Chapter XV. Effect of the Time of Turnover on the Magnitude of Advanced Capital

In this chapter and in the next, the sixteenth, we deal with the influence of the time of turnover on the self-expansion of capital.

Take the commodity capital which is the product of a working period of, say, nine weeks. Let us, for the time being, leave aside that portion of the value of the product which is added to it by the average wear and tear of the fixed capital, and also the surplus value added to the product during the process of production. The value of this product is then equal to that of the circulating capital advanced for its production, i. e., of the wages and the raw and auxiliary materials consumed in its production. Let this value be £900, so that the weekly outlay is £100. The period of production, which here coincides with the working period, is therefore 9 weeks. It is immaterial whether it is assumed that this is the working period of a continuous product, or whether it is a continuous working period for a discrete product, so long as the quantity of discrete product brought to market at one time costs 9 weeks' labour. Let the time of circulation be 3 weeks. Then the entire period of turnover is 12 weeks. At the end of 9 weeks the advanced productive capital is converted into commodity capital, but now it stays for three weeks in the period of circulation. The new period of production therefore cannot start before the beginning of the 13th week, and production would be at a standstill for three weeks, or for a quarter of the entire period of turnover. It again does not make any difference whether it is assumed that it takes so long on an average to sell the product, or that this length of time is bound up with the remoteness of the market or the terms of payment for the goods sold. Production would be standing still for 3 weeks every 3 months, making it 4 x 3 = 12 weeks in a year, which means 3 months, or one-quarter, of the annual period of turnover. Hence, if production is to be continuous and carried along on the same scale week after week, there is only this alternative:

Either the scale of production must be reduced, so that the £900 suffice to keep the work going both during the working period and the time of circulation of the first turnover. A second working period, hence also a second period of turnover, is then commenced with the 10th week, before the first period of turnover is completed, for the period of turnover is twelve weeks, and the working period nine weeks. A sum of £900 distributed over 12 weeks makes £75 per week. It is evident in the first place that such a reduced scale of business presupposes changed dimensions of the fixed capital and therefore, on the whole, a curtailment of the business. In the second place, it is questionable whether such a reduction can take place at all, for in each business there exists, commensurate with the development of its production, a normal minimum of invested capital essential to maintain its capacity to compete. This normal minimum grows steadily with the advance of capitalist production, and hence it is not fixed. There are numerous intermediate grades between the normal minimum existing at any particular time and the ever increasing normal maximum, a medium which permits of many different scales of capital investment. Within the limits of this medium reductions may take place, their lowest limit being the prevailing normal minimum.

When there is a hitch in production, when the markets are over-stocked, and when raw materials rise in price, etc., the normal outlay of circulating capital is restricted — once the pattern of the fixed capital has been set — by cutting down working time to, say, one half. On the other hand, in times of prosperity, the pattern of the fixed capital given, there is an abnormal expansion of the circulating capital, partly through the extension of working time and partly through its intensification. In businesses which have, from the outset, to reckon with such fluctuations, the situation is relieved partly by recourse to the above measures and partly by employing simultaneously a greater number of labourers, in combination with the application of reserve fixed capital, such as reserve locomotives on railways, etc. However, such abnormal fluctuations are not considered here, where we assume normal conditions.

In order to make production continuous, therefore, the expenditure of the same circulating capital is here distributed over a longer period, over 12 weeks instead of 9. In every section of time there consequently functions a reduced productive capital. The circulating portion of the productive capital is reduced from 100 to 75, or one-quarter. The total amount by which the productive capital functioning for a working period of 9 weeks is reduced = 9 x 25 = £225, or

^[1] /^[4] of £900. But the ratio of the time of circulation to that of turnover is likewise ^[3]/^[12] = '/^ It follows therefore: If production is not to be interrupted during the time of circulation of the productive capital transformed into commodity capital, if it is rather to be carried on simultaneously and continuously week after week, and if no special circulating capital is available for this purpose, it can be done only by curtailing productive operations, by reducing the fluid component of the functioning productive capital. The portion of fluid capital thus set free for production during the time of circulation is to the total advanced fluid capital as the time of circulation is to the period of turnover. This applies, as has already been stated, only to branches of production in which the labour process is carried on on the same scale week after week, where therefore no varying amounts of capital are to be invested in different working periods, as for instance in agriculture.

