This circular course taken by our presentation, on the one hand, corresponds to the historical development of capital, one of the conditions for the emergence of which is the exchange of commodities trade in commodities; but this condition itself is formed on the basis provided by a number of different stages of production which all have in common a situation in which capitalist production either does not as yet exist at all or exists only sporadically. On the other hand, the exchange of commodities in its full development and the form of the commodity as the universally necessary social form of the product first emerge as a result of the capitalist mode of production. If, in contrast, we consider societies where capitalist production is fully developed, the commodity appears there as both the constant elementary presupposition of capital and, on the other hand, as the direct result of the capitalist production process. Both commodities and money are the elementary presuppositions of capital, but they only develop into capital under certain conditions. Capital formation cannot occur except on the basis of the circulation of commodities (which includes the circulation of money), hence at an already given stage of development of trade in which the latter has achieved a certain extension. The production and circulation of commodities, however, do not conversely presuppose the capitalist mode of production for their existence; on the contrary, as I have already demonstrated, they also exist in pre-bourgeois social formations . They are the historical presupposition of the capitalist mode of production.  On the other hand, however, it is only on the basis of capitalist production that the commodity becomes the general form of the product, that every product must take on the commodity form, that sale and purchase seize control not only of the surplus of production but of its very substance, and that the various conditions of production themselves emerge in their totality as commodities which go into the production process from circulation. Hence if the commodity appears on the one hand as the presupposition for the formation of capital, the commodity also appears, on the other hand, as essentially the product and result of the capitalist production process, in so far as it is the universal elementary form of the product. At earlier stages of production, products assume the commodity form in part. Capital, in contrast, necessarily produces its product as a commodity. [Sismondi] Therefore, to the degree that capitalist production, i.e. capital, develops, the general laws developed with regard to the commodity for example, the laws concerning value are also realised in the different forms of money circulation. Here, it is apparent how even economic categories which belong to earlier epochs of production take on a specifically different, historical, character on the basis of the capitalist mode of production. The conversion of money, which is itself only a converted form of the commodity, into capital only takes place once labour capacity has been converted into a commodity for the worker himself; hence once the category of commodity trade has taken control of a sphere which was previously excluded from it, or only sporadically included in it. Only when the working population has ceased either to form part of the objective conditions of labour, or to enter the market as a producer of commodities, selling its labour itself or more precisely its labour capacity instead of the product of its labour, does production become the production of commodities to its complete extent, over the whole of its length and breadth. Only then are all products converted into commodities, and only then do the objective conditions of each individual sphere of production enter into production as commodities themselves. Only on the basis of capitalist production does the commodity in fact become the universal elementary form of wealth. If, e.g., capital has not yet taken control of agriculture, a large part of the product is still produced directly as means of subsistence, not as commodities; a large part of the working population will not yet have been converted into wage labourers, nor will a large part of the conditions of labour have been converted into capital. This implies that the developed division of labour, as it appears accidentally within society, and the capitalist division of labour within the workshop, condition and produce each other. For the commodity as the necessary form of the product, and therefore the alienation of the product as the necessary form of its appropriation, imply a fully developed division of social labour, while on the other hand it is only on the basis of capitalist production, hence also of the capitalist division of labour within the workshop, that. all products necessarily assume the commodity form, and all producers are therefore necessarily commodity producers. It is therefore only with the coming of capitalist production that use value is first generally mediated through exchange value. From this point of view the form in which the conditions of production themselves enter into the labour process is also entirely irrelevant. E.g. it is a matter of indifference whether they only give up their value to the product gradually, as in the case of a part of the constant capital, machinery, etc., or enter into it materially, as with the raw material; whether, as in the case of the seed in agriculture, a part  of the product is directly re-employed by the producer himself as a means of labour, or is first sold and then converted afresh into a means of labour. Whatever their role as use values in the production process, all the means of labour that have been produced now function at the same time as elements in the valorisation process. To the extent that they are not converted into real money, they are converted into money of account, they are treated as exchange values, and the value element they add to the product in one way or another is precisely calculated. In the same measure as e.g. agriculture becomes a branch of industry carried on in the capitalist fashion as capitalist production settles itself down in the country in the same measure as agriculture produces for the market, produces commodities articles for sale and not for its own direct consumption, in that measure does it calculate its expenditure, treat each item of it as a commodity (whether it buys from another or from itself, i.e. from production), and therefore to the extent that the commodity is treated as independent exchange value as money. Therefore since wheat, hay, cattle, seed of all kinds, etc., are sold as commodities and without being sold they do not count as products at all they enter into production as commodities, or, respectively, as money. The conditions of production, the elements of products, naturally become commodities in the same measure as the products do for they are identical with the products and in so far as the valorisation process comes into consideration they are calculated in the independent form of exchange value, as monetary magnitudes. The direct production process is here always and inseparably a labour process and a valorisation process just as the product is a unity of use value and exchange value, i.e. a commodity. Leaving aside this formal aspect, we can say that in the same measure as e.g. the