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CHAPTER XXI.
Accumulation and Reproduction on an Extended |
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Accumulation in Department I
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ACCUMULATION AND REPRODUCTION
ON AN EXTENDED SCALE
It has been shown in Book I how accumulation works in the case of the individual capitalist. By the conversion of the commodity-capital into money the surplus-product, in which the surplus-value is represented, is also turned into money. The capitalist reconverts the so metamorphosed surplus-value into additional natural elements of his productive capital. In the next cycle of production the increased capital furnishes an increased product. But what happens in the case of the individual capital must also show in the annual reproduction as a whole, just as we have seen it happen on analysing simple reproduction, namely, that the successive precipitation -- in the case of individual capital -- of its used-up fixed component parts in money which is being hoarded, also finds expression in the annual reproduction of society.
If a certain individual capital is equal to 400c + 100v, and the annual surplus-value is equal to 100, then the commodity-product amounts to 400c + 100v + 100s. These 600 are converted into money. Of this money, again, 400c are converted into the natural form of constant capital, 100v into labour-power, and -- provided tbe entire surplus-value is being accumulated -- 100s are converted besides into additional constant capital by transformation into natural elements of the productive capital. It is assumed in this case: 1) that this amount is sufficient under the given technical conditions either to expand the functioning constant capital or to establish a new industrial business. But it may also happen that surplus-value must be converted into money and this money hoarded for a much longer time before this process, i.e., before real accumulation, expansion of production, can take place;
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2) that production on an extended scale has actually been in process previously. For in order that the money (the surplus-value hoarded in money-form) may be converted into elements of productive capital, one must be able to buy these elements on the market as commodities. It makes no difference if they are not bought as finished products but made to order. They are not paid for until they are in existence and at any rate not until actual reproduction on an extended scale, an expansion of hitherto normal production, has taken place so far as they are concerned. They had to exist potentially, i.e., in their elements, as it requires only the impulse of an order, that is, the purchase of commodities before they actually exist and their anticipated sale, for their production really to take place. The money on the one side then calls forth extended reproduction on the other, because the possibility of it exists without money. For money in itself is not an element of real reproduction.
For instance capitalist A, who sells during one year or during a number of years certain quantities of commodities successively produced by him, thereby converts into money also that portion of the commodities which is the vehicle of surplus-value -- the surplus-product -- or in other words the very surplus-value produced by him in commodity-form, accumulates it gradually, and thus forms for himself new potential money-capital -- potential because of its capacity and mission to be converted into elements of productive capital. But in actual fact he only engages in simple hoarding, which is not an element of actual reproduction. His activity at first consists only in successively withdrawing circulating money out of the circulation. Of course it is not impossible that the circulating money thus kept under lock and key by him was itself, before it entered into circulation, a portion of some other hoard. This hoard of A, which is potentially new money-capital, is not additional social wealth, any more than it would be if it were spent in articles of consumption. But money withdrawn from circulation, which therefore previously existed in circulation, may have been stored up at some prior time as a component part of a hoard, may have been the money-form of wages, may have converted means of production or other commodities into money or may have circulated portions of constant capital or the revenue of some capitalist. It is no more new wealth than money, considered from the standpoint of the simple circulation of commodities, is the vehicle not only of its actual value but also of its ten-fold value, because it was turned over ten times a day, realised ten different commodity-values. The commodities
If we were to conceive the process of circulation between the various parts of the annual reproduction as taking place in a straight line -- which would be wrong as it always consists with a few exceptions of mutually opposite movements -- then we should have to start from the producer of gold (or silver) who buys without selling, and to assume that all others sell to him. In that case the entire yearly social surplus-product (the bearer of the entire surplus-value) would pass into his hands, and all the other capitalists would distribute among themselves pro rata his surplus-product, which naturally exists in the form of money, the natural embodiment in gold of his surplus-value. For that portion of the product of the gold producer which has to make good his active capital is already tied up and disposed of. The surplus-value of the gold producer, created in the form of gold, would then be the sole fund from which all other capitalists would draw the material for the conversion of their annual surplus-product into money. The magnitude of its value would then have to be equal to the entire annual surplus-value of society, which must first assume the guise of a hoard. Absurd as these assumptions would be, they would do nothing more than explain the possibility of a universal simultaneous formation of a hoard, and would not get reproduction itself one step further, except on the part of the gold producer.
Before we resolve this seeming difficulty we must distinguish between the accumulation in department I (production of means of production) and in department II (productlon of articles of consumption). We shall start with I.
