II. Appreciation, Depreciation, Release, and Tie-up of Capital
The phenomena analysed in this chapter require for their full development the credit system and competition on the world market, the latter being the basis and the vital element of capitalist production. These more definite forms of capitalist production can only be comprehensively presented, however, after the general nature of capital is understood. Furthermore, they do not come within the scope of this work and belong to its eventual continuation. ' Nevertheless the phenomena listed in the above title may be discussed in a general way at this stage. They are interrelated, first with one another and, secondly, also with the rate and amount of profit. They are to be briefly discussed here if only because they create the impression that not only the rate, but also the amount of profit — which is actually identical with the amount of surplus value — could increase or decrease independently of the movements of the quantity or rate of surplus value.
Are we to consider release and tie-up of capital, on the one hand, and its appreciation and depreciation, on the other, as different phenomena?
The question is what we mean by release and tie-up of capital? Appreciation and depreciation are self-explanatory. All they mean is that a given capital increases or decreases in value as a result of certain general economic conditions, for we are not discussing the particular fate of an individual capital. All they mean, therefore, is that the value of a capital invested in production rises or falls, irrespective of its self-expansion by virtue of the surplus labour employed by it.
By tie-up of capital we mean that certain portions of the total value of the product must be reconverted into elements of constant and variable capital if production is to proceed on the same scale. By release of capital we mean that a portion of the total value of the product which had to be reconverted into constant or variable capital up to a certain time, becomes disposable and superfluous, should production continue on the previous scale. This release or tie-up of capital is different from the release or tie-up of revenue. If the annual surplus value of an individual capital C is, let us say, equal to x, then a reduction in the price of commodities consumed by the capitalists would make x — a sufficient to procure the same enjoyments, etc., as before. A portion of the revenue = a is released, therefore, and may serve either to increase consumption or to be reconverted into capital (for the purpose of accumulation). Conversely, if x + a is needed to continue to live as before, then this standard of living must either be reduced or a portion of the previously accumulated income = a, expended as revenue.
Appreciation and depreciation may affect either constant or variable capital, or both, and in the case of constant capital it may, in turn, affect either the fixed, or the circulating portion, or both.
Under constant capital we must consider the raw and auxiliary materials, including semi-finished products, all of which we here include under the term of raw materials, machinery, and other fixed capital.
In the preceding analysis we referred especially to VARIATIONS in the price, or the value, of raw materials in respect to their influence on the rate of profit, and determined the general law that with other conditions being equal, the rate of profit is inversely proportional to the value of the raw materials. This is absolutely true for capital newly invested in a business enterprise, in which the investment, i.e., the conversion of money into productive capital, is only just taking place.
But aside from this capital, which is being newly invested, a large portion of the already functioning capital is in the sphere of circulation, while another portion is in the sphere of production. One portion is in the market in the shape of commodities waiting to be converted into money, another is on hand as money, in whatever form, waiting to be reconverted into elements of production; finally, a third portion is in the sphere of production, partly in its original form of means of production such as raw and auxiliary materials, semi-finished products purchased in the market, machinery and other fixed capital, and partly in the form of products which are in the process of manufacture. The effect of appreciation or depreciation depends here to a great extent on the relative proportion of these component parts. Let us, for the sake of simplicity, leave aside all fixed capital and consider only that portion of constant capital which consists of raw and auxiliary materials, and semi-finished products, and both finished commodities in the market and commodities still in the process of production.
If the price of raw material, for instance of cotton, rises, then the price of cotton goods — both semi-finished goods like yarn and finished goods like cotton fabrics — manufactured while cotton was cheaper, rises also. So does the value of the unprocessed cotton held in stock and of the cotton in the process of manufacture. The latter because it comes to represent more labour time in retrospect and thus adds more than its original value to the product which it enters, and more than the capitalist paid for it.
