The capital value was originally
advanced
in the money form.
Marx - Capital-Volume-I
?
Translated by Parissot.
Paris, 1823, p.
34.
)
3 --When capital is employed in advancing to the workman his wages, it adds nothing to the funds for the maintenance of labour. ? (Cazenove in note to his edition of Malthus' --Definitions in Pol. Econ. ? London, 1853, p. 22. )
4 --The wages of labour are advanced by capitalists in the case of less than one fourth of the labourers of the earth. ? (Rich. Jones: --Textbook of Lectures on the Pol. Econ. of Nations. ? Hertford, 1852, p. 36. )
5 --Though the manufacturer? (i. e. , the labourer) --has his wages advanced to him by his master, he in reality costs him no expense, the value of these wages being generally reserved, together with a profit,
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in the improved value of the subject upon which his labour is bestowed. ? (A. Smith, l. c. , Book II. . ch. III, p. 311. )
6 --This is a remarkably peculiar property of productive labour. Whatever is productively consumed is capital and it becomes capital by consumption. ? (James Mill, l. c. , p. 242. ) James Mill, however, never got on the track of this --remarkably peculiar property. ?
7 --It is true indeed, that the first introducing a manufacture employs many poor, but they cease not to be so, and the continuance of it makes many. ? (--Reasons for a Limited Exportation of Wool. ? London, 1677, p. 19. ) --The farmer now absurdly asserts, that he keeps the poor. They are indeed kept in misery. ? (--Reasons for the Late Increase of the Poor Rates: or a Comparative View of the Prices of labour and Provisions. ? London, 1777, p. 31. )
8 Rossi would not declaim so emphatically against this, had he really penetrated the secret of --productive consumption. ?
9 --The labourers in the mines of S. America, whose daily task (the heaviest perhaps in the world) consists in bringing to the surface on their shoulders a load of metal weighing from 180 to 200 pounds, from a depth of 450 feet, live on broad and beans only; they themselves would prefer the bread alone for food, but their masters, who have found out that the men cannot work so hard on bread, treat them like horses, and compel them to eat beans; beans, however, are relatively much richer in bone-earth (phosphate of lime) than is bread. ? (Liebig, l. c. , vol. 1. , p. 194, note. )
10 James Mill, l. c. , p. 238
11 --If the price of labour should rise so high that, notwithstanding the increase of capital, no more could be employed, I should say that such increase of capital would be still unproductively consumed. ? (Ricardo, l. c. , p. 163. )
12 --The only productive consumption, properly so called, is the consumption or destruction of wealth? (he alludes to the means of production) --by capitalists with a view to reproduction. . . . The workman . . . is a productive consumer to the person who employs him, and to the State, but not, strictly speaking, to himself. ? (Malthus' --Definitions, &c. ,? p. 30. )
13 --The only thing, of which one can say, that it is stored up and prepared beforehand, is the skill of the labourer. . . . The accumulation and storage of skilled labour, that most important operation, is, as regards the great mass of labourers, accomplished without any capital whatever. ? (Th. Hodgskin: --Labour Defended, &c. ,? p. 13. )
14 --That letter might be looked upon as the manifesto of the manufacturers. ? (Ferrand: --Motion on the Cotton Famine. ? H. o. C. , 27th April, 1863. )
15 It will not be forgotten that this same capital sings quite another song, under ordinary circumstances, when there is a question of reducing wages. Then the masters exclaim with one voice: --The factory operatives should keep in wholesome remembrance the fact that theirs is really a low species of skilled labour, and that there is none which is more easily acquired, or of its quality more amply remunerated, or which, by a short training of the least expert, can be more quickly, as well as abundantly, acquired . . . The master's machinery? (which we now learn can be replaced with advantage in 12 months,) --really plays a far more important part in the business of production than the labour and skill of the operative? (who cannot now be replaced under 30 years), --which six months' education can reach, and a common labourer can learn. ? (See ante, p. 423. )
16 Parliament did not vote a single farthing in aid of emigration, but simply passed some Acts empowering the municipal corporations to keep the operatives in a half-starved state, i. e. , to exploit them at less than the normal wages. On the other hand, when 3 years later, the cattle disease broke out, Parliament broke wildly through its usages and voted, straight off, millions for indemnifying the millionaire landlords, whose farmers in any event came off without loss, owing to the rise in the price
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of meat. The bull-like bellow of the landed proprietors at the opening of Parliament, in 1866, showed that a man can worship the cow Sabala without being a Hindu, and can change himself into an ox without being a Jupiter.
17 --L'ouvrier demandait de la subsistence pour vivre, le chef demandait du travail pour gagner. ? [The worker required the means of subsistence to live, the boss required labour to make a profit] (Sismondi, l. c. , p. 91. )
18 A boorishly clumsy form of this bondage exists in the county of Durham. This is one of the few counties, in which circumstances do not secure to the farmer undisputed proprietary rights over the agricultural labourer. The mining industry allows the latter some choice. In this county, the farmer, contrary to the custom elsewhere, rents only such farms as have on them labourers' cottages. The rent of the cottage is a part of the wages. These cottages are known as --hinds' houses. ? They are let to the labourers in consideration of certain feudal services, under a contract called --bondage,? which, amongst other things, binds the labourer, during the time he is employed elsewhere, to leave some one, say his daughter, &c. , to supply his place. The labourer himself is called a --bondsman. ? The relationship here set up also shows how individual consumption by the labourer becomes consumption on behalf of capital-or productive consumption-from quite a new point of view: --It is curious to observe that the very dung of the hind and bondsman is the perquisite of the calculating lord . . . and the lord will allow no privy but his own to exist in the neighbourhood, and will rather give a bit of manure here and there for a garden than bate any part of his seigneurial right. ? (--Public Health, Report VII. , 1864,? p. 188. )
19 It will not be forgotten, that, with respect to the labour of children, &c. , even the formality of a voluntary sale disappears.
20 --Capital pre-supposes wage labour, and wage labour pre-supposes capital. One is a necessary condition to the existence of the other; they mutually call each other into existence. Does an operative in a cotton-factory produce nothing but cotton goods? No, he produces capital. He produces values that give fresh command over his labour, and that, by means of such command, create fresh values. ? (Karl Marx: --Lohnarbeit und Kapital,? in the Neue Rheinische Zeitung: No. 266, 7th April, 1849. ) The articles published under the above title in the N. Rh. Z. are parts of some lectures given by me on that subject, in 1847, in the German --Arbeiter-Verein? at Brussels, the publication of which was interrupted by the revolution of February.
