## Part One: Commodities and Money

### Chapter 1: The Commodity

124:1 The wealth of societies in which the capitalist mode of production prevails appears as an ‘immense collection of commodities’; the individual commodity appears as its elementary form. Our investigation therefore begins with the analysis of the commodity.

The object of the critique of political economy is the systematic development of what the wealth is in a capitalist societies — the elementary form in which this wealth appears is the commodity.

#### The Two Factors of the Commodity: Use-Value and Value

A commodity is a thing that is produced for exchange. It is use-value and value.

It is use-value because it has the physical properties to satisfy human needs. As a use-value it is particular and different from other things.

It is value as a bit of social wealth as such which is exchangeable against any other commodity. Different commodities are equated, not in only theory but in practice. The expression of this general quality to be exchangeable as a bit of social wealth expresses itself as exchangeability against a particular other commodity. This expression of value is exchange value.

A commodity is value because human labour is needed to produce it which then is used as lever to gain access other products of labour.

#### The Dual Character of the Labour Embodied in Commodities

What counts is not that labour produced a particular useful thing – concrete labour – but that labour is effort. Labour is reduced to abstract labour. The substance of value is congealed abstract human labour.

Labour is measured in time and value is measured in labour-time. Any commodity counts only as a representative of all commodities of a certain kind due to generalised exchange. The magnitude of value is not individual labour-time, but socially necessary labour-time.

Commodity production presupposes a division of labour and develops it. But the division of labour does not presuppose commodity production.

For it to take full effect that the magnitude of value is socially necessary labour-time, it is presupposed that producers switch branches of industry when this allows them to get more value for their products. Some branches of industry are not that easy to switch into, they are to some extent exempt from the law of value: in these branches of industry complicated labour is performed (as opposed to simple labour). The labour there counts as multiplied labour of other branches of industry.

The productivity of labour measures how many use-values per labour time are produced; it is a determination of concrete labour. Increasing productivity on a social level has no effect on the amount of value produced in, say, one hour. Instead, the same value is distributed over more products. However, since socially necessary labour-time determines value, any commodity producer producing faster than average stands to gain: she can demand the equivalent of, say, 1 hour worth of abstract labour for, say, ½ labour-time actually expended (assuming simple labour). On the one hand, more labour means more value. On the other hand, less labour relative to other producers means more value per labour time expended.

#### The Value-Form, or Exchange-Value

Value is a quality of the commodity, but it is a social quality: power of access to social wealth. Before this quality can be activated it must be expressed. Commodities must express their value-being – they are not only themselves but a claim to social wealth. They must express this in a way which is unified, so that they all make the same claim towards each other.

They express this by declaring one commodity to be value pure and simple and by declaring themselves to be equal to that commodity: money. This also means that they deny their own immediate value being and they have to proof that they are indeed money-equal. In their attempt to express their own value-being, commodities confront themselves with money which immediately counts as value.

#### The Fetishism of the Commodity and Its Secret

While people collectively bring about the social relations of commodity production and exchange, they are not aware of this, they do not do this consciously — insofar as they are only interested in their practical success in this economy. Rather, the social relations of their labours appear to them as relations of things and they relate to these objective forms. In the price of commodities producers see how much social wealth their own labour commands. The latter fact does not appear directly, but indirectly in the relation between commodities. In this society the social relations of labour of producers is expressed as social relations between their products. Their own products of labour confront them as having power over them, but this is an expression of their own social relations: fetish. This does not follow from the division of labour but from the particular mode of production: private production for exchange.

### Chapter 2: The Process of Exchange

Commodity owners relate to each other through their objects and are subject to the economic laws governing their commodities. They are determined as character masks of their commodities.

The process of exchange presupposes that the exchangers respect each others private property and each other as proprietors of this property. They must acknowledge each other as free and equal persons – a status guaranteed by the state. Their power over each other is only the power of their commodities.

Commodity owners cannot cooperatively agree on a money as for each of them their own commodities count as immediately value and other commodities as particular use-values. The state fixes a money.

### Chapter 3: Money, or the Circulation of Commodities

#### The Measure of Values

In the price form a commodity claims to be money equal. This is the first function of the money commodity: to stand in ideally so that commodities can express their value – they are not only some particular concrete material wealth but also a part of and claim to total social wealth. The money commodity acts as measure of value because it is value. It acts as the standard of prices because it as a use-value can be measured and subdivided (length, volume, weight). No real money has to be at hand for a commodity to express its value in a price. However, the price form is a claim of a commodity to be value by being money equal. All commodities must prove they are as good as money, they must — at any cost: deviation of price from value — become money. The purpose of a commodity is to exchange for money.

