The Meeting of Demand and Supply
What is true of the individual capitalist applies to the capitalist class.
In so far as the capitalist merely personifies industrial capital, his own demand is confined to means of production and labour power. In point of value, his demand for MP is smaller than his advanced capital; he buys means of production of a smaller value than that of his capital, and therefore of a still smaller value than that of the commodity capital which he supplies.
[7] End of Manuscript V. What follows, to the end of the chapter, is a note contained in a notebook of 1877 or 1878 amid extracts from various books.
As regards his demand for labour power, it is determined in point of value by the relation of his variable capital to his total capital, hence = v: C. In capitalist production this demand therefore grows relatively smaller than his demand for means of production. His purchases of MP steadily rise above his purchases of L.
Since the labourer all too often converts his wages almost wholly into means of subsistence, and for the overwhelmingly larger part into absolute necessities, the demand of the capitalist for labour power is indirectly also a demand for the articles of consumption essential to the working class. But this demand is equal to v and not one iota greater (if the labourer saves a part of his wages — we necessarily discard here all credit relations — he converts part of his wages into a hoard and pro tanto[3] does not act as a bidder, a purchaser). The upper limit of a capitalist's demand is = to C = c + v, but his supply is c + v + s. Consequently if the composition of his commodity capital is 80c + 20v + 20s, his demand is = to 80c + 20v, hence, considered from the angle of the value it contains, ' /[5] smaller than his supply. The greater the percentage of the mass of surplus value m produced by him (his rate of profit) the smaller becomes his demand in relation to his supply. Although with the further development of production the demand of the capitalist for labour power, and thus indirectly for necessary means of subsistence, steadily decreases compared with his demand for means of production, it must not be forgotten on the other hand that his demand for MP is always smaller than his capital. His demand for means of production must therefore always be smaller in value than the commodity product of the capitalist who, working with a capital of equal value and under equal conditions, furnishes him with those means of production. That many capitalists and not only one do the furnishing does not alter the case. Take it that his capital is £ 1,000, and its constant part = -£ 800; then his demand on all these capitalists is = to £800. Together they supply means of production worth £1,200 for each £1,000 (regardless of what share in each £ 1,000 may fall to each one of them and of the fraction of his total capital which the share of each may represent), assuming that the rate of profit is the same. Consequently his demand covers only [2]/[3] of their supply, while his own total demand amounts to only [4]/[5] of his own supply, measured in value.
It still remains for us, incidentally, to investigate the problem of
to that extent turnover. Let the total capital of the capitalist be £5,000, of which £4,000 is fixed and £ 1,000 circulating capital; let these £ 1,000 be composed of 800c + 200v, as assumed above. His circulating capital must be turned over five times a year for his total capital to turn over once. His commodity product is then = £6,000, i. e., £ 1,000 more than his advanced capital, which results in the same ratio of surplus value as above:
5,000 C: 1,000,= 100ic+v) : 20s. This turnover therefore does not change anything in the ratio of his total demand to his total supply. The former remains '/[5] smaller than the latter.
Suppose his fixed capital has to be renewed in 10 years. So the capitalist pays every year '/io = £400 m t o a sinking fund and thus has only a value of £3,600 of fixed capital left + £400 in money. If the repairs are necessary and do not exceed the average, they represent nothing but capital he has invested later. We may look at the matter the same as if he had allowed for the cost of repairs beforehand, when calculating the value of his investment capital, so far as this enters into the annual commodity product, so that it is included in that '/io sinking fund payment. (If his need of repairs is below average he has done a good piece of business, and the reverse if it is above average. But this evens out for the entire class of capitalists engaged in the same branch ofindustry.) At any rate, although his annual demand still remains £5,000, equal to the original capital value he advanced (assuming his total capital is turned over once a year), this demand increases with regard to the circulating part of the capital, while it steadily decreases with regard to its fixed part.
We now come to reproduction. Let us assume that the capitalist consumes the entire surplus value m and reconverts only capital C of the original magnitude into productive capital. Then the demand of the capitalist is equal in value to his supply; but this does not refer to the movement of his capital. As a capitalist he exercises a demand for only [4]/[5] of his supply (in terms of value). He consumes '/[5] as a non-capitalist, not in his function as capitalist but for his private requirements or pleasures.