farmer s purchases of what he has to lay out expand, so also does the trade in seed, in manure, in breeding cattle, etc. whereas he sells his income. Thus for the individual farmer these conditions of production also pass in actuality out of circulation and enter into his production process; circulation becomes in effect the presupposition of his production, since the conditions of production increasingly become commodities really bought (or purchasable). In any case, for him they are already commodities, as articles, means of labour, which form at the same time parts of the value of his capital. (Hence if he returns them in natura to production he reckons them as having been sold to him qua the producer.) And indeed this develops in the same proportion as the capitalist mode of production develops in agriculture; hence in proportion as it is carried on increasingly in a factory-like fashion. The character of the commodity as the universally necessary form of the product, as the specific peculiarity of the capitalist mode of production, is palpably demonstrated in the large scale of production, the one-sidedness and the massive nature of the product brought about with the development of capitalist production. This mode of production imposes on the product a character which is social and is firmly bound up with the social context, while making its direct relation as use value to the satisfaction of the producer s needs appear, in contrast, as something wholly accidental, irrelevant and inessential. This mass product must be realised as exchange value, it must pass through the metamorphosis of the commodity, not only as a necessity for the subsistence of the producer who produces as a capitalist, but also as a necessity for the renewal and continuity of the production process itself. And this is why it passes into the sphere of trade. Its buyer is not  the direct consumer but the merchant, who effects the metamorphosis of the commodity as a business in its own right. [Sismondi] The product finally develops its character as a commodity, and hence its character as exchange value, because under capitalist production the number of different spheres of production, hence the spheres of the product s exchangeability, are constantly multiplied. [We proceed from the commodity, this specific social form of the product, as the basis and the presupposition of capitalist production. We take the individual product into our hands and analyse the formal determinations it contains as a commodity, which mark it out as a commodity. Before capitalist production, a large part of the products was not produced as commodities, not to serve as commodities; while, conversely, a large part of the products which entered production did not do so as commodities, did not enter the production process as commodities. The conversion of products into commodities only occurs at individual points, is limited only to the surplus of production, or only to individual spheres of production (the products of manufacture), etc. The whole range of products neither enters into the process as articles of trade, nor does it emerge from it as such. [see the French work of about 1752 in which it is asserted that corn was never regarded as an article of trade in France before . ] Nevertheless, commodity circulation, and money circulation within certain limits, hence a certain degree of development of trade, are the presupposition, the starting point of capital formation and the capitalist mode of production. It is as such a presupposition that we treat the commodity, since we proceed from it as the simplest element in capitalist production. On the other hand, the commodity is the product, the result of capitalist production. What appears first as its element is later revealed to be its own product. Only on the basis of capitalist production does the commodity become the universal form of the product, and the more this production develops, the more do all the ingredients of production enter into the production process as commodities.] The commodity as it emerges from capitalist production is determined differently from the commodity as it was at the starting point, as the element, the presupposition, of capitalist production. We started with the individual commodity as an independent article in which a specific quantity of labour time was objectified, and which therefore had an exchange value of a given magnitude. Henceforth the commodity appears in a dual determination: We saw earlier that the commodity must acquire a double mode of existence in order to be made fit for circulation. Not only must it confront the buyer as an article with particular useful qualities, as a particular use value which satisfies particular needs, whether of individual or of productive consumption. Its exchange value must have acquired a form different and distinct from its use value, independent of it, although only notionally. It must appear as the unity of use value and exchange value, but at the same time it must appear as this duality. Its exchange value acquires this independent form, a form entirely independent of its use value, as the pure existence of materialised social labour time, in its price, that expression in which exchange value is expressed as exchange value, i.e. as money; and indeed it is expressed in this way in money of account. There are in fact individual commodities, as for example railways, large buildings, etc., which are on the one hand so continuous in their nature, and on the other hand so extensive, that the entire product of the capital advanced appears as one single commodity. In this field, therefore, the law demonstrated in relation to single commodities would apply, namely that their price is nothing but their value expressed in money. The total value of the capital + the surplus value would be contained in the single commodity, and could be expressed in money of account. The price determination of a commodity of this kind would not differ from that given earlier for the single commodity, because here the total product of the capital would really be present as a single commodity. It is therefore unnecessary to discuss this point any further. The majority of commodities, however, are discrete in nature (and even the continuous ones can in most cases be treated notionally as discrete magnitudes), i.e., considered as amounts of a given article, they are divisible according to the measures customarily applied to them as specific use values,  e.g. a quarters of wheat, b centners of coffee, c yards of linen, x dozens of knives in this case the individual commodity itself counts as the unit of measurement, etc. We now have to look at the total product of the capital, which can always be considered as a single commodity, whatever its scale, and whether it is discrete or continuous; it can be considered as a single use value, and its exchange value therefore also appears in the total price as the expression of the total value of this total product. When the valorisation process was examined, it was shown that a part of the constant capital advanced, such as buildings, machines, etc., gives up to the product only the specific quantities of value it loses in the labour process as means of labour, and that it never enters into the product materially, in the form of its own use value. It was also shown that it continues to serve in the labour process over