Page 24 of Notebook IV of Outlines of the Critique of Political Economy

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the demand of the working class posited by production itself appears to each individual capital as an "ADEQUATE DEMAND". On the one hand, this demand posited by production itself drives on production beyond the proportion in which it would have to produce with regard to the [effective demand of] workers, and must do so. On the other hand, the demand EXTERIOR TO THE DEMAND OF THE LABOURER HIMSELF disappears or shrinks, hence the COLLAPSE occurs. Capital itself then regards the demand of the labourer, i.e. the payment of wages upon which this demand is based, not as gain but as loss, i.e. the immanent relationship of capital and labour asserts itself.

Here again, it is owing to the competition of capitals, their indifference to and independence of one another, that the individual capital does not relate to the workers of the entire remaining capital as workers: hinc is driven beyond the right proportion. It is precisely this which distinguishes capital from the [feudal] relationship of domination — that the worker confronts the capitalist as consumer and one who posits exchange value, in the form of a possessor of money, of money, of a simple centre of circulation — that he becomes one of the innumerable centres of circulation, in which his specific character as worker is extinguished.

^Exactly the same is true of the demand created by production itself for raw materials, semi-finished products, machinery, means of communication, and for the accessory materials used in production, such as dyes, coal, tallow, soap, etc. This demand, being effective and positing exchange value, is adequate and sufficient as long as the producers exchange among themselves. Its inadequacy becomes evident as soon as the final product encounters its limit in immediate and final consumption. This semblance [of adequate demand], which drives [production] beyond the right proportion, also arises from the essence of capital, which, as will have to be shown in more detail in the analysis of competition, is that of a number of capitals entirely indifferent to one another, repelling one another. In so far as one capitalist buys from others, buys or sells commodities, they stand in the relationship of simple exchange and do not relate to one another as capital. The correct (imaginary) proportion in which they must exchange with one another in order to be able to valorise themselves at the end as capital, lies outside their relation to one another.^

To begin with: capital compels the workers beyond necessary labour to surplus labour. Only thus does it valorise itself and create surplus value. But on the other hand capital posits necessary labour only in so far as and to the extent to which it is surplus labour, and is realisable as surplus value. It therefore posits surplus labour as a condition of necessary labour, and surplus value as the limit to objectified labour, to value in general. When it can no longer posit the former, it no longer posits the latter, and on the basis of capital only capital can posit necessary labour. Consequently, it restricts labour and the creation of value — by an ARTIFICIAL CHECK, as the English put it⁽¹⁾—and it does so for the same reason and to the same extent that it posits surplus labour and surplus value. By its very nature, therefore, capital sets [IV-25] a limit for labour and the creation of value, which stands in contradiction to its tendency to expand them boundlessly. And by both positing a limit specific to itself and on the other hand driving beyond any limit, it is the very embodiment of contradiction.

^Since value constitutes the basis of capital, and capital thus necessarily exists only through exchange for a counter-value, it necessarily repels itself from itself. A universal capital, not confronted by alien capitals with which it exchanges — and from our present standpoint nothing confronts it but wage labour or itself — is consequently an impossibility. The mutual repulsion of capitals is already inherent in capital as realised exchange value.^

While capital thus on the one hand makes surplus labour and its exchange for [other] surplus labour⁽²⁾ the precondition of necessary labour and therefore of positing the capacity to labour as a centre of exchange — hence already restricting and qualifying the sphere of exchange in this direction — it is just as essential for capital, on the other hand, to limit the consumption of the worker to what is necessary for the reproduction of his labour capacity, i.e. to make the value which expresses necessary labour the limit of the utilisation of the worker's labour capacity and hence of his capacity to exchange, and to try to reduce to a minimum the ratio of this necessary labour to surplus labour. [This is] a new limit on the sphere of exchange which, however, like the first, is identical with the tendency of capital to treat every limit on its self-valorisation as a barrier [which must be overcome]. The boundless enlargement of its value — the boundless positing of value — is thus absolutely identical here with the setting of limits to the sphere of exchange, i.e. to the possibility of valorisation, to the realisation of the value posited in the production process.

The same is true of the productive power. On the one hand, the tendency of capital necessarily to raise it to the utmost in order to increase relative surplus time. On the other hand, necessary labour time, i.e. the workers' capacity to exchange, thereby diminished. Moreover, as we have seen,⁽³⁾ relative surplus value grows much less relative to the productive power and indeed the proportion [between the increase in surplus value and that in productive power] declines the higher the level of productivity already attained. But the volume of products grows in similar proportion—if it did not, new capital and labour would be set free which would not enter into circulation. But in proportion to the growing volume of products, the difficulty of utilising the labour time contained in them also grows, because the demands made on consumption rise.

(Here, we are still only concerned with the way in which the process of the valorisation of capital is simultaneously its process of devaluation. We are not discussing the extent to which, while it has the tendency boundlessly to expand the productive forces, it also makes one-sided, limits, etc., the main force of production, man himself, and tends in general to restrict the productive forces.)

Capital thus posits necessary labour time as the limit on the exchange value of living labour capacity; posits surplus labour time as the limit on necessary labour time, and posits surplus value as the limit on surplus labour time. At the same time, it pushes all these limits aside, in so far as it looks to labour capacity as simply a participant in exchange, as money, and posits surplus labour time as the only limit, because it is the creator of surplus value. (Or, from the first aspect, capital posits the exchange of surplus values as a limit on the exchange of necessary values.)

Capital simultaneously posits the values already present in circulation — or, what amounts to the same thing, the ratio of the value created by capital to the value presupposed in capital itself and in circulation — as the limit, the necessary limit, to its creation of value. On the other hand, it posits its productivity as the only limit on, and as the sole creator of, values. Hence it constantly drives towards its own devaluation on the one hand, and towards the restriction of the productive forces and of the labour which objectifies itself in values on the other.

^ The nonsense about the impossibility of overproduction (in other words, the assertion of the immediate identity of the production process of capital and its process of valorisation) was at least sophistically, i.e. ingeniously, expressed by James Mill, as mentioned above,a in the formula: supply=its own demand, hence demand and supply are identical, which, put differently, means only that value is determined by labour time, and consequently exchange adds nothing to value. The only thing which is forgotten here is that exchange must take place, and whether it does or does not depends upon use value (in the final analysis). Therefore, as Mill says, if demand and supply are not identical, this is the result of too much being produced of one particular product (which is supplied) and too little of another (for which there is a demand). This too much and too little concerns not exchange value, but use value. More of the product is supplied than can be "used"; that is the essence of the matter; hence overproduction derives from use value and therefore from exchange itself.

Say expresses this proposition in stultified form: products are exchanged only for products'^[3]; therefore all that can happen is that too much is produced of one product and too little of another. He forgets (1) that values are exchanged for values, and one product is exchanged for another only in so far as it is value, i.e. only in so far as it is or becomes money; and (2) is exchanged for labour. The good fellow adopts the standpoint of simple exchange, in which indeed no overproduction is possible because it really is concerned with use value, not with exchange value. Overproduction takes place in relation to valorisation, NOTHING ELSE.^

[IV-26] Proudhon, who certainly hears the bells ringing, but never knows where, derives overproduction from the fact that "the worker cannot buy back his product".⁽⁴⁾ By this he means that interest and profit are charged on it, or that the price charged for the product is in excess of its actual value. This proves d'abord that he understands nothing of value determination, which, GENERALLY SPEAKING, cannot possibly include an item like OVERCHARGE. In actual commerce, capitalist A can cheat capitalist B. One profits by the amount the other loses. If we add them both together, the sum of their exchange = the sum of the labour time objectified in their products, of which capitalist A merely pocketed more than his due in relation to B. From the entire profits that capital, i.e. the total number of capitalists, makes, there are deducted (1) the constant part of capital; (2) the wages, or the objectified labour time necessary to reproduce the living labour capacity. They can therefore divide among themselves only surplus value. The proportions — just or otherwise — in which they share out this surplus value among themselves, make absolutely no difference to the exchange and to the relation of exchange between capital and labour.

It might be said that necessary labour time (i.e. wages), which therefore does not include profit but is RATHER to be subtracted from it, is itself in turn determined by the prices of the products, which already include profit. Where else could the profit come from, which the capitalist not directly employing this worker makes in the exchange with him? E.g. the worker employed by the SPINNER exchanges his wages for so many bushels of grain. But the profit of the farmer, i.e. of capital, is already included in the price of each bushel, so that the price of the means of subsistence which necessary labour time itself buys, already includes surplus labour time. D'abord, it is clear that the wages paid by the SPINNER to his WORKINGMEN must be sufficient to buy the necessary bushels of corn, whatever the farmer's profit entering into the price of the bushel of corn, but that equally, on the other side, the wages paid by the farmer to his labourers must be sufficient to enable them to obtain the necessary quantity of clothing, whatever may be the profit of the SPINNER and WEAVER entering into the price of this clothing.⁽⁵⁾

[IV-27] The point is simply that in this argument (1) price and value are confused; (2) relations are brought in which are irrelevant to the determination of value as such.

Assume, initially — and this is the conceptual relation — that capitalist A himself produces all the means of subsistence which the worker requires, or which represent the sum of use values in which his necessary labour objectifies itself. The worker would therefore have to buy back from the capitalist, with the money he received from him — money appears in this transaction merely as means of circulation — that fractional part of the product which represents his necessary labour. The price of a fractional part of the product of capitalist A is OF COURSE the same for the worker as it is for any other exchanger. From the moment he buys from the capitalist, his specific quality as worker is extinguished; in his money, every trace of the relationship and of the operation by means of which it was obtained has disappeared. He confronts the capitalist in circulation simply as M [money], and the capitalist confronts him as C [commodity]; he confronts the capitalist as réaliser of the price of C, which is therefore presupposed for him just as it is for every other representative of M, i.e. for every other buyer.

WELL. But in the price of the fractional parts of the commodity which he buys there is included the profit in which the surplus value falling to the capitalist appears. If, therefore, his necessary labour time represents 20 thaler=a particular fractional part of the product, and if profit is 10%, the capitalist sells him the commodity for 22 thaler.

This is what Proudhon thinks, and he therefore concludes that the worker cannot buy back his product, i.e. the fractional part of the total product which objectifies his necessary labour? (We shall come back directly to his other CONCLUSION: that therefore capital is unable to exchange adequately, hence overproduction.) To clarify the matter, suppose that the 20 thaler received by the worker—4 bushels of grain. If 20 thaler was the value of the 4 bushels expressed in money, and the capitalist sold it for 22, the worker could not then buy back the 4 bushels; he could buy only 3^[7]/n bushels. In other words, he [Proudhon] imagines that the monetary transaction falsifies the relationship. The price of necessary labour is 20 thaler=4 bushels, and this the capitalist hands over to the worker. But as soon as the latter wants to obtain the 4 bushels for his 20 thaler, he finds that he only gets 3⁽⁶⁾/n. But since he would then not be getting his necessary wages he could not live at all, and thus Mr. Proudhon proves too much.

^ The fact that in practice, capital both in its general tendency and directly via the price, as e.g. in the TRUCK-SYSTEM, tries to cheat necessary labour and to depress it below the standard set by nature as well as by a particular state of society, is irrelevant here. Here we must assume throughout that the wages being paid are economically just, i.e. determined by the general laws of political economy. The contradictions here must follow from the general relations themselves, not from the fraudulent tricks of individual capitalists. How all this develops in reality belongs to the theory of wages.^

But the presupposition, if you please, is wrong. If 5 thaler express the value of a bushel, i.e. the labour time objectified in it, and 4 bushels the necessary wages, capitalist A does not sell these 4 bushels for 22 thaler, as Proudhon believes, but for 20 thaler. The point is this: let total product (including necessary and surplus labour time) be 110 thaler=22 bushels; of these 16 bushels=80 thaler represent the capital laid out on seed, machinery, etc.; 4 bushels=20 thaler represent the necessary labour time; and 2 bushels =10 thaler represent surplus labour time. The capitalist sells each bushel for 5 thaler, the necessary value of the bushel, and yet he gains 10% on each bushel, or ^[5]/io thaler, ^[1]/^[2] thaler=15 silver groschen. Where does this come from? From the fact that he sells 22x5 instead of 20x5. We can here let the additional capital he must lay out to produce 2 more bushels=0, since they can be reduced to pure surplus labour, such as more thorough ploughing, weeding, spreading-on of animal manure, etc., which cost him nothing at all.

[IV-28] The value contained in the 2 surplus bushels has cost him nothing, and therefore constitutes a surplus above his expenses. If he sells 20 of the 22 bushels for what they have cost him, 100 thaler, and 2, which have cost him nothing — but whose value=the labour contained in them — for 10 thaler, this is the same for him as if he [having 20 bushels to sell] had sold each bushel for 15 silver groschen more than it cost him. (For V2 thaler or 10% on 5 thaler=^[5]/io) Thus, although he makes a profit of 2 thaler on the 4 bushels sold to the worker, the worker gets the bushel for its necessary value. The capitalist only makes a profit of 2 thaler on the 4 bushels, because in addition to these he sells another 18 at the same price. If he sold only 16 additional ones, he would make no profit; for he would then sell a total of 5x20=100, his capital outlay.

In manufacture, in fact, the outlays of capital need not necessarily grow for a surplus value to be realised; i.e. it is not necessary for the outlay on raw material and machinery to grow. Suppose that a given product acquires a higher FINISH and a higher use value merely through labour by hand — the volume of necessary raw material and instrument is assumed to be constant— and thus its use value is increased, not because its quantity but because its quality has been raised due to the increased handiwork employed on it. Its exchange value — the labour objectified in it — simply grows in proportion to this labour. If the capitalist then sells the product 10% more dearly, the fractional part of the product (expressed in terms of money) which represents necessary labour is paid to the worker, and if the product were divisible, the worker could purchase this fractional part. The capitalist's profit would not originate from his overcharging the worker for this fractional part, but from the fact that with the whole he sells a fractional part for which he has not paid, and which represents precisely surplus labour time.

As value, the product is always divisible; in its natural form it need not be so. Profit here always comes from the fact that the total value contains a fractional part which is not paid for, and therefore a fractional part of surplus labour is paid for in each fractional part of the whole. Take the example given above: if the capitalist sells 22 bushels, i.e. 2 representing the surplus labour, it is the same thing as if [with only 20 bushels to sell] he sold each bushel for Vio t°° much, i.e. Vio surplus value. If e.g. only 1 clock has been produced, with the same ratio of labour, capital and surplus value, the quality of the clock has been raised by Vio of the labour time, a rise of Vio m value which costs the capitalist nothing.