Hence, if the price of raw materials rises, and there is a considerable quantity of available finished commodities in the market, no matter what the stage of their manufacture, the value of these commodities rises, thereby enhancing the value of the existing capital. The same is true for the supply of raw materials, etc., in the hands of the producer. This appreciation of value may compensate, or more than compensate, the individual capitalist, or even an entire separate sphere of capitalist production, for the drop in the rate of profit attending a rise in the price of raw materials. Without entering into the detailed effects of competition, we might state for the sake of thoroughness that 1) if available supplies of raw material are considerable, they tend to counteract the price increase which occurred at the place of their origin; 2) if the semi-finished and finished goods press very heavily upon the market, their price is thereby prevented from rising proportionately to the price of their raw materials.
The reverse takes place when the price of raw materials falls. Other circumstances remaining the same, this increases the rate of profit. The commodities in the market, the articles in the process of production, and the available supplies of raw material, depreciate in value and thereby counteract the attendant rise in the rate of profit.
The effect of price variations for raw materials is the more pronounced, the smaller the supplies available in the sphere of production and in the market at, say, the close of a business year, i. e., after the harvest in agriculture, when great quantities of raw materials are delivered anew.
We proceed in this entire analysis from the assumption that the rise or fall in prices expresses actual fluctuations in value. But since we are here concerned with the effects such price variations have on the rate of profit, it matters little what is at the bottom of them. The present statements apply equally if prices rise or fall under the influence of the credit system, competition, etc., and not on account of fluctuations in value.
Since the rate of profit equals the ratio of the excess over the value of the product to the value of the total capital advanced, a rise caused in the rate of profit by a depreciation of the advanced capital would be associated with a loss in the value of capital. Similarly, a drop caused in the rate of profit by an appreciation of the advanced capital might possibly be associated with a gain.
As for the other portion of constant capital, such as machinery and fixed capital in general, the appreciation of value taking place in it with respect mainly to buildings, real estate, etc., cannot be discussed without the theory of ground rent, and does not therefore belong in this chapter. But of a general importance to the question of depreciation are:
The continual improvements which lower the use value, and therefore the value, of existing machinery, factory equipment, etc. This process has a particularly dire effect during the first period of newly introduced machinery, before it attains a certain stage of maturity, when it continually becomes antiquated before it has time to reproduce its own value. This is one of the reasons for the flagrant prolongation of the working time usual in such periods, for alternating day and night shifts, so that the value of the machinery may be reproduced in a shorter time without having to place the figures for wear and tear too high. If, on the other hand, the short period in which the machinery is effective (its short life vis-à-vis the anticipated improvements) is not compensated in this manner, it gives up so much of its value to the product through moral depreciation that it cannot compete even with hand labour. ' 5 )
After machinery, equipment of buildings, and fixed capital in general, attain a certain maturity, so that they remain unaltered for some length of time at least in their basic construction, there arises a similar depreciation due to improvements in the methods of reproducing this fixed capital. The value of the machinery, etc., falls in this case not so much because the machinery is rapidly crowded out or depreciated to a certain degree by new and more productive machinery, etc., but because it can be reproduced more cheaply. This is one of the reasons why large enterprises frequently do not flourish until they pass into other hands, i. e., after their first proprietors have been bankrupted, and their successors, who buy them cheaply, therefore begin from the outset with a smaller outlay of capital.
It leaps to the eye, particularly in the case of agriculture, that the
' [5] For examples see Babbage,[2]* among others. The usual expedient — a reduction of wages — is also employed in this instance, so that this continual depreciation acts quite contrary to the dreams of Mr. Carey's "harmonious brain".[25] causes which raise or lower the price of a product, also raise or lower the value of capital, since the latter consists to a large degree of this product, whether as grain, cattle, etc. (Ricardo").
There is still variable capital to be considered. Inasmuch as the value of labour power rises because there is a rise in the value of the means of subsistence required for its reproduction, or falls because there is a reduction in their value — and the appreciation and depreciation of variable capital are really nothing more than expressions of these two cases — a drop in surplus value corresponds to such appreciation and an increase in surplus value to such depreciation, provided the length of the working day remains the same. But other circumstances — the release and tie-up of capital — may also be associated with such cases, and since we have not analysed them so far, we shall briefly mention them now.
