Capital is
not a thing but an historically determined social-relation between
capital and wage labour. It is historically determined, because it
can only arise at a point where markets have already grown, on the
back of generalised
commodity production and exchange, by petty
commodity producers, to a size that is sufficiently large that it
justifies capitalist production, at least for some commodities. But,
it can also only arise when, on the one hand,
money-capital has been
accumulated in the hands of some members of society, and when, on the
other, there exists other members of society, who have no other means
of subsistence than by selling their
labour-power, and where,
therefore, labour-power itself arises as a commodity, to be bought
and sold in the market. Capital, as this social relation, however,
is manifest as things in different forms – money-capital,
productive-capital,
commodity-capital. Whatever the form, or shell
it takes, what remains constant, within that shell, is the
capital-value.
The
money-capital possessed by the capitalist, as Marx states, is, in its
strictest definition, merely this capital value in
money form. It
is, thereby, the same capital value as the productive-capital, it is
used to buy, and equally the same capital value as the
commodity-capital, whose sale is realised by it. In each of the
exchanges of the circuit of capital, therefore, this capital-value
remains constant. It simply changes the form of its manifestation.
This is a further proof of Marx's argument that
surplus value does
not result from exchange, but only from the creation of new
additional
value, by the expenditure of
labour, within the production
process.
When
capitalist A uses £1,000 of money, in their bank account, to buy
means of production from B, for the purpose of engaging in capitalist
production, the £1,000 of money, instantly becomes £1,000 of
money-capital. In other words, the thing £1,000 of money, whether
it is gold coins, or merely an entry of deposit in a bank account, is
not itself capital, or even money-capital. It is only a money shell,
whose content can be filled in a number of ways. For example, money
may not only be used as a shell containing capital-value, it can be a
shell that contains
revenue. Then, the money is not used to buy
productive-capital, but only to buy commodities required for personal
consumption.
It is only
when the money is actually used to buy productive-capital, whether
that productive capital be
constant capital, in the form of machines,
raw material and so on, or
variable capital in the form of
labour-power, that it becomes money-capital, and is (assuming that
commodities exchange at their values) tautologically, therefore,
merely the money equivalent of the value of that productive-capital.
As Marx points out, money-capital can only, thereby, exist
fleetingly. No sooner is its nature as money-capital determined, in
the act of buying productive-capital, than it ceases to exist in that
form, because the capital value now exists in the form of
productive-capital, whilst the money-capital has once more become
simply money, whose content as either capital or revenue is yet again
waiting to be determined.
When
capitalist A, therefore, exchanges this £1,000 of money-capital, for
means of production with a value of £1,000, owned by capitalist B,
this is an exchange of capital. A exchanges a capital value of
£1,000, contained in the shell, or in the form, of money-capital,
and obtains, in its place, a capital value of £1,000, in the shell,
or in the form, of productive-capital. This is an exchange of
capital with capital. Similarly, Capitalist B exchanges £1,000 of
capital value, in the shell of commodities, the form of
commodity-capital, for £1,000 of capital value, in the form of
money-capital. But, as stated above, this money-capital only exists
as such fleetingly. In reality, this money-capital is only potential
money-capital, because it is only such, if it is itself again used to
buy productive-capital. What capitalist A gives to B is not
money-capital, but only the money shell. In the very act of
exchange, the capital value of the money-capital, its capital
content, leaves that shell, and enters the shell of the
productive-capital obtained in exchange. Capital value only enters
that money shell, in the possession of B, to the extent that it is
used to buy productive-capital.
But, as Marx
sets out, in Capital II, a portion of this £1,000 can never be
used as money-capital, because a portion of this £1,000 represents
the surplus value, produced by capitalist B, in their production
process, and a portion of that surplus value must always be used, by
capitalist B, and other exploiters, who share in that surplus value,
to buy consumption goods. In other words, a portion must always be
used as revenue not as capital. As Marx points out, at the heart of
expanded reproduction remains simple reproduction. In other words,
before a capital can expand its production, it must first, at least,
reproduce its original scale of production, it must reproduce the
labour-power, and means of production, it had at the start of the
previous circuit.