If on the other hand we assume that the nature of the business excludes a reduction of the scale of production, and thus of the fluid capital to be advanced each week, then continuity of production can be secured only by additional fluid capital, in the above-named case of £300. During the twelve-week turnover period, £1,200 are successively invested, and £300 are one-quarter of this sum as 3 weeks are of 12. At the end of the working period of 9 weeks the capital value of £900 has been converted from the form of productive into that of commodity capital. Its working period is concluded, but it cannot be re-opened with the same capital. During the three weeks in which it stays in the sphere of circulation, functioning as commodity capital, it is in the same state, so far as the process of production is concerned, as if it did not exist at all. We rule out in the present case all credit relations and take for granted that the capitalist operates only with his own money. But during the time the capital advanced for the first working period, having completed its process of production, stays 3 weeks in the process of circulation, there functions an additional capital investment of £300, so that the continuity of production is not broken.

Now, the following must be noted in this connection: Firstly: The working period of the capital of £900 first advanced is completed at the close of 9 weeks and it does not return until after 3 weeks are up, that is to say, at the beginning of the 13th week. But a new working period is immediately begun with the additional capital of £300. By this means continuity of production is maintained.

Secondly: The functions of the original capital of £900 and of the capital of £300 newly added at the close of the first nine-week working period, inaugurating the second working period after the conclusion of the first without any interruption, are, or at least could be, clearly distinguished in the first period of turnover, while they cross each other in the course of the second period of turnover.

Let us make this matter plainer. First period of turnover of 12 weeks. First working period of 9 weeks; the turnover of the capital advanced for this is completed at the beginning of the 13th week. During the last 3 weeks the additional capital of £300 functions, opening the second working period of 9 weeks.

Second period of turnover. At the beginning of the 13th week, £900 have returned and are able to begin a new turnover. But the second working period has already been opened in the 10th week by the additional £300. At the start of the 13th week, thanks to this, one-third of the working period is already over and £300 has been converted from productive capital into product. Since only 6 weeks more are required for the completion of the second working period, only two-thirds of the returned capital of £900, or only £600, can enter into the productive process of the second working period. £300 of the original £900 are set free to play the same role which the additional capital of £300 played in the first working period. At the close of the 6th week of the second period of turnover the second working period is up. The capital of £900 advanced in it returns after 3 weeks, or at the end of the 9th week of the second 12-week period of turnover. During the 3 weeks of its period of circulation, the freed capital of £300 comes into action. This begins the third working period of a capital of £900 in the 7th week of the second period of turnover, or the 19th week of the year.

Third period of turnover. At the close of the 9th week of the second period of turnover there is a new reflux of £900. But the third working period has already commenced in the 7th week of the previous period of turnover, and 6 weeks have already elapsed. The third working period, then, lasts only another 3 weeks. Hence only £300 of the returned £900 enter into the productive process. The fourth working period fills out the remaining 9 weeks of this period of turnover and thus the 37th week of the year begins simultaneously the fourth period of turnover and the fifth working period.

In order to simplify the calculation in this case let us assume a working period of 5 weeks and a period of circulation of 5 weeks, making a turnover period of 10 weeks. Figure the year as composed of 50 weeks and the capital outlay per week as £100. A working period then requires a circulating capital of £"500 and the time of circulation an additional capital of £"500. The working periods and times of turnover then are as follows:

Working period Week £ in goods Returned

1st lst-5th 500 F ,nd of 10th week 2nd 6th-10th 500 „ 15th „ 3rd 11th-15th 500 „ 20th „ 4th 16th-20th 500 „ 25th „ 5th 21st-25th 500 „ 30th „ and so forth

