This is the third set of notes for a reading group on Marx’s Capital, and includes a Volume I refresher for further reading of Volume II. There are links to earlier posts and texts that may be useful.
davidharvey.org/…
M-C-M represents the process of taking Money, turning it into a Commodity, then back into (more) Money. Money - Commodity - Money.
readingmarx.wordpress.com/… (h/t Ed George)
Volume I Chapter Five: Contradictions in the General Formula
We have now established that capital is self-valorising value. The killer question now is, established what capital does, how does it do it? Whence the ΔM? But as soon as we ask this question, problems present themselves at every turn.
- First problem: the difference between the simple circulation of commodities and the circuit of capital is only the sequence in which the two inverted acts of sale and purchase occur. How can such a simple difference of form introduce such a radical difference of content?
- Second problem: this formal difference is moreover only a subjective difference, since it is only different from the point of view of the process’s mediator, the buyer-seller; for the other two people involved it would be the same whether they were taking part in C-M-C or M-C-M.
But, as we have established, M-C-M must be M-C-M’, M-C-M+ΔM (at least in intention, and therefore in possibility). Where does the ΔM come from, and how does it arise? Since the circuit M-C-M is circulation, Marx reasons, we need to look to see where, and how, in circulation the valorisation of values occurs (and in so doing we will surely find we have solved our problems above)
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Volume I, Chapter Six: The Sale and Purchase of Labour-Power
Vulgar bourgeois political economy now dispensed with, Marx proceeds with his own argument.
He summarises: we know that M-C-M΄ exists, because people do it. We know that ΔM, the extra value with which value self-valorises itself cannot originate within the circuit of capital, within M-C-M΄. But we know that it manifests itself there (in the form of M΄, i.e. M+ΔM). Marx now effects a reduction by elimination with regard to the circuit of capital, with regard to M-C-M΄, to see exactly where surplus-value can, and does, come from. It cannot, he reasons, come from:
1. the money-form at rest, for money at rest either realises the price of a commodity or is petrified as a hoard.
2. the first act of circulation, M-C, for what is here being dealt with is an exchange of equivalents.
3. the second act of circulation, C-M΄, for the same reason.
But something curious has clearly happened between M-C and C-M΄. We are here exchanging equivalents, so, with respect to value, M-C-M΄ tells us that, on the one hand, C = M, and, on the other, C = M΄, i.e. C = M +ΔM. But how can C be exchanged as an equivalent with money for two different quantities of money? In other words, how can the commodity have two different values?
The answer is this. The two transactions, M-C and C-M΄, occur separately in time, and, between the two transactions, the value of C has augmented. Clearly, it cannot augment its value in the sphere of circulation: it must have augmented its value in its consumption. Thus, Marx concludes, we must be dealing here with ‘a commodity whose use-value possesses the peculiar property of being a source of value, whose actual consumption is therefore itself an objectification of labour, hence a creation of value.’1
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Capital Volume 2, Chapter 4,5,6
recall that we can state Marx’s larger equation
Vol II, Chapter 1, section IV. The Circuit as a Whole
In the first place this entire circuit is premised on the capitalist character of the process of production, and therefore considers this process together with the specific social conditions brought about by it as the basis. M — C = M — C<LMP; but M — L assumes the existence of the wage-labourer, and hence the means of production as part of productive capital. It assumes therefore that the process of labour and self-expansion, the process of production, is a function of capital.
In the second place, if M ... M' is repeated, the return to the money-form appears just as evanescent as the money-form in the first stage. M — C disappears to make room for P. The constantly recurrent advance in the form of money and its constant return in the form of money appear merely as fleeting moments in the circuit.
In the third place
Beginning with the second repetition of the circuit, the circuit P ... C' — M'. M — C ... P appears before the second circuit of M is completed, and all subsequent circuits may thus be considered under the form of P ... C' — M — C ... P, so that M — C, being the first phase of the first circuit, is merely the passing preparation for the constantly repeated circuit of the productive capital. And this indeed is so in the case of industrial capital invested for the first time in the form of money-capital.
