The process of reproduction of capital comprises this direct process of production as well as the two phases of the circulation process proper, i.e., the entire circuit which, as a periodic process a process which constantly repeats itself in definite periods constitutes the turnover of capital. Whether we study the circuit in the form of M ... M' or that of P ... P, the direct process of production P itself always forms but one link in this circuit. In the one form it appears as a promoter of the process of circulation; in the other the process of circulation appears as its promoter. Its continuous renewal, the continuous re-appearance of capital as productive capital, is in either case determined by its transformations in the process of circulation. On the other hand the continuously renewed process of production is the condition of the transformations which the capital undergoes ever anew in the sphere of circulation, of its alternate appearance as money-capital and commodity-capital. Every individual capital forms, however, but an individualised fraction, a fraction endowed with individual life, as it were, of the aggregate social capital, just as every individual capitalist is but an individual element of the capitalist class. The movement of the social capital consists of the totality of the movements of its individualised fractional parts, the turnovers of the individual capitals. Just as the metamorphosis of the individual commodity is a link in the series of metamorphoses of the commodity-world the circulation of commodities so the metamorphosis of the individual capital, its turnover, is a link in the circuit described by social capital. This total process comprises both the productive consumption (the direct process of production) together with the conversions of form (materially considered, exchanges) which bring it about, and the individual consumption together with the conversions of form or exchanges by which it is brought about. It includes on the one hand the conversion of variable capital into labour-power, and therefore the incorporation of labour-power in the process of capitalist production. Here the labourer acts as the seller of his commodity, labour-power, and the capitalist as its buyer. But on the other hand the sale of the commodities embraces also their purchase by the working-class appears as buyer and the capitalists as sellers of commodities to the labourers. The circulation of the commodity-capital includes the circulation of surplus-value, hence also the purchases and sales by which the capitalist effect their individual consumption, the consumption of surplus-value. The circuit of the individual capitals in their aggregate as social capital, hence considered in its totality, comprises not only the circulation of capital but also the general circulation of commodities. The latter can originally consist of only two components: 1) The circuit of capital proper and 2) the circuit of the commodities which enter into individual consumption, consequently of the commodities for which the labourer expends his wages and the capitalist his surplus-value (or a part of it). At any rate, the circuit of capital comprises also the circulation of the surplus-value, since the latter is a part of the commodity capital, and likewise the conversion of the variable capital into labour-power, the payment of wages. But the expenditure of this surplus-value and wages for commodities does not form a link in the circulation of capital, although at least the expenditure of wages is essential for this circulation. In Volume I the process of capitalist production was analysed as an individual act as well as a process of reproduction: the production of surplus-value and the production of capital itself. The changes of form and substance experienced by capital in the sphere of circulation were assumed without dwelling upon them. It was presupposed that on the one hand the capitalist sells the product at its value and on the other that he finds within the sphere of circulation the objective means of production for restarting or continuing the process. The only act within the sphere of circulation on which we have dwelt was the purchase and sale of labour-power as the fundamental condition of capitalist production. In the first part of this Book II, the various forms were considered which capital assumes its circular movement, and the various forms of this movement itself. The circulation time must now be added to the working times discussed in Volume I. In the second Part, the circuit was studied as being periodic, i.e., as a turnover. It was shown on the one hand in what manner the various constituents of capital (fixed and circulating) accomplish the circuit of forms in different periods of time and in different ways; on the other hand the circumstances were examined by which the different lengths of the working period and circulation period are conditioned. The influence was shown which the period of the circuit and the different proportions of its component parts exert upon the dimensions of the production process itself and upon the annual rate of surplus-value. Indeed, while it was the successive forms continually assumed and discarded by capital in its circuit that were studied in Part I, it was shown in Part II how a capital of a given magnitude is simultaneously, though in varying proportions, divided, within this flow and succession of forms, into different forms: productive capital, money-capital, and commodity-capital, so that they not only alternate with one another, but different portions of the total capital-value are constantly side by side and function in these different states. Especially money-capital came forward with distinctive features not shown in Volume I. Certain laws were found according to which diverse large components of a given capital must be continually advanced and renewed depending on the conditions of the turnover in the form of money-capital in order to keep a productive capital of a given size constantly functioning. But in both the first and the second Parts it was always only a question of some individual capital, of the movement of some individualised part of social capital. However the circuits of the individual capitals intertwine, presuppose and necessitate one another, and form, precisely in this interlacing, the movement of the total social capital. Just