[ Section Two. Circulation Process of Capital. Conclusion]^[2]

[ Fixed and Circulating Capital]

[VI-19] Retournons maintenant à nos moutons.^[3]

Conceptually, the phases through which capital passes, which constitute one turnover of capital, begin with the conversion of money into the conditions of production. However, now that we proceed not from capital in its process of formation, but from capital as it has emerged from that process, it passes through the following phases:

(1) The creation of surplus value, or the immediate process of production. Its result is the product. (2) Bringing the product to market. Conversion of the product into a commodity. (3) (a) The entry of the commodity into ordinary circulation. Circulation of the commodity. Its result: conversion into money. This appears as the first moment of ordinary circulation, (ß) Re-conversion of the money into conditions of production: money circulation; in ordinary circulation, commodity circulation and money circulation always appear as allotted to two distinct subjects. Capital first circulates as a commodity and then as money, and vice versa. (4) The renewal of the process of production, which appears here as the reproduction of the original capital and the process of production of surplus [VI-20] capital.

The costs of circulation are reducible to the costs of movement; the costs of bringing the product to market; the labour time which is necessary for effecting the conversion from one condition into the other. All these costs are, in essence, reducible to accounting operations and the time they take (this the basis for a special,

^[3] Let us return to our subject (literally: "...to our sheep").— Ed.

technical money business). (It will emerge later whether or not the latter costs are to be regarded as deductions from surplus value).

In considering this movement, we find that the circulation of capital, mediated by exchange operations, opens up, on the one hand, to release the product into general circulation and to restore itself by drawing from it an equivalent in the form of money. We are not concerned here with what becomes of this product, which has thus dropped out of the circulation of capital and reverted to ordinary circulation. On the other hand, capital again ejects from its circulation process its form as money (partly so, to the extent that it is not wages), or it moves now in the form of money — after it has realised itself in it as value and simultaneously posited in itself the measure of its valorisation — but money only as means of circulation, and absorbs from general circulation the commodities necessary for production (the conditions of production). As a commodity, it ejects itself from its circulation into general circulation; as a commodity, capital also escapes from general circulation and incorporates it into itself, into its movement, in order to flow into the process of production. The circulation of capital is thus related to general circulation, constituting a moment of it, while general circulation itself appears to be posited by capital. This to be discussed later.

The overall production process of capital includes both the circulation process proper and the production process proper. They constitute the two great divisions of its movement, which appears as the totality of the two processes. On the one hand, there is labour time, on the other, circulation time. And the movement as a whole appears as the unity of labour time and circulation time, as the unity of production and circulation. This unity is itself movement, process. Capital appears as this dynamic unity of production and circulation, a unity which can be considered both as the totality of its production process and as the particular process through which capital goes during a single turnover, a single movement returning to itself.

The fact that capital needs circulation time, as well as labour time, is, however, only the adequate, ultimate form of a condition posed by production based upon the division of labour and exchange. The costs of circulation are costs of the division of labour and exchange, and are inevitably encountered in every less developed, pre-capital, form of production carried on on this basis.

As the subject, as value which dominates the various phases of this movement and maintains and multiplies itself in it, as the subject of these transformations, which occur in a circular way — a spiral movement, a series of expanding circles — capital is circulating capital.^[3] Hence circulating capital is, to begin with, not a particular form of capital. It is capital as such, in a more highly developed determination, as the subject of the movement described, which is capital itself as its own process of valorisation. In this respect, therefore, every capital is circulating capital.

In simple circulation, circulation itself appears as the subject. One commodity is cast out of it; another enters it. However, a given commodity is only evanescent in it. Money itself, to the extent that it ceases to be a means of circulation and is posited as independent value, withdraws from circulation. By contrast, capital is posited as the subject of circulation, and circulation as its very life process.

However, while capital as the totality of circulation is circulating capital, the transition from one phase to another, it is, in each phase, also posited in a specific determination, confined to a particular form, which negates it as the subject of the movement as a whole. In each particular phase capital, therefore, is the negation of itself as the subject of the various transformations. Non-circulating capital. Capital fixe, properly speaking fixed capital, fixed in one of the various determinations, phases, through which it has to pass. As long as it persists in one of these phases, that phase itself not appearing as a fluid transition — and each phase has a certain duration — capital is not circulating but fixed.

As long as it is tied up in the process of production, it is incapable of circulation, and hence is virtually devalued. As long as it is tied up in circulation, it is incapable of production, posits no surplus value, is not capital-in-process. As long as it cannot be thrown onto the market, it is fixed as a product; and as long as it must remain on the market, it is fixed as a commodity. So long as it cannot be exchanged for conditions of production, it is fixed as money. Finally, if the conditions of production remain in their form as conditions and do not enter into the process of production, capital is once again fixed and devalued. Capital as the subject which passes through all the phases, as the moving unity, the unity-in-process comprising circulation and production, is circulating capital; capital as itself locked up in any one of these phases, as posited in its distinct forms, is fixed, or engaged capital. As circulating capital it fixes itself, and as fixed capital it circulates.

Consequently, the distinction between circulating capital and fixed capital appears first of all as a determination of the form of capital, depending on whether it appears as the unity of the process or as a particular moment of it. The concept of dormant capital, capital lying fallow, can only refer to its lying fallow in one of these determinations, and it is a feature of capital that part of it always lies fallow. This is manifested in the fact that part of the national capital is always tied up in one of the phases through which capital has to pass. Money itself, so far as it constitutes a particular part of a nation's capital, but always remains in the form of means of circulation and hence never passes through the other phases, is therefore regarded by A. Smith as a pseudo-form of fixed capital.^[3] Similarly, capital may lie fallow, be fixed in the form of money, of value withdrawn from circulation. In crises—after the moment of panic — at the time when industry lies stagnant, money is fixed in the hands of BANKERS, BILL-BROKERS, etc., and pants after a FIELD OF EMPLOYMENT in which it can be utilised as capital as the hart pants after the water brooks.b

The fact that the determinations of capital as circulating and fixed are, to begin with, merely capital itself posited in the two determinations, first as the unity of the process, and then as a particular phase of it, capital distinct from itself as a unity,— not as two particular types of capital, capital of two particular types, but as different formal determinations of the same capital—this fact has given rise to a great deal of confusion in political economy. If one aspect of a material product was seized upon according to which it was to be regarded as circulating capital, it was easy to point to the opposite aspect, and vice versa. Capital as the unity of circulation and production is just as much their distinctness, namely their falling apart in space and time. In each of these moments, capital exists in a form which is indifferent to the other moment. So far as the individual capital is concerned, the transition from the one to the other appears to be a matter of chance, dependent upon external, uncontrollable circumstances. The same capital therefore always appears in both determinations, which is expressed in the fact that one part of it appears in one determination [VI-21] and the other in the other; one part as tied up, the other as circulating. However, it circulates here not in the sense that it is in the phase of circulation proper as distinct from the phase of production, but that the phase in which it happens to be is a fluid phase, a phase-in-process, leading on to the other phase. It is not tied up in either phase as such and hence is not checked in its overall process.

E.g., the industrialist employs in production only part of the capital available to him (whether borrowed or his own, is irrelevant here; nor, if one considers total capital, does this affect the economic process), because the other part needs a certain time before it returns from circulation. The part active in production is then the circulating one; the part in circulation is the fixed one. The overall productivity of his capital is thus limited; the part reproduced is limited, arid therefore also the part which is thrown into the market.

This also applies to the merchant: part of his capital is immobilised in the form of STOCK IN TRADE, the other part circulates. True, as in the case of the industrialist, now one part of his capital adopts this determination, now another, but his total capital is constantly posited in both determinations.

On the other hand, since this limit, arising from the nature of the valorisation process itself, is not a fixed one but alters with the circumstances, and capital may be closer to or further from its adequate determination as circulating capital, and since the splitting-up into these two determinations, with the valorisation process simultaneously appearing as the process of devaluation, contradicts capital's striving for the greatest possible valorisation, it invents CONTRIVANCES to shorten the phase of its fixity. Moreover, rather than coexisting side by side, the two determinations alternate. During one period, the process appears as a completely fluid one — the period of the maximum valorisation of capital. During the other period, a reaction to the first one, the other moment asserts itself all the more violendy — the period of the maximum depreciation of capital and stagnation of production. The moments when the two determinations appear side by side are themselves merely intermediate periods between these violent transitions and upheavals.

It is very important to conceive of these determinations of circulating and fixed capital as form determinations of capital in general, since [otherwise] many phenomena of the bourgeois economy — the period of the economic cycle, which is essentially distinct from the time of the single turnover of capital; the effect of new demand, and even of new gold- and silver-producing countries, upon general production — cannot be understood. There is no point in talking about the stimulus given by the Australian gold^[4] or by a newly discovered market. If it were not inherent in the nature of capital to be never fully employed, i.e. to be always partly fixed, devalued, unproductive, no stimuli could impel it to greater production. On the other hand, there are the absurd contradictions in which those economists — even Ricardo— get involved who assume that capital is always fully employed, and who therefore can only explain an INCREASE in production by the creation of new capital. Every INCREASE would then presuppose an earlier one or an expansion of the productive forces.

These limits to production based on capital are inherent to a still greater degree in the previous modes of production, in so far as they are based on exchange. But they do not constitute a law of production as such; when material production is no longer limited by exchange value, but [solely] by its relation to the overall development of the individual, all this business, with its convulsions and pains, comes to an end. We have already seen that money transcends the barriers imposed by barter only by making them general, i.e. by entirely separating purchase and sale from one another.^[3] Later we shall see that credit likewise transcends these barriers to the valorisation of capital only by elevating them to their most general form, by positing the period of overproduction and underproduction as two periods.

