II. Components, Replacement, Repair, and Accumulation of Fixed Capital
In any investment of capital the separate elements of the fixed capital have different lifetimes, and therefore different turnover times. In a railway, for instance, the rails, sleepers, earthworks, terminals, bridges, tunnels, locomotives, and carriages have different functional periods and times of reproduction, hence the capital advanced for them has different times of turnover. For a great number of years, buildings, platforms, water tanks, viaducts, tunnels, cuttings, dams, in short everything called WORKS OF ART in the English railway industry do not require any renewal. The things which wear out most are the tracks and the ROLLING STOCK. a
Originally in the construction of modern railways it was the prevailing opinion, nursed by the most prominent practical engineers, that a railway would last a century and that the wear and tear of the rails was so imperceptible that it could be ignored for all financial and other practical purposes; 100 to 150 years was supposed to be the life of good rails. But it was soon found that the life of a rail, which naturally depends on the speed of the locomotives, the weight and number of trains, the diameter of the rails, and on a multitude of other attend-ant circumstances, did not exceed an average of 20 years. In some railway terminals, great traffic centres, the rails even wear out every year. About 1867 began the introduction of steel rails, which cost about twice as much as iron rails but which last more than twice as long. The lifetime of wooden sleepers was from 12 to 15 years. It was also ascertained with regard to the rolling stock that freight cars wear out much faster than passenger cars. The life of a locomotive was estimated in 1867 to be about 10 to 12 years.
The wear and tear is first of all a result of use. As a rule "the wear of the rails is proportionate to the number of trains" (R. C , No. 17645).22i With increased speed the wear and tear of a railway increased in a higher ratio than the square of the speed; that is to say, if you doubled the speed of the engine, you more than quadrupled the cost of wear and tear of the road (R. C , No 17046).
[22] The quotations marked R.C. are from: Royal Commission on Railways. Minutes of Evidence taken before the Commissioners. Presented to both Houses of Parliament, London, 1867.—The questions and answers are numbered and the numbers given here.
'' In the original, this English term is given in parentheses after its German equivalent.
Wear and tear is furthermore caused by the action of natural forces. For instance sleepers suffer not only from actual wear but also from rot.
"The cost of maintaining the road does not depend so much upon the wear and tear of the traffic passing over it, as upon the quality of wood, iron, bricks and mortars exposed to the atmosphere. A month of severe winter would do more damage to the road of a railway than a year's traffic" (R. P. Williams, "On the Maintenance of Permanent Way." Paper read at the Institution of Civil Engineers, Autumn, 1867 [2 9]).
Finally, here as everywhere else in modern industry, the moral depreciation plays a role. After the lapse often years, one can generally buy the same number of cars and locomotives for £30,000 that would previously have cost £"40,000. Depreciation in the rolling stock must be set at 25 per cent of the market price even when there is no depreciation whatever in its use value (Lardner, Railway Economy, [p. 120]).
"Tube bridges will not be replaced in their present form."
(Because now there are better forms for such bridges.)
"Ordinary repairs, taking away gradually, and replacing are not practicable" (W.B. Adams, Roads and Rails, London, 1862, [p. 136]).[30]
The instruments of labour are largely modified all the time by the progress of industry. Hence they are not replaced in their original, but in their modified form. On the one hand the mass of the fixed capital invested in a certain bodily form and endowed in that form with a certain average life constitutes one reason for the only gradual pace of the introduction of new machinery, etc., and therefore an obstacle to the rapid general introduction of improved instruments of labour. On the other hand competition compels the replacement of the old instruments of labour by new ones before the expiration of their natural life, especially when decisive changes occur. Such premature re-newals of factory equipment on a rather large social scale are mainly enforced by catastrophes or crises.
By wear and tear (moral depreciation excepted) is meant that part of value which the fixed capital, on being used, gradually transmits to the product, in proportion to its average loss of use value.
This wear and tear takes place partly in such a way that the fixed capital has a certain average durability. It is advanced for this entire period in one sum. After the termination of this period it must be totally replaced. So far as living instruments of labour are concerned, for instance horses, their reproduction is timed by nature itself. Their average lifetime as instruments of labour is determined by laws of nature. As soon as this term has expired the worn-out items must be replaced by new ones. A horse cannot be raplaced piecemeal; it must be replaced by another horse.
Other elements of fixed capital permit of a periodical or partial renewal. In this instance partial or periodical replacement must be distinguished from gradual extension of the business.