1. The Formation of a Hoard
It is evident that both the investments of capital in the numerous lines of industry constituting class I and the different individual investments of capital within each of these lines of industry, according to their age, i.e., the space of time during which they already have functioned, quite aside from their volumes, technical conditions, market conditions, etc., are in different stages of the process of successive transformation from surplus-value into potential money-capital, whether this money-capital is to serve for the expansion of the active capital or for the establishment of new industrial enterprises -- the two forms of expansion of production. One part of the capitalists is continually converting its potential money-capital, grown to an appropriate size, into productive capital, i.e., with the money hoarded by the conversion of surplus-value into money they buy means of production, additional elements of constant capital. Another part of the capitalists is meanwhile still engaged in hoarding its potential money-capital. Capitalists belonging to these two categories confront each other: some as buyers, the others as sellers, and each one of the two exclusively in one of these roles.
For instance, let A sell 600 (equal to 4OOc + 100v + 100s) to B (who may represent more than one buyer). A sells 600 in commodities for 600 in money, of which 100 are surplus-value which he withdraws from circulation and hoards in the form of money. But these 100 in money are but the money-form of the surplus-product, which was the bearer of a value of 100. The formation of a hoard is no production at all, hence not an increment of production, either. The action of the capitalist consists here merely in withdrawing from circulation the 100 in money he grabbed by the sale of his surplus-product, holding on to it and impounding it. This operation is carried on not alone by A, but at numerous points along the periphery of circulation by other capitalists, A', A", A"', all of them working with equal zeal at
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Let us note by the way: Once more we find here, as we did in the case of simple reproduction, that the exchange of the various component parts of the annual product, i.e., their circulation (which must comprise at the same time the reproduction of the capital, and indeed its restoration in its various determinations, such as constant, variable, fixed, circulating, money- and commodity-capital) does not by any means presuppose mere purchase of commodities supplemented by a subsequent sale, or a sale supplemented by a subsequent purchase, so that there would actually be a bare exchange of commodity for commodity, as Political Economy assumes, especially the free-trade school since the physiocrats and Adam Smith. We know that the fixed capital, once the expenditure for it is made, is not replaced during the entire period of its function, but continues to act in its old form, while its value is gradually precipitated in the form of money. Now we have seen that the periodical renewal of fixed capital IIc (the entire capital-value IIc being converted into elements worth I(v+s)) presupposes on the one hand the mere purchase of the fixed part of IIc, reconverted from the form of money into its bodily form, to which corresponds the mere sale of Is; and presupposes on the other hand the mere sale on the part of IIc, the sale of its fixed (depreciation) part of the value precipitated in money, to which corresponds the mere purchase of Is. In order that the exchange may take place normally in this case, it must be assumed that the mere purchase on the part of IIc is equal in magnitude of value to the mere sale on the part of IIc, and that in the same way the mere sale of Is to IIc, section 1, is equal to its mere purchase from IIc, section 2. (Pp. 464-65.) Otherwise simple reproduction is disturbed. Mere purchase here must be offset by a mere sale there. It must likewise be assumed in this case that the mere sale of that portion of Is which forms the hoards of A, A', A" is balanced by the mere purchase of that portion of Is which converts the hoards of B, B', and B" into elements of additional productive capital.
So far as the balance is restored by the fact that the buyer acts later on as a seller to the same amount of value, and vice versa, the money returns to the side that advanced it on purchasing, and which sold before it bought again. But the actual balance, so far as the exchange of commodities itself, the exchange of the various portions of the annual product is concerned, demands that the values of the commodities exchanged for one another be equal.
But inasmuch as only one-sided exchanges are made, a number
The constant supply of labour-power on the part of working class I, the reconversion of a portion of commodity-capital I into the money-form of variable capital, the replacement of a portion of commodity-capital II by natural elements of constant capital
IIc -- all these necessary premises demand one another, but they are brought about by a very complicated process, including three processes of circulation which occur independently of one another but intermingle. This process is so complicated that it offers ever so many occasions for running abnormally.