Assume a third example in which the capitalist, as is often the case in manufacture (though not in the extractive industries), requires more raw material, in which surplus labour time is objectified (we assume that [the value of] the instrument remains constant; but it would make no difference if it were assumed to be variable).

(Really, this does not belong here yet, for capital can or must just as well be presumed to have produced the raw material, e.g. cotton, and surplus production at any particular point must be reducible to mere surplus labour; or, what is rather the reality, capital presupposes the simultaneous existence of surplus labour at all points in circulation.)

Let the capitalist spin 25 lbs of cotton, costing him 50 thaler, for which he needs machinery (which we shall assume to be completely used up in the production process) to a value of 30 thaler and let wages be 20 thaler; all this for 25 lbs of twist which he sells for 110 thaler. He then sells each pound of twist for 4^[2]/^[5] thaler or 4 thaler 12 silver groschen. The worker consequently obtains 4 ^[6] / n lbs of twist, if he wishes to buy back his product. If the worker worked for himself, he would likewise sell the pound for 4 thaler 12 silver groschen and make no profit — assuming that he merely performs the necessary labour; but he will spin less cotton into twist.^[3]

[IV-29] As we know, the value of a pound of twist consists exclusively of the amount of labour time objectified in it. Now suppose the value of the pound of twist is 5 thaler. Suppose, ^[4]/^[5] [of that 5 thaler], i.e. 4 thaler, represent cotton, instrument, etc.; then

1 thaler represents the labour realised in the cotton by means of the instrument. If the worker needs 20 thaler to subsist for say a month as a spinner, he would have to spin 20 lbs of twist, since he earns 1 thaler for spinning 1 lb. of twist, but needs to earn 20. If he himself owned the cotton, instrument, etc., and worked for himself, i.e. if he were his own master, he would have to sell 20 lbs of twist; for he would only earn on each lb. Vs [of its value], a thaler, and 1x20 = 20. If he works for the capitalist, the labour which spins the 20 lbs of cotton only represents necessary labour; for, by presupposition, of the 20 lbs of twist or 20x5=100 thaler, 80 thaler represent only the raw cotton and instrument already purchased, and the newly reproduced value represents nothing but necessary labour.

4 of the 20 lbs of twist=20 thaler would represent necessary labour and 16 nothing but the constant part of capital. 16x5 = 80 thaler. Every lb. in excess of 20 which the capitalist orders to be produced would contain Vs surplus labour, surplus value for him. (Objectified labour which he sells without having paid for it.) If he orders one more pound of twist spun, he makes a profit of 1 thaler; if 10 pounds more, 10 thaler. Out of 10 pounds or 50 thaler [obtained for surplus product] the capitalist would have 40 thaler to replace his outlays and 10 thaler of surplus labour; or 8 lbs of twist to buy the material for 10 (machinery and cotton), and 2 lbs of twist or their value which cost him nothing.

If we now summarise the capitalist's accounts, we find that he has invested

Thaler Thaler Thaler Thaler [Constant capital] Wages Surplus value [Value of the product] 80+40=120 20 10 (raw material, instrument, etc.)

120 20 10 = 150

The capitalist has produced a total of 30 lbs of twist (30x5=150); the pound at 5 thaler, its precise value, i.e. the value determined purely by the labour objectified in it and derived from it alone. Of these 30 lbs, 24 represent constant capital, 4 lbs are expended on wages, and 2 constitute surplus value. This surplus value, if we calculate it — as the capitalist himself does — on the basis of his total outlay, i.e. 140 thaler (or 28 pounds), is Vi4='7^[1]/7% (although in the present example the rate of surplus value on the [necessary] labour is 50%).

[IV-30] Suppose that there is an increase in the productivity of labour, so that the capitalist can spin 40 lbs with the same outlay on labour. According to our assumption, he would sell these 40 lbs at their real value, i.e. for 5 thaler per pound, 4 thaler representing the labour objectified in cotton, etc., and 1 thaler the labour newly added. He would therefore sell:

Thaler 40 lbs — the lb. for 5=40x5 20 lbs are expended for necessary labour, etc.

100. On the first 20 lbs he would not have earned a farthing; from the remaining hundred, take off ^[4]/ ^[5]=4x20=80. 80 for material, etc. Leaves

20 thaler.

On an outlay of 200 thaler, the capitalist would have gained 20, or 10% on the total outlay. In fact, however, his gain would be derived from the 20 thaler profit on the second 100 thaler, or from the second 20 lbs, for he has not paid for the labour objectified in them. Assume now that he can double his output, say:

Lbs Thaler 80 400. Of these take away 20 for necessary labour, etc. = 100. Leaves

300. Of these, take away ^[4]/^[5] for material, etc. 240. Leaves

60; a profit of 60 on 400 =6 on 40=15%

IN FACT, in the above example, the outlay of the capitalist is only 180, and on this he gains 20, or 11 V^[9]%.

The smaller the proportion of the outlay representing necessary labour, the larger will be his profit, though it bears no obvious relation to the real surplus value, i.e. surplus labour. For example, for the -capitalist to make a profit of 10%, he must have 40 lbs of twist spun; the worker needs to spin only 20=necessary labour.

Thaler

200; of these 40 lbs

100 Surplus labour=necessary labour, hence 100% surplus value. This is our old-established law. But this is not what is at issue here. In the above example of the 40 lbs, the real value of the pound is 5 thaler, and, like the capitalist, the worker, if he carried on his own business, as a worker who could advance to himself the funds to enable him to utilise the raw material, etc., to the extent required to enable him to subsist as a worker, would sell the pound at 5 thaler. But he would produce only 20 pounds; from the proceeds he would employ ^[4]/^[5] for the purchase of new raw materials and 7^[5] for his subsistence. His yield from the 100 thaler would only be his wages. The profit of the capitalist does not arise from selling the pound of twist too dearly — he sells it for its exact value—but from selling it for more than its production costs him (not for what its production costs in general; for the 7s [of the value of twist which constitutes the capitalist's profit] costs the worker his surplus labour). If he sold it for less than 5 thaler, he would sell it for less than its value, and the buyer would get the l/^[5] labour contained in each pound of twist over and above the outlays, etc., free of charge. But the capitalist reckons in this way:

Value of 1 lb. = 5 thaler of 40 lbs = 200 thaler; of which take away costs 180

20. Leaves 20.

He does not calculate that he [IV-31] gains 20 on the second 100 thaler, but that his profit is 20 on his total outlay of 180. This gives him a profit of 1179%, instead of 20. Furthermore, he calculates that in order to make this profit he must sell 40 lbs. 40 lbs at 5 thaler per lb. do not yield him 7s, or 20%, but 20 thaler distributed over 40 lbs or l/^[2] thaler per pound. At the price for which he sells the pound, he. gains l/^[2] thaler on 5 thaler; or 1 thaler on 10, 10% on the selling price.

The price [of the total product] is determined by the price of the fractional unit (1 lb.) multiplied by the number of these units sold; in this case, 1 lb. at 5 thaler x40. Appropriate as this way of determining the price may be with regard to the wallet of the capitalist, it is liable to mislead theoretically, since it seems as if there were an overcharge above the real value of each individual pound, and the creation of surplus value in the individual pound has disappeared from sight. This price determination by means of the multiplication of the value of the unit (measure) of use value (pound, yard, hundredweight, etc.) by the number of units produced, is important later on in the theory of prices. There follows from it among other things that the fall in the unit-price and the rise in the number of units, which occurs as the productive forces grow, demonstrates that profit rises in relation to labour or that the ratio of necessary labour to surplus labour falls — not the opposite, as maintained by Mr. Bastiat,⁽⁷⁾ etc.

E.g. if labour increased because of an increase in productivity, so that the worker produced twice as much twist as before in the same time — presupposing that e.g. 1 lb. of twist renders him the same service whatever it costs, and that he needs only twist, clothing to live — then the value added by labour to 20 lbs of twist would no longer amount to Vs but only to Vio> because he would now convert 20 lbs of cotton into twist in half the time. Hence a value of only 10 thaler, not 20, would be added to the 80 the raw material cost. The cost of the 20 lbs would be 90 thaler, and that of each pound ^[90]/^[20] or ^[49]/^[20] thaler.^[128]

But if total labour time remained the same, labour would now convert 80 lbs, not 40, of cotton into twist. 80 lbs of twist, at ^[49]/^[20] thaler per lb. = 356 thaler. The capitalist's calculation would be:

Total revenue 356 thaler;

90 deducted for labour, etc., leaving 266. From this take away for outlays, etc., 239 17/89

26 72/89.

The profit of the capitalist is therefore 26 ^{[7 2]}/ ^{[8 9]} now, instead of 20. Say 27, which is somewhat more (^[17]/s9 more). His total outlays are 330; more than 12%, although he would make a smaller profit on each pound.

The profit of the capitalist calculated in relation to the value of the measure (unit) of use value — pound, yard, quarter, etc.— declines in proportion to the decline in the ratio of living labour to raw material, etc.— newly added labour, i.e. in proportion to the decline in the quantity of labour time necessary to give the raw material the form expressed by the unit of use value, a yard of cloth, etc. But on the other hand — since this is identical with the increasing productivity of labour, or the growth of surplus labour time — there is an increase in the number of these units in which surplus labour time is contained, i.e. labour time not paid for by the capitalist.^[129]

It further follows from the above that capital can still make a profit even if the price falls below the value. The capitalist has only to sell a number multiplied by the unit which constitutes a surplus, over and above the number multiplied by the unit constituting the necessary price of labour [and constant capital]. If the proportion of [surplus] labour to raw material, etc., is V5, he can e.g. sell at a price of only Vio [IV-32] above constant value, since surplus labour costs him nothing. He then makes a present of Vio of the surplus labour to the consumer and realises only Vio for himself. This is a very important factor in competition, which Ricardo in particular overlooked.

The determination of price is based on the determination of value; but new elements are added. The price, which originally appears merely as value expressed in money, is further determined as itself a specific magnitude. If 5 thaler is the value of a pound of twist, i.e. if the same labour time is contained in 5 thaler as in a pound of twist, the determination of value is the same whether 4 or 4 million pounds of twist are valued. The factor of the number of p o u n d s becomes decisively significant in the determination of price, because it expresses the ratio of surplus to necessary labour in another form. This point illustrated in simple terms by the question of the Ten Hours Bill,^[88] etc.

It also follows from the above: The worker would spin only 20 lbs of twist, utilise raw materials, machinery, etc., to the value of only 80 thaler per month, if he confined himself to necessary labour. Apart from the raw materials, machinery, etc., which are necessary for the reproduction, self-maintenance, of the worker, the capitalist must lay out necessary capital in raw materials (and in machinery, even if not in the same proportion) for the objectification of surplus labour. (In the case of agriculture, fishing, and the extractive industries in general, this is not absolutely necessary; but it is always necessary even in these industries as soon as they are carried on on a large scale, i.e. industrially. The additional outlay then does not appear to be for the raw materials themselves but for the instruments to procure them.) These surplus outlays, i.e. making available the material for surplus labour, the objective elements for its realisation, are in fact what constitutes the specific so-called preliminary accumulation of capital; the accumulation of stock (let us say for the time being), specifically for capital. For it is absurd, as we shall see in more detail later, to regard it as a condition specific only to capital that the objective conditions of living labour must be present at all, whether they are supplied by nature or historically produced. These specific ADVANCES which capital makes signify nothing more than that it valorises surplus labour — surplus product — in new living surplus labour, instead of investing (spending) it on the building of pyramids, etc., like, say, the Egyptian Pharaohs or the Etruscan priestly nobles.

So far as price determination is concerned (and this will also be apparent in connection with profit), fraud, mutual cheating, also comes in. One party can gain through exchange what the other party loses; they, capital as a class, can only divide surplus value among themselves. It is the proportions [of exchange] which open up a whole field of individual trickery, etc. (quite apart from the effect of supply and demand), and this has nothing to do with the determination of value as such.

This, then, puts paid to Mr. Proudhon's discovery that the worker cannot buy back his product. It arises from his (Proudhon's) failure to understand either value determination or price determination. But even apart from that, his CONCLUSION that this is the cause of overproduction is false at this level of abstraction. Under the slave system, masters are not troubled by the fact that the labourers do not compete with them as consumers. (However, luxury production, as it appeared in antiquity, is a necessary result of the slave system. Not overproduction but overconsumption and absurd consumption, which in their degenera-tion to the level of the monstrous and the bizarre mark the downfall of the ancient state system.)

After capital steps out of the production process as a product, it must be reconverted into money. Money, which before appeared only as realised commodity, etc., now appears as realised capital, or realised capital as money. This is a new determination of money (and also of capital). It is already evident from the previous argument that the volume of money as means of circulation has nothing to do with the difficulty of realising capital, i.e. valorising it.

[IV-33] In the above example, where the capitalist sells the pound of twist for 5 thaler — i.e. 40 lbs at 5 thaler per pound — he sells the pound for its real value and thereby gains ^[1]/^[2] thaler on 5 (the sale price), 10% on the sale price, or V2 o n ^U-, i-e- HV9% on his outlay. Assume that he sells it for only a 10% overall profit — that he takes only ^[9]/^[20] thaler profit on 4V2 thaler (this differs by V20 from 7^[2] thaler on 47^[2]; a difference of precisely

i79%).

Let him then sell the pound for 4l/^[2] thaler+^[9]/^[20] thaler, i.e. 4^[19]/2o thaler, or the 40 lbs for 198 thaler. There are now various possibilities. Suppose that the capitalist with whom he exchanges— to whom he sells his 40 lbs — is the owner of a silver-mine, therefore a silver producer, and pays him only 198 thaler, hence gives him 2 thaler too little objectified labour in silver for the labour objectified in 40 lbs of twist. Suppose the proportions [of the component parts] of the outlay, etc., to be exactly the same for this capitalist B [as for capitalist A]. If capitalist B also takes only 10% profit instead of 117g%, he could not demand 40 lbs of twist for 200 thaler but only 39^[3]/^[5] lbs. Hence it is impossible for both capitalists at the same time to sell for l7g% too little, or for the one to offer 40 lbs for 198 thaler and the other to bid 200 thaler for 39^[3]/^[5] lbs; this situation cannot occur. Hence, in the case assumed, capitalist B would have paid l7g% too little in purchasing the 40 lbs of twist; i.e. he would have gained lVg% by the other capitalist incurring a loss, in addition to the profit of 1179% which he does not obtain in exchange but which is merely confirmed in exchange, or a total profit of 12^[2]/g%. He would have profited 1179% from his own workers — the labour set in motion with his own capital; the extra l7g% is surplus labour performed by the workers of capitalist A and appropriated by capitalist B.