As Marx puts
it, therefore, capitalist production is always based on the circuit M
– C – M, even where it appears as M – C – M'. If, for
capitalist B, they advance £600 of money-capital, to buy means of
production, and a further £200, to buy labour-power, then, with a
100% rate of surplus value, they produce £200 of surplus value. The
value of their commodity-capital is then £1,000. They sell the
commodities, that comprise this commodity-capital, to capitalist A, and
obtain, in exchange, £1,000 of money-capital. However, if they
continue to produce, on the same scale, as under simple reproduction,
only £800, of this potential money-capital, is actually used as
money-capital. That is, of this £1,000, £600 is once again used to
replace the means of production, consumed in the production of the
commodity-capital, and £200 is used to once again hire labour-power,
to process those means of production, and again reproduce the
commodity-capital. The remaining £200, of the £1,000, is not used
as money-capital at all, but is used, by capitalist B, as revenue, to
purchase the consumption goods they need themselves to live.
So, as Marx
says, at the heart of this circuit is M (£800) – C (600 + 200) –
M (800). The surplus value of £200 produced in the production
process as surplus value, is not, in fact, realised as £200 of
money-capital, because it is destined, not to function as
money-capital, to be exchanged for productive-capital, and thereby
change its form, as capital value. It is always destined, merely to
become revenue, to be used to buy consumption goods, for the
capitalist. Moreover, as Marx sets out, in Capital II, Chapter
20, this surplus value of £200 can only be realised, itself,
because the capitalist, previously, throws an equivalent £200 of
money, as revenue, into circulation.
In reality,
at the start of the circuit, capitalist B does not throw £800 of
money into circulation, but £1,000. They throw £800 of money into
circulation as money-capital, used to buy means of production and
labour-power, but they must themselves live during this process, and
so, to buy the consumption goods they require, they throw a further
£200 of money into circulation. So, the actual circuit, looked at
from a flow of money, is this. M £1,000 (800 c + 200 r) – C
£1,000 (800 c + 200 r) – M £1,000 (800 c + 200 r).
In other
words, capitalist B starts with £1,000 in money. Of this, £800
represents money-capital destined to be used to buy
productive-capital (c). The other £200, in their possession, by
contrast, is destined to fund capitalist B's consumption needs (r),
during the period of the production process. Capitalist B, thereby
exchanges £800 of capital value, in its money form, for £800 of
capital value, in the form of productive-capital. At the same time,
they exchange £200 of money, as revenue, for £200 of commodities,
required for their personal consumption. They have then thrown
£1,000 of money into circulation, which is now in the hands of
workers, and other capitalists, and thereby available for them to buy
the commodities which comprise the commodity-capital of capitalist B,
which has an equal value of £1,000. But, having now exchanged this
£1,000 of capital value, in the form of commodity-capital, for
£1,000 of capital value in the form of money-capital, B is now, in
reality, at the same position they started at, with £800 of this
£1,000 actually representing capital value, in its money form, ready
to be thrown into circulation once more, to reproduce the
productive-capital consumed, and £200, of the £1,000, actually
representing money as revenue, destined only to be used to meet
capitalist B's consumption needs. The money they receive back, at the
end of the circuit (£1,000), is only equal in value to the money they threw
into the circuit to begin with (£1,000), M – C – M. It is only the value of the money thrown into circulation as money-capital (£800), whose value has expanded to £1,000, and which returns to them. The £200 they spent as revenue does not return to them. It was not
advanced as capital value, but spent as revenue.
Moreover, as
Marx describes, in Capital II, even where we have a situation
of expanded reproduction, so that not all of the £200 of surplus
value is used, by capitalist B, as revenue, to meet their consumption
needs, this circuit remains at the heart of this expanded
reproduction. In order to realise the £200 of surplus value,
capitalist B, still has to throw into circulation £200 of money
themselves, in addition to the £800 of money thrown into circulation
to buy productive-capital. The only difference here is that instead
of this £200 being thrown into circulation, only to buy consumption
goods, they throw some of it into circulation to buy additional means
of production.
When
capitalist B throws their £1,000 of commodity-capital value into
circulation, therefore, and receives in exchange £1,000 of
money-capital, this is again an exchange of capital with capital. In
reality, A does not exchange £1,000 of commodity-capital for £1,000
of money-capital, but exchanges £1,000 of commodities for £1,000 in
money. The real process is that the commodity-capital value of
£1,000 is
metamorphosed into £1,000 of money-capital value. The
£1,000 of capital value leaves the shell of the commodity form, at
the point of exchange, and enters the money form received in
exchange. For simple reproduction to continue, £800 of that capital
value, equal to the capital value that commenced the circuit, must
remain in that money-form, until it is exchanged for
productive-capital, once more, whilst £200 must assume the form of
revenue, not capital, so as to be exchanged for consumption goods, to
meet the needs of the capitalist.