as in the simple circulation of commodities the total metamorphosis of a commodity appeared as a link in the series of metamorphoses of the world of commodities, so now the metamorphosis of the individual capital appears as a link in the series of metamorphoses of the social capital. But while simple commodity circulation by no means necessarily comprises the circulation of capital since it may take place on the basis of non-capitalist production the circuit of the aggregate social capital, as was noted, comprises also the commodity circulation lying outside the circuit of individual capital, i.e., the circulation of commodities which do not represent capital. We have now to study the process of circulation (which in its entirety is a form of the process of reproduction) of the individual capitals as components of the aggregate social capital, that is to say, the process of circulation of this aggregate social capital. In the study of the turnover of the individual capital money-capital revealed two aspects. In the first place it constitutes the form in which every individual capital appears upon the scene and opens its process as capital. It therefore appears as the primus motor, lending impetus to the entire process. In the second place, that portion of the advanced capital-value which must be continually advanced and renewed in the form of money differs in its ratio to the productive capital which it sets in motion, i.e., in its ratio to the continuous scale of production, depending on the particular length of the period of turnover and the particular ratio between its two component parts the working period and the period of circulation. But whatever this ratio may be, the portion of the capital-value in process which can continually function as productive capital is limited in any event by that portion of the advanced capital-value which must always exist beside the productive capital in the form of money. It is here merely a question of the normal turnover, an abstract average. Additional money-capital required to compensate for interruptions of the circulation is excepted. As to the first point: commodity production presupposes commodity circulation, and commodity circulation presupposes the expression of commodities in money, the circulation of money; the splitting of a commodity into commodity and money is law of the expression of the product as a commodity. Similarly the capitalist production of commodities whether considered socially or individually presupposes capital in the form of money, or money-capital, both as the primus motor of every incipient business, and as its continual motor. The circulating capital especially implies that the money-capital acts with constant repetition at short intervals as a motor. The entire advanced capital-value, that is to say, all the elements of capital, consisting of commodities, labour-power, instruments of labour, and materials of production, must be bought over and over again with money. What is true here of the individual capital is also true of the social capital, which functions only in the form of many individual capitals. But as we showed in Volume I, it does not at all follow from this that capital s field of operation, the scale of production, depends even on a capitalist basis for its absolute limits on the amount of functioning money-capital. Incorporated in capital are elements of production whose expansion within certain limits is independent of the magnitude of the advanced money-capital. Though payment of labour-power be the same, it can be exploited more or less extensively or intensively. If the money-capital is increased with this greater exploitation (that is, if wages are raised), it is not increased proportionately, hence not at all pro tanto. The productively exploited nature-given materials the soil, the seas, ores, forests, etc. which do not constitute elements of capital-value, are more intensively or extensively exploited with a greater exertion of the same amount of labour-power, without an increased advance of money-capital. The real elements of productive capital are thus multiplied without requiring an additional money-capital. But so far as such an addition becomes necessary for additional auxiliary materials, the money-capital in which the capital-value is advanced is not increased proportionately to the augmented effectiveness of the productive capital, hence is pro tanto not at all increased. The same instruments of labour, and thus the same fixed capital, can be used more effectively by an extension of the time they are daily used and by a greater intensity of employment, without an additional outlay of money for fixed capital. There is, in that case, only a more rapid turnover of the fixed capital, but then the elements of its reproduction are supplied more rapidly. Apart from the natural substances, it is possible to incorporate in the productive process natural forces, which do not cost anything, to act as agents with more or less heightened effect. The degree of their effectiveness depends on methods and scientific developments which cost the capitalist nothing. The same is true of the social combination of labour-power in the process of production and of the accumulated skill of the individual labourers. Carey calculates that the landowner never receives enough, because he is not paid for all the capital or labour put into the soil since time immemorial in order to give it its present productivity. (Of course, no mention is made of the productivity of which the soil is robbed.) According to that each individual labourer would have to paid according to the work which it cost the entire human race to evolve a modern mechanic out of a savage. On the contrary one should think that if all the unpaid labour put into the soil and converted into money by the landowner and capitalist is totalled up, all the capital ever invested in this soil has been paid back over and over again with usurious interest, so that society has long ago redeemed landed property over and over again. True enough, the increase in the productive power of labour, so far as it does not imply an additional investment of capital-value, augments in the first instance only the quantity of the product, not its value, except insofar as it makes it possible to reproduce more constant capital with the same labour and thus to preserve its value. But