a long period, and that the part of the value that it gives up over a particular period of time to the product produced during that period can be estimated according to the ratio between that particular period and the total period during which it is used up as a means of labour, thereby losing its total value and transferring its total value to the product. E.g. if it serves for 10 years, a calculation of the average will show that it gives up 1/10 of its value to the product in one year, and adds 1/10 of its value to the annual product of the capital. In so far as this part of the constant capital continues to serve as a means of labour, after disposing of a given quantity of products, and to represent a definite value, according to the average estimate indicated above, it does not enter into the formation of the value of the products that have been disposed of. In general, its total value is only a determinant of the value of the products disposed of, the products for the production of which it has already served, in so far as the value given up by it during a particular period of time is estimated as an aliquot part of its total value, determined by the ratio between the period of time during which it has served and given up a part of its value and the total period of time during which it serves and gives up its total value to the product. For the rest, the value it continues to have does not come into consideration when the value of the amount of commodities already disposed of is estimated. It can therefore be set at nothing in relation to this amount. Or, and this comes to the same thing, the matter can be regarded, for the sake of simplification, for the present purpose, as if the total capital, including the part of the constant capital which only enters completely into the product over long periods of production, were entirely contained, dissolved, in the product of the total capital which we are about to consider. Let us assume that the total product = 1,200 yards of linen. Let the capital advanced be = 100, of which 80 represents constant capital, and 20 variable capital, and let the rate of surplus value be = 100%, so that the worker works half the working day for himself, and the other half for the capitalist, without receiving payment. In this case, the surplus value that has been produced = 20, and the total value of the 1,200 yards = 120, 80 of which represents value added by the constant capital, and 40 newly added labour. Half of the latter replaces the wage, the other half represents surplus labour  or forms surplus value. Since the elements of capitalist production, only excepting the newly added labour, already enter into the production process as commodities, hence with specific prices, the value added by the constant capital is already given as a price, e.g. in the above example it is 80 for flax, machines, etc. But as regards the newly added labour, if the wage determined by the necessary means of subsistence = 20, and the surplus labour is of the same amount as the paid labour, it must be expressed in a price of 40, since the value in which the [newly] added labour is expressed depends on its quantity but not by any means on the situation in which it is paid. The total price of the 1,200 yards produced by the capital of 100 therefore = 120. How in this case is the value of the individual commodity to be determined, here the value of a yard of linen? Evidently by dividing the total price of the total product by the number of individual products as they result from a division of the product into aliquot parts according to measurements which are given. The total price of the product must be divided by the number of products; there use value provides the yardstick, hence in this case it is 120/1,200 yards. This gives a price of 2s. for the individual yard of linen. If the yard which serves as the measure of the linen is now further developed as a yardstick, by subdividing it into smaller aliquot portions, this will make it possible to go further, and to determine the price of half a yard, and so on. Thus the price of the individual commodity is determined by calculating its use value as an aliquot part of the total product and its price as a corresponding aliquot part of the total value brought forth by the capital. We have seen that in accordance with the different levels of productivity or productive power of labour the same labour time will be expressed in very diverse amounts of produce, or an exchange value of equal magnitude will be expressed in entirely different quantities of use value. In the case under consideration, assume that the productivity of linen weaving increases fourfold. The constant capital, flax, machines, etc., that was set in motion by the labour expressed in 40 was = 80. If the productivity of weaving labour were to increase fourfold, it would set in motion 4 times as much constant capital; thus 320 s worth of flax, etc. And the number of yards would increase fourfold, it would grow from 1,200 to 4,800. The newly added weaving labour, however, would continue to be expressed in 40, since the quantity of labour would have remained unchanged. The total price of the 4,800 yards therefore now = 360, and the price of a single yard = 360 /4,800 Yards = 1 1/2 s. The price of at single would have fallen by 1/4, from 2s., or 24d., to 1 1/2 s. or 18d., because the constant capital contained in the yard would have absorbed 1/4 less additional living labour during its conversion into linen, or the same quantity of weaving labour would have been distributed over a greater quantity of product.  Even so, our present purpose is still better served if we take an example in which the total capital advanced remains the same, but the productive power of labour is expressed in very diverse quantities of the same  use value, e.g. wheat, merely as a result of natural conditions, e.g. seasonable or unseasonable weather. Let us assume that the quantity of labour spent upon an acre of land, e.g. in the production of wheat, is expressed in 7, of which 4 is newly added labour, and 3 represents labour already objectified in constant capital. Let 2 of the 4 be wages and 2 surplus labour, in line with the ratio already presupposed of surplus labour / necessary labour = 100/100. But let the crop vary according to the variations in the seasons. [J. Arbuthnot, An Inquiry into the Connection etc. By a Farmer, London, 1773, p. 108.] The value or the price of the total product of the capital of 5 advanced for 1 acre always remains the same here, 7, since the amount of objectified and newly added living labour advanced remains constant. But this same labour is expressed in very different numbers of quarters, and the single quarter, the same aliquot part of the total product, therefore has very diverse prices. This variation in the prices of the individual commodities produced with the same capital does not however lead to any change at all in the rate of surplus value, in the ratio of surplus value to variable capital, or in the proportion in which the total working day is divided into paid and unpaid labour. The total value in which the newly added labour is expressed remains the same, because the same quantity of living labour as before is added to the constant capital, and the proportion between the surplus value and the wage, or between the paid and the unpaid labour, remains the same