This is the first set of notes for a reading group on Marx’s Capital, Volume II. Below are three study guides for the first chapter.
Study Guide for Karl Marx’s “Capital” Volume II (2002 Blunden)
Part I: The Metamorphoses of Capital and their Circuits
Chapter 1: - The Circuit of Money-Capital
Terms: Circuit of Capital, Commodity, Capital, Money, Production and Consumption, Metamorphosis of Capital. Labour-power, Price, Surplus Value, Means of Production, Proletariat.
Questions for discussion:
1. What does it mean to assume that commodities are sold “at their value”? Is this not a circular assumption?
2. Why does Marx say that labour cannot have a value?
3. Under what conditions is the sale of labour part of the circuit of capital, M —L?
4. Which specific features of M —L in capitalist production should be attributed to
money and which to capital?
5. Why is it necessary for commodity production to be general for wage-labour to be the dominant form of labour? And why is it impossible for money to take the form of capital outside of the circulation of commodities?
6. What is meant by money capital, productive capital and commodity capital and what is their relation to one another, and what is “industrial capital”?
7. What commodity is produced by the transportation industry? And how would you reckon the transportation commodity as part of the cost of getting a product to the market and realising its value as money? And what about a worker's cost of getting to the workplace?
(extra credit: is this a canita?)
|"The two forms assumed by capital-value at the various stages of its circulation are those of money-capital and commodity-capital. The form pertaining to the stage of production is that of productive capital." (p. 50 [p.133])
As explained in the Introduction, in the second volume of Capital, Marx changes his focus from the process of production to circulation. The first part of this second volume deals with the changes in form (or metamorphoses) of capital, changes that take place both in the sphere of circulation and in the sphere of production.
- In circulation, capital changes its form through the process of exchange, while
- in production, capital embodied in means of production and labor-power is materially transformed into new commodities.
What Marx calls the circuit of industrial capital is the totality, or unity, of changes of form taking place in circulation and in production. We shall see that the circuit of capital is, in reality, a continuous or circular process. In his analysis of the circuit of capital, however, Marx chooses to interrupt the continuous process in three distinct ways, and to consider separately the circuits of money capital, productive capital and commodity capital. As will be made clear presently, these three are the distinct forms that industrial capital assumes in the course of its circuit. The first chapter deals with the circuit of money capital.
Although Marx's approach is difficult at points, his separate consideration of the three forms of the circuit of capital serves to emphasize different aspects of the process, as we shall see shortly. More importantly, later in Volume II, Marx uses the different forms of the circuit for different analytic purposes. For instance, Marx employs the circuits of productive and money capital for his discussion of the turnover of capital in Part II, and the circuit of commodity capital for his analysis of social reproduction in Part III. In the course of his argument, Marx demonstrates how failure to distinguish among the forms of capital and among their circuits seriously compromises the analysis of other political economists.
The circuit of money capital begins with the capitalist in possession of a quantity of money, M, that is to be exchanged for the elements of productive capital. The exchange is an act of circulation, M—C: that is, the exchange of money for commodities of equal value. What distinguishes this exchange as part of the circuit of capital (as opposed to other acts of general circulation) is the particular use-values that the capitalist acquires: means of production and labor-power, which together function within the sphere of production as productive capital. Marx, therefore, diagrams the first stage in the circulation of money capital in the following manner:
M--C< LMP , where L represents the labor-power and MP the means of production purchased by the capitalist. In this act of circulation, money capital functions as money, because it serves as a means of purchase of means of production, and as a means of payment for labor-power. At the same time, money capital functions as capital because the exchange is part of the circuit of capital, in particular representing the acquisition of the elements of productive capital, which will expand their value in the process of production.
The division of money capital into a portion purchasing means of production (constant capital) and a portion purchasing labor-power (variable capital) is a qualitative division, since different use-values are acquired. It is, moreover, a qualitative division with a quantitative basis: for labor-power, once purchased, is employed as labor, and labor of a given quantity requires means of production of a particular amount to function properly in the process of production.