Consequently, the general rate of profit can fall in one or another branch of business, because competition, etc., forces the capitalist to sell below value, i.e. to realise a part of surplus labour not for himself but for the buyers of his product. But the general rate [of profit] cannot fall in this way; it can fall only because of a relative fall in the ratio of surplus labour to necessary labour [and constant capital]. And this, as we have seen earlier, occurs if the ratio [of constant to variable capital] is already very large or, otherwise expressed, the proportion of living labour set in motion by capital is very small — if the part of capital exchanged for living labour is very small relative to that which is exchanged for machinery and raw materials. In that case the general rate of profit may fall, even though absolute surplus labour rises.

This brings us to another point. A general rate of profit becomes possible only if the rate of profit in one branch of business is too great and in another too small, i.e. if a part of surplus value — which corresponds to surplus labour — is transferred from one capitalist to another. If, for example, in 5 branches of business, the rate of profit is respectively

a b c d e 15% 12% 10% 8% 5%, the average rate of profit is 10%. But for this rate to exist in reality, capitalists A and B must give up 7% to D and E, i.e. 2% to D and 5% to E, while in the case of C things remain as they are.

Equality of the rate of profit on the same capital of 100 [in the cases considered] is impossible, since the proportions of surplus labour [to the outlays of capital] are completely different [in them], depending on the productivity of labour and the proportions between raw materials, machinery and wages, and the scale on which the product must generally be produced. But assume that branch e is necessary, e.g. that of BAKERS, then the average 10% must be paid to it. But this can only happen, if a and b transfer part of their surplus labour to the credit of e. The capitalist class to a certain extent distributes total surplus value among its members in such a way that, TO A CERTAIN DEGREE, the capitalists [share in it] in proportion to the size of their capital, instead of to the surplus values actually created by the capitals in the particular branches. The larger profit which arises from actual surplus labour within one branch, from surplus value really created in that branch, is forced down to the general level by competition, and the minus of surplus value in the other branch is forced up to the general level by withdrawal of capital from that branch and the resulting favourable relationship between demand and supply. Competition cannot depress the general level itself, but only tends to create such a level. Further analysis [of this problem] belongs to the section on competition.

The general level is realised by the relationship of prices in the different branches, which in the one branch fall below value, in the other rise above it. This creates the appearance that an equal sum of capital in different branches creates equal surplus labour or surplus value.

[IV-34] In the above example, where capitalist A is forced, say by competition, to sell at a profit of 10% instead of \\ll^[9]%, and therefore sells the pound of twist V20 thaler too cheaply, the worker would continue, as assumed, to receive 20 thaler in money as before, his necessary wages; but in twist he would receive 4^[4]/g9 lbs instead of 4. In terms of twist, he would get [a little over] ^[4]/^[20] thaler= l/^[5] thaler or 6 silver groschen, i.e. 1% more than his necessary

^[130] wages.

If the worker works in a branch of business whose product is completely outside the sphere of his consumption, he gains not a farthing from this operation, but for him it is a question of performing a part of his surplus labour indirectly for capitalist B instead of directly for capitalist A, i.e. through the mediation of capitalist A. The worker can only gain from the fact that capitalist A lets go of a part of the labour objectified in his product free of charge, if he is himself a consumer of this product and only to the extent to which he is such a consumer. Consequently, if his consumption of twist amounts to Vio of his outlay, he gains EXACTLY Vso thaler by means of the operation (^[2]/i0o thaler on 2 thaler, Vioo on 1, exactly 1% on the 2 thaler), i.e. Vio% on his total wages of 20 thaler, or 77^[5] pfennigs.^[3] This would be the proportion—7^[1]/^[5] pfennigs — in which he would share in his own surplus labour of 20 thaler. This is the order of magnitude which the worker's surplus wage can reach in the most favourable case as the result of a fall in the price of the product below necessary value in the branch of business in which he is employed. In the most favourable case — and that is impossible — the LIMIT is (in the given case) 6 silver groschen or 1%, i.e. if he could live exclusively on twist. This means that in the most favourable case, his surplus wage is determined by the ratio of necessary labour time to surplus labour time. In the luxury-goods industries proper, from whose consumption he is himself excluded, it always=0.

Now let us assume that the capitalists A, B, C exchange [their products] among one another; for each of them, the total product=200 thaler. A produces twist, B grain and C silver. Let us assume that the ratio of surplus labour and necessary labour, and of outlay and profit, are exactly the same. A sells 40 lbs of twist for 198 thaler instead of for 200 thaler and loses lVg% profit; ditto, B his (say) 40 bushels of grain for 198 instead of for 200; but C exchanges all of his labour objectified in 200 thaler. The relationship between A and B is such that if each exchanged all of his product with the other, neither would lose. A would obtain 40 bushels of grain, B 40 lbs of twist; but each would obtain a value of only 198. C obtains for 198 thaler 40 lbs of twist or 40 bushels of grain, and in both cases pays 2 thaler too little, or obtains ^[2]/^[5] lb. of twist or ^[2]/^[5] of a bushel of grain too much.

But let us assume that the relationship was such that A sold his 40 lbs of twist to the silver producer C for 200 thaler, but the silver producer in turn must pay 202 thaler to the grain producer

;l The (Prussian and Saxon) thaler equalled 30 silver groschen, the silver groschen equalled 12 pfennigs.— Ed.

B, i.e. B receives 2 thaler more than the value of his product. In the relationship between the twist producer A and the silver producer C, everything is ALL RIGHT; both exchange [equal] values with one another. But because for B, price has risen above the value of his product, the 40 lbs of twist and the 200 thaler of silver expressed in terms of grain have fallen by 179%, o r both can in fact no longer purchase 40 bushels of grain with the 200 thaler but only 39^[6]7ioi bushels. 39^[6]7ioi bushels of wheat would cost 200 thaler, or one bushel of wheat 5720 thaler, 5 thaler IV2 silver groschen, instead of 5 thaler.

Assume now in the latter relationship that the worker's consumption consists 72 of wheat. His consumption of twist amounted to 7io of his income, his consumption of wheat to ^[5]/io-On the 7io he gained 7io% on his total wages; on the wheat he loses ^[5]/io%; hence he loses ^[4]/io% m all instead of gaining. Although the capitalist would have paid him his necessary labour, his wages would fall below the necessary wages because of grain producer B's overcharging. If this persisted, his necessary wages would have to rise.

Thus, if the sale of twist [at a lower price] by capitalist A is due to a rise above their value in the price of grain or other use values which form the greater part of the worker's consumption, capitalist A's worker loses in the same proportion in which his consumption of the dearer product is greater than that of the cheaper one produced by himself. But had A sold his twist l7g% above its value, and had B sold his grain l7g% below its value, the worker could at best, if he consumed only grain, have gained no more than 6 silver groschen. Or, since we have assumed that he [consumes] half his income in grain, he would gain only 3 silver groschen or 72% [IV-35] on his wages of 20 thaler.

For the worker, therefore, all three cases are possible: his gain or loss by the operation [the evening-up of profits] could=zero; the operation could depreciate his necessary Wage so that it no longer suffices, hence depress it below the necessary minimum; lastly, it could create for him a surplus wage, which would amount to an EXTREMELY SMALL share of his own surplus labour.

We have seen above that if the proportion of necessary labour to the other conditions of production [needed to perform necessary labour] = }/^[4] (20 of the total outlay of 100) or=20% of the total value (4 lbs of the 20 lbs of twist produced) (or the 100 thaler capital would be divided up into 80 raw materials and instrument, 20 labour), and the proportion of surplus labour to necessary labour is 100% (i.e. the same quantity), the capitalist makes 11 7g% on his outlay.

If he took only 10% and made a present of 179% or 2 thaler [of the 20 thaler] to the consumers (transferred surplus value to them), the worker would also gain in so far as he is a consumer, and in the best (impossible) case, if he lived only on the product produced by his MASTER, the following would take place, as we have seen:

1V^[9]% (=2 thaler) loss on the part of the capitalist Assume that the capitalist sold the pound of twist for 4^[15]/^[2]o (4^[3]/^[4]) thaler instead of 5; then the worker would gain ^[5]/^[2]o on the pound, and ^{[2 0]}/2o =l o n 4 lbs; but 1 on 20 is V20' i-e-^[5]%i 0 thaler on 20); the capitalist would sell the 40 lbs at 4i5/^[20] thaler or ^[95]/^[20] thaler X 40 =190 thaler; his outlay

180, his profit of 10 is 5^[5]/^[9][%]. 5 ^[5]/ ^[9] (=10 thaler) His loss [or] minus-prof it=5 ^[5]/g. If the capitalist sold the twist for 4^[12]/20> the worker would gain ^[8]/;>o thaler on the pound, ^[32]/^[2]o o n 4 lbs, 1^[12]/^[2]o thaler or 1 ^[3]/^[5] thaler on his total wages, i.e. 8%, but the =8 ^[8]/ ^[9]% capitalist would lose 16 thaler in (=16) surplus profit, or keep a total of only 184 thaler or 4 thaler profit on 180, i.e. V^[45] of 180 or 2 ^[2]/ ^[9]%; he would then lose 8^[8]/^[9]%. Finally, assume the capitalist sold the pound of twist for 4 V2 thaler; the 40 lbs for 180; his profit is then 0; Profit = 0 he makes the consumer a present (Loss= 11 Vg%) of the surplus value or [surplus] labour time [of the worker], so the worker gains V2 thaler per lb.=^[4]/^[2] thaler=2 thaler, or 2 thaler on 20=10%.

1%=6 silver groschen on 20 thaler (V5 thaler on 20) gain on wages for the worker

= 1 thaler

=5% (1 thaler on 20)

=8% (1 thaler 18 sgr.)

= 10% (2 thaler) (not quite

[IV-36] If, on the contrary, the capitalist had raised wages by 10%, from 20 to 22 thaler, perhaps because in his branch the demand for labour had risen above supply, while selling the pound of twist as before at its value, i.e. for 5 thaler, his profit would have fallen by only 2 thaler, from 20 to 18, i.e. by l7g%, and would still have been 10%.^[131] Consequently, if the capitalist, perhaps out of consideration for Mr. Proudhon, sold his commodities at the production costs they cost him, and his total profit=0, this would merely constitute a transfer of surplus value or surplus labour time from capitalist A to B, C, D, etc.; and with respect to his worker, in the best case the gain — i.e. his share in his own surplus labour — would be restricted to the part of his wages which he consumes in the depreciated commodity. And even if he spent his entire wages on it, his gain could not be any greater than in the proportion of necessary labour to the total product (in the above example, 20:200 = 7io, [his maximum share] 7i<> of 20 = 2 thaler).

With respect to the workers of other capitalists, the case is exactly the same: they gain from the depreciated commodity only (1) in proportion to their consumption of it; (2) in proportion to the size of their wages, which are determined by necessary labour. If the depreciated commodity were e.g. grain, ONE OF THE STUFFS OF LIFE, then first its producer, the farmer, and afterwards all the other capitalists would discover that the [hitherto] necessary wage of the worker is no longer the necessary wage, but stands above its level; it would therefore be lowered. Hence, in the end, only the surplus value of capitals a, b, c, etc., and the surplus labour of those employed by them would be increased.

Assume 5 capitalists, A, B, C, D and E. E produces a commodity which is consumed only by workers. E would then realise his profit exclusively by exchanging his commodity with wages. But, as always, his profit would not derive from the exchange of his commodity for the money of the workers, but from the exchange of his capital with living labour. Assume necessary labour in all 5 branches as l/^[5]; let surplus labour in all be l/^[5]; let constant capital in all = ^[3]/^[5] [of the value of the product]. Capitalist E then exchanges [^[4]/s of] his product for Vs of capital a, Vs of capital b, V5 of capital c, 7^[5] of capital d, and V5 constitutes his own workers' wages. He would make no profit on this last V5, as we have seen, or RATHER, his profit would not derive from his giving the workers l/^[5] of his capital in money and from their buying back this V5 from him as product. In other words, it would not derive from the exchange with the workers as consumers or centres of circulation. His whole transaction with them as consumers of his product consists in his giving it to them in the form of money and in their returning to him this same money for exactly the same fractional part of the product. His relationship to the workers of

A, B, C, D is not that of capitalist to worker, but that of C to M, of seller to buyer.

According to our assumption, the workers of A, B, C and D do not consume anything of the latters' own products; E certainly exchanges V-, of the product of A, B, C and D, i.e. ^[4]/^[5] of their producta But this exchange is only a roundabout way in which A,

B, C and D pay the wages to their own workers. They give their workers money, each to the amount of V5 of their product, or l/^[5] of their product as payment for necessary labour, and with this, i.e. with ^[4]/^[5] of the value of their product or [commodity] capital, the workers buy the commodity of E.b This exchange with E is therefore only an indirect form in which they advance that part of their capital which represents necessary labour — it is a deduction from their capital. Clearly, they cannot make a profit by this transaction. The profit derives from the valorisation of the remaining ^[4]/^[5] of the capitals a, b, c and d, which is effected by each one getting back in the exchange the labour objectified in his product in another form. As division of labour exists among them, ^[3]/^[5] replaces for each his constant capital — raw material and instrument of labour. The profit derives from the mutual valorisation of the last V5 — the valorisation of surplus labour time, which posits it as surplus value.

It is not necessary for capitals a, b, c and d to exchange the ^[4]/^[5] [remaining after the deduction of wages] entirely among one another. Since as capitalists they are at the same time significant consumers, and cannot live on air; and since likewise as capitalists they do not live by their own labour, it follows that they have nothing to exchange or consume but the product of alien labour. I.e. for their consumption, they exchange precisely the ^[1]/^[5] which represents surplus labour time, the labour created by capital. Assume that each [of the capitalists A, B, C and D] consumes V5 of this V5, i.e. V25» m the form of his [IV-37] own product. ^[4]/^[25] then still remain to be either valorised or converted into use value for the capitalist's own consumption by means of exchange. Let A exchange ^[2]/^[25] [of his product] with B, V25 with C, and V25 with E, and similarly on the part of B, C and E.c

The case we have assumed, where capital e realises its entire profit in exchange for wages, is the most favourable one — or rather it expresses the only correct relation in which it is possible for capital to realise in exchange its surplus value produced in production, by means of the workers' consumption. But in this case, capitals a, b, c and d can realise their value only by means of exchange with one another, i.e. by exchange of the capitalists among themselves. Capitalist E does not consume any of his own commodity, since he has paid l/^[5] of it to his own workers, exchanged l/^[5] for l/^[5] of capital a, V5 for V5 of capital b, V5 for V5 of capital c, l/^[5] for V5 of capital d. A, B, C and D make no profit from this exchange, since it merely realises the V5 with which they have respectively paid their own workers.