The value posited by capital in one turnover, ONE revolution, one circuit, is = to the value posited in the production process, i.e. to the value reproduced + the new value. Whether we consider the turnover to be completed when the commodity has been converted into money, or when the money has been reconverted into conditions of production, the result, whether expressed in money or in conditions of production, is always absolutely equal to the value posited in the production process. Here, we take [the cost of] the physical bringing of the product to the market as being zero; or rather as forming part of the immediate production process. The economic circulation of the product only begins when it is put on the market as a commodity — only then does it circulate. Here we are only dealing with the economic distinctions, determinations and moments of circulation, not with the physical prerequisites for bringing the finished product into the second phase, its circulation as a commodity. This is of as little concern to us as the technological process by which the raw material has been transformed into a product. The greater or lesser distance of the market from the producer, etc., is as yet of no concern to us.

What we want to state first of all is that the costs arising from the traversing of the different economic moments as such, die circulation costs as such, add nothing to the value of the product, are not costs which posit value, whatever the labour involved. They are mere deductions from the value produced. Suppose there are two individuals, each of whom produces his own product, but their labour is based on the division of labour, so that they exchange with each other, and the utilisation of their product for the satisfaction of their needs depends upon this exchange. The time which the exchange would cost them, e.g. dieir bargaining with each other and the calculations they must make to come to an agreement, would obviously not add the least amount to either their products or their exchange value.

If A claimed to B that he had spent such and such an amount of time on the exchange, B would claim exacdy the same to A. Each of them loses exacdy as much time in the exchange as the other. The time taken by die exchange is the same for both of them. If A demanded 10 thaler for his product — its equivalent— and 10 thaler for the time it costs him to obtain the 10 thaler from B, the latter would declare him ripe for the madhouse. This loss of time arises from the division of labour and the need for exchange. If A himself produced everything, he would not lose any of his time on exchanging with B, or on converting his product into money and the money back into a product.

The circulation costs proper (and they acquire a significant independent development in the money business) are not reducible to productive labour time. They are by dieir very nature confined to the time necessary to convert die commodity into money and the money back into a commodity, i.e. to the time needed for the translation of capital from one form into another. B and A might now find that they could save time by introducing a third person, C, as an intermediary between them, who would devote his time to effecting die circulation process. This could come about if, e.g., there were enough exchangers, enough subjects of circulation processes for the time taken by them in die successive acts of bilateral exchange over a year to be equal to a year. If every individual in turn had to spend (say) V50 of a year in the act of circulation, and if there were 50 of them, then one individual could devote all his time to this occupation. If this individual were paid only his necessary labour time, i.e. if he had to give up all his time in exchange for the NECESSARIES OF LIFE, the remuneration he would be receiving would be wages. But if he charged payment for the whole of his time, die remuneration diat he would receive would be an equivalent — in the form of objectified labour time. Now, this individual would not have added anything to value; he would merely have shared in the surplus value of the capitalists A, B, etc. They would still have gained by this, since by assumption a smaller amount would have been deducted from their surplus value. (Capital is not merely a quantity, or merely an operation; it is both at once.)

Money itself, [VI-22] in as much as it is made of precious metals or, in general, in as much as its production involves expense — as is the case even with, e.g., a paper currency — money itself, in as much as it costs labour time, adds nothing to the value of the objects exchanged, the exchange values. Its cost is, rather, a deduction from these values, a deduction which must be borne proportionately by the exchangers. The costliness of the instrument of circulation, of the instrument of exchange, merely expresses the costs of exchange. Rather than adding to value, they subtract from it. E.g. gold and silver money are themselves values like any others (not in the sense of money) to the extent that labour is objectified in them. But the fact that these values serve as means of circulation forms a deduction from available wealth.

It is the same with the production costs of the circulation of capital. Circulation adds nothing to values. The circulation costs as such do not posit value; they are the costs of realising values— deductions from values. Circulation [appears] as a series of transformations in which capital posits itself, but as far as value is concerned, it adds nothing to capital but merely posits it in the form of value. The potential value which is converted into money by circulation is presupposed as the result of the production process. To the extent that this series of processes takes place in time and involves costs, costs labour time or objectified labour, the costs of circulation are deductions from the quantity of value.

Assuming the costs of circulation to be zero, the result of one turnover of capital, in terms of value, is equal to the value posited in the process of production. I.e. the value preposited to circulation is that which emerges from it. At most, a smaller value may emerge from circulation — because of the circulation costs— than that which entered into it. From this angle, circulation time adds nothing to value; it does not appear alongside labour time as time which posits value. If a commodity of a value of £10 has been produced, circulation is necessary to set this commodity equal to the £10, its value, which exists in the form of money. The costs occasioned by this process, this alteration of form, are a deduction from the value of the commodity. The circulation of capital is the alteration of form through which value passes in different phases. The time which this process takes, or which is required to effect it, forms part of the production costs of circulation, of the division of labour, of production based on exchange.

This applies to one turnover of capital, i.e. to one passage of capital through these its different moments. The process of capital as value has money as its point of departure and ends in money, but in a greater quantity of money. The difference is merely a quantitative one. M—C—C—M has thus acquired a content. If we consider circulation up to this point, we are back at the point of departure. Capital has again become money. But it is now also presupposed, it has now become a condition, that this money becomes capital again, money which multiplies and maintains itself by purchasing labour, by going through the process of production. Its form as money is posited merely as a form, one of the many through which it passes in its metamorphosis.

If we now consider this point not as the end-point, but — as we must now consider it — as an intermediate point, or a new point of departure, itself posited by the production process as a transitory end-point and a merely apparent point of departure, then it is clear that the reconversion of the value posited as money into value-in-process, value entering into the production process, can only occur — or that the renewal of the production process can only take place — when the part of the circulation process which is distinct from the production process has been completed.

The second turnover of capital — the reconversion of money into capital as such, or the renewal of the production process, depends on the time which capital requires to complete its circulation, i.e. on its circulation time, as distinct from the production time. On the other hand, we have seen that the total value produced by capital (reproduced as well as newly produced value), which is realised in circulation as such, is wholly determined by the production process. Hence the sum of values that can be produced in a given period of time depends upon the number of times the production process can be repeated during this period. But the repetition of the production process is determined by the circulation time, which is equivalent to the velocity of circulation. The more rapid circulation is and the shorter the circulation time, the more frequendy the same capital can repeat the production process. Hence, in a given cycle of turnovers of capital, the sum of values produced by it (therefore the sum of surplus values as well, since capital always posits necessary labour only as labour necessary for surplus labour) is directly proportional to the labour time and inversely proportional to the circulation time. In a given cycle, the total value (hence also the sum of the surplus values posited) is equal to the labour time multiplied by the number of turnovers of the capital.

Or, the surplus value posited by capital no longer appears to be determined purely by the surplus labour it appropriates in the process of production, but by the coefficient of that process, i.e. the number expressing the frequency of its repetition in a given period of time. And this coefficient is determined by the circulation time capital requires for one turnover. Consequently, the sum of values (surplus values) is determined by the value posited in one turnover multiplied by the number of turnovers capital performs in a given period of time. One turnover of capital is equal to the production time+the circulation time. Assuming the circulation time as given, the total time required for one turnover depends upon the production time. Assuming the production time [as given], the duration of one turnover depends upon the circulation time. So far as circulation time determines the total mass of production time in a given period of time, and so far as the repetition of the production process, its renewal in a given period, depends upon it, it is itself a moment of production, or rather appears as a limit to production.

It is the nature of capital, of production based upon it, that circulation time becomes a moment determining labour time, the production of value. The independence of labour time is thereby negated, and the production process itself is posited as determined by exchange, so that the social relation and the dependence on this relation in immediate production is posited not merely as a material moment, but as an economic moment, a determination of form. The maximum of circulation — the limit to the renewal, through circulation, of the production process — is obviously determined by the duration of the production time during one turnover.

Suppose that the production process of a given capital, i.e. the time it requires to reproduce its value and to posit surplus value, takes three months. (Or the time that is necessary to complete a certain quantity of product=the total value of the producing capital+surplus value.) In this case, the capital could not, under any circumstances, renew die process of production or valorisation more frequently than four times a year. The maximum number of turnovers this capital could make in the course of a year would be 4, i.e. there would be no interruptions between the completion of one production phase and the beginning of another. The maximum of turnovers would be equivalent to continuity of the production process; as soon as the product was completed, new raw material would be worked up into product. The process would be continuous not merely within a single [VI-23] phase of production; there would also be continuity of the phases themselves.

But suppose now that, at the end of each phase, the capital requires one month of circulation time in order to assume once more the form of conditions of production. In this case, it could only perform three turnovers a year. In the first case, the number of turnovers = 1 phase X 4; or 12 months divided by 3. The maximum production of value by capital in a given period of time is this time period divided by the duration of the production process (the production time). In the second case, the capital would perform only three turnovers a year; it would repeat the valorisation process only three times. The sum of its valorisation processes would therefore =^[12]/^[4]=3. Here the divisor is the total circulation time required by the capital: 4 months; or the circulation time it requires for one production phase X by the number of times this circulation time is contained in a year.

In the first case, the number of turnovers=12 months,one year, the given time, divided by the duration of one production phase, or by the length of the production time itself. In the second case, it equals the same time divided by the [total] circulation time. There is maximum valorisation of capital, and maximum continuity of the production process, if circulation time = 0, i.e. if the conditions under which capital produces, its limitation by circulation time, the need to pass through the different phases of its metamorphosis, are transcended. Capital necessarily strives to posit circulation time as = 0, i.e. to transcend itself, for it is only capital that posits circulation time as a moment determining production time. It is the same as transcending the necessity of exchange, of money and of the division of labour based on them, i.e. the same as transcending capital itself.