? ? Chapter 24: Conversion of Surplus value into Capital
Section 1: Capitalist Production on a Progressively Increasing Scale. Transition of the Laws of Property that Characterise
Production of Commodities into Laws of Capitalist Appropriation
Hitherto we have investigated how surplus value emanates from capital; we have now to see how capital arises from surplus value. Employing surplus value as capital, reconverting it into capital, is called accumulation of capital. 1
First let us consider this transaction from the standpoint of the individual capitalist. Suppose a spinner to have advanced a capital of ? 10,000, of which four-fifths (? 8,000) are laid out in cotton, machinery, &c. , and one-fifth (? 2,000) in wages. Let him produce 240,000 lbs. of yarn annually, having a value of ? 2,000. The rate of surplus value being 100%, the surplus value lies in the surplus or net product of 40,000 lbs. of yarn, one-sixth of the gross product, with a value of ? 2,000 which will be realised by a sale. ? 2,000 is ? 2,000. We can neither see nor smell in this sum of money a trace of surplus value. When we know that a given value is surplus value, we know how its owner came by it; but that does not alter the nature either of value or of money.
In order to convert this additional sum of ? 2,000 into capital, the master-spinner will, all circumstances remaining as before, advance four-fifths of it (? 1,600) in the purchase of cotton, &c. , and one-fifth (? 400) in the purchase of additional spinners, who will find in the market the necessaries of life whose value the master has advanced to them.
Then the new capital of ? 2,000 functions in the spinning mill, and brings in, in its turn, a surplus value of ? 400.
The capital value was originally advanced in the money form. The surplus value on the contrary is, originally, the value of a definite portion of the gross product. If this gross product be sold, converted into money, the capital value regains its original form. From this moment the capital value and the surplus value are both of them sums of money, and their reconversion into capital takes place in precisely the same way. The one, as well as the other, is laid out by the capitalist in the purchase of commodities that place him in a position to begin afresh the fabrication of his goods, and this time, on an extended scale. But in order to be able to buy those commodities, he must find them ready in the market.
His own yarns circulate, only because he brings his annual product to market, as all other capitalists likewise do with their commodities. But these commodities, before coming to market, were part of the general annual product, part of the total mass of objects of every kind, into which the sum of the individual capitals, i. e. , the total capital of society, had been converted in the course of the year, and of which each capitalist had in hand only an aliquot part. The transactions in the market effectuate only the interchange of the individual components of this annual product, transfer them from one hand to another, but can neither augment the total annual production, nor alter the nature of the objects produced. Hence the use that can be made of the total annual product, depends entirely upon its own composition, but in no way upon circulation.
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The annual production must in the first place furnish all those objects (use values) from which the material components of capital, used up in the course of the year, have to be replaced. Deducting these there remains the net or surplus-product, in which the surplus value lies. And of what does this surplus-product consist? Only of things destined to satisfy the wants and desires of the capitalist class, things which, consequently, enter into the consumption fund of the capitalists? Were that the case, the cup of surplus value would be drained to the very dregs, and nothing but simple reproduction would ever take place.
To accumulate it is necessary to convert a portion of the surplus-product into capital. But we cannot, except by a miracle, convert into capital anything but such articles as can be employed in the labour process (i. e. , means of production), and such further articles as are suitable for the sustenance of the labourer (i. e. , means of subsistence). Consequently, a part of the annual surplus labour must have been applied to the production of additional means of production and subsistence, over and above the quantity of these things required to replace the capital advanced. In one word, surplus value is convertible into capital solely because the surplus-product, whose value it is, already comprises the material elements of new capital. 2
Now in order to allow of these elements actually functioning as capital, the capitalist class requires additional labour. If the exploitation of the labourers already employed do not increase, either extensively or intensively, then additional labour-power must be found. For this the mechanism of capitalist production provides beforehand, by converting the working class into a class dependent on wages, a class whose ordinary wages suffice, not only for its maintenance, but for its increase. It is only necessary for capital to incorporate this additional labour-power, annually supplied by the working class in the shape of labourers of all ages, with the surplus means of production comprised in the annual produce, and the conversion of surplus value into capital is complete. From a concrete point of view, accumulation resolves itself into the reproduction of capital on a progressively increasing scale. The circle in which simple reproduction moves, alters its form, and, to use Sismondi's expression, changes into a spiral. 3
Let us now return to our illustration. It is the old story: Abraham begat Isaac, Isaac begat Jacob, and so on. The original capital of ? 10,000 brings in a surplus value of ? 2,000, which is capitalised. The new capital of ? 2,000 brings in a surplus value of ? 400, and this, too, is capitalised, converted into a second additional capital, which, in its turn, produces a further surplus value of ? 80. And so the ball rolls on.
We here leave out of consideration the portion of the surplus value consumed by the capitalist. Just as little does it concern us, for the moment, whether the additional capital is joined on to the original capital, or is separated from it to function independently; whether the same capitalist, who accumulated it, employs it, or whether he hands it over to another. This only we must not forget, that by the side of the newly-formed capital, the original capital continues to reproduce itself, and to produce surplus value, and that this is also true of all accumulated capital, and the additional capital engendered by it.
The original capital was formed by the advance of ? 10,000. How did the owner become possessed of it? --By his own labour and that of his forefathers,? answer unanimously the spokesmen of Political Economy. 4 And, in fact, their supposition appears the only one consonant with the laws of the production of commodities.
But it is quite otherwise with regard to the additional capital of ? 2,000. How that originated we know perfectly well. There is not one single atom of its value that does not owe its existence to unpaid labour. The means of production, with which the additional labour-power is incorporated, as well as the necessaries with which the labourers are sustained, are nothing but component parts of the surplus-product, of the tribute annually exacted from the working class by the capitalist
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class. Though the latter with a portion of that tribute purchases the additional labour-power even at its full price, so that equivalent is exchanged for equivalent, yet the transaction is for all that only the old dodge of every conqueror who buys commodities from the conquered with the money he has robbed them of.
If the additional capital employs the person who produced it, this producer must not only continue to augment the value of the original capital, but must buy back the fruits of his previous labour with more labour than they cost. When viewed as a transaction between the capitalist class and the working class, it makes no difference that additional labourers are employed by means of the unpaid labour of the previously employed labourers. The capitalist may even convert the additional capital into a machine that throws the producers of that capital out of work, and that replaces them by a few children. In every case the working class creates by the surplus labour of one year the capital destined to employ additional labour in the following year. 5 And this is what is called: creating capital out of capital.