whether the yard, owing to differences in the productivity of labour, costs 2s. or 1 1/2 s. What has altered in regard to the individual yard is the total quantity of weaving labour added to it; but the proportion in which this total quantity is divided into paid and unpaid labour remains the same for each aliquot part whether larger or smaller of this total quantity which is contained in the individual yard. Similarly, under the given presupposition, in the second case with a decline in the productivity of labour a rise in the price of the quarter [of wheat], the fact that the newly added labour is distributed over fewer quarters, with a greater quantity of newly added labour therefore falling to the share of the individual quarter,  would make absolutely no difference to the proportion in which this larger or smaller quantity of labour absorbed by the individual quarter is divided between paid and unpaid labour. Nor does it make any difference, either to the total surplus value the capital has produced, or to the aliquot part of the surplus value contained in the value of the individual quarter, in relation to the value newly added to it. If under the given presuppositions more living labour is added to a specific quantity of the means of labour, more paid and more unpaid labour is added to it in identical proportions; if less living labour is added, less paid and less unpaid labour is added, again in identical proportions, but the ratio between these two components of the newly added labour remains unchanged. Leaving aside a number of distorting influences, which it is not relevant to consider for the present purpose, it is the tendency and the result of the capitalist mode of production continuously to raise the productivity of labour, hence continuously to increase the amount of the means of production converted into products with the same additional labour, continuously to distribute the newly added labour over a greater quantity of products, so to speak, and therefore to reduce the price of the individual commodity, or to cheapen commodity prices in general. But in and for itself this cheapening of commodity prices involves absolutely no change, either in the amount of surplus value produced by the same variable capital, or in the proportional division of the newly added labour contained in the individual commodity into paid and unpaid, or in the rate of surplus value realised in the individual commodity. If the conversion of a specific quantity of flax, spindles, etc., into a yard of linen absorbs less of the weaver s labour than before, this does not in the least alter the proportional division of this greater or lesser amount of labour into paid and unpaid. The absolute quantity of living labour added afresh to a given quantity of already objectified labour does not affect the proportion in which this amount, which can be larger or smaller according to the particular commodity, is divided into paid and unpaid labour. In spite of the variation in commodity prices arising out of a variation in the productive power of labour, i.e. a reduction in these commodity prices and a cheapening of the commodity, the proportion between paid and unpaid labour, and altogether the rate of surplus value realised by capital, may therefore remain constant. If a variation occurs, not in the productive power of the labour newly added to the means of labour, but in the productive power of the labour that creates the means of labour, the price of which will accordingly rise or fall, it is equally clear that the variation thus effected in the prices of the commodities would not alter the unchanging division of the additional living labour contained in them into. paid and unpaid labour. Conversely. If variation in the prices of commodities does not exclude a constant rate of surplus value, an unchanging division of the additional labour into paid and unpaid, constancy in the prices of commodities does not exclude variation in the rate of surplus value, changes in the proportional division of the newly added labour into paid and unpaid. In order to simplify matters let us assume that, in the branch of labour under discussion, no variation takes place in the productive power of any of the labour contained in it hence in the above case, for example, there is no variation in the productivity of weaving labour or the labour that provides the flax, the spindles, etc. On the above assumption, 80 is laid out in constant capital, 20 in variable capital. This 20 is supposed to express the 20 days (e.g. weekdays) of 20 weavers. According to our presupposition, they produced 40, hence worked half a day for themselves and half a day for the capitalist. But it is further  posited that the working day was = 10 hours, and is now extended to 12, so that the surplus labour is increased by 2 hours per man. The total working day would have grown by 1/5, from 10 hours to 12. Since 10:12 = 16 2/3:20, no more than 16 2/3 weavers would now be necessary to set in motion the same constant capital of 80, hence to produce 1,200 yards of linen. (For 20 men working 10 hours account for a total of 200 hours, and 16 2/3 men working 12 hours also account for 200 hours.) Or, if we keep the 20 workers as before, they will now add 240 hours of labour instead of the previous 200 hours. And since the value of 200 hours per day per week is expressed in 40, the value of 240 hours per day per week would be expressed in 48. But since the productive power of labour, etc., has remained the same, and since there are 80 of constant capital for 40 [of variable], there would be 96 of constant capital for 48 [of variable]. The capital advanced would therefore amount to 116, and the commodity, value produced by it would = 144. But since 120  = 1,200 yards, 128 = 1,280 yards. A single yard would therefore cost 128 / 1,280 = 1/10 = 2s. The price of the single yard would be unchanged, because it would still cost the same total quantity of weaving labour newly added and labour objectified in the means of labour. The surplus value contained in each yard, however, would have grown. Previously there was 20 of surplus value for 1,200 yards, hence 4d. for one yard ( 20 /1,200 = ( 2/120 = 1/60 = 1/3 s. = 4d.). Now there is 28 [of surplus value] for 1,280 yards, [and one yard] now [contains] 5 1/4d. [of surplus value], since 5 1/4d. x 1,280 = 28, which is the actual total of the surplus value contained in the 1,280 yards. Similarly, the additional 8 of surplus value are = 80 yards (at 2s. per yard), and in fact the number of yards has risen from 1,200 to 1,280. Here, then, the price of the commodity remains the same; the productive power of labour remains the same. The amount of capital laid out in wages remains the same. Nevertheless, the total amount of surplus value rises from 20 to 28, or by 8, which is 2/5 of 20; since 8x 5/2 = 40/2 = 20, it has risen by 40%. This is the percentage by which the total surplus value has grown. But as far as the rate of surplus value is concerned, it was originally 100% and is now 140%. These blasted figures can be corrected later. For the moment it is enough to say that surplus value grows where commodity prices remain constant  because the same amount of variable capital sets in motion more labour, and therefore produces not only more commodities of the same price, but more commodities containing more unpaid labour. The correct calculation