The fixed capital consists in part of homogeneous constituents which do not however last the same length of time but are renewed piecemeal at various intervals. This is true for instance of the rails in railway stations, which must be replaced more often than those of the remainder of the trackage. It also applies to the sleepers, which on the Belgian railways had to be renewed in the forties at the rate of 8% annually, according to Lardner, so that all the sleepers were renewed in the course of 12'^ years. Hence we have here the following situation: a certain sum is advanced for a certain kind of fixed capital for say ten years. This expenditure is made at one time. But a definite part of this fixed capital, the value of which has entered into the value of the product and been converted with it into money, is replaced in natura every year, while the remainder continues to exist in its original bodily form. It is this advance in one sum and the only partial reproduction in bodily form which distinguish this capital, as fixed, from circulating capital.
Other pieces of the fixed capital consist of heterogeneous components, which wear out in unequal periods of time and must so be replaced. This applies particularly to machines. What we have just said concerning the different durabilities of different constituent parts of a fixed capital applies in this case to the durability of different component parts of any machine figuring as a piece of this fixed capital.
With regard to the gradual extension of the business in the course of the partial renewal, we make the following remarks. Although, as we have seen, the fixed capital continues to perform its functions in the process of production in natura, a part of its value, proportionate to the average wear and tear, has circulated with the product, has been converted into money, and forms an element in the money reserve fund intended for the replacement of the capital pending its reproduction in natura. This part of the value of the fixed capital transformed into money may serve to extend the business or to make improvements in the machinery which will increase the efficiency of the latter. Thus reproduction takes place in larger or smaller periods of time, and this is, from the standpoint of society, reproduction on an enlarged scale — extensive if the field of production is extended; in-tensive if the means of production is made more effective. This reproduction on an extended scale does not result from accumulation — transformation of surplus value into capital — but from the reconversion of the value which has branched off, detached itself in the form of money from the body of the fixed capital into new additional or at least more effective fixed capital of the same kind. Of course it depends partly on the specific nature of the business, to what extent and in what proportions it is capable of such gradual addition, hence also in what amount a reserve fund must be collected to be reinvested in this way, and what period of time this requires. To what extent furthermore improvements in the details of existing machinery can be made, depends of course on the nature of these improvements and the construction of the machine itself. How well this point is considered at the very outset in the construction of railways is shown by Adams:
"The whole structure should be set out on the principle which governs the bee-hive— capacity for indefinite extension. Any fixed and decided symmetrical structure is to be deprecated, as needing subsequent pulling down in case of enlargement"
(p. 123).
This depends largely on the available space. In the case of some buildings additional storeys may be built; in the case of others lateral extension, hence more land, is required. Within capitalist production there is on the one side much waste of material, on the other much impracticable lateral extension of this sort (partly to the injury of the labour power) in the gradual expansion of the business, because nothing is undertaken according to a social plan, but everything depends on the infinitely different conditions, means, etc., with which the individual capitalist operates. This results in a great waste of the productive forces.
This piecemeal re-investment of the money reserve fund (i. e., of that part of the fixed capital which has been reconverted into money) is easiest in agriculture. A field of production of a given area is here capable of the greatest possible gradual absorption of capital. The same applies to where there is natural reproduction, as in cattle breeding.
Fixed capital entails special maintenance costs. A part of this maintenance is provided by the labour process itself; fixed capital spoils, if it is not employed in the labour process (see Buch I, Kap. VI, S. 196 and Kap. XIII, S. 423," on wear and tear of machinery when not in use). The English law therefore explicitly treats it as WASTE, b if rented lands are not cultivated according to the custom of the land ( W. A. Holdsworth, Barrister at Law, The Law of Landlord and Tenant, London, 1857, p. 96).
This maintenance resulting from use in the labour process is a free gift inherent in the nature of living labour. Moreover the preservative power of labour is of a two-fold character. On the one hand it preserves the value of the materials of labour by transferring it to the product, on the other hand it preserves the value of the instruments of labour without transferring this value to the product, by preserving their use value through their activity in the process of production.
