uring cattle (instrument of labour), represents the material mode of existence of fixed capital, while as cattle for fattening (raw material) it is a constituent part of the farmer’s circulating capital. On the other hand the same thing may now function as a constituent part of productive capital and now belong to the fund for direct consumption. A house for instance when performing the function of a workshop, is a fixed component part of productive capital; when serving as a dwelling it is in no wise a form of capital. The same instruments of labour may in many cases serve either as means of production or as means of consumption.
It was one of the errors following from Adam Smith’s idea that the property of being fixed or circulating capital was conceived as inherent in the things themselves. The mere analysis of the labour-process (Buch I, Kap. V) [ English edition: Volume I, Ch. VII. — Ed.] shows that the definitions of instruments of labour, materials of labour, and product change according to the various roles played by one and the same thing in the process. The definitions of fixed and non-fixed capital are based in their turn on the definite roles played by these elements in the labour-process, and therefore also in the value formation process.
In the second place, on enumerating the things fixed and circulating capitals consist of, it becomes fully apparent that Smith lumps together the distinction — valid and making sense only with regard to productive capital (capital in its productive form) — between the fixed and circulating components of the same, with the distinction between productive capital and those forms which pertain to capital in its process of circulation, viz., commodity-capital and money-capital. He says in the same passage (pp. 187 and 188):
“The circulating capital consists ... of the provisions, materials, and finished work of all kinds that are in the hands of their respective dealers, and of the money that is necessary for circulating and distributing them, etc.”
Indeed, if we look more closely we observe that here, contrary to his previous statements, circulating capital is again equated to commodity-capital and money-capital, that is to say, to two forms of capital which do not belong in the process of production at all, which do not form circulating (fluent) capital as opposed to fixed, but capital of circulation as opposed to productive capital. It is only alongside these that the constituents of productive capital advanced in materials (raw materials or semi-finished products) and really incorporated in the process of production then play a role again. He says:
“... The third and last of the three portions into which the general stock of the society naturally divides itself, is the circulating capital, of which the characteristic is, that it affords a revenue only by circulating or changing masters. It is composed likewise of four parts: first of the money ...”
(but money is never a form of productive capital, of capital functioning in the productive process; it is always only one of the forms assumed by capital within its process of circulation);
“secondly, of the stock of provisions which are in the possession of the butcher, the grazier, the farmer ... from the sale of which they expect to derive a profit ... Fourthly and lastly, of the work which is made up and completed, but which is still in the hands of the merchant and manufacturer. And, thirdly, of the materials, whether altogether rude, or more or less manufactured, of clothes, furniture, and buildings, which are not yet made up into any of those three shapes, but which remain in the hands of the growers, the manufacturers, the mercers and drapers, the timber-merchants, the carpenters and jointers, the brick-makers, etc.”
Nos. 2 and 4 contain nothing but products which have been thrust out as such from the process of production and must be sold, in short, which now function as commodities, hence as commodity-capital, and which therefore have a form and occupy a place in the process in which they are not elements of productive c