Because money now counts as the ultimate and immediate economic power, anything becomes available for sale, regardless of whether it has value or not.

#### The Means of Circulation

To be consumed a commodity must first be sold. Firstly, the body of a commodity is only useful in the hands of someone else (production for exchange). Secondly, the producer can only consume it, after it has been exchanged for money and back into a commodity. For a commodity to be sold it must not only meet demand but demand backed by money. A commodity must perform the change of form commodity-money-commodity: $C-M-C$. The metamorphosis of a commodity splits into two parts which are separate but belong together: selling and buying. This constitutes the abstract possibility of crisis.

Selling is the point when a commodity proves that it is value. It is the commodity’s “salto mortale” as the commodity either lands on its feet (realises its value) or dies (is thrown away).

A commodity drops out of circulation when it is consumed. Money, on the other hand, does not drop out: circulation of money. In this circulation money is always only a fleeing moment, the point is not to hold on to, but to pass it on to complete the metamorphosis with $M-C$. In this function money can be replaced by a symbol of value: a coin.

#### Money

So far all money functions did not require actual money to be involved. With money as money it is not sufficient any more to be only ideally present (measure of value) or to be represented by a symbol (means of circulation). Actual money is required.

The first act of circulation – $C-M$ – is the hard part, money is the ultimate means to gain access to anything in society, everything else is such only provisionally, in a society where producers deny each other the means to satisfy their needs. The desire and need arises for money. The hoarder satisfies this need by sale without purchase — sale to aquire money. Qualitatively, money is exchangable for anything and not limited, but quantitatively any sum of money is limited; the hoarder’s drive for money is boundless. Sale without purchase means that the hoarder pursues her interest by not engaging in consumption, she becomes richer by denying herself consumption – she does not really get richer. Money’s power is to access social wealth on the market, but the hoarder withholds it from circulation.

The present absence of money ought not to hinder business. Commodity owners may replace actual payment of money with promises of payment (which again may circulate). The money used to pay out such a promise of payment is a means of payment: it does not circulate commodities but satisfies a demand of payment. In the end only very little actual money may change hands because opposing demands may cancel each other out. However, when the process does not run smoothly (crisis), hard cash is demanded.

On the world market where money represents truly abstract wealth and where money is world money actual gold is required to settle accounts. No coin or promise suffices.

## Part Two: The Transformation of Money into Capital

### Chapter 4: The General Formula for Capital

The form of simple commodity circulation is $C-M-C$. The form of capital is money-commodity-money ($M-C-M$): value is the expressed purpose. This form would be a mere tautology if $M$ at the beginning was the same as at the end. The only sensible movement is $M-C-M’$ money becoming more money, value generating surplus-value. Still, the beginning and the end is the same: money. This was not the case with $C-M-C$ where the first and last commodity were different. In itself $M-C-M’$ has no limit and is endless. The bearer of the movement $M-C-M’$ is a capitalist and $M-C-M’$ the general formula of capital.

### Chapter 5: Contradictions in the General Formula

$M-C-M’$ seems to fly in the face of the laws of commodity exchange where equal exchanges for equal. $M’ = M + m$ cannot come from circulation. At the same time, a commodity producer can produce value on her own, but she cannot produce surplus-value $m$. That is, if $M$ is ought to be reason for $M’$ then this reason cannot be separated from circulation.

### Chapter 6: The Sale and Purchase of Labour-Power

The apparent contradiction is resolved by the purchase of a special commodity: labour-power. Labour-power, the ability to work, can be bought on the market. The value of this commodity is determined by the amount of socially-necessary labour to reproduce it, like for other commodities. However, unlike other commodities the standard of reproduction of proletarians, and therewith the value of labour-power, is flexible and established in society (“moral element”), e.g. through class struggle. Once labour-power is bought it can made to produce more value than is needed to reproduce it. The use-value of labour-power is that it can create value. The riddle of surplus-value is solved. A money owner must find free workers on the market. Free in a double sense: free to sell their labour-power and free from the means of production which compels them to sell their labour-power.

Capital is hence confronted with the determinations of the labour process.

## Part Three: The Production of Absolute Surplus-Value

### Chapter 7: The Labour Process and the Valorization Process

Labour is the purposeful interaction with nature. The labour process uses tools and material. It applies the laws of nature (physics etc.) to accomplish its purpose. Tools and material are consumed in the production process. These are the conditions dictated to capital and cannot change. Under the rule of capital there are two modifications: command of the capitalist and separation of the product of labour from the immediate producer. Under the rule of capital labour is a moment of capital in production.

The labour process only exists under the rule of capital if it is also valorisation process. Production must result in commodities which contain more value than was expended on production. The value of those commodities is a combination of the value of the means of production used up during their production and the new value created by labour during production.

