he locally fixed instruments of labour, which cannot be detached from the soil, will nevertheless, in all probability, have to function as commodity-capital for their producer and not constitute any elements of his fixed capital (which is made up as far as he is concerned of the instruments of labour he needs for the construction of buildings, railways, etc.), one should not by any means draw the contrary conclusion that fixed capital necessarily consists of immovables. A ship and a locomotive are effective only through their motion; yet they function, not for him who produced them, but for him who applies them as fixed capital. On the other hand things which are most decidedly fixed in the process of production, live and die in it and never leave it any more after once entering it, are circulating component parts of the productive capital. Such are for instance the coal consumed to drive the machine in the process of production, the gas used to light the factory, etc. They are circulating capital not because they bodily leave the process of production together with the product and circulate as commodities, but because their value enters wholly into that of the commodity which they help to produce and which therefore must be entirely replaced out of the proceeds of the sale of the commodity.
In the passage last quoted from Adam Smith, notice must also be taken of the following phrase:
“A circulating capital which furnishes ... the maintenance of the workmen who make them” (machines, etc.).
With the physiocrats that part of capital which is advanced for wages figures correctly under the avances annuelles as distinguished from the avances primitives. On the other hand it is not he labour-power itself that appears with them as a constituent part of the productive capital employed by the farmer, but the means of subsistence (the maintenance of the workmen, as Smith calls it) given to the farm-labourers. This hangs together exactly with their specific doctrine. For according to them the value-part added to the product by labour (quite like the value-part added to the product by raw material, instruments of labour, etc., in short, by all the material components of constant capital) is equal only to the value of the means of subsistence paid to the labourers and necessarily consumed for the maintenance of their ability to function as labour-power. Their very doctrine stands in the way of their discovering the distinction between constant and variable capital. If it is labour that produces surplus-value (in addition to reproducing its own price), then it does so in industry as well as in agriculture. But since, according to their system, labour produces surplus-value only in one branch of production, namely agriculture, it does not arise out of labour but out of the special activity (assistance) of nature in this branch. And only for this reason agricultural labour is to them productive labour, as distinct from other kinds of labour.
Adam Smith classifies the means of subsistence of labourers as circulating capital in contradistinction to fixed capital:
1) Because he confuses circulating as distinguished from fixed capital with forms of capital pertaining to the sphere of circulation, with capital of circulation — a confusion uncritically accepted. He therefore mixes up commodity-capital and the circulating component of productive capital, and in that case it is a matter of course that whenever the social product assumes the form of commodities, the means of subsistence of the labourers as well as those of the non- labourers, the materials as well as the instruments of labour themselves, must be supplied out of the commodity capital.
2) But the physiocratic conception too lurks in Smith’s analysis, although it contradicts the esoteric — really scientific — part of his own exposition.
Generally speaking the advanced capital is converted into productive capital, i.e., it assumes the form of elements of production which are themselves the products of past labour. (Among them labour-power.) Capital can function in the process of pro