The surplus-product, the bearer of surplus-value, does not cost its appropriators, capitalists I, anything. They are by no manner of means obliged to advance any money or commodities in order to obtain it. Even among the physiocrats an advance was the general form of value embodied in elements of productive capital. Hence what capitalists I advance is nothing but their constant and variable capital. The labourer not only preserves by his labour their constant capital; he not only replaces the value of their variable capital by a corresponding newly created portion of value in the form of commodities; by his surplus-labour he supplies them with a surplus-value existing in the form of surplus-product. By the successive sale of this surplus-product they form a hoard, additional potential money-capital. In the ease under consideration, this surplus-product consists from the outset of means of production of means of production. It is only when it reaches the hands of B, B', B", etc. (I) that this surplus-product functions as additional constant capital. But it is this virtualiter even before it is sold, even in the hands of the accumulators of hoards, A, A', A" (I). If we consider merely the amount of value of the reproduction on the part of I, we are still moving within the bounds of simple reproduction, for no additional capital has been set in motion to create this virtualiter additional constant capital (the surplus-product), nor has any greater amount of surplus-labour been expended than that on the basis of simple reproduction. The difference is here only in the form of the surplus-labour performed, in the concrete nature of its particular useful character. It has been expended in means of production for Ic instead of IIc, in means of production of means of production instead of means of production of articles of consumption. In the case of simple reproduction it was assumed that the entire surplus-value I is spent as revenue, hence in commodities II. Hence the surplus-value consisted only of such means of production as have to replace constant capital IIc in its bodily form. In order that the transition from simple to extended reproduction may take place, production in depart-
Hence it follows furthermore: The greater the productive capital already functioning in a country (including the labour-
While the sellers of the surplus-product, A, A', A", etc. (I),
We know from the analysis of simple reproduction that capitalists I and II must have a certain amount of money at hand in order to be able to exchange their surplus-product. In that case the money which served only as revenue to be spent for articles of consumption returned to the capitalists in the same measure in which they had advanced it for the exchange of their respective commodities. Here the same money re-appears, but
The different B's, B"s, B"'s, etc. (I), whose virtual new money capital enters upon its function as active capital, may have to buy their products (portions of their surplus-product) from one another, or to sell them to one another. Pro tanto the money advanced by them for the circulation of their surplus-product
flows back under normal conditions to the different B's in the same proportion in which they had advanced it for the circulation of their respective commodities. If the money circulates as a means of payment, then only balances are to be squared so far as the mutual purchases and sales do not cover one another. But it is important first and foremost to assume here, as everywhere, metallic circulation in its simplest, most primitive form, because then the flux and reflux, the squaring of balances, in short all elements appearing under the credit system as consciously regulated processes present themselves as existing independently of the credit system, and the matter appears in primitive form instead of the later, reflected form.
Hitherto we have been dealing only with additional constant capital. Now we must direct our attention to a consideration of the additional variable capital.
We have explained at great length in Book I that labour-power is always available under the capitalist system of production, and that more labour can be rendered fluent, if necessary, without increasing the number of labourers or the quantity of labour-power employed. We therefore need not go into this any further, but shall rather assume that the portion of the newly created money-capital capable of being converted into variable capital will always find at hand the labour-power into which it is to transform itself. It has also been explained in Book I that a given capital may expand its volume of production within certain limits without any accumulation. But here we are dealing with the accumulation of capital in its specific meaning, so that the expansion of production implies the conversion of surplus-value into additional capital, and thus also an expansion of the capital forming the basis of production.
The gold producer can accumulate a portion of his golden surplus-value as virtual money-capital. As soon as it becomes sufficient in amount, he can transform it directly into new variable capital, without first having to sell his surplus-product. He can likewise convert it into elements of the constant capital. But in the latter case he must find at hand the material elements of his constant capital. It is immaterial whether, as was assumed in our presentation hitherto, each producer works to stock up and then brings his finished product to the market or fills orders.
The actual expansion of production, i.e., the surplus-product, is assumed in either case, in the one case as actually available, in the other as virtually available, capable of delivery.
In this case the additional virtual money-capital on the side of A (I) is indeed a moneyed form of surplus-product (surplus-value), but the surplus-product (surplus-value) considered as such is here a phenomenon of simple reproduction, not yet of reproduction on an extended scale. I(v+s), for which this is true at all events of one portion of s, must ultimately be exchanged for IIc. in order that the reproduction of IIc may take place on the same scale. By the sale of his surplus-product to B (II), A (I) has supplied to the latter a corresponding portion of the value of constant capital in its bodily form. But at the same time he has rendered an equivalent portion of the commodities of B (II) unsaleable by
Let us now take a closer look at the accumulation in department II.
The first difficulty with reference to IIc, i.e., its reconversion from a component part of commodity-capital II into the bodily form of constant capital II, concerns simple reproduction. Let us take the former scheme:
(1,000v+1,000s) I are exchanged for 2,000 IIc.Now, if for instance one half of the surplus-product of I, hence 1,000/2 s or 500 Is; is reincorporated in department I as constant capital, then this portion of the surplus-product, being detained
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in I, cannot replace any part of IIc, Instead of being converted into articles of consumption (and here in this section of the circulation between I and II the exchange is actuaIIy mutual, that is, there is a double change of position of the cornmodities, unlike the replacement of 1,000 IIc by 1,000 Iv effected by the labourers of I), it is made to serve as an additional means of production in I itself. It cannot perform this function simultaneously in I and II. The capitalist cannot spend the value of his surplus-product for articles of consumption and at the same time consume the surplus-product itself productively, i.e., incorporate it in his productive capital. Instead of 2,000 I(v+s). only 1,500, namely (1,000v + 500s) I, are therefore exchangeable for 2,000 IIc; 500 IIc cannot be reconverted from the commodity-form into productive (constant) capital II. Hence there would be an over-production in II, exactly equal in volume to the expansion of production in I. This over-production in II might react to such an extent on I that even the reflux of the 1,000 spent by the labourers of I for articles of consumption of II might take place but partiaIIy, so that these 1,000 would not return to the hands of capitalists I in the form of variable money-capital. These capitalists would thus find themselves hampered even in reproduction on an unchanging scale, and this by the bare attempt to expand it. And in this connection it must be taken into consideration that in I only simple reproduction had actuaIIy taken place and that its elements, as represented in our scheme, are only differently grouped with a view to expansion in the future, say, next year.
