Capital II, Chapter 20 - Part 26

Every commodity, to be a commodity, must also be a use value, and it is irrelevant whether this use value is such as to enable that commodity to be used in any specific manner, i.e. as constant capital or as a consumer good. A commodity like coal, for example, will have a value part of which reproduces the constant capital, used to produce it, part the variable capital, and part the surplus value. If these components are comprised 4:1:1 as in Part 25, it is not at all necessary that, of the coal produced, ⅔ of it is used as constant capital, a sixth for workers consumption and a sixth unproductive consumption by capitalists.

All that is required is that the commodity be sold so that these components can once again be reproduced.

“It is different with the product of the aggregate social capital. All the material elements of reproduction must in their bodily form constitute parts of this product. The consumed constant part of capital can be replaced by the aggregate production only to the extent that the entire constant part of the capital reappearing in the product re-appears in the bodily form of new means of production which can really function as constant capital. Hence, simple reproduction being assumed, the value of that portion of the product which consists of means of production must be equal to the constant portion of the value of social capital.” (p 436)

That is simply to say that all of the constant capital consumed in the production process, for both Department 1 and 2, must be physically replaced if simple reproduction is to continue. So, the production of constant capital/means of production must be sufficient to ensure that reproduction takes place. Consequently, the production of constant capital must form the same proportion of total social production as constant capital forms in the total social capital. If a smaller physical quantity of constant capital is reproduced, a smaller quantity of labour-power can be set in motion by it, so simple reproduction ceases, there is a contraction of capital.

“Considered socially that portion of the social working-day which produces means of production, hence adding new value to them as well as transferring to them the value of the means of production consumed in their manufacture, creates nothing but new constant capital intended to replace that consumed in the shape of old means of production in both departments I and II. It creates only product intended for productive consumption. The entire value of this product, then, is only value which can function anew as constant capital, which can only buy back constant capital in its bodily form, and which, for this reason, resolves itself, considered socially, neither into variable capital nor surplus-value.” (p 437)

In other words, it represents only an exchange of capital with capital, not capital with revenue. Although, at an individual level, Department 1 workers and capitalists obtain revenue (wages and surplus value) this obscures the fact that two-thirds of Department 1 production, taken in the aggregate, generates no revenue, but only exchanges within Department 1, replacing existing constant capital.

It is only one third of Department 1 output that exchanges with Department 2. Department 2 capitalists advance money-capital to buy means of production. But, for this one third output of Department 1, equal to wages and surplus value, it constitutes revenue. It is used not to buy additional constant capital, but to buy means of consumption. It is thrown straight back into circulation, by Department 1 workers and capitalists, to buy Department 2 consumer goods.

Back To Part 25

Forward To Part 27