On the other hand before the second circuit of P is completed, the first circuit, that of commodity-capital, C' — M'.M — C ... P ... C' (abridged C' ... C') has already been made. Thus the first form already contains the other two, and the money-form thus disappears, so far as it is not merely an expression of value but an expression of value in the equivalent form, in money.
www.marxists.org/...
like this
where each circuit is also a layer
we move in Volume II Chapter 5 from the circuits to some way of thinking about labor and surplus value:
I The circular movement of industrial capital and its cycles
Let us summarise.
We have seen the three cycles of industrial capital:
| I |
M–C … P … C′–M′ |
the cycle of money capital |
| II |
P … C′–M′–C … P |
the cycle of productive capital |
| II |
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’,
|
I
|
M–C … P … C′–M′
|
|
II
|
P … Tc … P
|
|
III
|
Tc … P (C′)
|
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Volume II Chapter Two:
Penguin Vol II Chapter 2 p.146
Penguin Vol II Chapter 2 p.150
Penguin Vol II Chapter 2 p. 166
Penguin Vol II Chapter 3 p.175
Penguin Vol II chapter 4 p.193
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Capital Volume 2, Chapter 5: Circulation Time
The passage of capital through production and the two stages of circulation occur successively in time. Let us call the time that capital spends in the sphere of production its production time, and that it spends in that of circulation time its circulation time. The total time it takes to describe its cycle is therefore production time + circulation time.
Production time
In what does production time consist? Evidently, it consists in the labour process, but we also need to take into account:
• that a part of constant capital exists in instruments of labour which serve over the course of numerous labour processes until they wear out.
• periodic interruptions (at night, for example) of the labour process interrupt the functioning of the objects of labour while not affecting their stay in the place of production.
• that the capitalist needs to hold a stock of raw and ancillary (etc.) materials to be able to manage ‘accidents of daily supply’: this stock is only consumed gradually.
Thus a capital’s production time is not the same as its ‘functioning time’. The production time of means of production consists in:
1 the time they function as means of production in the production process
2 interruptions which impede the above
3 the time they are held in reserve in function of being productive capital.
Thus we can see here a distinction between the process of production and the sphere of production.
Circulation time restricts production time and it does so in function of its duration. How does classical political economy (even that current within it that Marx denotes as ‘scientific economics’11) see the matter? Deceived by appearances, ‘the effect of the circulation process on the valorisation process of capital in general’,12 it conceives the restriction as positive because its effects are positive. In this way, it holds to the illusion of that capital possesses a mysterious power to self-valorisation independent of production and the exploitation of labour. This illusion is reinforced by:
1 the capitalist manner of calculating profit, in which in relation to capitals in different spheres of investment, in which only circulation times differ, longer circulation time, being the basis for higher price, contributes to the equalisation of profit;
2 that circulation time forms only one moment of turnover time; but this latter includes production (or reproduction) time;
3 that the conversion of commodities into variable capital is conditioned by their previous transformation into money, i.e. in the circulation process; such that accumulation arising therefrom appears due to circulation time itself.
Circulation is composed of two acts, C–M and M–C, of which, as we have seen,13 the most problematic is the former...
Circulation is as necessary for production and reproduction as production itself; but for this there is no reason to confuse the circulation agents with the production agents just as there is none to confuse the function of productive capital with those of money and commodity capital.
There is another distinction between C–M and M–C which arises from the nature of capitalist production: C–M is also C′–M′, the realisation of the surplus-value in C′. Sale is thus more important than purchase. ‘M–C is [...] a necessary act for the valorisation of the value expressed in M, but it is not a realisation of surplus-value; it is a prelude to its production, not an appendix to it.’15
The circulation of commodity capital C′–M′ is delimited by the fact that it must be realised, under pain of spoilage, within a given interval of time. The absolute limits to this time is imposed by the perishablity of the product. Use-values remain the bearers of perennial and self-valorising capital value only insofar as they are constantly renewed [...].
Their sale in their finished commodity form, i.e. their entry, mediated through sale, into productive and individual consumption, is however the constantly repeated condition for their reproduction. They must change their old use form within a certain time, and continue their existence in a new one. It is only through this constant renewal of the body that the exchange-value maintains itself.16
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