A Contribution to the Critique of Political Economy Mercantile Capital. Money-dealing Capital
[MERCANTILE CAPITAL. MONEY-DEALING CAPITAL][12]
[XV-944][13] It appears entirely correct to say: The division of profit into interest and industrial profit becomes evident as soon as there exist 2 classes of CAPITALISTS, MONIED and INDUSTRIAL. The existence of these 2 classes is an expression of that division; but the split must be there (must be possible) for it to appear in the separation of the 2 classes. The profit may, however, be so low, e.g. 2%, that small capitalists are unable to live from it as MONIED CAPITALISTS; but this would not prevent big capitalists from doing so, since the sum total, THE ABSOLUTE AMOUNT, of interest, depends not only on its rate but on the size of the interest-bearing capital.
The level of interest for COMMON AGRICULTURISTS in India, for example, by no means indicates a profit of an extraordinary size. Firstly, the" profit as well as the interest is appropriated in the form of interest, and so is part of wages. (Indirectly also property in capital itself, i.e. here in the conditions of labour.) Secondly: the rate of profit is the higher the lower the mode of production, i.e. the more variable capital is expended in proportion to the total capital; [or] the [XV-945] smaller the amount of AUXILIARY capital in proportion to the capital paid out on labour.[14] Thirdly, to be sure, there is the paucity of the Indian's needs, determined by particular (physical) circumstances. HENCE THE LOW VALUE of his labour capacity.
With the development of monetary wealth (it is this development itself) as opposed to the more restricted forms of AGRICULTURAL and artisan wealth, the relation in which on the one hand the worker still appears as independent, hence not as a wage labourer, but on the other hand the objective conditions of his labour or the product already possess an independent existence alongside him — form the joint property of a special class, the usurers — necessarily develops in all modes of production resting more or less on exchange. This relation shows itself as a detachment of the conditions of labour, which increasingly derive from circulation and depend on it, from the economic existence of the worker, their attainment of autonomy. On the other hand, the worker has not yet been subsumed under the process of capital. Therefore the mode of production, too, is not essentially changed. Where this relation reoccurs within the bourgeois economy, it is in backward branches of industry, or those which are still resisting the transition to the modern mode of production. And it is in those branches that the most odious exploitation of labour takes place. Moreover, the relation between labour and capital does not here bear within itself any kind of basis for the development of new productive power, or the germs of new historical forms. In the mode of production itself, capital still appears here as materially subsumed under the individual worker or the worker's family, whether in handicraft production or in small-scale agriculture. Exploitation of capital takes place, without the mode of production of capital. The rate of interest is very high, because 1) the rate of profit is high, since the proportion of AUXILIARY CAPITAL is small; 2) the interest includes profit; 3) it even includes part of the wage; and 4) it is not only surplus value and wages but the appropriation of the conditions of labour themselves. A part of the interest cannot be paid; the conditions of labour are themselves mortgaged (as in India). With industrial capital it goes without saying that the part of the product which represents the conditions of labour falls to the share of the capitalist. This form of usury, in which capital does not take control of the mode of production, hence is capital only formally, presupposes pre-bourgeois modes of production as dominant; but it is reproduced again in bourgeois society in subordinate spheres. In so far as the effect of this capital is not political — dissolution of existing conditions, as in antiquity, etc.— in so far as it has an historical meaning, it is the separation of the conditions of labour from the worker on the one hand; which is the same thing in other words as the formation thereby of monetary wealth which later buys the conditions of production as commodities.[15]
Another historical form of interest (wherever there is slavery, serfdom, and wealth and income founded thereon): lending of capital to wealth engaged in consumption. This appears historically important here as itself a process by which capital originates, in that the income, rent a n d often the LAND TOO OF THE LANDED PROPRIETORS
ACCUMULATES AND BECOMES CAPITALISED IN THE HANDS OF THE USURERS. This is one of the forms in which money, circulating capital, accumulates in the hands of a class independent of landed property.
Trade develops with the development of capitalist production, and at the same time the necessity arises for the producer to produce commodities, partly to buy the elements of these, partly to sell the product, to pay within certain due dates, etc. In short, the money form of the commodity becomes essential to him. This leads to an extension of usury, which now already begins to perform increasingly the function of interest-bearing capital in the modern sense. But the money still lies in part in the hands of old-fashioned usurers, a few money-dealers, monopolists, who thus hold sway over the emerging industries. Hence the struggle, in the 17th century for example.[16]
It is clear that where trade and industry develop in towns, money-dealing also develops. Here usury is already more subsumed in relation to this form of capital (merchants' capital). It first becomes subordinated with the development of forms of credit in which payment in cash or payment in gold, silver, loses its significance. But a new class of parasites develops on this basis.
For the development of usury nothing is needed except a certain development of commodity production and of the necessity of making payments in money. There exists on the one hand, in the SLAVEHOLDER, FEUDAL LORD, a person who possesses SURPLUS labour and who turns it over to or shares it with the usurer. Similarly a class of merchants, alongside whom the hoard-builder who has developed into a usurer settles down, sharing with them their profits, which are for the most part PROFIT UPON EXPROPRIATION.[17] In relation to the small-scale producers, finally, it is a manner of reducing their income to a mere wage and appropriating the conditions of labour.
[XV-946] Thus as long as money capital retains its old-fashioned structure of usury, the rate of interest is compulsorily forced DOWN by law. As soon as the form of credit has been created — in which all the latent money capital of society is placed at the disposal of industrial production — as soon as money capital has become a commodity, subjected to competition, there is an end to the forcible methods of subjecting it to industrial capital and reducing it to a mere form, a moment of the latter.
We have seen[3]: The less developed the character of the product
a K. Marx, A Contribution to the Critique of Political Economy. Part One (present edition, Vol. 29, p. 367).— Ed.
as commodity, the less exchange value takes control of production over the whole of its breadth and depth, the more does money appear as actual wealth, as abstract wealth, vis-à-vis the restricted modes of representation it has in use values. Hoard formation is based on this. Leaving aside its functions of world money and hoard, it is precisely in the form of the means of payment that money appears as the absolute form of the commodity. And it is its development as means of payment which chiefly gives rise to interest, and develops money as money capital.[18] What spendthrift or corrupting wealth wants is money as money, AS THE GENERAL POWER OF PURCHASING. (Also for paying debts.) Where the small producer needs money above all, is for payment. In both cases money is used as money. Hoard formation, on the other hand, only becomes real, fulfils its dream, in usury. What is demanded of the usurer is not capital, but money as money, and through interest he converts this hoard of money for himself into capital, self-valorising value, a means whereby he takes control of part of the surplus labour and part of the conditions of production themselves, even if they remain nominally independent of him. Usury exists apparently in the pores of production, like the gods in the system of Epicurus.[19]
This form of interest-bearing capital admittedly presupposes that production has developed the circulation of commodities so far that it has progressed to the formation of money, and developed money in its various functions. But it depends on a situation in which the part of the product which is converted into a commodity still only forms a relatively small part of production, and in which the conversion of the commodity into money is still difficult, and money itself, the existence of the commodity as exchange value, is still exceptional. This kind of money capital, although it presupposes the production of commodities, cannot be derived directly from the relation between commodity and money. The more the commodity develops as a commodity, the more does money develop as its pure form; and the more is the price at which the commodities are sold determined by their value. It is competition as form of realisation of capital, in which this is paid. That money is paid for money loaned is a simple consequence of the need TO HAVE IT ON ANY PRICE, and the hoard-forming usurer exploits this need.[20] Money is a condition, a necessary condition, and it is the more difficult to obtain the less the commodity form is the general form of the product. It is a condition for production, even though still very extraneous, and a condition for extravagance and to fulfil the need for corruption. As such a condition, as money, it is sold. Merchants' wealth is older than interest-bearing money capital to the extent that it emerges directly from the circulation of commodities, whereas money capital emerges from the privileged position of money which grows out of circulation, and from the need for it as a condition. In the first case the form of circulation is M—C—M (or C—M—C). In the second the result is M — M'; that more money can be made with money. In so far as it attaches itself to commercial capital it has the same relation to it as interest-bearing capital does to capital on the basis of capitalist production in general. In contrast to this, where it exploits small-scale property or extravagant wealth (which itself appropriates the labour of slaves or serfs), it emerges simply from money as money — as hoard, in its function of means of payment, etc., and the price at which it is granted is determined purely by the price the usurer succeeds in extorting. That "nothing is given for nothing", hence nothing is lent free of charge, is already evident from the fact that [XV-947] with the development of the commodity every divestiture appears as an appropriation.[21]
Commercial capital, or money as it appears in merchants' wealth, is the first form of capital, i.e. value which proceeds exclusively from circulation (from exchange), preserves, reproduces, and increases itself within it; and thus the exclusive purpose of this movement is exchange value. There are two movements: buying in order to sell, and selling in order to buy, but M—C—M is the predominant one. Money and its increase predominate as the exclusive purpose of the operation. Commercial capital is money as the mediating movement of circulation. Money similarly appears here as an end in itself, without on that account rigidifying in its metallic existence. It is here the living transformation of value into the two forms of the commodity and money; the indifference of value towards the particular use values in which it is incorporated, and at the same time its metamorphosis into all of these forms, which appear, however, merely as disguises for it. Thus while the action of commerce gathers together the conditions of circulation, and merchants' wealth is therefore on the one hand the first form of capital's existence, and also appears historically in this way, on the other hand this form appears as contradictory to the concept of value. To buy cheap so as to sell dearer is the law of commerce. Hence not the exchange of equivalents. The concept of value is present to the extent that the different commodities are all value, and therefore money; equal, from the qualitative point of view, expressions of social labour. But they are not equal magnitudes of value. It should in general be noted that when products are first exchanged as commodities the quantitative ratio in which they are exchanged is d'abord(1) directly a matter of accident. They are posited as commodities to the extent that they are exchangeable at all, i.e. expressions of the same thing. But it is not thereby posited that they are equivalents, in so far as each contains the same amount of labour time. Continued exchange and therewith reproduction increasingly eliminates this accidental character. At first, however, this does not operate for the producer on the one side and the consumer on the other, but rather for the mediating movement between both of them, for the merchant, who compares the money prices and pockets the difference. He posits the equivalence through his own movement. He compares the prices. If the whole of production is based on the exchange value of the product, the value of the commodity is regulated not only by its qualitative but by its quantitative identity. Money as commercial wealth, as it appears embedded in the most divergent forms of society, and at the most distinct stages of the development of the social forces of production, is merely the mediating movement between extremes it does not dominate and presuppositions it does not create.
Money emerges from the mere form of commodity circulation C—M—C not only as measure of values and means of circulation but as absolute form of the commodity and thereby of wealth, as hoard, etc., and its retention and increase as money appears as an end in itself; in the same way, money, the hoard as self-preserving and self-increasing by alienation, emerges from the mere form of merchants' wealth, M—C—M', as a value which increases itself merely by being alienated. Usurers' capital has the same relation to merchants' wealth as interest-bearing money capital has to industrial capital. Usurers' capital, in and for itself, is as far from having an internal limit as is merchants' wealth, which rests on PROFIT UPON EXPROPRIATION. The second depends on fraud, which goes as far as it can, and the first depends on force, which goes as far as it can. That both develop monetary wealth means in fact that they appropriate for themselves the wealth of society in the form of money; that they monopolise the monetary wealth of society.
Independent merchants' wealth — as predominant form of capital — is the achievement by the process of circulation of an independent position vis-à-vis its extremes — and these extremes are the exchanging producers themselves. These extremes remain independent towards this process, this process is, conversely, independent towards them. Here the product becomes a commodity through trade. Trade does not exist because the product is produced from the outset as a commodity (or if it is this is only within narrow limits). Here it is trade which develops the forming of products into commodities; trade is not the movement of produced commodities. Here, therefore, capital first makes its appearance as capital in the circulation process, because this process is altogether the form in which exchange value first moves as in its element; exchange value dominates this form, whose development is the circulation process. What is produced, as a result of this money developed in the circulation process into capital, is money capital quand même* usurers' capital.
[XV-947a] The long and short of this story, the reason why capital develops as commercial capital and usurers' capital — in these two forms as monetary wealth — before its actual shape emerges, the shape in which it subjects production to itself, the shape in which it constitutes the fundamental form of modern society, is this, that the product is first developed as exchange value in circulation, that it first becomes commodity and money in circulation. Capital can be formed in the circulation process, and must be formed in it, before it dominates the extremes of the process — the different spheres of production between which the circulation process mediates. The circulation of money and commodities — hence also money and commodity capital — can mediate between the spheres of production of the most diverse organisations, which by virtue of their internal structure are still chiefly directed towards the production of use value. This achievement of an independent position by the circulation process, whereby the spheres of production' are related to each other by a third element, expresses two things. It expresses both that circulation has not yet taken control of production, but rather relates to it as an indifferent presupposition, a given presupposition, and that the process of production has not absorbed that of circulation as a mere moment of itself. Both these things are apparent in capitalist production. The process of production rests entirely on circulation, and circulation is a mere moment of production, merely the realisation of the product produced as a commodity. The form of capital which it obtains directly out of circulation, that of commercial capital, appears here as merely a form of capital in its movement of reproduction; the same is true of all the forms it assumes as money capital, and the valorisation of money capital as -such — through its mere alienation as commodity — appears as a particular form merely through its valorisation in the production process itself.
Wealth as the subject of consumption. This is at bottom more akin to productive capital than to commercial capital or usurers' capital, because it is a direct appropriation of surplus labour (of the slave, the serf, etc.) through the possession of the conditions of production. But here the worker himself still belongs d'une manière ou d'une autre* to the objective conditions of production. What is predominant is use value. The agents do not come to meet each other as buyers and sellers. The independent forms of exchange value as money and as commodity do not condition the process itself. The slave (not the serf) may be bought as a commodity. But his exploitation does not take place in the form of the exchange of commodities between exploiter and exploited. Slavery, serfdom, are posited by relations independent of production itself — in so far as it is directed to exchange value. The SLAVEHOLDER, FEUDAL LORD, possesses surplus labour in the form of HOMELY VALUES IN USE. The merchant brings him commodities, of which he exchanges very few for the mass of these products. Usury attaches itself here to anticipate the income of the LANDLORD, etc., to provide for him the means with which to purchase the merchant's commodities, and altogether to advance to him that form of wealth through which it always holds power over men and things. On top of this there is the necessity for payment.
Productive classes. To the extent that usury becomes attached to merchants' wealth itself, the latter aims to gain a profit. It therefore pays interest in order to make more profit. Here the interest must already become more moderate, because it must allow the possibility of a profit; it may however, where things are on a small scale, also lead simply to an increase in prices, to which interest and a proportional amount of profit are added. There are natural limits to this increase. With the merchant there is never the compulsion to buy from him BEYOND A CERTAIN PRICE. Thus reproduction is slow despite the high prices, because the market is restricted. Here, then, usury dominates the small, nascent COMMERCIAL and INDUSTRIAL TRADE. On the other hand, trade whose wealth exists only in circulation leads to the absolute dependence of that wealth on circulation, [XV-947b] to the development of due dates of payment, to dependence on the RETURNS, on the payments of others, etc. But in so far as money is means of payment it must absolutely be procured, AT WHATEVER COST.
Here therefore usury — which advances the money — rules unconditionally, prescribes the conditions.