If for the time being we abstract from the conversion of surplus value into surplus capital, a capital of 100 thaler that produced a surplus value of 4% on the total capital in the production process, would in the first case reproduce itself 4 times, and would, by the end of the year, have posited a surplus value of 16. By the end of the year the capital would=116. It would be the same as if a capital of 400 had made one turnover in a year, likewise producing a surplus value of 4%. In relation to the total production of commodities and values, surplus value has quad-rupled. In the other case, a capital of 100 thaler would only produce a surplus value of 12; the total capital at the end of the year=112. In relation to the total production — whether of values or use values — the difference would be still more significant. In the first case, a capital of 100 would have converted e.g. 400 thaler's worth of leather into boots, while in the second case it would have converted only 300 thaler's worth of leather.

Hence the total valorisation of capital is determined by the duration of the production phase — which we assume here, for the time being, to be identical with labour time X by the number of turnovers, or renewals of the production phase, in a given period of time. If the number of turnovers were only determined by the duration of one production phase, the total valorisation would be determined solely by the number of production phases contained in a given period of time. Or the number of turnovers would be absolutely determined by the production time itself. This would be the maximum of valorisation. So it is clear that circulation time, considered absolutely, is a deduction from the maximum of valorisation < than absolute valorisation. Therefore, it is impossible for any velocity of circulation or reduction of circulation time to bring about a valorisation > than that posited by the production phase itself. The most that velocity of circulation could effect— and then it would have to rise to °°—would be to posit circulation time as=0, i.e. to abolish itself. Therefore, it cannot constitute a positive value-creating moment, since its abolition — circulation without circulation time — would imply the maximum possible valorisation; its negation would imply that the productivity of capital had attained its highest possible level. //The productivity of capital as capital is not the productive power which multiplies use values, it is capital's capacity to produce values, the degree to which it produces values.// The total productivity of capital=the duration of one production phase X by the number of times it is repeated during a certain period of time. But this number is determined by circulation time.

Assume that a capital of 100 makes 4 turnovers in a year, i.e. completes the production process 4 times. At the end of the year, taking surplus value as 5% each time, the surplus value produced would be 20. On the other hand, for a capital of 400 that completed one turnover in a year, surplus value, given the same percentage, would also be 20. Hence a capital of 100 which circulated 4 times a year would yield a gain of 20%, while a capital 4 times as big which turned over only once, would yield a profit of only 5%. (We shall see presently, on closer examination, that the surplus value is exactly the same.) It appears, therefore, that size of capital can be compensated for by velocity of circulation, and velocity of circulation by size of capital. The appearance is thus created that circulation time is in itself productive. We must, therefore, use this CASE to clear the matter up.

Another question which arises is this: If 100 thaler is turned over 4 times a year, each time at, say, 5%, the production process could be commenced at the beginning of the second turnover with 105 thaler, and its product would be IIOV4; at the beginning of the third turnover, IÎOV4, the product of which would be 115^[61]/8o; at the beginning of the fourth turnover, 115^[61]/so> a n d at its end, 121881/i,6oo- The actual numbers chosen are without significance for the matter in hand. The point is that if a capital of 400 turns over only once a year, at 5%, the gain can only be 20; whereas if a capital a quarter as large turns over 4 times at the same percentage, the gain is l+881/i,6oo more. It thus appears that the mere moment of turnover — the fact of repetition — that is to say, a moment determined by circulation time, or rather by circulation, not merely realises value, but increases it in absolute terms. This, too, must be investigated.

Circulation time expresses merely the velocity of circulation; the velocity of circulation is merely a limit upon circulation. Circulation without circulation time—i.e. the passage of capital from one phase to another with the same speed with which one concept supplants another — would be the maximum, i.e. the coincidence of the renewal of the production process with its completion.

The act of exchange — and the economic operations by means of which circulation takes place are reducible to a succession of

échanges—up to the point where capital relates not as a commodity to money or as money to a commodity, but as value to its specific use value, labour — the act of exchanging value in one form for value in the other, money for a commodity or a commodity for money (and these are the moments of simple circulation), posits the value of one commodity in terms of another, thus realising it as exchange value, or, to put it another way, it posits the commodities as equivalents. The act of exchange thus posits value, in so far as values are presupposed; it realises the determination of the objects of exchange as values. But an act which posits a commodity as value or, what comes to the same thing, which posits another commodity as its equivalent—or, the same thing again, posits the equivalence of the two commodities — obviously adds nothing to value itself, just as the sign ± neither increases nor decreases the number which follows it.

If I posit 4 as +4 or —4, it remains, irrespective of the sign, equal to itself, 4, after this operation, and does not become either 3 or 5.

Similarly, if I [VI-24] exchange one lb. of cotton, with an exchange value of 6d., for 6d., it is posited as value; and it can equally be said that the 6d. is posited as value in the lb. of cotton; in other words, the labour time contained in the 6d. (the 6d. regarded here as value) is now expressed in terms of another material representing the same labour time. But since by the act of exchange the lb. of cotton and the 6d. of copper are each equated to their value, it is impossible that this exchange should bring about a quantitative increase in the value of the cotton or the value of the 6d., or in the sum of their values.

Exchange, as the positing of equivalents, merely alters the form; it realises the potentially existing values; realises the prices, IF YOU LIKE. A positing of objects, e.g. of a and b as equivalents cannot raise the value of a, for this act posits a as equal to its own value, hence not as unequal to it. It is posited as unequal only with respect to the form, in so far as it was not posited as value previously. At the same time, this act posits the value of a as equal to the value of b, and the value of b as equal to that of a. The sum of values exchanged = the value of a + the value of b. Each remains=to its own value; hence their sum remains equal to the sum of their values. Exchange, as the positing of equivalents, cannot therefore, by its very nature, raise the sum of values or the value of the commodities exchanged. (That things are different in the exchange with labour is due to the fact that the use value of labour itself posits value, but is not directly connected with its exchange value.)

A single exchange operation cannot increase the value of what is exchanged, nor can a sum of exchanges.

//It is essential to make this clear since the distribution of surplus value among capitals, the calculation of aggregate surplus value among individual capitals — this secondary economic operation — gives rise to phenomena that in ordinary political economy are confused with primary ones.//

Whether I repeat an act which does not produce any value once or an infinite number of times, IT CANNOT CHANGE ITS NATURE by virtue of its repetition. The repetition of an act which does not produce value can never turn it into an act which does. E.g., the number l/^[4] expresses a definite proportion. If I convert ^[1]/^[4] into decimals, positing it as 0.25, its form is altered, but this alteration of form leaves the value unchanged. Similarly, if I convert a commodity into the form of money, or money into the form of a commodity, the value remains the same; but its form has changed.

It is clear, therefore, that circulation — since it comes down to a series of operations in which equivalents are exchanged — cannot increase the value of the circulating commodities. Hence if labour time is required to effect this operation, i.e. if values must be consumed — for all consumption of values comes down to the consumption of labour time or objectified labour time, products— if circulation involves costs, and if circulation time costs labour time, then this is a deduction, a relative abolition of the circulating values, their devaluation by the amount of the circulation costs.

Suppose we have two workers — a fisherman and a hunter— who exchange with each other. The time that both of them lose in effecting the exchange would produce neither fish nor game; it would be a deduction from the time during which they can produce values, the one by fishing and the other by hunting, objectifying their labour time in a use value. If the fisherman wished to compensate for this loss by demanding more game from the hunter, or by giving him fewer fish, the hunter would similarly be entitled to compensation. They would sustain the same loss. These costs of circulation, of exchange, could only appear as a deduction from their total product or the value they had created. If they commissioned a third person, C, to carry on these EXCHANGES, and in this way avoided the direct loss of labour time, each of them would have to cede a proportional part of his product to C. All they could gain by this would be a greater or smaller [reduction of] loss. However, if they worked as joint proprietors, no exchange would take place, but, rather, joint consumption. The costs of exchange would therefore be eliminated. Not the division of labour, but the division of labour as based on exchange. J. St. Mill is therefore wrong in treating the circulation costs as the necessary price of the division of labour* They are merely costs of the naturally evolved division of labour, a division based not upon community of property, but upon private property.

The circulation costs as such, i.e. the consumption of labour time or of objectified labour time, values, occasioned by the operation of exchange and by a series of exchange operations, are therefore a deduction either from the time used for production or from the values posited by production. They can never increase value. They belong to the faux frais de production^ and these belong to the immanent costs of production based on capital. The merchant business and STILL MORE the money business proper — to the extent that their sole function is to perform the operations of circulation as such, e.g. the determination of prices (the measure-ment and calculation of values), in general, to perform these exchange operations as a function rendered independent by the division of labour, and hence represent this function of the overall process of capital — represent merely the faux frais de production of capital. In so far as they reduce these faux frais, they contribute to production, not by producing value but by diminishing the negation of the values produced. If they confined themselves to performing this function, they would always represent only the minimum of the faux frais de production. If they enable the producers to produce more values than they could produce without this division of labour, and so much more that a surplus remains after paying for this function, then they have, in effect, increased production. However, in this case, the values have increased not because the operations of circulation have created value, but because they have absorbed less value than they would have done otherwise. However, they are a necessary condition for production by capital.

The time lost by a capitalist in carrying out exchange is not as such a deduction from labour time. He is a capitalist — i.e. the representative of capital, personified capital — only in as much as he relates to labour as alien labour and appropriates and posits alien labour time. Hence circulation costs do not exist in the sense that they take away the time of the capitalist. His time is posited as superfluous time: not-labour-time, time that does not produce value, although it is capital that realises the value produced. The fact that the worker must work surplus time is identical with the capitalist's not having to work; it follows that his time is posited as not-labour-time, and that he does not work even the necessary time. The worker must work surplus time to be allowed to reify, utilise, i.e. objectify, the labour time necessary for his reproduction. On the other hand, the capitalist's necessary labour time, too, is therefore free time, time not required for his immediate subsistence. Since all free time is time for free development, the capitalist usurps the free time created by the workers for society, i.e. civilisation, and Wade is indeed right in this sense when he equates capital with civilisation.⁽¹⁾

In so far as circulation time claims the time of the capitalist as such, it is, from the economic viewpoint, exactly of as much concern to us as the time he spends with his doxy. If TIME is MONEY, this applies, from the standpoint of capital, only to alien labour time, which is, indeed, the MONEY of capital in the most basic sense of the word. With respect to capital as such, circulation time can be equated with labour time only in so far as it interrupts the time during which capital can appropriate alien labour time — and it is clear that this relative devaluation of capital adds nothing to its valorisation, but can only detract from it — or in so far as circulation costs capital objectified alien labour time, values. [VI-25] (E.g., because capital must pay someone else to perform this function.) In both cases, circulation time only comes into consideration in so far as it cancels, negates alien labour time, whether by interrupting the process of appropriation of alien labour time by capital, or by obliging capital to consume part of the produced value in order to accomplish the operations of circulation, i.e. in order to posit itself as capital. (This must be carefully distinguished from the PRIVATE CONSUMPTION OF THE CAPITALIST.)