One might attempt to circumvent this difficulty in the foIIowing way: Far from being over-production, the 500 IIc which are kept in stock by the capitalists and cannot be immediately converted into productive capital represent, on the contrary, a necessary element of reproduction, which we have so far neglected. We have seen that a money-supply must be accumulated at many points, hence money must be withdrawn from circulation, partly for the purpose of making it possible to form new money-capital in I, and partly to hold fast temporarily the value of the graduaIIy depreciating fixed capital in the form of money. But since we placed aII money and commodities from the very start exclusively into the hands of capitalists I and II when we drew up our scheme and since neither merchants, nor money-changers, nor bankers, nor merely consuming and not directly producing classes exist here, it foIIows that the constant formation of commodity stores in the hands of their respective producers is here indispen-
3) The simple circumstance that in the analysis of simple reproduction we did not stumble across the difficulty which is now to be surmounted proves that we are confronted by a specific phenomenon due solely to the different grouping (with
reference to reproduction) of elements I, a changed grouping without which reproduction on an extended scale cannot take place at all.
We shall now study reproduction according to the following scheme.
I. 4,000c + 1,000v + 1,000s = 6,000 \
Scheme a) } Total, 8,252.
II. 1.500c + 376v + 376s = 2,252 /
We note in the first place that the sum total of the annual social product, or 8,252, is smaller than that of the first scheme, where it was 9,000. We might just as well assume a much larger sum, for instance one ten times larger. We have chosen a smaller sum than in our scheme I in order to make it conspicuously clear that reproduction on an enlarged scale (which is here regarded merely as production carried on with a larger investment of capital) has nothing to do with the absolute volume of the product, that for a given quantity of commodities it implies merely a different arrangement or a different definition of the functions of the various elements of a given product, so that it is but a simple reproduction so far as the value of the product is concerned. It is not the quantity but the qualitative determination of the given elements of simple reproduction which is changed, and this change is the material premise of a subsequent reproduction on an extended scale.[58]
We might vary the scheme by changing the ratio between the variable and constant capital. For instance as follows:
I. 4,000c + 875v + 875s = 5,750 \
Scheme b) } Total, 8,252
II. 1,750c + 376v + 376s = 2,502 /
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tionally its elements are grouped in such a way that reproduction is resumed on the same scale, while under a) the functional grouping forms the material basis of reproduction on an extended scale. Under b) (875v + 875s) I, or 1,750 I(v+s), are exchanged without any surplus for 1,750 IIc, while under a) the exchange of (1,000v + 1,000s) I, equal to 2,000 I(v+s), for 1,500 IIc leaves a surplus of 500 Is for accumulation in class I.
Now let us analyse scheme a) more closely. Let us suppose that both I and II accumulate one half of their surplus-value, that is to say, convert it into an element of additional capital, instead of spending it as revenue. As one half of 1,000 Is, or 500, are to be accumulated in one form or another, invested as additional money-capital, i.e., converted into additional productive capital, only (1,000v + 500s) I are spent as revenue. Hence only 1,500 figures here as the normal size of IIc. We need not further examine the exchange between 1,500 I(v+s) and 1,500 IIc, because this has already been done under the head of process of simple reproduction. Nor does 4,000 Ic require any attention, since its re-arrangement for the newly commencing reproduction (which this time will occur on an extended scale) was likewise discussed as a process of simple reproduction.
The only thing that remains to be examined by us is 500 Is and (376v + 376s) II, inasmuch as it is a matter on the one hand of the internal relations of both I and II and on the other of the movement between them. Since we have assumed that in II likewise one half of the surplus-value is to be accumulated, 188 are to be converted here into capital, of which one-fourth,[*] or 47 or, to round it off, 48, are to be variable capital, so that 140 remain to be converted into constant capital.
Here we come across a new problem, whose very existence must appear strange to the current view that commodities of one kind are exchanged for commodities of another kind, or commodities for money and the same money again for commodities of another kind. The 140 IIs; can be converted into productive capital only by replacing them with commodities of Is of the same value. It is a matter of course that that portion of Is, which must be exchanged for IIs must consist of means of production, which may enter either into the production of both I and II, or exclusively into that of II. This replacement can be made feasible only by means of a one-sided purchase on the part of II, as the
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entire surplus-product of 500 Is, which we still have to examine, is to serve the purposes of accumulation within I, hence cannot be exchanged for commodities II; in other words, it cannot be simultaneously accumulated and consumed by I. Therefore II must buy 140 Is for cash without recovering this money by a subsequent sale of its commodities to I. And this is a process which is continually repeating itself in every new annual production, so far as it is reproduction on an extended scale. Where in II is the source of the money for this?
