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第7章

  Theadditionalcapitalwhichisthusreplacedbelongstothecirculatingcapital,althoughthemannerofitsexpenditureisirregular。Asitisofparamountimportancetoremedyeverydamagetomachineryimmediately,everycomparativelylargefactoremploysinadditiontotheregularfactoryforcespecialpersonnel——engineers,carpenters,mechanics,locksmiths,etc。Theirwagesareapartofthevariablecapitalandthevalueoftheirlabourisdistributedovertheproduct。Ontheotherhandtheexpensesformeansofproductionarecalculatedonthebasisoftheabove-mentionedaverage,accordingtowhichtheyformcontinuallyapartofthevalueoftheproduct,althoughtheyareactuallyadvancedinirregularperiodsandthereforeenterintotheproductorthefixedcapitalinirregularperiods。
  Thiscapital,expendedinrepairsproperlysocalled,isinmanyrespectsacapitalsuigeneris,whichcanbeclassedneitherascirculatingnorasfixedcapital,butbelongswithgreaterjustificationtotheformer,sinceitfiguresamongtherunningexpenses。
  Themannerofbook-keepingdoesnotofcoursechangeinanywaytheactualstateofaffairsbooked。Butitisimportanttonotethatcustomarilymanylinesofbusinessfigurethecostsofrepairstogetherwiththeactualwearandtearofthefixedcapitalinthefollowingmanner:Lettheadvancedfixedcapitalbe£;10,000anditsdurability15years。Theannualwearandtearisthen£;6662/3。Butthedepreciationiscalculatedonadurabilityofonlytenyears;inotherwords,£;1,000areaddedannuallytothepriceoftheproducedcommoditiesforwearandtearofthefixedcapital,insteadof£;6662/3。Thus£;3331/3arere-servedforrepairs,etc。Thefigures10and15arechosenonlybywayofillustration。
  Thisamountisspentonanaverageforrepairs,sothatthefixedcapitalmaylast15years。Suchacalculationnaturallydoesnotpreventthefixedcapitalandtheadditionalcapitalspentonrepairsfrombelongingtodifferentcategories。Onthestrengthofthismodeofcalculationitwasassumedforinstancethatthelowestcostestimateforthemaintenanceandreplacementofsteamshipswas15percentannuallythetimeofreproductionbeingtherefore62/3years。Inthesixties,theEnglishgovernmentindemnifiedthePeninsularandOrientalCo。attheannualrateof16percent,correspondingtoareproductiontimeof61/4years。Onrailwaystheaveragelifeofalocomotiveis10
  years,butthedepreciation,countinginrepairsistakenas121/2percent,whichbringsdownitsdurabilityto8years。Inthecaseofpassengerandgoodscars,theestimateis9percent,oradurabilityof111/9years。
  Legislationhaseverywheredrawnadistinction,inleasesofhousesandotherobjectswhichrepresentfixedcapitaltotheirownersandareleasedassuch,betweennormaldepreciation,whichistheresultoftime,theactionoftheelements,andnormalwearontheonehandandontheotherthoseoccasionalrepairswhicharerequiredfromtimetotimeformaintenanceduringthenormallifeofthehouseandduringitsnormaluse。
  Asarule,theformerarebornebytheowner,thelatterbythetenant。
  Repairsarefurtherdividedintoordinaryandsubstantialones。Thelast-namedarepartlyarenewalofthefixedcapitalinitsbodilyform,andtheyfalllikewiseontheshouldersoftheowner,unlesstheleaseexplicitlystatesthecontrary。TakeforinstancetheEnglishlaw:”Atenantfromyeartoyear,ontheotherhand,isnotboundtodomorethankeepthepremiseswindandwatertight,whenthatcanbedonewithout`substantial’
  repairs;andgenerallytodorepairscomingfairlyunderthehead`ordinary。’
  Evenwithrespecttothosepartsofthepremiseswhicharethesubjectof`ordinary’repairs,regardmustbehadtotheirageandgeneralstate,andcondition,whenhetookpossession,forheisnotboundtoreplaceoldandworn-outmaterialswithnewones,nortomakegoodtheinevitabledepreciationresultingfromtimeandordinarywearandtear。”Holdsworth,LawofLandlordandTenant,pp。90and91。
  Entirelydifferentfromthereplacementofwearandtearandfromtheworkofmaintenanceandrepairisinsurance,whichrelatestodestructioncausedbyextraordinaryphenomenaofnature,fire,flood,etc。
  Thismustbemadegoodoutofthesurplus-valueandisadeductionfromit。Or,consideredfromthepointofviewofsocietyasawhole,theremustbecontinuousover-production,thatis,productiononalargerscalethanisnecessaryforthesimplereplacementandreproductionoftheexistingwealth,quiteapartfromtheincreaseinpopulation,soastobeinpossessionofthemeansofproductionrequiredtocompensatefortheextraordinarydestructioncausedbyaccidentsandnaturalforces。
  Inpointoffactonlythesmallestpartofthecapitalneededforreplacementconsistsofthemoneyreservefund。Themostsubstantialpartconsistsintheextensionofthescaleofproductionitself,whichpartlyisactualexpansionandpartlybelongstothenormalvolumeofproductioninthosebranchesofindustrywhichproducethefixedcapital。Forinstanceamachinefactorymustarrangethingssothatthefactoriesofitscustomerscanannuallybeextendedandthatanumberofthemwillalwaysstandinneedoftotalorpartialreproduction。
  Ondeterminingthewearandtearaswellasthecostsofrepairs,accordingtothesocialaverage,greatdisparitynecessarilyappears,eveninthecaseofcapitalinvestmentsofequalsize,operatingotherwiseunderequalconditionsandinthesamebranchofindustry。Inpracticeamachine,etc。,lastswithonecapitalistlongerthantheaverageperiod,whilewithanotheritdoesnotlastsolong。Withtheonethecostsofrepairsareabove,withtheotherbelowaverage,etc。Buttheadditiontothepriceofthecommoditiesresultingfromwearandtearandfromcostsofrepairsisthesameandisdeterminedbytheaverage。Theonethereforegetsmoreoutofthisadditionalpricethanhereallyadded,theotherless。Thiscircumstanceaswellasallotherswhichresultindifferentgainsfordifferentcapitalistsinthesamelineofbusinesswiththesamedegreeofexploitationoflabour-powertendstoenhancethedifficultyofunderstandingthetruenatureofsurplus-value。
  Thelinebetweenrepairsproperandreplacement,betweencostsofmaintenanceandcostsofrenewal,isratherflexible。Hencetheeternaldispute,forinstanceinrailroading,whethercertainexpensesareforrepairsorforreplacement,whethertheymustbedefrayedfromcurrentexpendituresorfromtheoriginalstock。Atransferofexpensesforrepairstocapitalaccountinsteadofrevenueaccountisthefamiliarmethodbywhichrailwayboardsofdirectorsartificiallyinflatetheirdividends。
  However,experiencehasalreadyfurnishedthemostimportantcluesforthis。AccordingtoLardner,thesubsequentlabourrequiredduringtheearlylifeofarailwayforexample”oughtnottobedenominatedrepairs,butshouldbeconsideredasanessentialpartoftheconstructionoftherailway,andinthefinancialaccountsshouldbedebitedtocapital,andnottorevenue,notbeingexpensesduetowearandtear,ortothelegitimateoperationofthetraffic,buttotheoriginalandinevitableincompletenessoftheconstructionoftheline。”Lardner,loc。cit。,p。40。”Theonlysoundwayistochargeeachyear’srevenuewiththedepreciationnecessarilysufferedtoearntherevenue,whethertheamountisactuallyspentornot。”
  CaptainFitzmaurice,”CommitteeofInquiryonCaledonianRailway,”publishedinMoneyMarketReview,1867。
  Theseparationofthereplacementandmaintenanceoffixedcapitalbecomepracticallyimpossibleandpurposelessinagriculture,atleastwhennotoperatedbysteam。AccordingtoKirchhofHandbuchdelandwirtschaftlichenBetriebslehre,Dresden,1852,p。137,”whereverthereisacomplete,thoughnotexcessive,supplyofimplementsofagriculturalandotherimplementsandfarmappliancesofeverydescriptionitisthecustomtoestimatetheannualwearandtearandmaintenanceoftheimplements,accordingtothedifferentexistingconditions,atageneralaverageof15to25percentoftheoriginalstock。”
