This is the second set of notes for a reading group on Marx’s Capital, and includes a Volume I refresher for further reading of Volume II.
Volume I, Chapter 4: The General Formula for Capital
Summary Chapter 4: The General Formula for Capital
Marx says that capital's starting point is with the circulation of commodities. The ultimate product of this commodity circulation is money. We see this every day, when capital enters various markets in the form of money. Marx distinguishes two kinds of circulation.
- C-M-C (commodities transformed into money which is transformed back into commodities) is the direct form of circulation. In this case we sell commodities in order to buy more, and money acts as a kind of middle-man.
- However, there is also another form, M-C-M. In this case, we buy in order to sell; money is capital. The first phase transforms money into a commodity, the second transforms a commodity into money. Ultimately, then, we exchange money for money.
Marx then compares C-M-C and M-C-M. They are similar in that both have M-C and C-M phases, involving commodities and money, and buyers and sellers.
- However, in the case of C-M-C, the final product is a use-value, and thus gets spent once and for all. There is no "reflux" of money because it is lost in exchange for the product bought.
- In M-C-M the seller gets his money back again; the money is not spent, but rather advanced. This reflux of money occurs regardless of whether a profit is made, by the nature of the process.
Use-value is the purpose of C-M-C, while exchange-value is the purpose of M-C-M.
Money is indistinguishable, and it seems absurd to exchange it for itself. It is distinguishable only in amount.
Thus, in M-C-M what really occurs is M-C-M', where M' = M + excess. This excess is called surplus-value. The original value adds to itself and converts the surplus value to capital.
For the transformation of money into capital, then, there has to be annexed surplus-value, the valorisation of value. Thus, for the larval form of the money-owner (M) to become the butterfly of the capitalist extracting surplus-value (M’), labour-power becomes the pivotal commodity (C). Value, after all, is a congealed quantity of abstract labour and its crystallisation into surplus-value, which is soaked in the exploitation of labour-time. The general formula of capital as M–C–M’ is thus the purchase (M) of the commodity of labour-power (C) and its metamorphosis into surplus-value (M’) based on the exploitation of labour-time as surplus-labour.
Value thus undergoes a “metempsychosis” or transmigration that deserts the consumed body of the labourer to occupy the newly created one of capital in the form of surplus-value. It is a transmigration between bodies that involves the materialisation of blood into capital, the vampire-like sucking of living labour by capital.
Who are the dramatis personae of capital? After exploring the fetishism of the commodity and its secret in Capital, Marx turns his attention to the presuppositions from which capital may arise. These presuppositions commence with the metamorphosis of the world of commodities (C) into money (M) that begins to define the dramatis personae of the general formula, marked by buyer and seller. However, at this stage we are still in the realm of commodities in the sphere of simple circulation, based on use-values and the satisfaction of human needs; we are, in this formula, treading the path from commodity, to money, to commodity (C–M–C). The pupation of commodities into exchange-value creates the possibility for a continuous movement of commodities as capital – of the perpetuum mobile of capital. Here the obvious and trivial “thing” of a fetishised commodity becomes defined by its social relations and the mass of socially necessary labour time needed to produce it, which is then exchanged through the universal equivalent of money.
It is a world where the money-owner now strides out as the capitalist and the possessor of labour-power is the active agent of the worker. The sycophant of capital is “vulgar” political economy and the defence of private property the first negation of common interests. The struggle-driven process for the re-establishment of property on the basis of cooperation and the possession of land in common is the negation of that negation. It is a process still in motion, an alternative perpetuum mobile of class struggle.
In this chapter, Marx consolidates and partially extends the argument of the previous three chapters. He begins by noting that the circuit of capital represents the unity of circulation and production, but not this unity alone. The circuit of industrial capital represents in addition the unity of the three forms of capital and of their circuits.
We have already seen that the circuit of capital takes place partially in the sphere of circulation (where money is exchanged for the elements of productive capital, and where commodity capital is exchanged for money), and partially in the sphere of production (where productive capital functions to create commodity capital). The totality of an industrial capital is, however, at any given moment partially in all three forms: part in money form, ready to be exchanged for labor-power and means of production; part as functioning productive capital; and part as commodity products to be placed on the market.
Moreover, the circuit of capital is a process that unfolds over time. Marx argues that this dynamic aspect of capitalism is crucial to an understanding of the nature of capitalist society. As a formal matter, the idea of expansion of value during the circuit of capital (as a consequence of the production of surplus-value) implies a comparison over time: comparison of the value of advanced capital with the value of the product. Here Marx invokes the distinction between value (embodied labor time) and exchange-value (the manifestation of value in the proportions in which commodities exchange for one another on the market) to refute the misconception that non-contemporaneous comparisons of value are impossible. While it is indeed the case that advanced capital and the commodity product cannot exchange for one another, because they exist at different points in time, it is still sensible to compare their values. Indeed, changes in value of specific commodities that occur during the circuit of capital (as a consequence, e.g., of changes in productivity or in other conditions of production) can cause the process of reproduction to function abnormally. For example, if the value of means of production falls after the capitalist has purchased them, the value of the commodity product is depreciated.
