C' — M' is the second stage of the circuit of Productive Capital, P – P, and the final stage of the circuit of industrial capital M – M', but is only the first stage of the circuit of commodities. The process of self-expansion of capital has already occurred by C' . C' — M' only represents the realisation of that expanded value. If we assume that we have only Simple Reproduction, then m separates from M', and is consumed by the capitalist. In that case, M continues to circulate and purchases C, replacing the Means of Production and Labour-Power consumed in the previous production process. We return then to P. The same quantities of Means of Production and Labour-Power have been bought, and the production process can resume on the same scale as before.
Because C – M – C and c - m - c now exist as two separate circuits of commodities, the beginning and end values of C and c are the same. This disguises the fact that a Surplus Value has been created, and also gives rise, Marx says, to the illusion put forward by vulgar economy, that the purpose of capitalist production is the production of use values for consumption,
“... which the capitalist produces for no other purpose than that of getting in their place commodities with different use-values, or of exchanging them for such...” (p 70)
C' from the beginning is commodity capital because of the capitalistic process that created it. It already contains surplus-value, because it has been produced capitalistically using wage-labour. That c is a fraction of C', and is consumed unproductively by the capitalist, does not change its origin as the product of surplus labour, obtained by the capitalist unpaid for.
“This c is, by the very nature of its existence, bound to the circuit of capital-value in process and if this circuit begins to stagnate or is otherwise disturbed, not only is the consumption of c restricted or entirely arrested, but also the disposal of that series of commodities which serve to replace c. The same is true when C' — M' ends in failure, or only a part of C' can be sold.” (p 70)
But, c only continues to act as commodity capital so long as it is attached to C. As soon as c becomes merely part of the circulation of revenue for the capitalist i.e. c-m-c, it leaves the circuit of capital. In other words, if c is accumulated, it remains attached to C, and becomes productive capital. But, if c is used unproductively by the capitalist, to simply buy luxuries or other items for personal consumption, it is no longer capital. It is merely revenue for the capitalist.
“This circulation is connected with the movement of advanced capital inasmuch as the existence of capital presupposes the existence of the capitalist, and his existence is conditioned on his consuming surplus-value.” (p 70)
This distinction between the actual physical commodity, for example yarn, and its existence as capital value, can be seen by looking at the progress of both. As commodity-capital, the yarn is sold to a merchant, and the money-capital from it then is used to purchase productive-capital once again in the form of means of production and labour-power. Yet, the commodity itself, the yarn, may sit in the merchant's store for some time before it is actually consumed.
“Hence the real definitive metamorphosis of the mass of commodities thrown into circulation by the capitalist, C — M, their final exit into consumption may be completely separated in time and space from that metamorphosis in which this mass of commodities functions as his commodity-capital. The same metamorphosis which has been accomplished in the circulation of capital still remains to be accomplished in the sphere of the general circulation.
This state of things is not changed a bit if this yarn enters the circuit of some other industrial capital. The general circulation comprises as much the intertwining of the circuits of the various independent fractions of social capital, i.e., the totality of the individual capitals, as the circulation of those values which are not thrown on the market as capital but enter into individual consumption.” (p 71)
This is another example of how commodity fetishism can lead to confusion. Commodities are not themselves inherently valuable. They do not contain value inside them, for the simple reason that value is labour-time. Commodities only act as means of reflecting labour-time, in the same way that objects do not contain light, but only reflect light-energy. Objects appear red, green etc. not because they are actually red or green, but only because, due to their composition, they either absorb or reflect red or green light.
The social value of each commodity unit is not the actual amount of labour-time that went into its production (its individual value), because it is different for each ( e.g. the Friday afternoon car). Still less is it what was paid for it at some time in the past as the TSSI claims, in respect of capital. Each individual commodity unit merely acts “as a representative of its class” to use Marx's term, and the value of the class of commodities is equal to the average labour-time required currently for their production. The value of any class of commodities is determined by The Law Of Value as the proportion of total social labour-time currently required for its production.
But, capital-value is only value as capital. The fact that particular commodities act as productive-capital, rather than commodities for final consumption does not change matters.
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Forward To Part 3
But, c only continues to act as commodity capital so long as it is attached to C. As soon as c becomes merely part of the circulation of revenue for the capitalist i.e. c-m-c, it leaves the circuit of capital. In other words, if c is accumulated, it remains attached to C, and becomes productive capital. But, if c is used unproductively by the capitalist, to simply buy luxuries or other items for personal consumption, it is no longer capital. It is merely revenue for the capitalist.
“This circulation is connected with the movement of advanced capital inasmuch as the existence of capital presupposes the existence of the capitalist, and his existence is conditioned on his consuming surplus-value.” (p 70)
This distinction between the actual physical commodity, for example yarn, and its existence as capital value, can be seen by looking at the progress of both. As commodity-capital, the yarn is sold to a merchant, and the money-capital from it then is used to purchase productive-capital once again in the form of means of production and labour-power. Yet, the commodity itself, the yarn, may sit in the merchant's store for some time before it is actually consumed.
“Hence the real definitive metamorphosis of the mass of commodities thrown into circulation by the capitalist, C — M, their final exit into consumption may be completely separated in time and space from that metamorphosis in which this mass of commodities functions as his commodity-capital. The same metamorphosis which has been accomplished in the circulation of capital still remains to be accomplished in the sphere of the general circulation.
This state of things is not changed a bit if this yarn enters the circuit of some other industrial capital. The general circulation comprises as much the intertwining of the circuits of the various independent fractions of social capital, i.e., the totality of the individual capitals, as the circulation of those values which are not thrown on the market as capital but enter into individual consumption.” (p 71)
The social value of each commodity unit is not the actual amount of labour-time that went into its production (its individual value), because it is different for each ( e.g. the Friday afternoon car). Still less is it what was paid for it at some time in the past as the TSSI claims, in respect of capital. Each individual commodity unit merely acts “as a representative of its class” to use Marx's term, and the value of the class of commodities is equal to the average labour-time required currently for their production. The value of any class of commodities is determined by The Law Of Value as the proportion of total social labour-time currently required for its production.
But, capital-value is only value as capital. The fact that particular commodities act as productive-capital, rather than commodities for final consumption does not change matters.
Back To Part 1
Forward To Part 3
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