No More Learning

Let us see, in the first place, what the two forms have in common.
Both circuits are resolvable into the same two antithetical phases, C-M, a sale, and M-C, a purchase. In each of these phases the same material elements - a commodity, and money, and the same economic dramatis personae, a buyer and a seller - confront one another. Each circuit is the unity of the same two antithetical phases, and in each case this unity is brought about by the intervention of three contracting parties, of whom one only sells, another only buys, while the third both buys and sells.
What, however, first and foremost distinguishes the circuit C-M-C from the circuit M-C-M, is the inverted order of succession of the two phases. The simple circulation of commodities begins with a sale and ends with a purchase, while the circulation of money as capital begins with a purchase and ends with a sale. In the one case both the starting-point and the goal are commodities, in the other they are money. In the first form the movement is brought about by the intervention of money, in the second by that of a commodity.
In the circulation C-M-C, the money is in the end converted into a commodity, that serves as a use-value; it is spent once for all. In the inverted form, M-C-M, on the contrary, the buyer lays out money in order that, as a seller, he may recover money. By the purchase of his commodity he throws money into circulation, in order to withdraw it again by the sale of the same commodity. He lets the money go, but only with the sly intention of getting it back again. The money, therefore, is not spent, it is merely advanced. 3
In the circuit C-M-C, the same piece of money changes its place twice. The seller gets it from the buyer and pays it away to another seller. The complete circulation, which begins with the receipt, concludes with the payment, of money for commodities. It is the very contrary in the circuit M-C- M. Here it is not the piece of money that changes its place twice, but the commodity. The buyer takes it from the hands of the seller and passes it into the hands of another buyer. Just as in the simple circulation of commodities the double change of place of the same piece of money effects its passage from one hand into another, so here the double change of place of the same commodity brings about the reflux of the money to its point of departure.
Such reflux is not dependent on the commodity being sold for more than was paid for it. This circumstance influences only the amount of the money that comes back. The reflux itself takes place, so soon as the purchased commodity is resold, in other words, so soon as the circuit M-C- M is completed. We have here, therefore, a palpable difference between the circulation of money as capital, and its circulation as mere money.
The circuit C-M-C comes completely to an end, so soon as the money brought in by the sale of one commodity is abstracted again by the purchase of another.
If, nevertheless, there follows a reflux of money to its starting-point, this can only happen through a renewal or repetition of the operation. If I sell a quarter of corn for ? 3, and with this ? 3 buy clothes, the money, so far as I am concerned, is spent and done with. It belongs to the clothes merchant. If I now sell a second quarter of corn, money indeed flows back to me, not however as a sequel to the first transaction, but in consequence of its repetition. The money again leaves me, so soon as I complete this second transaction by a fresh purchase. Therefore, in the circuit C-M- C, the expenditure of money has nothing to do with its reflux. On the other hand, in M-C-M, the reflux of the money is conditioned by the very mode of its expenditure. Without this reflux, the
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operation fails, or the process is interrupted and incomplete, owing to the absence of its complementary and final phase, the sale.
The circuit C-M-C starts with one commodity, and finishes with another, which falls out of circulation and into consumption. Consumption, the satisfaction of wants, in one word, use-value, is its end and aim. The circuit M-C-M, on the contrary, commences with money and ends with money. Its leading motive, and the goal that attracts it, is therefore mere exchange-value.
In the simple circulation of commodities, the two extremes of the circuit have the same economic form. They are both commodities, and commodities of equal value. But they are also use-values differing in their qualities, as, for example, corn and clothes. The exchange of products, of the different materials in which the labour of society is embodied, forms here the basis of the movement. It is otherwise in the circulation M-C-M, which at first sight appears purposeless, because tautological. Both extremes have the same economic form. They are both money, and therefore are not qualitatively different use-values; for money is but the converted form of commodities, in which their particular use-values vanish. To exchange ? 100 for cotton, and then this same cotton again for ? 100, is merely a roundabout way of exchanging money for money, the same for the same, and appears to be an operation just as purposeless as it is absurd. 4 One sum of money is distinguishable from another only by its amount. The character and tendency of the process M-C-M, is therefore not due to any qualitative difference between its extremes, both being money, but solely to their quantitative difference. More money is withdrawn from circulation at the finish than was thrown into it at the start. The cotton that was bought for ? 100 is perhaps resold for ? 100 + ? 10 or ? 110. The exact form of this process is therefore M-C-M', where M' = M + D M = the original sum advanced, plus an increment. This increment or excess over the original value I call --surplus value. ? The value originally advanced, therefore, not only remains intact while in circulation, but adds to itself a surplus value or expands itself. It is this movement that converts it into capital.
