“It is only when, and in so far as, capital is newly invested — which also applies to accumulation — that capital in money-form appears as the starting-point and the end result of the movement. But for all capitals already engaged in the process, these first and last points appear merely as points of transit.” (p 315)
This is why Marx insists that the value of the productive-capital advanced to production must be based on its current reproduction cost, rather than its historic price, because its only on the former basis that the circuit is logically consistent. Its only on the basis of the current values, of the consumed productive-capital, that their use-value can be logically reproduced, and as Marx points out, it is this use value that must be reproduced, on a like for like basis, that must be effected for social reproduction to continue, on at least the same scale.
“This entire portion of constant capital consumed in production must be replaced in kind. Assuming all other circumstances, particularly the productive power of labour, to remain unchanged, this portion requires the same amount of labour for its replacement as before, i.e., it must be replaced by an equivalent value. If not, then reproduction itself cannot take place on the former scale.” (Chapter 49)
Marx also clarifies elsewhere that this “like for like” replacement of the physical use values is only “in terms of effectiveness”. That is a machine may be replaced by an equivalent machine, or better machine; a material may be replaced by some other material that is at least as good, and so on. This has the same effect, as if the labour-time required for production of these use values falls. In other words, if the labour-time required for the production of the use values that comprise the consumed constant capital falls, the value of the constant capital falls – the amount of social labour-time required for its reproduction is less, leaving a greater proportion of social labour-time available for other purposes. The rate of profit - the relation between the social surplus product, and the portion of the social product that must be devoted to this like for like replacement of the use values that comprise the constant and variable-capital - thereby rises. The opposite is true if the labour-time required for this like for like replacement increases.
The money received for the commodities that comprised the commodity-capital, is not an end point, but only the end of one stage of the metamorphosis of the productive-capital, but it is simultaneously the starting point of the second stage, of that metamorphosis, as the money-capital is transformed again into productive-capital, that physically reproduces that previously consumed. This applies equally to the merchant capital, when it assumes the function of converting the commodity-capital into money-capital.
“And although the C — M of industrial capital is always M — C — M for merchant's capital, the actual process for the latter is continually also C — M — C once it has begun to function.” (p 316)
But, as was analysed in Capital II, in relation to productive-capital, in order for production to be continuous, the same capital must be simultaneously in all its forms. Outputs are simultaneously inputs, whether for the same individual capital, as part of its labour process, or for the total social capital, as part of the process of social reproduction.
The conveyor belt was the classic manifestation of that as, along its length, its continuous movement meant that the output of one worker was simultaneously the input of the next, so that the first worker on the line was inextricably linked to the last.
The same applies to the merchant. They are not, in fact, buying in order to sell, other than when they advance their initial capital. Just like the productive capital, once it has started to function, the requirement of continuous movement means both occur simultaneously.
“But it performs the acts C — M and M — C simultaneously. This is to say that there is not just one capital in the stage C — M while another is in the stage M — C, but that the same capital buys continually and sells continually at one and the same time because of the continuity of the production process. It is to be found always in both stages at one and the same time. While one of its parts turns into money, later to be reconverted into commodities, another turns simultaneously into commodities, to be reconverted into money.” (p 316)
Incidentally, this simultaneity, which is fundamental to Marx's materialist and dialectical analysis, is rejected by the TSSI, which operates on the basis of syllogistic logic, and so denies the possibility of the contradiction implied by such simultaneity, but which is central to understanding any kind of movement and, therefore, process.
This is why Marx insists that the value of the productive-capital advanced to production must be based on its current reproduction cost, rather than its historic price, because its only on the former basis that the circuit is logically consistent. Its only on the basis of the current values, of the consumed productive-capital, that their use-value can be logically reproduced, and as Marx points out, it is this use value that must be reproduced, on a like for like basis, that must be effected for social reproduction to continue, on at least the same scale.
“This entire portion of constant capital consumed in production must be replaced in kind. Assuming all other circumstances, particularly the productive power of labour, to remain unchanged, this portion requires the same amount of labour for its replacement as before, i.e., it must be replaced by an equivalent value. If not, then reproduction itself cannot take place on the former scale.” (Chapter 49)
Marx also clarifies elsewhere that this “like for like” replacement of the physical use values is only “in terms of effectiveness”. That is a machine may be replaced by an equivalent machine, or better machine; a material may be replaced by some other material that is at least as good, and so on. This has the same effect, as if the labour-time required for production of these use values falls. In other words, if the labour-time required for the production of the use values that comprise the consumed constant capital falls, the value of the constant capital falls – the amount of social labour-time required for its reproduction is less, leaving a greater proportion of social labour-time available for other purposes. The rate of profit - the relation between the social surplus product, and the portion of the social product that must be devoted to this like for like replacement of the use values that comprise the constant and variable-capital - thereby rises. The opposite is true if the labour-time required for this like for like replacement increases.
The money received for the commodities that comprised the commodity-capital, is not an end point, but only the end of one stage of the metamorphosis of the productive-capital, but it is simultaneously the starting point of the second stage, of that metamorphosis, as the money-capital is transformed again into productive-capital, that physically reproduces that previously consumed. This applies equally to the merchant capital, when it assumes the function of converting the commodity-capital into money-capital.
“And although the C — M of industrial capital is always M — C — M for merchant's capital, the actual process for the latter is continually also C — M — C once it has begun to function.” (p 316)
But, as was analysed in Capital II, in relation to productive-capital, in order for production to be continuous, the same capital must be simultaneously in all its forms. Outputs are simultaneously inputs, whether for the same individual capital, as part of its labour process, or for the total social capital, as part of the process of social reproduction.
The conveyor belt was the classic manifestation of that as, along its length, its continuous movement meant that the output of one worker was simultaneously the input of the next, so that the first worker on the line was inextricably linked to the last.
The same applies to the merchant. They are not, in fact, buying in order to sell, other than when they advance their initial capital. Just like the productive capital, once it has started to function, the requirement of continuous movement means both occur simultaneously.
“But it performs the acts C — M and M — C simultaneously. This is to say that there is not just one capital in the stage C — M while another is in the stage M — C, but that the same capital buys continually and sells continually at one and the same time because of the continuity of the production process. It is to be found always in both stages at one and the same time. While one of its parts turns into money, later to be reconverted into commodities, another turns simultaneously into commodities, to be reconverted into money.” (p 316)
Incidentally, this simultaneity, which is fundamental to Marx's materialist and dialectical analysis, is rejected by the TSSI, which operates on the basis of syllogistic logic, and so denies the possibility of the contradiction implied by such simultaneity, but which is central to understanding any kind of movement and, therefore, process.
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