The accumulation of the first additional capital of ? 2,000 presupposes a value of ? 10,000 belonging to the capitalist by virtue of his --primitive labour,? and advanced by him. The second additional capital of ? 400 presupposes, on the contrary, only the previous accumulation of the ? 2,000, of which the ? 400 is the surplus value capitalised. The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.
In so far as the surplus value, of which the additional capital, No. 1, consists, is the result of the purchase of labour-power with part of the original capital, a purchase that conformed to the laws of the exchange of commodities, and that, from a legal standpoint, presupposes nothing beyond the free disposal, on the part of the labourer, of his own capacities, and on the part of the owner of money or commodities, of the values that belong to him; in so far as the additional capital, No. 2, &c. , is the mere result of No. 1, and, therefore, a consequence of the above conditions; in so far as each single transaction invariably conforms to the laws of the exchange of commodities, the capitalist buying labour-power, the labourer selling it, and we will assume at its real value; in so far as all this is true, it is evident that the laws of appropriation or of private property, laws that are based on the production and circulation of commodities, become by their own inner and inexorable dialectic changed into their very opposite. The exchange of equivalents, the original operation with which we started, has now become turned round in such a way that there is only an apparent exchange. This is owing to the fact, first, that the capital which is exchanged for labour- power is itself but a portion of the product of others' labour appropriated without an equivalent; and, secondly, that this capital must not only be replaced by its producer, but replaced together with an added surplus. The relation of exchange subsisting between capitalist and labourer becomes a mere semblance appertaining to the process of circulation, a mere form, foreign to the real nature of the transaction, and only mystifying it. The ever repeated purchase and sale of labour-power is now the mere form; what really takes place is this - the capitalist again and again appropriates, without equivalent, a portion of the previously materialised labour of others, and exchanges it for a greater quantity of living labour. At first the rights of property seemed to us to be based on a man's own labour. At least, some such assumption was necessary since only commodity-owners with equal rights confronted each other, and the sole means by which a man could become possessed of the commodities of others, was by alienating his own commodities; and these could be replaced by labour alone. Now, however, property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labour of others or its product, and to be the impossibility, on the part of the labourer, of appropriating his own product. The separation of
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property from labour has become the necessary consequence of a law that apparently originated in their identity. 6
Therefore,7 however much the capitalist mode of appropriation may seem to fly in the face of the original laws of commodity production, it nevertheless arises, not from a violation, but, on the contrary, from the application of these laws. Let us make this clear once more by briefly reviewing the consecutive phases of motion whose culminating point is capitalist accumulation.
We saw, in the first place, that the original conversion of a sum of values into capital was achieved in complete accordance with the laws of exchange. One party to the contract sells his labour-power, the other buys it. The former receives the value of his commodity, whose use value - labour - is thereby alienated to the buyer. Means of production which already belong to the latter are then transformed by him, with the aid of labour equally belonging to him, into a new product which is likewise lawfully his.
The value of this product includes: first, the value of the used-up means of production. Useful labour cannot consume these means of production without transferring their value to the new product, but, to be saleable, labour-power must be capable of supplying useful labour in the branch of industry in which it is to be employed.
The value of the new product further includes: the equivalent of the value of the labour-power together with a surplus value. This is so because the value of the labour-power - sold for a definite length of time, say a day, a week, etc. - is less than the value created by its use during that time. But the worker has received payment for the exchange-value of his labour-power and by so doing has alienated its use value - this being the case in every sale and purchase.
The fact that this particular commodity, labour-power, possesses the peculiar use value of supplying labour, and therefore of creating value, cannot affect the general law of commodity production. If, therefore, the magnitude of value advanced in wages is not merely found again in the product, but is found there augmented by a surplus value, this is not because the seller has been defrauded, for he has really received the value of his commodity; it is due solely to the fact that this commodity has been used up by the buyer.
The law of exchange requires equality only between the exchange-values of the commodities given in exchange for one another. From the very outset it presupposes even a difference between their use values and it has nothing whatever to do with their consumption, which only begins after the deal is closed and executed.
Thus the original conversion of money into capital is achieved in the most exact accordance with the economic laws of commodity production and with the right of property derived from them. Nevertheless, its result is:
(1) that the product belongs to the capitalist and not to the worker;
(2) that the value of this product includes, besides the value of the capital advanced, a surplus value which costs the worker labour but the capitalist nothing, and which none the less becomes the legitimate property of the capitalist;
(3) that the worker has retained his labour-power and can sell it anew if he can find a buyer.
Simple reproduction is only the periodical repetition of this first operation; each time money is converted afresh into capital. Thus the law is not broken; on the contrary, it is merely enabled to operate continuously. --Several successive acts of exchange have only made the last represent the first? (Sismondi, --Nouveaux Principes, etc. ,? p. 70).
And yet we have seen that simple reproduction suffices to stamp this first operation, in so far as it is conceived as an isolated process, with a totally changed character. --Of those who share the
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national income among themselves, the one side (the workers) acquire every year a fresh right to their share by fresh work; the others (the capitalists) have already acquired, by work done originally, a permanent right to their share? (Sismondi, l. c. , pp. 110, 111). It is indeed notorious that the sphere of labour is not the only one in which primogeniture works miracles.
Nor does it matter if simple reproduction is replaced by reproduction on an extended scale, by accumulation. In the former case the capitalist squanders the whole surplus value in dissipation, in the latter he demonstrates his bourgeois virtue by consuming only a portion of it and converting the rest into money.
The surplus value is his property; it, has never belonged to anyone else. If he advances it for the purposes of production, the advances made come from his own funds, exactly as on the day when he first entered the market. The fact that on this occasion the funds are derived from the unpaid labour of his workers makes absolutely no difference. If worker B is paid out of the surplus value which worker A produced, then, in the first place, A furnished that surplus value without having the just price of his commodity cut by a half-penny, and, in the second place, the transaction is no concern of B's whatever. What B claims, and has a right to claim, is that the capitalist should pay him the value of his labour-power. --Both were still gainers: the worker because he was advanced the fruits of his labour? (should read: of the unpaid labour of other workers) --before the work was done? (should read: before his own labour had borne fruit); --the employer (le mai^tre), because the labour of this worker was worth more than his wages? (should read: produced more value than the value of his wages). (Sismondi, l. c. , p. 135. )
To be sure, the matter looks quite different if we consider capitalist production in the uninterrupted flow of its renewal, and if, in place of the individual capitalist and the individual worker, we view in their totality, the capitalist class and the working class confronting each other. But in so doing we should be applying standards entirely foreign to commodity production.