is shown in the following comparison. But first certain additional prefatory remarks need to be made: If 20 v originally = 20 ten-hour days (which one can multiply by 6 to arrive at weeks, without changing matters) and if the working day = 10 hours, the total amount of labour = 200 hours. If the day is prolonged from 10 to 12 hours (and surplus labour from 5 to 7) the total labour of the 20 = 240 hours. If 200 hours of labour are represented in 40, 240 are represented in 48. If 200 hours set a constant capital of 80 in motion, 240 will set in motion a capital of 96. If 200 hours produce 1,200 yards, 240 hours, in contrast, will produce 1,440 yards. And now the comparison follows: Let us now assume the opposite, that the working day remains the same, = 10 hours, but that as a result of an increase in the productivity of labour, an increase which takes place not in the constant capital that employs the weaving labour, nor in this labour itself, but rather in other branches of industry, the products of which enter into the wage, necessary labour is reduced from 5 to 4 hours. Then the workers would work 6 hours for the capitalist instead of 5 as before, and 4 for themselves instead of 5.  The ratio of surplus labour to necessary labour was 5:5 = 100/100, 100%; but now it is 6:4 = 150:100 = 150%. 20 men continue to be employed for 10 hours, = 200 hours [altogether]; they continue to set in motion the same constant capital of 80. The value of the total product continues to be 120, the number of yards = 1,200, the price of the yard = 2s. The reason is that nothing at all has changed in the prices of production. The total product (in value) of 1 [worker] was 2, and of 20 was 40. But if at 5 hours a day the week = 20, 4 = 16, and he buys the same quantity of means of subsistence with the 16 as previously [with 20]. The 20 men, who now only perform 4 hours of necessary labour, are paid 16 instead of 20, as previously. Variable capital has fallen from 20 to 16, but continues to set in motion the same absolute quantity of labour. However, this quantity is now divided differently. Previously 1/2 was paid, 1/2 unpaid. Now 4 hours of the 10 are paid and 6 unpaid, hence 2/5 paid and 3/5 unpaid; in other words the ratio is now 6:4 instead of 5:5; thus the rate of surplus value is 150% instead of 100%. The rate of surplus value has risen by 50%. There would be 3 1/3 d. of paid and 4 4/5 d. of unpaid weaving labour in each yard; this is 24/5 : 16/5, or 24:16, as above. We should therefore have: It will be noted here that the total amount of surplus value is only 24, not 28 as in II. But if in III the same amount of variable capital (20) were to be laid out, the total amount of labour employed would have risen, since it remains the same if a variable capital of 16 is laid out. In fact it would have risen by 1/4, since 20 is more than 16. There would have been a rise in the total quantity of labour employed, not just in the proportion of surplus labour to paid labour. Since 16 yields 40 at this new rate, 20 yields 50, 30 of which is surplus value. If 40 = 200 hours, 50 = 250 hours. And if 200 set in motion 80c, 250 hours set in motion 100c. Finally, if 200 hours produce 1,200 yards, 250 hours produce 1,500. The calculation would be as follows: It should in general be noted that if, as a result of a fall in wages (which is a result here of an increase in productive power), less variable capital is needed to employ the same amount of labour, this amount of labour is employed with a greater advantage for capital, in that the paid part of this amount falls in comparison with the unpaid part. Furthermore, if the capitalist continues to lay out the same amount of variable capital, he makes a twofold gain, because he not only achieves a higher rate of surplus value on the same total quantity, but exploits a greater quantity of labour at this higher rate of surplus value, *although his variable capital has not increased in magnitude.*  We have therefore seen that: 1) the rate and quantity of surplus value may remain constant with changing commodity prices; 2) the rate and quantity of surplus value may vary with constant commodity prices. As was developed in our examination of the production of surplus value, commodity prices as such only influence surplus value in so far as they enter into the reproduction costs of labour capacity, thereby affecting the latter s own value; this effect may over short periods be cancelled out by countervailing influences. It follows from 1) that the fall in commodity prices which arises from the development of the productive power of labour, the resultant cheapening of commodities leaving aside the group of commodities which make labour capacity itself cheaper when they become cheaper (just as, inversely, their increased dearness makes labour capacity more expensive) admittedly implies that less labour is materialised in the individual commodities, or that the same labour is represented by a greater quantity of commodities, for which reason a smaller aliquot part of the labour falls to the share of each individual commodity, but it does not in itself imply any change in the proportional division of the labour contained in each individual commodity into paid and unpaid. The two laws developed here are universally valid for all commodities, including therefore those that do not enter directly or indirectly into the reproduction of labour capacity, and the prices of which are therefore irrelevant to the determination of the value of labour capacity itself, whether they have risen or fallen. It follows from 2) see remarks ad III) and IIIa) that although the commodity prices remain the same, and the productive power of the living labour employed directly in the branch of production which results in the commodity remains the same, the rate and the amount of surplus value may rise. [It would have been equally possible to demonstrate the obverse of this phenomenon, namely that prices may fall either if the total working day is reduced, or if the necessary labour time increases owing to an increase in the prices of other commodities, while the working day remains constant.] This is the case because a variable capital of a given magnitude may employ very unequal quantities of labour of a given productive power (and the prices of the commodities remain the same as long as the productive power of labour does not alter) or a variable capital of varying magnitude employs equal quantities of labour of a given productive power. In short, a variable capital of a given magnitude of value does not by any means always set in motion the same amount of living labour, and therefore, in so far as it is regarded as a mere symbol for the quantities of labour it sets in motion, it is a symbol of variable magnitude. This last remark ad 2) and law No. 2 shows how the commodity as a product of capital, as an aliquot constituent of capital, and as a repository of capital which has valorised itself and therefore contains an aliquot part of the surplus value created by capital, must be considered differently from the way we viewed it previously, at the beginning of our examination of the individual, independent commodity.' (When we speak of the prices of commodities, we always assume that the overall price of the mass of commodities produced by capital = the overall value of this mass of commodities, and therefore that the price