Circulation time comes into consideration only in its relation to — as a limit upon, negation of — the production time of capital; but this production time is the time during which capital appropriates alien labour, the alien labour time posited by capital. It is the greatest confusion to regard the time spent by the capitalist on circulation as time positing value or, indeed, time positing surplus value. Capital as such has no labour time other than its production time. The capitalist does not concern us here at all, except as capital. As such, too, he is active only in the overall process which we have to analyse. Otherwise one could even imagine that the capitalist is entitled to compensation for the time during which he does not earn money as the wage worker of another capitalist—or else that he loses that time. That it belongs to the production costs. The time he loses or employs as a capitalist is, in general, lost time, placé à fonds perdu,⁽²⁾ from this viewpoint. We shall have to discuss later the so-called labour time of the capitalist—as distinct from that of the worker — which is supposed to form the basis of the capitalist's profit as WAGES sui generis.

Nothing is more common than to include transport, etc., in so far as they are connected with commerce, among the pure costs of circulation. By bringing a product to market, commerce gives it a new form. Of course, it only changes the spatial location of the product. But we are not concerned with the way in which its form is altered. Commerce imparts a new use value to the product (and this is true right down to the retailer, who weighs, measures and packs it up, thus giving the product a form that makes it suitable for consumption). This new use value costs labour time and hence is simultaneously exchange value. The bringing to market is part of the production process itself. The product is a commodity, is in circulation, only when it is on the market.

//"In every species of industry the entrepreneurs become sellers of products, while the entire rest of the nation and often even foreign nations are buyers of these products... The continuous, constandy repeated movement made by circulating capital in departing from the entrepreneur and in returning to him in the form it first possessed, is comparable to its traversing a circle. Hence the name 'circulating' applied to capital, and 'circulation' applied to its movement" (Storch,

Cours d'économie politique, Vol. I, Paris, 1823, pp. 404-05. Notebook,^[5] p. 34).⁽³⁾

"In the broad sense, circulation includes the movement of every commodity which is exchanged" (p. 405, I.e.). "Circulation is effected by exchanges ... once money is introduced, they [commodities] are no longer exchanged, they are sold" (pp. 405-06, I.e.). "To put a commodity into circulation, it is sufficient to offer it [for sale]... Wealth in circulation: commodity" (p. 407, I.e.). "Commerce is only a part of circulation. The former comprehends only the purchases and sales by merchants; the latter those by all entrepreneurs and even all INHABITANTS" (p. 408, Le).

"Circulation is real, and its value increases the annual product, only as long as the costs of circulation are indispensable for getting the commodities to the consumers. From the moment when it exceeds this measure, circulation is artificial and no longer contributes in any way to the enrichment of the nation" (p. 409). "In recent years, we have seen examples of artificial circulation in Russia, at St. Petersburg. The stagnation of foreign trade had forced the merchants to adopt a different method of investing their idle capital; no longer being able to use it to import foreign commodities and to export domestic ones, they hoped to profit by buying and reselling commodities available on the market. Enormous quantities of sugar, coffee, hemp, iron, etc., passed rapidly from one merchant to another, and often a commodity changed hands twenty times without leaving the warehouse. A circulation of this type offers merchants all the opportunities of a game of chance. But while it enriches some, it ruins others, and the national wealth gains nothing from it. Similarly in the circulation of money... An artificial circulation of this type, which is only based upon the simple variation of prices, is called agiotage" (pp. 410, 411). "Circulation only benefits society in so far as it is indispensable for bringing the goods to the consumer. Every detour, retardation, intermediate exchange which is not absolutely necessary to bring this about, or which does not contribute to diminishing the costs of circulation, harms the national wealth by needlessly raising the prices of commodities" (p. 411).

"Circulation is the more productive the more rapid it is, i.e. the less time it requires to enable the entrepreneur to dispose of the finished product which he offers for sale, and to regain his capital in its original form" (p. 411). "The entrepreneur can only recommence production after he has sold the finished the more promptly circulation brings about these two effects, the more quickly is he in a position to recommence his production, and the greater the profit his capital yields in a given period of time" (pp. 411-12). "A nation whose capital circulates rapidly enough to return several times a year to him who first set it in motion, is in the same position as the labourer in a favourable climate, who can raise three or four harvests in succession on the same land each year" (pp. 412, 413). "A slow circulation makes the objects of consumption more expensive (1) indirectly, by diminishing the volume of commodities that could exist; (2) direcdy, because as long as a product is in circulation its value is progressively increased by the interest on the capital employed in its production. The more slowly circulation goes on, the more this interest piles up, needlessly raising the price of the commodity." "Means for the shortening and acceleration of circulation: (1) formation of a special class of workers solely occupied in commerce; (2) ease of transportation; (3) money; (4) credit" (p. 413).//

Simple circulation consisted of a multitude of simultaneous or successive exchanges. Strictly speaking, their unity as circulation existed only from the standpoint of the observer. (Exchange may be a matter of chance, and it more or less has this character where it is confined to the exchange of the surplus, and does not embrace the entire production process.) In the circulation of capital, we have a series of exchange operations, of acts of exchange, each of which constitutes a qualitative moment vis-à-vis the other, a moment in the reproduction and growth of capital. A system of exchanges, exchange of matter, if seen from the angle of use value; a change of form, if seen from the angle of value as such. The product is related to the commodity as use value to exchange value; the commodity is related similarly to money. Here the one series attains its peak. Money is related to the commodity into which it is reconverted, as exchange value to use value, and to an even greater degree the same is true of the relation of money to labour.

[VI-26] In so far as capital in every moment of the process is itself the possibility of transition into its other, next phase, and is thus the possibility of the whole process which expresses the life-act of capital, each of the moments appears as potentially capital — hence commodity capital, money capital — alongside the value which posits itself as capital in the production process. The commodity may represent capital as long as it can be converted into money, i.e. as long as it can purchase wage labour (surplus labour). This from the aspect of the form deriving from the circulation of capital. From the material aspect, the commodity remains capital as long as it constitutes raw material (in the strict sense or partly processed), instrument, and means of subsistence for the workers. Each of these forms is potential capital. Money is, on the one hand, realised capital, capital as realised value. From this aspect (considered as the end-point of circulation, where it must also be considered as the point of departure), money is capital xaT'é£oxT|v.⁽⁴⁾ It is then once again capital, especially in relation to the production process, to the extent that it is exchanged for living labour. On the other hand, when the capitalist exchanges it for commodities (purchases new raw materials, etc.), it appears not as capital but as means of circulation; merely a vanishing mediator by means of which the capitalist exchanges his product for its primary elements.

Circulation is not a merely external operation for capital. Just as it only becomes capital by means of the production process, in which value is perpetuated and increased, so it is reconverted into the pure form of value — in which both the traces of its becoming and its specific being in use value are extinguished — only by means of the first act of circulation. The repetition of this act, i.e. of the life-process [of capital], is only made possible by the second act of circulation, which consists in the exchange of money for the conditions of production and is the introduction to the act of production. Circulation therefore belongs within the concept of capital. Initially, money or accumulated labour appeared as a prerequisite for, and hence preceding, the exchange with free labour. But the apparent independence of the objective moment of capital in relation to labour was cancelled, and objectified labour, which becomes independent in value, appeared in every respect as the product of alien labour, the alienated product of labour itself. In similar fashion, capital now appears first as presupposed to its circulation (capital as money was presupposed to its becoming capital; but capital as the result of value absorbing and assimilating living labour appeared as the point of departure of the circulation of capital, not of circulation in general), as if capital existed independently, indifferent to and without this process. But the movement of the metamorphoses it has to go through appears now as a condition of the production process itself, just as much as its result.

Capital in its reality thus appears as a series of turnovers in a given period. It is no longer merely a single turnover, a single circulation, but the positing of turnovers, of the entire process. Its positing of value therefore appears as determined (and value is capital only in so far as it is value which perpetuates and multiplies itself) (1) qualitatively: since it cannot renew the phase of production without passing through the phases of circulation;

(2) quantitatively: since the quantity of values which it posits depends upon the number of turnovers it performs in a given period; (3) since circulation time thus appears from both aspects as a limiting principle, a barrier to production time and vice versa. Hence capital is essentially circulating capital. While appearing as owner and MASTER in the workshop of the production process, it is, from the angle of circulation, dependent and determined by the social nexus, which at the point where we still find ourselves causes capital to enter into simple circulation and figure in it alternately as C over against M and M over against C.