The fixed capital however requires also a positive expenditure of labour for its maintenance in good repair. The machinery must be cleaned from time to time. It is a question here of additional labour without which the machinery becomes useless, of merely warding off the noxious influences of the elements, which are inseparable from the process of production; hence it is a question of keeping the machinery literally in working order. It goes without saying that the normal durability of fixed capital is calculated on the supposition that all the conditions under which it can perform its functions normally during that time are fulfilled, just as we assume, in placing a man's life at 30 years on the average, that he will wash himself. It is here not a question of replacing the labour contained in the machine, but of constant additional labour made necessary by its use. It is not a question of labour performed by the machine, but of labour spent on it, of labour in which it is not an agent of production but raw material. The capital expended for this labour must be classed as circulating capital, although it does not enter into the labour process proper to which the product owes its existence. This labour must be continually expended in production, hence its value must be continually replaced by that of the product. The capital invested in it belongs in that part of circulating capital which has to cover the unproductive costs and is to be distributed over the produced values according to an annual average calculation. We have seen0 that in industry proper this labour of cleaning is performed by the working men gratis, during the rest periods, and for that very reason often also during the process of production itself, and most accidents can be traced to this source. This labour does not figure in the price of the product. As far as that goes the consumer receives it gratis. On the other hand the capitalist thus does not pay the maintenance costs of his machine. The labourer pays in persona, and this is one of the mysteries of the self-preservation of capital, which in point of fact constitute a legal claim by the labourer on the machinery, on the strength of which he is a co-owner of the machine even from the standpoint of bourgeois law.[3] ' However, in various branches of production, in which the machinery must be removed from the process of production for the purpose of cleaning and where therefore the cleaning cannot be performed inbetween, as for instance in the case of locomotives, this maintenance work counts as current expenses and is therefore an element of circulating capital. For instance a goods engine should not run more than 3 days without being kept one day in the shed. If you attempt to wash out the boiler before it has cooled down that is very injurious (R. C , No. 17823).
The actual repairs or patchwork require expenditures of capital and labour which are not contained in the originally advanced capital and cannot therefore be replaced and covered, at least not always, by the gradual replacement of the value of the fixed capital. For instance if the value of the fixed capital = £10,000 and its total life = 10 years, then these £10,000, having been entirely converted into money after the lapse of ten years, will replace only the value of the capital originally invested, but they do not replace the capital, or labour, added in the meantime for repairs. This is an additional component part of the value, which is not advanced all at one time but whenever a need for it arises, and the various times for advancing it are in the very nature of things accidental. All fixed capital demands such subsequent, dosed out, additional outlay of capital for instruments of labour and labour power.
The damage which separate parts of the machinery, etc., may incur is naturally accidental and so are therefore the repairs involved. Nevertheless two kinds of repairs are to be distinguished in the general mass, which are of a more or less fixed character and fall within various periods of the life of fixed capital. These are the ailments of childhood and the far more numerous ailments of the post-middle durability period. A machine for instance may be commissioned in ever so perfect a condition, still actual use will reveal shortcomings which must be remedied by subsequent labour. On the other hand the more a machine passes beyond the mid-durability point, the more therefore the normal wear and tear has accumulated and the more the material of which it is made has been worn out and become decrepit, the more numerous and considerable will be the repairs required to keep it going for the remainder of its average durability. It is the same with an old man, who incurs more medical expenses to keep from dying prematurely than a young and strong man. So in spite of its accidental character repair work is unevenly distributed over the various periods of life of fixed capital.
From the foregoing and from the generally accidental character of repair work on machines it follows:
In one respect the actual expenditure of labour power and instruments of labour on repairs is accidental, like the circumstances which necessitate these repairs; the amount of the repairs needed is unevenly distributed over the different periods of fixed capital's life. In other respects it is taken for granted in estimating the average life of fixed capital that it is constantly kept in good working order, partly by cleaning (including the cleaning of the premises), partly by repairs as often as required. The transfer of value through wear and tear of fixed capital is calculated on its average life, but this average life itself is based on the assumption that the additional capital required for maintenance purposes is continually advanced.
But then it is also evident that the value added by this extra expenditure of capital and labour cannot enter into the price of the commodities concerned at the same time as it is incurred. For example, a cotton spinner cannot sell his yarn dearer this week than last, because one of his wheels broke or a belt tore this week. The general costs of spinning have not been changed in any way by this accident in some individual factory. Here, as in all determinations of value, the average decides. Experience shows the average occurrence of such accidents and the average volume of the maintenance and repair work necessary during the average life of the fixed capital invested in a given branch of business. This average expense is distributed over the average life and added to the price of the product in corresponding aliquot parts; hence it is replaced by means of its sale.