If wages fall in consequence of a depreciation in the value of labour power (which may even be attended by a rise in the real price of labour), a portion of the capital hitherto invested in wages is released. Variable capital is set free. In the case of new investments of capital, this has simply the effect of its operating with a higher rate of surplus value. It takes less money than before to set in motion the same amount of labour, and in this way the unpaid portion of labour increases at the expense of the paid portion. But in the case of already invested capital, not only does the rate of surplus value rise but a portion of the capital previously invested in wages is also released. Until this time it was tied up and formed a regular portion which had to be deducted from the proceeds for the product and advanced for wages, acting as variable capital if the business were to continue on its former scale. Now this portion becomes disposable and may be used as a new investment, be it to extend the same business or to operate in some other sphere of production.
Let us assume, for instance, that £500 per week were required at first to employ 500 labourers, and that now only £400 are needed for the same purpose. If the quantity of value produced in either case = £1,000, the amount of weekly surplus value in the first case = £500 and the rate of surplus value -J^ = 100%. But after the wage reduction the quantity of surplus value £1,000 — £400 = £600, and its rate — = 150%. And this increase in the rate of surplus value is the only effect for one who starts a new enterprise in this sphere of production with a variable capital of £400 and a corresponding constant capital. But when this takes place in a business already in operation, the depreciation of the variable capital does not only increase the quantity of surplus value from £500 to £600, and the rate of surplus value from 100 to 150%, but releases £100 of the variable capital for the further exploitation of labour. Hence, the same amount of labour is exploited to greater advantage, and, what is more, the release of £100 makes it possible to exploit more labourers than before at the higher rate with the same variable capital of £500.
Now the reverse situation. Suppose, with 500 employed labourers, the original proportion in which the product is divided = 400v
+ 600s = 1,000, making the rate of surplus value = 150%. In that case, the labourer receives £[4]/5, or 16 shillings per week. Should 500 labourers cost £500 per week, due to an appreciation of variable capital, each one of them will receive a weekly wage = £ 1 , and £400 can employ only 400 labourers. If the same number of labourers as before is put to work, therefore, we have 500v + 500s = 1,000. The rate of surplus value would fall from 150 to 100%, which is y . In the case of new capital the only effect would be this lower rate of surplus value. Other conditions being equal, the rate of profit would also have fallen accordingly, although not in the same proportion. For instance, if c = 2,000, we have in the one case 2,000c + 400v
600 + 600s = 3,000; s' = 150%, p' = — = 25%. In the second case, 2,000c + 500v + 500s = 3,000; s' = i00%, p' = ~ = 20%. In the case of already engaged capital, however, there would be a dual effect. Only 400 labourers could be employed with a £400 variable capital, and that at a rate of surplus value of 100%. They would therefore produce an aggregate surplus value of only £400. Furthermore, since a constant capital of £2,000 requires 500 labourers for its operation, 400 labourers can put into motion only a constant capital of £1,600. For production to continue on the same scale, so that ~ of the machinery does not stand idle, £100 must be added to the variable capital in order to employ 500 labourers as before. And this can be accomplished only by tying up hitherto disposable capital, so that part of the accumulation intended to extend production serves merely to stop a gap, or a portion reserved for revenue is added to the old capital. Then a variable capital increased by £100 produces £100 less surplus value. More capital is required to employ the same number of labourers, and at the same time the surplus value produced by each labourer is reduced.
The advantages resulting from a release and the disadvantages resulting from a tie-up of variable capital both exist only for capital already engaged and reproducing itself under certain given conditions. For newly invested capital the advantages on the one hand, and the disadvantages on the other, are confined to an increase or drop in the rate of surplus value, and to a corresponding, if in no way proportionate, change in the rate of profit.
The release and tie-up of variable capital, just analysed, is the result of a depreciation or appreciation of the elements of variable capital, that is, of the cost of reproducing labour power. But variable capital could also be released if, with the wage rate unchanged, fewer labourers were required due to the development of the productive power of labour to set in motion the same amount of constant capital. In like manner, there may reversely be a tie-up of additional variable capital if more labourers are required for the same quantity of constant capital due to a drop in productivity. If, on the other hand, a portion of capital formerly employed as variable capital is employed in the form of constant capital, so that merely a different distribution exists between the components of the same capital, this has an influence on both the rate of surplus value and the rate of profit, but does not belong under the heading of tie-up and release of capital, which is here being discussed.