If the time of circulation is zero, so that the period of turnover is equal to the working period, then the number of turnovers is equal to the number of working periods of the year. In the case of a 5-week working period this would make ^[50]/^[5] = 10 weeks, and the value of the capital turned over would be 500 x 10 = 5,000. In our table, in which we have assumed a circulation time of 5 weeks, the total value of the commodities produced per year would also be £"5,000, but '/io of this = £"500 would always be in the form of commodity capital, and would not return until after 5 weeks. At the end of the year the product of the tenth working period (the 46th to the 50th working week) would have completed its time of turnover only by half, and its time of circulation would fall within the first 5 weeks of the next year. N Now let us take a third illustration: Working period 6 weeks, time of circulation 3 weeks, weekly advance during labour process £"100. 1st working period: lst-6th week. At the end of the 6t;h week a commodity capital of £"600, returned at the end of the "9th week. 2nd working period: 7th-12th week. During the 7th-9th week £"300 of additional capital is advanced. At the end of the 9th wefek, return of £600. Of this, £"300 are advanced during the 10th-12th week. At the end of the 12th week therefore £"300 are free and £"600 are in the form of commodity capital, returnable at the end of the f5th week. 3rd working period: 13th-18th week. During the 13th-15th week, advance of above £"300, then reflux of £"600, of which £"300 are advanced for the 16th-18th week. At the end of the 18th week, £"300 are free in money form; £"600 on hand as commodity capital which returns at the end of the 21st week. (See the more detailed presentation of this case under II, below.)

In other words during 9 working periods ( = 54 weeks) 600 x 9 = £5,400 worth of commodities are produced. At the end of the ninth working period the capitalist has £300 in money and £600 in commodities which have not yet completed their time of circulation.

A comparison of these three illustrations shows, first, that a successive release of capital I of £500 and of additional capital II of likewise £500 takes place only in the second illustration, so that these two portions of capital move separately and apart from each other. But this is so only because we have made the very exceptional assumption that the working period and the time of circulation form two equal halves of the turnover period. In all other cases, whatever the difference between the two constituents of the period of turnover, the movements of the two capitals cross each other, as in illustrations I and III, beginning with the second period of turnover. The additional capital II, with a portion of capital I, then forms the capital functioning in the second turnover period, while the remainder of capital I is set free to perform the original function of capital II. The capital operating during the circulation time of the commodity capital is not identical, in this case, with the capital II originally advanced for this purpose, but it is of the same value and forms the same aliquot part of the total capital advanced.

Secondly: The capital which functioned during the working period lies idle during the time of circulation. In the second illustration the capital functions during the 5 weeks of the working period and lies idle during the 5 weeks of the circulation time. Therefore the entire time during which capital I lies idle here amounts to one half of the year. It is the additional capital II that appears during this time having, in the case before us, also in its turn lain idle half a year. But the additional capital required to ensure the continuity of production during the time of circulation is not determined by the aggregate amount, or sum total, of the times of circulation during the year, but only by the ratio of the time of circulation to the period of turnover. (We assume, of course, that all the turnovers take place under the same conditions.) For this reason £500 of additional capital, and not £2,500, are required in the second illustration. This is simply due to the fact that the additional capital enters just as well into the turnover as the capital originally advanced, and that it therefore makes up its magnitude just as the other by the number of its turnovers.

Thirdly: The circumstances here considered are not affected by whether the time of production is longer than the working time or not. True, the aggregate of the periods of turnover is prolonged thereby, but this extension does not necessitate any additional capital for the labour process. The additional capital serves merely the purpose of filling the gaps in the labour process that arise on account of the time of circulation. Hence it is there simply to protect production against interruptions, originating in the time of circulation. Interruptions arising from the specific conditions of production are to be eliminated in another way, which need not be discussed at this point. There are however establishments in which work is carried on only intermittently, to order, so that there may be intervals between the working periods. In such cases, the need for additional capital is pro tanto eliminated. On the other hand in most cases of seasonal work there is a certain limit for the time of reflux. The same work cannot be renewed next year with the same capital, if the circulation time of this capital has not, in the meantime, run out. On the contrary the time of circulation may also be shorter than the interval between two periods of production. In that event the capital lies fallow, unless it is meanwhile employed otherwise.

Fourthly: The capital advanced for a certain working period — for instance the £600 in the third illustration — is invested partly in raw and auxiliary materials, in a productive supply for the working period, in constant circulating capital, and partly in variable circulating capital, in the payment of labour itself. The portion laid out in constant circulating capital may not exist for the same length of time in the form of a productive supply; the raw material for instance may not be on hand for the entire working period, coal may be procured only every two weeks. However, as credit is still out of the question here, this portion of capital, in so far as it is not available in the form of a productive supply, must be kept on hand in the form of money so that it can be converted into a productive supply as and when needed. This does not alter the magnitude of the constant circulating capital value advanced for 6 weeks. On the other hand — regardless of the money supply for unforeseen expenses, the reserve fund proper for the elimination of disturbances — wages are paid in shorter intervals, mostly weekly. Therefore unless the capitalist compels the labourer to advance his labour for a longer time, the capital required for wages must be on hand in the form of money. During the reflux of the capital a portion must therefore be retained in money form for the payment of the labour, while the remaining portion may be converted into productive supply.