304:1 The production process, considered as the unity of the labour process and the process of creating value, is the process of production of commodities; considered as the unity of the labour process and the process of valorization, it is the capitalist process of production, or the capitalist form of the production of commodities.

### Chapter 8: Constant Capital and Variable Capital

The moments of the labour process differ in how they appear in the valorisation process.

The means of production (tools and material) are constant capital: $c$. They do not create new value. They are not variable but constant magnitudes as their value is simply transferred. How? The concrete side of labour transforms material into a finished product and transfers its value. It is a gratis service of labour that it transfers and therewith preserves value.

Labour-power once it is bought by capital is variable capital: $v$. The amount of value it produces is variable and not dependent on its value itself. Its value is not transferred but reproduced. It is the part of capital that produces surplus-value.

### Chapter 9: The Rate of Surplus-Value

The movement $M-C-M’$ depends on the expansion that $v$ can accomplish. The rate of surplus-value is the effectiveness of variable capital in producing a surplus. It is given by surplus-value/variable-capital = $s/v$. Constant capital $c$ does not influence the amount of surplus-value $s$, except to provide the necessary conditions. Increasing the ratio $s/v$ is not the standpoint of capitalists. But the rate of surplus-value expresses the source of surplus-value and its effectiveness.

The time during which the worker only produces an equivalent of the value of her labour-power is called necessary labour-time. The time during which she produces surplus-value is called surplus labour-time. The rate of surplus-value also expresses the rate of exploitation of labour-power and is equally expressed as (surplus labour-time)/(necessary labour-time). The sum of necessary labour-time and surplus labour-time is the absolute extent of labour-time, i.e. the working day.

### Chapter 10: The Working Day

The rate of surplus-value is expressed by the ratio of surplus labour-time to necessary labour-time. For a given necessary labour-time capital can improve the ratio by extending the working day. The working day is not a fixed quantity, only necessary labour-time is — for now — fixed. The working day is bounded above by a physical limit when workers cannot be sufficiently reproduced to do their job and by class struggle (“moral obstacles”). Capital demands to maximise the utilisation of the commodity it purchased, workers demand that they can use their commodity — labour-power — as a means of living. From the laws of commodity exchange no given extent of the working day follows.

Through class struggle the state is informed that capital’s hunger for surplus labour is destroying the basis of its own valorisation. The state intervenes and establishes a normal working day — a normal standard of exploitation. This restriction on exploitation in the interest of its continuation must be enforced against capital. The state also reflects that this restriction is for capital by allowing exceptions.

Capital not only has an interest in extending the working day per worker but also in keeping production going all night and day. The preservation and utilisation of constant capital is here the main incentive: the shift system.

### Chapter 11: The Rate and Mass of Surplus-Value

1. The mass of surplus-value $S$ is given by $S = V · s/v$ where $s$ is the surplus-value supplied by a single worker per day, $v$ is the value of her labour-power and $V$ is the total expenditure on variable capital. As $s’=s/v$ and $V$ determine the mass of surplus-value, a drop in one can be compensated by an increase in the other.

2. However, the absolute length of the day — i.e. that it only has 24 hours — puts a limit on compensating a reduction of variable capital by an increased rate of surplus-value.

3. The mass of surplus-value produced by different capitals — if the value of labour-power is given and the rate of exploitation constant — differs directly as their outlay in variable capital $V$.

This means that the amount of workers employed (resp. in society) represents a limit for surplus-value $S$ for a given capital (resp. overall).

## Part Four: The Production of Relative Surplus-Value

### Chapter 12: The Concept of Relative Surplus-Value

Improving the rate of surplus-value by lengthening the working day is the production of absolute surplus-value. The production of absolute surplus-value has its limits in the length of the day and the amount of workers employed or in society.

If the length of the working day is constant, then the rate of surplus-value can only be improved by shortening necessary labour-time. This is the production of relative surplus-value.

Necessary labour-time is shortened by improving the productivity of labour in those branches of industry for those products which (eventually) end up as necessary means of subsistence for workers. If the necessary means of subsistence can be produced more cheaply, necessary labour-time drops. Capital uses its command over the labour process to restructure it with the effect of a reduction in necessary labour-time.

This result is attained not by a conscious plan by capitalists to reduce necessary labour-time on a social level but by their attempts to increase the productivity of labour in their own factories. Since socially necessary labour-time determines value, anyone producing faster than average stands to gain extra. For them individually the ration $s/v$ is improved. This is an incentive for capitalists to increase productivity. Eventually competitors will catch up or perish. In any case, the result is that the new level of productivity becomes generalised and the value of the produced products drops. If these products belong to the necessary means of subsistence, then this reduces the value of labour-power — improving the ratio $s/v$ in general.