His calculation, expressed in percentages, is then as follows:
Demand as capitalist = 100, supply = 120 Demand as man about town = 20, supply = —
Total demand = 120, supply = 120 This assumption is tantamount to assuming that capitalist production does not exist, and therefore that the industrial capitalist himself does not exist. For capitalism is abolished root and branch by the bare assumption that it is personal consumption and not enrichment that works as the compelling motive.
But such an assumption is impossible also technically. The capitalist must not only form a reserve capital to cushion price fluctuations and enable him to wait for favourable buying and selling conditions. He must accumulate capital in order to extend his production and build technical progress into his productive organism.
In order to accumulate capital he must first withdraw in money form from circulation a part of the surplus value which he obtained from that circulation, and must hoard it until it has increased sufficiently for the extension of his old business or the opening of a side-line. So long as the formation of the hoard continues, it does not increase the demand of the capitalist. The money is immobilised. It does not withdraw from the commodity market any equivalent in commodities for the money equivalent withdrawn from it for commodities supplied.
Credit is not considered here. And credit includes for example deposits by the capitalist of accumulating money in a bank on current account paying interest.
Endnotes
[7] In the 1861-63 manuscript Marx quotes Adam Smith in French according to Re-cherches sur la nature et les causes de la richesse des nations trad, par G. Garnier, Paris, 1802, t. 1, pp. 96-97, 99-100. Marx copied out passages from this book in his Paris notebook compiled in 1844. See MEGA 2, Bd. IV/2, Berlin, 1981, S. 332-86. Marx had this French edition in his personal library.—13
[2] Engels did not have time to publish Marx's Theories of Surplus Value as the fourth volume of Capital. It was first published in 1905-10 by Karl Kautsky. In 1954-61 and 1962-64, the Institute of Marxism-Leninism of the CC CPSU in Moscow published in Russian a new edition of Theories... which differed from that of Kautsky. In 1956-62 this Russian edition was used by the Institute of Marxism-Leninism of the CC SUPG as the basis for the publication of Theories... in German. In the present edition Theories of Surplus Value is published, according to MEGA 2, Abt. II, Bd. 3, Berlin, 1976-82, as part of the Economic Manuscript of 1861-63 (see present edition, vols 30-34).— 6
[3] From the numerous notebooks compiled by Marx in the period indicated by Engels, the Institute of Marxism-Leninism of the CC CPSU published nearly all the passages from Russian sources (see Marx-Engels Archives, vols XI-XII, XVI, Moscow, 1948, 1952, 1955, 1982) as well as Mathematical Manuscripts (Moscow, 1968). Marx's notebooks are published in full in Section IV of Marx-Engels Gesamtausgabe.— 7
[5] Engels is referring to the letter written by K. Rodbertus to J.Zeller on March 14, 1875. Rodbertus died in 1875 but his letter to Zeller was not published until 1879. A copy of Briefe und Sozialpolitische Aufsätze mentioned below (ed. by R.Meyer, Berlin, 1881), with Engels' remarks, was kept in Marx's personal library.—10
[4] State socialism — a bourgeois-reformist and opportunist conception whose adherents reduced the essence of socialism to bourgeois state interference in economics and to a certain degree of regulation of social relations. Among its theoreticians were Louis Blanc (France), Ferdinand Lassalle, Karl Rodbertus-Jagetzow (Germany) and others. Armchair socialism (Kathedersozialismus) — a trend in German bourgeois political economy that emerged in Germany at the close of 1860s as a reaction to the growth of the working-class movement and the dissemination within it of the ideas of scientific socialism propounded by Marx and Engels. Under the banner of socialism its exponents (L. Brentano, A. Wagner, W. Zombart and others) preached bourgeois reformism; they asserted that any state, including the German Empire, had a super-class character and that with its help it was possible to achieve a considerable improvement in the condition of the working class through social reforms effected by governments. The armchair socialists called upon the workers to refrain from economic and political revolutionary struggle.— 9