  Inthecaseoftherollingstockofarailway,repairsandreplacementcannotbeseparatedatall。”Wemaintainourstockbynumber。Whatevernumberofengineswehavewemaintainthat。Ifoneisdestroyedbyage,anditisbettertobuildanewone,webuilditattheexpenseofrevenue,ofcourse,takingcreditforthematerialsoftheoldoneasfarastheygo……thereisagreatdealleft;therearethewheels,theaxles,theboilers,andinfactagreatdealoftheoldengineisleft。”T。Gooch,ChairmanofGreatWesternRailwayCo。,R。C。onRailways,p。858,Nos。
  17327-17329。”……Repairingmeansrenewing;Idonotbelieveinthewordreplacement……;oncearailwaycompanyhasboughtavehicleoranengine,itoughttoberepaired,andinthatwayadmitofgoingonforever。”No。
  17784。”……Theenginesaremaintainedforeveroutofthis81/2d。
  Werebuildourengines。Ifyoupurchaseanengineentirelyitwouldbespendingmoremoneythanisnecessary……yetthereisalwaysapairofwheelsoranaxleorsomeportionoftheenginewhichcomesin,andhenceitcheapensthecostofproducingapracticallynewengine。”No。
  17790。”Iamatthismomentturningoutanewengineeveryweek,orpracticallyanewengine,forithasanewboiler,cylinder,orframing。”No。17823。
  ArchibaldSturrock,LocomotiveSuperintendentofGreatNorthernRailway,inR。C。,1867。
  Thesamewithcoaches:”Inthecourseoftimethestockofenginesandvehiclesiscontinuallyrepaired。Newwheelsareputonatonetime,andanewbodyatanother。Thedifferentmovingpartsmostsubjecttoweararegraduallyrenewed;andtheenginesandvehiclesmaybeconceivedeventobesubjecttosuchasuccessionofrepairs,thatinmanyofthemnotavestigeoftheoriginalmaterialsremains……Eveninthiscase,however,theoldmaterialsofcoachesorenginesaremoreorlessworkedupintoothervehiclesorengines,andnevertotallydisappearfromtheroad。Themovablecapitalthereforemaybeconsideredtobeinastateofcontinualreproduction;andthatwhich,inthecaseofthepermanentway,musttakeplacealtogetheratafutureepoch,whentheentireroadwillhavetoberelaid,takesplaceintherollingstockgraduallyfromyeartoyear。Itsexistenceisperennial,anditisinaconstantstateofrejuvenescence。”
  Lardner,op。cit。,pp。115-16。
  Thisprocess,whichLardnerheredescribesrelativetoarailway,doesnotfitthecaseofanindividualfactory,butmaywellserveasanillustrationofcontinuous,partialreproductionoffixedcapitalintermingledwithrepairswithinanentirebranchofindustryorevenwithintheaggregateproductionconsideredonasocialscale。
  Hereisproofofthelengthstowhichadroitboardsofdirectorsmaygoinmanipulatingthetermsrepairsandreplacementforthepurposeofextractingdividends。Accordingtotheabove-quotedpaperreadbyR。
  P。Williams,variousEnglishrailwaycompanieswroteoffthefollowingsumsfromtherevenueaccount,asaveragesoveranumberofyears,forrepairsandmaintenanceofthepermanentwayandbuildingsperEnglishmileoftrackannually。
  London&;NorthWestern……
  £;370
  Midland……£;225
  London&;SouthWestern……£;257
  GreatNorthern……£;360
  Lancashire&;Yorkshire……£;377
  SouthEastern……£;263
  Brighton……£;266
  Manchester&;Sheffield……£;200
  Thesedifferencesariseonlytoaveryminordegreefromdifferencesintheactualexpenses;theyareduealmostexclusivelytodifferentmethodsofcalculation,accordingtowhetheritemsofexpensesaredebitedtothecapitalortherevenueaccount。Williamssayssoinsomanywordsthatalesserchargeisbookedbecausethisisnecessaryforagooddividend,andahigherchargeisbookedbecausethereisagreaterrevenuewhichcanbearit。
  Incertaincasesthewearandtear,andthereforeitsreplacement,ispracticallyinfinitesimalsothatnothingbutcostsofrepairshavetobecharged。Lardner’sstatementsbelowrelativetoworksofartinrailroadingapplyingeneraltoallsuchdurablestructuresasdocks,canals,ironandstonebridges,etc。”Thatwearandtearwhich,beingduetotheslowoperationoftimeactinguponthemoresolidstructures,producesaneffectaltogetherinsensiblewhenobservedthroughshortperiods,butwhich,afteralongintervaloftime,such,forexample,ascenturies,mustnecessitatethereconstructionofsomeorallevenofthemostsolidstructures。Thesechangesmaynotunaptlybeassimilatedtotheperiodicalandsecularinequalitieswhichtakeplaceinthemovementsofthegreatbodiesoftheuniverse。
  Theoperationoftimeuponthemoremassiveworksofartupontherailway,suchasthebridges,tunnels,viaducts,etc。,affordexamplesofwhatmaybecalledthesecularwearandtear。Themorerapidandvisibledeterioration,whichismadegoodbyrepairsorreconstructioneffectedatshorterintervals,isanalogoustotheperiodicinequalities。Intheannualrepairsisincludedthecasualdamagewhichtheexteriorofthemoresolidanddurableworksmayfromtimetotimesustain;but,independentlyoftheserepairs,ageproducesitseffectsevenonthesestructures,andanepochmustarrive,howeverremoteitbe,atwhichtheywouldbereducedtoastatewhichwillnecessitatetheirreconstruction。Forfinancialandeconomicpurposessuchanepochisperhapstooremotetorenderitnecessarytobringitintopracticalcalculation,andthereforeitneedhereonlybenoticedinpassing。”
  Lardner,loc。cit。,pp。,38,39。
  Thisappliestoallsimilarstructuresofsecularduration,inwhichcasesthereforethecapitaladvancedneednotbegraduallyreplacedcommensuratewiththeirwearandtear,butonlytheannualaveragecostsofmaintenanceandrepairneedbetransferredtothepricesoftheproduct。
  Although,aswehaveseen,agreaterpartofthemoneyreturningforthereplacementofthewearandtearofthefixedcapitalisannually,oreveninshorterintervals,reconvertedintoitsbodilyform,neverthelesseverysinglecapitalistrequiresasinkingfundforthatpartofhisfixedcapitalwhichfallsdueforreproductiononlyafteralapseofyearsbutmustthenbeentirelyreplaced。Aconsiderablecomponentpartofthefixedcapitalprecludesgradualreproductionbecauseofitspeculiarproperties。
  Besides,incaseswherethereproductiontakesplacepiecemealinsuchawaythatatshortintervalsnewstockisaddedtothedepreciatedoldstock,apreviousaccumulationofmoneyofagreaterorsmalleramount,dependingonthespecificcharacterofthebranchofindustry,isnecessarybeforethereplacementcanbeeffected。Notjustanysumofmoneywillsufficeforthispurpose;adefiniteamountisneeded。
  Ifwestudythisquestionontheassumptionofsimplecirculationofmoney,withoutregardtothecreditsystem,ofwhichweshalltreatlater,[ThecapitalistcreditsystemistreatedinpartsIVandVofthethirdvolumeofCapital——Ed。]thenthemechanismofthismovementisasfollows:ItwasshownBuchI,Kap。III,3a[Englishedition:Ch。
  III,3a,——Ed。]thattheproportioninwhichtheaggregatemassofmoneyisdistributedoverahoardandmeansofcirculationvariessteadily,ifonepartofthemoneyavail-ableinsocietyconstantlyliesfallowasahoard,whileanotherper-formsthefunctionsofamediumofcirculationorofanimmediatereservefundofthedirectlycirculatingmoney。Nowinourcasemoneythatmustbeaccumulatedasahoardinthehandsofarelativelybigcapitalistinratherlargeamountsisthrownallatonceintocirculationonthepurchaseofthefixedcapital。Itthendividesagaininsocietyintomediumofcirculationandhoard。Bymeansofthesinkingfund,inwhichthevalueofthefixedcapitalflowsbacktoitsstarting-pointinproportiontoitswearandtear,apartofthecirculatingmoneyagainformsahoard,foralongerorshorterperiod,inthehandsofthesamecapitalistwhosehoardhad,uponthepurchaseofthefixedcapital,beentransformedintoamediumofcirculationandpassedawayfromhim。Itisacontinuallychangingdistributionofthehoardwhichexistsinsocietyandalternatelyfunctionsasamediumofcirculationandthenisseparatedagain,asahoard,fromthemassofthecirculatingmoney。Withthedevelopmentofthecreditsystem,whichnecessarilyrunsparallelwiththedevelopmentofmodernindustryandcapitalistproduction,thismoneynolongerservesasahoardbutascapital;howevernotinthehandsofitsownerbutofothercapitalistsatwhosedisposalithasbeenplaced。
