1. Replacement of the Wear and Tear Portion of the Value in the Form of Money
Now, if to start with we take
I. 4,000c + l,000v + 1,000,
II 2,000c + 500v + 500s,
the exchange of the commodities 2,000 IIC for commodities of the same value I (l,000v + l,000s) would presuppose that the entire 2,000 IIC are reconverted in natura into the natural elements of the constant capital of II, produced by I. But the commodity value of 2,000, in which the latter exists, contains an element making good the diminution in value of the fixed capital, which is not to be replaced immediately in natura but converted into money, which gradually accumulates into a sum total until the time for the renewal of the fixed capital in its natural form arrives. Every year registers the demise of fixed capital which must be replaced in this or that individual business, or in this or that branch of industry. In the case of one and the same individual capital, this or that portion of its fixed capital must be replaced (since its different parts have different durabilities). On examining annual reproduction, even on a simple scale, i. e., disregarding all accumulation, we do not begin ab ovo. The year which we study is one in the course of many; it is not the first year after the birth of capitalist production. The various capitals invested in the manifold lines of production of class II therefore differ in age, and just as people functioning in these lines of production die annually, so a host of fixed capitals expire annually and must be renewed in natuta out of the accumulated money fund. Therefore the exchange of 2,000 IIC for 2,000 I(V + S) includes a conversion of 2,000 IIC from its commodity form (articles of consumption) into natural elements which consist not only of raw and auxiliary materials but also of natural elements of fixed capital, such as machinery, tools, buildings, etc. The wear and tear, which must be replaced in money in the value of 2,000 IIC, therefore by no means corresponds to the amount of the functioning fixed capital, since a portion of this must be replaced in natura every year. But this assumes that the money necessary for this replacement was accumulated in former years by the capitalists of class II. However that very condition holds good in the same measure for the current year as for the preceding ones.
In the exchange between I (l,000v+ 1,000[5]) and 2,000 IIC it must be first noted that the sum of values I(V + s) does not contain any constant element of value, hence also no element of value to replace wear and tear, i. e., value that has been transmitted from the fixed component of the constant capital to the commodities in whose natural form v + s exist. On the other hand this element exists in IIC, and it is precisely a part of this value element that owes its existence to fixed capital which is not to be converted immediately from the money form into its natural form, but has first to persist in the form of money. The exchange between I (l,000v+ l,000s) and 2,000 IIC, therefore, at once presents the difficulty that the means of production of I, in whose natural form the 2,000(v + s) exist, are to be exchanged to the full value of 2,000 for an equivalent in articles of consumption II, while on the other hand the 2,000 IIC of articles of consumption cannot be exchanged at their full value for means of production I (l,000v+ l,000s) because an aliquot part of their value — equal to the wear and tear, or the value depreciation of the fixed capital that is to be replaced — must first be precipitated in the form of money that will not function any more as a medium of circulation during the current period of annual reproduction, which alone we are examining. But the money paying for this element of wear and tear incorporated in the commodity value 2,000 IIC can come only from class I, since II cannot pay for itself but effects payment precisely by selling its goods, and since presumably Ilv + Si buys the whole of the commodities 2,000 IIC. Hence class I must by means of this purchase convert that wear and tear into money for II. But according.to the law previously evolved, money advanced to the circulation returns to the capitalist producer who later on throws an equal amount of commodities into circulation. It is evident that in buying IIC, I cannot give II commodities worth 2,000 and an additional amount of money on top ofthat once and for all (without any return of the same by way of the operation of exchange). Otherwise I would buy the commodity mass IIC above its value. If II actually exchanges its 2,000c for I (l,000v+ l,000s), it has no further claims on I, and the money circulating in this exchange returns to either I or II, depending on which of them threw it into circulation, i. e., which of them acted first as buyer. At the same time, in this case, II would have reconverted the entire value of its commodity capital into the natural form of means of production, while our assumption is that after its sale it would not reconvert an aliquot portion of it during the current period of annual reproduction from money into the natural form of fixed components of its constant capital. A money balance in favour of II could arise only if it sold 2,000 worth to I and bought less than 2,000 from I, say only 1,800. In that case I would have to make good the debit balance by 200 in money, which would not flow back to it, because it would not have withdrawn from circulation the money it had advanced to it by throwing into it commodities equal to 200. In such an event we would have a money fund for II, placed to the credit of the wear and tear of its fixed capital. But then we would have an overproduction of means of production to the amount of 200 on the other side, the side of I, and the basis of our scheme would be destroyed, namely reproduction on the same scale, where complete proportionality between the various systems of production is assumed. We would only have done away with one difficulty in order to create another one, much worse.
As this problem offers peculiar difficulties and has hitherto not been treated at all by the political economists, we shall examine seriatim all possible (at least seemingly possible) solutions, or rather formulations of the problem.