We have already seen that constant capital may also be tied up or released by the appreciation or depreciation of its component elements. Aside from this, it can be tied up only if the productive power of labour increases (provided a portion of the variable is not converted into constant capital), so that the same amount of labour creates a greater product and therefore sets in motion a larger constant capital. The same may occur under certain circumstances if productive power decreases, for instance in agriculture, so that the same quantity of labour requires more means of production, such as seeds or manure, drainage, etc., in order to produce the same output. Constant capital may be released without depreciation if improvements, utilisation of the forces of Nature, etc., enable a constant capital of smaller value to technically perform the same services as were formerly performed by a constant capital of greater value.
We have seen in Book II (1) that once commodities have been converted into money, or sold, a certain portion of this money must be reconverted into the material elements of constant capital, and in the proportions required by the technical nature of the particular sphere of production. In this respect, the most important element in all branches — aside from wages, i. e., variable capital — is raw material, including auxiliary material, which is particularly important in such lines of production as do not involve raw materials in the strict sense of the term, for instance in mining and the extractive industries in general. That portion of the price which is to make good the wear and tear of machinery enters the accounts chiefly nominally so long as the machinery is at all in an operating condition. It does not greatly matter whether it is paid for and replaced by money one day or the next, or at any other stage of the period of turnover of the capital. It is quite different in the case of the raw material. If the price of raw material rises, it may be impossible to make it good fully out of the price of the commodities after wages are deducted. Violent price fluctuations therefore cause interruptions, great collisions, even catastrophes, in the process of reproduction. It is especially agricultural produce proper, i. e., raw materials taken from organic nature, which — leaving aside the credit system for the present '—is subject to such fluctuations of value in consequence of changing yields, etc. Due to uncontrollable natural conditions, favourable or unfavourable seasons, etc., the same quantity of labour may be represented in very different quantities of use values, and a definite quantity of these use values may therefore have very different prices. If the value x is represented by 100 lbs of the commodity a, then the price of one lb. of a = -*r ; if it is represented by 1,000 lbs of a, the price of one lb. of a = , etc. This is therefore one of the elements of these
fluctuations in the price of raw materials. A second element, mentioned at this point only for the sake of completeness — since competition and the credit system are still outside the scope of our analysis — is this: It is the nature of things that vegetable and animal substances whose growth and production are subject to certain organic laws and bound up with definite natural time periods, cannot be suddenly augmented in the same degree as, for instance, machines and other fixed capital, or coal, ore, etc., whose augmentation can, provided the natural conditions do not change, be rapidly accomplished in an industrially developed country. It is therefore quite possible, and under a developed system of capitalist production even inevitable, that the production and increase of the portion of constant capital consisting of fixed capital, machinery, etc., should considerably outstrip the portion consisting of organic raw materials, so that demand for the latter grows more rapidly than their supply, causing their price to rise. Rising prices actually cause 1) these raw materials to be shipped from greater distances, since the mounting prices suffice to cover greater freight rates; 2) an increase in their production, which circumstance, however, will probably not, for natural reasons, multiply the quantity of products until the following year; 3) the use of various previously unused substitutes and greater utilisation of waste. When this rise of prices begins to exert a marked influence on production and supply it indicates in most cases that the turning-point has been reached at which demand drops on account of the protracted rise in the price of the raw material and of all commodities of which it is an element, causing a reaction in the price of raw material. Aside from the convulsions which this causes in various forms through depreciation of capital, there are also other circumstances, which we shall mention shortly.
But so much is already evident from the foregoing: The greater the development of capitalist production, and, consequently, the greater the means of suddenly and permanently increasing that portion of constant capital consisting of machinery, etc., and the more rapid the accumulation (particularly in times of prosperity), so much greater the relative overproduction of machinery and other fixed capital, so much more frequent the relative underproduction of vegetable and animal raw materials, and so much more pronounced the previously described rise of their prices and the attendant reaction. And so much more frequent are the convulsions caused as they are by the violent price fluctuations of one of the main elements in the process of reproduction.