The additional capital is divided exactly like the original. But it is distinguished from capital I by the fact that (apart from credit relations) in order to be available for its own working period it must be advanced during the entire duration of the first working period of capital I, into which it does not enter. During this time it can already be converted, at least in part, into constant circulating capital, having been advanced for the entire period of turnover. To what extent it assumes this form or how long it persists in the form of additional money capital until this conversion becomes necessary, will depend partly on the special conditions of production of definite lines of business, partly on local conditions, partly on the price fluctuations of raw material, etc. If social capital is viewed in its entirety, a more or less considerable part of this additional capital will always be for a rather long time in the state of money capital. But as for that portion of capital II which is to be advanced for wages, it is always converted only gradually into labour power, as small working periods expire and are paid for. This portion of capital II, then, is available in the form of money capital during the entire working period, until by its conversion into labour power it takes part in the function of productive capital.

Consequently, the accession of the additional capital required for the transformation of the circulation time of capital I into time of production, increases not only the magnitude of the advanced capital and the length of time for which the aggregate capital must necessarily be advanced, but also, and specifically so, that portion of the advanced capital which exists as money supply, which hence exists in the state of money capital and has the form of potential money capital.

The same thing also takes place — as far as it concerns both the advance in the form of a productive supply and in that of a money supply — when the separation of capital into two parts made necessary by the time of circulation, namely, into capital for the first working period and replacement capital for the time of circulation, is not caused by the increase of the capital laid out but by a decrease of the scale of production. The amount of capital tied up in the money form grows here still more in relation to the scale of production.

What is achieved in general by this separation of capital into an originally productive and an additional capi'tal is a continuous succession of the working periods, the constant function of an equal portion of the advanced capital as productive capital.

Let us look at the second illustration. The capital continuously employed in the process of production amounts to £500. As the working period = 5 weeks it operates ten times during 50 weeks (taken as a year). Hence its product, apart from surplus value, is 10 x £500 = £5,000. From the standpoint of a capital working directly and uninterruptedly in the process of production — a capital value of £500 — the time of circulation seems to be brought to nought. The period of turnover coincides with the working period, and the time of circulation is assumed to be equal to zero.

But if the capital of £500 were regularly interrupted in its productive activity by a 5-week circulation time, so that it would again become capable of production only after the close of the entire 10-week turnover period, we should have 5 turnovers often weeks each in the 50 weeks of the year. These would comprise five 5-week periods of production, or a sum of 25 productive weeks with a total product worth 5 x £500 = £2,500, and five 5-week periods of circulation, or a total circulation time of likewise 25 weeks. If we say in this case that the capital of £500 has been turned over five times in the year, it will be clear and obvious that during half of each period of turnover this capital of £500 did not function at all as a productive capital and that, all in all, it performed its function only during one half of the year, but did not function at all during the other half.

In our illustration the replacement capital of £500 appears on the scene during those five periods of circulation and the turnover is thus expanded from £2,500 to £5,000. But now the advanced capital is £1,000 instead of £500. 5,000 divided by 1,000 is 5. Hence, there are five turnovers instead of ten. And that is just the way people figure. But when it is said that the capital of £1,000 has been turned over five times during the year, the recollection of the time of circulation disappears from the hollow skulls of the capitalists and a confused idea is formed that this capital has served continuously in the production process during the five successive turnovers. But if we say that the capital of £1,000 has been turned over five times this includes both the time of circulation and the time of production. Indeed, if £1,000 had really been continuously active in the process of production, the product would, according to our assumptions, have to be £10,000 instead of £5,000. But in order to have £1,000 continuously in the process of production, £2,000 would have to be advanced. The economists, who as a general rule have nothing clear to say in reference to the mechanism of the turnover, always overlook this main point, to wit, that only a part of the industrial capital can actually be engaged in the process of production if production is to proceed uninterruptedly. While one part is in the period of production, another must always be in the period of circulation. Or in other words, one part can perform the function of productive capital only on condition that another part is withdrawn from production proper in the form of commodity or money capital. In overlooking this, the significance and role of money capital is entirely ignored.