Petty-bourgeois and small peasant industry.[23]
Needs money either as means of purchase or means of payment. As means of purchase chiefly when, in forms of production where the worker must still be the proprietor of his conditions of production, must possess the conditions of production, those conditions are lost to him through accidents or extraordinary vicissitudes, or at least fail to be replaced in the customary course of reproduction. For example, harvest failure or cattle plague, etc. These [corn and cattle] also belong among the conditions of production as means of subsistence and raw material. A mere rise in their price can make him incapable of buying them back with the yield of his product or even replacing them in natura. Examples: the same wars through which the Roman patricians ruined the plebeians, forcing them into military services which prevented them from reproducing their conditions of labour, hence impoverishing them (and this is here the predominant form — impoverishment is here the loss of the conditions of reproduction), filled up their storehouses and cellars with cap-tured copper, the money of that epoch. Instead of giving the plebeians directly the commodities — corn, horses, etc.—they lent them this useless copper, and used the situation to charge enormous, usurious interest rates. Under Charlemagne, who similarly ruined the peasants, all they could do was become serfs instead of debtors. Thus we know that in Africa, as in the Romanian principalities,[23] etc., starvation leads people e.g. to sell themselves as slaves to those who are richer. This for the epoch-making moments at which money develops as usurers' capital. If this is considered in detail, the retention or the loss of the conditions of production depends for the individual producer on 1,000 fortuities, and every such accident of loss — of impove-rishment—is a point at which the usurer-parasite can strike root. For a small peasant it merely needs the death of a cow, for a small cobbler it merely needs a rise in the price of leather, to make both of them unable TO BEGIN their reproduction ANEW on the previous scale: and here usury steps in, seizing control of their surplus labour, etc., by alienating from them their conditions of production juristically if not yet economically. Here money is demanded purely as means of purchase, yet the intention is neither to consume nor to make a "profit", but rather to recover control of the conditions of labour which have been lost.
Means of payment. This is the true terrain of usury, large in extent and peculiar to it. Here money steps forth in its absolute form, and indeed in the usual sphere of the production process, in the native sphere of the circulation process. In the narrowest circle. Every monetary obligation to be fulfilled on certain TERMS, tribute, taxation, involves the necessity to pay money. And with the slightest degree of division of labour, and emerging from commodity production itself, the relation of creditor and debtor develops from that of buyer and seller, as I have proved,(2) partly from the particular form of alienation which flows from the particular nature of use values, partly from the failure of the different times and periods of production of the different TRADES to coincide. Here it is absolutely essential to have the commodity in the form of money at the particular time appointed. Use value as such, the commodities themselves, appear here as worthless rubbish. Money is absolute, counts for everything, and this all-embracing power of money is the power of the usurer.
[XV-948] Even on the basis of modern capital, e.g. in monetary crises, where interest=20%, the price of the commodity is far below its production costs. Then usury holds sway even here. And the same usury is the chief means of developing the necessity of money as means of payment, for it pushes the producer more and more deeply into debt, and nullifies his usual means of payment, his total production being insufficient for him to pay the interest. Here usury sprouts from money as means of payment and creates and extends this form of money, hence its own terrain.
Means of purchase—as soon as the usual reproduction is dislocated and fails to provide for the replacement of the conditions of labour, which therefore have to be derived from circulation. Means of payment as the form of money in which it appears, in general, as the absolute form vis-à-vis concrete wealth. In both forms money is required not as capital but as money: In one case money must, by way of exception, be first converted into the conditions of labour. In the other case we have the necessity of conversion into money. In both forms money capital develops on a basis independent of capitalist production. In both forms it can lead to the latter. In their direct form, usury and trade merely exploit given relations of production. They do not create these relations; are external to them. Direct usury endeavours to preserve them in order to be able to exploit them again and again; it is conservative, it merely makes them more wretched. The less the conditions of production enter the process and emerge from it again as a commodity, the more does their creation out of money appear as a specific act. The less the whole of production depends on circulation, with payments exclusively in cash, with the sale of commodities restricted to a narrow sphere, with little accumulation and little money in circulation, with slow and interrupted metamorphoses, little intertwining therefore of the production process of one person with the circulation of the other, the stronger is the power of money as means of payment. Hence the greater the area for usury. Just as money as hoard is the more important, the less exchange value is developed, so money as usurers' capital is the more important, the less money is a form naturally implied by the mode of production.
The development of monetary wealth as a particular form of wealth means with regard to usurers' capital that all its claims are possessed in the form of monetary claims. The more the bulk of production in a given country is restricted to payments in kind, etc., and use value, the more does monetary wealth develop there. Adam Smith has this to say with regard to merchants' capital: "The inhabitants of a city, it is true, must always ultimately derive their subsistence, and the whole materials and means of their industry, from the country. But those of a city, situated near either the sea-coast or the banks of a navigable river, may draw them from the most remote corners of the world, either in exchange for the manufactured produce of their own industry, or by performing the office of carriers between distant countries, and exchanging the produce of one for that of another. A city might, in this manner, grow up to great wealth, while not only the country in its neighbourhood, but all those to which it traded, were in poverty. Each of those countries, perhaps, taken singly, could afford it but a small part either of its subsistence or of its employment; but all of them taken together, could afford it both a great subsistence, and a great employment" ([Garnier,] t. Il, liv. Ill [pp. 452-53; McCulloch's edition, Vol. Ill, p. 209] [24]).
Just as money first developed [in exchange] between communities, so did trade first develop as foreign trade and intermediary trade. On a large scale first as CARRYING TRADE.
"The cities of Italy seem to have been the first in Europe which were raised by commerce. The crusades gave extraordinary encouragement to the shipping of Venice, Genoa, and Pisa, sometimes in transporting men, and always in supplying them with provisions. These republics were the commissaries, if one may say so, of those armies" (I.e. [p. 454; Vol. Ill, p. 210]).
[XV-949] "The inhabitants of trading cities, by importing the improved manufactures and expensive luxuries of richer countries, afforded some food to the vanity of the great proprietors, who eagerly purchased them with great quantities of the rude produce of their own lands. The commerce of a great part of Europe in those times, accordingly, consisted in the exchange of their own rude, for the manufactured produce of more civilised nations" ([pp.] 454-55 [ibid.]).
Adam Smith speaks of a second kind, which
"grow up naturally, and ... of their own accord, by the gradual refinement of household manufactures. Worked up HOME-GROWN MATERIALS" ([p.] 459 [Vol. Ill, p. 213]).
The trading peoples of antiquity, like the gods of Epicurus, exist in the spaces between the worlds, or RATHER like the Jews in the pores of Polish society.[19]
The first independent trading peoples or cities attained their magnificent development through the CARRYING TRADE, which rested on the barbarism of the producing peoples, between which they played the part of intermediary.
In the preliminary stages of bourgeois society, trade dominates industry; in modern society the reverse. Trade will naturally react back to varying degrees upon the communities between which it is carried on. It will subjugate production more and more to exchange value; force direct use value more and more into the background, by making enjoyment and subsistence more dependent on the sale than on the immediate use of the product. It dissolves the old relations. It increases the circulation of money. It does not merely seize hold of the overflow of production; it progressively bites into production itself. (Certain branches of production are still based on trade.) Yet its solvent effect depends to a great extent on the nature of the producing communities between which it operates. For example, [it] has hardly shaken the old Indian communities and Asiatic relations in general. Fraud in exchange is the basis of trade where it appears independently.
Commercial wealth, like usury, as an independent economic form and as the foundation for trading peoples and trading cities, exists and has existed between peoples standing at very different stages of economic development, and production in the guild form, etc., can continue to exist in the trading city itself (the old Asian cities, the Italian cities of the Middle Ages, the Greek cities, etc.).
(This COLLECTION INTO A FEW HANDS is not yet a feature of the process of production itself.)
"The CONSUMER does not buy so as to sell again. The merchant buys and sells solely WITH A VIEW TO GAIN" ([p.] 175). "The most simple of all TRADE, is that which is carried on by BARTERING the necessary articles of subsistence" (barter between the SURPLUS fund of the farmers and the FREE HANDS26) ([p.] 175). "When reciprocal wants are SUPPLIED BY BARTER, there is not the smallest occasion for money: this is the most simple of all combinations. When wants are multiplied, BARTERING BECOMES more difficult; UPON THIS MONEY IS INTRODUCED. This is the COMMON PRICE of all things: it is a PROPER equivalent in the hands of those who WANT. This OPERATION OF BUYING AND SELLING is a little more complex than the former" [ibid., p. 177].
Thus 1) BARTER; 2) SALE; 3) COMMERCE. The merchant must be introduced. What before we called WANTS is here represented by the CONSUMER; what we called industry, by the MANUFACTURER; what we called money, [XV-950a] by the merchant.
//Money is on the one hand the first metamorphosis of the commodity, its existence as exchange value. Secondly, however, it is the beginning of the 2nd metamorphosis, as the form in which the commodity is converted into the other commodity. The merchant represents these two points, the 2 moments of money in
M—C—M, but in such a way that money itself appears as the aim. //
"...This OPERATION of BUYING and SELLING is TRADE: IT RELIEVES both parties of the whole TROUBLE OF TRANSPORTATION, and ADJUSTING WANTS TO WANTS, OR WANTS TO MONEY; THE MERCHANT REPRESENTS BY TURNS THE CONSUMER, THE MANUFACTURER, AND THE MONEY. To the CONSUMER he appears as the whole body of MANUFACTURERS; to the manufacturer as the whole body of CONSUMERS; and to one and the other class HIS CREDIT SUPPLIES THE USE OF MONEY" ([pp.] 177-78).
* "Merchants are supposed to buy and sell not by necessity, but with a view to profit"* (I.e., [p.] 201).
Gilbart (J. W.), The History and Principles of Banking, London, 1834, has this to say about interest:
"That a man who borrows money with a view of making a profit by it, should give some portion of his profit to the lender, is A SELF-EVIDENT PRINCIPLE OF NATURAL JUSTICE. A man makes a profit usually by means of TRAFF1CK. But in the Middle Ages the population was purely agricultural. And under such conditions, as under FEUDAL GOVERNMENT, there can be but little TRAFFICK, and hence little PROFIT. Therefore, the laws on usury in the Middle Ages were justified" [pp. 163, 164].
" B e s i d e s , IN AN AGRICULTURAL COUNTRY A PERSON SELDOM WANTS T O BORROW MONEY EXCEPT HE BE REDUCED T O POVERTY OR DISTRESS BY MISERY" ( p . 1 6 3 ) .
"Henry VIII limited interest to 10%, James I to 8, Charles II to 6, Anne to 5%" (pp. 164-65). "In those times, the lenders were in fact, if not legally, monopolists, and hence it was necessary that they, like other monopolists, should be placed under RESTRAINT" (I.e., [p.] 165). "In our times, it is the rate of profit which regulates the rate of interest; in those times, it was the rate of interest which regulated the rate of profit. If the money-lender charged a high rate of interest to the merchant, the merchant had to charge a higher rate of profit on his GOODS. Hence, a large sum of money was taken from the pockets of the purchasers to be put into the pockets of the MONEY-LENDERS. This ADDITIONAL PRICE, put upon the goods, made the capital less able and less inclined to purchase them" ([p.] 165).
In the 17th century, Josiah Child, in his Traités sur le commerce et sur les avantages qui résultent de la réduction de l'intérêt de l'argent (written in 1669, translated from the English), Amsterdam and Berlin, 1754 //a Traité contre l'usure, by Thomas Culpeper, 1621, is there as well argues against Thomas Manley (whose TRACT is called Interest of Money Mistaken), calling him the "CHAMPION OFTHE USURERS".27
T h e starting point, as with all the discussions of the English political economists of the 17th century, is naturally the wealth of Holland, where "the RATE OF INTEREST is LOW". Child makes this LOW RATE OF INTEREST the reason for the wealth [of the Dutch], Manly says it is only the result of it.
"Insomuch that to know whether any country be rich or poor no other question needs to be resolved, but this, viz. What interest do they pay for money?" ([J. Child, Brief Observations Concerning Trade and Interest of Money, London, 1668, p. 9] I.e., [p.] 74).a "Like a stout champion for the sly and timorous herd of usurers, he plants his main battery against that part which I confessed to be weakest. ... And he positively denies that the lowness of interest is the cause of wealth and affirms it to be only the effect thereof" ([J. Child, A New Discourse of Trade..., London, 1775, p. 39; Traités..., p.] 120).b "When interest is abated, they who call in their money must either buy land (whose price goes up as a result of the number of buyers) or trade with it" ([A New Discourse..., p. 47; Traités..., p.] 133).a "Whilst interest is at 6 per cent no man will run an adventure to sea for the gain of 8 or 9 per cent which the Dutch, having money at 4 or 3 per cent at interest, are contented with" ([ibid.; Traités..., p.] 134). "The low rate of interest and the high price of land force the merchant to stick to commerce" ([ibid., p. 52;
Traités..., p.] 140). "The reduction of interest inclines a nation to thriftiness" ([ibid.; Traités..., p.] 144).a "If trade be that which enriches any kingdom, and lowering of interest advances trade, then the abatement of interest, or more properly restraining of usury, is doubtless a primary and principal cause of the riches of any nation; it being not absurd to say that the same thing may be both [XV-950b] a cause under certain CIRCUMSTANCES and an effect under others" ([ibid., p. 58; Traités..., p.] 155).a "An egg is the cause of a hen, and a hen the cause of an egg. The abatement of interest causes an increase of wealth, and the increase of wealth may cause a further abatement of interest. But that is best done by the midwifery of good laws" ([ibid., p. 59; Traités..., p.] 156).a "I am an advocate for industry, my adversary for idleness and sloth" ([ibid., p. 71; Traités..., p.] 179).b The number of turnovers of capital can only increase profits in so far as it increases the number of reproductions, hinc* the amount OF SURPLUS LABOUR, or the amount of reproduction (its scale) in the same period of time. Engaged capital cannot be utilised to extend the scale of reproduction. But with COMMERCIAL CAPITAL the situation is different.
If the productivity of industry increases, the price of the individual commodity falls. It contains less labour, less paid and unpaid labour. Let us assume 300 yards of linen instead of 100. Let these 300 be the work of 10 men (as linen, and let yarn remain equally expensive, etc.); while previously the 100 were the work of 10 men. In the latter case 10 yards would contain the work of one man, for instance=12 hours of labour. 10 yards=12 hours of labour; 1 yard = [12]/io=[6]/5=l[1]/5 hours of labour. In the former case 30 yards=12 hours of labour; 1 yard=[12]/[30] hours of labour=[4]/io=2/5 hours of labour. In one case the yard contains [6]/[5] hours of labour, in the other [2]/s, hence 3 times less. Assume that 1 hour of labour=3 shillings.[28] Then in the first case the yard costs l'/ss. and in the second [2]/[5]s. In the first case Is. 2[2]/sd. and in the second case 4[4]/gd. Assume now that the yarn, etc., the constant capital contained in the yard,=ls. Then in the first case the yard costs 2s. 2[2]/sd. and in the second Is. 4[4]/[5]d. Assume the wage='/2 of the value added; then in the first case the yard contains 7Vsd. and in the second 2[2]/sd. [of the wage]. The surplus value is equal to this. The ratio between the wage and the surplus value has remained the same. If the individual commodity is considered, the profit (and the wage) contained in it is 3 times smaller than in the other case. But if the total amount is considered,the total of wages and profits has remained the same, because 10x775=30x2[2]/[5]. The rate of profit, in contrast, would have fallen, because the capital laid out in yarn, etc., would be tripled. The rate of profit could only remain the same if the yarn, etc., had also fallen three times in value or there had been a threefold reduction in wages.
In the first case the 10 yards cost 10 (2s. 2[2]/sd.)=£l 2s. In the second case the 30 yards cost 30 (Is. 4[4]/[5]d.)=£2 2s. (but in the first case 30 would have cost £3 6s.)
Let us now assume that the cost of the yarn, etc., falls threefold in the second case as well.
Thus in the first case the 10 yards cost £1 2s., and one yard costs 2s. 2[2]/[5]d.
In the second case the 30 yards cost £1 2s. and one yard costs 8[4]/[5]d.
