II. Accumulation and Reproduction on an Extended Scale . .
Since accumulation takes place in the form of reproduction on an extended scale, it is evident that it does not offer any new problem with regard to money circulation.
In the first place, as far as the additional money capital required for the functioning of the increasing productive capital is concerned, that is supplied by the portion of the realised surplus value thrown into circulation by the capitalists as money capital, not as the money form of the revenue. The money is already in the hands of the capitalists. Only its employment is different.
Now, however, in consequence of the additional productive capital, its product, an additional mass of commodities is thrown into circulation. Together with this additional quantity of commodities, a part of the additional money needed for its realisation is thrown into circulation, inasmuch as the value of this mass of commodities is equal to that of the productive capital consumed in their production. This additional amount of money has been advanced precisely as additional money capital, and therefore returns to the capitalist through the turnover of his capital. Here the same question as above re-appears. Where does the additional money come from with which to realise the additional surplus value now contained in the form of commodities?
The general reply is again the same. The sum total of the prices of the circulating commodities has been increased, not because the prices of a given quantity of commodities have risen, but because the mass of the commodities now circulating is greater than that of the previously circulating commodities, without it being offset by a fall in prices. The additional money required for the circulation of this greater quantity of commodities of greater value must be secured either by greater economy in the use of the circulating quantity of money — whether by balancing the payments, etc., by measures which acceler-ate the circulation of the same coins — or by the transformation of money from the form of a hoard into that of a circulating medium. The latter does not only imply that idle money capital begins to function as a means of purchase or payment, or that money capital, already functioning as a reserve fund while performing this function for its owner, actively circulates for society (as is the case with bank deposits which are continually lent), thus performing a double function. It also implies that the stagnating reserve funds of coins are econ-omised.
"So that money as coin may flow continuously, coin must continuously congeal into money. The continual movement of coin implies its perpetual stagnation in larger or smaller amounts in reserve funds of coin which arise everywhere within the framework of circulation and which are at the same time a condition of circulation. The formation, distribution, dissolution and re-formation of these funds constantly changes; existing funds disappear continuously and their dis-apperance is a continuous fact. This unceasing transformation of coin into money and of money into coin was expressed by Adam Smith when he said that, in addition to the particular commodity he sells, every commodity owner must always keep in stock a certain amount of the general commodity with which he buys. We have seen that M — C, the second member of the circuit C — M — C, splits up into a series of purchases, which are not effected all at once but successively over a period of time, so that one part of M circulates as coin, while the other part remains at rest as money. In this case, money is in fact only suspended coin and the various component parts of the coin-age in circulation appear, constantly changing, now in one form, now in another. The first transformation of the medium of circulation into money constitutes therefore merely a technical aspect of the circulation of money" (Karl Marx, %ur Kritik der Politischen Oekonomie, 1859, S. 105, 106.(1) — "Coin" as distinguished from money is here employed to indicate money in its function of a mere medium of circulation in contrast with its other functions.)
To the extent that all these measures do not suffice, additional gold must be produced, or, what amounts to the same, a part of the additional product exchanged, directly or indirectly, for gold — the product of countries in which precious metals are mined.
The entire amount of labour power and social means of production expended in the annual production of gold and silver intended as instruments of circulation constitutes a bulky item of the faux frais b of the capitalist mode of production, of the production of commodities in general. It is an equivalent abstraction from social utilisation of as many additional means of production and consumption as possible, i. e., of real wealth. To the extent that the costs of this expensive machinery of circulation are decreased, the given scale of production or the given degree of its extension remaining constant, the productive power of social labour is eo ipso increased. Hence, so far as the ex-pediences developing with the credit system have this effect, they increase capitalist wealth directly, either by performing a large portion of the social production and labour process without any intervention of real money, or by raising the functional capacity of the quantity of money really functioning.
This disposes also of the absurd question whether capitalist production in its present volume would be possible without the credit system (even if regarded only from this point of view), that is, with the circulation of metallic coin alone. Evidently this is not the case. It would rather have encountered barriers in the volume of production of precious metals. On the other hand one must not entertain any fantastic illusions on the productive power of the credit system, so far as it supplies or sets in motion money capital. A further analysis of this question is out of place here.
We have now to investigate the case in which there takes place no real accumulation, i. e., no direct expansion of the scale of production, but where a part of the realised surplus value is accumulated for a longer or shorter time as a money reserve fund, in order to be transformed later into productive capital.
Inasmuch as the money so accumulating is additional money, the matter needs no explanation. It can only be a portion of the excessive gold brought from gold-producing countries. In this connection it must be noted that the home product, in exchange for which this gold is imported, is no longer available in the country in question. It has been exported to foreign countries in exchange for gold.
But if we assume that the same amount of money is still in the country as before, then the accumulated and accumulating money has accrued from the circulation. Only its function is changed. It has been converted from money in currency into latent money capital gradually taking shape.
The money which is accumulated in this case is the money form of sold commodities, and moreover of that part of their value which constitutes surplus value for their owner. (The credit system is here assumed to be non-existent.) The capitalist who accumulates this money has sold pro tanto without buying.