Given the proportions we have assumed, ^[2]/^[5] raw materials, ^[1]/^[5] machinery, l/^[5] workers' NECESSARIES, ^[1]/^[5] surplus produce of which Messrs. the capitalists both live and realise their surplus value, then, if the total product of each of the capitalists A, B, C, D and £ = 100, we need a producer E for workers' NECESSARIES, 2 capitalists A and B who produce raw materials for [themselves and] all the others, 1 capitalist C who produces machinery, and one capitalist D who makes the surplus produce.

The calculation [for the different capitalists] would be as follows (the machine producer, etc., must each produce part of his commodity for himself):

For Raw Machinery Surplus labour material produce A. Raw material

B.

producer Ditto

20 -20 -

-40 --40 -

-20 --20 -

-20 -20

= 100 = 100

2V^[2] 2V^[2] C. Machine

E.

producer Workers'

NECES-

20 --40 --20 --20 = 100 2V^[2]

SARIES 20 --40 --20 --20 = 100 2V^[2] D. Surplus producer 20 -10

-40 -20

-20 -10

-20 10

= 100 = 50

E therefore exchanges his total product of 100 for 20 in his own workers' wages, 20 for the workers of the raw material producer A, 20 for the workers of the raw material producer B, 20 for the workers of the machine producer C, 20 for the workers of the surplus producer D. Hence he exchanges 40 for raw material, 20 for machinery, gets back 20 for [his own] workers' NECESSARIES, and 20 remain with him for the purchase of surplus produce, on which he himself subsists. Likewise in proportion the other capitalists. What constitutes their surplus value is the l/^[5] or 20 which they can all exchange for surplus produce. If they consumed the entire surplus, they would have got no further at the end than they were at the beginning, and the surplus value of their capital would not grow.

Suppose that they consume only 10, or Vio [of the value of the product], half the surplus value. As a result, the surplus producer D would himself consume 10 less, and each of the others 10 less. In total, therefore, D would sell only half his commodity=50, and could not recommence his business.

So assume that he produces only 50 in consumables [for the capitalists].^[3] Of the 400 thaler which exist in the form of raw materials, machinery, workers' NECESSARIES, only 50 become available in the form of consumables for the capitalists. But each of the capitalists now possesses a surplus of 10, 4 of which he lays out in raw materials, 2 in machinery and 2 in workers' NECESSARIES, on which he should get a profit of 2 (as previously with 80, 100). D has gained 10 on his 40 and can therefore increase his production in the same proportion [as the other capitalists], viz. by 5. In the next year he will increase his production by 7⁽⁸⁾/^[2] [the total then being]=57!/2-

[IV-38] This example may or may not be developed later. Does not really belong here. This much is clear that valorisation occurs here in the exchange of the capitalists among one another. For although E produces only for workers' consumption, he obtains by means of exchange in the form of wages Vs of A, Vs of B, ^[1]/^[5] of C, and '/s of D. In the same way, A, B, C and D exchange with E: not directly but indirectly, since each one of them must get ^[1]/^[5] from E as workers' NECESSARIES. The valorisation consists in each capitalist exchanging his own product for a fractional part of the products of the other four, and this in such a way that a part of the surplus product is destined for the consumption of the capitalist, and a part is converted into surplus capital with which to set new labour in motion. The valorisation consists in the real possibility of greater valorisation — the production of new and larger values.

It is clear here that if D and E (E representing commodities entirely consumed by workers and D commodities entirely consumed by capitalists) had produced too much — i.e. too much relative to the proportion of the part of capital destined for the workers, or too much relative to the part of capital consumable by the capitalists ^ too much relative to the rate at which they must expand capital; and this rate later becomes subject to a minimum limit in the form of interest^—general overproduction would occur, not because relatively too little of the commodities to be consumed by the workers, or relatively too little of those to be consumed by the capitalists, [would have been consumed,] but because too much of both would have been produced — too much not for consumption, but too much to maintain the correct ratio between consumption and valorisation; too much for valorisation.

In other words: at a given point in the development of the productive forces—(for this will determine the ratio of necessary to surplus labour)—there exists a fixed relationship in which the product is divided into several parts — corresponding to raw materials, machinery, necessary labour, and surplus labour; and ultimately surplus labour is divided itself into one part which falls to consumption, and another which becomes capital again. In exchange, this inner conceptual division of capital expresses itself in the particular and delimited (though in the production process constantly varying) proportions in which capitals exchange with one another. A proportional division within a capital of e.g. ^[2]/^[5] raw material, ^[1]/^[5] machinery, 7^[5] wages and V5 surplus product, of which in turn V10 is destined for [the capitalist's] consumption and '/io for new production, will appear in exchange as the division [of the total product] between (SAY) 5 capitals. In any case, both the sum of the exchange which can take place, and the proportions in which each of these capitals must both exchange and produce, are thereby given. If the ratio of necessary labour to the constant part of capital, as e.g. in the above example, = i/^[5]:^/^[5], then, as we have seen, the total capital which works for the consumption of both capitalists and workers [i.e. capitals D and E] cannot be greater than V5 + V10 of the 5 capitals, each of which represents 1 = 1 V2 capitals.

Given also is the proportion in which each capital must exchange with the other which represents one of its own particular moments. Given, finally, is the proportion in which each capital must generally exchange.

If the proportion of e.g. the raw material is ^[2]/^[5], then the capitals which produce raw materials can at any final point only exchange ^[3]/^[5], while ^[2]/^[5] have to be considered as fixed (e.g. seeds, etc., in agriculture). Exchange in and for itself gives these conceptually distinct moments a being indifferent to one another. They exist independently of one another; their inner necessity becomes manifest in crises, which make short shrift of the semblance of their mutual indifference.

A revolution in the productive forces further alters these relations, transforms these relationships themselves, whose basis— from the viewpoint of capital and thus also of valorisation by means of exchange — always remains the ratio of necessary labour to surplus labour, or, IF YOU PLEASE, of the different moments of objectified labour to living labour. It is possible, as we have already indicated earlier,^[3] that the capital as well as the living labour capacity set free by the increase in the productive forces must both remain unused, because they are not present in the proportions required by production on the basis of the newly developed productive forces. If production proceeds regardless of this, then ultimately a minus on the one side or the other, a negative magnitude, must result from the exchange.

The limit always remains the fact that exchange — hence also production — takes place in such a way that the ratio of surplus labour to necessary labour remains the same, for this=the constancy of the valorisation of capital. The second relationship— the ratio of the part of the surplus product consumed by capital to the part converted anew into capital — is determined by the first ratio. In the first place, the magnitude of the sum to be divided into these two parts depends on this original ratio. Secondly, just as the creation of the surplus value of capital is based on the creation of surplus labour, so the increase of capital as capital (i.e. accumulation, without which capital cannot constitute the basis of production, since it [IV-39] would remain stagnant and would not be an element of progress, which it must needs become if only because of the growth of population, etc.) depends on the conversion of part of this surplus product into new capital. If surplus value were merely consumed, capital would not have valorised itself and not produced itself as capital, i.e. as value which produces value.

We have seen that, if 40 lbs of twist with a value of 200 thaler — because they contain the labour time objectified in 200 thaler — are exchanged for 198, not only does the twist manufacturer lose V/⁽⁹⁾% profit but his product is also depreciated, is sold below its real value, although it is sold at a price which STILL LEAVES HIM A PROFIT OF 10%. On the other hand, the silver producer gains 2 thaler; he retains 2 thaler as released capital. Nevertheless, a depreciation has occurred if the total sum is considered. For the sum is now 398 thaler instead of 400. For, in the hands of the silver producer, the 200 thaler of twist are now also worth only 198; for him it is the same as if the productivity of his labour had increased in such a way that the same objectified labour as before is contained in 200 thaler, but 2 thaler of it had been transferred from the account of necessary outlay to that of surplus value; as if he had paid 2 thaler less for necessary labour.

The opposite could be the case only if the silver producer were able to resell for 200 thaler the 40 lbs of twist he had bought for 198 thaler. He would then have 202 thaler. Let us say he sold the twist to a silk manufacturer who gave him silk to the value of 200 thaler for the 40 lbs of twist. The 40 lbs of twist would then have been sold at their true value, if not at first hand by their producer, at least at second hand by their buyer. The overall calculation would then look thus: 3 products, each containing objectified labour to the value of 200, have been exchanged; hence the sum of values of the capitals: 600. A is the twist manufacturer, B the silver producer, C the silk manufacturer: [as a result of the exchange] A has 198, B 202 (namely 2 excess from the first exchange and 200 in silk), C 200. Total 600. In this case the total value of the capitals has remained the same, and there has merely been a déplacement, since B would have pocketed an excessive part of the value of which A received too little.

If A, the twist manufacturer, could only sell 180 [thaler's worth of twist] (what it cost him), and was absolutely unable to dispose of 20 [in] twist, objectified labour of 20 thaler would have become valueless. The same would be the case, if he sold a value of 200 for 180 thaler. B, the silver producer — in so far as this necessity [to reduce the price of twist] had arisen for A because of overproduction of twist, B too would be unable to dispose of the value contained in the 40 lbs of twist for more than 180—[B] would have 20 thaler of his capital set free for him. He would have in hand a relative surplus value of 20 thaler, but in absolute value — objectified labour time in so far as it is exchangeable— only 200 as before, viz. 40 lbs of twist for 180 and 20 thaler of released capital. For him it would be the same as if the costs of production of twist had declined, i.e. as if, as a result of a rise in the productivity of labour, 20 thaler less labour time were contained in 40 lbs of twist; or, as if the value of the working day=4 thaler; as if 5 days less labour were necessary to transform x lbs of cotton into 40 lbs of twist; as if he would therefore have to exchange less labour time objectified in silver for the labour time objectified in twist. But the total sum of existing values would be 380 instead of 400. Thus a general devaluation of 20 thaler, or a destruction of capital to the extent of 20 thaler, would have taken place.

Hence a general devaluation takes place, although the depreciation resulting from the twist manufacturer's sale of 40 lbs for 180 thaler instead of 200 necessarily appears as an appreciation on the side of silver, a depreciation of twist relative to silver, and a general depreciation of prices in any case always includes an appreciation of money, i.e. of the commodity in terms of which all others are valued. Thus in a crisis — with a general depreciation of prices — then« also occurs up to a certain moment a general devaluation or destruction of capital. The devaluation can be general, absolute, and not just relative, as with a depreciation, because value does not, like price, merely express the relationship of one commodity to another, but the relationship between the price of the commodity to the labour objectified in it, or the relationship of one amount of objectified labour of the same quality to another. If these amounts are not equal, a devaluation occurs which is not compensated for by an appreciation on the other side, since the other side expresses a fixed amount of objectified labour which cannot be altered by exchange. In general crises, this devaluation extends even to living labour capacity.

According to what has been indicated above, [IV-40] the destruction of value and capital which occurs in a crisis coincides with — or means the same as — a general growth of the productive forces, which, however, does not take place through a real increase in the productivity of labour (in so far as this results from crises, it does not belong here) but through a diminution of the existing value of raw materials, machinery and labour capacity. E.g. the cotton manufacturer loses capital on his products (e.g. twist), but he buys the same value in cotton, labour, etc., at a lower price. It is the same for him as if the real value of labour, of cotton, etc., had diminished, i.e. as if they had been more cheaply produced through an increase in the productivity of labour.

Likewise, on the other hand, a sudden general growth of the productive forces would devalue relatively all existing values, labour objectified at a lower level of the productive forces, and therefore destroy existing capital just as it would destroy existing labour capacity. The other aspect of the crisis resolves itself into a real fall in production, in living labour, in order to restore the correct proportion of necessary to surplus labour, on which, in the last analysis, everything rests. (Thus it is by no means the case, as Lord

14* Overstone thinksa—as a true usurer — that crises simply resolve themselves into ENORMOUS PROFITS FOR THE ONE, AND TREMENDOUS LOSSES FOR THE OTHER.)

Exchange does not alter the inner conditions of valorisation, but it projects them outwards, gives them a form independent of one another, and thus lets their inner unity exist only as an inner necessity which is therefore given violent external expression in crises. Both are therefore posited in the essence of capital: its devaluation in the production process, as well as the transcendence of this devaluation and the restoration of the conditions for the valorisation of capital. The movement in which this really takes place can only be considered when we consider real capital, i.e. competition, etc.; the real, existing conditions. It does not belong here yet. On the other hand, without exchange, the production of capital as such would not exist, since valorisation as such does not exist without exchange. Without exchange, we should be concerned only with the measurement, etc., of the use value produced, with absolutely nothing but use value.

After capital, by means of the production process, has (1) valorised itself, i.e. created a new value; (2) devalued itself, i.e. passed from the form of money into that of a particular commodity; it (3) valorises itself together with its new value, in that the product is thrown into circulation again and exchanged as C for M. At the point which we have now reached, where capital is only being considered in general, the real difficulties of this third process exist only as possibilities, and are therefore likewise transcended as possibilities. Hence the product is now posited as having been transformed back into money.

Consequently, capital is now again posited as money, and money thus posited in its new determination as realised capital, not merely as the realised price of the commodity. In other words, the commodity realised as price is now realised capital. This new determination of money, or rather of capital as money, will be considered later. In the first place, according to the nature of money — when capital is converted into money — only the new value which it has created appears to be measured by it, i.e. the first determination of money as the general measure of commodities is reiterated, now as the measure of surplus value — of

a This presumably refers to the speech on the economic crisis by Lord Overstone (Loyd) at the opening session of the House of Lords on 3 December 1857.— £rf.

the valorisation of capital. In the form of money, this valorisation appears measured in terms of itself, as being its own measure.

The capital was originally 100 thaler; since it is now 110, the measure of its valorisation is posited in its own form — as a proportion of the capital returned (reverted to its form as money) from the production process and from exchange, to the original capital. It is no longer posited as the relation of two qualitatively different things — objectified and living labour — or of necessary labour and the surplus labour produced. In as much as capital is posited as money, it is posited in the first determination of money, i.e. as the measure of value. But this value is here its own value, or the measure of its own valorisation. We shall return to this (in the section on profit).