Only buyer and seller, mutually independent, face each other in commodity production. The relations between them cease on the day when the term stipulated in the contract they concluded expires. If the transaction is repeated, it is repeated as the -result of a new agreement which has nothing to do with the previous one and which only by chance brings the same seller together again with the same buyer.
If, therefore, commodity production, or one of its associated processes, is to be judged according to its own economic laws, we must consider each act of exchange by itself, apart from any connexion with the act of exchange preceding it and that following it. And since sales and purchases are negotiated solely between particular individuals, it is not admissible to seek here for relations between whole social classes.
However long a series of periodical reproductions and preceding accumulations the capital functioning today may have passed through, it always preserves its original virginity. So long as the laws of exchange are observed in every single act of exchange the mode of appropriation can be completely revolutionised without in any way affecting the property rights which correspond to commodity production. These same rights remain in force both at the outset, when the product belongs to its producer, who, exchanging equivalent for equivalent, can enrich himself only by his own labour, and also in the period of capitalism, when social wealth becomes to an ever- increasing degree the property of those who are in a position to appropriate continually and ever afresh the unpaid labour of others.
This result becomes inevitable from the moment there is a free sale, by the labourer himself, of labour-power as a commodity. But it is also only from then onwards that commodity production is generalised and becomes the typical form of production; it is only from then onwards that, from
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the first, every product is produced for sale and all wealth produced goes through the sphere of circulation. Only when and where wage labour is its basis does commodity production impose itself upon society as a whole; but only then and there also does it unfold all its hidden potentialities. To say that the supervention of wage labour adulterates commodity production is to say that commodity production must not develop if it is to remain unadulterated. To the extent that commodity production, in accordance with its own inherent laws, develops further, into capitalist production, the property laws of commodity production change into the laws of capitalist appropriation. 8
We have seen that even in the case of simple reproduction, all capital, whatever its original source, becomes converted into accumulated capital, capitalised surplus value. But in the flood of production all the capital originally advanced becomes a vanishing quantity (magnitudo evanescens, in the mathematical sense), compared with the directly accumulated capital, i. e. , with the surplus value or surplus-product that is reconverted into capital, whether it functions in the hands of its accumulator, or in those of others. Hence, Political Economy describes capital in general as --accumulated wealth? (converted surplus value or revenue), --that is employed over again in the production of surplus value,? 9 and the capitalist as --the owner of surplus value. ? 10 It is merely another way of expressing the same thing to say that all existing capital is accumulated or capitalised interest, for interest is a mere fragment of surplus value. 11
Section 2: Erroneous Conception, by Political Economy, of Reproduction on a Progressively Increasing Scale
Before we further investigate accumulation or the reconversion of surplus value into capital, we must brush on one side an ambiguity introduced by the classical economists.
Just as little as the commodities that the capitalist buys with a part of the surplus value for his own consumption, serve the purpose of production and of creation of value, so little is the labour that he buys for the satisfaction of his natural and social requirements, productive labour. Instead of converting surplus value into capital, he, on the contrary, by the purchase of those commodities and that labour, consumes or expends it as revenue. In the face of the habitual mode of life of the old feudal nobility, which, as Hegel rightly says, --consists in consuming what is in hand,? and more especially displays itself in the luxury of personal retainers, it was extremely important for bourgeois economy to promulgate the doctrine that accumulation of capital is the first duty of every citizen, and to preach without ceasing, that a man cannot accumulate, if he eats up all his revenue, instead of spending a good part of it in the acquisition of additional productive labourers, who bring in more than they cost. On the other hand the economists had to contend against the popular prejudice, that confuses capitalist production with hoarding,12 and fancies that accumulated wealth is either wealth that is rescued from being destroyed in its existing form, i. e. , from being consumed, or wealth that is withdrawn from circulation. Exclusion of money from circulation would also exclude absolutely its self-expansion as capital, while accumulation of a hoard in the shape of commodities would be sheer tomfoolery. 13 The accumulation of commodities in great masses is the result either of over-production or of a stoppage of circulation. 14 It is true that the popular mind is impressed by the sight, on the one hand, of the mass of goods that are stored up for gradual consumption by the rich,15 and on the other hand, by the formation of reserve stocks; the latter, a phenomenon that is common to all modes of production, and on which we shall dwell for a moment, when we come to analyse circulation. Classical economy is therefore quite right, when it maintains that the consumption of surplus- products by productive, instead of by unproductive labourers, is a characteristic feature of the
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process of accumulation. But at this point the mistakes also begin. Adam Smith has made it the fashion, to represent accumulation as nothing more than consumption of surplus products by productive labourers, which amounts to saying, that the capitalising of surplus value consists in merely turning surplus value into labour-power.
Let us see what Ricardo, e. g. , says:
--It must be understood that all the productions of a country are consumed; but it makes the greatest difference imaginable whether they are consumed by those who reproduce, or by those who do not reproduce another value. When we say that revenue is saved, and added to capital, what we mean is, that the portion of revenue, so said to be added to capital, is consumed by productive instead of unproductive labourers. ? There can be no greater error than in supposing that capital is increased by non-consumption. ? 16
There can be no greater error than that which Ricardo and all subsequent economists repeat after A. Smith, viz. , that
--the part of revenue, of which it is said, it has been added to capital, is consumed by productive labourers. ?
According to this, all surplus value that is changed into capital becomes variable capital. So far from this being the case, the surplus value, like the original capital, divides itself into constant capital and variable capital, into means of production and labour-power. Labour-power is the form under which variable capital exists during the process of production. In this process the labour-power is itself consumed by the capitalist while the means of production are consumed by the labour-power in the exercise of its function, labour. At the same time, the money paid for the purchase of the labour-power, is converted into necessaries, that are consumed, not by --productive labour,? but by the --productive labourer. ? Adam Smith, by a fundamentally perverted analysis, arrives at the absurd conclusion, that even though each individual capital is divided into a constant and a variable part, the capital of society resolves itself only into variable capital, i. e. , is laid out exclusively in payment of wages. For instance, suppose a cloth manufacturer converts ? 2,000 into capital. One portion he lays out in buying weavers, the other in woollen yarn, machinery, &c. But the people, from whom he buys the yarn and the machinery, pay for labour with a part of the purchase money, and so on until the whole ? 2,000 are spent in the payment of wages, i.