In this case too, the total amount of profit (and wages) is as much for the 30 yards as it was previously for the 10; despite the big fall in the price of the commodity, of each individual yard. The rate of profit is the same on the individual yard, for in the first case it comes to 7'/sd. on an outlay of Is. 7'/5d. In the second case the ratio is 2[2]/[5]:6[2]/[5]. In both of them the ratio is 3:8. But from the point of view of the individual yard the amount of profit is reduced. In the first case it was 7'/sd., while in the second it is now only 2[2]/[5]d.[29]
[XV-950] If 300 yards are the work of 10 men, who previously produced 100 yards, there would be in the first case 30 yards from 1 man, in the second 10 yards from 1 man. In the first case the yard contains '/so of a day's labour, in the second case Vio-
Let us therefore assume that the price of the yarn, etc., remains the same, e.g. = x; then in one case the price of the yard = x + '/io M,a in the other it=x + '/3o M. The 100 yards cost in the first case 100 (x + Vio M)=100x + 10 M; and in the second 300 (x + Vso) = 300 x+10 M. It is clear, therefore, that if the wage remains the same, e.g. l/[2] of the day's labour, the amount of profit will remain the same in both cases. In the first case the profit on 100 yards=[100]/2o M=5 M, and in the second case the profit on 300 yards=300/[60]=[10]72o=5 M. The amount of profit is the same here because 100 (V20) is not more than 300 (/«))• But the rate of profit has fallen; for in the [first] case the outlay on one yard = x + V2o M and the profit='/2o M. In the second case [the outlay] = 3c + '/6o [M] and the profit='/6o- If the man's cost=20s., and the x (yarn, etc.)=ls., then X + V20 M= ls.+ls. = 2s. And the profit similarly ='/2o M=ls. The price would therefore be 3s., and the profit within that would be V3. In the other case X + VÔO M=ls.+4d.= ls. 4d. And the profit would = '/6o M=4d. Therefore the price=ls. 8d. and the profit within that would be V5. Disregarding this fall in the rate of profit, the total amount of profit on each yard would in the first case='/2o M and in the second VÖO [M], hence 3 times less. But the latter profit is repeated on 3 times as many yards as the former.
Let us posit the second case, namely that the yarn becomes cheaper TO THE SAME DEGREE as weaving becomes more productive.
Under the old mode of production 100 yards would have been produced by 10 men. The price of the whole product= = 100 x +10 M. The price of a single yard=x +'/io M. And the profit on that is V20 M.
In the second case the yarn, etc., for 300 yards costs 300/[3] x=100 x. The 300 yards cost 100 x +10 M. The price of a
single yard is 7s+'/so M. The profit='/60 M. So if x again=ls. and 1 M=20s., the yard cost Vss.[+] [20]/soS. = Vs [s.]+[2]/[3]s.= ls. The profit out of this would be VÔO M=[20]/6oS. = [1]/[3]s. The rate of profit would therefore be Vs of the whole, as in the old production. But the amount of profit on a single yard would in the first case be V20 M or Is.; in the second it would only be '/6o of a man = V3S., hence 3 times less. The profit on the total number of yards would be the same, for 100 or 100s. = 300x[1]/[3]s.=300/[3]=100s.
Assume a third case, in which it is not the yarn but the wage which falls in the same measure as weaving becomes more productive.
In the old mode of production the yard = x + '/io M. The profit=Vso M. In the new mode of production the yard = x + 7so M. But the profit=[2]/[90] M. The outlay is x + Vso M. Therefore if x = ls. and 1 M = 20s., [XV-951] Vso M=[20]/[30]s.=[2]/[3]s. [3]/[90] M = Vsn M=[2]/[3]s. and V90 M=[2]/9S. The profit would therefore be [4]/gS.
The price of the commodity=l[2]/[3]s. The profit contained within that=[4]/gs. The price of the commodity=[15]/gS., of which [4]/g, hence more than 'A, is profit.
Positing the fourth case: yarn and wages fall equally. So we have the following four cases:
Case I. Price of yarn, etc., remains the same in both modes of production = Is., per yard. The value of a man or a day's labour=20s.
a) 10 M produce 100 yards, 1 M 10 yards; 1 yard therefore contains V10 of a man=[2]%os.=2s. The yard therefore costs Is. yarn+2s. labour=3s. The 100 yards cost 300s.=£15. If the rate of surplus value amounts to half the labour, the profit on 1 yard=ls. = [1]/3 of the [price of the] product. Or, calculated on the outlay, the rate of profit is Is.:2 = 50%. On the 100 yards it is 100s.=£5 = 5 men.
b) 10 M produce 300 yards, 1 man 30 yards; 1 yard therefore=Vso M=[20]/s0s.=[2]/3S. A single yard therefore costs Is. (yarn, etc.)+[2]/[3]s. (labour) = l[2]/[3]s. The 300 yards cost 300 (l+[2]/[3]) or 500s.=£25. Rate of surplus value as previously, thus the surplus value on 1 yard is [2]/eS. = ih of the product. Or, calculated on the outlay, it is [2]/[6] or 7[3]s. to ls. + Vs=[4]/3S. Therefore the rate of profit=l:4=25%. On the 300 yards,=300 (l+[2]/[3]s.) = 500s., this makes 300/[3]s.=£5 = 5 M as above.
In this case, I [b)], the rate of profit falls, the amount of profit on a single yard falls from Is. to '/ss., from '/20 M to [1]/eo M. The amount of profit on the whole product remains the same.
Case II. The price of yarn, etc., falls under the 2nd mode of production in line with the [rise in the] productivity of the weaving, hence a 3fold fall. The yarn, etc., for the 300 yards then costs as much as it cost previously for 100, namely 100s. A yard therefore costs 7ss. yarn, etc.+[2]/[3]s. labour=ls. The 300 yards cost 300s.=£15, as in case a) of I. The profit='/3S. = 7s of the product. Or, calculated on the outlay, 7s against [2]I$=50%, which is the rate of profit.
In this case the rate of profit remains the same, while the amount of profit on a single yard, compared with la), falls from Is. to '/ss. The amount of profit on the whole product remains the same, for 300/[3]=l00s.=£5 = 5 M.
Case III. The price of yarn, etc., remains the same as under I, while the rate of surplus value undergoes a threefold increase with the tripling of productivity:
Yarn for the 300 yards costs 300s. One yard costs Is. yarn+[2]/[3]s. labour= l[2]/ss., as under I b). But now only 73,=[2]/9S., of the [2]/3S. labour represents wages. Hence the profit=[4]/9[s.]=[2]/s of the product=40% on the product.[30] [XV-952] The outlay is Is. yarn+[2]/[9] wages=u/9S. And the profit is [4]/[9]; the ratio is therefore 4:11, which gives a rate of profit of 36*/u%. The rate of profit is lower than in I a) and II, but higher than in I b).
The 300 yards cost 300 (l+[2]/[3])=500s.=£25, as in I b). The amount of profit on a single yard is [4]/gs., whereas under I a) it came to Is.; under I b) it was 73s., under II it was '/3s- Therefore in comparison with I a), at %, it has fallen by over a half; in comparison with I b), at VsS., or [3]/[9], it has risen by V9; and similarly in comparison with II, where the amount of profit was also VsS., or [3]/[9]. The amount of profit on the whole product rises from 100s. to 133'/ss. It is now 6[2]/s M instead of 5 M.
Case IV. The price of yarn falls in the new mode of production, and similarly the rate of wages, in the same proportion as the productivity of labour grows.
As before, there are 10 men producing 300 yards. 1 M for 30 yards. 1 yard = 7so M.
The price of yarn = '/3S. Therefore the price of yarn, etc., for the 300 yards=[30]%s. = 100s., as under I and II. The price of the product='/ss. yarn+ 730 M, or 7ss. yarn+[20]/[30]s. = 73 + [2]/3=ls., as under II and I a).[31] But out of this Is., or [9]/[9]s., [4]/g are profit. And if we calculate the outlay, we have 73S. + [2]/gS. wages, or [3]/[9]+[2]/[9], or • » » < 0 j • V
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953 of Notebook XV of the Economic Manuscript of 1861-63
[5]/g. The profit is therefore in the ratio ik:bl[9], or 4:5, = a rate of prof it of 80%. The amount of profit on a single yard is V9S., as under III, hence higher than under I b) and II but it continues to be more than 50% lower than under I a). The amount of profit on the whole product=300x[4]/9=133'/s, = 6[2]/3 M, hence as under III.
If we now compare these 4 cases with each other, we see that in all those cases where the productivity of labour grows, there is a decline not only in the value of the individual commodity and therewith in its price, but in the amount of profit in proportion to the individual commodity, whether the rate of profit rises or falls. The same labour produces 3 times the product; hence [2]/[3] less labour is contained in the individual product, and since the amount of profit can be nothing other than a portion of this quantity of labour contained in the individual commodity, the amount of prof it on the individual commodity must decline. In all the cases the amount of profit on the whole product does not fall below the original amount of profit, for the number of products increases in the same proportion as the amount of profit on the individual product declines.
The amount of profit remains the same as long as the rate of exploitation remains the same, and the same number of workers are employed, however the amount of profit is divided among the number of commodities; there is no change either in the amount or in the division of that amount between workers and capitalist. Thus under I a), with 100 yards and a profit of Is. per yard, a profit of 100s. or £5 results; the same with 300 yards and a profit of V3S. under I b) and II.
In comparing II with I a) we found that the rate of profit remained the same, for in the 2nd case the profit on an outlay of 3s. was Is. and in the other case it was Vss. on [2]/[3]s. outlay. This happens when, firstly, the rate of wages remains the same, but, secondly, when, as labour becomes more productive in a particular sphere, it becomes more productive in the same proportion in the spheres which provide constant capital, yarn, etc. In this case the rate of profit remains the same because the proportional values of the raw material, etc., contained in the individual commodity and of paid labour, the proportion between the two, remains the same; just as does the ratio between paid [XV-953] and unpaid labour.
In I b), where the productivity of weaving increases threefold and wages remain the same, but the yarn, etc., retains its old price, we have a fall in the rate of profit. In this case the rate of profit falls from 50% to 25%, by half therefore. It falls because the value of the added labour[32] falls in relation to the value and not merely in relation to the quantity (as under II) of the constant capital applied, and the division of this added labour between capitalist and worker remains the same; under II, where the rate of profit remains the same, the total price of the individual commodity falls in the same proportion as the productivity of labour [rises]. Previously[33] the yard cost 3s., under II it costs Is. Under I b), in contrast, it costs l[2]/ss. Here, therefore, where the rate of profit falls, the total price of the commodity does not fall in the same proportion as the productivity of labour in the weaving process [increases].
We have equally a fall in the rate of profit under III, where wages fall in the same proportion as the productivity of labour [rises]. But raw materials, etc., remain the same here as before the threefold increase in the productivity of labour, as under I a). The value of the whole of the labour[34] falls here in relation to the constant capital, and with it the rate of profit too. But the amount of profit on the whole product rises here, whereas in the 3 cases I a), I b), and II, it remained the same.
The amount of profit, namely, in I a),= lOOx Is.= 100s. In I b) it=300x7 [3]s. = 100s. And in II it=300 yardsxV[3]s.= 100s; namely in I a) the number is 100 yards (= 100s.)X Is. In I b) the number is 300 yards X 73=100s. And in II the number is 300 yardsx'/s-Nevertheless, the yard costs 3s. in the first case, l[2]As. in the 2nd, and only Is. in the 3rd. In the first case as in the third the profit=73 of the product.
In Case III the amount of profit rises, for 300 Ch) is more than 100X1 or 300 (7s), which only=300x[3]/[9]. The amount of profit on the individual [product] has fallen (compared with I a)) from [9]/[9] to */g; more than a half. But the number of yards has tripled. The amount of profit on a single yard has therefore not fallen in the same proportion as the number of yards has increased. Hence an increase in the amount of profit on the product taken as a whole.
In Case IV, finally, the price falls as under II to a 3rd of I a), from 3s. to Is. But there is a rise in the rate of profit and the amount of profit on the whole product. The amount of profit on the individual yard, as under III,=[4]/9S., but this amount of profit forms a higher rate on the constant capital in the individual yard.
Let us put these results together.[35]
[XV-956] [36] These results follow from the foregoing investigation: If the increase in the productive power of labour has an equal effect on all components of the commodity, as under II and IV, the price of the commodity will fall in the same proportion as the productivity of labour increases. In this case, therefore, where the Number of yards
I a) 100 I b)300 II) 300
III) 300
IV) 300
Price Total of yard product
3s. 300s. l[2]/[3]s. 500s. Is. 300s.
Is. 300s.
Outlay Profit
Is. yarn+ls. wages Is. Is. yarn + 1/3s. wages '/[3]s. Vs yarn + '/jS. wages '/[3]s.
Is. yarn+[2]/[9]s. wages [4]/[9]s.
Labour in a yard
Rati of surplus value
V10 M 100% = V30 M 100% =
'/so i/
'60 /eo
M
Amount of profit on 1 yard
Is. =V[2], VjS^Va
VjS." 1/«
4/9s-
4/9s-
M M M
=[2]/oo o r '/*
M
M
Profit on total amount
100s. = 5 M
300x4 = 6 6 _ M 9 9 300X4 = 6 6 _ M 8 0 [ % ]
Jîale of profit
50% 25% 50%
36[4]/„[%]
Composition of Capital
Total outlay Total product Constant Variable Surplus value
Amount of profit
Rate of profit
Jnder I a) 200s. 300 I a) 100 100 100 100 50% I b) 400 500 I b) 300 100 100 100 25% II) 200 300 II) 100 100 100 100 50% III) 366[2]/[3] 500 III) 300 66[2]/, 133V[3] 133V[3] 36[4]/u% IV) 166[2]/[3] 300 IV) 100 66[2]/[3] 133V, 133VS 80% productivity of labour is tripled, the price of the individual yard undergoes a 3fold reduction, it falls from 3s. to Is. Similarly, the ratio of the IMMEDIATE LABOUR contained in the commodity to the REALISED LABOUR contained in it remains the same. If for that reason the value of the wage remains the same, or the ratio between paid and unpaid labour, the division of the product of the IMMEDIATE LABOUR between capitalist and worker, then the ratio between variable and constant capital also remains the same, hence the rate of profit. Compare II with I a).
//, on the other hand, wages (the value of labour capacity), and therefore the necessary labour time, fall in the same proportion as the productivity of labour grows (the middle stages, e.g. a fall, but not a very deep one, only bring about a modification in the level), the rate of profit will rise, as in IV, and the amount of profit on the whole product will grow. (The rate of profit=the ratio of the amount of profit to the capital laid out.)
This is the situation with cases II and IV, where the price falls from 3s. to Is.; in II the rate of profit remains the same and the total amount of profit ditto; in IV the rate of profit rises and the total amount of profit ditto.
I b) and III, in contrast, both represent cases in which the productivity of labour is multiplied by three in the FINISHING PROCESS, but the value of raw material, etc., remains UNALTERED. Here there is a reduction in l b ) : if wages remain the same, the proportion of variable to constant capital falls to the same degree as constant capital grows. Hence a fall in the rate of profit. If, as in III, the value of labour falls,[37] the rate of profit admittedly falls, because the surplus value is calculated on a greater total capital. But, firstly, the total capital does not rise as high as in I b), where firstly the constant capital rises from 100 to 300 and secondly the variable capital, 100, remains the same, the total capital therefore rising by 200 (the excess of the constant capital in I b) over the constant capital in l a ) ; whereas the surplus value remains the same as in I a); whereas in III the constant capital admittedly rises from 100 to 300, but the variable capital, in contrast, falls from 100 to 66[2]/s, the total capital therefore does not rise by the whole amount of the growth of the constant capital; and, secondly, the surplus value grows from 100 to 133'/s, therefore rises by 3373% in comparison with I a). The rate of profit therefore falls, but not in the same proportion as in I b), and the amount of profit on the whole thing rises, because the rate of profit is admittedly lower than in I a), but the AGGREGATE surplus value is greater, or, in other words, the rate of profit in III falls in a lesser proportion, as compared with I a), than the total capital advanced in III rises, as compared with I a).