The second form of money was that of means of circulation, and in this regard the money form of capital appears as a merely transitory moment, a form which capital assumes merely to be re-exchanged, but not, as in the case of money as means of circulation in general, to be exchanged for commodities — use values — for consumption, but for the particular use values of raw materials and instrument on the one hand, and living labour capacity on the other, in which it can recommence its turnover as capital.

[IV-41] In this determination it is capital circulant, which we shall discuss later. However, the end product of capital as money in its determination as means of circulation is the starting point of the act of production originating from posited capital. This is the point which we shall consider, before going any further.

(In the first determination [of capital as money], that of measure, the new value does indeed appear to be measured. But the distinction is purely formal: instead of surplus labour, money — i.e. surplus labour objectified in a particular commodity. But the qualitative nature of this new value, i.e. of the magnitude of the measure itself, also undergoes a change, which we shall discuss later.

Secondly, as means of circulation, the disappearance of the money form is now also only formal. It does not become essential until not only the first circuit but also the second has been completed. Thus, initially it results only in our standing at the beginning of the valorisation process once more. Consequently, it is at this point that we shall take up the development to start with.)

The third form of money as independent value maintaining itself negatively as against circulation, is capital which does not emerge from the production process as a commodity that re-enters exchange to become money, but which becomes a commodity in the form of self-relating value, and enters into circulation in this form. (Capital and interest.) This third form presupposes capital in the previous forms and simultaneously constitutes the transition from capital to particular capitals, the real capitals. For in this third form capital in its very concept is divided into two capitals with an independent existence. With this duality, plurality in general is then given. SUCH IS THE MARCH OF THIS DEVELOPMENT.

^"Before we go any further, one more observation: capital in general, as distinct from particular capitals, does indeed appear (1) only as an abstraction; not an arbitrary abstraction but one which grasps the differentia specifica which distinguishes capital from all other forms of wealth or modes in which (social) production develops. These are determinations which are common to every capital as such, or which make any particular sum of values into capital. And the distinctions within this abstraction are likewise abstract particularities which characterise every type of capital, in that it is their position or negation (e.g. capital fixe or capital

circulant).

But (2) capital in general is itself a real existence distinct from particular real capitals. This is recognised, even if it is not understood, by current political economy, and constitutes a very important element for its doctrine of evening up [of profits], etc. For instance, capital in this general form, although belonging to individual capitalists, in its elemental form as capital, constitutes capital which accumulates in BANKS or is distributed by them, and, as Ricardo puts it, is distributed most admirably in proportion to the needs of production.^[3] Similarly, through LOANS, etc., it forms a LEVEL between the different countries. Therefore, if e.g. it is a law of capital in general that, in order to valorise itself, it must posit itself doubly, and must be valorised in this dual form, then e.g. the capital of a particular nation which represents capital par excellence in opposition to another, must be loaned to a third nation to be able to valorise itself. This double-positing, this relating itself to itself as to something alien, becomes damn real in this CASE. While on the one hand the general is therefore only a set of differentia specifica in thought, it is at the same time a particular real form alongside the form of the particular and individual.

(Nous reviendrons plus tard sur ce point qui, quoique d'un caractère

D. Ricardo, On the Principles of Political Economy, and Taxation, pp. 81-82.— Ed.

plus logique^[1]™ qu'économiste, prouvera néanmoins d'une grande importance dans le progrès de notre recherche.^[3]

The same also in algebra. E.g. a, b, c are numbers as such; in general; but they are also whole numbers as opposed to 7b> b/c, c/b, 7a, b/a> etc-> which, however, presuppose them as their general elements.)^

[IV-42] The new value⁽¹⁰⁾ is thus posited once more as capital, as objectified labour entering into the process of exchange with living labour, therefore dividing itself into a constant part — the objective conditions of labour, material and instrument — and the conditions for the subjective condition of labour, the existence of living labour capacity, the NECESSARIES, means of subsistence for the worker. At this second appearance of capital in this form, some points appear clarified which were altogether unclear in its first appearance — as money in its transition from its determination as value to its determination as capital. Now they are explained by the process of valorisation and production itself. In its first appearance, the presuppositions themselves appeared outwardly to emerge from circulation; as external presuppositions of the origin of capital, and not therefore emerging from and explained by its inner essence. These external presuppositions will now appear as moments of the movement of capital itself, so that it has itself presupposed them as its own moments — however they may have arisen historically.

Within the production process itself, the surplus value, the surplus value solicited by the compulsion of capital, appeared as surplus labour; even in the form of living labour, which, however, since it cannot produce something out of nothing, finds its objective conditions already in existence. Now this surplus labour appears objectified as surplus product, which in turn, to be valorised as capital, must divide itself into two forms: the objective condition of labour—material and instrument — and the subjective condition — means of subsistence for the living labour now to be set to work.

The general form of value — objectified labour, and objectified labour emerging from circulation — is of course the general, self-evident presupposition. Furthermore: the surplus product in its totality — objectifying the totality of surplus labour — now appears as surplus capital (as compared to the initial capital, before it had traversed this circuit), i.e. as exchange value become independent and confronting the living labour capacity as its specific use value. All the moments which confronted living labour capacity as alien, external powers, consuming and using it under certain conditions independent of it, are now posited as its own product and result.

Firstly: Surplus value or surplus product is nothing but a certain sum of objectified living labour — the sum of surplus labour. This new value, which confronts living labour as value independent of and exchanging itself with it, i.e. as capital, is the product of labour. It is itself nothing but the surplus of labour in general over necessary labour—in objective form and hence as value.

Secondly: The particular forms which this value must adopt to be valorised anew, i.e. to be posited as capital — on the one hand as raw material and instrument, on the other hand as means of subsistence for labour during the act of production — are likewise, therefore, merely particular forms of surplus labour itself. It is surplus labour which produces raw material and instrument in such a ratio — or it is itself objectively posited as raw material and instrument in such a proportion — that not only can a definite sum of necessary labour, i.e. living labour which reproduces the means of subsistence (their value), objectify itself in it and indeed do so continuously, i.e. can always begin anew the diremption into the objective and subjective conditions of its self-preservation and self-reproduction, but that living labour, by carrying out this process of reproducing its objective conditions, simultaneously posits raw material and instrument in such proportions that it can realise itself in them as surplus labour, labour over and above necessary labour, and can thus convert them into the material for the creation of new value. The objective conditions of surplus labour are limited to the proportion of raw materials and instrument over and above the requirements of necessary labour, while the objective conditions of necessary labour are divided within their objectivity into objective and subjective moments of labour, physical moments and subjective ones (means of subsistence for living labour). They therefore appear now, are now posited, as the product, the result, the objective form, the external existence, of surplus labour itself. Originally, by contrast, it appeared alien to living labour itself, appeared as an act of capital, that instrument and means of subsistence were available to an extent which made it possible to realise living labour not only as necessary labour but as surplus labour as well.

Thirdly: The independent being-for-itself of value vis-à-vis living labour capacity, hence its being as capital; the objective self-sufficient indifference, the separateness of the objective conditions of labour vis-à-vis living [IV-43] labour capacity, which goes so far that these conditions confront the person of the worker in the person of the capitalist — as a personification with its own will and interest; this absolute divorce and separation of property, i.e. of the physical conditions of labour, from living labour capacity — that they confront it as alien property, as the reality of another juridical person, as the absolute realm of his will; that on the other hand, therefore, labour appears as alien labour vis-à-vis the value personified in the capitalist, or vis-à-vis the conditions of labour — this absolute separation between property and labour, between living labour capacity and the conditions for its realisation, between objectified labour and living labour, between value and value-creating activity, hence also the fact that the content of labour is alien to the worker himself — this separation now also appears as the product of labour itself, as the objectification of its own moments. For through the very act of new production — which only confirmed the exchange between capital and living labour that preceded it — surplus labour and hence surplus value, the surplus product, the total result of labour altogether (of both surplus and necessary labour) are posited as capital, as exchange value confronting living labour capacity independently and indifferently, in other words as its mere use value.

Labour capacity has appropriated only the subjective conditions of necessary labour — the means of subsistence for productive labour capacity, i.e. for its reproduction as mere labour capacity separated from the conditions of its realisation — and it has posited these conditions themselves as objects, values, which confront it in an alien, commanding personification. It emerges from the process not only no richer but actually poorer than it entered into it. For not only has it created the conditions of necessary labour as conditions belonging to capital; but the valorisation inherent in it as a potentiality, the value-creating potentiality, now also exists as surplus value, surplus product, in a word, as capital, as domination over living labour capacity, as value endowed with its own power and will confronting it in its abstract, object-less, purely subjective poverty. Not only has it produced alien wealth and its own poverty, but also the relationship of this wealth as self-sufficient wealth to itself as poverty, which this wealth consumes to draw new life and spirit to itself and to valorise itself anew.

All this arose from the act of exchange in which the worker exchanged his living labour capacity for an amount of objectified labour, except that this objectified labour, these conditions for his being which are external to him, and the independent externality (to him) of these physical conditions, now appear as posited by himself, as his own product, as his own self-objectification as well as the objectification of himself as a power independent of himself, indeed dominating him, dominating him as a result of his own actions.

All the moments of surplus capital are the product of alien labour—alien surplus labour converted into capital: means of subsistence for necessary labour; the objective conditions— material and instrument — so that necessary labour can reproduce the value exchanged for it in means of subsistence; finally, the necessary amount of material and instrument so that new surplus labour can realise itself in them or new surplus value can be created.

It no longer seems here, as it still did in the first consideration of the production process, as if capital, for its part, brought with it some sort of value from circulation. The objective conditions of labour now appear as labour's product — both in so far as they are value in general, and as use values for production. But if capital thus appears as the product of labour, the product of labour for its part appears as capital — no longer as mere product nor exchangeable commodity, but as capital; objectified labour as dominion, command over living labour. It likewise appears as the product of labour that its product appears as alien property, as a mode of existence independently confronting living labour, equally as a t>a/it£-for-itself; that the product of labour, objectified labour, is endowed with a soul of its own by living labour itself and establishes itself as an alien power confronting its creator.⁽¹¹⁾

Considered from the standpoint of labour, the result of its activity in the production process thus appears to be that it rejects its realisation in objective conditions as an alien reality, and therefore posits itself as an insubstantial, merely necessitous labour capacity in face of this reality alienated from it, a reality not belonging to it but to others; that it posits its own reality not as a being-for-itself but as a mere being for something else, and hence also as a mere other-being or as the being of something else confronting itself.

The process of the realisation of labour is at the same time the process of its de-realisation. It posits itself objectively, but it posits this its objectivity as its own non-being, or as the being of its non-being — the being of capital. It returns back into itself as the mere potentiality of positing value or of valorisation, because the totality of real wealth, the world of real value, and equally the real conditions for its own [IV-44] realisation, are posited as independent existences facing it. It is the potentialities resting in living labour's own womb which come to exist as realities outside it as a result of the production process — but as realities alien to it, which constitute wealth in opposition to it.

In so far as the surplus product is valorised anew as surplus capital, enters anew the production process and the process of self-valorisation, it divides itself into (1) means of subsistence for the workers to be exchanged for living labour capacity. Let us define this part of capital as the wages fund. This wages fund, the part destined for the maintenance of labour capacity — and for its progressive maintenance, since surplus capital grows continuously— now appears as the product of alien labour, of labour alien to capital, just as much as do (2) the other components of [surplus] capital — the physical conditions for the reproduction of a value=these means of subsistence + a surplus value.

Furthermore, when we consider this surplus capital, the division of capital, into a constant part — a part primevally existing before labour, namely raw materials and instruments of labour — and a variable part, i.e. the means of subsistence exchangeable for living labour capacity, appears to be a purely formal division in so far as both parts are equally posited by labour and equally posited by it as its own presuppositions. Now, however, this internal division of capital appears in such a way that labour's own products-objectified surplus labour — is divided into two components: (1) objective conditions for new utilisation of labour, and (2) a wages fund for maintaining the possibility of this living labour, i.e. for keeping living labour capacity alive, but in such a way that labour capacity can only reappropriate that part of its own result — of its own being in objective form — which is determined as wages fund, can only extract that part from the form of alien wealth confronting it, by not only reproducing its value but also by valorising the part of new capital which represents the objective conditions for the realisation of new surplus labour and surplus production or production of surplus values. Labour has itself created a new fund for the employment of new necessary labour, or, which is the same, a fund for the maintenance of new living labour capacities, of workers; but at the same time it has created the condition that this fund can be appropriated only if new surplus labour is employed on the extra part of surplus capital. Hence, by producing surplus capital, surplus value, labour has simultaneously created the real necessity for new surplus labour, surplus capital thus itself being the real possibility of both new surplus labour and new surplus capital.

It becomes evident here how progressively the objective world of wealth is enlarged through labour even as an alien power confronting it, and how it gains an ever wider and fuller existence, so that relatively, in relation to the values created or to the real conditions for the creation of value, the necessitous subjectivity of living labour capacity stands out in ever more glaring contrast. The more labour capacity — labour — objectifies itself, the greater becomes the objective world of values which confronts it as alien — as alien property. By creating surplus capital, labour imposes on itself the compulsion to create yet further surplus capital, etc., etc.

With regard to the original, not-surplus, capital the relation has changed for labour capacity in so far as (1) the part exchanged for necessary labour is reproduced by this labour itself, i.e. it no longer comes to labour out of circulation but is its own product; and (2) the part of value which represents the real conditions for the utilisation of living labour, in the form of raw material and instrument, has been maintained by living labour itself in the production process. And since every use value by its nature consists of transitory material, and exchange value is present, exists, only within use value, this maintenance=protection from destruction, or the negation of the transitory nature of the values owned by the capitalists. In this way, these values are posited as values-for-themselves, as imperishable wealth. Hence only in the production process has living labour posited this original sum of values as capital.

Now from the standpoint of capital: so far as surplus capital is considered, the capitalist represents value-for-itself, money in its third moment, wealth obtained by simple appropriation of alien labour. For each moment of surplus capital (material, instrument, means of subsistence) resolves into alien labour, which the capitalist has not appropriated by means of exchange for already existing values but which he has appropriated without exchange. True, the exchange of a part of the values belonging to him, or of objectified labour possessed by him, for alien living labour capacity, appears as the original condition for [the production of] this surplus capital.