Of course, it is also possible, that in C-M-C, the two extremes C-C, say corn and clothes, may represent different quantities of value. The farmer may sell his corn above its value, or may buy the clothes at less than their value. He may, on the other hand, --be done? by the clothes merchant. Yet, in the form of circulation now under consideration, such differences in value are purely accidental. The fact that the corn and the clothes are equivalents, does not deprive the process of all meaning, as it does in M-C-M. The equivalence of their values is rather a necessary condition to its normal course.
The repetition or renewal of the act of selling in order to buy, is kept within bounds by the very object it aims at, namely, consumption or the satisfaction of definite wants, an aim that lies altogether outside the sphere of circulation. But when we buy in order to sell, we, on the contrary, begin and end with the same thing, money, exchange-value; and thereby the movement becomes interminable. No doubt, M becomes M + D M, ? 100 become ? 110. But when viewed in their qualitative aspect alone, ? 110 are the same as ? 100, namely money; and considered quantitatively, ? 110 is, like ? 100, a sum of definite and limited value. If now, the ? 110 be spent as money, they cease to play their part. They are no longer capital. Withdrawn from circulation, they become petrified into a hoard, and though they remained in that state till doomsday, not a single farthing would accrue to them. If, then, the expansion of value is once aimed at, there is just the same inducement to augment the value of the ? 110 as that of the ? 100; for both are but limited expressions for exchange-value, and therefore both have the same vocation to approach, by quantitative increase, as near as possible to absolute wealth. Momentarily, indeed, the value originally advanced, the ? 100 is distinguishable from the surplus value of ? 10 that is annexed to it during circulation; but the distinction vanishes immediately. At the end of the process, we do not
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receive with one hand the original ? 100, and with the other, the surplus value of ? 10. We simply get a value of ? 110, which is in exactly the same condition and fitness for commencing the expanding process, as the original ? 100 was. Money ends the movement only to begin it again. 5 Therefore, the final result of every separate circuit, in which a purchase and consequent sale are completed, forms of itself the starting-point of a new circuit. The simple circulation of commodities - selling in order to buy - is a means of carrying out a purpose unconnected with circulation, namely, the appropriation of use-values, the satisfaction of wants. The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement. The circulation of capital has therefore no limits. 6
As the conscious representative of this movement, the possessor of money becomes a capitalist. His person, or rather his pocket, is the point from which the money starts and to which it returns. The expansion of value, which is the objective basis or main-spring of the circulation M-C-M, becomes his subjective aim, and it is only in so far as the appropriation of ever more and more wealth in the abstract becomes the sole motive of his operations, that he functions as a capitalist, that is, as capital personified and endowed with consciousness and a will. Use-values must therefore never be looked upon as the real aim of the capitalist; 7 neither must the profit on any single transaction. The restless never-ending process of profit-making alone is what he aims at. 8 This boundless greed after riches, this passionate chase after exchange-value9, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser. The never-ending augmentation of exchange-value, which the miser strives after, by seeking to save10 his money from circulation, is attained by the more acute capitalist, by constantly throwing it afresh into circulation. 11
The independent form, i. e. , the money-form, which the value of commodities assumes in the case of simple circulation, serves only one purpose, namely, their exchange, and vanishes in the final result of the movement. On the other hand, in the circulation M-C-M, both the money and the commodity represent only different modes of existence of value itself, the money its general mode, and the commodity its particular, or, so to say, disguised mode. 12 It is constantly changing from one form to the other without thereby becoming lost, and thus assumes an automatically active character. If now we take in turn each of the two different forms which self-expanding value successively assumes in the course of its life, we then arrive at these two propositions: Capital is money: Capital is commodities. 13 In truth, however, value is here the active factor in a process, in which, while constantly assuming the form in turn of money and commodities, it at the same time changes in magnitude, differentiates itself by throwing off surplus value from itself; the original value, in other words, expands spontaneously. For the movement, in the course of which it adds surplus value, is its own movement, its expansion, therefore, is automatic expansion. Because it is value, it has acquired the occult quality of being able to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs.
Value, therefore, being the active factor in such a process, and assuming at one time the form of money, at another that of commodities, but through all these changes preserving itself and expanding, it requires some independent form, by means of which its identity may at any time be established. And this form it possesses only in the shape of money. It is under the form of money that value begins and ends, and begins again, every act of its own spontaneous generation. It began by being ? 100, it is now ? 110, and so on. But the money itself is only one of the two forms of value. Unless it takes the form of some commodity, it does not become capital. There is here no antagonism, as in the case of hoarding, between the money and commodities. The capitalist knows that all commodities, however scurvy they may look, or however badly they may smell,
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are in faith and in truth money, inwardly circumcised Jews, and what is more, a wonderful means whereby out of money to make more money.