3 --When capital is employed in advancing to the workman his wages, it adds nothing to the funds for the maintenance of labour. ? (Cazenove in note to his edition of Malthus' --Definitions in Pol. Econ. ? London, 1853, p. 22. )
4 --The wages of labour are advanced by capitalists in the case of less than one fourth of the labourers of the earth. ? (Rich. Jones: --Textbook of Lectures on the Pol. Econ. of Nations. ? Hertford, 1852, p. 36. )
5 --Though the manufacturer? (i. e. , the labourer) --has his wages advanced to him by his master, he in reality costs him no expense, the value of these wages being generally reserved, together with a profit,
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in the improved value of the subject upon which his labour is bestowed. ? (A. Smith, l. c. , Book II. . ch. III, p. 311. )
6 --This is a remarkably peculiar property of productive labour. Whatever is productively consumed is capital and it becomes capital by consumption. ? (James Mill, l. c. , p. 242. ) James Mill, however, never got on the track of this --remarkably peculiar property. ?
7 --It is true indeed, that the first introducing a manufacture employs many poor, but they cease not to be so, and the continuance of it makes many. ? (--Reasons for a Limited Exportation of Wool. ? London, 1677, p. 19. ) --The farmer now absurdly asserts, that he keeps the poor. They are indeed kept in misery. ? (--Reasons for the Late Increase of the Poor Rates: or a Comparative View of the Prices of labour and Provisions. ? London, 1777, p. 31. )
8 Rossi would not declaim so emphatically against this, had he really penetrated the secret of --productive consumption. ?
9 --The labourers in the mines of S. America, whose daily task (the heaviest perhaps in the world) consists in bringing to the surface on their shoulders a load of metal weighing from 180 to 200 pounds, from a depth of 450 feet, live on broad and beans only; they themselves would prefer the bread alone for food, but their masters, who have found out that the men cannot work so hard on bread, treat them like horses, and compel them to eat beans; beans, however, are relatively much richer in bone-earth (phosphate of lime) than is bread. ? (Liebig, l. c. , vol. 1. , p. 194, note. )
10 James Mill, l. c. , p. 238
11 --If the price of labour should rise so high that, notwithstanding the increase of capital, no more could be employed, I should say that such increase of capital would be still unproductively consumed. ? (Ricardo, l. c. , p. 163. )
12 --The only productive consumption, properly so called, is the consumption or destruction of wealth? (he alludes to the means of production) --by capitalists with a view to reproduction. . . . The workman . . . is a productive consumer to the person who employs him, and to the State, but not, strictly speaking, to himself. ? (Malthus' --Definitions, &c. ,? p. 30. )
13 --The only thing, of which one can say, that it is stored up and prepared beforehand, is the skill of the labourer. . . . The accumulation and storage of skilled labour, that most important operation, is, as regards the great mass of labourers, accomplished without any capital whatever. ? (Th. Hodgskin: --Labour Defended, &c. ,? p. 13. )
14 --That letter might be looked upon as the manifesto of the manufacturers. ? (Ferrand: --Motion on the Cotton Famine. ? H. o. C. , 27th April, 1863. )
15 It will not be forgotten that this same capital sings quite another song, under ordinary circumstances, when there is a question of reducing wages. Then the masters exclaim with one voice: --The factory operatives should keep in wholesome remembrance the fact that theirs is really a low species of skilled labour, and that there is none which is more easily acquired, or of its quality more amply remunerated, or which, by a short training of the least expert, can be more quickly, as well as abundantly, acquired . . . The master's machinery? (which we now learn can be replaced with advantage in 12 months,) --really plays a far more important part in the business of production than the labour and skill of the operative? (who cannot now be replaced under 30 years), --which six months' education can reach, and a common labourer can learn. ? (See ante, p. 423. )
16 Parliament did not vote a single farthing in aid of emigration, but simply passed some Acts empowering the municipal corporations to keep the operatives in a half-starved state, i. e. , to exploit them at less than the normal wages. On the other hand, when 3 years later, the cattle disease broke out, Parliament broke wildly through its usages and voted, straight off, millions for indemnifying the millionaire landlords, whose farmers in any event came off without loss, owing to the rise in the price
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of meat. The bull-like bellow of the landed proprietors at the opening of Parliament, in 1866, showed that a man can worship the cow Sabala without being a Hindu, and can change himself into an ox without being a Jupiter.
17 --L'ouvrier demandait de la subsistence pour vivre, le chef demandait du travail pour gagner. ? [The worker required the means of subsistence to live, the boss required labour to make a profit] (Sismondi, l. c. , p. 91. )
18 A boorishly clumsy form of this bondage exists in the county of Durham. This is one of the few counties, in which circumstances do not secure to the farmer undisputed proprietary rights over the agricultural labourer. The mining industry allows the latter some choice. In this county, the farmer, contrary to the custom elsewhere, rents only such farms as have on them labourers' cottages. The rent of the cottage is a part of the wages. These cottages are known as --hinds' houses. ? They are let to the labourers in consideration of certain feudal services, under a contract called --bondage,? which, amongst other things, binds the labourer, during the time he is employed elsewhere, to leave some one, say his daughter, &c. , to supply his place. The labourer himself is called a --bondsman. ? The relationship here set up also shows how individual consumption by the labourer becomes consumption on behalf of capital-or productive consumption-from quite a new point of view: --It is curious to observe that the very dung of the hind and bondsman is the perquisite of the calculating lord . . . and the lord will allow no privy but his own to exist in the neighbourhood, and will rather give a bit of manure here and there for a garden than bate any part of his seigneurial right. ? (--Public Health, Report VII. , 1864,? p. 188. )
19 It will not be forgotten, that, with respect to the labour of children, &c. , even the formality of a voluntary sale disappears.
20 --Capital pre-supposes wage labour, and wage labour pre-supposes capital. One is a necessary condition to the existence of the other; they mutually call each other into existence. Does an operative in a cotton-factory produce nothing but cotton goods? No, he produces capital. He produces values that give fresh command over his labour, and that, by means of such command, create fresh values. ? (Karl Marx: --Lohnarbeit und Kapital,? in the Neue Rheinische Zeitung: No. 266, 7th April, 1849. ) The articles published under the above title in the N. Rh. Z. are parts of some lectures given by me on that subject, in 1847, in the German --Arbeiter-Verein? at Brussels, the publication of which was interrupted by the revolution of February.