of the aliquot part, of the individual commodity, = the aliquot part of that overall value. Price here is in general only the monetary expression of value. Prices as distinct from values are not as yet present at all in our treatment of the question.) We have seen  that capitalist production is the production of surplus value, and as such (in accumulation) it is at the same time the production of capital and the production and reproduction of the whole capital-relation on an ever more extensive scale. Surplus value, however, is only produced as a part of the commodity s value, just as it is then expressed in a specific quantity of a commodity or in surplus produce. Only as a producer of commodities does capital produce surplus value and reproduce itself. Therefore what we have again to concern ourselves with next is the commodity as its direct product. As we have seen, however, commodities are incomplete results from the point of view of their form (according to their format economic determination). They have to pass through certain changes of form they must re-enter the process of exchange, in which they undergo these changes of form before they can again function as wealth, whether in the form of money or as use values. We therefore have now to examine the commodity more closely as the immediate result of the capitalist production process, and following that the further processes it has to pass through.)] (Commodities are the elements of capitalist production, and they are its product; they are the form in which capital reappears at the end of the production process.) The individual commodity as the product of capital, in fact as the elementary constituent of reproduced and valorised capital displays the difference between it and the individual commodity from which we started out as the presupposition of capital formation, the commodity considered in its independence. One point of difference apart from the point considered previously, relating to the determination of the price is that when the commodity is sold at its price the value of the capital advanced to produce it is not realised, still less the surplus value created by that capital. Indeed, considered merely as the repositories of capital, not only materially, as parts of the use value of which the capital consists, but also as repositories of the value of which the capital consists, commodities can be sold at the price which corresponds to their value and nevertheless be sold below their value as products of capital and as constituents of the overall product in which the capital that has been valorised exists initially. In the example above, a capital of 100 was reproduced in 1,200 yards of linen, at a price of 120. In view of our earlier discussion, where we had c = 80, v = 20, s = 20., we can express matters like this: the 80 of constant capital is represented by 800 yards, or 2/3 of the overall product, the 20 of variable capital, or wages, is represented by 200 yards, or 1/6 of the overall product, and the 20 of surplus value is similarly represented by 200 yards, or a further 1/6 of the overall product. If now 800 yards, for example, rather than 1 yard, were sold at their price, = 80, and if the other 2 parts [of the product] could not be sold, the original capital value of 100 would only be reproduced to an extent of 4/5. The 800 yards, in their capacity as repositories of the total capital of 100, i.e. as the sole actual product of this total capital, would be sold below their value, in fact 1/3 below their value, since the value of the overall product = 120, and 80 = only 2/3 of the overall product. The missing value, 40, is equal to the remaining third of that product. The 800 yards mentioned above could also be sold above their value, if we look at them in isolation, and they would then nevertheless be sold at their value as repositories of the total capital, if, for example, they were themselves sold at 90, and the remaining 400 yards were sold at only 30. But here we shall disregard entirely the sale of separate portions of the overall quantity of commodities above or below their value, since according to our original presupposition commodities are lit general sold at their value.  What is involved here is not only the sale of the commodity at its value, as in the case of the independent commodity, but its sale as repository of the capital advanced for its production and therefore its sale at its value (price) as an aliquot part of the capital s overall product. If only 800 out of this overall product of 1,200 yards = 120 are sold, the 800 do not represent 2/3 aliquot parts of the total value, but the total value itself; they therefore represent a value of 120 and not one of 80, and the individual commodity is not = 80/800 = 8/80 = 4 /40 = 2/20 = 2s., but = 120/800 = 12/80 = 3/20 = 3s. According to this, the individual commodity would be sold 50% too dear, if it were sold at 3s. instead of two. The individual commodity, as an aliquot part of the total value produced, must be sold at its price, and therefore must be sold as an aliquot part of the overall product being sold. It must be sold, not as an independent commodity, but as e.g. 1/1,200 of the overall product, as the complement, therefore, of the other 1,199/1,200. What is important is that the individual commodity should be sold at its price x the number which is its denominator as an aliquot part [of the overall product]. [Needless to say, the result of this is that with the development of capitalist production and the cheapening of the commodity corresponding to that development the quantity of commodities grows, the number of commodities that have to be sold grows; hence a constant extension of the market is necessary, is a requirement of the capitalist mode of production. But this point belongs better to the subsequent book.] [This also explains why the capitalist is unable to deliver 1,300 yards at 2s. apiece, whereas he could deliver 1,200 at that price. The reason is that the additional 100 yards might perhaps require an additional provision of constant capital, etc., which could provide an additional production of 1,200 yards at that price but not 100, etc.] From this it can be seen how the commodity as product of capital is distinguished from the individual commodity, treated independently; this distinction will be more and more apparent, and will affect the real price determination of the commodity, etc., in ever increasing measure, the further we trace the course of the capitalist production and circulation process. But the point I want to draw particular. attention to is this: We saw in Chapter II, Section 3, of this First Book how the different value components of the product of capital the value of constant capital, the value of variable capital and surplus value on the one hand are represented, repeat themselves, in their proportional parts in each individual commodity, which itself represents an aliquot part of the total amount of use value that has been produced, as well as an aliquot part of the total amount of value that has been produced; and how on the other hand the overall product can be divided up into certain portions, quotients, of the use value, the article, that has been produced, one part of which represents the value of the constant capital alone, a second part the value of the variable capital alone, and finally the third part the surplus