To
facilitate an understanding of these circuits, and exchanges, I have
produced the diagram of the Circuits of Capital and Money (which are
free to use, provided the source is accredited), which describes
this.
The circuit
of commodity-capital commences at C', where the end
product exists, and already embodies surplus value. In other words,
it assumes capitalist production is already being undertaken. As we
have seen in previous chapters, we can then make several assumptions.
Money already exists, and is here depicted as sitting in Bank
Deposits. We can also assume that capitalists not only have
sufficient money-capital to advance for the purchase of
productive-capital, but they also have sufficient money to cover
their own consumption needs, to buy commodities, for personal
consumption, during the period until they receive payment for the
commodities they sell. We can also assume that workers have not
simply arisen from nowhere, but are the result of the long historical
process discussed in Volume I, and so are able to offer their
labour-power for sale as an advance to capital, prior to being paid
for it at the end of the day, week or whatever period.
Similarly,
capitalist producers have not simply arisen from nowhere, but are
also the result of the same historical process, and so both means of
production and consumption have evolved from being produced and
provided by peasant and artisan producers, to now being produced and
sold as commodities, capitalistically. That means that means of
production and consumption already exist, and may already be in the
hands of capitalists ready to be advanced. Indeed, that is one
reason Marx refers to the Tableau Economique, whose starting point is
last year's harvest, i.e. it assumes the existence of these stocks
available to be advanced.
The
consequence of these entirely reasonable assumptions is that the
total value of commodity-capital at C', can be bought with
money resources held by workers and capitalists, i.e. with existing
money funds, or from wages or surplus value. In reality, as was seen
earlier, those money funds are really primarily in the hands of
capitalists, who advance it as capital and revenue, and in doing so, also put a part of those money funds in the hands of workers, in the
form of wages. These money funds flow from and through Bank
Deposits, and as a money flow are indicated by the green line. The
flow of capital-value is indicated by the red lines.
The result
of the realisation of this commodity-capital (total national output)
is M', which also includes the surplus value. That
surplus value, as described in previous chapters, is equal to the
additional money that capitalists threw into circulation, to cover
their own unproductive consumption, in the period while they were
waiting to sell their commodities. In the conditions of simple
reproduction, we are discussing, the surplus value, now reproduces
that money, enabling the capitalists to once more throw it into
circulation, to cover their personal consumption, in the next cycle.
At M',
for the reasons Marx described earlier, the circuit of money-capital
ends. Its circuit always starts with M never with M'. M
– C – M, is always the circuit of newly invested money capital,
not the circuit of industrial capital in the process of reproduction,
whether it is simple reproduction or expanded reproduction. Under
expanded reproduction, as Marx showed earlier, what we really have
for money-capital is two circuits. The first circuit M – C – M,
ensures that the productive capital consumed in the first circuit is
physically reproduced. So, if the value of that productive-capital
has changed, this is reflected in the values retrospectively. But,
the surplus value accumulated forms a new circuit of money capital m
– c – m, where this is not the case. This money capital buys
productive capital at its current value. So, this m will buy a
greater or lesser physical quantity of productive-capital, c,
dependent upon whether its price has fallen or risen.
So, if
£1,000 was paid for 1000 kilos of cotton, and £1000 for
labour-power, with a 100% rate of surplus value, we would have – C
1000 + V 1000 + S 1000 = E 3,000. But, if the price of cotton
doubled after it was bought, but before the completed yarn was sold,
this would be retrospectively reflected in these values. So, C 2000
+ V 1000 + S 1000 = E 4000. The yarn would now sell for £4,000, and
thereby enable the same quantity of cotton and labour-power to be
bought, as in this cycle. However, if all of S is accumulated, it is
clear that this is not the case, for this new additional capital
value. Previously, (M)£1,000 bought 1000 kilos of cotton, and now M
still buys 1000 kilos of cotton, but the £1,000 of surplus value
becomes m – c – m, and here in this new circuit of money capital,
m only buys 500 kilos of cotton.
So, the
circuit of money-capital ends at M'. It is deposited in
the bank, awaiting its future destiny. Here, Bank Deposits are a sort
of Black Box. That is, the true nature of what is inside is not
determined. It is the equivalent of
the Uncertainty Principle.
Like Schrodinger's Cat,
the condition of the money inside remains undetermined, until it is
observed. It exists in limbo, as a money hoard, that might be
money-capital, or else might be simply money to be used as revenue.
But, we are
examining the circuit of commodity-capital, not money-capital, and
that proceeds from C' to C'. In the simple
reproduction model we have assumed, the same value of money-capital
comes out of Bank Deposits, as was originally used, as Money-capital, at the start of the previous circuit of Money Capital, that started
at M. By definition, this means that because M' = M + m,
an amount of money equal to m, remains in Bank Deposits, and can once
again be used by Capitalists to purchase their own personal
consumption needs.