? ? Chapter 24: Conversion of Surplus value into Capital
Section 1: Capitalist Production on a Progressively Increasing Scale. Transition of the Laws of Property that Characterise
Production of Commodities into Laws of Capitalist Appropriation
Hitherto we have investigated how surplus value emanates from capital; we have now to see how capital arises from surplus value. Employing surplus value as capital, reconverting it into capital, is called accumulation of capital. 1
First let us consider this transaction from the standpoint of the individual capitalist. Suppose a spinner to have advanced a capital of ? 10,000, of which four-fifths (? 8,000) are laid out in cotton, machinery, &c. , and one-fifth (? 2,000) in wages. Let him produce 240,000 lbs. of yarn annually, having a value of ? 2,000. The rate of surplus value being 100%, the surplus value lies in the surplus or net product of 40,000 lbs. of yarn, one-sixth of the gross product, with a value of ? 2,000 which will be realised by a sale. ? 2,000 is ? 2,000. We can neither see nor smell in this sum of money a trace of surplus value. When we know that a given value is surplus value, we know how its owner came by it; but that does not alter the nature either of value or of money.
In order to convert this additional sum of ? 2,000 into capital, the master-spinner will, all circumstances remaining as before, advance four-fifths of it (? 1,600) in the purchase of cotton, &c. , and one-fifth (? 400) in the purchase of additional spinners, who will find in the market the necessaries of life whose value the master has advanced to them.
Then the new capital of ? 2,000 functions in the spinning mill, and brings in, in its turn, a surplus value of ? 400.
The capital value was originally advanced in the money form. The surplus value on the contrary is, originally, the value of a definite portion of the gross product. If this gross product be sold, converted into money, the capital value regains its original form. From this moment the capital value and the surplus value are both of them sums of money, and their reconversion into capital takes place in precisely the same way. The one, as well as the other, is laid out by the capitalist in the purchase of commodities that place him in a position to begin afresh the fabrication of his goods, and this time, on an extended scale. But in order to be able to buy those commodities, he must find them ready in the market.
His own yarns circulate, only because he brings his annual product to market, as all other capitalists likewise do with their commodities. But these commodities, before coming to market, were part of the general annual product, part of the total mass of objects of every kind, into which the sum of the individual capitals, i. e. , the total capital of society, had been converted in the course of the year, and of which each capitalist had in hand only an aliquot part. The transactions in the market effectuate only the interchange of the individual components of this annual product, transfer them from one hand to another, but can neither augment the total annual production, nor alter the nature of the objects produced. Hence the use that can be made of the total annual product, depends entirely upon its own composition, but in no way upon circulation.
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The annual production must in the first place furnish all those objects (use values) from which the material components of capital, used up in the course of the year, have to be replaced. Deducting these there remains the net or surplus-product, in which the surplus value lies. And of what does this surplus-product consist? Only of things destined to satisfy the wants and desires of the capitalist class, things which, consequently, enter into the consumption fund of the capitalists? Were that the case, the cup of surplus value would be drained to the very dregs, and nothing but simple reproduction would ever take place.
To accumulate it is necessary to convert a portion of the surplus-product into capital. But we cannot, except by a miracle, convert into capital anything but such articles as can be employed in the labour process (i. e. , means of production), and such further articles as are suitable for the sustenance of the labourer (i. e. , means of subsistence). Consequently, a part of the annual surplus labour must have been applied to the production of additional means of production and subsistence, over and above the quantity of these things required to replace the capital advanced. In one word, surplus value is convertible into capital solely because the surplus-product, whose value it is, already comprises the material elements of new capital. 2
Now in order to allow of these elements actually functioning as capital, the capitalist class requires additional labour. If the exploitation of the labourers already employed do not increase, either extensively or intensively, then additional labour-power must be found. For this the mechanism of capitalist production provides beforehand, by converting the working class into a class dependent on wages, a class whose ordinary wages suffice, not only for its maintenance, but for its increase. It is only necessary for capital to incorporate this additional labour-power, annually supplied by the working class in the shape of labourers of all ages, with the surplus means of production comprised in the annual produce, and the conversion of surplus value into capital is complete. From a concrete point of view, accumulation resolves itself into the reproduction of capital on a progressively increasing scale. The circle in which simple reproduction moves, alters its form, and, to use Sismondi's expression, changes into a spiral. 3
Let us now return to our illustration. It is the old story: Abraham begat Isaac, Isaac begat Jacob, and so on. The original capital of ? 10,000 brings in a surplus value of ? 2,000, which is capitalised. The new capital of ? 2,000 brings in a surplus value of ? 400, and this, too, is capitalised, converted into a second additional capital, which, in its turn, produces a further surplus value of ? 80. And so the ball rolls on.
We here leave out of consideration the portion of the surplus value consumed by the capitalist. Just as little does it concern us, for the moment, whether the additional capital is joined on to the original capital, or is separated from it to function independently; whether the same capitalist, who accumulated it, employs it, or whether he hands it over to another. This only we must not forget, that by the side of the newly-formed capital, the original capital continues to reproduce itself, and to produce surplus value, and that this is also true of all accumulated capital, and the additional capital engendered by it.
The original capital was formed by the advance of ? 10,000. How did the owner become possessed of it? --By his own labour and that of his forefathers,? answer unanimously the spokesmen of Political Economy. 4 And, in fact, their supposition appears the only one consonant with the laws of the production of commodities.
But it is quite otherwise with regard to the additional capital of ? 2,000. How that originated we know perfectly well. There is not one single atom of its value that does not owe its existence to unpaid labour. The means of production, with which the additional labour-power is incorporated, as well as the necessaries with which the labourers are sustained, are nothing but component parts of the surplus-product, of the tribute annually exacted from the working class by the capitalist
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class. Though the latter with a portion of that tribute purchases the additional labour-power even at its full price, so that equivalent is exchanged for equivalent, yet the transaction is for all that only the old dodge of every conqueror who buys commodities from the conquered with the money he has robbed them of.
If the additional capital employs the person who produced it, this producer must not only continue to augment the value of the original capital, but must buy back the fruits of his previous labour with more labour than they cost. When viewed as a transaction between the capitalist class and the working class, it makes no difference that additional labourers are employed by means of the unpaid labour of the previously employed labourers. The capitalist may even convert the additional capital into a machine that throws the producers of that capital out of work, and that replaces them by a few children. In every case the working class creates by the surplus labour of one year the capital destined to employ additional labour in the following year. 5 And this is what is called: creating capital out of capital.