This £200
of revenue, expended by capitalist B, to buy consumption goods, from
some other capitalist, is then an exchange of revenue with capital,
because the money in the hands of B, functions as revenue not
capital, but in buying commodities, it realises the commodity-capital
of some other capitalist, C. Capitalist C, exchanges a part of their
commodity-capital, equal to £200 of capital-value, for £200 of
potential money-capital, paid to them by B, but, for B, that £200 is
not advanced as capital, but only spent as revenue. B does not
advance this £200 of value for the purpose of its self expansion,
but only to obtain an equal value of commodities required for
personal consumption. For C, just as previously for B, what they
receive is only money, not capital. Whether this money shell is
filled with a content of capital value, or only acts as revenue,
depends upon the function for which the money itself is used.
For B, the
exchange is simply an exchange of £200 of value, in the form of
money, as revenue, for £200 of value in the form of commodities.
Similarly, when capitalist A bought means of production from B, what
they bought was not capital, but only commodities. They exchanged
£800 of value in the form of money, for £800 in the form of
commodities. Likewise, B did not sell them £800 of capital, but
£800 of commodities. In the same way that the £800 of
capital-value left its money shell, in the process of the exchange,
so it entered the commodity shell, as part of that exchange. Neither
the money nor the commodities, in themselves, represented capital.
They were merely things, shells, which contained the capital value.
The value itself only functions as capital value, because of the
specific function to which it is used, as a means of expanding value
through the production process. In other words, the commodities that
make up the means of production exist as capital-value, only because
they function as productive-capital, as a means of expanding value.
The money-only exists as money-capital, as capital value, to the
extent that it is used to buy productive-capital. The final
commodity product, the commodity-capital, exists as capital-value,
because it already represents expanded value, it contains surplus
value, and its only function is then to be realised in its money
form, so that the circuit can be reproduced.
When Capital
A uses their £200 of money-capital to buy productive-capital, in the
form of labour-power, however, this is immediately an exchange of
capital with revenue. In the case of the exchange between A and B, A
exchanges £800 of capital value in the money form for £800 of
capital value in the commodity form. B exchanges £800 of capital
value in the commodity form for £800 of capital in the money form.
But, for the worker, the commodity they sell, labour-power does not
exist for them as capital value, as commodity-capital. It is only
ever just a commodity. For B, their commodity-capital is defined as
commodity-capital, precisely because it already represents expanded
capital value, it already contains surplus value, prior to being
sold. But, the worker's labour-power, does not contain any surplus
value.
What
distinguishes labour-power, from the commodity-capital of the
capitalist, is that, although both exchange at their value, the
worker only obtains an amount of value equal to that which they have
to expend for its reproduction, whereas the capitalist obtains an
amount of value greater than that they have advanced for the
production of the commodities they sell. The difference for the
capitalist is then that an additional amount of surplus value has
been created in the production process, an amount of additional
value, for which they have not paid. The capital value of their
commodity-capital is greater than the capital value of the
productive-capital used to produce it, or the money-capital advanced
to buy that productive-capital. But, this expansion of capital value
arises not as a consequence of any of the foregoing exchanges, but
only as a consequence of new, additional value being created in the
production process.
The worker
then exchanges an amount of value in the form of labour-power, equal
to £200, and obtains in return a value of £200 in the form of
money paid to them as
wages. In reality, the worker, if taken as workers as a whole, could
simply have been given, by capitalists as a whole, commodities
required for their reproduction, equal to this £200, because the
£200 in money, is, in any case, used to simply buy those
commodities. It is an exchange not of capital, but simply of one
commodity, labour-power, for another, or series of others.
But, looked
at from the perspective of capitalist A, they exchange a capital
value, in its money-form , of £200, for a capital value of £200, in
its form as productive-capital (variable-capital). Capitalist A gives to the worker
£200 in money. The worker gives to capitalist A a commodity
(labour-power) with a value of £200. In the process of exchange,
the capital value of £200 leaves the shell of its money form, and
enters the shell of its form as productive-capital (labour-power).
Whilst the labour-power for the worker is not capital, but merely a
commodity, for capitalist A, the labour-power is capital, precisely
because, in the production process, it expands capital-value. It
produces surplus value equal to £200.