I The circular movement of industrial capital and its cycles
Let us summarise.
We have seen the three cycles of industrial capital:
||M–C … P … C′–M′
|| the cycle of money capital
||P … C′–M′–C … P
|| the cycle of productive capital
||C′–M′–C … P … C′
|| the cycle of commodity capital
The overall movement can be described like this:
M–C … P … C′–M′ . M–C … P … C′–M′ . M–C … P … etc.
The three cycles can also be represented like this, with Tc standing for ‘total circulation process’,
M–C … P … C′–M′
P … Tc … P
Tc … P (C′)
Marx did indeed start volume 1 with value in exchange, which does indeed imply the two commodities compared being simultaneous. But the movement of capitalist production involves comparison and commensuration of commodities at different times.
“Capital… can only be grasped as a movement, and not as a static thing. Those who consider the autonomisation of value as a mere abstraction forget that the movement of industrial capital is this abstraction in action… [The] sequence of metamorphoses of capital in process implies the continuous comparison of the change of value brought about in the circuit with the original value of the capital… Value functions as… capital only in so far as it remains identical with itself and is compared with itself in the different phases of its circuit, which are in no way ‘contemporary’, but rather occur in succession” [185-6].
I don’t know that Marx’s discussion here brings any light to the problem of modern economic accounting in trying to separate out “real growth” from “nominal growth” – chain indices and so on. It focuses rather on indicating that this is a real problem. There is a difference between the mere growth of prices due to inflation, and the growth of underlying values due to accumulation.
In these pages Marx adds comments about what happens if one of his six simplifying assumptions falls down, i.e. if there are revolutions in value. “The process takes place quite normally only if value relations remain constant” , but of course they don’t.
Thus “the greater the money capital that the industrial capital must possess [or be able to cash in or borrow at short notice: in some industries capitalists can operate with quite small amounts of actual cash on hand] in order to ride out the period of readjustment… this circumstance is added to the other circumstances which increasingly turn the function of industrial capitalist into a monopoly of large-scale money capitalists, either individual or associated” .
Commodity inputs for production can be got from pre-capitalist production . “To this extent the capitalist mode of production is conditioned by modes of production lying outside its own stage of development. Its tendency, however, is to transform all possible production into commodity production… and developed commodity production [though beware: a lot here hinges on the word “developed”] is itself capitalist commodity production. The intervention of industrial capital everywhere promotes this transformation, and with it too [what is essential for the commodity production to be “developed”] the transformation of all immediate producers into wage-labourers” .
Marx introduces merchant capital. “As the capitalist mode of production presupposes production on a large scale [and continuously, without waiting for each batch of products to be sold one by one], so it also necessarily presupposes large-scale sale: sale to the merchant, not to the individual consumer” .
Credit economy grows out of money economy as capitalist production develops . (Marx does not come back to this until volume 3).
But Marx emphasizes that money economy is not necessarily capitalist economy. It is so only when labour-power becomes a commodity on a large scale.
Grimes (the experimental musician also known as C, and possibly soon, Clair de Lune)…
...Grimes may have pranked the paparazzi who were following her around after her recent breakup with Elon Musk.
On Friday, the 33-year-old singer was snapped posing with a copy of Karl Marx’s The Communist Manifesto while walking down the street in an El Lay residential neighborhood. You can take a look at the images published by The New York Post HERE. Of course, the strange pictures soon went viral on social media at the time.
However, it turns out there may have been more to the story behind those snapshots. On Saturday, Grimes admitted on Twitter that she stage the photos of herself reading Karl Marx after photographers kept hounding her, explaining:
“Paparazzi followed me 2 a shoot so I tried 2 think what I could do that would yield the most onion-ish possible headline and it worked haha. This whole thing is so funny I think my publicist is stressed, I should probably stop impulsively doing controversial things, my friend just had the book and the photogs were outside. I’ll prob regret this later hahaha.”
Grimes then added on Instagram that she “was really stressed when paparazzi wouldn’t stop following me this wk but then I realized it was opportunity to troll” and clarified that she’s “not a communist,” saying:
“Full disclosure I’m still living with e and I am not a communist (although there are some very smart ideas in this book -but personally I’m more interested in a radical decentralized ubi that I think could potentially be achieved thru crypto and gaming but I haven’t ironed that idea out enough yet to explain it. Regardless my opinions on politics are difficult to describe because the political systems that inspire me the most have not yet been implemented).”
Concluding her lengthy message, the Entropy performer expressed that she is also open to more suggestions on ways to troll the paps in the future:
“Anyway if paparazzi keep chasing me perhaps I will try to think of more ways to meme – suggestions welcome!”
We guess everyone has different ways of dealing with a breakup…