Yet this circulation is a mist veiling an entire world, the world of the interconnections of capital, which affix the property deriving from circulation, from social intercourse, to this intercourse and rob it of the independence of SELF-SUSTAINING PROPERTY as its characteristic feature. Two views of this world, as yet lying in the distance, have already opened up to us: [firstly,] at the point where the circulation of capital precipitates from its circle the value which capital posits and circulates in the form of the product, and secondly, at the point where capital draws another product from circulation into its circuit, converting this product itself into one of the moments of its existence. At the second point, it presupposes production, though not its own immediate production. At the first point, it may presuppose either production, if its product is itself the raw material for other production; or consumption, if its product has acquired the final foKm that makes it suitable for consumption. That much is clear that consumption does not have to enter into its circle directly. The characteristic circulation of capital is, as we shall see later, still CIRCULATION BETWEEN DEALERS AND DEALERS.^[6] CIRCULATION BETWEEN DEALERS and CONSUMERS, identical with retail trade, is a second circle, which does not fall within the immediate sphere of circulation of capital. It is a path it traverses after and simultaneously with traversing the first path. The simultaneity of the different paths traversed by capital, like that of its different determinations, only becomes evident when many capitals are presupposed. In the same way, the life-process of man consists in his passing through a succession of ages; at the same time, all ages of man exist alongside one another, distributed to different individuals.

In so far as capital's production process is, at the same time, a technological process — production process pure and simple— namely, the production of particular use values by means of particular labour, in short, production carried on in a way determined by this purpose itself; in so far as of all these production processes, the most fundamental appears to be that by which the body reproduces for itself the necessary exchange of matter, i.e. produces means of subsistence in the physiological sense; in so far as this production process coincides with agriculture, which either directly (as in the case of cotton, flax, etc.) or indirectly, by means of the animals it feeds (silk, wool, etc.), simultaneously supplies a large part of the raw materials for industry (in effect, all that are not supplied by the extractive industries); in so far as reproduction in agriculture in the temperate zone (the homeland of capital) is tied up with the general telluric circulation, i.e. harvests are mostly of an annual nature — in so far as all this is so, the year is generally taken as the period of time with respect to which the sum of turnovers of capital is calculated and measured (except that the year is calculated differently for the different branches of production), just as the natural working day provided such a natural unit as measure of labour time. Accordingly, in the calculation of profit, and even more in that of interest, we see the unity of circulation time and production time — capital — posited as such and acting as its own measuring-rod. Capital itself as capital-in-process—i.e. capital performing a turnover—[VI-27] is regarded as working capital, and the fruits WHICH IT IS SUPPOSED TO YIELD are calculated with respect to its working time — the total circulation time of one turnover. The mystification to which this gives rise is inherent in the nature of capital.

Before we embark upon a more detailed analysis of the arguments outlined above, let us first examine the distinctions between fixed capital and circulating capital given by the economists. Above, we have already come across a new moment which enters in the calculation of profit as distinct from surplus value.⁽⁵⁾

Similarly, another new moment must emerge now between profit and interest. Surplus value in relation to circulating capital obviously appears as profit, in distinction to interest as surplus value in relation to fixed capital.

Profit and interest are both forms of surplus value. Profit is contained in price, and hence ceases and is realised as soon as capital has reached that point in its circulation at which it is reconverted into money, or passes over from its form as commodity into the form of money. The striking ignorance upon which Proudhon's polemic against interest is based [will be discussed] later on.

(Yet, lest we forget it, here once more od vocem* Proudhon: The problem of SURPLUS VALUE, which is a source of much trouble for all Ricardians and anti-Ricardians, is solved by this bold thinker simply by mystifying it. "Tout travail laisse un surplus", "je le pose en axiome"..}' The basic formula to be looked up in my notebook.⁽⁶⁾

The fact that labour is done in excess of necessary labour is turned by Proudhon into a mystical property of labour. Surplus value cannot be explained by the mere growth of the productive power of labour; for while the latter may increase the quantity of products produced in a definite labour time, it can give no PLUS-VALUE to them. It is only relevant here in as much as it sets free SURPLUS TIME, TIME for labour in excess of necessary labour. The sole extra-economic FACT here is that man does not need all his time for the production of NECESSARIES, that he has free time at his disposal in excess of the labour time necessary for subsistence, and hence can use it also for surplus labour. But there is nothing mystical about this, since his NECESSARIES are small in the same measure as is his labour power⁽⁷⁾ in the primitive condition. And wage labour, in general, makes its appearance only when the productive power has already been developed to such an extent that a significant amount of time has been set free. This setting-free is already an historical product here. Proudhon's ignorance is only EQUALLED BY Bastiat's décroissante rate du profit qui est supposé d'être l'équivalent d'une rate du salair croissante.⁽⁸⁾ Bastiat gives a dual expression to this NONSENSE, which he borrows from Carey: firstly, the rate of profit falls (i.e. the ratio of surplus value to the capital employed); secondly, prices fall, but value, i.e. the total sum of prices, increases. This merely means that what grows is the GROSS PROFIT, not the rate of profit.)

Firstly, fixed capital in the sense in which we have used it above. Defined by John St. Mill (Essays on Some Unsettled Questions of Political Economy,) (p. 55) as tied-down capital, capital which is not DISPOSABLE, not AVAILABLE, stuck fast in a particular phase of its overall circulation process. In this sense he correcdy says, as does Bailey too in the above quotations,⁽⁹⁾ that a large part of a country's capital always lies idle.

real. For example, gold is FIXED CAPITAL; FLOATING only as far as it is consumed for GILDING, etc. Ships are fixed capital, ALTHOUGH LITERALLY FLOATING. FOREIGN RAILWAY SHARES ARE ARTICLES OF COMMERCE IN OUR MARKETS; SO MAY OUR RAILWAYS

BE IN THE MARKETS OF THE WORLD; AND SO FAR THEY ARE FLOATING CAPITAL, ON A PAR WITH GOLD" (Anderson, The Recent Commercial Distress, etc., London, 1847, p. 4) (Notebook I, 27).^[9]

According to Say, [fixed capital is] capital

"so engaged in one kind of production that it can no longer be diverted from it to be employed in another kind of production" (Traité d'économie politique, Vol. II, Paris, 1817, p. 430).a

T h e identification of capital with a particular use value, use value for the process of production. T h e fact that capital as value is tied to a particular use value — use value within production — is at any rate an important aspect. It expresses more than does the inability to circulate, which essentially means only that fixed capital is the opposite of circulating capital.

In his Logic of Political Economy ([London, Edinburgh, 1844,] pp. 113-14) (Notebook X, 4),^[10] De Quincey says:

"CIRCULATING CAPITAL, IN ITS NORMAL IDEA, MEANS ANY AGENT WHATEVER" (marvellous logician) "USED PRODUCTIVELY WHICH PERISHES IN THE VERY ACT OF BEING USED."

(According to this, coal would be circulating capital, and so would be oil, but not cotton, etc. It cannot be said THAT COTTON PERISHES BY BEING

TRANSFORMED INTO TWIST OR CALICO, AND SUCH TRANSFORMATION MEANS CERTAINLY

USING IT PRODUCTIVELY!)

"Capital is FIXED, if the object serves, repeatedly, again and again, for the same operation, AND BY HOW MUCH LARGER HAS BEEN THE RANGE OF ITERATIONS, BY SO MUCH MORE INTENSELY is THE TOOL, ENGINE, OR MACHINERY ENTITLED TO THE DENOMINATION OF FIXED" (pp. 113-14) (Notebook X, 4).

According to this, CIRCULATING CAPITAL would perish, be consumed, in the act of production; fixed capital — which for greater clarity is defined as TOOL, ENGINE, OR MACHINERY (and which therefore excludes, e. g., the IMPROVEMENTS incorporated in the soil)—would serve repeatedly for the same operation. T h e distinction concerns here only the technological difference in the act of production; it does not concern the form at all. CIRCULATING and FIXED CAPITAL, in the distinctions given here, may well possess features on the strength of which one agent, "any AGENT WHATEVER", is FIXED capital and the other CIRCULATING, but NEITHER OF THEM [possesses] ANY QUALIFICATION According to Ramsay ([An Essay on the Distribution of Wealth, Edinburgh, London, 1836,] IX, 83-84)"

"only the approvisionnement* is CIRCULATING CAPITAL, because the capitalist MUST PART WITH IT IMMEDIATELY and it does not enter into the process of reproduction at all, but is exchanged direct for living labour, for consumption. All other capital (raw material, too) REMAINS IN THE POSSESSION OF ITS OWNER OR EMPLOYER UNTIL THE PRODUCE IS COMPLETED" (1. C. [p. 21]). "CIRCULATING CAPITAL CONSISTS ONLY OF SUBSISTENCE AND OTHER NECESSARIES ADVANCED TO THE WORKMAN, PREVIOUS TO THE COMPLETION OF THE PRODUCE OF HIS LABOUR" (l.C. [p. 23]).

With respect to the approvisionnement, he is right in so far as it is the only part of capital which circulates during the production phase itself, and from this aspect it is circulating capital par excellence. On the other hand, it is wrong to maintain that FIXED CAPITAL REMAINS IN THE POSSESSION OF ITS OWNER OR EMPLOYER no longer than or only "UNTIL THE PRODUCE IS COMPLETED". Hence later, too, he defines FIXED CAPITAL as

"ANY PORTION OF THAT LABOUR (BESTOWED UPON ANY COMMODITY) IN A FORM IN WHICH, THOUGH ASSISTING TO RAISE THE FUTURE COMMODITY, IT DOES NOT MAINTAIN LABOUR" [p. 59].

(But how many COMMODITIES DO NOT MAINTAIN LABOUR! I. e. do not belong to the articles of the worker's consumption. In Ramsay's view, these are all fixed capital.)

(If the interest on £100 at the end of the first year or of the first three months is £5, then at the end of the first year, the capital will be 105 or 100 (1 + 0.05); at the end of the 4th year, it will=100 (1 + 0.05)" = £121. £H/ioo and £7i,6oo = £121 lis. s/5 farth. or £121 lis. 0.6 farthing. Therefore it yields £1 lis. 8/io farthing over and above 20.)

