Capital II, Chapter 21 - Part 1

Accumulation and Reproduction on an Extended Scale

 Part I

“It has been shown in Book I how accumulation works in the case of the individual capitalist. By the conversion of the commodity-capital into money the surplus-product, in which the surplus-value is represented, is also turned into money. The capitalist reconverts the so metamorphosed surplus-value into additional natural elements of his productive capital. In the next cycle of production the increased capital furnishes an increased product. But what happens in the case of the individual capital must also show in the annual reproduction as a whole, just as we have seen it happen on analysing simple reproduction, namely, that the successive precipitation – in the case of individual capital – of its used-up fixed component parts in money which is being hoarded, also finds expression in the annual reproduction of society.” (p 493)

Suppose we have an additional capital made up:-

C 400 + V 100 + S 100 = 600.

The capital sells the output for £600, and can thereby reproduce itself by buying again £400 of constant capital (more correctly means of production), and £100 of labour-power. But, given certain assumptions, it can also use the £100 of surplus-value to expand itself, to buy additional means of production, and labour-power, and thereby to produce an even larger amount of value and surplus value. The assumptions are that this £100 of surplus-value is enough to purchase the additional means of production and labour-power required. In Volume I, it was seen that capital can only expand in accordance with certain technical limits determined by the Technical Composition of Capital. For example, a glass manufacturer might have a furnace with six openings. To run it efficiently, they need enough capital to employ teams of workers for each opening, and materials for them to work with.

But, the surplus value does not have to expand an existing business. It could be used to start some new business. However, the same assumption applies. It must be sufficient to enable the required amount of capital to be set in motion. If not, the surplus value may not be consumed unproductively. It could be hoarded in money form, waiting for the time when a sufficient hoard exists to set in motion the required capital. We will see later that the development of credit, as well as the development of socialised capital in the form of joint stock companies and co-operatives, are a means of mobilising these individual capitals and putting them to work, rather than them lying fallow.

The second assumption made is that production on an extended scale has been in process previously. This might seem to involve a circular argument – explaining the existence of expanded reproduction on the basis of an assumption of expanded reproduction. It isn't, for the simple reason that the whole of Man's history has been characterised by expanded reproduction. From the first primitive humans, mankind has learned how to utilise social surpluses for the production of means of production so as to extend its productive potential further still. All this assumption does is to accept that reality, and demonstrate how this operates under capitalist production.

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