We can therefore see that with a fall in the price of the individual commodity resulting from an increase in the productivity of labour and therefore a simultaneous increase in the numbers of these LOWER-PRICED COMMODITIES, the rate of profit may fall, or rise, or remain the same. At least the AGGREGATE amount of profit remains always the same, if the same number of workers remain in employment (and wages do not rise); it may rise if the further condition is added to these that wages fall as the productivity of labour increases. But the aggregate amount of profit only remains equal under the condition that the same number of workers remains in employment. This is only possible, in case no CHANGE OF VALUE occurs in the constant capital, if the capital outlay is increased. For example, compare I b) with I a). If the expendable capital remained the same in I b) as it was in I a), namely 200, the amount of profit could not remain the same. SU of this 200 would now have to be laid out in constant capital, and V4 in variable capital. Therefore 150 in constant capital and 50 in variable capital. 100 represented 10 M; 50 would therefore only represent 5.[38] And we should have:
Constant Variable Surplus Product Number of Price of Rate of Amount of capital capital value yards yard profit profit
150[s.] 50[s.] 50s. 250s. 150 12/Ss. 25% 50[s.]
The capital laid out would be the same. The number of yards would have grown from 100 to 150, hence by 50%; the amount of profit, on the other hand, would have fallen from 100 to 50, hence by 50. The exploitation of labour would remain the same; hinc the rate of surplus value too. Both the amount of profit and the rate of profit can remain the same if, as in II, productivity grows simultaneously and in the same measure in those branches of industry which produce constant capital and those which USE IT UP. It can only grow if, apart from this condition, another is added to it, that there is a fall in wages.
[XV-954][36] It would appear, according to this, that the rate of profit cannot fall unless:
1) the relative value of labour capacity rises (while the value of the constant capital remains the same). This is Ricardo's assertion, but he does not include the restrictive clause, without which the statement is absolutely incorrect.[39]
2) or there is a rise in the value of constant capital in relation to variable. And the latter would appear to be restricted to cases where the productive power of labour does not rise equally and simultaneously in all the branches of production which contribute to produce the commodity.
Let us assume a threefold increase in productivity in spinning and weaving. If productivity in the production of cotton itself is simultaneously tripled, the proportion of constant to variable capital so FAR remains the same (in so far as the raw material comes into consideration). If £100 can command 10 [40] men, and these ten previously worked up cotton for £300, and they now work up 3 times as much cotton, 3 times x cotton now cost only £300, which is what x cotton cost previously, since the value of cotton has fallen three times. Even in this case a fall in profit would prove not that the yield of cotton cultivation had declined, but only that it had not become more productive in the same ratio as cotton manufacturing. Therefore only a relative reduction in its productivity, despite the absolute increase in it. Ricardo, however, thinks that agriculture must become more unproductive absolutely. It would only demonstrate that industry and agriculture do not develop to the same degree in bourgeois production. If they do not do this, that alone is sufficient to explain the decline in the rate of profit.
But the presupposition that the value of constant capital, despite the increase in its amount, falls in the same proportion as the productivity of labour increases, can be reduced to the presupposition that the value of constant capital consists of present labour alone, and no past labour enters into reproduction. The value of the past labour does indeed fall once its product can be reproduced more cheaply. If, with a threefold increase in the productivity of spinning, a worker sets 1,800 spindles into action instead of 600, it must be assumed that 1,800 spindles could now be reproduced with the same labour as was required previously for 600. We shall postpone any further discussion of this question, and pass on to why we took up this investigation again at all at this point.
We have seen that in all cases where the productivity of labour grows, hence the same amount of labour is represented in a greater quantity of commodities, hence the price of the individual commodity falls (because the value does), the amount of profit made on the individual commodity is reduced, whether the rate of profit rises, falls, or stays the same, and even if there is an increase in the amount of profit on the total product.
//It turns out, incidentally, that the investigation always goes awry when one looks at the price of the individual commodity in itself. Or when one merely measures the labour IN REGARD-TO THE QUANTITY OF COMMODITY PRODUCED BY IT. Everything depends on the magnitude of the total amount of capital laid out. Even if we analyse the price of the individual commodity, e.g. in the above case, where the price of the yard falls from 3s. to l[2]/ss.; if we know that ls.=yarn, etc., 7[3]s.=wages and V3S. = profit, we do not know whether the total amount of profit has remained the same or not. For example, in case I b), if the capital laid out continues to be, as before, only 200, the amount of profit falls; if it is 400 it remains the same. Even in case III, if the capital remains the same at this price of 1[2]/3S. per yard, while the rate of wages is reduced, the amount of profit on the whole product does not grow. The situation would then be as follows:
Constant Variable Surplus Product Number of Price of Rate of Amount of capital capital value yards yard profit profit
163'/,, 364/,, 7 2 8 / n 2728/,, 163'/,, l2/ss. 36*/,, 728/,,
Total capital is 200 instead of 100 as previously.[41]// [XV-955] The phenomenon — which derives from the nature of capitalist production — that with a growing productive power of labour the price of the individual commodity falls, the number of commodities increases, the amount of profit on the individual commodities declines in all circumstances, the rate of profit rises, falls or remains the same, but the amount of profit on the total number of commodities remains the same or grows (even when it falls in the cases we have explained, in which the capital ought to have grown but remains the same, it in fact remains the same or grows, because the capitalist who applies the improved mode of production sells below the old market price alias above his own individual production price, until competition has balanced this out; the second requisite, the growth of the capital laid out, proceeds hand in hand with this period of adjustment)—this phenomenon only presents itself on the surface in: a fall in the amount of profit on the individual commodity, a fall in its price, a stable or growing amount of profit on the increased total number of commodities. This is conceived in such a way that the capitalist, of his own free choice, adds less profit on each single commodity but finds compensation through the increased number of commodities he sells. This view rests on the notion of "PROFIT UPON ALIENATION",[17] which is in turn for its part abstracted from the attitude of mind of merchants' capital, of commercial capital. If a merchant were to sell 100 yards, which cost him 3s. per yard (I a)), hence 300s. per year, with a 10% increase in the price, he would make a profit of 30s. And he would sell one yard at 3s. 3[3]/[5]d. (3[3]/[5]d. or [18]/[5]d. or [36]/io of a penny=s/,0s., since 3s.=3x 12d.=36d., hence [3]/i0s.=[36]/,0d.). If, in contrast, he sells 300 yards (case II), each yard costing him Is., he must equally make a profit of 30s. in order to gain 10% on the capital of 300s. But whereas the first merchant adds [3]/i0s. to each yard, this one only needs to add VioS.; the first merchant adds 3[3]/sd., he only adds l'/sd. He therefore sells a yard at Is. l'/sd., whereas the first merchant sells it at 3s. 3[3]/[5]d., and he makes the same profit thereby as the first merchant. If he sold at Is. l'/sd., he would make a much greater profit than the other, despite adding much less to the individual yard, and even so he would still sell it more than twice as cheap.
If we now look at merchants' capital as a whole, e.g. here the whole section of MERCANTILE CAPITAL INVESTED IN THE SELLING OF LINEN, it is clear that it by no means depends on merchants' capital whether it has 100 or 300 yards to sell, and whether it has to advance 300s. for 100 yards or for 300, whether its cost price per yard is Is. or 3s., and it therefore depends just as little on merchants' capital whether it makes its 10% profit by adding 3[9]/[5]d. per item on a smaller number of yards or l'/sd. per item on a greater number. The rate of surcharge itself — again from the point of view of the whole — depends just as little on the merchant; it is determined rather by the general law of AVERAGE PROFIT, namely that he can obtain the same profit, e.g. 10%, for capital of equal magnitude, whatever particular sphere it may be invested in, and however much or however little labour it may set in motion. This is just as valid for capital which remains constantly in the process of circulation as it is, let us say, for fixed capital, which never (in natura) dwells anywhere but in the sphere of the direct process of production. The production price of industrial capital appears as the cost price for commercial capital. But since industrial capital does actually buy, does replace on the market the elements, in part of its constant capital, in part of its variable capital (the latter in so far as the value of labour capacity is determined by the price of the worker's means of consumption)—and since these elements pass from the hands of the merchant into the hands [XV-957][42] of the industrialist, it is clear that not only does the production price of one commodity pass over into the cost price of the other, but the industrial production price of one commodity together with the commercial addition to this price appear as an element in the cost price of the other commodity.
The industrial production price of one commodity always enters into the cost price of the other, even when the industrialists exchange directly, without the interposition of merchants. The weaver, for example, pays the production price of the yarn. This therefore forms an outlay for him, it enters into his constant capital, it is an advance for him, an element in the cost price. It is therefore not only in the form of interest that SURPLUS VALUE, even from the point of view of the individual capitalist, forms a part of his advances, enters into the cost price of his commodity. But this is also the case for all the elements of his constant capital, and for wages (variable capital) in so far as the value of labour capacity is determined by the production price of the worker's means of consumption.
Profit — and therefore the difference between price of production and cost price — appears to him as a surplus over the cost price only as regards his own commodity. As regards all the other commodities which enter into the price of production of his own commodity, their cost price, hence the costs of his production, appear to him as determined by the price of production, and profit therefore appears as an element which e n t e r s into the price of production, not as a result which e m e r g e s from it.
This is the case if the price of production is considered quite independently of the interposition of merchants' capital. But how do things stand with the latter's inclusion? Is the additional charge it makes to be regarded as a merely nominal raising of the price over the value, or how otherwise? If this is the case on an average— since the commercial price of the commodities enters as an element into their reproduction — then all commodities are sold above their value. For included in the price of production are, 1) the whole of the capital advanced, and 2) the whole of the surplus value, divided among the different capitals pro rata* their magnitude. But, firstly, the capital advanced consists of the objectified labour in the means of labour, etc., secondly it is replaced by an equal quantity of living labour (wages), and thirdly the whole of the surplus value comprises the totality of the surplus labour. So if yet a further element is added to this, which raises the price of production, the price of the total commodity is>than its value, and the price of the individual commodity>than its price of production, i.e. greater than its price as determined by the value of the total commodity. But this seems to be the case with commercial capital.
A distinction must be made in dealing with capital included in the process of circulation.
D'abord^ functions are confused with merchants' capital, or are to be found in practice plus ou moins* bound up with it, which belong to the process of production itself, although they do not proceed in the workshop of the producer.
The first of these functions is the transport industry (THE CARRIAGE OF COMMODITIES). The use value of the commodity is admittedly in its finished form, but this use value does nevertheless undergo an alteration. Its location, its spatial existence, is changed. This process belongs to the process of production itself. The commodity is not on the market, hence is not yet in circulation, before it has passed through this change of location. Everything that occurs in connection with this process belongs to the process of production.
Secondly: The use value of the commodity must first be divided into the amounts appropriate to it as use value, it must be separated out, before the commodity really exists as a commodity. 1 qr of wheat, for example, first exists as a quarter when a quarter has been weighed out from the total amount of wheat, etc. This measuring, weighing, real reduction of the commodity to the units of measurement which are appropriate to it as a use value — and which at first only exist notionally — forms a part of the preparation of the commodity, a part of its process of production. It is a process which the commodity must pass through before it is present wholesale or retail as a commodity, and it is an operation which use value [XV-958] must itself pass through before it is ready as use value of the commodity. Since capitalist production produces on a large scale, whereas individual consumption takes place on a small scale, this operation constitutes a very significant part of the RETAIL trade. The packer, WAREHOUSEMAN, weigher, etc., in the workshop belong to the productive workers just as much as do the spinner, dyer, etc.; the capital expended on those functions is just as much productive capital as that directly laid out for spinning, etc. In the same way, this employment of capital, even when it takes place and is repeated in capital's sphere of circulation, belongs entirely to the process of production of the commodity.
Thirdly: What is the situation with the fixed and circulating capital which is necessary for the conservation, storage, preservation of the commodities whilst they are on the market, hence have already left the actual production process and entered the sphere of circulation?
The answer to this is most obvious when we look first at commodities which are only placed on the market once a year, because they can only be reproduced once a year, as e.g. corn, cotton, etc. If the COTTON IMPORTERS in Liverpool had no WAREHOUSES, DOCKS, etc., the manufacturer in Manchester, etc., would himself have to store the quantity of cotton he needed during the year, expending on the one hand capital for WAREHOUSES, buildings (fixed capital), and on the other hand variable capital, to buy the wage labour[43] to perform the OPERATIONS necessary for the preservation of the cotton. Exactly the same situation holds for the miller and his corn, the baker and his flour, etc. All these things are conditions of production, and the operations and expenses, etc., required for conservation and storage themselves belong among the conditions of production. The only difference is that a part of the capital required for the manufacture of COTTON or bread, which has these particular functions allotted to it, is to be found and operates in the hands of COTTON IMPORTERS, corn dealers, etc., instead of COTTON MANUFACTURERS, MILLERS and BAKERS. But the capitals engaged in these functions are directly productive capitals, they are engaged in the process of production although they are to be found in the sphere of circulation. They are parts of productive capital which are to be found OUT OF DOORS (i.e. outside the immediate workshop). This is true for all capitals invested in WAREHOUSING, in so far as the commodities WHICH ARE KEPT AND PRESERVED form the elements of a further process of production; their WAREHOUSING and PRESERVING would be the responsibility of the immediate producer if it had not been MADE OVER, through the division of labour, TO OUT OF DOORS CAPITALISTS.
We come now to the second sort of commodity, those which enter directly into individual consumption. It is clear from the outset that, in so far as they form the workers' means of consumption — IN FACT variable capital which has shed its monetary form — the preservation and WAREHOUSING of these commodities belongs among the direct conditions of the process of production. They form part of variable capital in exactly the same way as the first sort forms part of constant. Therefore the same thing is true here as well. But looking now at the WAREHOUSING of commodities which do not form part either of constant or of variable capital, can we say of them that the capital and labour required for this enter the direct process of production of the commodities? Certainly not. Nevertheless they do enter by a roundabout route. They enter into the direct cost of consumption. WAREHOUSING of the first sort enters into the cost of industrial consumption, hence of direct production; that of the second sort enters into the cost of individual consumption, hence the cost of consumption. If all such commodities, instead of being bought au fur et à mesure,(3) had to be drawn, e.g. AT ONCE, to the amount of their production over a year e.g., [XV-959] the private consumers would have to expend capital for buildings to store them and for wage labour to preserve those commodities in a usable condition. Consumption costs en general— e.g. the fact that I must have my furniture cleaned, my house scrubbed, my meat cooked, my shoes polished — do not enter the commodity's process of production and therefore do not enter its price of production. They only occur after the commodity has ceased to be a commodity and become a mere use value. But in so far as the costs of consumption are anticipated the consumer receives the commodity in a form ready for consumption, in a form in which the price of production requires no additional private payment. For example, if yarn is manufactured and linen woven at home, the weaving belongs to the cost of consumption of the yarn. If it is woven industrially, the weaving process belongs to the cost of production. And so it is in the case mentioned above. If I have my meat cooked at home, the cooking belongs to its cost of consumption. If I get it ready cooked from the cook-sHOP, it belongs to its cost of production, it enters into its production process, but it also emerges from the production process in a more advanced form, and it enters into the process of consumption in a more finished form.
To that extent, then, the WAREHOUSING of the second sort of commodity, which does not enter as an element into either constant or variable capital, is also included in the direct process of production. And the capital employed therein is directly productive capital. Productive capital can in general have 2 meanings: 1) capital entering directly into the production process; 2) capital which enters into the process of reproduction (which includes circulation).
In connection with this 3rd category, capital INVESTED IN WAREHOUSING (which includes storage and preservation), it must be noted: these actions are only more productive in so far as they are required by the AVERAGE conditions of production. If instead the markets are overstocked, etc., goods cannot be sold, there follows a STOPPAGE OF COMMODITIES IN THE CIRCULATING RESERVOIRS; if t h i s r e s u l t s from an interruption in the process of circulation, it belongs to the faux frais de production(4) for the industrial producer. It increases the cost price for him by contracting the difference between price of production and cost price. T h e FINAL market price is not increased thereby, but, rather, mostly stands in an inverse ratio to the faux frais, just as d o transport costs, when they arise from blockages of this kind in the process of circulation, e.g. when a commodity which is sent from Manchester to China finds the markets overstocked there, travels from there to Australia, suffers the same fate here, and is finally disposed of in South America.