it forms at the same time new material for capital, hence the basis of increased accumulation of capital. So far as the organisation of social labour itself, and thus the increase in the social productive power of labour, requires large-scale production and therefore the advance of large quantities of money-capital by individual capitalists, we have shown in Book I [From Manuscript II. F. E.] that this is accomplished in part by the centralisation of capitals in a few hands, without necessitating an absolute increase in the magnitude of the functioning capital-values, and consequently also in the magnitude of the money-capital in which they are advanced. The magnitude of the individual capitals can increase by centralisation in the hands of a few without a growth of their social sum total. It is only a changed distribution of the individual capitals. Finally, we have shown in the preceding Part that a shortening of the period of turnover permits of setting in motion either the same productive capital with less money-capital or more productive capital with the same money-capital. [English edition: Vol. I, pp. 624-28, 761-64. Ed.] But evidently all this has nothing to do with the question of money-capital itself. It shows only that the advanced capital a given sum of values consisting in its free form, in its value-form, of a certain sum of money includes, after its conversion into productive capital, productive powers whose limits are not set by the limits of its value, but which on the contrary may operate within certain bounds with differing degrees of extensiveness or intensiveness. If the prices of the elements of production the means of production and labour-power are given, the magnitude of the money-capital required for the purchase of a definite quantity of these elements of production existing as commodities is determined. Or the magnitude of value of the capital to be advanced is determined. But the extent to which this capital acts as a creator of values and products is elastic and variable. As to the second point: it is self-evident that part of the social labour and means of production which must be annually expended for the production or purchase of money in order to replace worn-off coin is pro tanto a diminution of the volume of social production. But as for the money-value which functions partly as a medium of circulation, partly as a hoard, it is simply there, acquired, present alongside the labour-power, the produced means of production, and the natural sources of wealth. It cannot be regarded as a limit set to these things. By its transformation into elements of production, by its exchange with other nations, the scale of production might be extended. This presupposes, however, that money plays its role of world-money the same as ever. To set the productive capital in motion requires more or less money-capital, depending on the length of the period of turnover. We have also seen that the division of the period of turnover into working time and circulation time requires an increase of the capital latent or suspended in the form of money. Inasmuch as the period of turnover is determined by the length of the working period, it is determined, other conditions remaining equal, by the material nature of the process of production, hence not by the specific social character of this process of production. However, on the basis of capitalist production, more extensive operations of comparatively long duration necessitate large advances of money-capital for a rather long time. Production in such spheres depends therefore on the magnitude of the money-capital which the individual capitalist has at his disposal. This barrier is broken down by the credit system and the associations connected with it, e.g., the stock companies. Disturbances in the money-market therefore put such establishments out of business, while these same establishments, in their turn, produce disturbances in the money-market. On the basis of socialised production the scale must be ascertained on which those operations which withdraw labour-power and means of production for a long time without supplying any product as a useful effect in the interim can be carried on without injuring branches of production which not only withdraw labour-power and means of production continually, or several times a year, but also supply means of subsistence and of production. Under socialised as well as capitalist production, the labourers in branches of business with shorter working periods will as before withdraw products only for a short time without giving any products in return; while branches of business with long working periods continually withdraw products for a longer time before they return anything. This circumstance, then, arises from the material character of the particular labour-process, not from its social form. In the case of socialised production the money-capital is eliminated. Society distributes labour-power and means of production to the different branches of production. The producers may, for all it matters, receive paper vouchers entitling them to withdraw from the social supplies of consumer goods a quantity corresponding to their labour-time. These vouchers are not money. They do not circulate. We see that inasmuch as the need for money-capital originates in the length of the working period, it is conditioned by two things: First, that money in general is the form in which every individual capital (apart from credit) must make its appearance in order to transform itself into productive capital; this follows from the nature of capitalist production and commodity-production in general. Second, the magnitude of the required money advance is due to the circumstance that labour-power and means of production are continually withdrawn from society for a comparatively long time without any return to it, during that period, of products convertible into money. The first condition, that the capital to be advanced must be advanced in the form of money, is not eliminated by the form of this money itself, whether it is metal-money, credit-money, token-money, etc. The second condition is in no way affected by what money-medium or in what form of production labour, means of subsistence, and means of production are withdrawn without the return of some equivalent to the circulation.
Economic Manuscripts: Capital: Volume Two