The additional capital which is thus replaced belongs to the circulating capital, although the manner of its expenditure is irregular. As it is of paramount importance to remedy every damage to machinery immediately, every comparatively large factory employs in addition to the regular factory force special personnel — engineers, carpenters, mechanics, lock-smiths, etc. Their wages are a part of the variable capital and the value of their labour is distributed over the product. On the other hand the required expenses for means of production are calculated on the basis of the above-mentioned average, according to which they form continually a part of the value of the product, although they are actually advanced in irregular periods and therefore enter into the product or the fixed capital in irregular periods. This capital, expended in repairs properly so called, is in many respects a capital sui generis, which can be classed neither as circulating nor as fixed capital, but belongs with greater justification to the former, since it figures among the running expenses.
The manner of bookkeeping does not of course change in any way the actual state of affairs booked. But it is important to note that cus-tomarily many lines of business figure the costs of repairs together with the actual wear and tear of the fixed capital in the following manner: Let the advanced fixed capital be £10,000 and its durability 15 years. The annual wear and tear is then £666[2]/[3]. But the depreciation is calculated on a durability of only ten years; in other words, £1,000 are added annually to the price of the produced commodities for wear and tear of the fixed capital, instead of £666[2]/[3]. Thus £333l/[3] are reserved for repairs, etc. (The figures 10 and 15 are chosen only by way of illustration.) This amount is spent on an average for repairs, so that the fixed capital may last 15 years. Such a calculation naturally does not prevent the fixed capital and the additional capital spent on repairs from belonging to different categories. On the strength of this mode of calculation it was assumed for instance that the lowest cost estimate for the maintenance and replacement of steamships was 15% annually, the time of reproduction being therefore 6[2]/[3] years. In the sixties, the English government indemnified the Peninsular and Oriental Co. at the annual rate of 16%, corresponding to a reproduction time of 6'/[4] years. On railways the average life of a locomotive is 10 years, but the depreciation, counting in repairs, is taken as 12ll[2]%> which brings down its durability to 8 years. In the case of passenger and goods cars, the estimate is 9%, or a durability of 1 l'/g years.
Legislation has everywhere drawn a distinction, in leases of houses and other objects which represent fixed capital to their owners and are leased as such, between normal depreciation which is the result of time, the action of the elements, and normal wear, and between those occasional repairs which are required from time to time for maintenance during the normal life of the house and during its normal use. As a rule, the former are borne by the owner, the latter by the tenant. Repairs are further divided into ordinary and substantial ones. The last-named are partly a renewal of the fixed capital in its bodily form, and they fall likewise on the shoulders of the owner, unless the lease explicitly states the contrary. Take for instance the English law:
"A tenant from year to year [...] is not bound to do more than keep the premises wind and watertight, when that can be done without 'substantial' repairs; and generally to do repairs coming fairly under the head 'ordinary'. Even with respect to those parts of the premises which are the subject of'ordinary' repairs, regard must be had to their age and general state, and condition, when he took possession, for he is not bound to replace old and worn-out materials with new ones, nor to make good the inevitable depreciation resulting from time and ordinary wear and tear" (Holdsworth, Law of Landlord and Tenant, pp. 90-91).
Entirely different from the replacement of wear and tear and from the work of maintenance and repair is insurance, which relates to destruction caused by extraordinary phenomena of nature, fire, flood, etc. This must be made good out of the surplus value and is a deduction from it. Or, considered from the point of view of society as a whole, there must be continuous overproduction, that is, production on a larger scale than is necessary for the simple replacement and reproduction of the existing wealth, quite apart from the increase in population, so as to be in possession of the means of production required to compensate for the extraordinary destruction caused by accidents and natural forces.
In point of fact only the smallest part of the capital needed for replacement consists of the money reserve fund. The most substantial part consists in the extension of the scale of production itself, which partly is actual expansion and partly belongs to the normal volume of production in those branches of industry which produce the fixed capital. For instance a machine factory must arrange things so that the factories of its customers can annually be extended and that a number of them will always stand in need of total or partial reproduction.
On determining the wear and tear as well as the costs of repairs, according to the social average, great disparity necessarily appears, even in the case of capital investments of equal size, operating otherwise under equal conditions and in the same branch of production. In practice a machine, etc., lasts with one capitalist longer than the average period, while with another it does not last so long. With the one the costs of repairs are above, with the other below average, etc. But the addition to the price of the commodities resulting from wear and tear and from costs of repairs is the same and is determined by the average. The one therefore gets more out of this additional price than he really added, the other less. The circumstance, as well as all others which result in different gains for different capitalists in the same line of business with the same degree of exploitation of labour power, tends to enhance the difficulty of understanding the true nature of surplus value.