  NOTES
  [20]Onaccountofthedifficultyofdeterminingwhatisfixedandwhatcirculatingcapital,HerrLorenzSteinthinksthatthisdistinctionismeantonlytofacilitatethetreatmentofthesubject。
  [21]EndofManuscriptIV,beginningofManuscriptII——Ed。
  [22]ThequotationsmarkedR。C。arefrom:RoyalCommissiononRail-ways。MinutesofEvidencetakenbeforetheCommissioners。PresentedtobothHousesofParliament,London,1867。
  Thequestionsandanswersarenumberedandthenumbersgivenhere。
  1885:CapitalII——Chapter9
  partII
  THETURNOVEROFCAPITAL
  CHAPTERIX
  THEAGGREGATETURNOVEROFADVANCEDCAPITAL,CYCLESOFTURNOVERWehaveseenthatthefixedandcirculatingcomponentpartsofproductivecapitalareturnedoverinvariouswaysandatvariousperiods,alsothatthedifferentconstituentsofthefixedcapitalofabusinesshavedifferentperiodsofturnover,dependingontheirdifferentdurabilitiesandthereforeontheirdifferenttimesofreproduction。Ontherealorapparentdifferenceintheturnoverofdifferentconstituentsofcirculatingcapitalinthesamebusiness,seethecloseofthischapter,under6。
  1Theaggregateturnoverofanadvancedcapitalistheaverageturnoverofitsvariousconstituentparts;themodeofitscalculationisgivenlater。Inasmuchasitismerelyaquestionofdifferentperiodsoftime,nothingiseasierthantocomputetheiraverage。But2Wehaveherenotalonequantitativebutalsoqualitativedifference。
  Thecirculatingcapitalenteringintotheprocessofproductiontransfersitsentirevaluetotheproductandmustthereforebecontinuallyreplacedinkindbythesaleoftheproduct,iftheprocessofproductionistoproceedwithoutinterruption。Thefixedcapitalenteringintotheprocessofproductiontransfersonlyapartofitsvaluethewearandteartotheproductanddespitethiswearandtearcontinuesfunctioningintheprocessofproduction。Thereforeitneednotbereplacedinkinduntilthelapseofintervalsofvariousduration,atanyratenotasfrequentlyasthecirculatingcapital。Thisnecessityofreplacement,thereproductionterm,isnotonlyquantitativelydifferentforthevariousconstituentpartsoffixedcapital,but,aswehaveseen,apartoftheperennialfixedcapital,thatwhichlastslonger,maybereplacedannuallyoratshorterintervalsandaddedinkindtotheoldfixedcapital。Inthecaseoffixedcapitalofdifferentpropertiesthereplacementcantakeplaceonlyallatonceattheendofitsperiodofdurability。
  Itisthereforenecessarytoreducethespecificturnoversofthevariouspartsoffixedcapitaltoahomogeneousformofturnover,sothattheywillremaindifferentonlyquantitatively,namely,accordingtodurationofturnover。
  Thequalitativeidentitydoesnotcomeaboutifwetakeasourstarting-pointP……P,theformofthecontinuousprocessofproduction。
  FordefiniteelementsofPmustbeconstantlyreplacedinkindwhileothersneednot。HowevertheformM……Mundoubtedlyyieldsthisidentityofturnover。Takeforinstanceamachineworth£;10,000,whichlaststenyearsofwhichone-tenth,or£;1,000,isannuallyreconvertedintomoney。These£;1,000havebeenconvertedinthecourseofoneyearfrommoney-capitalintoproductivecapitalandcommodity-capital,andthenreconvertedfromthisintomoney-capital。Theyhavereturnedtotheiroriginalform,themoney-form,justlikethecirculatingcapital,ifwestudythelatterinthisform,anditisimmaterialwhetherthismoney-capitalof£;1,000isoncemoreconvertedattheendoftheyearintothebodilyformofamachineornot。Incalculatingtheaggregateturnoveroftheadvancedproductivecapitalwethereforefixallitselementsinthemoney-form,sothatthereturntothatformconcludestheturnover。
  Weassumethatvalueisalwaysadvancedinmoney,eveninthecontinuousprocessofproduction,wherethismoney-formofvalueisonlythatofmoneyofaccount。Thuswecancomputetheaverage。
  3Itfollowsthatevenifbyfarthegreaterpartoftheadvancedproductivecapitalconsistsoffixedcapitalwhoseperiodofreproduction,hencealsoofturnover,comprisesacycleofmanyyears,thecapital-valueturnedoverduringtheyearmay,onaccountoftherepeatedturnoversofthecirculatingcapitalwithinthesameyear,belargerthantheaggregatevalueoftheadvancedcapital。
  Supposethefixedcapitalis£;80,000anditsperiodofreproduction10years,sothat£;8,000ofitannuallyreturntotheirmoney-form,oritcompletesone-tenthofitsturnover。Supposefurtherthecirculatingcapitalis£;20,000,anditsturnoveriscompletedfivetimesperyear。Thetotalcapitalwouldthenbe£;100,000。Theturned-overfixedcapitalis£;8,000,theturned-overcirculatingcapitalfivetimes£;20,000,or£;100,000。Thenthecapitalturnedoverduringoneyearis£;108,000,or£;8,000morethantheadvancedcapital。
  12/25ofthecapitalhavebeenturnedover。
  4Thereforetheturnovertimeofthevalueoftheadvancedcapitaldiffersfromitsactualtimeofreproductionorfromtheactualtimeofturnoverofitscomponentparts。Takeforinstanceacapitalof£;4,000andletitturnover,say,fivetimesayear。Theturned-overcapitalisthenfivetimes£;4,000,or£;20,000。Butwhatreturnsattheendofeachturnovertobeadvancedanewistheoriginallyadvancedcapitalof£;4,000。Itsmagnitudeisnotchangedbythenumberofturnoverperiods,duringwhichitperformsanewitsfunctionsascapital。
  Apartfromsurplus-value。
  IntheillustrationunderNo。3,then,thesumsassumedlyreturnedintothehandsofthecapitalistattheendofoneyearareaasumofvalueamountingto£;20,000whichheinvestsagaininthecirculatingconstituentsofthecapital,andbasumof£;8,000whichhasbeensetfreebywearandtearfromthevalueoftheadvancedfixedcapital;
  simultaneouslythissamefixedcapitalremainsintheprocessofproduction,butwiththereducedvalueof£;72,000insteadof£;80,000。Theprocessofproductionthereforewouldhavetobecontinuedfornineyearsmore,beforetheadvancedfixedcapitaloutliveditstermandceasedtofunctionasacreatorofproductsandvalues,sothatitwouldhavetobereplaced。Theadvancedcapital-value,then,hastopassthroughacycleofturnovers,inthepresentcaseacycleoftenannualones,andthiscycleisdeterminedbythelife,hencethereproductionorturnovertimeoftheappliedfixedcapital。
  Asthemagnitudeofthevalueandthedurabilityoftheappliedfixedcapitaldevelopwiththedevelopmentofthecapitalistmodeofproduction,thelifetimeofindustryandofindustrialcapitallengthensineachparticularfieldofinvestmenttoaperiodofmanyyears,sayoftenyearsonanaverage。
  Whereasthedevelopmentoffixedcapitalextendsthelengthofthislifeontheonehanditisshortenedontheotherbythecontinuousrevolutioninthemeansofproduction,whichlikewiseincessantlygainsmomentumwiththedevelopmentofthecapitalistmodeofproduction。Thisinvolvesachangeinthemeansofproductionandthenecessityoftheirconstantreplacement,onaccountofmoraldepreciation,longbeforetheyexpirephysically。Onemayassumethatintheessentialbranchesofmodernindustrythislife-cyclenowaveragestenyears。Howeverwearenotconcernedherewiththeexactfigure。Thismuchisevident:thecycleofinterconnectedturnoversembracinganumberofyears,inwhichcapitalisheldfastbyitsfixedconstituentpart,furnishesamaterialbasisfortheperiodiccrises。Duringthiscyclebusinessundergoessuccessiveperiodsofdepression,mediumactivity,precipitancy,crisis。True,periodsinwhichcapitalisinvesteddiffergreatlyandfarfromcoincideintime。Butacrisisalwaysformsthestarting-pointoflargenewinvestments。Therefore,fromthepointofviewofsocietyasawhole,moreorless,anewmaterialbasisforthenextturnovercycle。[22a]