Each act of circulation may be regarded from the point of view of the buyer and from the perspective of the seller. From the point of view of the capitalist, M—L is an act of purchase; from the perspective of the laborer, L—M is a sale. Having acquired money (i.e., wages) through the sale of labor-power, the worker exchanges this money for means of subsistence, that is, for other commodities. The circulation of labor-power, therefore, has a circuit of its own, L—M—C, distinct from but related to the circuit of capital. The circuit of capital, moreover, presupposes the class relation between workers and capitalists, and, in particular, the existence of a class of laborers who must sell their labor-power to capital so as to acquire means of subsistence. This class relation and its origin were dealt with in detail in Volume I (Part VIII) of Capital. Marx notes, in the present context, that it is not money that creates the class division of workers and capitalists. On the contrary, it is the existence of this division that makes it possible for money to function as money capital, to purchase labor-power as a commodity.
Once the capitalist has purchased means of production and labor-power, these commodities become the elements of productive capital; that is, they are used in the process of production. The circulation of capital is therefore interrupted by production. Marx represents this interruption in the following manner:
M—CM— C< LMP . . . P; where P symbolizes capital functioning within the sphere of production.
The process of production begins with commodities of particular form, means of production and labor-power, and it ends with a commodity of another form, a product. The product embodies the value of the means of production, transferred to it during the process of production. In addition, the product contains newly created value, the embodiment of labor expended in the productive process. Because, under capitalist production, the worker produces surplus-value, value in excess of the value of labor-power, the value of the product is greater than the value of means of production and labor-power comprising productive capital.
Capitalist production is production for exchange -- its product consists of commodities. These commodities are commodity capital because they represent a phase in the circuit of capital, and, more specifically, because they contain the surplus-value yielded by the capitalist process of production. Marx writes the equation C' = C + c, where C represents the portion of commodity capital that is the value equivalent of the money capital (M) that began the circuit, and c represents the portion of commodity capital containing surplus-value.
To realize the value of commodity capital, the capitalist must transform it back into money form by selling it: C'—M'. Capital in the form of commodity capital, therefore, reenters the sphere of circulation. The symbol M' is used because the value realized by the capitalist upon the sale of commodity capital exceeds the money capital originally advanced. This is the case because commodity capital contains surplus-value. The sale of commodity capital, then, represents both the reconversion of original capital-value into money form, C—M, and the realization of surplus-value, c—m.
The complete form of the circuit of money capital may be represented as
M—C . . . P . . . C—M', or, in expanded form as
M—C< LMP . . . P . . . (C + c)—(M + m).
Note that the lines (--) symbolize acts of exchange taking place in the sphere of circulation, while the dots ( . . . ) represent the functioning of capital in the sphere of production. During the course of its circuit, industrial capital successively takes on three forms: money capital, productive capital (means of production and labor-power), and commodity capital. The transformation of money capital into productive capital, and that of commodity capital into money capital, take place in the sphere of circulation, through exchange. The conversion of productive capital into commodity capital (and the augmentation of capital-value) takes place in the sphere of production. Marx implicitly distinguishes here between industrial capital, which as productive capital participates in the process of expansion of value, and other types of capital, which have different circuits. The other types of capital (e.g., merchant's capital) are dealt with in Volume III.
The circuit of money capital ends as it began: with money. At the end of the circuit, therefore, the capitalist is in a position to purchase once more the elements of productive capital. Because the money available to the capitalist at the end of the circuit (M') contains surplus-value, the capitalist can expand the process of production, invest the additional capital elsewhere, or employ surplus-value as revenue for personal consumption. These possibilities are taken up in the next chapter and in the third part of the volume.
The continuous, or circular, nature of the circuit of capital is represented in Figure 1.
When (all or part of) M' is reinvested, the symbol M, representing the advance of money capital, is employed; that is, M' represents money capital that includes realized surplus-value, while M represents money capital advanced to purchase elements of productive capital. M' . M symbolizes this change in role.
Marx's analysis of the circuit of money capital conceptually disconnects this circle at M: M--C . . . P . . . C'--M'.
By disconnecting the process at P, Marx examines the circuit of productive capital, the subject of the next chapter: P . . . C'--M' . M--C . . . P.
Disconnecting the process at C' yields the circuit of commodity capital, treated in Chapter 3: C'--M' . M--C . . . P . . . C'.
Simon Clarke’s Guide to Capital: All Three Volumes by cominsitu
VOLUME TWO PRODUCTION AND CIRCULATION.