Apart from that, what all these INVESTMENTS OF CAPITAL IN TRANSPORTING, DIVIDING ACCORDING TO MEASURE AND WEIGHT, AND WAREHOUSING OF COMMODITIES have in common is that they are employed in processes which directly alter and affect the use value of commodities, give it another form, whether through change of place or through a real reduction of the use value into parts corresponding to its natural quantities, or through the preservation of that use value. It is precisely the direct relation of these processes to the use value of the commodity as use value which makes them into directly productive processes and the capital employed in them into PRODUCTIVE CAPITAL, EMPLOYED IN PECULIAR SPHERES OF IMMEDIATE PRODUCT ACCORDING TO THE GENERAL DIVISION OF LABOUR.
It was necessary to strip off these FEATURES OF THE CIRCULATING CAPITAL — in other words to separate them from the CIRCULATING CAPITAL. T h e processes of production, which continue within the sphere of circulation, extend beyond the direct process of production. This is all the more necessary in that the capital which functions merely in circulation, merchant's capital especially, in part combines these functions too with its own, hence does not step forth in its pure form. But after these features have been stripped off we have the pure form of circulating capital.
[XV-960] Before we now pass on to this particular kind of capital, it must further be noted:
Firstly: TRANSPORTING, RETAILING (DIVIDING) (MEASURING) AND WAREHOUSING CAPITAL, which have the appearance of belonging to the circulation process, are IN FACT not distinguished from other productive capital except in that they form particular spheres, just as AGRICULTURAL, MINING, MANUFACTURING CAPITAL (alongside their subdivisions) are distinguished only as particular spheres; except in that they create different use values. This therefore does not give rise to any new distinctions in the form of capital in general,[4]* separate from consideration of the peculiarities of its process of production which arise from the nature of the use value created by it.
Secondly: As in all other spheres of capital, profit here is derived partly from the wage labour directly exploited in these spheres, and partly, when the organic composition of the capital is not average, e.g. when it contains less variable, more fixed capital, from the share, pro rata the magnitude of the capital, of the surplus value created in other spheres of production.
We come now to the particular shapes of capital which are confined within the process of circulation and have absolutely nothing to do with the use value of the commodity and THE DIVERS DEGREES OF ITS FINISHING. They are not only distinguished as particular spheres of application of capital; but they also form a kind of capital which is distinct from productive capital as such.
Since they are only concerned with the functions of the circulation process as such, their peculiar functions must be explained from the form of metamorphosis of the commodity, hence from the movements of form which are peculiar to circulation as such.
Capital is in circulation only qua commodity or qua money; commodity or money capital. The movement of the commodity (and therefore of commodity capital) is C—M—C, selling in order to buy, and, in so far as this process is constantly repeated, selling in order to buy and buying in order to sell. It is this latter movement which makes the metamorphosis of commodities into the metamorphosis of commodity capital. For it emerges here that what is in question is not only a CHANGE in the form of commodity and money, but the preservation and increase of value in this process. This is therefore the function of merchants' capital. It presents the total movement of the metamorphosis of commodities as a movement of commodity capital, and apart from this change of form and its movement merchants' capital as merchants' capital has no function.
The second is money, in so far as it possesses functions apart from those of being merely means of circulation (the sole form in which it functions in merchants' capital (commodity capital) as such, namely as the purely evanescent form of the commodity). As I showed in the first part,(5) this reduces itself, these peculiar and apparently independent movements of money which emerge from the metamorphosis of the commodity reduce themselves, to 1) hoard formation; 2) the function of money as means of payment; 3) the functions of money as world money, in which it has a double movement, running backwards and forwards between the national spheres of circulation on the one hand, and movement from its sources of production over the world market and the division of this influx between the national spheres of circulation [on the other].
From the standpoint of the exchange of commodities, as we have seen,[3] hoard formation—viewed merely as a form of money— is the petrifaction or autonomisation of the commodity in its first metamorphosis. But here as presence of capital, the money which is precipitated as hoard is capital (or at least the aliquot part), productive capital which has completed its process of production and been converted back from money into commodity and from commodity into more money. The different determinations of money as hoard now appear as determinations of money capital. The first form of the hoard, or function of the [XV-961] hoard, was to serve as reserve fund of coin. Now, in this quality, in which it has to function as means of circulation held READY, i.e. as means of purchase, it is the part of circulating capital which the industrial capitalist (or commercial, which in respect of money capital is the same thing) must always keep in store as money capital, in order to defray current expenses — to pay wages, to cover HIS OWN PERSONAL EXPENSES (WHAT HE SPENDS AS REVENUE) and to buy other ingredients of production which need to be paid for in cash.
The second function of money as hoard was to form a reserve fund for payments, the fund from which money flows as means of payment. We shall soon come to this point when we arrive at means of payment.
The third function of money as hoard was to be a reserve fund of world money, a fund of means of purchase or payment in foreign markets, and apart from this in particular to represent the form in which new supplies of money for the world market are drawn from the sources of production of money, etc., in exchange for commodities.
Whether the hoard is to serve as reserve fund for means of payment in the home market, or as means of payment and means of purchase in the foreign market, this form of functioning as means of payment or world money alters absolutely nothing, IN REGARD TO THE CAPITAL, in the fact that it is the part of circulating capital which the industrialist always needs in the form of money, just as in the case of the reserve fund of coin.
Finally: The hoard, in so far as it did not function as reserve fund of coin, means of payment and world money, was hoard as such, the commodity petrified in its first metamorphosis, made independent, and conserved. But for capital the hoard is capital lying idle—a part of it lying idle in the form of money, which it is unable to valorise directly in its own business. For the capitalist, who does not share the DELUSIONS of the hoarder, and to whom money has value not as absolute form of the commodity but only as absolute form of capital — self-valorising and functioning value — this form of capital lying idle is unproductive capital, loanable capital, which ought at least to be converted into interest-bearing capital if he himself is not to utilise it as profit-bringing capital. For the capitalist, therefore, it is money which is to be found on the market as money capital. It may be newly accumulated profit, i.e. profit converted into capital. But a part of this capital which lies idle may also flow from rent or other sources of income of the unproductive workers (and even of the productive ones), who want to sell as capital, i.e. loan out, a part of their revenue which is available in money.
As far as the hoard as such is concerned, whether it serves in any particular function or not, it makes only one operation necessary, that of preservation. The costs of preservation can be reduced to buildings, coffre fort,(6) hence SOME fixed capital; the counting of the hoard; and if it is large, perhaps the wage labour of a number of unproductive workers for the "protection" of the hoard, not against moth and rust, but against thieves.[45]
If it is the exclusive task of particular capitals to perform the operations which emerge from the circulation of capital, these can only be operations which emerge from the functions of circulation as such. Functions separated off from the total process of capitalist production, peculiar to the process of circulation, and distinguishing it.
Hence commodity capital, merchants' capital, commodity dealers, as the operation of a particular capital, exclusively concerned with this, have as such nothing else to do but to buy and sell commodities, an operation which costs labour time, but in this case lays claim to the whole labour time, both the capitalist's and that of his wage labourers, clerks, etc. The movement which represents the constant metamorphosis of the commodity appears here as his exclusive operation, as proceeding through his mediating activity or RATHER the specific activity of capital through which it functions.
[XV-962] Similarly, the function of a specific capital as money capital, in short the trade in money, can only obtain content from the specific functions of money — and therefore of capital as money, in its mode of existence as money — as opposed to the functions performed by money as a moment of merchants' capital (where it always acts as means of purchase).
These functions are therefore firstly: hoard formation as such, which consists merely in the preservation of money precipitated from circulation (capital precipitated in the form of money and profit or REVENUE in general). We have already seen," in examining money, that whereas the money hoard is fragmented in pre-bourgeois stages of production, within capitalist production it becomes centralised in large repositories. This is the first function of the money dealer or the trade in money.
The industrial capitalist (like the commercial capitalist) must constantly have READY a definite part of his circulating capital in the form of money capital, i.e. as hoard (in its form), as a reserve fund for coin and means of payment, whether at home or abroad. And this part stands in a definite proportion to the scale on which he produces, e.g. to the wages he has to pay every week, etc. And the magnitude of the cash operations currently in progress, e.g. with the merchant. But although this part is determinate (changing of course at different moments of reproduction), it is dissolved again and again, i.e. as means of purchase and means of payment (here as payment of the balance) its form as hoard is dissolved, the hoard is emptied, and in turn constantly refilled by the sale of commodities or payment for sold commodities. Its parts therefore change constantly; on the one hand it dissolves as means of purchase and means of payment, on the other hand it is constantly reconstituted by the constant conversion of the commodity back into money. C'est un continuel va-et-vientb; by no means the static hoard of the hoarder. Thus the second function of the trade in money consists in constantly receiving the money taken in by the industrialist and the merchant, collecting it as a hoard, and constantly returning it as means of purchase or payment. This operation makes accountancy necessary, constant payment and calculation. This movement of the hoard (money capital)—its constant formation and dissolution — and the maintenance of an equilibrium between the two, is mediated by the activity of the money dealer, who does nothing else. In so far as money in particular functions as means of payment — a function in which, as we explained previously,[3] reciprocal claims have to be calculated, and only the balance has to be paid in money — the money dealer has to perform this function of money as means of payment, to settle the claims, at one time to pay money as a balance, at another time to accept money as a balance. This balancing and mediating operation of money as means of payment is particularly developed in capitalist production, where the whole of production is based on exchange value, on circulation, and therefore accounts must constantly be settled among the producers (and the merchants).
In so far as payment or buying on the foreign market makes special operations necessary, necessitates, creates special forms of transmitting the balance or of money as means of purchase (rate of exchange, etc.) these again form a particular function of the money trade.
In the same way, the RETURN of money from the sources of production in exchange for commodities can achieve independence as a separate operation and function (BULLION dealing, etc.). This is in turn a particular function of the money trade.
Finally, money which lies idle is lent out, i.e. thrown onto the market as money capital; it is borrowed by others, and this appears in turn — in different forms (LOAN, DISCOUNT, etc.)—as a particular function of the money trade, which is thus at once for loanable money capital the same thing as the merchant is for commodities, the intermediary through which supply of and demand for money capital are balanced out and centralised.
Lastly, we may add yet a further point: Money as world money sheds its national [XV-963] character as the money of a particular country, and is reduced to its gold and silver content, while gold and silver, as the two commodities which circulate as world money, have simultaneously to be reduced to the ratio of their values, which constantly changes. This, too, happens through the mediation of the money dealer, who makes it his particular business to perform this adjustment of national money to world money. (Rate of exchange; in this case the current state of the balance of payments is a further factor, but this is a detail which does not belong here.[46]) On the other hand, this operation too ultimately comes down to the simple exchange for each other of the kinds of money used in different countries, just as within a single country the kinds of money belonging to the various particular spheres of circulation are exchanged. (Simple money changers.) All these functions together form the business of the money trade, which splits in turn into different branches, just as the commodity trade does.
Just as the operations of the commodity dealer (merchant) are absolutely nothing but the independent form of the movements, functions, the commodity and therefore capital in its shape of commodity capital must pass through in the whole of its process of circulation or the movements of its metamorphosis as a whole; in the same way the operations of the money dealer (operations of specific money capital) are absolutely nothing but the movements which flow from the functions of money as such as opposed to itself as means of circulation (in the way that it functions in trading capital), hence they also fall within the sphere of capital in its shape as money, as money capital.
It therefore appears in fact from a more exact analysis—//the sale of money as capital too, the throwing of money into circulation as capital, only initiates the process of production, which proceeds from money; that this representation of capital as initiating the whole process in the form of money appears here as a particular function, that the person who lends the money throws it into production or circulation as capital only indirectly, through the industrial capitalist or merchant, this intermediate operation, the changing hands of the money before it opens the process, does not change the essence of the matter at all//—that trading capital, i.e. commodity capital as a specific capital, and on the other hand money capital, as capital which is INVESTED AND SHUT UP in a specific business, the money trade—that these are nothing but independent modes of existence of these forms of money capital and commodity capital, which productive capital assumes in passing through the whole of the reproduction process, the forms which it assumes in its own sphere of circulation, in the interval between leaving the actual process of production and returning to it.
Nothing can be more incorrect than to view COMMERCIAL CAPITAL and MONEYED CAPITAL (here in the sense of the money trade) as particular departments of PRODUCTIVE CAPITAL, somewhat in the same way as MINING, FISHING, FARMING, MANUFACTURING, ETC, CAPITAL. It is rather that every PRODUCTIVE CAPITAL is COMMERCIAL CAPITAL, in so far as it passes through the whole movement of its process of production, C—M—C or M—C—M, and is looked at in this form in isolation. It is in fact its form as CIRCULATING CAPITAL, this being viewed as a unity of the opposed phases of the metamorphosis.
Similarly, every productive capital is MONEYED CAPITAL in one phase, whether this takes the form of M—M', or in so far as the functions which it performs in its form of money, hence its monetary functions, are viewed in isolation. Moreover, productive capital does not cease to perform the functions of COMMERCIAL CAPITAL and to appear in one phase as COMMERCIAL CAPITAL because of the interposition of COMMERCIAL CAPITAL as a particular kind of capital, capital INVESTED IN A PECULIAR SPHERE AND MANAGED BY A PECULIAR SET OF CAPITALISTS; or because of the interposition of MONEYED CAPITAL as a particular kind of capital, the capital of the money dealers; just as little does it cease to be MONEYED CAPITAL and to perform the functions of MONEYED CAPITAL.
[XV-964] A reduplication therefore takes place (at least in appearance). COMMERCIAL CAPITAL (commodity capital) and MONEYED CAPITAL[1] are on the one hand general formal determinations of productive capital, a n d the particular movements it passes through as COMMERCIAL CAPITAL (commodity trade) and MONEYED capital (money trade) are particular functions which productive capital performs in its process of reproduction in both those forms. O n the other hand, particular capitals (therefore also PECULIAR SETS OF CAPITALISTS) are exclusively engaged, whether in the form of COMMERCIAL CAPITAL or in the form of MONEYED CAPITAL. A S particular forms of productive capital in general, they also become the spheres of particular capitals; particular spheres of the valorisation of capital. It is well known that, STRICTLY SPEAKING, a banker does not need to possess any capital of his own besides the capital of his customers; and it is a fact not less well known that e.g. commercial AGENTS only administer the capital of their customers (the industrialists) as MANAGERS, and do not need to have any particular capital in addition to this. GENERALLY speaking, the private capital of commerçants and BANKERS is only the basis on which an immense superstructure is erected, and it bears no relation at all (the larger it is, the less the relation) to the capital of other people, which they turn over, a n d with which they conduct their business.
