So, it is clear that the consumers do not pay for the reproduction of the total consumed constant capital, and similarly, the currency required to circulate the commodities that comprise the exchange between Department I and II is not sufficient to circulate the total value of commodities, because the total value of output also includes the additional value of constant capital that circulates only within Department I. Consumers only pay for the constant capital consumed in Department II, not that in Department I, and that, because the constant capital consumed in Department II, is itself only equal to Department I revenues. It is Department I consumers who pay for Department II constant capital, from the revenues obtained from the sale of that constant capital to Department II. But, on that basis all revenues are accounted for, leaving none left for the purchase of Department I constant capital.
In the example given, here, only the question of the replacement of Department I constant capital, in kind, is considered, but, as Marx sets out, this also applies to the consumed Department I constant capital that is replaced via mutual exchange rather than in kind.
Here, then, the question of how the 8 metres of linen, £24, equal to the constant capital of the weaver is resolved. When we get back to the flax grower, the flax they sell to the spinner comprises only a part of their actual output, and the same applies to the machine-maker, who makes the spinning machines and looms. The machine maker also makes machines that replace their own worn out machines, just as the flax grower replaces their own seed etc., from their own output. So, neither the flax-grower nor the machine maker recovers this cost in the portion of their total output sold to the spinner. Its value consists entirely of revenues, and no element of constant capital. They both consume other constant capital, bought from other producers, such as wood and metal producers. Continuing back to these further primary producers, they also replace their constant capital directly from their own production, so that the portion of their total output actually sold comprises no value of constant capital, but only revenue, and all this revenue can then be consumed.
It is this fact that not all output of the producers of means of production is sold to Department II, but a portion is always retained and used to replace Department I means of production that explains how the total constant capital can be reproduced, as well as how revenues comprising only v + s can buy a consumable product comprising c + v + s. As Marx describes, it does not matter whether this retained portion, not exchanged with Department II, is replaced in kind or by mutual exchanges within Department I. The result is the same, it is replaced out of capital and not out of revenue. It is why revenues/GDP can never be equal to the value of total output, but only equals the new value created by labour during the year, v +s. Marx now addresses this in the next subsection, examining the exchange of capital for capital.
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