The Object of the Inquiry

The process of reproduction of capital includes (a) the immediate process of production where it realises its determining motive of producing surplus-value. It also includes (b) the circulation process - buying and selling

• which it has to go through to renew the process of production. At the same time does capital need to go through the process of production in order to re-enter the sphere of circulation.

The continued realisation of valorisation is conditioned on the continuous change of form of capital from commodity to money to productive capital. In this change of form each individual capital is dependent on all other capitals in society. The other capitals must buy the commodities one capital has to sell and sell means of production to it, otherwise there are frictions. Each individual capital produces, buys and sell according to its own needs and motives, not as a self-conscious part of total social capital. At the same time, each individual capital only exists as a part of total social capital and is dependent on it.

427:4 But each individual capital forms only a fraction of total social capital

The overall process of reproduction of capital involves both productive and unproductive consumption. The reproduction of total social capital includes the acts of exchange where workers are paid for their labour-power and where they use this money to buy the products of sustenance they require. This process also includes the transformation of surplus-value into luxury articles for the capitalists. The totality of all individual capital’s circuits hence not only contain the circulation of capital but also commodity circulation in general. Reproduction of workers and luxury consumption of capitalists are not acts of reproduction to be considered separate from the reproduction of capital but are part of the reproduction of capital as total social capital.

In Volume 1 we simply presupposed that capital sells all its commodities at value and that it finds the material means for its production on the market. So far in Volume 2 the process of circulation was considered. The result of this investigation was that the success of capital presupposes the success of capital elsewhere. The realisation of $C’$ presupposes the realisation of $C’$ elsewhere (Chapter 3) and that the accumulation of capital presupposes the accumulation of capital else (Chapter 17). In Parts I and II this relationship was pointed out, but not developed or studied in its own right.

429:3 What we were dealing with in both Parts One and Two, however, was always no more than an individual capital, the movement of an autonomous part of the social capital.

The object of Part 3 is then to study the interlink of individual capitals which stamps them as independent parts of total social capital and the reproduction of this total social capital.The content this reproduction is the reproduction of the material means for the production of surplus-value. The form of this process, how it is accomplished, is the circulation process, where individual capitals interact and form total social capital.

430:1 What we now have to consider is the circulation process (which, taken in its entirety, is form of the reproduction process) of the individual capitals as components of the total social capital, i.e. the circulation process of this total social capital.¹

Equilibrium and Friction

In Volume 1 we learned that the laws of commodity circulation developed there ought not to be confused with harmonic relations. Marx pointed to the oppositions and frictions and made fun of the dogma which claims that commodity circulation would produce an equilibrium of sales and purchases. He showed abstractly how the pursuit of money making by all undermines the conditions of this pursuit, which eventually leads to a breakdown: crisis.

The same needs to be considered now when the reproduction of total social capital is considered. The purpose of individual capitals is only realised if an individual capital fits into the overall process of reproduction of total social capital. This does not mean, however, that the success of the overall reproduction process is its purpose. This also does not mean that the invisible hand of the market takes care of this fitting. The capitalist mode of production is a system where the individual parts have opposing purposes and interests. Hence, these parts change and adapt relatively to the overall system or bring the overall process to stand-still: crisis.

The Role of Money Capital

Individual capital steps on the stage in the form of money capital. Money is its prime mover as money capital. All means of production and all labour-power must first be bought with money. This is still true for social capital and no new question arises. However, the scale of capitalist production - as already shown in Volume 1 - does not have an absolute limit in the amount of money capital in operation (increases in productivity, economy in the use of fixed capital, …). Also, increasing the turnover allows a bigger productive capital to be set in motion with the same money capital. Already for individual capital is money not a strict barrier to its reproduction and accumulation.

433:1 All this clearly has nothing to do with the specific question of money capital as such. It simply indicates that the capital advanced - a given sum of value which, in its free form, its value form, consists of a certain sum of money - contains, once it has been transformed into productive capital, productive powers whose limits are not given by the bounds of its own value, but, within a given field of action, can operate differently, both in extent and intensity. Once the prices of the elements of production (means of production and labour-power) are given, the size of the money capital required to buy a certain quantity of these elements of production, present as commodities, is also determined. In other words, the capital value that has to be advanced is determined. However, the scale on which this capital operates to form values and products is elastic and variable.

On the other hand, money capital must exist alongside productive capital. Some money capital must lay idle. This money must be produced and renewed by society which reduces the amount of labour available to society for the production of surplus-value. However, insofar this money already exists no problem appears (except for wear and tear) when dealing with the reproduction of total social capital. The amount of idle money which must exist alongside productive capital is dependent on the turnover of capital. Insofar as the turnover is determined by the length of the working period, it is conditioned by the material conditions of production not by the specific social character of capitalist production. Under all modes of production society would have to deal with some branches of industry taking a long time to finish their products. The workers involved in those branches would withdraw means of subsistence from society’s pool of products, but they would not contribute products of their own for a long time. However, in the capitalist mode of production this takes the form that branches with a long turnover throw money into circulation for a long time, without throwing an equivalent in value as commodities. For the same reason, the reproduction of total social capital is conditioned on individual capitals’ circuits interlocking correctly, not on the amount of money capital available.

The question “where does the money come from” is not a central question for the following investigation. If individual capitals do not inerlock without friction, this might express itself as a lack of money, but this is a symptom not a cause.