  5Onthewaytocalculatetheturnovers,anAmericaneconomiststates:”Insometradesthewholecapitalembarkedisturnedorcirculatedseveraltimeswithintheyear。Inothersapartisturnedoftenerthanonceayear,anotherpartlessoften。Itistheaverageperiodwhichhisentirecapitaltakesinpassingthroughhishands,ormakingonerevolution,fromwhichacapitalistmustcalculatehisprofits。Supposeforexamplethatapersonengagedinaparticularbusinesshasonehalfofhiscapitalinvestedinbuildingsandmachinery;soastobeturnedonlyonceintenyears;thatone-fourthmore,thecostofhistools,etc。,isturnedonceintwoyears;andtheremainingfourth,employedinpayingwagesandpurchasingmaterial,isturnedtwiceinoneyear。Saythathisentirecapitalis$50,000。
  Thenhisannualexpenditurewillbe,$25,000:10=$2,500
  12,500:2=6,500
  12,500x2=25,000——
  $33,750……themeanterminwhichhiscapitalisturnedbeingaboutsixteenmonths[InthemanuscriptMarxpointsoutthefallacyofsuchamethodofcalculatingtheperiodoftheturnoverofcapital。Themeantermofturnover16monthsgiveninthequotationwascalculatedwithaccounttakenofaprofitof7。5percentontheaggregatecapitalof$50,000。
  Profitdiscounting,theturnoverofcapitalisequalto18months——Ed。]……Takeanothercase,……saythatone-fourthoftheentirecapitalcirculatesintenyears,one-fourthinoneyear,andonehalftwiceintheyear。Thentheannualexpenditurewillbe,$12,500
  :10=$1,250
  12,500
  =12,500
  25,000
  x2=50,000——
  Turnedoverin1year$63,750
  Scrope,Pol。Econ。,edit。AlonzoPotter,NewYork,1841,pp。142,143。[ThebookreferredtoisA。Potter’sPoliticalEconomy,ItsObjects,Uses,andPrinciples,NewYork,1840。Accordingtotheauthor’s”Advertisement”,thesecondpartofthebookissubstantiallyareprintwithmanyalterationsmadebyA。PotterofG。J。P。Scrope’sThePrinciplesofPoliticalEconomy,London,1833——Ed。]
  6Realandapparentdifferencesintheturnoverofthevariouspartsofcapital。
  ThesameScropesaysinthesamepassage:”Thecapitallaidoutbyamanufacturer,farmer,ortradesmaninthepaymentofhislabourer’swages,circulatesmostrapidly,beingturnedperhapsonceaweekifhismenarepaidweekly,bytheweeklyreceiptsonhisbillsorsales。Thatinvestedinhismaterialsandstockinhandcirculateslessquickly,beingturnedperhapstwice,perhapsfourtimesintheyear,accordingtothetimeconsumedbetweenhispurchasesoftheoneandsalesoftheother,supposinghimtobuyandsellonequalcredits。Thecapitalinvestedinhisimplementsandmachinerycirculatesstillmoreslowly,beingturned,thatis,consumedandrenewed,ontheaverage,perhapsbutonceinfiveortenyears;thoughtherearemanytoolsthatarewornoutinonesetofoperations。Thecapitalwhichisembarkedinbuildings,asmills,shops,warehouses,barns,inroads,irrigation,etc。,mayappearscarcelytocirculateatall。But,intruth,thesethingsare,tothefull,asmuchasthosewehaveenumerated,consumedincontributingtoproduction,andmustbereproducedinordertoenabletheproducertocontinuehisoperations;
  withthisonlydifference,thattheyareconsumedandreproducedbyslowerdegreesthantherest……andthecapitalinvestedinthemmaybeturnedperhapseverytwentyoffiftyyears。”[Pp。141-42。]
  Scropeconfusesherethedifferenceintheflowofcertainpartsofthecirculatingcapital,broughtaboutfortheindividualcapitalistbytermsofpaymentandconditionsofcredit,withthedifferenceintheturnoversduetothenatureofcapital。Hesaysthatwagesmustbepaidweeklyoutoftheweeklyreceiptsfrompaidsalesorbills。Itmustbenotedhereinthefirstplacethatcertaindifferencesoccurrelativetowagesthemselves,dependingonthelengthofthetermofpayment,thatis,thelengthoftimeforwhichthelabourermustgivecredittothecapitalist,whetherwagesarepayableeveryweek,month,threemonths,sixmonths,etc。Inthiscase,thelawexpoundedbefore,holdsgood,totheeffectthat”thequantityofthemeansofpaymentrequiredforallperiodicalpayments”henceofthemoney-capitaltobeadvancedatonetime”isininverse[Thisisevidentlyaslipofthepen,theproportionbeingdirectandnotinverse——Ed。]proportiontothelengthoftheirperiods。”
  BuchI,Kap。III,3b,Seite124。[Englishedition:Ch。III,3b,p。141——
  Ed。]
  Inthesecondplace,itisnotonlythenewvalueaddedintheprocessofproductionbytheweek’slabourwhichenterscompletelyintotheweeklyproduct,butalsothevalueoftherawandauxiliarymaterialsconsumedbytheweeklyproduct。Thisvaluecirculateswiththeproductcontainingit。Itassumestheformofmoneythroughthesaleoftheproductandmustbereconvertedintothesameelementsofproduction。Thisappliesasmuchtothelabour-powerastotherawandauxiliarymaterials。ButwehavealreadyseenChapterVI,II,1thatcontinuityofproductionrequiresasupplyofmeansofproductiondifferentfordifferentbranchesofindustry,anddifferentwithinoneandthesamebranchofbusinessfordifferentcomponentpartsofthiselementofthecirculatingcapital,forinstance,forcoalandcotton。Hence,althoughthesematerialsmustbecontinuallyreplacedinkind,theyneednotalwaysbeboughtanew。Thefrequencyofpurchasesdependsonthesizeoftheavailablestock,onthetimeittakestoexhaustit。Inthecaseoflabour-powerthereisnosuchstoringofasupply。Thereconversionintomoneyofthepartofcapitallaidoutinlabour-powergoeshandinhandwiththatofthecapitalinvestedinrawandauxiliarymaterials。Butthereconversionofthemoney,ontheonehandintolabour-power,ontheotherintorawmaterials,proceedsseparatelyonaccountofthespecialtermsofpurchaseandpaymentofthesetwoconstituents,oneofthembeingboughtasaproductivesupplyforlongperiods,theother,labour-power,forshorterperiods,forinstanceaweek。Ontheotherhandthecapitalistmustkeepastockoffinishedcommoditiesbesidesastockofmaterialsforproduction。Letusleavesalesdifficultiesaside。Acertainquantityofgoodsmustbeproduced,say,onorder。Whilethelastportionofthislotisbeingproduced,thefinishedproductsarewaitinginthewarehouseuntiltheordercanbecompletelyfilled。Otherdifferencesintheturnoverofcirculatingcapitalarisewheneversomeofitsseparateelementsmuststayinsomepreliminarystageoftheprocessofproductiondryingofwood,etc。longerthanothers。
  Thecreditsystem,towhichScropehererefers,aswellascommercialcapital,modifiestheturnoverfortheindividualcapitalist。Onasocialscaleitmodifiestheturnoveronlyinsofarasitdoesnotacceleratemerelyproductionbutalsoconsumption。
  NOTES
  [22a]”Urbanproductionisboundtoacycleofdays,ruralproductiononthecontrarytooneofyears。”AdamG。Mü;ller,DieElementederStaatskunst,Berlin,1809,III,p。178。thisisthenaiveconceptionofindustryandagricultureheldbytheromanticschool。
  1885:CapitalII——Chapter10
  partII
  THETURNOVEROFCAPITAL
  CHAPTERX
  THEORIESOFFIXEDANDCIRCULATINGCAPITAL。