It would rather seem that II is a very unprofitable field for the formation of new money-capital which accompanies actual accumulation and necessitates it under capitalist production, and which at first actually presents itself as simple hoarding.
We have first 376 IIv. The money-capital of 376, advanced In labour-power, continually returns through the purchase of commodities II as variable capital in money-form to capitalist II. This constant repetition of departure from and return to the starting-point, the pocket of the capitalist, does not add in any way to the money roving over this circuit. This, then, is not a source of the accumulation of money. Nor can this money be withdrawn from circulation in order to form hoarded, virtually new, money-capital.
But stop! Isn't there a chance here to make a little profit?
We must not forget that class II has this advantage over class I, that its labourers have to buy back from it the commodities produced by themselves. Class II is a buyer of labour-power and at the same time a seller of the commodities to the owners of the labour-power employed by it. Class II can therefore:
1) -- and this it shares with the capitalists of class I -- simply depress wages below their normal average level. By this means a portion of the money functioning as the money-form of variable capital is released, and if this process is continually repeated, it might become a normal source of hoarding, and thus of virtually additional money-capital in class II. Of course we are not referring to a casual swindle profit here, since we are treating of a normal formation of capital. But it must not be forgotten that the normal wages actually paid (which ceteris paribus determine the magnitude of the variable capital) are not paid by the capitalists out of the goodness of their hearts, but must be paid under given relations. This eliminates the above method of explanation. If we assume that 376v is the variable capital to be laid out by class II, we have no right suddenly to sneak in the hypothesis that it may pay only 350v instead of 376v, merely to elucidate a problem that has newly arisen.
So with the 376 IIv we cannot get any nearer the goal we have mentioned.
There seem to be only two ways by which this money can be withdrawn from circulation to form virtually additional money-capital. Either one part of capitalists II cheats the other and thus robs them of their money. We know that no preliminary expansion of the circulating medium is necessary for the formation of new money-capital. All that is necessary is that the money should be withdrawn from circulation by certain parties and hoarded. It would not alter the case if this money were stolen, so that the formation of additional money-capital by one part
Or a part of IIs represented by necessities of life is directly converted into new variable capital within department II. How that is done we shall examine at the close of this chapter (under No. IV).
A. Scheme of Simple Reproduction
I. 4,000c + 1,000v + 1,000s = 6,000 \
} = 9,000.
II. 2,000c + 500v + 500s = 3,000 /
B. Initial Scheme for Reproduction on an Extended Scale
I. 4,000c + 1,000v + 1,000s = 6,000 \
} = 9,000.
II. 1,500c + 750v + 750s = 3,000 /
Let us now assume that 400 of the 500 Is, are to be converted into constant capital, and 100 into variable capital. The exchange within I of the 400s, which are thus to be capitalised, has already been discussed. They can therefore be annexed to Ic, without more ado and in that case we get for I:
II in turn buys from I for the purpose of accumulation the 100 Is, (existing in means of production) which now form additional constant capital II, while the 100 in money which it pays for them are converted into the money-form of the additional variable capital of I. We then have for I a capital of 4,400c + 1,100v (the latter in money), equalling 5,500.
II has now 1,600c for its constant capital. In order to put them to work, it must advance a further 50v in money for the purchase of new labour-power, so that its variable capital grows from 750 to 800. This expansion of the constant and variable capital of II by a total of 150 is supplied out of its surplus-value. Hence only
The 150s produced in articles of consumption, which have been converted here into (100c + 50v) II, go entirely in their bodily form for the consumption of the labourers, 100 being consumed by the labourers of I (100 Iv), and 50 by the labourers of II (50 IIv), as explained above. As a matter of fact in II, where its total product is prepared in a form suitable for accumulation, a part greater by 100 of the surplus-value in the form of necessary articles of consumption must be reproduced. If reproduction really starts on an extended scale, then the 100 of variable money-capital I flow back through the hands of its working class to II, while II transfers 100s in commodity-supply to I and at the same time 50 in commodity-supply to its own working class.
The arrangement changed for the purpose of accumulation is now as follows:
I. 4,400c + 1,100v + 500s consumption-fund = 6,600
II. 1,600c + 800v + 600s consumption-fund = 3,000
_____
Total, as before, 9,000.
I. 4,400c + 1,100v (money) = 5,500 \
} = 7,900,
II. 1,600c + 800v (money) = 2,400 /
I. 4,000c + 1,000v = 5,000 \
} = 7,250.