The possession of values by the capitalist, part of which he formally exchanges for living labour capacity, appears to be the condition for the formation of surplus capital I, if that is what we call the surplus capital arising from the original production process, i.e. the condition for the appropriation of alien labour, of objectified alien labour. We say "formally", because living labour has to replace and return to the capitalist these exchanged values as well. Be that as it may. In any case, it appears as a condition for the formation of surplus capital I, i.e. for the appropriation of alien labour or of the values in which it has objectified itself, that there be an exchange of values belonging to the capitalist, thrown into circulation by him, and supplied to living labour capacity by him — of values which do not derive from his [IV-45] exchange with living labour, or from his relation as capital to labour.

But now let us think of this surplus capital being thrown again into the production process, realising its surplus value in exchange once more, and appearing once more as new surplus capital at the beginning of a third production process. This surplus capital II has different presuppositions from those of surplus capital I. The presupposition of surplus capital I was the existence of values belonging to the capitalist and thrown by him into circulation, or more precisely into the exchange with living labour capacity. The presupposition of surplus capital II is nothing but the existence of surplus capital I; i.e. in other words, the presupposition that the capitalist has already appropriated alien labour without exchange. This enables him to begin the process again and again. True, in order to create surplus capital II, he had to exchange a part of the value of surplus capital I in the form of means of subsistence for living labour capacity. But what he thus exchanged were values which he did not originally put into circulation from his own funds, but alien objectified labour which he appropriated without giving any equivalent for it, and which he now exchanges again for alien living labour, just as the material, etc., in which this new labour is realised and produces surplus value has come into his possession without exchange, by means of simple appropriation.

Past appropriation of alien labour now appears as the simple condition for new appropriation of alien labour. In other words, his possession of alien labour in objective [physical] form, in the form of values already in existence, appears to be the condition for his appropriation of new alien living labour capacity, hence of surplus labour, labour without equivalent. That he should already be confronting living labour as capital, this appears to be the sole condition not only for him maintaining himself as capital, but for him as growing capital appropriating alien labour without equivalent on an increasing scale, or extending his power, his existence as capital vis-à-vis living labour capacity, while constantly positing and repositing living labour capacity as living labour capacity in its subjective, insubstantial necessitousness.

Property in past or objectified alien labour appears as the sole condition for further appropriation of present or living alien labour. In so far as a surplus capital I was created by means of simple exchange between objectified labour and living labour capacity — an exchange wholly based on the laws of exchange of equivalents as estimated by the quantity of labour or labour time contained in them — and in so far as this exchange, speaking juridically, presupposed nothing but the right of property of each person in his own products and his right to freely dispose of them — but in so far as the relationship of surplus capital II to I is therefore a consequence of this first relationship [between labour and capital]—we see that by a peculiar logic the right of property on the side of capital is dialectically transformed into the right to an alien product or into the right of property in alien labour, the right to appropriate alien labour without equivalent; on the side of labour capacity it is transformed into the duty to relate itself towards its own labour or its own product as alien property. The right to property is inverted into the right on the one side to appropriate alien labour and the duty on the other side to respect the product of one's own labour and one's own labour itself as values belonging to others.

But the exchange of equivalents which appeared as the initial operation, and which juridically expressed the right to property, has been reversed in such a way that on the one side only an apparent exchange takes place, in that the part of capital exchanged for living labour capacity is, in the first place, itself alien labour appropriated without equivalent, and in that, secondly, it must be replaced by labour capacity with a surplus, i.e. it is not IN FACT given away but only transformed from one form into another. The relationship of exchange has therefore completely disappeared, or it has become a mere semblance.

Furthermore, the right to property originally appeared to be based on one's own labour. Now property appears as the right to alien labour and as the impossibility for labour to appropriate its own product. The complete separation of property, and even more of wealth, from labour now appears as a consequence of the law which arose from their identity.

Finally, the result of the process of production and valorisation now appears to be above all the reproduction and new production of the very relationship of capital and labour, of capitalist and worker. IN FACT, this social relationship, this relationship of production, appears to be an even more important result of the process than its material results. And more particularly, within this process the worker produces himself as labour capacity and produces the capital confronting him, while at the same time the capitalist produces himself as capital and produces the living labour capacity confronting him. Each reproduces himself by reproducing his other, his negation. The capitalist produces labour as alien; labour produces the product as alien. The capitalist produces the worker and the worker the capitalist, etc.

As soon as production based on capital is presupposed — actually money has been transformed into capital only at the end of the first production process, which resulted in its reproduction and the new production of surplus capital I; but surplus capital I is itself only posited, realised, as surplus capital once it has produced surplus capital II, i.e. once the presuppositions of money in the process of becoming capital which still lie outside the movement of real capital have disappeared, and capital therefore has IN FACT itself and in accordance with its immanent essence posited the very conditions from which it sets out in production — the condition that the capitalist must bring into circulation values [IV-46] created by his own labour or in some other way — excepting only values created by already existing, past wage labour — in order to posit himself as capital, belongs to the antediluvian conditions of capital; to its historical presuppositions, which, precisely as such historical presuppositions, have vanished and therefore belong to the history of its formation but by no means to its contemporary history, i.e. do not belong to the real system of the mode of production dominated by it.

If e.g. the flight of serfs into the cities is one of the historical conditions and presuppositions for the development of cities, it is not a condition, a moment, of the reality of fully developed city life, but belongs to its past presuppositions, to the presuppositions of its becoming, which are transcended in its being. The conditions and presuppositions of the becoming, the emergence, of capital imply precisely that it is not yet in being but is only becoming. Hence they disappear with the development of real capital, the capital which, setting out from its own reality, itself posits the conditions for its realisation. Thus e.g., while the process in which money or value-for-itself originally becomes capital presupposes an accumulation by the capitalist — perhaps by savings made on the products and values created by his own work, etc.—which he has achieved as non-capitalist; while, therefore, the presuppositions for the transformation of money into capital appear as the given, external presuppositions for the emergence of capital; as soon as capital has become capital, it creates its own presuppositions, namely the possession of the real conditions for the creation of new values without exchange—by means of its own production process.

These presuppositions which originally appeared as prerequisites of its becoming — and therefore could not arise from its action as capital—now appear as results of its own realisation, reality, as posited by it—not as conditions of its emergence, but as results of its being. It no longer sets out from presuppositions in order to become, but is itself presupposed, and, setting out from itself, it itself creates the presuppositions for its maintenance and growth. The conditions, therefore, which preceded the creation of surplus capital I, or which express the becoming of capital, do not fall within the sphere of the mode of production for which capital serves as the presupposition. They lie behind it as preliminary historical stages of its becoming, just as the processes through which the Earth was transformed from a fluid sea of fire and vapour into its present form, lie beyond its life as finished Earth. This means that individual capitals can still emerge e.g. by HOARDING. But the HOARD is transformed into capital only by the exploitation of labour.

The bourgeois economists, who consider capital to be an eternal and natural (not historical) form of production, nevertheless try to justify it by declaring the conditions of its becoming as the conditions of its present realisation, i.e. they present the moments in which the capitalist still appropriates as non-capitalist — because he is only in the process of becoming — as the VERY CONDITIONS in which he appropriates as capitalist. These attempts at apologetics demonstrate a bad conscience and the inability to bring the mode of appropriation of capital as capital into harmony with the general laws of property proclaimed by capitalist society itself.

On the other hand — and this is much more important for us — our method indicates the points at which historical analysis must be introduced, or at which bourgeois economy as a mere historical form of the production process points beyond itself towards earlier historical modes of production. To present the laws of the bourgeois economy, it is not necessary therefore to write the real history of the production relations. But the correct analysis and deduction of these relations as relations which have themselves arisen historically, always leads to primary equations— like e.g. empirical numbers in natural science — which point to a past lying behind this system. These indications, together with the correct grasp of the present, then also offer the key to the understanding of the past — a work in its own right, which we hope to be able to undertake as well. This correct approach, moreover, leads to points which indicate the transcendence of the present form of production relations, the movement coming into being, thus FORESHADOWING the future. If, on the one hand, the pre-bourgeois phases appear as merely historical, i.e. transcended premisses, so [on the other hand] the present conditions of production appear as conditions which transcend themselves and thus posit themselves as historical premisses for a new state of society.

If we consider first of all the relationship as it has become, value which has become capital, and living labour as mere use value confronting it, so that living labour appears as mere means for the utilisation of objectified, dead labour, for its permeation with a life-giving soul while losing its own soul to it — and having produced as a result alien wealth on the one hand, but on the other, as its own property, only the necessitousness of living labour capacity — then we can see clearly that the physical conditions of living labour (the material in which it is utilised, the instrument by means of which it is utilised, [IV-47] and the means of subsistence which kindle the flame of living labour capacity into activity and prevent its being extinguished, and supply the necessary matter for its life process) are posited in and through the process itself as alien, independent existences; in other words as the mode of existence of an alien person, as self-sufficient values-for-themselves, and thus as values which form wealth alien to the subjective labour capacity standing in isolation from them, the wealth of the capitalist.

The objective conditions of living labour appear as separate values, become independent as against living labour capacity as subjective being, which therefore appears, as against them, only as value of another kind (distinct from them not as value, but as use value). Once this separation is presupposed, the production process can only produce it anew, reproduce it, and that on a larger scale. How it does this, we have already seen. The objective conditions of living labour capacity are presupposed as an independent existence confronting it, as the objectivity of a subject distinct from living labour capacity and independently confronting it. The reproduction and valorisation, i.e. the expansion, of these objective conditions is therefore simultaneously their reproduction and their new production as the wealth of an alien subject, indifferent to and independently confronting labour capacity. What is reproduced and newly produced is not only the being of these objective conditions of living labour but their being as independent values, i.e. values belonging to an alien subject, confronting this living labour capacity.

The objective conditions of labour gain a subjective existence as against the living labour capacity — capital gives rise to the capitalist. On the other hand, the purely subjective being of labour capacity vis-à-vis its own conditions gives it a merely indifferent objective form as against these conditions — it is only a value of a particular use value alongside the conditions of its own utilisation as values of a different use value. Instead of being realised in the production process as conditions for its realisation, living labour capacity on the contrary emerges from the process as a mere condition for their valorisation and preservation as values-for-themselves over against it.

The material on which it works is alien material; just as the instrument is an alien instrument; its labour appears as a mere accessory to them as substance and therefore objectifies itself in things not belonging to it. Indeed, living labour itself appears as alien vis-à-vis living labour capacity whose labour it is, whose life it expresses, for it is surrendered to capital in return for objectified labour, for the product of labour itself. Labour capacity relates to it as to something alien, and if capital wanted to pay it without setting it to work, it would make the bargain with pleasure. Its own labour is therefore just as alien to it — and it really is alien, as regards its direction, etc.—as the material and instrument. Therefore, naturally, the product appears to it as a combination of alien material, alien instrument and alien labour — as alien property, and after production it has only become poorer by the life force expended; but begins the DRUDGERY anew of itself as a merely subjective labour capacity separated from the condition of its life.

The recognition of the products as its own, and its awareness that its separation from the conditions of its realisation is improper and imposed by force, is an enormous consciousness, and is itself the product of the mode of production based on capital, and just as much the KNELL TO ITS DOOM as the consciousness of the slave that he cannot be the property of another, his consciousness of being a person, reduced slavery to an artificial lingering existence, and made it impossible for it to continue to provide the basis of production.

However, if we consider the original relation, before money entered into the process of self-valorisation, we come up against various conditions which must have arisen, or been given, historically, for money to become capital and for labour to become labour positing, producing capital, i.e. wage labour. (Wage labour, here in the strict economic sense, which is the only one we need — and we shall later have to distinguish it from other forms of labour for day-wages, etc.—is labour which posits, produces capital, i.e. living labour which produces the objective conditions for its realisation as activity, as well as the objective moments of its being as labour capacity, as alien powers confronting itself, as values-for-themselves independent of it.)

The essential conditions are posited in the relationship itself as it originally appeared: (1) On the one side, the existence of living labour capacity as a purely subjective existence, separated from the moments of its objective reality; therefore separated just as much from the conditions of living labour as from the means of existence, the means of subsistence, the means of self-maintenance of living labour capacity; the living possibility of labour on one side in this complete abstraction. (2) On the other side, the value or objectified labour must be an accumulation of use values, sufficiently large to provide the objective conditions not merely for the production of the products or values necessary to reproduce or maintain living labour capacity, but also to absorb surplus labour, to [IV-48] supply the objective material for it. (3) A system of free exchange — money circulation — between the two sides; a relationship between the two extremes which is based upon exchange values, not on the lord-subject relationship, i.e. production which does not directly supply the means of subsistence to the producers but is mediated by exchange, and which cannot therefore usurp alien labour directly but must buy it from the worker himself by means of exchange. Finally (4) the one side — which represents the objective conditions of labour in the form of independent values-for-themselves — must present itself as value and regard as its ultimate aim the positing of value, self-valorisation, the creation of money — not immediate enjoyment or creation of use value.

So long as both sides exchange their labour with one another only in the form of objectified labour, the relation is impossible. It is equally impossible if living labour capacity itself appears as the property of the other side and not, therefore, as exchanger. (That slavery can exist at individual points within the bourgeois system of production, does not contradict this. But slavery is then possible only because it does not exist at other points, and represents an anomaly in relation to the bourgeois system itself.)

The conditions under which the relationship originally appears, or which appear as historical presuppositions for its becoming, exhibit at first glance a dual character — on the one side dissolution of lower forms of living labour, on the other side dissolution of happier forms of it.⁽¹²⁾

To start with, the first presupposition is the transcendence of the relation of slavery or serfdom. Living labour capacity belongs to itself and disposes by means of exchange over the application of its own energy. The two sides confront each other as persons. Formally, their relation is that of equal and free exchangers.

That this form is mere appearance, and deceptive appearance at that, appears, as far as the juridical relationship is concerned, as an external matter. What the free worker sells is always only a particular, specific measure of the application of his energy. Above every specific application of energy stands labour capacity as a totality. The worker sells the specific application of his energy to a specific capitalist, whom he confronts independently as a single individual. Clearly, this is not his [real] relationship to the existence of capital as capital, i.e. to the class of capitalists. Nevertheless, as far as the individual, real person is concerned, a wide field of choice, caprice and therefore of formal freedom is left to him. In the relation of slavery, he belongs to the individual, specific owner, and is his labouring machine. As the totality of the application of his energy, as labour capacity, he is a thing belonging to another, and hence does not relate as a subject to the specific application of his energy, or to the living act of labour. In the relation of serfdom, he appears as an integral element of landed property itself; he is an appurtenance of the soil, just like draught-cattle. In the relation of slavery, the worker is nothing but a living labouring machine, which therefore has a value for others, or rather is a value. Labour capacity in its totality appears to the free worker as his own property, one of his own moments, over which he as subject exercises control, and which he maintains by selling it. This to be developed later under wage labour.