M now
purchases the same quantity of means of production and labour-power
as in the original circuit – C. This is indicated by the red lines
M – C (MoP and LP). These are red lines, because although the
payment is necessarily in money, it is money-capital i.e.
capital-value in money form. The Capital-value, previously
inhabiting the money-capital, now abandons it, and is metamorphosed
into Productive-Capital. But, as seen previously, there is a
difference here between the exchange between this capital, and the
workers, and between the capital, and the producers of means of
production.
The exchange
between this capital and labour is an exchange between capital and
revenue. The workers sell a commodity, labour-power, that is not
capital. It produces no surplus value for the worker when they sell
it. In exchange for this commodity, they obtain not money-capital,
but money, as revenue. What was money-capital, for the capitalist, in
the same exchange, is metamorphosed into productive-capital, in the
shape of labour-power. This labour-power, in the hands of the
capitalist, is capital, even though it was not for the worker. For
the capitalist, it is the means of expanding value, via the creation
of surplus value.
However, the
producer of means of production is not merely exchanging a commodity
for money. For them, the commodities they are selling constitute a
part of their capital – the commodity-capital. When they sell
them, they metamorphose their capital value from that of
commodity-capital into money-capital, or at least potential
money-capital. In the same way, the capitalist buying these means of
production, metamorphoses their money-capital into
productive-capital, via this exchange. The exchange between these
two capitals, therefore, is an exchange of capital with capital, not
of capital with revenue.
The buyer of
the means of production, however, does not buy productive-capital.
They buy merely commodities, albeit commodities that already contain
surplus value, and form the commodity-capital of some other
capitalist. These commodities, like the labour-power, only become
productive-capital in the hands of the buyer, to the extent that
they are employed productively. In the same way, the seller of means
of production does not obtain money-capital, from the buyer, but only
money. It only becomes money-capital in their hands, if it is again
used to buy productive-capital.
The money
now begins its own new independence and circuit. This is indicated
by the green money flow line from Productive Capital, K, to Bank
Deposits. In other words, this represents the myriad of separate
circuits of money and commodities that result from these payments.
Workers deposit their wages in the bank, and from there make numerous
purchases of commodities, to meet their needs. In fact, those
purchases are themselves represented by the green line from Bank
Deposits to C', the commodity-capital.
But, also
the capitalists selling means of production, put their money receipts
into the Bank and, from there, pay for their purchases, be they for labour-power or for their own means of production, or for their own
personal consumption. Given that C' is equal to K, plus
the surplus value produced in the production process, we can now see
that both an equivalent amount of value is created to be exchanged
with it, and a sufficient amount of money, equal to this value, exists
with which to purchase it. The wages paid to workers, and the
receipts of capitalists that come out of K, are equal to the
capital-value they transfer to the end product. The money equivalent
of that exists in Bank Deposits, available to purchase commodities
equal to that value. That leaves those commodities that are equal to
the surplus value produced, but an amount of value, and of money
equal to that amount was deposited in the Bank at the start i.e. m,
which was the residual from M'.
Returning to
the flow of capital, the productive-capital, engages in the
production process, and as a result, surplus value is created by
labour. The capital-value now exits the productive-capital, and
enters the newly produced commodity-capital. So, now the circuit is
complete. All output can be exchanged, and fully accounted for.
That, of course does not mean to say that it is. We only have here a
potential for these exchanges to occur. Similarly, the purchases
undertaken from C' might be accomplished using either
commercial or consumer credit. That opens a series of further
complications. For example, potential deficiencies in demand
resulting from some consumers (productive or unproductive) choosing
not to buy, might be balanced by others choosing to buy, using credit, rather than their own revenue. It also opens the potential for
higher monetary demand than the amount of value thrown into
circulation as supply. The consequences of that, which might be
inflation or else the stimulation of increased output, cannot be
discussed here.
“In the circuits M — C ... P... C'— M' and P ... C'— M'— C ... P, the movement of the capital is the starting and finishing point. And of course this includes consumption, for the commodity, the product, must be sold. When this has assumedly been done it is immaterial for the movement of the individual capital what becomes of the commodities subsequently. On the other hand in the movement of C' ... C' the conditions of social reproduction are discernible precisely from the fact that it must be shown what becomes of every portion of value of this total product, C'. In this case the total process of reproduction includes the process of consumption brought about by the circulation quite as much as the process of reproduction of the capital itself.” (p 396-7)
Back To Part 2
Forward To Part 4
No comments:
Post a Comment