In simple circulation, C-M-C, the value of commodities attained at the most a form independent of their use-values, i. e. , the form of money; but that same value now in the circulation M-C-M, or the circulation of capital, suddenly presents itself as an independent substance, endowed with a motion of its own, passing through a life-process of its own, in which money and commodities are mere forms which it assumes and casts off in turn. Nay, more: instead of simply representing the relations of commodities, it enters now, so to say, into private relations with itself. It differentiates itself as original value from itself as surplus value; as the father differentiates himself from himself qua the son, yet both are one and of one age: for only by the surplus value of ? 10 does the ? 100 originally advanced become capital, and so soon as this takes place, so soon as the son, and by the son, the father, is begotten, so soon does their difference vanish, and they again become one, ? 110.
Value therefore now becomes value in process, money in process, and, as such, capital. It comes out of circulation, enters into it again, preserves and multiplies itself within its circuit, comes back out of it with expanded bulk, and begins the same round ever afresh. 14 M-M', money which begets money, such is the description of Capital from the mouths of its first interpreters, the Mercantilists.
Buying in order to sell, or, more accurately, buying in order to sell dearer, M-C-M', appears certainly to be a form peculiar to one kind of capital alone, namely, merchants' capital. But industrial capital too is money, that is changed into commodities, and by the sale of these commodities, is re-converted into more money. The events that take place outside the sphere of circulation, in the interval between the buying and selling, do not affect the form of this movement. Lastly, in the case of interest-bearing capital, the circulation M-C-M' appears abridged. We have its result without the intermediate stage, in the form M-M', --en style lapidaire? so to say, money that is worth more money, value that is greater than itself.
M-C-M' is therefore in reality the general formula of capital as it appears prima facie within the sphere of circulation.
1 The contrast between the power, based on the personal relations of dominion and servitude, that is conferred by landed property, and the impersonal power that is given by money, is well expressed by the two French proverbs, --Nulle terre sans seigneur,? and --L'argent n'a pas de mai^tre,? - --No land without its lord,? and --Money has no master. ?
2 --Avec de l'argent on ache`te des marchandises et avec des marchandises on ache`te de l'argent. ? [--With money one buys commodities, and with commodities one buys money? ] (Mercier de la Rivie`re: --L'ordre naturel et essentiel des socie? te? s politiques,? p. 543. )
3 --When a thing is bought in order to be sold again, the sum employed is called money advanced; when it is bought not to be sold, it may be said to be expended. ? -- (James Steuart: --Works,? &c. Edited by Gen. Sir James Steuart, his son. Lond. , 1805, V. I. , p. 274. )
4 --On n'e? change pas de l'argent contre de l'argent,? [--One does not exchange money for money,? ] says Mercier de la Rivie`re to the Mercantilists (l. c. , p. 486. ) In a work, which, ex professo treats of --trade? and --speculation,? occurs the following: --All trade consists in the exchange of things of different kinds; and the advantage? (to the merchant? ) --arises out of this difference. To exchange a pound of bread against a pound of bread . . . would be attended with no advantage; . . . Hence trade is advantageously contrasted with gambling, which consists in a mere exchange of money for money. ? (Th. Corbet, --An Inquiry into the Causes and Modes of the Wealth of Individuals; or the Principles of
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Trade and Speculation Explained. ? London, 1841, p. 5. ) Although Corbet does not see that M-M, the exchange or money for money, is the characteristic form of circulation, not only of merchants' capital but of all capital, yet at least he acknowledges that this form is common to gambling and to one species of trade, viz.