The exchange of objectified labour for living labour does not [as such] constitute either capital on the one hand or wage labour on the other. The entire class of so-called services, from boot-black up to King, falls into this category. The same is true of the free day-labourer, whom we encounter sporadically wherever either the Oriental community or the Western commune of free landowners has broken up into its individual elements — as a result of an increase in population, release of prisoners of war, chance occurrences through which individuals were impoverished and deprived of the objective conditions for their SELF-SUSTAINING LABOUR, as a result of the division of labour, etc.

If A exchanges a value or money, i.e. objectified labour, in order to obtain a service from B, i.e. living labour, this can belong:

(1) within the relation of simple circulation. Both parties in fact exchange only use values with each other; the one means of subsistence, the other labour, a service, which the former wishes to consume either directly — a personal service — or he supplies the latter with the material, etc., in which that other person supplies him, through his labour, by the objectification of his labour, a use value designed for A's consumption. E.g. when the peasant takes into his house a tramping tailor, such as existed in the past, and gives him the material to make clothes with. Or if I give money to a doctor to patch up my health. What is important in these cases is the service which the two perform for each other. Do ut facias appears here on quite the same level as facio ut des or do ut des.⁽¹³⁾

The man who uses material which I gave him to make clothes for me, gives me a use value. But instead of giving it to me directly in objectified form, he gives it in the form of activity. I give him a finished use value; he produces another one for me. The distinction between past objectified labour and living present labour appears here as a merely formal distinction between the different tenses of labour, which is in the perfect tense at one time and in the present at another. It appears in fact merely as a formal distinction mediated by division of labour and exchange, whether B himself produces his own means of subsistence, or whether he obtains them from A and, instead of producing the means of subsistence directly, produces clothes for which he obtains his subsistence from A in exchange. In both cases, he can take possession of the use value owned by A only by giving him an equivalent for it, an equivalent which is ultimately always reducible to his own living labour, whatever the objective form it may assume, either before the exchange has been agreed, or as a result of it. Now, the clothes contain not only a particular form-giving labour — a particular utility bestowed upon the material by the act of labour — but also a certain quantity of labour; therefore not only use value but value in general, value as such. But this value does not exist for A, because he consumes the clothes and is not a clothes merchant. Therefore he has obtained the labour in exchange as an activity which creates utility, use value, not as labour which posits value.

[IV-49] In the case of personal services, this use value is consumed as such, without passing from the form of movement into that of a thing. If, as is frequently the case in simple relationships, the person performing the service does not receive money but direct use values, even the semblance disappears that either party to the exchange is concerned with values as distinct from use values. But even assuming that A pays money for the service, A's money has not thereby been converted into capital. Rather, it is posited as mere means of circulation in order to obtain an object of consumption, a particular use value. Consequently, this act is not one which produces wealth but, on the contrary, one which consumes it. What concerns A is not at all that labour as such, a certain labour time, i.e. value, is objectified in the cloth, but that a certain need is satisfied. A sees his money not valorised but devalued by converting [it] from the form of value into that of use value. Labour here is not obtained in exchange as use value for value, but as itself a specific use value, as a value for use. The more frequently A repeats the exchange, the poorer he becomes. This exchange is not an act by which he enriches himself, not an act which creates value, but one by which he devalues existing values in his possession. The money which A exchanges here for living labour — service in kind or a service which is objectified in a thing — is not capital but revenue; money as means of circulation in order to obtain use value; money in which value is posited in a merely transient form; not money which seeks to preserve and valorise itself as such through the purchase of labour. The exchange of money as revenue, as mere means of circulation, for living labour, can never posit money as capital, nor, therefore, labour as wage labour in the economic sense.

It needs no elaborate explanation to show that the consumption of money is not the same as its production. In conditions where most surplus labour takes the form of agricultural labour, and where the landowner is therefore the owner of both surplus labour and surplus product, it is the revenue of the landowner which makes up the wages fund for the free workers, for the workers in manufacture (here artisans) as against the agricultural labourers.

His exchange with them is a form of the landowner's consumption — he divides another part of his revenue directly, for personal services, often for only the semblance of service, with a horde of RETAINERS. In Asiatic societies, where the monarch is the exclusive owner of the surplus produce of the land, the exchange of his revenue with the "FREEHANDS", as Steuart calls them,⁽¹⁴⁾ gives rise to whole cities which are au fond nothing but migratory camps. In this relationship there is nothing of wage labour, although it can stand in contradiction to slavery and serfdom; it need not do so, however, for it constantly recurs under different forms of overall organisation of labour. In so far as money mediates this exchange, price determination will become important for both parties, but for A only in so far as he does not wish to pay too much for the use value of labour; not in so far as he is concerned about its value. The essence of the relationship is not affected by the fact that this price, originally largely conventional and traditional, is gradually determined economically, at first by the condition of demand and supply and eventually by the production costs at which the vendors themselves of these living services can be produced; for the determination of price remains only a formal moment for the exchange of mere use values. This determination itself, however, arises from other relationships, from the general laws and self-determination of the dominant mode of production, acting, as it were, behind the back of this particular act of exchange.

One of the forms in which this type of payment first occurs in ancient communities is the standing army. The pay of the common soldier is also reduced to a minimum, is determined purely by the production costs for which he can be procured. But what he receives in exchange for his service is the revenue of the State, not capital.⁽¹⁵⁾

In bourgeois society itself all kinds of exchange of personal services for revenue belong in this category — including labour for personal consumption, cooking, sewing, etc., gardening, etc., right up to all the unproductive classes, civil servants, doctors, lawyers, scholars, etc. All MENIAL SERVANTS, etc. By means of the services they perform — often forced [upon the client]—all these workers, from the lowest to the highest, obtain for themselves a share of the surplus product, of the revenue of the capitalist. But it does not occur to anyone to think that through the exchange of his revenue for such services, i.e. by his private consumption, the capitalist posits himself as capital. Rather, he thereby spends the fruits of his capital. The nature of the relationship is not affected by the fact that the proportions in which revenue is exchanged for this type of living labour are themselves determined by the general laws of production.

As we have already mentioned in the section on money? it is the person performing a service who here essentially posits value; who converts a use value — a certain type of labour, service, etc.—into value, money. In the Middle Ages, therefore, those who are orientated towards the production and accumulation of money proceed partly not from the side of the consuming landed nobility, but from the side of living labour; they accumulate and thus become 8vvà(jLeu⁽¹⁶⁾ capitalists for a later period. Capitalists partly derive from emancipated serfs.

It therefore does not depend on the relation in general but on the natural, specific quality of the service performed, whether the recipient of payment obtains a day-wage, or a fee, or a Civil List — and whether he appears superior or inferior in rank to the person paying him for his service.

True, under the rule of capital, all these relationships will become more or less dishonoured. But this does not belong here yet, this de-sanctification of personal services, however exalted a character tradition, etc., may have attributed to them.

Capital and therefore wage labour are not, then, constituted simply by an exchange of objectified labour for living labour—which from this viewpoint appear as two different determinations, as use values in different form; the one as determination in objective form, the other in subjective form. They are constituted by the exchange of objectified labour as value, as self-sufficient value, for living labour as its use value, as use value not for a certain specific use or consumption, but as use value for value.

[IV-50] In the exchange of money for labour or service for immediate consumption, a real exchange always takes place; that amounts of labour are exchanged on both sides is merely of formal interest, for measuring the particular forms of the utility of labour in relation to one another. This concerns only the form of the exchange; it does not constitute its content. When capital is exchanged for labour, value is not the measure for the exchange of two use values but the content of the exchange itself.

(2) In periods of the dissolution of pre-bourgeois relationships, we sporadically find free workers whose service is bought not for the purpose of consumption but for that of production. But, firstly, even on a large scale only for the production of direct use values, not of values. Secondly, if the nobleman e.g. employs the free worker alongside his serf, and moreover resells part of his product, and the free worker thus produces value for him, this exchange takes place only for the superfluous product and only in the interest of superfluity, of luxury consumption; is thus au fond

only a disguised purchase of alien labour for direct consumption or as use value. Incidentally, where these free workers increase in number and this relationship becomes more extensive, the old mode of production — commune, patriarchal, feudal, etc.—is in a state of dissolution and the elements for real wage labour are coming into being. But these free servants [Knechte] can also appear and then disappear again, as e.g. in Poland, without the mode of production being thereby changed.

z/\x\ order to express the relations into which capital and wage labour enter as property relationships or laws, we have only to express the conduct of both sides in the process of valorisation as a process of appropriation. For instance, the fact that surplus labour is posited as surplus value of capital means that the worker does not appropriate the product of his own labour; that it appears to him as alien property; and, conversely, that alien labour appears as the property of capital. This second law of bourgeois property, which is the inversion of the first [the law that the product of labour is the property of the labourer] — and which through the right of inheritance, etc., obtains an existence independent of the chance transitory existence of individual capitalists — is just as much established as a law as the first. The first law is the identity of labour with property; the second is labour as negated property or property as the negation of the alien quality of alien labour.

IN FACT, in the production process of capital, as will become more evident in the further analysis of that process, labour is a totality — a combination of labours — the individual components of which are alien to one another, so that the aggregate of labour, as a totality, is not the work of the individual worker, and, moreover, it is the work of the different workers taken together only in so far as they are combined [by an external force]—not entering into [voluntary] combination with each other. In combination, this labour likewise appears subservient to an alien will and an alien intelligence, and directed by the latter — having its animate unity outside itself, and subordinated in its material unity to the objective unity of machinery, of capital fixe, which as an animated monster objectifies the scientific idea, and is in fact the concentrating element, which in no way relates to the individual worker as instrument, but to which, on the contrary, he is affixed as an animated individual spot [of labour], a living isolated accessory to it.

Combined labour is thus in two ways a combination in itself; for it is neither combination as the relationship of individuals working together to one another, nor as their going beyond their specific individualised task or beyond [the activity proper to] their instrument of labour. Hence, if the worker relates to the product of his labour as alien, he no less relates to combined labour as alien, and to his own labour as an expression of his life which, though it certainly belongs to him, is alien to him and brought out under duress, and which Adam Smith, etc., therefore conceived as a burden, sacrifice, etc.⁽¹⁷⁾ Labour itself, like its product, is negated in its form as the labour of the particular, individualised worker. The negated individualised labour is now in fact posited as social or combined labour. However, social or combined labour thus posited — both as activity and as having passed over into the inert form of the object — is simultaneously posited directly as an other in relation to really existing individual labour — both as alien objectivity (alien property) and alien subjectivity (that of capital). Thus capital represents both labour and its product as negated individualised labour, and hence as the negated property of the individualised worker. It is therefore the existence of social labour — its combination as subject and also as object — but it is this existence as itself existing independently as against its real moments — i.e. as a separate existence beside them. Capital for its part therefore appears as the trespassing subject and as the owner of alien labour, and its own relation is as complete a contradiction as is that of wage labour.^

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Endnotes

Page 24 of Notebook IV of Outlines of the Critique of Political Economy

(1) Th. Hodgskin, Popular Political Economy, p. 246.— Ed.

(2) I.e. its realisation in the process of exchange.— Ed.

(3) See this volume, pp. 259-66.— Ed.

a See this volume, p. 338.— Ed.

b J. B. Say, Traité d'économie politique, 3rd ed., Vol. II, p. 4 4 1 . — Ed.

(4) P. J. Proudhon, Qu'est-ce que la propriété?, Ch. IV, § 5, Paris, 1841, p. 202; Gratuité du crédit. Discussion entre M. Fr. Bastiat et M. Proudhon, pp. 207-08. — Ed.

(5) Here Marx crossed out a series of calculations illustrating the above proposition. He gives these calculations, in somewhat changed form, below (see pp. 354-55).— Ed.

[7] The heading "I. Production, Consumption, Distribution, Exchange (Circulation)" does not occur in Marx's table of contents on the cover of Notebook M and refers, strictly speaking, only to the first two sections of the Introduction, that headed "Production" (the heading in the table of contents on the cover is more accurate: "Production in general") and that headed "The General Relation of Production to Distribution, Exchange and Consumption". There are no Roman numerals in the further text of the Introduction to correspond to the figure I marking the section "Production, Consumption, Distribution, Exchange (Circulation)".—17

(6) Gratuité du credit. Discussion entre M. Fr. Bastiat et M. Proudhon, pp. 191-208.— Ed.

a In the manuscript, there follows a passage, crossed out by Marx, containing a series of calculations which must have dissatisfied him.— Ed.

[90] This refers to the British Owenites John Francis Bray, John Gray, Thomas Hodgskin, William Thompson and others who drew socialist conclusions from Ricardo's theory (see Note 32). Marx discussed their views in the manuscripts of 1861-63, in connection with the pamphlet Labour Defended against the Claims of Capital (London, 1825), published anonymously by Thomas Hodgskin. He examined the tendency, common to all these socialists, to regard capital not as a social relation but as a sum of objects and explain the misery of the working people by the estranged form in which these objects appear in the hands of the capitalists (see present edition, Vol. 32).—229, 436

[128] 129 Marx examines the effect of changes in the organic composition of capital on the size of surplus value in Capital, Vol. I, Chapter XXIV (see present edition, Vol. 35).—361

[72] "Self-reflection" is a Hegelian term denoting the reflection of a conceptual determination back into itself.—176

[89] Existing for itself may be an allusion to the Hegelian term "Fürsichsein", which denotes the condition of an attribute regarded in its fixity or relative self-containment.—228

[17] Marx expresses similar ideas in his letter to Engels of September 25, 1857: "More graphically than anything else the history of the army demonstrates the Tightness of our views as to the connection between the productive forces and social relations. Altogether, the army is of importance in economic development. E.g. it was in the army of Antiquity that the salaire was first fully developed. Likewise the peculium castrense [personal property of soldiers in military camps] in Rome, the first legal form according recognition to the movable property of others than fathers of families. Likewise the guild system in the corporation of the fabri [teams of artisans attached to the army in ancient Rome]. Here too the first use of machinery on a large scale. Even the special value of metals and their use as money would seem to have been based originally — as soon as Grimm's Stone Age was over — on their significance in war. Again, the division of labour within a branch was first put into practice by armies. All this, moreover, a very striking epitome of the whole history of civil societies" (see present edition, Vol. 40, p. 186).—40, 396

[129] 130 T h e figures in this calculation should be as follows: the worker would obtain

(7) See Gratuité du crédit. Discussion entre M. Fr. Bastiat et M. Proudhon, pp. 130-31 and 133-57.— Ed.