  THEPHYSIOCRATSANDADAMSMITHInQuesnaythedistinctionbetweenfixedandcirculatingcapitalpresentsitselfasavancesprimitivesandavancesannuelles。Hecorrectlyrepresentsthisdistinctionasoneexistingwithinproductivecapital,capitaldirectlyengagedintheprocessofproduction。Asheregardsthecapitalemployedinagriculture,thecapitalofthefarmer,astheonlyreallyproductivecapital,hedrawsthesedistinctionsonlyforthecapitalofthefarmer。Thisalsoaccountsfortheannualperiodofturnoverofonepartofthecapital,andthemorethanannualdecennialperiodoftheotherpart。Inthecourseofthedevelopmentthephysiocratsincidentallyappliedthesedistinctionsalsotootherkindsofcapitalandtoindustrialcapitalingeneral。Thedistinctionbetweenannualadvancesandothersoflongerdurationhasretainedsuchimportanceforsocietythatmanyeconomists,evenafterAdamSmith,returntothisdefinition。
  Thedifferencebetweenthesetwokindsofadvancesdoesnotariseuntiladvancedmoneyhasbeentransformedintotheelementsofproductivecapital。Itisadifferencethatexistssolelywithinproductivecapital。
  ItthereforeneveroccurstoQuesnaytoclassifymoneyeitheramongtheoriginalortheannualadvances。Asadvancesforproduction,i。e。,asproductivecapital,bothofthemstandopposedtomoneyaswellasthecommoditiesexistinginthemarket。FurthermorethedifferencebetweenthesetwoelementsofproductivecapitaliscorrectlyreducedinQuesnaytothedifferentmannerinwhichtheyenterintothevalueofthefinishedproduct,hencetothedifferentmannerinwhichtheirvaluesarecirculatedtogetherwiththoseoftheproducts,andhencetothedifferentmanneroftheirreplacementortheirreproduction,thevalueoftheonebeingwhollyreplacedannually,thatoftheotherpartlyandatlongerintervals。[23]
  TheonlyprogressmadebyAdamSmithisthegeneralisationofthecategories。Withhimitnolongerappliestoonespecialformofcapital,thefarmer’scapital,buttoeveryformofproductivecapital。Henceitfollowsasamatterofcoursethatthedistinctionderivedfromagriculturebetweenanannualturnoverandoneoftwoormoreyears’durationissupersededbythegeneraldistinctionintodifferentperiodsofturnover,oneturnoverofthefixedcapitalalwayscomprisingmorethanoneturnoverofthecirculatingcapital,regardlessoftheperiodsofturnoverofthecirculatingcapital,whethertheybeannual,morethanannual,orlessthanannual。ThusinAdamSmiththeavancesannuellestransformthemselvesintocirculatingcapital,andtheavancesprimitivesintofixedcapital。Buthisprogressisconfinedtothisgeneralisationofthecategories。HisimplementationisfarinferiortothatofQuesnay。
  ThecrudelyempiricalmannerinwhichSmithbroachestheinvestigationengendersattheveryoutsetalackofclarity:”Therearetwodifferentwaysinwhichacapitalmaybeemployedsoastoyieldarevenueorprofittoitsemployer。”WealthofNations,BookII,Chap。I,p。189,Aberdeenedition,1848。[WhereverMarxdidnotgiveapagereferencetoquotationsfromSmith’swork,editorialpagereferencesaregiveninsquarebracketstotheLondon1843editionofAnInquiryintotheNatureandCausesoftheWealthofNations,Aneweditioninfourvolumes。ThisandallthefollowingquotationsfromSmithhavebeencheckedwiththisedition——Ed。]
  Thewaysinwhichvaluemaybeinvestedsoastoperformthefunctionsofcapital,toyieldsurplusvaluetoitsowner,areasdifferentandvariedasthespheresofinvestmentofcapital。Itisaquestionofthedifferentbranchesofproductioninwhichcapitalmaybeinvested。Ifputinthisway,thequestionimpliesstillmore。Itincludesthequestionofthewayinwhichvalue,evenifitisnotinvestedasproductivecapital,canfunctionascapitalforitsowner,forinstanceasinterest-bearingcapital,merchants’
  capital,etc。Atthispointwearealreadymilesawayfromtherealsubjectoftheanalysis,viz。,thequestionofhowthedivisionofproductivecapitalintoitsdifferentelements,apartfromtheirdifferentspheresofinvestment,affectstheirturnover。
  AdamSmithimmediatelycontinues:”First,itmaybeemployedinraising,manufacturing,orpurchasinggoods,andsellingthemagainwithaprofit。”[Vol。II,p。254。]Hedoesnottellusanythingelseherethanthatcapitalmaybeemployedinagriculture,manufacture,andcommerce。
  Hespeaksthereforeonlyofthedifferentspheresofinvestmentofcapital,includingsuchinwhich,asincommerce,capitalisnotdirectlyembodiedintheprocessofproduction,hencedoesnotfunctionasproductivecapital。
  Insodoingheabandonsthefoundationonwhichthephysiocratsbasethedistinctionswithinproductivecapitalandtheireffectontheturnover。
  More。Heusesmerchant’scapitalasanillustrationinaproblemwhichconcernsexclusivelydifferenceswithintheproductivecapitalintheproductandvalue-creatingprocess,whichinturncausedifferencesinitsturnoverandreproduction。
  Hecontinues:”Thecapitalemployedinthismanneryieldsnorevenueorprofittoitsemployer,whileiteitherremainsinhispossessionorcontinuesinthesameshape。”[Vol。II,p。254。]”Thecapitalemployedinthismanner!”ButSmithspeaksofcapitalinvestedinagriculture,inindustry,andhetellsuslaterthatacapitalsoemployeddividesintofixedandcirculatingcapital!Henceinvestmentofcapitalinthismannercannotmakefixedorcirculatingcapitalofit。
  Ordoeshemeantosaythatcapitalemployedinordertoproducegoodsandtoselltheseataprofitmustbesoldafteritstransformationintogoodsandbymeansofthesalemustinthefirstplacepassfromthepossessionofthesellerintothatofthebuyer,andinthesecondplacechangefromitsbodilyform,goods,intoitsmoney-form,sothatitisofnousetoitsownersolongasiteitherremainsinhispossessionorcontinuesinthesameshape?Inthatcase,thewholethingamountstothis:
  Thecapital-valuethatformerlyfunctionedintheformofproductivecapital,inaformpeculiartotheprocessofproduction,nowfunctionsascommodity-capitalandmoney-capital,informspeculiartotheprocessofcirculation,whereitisnolongereitherfixedorcirculatingcapital。Andthisappliesequallytothoseelementsofvaluewhichareaddedbyrawandauxiliarymaterial,i。e。,bycirculatingcapital,andtothosewhichareaddedbythewearandtearofinstrumentsoflabourhencebyfixedcapital。Wedonotgetanynearertothedifferencebetweenfixedandcirculatingcapitalinthisway。
  Further:”Thegoodsofthemerchantyieldhimnorevenueorprofittillhesellsthemformoney,andthemoneyyieldshimaslittletillitisagainexchangedforgoods。Hiscapitaliscontinuallygoingfromhiminoneshape,andreturningtohiminanother,anditisonlybymeansofsuchcirculation,orsuccessiveexchanges,thatitcanyieldhimanyprofit。Suchcapitalsthereforemayveryproperlybecalledcirculatingcapitals。”[Vol。II,p。254。]
  WhatAdamSmithheredefinesascirculatingcapitaliswhatI
  wanttocallcapitalofcirculation,capitalinaformpertinenttotheprocessofcirculation,toachangeofformbymeansofexchangeachangeofsubstanceandchangeofhands,hencecommodity-capitalandmoney-capital,asdistinguishedfromitsformpertinenttotheprocessofproduction,thatofproductivecapital。Thesearenotdifferentkindsintowhichtheindustrialcapitalistdivideshiscapital,butdifferentformsoverandoveragainassumedandstrippedoffsuccessivelybythesameadvancedcapital-valueduringitscurriculumvitae。AdamSmithlumpsthistogether——andthisisabigstepbackcomparedtothephysiocrats——withthedistinctionsinformwhichariseinthesphereofcirculationofcapital-value,initscircularcoursethroughitssuccessiveforms,whilethecapital-valueexistsintheformofproductivecapital;
