Theories of Surplus Value, Part III, Chapter 21 - Part 56

The circuit M – C … P... C` - M`, as Marx sets out in Capital II, is only the circuit for newly invested money-capital, such as where a new business is established, or where realised profits are reinvested. But, for the reasons Marx describes here, this represents only a tiny proportion of the total capital employed. The other instance where the circuit M – C … P... C` - M` applies is where capital ceases operating, when a business closes down, so that all of the productive-capital, as well as the commodity-capital is liquidated, and is thereby converted from capital into money revenue, with no requirement to act as money-capital in the process of metamorphosis into productive-capital. 

As Marx describes, in the next chapter, in discussing Ramsay, if the circuit of capital is viewed as M – C … P … C` - M`, rather than P … C` - M`. M – C … P, or C` - M`. M – C`, in the case of merchant capital, this creates an illusion of profit where capital is released as a result of a fall in the value of constant capital, i.e. where the value falls compared to its historic price. But, this illusion of additional profit disappears, as soon as the assumption of continuous capitalist production is restored. Then, on the basis of values (current reproduction cost) rather than historic prices, no such spurious profits or losses arise, but the rate of profit does change according to the change in the value of the advanced capital. 

If we disregard the profit of the shopkeeper, 

“The movement C—M—C also takes place in the transactions of the shopkeeper.” (p 283) 

The shopkeeper effectively acts as an intermediary between the consumer and producer. They act as agent of the consumer in buying the commodity, and agent of the producer in selling the commodity. The money they obtain from the consumer is the same money they use to buy the commodity from the producer. Obviously, not the self-same use value, just as the house of today cannot be built with the bricks the builder buys tomorrow, but the use values that replace those currently consumed. 

“Insofar as he buys again from the producer with the money, this constitutes the first metamorphosis of the producer’s commodity and signifies the transition of the commodity into the intermediate stage, where it remains as a commodity in the sphere of circulation. C—M—C, insofar as it concerns the transformation of the commodity into the consumer’s money and the transformation back again of the money, whose owner is now the shopkeeper, into the same commodity (a commodity of the same kind), expresses merely the constant passing over of commodities into consumption, for the vacuum left by the commodity reaching the sphere of consumption must be filled by the commodity emerging from the production process and now entering this stage.” (p 283-4) 

The shopkeeper here symbolises all of the merchants through whose hands the commodity passes prior to sale to the final consumer.

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