If, however, a collapse of these high prices occurs because their rise caused a drop in demand on the one hand, and, on the other, an expansion of production in one place and in another importation from remote and previously less resorted to, or entirely ignored, production areas, and, in both cases, a supply of raw materials exceeding the demand — particularly at the old high prices — then the result may be considered from different points of view. The sudden collapse of the price of raw materials checks their reproduction, and the monopoly of the original producing countries, which enjoy the most favourable conditions of production, is thereby restored— possibly with certain limitations, but restored nevertheless. True, due to the impetus it has had, reproduction of raw material proceeds on an extended scale, especially in those countries which more or less possess a monopoly of this production. But the basis on which production carries on after the extension of machinery, etc., and which, after some fluctuations, is to serve as the new normal basis, the new point of departure, is very much extended by the developments in the preceding cycle of turnover. In the meantime, the barely increased reproduction again experiences considerable impediments in some of the secondary sources of supply. For instance, it is easily demonstrated on the basis of the export tables that in the last 30 years (up to 1865) the production of cotton in India increases whenever there has been a drop in American production, and subsequently it drops again more or less permanently. During the period in which raw materials become dear, industrial capitalists join hands and form associations to regulate production. They did so after the rise of cotton prices in 1848 in Manchester, for example, and similarly in the case of flax production in Ireland. But as soon as the immediate impulse is over and the general principle of competition to "buy in the cheapest market" (instead of stimulating production in the countries of origin, as the associations attempt to do, without regard to the immediate price at which these may happen at that time to be able to supply their product)—as soon as the principle of competition again reigns supreme, the regulation of the supply is left once again to "prices". All thought of a common, all-embracing and far-sighted control of the production of raw materials gives way once more to the faith that demand and supply will mutually regulate one another. And it must be admitted that such control is on the whole irreconcilable with the laws of capitalist production, and remains for ever a pious wish, or is limited to exceptional co-operation in times of great stress and confusion. '6l The superstition of the capitalists in this
[16] Since the above was written (1865), competition on the world market has been considerably intensified by the rapid development of industry in all civilised countries, respect is so deep that in their reports even factory inspectors again and again throw up their hands in astonishment. The alternation of good and bad years naturally also provides for cheaper raw materials. Aside from the direct effect this has on raising the demand, there is also the added stimulus of the previously mentioned influence on the rate of profit. The aforesaid process of production of raw materials being gradually overtaken by the production of machinery, etc., is then repeated on a larger scale. An actual improvement of raw materials satisfying not only the desired quantity, but also the quality desired, such as cotton from India of American quality, would require a prolonged, regularly growing and steady European demand (regardless of the economic conditions under which the Indian producer labours in his country). As it is, however, the sphere of production of raw materials is, by fits, first suddenly enlarged, and then again violently curtailed. All this, and the spirit of capitalist production in general, may be very well studied in the cotton shortage of 1861-65,[26] further characterised as it was by the fact that a raw material, one of the principal elements of reproduction, was for a time entirely unavailable. To be sure, the price may also rise in the event of an abundant supply, provided the conditions for this abundance are more knotty. Or, there may be an actual shortage of raw material. It was this last situation which originally prevailed in the cotton crisis.
The closer we approach our own time in the history of production, the more regularly do we find, especially in the essential lines of industry, the ever-recurring alternation between relative appreciation and the subsequent resulting depreciation of raw materials obtained from organic nature. What we have just
especially in America and Germany. The fact that the rapidly and enormously expanding productive forces today outgrow the control of the laws of the capitalist mode of commodity exchange, within which they are supposed to operate, impresses itself more and more even on the minds of the capitalists. This is disclosed especially by two symptoms. First, by the new and general mania for a protective tariff, which differs from the old protectionism in that now articles fit for export are those best protected. And secondly, by the trusts of manufacturers of whole spheres of production which regulate production, and thus prices and profits. It goes without saying that these experiments are practicable only so long as the economic climate is relatively favourable. The first storm must upset them and prove that, although production assuredly needs regulation, it is certainly not the capitalist class which is fitted for that task. Meanwhile, the trusts have no other mission but to see to it that the little fish are swallowed by the big fish still more rapidly than before.— F.E.
analysed will be illustrated by the following examples taken from reports of factory inspectors.