  andtheyarisebecauseofthedifferentwaysinwhichthedifferentelementsofproductivecapitaltakepartintheformationofvaluesandtransfertheirvaluetotheproduct。Weshallseebelowthecon-sequencesofthisbasicconfusionofproductivecapitalandcapitalinthesphereofcirculationcommodity-capitalandmoney-capitalontheonehand,withfixedandcirculatingcapitalontheother。Thecapital-valueadvancedinfixedcapitalisasmuchcirculatedbytheproductasthatwhichhasbeenadvancedinthecirculatingcapital,andbothareequallyconvertedintomoney-capitalbythecirculationofthecommodity-capital。Thedifferenceevolvesonlyfromthefactthatthevalueofthefixedcapitalcirculatespiece-mealandthereforemustlikewisebereplacedpiecemeal,atshorterorlongerintervals,mustbereproducedinitsbodilyform。
  ThatbycirculatingcapitalAdamSmithmeansherenothingbutcapitalofcirculation,i。e。,capital-valueintheformspertainingtotheprocessofcirculationcommoditycapitalandmoney-capitalisshownbyhissingularlyill-chosenillustration。Heselectsforthispurposeakindofcapitalwhichdoesnotbelongatallintheprocessofproduction,butwhoseabodeisexclusivelythesphereofcirculation,whichconsistssolelyofcapitalofcirculation——merchant’scapital。
  Howabsurditistostartoutwithanillustrationinwhichcapitaldoesnotfigurealtogetherasproductivecapitalisstatedrightafterwardsbyhimhimself:”Thecapitalofamerchant,forexample,isaltogetheracirculatingcapital。”[Vol。II,p。255。]Yetwearetoldlateronthatthedifferencebetweencirculatingandfixedcapitalevolvesoutofessentialdifferenceswithintheproductivecapitalitself。OntheonehandAdamSmithhasthedistinctionofthephysiocratsinmind,ontheotherthedifferentformsassumedbycapital-valueinitscircuit。Andboththesethingsarehiggledy-piggledyjumbledtogether。
  Buthowaprofitistocomeintoexistencebychangesofformofmoneyandcommodities,byameretransmutationofvaluefromoneoftheseformsintoanotherismorethananyonecantell。Andanexplanationbecomesabsolutelyimpossiblebecausehestartsoutherewithmerchants’
  capital,whichmovesonlyinthesphereofcirculation。Weshallreturntothislater。Letusfirsthearwhathehastosayaboutfixedcapital。
  [Vol。II,pp。254-55。]”Secondly,itcapitalmaybeemployedintheimprovementofland,inthepurchaseofusefulmachinesandinstrumentsoftrade,orinsuchlikethingsasyieldarevenueorprofitwithoutchangingmasters,orcirculatinganyfurther。Suchcapitalsthereforemayveryproperlybecalledfixedcapitals。Differentoccupationsrequireverydifferentproportionsbetweenthefixedandcirculat-ingcapitalsemployedinthem……Somepartofthecapitalofeverymasterartificerormanufacturerbefixedintheinstrumentsofhistrade。Thispart,however,isverysmallinsome,andverygreatinothers……Thefargreaterpartofthecapitalofallsuchmasterartificerssuchastailors,shoemakers,weavershoweveriscirculated,eitherinthewagesoftheirworkmen,orinthepriceoftheirmaterials,andtoberepaidwithaprofitbythepriceofwork。”
  Apartfromthenaï;vedeterminationofthesourceofprofitweaknessandconfusionbecomeatonceapparentfromthefollowing:Toamachinemanufacturerforexamplethemachineishisproduct,whichcirculatesascommodity-capital,orinAdamSmith’swords,”ispartedwith,changesmasters,circulatesfurther。”Accordingtohisowndefinitionthereforethismachinewouldnotbefixedbutcirculatingcapital。ThisconfusionisagainduetothefactthatSmithmixesupthedistinctionbetweenfixedandcirculatingcapitalevolvedoutofthemanifoldcirculationofthevariouselementsofproductivecapital,withdifferencesintheformassumedbythesamecapitalwhichfunctionsasproductivecapitalwithintheprocessofproductionandascirculationcapital,thatistosay,ascommodity-capitalorasmoney-capital,withinthesphereofcirculation。ConsequentlywithAdamSmiththingscanfunctionasfixedcapitalasinstrumentsoflabour,elementsofproductivecapital,oras”circulating”capital,commodity-capitalasproductsthrustoutofthesphereofproductionintothatofcirculation,alldependingonthepositiontheyoccupyinthelife-processofcapital。
  ButAdamSmithsuddenlychangestheentirebasisofhisclassification,andcontradictsthetextwithwhichhehadopenedtheentireinvestigationafewlinespreviously。Thisrefersparticularlytothestatement:”Therearetwodifferentwaysinwhichacapitalmaybeemployedsoastoyieldarevenueoraprofittoitsemployer,”[Vol。II,p。254]namely,ascirculatingorasfixedcapital。Accordingtothatthesearethereforedifferentmethodsofemployingdifferentcapitalsindependentofoneanother,suchascapitalsthatcanbeemployedeitherinindustryorinagriculture。Andthenweread[Vol。II,p。255]:”Differentoccupationsrequireverydifferentproportionsbetweenthefixedandcirculatingcapitalsemployedinthem。”Fixedandcirculatingcapitalarenownolongerdifferent,independentinvestmentsofcapital,butdifferentportionsofthesameproductivecapital,whichformdifferentpartsofthetotalvalueofthiscapitalindifferentspheresofinvestment。Hencewehaveheredifferencesarisingfromanappropriatedivisionoftheproductivecapitalitselfandthereforevalidonlywithrespecttoit。Butthisrunscountertothecircumstancethatmerchants’
  capital,beingmerelycirculatingcapital,isopposedtofixedcapital,forAdamSmithsayshimself:”Thecapitalofamerchantforexampleisaltogetheracirculatingcapital。”[Vol。II,p。255。]Itisindeedacapitalperformingitsfunctionssolelywithinthesphereofcirculationandassuchstandsopposedingeneraltoproductivecapital,thecapitalembodiedintheprocessofproduction。Butforthisveryreasonitcannotbecontrasted,asthecirculatingcomponentpartofproductivecapital,toitsfixedcomponentpart。
  IntheillustrationsSmithgiveshedesignatesthe”instrumentsoftrade”asfixedcapital,andtheportionofcapitallaidoutinwagesandrawmaterials,includingauxiliarymaterials,ascirculatingcapital”repaidwithaprofitbythepriceofthework”。
  Andsohestartsout,inthefirstplace,fromthevariousconstituentsofthelabour-process,fromlabour-powerlabourandrawmaterialsontheonehand,andinstrumentsoflabourontheother。Buttheseareconstituentsofcapital,becauseasumofvaluewhichistofunctionascapitalisinvestedinthem。Tothisextenttheyarematerialelements,modesofexistenceofproductivecapital,thatistosay,ofcapitalfunctioningintheprocessofproduction。Butwhyisoneofthesepartscalledfixed?
  Because”somepartsofthecapitalmustbefixedintheinstrumentsoftrade。”[Vol。II,p。254。]Buttheotherpartisalsofixed——inwagesandrawmaterials。Machineshoweverand”instrumentsoftrade……orsuchlikethings……yieldarevenueorprofitwithoutchangingmasters,orcirculatinganyfurther。Suchcapitals,therefore,mayveryproperlybecalledfixedcapitals。”[Vol。II,p。254。]
  Takeforinstancetheminingindustry。Norawmaterialatallisusedthere,becausethesubjectoflabour,suchascopper,isaproductofnature,whichmustfirstbeappropriatedbylabour。Thecoppertobefirstappropriated,theproductoftheprocess,whichcirculateslaterasacommodity,orcommodity-capital,doesnotformanelementofproductivecapital。Nopartofitsvalueisinvestedinit。Ontheotherhandtheotherelementsoftheproductiveprocess,labour-powerandauxiliarymaterialssuchascoal,water,etc。,donotentermateriallyintotheproduct,either。
  Thecoalisentirelyconsumedandonlyitsvalueentersintotheproduct,justasapartofthevalueofthemachine,etc。,entersintoit。Finally,thelabourerremainsasindependentvis-á;-vistheproduct,thecopper,asthemachine;exceptthatthevaluewhichheproducesbymeansofhislabourisnowacomponentpartofthevalueofthecopper。Henceinthisillustrationnotasingleconstituentofproductivecapitalchanges”masters,”
  norisanyofthemcirculatedfurther,becausenoneofthementermateriallyintotheproduct。Whatbecomesofthecirculatingcapitalinthiscase?