The purpose of reducing the required time to produce a given item is not to save labour-time, but to save necessary labour-time in order to increase surplus labour-time. Labour saving technologies do not result in a reduction of work.

### Chapter 13: Co-operation

It is a condition for capital that it employs several workers at the same time. This allows for the first method of relative surplus-value production: cooperation.

1. Employing many workers emancipates capital from the limitations of individual workers and — if a certain size is reached — their difference average out.

2. Employing many workers allows for a more economic use of constant capital $c$, less outlay to put the same amount of workers in motion. Reducing outlay in $c$ might also reduce the value of labour-power if we are considering branches of industries whose products somehow enter the means of subsistence for workers. Economy of constant capital is picked up again Volume 3.

3. Capital can also exploit gains in productivity which result from social labour and cooperation: more people work and can accomplish more, they educate each other, they motivate each other.

Capitalist cooperation is not mere cooperation as required by the use-value being produced, say, a pyramid which can only be produced by many people. Instead, capital employs cooperation as a general technique to improve the productivity of labour.

The benefits of cooperation entail a certain size of capital which is bigger than the formal minimal capital based on mere absolute surplus-value production. A certain number of workers is needed and these workers need a certain amount of means of production.

The workers who cooperate are not the subjects of their cooperation. It is only capital which brings them together and impose cooperation on them. Capital must supervise this cooperation and assert it against individual workers. This requires a new strata of workers who exercise this control and supervision.

Cooperation is the logically first method of production of relative surplus-value, all other methods rely on cooperation.

### Chapter 14: The Division of Labour and Manufacture

Capital transcends its dependency on the quality of labour-powers working independently side-by-side by restructuring their activity in accordance with their function. Their activities become proper partial operations in manufacture.

The specialisation attained in manufacture allow capital to reshape labour processes and tools.

1. Specialisation improves performance but at the same time is monotonous for the worker. Productivity increases to the detriment of the specialised worker.

2. Tools are specialised in accordance with their new narrower task. Productivity increases through monotonous specialisation becomes a quality of the tools.

The various degrees of skill required produce a division of labour in manufacture and with it a hierarchy of jobs. At the same time a category of unskilled labour is produced, which allows to reduce $v$. In any case: less training costs and qualification required by simplification and narrowing of labour.

Manufacture increases the minimal size required for capital as its methods require a certain size to be applied.

In the first step the worker had to sell her labour-power because she lacked the means of production. Now, she has to sell her labour-power because her labour is so narrowed and emptied that it could not be usefully expended except as part of social production process which — in this society — capital brings together.

Yet, in manufacture capital remains dependent on the skill of its workers. However, manufacture creates the technical basis for large scale machinery which overcomes this obstacle.

### Chapter 15: Machinery and Large-Scale Industry

#### The Development of Machinery

With the use of big machinery capital emancipates itself from the limits of individual skill and the human body. Tools are revolutionised and turn into a modern system of machinery where human “hands” only support it. The conditions and form of labour is dictated to the worker by the objective existence in the machinery. The tool dictates the worker how to work — the machine applies the worker.

The machine replaces the worker who operates single tools, replacement of human body strength by the application of forces of nature.

The purpose of this operation is not a more pleasant production process or more free time due to increases in productivity. The purpose is to reduce necessary labour-time in order to increase surplus labour-time.

#### The Value Transferred by the Machinery to the Product

The results of science cost nothing once they are attained. But to use them the appropriate means of production are required. Their value increases the value of the product because their value is transferred. Yet, the purpose is to make these products cheaper. The individual machine might cost more, so the minimal size of capital increases. However, because the machine is more productive its value spreads across more products. There is less $c$ contribution for each individual product.

Furthermore, as the productivity of making machines increases their value drops, they become cheaper.

The part of value which is transferred from the means of production to the final product increases relatively to $v$ but drops absolutely (the product becomes cheaper).

Machinery is only employed to replace living necessary labour. It is only worthwhile to capital when it is cheaper to buy the machine than to pay workers. The conditions for applying labour saving techniques are narrower than in a mode of production where production is for use-values. A machine is not used if it only saves labour absolutely, but only when it saves $v$.

#### The Most Immediate Effects of Machine Production on the Worker

1. Previous requirements on workers become obsolete which opens the door to hire new groups of workers previously not available to capital (women, children). This leads to more competition on the labour market and for each family more members must now work in order to survive. Previously, one wage had to suffice for family, now 2+ wages are required to do the same.