II. 1,500c + 700v = 2,250 /
I. 4,400c + 1,100v + 1,100s = 6,600 \
} = 9,800.
II. 1,600c + 800v + 800s = 3,200 /
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replaced, is equal to only 1,600; hence the remaining 50 must be supplemented out of 800 IIs. Leaving aside the money aspect for the present, we have as a result of this transaction:
I. 4,400c + 550s (to be capitalised); furthermore, realised in commodities IIc, the consumption-fund of the capitalists and labourers 1,650(v+s)
II. 1,650c (50 added from IIs as indicated above) + 800v + 750s (consumption-fund of the capitalists).
But if the old ratio of v:s is maintained in II, then additional 25v must be laid out for 50c, and these are to be taken from thc 750s. Then we have
II. 1,650c + 825v + 725s
I. (4,400c + 440c ) + (1,100v + 110v) = 4,840c + 1,210v = 6,050
II. (1,600c + 50c +110c ) + (800v + 25v + 55v) =
2,640
= 1,760c + 880v = ______
8,640
If reproduction is continued on this basis and conditions otherwise remain unchanged we obtain at the end of the succeeding year:
I. 4,840c + 1,210v + 1,210s = 7,260 \
} = 10,780.
II. 1,760c + 880v + 880s = 3,520 /
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half of s, or 605, a total of 1,815. This consumption-fund is again larger than IIc by 55. These 55 must be deducted from 880s, leaving 825. Furthermore, the conversion of 55 IIs into IIc implies another deduction from IIs for a corresponding variable capital of 27 1/2, leaving for consumption 797 1/2 IIs.
I has now to capitalise 605s. Of these 484 are constant and 121 variable. The last named are to be deducted from IIs, which is still equal to 797 1/2, leaving 676 1/2 IIs. II, then, converts an other 121 into constant capital and requires another variable capital of 60 1/2 for it, which likewise comes out of 676 1/2, leaving 616 for consumption.
Then we have the following capitals:
I. Constant: 4,840 + 484 = 5,324.
Variable: 1,210 + 121= 1,331.
II. Constant: 1,760 + 55 + 121= 1,936.
Variable: 880 + 27 1/2 + 60 1/2 = 968.
Totals: I. 5,324c + 1,331v = 6,655 \
} = 9,559.
II. 1,936c + 968v = 2,904 /
I. 5,324c + 1,331v + 1,331s = 7,986 \
} = 11,858.
II. 1,936c + 968v + 968s = 3,872 /
I. 5,856c + 1,464v + 1,464s = 8,784 \
} = 13,043.
II. 2,129c + 1,065v + 1,065s = 4,259 /
I. 6,442c + 1,610v + 1,610s = 9,662 \
} = 14,348.
II. 2,342c + 1,172v + 1,172s = 4,686 /
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Now take the annual product of 9,000, which is altogether a commodity-capital in the hands of the class of industrial capitalists in a form in which the general average ratio of the variable to the constant capital is that of 1:5. This presupposes a considerable development of capitalist production and accordingly of the productivity of social labour, a considerable previous increase in the scale of production, and finally a development of all the circumstances which produce a relative surplus-population among the working-class. The annual product will then be divided as follows, after rounding off the various fractions:
I. 5,000c + 1,000v + 1,000s = 7,000 \
} 9,000
II. 1,430c + 285v + 285s = 2,000 /
I. 5,000c + 500s (to be capitalised) + 1,500(v+s)
II. 1,430c + 70s (to be capitalised) + 285v + 215s
II. (1,430c + 70c) + (285v + 14v) + 201s
The exchange of 1,500 I(v+ 1/2s) for 1,500 IIc is a process of simple reproduction, and nothing further need be said about it. However a few peculiarities remain to be noted here, which arise from the fact that in accumulating reproduction I(v+ 1/2s) is not replaced solely by IIc, but by IIc plus a portion of IIs.