  AccordingtoAdamSmith’sowndefinitiontheentirecapitalemployedinacoppermineconsistsoffixedcapitalandnothingelse。
  Letustakeontheotherhandadifferentindustry,onewhichutilisesrawmaterialsthatformthesubstanceofitsproduct,andauxiliarymaterialsthatenterintotheproductbodilyandnotonlyassomuchvalue,asisthecasewithfuelcoal。Theproduct,forinstancetheyarn,changeshandstogetherwiththerawmaterial,thecotton,composingit,andpassesfromtheprocessofproductionintothatofconsumption。Butsolongasthecottonfunctionsasanelementofproductivecapital,itsmasterdoesnotsellit,butprocessesit,hasitmadeintoyarn。Hedoesnotpartwithit。Or,touseSmith’scrudelyerroneousandtrivialterms,hedoesnotmakeanyprofit”bypartingwithit,byitschangingmasters,orbycirculatingit。”Hedoesnotpermithismaterialstocirculateanymorethanhismachines。Theyarefixedintheprocessofproduction,thesameasthespinningmachinesandthefactorybuildings。Indeed,apartoftheproductivecapitalmustbejustascontinuallyfixedintheformofcoal,cotton,etc。,asintheformofinstrumentsoflabour。Thedifferenceisonlythatforinstancethecotton,coal,etc。,requiredforoneweek’syarnproduction,arealwaysentirelyconsumedinthemanufactureoftheweeklyproduct,sothatnewcotton,coal,etc。,mustbesuppliedintheirplace;inotherwords,theseelementsofproductivecapital,althoughremainingidenticalinkind,alwaysconsistofnewspecimensofthesamekind,whilethesameindividualspinningmachineorthesameindividualfactorybuildingcontinuesitsparticipationinawholeseriesofweeklyproductionswithoutbeingreplacedbyanewspecimenofitskind。Aselementsoftheproductivecapitalallitsconstituentpartsarecontinuallyfixedintheprocessofproduction,foritcannotproceedwithoutthem。Andalltheelementsofproductivecapital,whetherfixedorcirculating,equallyconfront,asproductivecapital,thecapitalofcirculation,i。e。,commodity-capitalandmoney-capital。
  Itisthesamewithlabour-power。Apartoftheproductivecapitalmustbecontinuallyfixedinit,anditisthesameidenticallabour-powers,justasitisthesamemachines,thatareeverywhereemployedforacertainlengthoftimebythesamecapitalist。Thedifferencebetweenlabour-powerandmachinesinthiscaseisnotthatthemachinesareboughtonceandforallwhichisnotsowhentheyarepaidforininstalments,whilethelabourerisnot。Thedifferenceisratherthatthelabourexpendedbythelabourerenterswhollyintothevalueoftheproduct,whilethevalueofthemachinesentersonlypiecemeal。
  Smithconfusesdifferentdefinitionswhenhesaysofcirculatingcapitalasopposedtofixed:”Thecapitalemployedinthismanneryieldsnorevenueorprofittoitsemployer,whileiteitherremainsinhispossessionorcontinuesinthesameshape。”[Vol。II,p。254。]Heplacesthemerelyformalmetamorphosisofthecommodity,whichtheproduct,thecommodity-capital,undergoesinthesphereofcirculationandwhichbringsaboutthechangeofhandsofthecommodities,onthesamelevelasthebodilymetamorphosis,whichthevariouselementsofproductivecapitalundergoduringtheprocessofproduction。Heindiscriminatelyjumblestogetherthetransformationofcommoditiesintomoneyandofmoneyintocommodities,orpurchaseandsale,withthetransformationofelementsofproductionintoproducts。
  Hisillustrationforcirculatingcapitalismerchants’capital,whichisconvertedfromcommoditiesintomoneyandfrommoneyintocommodities——
  thechangeofformC——M——Cpertainingtothecirculationofcommodities。
  Butthischangeofformwithinthecirculationsignifiesfortheindustrialcapitalinactionthatthecommoditiesintowhichthemoneyisreconvertedareelementsofproductioninstrumentsoflabourandlabour-power,that,therefore,thechangeofformrendersthefunctionofindustrialcapitalcontinuous,renderstheprocessofproductionacontinuousone,oraprocessofreproduction。Thisentirechangeofformtakesplaceincirculation。
  Itisthischangeofformthatbringsabouttherealpassageofthecommoditiesfromhandtohand。Butthemetamorphosesgonethroughbyproductivecapitalwithinitsprocessofproductionareonthecontrarymetamorphosesthatpertaintothelabour-processandarenecessarytotransformtheelementsofproductionintothedesiredproduct。AdamSmithclingstothefactthatapartofthemeansofproductiontheinstrumentsoflabourproperserveinthelabour-process”yieldaprofittotheirmaster,”
  asheerroneouslyexpressesitwithoutchangingtheirbodilyformandwearoutonlybydegrees;whiletheotherpart,thematerials,changeandbyvirtueofthisverychangeattaintheirdestinationasmeansofproduction。
  Thisdifferenceinthebehaviouroftheelementsofproductivecapitalinthelabour-processformshoweveronlythepointofdepartureofthedifferencebetweenfixedandnon-fixedcapital,notthisdifferenceitself。
  Thatfollowsfromthefactalonethatthisdifferentbehaviourexistsinequalmeasureunderallmodesofproduction,capitalistandnon-capitalist。
  Tothisdifferentbehaviourofmaterialelementscorrespondshoweverthetransmissionofvaluetotheproduct,andtothisinturncorrespondsthereplacementofvaluebythesaleoftheproduct。Thatandthataloneiswhatconstitutesthedifferenceinquestion。Hencecapitalisnotcalledfixedbecauseitisfixedintheinstrumentsoflabourbutbecauseapartofitsvaluelaidoutininstrumentsoflabourremainsfixedinthem,whiletheotherpartcirculatesasacomponentpartofthevalueoftheproduct。”Ifitthestockisemployedinprocuringfutureprofit,itmustprocurethisprofiteitherbystayingwithhimtheemployer,orbygoingfromhim。Intheonecaseitisafixed,intheotheritisacirculatingcapital。”P。189。
  Whatstrikesonehereaboveallisthatthecrudelyempiricalconceptionofprofitderivedfromtheoutlookoftheordinarycapitalist,whichwhollycontradictsthebetteresotericunderstandingofAdamSmith。
  Notonlythepriceofmaterialsandthatofthelabour-powerisreplacedinthepriceoftheproduct,butalsothatpartofvaluewhichistransferredbywearandtearfromtheinstrumentsoflabourtotheproduct。Undernocircumstancesdoesthisreplacementyieldprofit。Whetheravalueadvancedfortheproductionofacommodityisreplacedentirelyorpiecemeal,atonetimeorgradually,bythesaleofthatcommodity,cannotchangeanythingexceptthemannerandtimeofreplacement。Butinnoeventcanittransformthatwhichiscommontoboth,thereplacementofvalue,intoacreationofsurplus-value。Atthebottomofitallliesthecommonlyheldideathat,becausesurplus-valueisnotrealiseduntiltheproductissold,untilitcirculates,itoriginatesonlyfromsales,fromthecirculation。Indeedthedifferentmanneroforiginationofprofitisinthiscasebutawrongwayofexpressingthefactthatthedifferentelementsofproductivecapitalservedifferently,thatasproductiveelementstheyactdifferentlyinthelabour-process。Intheend,thedifferenceisnotderivedfromtheprocessoflabourorself-expansion,notfromthefunctionofproductivecapitalitself,butitissupposedtoapplyonlysubjectivelytotheindividualcapitalist,towhomonepartofcapitalservesausefulpurposeinoneway,whileanotherpartdoessoinanotherway。
  Quesnay,ontheotherhand,hadderivedthesedifferencesfromtheprocessofreproductionanditsnecessities。Inorderthatthisprocessmaybecontinuous,thevalueoftheannualadvancesmustannuallybereplacedinfulloutofthevalueoftheannualproduct,whilethevalueoftheinvestmentcapitalneedbereplacedonlypiecemeal,sothatitrequirescompletereplacementandthereforecompletereproductiononlyinaperiodof,say,tenyearsbyanewmaterialofthesamekind。ConsequentlyAdamSmithfallsfarbelowQuesnay。
  SothereisthereforeabsolutelynothinglefttoAdamSmithforadefinitionoffixedcapitalexceptthatitisinstrumentsoflabourwhichdonotchangetheirshapeintheprocessofproductionandcontinuetoserveinproductionuntiltheyarewornout,asopposedtotheproductsintheformationofwhichtheyassist。Heforgetsthatallelementsofproductivecapitalcontinuallyconfrontintheirbodilyformasinstrumentsoflabour,materials,andlabour-powertheproductandtheproductcirculatingasacommodity,andthatthedifferencebetweenthepartconsistingofmaterialsandlabour-powerandthatconsistingofinstrumentsoflabourisonlythis:withregardtolabour-power,thatitisalwayspurchasedafreshnotboughtforthetimeitlasts,asaretheinstrumentsoflabour;
  withregardtothematerials,thatitisnotthesameidenticalmaterialsthatfunctioninthelabour-processthroughout,butalwaysnewmaterialsofthesamekind。Atthesametimethefalseimpressioniscreatedthatthevalueofthefixedcapitaldoesnotparticipateinthecirculation,althoughofcourseAdamSmithpreviouslyexplainedthewearandtearoffixedcapitalasapartofthepriceoftheproduct。
