II. Accumulation in Department II

We have hitherto assumed that A, A', A" (I) sell their surplus product to B, B', B", etc., who belong to the same department I. But supposing A (I) converts his surplus product into money by selling it to one B in department II. This can be done only by A (I) selling means of production to B (II) without subsequently buying articles of consumption, i. e., only by a one-sided sale on A's part. Now whereas IIC cannot be converted from the commodity-capital form into the natural form of productive constant capital unless not only Iv but also at least a portion of Is is exchanged for a portion of JIC, which IIt. exists in the form of articles of consumption; but now A converts his Is into money by not making this exchange but rather withdrawing from circulation the money obtained from II on the sale of his Is instead of exchanging it in the purchase of articles of consumption IIC — then what we have on the part of A (I) is indeed a formation of additional virtual money capital, but on the other hand a portion of the constant capital of B (II) of equal magnitude of value is tied up in the form of commodity capital, unable to transform itself into the natural form of productive, constant capital. In other words, a portion of the commodities ofB (II), and indeed prima facie a portion without the sale of which he cannot reconvert his constant capital entirely into its productive form, has become unsaleable. As fas as this portion is concerned there is therefore an overproduction, which, likewise as far as the same portion is concerned, clogs reproduction, even on the same scale.

In this case the additional virtual money capital on the side of A (I) is indeed a moneyed form of surplus product (surplus value), but the surplus product (surplus value) considered as such is here a phenomenon of simple reproduction, not yet of reproduction on an extended scale. I(v+s), for which this is true at all events of one portion of s, must ultimately be exchanged for IIr, in order that the reproduction of IIC may take place on the same scale. By the sale of his surplus product to B (II), A (I) has supplied to the latter a corresponding portion of the value of constant capital in its natural form. But at the same time he has rendered an equivalent portion of the commodities of B (II) unsaleable by withdrawing the money from circulation — by failing to complement his sale through subsequent purchase. Hence, if we survey the entire social reproduction, which comprises the capitalists of both I and II, the conversion of the surplus product of A (I) into virtual money capital expresses the impossibility of reconverting commodity capital of B (II) representing an equal amount of value into productive (constant) capital; hence not virtual production on an extended scale but an obstruction of simple reproduction, and so a deficit in simple reproduction. As the formation and sale of the surplus product of A (I) are normal phenomena of simple reproduction, we have here even on the basis of simple reproduction the following interdependent phenomena: Formation of virtual additional money capital in class I (hence underconsumption from the viewpoint of II); piling up of commodity supplies in class II which cannot be reconverted into productive capital (hence relative overproduction in II); excess of money capital in I and reproduction deficit in II.

Without pausing any longer at this point, we simply remark that we had assumed in the analysis of simple reproduction that the entire surplus value of I and II is spent as revenue. As a matter of fact however one portion of the surplus value is spent as revenue, and the other is converted into capital. Actual accumulation can take place only on this assumption. That accumulation should take place at the expense of consumption is, couched in such general terms, an illusion contradicting the nature of capitalist production. For it takes for granted that the aim and compelling motive of capitalist production is consumption, and not the snatching of surplus value and its capitalisation, i.e., accumulation.

Let us now take a closer look at the accumulation in department II. The first difficulty with reference to IIC, i. e., its reconversion from a component part of commodity capital II into the natural form of constant capital II, concerns simple reproduction. Let us take the former scheme:

(l,000v + l,000s) I are exchanged for 2,000 IIC. Now, if for instance one half of the surplus product of I, hence ' s or 500 Is is reincorporated in department I as constant capital, then this portion of the surplus product, being detained in I, cannot replace any part of IIC. Instead of being converted into articles of consumption (and here in this section of the circulation between I and II the exchange is actually mutual, that is, there is a double change of position of the commodities, unlike the replacement of 1,000 IIC by 1,000 Iv effected by the labourers of I), it is made to serve as an additional means of production in I itself. It cannot perform this function simultaneously in I and II. The capitalist cannot spend the value of his surplus product for articles of consumption and at the same time consume the surplus product itself productively, i.e., incorporate it in his productive capital. Instead of 2,000 I(v+s), only 1,500, namely (l,000v + 500s) I, are therefore exchangeable for 2,000 IIC; 500 IIC cannot be reconverted from the commodity form into productive (constant) capital II. Hence there would be an overproduction in II, exactly equal in volume to the expansion of production in I. This overproduction in II might react to such an extent on I that even the reflux of the 1,000 spent by the labourers of I for articles of consumption of II might take place but partially, so that these 1,000 would not return to the hands of capitalists I in the form of variable money capital. These capitalists would thus find themselves hampered even in reproduction on an unchanging scale, and this by the bare attempt to expand it. And in this connection it must be taken into consideration that in I only simple reproduction had actually taken place and that its elements, as represented in our scheme, are only differently grouped with a view to expansion in the future, say, next year.

One might attempt to circumvent this difficulty in the following way: Far from being overproduction, the 500 IIC which are kept in stock by the capitalists and cannot be immediately converted into productive capital represent, on the contrary, a necessary element of reproduction, which we have so far neglected. We have seen that a money supply must be accumulated at many points, hence money must be withdrawn from circulation, partly for the purpose of making it possible to form new money capital in I, and partly to hold fast temporarily the value of the gradually depreciating fixed capital in the form of money. But since we placed all money and commodities from the very start exclusively into the hands of capitalists I and II when we drew up our scheme and since neither merchants, nor money changers, nor bankers, not merely consuming and not directly producing classes exist here, it follows that the constant formation of commodity stores in the hands of their respective producers is here indispensable to keep the machinery of reproduction going. The 500 IIC held in stock by capitalists II therefore represent the commodity supply of articles of consumption which ensures the continuity of the process of consumption implied in reproduction, here meaning the passage of one year to the next. The consumption fund, which is as yet in the hands of its sellers who are at the same time its producers, cannot fall one year to the point of zero in order to begin the next with zero, any more than such a thing can take place in the transition from today to tomorrow. Since such supplies of commodities must constantly be built up anew, though varying in volume, our capitalist producers II must have a reserve money capital, which enables them to continue their process of production although one portion of their productive capital is temporarily tied up in the shape of commodities. Our assumption is that they combine the whole business of trading with that of producing. Hence they must also have at their disposal the additional money capital, which is in the hands of the merchants when the individual functions in the process of reproduction are separated and distributed among the various kinds of capitalists.

To this one may object: 1 ) that the forming of such supplies and the necessity of doing so applies to all capitalists, those of I as well as of II. Considered as mere sellers of commodities, they differ only in that they sell different kinds of commodities. A supply of commodities II implies a previous supply of commodities I. If we neglect this supply on one side, we must also do so on the other. But if we take them into account on both sides, the problem is not altered in any way.

2) Just as a certain year closes on the part of II with a supply of commodities for the following year, so it was opened with a supply of commodities on the same part, taken over from the preceding year. In an analysis of annual reproduction, reduced to its most abstract form, we must therefore strike it out in both cases. If we leave to the given year its entire production, including the commodity supply to be yielded up for next year, and simultaneously take from it the supply of commodities transferred to it from the preceding year, we have before us the actual aggregate product of an average year as the subject of our analysis.

3) The simple circumstance that in the analysis of simple reproduction we did not stumble across the difficulty which is now to be sur-mounted proves that we are confronted by a specific phenomenon due solely to the different grouping (with reference to reproduction) of elements I, a changed grouping without which reproduction on an extended scale cannot take place at all.