[2. Circulation between Farmers and Landowners. The Return Circuit of Money to the Farmers, Which Does Not Express Reproduction]
Quesnay and the Physiocrats begin their analysis of social reproduction not with this year's production, but with last year's harvest. On this basis, the farmers begin the cycle with a quantity of commodity-capital, a portion of which is destined, as seed, manure etc., to form the constant capital for this year's production, and acts to replace, in kind, the constant capital consumed in last year's production. Another portion is destined to form the consumption fund, or variable capital, required to feed the workers during this year's production. A final part constitutes the surplus product, which is appropriated by the landlords as rent.
This process of social reproduction is also adopted by Marx in his schemas. Although the circuit of capital is often described as being M-C...P...C'-M', Marx makes clear, in Capital II, that this is only the case in respect of newly invested money-capital. For all existing productive-capital, the circuit is, as described here, P...C'-M'.M-C...P, or else C'-M'.M-C...P...C'.
That is, all existing industrial capital starts its circuit with a quantity of productive-capital, in the shape of buildings, materials, labour-power and work in progress. Simple reproduction requires that, at the end of its circuit all of the use values that comprise this productive-capital have been reproduced, “in kind, at least in terms of effectiveness”. That is if 100 kg of grain has been consumed as seen, then out of this year's production, this 100 kg of seed must be withdrawn to replace it, and so on.
Marx points out later that this is clearly indicated in the case of labour-power. The worker advances labour-power to the capitalist in the production process. The capitalist only pays wages to the worker at the end of this process, thereby enabling the worker to obtain a portion of the product they have just themselves produced.
In the case of the Tableau, the farmers could pay their rent in kind with the surplus product. However, its assumed that this is a money economy, and so the farmers pay ₣2 Billion to landlords as rent, this being the amount of their surplus value. With this money, the landlords buy ₣1 Billion of food from the farmers, which covers the requirements of themselves and their retainers. This is indicated by the line a-b. The landlords also buy ₣1 Billion of manufactured goods from the industrial capitalists, which is represented by the line a-c. The landlords have now spent all of their rent, and obtained ₣1 Billion of food, and ₣1 Billion of manufactured goods, to meet the needs of them and their retainers.
₣1 Billion of the rent paid by farmers to landlords has now returned to them, whilst ₣1 Billion has passed into the hands of the industrial capitalists.
The industrial capitalists now buy ₣1 Billion of food from the farmers, to cover the needs of them and their workers. All of the ₣2 Billion the farmers paid as rent has now returned to them, c-d.
The farmers now buy ₣1 Billion of manufactured goods from the industrial capitalists, a'-b', but this flows back to the farmers as the industrial capitalists buy ₣1 Billion of agricultural products from them as raw materials, for their production process, a''-b''.
At the end of the process, everyone is back to the same position they were in at the beginning.
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