The moral of history, also to be deduced from other observations concerning agriculture, is that the capitalist system works against a rational agriculture, or that a rational agriculture is incompatible with the capitalist system (although the latter promotes technical improvements in agriculture), and needs either the hand of the small farmer living by his own labour or the control of associated producers.
Herewith follow the illustrations referred to above, taken from the English Factory Reports.
"The state of trade is better; but the cycle of good and bad times diminishes as machinery increases, and the changes from the one to the other happen oftener, as the demand for raw materials increases with it.... At present, confidence is not only restored after the panic of 1857, but the panic itself seems to be almost forgotten. Whether this improvement will continue or not depends greatly upon the price of raw materials. There appear to me evidences already, that in some instances the maximum has been reached, beyond which their manufacture becomes gradually less and less profitable, till it ceases to be so altogether. If we take, for instance, the lucrative years in the WORSTED trade of 1849 and 1850, we see that the price of Englsh combing wool stood at Is. Id., and of Australian at between Is. 2d. and Is. 5d. per lb., and that on the average of the ten years from 1841 to 1850, both inclusive, the average price of English wool never exceeded Is. 2d. and of Australian wool Is. 5d. per lb. But that in the com-mencement of the disastrous year of 1857, the price of Australian wool began with Is. 1 Id., falling to Is. 6d. in December, when the panic was at its height, but has gradually risen again to Is. 9d. through 1858, at which it now stands; whilst that of English wool, commencing with Is. 8d., and rising in April and September 1857 to Is. 9d., falling in January 1858 to Is. 2d., has since risen to Is. 5d., which is 3d. per lb. higher than the average of the ten years to which I have referred.... This shows, I think, ... either that the bankruptcies which similar prices occasioned in 1857 are forgotten; or that there is barely the wool grown which the existing spindles are capable of consuming; or else, that the prices of manufactured articles are about to be permanently higher.... And as in past experience I have seen spindles and looms multiply both in numbers and speed in an incredibly short space of time, and our exports of wool to France increase in an almost equal ratio, and as both at home and abroad the average age of sheep seems to be getting less and less, owing to rapidly increasing populations and to what the agriculturalists call 'a quick return in stock', so I have often felt anxious for persons whom, without this knowledge, I have seen embarking skill and capital in undertakings, wholly reliant for their success on a product which can only be increased according to organic laws. ... The ... state of supply and demand of all raw materials ... seems to account for many of the fluctuations in the cotton trade ..., as well as for the condition of the English wool market in the autumn of 1857, and the subsequent commercial crisis"" " ' (R. Baker in Reports of Insp. of Fact., Oct. 1858, pp. 56-61).
The halcyon days of the West-Riding WORSTED industry, of Yorkshire, were 1849-50. This industry employed 29,246 persons in 1838; 37,000 persons in 1843; 48,097 in 1845; and 74,891 in 1850. The same district had 2,768 mechanical looms in 1838 b; 11,458 in 1841; 16,870 in 1843; 19,121 in 1845 and 29,539 in 1850 (Reports of Insp. of Fact.,
1850, p. 60). This prosperity of the carded wool industry excited certain forebodings as early as October 1850. In his report of April
1851, Sub-Inspector Baker said in regard to Leeds and Bradford:
"The state of trade is, and has been for some time, very unsatisfactory. The worsted spinners are fast losing the profits of 1850, and, in the majority of cases, the manufacturers are not doing much good. I believe, at this moment, there is more woollen machinery standing than I have almost ever known at one time, and the flax spinners are also turning offhands and stopping frames. The cycles of trade, in fact, in the textile fabrics, are now extremely uncertain, and I think we shall shortly find to be true ... that there is no comparison made between the producing power of the spindles, the quantity of raw material, and the growth of the population" (p. 52).