value alone. These two presentations, although they are identical in substance, as shown earlier, are contradictory in their mode of expression. For in the second one the individual commodities which belong to LOT 1, which merely reproduces the value of the constant capital, appear as if they represented labour objectified only before the production process. Hence e.g. the 800 yards = 80 = the value of the constant capital advanced only represent the value of the cotton yarn, oil, coal, machinery, etc., that has been consumed, but not one particle of the value of the newly added weaving labour; whereas viewed as use value every yard of linen contains in addition to the flax, etc., a definite quantity of weaving labour, which has indeed given it the form of linen, and the price of each yard, 2s., contains 16d. as reproduction of the constant capital consumed in it, 4d. for wages, and 4d. for unpaid labour materialised in it. This apparent contradiction the failure to solve which has given rise to fundamental analytical blunders, as we shall see later is at first view just as confusing for the person who only considers the price of the individual commodity as is perhaps the proposition put forward shortly before to the effect that the individual commodity, or a particular portion of the overall product, can be sold at its price below its price; above its price at its price; and even above its price below its price. Proudhon is an example of this confusion (verte). (The price of the yard in the above example is not determined in isolation but as an aliquot part of the overall product.)  (Earlier I gave a presentation of what had been developed previously concerning the determination of prices, as follows (certain elements of this should perhaps be inserted into the foregoing discussion): Originally we considered the individual commodity independently, as the result and direct product of a particular quantity of labour. Now it is the result of capital, and the situation alters formally (later on it alters really, in the production prices) in this way: The amount of use values produced represents a quantity of labour which is = the value of the constant capital contained and consumed in the product (the value of the quantity of materialised labour transferred by it to the product) + the quantity of labour received in exchange for the variable capital, part of which replaces the value of the variable capital, the other part forming surplus value. If. the labour time contained in the capital, expressed in money, = 100, 40 of which is variable capital, and if the rate of surplus value = 50%, the total amount of labour contained in the product is represented by 120. Before the commodity can circulate, its exchange value must first be converted into price. Hence if the overall product is not a single continuous item, so that the whole of capital cannot be reproduced in an individual commodity, as e.g. a house, the capital must calculate the price of the individual commodity, i.e. it must express the exchange value of the individual commodity in money of account. The overall value of 120 will now be divided between a larger or smaller number of products according to the varying productivity of labour, and the price of the individual commodity will therefore be in an inverse proportion to the total number of commodities, will represent per piece a larger or smaller aliquot part of the 120. If the overall product = e.g. 60 tons of coal, the 60 tons = 120 = 2 per ton = 120/60; if the product = 75 tons, the ton will = 120/75 = 1 12s.; if the product = 240 tons, the ton will = 120/240 = 12/24 = 1/2, and so on. The price of the individual commodity therefore = the total price of the product / the total number of products, the total price divided by the total number of products, which are measured in the various units of measurement appropriate to the use value of the product. Thus if the price of the individual commodity = the total price of the quantity of commodities (number of tons) produced by the capital of 100 divided by the total number of commodities (here tons), the total price of the overall product, on the other hand, = the price of the individual commodity multiplied by the total number of commodities produced. If the quantity of commodities has risen, owing to a rise in productivity, their number has too, while the price of the individual commodity has fallen. The inverse is the case if productivity has fallen: one factor, the price, will rise, while the other factor, the number, will fall. As long as the amount of labour laid out is the same, it will be expressed in the same total price of 120, whatever proportion of this falls to the account of the individual commodity, with its varying quantities, which vary in proportion to the productivity of labour. If the part of the price which falls to the individual product the aliquot part of the overall value is smaller, owing to the, larger [total] number of products, i.e. owing to the greater productivity of labour, the part of the surplus value that falls to it is also smaller, [i.e.] the aliquot part of the total price in which the surplus value of 20 is expressed, and which attaches to the product, is smaller. But this does not alter the ratio of the part of the price of the individual commodity that expresses surplus value to the part of the price of the commodity that represents wages or paid labour. It was admittedly shown, when we considered the capitalist production process,  that, if we disregard any lengthening of the working day, the cheapening of the commodities which determine the value of labour capacity, i.e. enter into the worker s necessary consumption, has a tendency to cheapen labour capacity itself, and therefore simultaneously to reduce the paid part of the labour and to prolong the unpaid part, the overall length of the working day remaining the same. So whereas on the previous presupposition the price of the individual commodity participates in the surplus value in the same proportion as it formed an aliquot part of the overall value, and in the same proportion as it participated in the total price, the part of this price which represents surplus value will now rise, in . spite of the falling price of the product. This is, however, only the case because the surplus value takes up a greater proportional place in the total price of the product, as a result of the increased productivity of labour. The same cause the increased productivity of labour [the reverse would occur with declining productivity] which leads the same quantity of labour, the same value of 120, to be expressed in a greater quantity of products, therefore reduces the price of the individual commodity, lessens the value of labour capacity. Although the price of the individual commodity therefore falls, although the total quantity of labour contained in it falls, and therefore also its value falls, the proportional component of this price which consists of surplus value rises, or, in other words. a greater quantity of unpaid labour is contained in the smaller total quantity of labour contained in the individual commodity, e.g. in a single ton, than previously, where the labour was less productive, the amount of product was smaller, and the price of the individual commodity was higher. Now more unpaid labour is contained in the total price of 120, and therefore in each aliquot part of that 120.  