o do with the role played in the process of self-expansion by this variable part, as distinct from the constant part of capital. This refers only to how this part of the advanced capital-value is to be replaced, renewed, hence reproduced out of the value of the product of means of the circulation. The purchase and repurchase of labour-power belong in the process of circulation. But it is only within the process of production that the value laid out in labour-power is converted (not for the labourer but for the capitalist) from a definite, constant magnitude into a variable one, and only thus the advanced value is converted altogether into capital-value, into capital, into self-expanding value. But by classing, like Smith, the value expended for the means of subsistence of the labourers, instead of value laid out in labour-power, as the circulating component of productive capital, the understanding of the distinction between variable and constant capital, and thus the understanding of the capitalist process of production in general, is rendered impossible. The determination that this part of capital is variable capital in contrast to the constant capital, spent for material creators of the product, is buried beneath the determination that the part of the capital invested in labour-power belongs, as far as the turnover is concerned, in the circulating part of productive capital. And the burial is brought to completion by enumerating the labourer’s means of subsistence instead of his labour-power as an element of productive capital. It is immaterial whether the value of the labour-power is advance in money or directly in means of subsistence. However under capitalist production the latter can be but an exception.
By thus establishing the definition of circulating capital as being the determinant of the capital value laid out for labour-power — this physiocratic definition without the premise of the physiocrats — Adam Smith fortunately killed among his followers the understanding that that part of capital which is spent on labour-power is variable capital. The more profound and correct ideas developed by him elsewhere did not prevail, but this blunder of his did. Indeed, other writers after him went even further. They were not content to make it the decisive definition of the part of capital invested in labour-power to be circulating as opposed to fixed capital; they made it the essential definition of circulating capital to be invested in labour-power to be circulating as opposed to fixed capital; they made it the essential definition of circulating capital to be invested in means of subsistence for labourers. Naturally associated with this is the doctrine that the labour-fund, [Karl Marx, Capital, Vol. I, pp. 609-11. — Ed.] consisting of the necessary means of subsistence, is of a definite magnitude, which on the one hand physically limits the share of the labourers in the social product, but on the other has to be fully expended in the purchase of labour-power.
23 Cf. Quesnay, Analyse du Tableau Economique (Physiocrates, èd. Daire, 1. partie, Paris, 1846). There we read, for instance: "The annual advances consist of the expenses incurred annually for the labour of cultivation; these advances must be distinguished from the original advances, which form the fund for the establishment of the farming enterprise." (P. 59.) In the works of the later physiocrats these advances are sometimes termed directly capital: Capital ou avances Dupont de Nemours, Maximes du Docteur Quesnay, ou Rèsumè de ses Principes d’Economie Sociale (Daire, I, p. 391); furthermore Le Trosne writes: "As a result of the greater or smaller durability of the works of human labour, a nation possesses a substantial fund of wealth independent of its annual reproduction, this fund forming a capital — accumulated over a long period and originally paid with products — which is continually preserved and augmented." (Daire, II, pp. 928-29.) Turgot employs the term capital more regularly for avances, and identifies the avances of the manufacturers still more with th