ating.
Inasmuch as under capitalist production the entire mass of social products circulates in the market as commodity-capital, with the exception of that part of the products which is directly used up again by the individual capitalist producers in its bodily form as means of production without being sold or bought, it is evident that not only the fixed and circulating elements of productive capital, but likewise all the elements of the consumption-fund are derived from the commodity-capital. This is tantamount to saying that on the basis of capitalist production both means of production and articles of consumption first appear as commodity-capital, even though they are intended for later use as means of production or articles of consumption, just as labour-power itself is found in the market as a commodity, although not as commodity-capital.
This accounts for the following new confusion in Adam Smith. He says:
“Of these four parts”
(of the “circulating” capital, i.e., of capital in its forms of commodity-capital and money-capital belonging in the process of circulation, two parts which are turned into four by the material distinctions Adam Smith makes between the constituent parts of commodity-capital)
“three — provisions, materials, and finished work, are either annually or in a longer or shorter period, regularly withdrawn from it and placed either in the fixed capital, or in the stock reserved for immediate consumption. Every fixed capital is both originally derived from, and requires to be continually supported by, a circulating capital. All useful machines and instruments of trade are originally derived from a circulating capital which furnishes the materials of which they are made and the maintenance of the workmen who make them. They require, too, a capital of the same kind to keep them in constant repair.” (p. 188.)
With the exception of that part of the product which is constantly consumed again as means of production directly by its producers, the following general proposition applies to capitalist production: All products reach the market as commodities and therefore circulate for the capitalist as the commodity-form of his capital, as commodity-capital, regardless of whether these products must or can function in their bodily form, in accordance with their use-values, as elements of productive capital (of the process of production), as means of production and therefore as fixed or circulating elements of productive capital; or whether they can serve only as means of individual, not of productive, consumption. All products are thrown upon the market as commodities; all means of production or consumption, all elements of productive and individual consumption, must therefore be extracted from the market by purchasing them as commodities. This truism is of course correct. It applies for this reason to the fixed as well as the circulating elements of productive capital, to instruments of labour as well as material of labour in all forms. (This, moreover, ignores the fact that there are elements of productive capital which are furnished by nature, are not products.) A machine is bought in the market, as is cotton. But it does not follow from this by any means that every fixed capital stems originally from some circulating capital; that follows only from the Smithian confusion of capital of circulation with circulating or fluent, i.e., non-fixed capital. Besides, Smith actually refutes himself. According to him himself, machines, as commodities, form a part of No. 4 of the circulating capital. Hence to say that they come from the circulating capital means only that they functioned as commodity-capital before they functioned as machines, but that materially they are derived from themselves; so is cotton, as the circulating element of some spinner’s capital, derived from the cotton in the market. But if Adam Smith in his further exposition derives fixed capital from circulating capital for the reason that labour and raw material are required to build machines, it must be borne in mind that in the first place, instr