Capital II, Chapter 8 - Part 5

Of the other productive capital, the auxiliary materials, like fixed capital, transfer their value, but not their use value, to the end product. Raw materials transfer their use value and their value to the end product. Labour-power does not transfer its use value or value to the end product. The use-value of labour-power is its ability to create surplus-value. It does that by undertaking the act of labour, which in itself is a process of new value creation. It reproduces itself in the production process i.e. it creates sufficient new value to replace the value consumed in producing the labour-power, as well as producing a surplus value over and above it.

“But all these differences are immaterial so far as the circulation and therefore the mode of turnover is concerned. Since auxiliary and raw materials are entirely consumed in the creation of the product, they transfer their value entirely to the product. Hence this value is circulated in its entirety by the product, transforms itself into money and from money back into the elements of production of the commodity. Its turnover is not interrupted, as is that of fixed capital, but passes uninterruptedly through the entire circuit of its forms, so that these elements of productive capital are continually renewed in kind.” (p 167)

Labour-power is bought for a fixed period of time and consumed entirely during this period. It is circulating capital. The worker remains after this period, but it is not the worker who is being bought. It is only a defined amount of his labour-power.  But, although the labour-power of the worker has to be constantly reproduced, in accordance with the periods, the product of that labour may take longer or shorter to realise. A worker might be paid their wages weekly, but the product of their labour might take a month to realise, or in the case of a ship, several years.  But, the labour-power itself can only be reproduced when the product is sold, and the money so raised is used to purchase labour-power once more. Labour-power is like the other elements of constant capital that are not fixed capital. It is circulating capital, and its turnover time is equal to the time when its product has passed through both the production and circulation processes, and has once more been converted into labour-power.

Marx then sets out exactly what this circulating capital consists of. The worker sells his labour-power to the capitalist. The value of that labour-power is equal to the value of the commodities required to reproduce the worker, for the period he is contracted to work. Those commodities are provided out of society's consumption fund i.e. the total production of commodities set aside for individual consumption, rather than to replace means of production or investment.

In a sense then, as set out in Volume I, it is as though the capitalist had bought these commodities, and given them to the worker. However, that is not the case. The worker buys these commodities with their wages, and these wages form the variable capital of the capitalist. If we set aside, for now, the surplus value, created by the worker, the variable capital of the capitalist has its counterpart in the capital-value of that part of the productive capital represented by the labour-power. It is this which constitutes the circulating capital. The workers wages do not circulate as capital. The worker spends them as revenue. The labour-power does not circulate as capital either. Once expended, it is gone, consumed in the productive process. What circulates is only the capital-value. It is that which is embodied in the end product, which is then metamorphosed into money, which in turn is metamorphosed once more into labour-power.

“It is therefore not the labourer’s means of subsistence which acquire the definite character of circulating capital as opposed to fixed capital. Nor is it his labour-power. It is rather that part of the value of productive capital which is invested in labour-power and which, by virtue of the form of its turnover, receives this character in common with some, and in contrast with other, component parts of the constant capital.” (p 169)

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