Assume that a merchant possesses £1,000 of capital and turns it over 40 times in the year; in the course of the year h e will lay out a money capital of £40,000, and purchase commodity capital to the amount of £40,000, so that altogether a capital of £80,000 passes through his hands. This turnover of merchants' capital (in sô far as it relates to the £1,000 which form the specific capital of the merchant) is very different from the turnover of productive capital. In
a Marx adds the German equivalent in brackets.— Ed.
fact it represents nothing but the law of the circulation of money, that the quantity of prices realised by the money is represented by the rapidity of its circulation, by the number of circuits it performs within a given period. What is true of money in general — money as means of circulation, as means of purchase and means of payment, and this is how it functions in MERCANTILE capital — is true here as a function of capital. Admittedly, it makes a profit with each turnover, and this is what makes the sum of money WITH WHICH HE STARTS into capital //For the individual merchant, who can seize hold of a greater or lesser amount of the total business and make a SURPLUS PROFIT because his counterpart makes a smaller than AVERAGE PROFIT, it is correct to say: If the rate of profit and the prices of commodities are given, the total amount of his profit depends on the number of turnovers in the year or the amount of business he does. If the rate of profit and the number of turnovers are given, it depends on the prices of the commodities. If prices and number of turnovers are given, it depends on the rate of profit//, but this profit too is determined in another manner than in the case of productive capital. The turnover of productive capital is by no means an expression of the number of circuits performed by money as means of circulation. It is rather the opposite: the number of circuits of money is here an expression of the frequency of renewal of the process of reproduction, of how often money is converted into capital. Here it turns over a given number of times because it functions as capital a given number of times. In commercial capital it functions a given number of times as capital because it turns over a given number of times. The number of turnovers is therefore important with productive capital because they express the number of periods within which the creation of surplus value, hence of profit, is repeated. Here the turnover enters the rate of profit as a determining factor, because it expresses the circulation time within which capital exploits a definite quantity of labour, appropriates unpaid labour. The turnover itself has nothing to do with the creation of profit. It expresses rather 1) the periods of its realisation; and 2) the degree to which labour time is limited by circulation time. With COMMERCIAL CAPITAL there are two points to make. Firstly: Profit is only made through turnover, which represents nothing but the circulation of money; the number of circuits performed by the same sum of money; i.e. the repetition of the acts of buying and selling. Even the simple C — M—C" in the circulation process of productive capital has another meaning. C is the result of the process of production, the commodity which results from the process of production; C, in contrast, is the commodities which enter as elements of the commodity into its process of production, which represent its conditions of production. But, as against this, looking at C—M—C" in commercial capital, C is distinguished from C" only as price, not as commodity, [XV-965] and even if C is another use value, the relation of this to C is no different from if it were the same use value.
Secondly, however, although the profit is made here by the turnover itself, not first realised within the turnover, as was the case with productive capital, the number of turnovers is not a factor in determining the rate of profit here, but rather the opposite. The (AVERAGE) rate of profit determines the profit on each individual turnover. If the general rate of profit is e.g. 10%, that is also the rate of profit of merchants' capital. For a merchants' capital of e.g. £1,000 to realise a profit of 10% over the year, it may only take, if it turns over ten times, a profit of 1% in each turnover on a quantity of commodities of £100, hence adding 10 to 1,000. Thus, for example, only £7ioo on a commodity priced at £1=[2]%OOS.=[2]/IOS. = [1]/5S- = 2 /(7)d. If it turned over 20 times, it would need to make only [1]/[2]% on each turnover, for 20x72=10. 72 per 100 is [10]/ä or 5 on 1,000. Thus on a commodity priced at £ 1 , for example, it is only £72oo=[2]°/2oos.=[2]/2os. = 7ios. = l 7sd. The average number of turnovers in the different spheres of the trade in commodities is presupposed as given here. Thus in merchants' capital everything appears entirely on the surface.
Let us now take, e.g., the rotation of a capital in the manufacture of CALICO. The product, 10,000 yards of calico=(e.g.) £1,000. The manufacturer sells these 10,000 yards to a MERCHANT, a CLOTHDEALER, who pays him £1,000. (We shall ignore credit as not yet developed.) The 10,000 yards of calico are now in the hands of the MERCHANT, and they represent there commodity capital, merchants' capital. In the hands of the MANUFACTURER they represented CAPITAL+PROFIT. Let this MERCHANT be MERCHANT I. The manufacturer now uses his £1,000 to buy yarn for £700, coal, etc., for £100, and with a further £100 he buys labour.[43] The remaining £100 he spends as revenue. If we analyse the latter transaction further, we find that, BY and BY, au fur et à mesure* as the workers receive the £100, they buy commodities from épicier, just as the manufacturer buys means of consumption from the épicier with his £100. MERCHANT II, the yarn dealer, now has £700 instead of the yarn, his commodity capital. The same applies to the coal dealer, MERCHANT in, who has £100 instead of his coal, and finally to the épicier, MERCHANT IV, who has £200 for his commodities. It is clear at the outset that the CALICO continues to be available on the market as a commodity, even though it has passed from the hands of the MANUFACTURER into those of the MERCHANT. It is the capital of the MANUFACTURER, which has not yet passed through its first metamorphosis, has not yet been reconverted from commodity into money. For the MANUFACTURER this conversion has taken place. He has £1,000 instead of his CALICO. But for the CALICO itself the conversion has not taken place. It has not yet been converted into money, it has not yet passed over either into industrial or into individual consumption as a use value. MERCHANT I now represents on the market the same commodity capital as the MANUFACTURER originally represented. For the latter, the process of metamorphosis has been cut short by merchant I, but only to be taken up again, perforce, in the hands of the merchant. If the MANUFACTURER had had to wait until his CALICO really ceased to be a commodity, until it was converted into money, had passed through its first metamorphosis, had been sold to the actual buyer — the industrial or individual CONSUMER — his process of reproduction would have been interrupted. Or, in order not to interrupt it, he would have had to restrict his operations, expend a smaller part of his capital for yarn, etc., wage labour, etc., in short, for the elements of the production process, and retain a greater part of it in money as a reserve fund, so that, whilst a part of it was on the market as a commodity, another part could be converted afresh into productive capital, and then, whilst the second part entered the market as a commodity, the first part could return to him. This division is also necessary with trade. But, without the latter, the part of circulating capital held en reserve in the form of money would always have to be greater in proportion to the part involved in the process of production, and the scale of reproduction would therefore have to be restricted. Instead of that, the MANUFACTURER can now keep a larger part of his capital in the actual production process, a smaller part as money reserve. But instead of that a part of the capital of society — initially in the form of merchants' capital — is always to be found within the process of circulation; it never enters directly into the process of reproduction. It is always and exclusively employed in the purchase of commodities. There therefore appears to have taken place no more than A CHANGE in the persons who have in their hands this portion of capital.
[XV-966] If the merchant were to employ the £1,000 productively himself, instead of using it to buy COTTON, there would be an increase in the size of the productive capital. But of course in that case the MANUFACTURER would have to keep a more significant part back as money reserve, and the same would be true of MERCHANT I, now turned into a MANUFACTURER. In the one case the productive part of the MANUFACTURERS capital would be increased; but in return for this the whole of the merchants' capital would be withdrawn from production. In the other case both of them would have to increase their money reserve, but then a large part of the merchants' capital would also be devoted to production. Thus it looks like six of one and half a dozen of the other; what is gained on one side is lost on the other. Nevertheless, it is not so (unless merchants' capital exceeds its necessary proportions). And indeed it is not so because the reproduction of merchants' capital and the reproduction of productive capital are two different processes, although the first is only a moment of the reproduction process of the total capital. In the best case, i.e. if he works to order and receives his money as soon as the commodity is finished, the COTTON MANUFACTURER can still only turn over his capital e.g. 4 times in the year, because he cannot produce and reproduce more than 10,000 yards in 3 months. The repetition of his reproduction process is not only determined by the actual act of circulation— C—M—C—the circulation his commodity must pass through from the moment at which it emerges from the process as a finished commodity, in order to enter it once again in the form of the elements of the production of the commodity. It is determined further by the duration of the production process itself. If his capital were [£]900, and he always had to have 7s in the money reserve, there would never be more than £600 present in the production process, and he would only be able to produce 6,000 yards in one rotation, hence if his capital turned over 4 times he would produce 24,000 yards, whereas in the other case[47] he produces 40,000. When and how much he converts back into capital is by no means dependent on the character of his money as money; it is rather that this reconversion of money into productive capital, and the repetition of this reconversion, depends on the specific nature of his productive capital, on the use value of the commodity it produces, and the particular kind of labour which produces this use value and the conditions under which it is produced.
If I now consider the £1,000 of MERCHANT I in relation to this single MANUFACTURER, the reproduction of his capital is in fact entirely dependent on the reproduction of this productive capital. He buys the 10,000 yards today, and sells them it doesn't matter when, say in a week. He cannot convert the money used in this way back into yards until the MANUFACTURER'S second turnover time arrives, at the end of the first 6 months, when the latter again places 10,000 yards on the market, and so on. But merchants' capital, after the 10,000 yards of COTTON MANUFACTURER I have been sold, can again buy 10,000 yards there from COTTON MANUFACTURERS II, III, IV. If we assume the merchant needs a month to make the sale, he could buy 12,000 yards every month, hence in the course of a year 12x12,000=144,000 yards; and thus with his capital of £1,000 he could buy and sell the commodities of 36 MANUFACTURERS, each of them producing 40,000 yards in the year and having a total capital of £32,400 (each of them £900) fixed in their TRADES.[48] Admittedly, we are assuming here that the merchant sells more quickly than the MANUFACTURER could. If this were not the case, merchants' capital would represent absolutely nothing but the capital of the MANUFACTURER lying idle. And it would be the same thing as if the latter always had £1,000 in the process of production and £1,000 as reserve or as means of purchase available in the process of circulation. But this more rapid sale, i.e. the more rapid finding of buyers, results from the principle of the division of labour, since the merchant has nothing else to do but find buyers and sellers. The first moment is therefore that the merchant not only enables the MANUFACTURER to convert his commodity, his calico, into money at an earlier stage, but also enables this calico itself to pass through its first metamorphosis more rapidly, to be sold more rapidly.
With this presupposition, the turnovers of merchants' capital by no means represent the turnovers or the repetition of the reproduction process — conversion of the commodity into money — of MANUFACTURER I, of a single capital in a particular sphere, but rather the turnovers of 36, perhaps, or ANY OTHER AMOUNT, of capitals functioning in this sphere.
[XV-967] Or if the merchant is a GENERAL MERCHANT, he will be able, after the sale of the 10,000 yards of calico for £1,000, etc., to buy silk, etc., with the result that the turnover of his capital can represent not only the turnovers of many capitals in a single sphere of production, but the turnovers of a number of capitals in various spheres of production.
His money capital thus performs the same function towards the productive capitals to be found on the market in the shape of commodity capitals as money performs towards the commodities whose prices it realises in sequence through the number of its circuits in a given period. Its turnover is absolutely nothing but the turnover of money as means of purchase, i.e. means of
5-613 circulation, since in fact it merely represents C—M—C—M, etc. After the merchant has converted the commodity (of the MANUFACTURER) into money and therefore his own money into a commodity, he converts this money into a commodity again, etc. These turnovers of his money capital as means of purchase, as an intermediary in the circulation of commodities, depend on the total reproduction process, or at least on a substantial part of it (for the individual merchant), but they do not depend on the reproduction process of the individual capital. In so far as he, because of the process as a whole, always finds commodities on the market — and this is the prerequisite for him — his turnover consists in the mere repetition of purchases, a repetition mediated by the repetition of sales. His turnover merely represents the repetition of the circuit of money. The difference between his turnover and the simple circuit of money is this: the same piece of money repeats purchases. E.g. A buys from B with £10, B buys from C with the same £10, C from D and so on. Here the buyer is always a different person, although the £10 always remain the same. The money changes hands. But the MERCHANT who buys calico from the MANUFACTURER with £1,000 sells the same calico again to a third person, and the same amount of money returns to his hands. Whether it consists of the same coins is a purely accidental matter. It is at the same time M—C—M, the form of capital. But how often the merchant can renew the same operation depends on how often the same amount of money, his capital as money capital, returns to his hands. If we start from the merchant as commodity owner — and he has become a commodity owner by the purchase of the 10,000 yards — he sells the commodity, and he buys a new commodity with the money into which it has been converted. C—M—C. The same money changes places twice: it comes into the hands of the merchant as seller and it leaves his hands as buyer. This is the movement of the metamorphosis of the commodity in general, a movement which the merchant represents in so far as he first sells (the commodity) and buys with the price of that commodity; first converts the commodity into money, then the money into a commodity. Here the money is mere means of circulation, although it represents capital for him. Nevertheless, this is not the peculiar movement of merchants' capital, although that movement does form a moment of its own movement; in so far as the movement includes a twofold movement of the same piece of money. But merchants' capital, as separated from productive capital, in so far as this itself circulates, always steps forth first as buyer, as money which is to be converted into a commodity. It never makes its first appearance as a commodity, for the commodity appears in the hands of its first owner as product, and it never appears as such in the hands of the actual merchant. The real movement of merchants' capital is this:
1) 2)3) 4)5) 6)7) 8)9) e t c M — C — M — C — M ' Money is exchanged for a commodity, the same commodity is exchanged for money, the same money is exchanged for a commodity, the same commodity is exchanged for money, etc. The difference between this and the metamorphosis of the commodity, in which money only functions as means of circulation, is this: There it is only the same piece of money which changes hands twice and is to be found in the same hand in a double determination (first as realised price of the commodity, second as means of purchase), while the two extremes, the two different commodities, only change their place once and then fall out of circulation. But here it is the same, the identical commodity which changes hands twice. It is sold twice, first by the producer to the merchant, and then by the merchant to the consumer, industrial or individual. There the twofold change of place of the same pieces of money is the mediation of the real exchange of commodities, the real exchange of matter. Here, in contrast, the twofold change of place of the same commodity is not the means whereby the same amount of money (increased) returns to the hands of the same person. It is merely through this twofold change of place of the same commodity — it is the means of pulling back the money — that the money constantly returns here, so that its movement appears as a movement of capital, although it constantly functions in the process as means of circulation. [XV-968] The sale of the commodity — the same phase of its metamorphosis — is here passed through twice.
1)2) This is true if we consider the first rotation M—C — M. It is otherwise in the reproduction, the continuity, the repetition of this process, and the movement of merchants' capital is this constant repetition.
M — C — M/M — C — M, etc. In the first rotation the same commodity only changes its position twice, and the same sum of money comes back. (This return of the same sum of money — hence the same sum of value {capital, because every sum of value appears in its return as self-preserving and self-valorising and [as] value relating itself
5* to itself)—is very different from the twofold functional displacement of the same piece of money. The money performs the latter function in its determination as money and indeed as means of circulation. The return may, it is true, also be purely formal. For example, when the capitalist pays wages in money, and the worker buys the commodity from the capitalist with the same money. This means only that the same persons confront each other as seller and buyer, the same money can therefore serve both of them as means of purchase.) But the sum of money which has thus returned — it is capital with reference to the money laid out, with which the process began; but it is also the realised price of the commodity which has been sold, hence the first metamorphosis of this commodity— the same identical pieces of money now in turn buy commodities, which are in turn sold, etc. Here, then, there is in addition to the twofold displacement of the commodity a twofold displacement of the same money, or its displacement as means of circulation. The RETURN of the money as capital, accomplished by the twofold displacement of the commodity or its sale twice (or more times) in succession. But the repetition of this process, and therefore the purchase of the commodity, is mediated by the twofold displacement of the money which has returned, or its function as means of circulation. The rapidity of turnover of merchants' capital is therefore dependent on 2 moments: 1) On the rapidity with which its money capital performs the circuit as means of circulation, or, and this is the same thing, repeats its purchases. Here the purchase is always repeated with the money which has returned. Its rapidity is therefore the same as the rapidity with which the money changes its place twice, passes from the buyer of the commodity to the merchant, and from the merchant to the seller of another commodity. Rapidity in the turnover of merchants' capital, and rapidity in the circuit of money are therefore identical here. This repetition naturally depends upon a constant flow of new commodities onto the market, hence a constant flow of reproduction. If the self-renewing merchants' capital is large, the reproduction of the commodity must be not only constant and rapid but also on a mass scale. [The rapidity of turnover of merchants' capital however also depends] 2) on the rapidity with which the same commodity changes hands twice, hence on the rapidity of circulation of the same commodity. It must pass quickly from the hands of the producer into those of the merchant. But this is already implied in moment 1). What is added here, essentially, is this, that it must pass quickly from the hands of the merchant into those of the final buyer. He must sell quickly. He now sells either to the industrial consumer //we are leaving out of consideration the division of labour amongst the merchants themselves, by which WHOLESALE DEALER sells to RETAILER, etc.// or to the individual consumer. If to the former, this rapidity of re-sale will depend directly on the rapidity of reproduction. If to the individual consumer, consumption will form in reality a moment of the process of reproduction. It is C—M—C'in the first sense, that in which the commodity is converted into means of consumption through the mediation of money. The more production as a whole rests on circulation, each producer therefore possessing his product only in the shape of a commodity or of money, his consumption therefore resting on sale (qua ad commodity) and purchase (qua ad money), the more is the rapidity of consumption, of the commodity's withdrawal from circulation, conditioned by the manner of the production process itself.