[VI-28] (In the question posed above,b it is assumed that on the one hand a capital of 400 turns over only once in a year, while on the other [a capital of 100 turns over] four times, in both cases at 5%. In the first case the capital would yield 5% once a year, i.e. 20 on 400; in the second case, 4 x 5%, likewise 20, on 100 in a year. The velocity of circulation would compensate for the size of the capital; just as in simple money circulation, 100,000 thaler which circulates three times a year is=to 300,000, but so also is 3,000 which circulates 100 times. But if the capital circulates four times a

a Means of subsistence.— Ed. b See this volume, pp. 18-19.— Ed.

year, it is possible that the surplus gain itself is added to the capital in the second turnover and turned over with it. In this way the difference of £1 lis. 0.6 farthing would come about. But this difference in no way follows from the presupposition. Only the abstract possibility exists. What follows from the presupposition is, rather, that three months are necessary to turn over a capital of £100. Then, if, e.g., the month = 30 days, to turn over a capital of £105 — assuming the same turnover ratio, the same relation of the turnover time to the size of the capital — would take not 3 months

90 x 105 9,450 . b u t * 105:x = 100:90; x = = — = 94^[5]/io days = 3 months 100 100 ' 4'/2 days. T h e first difficulty is thereby completely resolved.)

(The fact that a larger capital with a slower turnover does not produce more surplus value than a smaller capital with a relatively more rapid turnover, in no way means in itself that a smaller capital turns over more rapidly than a larger one. In so far as the larger capital consists of more fixed capital and must seek out more distant markets, this is indeed the case. T h e size of the market and the velocity of circulation are not necessarily inversely related. This relationship only occurs when the available physical market is no longer the economic market, i.e. when the economic market moves farther and farther away from the place of production. Incidentally, to the extent that this does not stem from the mere distinction between fixed and circulating capital, the moments determining the circulation of the different capitals cannot, as yet, be discussed here at all. It may be observed in passing that in so far as trade posits new points of circulation, i.e. brings different countries into the sphere of commerce, discovers new markets, etc., this is something quite different from the mere circulation costs, which are required to effect a definite number of exchange operations. It is the positing of exchange itself, not of operations of exchange. Creation of markets. This point will have to be considered specially, before we HAVE DONE WITH CIRCULATION.)

Let us now continue our examination of the views on "FIXED"

a n d "CIRCULATING CAPITAL".

"Depending on whether capital is more perishable or less perishable, i.e. must be reproduced more frequently or less frequently in a given period of time, it is called circulating capital or fixed capital. Furthermore, capital circulates, or returns to its employer, in very unequal times. E.g., the wheat bought by a farmer to sow is comparatively a fixed capital to the wheat purchased by a baker to make into loaves" (Ricardo, [On the Principles of Political Economy, and Taxation, 3rd edition, London, 1821, pp. 26-27,] VIII, 19)^[1]*

Then he also remarks:

"Different proportions of fixed and circulating capital in different trades; different durability of fixed capital itself" (Ricardo, I.e. [p. 27]).

"Two kinds of COMMERCE may employ capital of equal value, but it may be very differently divided with respect to the part which is fixed, and that which is circulating. They may even employ an equal value of fixed capital and of circulating capital; but the durability of the fixed capital may be very unequal. E.g., one may have steam-engines to the value of £10,000, the other, ships." (This from the translation of Ricardo's book [published] by Say, [Des principes de l'économie politique et de l'impôt, 2nd éd.,] Vol. I, [Paris, 1835,] pp. 29, 30).

What is wrong, from the outset, is that, according to Ricardo, capital is "more or less perishable". Capital as capital, value, is not perishable. Yet the use value in which the value is fixed, in which it exists, is "more or less perishable" and must therefore "be reproduced more frequently or less frequently in a given period of time". Hence the distinction between fixed capital and circulating capital is reduced here to the greater or lesser necessity to reproduce a given capital, in a given period of time. This is one distinction made by Ricardo.

The different degrees of durability or different degrees of fixity of capital, i.e. the different degrees, the relative duration of the relative fixity, is the second distinction. So that fixed capital itself is fixed more or less. The same capital appears in the same business in two different forms, particular modes of existence, as fixed and circulating, hence exists doubly. To be fixed or circulating appears as a particular determinateness of capital, apart from that of being capital. But it necessarily must proceed to this particularity.

Finally, as [regards] the third distinction, "that capital circulates, or returns, in very unequal times", Ricardo means by it, as his example of the baker and the farmer shows, merely the difference in the time for which capital in different branches of business, according to their specificity, is fixed, engaged in the phase of production as distinct from that of circulation. Fixed capital therefore occurs here as we had it before, as fixedness in each phase; except that the specifically longer or shorter fixedness in the phase of production, in this definite phase, is regarded as positing a characteristic feature, a particularity, of capital.

Money sought to posit itself as imperishable value, as eternal value, by relating negatively to circulation, i.e. to exchange with real wealth, perishable commodities, which are dissolved in transient enjoyments, as Petty very neatly and very naively puts it.⁽¹⁰⁾

In capital, the imperishability of value is posited (TO A CERTAIN DEGREE) in that capital, while of course embodying itself in, adopting the form of, perishable commodities, just as constantly changes form, alternately adopting its eternal form as money and its perishable form as commodities. The imperishability is posited as the only thing it can be, perishability that is perishable — process — life. But capital maintains this ability only by constantly sucking in, vampire-like, living labour as its life-blood.

The imperishability — the durability of value in its form as capital — is only posited by reproduction, which itself is dual, reproduction as commodity, reproduction as money and unity of these two reproduction processes. When reproduced as a commodity, capital is fixed in a particular form of use value, and hence is not universal exchange value, or indeed realised value, as it should be. That it has posited itself as value in the act of reproduction, in the production phase, it only proves through circulation. The greater or lesser perishability of the commodity in which [VI-29] value exists, requires slower or more rapid reproduction of that value, i.e. repetition of the labour process.

The particular nature of the use value in which value exists, or which now appears as the body of capital, appears here as itself determining the form and the action of capital; as giving one capital a particular quality as compared with another; as particularising it. Hence, as we have already seen on repeated occasions, nothing is more mistaken than overlooking the fact that the distinction between use value and exchange value, which in simple circulation, to the extent that it is realised, lies outside the economic determination of form, lies outside it in general. We have found, rather, that at the different stages of the development of economic relations exchange value and use value are determined in different relations, and that this determinateness itself appears as a different determination of value as such.

Use value itself plays a role as an economic category. Where precisely it does so, emerges from the development itself. E.g. Ricardo, while believing that bourgeois political economy deals only with exchange value and treats use value merely as exoteric, derives precisely the most important determinations of exchange value from use value, from their mutual relation: for instance, rent, the minimum level of wages, and the distinction between fixed and circulating capital, to which precisely he attributes a very important influence on the determination of prices (THROUGH THE DIFFERENT

REACTION PRODUCED UPON THEM BY A RISE OR FALL IN THE RATE OF WAGES). Similarly in the relationship of demand and supply, etc.

The same determination appears once in the determination of use value and then in that of exchange value, but at different stages and with different significance. Using is consuming, whether for production or for consumption. Exchange is this act mediated by a social process. The using itself may be posited by, and be a mere consequence of, exchange; on the other hand, exchange may appear simply as a moment of using, etc. From the standpoint of capital (in circulation), exchange appears as the positing of its use value; while, on the other hand, its use (in the act of production) appears as positing for exchange, as the positing of its exchange value.

It is the same with production and consumption. In the bourgeois economy (as in every economy) they are posited in specific distinctions and in specific unities. The point is, precisely, to understand this differentia specifica. Mr. Proudhon's or the social sentimentalists' [assertion] that they are the same gets one nowhere.^[3]

The good thing about Ricardo's analysis is that, to begin with, the moment is emphasised of the necessity of more rapid or slower reproduction; that, hence, the greater or lesser perishability, the slower or more rapid consumption (in the sense of self-consumption), is considered with respect to capital itself. I.e., the relationship of use value for capital itself.

Sismondi, on the contrary, at once introduces a determination which is initially exoteric to capital: direct or indirect consumption by man, i.e. whether the object is a direct or an indirect means of subsistence for him. He associates this with the more rapid or slower consumption of the object itself. The objects which serve directly as means of subsistence are more perishable, because intended for consumption, than those which help to make means of subsistence. The latter type of objects are meant to be durable; their perishability is fate. He says:

"Fixed capital is consumed slowly, in an indirect manner, to help to reproduce what man destines for his use; circulating capital never ceases to be directly employed for the use of man. Whenever a thing is consumed, it is consumed for one person sans retour⁽¹¹⁾; at the same time, there may be a person for whom its consumption ed., Vol. I, Paris, 1827, p. 95] VI).^[13]

He also represents the relationship thus:

"The first transformation of the annual consumption into permanent installations suitable for increasing the productive forces of future labour [is] fixed capital; this first labour is always accomplished by a labour, represented by a wage, exchanged for means of subsistence, which the worker consumes in the process of labour. Fixed capital is consumed gradually" (i.e. is gradually used up). Second transformation: " Circulating capital consists of the seeds to be worked up by labour (raw material) and the worker's consumption" (I.e. [pp. 97-98, 94]).

This is more relevant to the origin [of capital]. Firstly, the transformation of fixed capital itself into what is merely a stationary form of circulating capital, fixed circulating capital; secondly, the purpose: the one is intended to be consumed as means of production, the other as product; or the different ways in which a thing is consumed, determined by its role among the conditions of production in the production process.

Cherbuliez simplifies the matter in the sense that circulating capital [is] the consumable, fixed capital the non-consumable, part of capital.^[3] (The one can be eaten up, the other cannot. A VERY EASY

METHOD OF TAKING THE THING.)

Storch, in a passage already cited above⁽¹²⁾ (34 in the Notebook), vindicates for circulating capital in general the property of capital to circulate. But he refutes himself by arguing⁽¹³⁾ that

"all fixed capital is originally derived from circulating capital and must constantly be maintained at the expense of the latter".⁽¹⁴⁾

(Hence it derives from circulation, or is itself circulating in its first moment and constandy renews itself by means of circulation; consequently, though it does not enter into circulation, circulation enters into it.) Storch adds further on:

'Wo fixed capital can bring in revenue except by means of circulating capital" (26, b Notebook).⁽¹⁵⁾

We shall come back to this later.