2. Big machinery creates new motives for the extension of the working day. A machine decays when it is used and when it is not used → incentive to use it all the time. As the productivity of labour used to produce the machine increases, it looses value (moral depreciation). As productivity gains generalise a capitalist individual advantage in applying a certain machine diminishes and the rate of surplus-value drops. Capital counters this by extending the working day (in anticipation and in reaction). Also there is an incentive to use up a machine as quickly as possible (shift system)

3. Capitalist application of machines produces surplus population who are made redundant due to the improved productivity of labour. They compete for the remaining jobs which pushes down outlay in $v$ (cf. Chapter 25).

4. Capital responds to the legal limit on the working day by mandating more intense labour, more labour in the same time. Since capital controls the production process in the form of its objective conditions it has the means accomplish this.

The machine becomes the means to get more labour out of workers.

#### The Factory

The factory replaces the fixation of one special operation (manufacture) with universal applicability, interchangeability. Skill is extinguished, the machine applies the worker who only needs to be able to endure that. Complete separation of knowledge about the production process (intellectual labour) and the immediate producers (manual labour).

This also creates a small strata of specialised workers who supervise workers and machines.

#### The Struggle between Worker and Machine

The effect of capitalist application of machinery is detrimental to workers. The machine makes workers redundant, which is not a reason to rejoice but means greater poverty for those workers. The machine appears as the opponent of the worker.

#### The Revolutionary Impact of Large-Scale Industry on Manufacture, Handicrafts and Domestic Industry

To compete against superior productivity of large-scale industry manufacture, handicraft and domestic industries extend and intensify the working day of their workers. Only when this reaches a limit, those methods of production are abandoned. When cheaper workers become available then these outdated methods of production might become worthwhile again and sweatshops are set up again.

#### The Health and Education Causes of the Factory Acts

Even basic rules about hygiene and health have to be enforced against the agents of production. This says everything necessary about this mode of production.

#### Large-Scale Industry and Agriculture

Large scale machinery revolutionises agriculture, no more farmers but rural wage labourers.

637:1 Capitalist production, therefore, only develops the techniques and the degree of combination of the social process of production by simultaneously undermining the original sources of all wealth - the soil and the worker.

## Part Five: The Production of Absolute and Relative Surplus-Value

### Chapter 16: Absolute and Relative Surplus-Value

In Chapter 7 the concept of productive labour was initially defined as purposeful interaction with nature. Under the capitalist mode of production this concept changes. It becomes wider because functions which were previously functions of the same labourer now become distributed across various labourers. To be productive it now suffices to be an organ for the collective labourer. For example, a worker exclusively coordinating the production process is a productive labourer.

At the same time, the concept becomes narrower. Not only must the producer produce value (first narrowing) but also surplus-value. Only that labour which produces surplus-value is productive for capital. Which labour is productive is determined by the purpose of capital.

The first method of production of surplus-value is the production of absolute surplus-value: the extension of the working day. Here, capital does not restructure the labour process: formal subsumption. It implements a time relation in production which is divided into necessary and surplus labour.

This is the starting point and premise of the production of relative surplus-value production where capital uses its command over the labour process to restructure it according to its needs: real subsumption. The previously established time relation is improved by reducing necessary labour-time and thus increasing surplus labour-time.

### Chapter 17: Changes of Magnitude in the Price of Labour-Power and in Surplus-Value

Assuming that commodities are sold at value and that labour-power never sells below its value, we have three determinants for the relative magnitudes of surplus-value and price of labour-power.

1. the length of the working day,

2. the normal intensity of labour, and

3. the productivity of labour.

These are levers for capital to diminish the value of labour power relatively to surplus-value. The combination of these levers allows capital to deal with the limits of all these levers on their own.

### Chapter 18: Different Formulae for the Rate of Surplus-Value

The correct formula for the rate of surplus-value is

(I) $\frac{\mbox{surplus-value}}{\mbox{variable capital}} = \frac{\mbox{surplus-value}}{\mbox{value of labour-power}} = \frac{\mbox{surplus labour}}{\mbox{necessary labour}}$

which relates surplus-value to its source (in value terms and in time terms). Another formula is

(II) $\frac{\mbox{surplus labour}}{\mbox{working day}} = \frac{\mbox{surplus-value}}{\mbox{value of the product}} = \frac{\mbox{surplus product}}{\mbox{total product}}.$

This formula is not sound as it has no relation to how surplus-value is actually produced. Instead, it relates it to the total product and implies a sharing of the proceeds of joint production among capital and labour (piece of the pie).

The formula

(III) $\frac{\mbox{unpaid labour}}{\mbox{paid labour}}$

is a synonym for the first formula but invites the confusion that labour and not labour-power is bought. But it is not mere ideology, as this expresses why workers are hired: to produce a surplus.