Volume 1 of Capital started with an examination of the commodity and of the process of exchange, before turning to the study of production as the process of production of surplus value. In volume 1, therefore, production and circulation were examined independently of one another, with circulation being treated in parentheses. In volume 2 Marx turns to the role of circulation in a capitalist society and examines the relationship between capitalist production and circulation. A lot of the discussion is detailed and technical, and we will skip. But the basic argument is fundamental to Marx’s account of capitalist society, and both modifies and complements the analysis of volume 1. Marx’s main concern is to show in a systematic and rigorous way that circulation is subordinate to production: that capitalist social relations are rooted in production rather than in circulation; that the role of circulation is to provide a mechanism that can, through the exchange of products and the operation of markets, ensure that commodities of particular types (i.e. particular use- values) are produced in the quantities and in the proportions required for the reproduction of the system. Thus the market serves to co-ordinate the different branches of capitalist production: it regulates the “social division of labour” in a capitalist society as in simple commodity production. The secondary literature on volume 2 of Capital , and especially on the “circuits” of capital, is almost non-existent. Ben Fine: Marx’s Capital, ch 7 gives a brief account, as does his article: “The Circulation of Capital, Ideology and Crisis”. CSE Bulletin, 12, Oct 1975 (was once in SRC!). The latter article indicates the importance of the analysis for Marx’s account of ideology and of crises.
Chapter 1. In the first three chapters Marx looks at the circuit of capital from three different points of view. The elements of the circuit are the same in each case, but approaching the same thing from different angles both gives a complete picture of the whole, and an understanding of the kinds of illusions to which a partial view can give rise.
The basic circuit under examination is the circuit of industrial capital. This is composed of the purchase of labour power and means of production, the act of production, and the sale of the commodities produced in a constantly repeated cycle. If we look at the cycle starting from a sum of money capital we have the circuit of money capital that is looked at in chapter 1:
M – C – L/MP………..P….. C’ – M’.
In this formula M is money-capital, C is commodity-capital (here composed of means of production and labour-power), P is productive-capital, C’ is again commodity-capital (now composed of products), M’ is again money-capital. Thus M,C,C’,M’ are various forms of capital, appropriate to various phases in the circuit of industrial capital. What Marx wants examine is these different forms of capital. What he wants to show is
i) that these different forms of capital are not inherently capital but only become capital because of their roles within the circuit as a whole. Thus neither money, nor commodities are inherently capital.
ii) that the circuit as a whole is defined as a circuit of capital because it includes within it the capitalist process of production within which surplus value is produced. Thus it is through their functional relationship to the production of surplus value that money and commodities within this circuit function as capital. Marx tries to show this by examining each form of capital in turn.
The first stage of the circuit is the purchase of commodities with money: M – C. This act is not capitalist in itself: it is a simple act of circulation. Thus there is nothing inherent within it to stamp either M or C as capital. Thus what makes this act capitalist, and M and C forms of capital, is not “the form of the act but its material content ” (24), the fact that C is made up of means of production and labour power in definite proportions appropriate for capitalist production. Thus C here takes the form of productive-capital, capital that can produce surplus-value. It is only because the original money-capital is turned into productive capital that it represents a form of canita1– In itself it performs only the functions of money – it purchases a set of commodities. Thus the initial sum of money serves as capital because of its function within the circuit, which is to buy productive capital and so to make possible the production of surplus value (26).