//"Reproductive consumption is not, properly speaking, an expense, but merely an advance, since it is reimbursed to him who grants it." Storch's polemic against Say [Considérations etc.], p. 54 (p. 5b, second notebook on Storch).

(The capitalist gives back to the worker a part of his own surplus labour in the form of an avance, for which he must reimburse the capitalist not merely with an equivalent, but with surplus labour.)//

(The formula for the calculation of compound interest is: S= c (1 + i)⁽¹⁶⁾. (Sis the total volume of capital c after the lapse of n years at an interest rate of i.)

The formula for the calculation of an ANNUITY is:

x (the ANNUITY) = --.) i+(i +o+(i +/)2+ •.. +(i+«r_1

In the preceding analysis, we divided capital up into constant value and variable value? This is always correct when capital is considered within the production phase, i.e. in its immediate valorisation process. How capital itself, as presupposed value, may alter its value, depending upon whether its reproduction costs rise or fall, or also as a result of a fall in profits, etc., obviously does not belong here, where the general concept of capital is discussed, but in the section dealing with capital as real capital, as the reciprocal effect of many capitals upon each other.

//Because competition appears historically as the dissolution of guild compulsion, government regulation, internal tariffs and the like, within the country, and as the abolition of shutting-off, prohibition or protection, on the world market — in short, because it appears historically as the negation of the limits and barriers peculiar to the production stages preceding capital — and because historically it was quite correctly described and [VI-30] advocated by the Physiocrats as laissez faire, laissez passer, it has accordingly been considered in terms of that, purely negative, its purely historical, aspect. On the other hand, this has led to the even greater stupidity of regarding competition as the clash of the un-fettered individuals actuated only by self-interest — as the mutual repulsion and attraction of the free individuals, and hence as the absolute form of existence of free individuality in the sphere of production and exchange. Nothing could be further from the truth.

(1) If free competition dissolved the barriers of earlier production relations and modes of production, one must d'abord⁽¹⁷⁾

take into account that what was a barrier to free competition, was an immanent limit for earlier modes of production, within which they spontaneously developed and moved. These limits became barriers only after the productive forces and relations of intercourse had attained a level of development sufficient for capital as such to begin to act as the regulating principle of production. The limits it swept away were barriers to its movement, development, realisation. In so doing, it by no means abolished all limits, or all barriers, only the limits that did not correspond to it, that were barriers to it. Within its own limits — much as they may appear, from a higher viewpoint, as barriers to production and be posited as such by capital's own historical development — it feels itself to be free, unconfined, i.e. limited only by itself, only by its own conditions of life. Just as guild industry in its heyday found in the guild organisation absolutely the kind of freedom which it needed, i.e. the production relations which corresponded to it. Indeed, it posited these relations out of itself and developed them as its own immanent conditions, hence not at all as external and restricting barriers. From the historical aspect, the negation of the guild system, etc., by capital through free competition merely means that capital, once it had grown strong enough, tore down, by means of the mode of intercourse adequate to it, the historical barriers which hindered and impeded the movement adequate to it.

Yet competition is far removed from having only this historical significance or from being only this negativity. Free competition is the relation of capital to itself as another capital, i.e. the real behaviour of capital as capital. It is only at this point that the inner laws of capital — which only appear as tendencies in the initial historical stages of its development — are first posited as laws; production based upon capital only posits itself in its adequate forms in so far and to the extent that free competition is developed. For free competition is the free development of the mode of production based upon capital; the free development of its conditions and of its process as constantly reproducing these conditions.

In free competition, it is capital that is set free, not the individuals. As long as production based on capital is the necessary, hence the most appropriate, form for the development of society's productive power, the movement of individuals within the pure conditions of capital appears as their freedom. But then it is also dogmatically affirmed as such by continual references to the barriers which free competition has demolished. Free competition is the real development of capital. By means of it, that which corresponds to the nature of capital, to the mode of production based upon capital, to the concept of capital, is posited as an external necessity for the individual capital. The reciprocal compulsion exerted under free competition by capitals upon one another, upon labour, etc. (the competition of workers among themselves is merely another form of the competition of capitals) is the free, and at the same time real, development of wealth as capital. This is so much the case that the most profound economic thinkers, e.g. Ricardo, presuppose the absolute dominance of free competition as essential for studying and formulating the adequate laws of capital, which simultaneously appear as the vital tendencies dominating it.

On the other hand, free competition is the adequate form of the productive process of capital. The further free competition is developed, the purer do the forms of the movement of capital emerge. What Ricardo, e.g., has thereby admitted, malgré lui, is the historical nature of capital, and the restricted character of free competition, which is merely the free movement of capitals, i.e. their movement within conditions which are not part of any dissolved earlier stages, but are capital's own conditions. The dominance of capital is the presupposition for free competition, just as the Roman imperial despotism was the presupposition for the free Roman "private law".

As long as capital is weak, it itself still looks for the crutches of past modes of production, or of modes of production which pass away with its rise. As soon as it feels strong enough, it throws the crutches away and moves according to its own laws. As soon as it begins to feel that it itself is, and is known to be, a barrier to development, it takes refuge in forms which, while apparently completing the dominance of capital by curbing free competition, simultaneously proclaim the dissolution of capital and of the mode of production based upon it. What is inherent in the nature of capital is actually externalised, as an outward necessity, only by competition, which is merely the forcing by the many capitals of the immanent determinations of capital upon one another and upon themselves. Hence not a single category of the bourgeois economy, not even the most basic one, e.g. the determination of value, really comes into its own [other than] through free competition, i.e. through the actual process of capital, which appears as the reciprocal effect of all capitals and all other relations of production and commerce determined by capital upon one another.

Hence, on the other hand, the absurdity of regarding free competition as the ultimate development of human freedom, and the negation of free competition as equivalent to the negation of individual freedom and of social production based upon individual freedom. It is merely the kind of free development possible on the limited basis of the domination of capital. This type of individual freedom is therefore, at the same time, the most sweeping abolition of all individual freedom and the complete subjugation of individuality to social conditions which assume the form of objective powers, indeed of overpowering objects — objects independent of the individuals relating to one another.

To bring out the essence of free competition is the only rational answer to its glorification by the prophets of the MIDDLE CLASS and to its anathematising by the socialists. If it is argued that within free competition individuals, in pursuing their purely private interest, realise the common or RATHER the general interest, this means merely that they press upon each other under the conditions of capitalist production and hence their mutual repulsion itself only reproduces the conditions under which this interaction takes place. Incidentally, once the illusory view of competition as the alleged absolute form of free individuality begins to vanish, this is proof that the conditions of competition, i.e. of production based upon capital, are already felt to be and thought of as barriers, and therefore already are barriers, and to a constantly increasing degree. The assertion that free competition is equivalent to the ultimate form of development of the productive forces, and hence of human freedom, boils down to the assertion that the rule of the MIDDLE CLASS is the terminal point of world history — certainly an agreeable thought for the parvenus of the day before yesterday.//

[VI-31] Before continuing our survey of views on fixed and circulating capital, let us for a moment return to something discussed earlier.

For the time being we assume that production time coincides with labour time. The CASE in which there are, within the production phase itself, interruptions conditioned by the technological process will be considered later.

Suppose that the production phase of a capital is 60 working days, 40 of which are necessary labour time. Then, under the law developed earlier, surplus value, or the new value posited by capital, i.e. the alien labour time appropriated, = 60 — 40; = 20. Let this surplus value (=20) be represented by S, and the production phase — or the labour time used during the production phase — by p. In a given period of time, (which we shall call Z)—e.g., 360 days — the total value produced can never be greater than the [sum of value produced within the] number of production phases contained in 360. The highest possible coefficient of S — i.e. the maximum of surplus value that capital can produce under the given assumptions — is equal to the number of repetitions of the production of S in 360 days. The maximum number of times this process — the reproduction of capital, or rather, now, the reproduction of its production process — can be repeated is determined by the ratio of the production period to the overall time period within which the former is to be repeated. If the given time=360 days, and the duration of the production phase=60 days, then

or — , i.e. 6, is the coefficient which shows how many times p 60 P 7 r is contained in Z, or how many times, given its own immanent limits, the process of reproduction of capital can be repeated in 360 days.

Self-evidently, the maximum quantity of S that can be produced, i.e. of surplus value that can be posited, is determined by the number of processes in which 5 can be produced in a given

Z . . Z time period. — expresses this relation. The quotient of — or ^ is

the largest possible coefficient of S in the time period of 360 days,

SZ in general in Z. — or Sq is the maximum [surplus] value [that

p z can be produced in Z]. If — = q, Z=pq, i.e. the entire duration of

Z would be production time: the production phase p is repeated as many times as it is contained in Z. The total [surplus] value produced by capital in a given period of time would then be=to the surplus labour appropriated by it in one production phase X by the number of times this production phase is contained in the given time.

Hence, in the above example, = 20-^[36]%o =20x6= 120 days. The

Z magnitude q, i.e. — , would express the number of turnovers of

Z capital; but since Z=pq, p=—, i.e. the duration of one production

phase would be equal to the total time divided by the number of turnovers. One production phase of capital would therefore equal one turnover. Turnover time and production time would then be completely identical; hence the number of turnovers would be determined exclusively by the ratio of one production phase to total time.