We have now to ascertain what differences in the turnover arise if the two sections of the period of turnover, the working period and the circulation period, are equal, or if the working period is greater or smaller than the circulation period, and, furthermore, what effect this has on the tie-up of capital in the form of money capital.

We assume the capital advanced weekly to be in all cases £100, and the period of turnover 9 weeks, so that the capital to be advanced for each period of turnover is £900.

I. The Working Period Equal to the Circulation Period

Although this case occurs in reality only as an accidental exception, it must serve as our point of departure in this investigation, because here relations shape themselves in the simplest and most intelli-gible way.

The two capitals (capital I advanced for the first working period, and additional capital II, which functions during the circulation period of capital I) relieve one another in their movements without crossing. With the exception of the first period, either of the two capitals is therefore advanced only for its own period of turnover. Let the period of turnover be 9 weeks, as indicated in the following illustrations, so that the working period and the circulation period are each 4'/ ^[2] weeks. Then we have the following annual diagram.

Table I

CAPITAL I

Periods of Tu Working Periods Periods of Circula

I. lst-9th II. 10th-I8th III. 19th-27th

IV. 28th-36th

V. 37th-45th

week

VI. 46th-(54th)

lst-4th '/^[2] week 10th-13th '/^[2] 19th-22nd '/^[2] 28th-31st '/^[2] 37th-40th 7^[2] 46th-49th '/^[2]

£450 £450 £450 £450 £450 £450

/2-9th ,^[2]-18th 4th '/. 13th Vi. 22nd '/^[2]-27th 31st '/^[2]-36th 40th '/^[2]-45th 49th '/^[2]-(54th)

week

CAPITAL II

Periods of Turnover Working Periods Advance Periods of Circulation

I. 4th 7^[2]-13th 7^[2]week II. 13th '/^[2]-22nd '/^[2] III. 22nd V^[2]-31st '/^[2] IV. 31st '/^[2]-40th V^[2]

V. 40th '/2-49th V^[2] VI. 49th '/^[2]-(58th V^[2])

4th '/^[2]-9th v 13th 7^[2]-18th 22nd 7^[2]-27th 31st 7^[2]-36th 40th 7^[2]-45th 49th 7^[2]-(54th)

reek £ 450 10th-13th 7^[2] week £ 450 19th-22nd 7^[2] „ £ 450 28th-31st '/^[2] £ 450 37th-40th 7^[2] £ 450 46th-49th 7^[2] £ 450 (55th-58th 7^[2]) „

Within the 51 weeks which here stand for one year, capital I runs through six full working periods, producing 6 x 450 = £2,700 worth of commodities, and capital II producing in five full working periods 5 x 450 = £2,250 worth of commodities. In addition, capital II produced, within the last 1 ' /^[2] weeks of the year (middle of the 50th to the end of the 51st week), an extra £150 worth. The aggregate product in 51 weeks is worth £5,100. So far as the direct production of surplus value is concerned, which takes place only during the working period, the aggregate capital of £900 would have been turned over 5^[2]/^[3] times (5 ^[2]/^[3] x 900 = £5,100). But if we consider the real turnover, capital I has been turned over 5 ^[2]/^[3] times, since at the close of the 51st week it still has 3 weeks to go of its sixth period of turnover; 5 ^[2]/ ^[3] x 450 = £2,550; and capital II turned over 5 '/e times, since it has completed only 1 xj^[2] weeks of its sixth period of turnover, so that 7 'l^[2] weeks of it run into the next year; 5 '/e x 450 = £2,325; real aggregate turnover: £4,875.

^[3] ' The weeks falling within the second year of turnover are put in parenth-

Let us consider capital I and capital II as two capitals wholly independent of one another. They are entirely independent in their movements; these movements complement one another merely because their working and circulating periods directly relieve one another. They may be regarded as two totally independent capitals belonging to different capitalists.