The rapidity of turnover of merchants* capital therefore depends on 2 moments: the rapidity with which the same money changes its position, performs its circuit, hence the rapidity of money as means of circulation (is expressed in this). Then the rapidity with which the double displacement of the same commodity takes place, the peculiar circulation which is appropriate to it as commodity capital (not as mere commodity). Both moments depend on the rapidity of the total reproduction process. The turnover of merchants' capital is not, however, identical with the turnover or the number of reproductions of a productive capital of equal magnitude. It represents rather the sum total of the turnovers of a number of such capitals, whether in the same sphere or in different spheres of production.
[XV-969] The more quickly merchants' capital turns over, the smaller it is in relation to the amount of productive capital. The more slowly it turns over, the greater is the part of the total money capital which figures as merchants' capital. Hence in modes of production, or at stages of production, at which circulation is undeveloped, because in general the exchange-value character and further the capitalist character of production is undeveloped, the total amount of merchants' capital (although small absolutely) is relatively large in proportion to the total amount of commodities thrown into circulation. The greater part of the actual money capital is therefore in the hands of the merchants, whose wealth thus forms monetary wealth as far as the others are concerned. (The actual money trade must be added to this. But we shall deal with this later.)
It further follows from the calculations: In so far as merchants' capital appears as commodity capital, it is absolutely nothing but productive capital itself, which happens to be in the sphere of circulation sub specie* commodity capital. It is true that it now appears in the hands of another commodity owner. But the fact that it is in reality just a phase of productive capital emerges immediately when the commodity capital in the hands of the merchant is unsaleable, when his money capital is therefore not returned to him, when he therefore cannot buy the commodity afresh. Then the same standstill in reproduction occurs as if the capital — in the form of commodity capital, in the first stage of its circulation process — were to be found unsaleable in the hands of the producer.
It is not necessarily the case that merchants' capital performs just the turnover considered above. The merchant may perform both movements simultaneously. Then his capital is divided into two parts. One consists of commodity capital, the other of money capital. From one he buys, thereby converting his capital into commodities. To the other he sells, thereby converting another part of his capital into money. On the one hand his capital flows back to him as money capital, while on the other hand his money capital is simultaneously converted into commodity capital or flows back to him as commodity capital. The larger the part which exists in one form, the smaller the part which exists in the other. But this division must balance out. E.g. £300 merchants' capital. He initially keeps £100 in reserve and buys commodities with £200. As long as this £200 exists in the commodity form he cannot buy with it. Now he buys with £100. At this point, however, £200 has been converted from commodities into money and £100 from money into commodities. But what is important here is that the merchant simultaneously buys with one part of his capital and sells with the other part. Assume he buys at 3 weeks' payment and he sells similarly at 3 weeks' payment. At the end of 3 weeks he owes £200 and is due to receive £100. He has thus a balance of £100 to pay, while he simultaneously possesses £200 in commodities. Instead of £300 he would then require only £100 to conduct the transaction. But if he has sold the commodities over the 3 weeks, he can pay the balance with the money he has made, and therefore does not need to lay out any money at all.
Therefore: 200 bought x yards payable after 3 weeks -£200
£200 to pay
100 x qrs sold payable after 3 weeks
[£]100 to take in
Thus he pays for the 200 x yards with the £100 made+£100 he will make, but he needs for the whole transaction only £100. I.e. he needs only £100 to buy 200 yards for £100 (8) and sell 100 qrs. at £100.
This employment of money as means of payment involves the circuit of money as means of circulation :
Bought x yards payable after 3 weeks with £200. Sold before the end of the 3 weeks.
Owes£200,possesses £200
£100 to take
Thus he pays for the 100 x yards with the price he gained from their sale. I.e. the purchase of the 200 x yards costs him no monetary outlay. He has bought without money, sold for money. Hence instead of £100 to add he has £100 in his possession.
With the addition of money as means of payment, and the credit system founded on this, there is a further reduction in the quantity of money capital which forms mercantile capital, in proportion to the magnitude of the transactions this mercantile capital performs. If I buy £1,000 worth of commodities at 3 months' payment, and I sell the commodities before the end of 3 months, I do not need to advance a single farthing for this transaction. [XV-970] In this case it is also as clear as day that the money capital, which appears here as mercantile capital, is absolutely nothing other than productive capital itself in its form of money capital, its RETURN to itself in the form of money. (That the MANUFACTURER who sells the £1,000 of commodities for 3 months can discount the bill on the MERCHANT changes nothing in the situation, and has nothing to do with merchants' capital as such.) If the market prices of the commodities were to fall in the meantime, e.g. by Vio, the merchant would only receive £900 back IN RETURN, and would have to add £100 in order to pay. This £100 would therefore be merely a reserve to compensate for a possible difference in price. But the same thing is true for the MANUFACTURER.
If he had himself sold at falling market prices, £900 would have come back instead of £1,000, and he could not have started the operation again on the same scale without a reserve capital of £ioo.
Let us now consider another phase of the above process. The MANUFACTURER received £1,000 from the merchant to whom he sold his CALICO. With the £1,000 he buys yarn from the yarn dealer; MERCHANT II. His (the MANUFACTURERS) capital has thereby completed its circulation process and is once again in the sphere of production. The £1,000 in the hands of the yarn dealer represent on the one hand the RETURN of his money capital, the reconversion of his money into money. But with reference to the yarn itself, hence productive capital, the £1,000 represent in fact its first metamorphosis, its conversion into money (although this has already happened for the yarn MANUFACTURER specifically through his sale to MERCHANT II). The phases of production of the capitals in the various spheres are intertwined with each other, in that what emerges from one phase as product (finished commodity) enters the other as condition of production, and indeed they may interlock with each other reciprocally in the way that iron enters the production of coal and coal the production of iron. The spheres of circulation are intertwined with each other in exactly the same way. Thus here the reconversion of the money capital of the CALICO MANUFACTURER into productive capital is the reconversion of the yarn into money, the RETURN of the money capital of the YARN MANUFACTURER. This represents at the same time the RETURN of the money capital of the YARN dealer. The money with which the CALICO MANUFACTURER pays the yarn dealer is not the money of MERCHANT I, for the latter has obtained commodities to the amount of £1,000 for this. It is his own capital in the form of money. These £1,000 now appear in the hands of the yarn dealer as MERCANTILE CAPITAL, but to what extent are they this, as distinct from this money as the money form the CALICO has shed, and the money form the YARN has assumed? If, for example, the YARN dealer bought on credit, and sold before he had to pay, the £1,000 would contain not a farthing of MERCANTILE capital as distinct from the money form, which productive capital itself assumes in its process of circulation. MERCANTILE capital, in so far as it is not a mere form of productive capital, which appears as a particular kind of capital because productive capital is to be found on the market in the hands of MERCHANTS in its shape as commodity capital and its shape as money capital, is therefore nothing but the part of money capital which belongs to the MERCHANT himself. This part represents — on a much lessened scale (if this were not so, mercantile capital would be GOOD FOR NOTHING), on a highly reduced scale — nothing but the part of productive capital which must always be available in the hands of the MANUFACTURER as a reserve for means of purchase, as money; IN FACT it represents nothing but a part of the part of productive capital which must always circulate as money capital. (It also circulates when held in reserve as means of circulation, as means of purchase. But it would really circulate. E.g. the MANUFACTURER has [£] 1,000 in commodities instead of £1,000. He cannot begin his process of reproduction with these commodities. He would need in addition £1,000 in money in order to buy means of production, etc.) This part is now to be found much reduced in size in the hands of a particular SET of capitalists, and it is always in circulation, always functioning in the circulation process. (To say that the merchant extends the market, that there is consequent division of labour, etc., amounts to saying that he finds buyers more quickly. For even finding more [XV-971] buyers only means finding buyers for more commodities.) It is very much reduced because it serves the turnover not of one capital but of many capitals. Apart from the part of productive capital which must constantly exist as money for current expenditure, another part must constantly circulate as means of purchase on the market, without ever itself being converted into productive capital, for the whole of the capitalist class, for the process of reproduction of the total capital — for the continuity of this process. This part forms mercantile capital. It is the smaller, relatively speaking, the more rapid the total process of reproduction, hence the circuit of money, and the more developed money is as means of payment, hence the credit system.
We saw when we considered the total process of reproduction[49]
that in part capital is exchanged with capital, in part capital with income and capital, and, finally, in part capital with income. With MERCANTILE capital this is represented in the following way, that to the extent that it exchanges with industrial consumers (disregarding here movements from the hands of one buyer into those of another, from the WHOLESALERS hands into the RETAILERS, etc.) it is a mere TRANSFER of capital; to the extent that it exchanges with individual consumers it is exchange with income.
Mercantile capital is nothing but capital which functions within the sphere of circulation. The circulation process is a phase of the total process of reproduction. But no value is produced in the circulation process, hence no surplus value is produced either. There occur only changes of form in a magnitude of value which remains the same. In fact what occurs is nothing but the metamorphosis of the commodity, which has nothing to do with value creation or value alteration as such. If surplus value is realised in the sale of the commodity, this is because the surplus value already exists in it; hence in the second act, the exchange back of the money capital in return for the commodity, no surplus value is realised (this can only be achieved here through the exchange of money for labour). On the contrary. In so far as this metamorphosis costs circulation time — a time during which capital does not produce — hence does not produce surplus value either — it is a limitation on the creation of value, and the surplus value will be expressed as a rate of profit in an exactly inverse ratio to the duration of circulation time. Mercantile capital therefore creates neither value nor surplus value. That is to say, not directly. In so far as it contributes to the curtailment of circulation time, and in general mediates the metamorphosis without which capital cannot begin its process of production anew, it performs a function indispensable to the capitalist mode of production, and it may indirectly help to increase the surplus value created by productive capital, or at least establish it as a higher rate of profit, or both at once. In so far as it helps to extend the market and mediates the division of labour between the capitals — hence also enables the individual capital to work on a larger scale — its function promotes the productivity of productive capital and the process of accumulation, the reconversion of profit into productive capital. In so far as it curtails circulation time, it raises the ratio of surplus value to the capital advanced, hence the rate of profit. Finally, in so far as it inserts a smaller part of capital (money capital) into the sphere of circulation of the commodities, into the process of circulation of capital (to the extent that this circulation process excludes the exchange of capital and labour capacity), it increases the part of capital directly invested in production. But as we have said: in so far as it has an impact on the magnitude of value as such, and the ratio of surplus value to the value advanced, it does this only indirectly, through its impact on the productive capital. Within the sphere of circulation — the only sphere in which it functions — it does not itself create value or surplus value, apart from that which flows from the sphere of direct production into the sphere of circulation. The profit which mercantile capital brings in is therefore merely a part of the surplus value, which is created by the total productive capital, and of which an aliquot part is transferred to mercantile capital. What mercantile capital is exchanged for — whether it is capital, or money representing income, profit (interest), rent, wages — is a fixed amount of value, which remains what it was through this exchange. Mercantile capital not only does not itself produce its profit, which is, rather, [XV-972] only a TRANSFER from the surplus value made, squeezed out, by productive capital; it is also preserved as capital only through the constant renewal of the process of production. But the latter point is already implied by the fact that MERCANTILE CAPITAL is in reality nothing but productive capital in its sphere of circulation; and it only appears alongside productive capital as distinguishable and distinct MERCANTILE capital because the part of PRODUCTIVE capital which would always have to be present in the hands of the INDUSTRIAL capitalist as circulating money capital is now to be found, on a much reduced scale, in the hands of a particular SET OF CAPITALISTS, whose function lies outside the actual process of production.
Indeed, mercantile capital does not function in the actual process of production, but in the process of reproduction of the commodity, of which the process of circulation forms a section of its own. Just as the industrial capitalist is an agent of capitalist production, or productive capital personified, so the MERCHANT is an AGENT of capitalist circulation, IN FACT a personification of circulating capital. But every capital which is engaged in the process of production or reproduction, which performs any necessary function of capital at all, draws, pro rata its size, an equal portion of the surplus value produced by the total capital within a definite period, hence e.g. annually. This is therefore true of mercantile capital as well, although it has nothing to do with the direct production of that surplus value, hence also nothing to do with the direct exploitation of the worker. (In so far as the RETAILER, etc., exploits the worker, he exploits him as a seller exploits the buyer. This cheating, this fraud, which we are not examining here at all, is not a form characteristic of capitalist production as such.) Just as a capital of 1,000 brings the same AVERAGE PROFIT as another capital of 1,000, even though it only employs perhaps Vs of the workers, and returns perhaps only once whereas the other capital returns 4 times a year, hence has a longer circulation time, and employs less variable capital, so also with MERCANTILE CAPITAL. What is involved here is only the size of the capital outlay, and the functioning of that capital IN WHATEVER WAY DURING A CERTAIN PERIOD, SAY [an] ANNUAL PERIOD. Since the actual productivity of capital as capital consists in its producing profit; and since mercantile capital produces the same AVERAGE PROFIT as industrial capital (interest+commercial profit=interest+industrial profit), mercantile capital does not appear as a particular kind of capital alongside productive capital, but as a particular kind of productive capital, as one of the particular spheres into which it is divided and within which it functions. We therefore find the following put forward side by side as kinds of productive capital: APPROPRIATIVE INDUSTRY, AGRICULTURAL INDUSTRY, MANUFACTURING INDUSTRY, CARRYING INDUSTRY, MERCANTILE INDUSTRY. As if it were only distinguished materially from the other spheres of productive capital, whether through the particular kind of use value it produces (as with the MINING and AGRICULTURAL INDUSTRY), or through the particular way in which the use value is further shaped (as with the MANUFACTURING INDUSTRY and the CARRYING INDUSTRY). But mercantile capital is not a particular sphere of productive capital; it is a sphere of capital separated off from the spheres of productive capital. It has nothing to do with use value as such, being only concerned with the exchange of the use values, just as it has nothing to do with exchange value, but is only concerned with changes in its form. Mercantile capital should rather be placed in the same sphere as MONETARY CAPITAL. Trade in commodities and trade in money as two particular spheres or functions of parts of the total capital which belong to the process of circulation. The great political economists, like Smith, Ricardo, etc., are embarrassed by MERCANTILE CAPITAL as a separate kind of capital, since they rightly examine the fundamental form of capital, productive capital, and IN FACT only examine circulating capital in so far as it is itself a phase of the reproduction process of capital. Propositions about profit, etc., derived directly from the examination of productive capital, cannot be applied directly to mercantile capital. They therefore in fact leave the latter aside entirely, mentioning it only en passant as a kind of productive capital. Where they deal specifically with it, as Ricardo e.g. in connection with foreign trade, they endeavour to demonstrate [XV-973] that it creates no value, hinc" NO SURPLUS VALUE. But what is valid for foreign trade is also valid for internal trade. The mere [act] of exchanging commodities, buying and selling, presupposes the commodities as use values which have a certain price, and creates neither the one nor the other.(9)
On the other hand, since mercantile capital is the first free mode of existence of capital in history, and appears as such vis-à-vis guild and feudal, petty-bourgeois and small peasant production, "'"* %
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Page 973 of Notebook XVI of the Economic Manuscript of 1861-63 the [advocates of the ] Monetary a n d Mercantile System regarded it as the fundamental form of capital, a n d they derived from it their notions of SURPLUS VALUE a n d PROFIT. PROFIT UPON EXPROPRIATION.17 In reality the merchant draws his profit from circulation and makes it in the act of circulation. But he withdraws what is already there; he merely appropriates a part of the surplus value which is already contained in the commodity, and thereby shares it with his BROTHER CAPITALISTS. Because it arises from circulation for him, it appears to arise from circulation in and for itself.