672:1 The secret of the self-valorization of capital resolves itself into the fact that it has at its disposal a definite quantity of the unpaid labour of other people.

## Part Six: Wages

### Chapter 19: The Transformation of the Value (and Respectively the Price) of Labour-Power into Wages

The wage form expresses the value of labour-power as a price of labour. This expression is irrational as labour has no value and it is labour-power which is bought.

However, it is not a mere false idea. Since the production of surplus-value is the purpose of the capitalist production process, the worker’s labour-power is bought in order to put her to work long enough to realise a surplus-value $s$. The wage is the form in which the purchase of labour power and the purpose of this purchase are consolidated. Capital buys labour-power to put it to work for a certain amount of time. The form of payment expresses the truth that necessary labour is conditioned on surplus labour under the rule of capital, not the other way around.

Time and intensity are the two determinations which characterise the magnitude of value produced by labour. Each wage form is a reflection on these determinants.

### Chapter 20: Time-Wages

The price of labour for an hour is calculated as

$\mbox{price of 1 hour} = \frac{\mbox{working day}}{\mbox{value of labour-power}}.$

But this is not merely an arithmetic operation. The production of surplus-value necessitates that a worker produces longer than needed to reproduce her labour-power. Time-wages implement this interest of capital in the worker. A worker is only paid the full value of labour-power if she produced not only the value equivalent of her labour-power but also surplus-value.

Now if capital employs a worker for less than a full day (short-time work), a worker is not able to reproduce herself, as she is not paid the value of her labour-power, but that is not immediately capital’s problem. It is irrelevant here if she worked more or less than necessary labour-time, as payment is attached to the full working day which includes both necessary and surplus labour-time.

Capital pays extra for overtime to compensate for the additional devastation of such long hours. Due to a low hourly wage workers develop an interest in overtime. Overtime becomes the new norm, the same workers work longer, more competition on the labour market and ability of capital to supress wages further; increased interest of workers in overtime …

### Chapter 21: Piece-Wages

The price of labour per piece produced is calculated as:

$\mbox{price per piece} = \frac{\mbox{price per hour}}{\mbox{pieces per hour}}.$

Again, this is not merely an arithmetic operation. With piece wages the interest of capital in high intensity of labour is implanted in the worker: work fast and concentrated to earn more. As workers therewith increase intensity, they provide capital with the means to lower the piece wage: the new level of intensity becomes the norm and workers still only get paid the value of their labour-power.

This wage form does away with many otherwise necessary forms of supervision, but it necessitates quality control, where workers are only paid for products of sufficient quality.

### Chapter 22: National Differences in Wages

Real wage levels may vary from country to country. What is considered a normal level of reproduction on one country may be considered beyond this level in another. The production of the means of subsistence might be cheaper in one country than another (agriculture and its reliance on climate, quality of the soil, etc.).

Yet, the production of surplus-value does not rely on absolute wage levels, but on the rate of surplus-value. This rate might be lower in a country with a low wage level and vice versa. Capital does not require absolutely low wages, it presupposes the rate of surplus-value.

## Part Seven: The Process of Accumulation of Capital

### Chapter 23: Simple Reproduction

Whatever the social form of production it must be continuous. Every social process of production is also a process of reproduction which reproduces its premises.

Capital must reproduce constant and variable capital. A part of the yearly product belongs to production and exits in a use-values which are designated for use in production (machines etc.). A part of the product of the product must exist in a natural form in which it can function as means of subsistence of workers (food, clothes, etc.).

If capitalists do not reinvest their surplus-value but merely consume it by spending it on means of subsistence and luxury articles, then simple reproduction takes place. Capital produces and reproduces its component parts. It also periodically produces surplus-value which is consumed by the capitalist and which therefore assumes the form of revenue arising out of capital.

However, the mere repetition of this process brings to light aspects of this process which do not appear when looked at in isolation.

Whatever allowed capital to initially buy labour-power, as soon as the process is repeated, it is a worker’s past labour that allows a capitalist hire her again.

Whatever the initial investment, after a certain number of repetitions it produced a surplus-value of the same size which the capitalist consumed. The reason she did not consume her complete capital when she consumed the value equivalent of it, is because her workers produced it as surplus-value. All capital is accumulated capital, even when we leave aside reproduction on an extended scale (accumulation proper).

The products of labour not only turn into commodities but also into capital which then confronts the worker. At the same time, the worker is reproduced exactly as before: she has nothing but her labour-power which she must sell to capital.