In the first place, we have just assumed that II sells commodities of the value of 2,000 to I, but buys from it only 1,800 worth. The commodity value 2,000 IIC contains 200 for replacement of wear and tear, which must be stored up in the form of money. The value of 2,000 IIC would thus be divided into 1,800, to be exchanged for means of production I, and 200, to replace wear and tear, which are to be kept in the form of money (after the sale of the 2,000c to I). Expressed in terms of value, 2,000 IIC= l,800c+200c(d), this d standing for déchet J /depreciation / /.
We would then have to study Exchange
I. l,000v + l,000s
II. l,800c + 200c (d).'
I buys with £1,000, which has gone to the labourers in wages for their labour power, 1,000 IIC of articles of consumption. II buys with the same £1,000 means of production 1,000 Iv. Capitalists I thus recover their variable capital in the form of money and can employ it next year in the purchase of labour power to the same amount, i. e., they can replace the variable portion of their productive capital in natura.
Furthermore, II buys with advanced £400 means of production Is, and I, buys with the same £400 articles of consumption IIC. The £400 advanced to the circulation by the capitalists of II have thus returned to them, but only as an equivalent for sold commodities. I now buys articles of consumption for advanced £400; II buys from I £400 worth of means of production, whereupon these £400 flow back to I. So far, then, the account is as follows:
I throws into circulation l,000v+ 800s in commodities; it furthermore throws into circulation, in money, £1,000 in wages and £400 for exchange with II. After the exchange has been made, I has l,000v in money, 800s exchanged for 800 IIC (articles of consumption) and £400 in money.
II throws into circulation l,800c in commodities (articles of consumption) and £400 in money. On the completion of the exchange it has 1,800 in commodities I (means of production) and £400 in money.
There still remain, on the side of I, 200s (in means of production) and, on the side of II, 200c(d) (in articles of consumption).
According to our assumption I buys with £200 the articles of consumption c (d) of the value of 200. But II holds on to these £200 since 200c(d) represent wear and tear, and are not to be immediately reconverted into means of production. Therefore 200 Is cannot be sold; '/[5] of the surplus value I to be replaced cannot be realised, or converted, from its natural form of means of production into that of articles of consumption.
This not only contradicts our assumption of reproduction on a simple scale; it is by itself not a hypothesis which would explain the transformation of 200c(d) into money. It means rather that it cannot be explained. Since it cannot be demonstrated in what manner 200c(d) can be converted into money, it is assumed that I is obliging enough to do the conversion just because it is not able to convert its own remainder of 200s into money. To conceive this as a normal operation of the exchange mechanism is tantamount to the notion that £200 fall every year from the clouds in order regularly to convert 200r(d) into money.
But the absurdity of such a hypothesis does not strike one at once if Is, instead of appearing, as it does in this case, in its primitive mode of existence — namely as a component part of the value of means of production, hence as a component part of the value of commodities which their capitalist producers must convert into money by sale — appears in the hands of the partners of the capitalists, for instance as ground rent in the hands of landowners or as interest in the hands of money lenders. But if that portion of the surplus value of commodities which the industrial capitalist has to yield as ground rent or interest to other co-owners of the surplus value cannot be realised for a long time by the sale of the commodities, then there is also an end to the payment of rent and interest, and the landowners or recipients of interest cannot therefore serve as dei ex machinaa to convert at pleasure definite portions of the annual reproduction into money by spending rent and interest. The same is true of the expenditures of all so-called unproductive labourers — government officials, physicians, lawyers, etc., and others who as members of the "general public" "serve" the political economists by explaining what they left unexplained.
Nor does it improve matters if instead of direct exchange between I and II — between the two major departments of capitalist producers— the merchant is drawn in as mediator and helps to overcome all difficulties with his "money". In the present case for instance 200 Is must be definitively disposed of to the industrial capitalists of II. It may pass through the hands of a number of merchants, but the last of them will find himself, according to the hypothesis, in the same predic-ament, vis-à-vis II, in which the capitalist producers of I were at the outset, i. e., they cannot sell the 200 Is to II. And this stalled purchase sum cannot renew the same process with I.
We see here that, aside from our real purpose, it is absolutely necessary to view the process of reproduction in its basic form — in which obscuring minor circumstances have been eliminated — in order to get rid of the false subterfuges which furnish the semblance of "scientific" analysis when the process of social reproduction is immediately made the subject of the analysis in its complicated concrete form.
The law that, when reproduction proceeds normally (whether it be on a simple or on an extended scale), the money advanced by the capitalist producer to the circulation must return to its point of departure (whether the money is his own or borrowed) excludes once and for all the hypothesis that 200 IIc(d) is converted into money by means of money advanced by I.
2. REPLACEMENT OF FIXED CAPITAL 1X NA TU RA
Endnotes
[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