The same is true of the cotton industry. In the cited report for October 1858, we read:
"Since the hours of labour in factories have been fixed, the amounts of consumption, produce, and wages in all textile fabrics have been reduced to a rule of three. ... I quote from a recent lecture delivered by ... the present Mayor of Blackburn, Mr. Baynes, on the cotton trade, who by such means has reduced the cotton statistics of his own neighbourhood to the closest approximation ' :—
" 'Each real and mechanical horse-power will drive 450 self-acting mule spindles with preparation, or 200 THROSTLE spindles, or 15 looms for 40 inches cloth, with winding, warping, and sizing. Each horse-power in spinning will give employment to 2 '/2 operatives, but in weaving to 10 persons, at wages averaging full 10s. 6d. a week to each person. ... The average counts of yarn spun and woven are from 30s. to 32s. twist, and 34s. to 36s. weft yarns; and taking the spinning production at 13 ounces per spindle per week, will give 824,700 lbs yarn spun per week, requiring 970,000 lbs or 2,300 bales of cotton, at a cost of £28,300. ... The total cotton consumed in this district (within a five-mile radius round Blackburn) per week is 1,530,000 lbs, or 3,650 bales, at a cost of £44,625.... This is one-eighteenth of the whole cotton spinning of the United Kingdom, and one-sixth of the whole power-loom weaving.'
" ' It goes without saying that we do not, like Mr. Baker, explain the wool crisis of 1857 on the basis of the disproportion between the prices of raw material and finished product. This disproportion was itself but a symptom, and the crisis was a general one.— F. E.
"Thus we see that, according to Mr. Baynes's calculations, the total number of cotton spindles in the United Kingdom is 28,800,000, and supposing these to be always working full time, that the annual consumption of cotton ought to be 1,432,080,000 lbs. But as the import of cotton, less the export in 1856 and 1857, was only 1,022,576,832 lbs, there must necessarily be a deficiency of supply equal to 409,503,168 lbs. Mr. Baynes, however, who has been good enough to communicate with me on this subject, thinks that an annual consumption of cotton based upon the quantity used in the Blackburn district would be liable to be overcharged, owing to the difference, not only in the counts spun, but in the excellence of the machinery. He estimates the total annual consumption of cotton in the United Kingdom at 1,000,000,000 lbs. But if he is right, and there really is an excess of supply equal to 22,576,832 lbs, supply and demand seem to be nearly balanced already, without taking into consideration those additional spindles and looms which Mr. Baynes speaks of as getting ready for work in his own district, and, by parity of reasoning, probably in other districts also" (pp. 59, 60, 61).
Endnotes
[5] A reference to: 1 ) First Report from the Secret Committee on Commercial Distress; with the minutes of evidence. Ordered, by the House of Commons, to be printed, 8 June 1848; 2) Report from the Secret Committee of the House of Lords, Appointed to Inquire into the Causes of the Distress which has for some time prevailed among the commercial classes, and how far it has been affected by the laws for regulating the issue of banknotes payable on demand. Together with the minutes of evidence and an appendix. Ordered, by the House of Commons, to be printed, 28 July 1848. [Reprinted 1857.J — 11
[2] As early as 1865, when working on the manuscript Marx planned to have Capital translated into English (see Marx's letter to Engels of July 31, 1865; present edition, Vol. 42, p. 173). Reporter Peter Fox, a member of the British labour movement, was to help him find a publisher. However, he died in 1869, and nothing was settled. The English translation of Volume I of Capital, edited by Engels, appeared after Marx's death, in January 1887 (ibid., Vol. 35). The translation was done by Samuel Moore and Edward Aveling between mid-1883 and March 1886; Eleanor Marx-Aveling assisted in preparing the translation for the press.— 5
[25] See H.C. Carey, Principles of Political Economy, Philadelphia, 1837. Cf. K.Marx, Outlines of the Critique of Political Economy (present edition, Vol. 29, p. 138).—115
[4] Cf. the contents of Book III of Capital as set forth by Marx in his letter to Engels of April 30, 1868 (ibid., Vol. 43, pp. 21-25).—10
[16] Engels has in mind Wilhelm Lexis' review of Volume II of Capital published in Jahrbücher für Nationalökonomie und Statistik, Neue Folge, 11. Band, Jena, 1885, S. 458-59.—80
[26] On the cotton shortage caused by the American Civil War of 1861-65 see K. Marx, "The British Cotton Trade" and "On the Cotton Crisis" (present edition, Vol. 19, pp. 17-20 and 160-62).—122