### Chapter 24: The Transformation of Surplus-Value into Capital

#### Capitalist Production on a Progressively Increasing Scale. The Inversion which Converts the Property Laws of Commodity Production into Laws of Capitalist Appropriation

So far the purpose of capitalist production was determined as the production of surplus-value. If not all surplus-value is consumed but (part of) it is re-invested accumulation takes place and capital arises out of surplus-value. Therewith surplus-value is determined as a means of the accumulation of capital, not its end.

For actual accumulation to take place, expanded reproduction must take place. Additional money seeks to buy additional means of production and labour(-power) on the market.

These commodities must be available on the market, which means they must have been produced already by the time a capitalist extends production. Other capitals must have produced more machines instead of luxury articles for accumulation to take place: expanded production presupposes expanded production elsewhere.

If these additional means of production ought to be used productively, additional labour is required. Capital can either increase the intensity or extent of labour of its already employed workers. If additional workers are required these must be available on the market — which is usually provided for by the capitalist mode of production (cf. Chapter 25).

Given that capital can rely on finding the material means of expanded production on the market the condition for its accumulation is its previous accumulation.

729:1 The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.

Being the sole condition it is also the necessary condition: capitalists impose the law to accumulate on each other such that the minimal amount of capital required for successful accumulation increases. This way, the wealth that is produced by workers and confronts them increases.

The complete separation of labour and wealth — that the products of labour confront workers in the form of capital on an increasing scale — is the purpose and consequence of commodity production of private producers, not its adulteration.

#### The Circumstances which, Independently of the Proportional Division of Surplus-Value into Capital and Revenue, Determine the Extent of Accumulation, namely, the Degree of Exploitation of Labour-Power, the Productivity of Labour, the Growing Difference in Amount between Capital Employed and Capital Consumed, and the Magnitude of the Capital Advanced

If the ratio how surplus-value is split into revenue and capital is fixed, the size of accumulated capital depends on the absolute size of surplus-value. All means to increase surplus-value are also means to increase accumulation. Of particular relevance here are:

• lowering wages below the value of labour-power

• economy in the application of constant capital (factory buildings etc.)

• increases in productivity, commodities get cheaper: capitalists can consume more even if they spend the same money, the value of labour-power falls, constant capital becomes cheaper, less capital is needed to expand production

### Chapter 25: The General Law of Capitalist Accumulation

What effect does accumulation have on the working class?

#### A Growing Demand for Labour-Power Accompanies Accumulation if the Composition of Capital Remains the Same

The composition of capital is understood in two ways:

1. technical composition means of production and living labour and
2. value composition constant and variable capital.

Insofar as the value composition is a reflection of the technical composition we speak of organic composition. If organic composition remains the same, then as capital grows its demand for labour(-power) increases at the same speed. The faster capital grows, the faster its demand for workers grows as well. This way capital demands more labour-power than is supplied and prices rise.

This does not mean there is no exploitation:

1. Either capital simply pays those higher wages, because they are means for accumulation. The mass of surplus-value rises, even if the rate falls.

2. Or shrinking profits mean lessened accumulation, which lowers the price of labour again to a level at which it is a means for valorisation. This way the obstacles created by accumulation are resolved by the process itself.

In any case, not the number of workers determines employment but accumulation. Accumulation and its needs is the independent variable and the wage the dependent.

#### A Relative Diminution of the Variable Part of Capital Occurs in the Course of the Further Progress of Accumulation and of the Concentration Accompanying it

Insofar as capital uses increases in productivity as a means of accumulation, the technical composition of capital increases. This implies a relative diminishing of variable capital relatively to $c$ (although organic composition increases slower than technical composition due to cheapening of $c$) and transcends the obstacle of the previous sub-chapter.

This process of accumulation implies a growing concentration of the means of production in the hands of individual capitalists. On the other hand, new capitals are founded or capitals are split into parts (repulsion). This fragmentation of total social capital into many capitals is counteracted by centralisation where individual capitals are combined into one. Growth through centralisation is not limited by growth of total social capital.

This way centralisation contributes to the extension of the capitalist mode of production and of labour-saving techniques, which lessens the relative demand for labour(-power).

On the one hand, new capital attracts relatively less new workers as it enters the world. On the other hand, capital repels workers whenever it revolutionises its technical basis.

#### The Progressive Production of a Relative Surplus Population or Industrial Reserve Army

As capital accumulates it needs more capital to employ the same number of workers as capital that is already functioning reduces the number of workers it employs absolutely as it restructures its production process. If this accumulation is sufficient to employ those redundant workers depends on the rate of accumulation and the extent to which workers are made redundant.