It is puzzles of this kind which confuse Proudhon, because he looks only at the price of the individual, independent commodity, and does not view the commodity as the product of the total capital, hence does not consider the proportions in which the overall product with its respective prices is divided conceptually. This is quite correct. In order to make matters clear, let us assume that the worker, l'ouvrier involved here, is the whole working class. The weekly money which the class receives, and with which it has now to buy the means of subsistence, etc., is expended on a mass of commodities of which the price, viewing them individually and all together, contains in addition to a part which = wages, another part, which = surplus value, of which the interest referred to by Proudhon only forms a single part, and perhaps a small proportional part relatively speaking. How then is it possible for the working class, with its weekly income, which only = wages, to buy a quantity of commodities which = wages + surplus value. Since the weekly wage, seen from the point of view of the class as a whole, only = the weekly amount of the means of subsistence, it follows, as night follows day, that the worker is unable to buy the necessary means of subsistence with the sum of money he has received. For the sum of money he has received = the weekly wage, the weekly price of his labour which has been paid to him, while the price of the weekly necessary means of subsistence = the weekly price of the labour contained in them + the price in which the unpaid surplus labour is expressed. Ergo: it is impossible for the worker to be able to buy back what he himself has produced. To live by working , given these presuppositions, is, therefore, implicitly self-contradictory . Proudhon is entirely right, as far as appearances are concerned. But if he were to view the commodity as the product of capital, instead of independently, he would find that the weekly product can be divided into one part, the price of which, = the wage, = the variable capital laid out during the week, contains no surplus value, etc., and another part, the price of which only = the surplus value, etc.; although the price of the commodity includes all these elements, etc. But it is precisely, and only, the first part, which the worker buys back. (Whereby it is irrelevant for the present purpose that he may be, and is, swindled by the picier, [grocer] etc., when buying back.) This is the usual position with Proudhon s apparently deep and inextricable economic paradoxes. They consist in the fact that he expresses the confusion created in his brain by economic phenomena as the law governing these phenomena. (Proudhon s argument is in fact even worse, because implicit in it is the presupposition that the true price of the commodity = the wage contained in it = the quantity of paid labour contained in it, and the surplus value, interest, etc., is only a supplementary charge, arbitrarily made, over and above. the true price of the commodity.) But worse still is the criticism made of him by the vulgar economists. Mr. Forcade for example (the passage should be quoted here not only points out that Proudhon s argument, on the one hand, proves too much, in that the working class would not be able to survive at all on this argument, but also, on the other hand, that he does not go far enough in expressing the paradox, in that the price of the commodities the worker buys includes, in addition to wages + interest, etc., raw material, etc. (in short, it includes the elements of the price of constant capital). Quite correct, Forcade. But what next? He shows that the problem is in fact still more difficult than it is in Proudhon s formulation; and this is a reason for him not to solve it, not even to the extent of Proudhon s presentation, sliding over it instead with a hollow phrase (see No. 1).  In fact the good thing about Proudhon s approach is that he frankly expresses the confusion inherent in the economic phenomena, with sophistical self-satisfaction, unlike the vulgar economists, who endeavour to conceal it but are incapable of grasping these questions, laying bare the poverty of their theoretical understanding. Thus Mr. W. Thucydides Roscher describes Proudhon s Qu'est-ce que la propri t ? as confused and confusing . The word confusing expresses the feeling of powerlessness experienced by vulgar political economy when faced with this confusion. It is incapable of solving the contradictions of capitalist production, even in the confused, superficial and sophistical form in which Proudhon formulates and thrusts them upon it. There is nothing left for it to do except appeal from [Proudhon s] sophistry, which it is unable to overcome theoretically, to ordinary common sense, and to point out that things still work out despite all this. A fine consolation for self-styled theorists"! [N.B. The whole of this passage on Proudhon would be better placed in Chapter III of Book II, or even later] With this, the problem presented in Chapter 1  is solved at the same time. If the commodities which form the product of capital are sold at prices determined by their values, hence if the whole capitalist class sells the commodities at their value, each capitalist will realise a surplus value, i.e. he will sell a part of the value of the commodity which has cost him nothing, which he has not paid for. The gain the capitalists make in dealing with each other is thus not attained by reciprocal fraud this can only relate to the case where one snaps up a piece of the surplus value which was destined for another nor is it attained by their selling each other their commodities above their value. It is attained instead by their selling them to each other at their value. This presupposition, that commodities are sold at prices which correspond to their values, also forms the basis of the investigations contained in the next book. The immediate result of the direct capitalist production process, its product, is the commodity. Not only does its price replace the value of the capital advanced, and consumed during the commodity s production, it also, and at the same time, materialises as surplus value, objectifies, the surplus labour consumed during that production. As a commodity, the product of capital must enter into the process of the exchange of commodities, thereby not only entering into the real metabolic process but also at the same time passing through those changes of form we have presented as the metamorphosis of the commodities. In so far as this is merely a matter of formal changes the conversion of these commodities into money, and their reconversion into commodities the process has already been presented in what we called simple circulation the circulation of commodities as such. But these commodities are now at the same time the repositories of capital; they are capital itself, valorised, pregnant with surplus value. And in this connection their circulation, which is now at the same time the reproduction process of capital, implies further determinations, which were alien to commodity circulation when it was considered in abstraction. We have now to consider, therefore, the circulation of commodities as the circulation process of capital. This will be done in the next book. 
Economic Manuscripts:  Results of the Direct Production Process by Karl Marx 1864