  Inopposingcirculatingcapitaltofixed,noemphasisisplacedonthefactthatthisoppositionexistssolelybecauseitisthatconstituentpartofproductivecapitalwhichmustbewhollyreplacedoutofthevalueoftheproductandmustthereforefullyshareinitsmetamorphoses,whilethisisnotsointhecaseofthefixedcapital。Insteadthecirculatingcapitalisjumbledtogetherwiththoseformswhichcapitalassumesonpassingfromthesphereofproductiontothatofcirculation,ascommodity-capitalandmoney-capital。Butbothforms,commodity-capitalaswellasmoney-capital,arecarriersofthevalueofboththefixedandthecirculatingcomponentpartsofproductivecapital。Bothofthemarecapitalofcirculation,asdistinguishedfromproductivecapital,butnotcirculatingfluentcapitalasdistinguishedfromfixedcapital。
  Finally,owingtothewhollyerroneousexplanationthatprofitismadebyfixedcapitalstayingintheprocessofproduction,andbycirculatingcapitalleavingitandbeingcirculated,andalsoonaccountoftheidentityofformassumedintheturnoverbythevariablecapitalandthecirculatingconstituentoftheconstantcapital,theiressentialdifferenceintheprocessofself-expansionandoftheformationofsurplus-valueishidden,sothattheentiresecretofcapitalistproductionisobscuredstillmore。Thecommondesignation”circulatingcapital”abolishesthisessentialdifference。PoliticalEconomysubsequentlywentstillfartherbyholdingfastnottotheantithesisbetweenvariableandconstantcapitalbuttotheantithesisbetweenfixedandcirculatingcapitalastheessentialandsoledelimitation。
  AfterAdamSmithhasdesignatedfixedandcirculatingcapitalastwoparticularwaysofinvestingcapital,eachofwhichyieldsaprofitbyitself,hesays:”Nofixedcapitalcanyieldanyrevenuebutbymeansofacirculatingcapital。Themostusefulmachinesandinstrumentsoftradewillproducenothingwithoutthecirculatingcapitalwhichaffordsthematerialstheyareemployedupon,themaintenanceoftheworkmenwhoemploythem。”P。188。
  Hereitbecomesapparentwhatthepreviouslyusedexpressions”yieldarevenue,””makeaprofit,”etc。,signify,viz。,thatbothpartsofcapitalserveascreatorsofproduct。
  AdamSmiththengivesthefollowingillustration:”Thatpartofthecapitalofthefarmerwhichisemployedintheinstrumentsofagricultureisafixed,thatwhichisemployedinthewagesandmaintenanceofhislabouringservantsisacirculatingcapital。”Herethedifferencebetweenfixedandcirculatingcapitaliscorrectlyappliedonlytodifferenceincirculation,totheturnoversofdifferentconstituentpartsofproductivecapital。”Hemakesaprofitoftheonebykeepingitinhisownpossession,andoftheotherbypartingwithit。Thepriceorvalueofhislabouringcattleisafixedcapital”hereheisagaincorrectwhenhesaysitisthevalue,notthematerialelement,towhichthedifferenceapplies”inthesamemannerasthatoftheinstrumentsofhusbandry;theirmaintenance”
  thatofthelabouringcattle”isacirculatingcapitalinthesamemannerasthatofthelabouringservants。Thefarmermakeshisprofitbykeepingthelabouringcattle,andbypartingwiththeirmaintenance。”Thefarmerkeepsthefodderofthecattle,hedoesnotsellit。Heusesittofeedthecattle,whileheusesusthecattlethemselvesasinstrumentsoflabour。
  Thedifferenceisonlythis:Thefodderthatgoesforthemaintenanceofthelabouringcattleisconsumedwhollyandmustbecontinuallyreplacedbynewcattlefodderoutoftheproductsofagricultureorbytheirsale;
  thecattlethemselvesarereplacedonlyaseachheadbecomesincapacitatedforwork。”Boththepriceandthemaintenanceofthecattlewhichareboughtinandfattened,notforlabourbutforsale,areacirculatingcapital。Thefarmermakeshisprofitbypartingwiththem。”[Vol。II,pp。
  255-56。]Everyproducerofcommodities,hencelikewisethecapitalistproducer,sellshisproduct,theresultofhisprocessofproduction,butthisisnoreasonwhythisproductshouldformapartofeitherthefixedorthecirculatingcomponentofhisproductivecapital。Theproductnowexistsratherinthatforminwhichitisthrustoutoftheprocessofproductionandmustfunctionascommodity-capital。Thefattenedstockfunctionintheprocessofproductionasrawmaterial,notasinstrumentsoflabourlikethelabouringcattle。Hencethefattenedcattleenterintotheproductassubstance,andtheirwholevalueentersintoit,justasthatoftheauxiliarymaterial[itsfodder]。Thefattenedcattlearethereforeacirculatingpartoftheproductivecapital,butnotbecausethesoldproduct,thefattenedcattle,havethesamebodilyformastherawmaterial,thecattlenotyetfattened。Thisisaccidental。AtthesametimeAdamSmithmighthaveseenbythisillustrationthatitisnotthematerialformoftheelementofproductionbutitsfunctionwithintheprocessofproductionthatdeterminesthevaluecontainedinitasfixedorcirculating。”Thewholevalueoftheseedtooisproperlyafixedcapital。Thoughitgoesbackwardsandforwardsbetweenthegroundandthegranary,itneverchangesmasters,andthereforeitdoesnotproperlycirculate。Thefarmermakeshisprofitnotbyitssale,butbyitsincrease。”[Vol。II,p。256。]
  AtthispointtheutterthoughtlessnessoftheSmithiandistinctionrevealsitself。Accordingtohimseedwouldbefixedcapital,iftherewouldbeno”changeofmasters,”thatistosay,iftheseedisdirectlyreplacedoutoftheannualproduct,isdeductedfromit。Ontheotherhanditwouldbecirculatingcapital,iftheentireproductweresoldandwithapartofitsvalueseedofanotherownerwerebought。Intheonecasethereisa”changeofmasters,”intheotherthereisnot。Smithoncemoreconfusesherecirculatingandcommodity-capital。Theproductisthematerialvehicleofthecommodity-capital,butofcourseonlythatpartofitwhichactuallyentersintothecirculationanddoesnotre-enterdirectlyintotheprocessofproductionfromwhichitemergedasaproduct。
  Whethertheseedisdirectlydeductedfromtheproductasapartofitortheentireproductissoldandapartofitsvalueconvertedinthepurchaseofanotherman’sseed——ineithercaseitismerereplacementthattakesplaceandnoprofitismadebythisreplacement。Intheonecasetheseedentersintocirculationasacommoditytogetherwiththeremainderoftheproduct;intheotheritfiguresonlyinbook-keepingasacomponentpartofthevalueoftheadvancedcapital。Butinbothcasesitremainsacirculatingconstituentoftheproductivecapital。Theseedisentirelyconsumedtogettheproductready,anditmustbeentirelyreplacedoutoftheproducttomakereproductionpossible。”Hencerawmaterialandauxiliarysubstanceslosethecharacteristicformwithwhichtheyareclothedonenteringthelabour-process。Itisotherwisewiththeinstrumentsoflabour。Tools,machines,workshops,andvessels,areofuseinthelabour-process,onlysolongastheyretaintheiroriginalshape,andarereadyeachmorningtorenewtheprocess,withtheirshapeunchanged。Andjustasduringtheirlifetime,thatistosay,duringthecontinuedlabour-processinwhichtheyserve,theyretaintheirshapeindependentoftheproduct,sotoo,theydoaftertheirdeath。
  Thecorpsesofmachines,tools,workshops,etc。,arealwaysseparateanddistinctfromtheproducttheyhelpedtoturnout。”BuchI,Kap。VI,S。
  192。[Englishedition:Ch。VIII,p。203——Ed。]
  Thesedifferentwaysinwhichmeansofproductionareconsumedtoformtheproduct,someofthempreservingtheirindependentshapevis-á;-vistheproduct,otherschangingorlosingitentirely——thisdifferencepertainingtothelabour-processassuchandthereforejustaswelltothelabour-processesaimedatsatisfy-ingmerelyone’sownneeds,e。g。,theneedsofthepatriarchalfamily,withoutanyexchange,withoutproductionofcommodities——arefalsifiedbyAdamSmith。Hedoesso1byintroducingherethetotallyirrelevantdefinitionofprofit,claimingthatsomeofthemeansofproductionyieldaprofittotheirownerbypreservingtheirform,whiletheothersdosobylosingit;2byjumblingtogetherthealterationsofapartoftheelementsofproductioninthelabour-processwiththechangeofformpurchaseandsalethatischaracteristicoftheexchangeofproducts,ofcommoditycirculation,andwhichatthesametimeincludesachangeintheowner-shipofthecirculatingcommodities。
  Theturnoverpresupposesreproductioneffectedbycirculation,hencebythesaleoftheproduct,byitsconversionintomoneyanditsreconversionfrommoneyintoitselementsofproduction。Butsinceapartofthecapitalistproducer’sownproductserveshimdirectlyasmeansofproduction,heappearsasasellerofittohimself,andthatishowthematterfiguresinhisbooks。Inthatcasethispartofthereproductionisnotbroughtaboutbycirculationbutproceedsdirectly。Howeverthepartoftheproductthusservingagainasmeansofproductionreplacescirculating,notfixedcapital,since1itsvaluepasseswhollyintotheproduct,and2ititselfhasbeenwhollyreplacedinkindbyanewspecimenoutofthenewproduct。