, speculation: but then comes MacCulloch and makes out, that to buy in order to sell, is to speculate, and thus the difference between Speculation and Trade vanishes. --Every transaction in which an individual buys produce in order to sell it again, is, in fact, a speculation. ? (MacCulloch: --A Dictionary Practical, &c. , of Commerce. ? Lond. , 1847, p. 1009. ) With much more naivete? , Pinto, the Pindar of the Amsterdam Stock Exchange, remarks, --Le commerce est un jeu: (taken from Locke) et ce n'est pas avec des gueux qu'on peut gagner. Si l'on gagnait longtemps en tout avec tous, il faudrait rendre de bon accord les plus grandes parties du profit pour recommencer le jeu. ? [--Trade is a game, and nothing can be won from beggars. If one won everything from everybody all the time, it would be necessary to give back the greater part of the profit voluntarily, in order to begin the game again? ] (Pinto: --Traite? de la Circulation et du Cre? dit. ? Amsterdam, 1771. p. 231,)
5 --Capital is divisible . . . into the original capital and the profit, the increment to the capital . . . although in practice this profit is immediately turned into capital, and set in motion with the original. ? (F. Engels, --Umrisse zu einer Kritik der Nationalo? konomie, in: Deutsch-Franzo? sische Jahrbu? cher, herausgegeben von Arnold Ruge und Karl Marx. ? Paris, 1844, p. 99. )
6 Aristotle opposes Oeconomic to Chrematistic. He starts from the former. So far as it is the art of gaining a livelihood, it is limited to procuring those articles that are necessary to existence, and useful either to a household or the state. --True wealth (o aleqinos ploutos) consists of such values in use; for the quantity of possessions of this kind, capable of making life pleasant, is not unlimited. There is, however, a second mode of acquiring things, to which we may by preference and with correctness give the name of Chrematistic, and in this case there appear to be no limits to riches and possessions. Trade (e kapelike is literally retail trade, and Aristotle takes this kind because in it values in use predominate) does not in its nature belong to Chrematistic, for here the exchange has reference only to what is necessary to themselves (the buyer or seller). ? Therefore, as he goes on to show, the original form of trade was barter, but with the extension of the latter, there arose the necessity for money. On the discovery of money, barter of necessity developed into kapelike, into trading in commodities, and this again, in opposition to its original tendency, grew into Chrematistic, into the art of making money. Now Chrematistic is distinguishable from Oeconomic in this way, that --in the case of Chrematistic circulation is the source of riches poietike crematon . . . dia chrematon diaboles. And it appears to revolve about money, for money is the beginning and end of this kind of exchange (to nomisma stoiceion tes allages estin). Therefore also riches, such as Chrematistic strives for, are unlimited. Just as every art that is not a means to an end, but an end in itself, has no limit to its aims, because it seeks constantly to approach nearer and nearer to that end, while those arts that pursue means to an end, are not boundless, since the goal itself imposes a limit upon them, so with Chrematistic, there are no bounds to its aims, these aims being absolute wealth. Oeconomic not Chrematistic has a limit . . . the object of the former is something different from money, of the latter the augmentation of money. . . . By confounding these two forms, which overlap each other, some people have been led to look upon the preservation and increase of money ad infinitum as the end and aim of Oeconomic. ? (Aristoteles, De Rep. edit. Bekker, lib. l. c. 8, 9. passim. )
7 --Commodities (here used in the sense of use-values) are not the terminating object of the trading capitalist, money is his terminating object. ? (Th. Chalmers, On Pol. Econ. &c. , 2nd Ed. , Glasgow, 1832, pp. 165, 166. )
8 --Il mercante non conta quasi per niente il lucro fatto, ma mira sempre al futuro. ? [--The merchant counts the money he has made as almost nothing; he always looks to the future. ? ] (A. Genovesi,
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Lezioni di Economia Civile (1765), Custodi's edit. of Italian Economists. Parte Moderna t. viii, p. 139. )
9 --The inextinguishable passion for gain, the auri sacra fames, will always lead capitalists. ? (MacCulloch: --The Principles of Polit. Econ. ? London, 1830, p. 179. ) This view, of course, does not prevent the same MacCulloch and others of his kidney, when in theoretical difficulties, such, for example, as the question of over-production, from transforming the same capitalist into a moral citizen, whose sole concern is for use-values, and who even develops an insatiable hunger for boots, hats, eggs, calico, and other extremely familiar sorts of use-values.
10 Sozein is a characteristic Greek expression for hoarding. So in English to save has the same two meanings: sauver and e? pargner.
11 --Questo infinito che le cose non hanno in progresso, hanno in giro. ? [--That infinity which things do not possess, they possess in circulation. ? ] (Galiani. )
12 --Ce n'est pas la matie`re qui fait le capital, mais la valeur de ces matie`res. ? [--It is not matter which makes capital, but the value of that matter. ? ] (J. B. Say: --Traite? d'Econ. Polit. ? 3e`me e? d. Paris, 1817, t. II. , p. 429. )
13 --Currency (! ) employed in producing articles. . . is capital. ? (Macleod: --The Theory and Practice of Banking. ? London, 1855, v. 1, ch. i, p. 55. ) --Capital is commodities. ? (James Mill: --Elements of Pol. Econ. ? Lond. , 1821, p. 74. )
14 Capital: --portion fructifiante de la richesse accumule? e. . . valeur permanente, multipliante. ? (Sismondi: --Nouveaux Principes d'Econ. Polit. ,? t. i. , p. 88, 89. )
? ? Chapter 5: Contradictions in the General Formula of Capital
The form which circulation takes when money becomes capital, is opposed to all the laws we have hitherto investigated bearing on the nature of commodities, value and money, and even of circulation itself. What distinguishes this form from that of the simple circulation of commodities, is the inverted order of succession of the two antithetical processes, sale and purchase. How can this purely formal distinction between these processes change their character as it were by magic?