The accumulation of the first additional capital of ? 2,000 presupposes a value of ? 10,000 belonging to the capitalist by virtue of his --primitive labour,? and advanced by him. The second additional capital of ? 400 presupposes, on the contrary, only the previous accumulation of the ? 2,000, of which the ? 400 is the surplus value capitalised. The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.
In so far as the surplus value, of which the additional capital, No. 1, consists, is the result of the purchase of labour-power with part of the original capital, a purchase that conformed to the laws of the exchange of commodities, and that, from a legal standpoint, presupposes nothing beyond the free disposal, on the part of the labourer, of his own capacities, and on the part of the owner of money or commodities, of the values that belong to him; in so far as the additional capital, No. 2, &c. , is the mere result of No. 1, and, therefore, a consequence of the above conditions; in so far as each single transaction invariably conforms to the laws of the exchange of commodities, the capitalist buying labour-power, the labourer selling it, and we will assume at its real value; in so far as all this is true, it is evident that the laws of appropriation or of private property, laws that are based on the production and circulation of commodities, become by their own inner and inexorable dialectic changed into their very opposite. The exchange of equivalents, the original operation with which we started, has now become turned round in such a way that there is only an apparent exchange. This is owing to the fact, first, that the capital which is exchanged for labour- power is itself but a portion of the product of others' labour appropriated without an equivalent; and, secondly, that this capital must not only be replaced by its producer, but replaced together with an added surplus. The relation of exchange subsisting between capitalist and labourer becomes a mere semblance appertaining to the process of circulation, a mere form, foreign to the real nature of the transaction, and only mystifying it. The ever repeated purchase and sale of labour-power is now the mere form; what really takes place is this - the capitalist again and again appropriates, without equivalent, a portion of the previously materialised labour of others, and exchanges it for a greater quantity of living labour. At first the rights of property seemed to us to be based on a man's own labour. At least, some such assumption was necessary since only commodity-owners with equal rights confronted each other, and the sole means by which a man could become possessed of the commodities of others, was by alienating his own commodities; and these could be replaced by labour alone. Now, however, property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labour of others or its product, and to be the impossibility, on the part of the labourer, of appropriating his own product. The separation of
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property from labour has become the necessary consequence of a law that apparently originated in their identity. 6
Therefore,7 however much the capitalist mode of appropriation may seem to fly in the face of the original laws of commodity production, it nevertheless arises, not from a violation, but, on the contrary, from the application of these laws. Let us make this clear once more by briefly reviewing the consecutive phases of motion whose culminating point is capitalist accumulation.
We saw, in the first place, that the original conversion of a sum of values into capital was achieved in complete accordance with the laws of exchange. One party to the contract sells his labour-power, the other buys it. The former receives the value of his commodity, whose use value - labour - is thereby alienated to the buyer. Means of production which already belong to the latter are then transformed by him, with the aid of labour equally belonging to him, into a new product which is likewise lawfully his.
The value of this product includes: first, the value of the used-up means of production. Useful labour cannot consume these means of production without transferring their value to the new product, but, to be saleable, labour-power must be capable of supplying useful labour in the branch of industry in which it is to be employed.
The value of the new product further includes: the equivalent of the value of the labour-power together with a surplus value. This is so because the value of the labour-power - sold for a definite length of time, say a day, a week, etc. - is less than the value created by its use during that time. But the worker has received payment for the exchange-value of his labour-power and by so doing has alienated its use value - this being the case in every sale and purchase.
The fact that this particular commodity, labour-power, possesses the peculiar use value of supplying labour, and therefore of creating value, cannot affect the general law of commodity production. If, therefore, the magnitude of value advanced in wages is not merely found again in the product, but is found there augmented by a surplus value, this is not because the seller has been defrauded, for he has really received the value of his commodity; it is due solely to the fact that this commodity has been used up by the buyer.
The law of exchange requires equality only between the exchange-values of the commodities given in exchange for one another. From the very outset it presupposes even a difference between their use values and it has nothing whatever to do with their consumption, which only begins after the deal is closed and executed.
Thus the original conversion of money into capital is achieved in the most exact accordance with the economic laws of commodity production and with the right of property derived from them. Nevertheless, its result is:
(1) that the product belongs to the capitalist and not to the worker;
(2) that the value of this product includes, besides the value of the capital advanced, a surplus value which costs the worker labour but the capitalist nothing, and which none the less becomes the legitimate property of the capitalist;
(3) that the worker has retained his labour-power and can sell it anew if he can find a buyer.
Simple reproduction is only the periodical repetition of this first operation; each time money is converted afresh into capital. Thus the law is not broken; on the contrary, it is merely enabled to operate continuously. --Several successive acts of exchange have only made the last represent the first? (Sismondi, --Nouveaux Principes, etc. ,? p. 70).
And yet we have seen that simple reproduction suffices to stamp this first operation, in so far as it is conceived as an isolated process, with a totally changed character. --Of those who share the
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national income among themselves, the one side (the workers) acquire every year a fresh right to their share by fresh work; the others (the capitalists) have already acquired, by work done originally, a permanent right to their share? (Sismondi, l. c. , pp. 110, 111). It is indeed notorious that the sphere of labour is not the only one in which primogeniture works miracles.
Nor does it matter if simple reproduction is replaced by reproduction on an extended scale, by accumulation. In the former case the capitalist squanders the whole surplus value in dissipation, in the latter he demonstrates his bourgeois virtue by consuming only a portion of it and converting the rest into money.
The surplus value is his property; it, has never belonged to anyone else. If he advances it for the purposes of production, the advances made come from his own funds, exactly as on the day when he first entered the market. The fact that on this occasion the funds are derived from the unpaid labour of his workers makes absolutely no difference. If worker B is paid out of the surplus value which worker A produced, then, in the first place, A furnished that surplus value without having the just price of his commodity cut by a half-penny, and, in the second place, the transaction is no concern of B's whatever. What B claims, and has a right to claim, is that the capitalist should pay him the value of his labour-power. --Both were still gainers: the worker because he was advanced the fruits of his labour? (should read: of the unpaid labour of other workers) --before the work was done? (should read: before his own labour had borne fruit); --the employer (le mai^tre), because the labour of this worker was worth more than his wages? (should read: produced more value than the value of his wages). (Sismondi, l. c. , p. 135. )
To be sure, the matter looks quite different if we consider capitalist production in the uninterrupted flow of its renewal, and if, in place of the individual capitalist and the individual worker, we view in their totality, the capitalist class and the working class confronting each other. But in so doing we should be applying standards entirely foreign to commodity production.