The boundary-line between repairs proper and replacement, between costs of maintenance and costs of renewal, is somewhat fluid. Hence the eternal dispute, for instance on the railways, as to whether certain expenses are for repairs or for replacement, whether they must be defrayed from current expenditures or from the original stock. A transfer of expenses for repairs to capital account instead of revenue account is the well-known method by which railway directors artificially inflate their dividends. However, here too experience has already furnished the most important bases for estimation. The subsequent labour required during the early life of a railway for example
"ought not to be denominated repairs, but should be considered as an essential part of the construction of the railway, and in the financial accounts should be debited to capital, [...] not being expenses due to wear and tear, or to the legitimate operation of the traffic, but to the original and inevitable incompleteness of the construction of the line" (Lardner, loc. cit., p. 40).
"The only sound way is to charge each year's revenue with the depreciation necessarily suffered to earn the revenue, whether the amount is actually spent or not" (Cap-tain Fitzmaurice, "Committee of Inquiry on Caledonian Railway," published in Money Market Review, 1868).[32]
The separation of the replacement and maintenance of fixed capital becomes practically impossible and purposeless in agriculture, at least when not operated by steam.
"Wherever there is a complete, though not excessive, supply of implements" (of agricultural and other implements and farm appliances of every description) "it is the custom to estimate the annual wear and tear and maintenance of the implements, according to the different existing conditions, at a general average of 15 to 25 per cent of the original stock" (Kirchhof, Handbuch der landwirtschaftlichen Betriebslehre, Dessau,
1852, p. 137).[33]
In the case of the rolling stock of a railway, repairs and replacement cannot be separated at all.
"We maintain our stock by number. Whatever number of engines we have we maintain that. If one is destroyed by age, and it is better to build a new one, we build it at the expense of revenue, of course, taking credit for the materials of the old one as far as they go.... There is a great deal left; there are the wheels, the axles, the boilers, and in fact a great deal of the old engine is left" (D. Gooch, Chairman of Great Western Railway Co., R. C , Nos. 17327, 17329). "Repairing means renewing; I do not believe in the word replacement...; once a railway company has bought a vehicle or an engine, it ought to be repaired, and in that way admit of going on for ever" (No. 17784). "We calculate 8'/[2] d. per English train mile for the cost of the locomotives. The engines are maintained for ever out of this 8'/[2] d. We rebuild our engines. If you purchase an engine entirely it would be spending more money than is necessary ... yet there is always a pair of wheels or an axle or some portion of the engine which comes in, and hence it cheapens the cost of producing a practically new engine" (No. 17790). "I am at this moment turning out a new engine every week, or practically a new engine, for it has a new boil-er, cylinder, or framing" (No. 17823. Archibald Sturrock, LOCOMOTIVE SUPERINTEN-
DENT OF GREAT NORTHERN RAILWAY, IN R. C , 1867).
The same with coaches:
"In the course of time the stock of engines and vehicles is continually repaired. New wheels are put on at one time, and a new body at another. The different moving parts most subject to wear are gradually renewed; and the engines and vehicles may be conceived even to be subject to such a succession of repairs, that in many of them not a ves-tige of the original materials remains.... Even in this case, however, the old materials of coaches or engines are more or less worked up into other vehicles or engines, and never totally disappear from the road. The movable capital therefore may be considered to be in a state of continual reproduction; and that which, in the case of the permanent way, must take place altogether at a future epoch, when the entire road will have to be relaid, takes place in the rolling stock gradually from year to year. Its existence is perennial, and it is in a constant state of rejuvenescence" (Lardner, op. cit, pp. 115-16).
This process, which Lardner here describes relative to a railway, does not fit the case of an individual factory, but may well serve as an illustration of continuous, partial reproduction of fixed capital inter-mingled with repairs within an entire branch of industry or even within the aggregate production considered on a social scale.
Here is proof of the lengths to which adroit boards of directors may go in manipulating the terms repairs and replacement for the purpose of extracting dividends. According to the above-quoted paper read by R. P. Williams, various English railway companies wrote off the following sums from the revenue account, as averages over a number of years, for repairs and maintenance of the permanent way and buildings (per English mile of track annually).