In the transformation of money-capital into productive-capital the status of the two purchases M – L and M – MP is different. Means of production have to be purchased in order to set the labour power to work, labour-power is purchased because it is productive of surplus value. Thus M – L is the core of the circuit, the characteristic transaction of the capitalist mode of production. (Not simply because of the existence of wage-labour; i.e. not because of the form of the transaction, but because the transaction is the prelude to the production of surplus value. It is only when the purchase of labour-power becomes the means of producing surplus value (when labour power appears characteristically as a commodity) that such a purchase converts the money involved in it into money-capital. Thus money does not become money-capital simply by virtue of employing somebody (e.g. a servant)). (28). Consequently M-L is only a phase in the circuit of capital when the class relation between capital and labour has developed (and the worker has been separated from the means of production and subsistence), and “the class relation between capitalist and wage-labourer therefore exists, is presupposed from the moment that the two face each other in the act M—L” (29) (This is very important: it means that the exchange of money for labour-power is not a relation between two individual commodity owners; thus it does not have the form of exchange analysed in volume 1. It is an exchange between individual members of two antagonistic social classes. The capitalist comes to market as a capitalist, not simply as an isolated individual, while the worker comes as a worker). It is this class relation between capital and labour that is the basis of capitalist production and so that makes possible the transformation of money into capital. (30) Thus the economic categories examined in the circuit of capital reveal on examination a definite set of social relations lying behind them, and it is these social relations that make it possible for money to act as capital (30-31). Thus the circuit of money-capital, in which money appears to generate surplus value, on examination presupposes the circuit of productive capital, within which, as we shall see, the purchase of labour-power by money is subordinate to the production of surplus value (i.e. the role of money is simply to bring together the elements for the production of surplus value) (32).
The circuit also presupposes the development of commodity production on an extensive scale (31-33): the capitalist must have money-capital to start with and this must come from the prior sale of commodities. The workers must be able to buy commodities with their wages if they are to reproduce their labour-power. Hence capitalist production is also the generalisation of commodity production. Thus the separation of the worker from his or her means of production and subsistence, which is the basis of the extensive development of commodity production, is again found to be a condition of the circuit of capital.
If we look at the stage of productive capital we see the capitalist setting means of production and labour-power to work. It is not, however, their character as means of production or labour-power that makes these factors of production into capital. It is only because of their role in the production of surplus value that they become capital. Thus labour-power is simply a commodity in the hands of the worker, only becoming capital when bought by the capitalist, while the means of production only function as capital when combined with labour-power. Hence again it is only the historically developed social relations in which the capitalist monopolises means of production and subsistence and so confronts free labour that give labour power and means of production (“productive capital’) their character of forms of capital (35).
Capitalist production finishes up with commodities. As the results of capitalist production these are the form of commodity-capital. Again there is nothing in the commodities themselves, or in their sale, that makes them capital. They are capital because of their role in the circuit of capital as the bodily form of the valorised capital: capital plus surplus value. Just as the original money-capital was a form of capital because it prefigured the process of production of surplus value, ‘so commodity capital is a form of capital because it expresses it (37). The sale of the commodities that comprise commodity capital is a realisation of the capital-value and surplus-value embodied in those commodities. While capital is in the form of commodity -capital, awaiting a seller in the market, it is not creating new value and so is not creating surplus-value. Thus the amount of surplus value a capital can `produce’ in a certain time depends on the amount of time it is tied up as commodity-capital: the more rapidly a capital can be “turned-over” the more surplus value it can produce. This introduces a determinant of the rate of surplus value other than the rate of exploitation (38).
With the sale of commodity-capital the original capital is restored to its money-form. From the point of view of the original capital the whole `circuit is simply a series of changes in form. However the transformation of commodity capital into money also represents the realisation of surplus value in the form of money for the first time.
Thus the final money-capital, M’, plays two roles:
- it restores the original capital to the money-form, and
- it realises the surplus value.
This final sum of money is again capital only because of its functional role in the circuit of capital, i.e. it is only because the commodities which are sold are the embodiment of the original capital plus the new surplus value that the sum of money their sale realises is a sum of money-capital. (40-42).
If the circuit of money-capital is looked at as a whole, in summary form, it looks as though it is the original capital that has given rise to the surplus value on its own (42-4): it appears that the surplus value is the product of the original capital, rather than deriving from the process of production. This is the irrational expression of money- capital (Irrational because money cannot breed money on its own – Marx has tried to show that it is only in its relation to the production of surplus value in the circuit of capital that the original sum of money, the productive capital, the commodity capital and the final sum of money are all forms of capital. In themselves they are only money or commodities with no miraculous powers of self-expansion) Thus the final form of money-capital, M’, contains no trace of the process of production from which it derived its character as capital (45-6).