But that is not all. This inversion has no existence for two out of the three persons who transact business together. As capitalist, I buy commodities from A and sell them again to B, but as a simple owner of commodities, I sell them to B and then purchase fresh ones from A. A and B see no difference between the two sets of transactions. They are merely buyers or sellers. And I on each occasion meet them as a mere owner of either money or commodities, as a buyer or a seller, and, what is more, in both sets of transactions, I am opposed to A only as a buyer and to B only as a seller, to the one only as money, to the other only as commodities, and to neither of them as capital or a capitalist, or as representative of anything that is more than money or commodities, or that can produce any effect beyond what money and commodities can. For me the purchase from A and the sale to B are part of a series. But the connexion between the two acts exists for me alone. A does not trouble himself about my transaction with B, nor does B about my business with A. And if I offered to explain to them the meritorious nature of my action in inverting the order of succession, they would probably point out to me that I was mistaken as to that order of succession, and that the whole transaction, instead of beginning with a purchase and ending with a sale, began, on the contrary, with a sale and was concluded with a purchase. In truth, my first act, the purchase, was from the standpoint of A, a sale, and my second act, the sale, was from the standpoint of B, a purchase. Not content with that, A and B would declare that the whole series was superfluous and nothing but Hokus Pokus; that for the future A would buy direct from B, and B sell direct to A. Thus the whole transaction would be reduced to a single act forming an isolated, non-complemented phase in the ordinary circulation of commodities, a mere sale from A's point of view, and from B's, a mere purchase. The inversion, therefore, of the order of succession, does not take us outside the sphere of the simple circulation of commodities, and we must rather look, whether there is in this simple circulation anything permitting an expansion of the value that enters into circulation, and, consequently, a creation of surplus value.
Let us take the process of circulation in a form under which it presents itself as a simple and direct exchange of commodities. This is always the case when two owners of commodities buy from each other, and on the settling day the amounts mutually owing are equal and cancel each other. The money in this case is money of account and serves to express the value of the commodities by their prices, but is not, itself, in the shape of hard cash, confronted with them. So far as regards use-values, it is clear that both parties may gain some advantage. Both part with goods that, as use-values, are of no service to them, and receive others that they can make use of. And there may also be a further gain. A, who sells wine and buys corn, possibly produces more wine, with given labour-time, than farmer B could, and B on the other hand, more corn than wine-grower A could. A, therefore, may get, for the same exchange-value, more corn, and B more wine, than each would respectively get without any exchange by producing his own corn
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and wine. With reference, therefore, to use-value, there is good ground for saying that --exchange is a transaction by which both sides gain. ? 1 It is otherwise with exchange-value. --A man who has plenty of wine and no corn treats with a man who has plenty of corn and no wine; an exchange takes place between them of corn to the value of 50, for wine of the same value. This act produces no increase of exchange-value either for the one or the other; for each of them already possessed, before the exchange, a value equal to that which he acquired by means of that operation. ? 2 The result is not altered by introducing money, as a medium of circulation, between the commodities, and making the sale and the purchase two distinct acts. 3 The value of a commodity is expressed in its price before it goes into circulation, and is therefore a precedent condition of circulation, not its result. 4
Abstractedly considered, that is, apart from circumstances not immediately flowing from the laws of the simple circulation of commodities, there is in an exchange nothing (if we except the replacing of one use-value by another) but a metamorphosis, a mere change in the form of the commodity. The same exchange-value, i. e. , the same quantity of incorporated social labour, remains throughout in the hands of the owner of the commodity, first in the shape of his own commodity, then in the form of the money for which he exchanged it, and lastly, in the shape of the commodity he buys with that money. This change of form does not imply a change in the magnitude of the value. But the change, which the value of the commodity undergoes in this process, is limited to a change in its money-form. This form exists first as the price of the commodity offered for sale, then as an actual sum of money, which, however, was already expressed in the price, and lastly, as the price of an equivalent commodity. This change of form no more implies, taken alone, a change in the quantity of value, than does the change of a ? 5 note into sovereigns, half sovereigns and shillings. So far therefore as the circulation of commodities effects a change in the form alone of their values, and is free from disturbing influences, it must be the exchange of equivalents.