of Capital, promoted by credit, 268.
Consumption, individual, of capitalist, not included in formula of repro- duction of money-capital, 56, 66.
Consumption, individual and produc- tive interrelated, 106.
Consumption, not identical with sale, Consumption, productive, a part of the cycle of capital, 85.
Continuity, essential to capitalist re- Credit, complicates relations between originally advanced capital and capi- talized surplus-value, 368.
Credit, not analyzed in volume II, (See volume III).
Credit-System, its influence on individ- ual and social turn-over of capital, Crisis, commercial, new basis for cycles of turn-over, 211.
Crisis, commercial, due to decrease in exchange of capitals, 87.
Crop Rotation, its influence on turn- over of capital, 282.
Demand, may be demand for payment or demand for consumption, 87.
Depreciation, allowed for in capital calculation as necessary, 203.
Depreciation of fixed Capital, through disuse, adds value to product, 276.
Destutt de Tracy, his theory of re- production criticized, 560.
Differences, real and apparent, in turn- over of component parts of capital, Distance, of markets, affects turn-over of capital, 285.
Distribution, its meaning in capitalist production, 40.
Division of _ Labor, does not make an unproductive function productive, Elements of Production, their different forms, 45.
Exchange, between constant and vari- able capitals of the two depart- ments of reproduction, 462.
Exchange, between the two depart- ments of reproduction, 460.
Exchange, within department II, for reproduction, 465.
Expansion of capital, intensive and extensive, 195.
Expenses of Circulation, 147.
Expenses of Circulation, due to storage and formation of supply, enter in part into value of commodi- ties, 157.
Expenses of Circulation, general rule determining whether they add value Expenses of Circulation, genuine, 147.
Expenses of Circulation, if preserving use-value of product, preserve also exchange-value, 158.
Expenses of Storage, may add valut and surplus-value to the product, Expenses of Transportation, add valui to product, 170.
Fixed Capital, its peculiar form, 178.
Fixed Capital, its circulation only s circulation of value, not of substance, Fixed Capital, difficulty in analyzing role of money in reproduction o{ wear and tear, 529.
Fixed Capital, its distinction from cir- culating capital not due to theii different role in production but to their different mode of turn-over, 189- Fixed Capital, its distinction from cir- culating capital refers only to prod uctive capital, not to commodity- capital and money-capital, 190.
Fixed Capital, its durability deter- mines ratio of its transfer of value, Fixed Capital, its effectiveness, in- creased by more intensive exploita- tion of labor without an increase of capital, 409.
Fixed Capital, its individual elements have different periods of turn-over, Fetishism, typical of bourgeois economy, 257.
Fixed Capital, accumulation of a re- serve fund of money for its repro- duction, 185.
Fixed Capital, distinguished from cir- culating capital by different mode of turn-over, 187.
Fixed Capital, its peculiar role in the turn-over of capital, 185.
Fixed Capital, its reproduction in a natural form, 532.
Fixed Capital, its turn-over comprizes several turn-overs of circulating Capital, 190.
Index.
Fixed Capital, its value advanced in one lump sum, but recovered in in- stallments, 190.
Fixed Capital, mistaken for constant capital, 182.
Fixed Capital, may lose its character as such under certain circumstances, Fixed Capital, not necessarily immov- Fixed Capital, requires periodical in- vestment of additional capital for repairs and labor-power, 198.
H Hoard, of money, its development into loanable capital, 576. Hoard, of money, its formation under reproduction on an enlarged scale, Hoarding, a phase in the circulation of capital, 60.
I Industrial Capital, its first and sub- sequent investments, 70.
Industrial Capital, its individual volume depends on social conditions, Industrial Capital, makes independent money-capital and commodity-capital subordinate to itself, 63.
Industrial Capital, only a part actively engaged in process of production, if production is to proceed uninter- ruptedly, 305.
Interest, not analyzed in volume II, see volume III.
Irregularities, in the process of repro- duction, 130.
Labor, advanced by laborer to capi- talist, 247.
Labor, resolves itself into necessary and surplus-labor, 443.
Labor, spent in keeping fixed capital in normal working order is an ele- ment of circulating capital, 197.
Laborer, his point of view concerning his relation to money-capital, 38.
Labor-Power, its decreasing proportion to the means of production, 134.
Labor-Power, its quantitative and qualitative relation to money-capital, Labor-Power, its productive consump- Labor-Power, social, a portion of it expended in the production of gold and silver, 375.
Labor-Time, its role in the process of production, 141.
Labor-Time, small compared to time of production in timber raising, 272.
Latent Capital, its different forms, 330.
Latent Capital, not productive of sur- plus-value, 342.
Legislation, distinguishes between natural wear and tear of fixed capi- tal and occasional repairs, 201.
M Machinery, when fixed capital and when merely commodity-capital, 181.
Manuscripts of Marx for volume II, Manuscripts of Marx, for volume III, Market Combinations, their effect on the turn-over of capital, 364.
Market-Prices, of products, may mean loss or gain of capital, 334.
Marx, Karl, his theory of surplus-value vindicated, 24.
Material, when circulating and when fixed capital, 251.
Means of Production, their relation to money-capital, 34.
Mechanism of capitalism, its abnor- malities are not a sound basis for theoretical analysis of capitalist economics, 595.
Merchants' Capital, its relation to in- dustrial capital, 126.
Money, a homogeneous medium for measuring the turn-over of capital, Money, advanced in exchange of com- modities flows back to advancing capitalist, 478.
Money, as a reserve fund, 96.
Money, in circulation, its quantity so much smaller the more frequently it is advanced, 480.
Money, in excess of value of commodi- ties does not increase value in cir- culation, 464.
Money, its relation to money-capital, Money, its role as a hoard, 95.
Money, its role in the reproduction of the wear and tear of fixed capital, Money, not consumed productively or individually, 154.
Money, historical order of its forms, Money, increased speed of its circula- tion does not necessarily mean a more rapid turn-over of capital, 395.
Money, may be capital in one hand and revenue in another, 511.
Money, the quantity used for the cir- culation of the annual product must have been produced in previous years, except the small amount needed to make up for depreciation, Money, the tangible form of value, 65.
Money-Capital, additional, when re- quired, 122.
Money-Capital, composition of value of its elements, 47.
Money-Capital, its circulation the typical form of circulation of in- dustrial capital, 67.
Money-Capital, its own limitations and their influence in limiting social capital, 412.
Money-Capital, its three stages of cir- culation, 31.
Money-Capital, its first stage of cir- culation analyzed, 32.
Money-Capital, its second stage of cir- culation, 41.
Index.
Money-Capital, its third stage o£ cir- culation, 4(5.
Money-Capital, its transformation into productive capital, 36.
Money-Capital, latent, its different forms, 402. (See also Latent and Potential Capital).
Money-Capital, virtual, its growth through hoarded surplus-value, 582.
Money-Capital, released by mechanism of turn-over, 322.
Money, reproduction of its supply, 547.
Money-Capital, significance of its cycles as surplus-value and capital-value, 51.
Money-Capital, two errors of con- ception, 39.
Money-Capital, two observations con- cerning its money-form, 52.
Money-System, common to all stages of commodity-production, 132.
Money System, its characteristic sig- nature, 37.
Overproduction, a necessary con- sequence of reproduction on an en- larged scale, 202.