Only buyer and seller, mutually independent, face each other in commodity production. The relations between them cease on the day when the term stipulated in the contract they concluded expires. If the transaction is repeated, it is repeated as the -result of a new agreement which has nothing to do with the previous one and which only by chance brings the same seller together again with the same buyer.
If, therefore, commodity production, or one of its associated processes, is to be judged according to its own economic laws, we must consider each act of exchange by itself, apart from any connexion with the act of exchange preceding it and that following it. And since sales and purchases are negotiated solely between particular individuals, it is not admissible to seek here for relations between whole social classes.
However long a series of periodical reproductions and preceding accumulations the capital functioning today may have passed through, it always preserves its original virginity. So long as the laws of exchange are observed in every single act of exchange the mode of appropriation can be completely revolutionised without in any way affecting the property rights which correspond to commodity production. These same rights remain in force both at the outset, when the product belongs to its producer, who, exchanging equivalent for equivalent, can enrich himself only by his own labour, and also in the period of capitalism, when social wealth becomes to an ever- increasing degree the property of those who are in a position to appropriate continually and ever afresh the unpaid labour of others.
This result becomes inevitable from the moment there is a free sale, by the labourer himself, of labour-power as a commodity. But it is also only from then onwards that commodity production is generalised and becomes the typical form of production; it is only from then onwards that, from
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the first, every product is produced for sale and all wealth produced goes through the sphere of circulation. Only when and where wage labour is its basis does commodity production impose itself upon society as a whole; but only then and there also does it unfold all its hidden potentialities. To say that the supervention of wage labour adulterates commodity production is to say that commodity production must not develop if it is to remain unadulterated. To the extent that commodity production, in accordance with its own inherent laws, develops further, into capitalist production, the property laws of commodity production change into the laws of capitalist appropriation. 8
We have seen that even in the case of simple reproduction, all capital, whatever its original source, becomes converted into accumulated capital, capitalised surplus value. But in the flood of production all the capital originally advanced becomes a vanishing quantity (magnitudo evanescens, in the mathematical sense), compared with the directly accumulated capital, i. e. , with the surplus value or surplus-product that is reconverted into capital, whether it functions in the hands of its accumulator, or in those of others. Hence, Political Economy describes capital in general as --accumulated wealth? (converted surplus value or revenue), --that is employed over again in the production of surplus value,? 9 and the capitalist as --the owner of surplus value. ? 10 It is merely another way of expressing the same thing to say that all existing capital is accumulated or capitalised interest, for interest is a mere fragment of surplus value. 11
Section 2: Erroneous Conception, by Political Economy, of Reproduction on a Progressively Increasing Scale
Before we further investigate accumulation or the reconversion of surplus value into capital, we must brush on one side an ambiguity introduced by the classical economists.
Just as little as the commodities that the capitalist buys with a part of the surplus value for his own consumption, serve the purpose of production and of creation of value, so little is the labour that he buys for the satisfaction of his natural and social requirements, productive labour. Instead of converting surplus value into capital, he, on the contrary, by the purchase of those commodities and that labour, consumes or expends it as revenue. In the face of the habitual mode of life of the old feudal nobility, which, as Hegel rightly says, --consists in consuming what is in hand,? and more especially displays itself in the luxury of personal retainers, it was extremely important for bourgeois economy to promulgate the doctrine that accumulation of capital is the first duty of every citizen, and to preach without ceasing, that a man cannot accumulate, if he eats up all his revenue, instead of spending a good part of it in the acquisition of additional productive labourers, who bring in more than they cost. On the other hand the economists had to contend against the popular prejudice, that confuses capitalist production with hoarding,12 and fancies that accumulated wealth is either wealth that is rescued from being destroyed in its existing form, i. e. , from being consumed, or wealth that is withdrawn from circulation. Exclusion of money from circulation would also exclude absolutely its self-expansion as capital, while accumulation of a hoard in the shape of commodities would be sheer tomfoolery. 13 The accumulation of commodities in great masses is the result either of over-production or of a stoppage of circulation. 14 It is true that the popular mind is impressed by the sight, on the one hand, of the mass of goods that are stored up for gradual consumption by the rich,15 and on the other hand, by the formation of reserve stocks; the latter, a phenomenon that is common to all modes of production, and on which we shall dwell for a moment, when we come to analyse circulation. Classical economy is therefore quite right, when it maintains that the consumption of surplus- products by productive, instead of by unproductive labourers, is a characteristic feature of the
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process of accumulation. But at this point the mistakes also begin. Adam Smith has made it the fashion, to represent accumulation as nothing more than consumption of surplus products by productive labourers, which amounts to saying, that the capitalising of surplus value consists in merely turning surplus value into labour-power.
Let us see what Ricardo, e. g. , says:
--It must be understood that all the productions of a country are consumed; but it makes the greatest difference imaginable whether they are consumed by those who reproduce, or by those who do not reproduce another value. When we say that revenue is saved, and added to capital, what we mean is, that the portion of revenue, so said to be added to capital, is consumed by productive instead of unproductive labourers. ? There can be no greater error than in supposing that capital is increased by non-consumption. ? 16
There can be no greater error than that which Ricardo and all subsequent economists repeat after A. Smith, viz. , that
--the part of revenue, of which it is said, it has been added to capital, is consumed by productive labourers. ?
According to this, all surplus value that is changed into capital becomes variable capital. So far from this being the case, the surplus value, like the original capital, divides itself into constant capital and variable capital, into means of production and labour-power. Labour-power is the form under which variable capital exists during the process of production. In this process the labour-power is itself consumed by the capitalist while the means of production are consumed by the labour-power in the exercise of its function, labour. At the same time, the money paid for the purchase of the labour-power, is converted into necessaries, that are consumed, not by --productive labour,? but by the --productive labourer. ? Adam Smith, by a fundamentally perverted analysis, arrives at the absurd conclusion, that even though each individual capital is divided into a constant and a variable part, the capital of society resolves itself only into variable capital, i. e. , is laid out exclusively in payment of wages. For instance, suppose a cloth manufacturer converts ? 2,000 into capital. One portion he lays out in buying weavers, the other in woollen yarn, machinery, &c. But the people, from whom he buys the yarn and the machinery, pay for labour with a part of the purchase money, and so on until the whole ? 2,000 are spent in the payment of wages, i.