It goes without saying that as soon as we assume accumulation, I(v+s) is greater than IIc, not equal to IIc, as in simple reproduction. For in the first place, I incorporates a portion of its surplus-product in its own productive capital and converts five-sixths of it into constant capital, therefore cannot replace
By the by. The capitalist, as well as his press, is often dissatisfied with the way in which the labour-power spends its money and with the Gommodities II in which it realises this money. On such occasions he philosophises, babbles of culture, and dabbles in philanthropical talk, for instance after the manner of Mr. Drummond, the Secretary of the British Embassy in Washington. According to him, The Nation (a journal) carried last October 1879, an interesting article, which contained among other things the following passages: "The working-people have not kept up in culture with the growth of invention, and they have had things showered on them which they do not know how to use, and thus make no market for." [Every capitalist naturally wants the labourer to buy his commodities.] "There is no reason why the working man should not desire as many comforts as the minister, lawyer, and doctor, who is earning the same amount as himself." [This class of lawyers, ministers and doctors have indeed to be satisfied with the mere desire of many comforts!] "He does not do so, however. The problem remains, how to raise him as a consumer by rational and healthful processes, not an easy one, as his ambition does not go beyond a diminution of his hours of labour, the demagogues rather inciting
The same Drummond, whose beautiful soul is enamoured of the capitalist attempts to uplift the working-class, tells in the same report among other things of the cotton goods manufacture of the Lowell and Lawrence Mills. The boarding and lodging houses for the factory girls belong to the corporation or company owning the mills. The stewardesses of these houses are in the employ of the same company which prescribes them rules of conduct. No girl is permitted to stay out after 10 p.m. Then comes a gem: a special police patrol the grounds for the purpose of guarding against an infringement of those rules. After 10 p.m. no girl can leave or enter. No girl may live anywhere but on the premises of the company, and every house on it brings the company about 10 dollars per week in rent. And now we see the rational consumer in his full glory: "As the ever present piano is however to be found in many of the best appointed working girls' boarding houses, music, song, and dance come in for a considerable share of the operatives' attention at least among those who, after 10 hours' steady work at the looms, need more relief from monotony than actual rest." (P. 412.) But the main secret of making a rational consumer out of the labourer is yet to be told. Mr. Drummond visits the cutlery works of Turner's Falls (Connecticut River), and Mr. Oakman, the treasurer of the concern, after telling him that especially American table cutlery beat the English in quality, continues: "The time is coming that we will beat England as to prices also, we are ahead in quality now, that is acknowledged, but we must have lower prices,
Consequently, just as I has to supply the additional constant capital of II out of its surplus-product, so II likewise supplies the additional variable capital for I. II accumulates for I and for itself, so far as the variable capital is concerned, by reproducing a greater portion of its total product, and hence especially of its surplus-product, in the shape of necessary articles of consumption.
In production on the basis of increasing capital, I(v+s) must be equal to IIc plus that portion of the surplus-product which is re-incorporated as capital, plus the additional portion of constant capital required for the expansion of the production in II; and the minimum of this expansion is that without which real accumulation, i.e., a real expansion of production in I itself, is unfeasible.
Reverting now to the case which we examined last, we find in it the peculiarity that IIc is smaller than I(v+ 1/2s), than that portion of product I which is spent as revenue for articles of consumption, so that on exchanging the 1,500 I(v+s) a portion of surplus-product II, equal to 70, is at once realised. As for IIc, equal to 1,430, it must, all other conditions remaining the same, be replaced by an equal magnitude of value out of I(v+s), in order that simple reproduction may take place in II, and to that extent we need not pay any more attention to it here. It is different with the additional 70 IIs. What for I is merely a replacement of revenue by articles of consumption, merely commodity-exchange meant for consumption, is for II not a mere reconversion of its constant capital from the form of commodity-capital into its bodily form, as it is in simple reproduction, but a direct process of accumulation, a transformation of a part of its surplus-product from the form of articles of consumption into that of constant capital. If with £70 in money (money-reserve for the conversion of surplus-value) I buys the 70 IIs, and if II does not buy in exchange 70 Is, but accumulates the £70 as money-capital, then the latter is indeed always an expression of additional product (precisely of the surplus-product of II, of which
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it is an aliquot part), although this is not a product which re-enters production; but in that case this accumulation of money on the part of II would at the same time express that 70 Is, in means of production are unsaleable. There would be a relative over-production in I. corresponding to the simultaneous non-expan sion of reproduction on the part of II.
The product of 9,000 in the second illustration must, as we have seen, be distributed in the following manner for the purpose of reproduction, if 500 Is is to be capitalised. In doing so we merely consider the commodities and neglect the money circulation.
I. 5,000c + 500s (to be capitalised) + 1,500(v+s) consumption-fund equals 7,000 in commodities.
II. 1,500c + 299v + 201s equals 2,000 in commodities. Grand total, 9,000 in commodities.
Capitalisation takes place in the following manner:
In I the 500s which are being capitalised divide into five-sixths, or 417c plus one-sixth, or 83v. The 83v draw an equal amount out of IIs, which buys elements of constant capital and adds them to IIc. An increase of IIc by 83 implies an increase
of IIv by one-fifth of 83, or 17. We have, then, after this exchange
I. (5,000c + 417s)c + (1,000v + 83s)v = 5,417c + 1,083v = 6,500
II. (1,500c + 83s)c + (299v + 17s)v = 1,583c + 316v = 1,899
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Total. . . 8,399.
The capital in I has grown from 6,000 to 6,500, or by 1/12. That of II has grown from 1,715 to 1,899, or by not quite 1/9.