London & North Western £370 Midland £225 London & South Western £257 Great Northern £360 Lancashire & Yorkshire South Eastern Brighton Manchester & Sheffield
These differences arise only to a very minor degree from differences in the actual expenses; they are due almost exclusively to different methods of calculation, according to whether items of expense are de-bited to the capital or the revenue account.Williams says in so many words:
"A smaller charge is adopted because its adoption is necessary for a good dividend, and the larger charge is put forward because it can be supported by reason of revenue being superior." [29]
In certain cases the wear and tear, and therefore its replacement, is practically infinitesimal so that nothing but costs of repairs have to be charged. Lardner's statements below relative to WORKS OF ART in the railway apply in general to all such durable structures as canals, docks, iron and stone bridges, etc.
"That wear and tear which, being due to the slow operation of time acting upon the more solid structures, produces an effect altogether insensible when observed through short periods, but which, after a long interval of time, such, for example, as centuries, must necessitate the reconstruction of some or all even of the most solid structures. These changes may not unaptly be assimilated to the periodical and secular ineq-ualities which take place in the movements of the great bodies of the universe. The operation of time upon the more massive works of art upon the railway, such as the bridges, tunnels, viaducts, etc., afford examples of what may be called the secular wear and tear. The more rapid and visible deterioration, which is made good by repairs or reconstruction effected at shorter intervals, is analogous to the periodic inequalities. In the annual repairs is included the casual damage which the exterior of the more solid and durable works may from time to time sustain; but, independently of these repairs, age produces its effects even on these structures, and an epoch must arrive, however remote it be, at which they would be reduced to a state which will necessitate their reconstruction. For financial and economical purposes such an epoch is perhaps too remote to render it necessary to bring it into practical calculation" (Lardner, loc. cit., pp. 38, 39).
This applies to all similar structures of secular duration, in which cases therefore the capital advanced need not be gradually replaced commensurate with their wear and tear, but only the annual average costs of maintenance and repair need be transferred to the prices of the product.
Although, as we have seen, a greater part of the money returning for the replacement of the wear and tear of the fixed capital is an-
£377 £263 £266 £200 34 nually, or even in shorter intervals, reconverted into its bodily form, nevertheless every single capitalist requires a sinking fund for that part of his fixed capital which falls due for reproduction only after a lapse of years but must then be entirely replaced. A considerable component part of the fixed capital precludes piecemeal reproduction because of its peculiar properties. Besides, in cases where the reproduction takes place piecemeal in such a way that at short intervals new stock is added to the depreciated old stock, a previous accumulation of money of a greater or smaller amount, depending on the specific character of the branch of production is necessary before the replacement can be effected. Not just any sum of money will suffice for this purpose; a definite amount is needed.
If we study this question on the assumption of simple circulation of money, without regard to the credit system, of which we shall treat later,[35] then the mechanism of this movement is as follows: It was shown in the first book (Kap. Ill, 3a)(1) that the proportion in which the aggregate mass of money is distributed over a hoard and means of circulation varies steadily, if one part of the money available in society constantly lies fallow as a hoard, while another performs the functions of a medium of circulation or of an immediate reserve fund of the directly circulating money. Now in our case money that must be accumulated as a hoard in the hands of a relatively big capitalist in rather large amounts is thrown all at once into circulation on the purchase of the fixed capital. It then divides again in society into medium of circulation and hoard. By means of the sinking fund, in which the value of the fixed capital flows back to its starting-point in proportion to its wear and tear, a part of the circulating money again forms a hoard, for a longer or shorter period, in the hands of the same capitalist whose hoard had, upon the purchase of the fixed capital, been transformed into a medium of circulation and passed away from him. It is a continually changing distribution of the hoard which exists in society and alternately functions as a medium of circulation and then is separated again, as a hoard, from the mass of the circulating money. With the development of the credit system, which necessarily runs parallel with the development of modern industry and capitalist production, this money no longer serves as a hoard but as capital; however not in the hands of its owner but of other capitalists at whose disposal it has been placed.
Endnotes
[22] Passages from Th. Corbet's book, An Inquiry into the Causes and Modes of the Wealth of Individuals; or the Principles of Trade and Speculation Explained, were copied out by Marx in Notebook XVI, compiled in London in 1851.— 142
[30] Marx had this book by W.B. Adams in his personal library.— 173
[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
[32] Marx's excerpts from The Money Market Review for January 25, 1868, are exant.— 181
[33] Marx had this book by Friedrich Kirchhof in his personal library.—181, 242
[35] Marx investigates the system of capitalist credit in Parts IV and V of Capital, Vol. Ill (see present edition, Vol. 37).—184
[29] This quotation from R. P. Williams' work is given on p. 76 of the London Notebook for 1867-68, and is taken from The Money Market Review, December 21, 1867.— 173, 183
[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
[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