However, in this case, circulation time has been assumed as=0. Actually, it has a certain length, which can never become=0. Now assume that for every 60 days' production time or 60 production days, 30 circulation days are required. This circulation time, required for p, can be designated as c. In this case, one turnover of capital, i.e. the total time it requires before it is in a position to repeat the valorisation process, the positing of surplus value, is equal to 3 0 + 6 0 , = 9 0 days (=p+c) (It/ (turnover) = p + c). In a period of 360 days, a turnover taking 90 days can be

repeated only , i.e. 4 times. The surplus value of 20 could

then be posited only 4 times; 2 0 x 4 = 8 0 . In 60 days, the capital produces 20 surplus days; yet it must circulate for 30 days, i.e. it cannot posit any surplus labour, any surplus value, during these 30 days. For the capital this is the same (so far as the result is concerned) as if in 90 days it had only posited a surplus value of 20 days. Formerly, the number of turnovers was determined by

7 • • • 7 7 — ; now it is determined by , or —. Formerly, the maximum P ^[7]p + c U r sz [surplus] value was — ; the surplus value actually produced now is - T - ; (20-=20 = 2 0 x 4 = 8 0 ) . T h e number of P + c 60 + 30 90 turnovers is, therefore, equal to the total time divided by the sum of the production time and the circulation time; and the total [surplus] value is S multiplied by the number of turnovers. But this formula is not enough yet to express the relations of surplus value, production time and circulation time.

The maximum of [surplus] value creation is expressed by the SZ formula — , the maximum limited by circulation time is given by SZ SZ -qj- (or -=-)• Subtracting the second quantity from the first, we

get:

SZ SZ _ SZ(p + c) — SZp SZp + SZc-SZp SZc P P + c P{P + c) PiP + c) Pip + c)'

T h e difference is therefore , or X—:—. T h e p(p + c) p P + c SZ magnitude r e > or 5' , as we may represent [surplus] value in the second determination, is expressed by the formula

---

Endnotes

[2] Marx dealt with the circuit and turnover of capital in the preceding part of Section Two of the "Chapter on Capital" (see present edition, Vol. 28, pp. 439-72), but then he interrupted his exposition of these problems and wrote a section about bourgeois theories of surplus value and profit (see Vol. 28, pp. 473-537). He did, however, return to the topic.— 7

a A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. II, London, 1836, pp. 271-85, and Vol. Ill, 1839, pp. 70-106. (See present edition, Vol. 28, p. 149.)— Ed. b Psalms 42:1.— Ed.

a See present edition, Vol. 28, pp. 87-89.— Ed.

[12] Marx quotes Ricardo from his Excerpt Notebook VIII (London, April-mid-May 1851).—33, 77

a J. St. Mill, Essays on Some Unsettled Questions of Political Economy, London, 1844, pp. 55, 56.— Ed. b Overhead costs of production.— Ed.

(1) J. Wade, History of the Middle and Working Classes, 3rd ed., London, 1835, pp. 161, 162 and 164.— Ed.

(2) A wasted fund.— Ed.

(3) Marx reproduces these and the following passages from Storch in German translation, using many French words and phrases.— Ed.

3-785

(4) In the true sense.— Ed.

[6] When speaking about circulation between dealers, and that between dealers and consumers, Marx has in mind Adam Smith's division of the whole circulation into these two different branches (see Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. II, Book II, Ch. II).—27, 65

3«

(5) See present edition, Vol. 28, p. 485.— Ed.

(6) As regards.— Ed.

(7) "All labour gives rise to a surplus", "I take it as an axiom."—Ed.

(8) Falling rate of profit, supposed to be the equivalent of a rising rate of wages.— Ed.

(9) This refers to the quotations, in the previous section, from [S. Bailey,] Money and Its Vicissitudes in Value, London, 1837, and J. St. Mill, Essays on Some Unsettled Questions of Political Economy. See present edition, Vol. 28, pp. 503-04, 535-36.— Ed.

[9] Marx is referring to Excerpt Notebook I (London, September 1850).—30

[10] The reference is to Excerpt Notebook X (London, mid-June-July 1851).—30, 102

WHICH WOULD ENTITLE IT TO THE "DENOMINATION" OF CAPITAL. a Marx quotes in French.— Ed.

* On the other hand, it could be assumed that, with continuity of the production process, the surplus obtained is converted into capital every 3 months.

(10) W. Petty, Several Essays in Political Arithmetick, London, 1699, pp. 178-79 and 195-96.— Ed.

[13] The Roman numeral refers to a page in Marx's Excerpt Notebook that has not

a See present edition, Vol. 28, pp. 31 and 339-40.— Ed.

(11) Irrevocably.— Ed.

(12) A. Cherbuliez, Richesse ou pauvreté Paris, 1841, pp. 16-19.— Ed.

(13) See this volume, p. 24.— Ed.

(14) H. Storch, Cours d'économie politique, Vol. I, p. 246.— Ed.

(15) Here and below Marx quotes Storch in French.— Ed.

(16) See present edition, Vol. 28, pp. 291-323 and 352-53.— Ed.

(17) First of all.— Ed.

[36] Here Marx criticises the views of the so-called "little shilling men", the Birmingham school of bourgeois political economy initiated by the banker Thomas Attwood. These views were set out in The Currency Question. The Gemini Letters, a book published anonymously by Thomas Wright and John Harlow, who called themselves Gemini. On this school, see also Volumes I and III of Capital (present edition, vols 35 and 37).—185, 319

[7] Marx has in mind Notebook XVI of the 24 notebooks of excerpts on political economy he made in the early 1850s. The notebook contains excerpts from Gratuité du crédit. Discussion entre M. Fr. Bastiat et M. Proudhon, Paris, 1850. Proudhon's formula on the surplus added by labour is to be found on p. 200 of this book, as well as in Proudhon's Système des contradictions économiques, ou Philosophie de la misère, Vol. I, Paris, 1846, p. 73. Cf. present edition, Vol. 28, p. 531. For criticism of this formula, see also Marx's work The Poverty of Philosophy (present edition, Vol. 6, pp. 152-60).—29

[3] In his manuscript, to denote these categories Marx uses mostly the French terms "capital circulant" and "capital fixe", but sometimes he also uses the German ones "zirkulierendes Kapital" and "fixiertes Kapital", or the English "circulating capital", "floating capital", and "fixed capital".— 9, 201, 515, 526

[4] This refers to the discovery of rich deposits of gold in Australia in 1851. The development of these deposits, alongside the extraction of gold discovered in California in 1848, spurred industrial and stock-exchange activity in capitalist countries.—11, 265

[61] Marx contributed to the New-York Daily Tribune from August 1851 to March 1862. Articles by Marx and Engels in the New-York Daily Tribune dealt with key issues of foreign and domestic policy, the working-class movement, the economic development of European countries, colonial expansion and the national liberation movement in colonial and dependent countries. Their profundity, political insight and literary merits immediately attracted attention. The New-York Daily Tribune's editors publicly acknowledged their quality. The articles reached Europe, too. For example, in his speech in the House of Commons on July 1, 1853, John Bright, leader of the Free Traders, specially noted Marx's article on Gladstone's budget, published in the Tribune (see present edition, Vol. 12, p. 176). The Tribune's editors sometimes took liberties with articles, printing them unsigned, in the form of editorials, especially from September 1854 onwards. In some cases they tampered with the text, making insertions, some of which were in direct contradiction with the content of the articles. Marx protested repeatedly against these practices. In the autumn of 1857, he was forced to reduce the number of his contributions in view of the Tribunes weak financial position, a result of the economic crisis in the USA. He ceased contributing to the paper altogether after the outbreak of the American Civil War, mainly because the Tribune had come under the influence of people advocating a compromise with the slave-owning states.—265

[1] This is the concluding part of Marx's economic manuscript of 1857-1858. Consisting of seven large notebooks, which Marx numbered I-VII, the manuscript is the first rough draft of Capital. On the cover of the last, seventh, notebook, Marx wrote Political Economy, Criticism of in English and "Fortsetzung [Continuation]" in German. This implies that Notebook VII is a continuation of the preceding six notebooks and that Marx did not consider it to be the concluding one. The words Political Economy, Criticism of can be regarded as the author's title for the whole manuscript. The words "rough draft" are taken from Marx's letter to Engels of November 29, 1858 in which Marx calls his economic manuscript of 1857-1858 a Rohentwurf (Rough Draft). The manuscript is, indeed, a rough draft, for it is unfinished and breaks off in mid-sentence. A major part of the manuscript is included in Volume 28 of the present edition and begins with Chapter II—"Chapter on Money", followed by a long third chapter, "Chapter on Capital". Notebook VII contains the conclusion ot this chapter, followed by fragments intended as additions to the two chapters — on money and on capital. The Economic Manuscript of 1857-1858 is being published in the sequence given by Marx. The numbers of the notebooks are indicated in Roman numerals and the pages in Arabic ones, in square brackets. The square brackets in the manuscript are, therefore, replaced by oblique lines. Some passages have been transposed — as indicated by Marx in the manuscript or where there are obvious additions relevant to the preceding text. All such cases are mentioned in the footnotes, which also indicate passages crossed out by Marx and sometimes reproduce them. Where Marx, in quoting, gives references to pages of his excerpt notebooks, these have been supplemented, in brackets, with references to the pages of the editions Marx used. Where he merely gives the authors' names, the titles of the quoted works have been supplied. Foreign words and expressions, including Greek and Latin, are preserved when the author used them for stylistic or terminological purposes. English phrases, expressions and separate words are given in small caps. Quotations from English sources are given according to the editions used by the author. In all cases the form in which Marx quoted is respected. The language in which Marx quotes is indicated, unless it is German. The manuscript was first published in full in the language of the original (German) in Karl Marx, Grundrisse der Kritik der politischen Oekonomie (Rohentwurf). 1857-1858, Moscow, 1939-41 and reproduced by Dietz Verlag, Berlin, in 1953. In English, the manuscript was published in full 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. Separate extracts had been published previously in Marx's Grundrisse, ed. David McLellan, Macmillan Press Ltd., London, 1971.—Title-page

[5] The reference is to the 1845 Brussels Excerpt Notebook. Other quotations from Storch are on pages 26, 34-35 of this notebook.— 24, 118