[88] Britain's working class had fought for a legal limitation of the working day to ten hours from the late 18th century, the struggle assuming a mass character in the 1830s. The Ten Hours' Bill, passed by Parliament on June 8, 1847, applied only to women and "young persons". Marx discusses the British workers' struggle for a normal working day in detail in Capital, Vol. I, Ch. X (see present edition, Vol. 35).—220, 361

[19] A Manchester firm which designed tools, machines and locomotives. From 1843 it was headed by Richard Roberts, the inventor of many machines, including the self-actor.—47

[130] each pound of twist at a discount of V20 thaler, and since he would now get, 44/qq lbs, or 400/qq lbs, his gain would be l x 4 0 0 thaler, i.e. altogether, . 20x99 20/qq thaler, not 20/ioo thaler, as Marx assumes to simplify the calculation.— 364

[15] Speaking of "what is called exchange between dealers and dealers", Marx has in mind Adam Smith's division of circulation into that between dealers, and that between dealers, on the one hand, and individual consumers, on the other (see Smith's An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. II, Book II, Chapter II).—36

[95] This is the first time Marx uses the term "surplus value" (Mehrwert) to denote that surplus over and above the advanced value which is appropriated by the capitalist without compensation. Further in the text he frequently uses the combination "Surplus-wert" for surplus value. The term "surplus value" also occurs in An Inquiry into the Principles of the Happiness (London, 1824, Distribution of Wealth Most Conducive to Human pp. 167, 169) by the English socialist William Thompson, who based his conclusions on the theory of Ricardo. However, as Engels showed, Thompson meant by it the extra profit obtained by the capitalist employing machinery over and above the profit of the manual artisan. Thompson also used the term "additional value", to designate all newly created value (the value of the expended part of constant capital and the surplus value) (v + s). Apart from this, as Engels noted in his article "Juridical Socialism", "in the daily business life of France the term plus-value has been commonly used since time immemorial to denote any increase in value which involves no expense for the owner of the commodity" (see present edition, Vol. 27). In one of his early articles (written in October 1842) Marx used the term "Mehrwert" several times for the extra value received by forest owners in the form of fines imposed for the theft of wood (see present edition, Vol. 1, pp. 250-51, 254-55). This had no relation to his later use of the word "Mehrwert" in the analysis of the capitalist exploitation of wage labourers.—

[32] Wilhelm Weitling's theory of labour money is set forth in his book Garantien der Harmonie und Freiheit, Vevey, 1842, pp. 153-75. Speaking of the English supporters of this theory, Marx means John Francis Bray, Thomas Hodgskin, William Thompson and other adherents of Robert Owen, who tried to draw socialist conclusions from the economic theory of Ricardo. Marx gave a critical analysis of the views of these Utopian socialists in The Poverty of Philosophy. Answer to the "Philosophy of Poverty" by M. Proudhon (see present edition, Vol. 6). Later he discussed their theory of "labour money", as propounded, e.g., by John Gray, in A Contribution to the Critique of Political Economy, Part One (see present edition, Vol. 29).—73

[45] The passage is from [S. Bailey,] Money and Its Vicissitudes in Value; as they affect national industry and pecuniary contracts: with a postscript on joint-stock banks, London, 1837, pp. 5-6. Marx quotes in English. He also reproduces the whole passage in English in the original version of A Contribution to the Critique of Political Economy, Part One (see present edition, Vol. 29).—110

[131] The figures in this calculation should be as follows: before the rise in wages the value of the 40 lbs of twist fell into 160 c (constant capital) + 20 v (variable capital)-!-20s (surplus value). Now it falls into 160c+22u + 18s. Formerly, the rate of profit was 20/180, i.e. l\l/g%, now it is 18/182, i.e. 981/gi%.—367

a This should read "... of A, B, C and D, giving 4/5 of his own product for it".— Ed. b This should read "... and with this the workers buy the commodity of E to the amount of 4/e, of the value of his product or [commodity] capital".— Ed. ' Here Marx crossed out several lines representing an unfinished outline of the exchange of products between capitals belonging to different branches.— Ed.

(8) Crossed out in the manuscript: "In money likewise 50; thus each of the capitalists A, B, C, D, E would accumulate in money 10 thaler. This would represent the unconsumed surplus value. The 10 thaler or TOGETHER 50, however, could only be valorised if invested in new labour. A and B, in order to produce more raw material, need 4 thaler more living labour and, since they have no new machinery for that, 6 thaler more manual labour." — Ed.

(9) See this volume, p. 351.— Ed. 14-852

a We shall return to this point, which, although it possesses a logical rather than an economic character, will nevertheless prove to be of great importance in the progress of our investigation.— Ed.

(10) Newly created surplus value.— Ed.

(11) See present edition, Vol. 3, pp. 270-82.— Ed.

(12) In reproducing this passage in his 1861-63 manuscript (Notebook XXII, p. 1397) Marx added here: "for the immediate producer. On the one hand, dissolution of slavery and serfdom. On the other, dissolution of the form under which the means of production are immediately available as the property of the immediate producer, whether his work is predominantly directed at use value (agriculture) or exchange value (urban work). Dissolution of the form of community in which the worker as organ of this naturally evolved community is, at the same time, posited as owner or possessor of his means of production." — Ed.

(13) "I give that you may make", "I make that you may give", "I give that you may give" (contractual formulas in Roman law), Corpus iuris civilis, Digesta XIX, 5.5.— Ed.

(14) J. Steuart, An Inquiry into the Principles of Political Oeconomy, Vol. I, pp. 30-31, 40, 48, 151, 153, 176, 178, 179 and 396.— Ed.

(15) See this volume, pp. 202-03. (The passage is in the section on capital, not in that on money.)—Ed.

(16) Potentially.— Ed.

(17) A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. I, London, 1835, pp. 104-05.— Ed.

[1] The unfinished draft manuscript "Bastiat and Carey", the first of Marx's Economic Manuscripts of 1857-58, takes up the first seven pages in one of the seven notebooks containing the main manuscript of that cycle, the Outlines of the Critique of Political Economy (Rough Draft). However, the date, "July 1857", which Marx put on the cover of that notebook, shows that "Bastiat and Carey" was written somewhat earlier than the Outlines. Pages 1, 2, 3 and the upper half of page 4 contain the "Avantpropos" (Introductory Notes) to "Bastiat and Carey", the lower half of page 4 is blank, and pages 5-7 are taken up by a passage entitled "XIV. De salaires". From page 8 onwards, there follows the continuation of the text contained in Notebook II of the main manuscript (see page 219 of this volume). Marx marked this continuation "Notebook III" and dated it "November 29 and 30, and December 1857". Since in the manuscript the draft bears the same subtitle as Bastiat's book, it may be assumed that Marx originally wanted to write an extensive review, but later decided that the book did not deserve detailed discussion, and therefore gave up his original intention. The draft goes beyond the bounds of an ordinary review. In the "Avantpropos", Marx sums up the bourgeois political economy of his time and strictly delimits the era of classical political economy as beginning in the late 17th century, with the works of Petty and Boisguillebert, and ending in the first third of the 19th century, with the writings of Ricardo and Sismondi. He shows that the bourgeois economists of the subsequent period were either epigones of the classics or vulgar critics of them. The works of the Frenchman Bastiat and the American Carey, directed above all against Ricardo, were examples of that kind of criticism. The title "Bastiat and Carey" occurs in Marx's "References to My Own Notebooks", written in the summer of 1861 (see present edition, Vol. 29). This shows that Marx himself regarded the draft as part of his Economic Manuscripts of 1857-58. He quotes from Bastiat partly in French and partly in German translation. In this volume, all quotations are in English; only foreign-language phrases in Marx's own text are given in the language of the original. The draft was first published in the journal Die Neue Zeit, Vol. 2, No. 27, Stuttgart, 1903-1904. In English, it first appeared, under the title "Critique of Bastiat and Carey", in Marx's Grundrisse by David McLellan, Macmillan Press Ltd., London, 1971, pp. 47-58 and in: Karl Marx, Grundrisse. Foundations of the Critique of Political Economy (Rough Draft). Translated with a Foreword by Martin Nicolaus. Penguin Books in association with New Left Review. London, 1973, pp. 883-93.-5

[4] Marx means the philosophical and historical constructions in Proudhon's book Système des contradictions économiques, ou Philosophie de la misère (Paris, 1846). In 1847 Marx attacked them in The Poverty of Philosophy. Answer to the "Philosophy of Poverty" by M. Proudhon (see present edition, Vol. 6, pp. 105-212, particularly pp. 111-15 and 157-60).—13

[3] According to Bastiat, "the workers' pension fund" was to be made up of contributions by the workers themselves, for thus alone the necessary degree of "stability" could be ensured (Fr. Bastiat, Harmonies économiques, 2nd edition, Paris, 1851, p. 395).—11

[5] The "supreme being" {être suprême) was Voltaire's designation of God, whom he, in contrast to the positive religions, described as an impersonal rational creator, who, having, laid down the laws of the world and given it an initial impulse, has refrained from any further intervention in the natural course of events.—13

[2] This refers to Chapter XIV in the second edition of Bastiat's book Harmonies économiques (there are 25 chapters in that edition). Since this section of the draft "Bastiat and Carey" begins on page 5 of the manuscript, while half of page 4 was left blank, it may be assumed that Marx originally intended to discuss Bastiat's book in greater detail, giving, in particular, an account of the preceding 13 chapters.—11

[6] This Introduction, prefaced by Marx to the Outlines of the Critique of Political Economy, the first rough draft of Capital, holds an important place among his Economic Manuscripts of 1857-58. It is contained in Notebook M, marked "London, 23 August '57", which is probably the day when Marx began writing the Introduction. He interrupted this work, in all likelihood, in the last days of August, leaving the Introduction unfinished. On the cover of Notebook M, Marx listed the main items to be discussed in the Introduction. The headings of the individual sections in this table of contents differ somewhat from the corresponding headings in the text proper. Marx's list is as follows: "Contents "A. Introduction "1) Production in general "2) General relationship between production, distribution, exchange and consumption "3) The method of political economy "4) The means (forces) of production and production relations; production relations and relations of intercourse, etc." As the table reflects the overall structure of the Introduction more accurately than the headings of some of the sections in the text do, one may assume that Marx wrote it after drafting the Introduction. The fourth, closing section is in the form of a detailed outline. Of the subsections listed in it, only subsection 1, containing Marx's views on art, was written, and even that not in full. For instance contrary to his original intention, he did not investigate the relation of Shakespeare to the modern world. Having put to paper his views on Greek art, Marx broke off the work on the Introduction. Later, when preparing the manuscripts for publication, he abandoned his intention to open them with an extensive introduction and confined himself to a shorter preface formulating in brief the general philosophical premisses of his method of economic research (the materialist conception of history). In the Preface to Part One of A Contribution to the Critique of Political Economy, dated January 1859, Marx wrote: "A general introduction, which I had drafted, is omitted, since on further consideration it seems to me confusing to anticipate results which still have to be substantiated, and the reader who really wishes to follow me will have to decide to advance from the particular to the general" (see present edition, Vol. 29). The Introduction was first published in the journal Die Neue Zeit, Vol. 1, Nos. 23-25, Stuttgart, 1902-1903. In English, in first appeared in A Contribution to the Critique of Political Economy by Karl Marx. Translated from the second German edition by N. I. Stone. With an appendix containing Marx's Introduction to the Critique recently published among his posthumous papers. Charles H. Kirr & Company, Chicago, 1904, pp. 265-312. It was also published in Marx and Modern Economics, ed. by D. Horowitz. Mac Gibbon & Kee, London, 1968, pp. 21-48, in Marx's Grundrisse by David McLellan, Macmillan Press Ltd., London, 1971, pp. 16-46, and in Karl Marx, Grundrisse. Translated with a Foreword by Martin Nicolaus. London, 1973, pp. 81-111.—17

[9] The term bürgerliche Gesellschaft (see G.W.F. Hegel, Grundlinien der Philosophie des Rechts, in: Werke, Vol. 8, Berlin, 1833, § 182, Addendum) was used by Marx, even in his early writings, in two senses: in a broader one, to denote the economic system of society regardless of the historical stage of its development, i.e. the totality of material relations determining the political institutions and ideological life; and in a narrower one, to denote the material relations of bourgeois society (later, bourgeois society as a whole), i.e. capitalism. Depending on the context, the term is translated in this edition either as "bourgeois society" or as "civil society".—17

[20] The Crédit Mobilier (Société générale du Crédit mobilier) was a big French joint-stock bank founded by_ the Péreire brothers in 1852. It was notorious for speculation and other irregular practices. The Crédit Mobilier took an active part in railway construction and the establishment of industrial enterprises. Though closely linked with and enjoying the protection of Napoleon Ill's government, it went bankrupt in 1867. In 1856 and 1857, Marx wrote a series of articles about its speculative activities for the Chartist People's Paper, published in London, and the New-York Daily Tribune (see this edition, Vol. 15, pp. 8-24, 270-77, 357-60).—47, 59

[49] The data on Chinese money are from Gustav von Gülich's book Geschichtliche Darstellung des Handels, der Gewerbe und des Ackerbaus der bedeutendsten handeltreibenden Staaten unsrer Zeit, Vol. V, Jena, 1845, pp. 110-11, 131.—119

[12] Determination is negation—Marx quotes this thesis of Spinoza in the widely accepted interpretation given it by Hegel. In Spinoza, it means "limitation is negation" (Epistolae doctorum quorundam virorum ad B. de Spinoza et auctoris responsiones; ad aliorum ejus operum elucidationem non parum facientes. Epistola L 1674). Hegel's interpretation emphasises the element of negation 2 Junii inherent in any determined being, in any particular thing (see his Wissenschaft der Logik, Book I, Part I, Chapter 2, note on "Reality and Negation" and his Enzyklopädie der philosophischen Wissenschaften, Part I; Wissenschaft der Logik, § 91, Addendum).—28

[8] Contrat social—in Rousseau's theory, the voluntary agreement entered into by primitive people — originally living in "the state of nature"—which led to the formation of the political state. The theory was set forth in Rousseau's Du Contrat social; ou Principes du droit politique, London, 1782.—17

[25] In the manuscript, Marx rounds off the figures cited by Darimon (the latter gives the number of centimes as well as of francs). However, some of the approximations are not quite accurate.— 52