The reproduction on this basis in the second year brings the capital at the end of that year to
I. (5,417c + 452s)c + (1,083v + 90s)v = 5,869c + 1,173v = 7,042 II. (1,583c + 42s + 90s)c + (316v + 8s + 18s)v = 1,715c + 342v = 2,057.
And at the end of the third year, we have a product of
I. 5,869c + 1,173v + 1,173s II. 1,715c + 342v + 342s.
If I accumulates one half of its surplus-value, as before, we find that I(v+ 1/2s) yields 1,173v + 587(1/2s), equal to 1,760, more than the entire 1,715 IIc, an excess of 45. This must again be balanced by transferring an equal amount of means of production to IIc, which thus grows by 45, necessitating an addition of one-fifth, or 9, to IIv. Furthermore, the capitalised 587 Is divide into five-sixths and one-sixth, i.e., 489c and 98v. The 98 imply in II a new addition of 98 to the constant capital, and this again an increase of variable capital II by one-fifth, or 20. Then we have:
I. (5,869c + 489s)c + (1,173v + 98s)v = 6,358c + 1,271v = 7,629 II. (1,715c + 45s + 98s)c + (342v + 9s + 20s)v = 1,858c + 371v = 2,229.In three years of growing reproduction the total capital of I has increased from 6,000 to 7,629 and that of II from 1,715 to 2,229, the aggregate social capital from 7,715 to 9,858.Total capital=9,858.
In the exchange of I(v+s) for IIc we thus meet with various cases.
In simple reproduction both of them must be equal and
The premise of simple reproduction, that I(v+s) is equal to IIc, is not only incompatible with capitalist production, although this does not exclude the possibility that in an industrial cycle of 10-11 years some year may show a smaller total production than the preceding year, so that not even simple reproduction takes place compared to the preceding year. Besides that, considering the natural annual increase in population simple reproduction could take place only to the extent that a correspondingly larger number of unproductive servants would partake of the 1,500 representing the aggregate surplus-value. But accumulation of capital, real capitalist production, would be impossible under such circumstances. The fact of capitalist accumulation therefore excludes the possibility of IIc being equal to I(v+s). Nevertheless it might occur even with capitalist accumulation that in consequence of the course taken by the processes of accumulation during a preceding series of periods of
It must be noted that in this exposition of accumulation the value of the constant capital is not presented accurately so far as that capital is a part of the value of the commodity-capital it helped to produce. The fixed portion of the newly accumulated constant capital enters into the commodity-capital only gradually and periodically, according to the different natures of these fixed elements. Therefore whenever raw materials, semi-finished goods, etc., enter in huge quantities into the production of commodities, the commodity-capital consists for the most part of replacements of the circulating constant components and of the variable capital. (On account of the specific turnover of the circulating component parts this way of presenting the matter may nevertheless be adopted. It is then assumed that the circulating portion together with the portion of value of the fixed capital transferred to it is turned over so often during the year that the aggregate sum of the commodities supplied is equal in value to all the capital entering into the annual production.) But wherever
only auxiliary materials are used for mechanical industry, and no raw material, there the labour element, equal to v, must reappear in the commodity-capital as its larger constituent. While in the calculation of the rate of profit the surplus-value is figured on the total capital, regardless of whether the fixed components periodically transfer much or little value to the product, the fixed portion of constant capital is to be included in the calculation of the value of any periodically created commodity-capital only to the extent that on an average it yields value to the product on account of wear and tear.
The original source of the money for II is v+s of the gold industry I exchanged for a part of IIc. The v+s of the producer of gold does not enter into II only to the extent that he accumulates surplus-value or converts it into means of production I, i.e., to the extent that he expands his production. On the other hand, since the accumulation of money on the part of the gold producer himself leads ultimately to reproduction on an extended scale, a portion of the surplus-value of gold production not spent as revenue passes as additional variable capital of the gold producer into II, promotes here the formation of new hoards or supplies new means with which to buy from I without selling to it direct. From the money derived from this I(v+s) of the production of gold that portion of the gold must be deducted which certain branches of production II need as raw material, etc., in short as an element for the replacement of their constant capital. An element for the preliminary formation of hoards -- for the purpose of future extended reproduction -- exists in the exchange between I and II: for I only if part of Is is sold one-sidedly, without a balancing purchase, to II and serves there as additional constant capital II; for II, when the same is the case on the part of I for additional variable capital; furthermore, if a part of the surplus-value spent by I as revenue is not covered by IIs, hence a part of IIs is bought with it and thus converted into money. If I(v+(s/x)) is greater than IIc, then IIc need not for its simple reproduction replace in commodities from I what I consumed out of IIs. The question arises to what extent hoarding can take place within the sphere of exchange of capitalists II among themseives, an exchange which can consist only of a