If we look upon this process merely as an individual phenomenon, there is nothing to explain. A part of the capitalists keeps a portion of the money realised by the sale of its product without withdrawing products from the market in return. Another part of them on the other hand transforms its money wholly into products, with the exception of the constantly recurring money capital required for running the business. One portion of the products thrown upon the market as vehicles of surplus value consists of means of production, or of the real elements of variable capital, the necessary means of subsistence. It can therefore serve immediately for the expansion of production. For it has not been premised in the least that one part of the capitalists accumulates money capital, while the other consumes its surplus value entirely, but only that one part does its accumulating in the shape of money, forms latent money capital, while the other part accumulates genuinely, that is to say, enlarges the scale of production, genuinely expands its productive capital. The available quantity of money remains sufficient for the requirements of circulation, even if, alternately, one part of the capitalists accumulates money, while the other enlarges the scale of production, and vice versa. Moreover, the accumulation of money on one side may proceed even without cash money by the mere accumulation of outstanding claims.
But the difficulty arises when we assume not an individual, but a general accumulation of money capital on the part of the capitalist class. Apart from this class, according to our assumption — the general and exclusive domination of capitalist production — there is no other class at all except the working class. All that the working class buys is equal to the sum total of its wages, equal to the sum total of the variable capital advanced by the entire capitalist class. This money flows back to the capitalist class by the sale of its product to the working class. Its variable capital thus resumes its money form. Let the sum total of the variable capital be x times -£ 100, i.e., the sum total of the variable capital employed, not advanced, during the year. The question now under consideration is not affected by how much or how little money, depending on the velocity of the turnover, is needed to advance this variable capital value during the year. The capitalist class buys with these x times £ 100 of capital a certain amount of labour power, or pays wages to a certain number of labourers— first transaction. The labourers buy with this same sum a certain quantity of commodities from the capitalists, whereby the sum of x times £100 flows back into the hands of the capitalists — second transaction. And this is constantly repeated. This amount of x times £ 100, therefore, can never enable the working class to buy the part of the product which represents the constant capital, not to mention the part which represents the surplus value of the capitalist class. With these x times £ 100 the labourers can never buy more than a part of the value of the social product equal to that part of the value which represents the value of the advanced variable capital.
Apart from the case in which this universal accumulation of money expresses nothing but the distribution of the precious metal addition-ally introduced, in whatever proportion, among the various individual capitalists, how is the entire capitalist class then supposed to accumulate money?
They would all have to sell a portion of their product without buying anything in return. There is nothing mysterious about the fact that they all have a certain fund of money which they throw into circulation as a medium of circulation for their consumption, and a certain portion of which returns to each one of them from the circulation. But in that case this money fund exists precisely as a fund for circulation, as a result of the conversion of the surplus value into money, and does not by any means exist as latent money capital.
If we view the matter as it takes place in reality, we find that the latent money capital, which is accumulated for future use, consists:
1) Of deposits in banks; and it is a comparatively trifling sum which is really at the disposal of the bank. Money capital is accumulated here only nominally. What is actually accumulated is outstanding claims which can be converted into money (if ever) only because a certain balance arises between the money withdrawn and the money deposited. It is only a relatively small sum that the bank holds in its hands in money.
2) Of government securities. These are not capital at all, but merely outstanding claims on the annual product of the nation.
3) Of stocks. Those which are not fakes are titles of ownership of some corporative real capital and drafts on the surplus value accruing annually from it.
There is no accumulation of money in any of these cases. What appears on the one side as an accumulation of money capital appears on the other as a continual actual expenditure of money. It is immaterial whether the money is spent by him who owns it, or by others, his debtors.
On the basis of capitalist production the formation of a hoard as such is never an end in itself but the result either of a stagnation of the circulation — larger amounts of money than is generally the case assuming the form of a hoard — or of accumulations necessitated by the turnover; or, finally, the hoard is merely the creation of money capital existing temporarily in latent form and intended to function as productive capital.
If therefore on the one hand a portion of the surplus value realised in money is withdrawn from circulation and accumulated as a hoard, another part of the surplus value is at the same time continually converted into productive capital. With the exception of the distribution of additional precious metals among the members of the capitalist class, accumulation in the form of money never takes place simultaneously at all points.
What is true of the portion of the annual product which represents surplus value in the form of commodities, is also true of the other portion of it. A certain sum of money is required for its circulation. This sum of money belongs to the capitalist class quite as much as the annually produced quantity of commodities which represents surplus value. It is originally thrown into circulation by the capitalist class itself. It is constantly redistributed among its members by means of the circulation itself. Just as in the case of the circulation of coin in general, a portion of this sum stagnates at ever varying points, while another portion continually circulates. Whether a part of this accumulation is intentional, for the purpose of forming money capital, or not, does not alter things.
No notice has been taken here of those adventures of circulation in which one capitalist grasps a portion of the surplus value, or even of the capital, of another, thereby bringing about one-sided accumulation and centralisation of money capital as well as of productive capital. For instance a part of the snatched surplus value accumulated by A as money capital may be a part of the surplus value of B which does not return to him.