When we examine the circuit as a whole we see that it is only the process of production that is ” a real metamorphosis of capital, as compared with the purely formal metamorphosis of circulation” (47). Within the circuit money-capital, productive-capital, commodity-capital are not independent capitals, but are different forms of industrial capital, each with a functional role to fulfil in the circuit of industrial capital. It is only as forms of industrial capital that the money and commodities in question function as capital. (48). But because capital has to pass through all these functional forms it can be blocked e.g. in the form of a hoard of money, a stock of unsold commodities, or idle labour and means of production, with the result that the production of surplus value, and so accumulation of capital, is slowed (48). This is quite normal with regard to fixed capital: a certain amount of capital is immobilised in the form of machines (51). Transport and communications, like gold production, are exceptional in that the product does not take an independent commodity form (52-5).
Before the era of capitalist production commodity-capital (merchants) and money-capital (bankers) existed as independent forms of capital. With the rise of capitalist production, and so of industrial capital in which capital is involved in the production as well as the appropriation of surplus value, money-capital and commodity-capital lose their independence and become simply functional forms of industrial capital, subordinate to it. (55)
Looking at the circuit of industrial capital from the starting point of money-capital imposes a particular perspective on the circuit:
1) It makes it clear that the purpose of production is exchange-value, and not use-value, so that the process of production appears “merely as an unavoidable intermediate link”
2) Production itself is seen as merely the means of expanding value in between two phases of circulation
3) It portrays the generation of surplus value explicitly as the basis of the circuit of capital by expressing it in the money-form (since there is no change of form between the beginning and the end of the circuit its aim can only be to increase the quantity of value).
4) This form of the circuit of capital does not include individual consumption, but only productive consumption of labour power and means of production (although it implies that the labourers are in fact consuming). Thus at the end of the circuit M’ is available for further accumulation, so the circuit expresses “simply the process of self-expansion and accumulation” (57).
Although in some respects the circuit of money-capital is “the most striking and typical form in which the circuit of industrial capital appears” (59), it is also misleading if it is treated in isolation. It gives rise to the illusion of the “monetary system”, that surplus value derives from circulation, and the illusion of the “mercantile system” that the purpose of accumulation is to accumulate money. The former illusion is dissipated when it is realised that the circuit depends on capitalist production, so points to the circuit of productive capital. The latter illusion is dissipated when it is realised that the single circuit is merely part of an endless repetition of the circuit as money-capital is thrown back in. Thus the aim is renewed accumulation, not the hoarding of money. (61).
The productivity of the notion of singularity is argued to be based on the fact that it allows us to highlight the element of individual realisation, stressing at the same time its distance from the modern conception of individuality. The “correlate” of singularity is the reciprocity, moving and unstable, between the “individual” and the “collective”, which occurs in class struggles.
Thus, singularity is a metaphor for the appearance of a process of a new nature or a transition from one process to another. We just should not mix the processes of different scales and maintain consistency between events and process of each scale. For example, the social evolution of humankind has only two singularities – the initial and the final. However, if we are able to distinguish between different subprocesses within this evolution, then we can understand phase transitions as singularities of these smaller scale subprocesses. The initial singularity of social evolution is a ‘moment’ of a new phenomenon appearance – symbolic content of consciousness. Content development is a new type of evolution. One can localize separation of symbolic evolution from biological between200,000 and 40,000 BC.
Marx Capital Volume 2 Chapter 1 (p.109 Penguin)
also at (en.wikisource.org/...)
The circuit of capital comprises three stages. As we have depicted them in Volume 1, these form the following series :
First stage: The capitalist appears on the commodity and labour markets as a buyer; his money is transformed into commodities, it goes through the act of circulation M—C.
Second stage: Productive consumption by the capitalist of the commodities purchased. He functions as capitalist producer of commodities ; his capital passes through the production process. The result: commodities of greater value than their elements of production.
Third stage: The capitalist returns to the market as a seller; his commodities are transformed into money, they pass through the act of circulation C—M.
Thus the formula for the circuit of money capital is
M—C. . . P. . . C'—M'
The dots indicate that the circulation process is interrupted, while C’ and M’ denote an increase in C and M as the result of surplus-value. In Volume 1, the first and third stages were discussed only in so far as this was necessary for the understanding of the second stage, the capitalist production process. Thus the different forms with which capital clothes itself in its different stages, alternately assuming them and casting them aside, remained uninvestigated. These will now be the immediate object of our inquiry. In order to grasp these forms in their pure state, we must first of all abstract from all aspects that have nothing to do with the change and constitution of the forms as such. We shall therefore assume here, both that commodities are sold at their values, and that the circumstances in
which this takes place do not change. We shall also ignore any changes of value that may occur in the course of the cyclical process.