Capital I has completed five full turnovers and two-thirds of its sixth turnover period. At the end of the year it has the form of commodity capital, which is 3 weeks short of its normal realisation. During this time it cannot enter into the process of production. It functions as commodity capital, it circulates. It has completed only ~j^[3] of its last period of turnover. This is expressed as follows: It has been turned over only ^[2]/^[3] of a time, only ^[2]/:( of its total value have performed a complete turnover. We say that £450 complete their turnover in 9 weeks, hence £300 do in 6 weeks. But in this mode of expression the organic relations between the two specifically different components of the turnover time are ignored. The exact meaning of the expression that the advanced capital of £450 has made 5^[2]/;! turnovers is merely that it has accomplished five turnovers fully and only ^[2]/:i of the sixth. On the other hand the expression that the turned-over capital = 5 ^[2]/:i times the advanced capital — hence, in the above case, 5^[2]/s x £450 = £2,550 — is correct, meaning that unless this capital of £450 were complemented by another capital of £450, one portion of it would have to be in the process of production while another in the process of circulation. If the time of turnover is to be expressed in terms of the quantity of capital turned over, it can always be expressed only in terms of a quantity of existing value (in fact, of finished product). The circumstance that the advanced capital is not in a condition in which it may re-open the process of production finds expression in the fact that only a part of it is in a state capable of production or that, in order to be in a state of uninterrupted production, the capital would have to be divided into a portion which would be continually in the period of production and into another which would be continually in the period of circulation, depending upon the relation of these periods to each other. It is the same law which determines the quantity of the constantly functioning productive capital by the ratio of the time of circulation to the time of turnover.

By the end of the 51st week, which we regard here as the end of the year, £150 of capital II have been advanced to the production of an unfinished lot of goods. Another part of it exists in the form of circulating constant capital — raw materials, etc.— i.e., in a form in which it can function as productive capital in the production process. But a third part of it exists in the form of money, at least the amount of the wages for the remainder of the working period (3 weeks), which is not paid, however, until the end of each week. Now, although at the beginning of a new year, hence of a new turnover cycle, this portion of the capital is not in the form of productive capital but in that of money capital, in which it cannot take part in the process of production, at the opening of the new turnover circulating variable capital, i. e., living labour power, is nevertheless active in the process of production. This is due to the fact that labour power is not paid until the end of the week, although bought at the beginning of the working period, say, per week, and so consumed. Money serves here as a means of payment. For this reason it is still as money in the hands of the capitalist, on the one hand, while, on the other hand, labour power, the commodity into which money is being transformed, is already active in the process of production, so that the same capital value appears here doubly.

If we look merely at the working periods,

capital I produces 6 x 450 = £2,700 capital II " 5 '/^[3] x 450 = £2,400

hence together 52^ x 900 = £5,100.

Hence the total advanced capital of £900 has functioned 5^[2]/^[3] times throughout the year as productive capital. It is immaterial for the production of surplus value whether there are always £450 in the production process and always £450 in the circulation process, or whether £900 function 4'/ ^[2] weeks in the process of production and the following 4 '/^[2] weeks in the process of circulation.

On the other hand, if we consider the periods of turnover, there has been turned over:

capital I, 5 ^ x 4 5 0 = £2,550 capital iï, 5 V^[6]x 450 = £2,325

hence the total capital 5^[5]/^[12]x900 = £4,875.

For the number of turnovers of the total capital is equal to the sum of the amounts turned over by I and II, divided by the sum of I and II.

It is to be noted that if capitals I and II were independent of each other they would nevertheless form merely different independent portions of the social capital advanced in the same sphere of production. Hence if the social capital within this sphere of production were composed solely of I and II, the same calculation would apply to the turnover of the social capital in this sphere as applies here to the two constituent parts I and II of the same private capital. Going further, every portion of the entire social capital invested in any particular sphere of production may be so calculated. But in the last analysis, the number of turnovers made by the entire social capital is equal to the sum of the capitals turned over in the various spheres of production divided by the sum of the capitals advanced in those spheres.

It must further be noted that just as capitals I and II in the same private business have here, strictly speaking, different turnover years (the cycle of turnover of capital II beginning 4- '/^[2] weeks later than that of capital I, so that the year of I ends 4 '/^[2] weeks earlier than that of II), so the various private capitals in the same sphere of production begin their operations at totally different periods and therefore conclude their turnover years at different times of the year. The same calculation of averages that we employed above for I and II suffices also here to bring down the turnover years of the various independent portions of the social capital to one uniform turnover year.