If MERCANTILE CAPITAL brings in A HIGHER AVERAGE PERCENTAGE OF PROFIT than industrial capital, a part of the industrial capital is converted into mercantile. If it brings in A LOWER AVERAGE PERCENTAGE OF PROFIT, the reverse process takes place. A part of MERCANTILE CAPITAL is converted into INDUSTRIAL CAPITAL. T h e r e is n o capital which can change its determination, the sphere of its functions, with greater ease.
This is now the question: How does MERCANTILE CAPITAL appropriate the rate of surplus value or profit which is owing to it? It appears on the surface that it adds the AVERAGE RATE OF PROFIT to the price of the commodity. We have seen [5 2] that the price of production of the individual commodity or for the whole capital of every particular sphere of production is different from the value of the commodity, may be equal, larger, or smaller. But the sum of the production prices of the commodities=the sum of their values. So if the AVERAGE price at which every industrial capitalist sells to the MERcHANT=the production price of his commodity, the sum of the commodity prices paid by mercantile capital=the sum of the values. A n d taking mercantile capital as a whole, the value of the commodities would form the cost price or BUYING PRICE. A n d since the merchant's profit=the difference between BUYING PRICE a n d SELLING PRICE, he would sell all commodities above their value. For every individual commodity the PRODUCING PRICE would be his COST PRICE, a n d he would sell it above its PRODUCING PRICE. For all commodities together this would be identical with his selling them above their value. His profit — taking the whole — would therefore come from buying the commodities at their value and selling them above their value. Through this operation, a part of the surplus value (or of profit), or a part of the commodity within which the surplus value is represented, would stick to his fingers. If, for example, I buy a yard at 2s. and sell it at 2s. 2[2]/[5]d., that is the same as if I were to sell only [10]/n of a yard for 2s. and appropriate for myself either Vu of a yard or its price,= [2]/ [1 0]s. I achieve this, however, only because the buyer pays as much for one yard as I + V5 (l+ [2]/io) of a yard cost. This is A CIRCUITOUS WAY OF PARTAKING IN THE SURPLUS VALUE. Or, alternatively, the production price at which industrial capital sells is not=to the real production price of the commodity, but=its production price — the part of the profit which falls to the MERCHANT. In this case, the production price of the commodity=its cost price+the industrial profit (interest INCLUDED)+THE MERCANTILE PROFIT. Just as INDUSTRIAL CAPITAL only realises in circulation profit which is already contained in the commodities as surplus value //although for the particular capital the quota of profit it realises is different from the quota of surplus value which this specific capital produces// so here mercantile capital would only realise a profit because the whole surplus value is not yet realised in the price of the commodity realised by INDUSTRIAL CAPITAL. Its SELLING PRICE stands above the BUYING PRICE, not [because it] stands above the value of the totality of commodities, but because in its BUYING price the value is realised,— [namely in] surplus value — the part which is due to the merchant.[53]
* * *
Endnotes
[13] The text on pp. 9-25 of this volume reproduces in part and with some alterations a number of passages from Marx's economic manuscript of 1857-58 (see present edition, Vol. 29, pp. 226-36).-—9
[14] The term "auxiliary capital" was used by Richard Jones, who, in Marx's words, understood it to mean "the part of constant capital which is not made up of raw material" (see this volume, p. 357). Cf. p. V — 196 of the manuscript, where Marx also uses the said term (present edition, Vol. 30, p. 327).—9
[16] Page XV — 941 of the manuscript has the note, "England. 17th century. The polemics are no longer directed against usury as such, but against the amount of interest" (see present edition, Vol. 32, p. 537).—11
[21] The dialectics of alienation and appropriation in the process by which the bourgeois mode of production emerges and develops were discussed in detail by Marx back in Outlines of the Critique of Political Economy (Rough Draft of 1857-58) notably in the section headed "Forms Preceding Capitalist Production" (see present edition, Vol. 28, pp. 399-439).—13
[24] Here Marx quotes from Recherches sur la nature et les causes de la richesse des nations, Paris, 1802, Garnier's translation of Adam Smith's work. Marx made excerpts from it in Paris in the spring of 1844. In the present volume all quotations from Garnier's translation are given according to the English edition (A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, by J. R. MacCulloch. In four volumes. Edinburgh, London, 1828), with the pages indicated in brackets, and Marx's wording respected. Marx widely used the 1828 edition when working on the manuscript of 1861-63.—19
[28] Below in the original mistakes were made when converting pence into shillings.—23
[29] There follows an incomplete sentence which concludes p. 950b: "If wages fell to V3, say from 2/5s...."—24
[100] \farx is referring to the sections "Relative Surplus Value" and "Capital and Profit" of the manuscript contained in notebooks III-V and XVI (see present edition, Vol. 30, and this volume, pp. 69-153).—109
[60] Marx criticised the erroneous arguments on interest and compound interest in Richard Price's works An Appeal to the Public..., London, 1772, and Observations on Reversionary Payments..., London, 1772, and also William Pitt's fantasy engendered by Price's ideas, back in the manuscript of 1857-58 (see present edition, Vol. 29, pp. 218-19). When examining the question of compound interest on p. XIV — 853 of the manuscript he noted: "We shall return to Price's fantasy in the section on revenue and its sources" (see present edition, Vol. 32, p. 376). However, in Notebook XV, which contains a summary of the views of vulgar bourgeois political economists on revenue and its sources (see ibid.) there is no mention of "Price's fantasy". Marx did not resume his criticism of Price on this question until p. XVIII — 1066 of the manuscript of 1861-63 (see this volume, pp. 222-24). Subsequently a critical analysis of Price's views was given in Capital, Vol. Ill, Chapter XXIV (see present edition, Vol. 37).—71, 222
[31] The price of the product in this case is the same as in II, but not in I a).—26
[32] Marx is referring to the value added by living labour.—29, 128
[33] Marx is referring to case I a).—30
[34] The reference is to the value added by living labour, both paid and unpaid.— 30
[35] In the table below, several figures which Marx gives twice are reproduced only once.— 30
[37] Marx means the value of labour power, or of labour capacity. He deliberately drew a distinction between labour and labour power (labour capacity) back in the economic manuscript of 1857-58 (see present edition, vols 28 and 29). However, in this manuscript, which was not intended for publication, the term "value of labour" is often used for the sake of brevity in the sense of "value of labour capacity".—32
[38] Up to here, according to Marx's supposition, 100s. represented 5 M and not 10 M, so that 50s. represent not 5 M, but 2V2 M.—33
[39] See D. Ricardo, On the Principles of Political Economy, and Taxation, London, 1821, chapters I, V, VI, and XXI. This thesis of Ricardo's is examined by Marx in greater detail in notebooks XII and XIII of the manuscript (see present edition, vols 31 and 32).—33
[40] In the previous exposition Marx assumed throughout that £100 commanded 5 men.—34
[41] Marx examines case III.—35
[42] Page 957 is the direct continuation of page 955.—36
[45] Cf. Matthew 6:19: "Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal."—44
[46] These questions are examined in detail by Marx in Capital, Volume III, Chapter XXXV (see present edition, Vol. 37).—46
[47] Marx means the case when the cotton manufacturer's capital amounts to £1,000 and turns over four times a year.—52
[48] In the manuscript the annual production of each manufacturer is given as 40,000 yards. This implies that their capitals turn over several times a year, whereas all the other figures in this example show that each capital turns over just once a year, producing 4,000 yards. If we assume that the manufacturer's capital (£900) turns over four times a year, in a year it will produce 36,000 yards. In this case each merchant could buy and sell the commodities produced by four manufacturers.—53
[49] See notebooks IX and X of the manuscript (present edition, Vol. 31, pp. 130-200, 204-40).—61
[52] Marx dwelled on this question on pp. X — 450-454, 470-473, XI — 529-560, XIV — 788-789 of the manuscript of 1861-63 (see present edition, Vol. 31, pp. 261-71, 301-05, 401-57; Vol. 32, pp. 270-73).—67 34-613
[53] This is the end of Notebook XV of the manuscript of 1861-63. There follows a note by Marx: "Continued in Notebook XVII." The single front cover of notebooks XVII and XVIII (p. 1066) carries the note: "Beginning on page 1029 continuation of Notebook XV" (see also Note 127).—68
[12] In the economic manuscript of 1857-58 (see present edition, Vol. 28), and also in notebooks I, II and XI of the present manuscript (see present edition, vols 30 and 31), Marx described mercantile and money-dealing capitals as being, on the one hand, the first historical forms of capital and, on the other hand, derivative forms of capital in bourgeois society. Marx drew attention to the need to go into greater detail on the role of trade in the development of capitalist production on p. II — 71 of the manuscript (see present edition, Vol. 30, p. 136).—9
[15] Above, on p. XV — 939 of the manuscript, Marx writes on this score: "The usurer in all pre-capitalist modes of production has a revolutionary impact only in the political sense, in that he destroys and wrecks the forms of property whose constant reproduction in the same form constitutes the stable basis of the political structure" (see present edition, Vol. 32, p. 535).—10
[17] "Profit upon expropriation" (or "profit upon alienation") is a term which was used in writings on political economy before Marx. On p. VI — 221 he writes that "profit upon alienation ... arises ... from the goods being sold above their value" (see present edition, Vol. 30, p. 351).—11, 35, 67, 241, 351
[3] An analysis of vulgar political economy is to be found in Notebook XV, where revenue and its sources are examined (see present edition, Vol. 32, pp. 449-541). On p. XV — 935, Marx refers to the "section on the vulgarians" in which he will "return" to the polemic between Proudhon and Bastiat mentioned here chapter specifically devoted to vulgar political economy is provided by the plan for the third part of Capital, which he drew up in January 1863; the eleventh, and penultimate, chapter was to have the title "Vulgar Economy" (see this volume, p. 347).—7, 255
[18] There follows the end of the sentence crossed out by Marx: "before it takes on its other functions, before capitalist production, and therefore before capital itself comes to be the all-dominant relation of production, before its fundamental form is developed in which it constitutes the basis of modern society".—12
[19] Cf. Outlines of the Critique of Political Economy (Rough Draft of 1857-58) (present edition, Vol. 29, p. 233) and also Capital, Vol. Ill, chapters XX and XXXVI (present edition, Vol. 37).—12, 20
[20] In the original there follows the sentence crossed out by Marx: "What he receives for his money therefore depends neither on its value nor on the value of the commodities, since the general measure of valorisation and thus profit, the average rate of profit, come into being only on the foundation of capitalist production itself. " —12
[23] In the manuscript, the word "principalities" (Provinzen) was crossed out and "lands" (Ländern) written above it. On the exploitation of peasants in the "Romanian principalities" see Capital, Vol. I, Chapter X (present edition, Vol. 35).—17
[6] Marx evidently meant the ratio between the rate of profit and the rate of surplus value, which is in inverse proportion to the ratio of variable to total capital. On the importance of distinguishing between the rate of surplus value and the rate of profit see p. Ill — 124e of the manuscript (see present edition, Vol. 30, p. 229).—7, 77
[1] Having completed the economic manuscript of 1857-58 (see present edition, vols 28 and 29), Marx embarked on a substantial economic work which, as he planned, was to encompass all aspects of life in capitalist society. The first step was the publication, in 1859, of A Contribution to the Critique of Political Economy. Part One. In the preface to this work, Marx sets out the plan of his ambitious project: "I examine the system of bourgeois economy in the following order: capital, landed property, wage-labour; the State, foreign trade, world market... The first part of the first book, dealing with Capital, comprises the following chapters: 1. The commodity; 2. Money or simple circulation; 3. Capital in general. The present part consists of the first two chapters" (see present edition, Vol. 29, p. 261). The extant correspondence (see present edition, Vol. 40) shows that after the publication of Part One Marx intended to start immediately on the second part, dealing with capital in general. However, certain circumstances, his preoccupation with Herr Vogt among them, prevented him from immediately carrying out this intention. Preparatory work (drafting plans, reviewing the 1857-58 manuscript and excerpts dealing with capital — see present edition, Vol. 29 — as well as making new excerpts, etc.), continued up to the summer of 1861, and in August 1861 Marx began writing. Viewed as the second part of A Contribution to the Critique of Political Economy, the new manuscript originally bore the same title, and on the covers of the first two notebooks he wrote the subtitle "Third Chapter. Capital in General" (see present edition, Vol. 30, p. 6). But soon the size of the manuscript grew considerably and reached 23 notebooks, 1,472 large pages in all. In the present edition it is published in vols 30-34.—5
[30] The magnitude 2/5, or 40 per cent, does not reflect the ratio between the amount of profit and the price of the product, but the approximate ratio between the profit and the outlay on the product's manufacture. In actual fact the former ratio is 4/15, or 262/3 per cent.—26
[4] By the "third chapter" or "third section" Marx means the entire third part of the investigation of "capital in general" (see Note 1). The title "Third Chapter. Capital and Profit", and also the draft plan of this chapter, are to be found on the inside front cover of Notebook XVI (originally Marx called this notebook, dated December 1861-January 1862, "Notebook Ultimum"). This title is also reproduced on p. XVI — 973. A slightly changed and extended version of the plan for this section of his study is given by Marx on p. XVIII — 1139 (see this volume, pp. 346-47). In mid-1863, when embarking on a new, third, version of the work which was later to become Capital, Marx concluded that the chapters, or sections,in his study of "capital in general" would actually represent separate books that would be comprised in Capital. From this time on, the third chapter began to figure as Book III (later Volume III) of Capital.—7, 346, 380, 478
[5] Marx drew attention to the need for a special examination of the relation between surplus value and profit on p. Ill — 98 of the manuscript (see present edition, Vol. 30, p. 178).—7
[2] The section on Ravenstone begins on p. XIV — 861 of the manuscript (see present edition, Vol. 32, p. 392). Preceding it in Notebook XIV and numbered "1)" is a section devoted to the anonymous pamphlet The Source and Remedy of the National Difficulties.— 7
[10] In March 1862 Marx interrupted his successive analysis of relative surplus value and embarked on a detailed examination of bourgeois theories of surplus value. As a result, part of Notebook V was not filled in. In late 1862-early 1863 Marx returned to his analysis of the use of machinery in capitalist production and made records in notebooks V, XIX and XX, as is testified by his letters to Engels of January 24 and 28, 1863 (see present edition, Vol. 41, pp. 446 and 449-51). Part of Notebook V has therefore been included in this volume in accordance with the time it was written. The text on pp. 372-501 of this volume thus represents the continuation of subsection "y) Machinery. Utilisation of the Forces of Nature and of Science" of section "3) Relative Surplus Value", the beginning of which is published in Volume 30 of the present edition. Marx did not write the table of contents for Notebook V on the inside front cover, which he did for other notebooks of the manuscript of 1861-63 beginning with Notebook VI.—8, 372, 489
[90] The reference is to J. Fullarton, On the Regulation of Currencies..., London, 1844, pp. 161-66. Marx examines Fullarton's views on crises in the manuscript of 1857-58 and on p. XIII — 707 of the manuscript of 1861-63 (see present edition, Vol. 29, p. 225, Vol. 32, p. 129).—105, 112
[9] The cover of Notebook XVIII has not survived. The notes given below were made on the inside front cover of Notebook XIX of the manuscript of 1861-63. Besides the table of contents there are references here to Factories. Returns for various years. The front cover of Notebook XIX is dated: "Jan. 1863".— 8, 387
[36] Page XV — 956 is the direct continuation of page XV — 953, and page XV — 954 is the direct continuation of page XV — 956.—30, 33
[43] In this manuscript Marx often refers to "wage labour" or "labour" pure and simple when he means hired labour power (see also Note 36).—39, 50, 175, 176, 179, 198, 204, 206, 234, 262