The formula M—C. . . P. . . C'—M', with the result M' = M+m, contains in its form a certain deception; it bears an illusory character that derives from the existence of the advanced and valorized value in its equivalent form, in money. What is emphasized is not the valorization of the value, but the money form of this process, the fact that more value in the money form is finally withdrawn from the circulation sphere than was originally advanced to it, i.e. the increase in the mass of gold and silver belonging to the capitalist. The so-called Monetary System* is
simply the expression of the superficial form M—C—M', a movement that
proceeds exclusively in the circulation sphere, and hence can only explain the two acts (1) M—C and (2) C—M' by saying' that C in the second act is sold above its value, and therefore withdraws more money from the circulation sphere than was cast into it by its purchase. On the other hand, however, M—C. . . P. . . C'—M', when regarded as the exclusive form, is the basis for the more developed Mercantile System, in which it is not simply the circulation of commodities but also their production that appears as a necessary element.
The illusory character of M—C. . . P. . . C'— M', and the corresponding illusory significance it is given, is there as soon as this form is regarded as the sole form, not as one that flows and is constantly repeated ; i.e. as soon as it is taken not just as one of the forms of the circuit, but rather as its exclusive form. In itself, however, it refers to other forms.
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
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.
Finally, if we consider some newly invested individual capital describing for the first time the circuit M — C ... P ... C' — M', then M — C is the preparatory phase, the forerunner of the first process of production gone through by this individual capital. This phase M — C is consequently not presupposed but rather called for or necessitated by the process of production. But this applies only to this individual capital. The general form of the circuit of industrial capital is the circuit of money-capital, whenever the capitalist mode of production is taken for granted, hence in social conditions determined by capitalist production. Therefore the capitalist process of production is assumed as a pre-condition, if not in the first circuit of the money-capital of a newly invested industrial capital, then outside of it. The continuous existence of this process of production presupposes the constantly renewed circuit P ... P. Even in the first stage, M — Clmp, this premise plays a part, for this assumes on the one hand the existence of the class of wage-labourers; and then, on the other, that which is M — C, the first stage, for the buyer of means of production, is C' — M' for their seller; hence C' presupposes commodity-capital, and thus the commodities themselves as a result of capitalist production, and thereby the function of productive capital.
(p. 141-42. Capital Volume 2, Penguin)
Chapter 2 (p.143)
The circuit of productive capital has the general formula :
P. . . C'— M'— C. . .P.
It signifies the periodically repeated function of the productive capital, i.e. reproduction. In other words it signifies that its production process is a reproduction process in respect of valorization; not only does production occur, but also the periodic reproduction of surplus-value. It signifies that the function of the industrial capital that exists in its productive form does not take place once and for all, but is periodically repeated, so that the new beginning is given by the point of departure itself. A part of C' (in certain cases, in the investment branches of industrial capital) may directly re-enter, as means of production, the same
labour process from which it emerged as a commodity; all this does is circumvent the need to transform its value into real money or money tokens ; in other words the only independent expression it receives is as money of account. This part of the value does not enter the circulation process. The same holds for the part of C' that the capitalist consumes in kind, as part of the surplus product. This is however insignificant for capitalist production ; at most it comes into consideration in agriculture.
Two things about this form immediately catch the eye.
Firstly, while in the first form, M. . . M', the production process, the function of P, interrupts the circulation of money capital and appears only as mediator between its two phases M— C and C'— M', here the entire circulation process of industrial capital, its whole movement within the circulation phase, merely forms an interruption, and hence a mediation between the productive capital that opens the circuit as the first extreme and closes it in the same form as the last extreme, i.e. in the form of its new beginning. Circulation proper appears only as the
mediator of the reproduction that is periodically repeated and made
continuous through this repetition.
Secondly, the entire circulation presents itself in the opposite form from that which it possessed in the circuit of money capital. There it was M—C—M (M—C, C—M), disregarding the value determination; here, again disregarding the value determination, it is C—M—C (C—M, M—C), i.e. the form of simple commodity circulation.