Successful capitalist production produces a surplus of workers which are not currently needed: relative surplus population. Unemployment is not a phenomenon of crisis, but a result of the normal accumulation of capital. The capitalist law of population is that the working class produces the means to make itself redundant on an increasing scale.

The surplus population is not only a product of the capitalist mode of production but also its means: it provides reserves of labour-power so that capital can increase its demand when needed. It functions as the industrial reserve army.

Furthermore, the unemployed function as a means to put pressure on workers:

1. The threat of unemployment allows to extend the working day, which increases the supply of labour without (much) additional outlay in $v$. It also allows for economy in the application of $c$. “Overwork” of employed workers is not a contradiction to unemployment but the latter is used as a means for the former.

2. The threat of unemployment also lowers wages.

The particularity of the labour market is that accumulation is both the subject of (increased) demand and the subject of supply by making them redundant. There are not two independent forces confronting each other on the market, but capital regulates the supply and demand for labour-power according to its needs.

#### Different Forms of Existence of the Relative Surplus Population. The General Law of Capitalist Accumulation

The industrial reserve army splits into those which are temporarily thrown out of work and might be employed again and those which capital has no use for permanently. As capital grows it also produces pauperism with it.

## Part Eight: So-Called Primitive Accumulation

### Chapter 26: The Secret of Primitive Accumulation

Accumulation reproduces its conditions — workers on the one side and capital (in money form) on the other — but it also presupposes them. It needs its result as precondition.

The initial creation of the conditions for capitalist accumulation was not the deed of capital but of agents who pursued different interests. A popular ideology is that capital grew out of the abstinence (hoarding) of later capitalists.

What needed to happen was the transformation of the means of subsistence and nourishment into capital and the production of free wage labourers. Producers had to be separated from their means of production.

### Chapter 27: The Expropriation of the Agricultural Population from the Land

Workers were created by (forcefully) separating peasants from their land. Previously valid feudal titles were voided.

### Chapter 28: Bloody Legislation against the Expropriated since the End of the Fifteenth Century. The Forcing Down of Wages by Act of Parliament

1. In its infancy capital did not manage to discipline the new peasants-turned-proletarians by the silent compulsion of economic relations. The state applied harsh punishment to anyone not working, forcing people into employment for capital. With the success of capital such methods of immediate coercion become unnecessary due to the silent compulsion of economic relations.

2. During this early phase workers were not absolutely dependent on capital yet and could demand higher wages. The state uses direct coercion to prevent them from doing so. As the capitalist mode of production develops setting such maximum wages becomes unnecessary.

### Chapter 29: The Genesis of the Capitalist Farmer

Three conditions further the transformation of rich farmers into capitalists:

1. The agricultural revolution increases productivity of agricultural production.

2. Appropriation of previously common land allows to augment the stock of cattle.

3. Contracts for farms ran for a long time (99 years). When the value of money dropped farmers had to pay less on rent and wages due to these expenditures being fixed in the old money value.

### Chapter 30: Impact of the Agricultural Revolution on Industry. The Creation of a Home Market for Industrial Capital

The expropriation of peasants from their land separates them from their means of production and of nourishment which now are available as material elements of variable and constant capital. The agricultural revolution also allows that fewer agricultural workers feed the newly emerging proletariat in the cities.

Furthermore, a home market for products previously mainly produced for subsistence develops. Agricultural capitalist provide the raw materials and means of subsistence for manufacture and workers.

### Chapter 31: The Genesis of the Industrial Capitalist

The transformation of money hoards into capital that augments itself was helped along by the colonial system which created new markets and provided cheap raw materials by the act of plundering, sovereign debt which allows to turn any sum of money into capital by lending it to the state. This debt also helps to create a modern banking system whose credit funds capitalist accumulation. Taxation (in money) drives petty producers into bankruptcy, they become proletarians.

### Chapter 32: The Historical Tendency of Capitalist Accumulation

The capitalist mode of production needed the expropriation of petty producers to develop. As it develops this expropriation continues and big capitalists eat small capitalists. What is not true — in contrast to what Marx claims — is that there is an inherent historical necessity for this development due to the development of the productivity of labour.

Having explained how capital appropriates the labour process to make it its means over the last 31 chapters, Marx now does a 180 and presents us with a historical materialist teleology where the productive forces are the subject which does away with modes of production when they become an “obstacle”. The capitalist mode of production as a means for the development of the productive forces:

929:1 The monopoly of capital becomes a fetter upon the mode of production which has flourished alongside and under it. The centralization of the means of production and the socialization of labour reach a point at which they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.

Unfortunately, we are still waiting …

### Chapter 33: The Modern Theory of Colonization

Means of production and workers are not sufficient for the capitalist mode of production. It needs social relations which compel workers to sell their labour-power to capital.