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Endnotes

[1] In the second half of the 1850s Marx began to study the problems to be dealt with in Volume II of Capital, and continued this work in the 1860s, as is shown, amongst other things, by the Economic Manuscripts of 1861-63 and 1864-65 where the results of these investigations were still, in his words, in the form of preparatory outlines. Later stages in Marx's work on this volume are described at length by Engels in his Preface to the First Edition, which he prepared for the press and published after Marx's death. Manuscript I, written in the early half of 1865, was, in effect, the first composite version of the volume. According to Engels, "Some parts of the argument would be treated in detail, others of equal importance only indicated" in this manuscript (see this volume, p. 5). From the end of 1868 to the middle of 1870 Marx prepared the second version of the volume — Manuscript II — which comprises all three parts (three sections, according to Engels) and "is the only somewhat complete elaboration of Book II" (see this volume, p.7). After 1870 there followed a long interruption in the work on the volume, mainly as a result of the author's illness. Marx was able to resume his work only in 1877. Prior to 1881 he wrote several more manuscripts of varying size; most of them were versions of the beginning of the volume, and only the last represented a revised version of the third chapter of Manuscript II. During the last two years of his life Marx did not work on Volume II. After studying the content of Marx's manuscripts and considering the volume of material involved, Engels decided to divide Volume II into two portions and publish two separate volumes — Vol. II and Vol. III. Engels edited the text with great discretion: according to his own words, he con-tented himself "with reproducing these manuscripts as literally as possible, changing the style only in places where Marx would have changed it himself, and interpolat-ing explanatory sentences or connecting statements only where this was absolutely necessary, and where, besides, the meaning was clear beyond any doubt" (see this volume, pp. 5-6). Structural division was made according to the model used in the Second Edition of Capital, Vol. I (1872). The titles of parts and chapters were also provided by Engels. The first German edition of Vol. II appeared in 1885, the second edition — in 1893. Soon after the publication of the volume the newspaper Le Socialiste printed a review of it in its first number for August 29, 1885. "The second volume of Marx's Capital has just been published in German thanks to the work done by Frederick Engels, his old friend and staunch associate. It was compiled on the basis of manuscripts left by Marx. "In the first volume Marx examined the question of the production of capital; on the basis of a broad and comprehensive analysis he demonstrated that capital was just unpaid labour, in other words, labour stolen from the working class. Although many economists in Germany, France, Italy, Russia and America tried to criticise his book, not one of them could refute Marx's scientific proposition. To this day Capital remains the most formidable indictment written against capitalist society; and the fact that capital is a product of theft is now proved beyond doubt. "In the second volume, which is expected so impatiently, Marx analyses the circulation of capital, that is, the manner in which the bourgeois divide among themselves the products they have stolen from the working class. After making a comprehensive study of all economic theories of ground rent he refuted all of them and formulat-ed a new theory of rent. "Marx's works are not text-books consisting of repetitions, neither are they volumes filled with the banal talk of representatives of various schools, such as the works of Mr. Leroy-Beaulieu and Co.; they are scientific books that must be studied thoroughly as mathematical treatises and works on physics or chemistry; for the moment, therefore, we are merely announcing the fact of publication, and after reading and re-reading it with a clear head we shall return to discuss it with our readers." The first English edition of Capital, Vol. II was published in Chicago in 1907 by the Charles H. Kerr & Company in the translation of Ernest Untermann.— 1

[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

[50] Concerning Linguet see present edition, Vol. 31, pp. 241-45.— 358

[6] Mercantilism — a school of bourgeois political economy, that emerged in the last third of the fifteenth century; it expressed the interests of the merchant bourgeoisie in the period of the primitive accumulation of capital, identified the wealth of the country with the accumulation of money, and attached primary importance in this to the state. Marx called the early period of mercantilism the monetary system.— 13, 66

[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

[12] A copy of this book, which belonged to Engels (1850 edition) and contained Marx's remarks, has survived. From the 1824 edition Marx copied out passages in one of his Manchester notebooks for 1845.— 18

[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

[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