l, but to every form of productive capital. Hence it follows as a matter of course that the distinction derived from agriculture between an annual turnover and one of two or more years’ duration is superseded by the general distinction into different periods of turnover, one turnover of the fixed capital always comprising more than one turnover of the circulating capital, regardless of the periods of turnover of the circulating capital, whether they be annual, more than annual, or less than annual. Thus in Adam Smith the avances annuelles transform themselves into circulating capital, and the avances primitives into fixed capital. But his progress is confined to this generalisation of the categories. His implementation is far inferior to that of Quesnay.
The crudely empirical manner in which Smith broaches the investigation engenders at the very outset a lack of clarity:
“There are two different ways in which a capital may be employed so as to yield a revenue or profit to its employer.” (Wealth of Nations, Book II, Chap. I, p. 189, Aberdeen edition, 1848. [Wherever Marx did not give a page reference to quotations from Smith’s work, editorial page references are given in square brackets to the London 1843 edition of An Inquiry into the Nature and Causes of the Wealth of Nations, A new edition in four volumes. This and all the following quotations from Smith have been checked with this edition. — Ed.]
The ways in which value may be invested so as to perform the functions of capital, to yield surplus value to its owner, are as different and varied as the spheres of investment of capital. It is a question of the different branches of production in which capital may be invested. If put in this way, the question implies still more. It includes the question of the way in which value, even if it is not invested as productive capital, can function as capital for its owner, for instance as interest-bearing capital, merchants’ capital, etc. At this point we are already miles away from the real subject of the analysis, viz., the question of how the division of productive capital into its different elements, apart from their different spheres of investment, affects their turnover.
Adam Smith immediately continues:
“First, it may be employed in raising, manufacturing, or purchasing goods, and selling them again with a profit.” [Vol. II, p. 254.]
He does not tell us anything else here than that capital may be employed in agriculture, manufacture, and commerce. He speaks therefore only of the different spheres of investment of capital, including such in which, as in commerce, capital is not directly embodied in the process of production, hence does not function as productive capital. In so doing he abandons the foundation on which the physiocrats base the distinctions within productive capital and their effect on the turnover. More. He uses merchant’s capital as an illustration in a problem which concerns exclusively differences within the productive capital in the product and value-creating process, which in turn cause differences in its turnover and reproduction.
“The capital employed in this manner yields no revenue or profit to its employer, while it either remains in his possession or continues in the same shape.” [Vol. II, p. 254.]
“The capital employed in this manner!” But Smith speaks of capital invested in agriculture, in industry, and he tells us later that a capital so employed divides into fixed and circulating capital! Hence investment of capital in this manner cannot make fixed or circulating capital of it.
Or does he mean to say that capital employed in order to produce goods and to sell these at a profit must be sold after its transformation into goods and by means of the sale must in the first place pass from the possession of the seller into that of the buyer, and in the second place change from its bodily form, goods, into its money-form, so that it is of no use to its owner so long as it either remains in his possession or continues in the same shape? In that case, the whole thing amounts to this: The capital-value t