ulating or fixed constituents of productive capital after they have been removed from the market.
The product of the cotton spinner, yarn, is the commodity-form of his capital, is commodity-capital as far as he is concerned. It cannot function again as a constituent part of his productive capital, neither as material of labour nor as an instrument of labour. But in the hands of the weaver who buys it it is incorporated in the productive capital of the latter as one of its circulating constituent parts. For the spinner, however, the yarn is the depository of the value of part of his fixed as well as circulating capital (apart from the surplus-value). In the same way a machine, the product of a machine-manufacturer, is the commodity-form of his capital, is commodity-capital to him. And so long as it stays in this form it is neither circulating nor fixed capital. But if sold to a manufacturer for use it becomes a fixed component part of a productive capital. Even if by virtue of its use-form the product can partly re-enter as means of production into the process from which it originated, e.g., coal into coal production, precisely that part of the output of coal which is intended for sale represents neither circulating nor fixed capital but commodity-capital.
On the other hand a product, due to its use-form, may be wholly incapable of forming any element of productive capital, either as material of labour or as an instrument of labour. For instance any means of subsistence. Nevertheless it is commodity-capital for its producer, is the carrier of the value of his fixed as well as circulating capital; and of the one or the other according to whether the capital employed in its production has to be replaced in whole or in part, has transferred its value to the product in whole or in part.
With Smith, in No. 3, the raw material (material not worked up, semi-finished products, auxiliary substances) does not figure on the one hand as a component part embodied in the productive capital, but actually only as a special kind of use-values of which the social product can at all consist, as a special kind of commodities existing alongside the other material constituent parts, means of subsistence, etc., enumerated under Nos. 2 and 4. On the other hand these materials are indeed cited as incorporated in the productive capital and therefore as elements of it in the hands of the producer. The confusion is evidenced by the fact that they are partly conceived as functioning in the hands of the producer (“in the hands of the growers, the manufacturers, etc.”), and partly in the hands of merchants (“mercers, drapers, timber-merchants”), where they are merely commodity-capital, not component parts of productive capital.
Indeed, Adam Smith wholly forgets here, in enumerating the elements of circulating capital, the distinction — applying only to the productive capital — between fixed and circulating capital. He rather places commodity-capital and money-capital, i.e., the two forms of capital typical of the process of circulation, in opposition to the productive capital, but that quite unconsciously.
Finally, it is a striking fact that Adam Smith forgets to mention labour-power when counting off the constituent parts of circulating capital. There are two reasons for this.
We have just seen that, apart from money-capital, circulating capital is only another name for commodity-capital. But to the extent that labour-power circulates in the market, it is not capital, no form of commodity-capital. It is not capital at all; the labourer is not a capitalist, although he brings a commodity to market, namely his own skin. Not until labour-power has been sold, been incorporated in the process of production, hence not until it has ceased to circulate as a commodity, does it become a constituent of productive capital — variable capital as the source of surplus-value, a circulating component part of productive capital with reference to the turnover of the capital-value invested in it. Since Smith here confuses the circulating capital with commodity-capital, h