(I’ve had sporadic internet and computer access for a bit here so I’ve written bits of drafts of a few posts over a few days, I’m going to post this stuff all now.)

Getting into v2 of Capital now, beyond the preface.

Marx describes what he calls “the circular movement of capital” (23) via this abbreviation:


The dashes represent market activity (exchanges) and the ellipses represent time away from markets (production). Marx breaks this sequence down into “three stages.” (23.)

The stage M-C represents the capitalist appearing on the market as an owner of money, M, looking to buy commodities, C. These commodities consist of a variety of objects (means of production) and of labor power.

The stage C…P…C’ represents the process of production. The workers hired (ie, the labor power purchased) are set to work in production, P, using the other objects purchased – raw material, tools, machines, the physical space of the work place. The produce new commodities, C’.

The stage C’-M’ represents the capitalist returning to the market as an owner of commodities, the end result of the production process P.

This drawing is an attempt to show these stages in relation to a single capitalist.

Each time the series ends with M’, that money becomes the funds that kick the whole thing off again. Of course the final M’ at the top here ought to be leaping again into a new series, it’s not supposed to stop. Over time the M’ gets bigger and bigger, that’s not represented in this picture. What’s also not represented in this picture is the interaction between multiple capitalists. Each time a capitalist purchases C, the commodities purchased (other than labor power) are sold by some capitalist. The picture below represents an element of this.

The black, blue, and orange colored letters represent different capitalists. For one capitalist a portion of the M they bring to market is the M’ that another capitalist will take from the market (when an M and an M’ are circled by the same color circle this represents that the M and M’ in two different sequences are tied together via having changed hands). Likewise the C’ that one capitalist brings to market as a product for sale is the source for the C (specifically, means of production, MP) that another capitalist will take from the market in order to set workers to work upon it to create C’, a product or set of products to bring back to the market to sell.

Marx examines each stage in more detail.

Stage 1, M-C
In what Marx represents as the first stage, M-C, the capitalist goes to market with money, M, looking to buy commodities, C. These commodities consist of means of production and labor power. That is,“the sum of commodities” purchased, C, are “L+MP” (24). That is, M-C represents not one act of purchase but rather all the purchases the capitalist does that feed into the production process. The bundle of money, M, is segmented into different series aimed at these different commodities – “that is to say M-C is composed of M-L and M-MP.” (24.) “These two series of purchases belong to entirely different markets, the one to the commodity market and the other to the labor market.” (24.) We might say as well that these are different orders of markets, because markets for means of production are different from markets for labor power, and there exist multiple markets of each order (ie, multiple MP markets and multiple L markets).

Labor power is purchased at its value. That is, labor power is paid for according to the socially necessary labor time (the labor time which it is required to pay for) that goes into producing labor power, like any other commodity. (Note to self: think more about the processes by which SNLT is constituted and reconstituted.) (24.)

Marx states that M-C, that is, money exchanged for L+MP (labor and means of production) includes the proportion of labor power to other commodities used in production, which is “determined (…) by the quantity of excess surplus-labour to be expended by a certain number of labourers.” (25.) That is, the number of workers and their rate of exploitation are factors that shape capitalist’s planning and purchasing.

M-C is the transformation of money capital into productive capital. (26.) Marx takes pains to note that it is the context here, the sequences or circuits of capitalism as a social relation, that make money into capital and make production here into productive capital. Money is not always capital nor is production.

Marx notes that “what is M-C” for the capitalist, when it is the purchase of that special commodity which is labor power, is L-M “for the seller”, the worker. “The labourer spends the money so obtained gradually for a number of commodities required for the satisfaction of his needs, for articles of consumption. The complete circulation of his commodity [labor power] therefore appears as L-M-C (…) hence in the general form of the simple circulation of commodities, C-M-C. Money is in this case merely a passing means of circulation, a mere medium in the exchange of one commodity for another.” (27.)

The purchase of labor power, the exchange “M-L is the characteristic moment in the transformation of money-capital into productive-capital, because it is the essential condition for the real transformation of the value advanced in the form of money into capital, into a value producing surplus-value.” (27.) The purchase of means of production, M-MP (the other series which M-C is segmented alongside M-L), is only important because it’s what the workers work on. It’s their work that adds the new value. Marx notes that he discussed this in v1 of Capital, in Part II in the part labeled “The Transformation of Money into Capital.”

Marx’s series abstract from the particular phases of capitalist production. That is, the abbreviations only don’t depict some changes over time; others are not distinguished here. Marx says that when or “If money is transformed into productive capital for the first time or if it performs for the first time the function of money-capital for its owner, he must begin by buying means of production, such as buildings, machinery, etc., before he buys labour-power. For as soon as he compels labour-power to act in obedience to his sway, he must have the means of production to which he can apply it as labour power.” (29.)

So, the capitalist first engages primarily in M-C of the M-MP variety until the capitalist has enough purchased – enough of the places, tools, machines, and techniques of production – to be able to actually put workers to work producing. During those exchanges, the capitalist is more properly a would-be capitalist. He only becomes a capitalist properly speaking after he has hired workers, begun to extract surplus value from them, and begun to regularly re-invest that surplus value into continued and expanded production.

Marx points out that not all payment of wages – not all purchase of labor power – is capitalist.
“Money (…) appears very early as a buyer of so-called services, without the transformation of M into money-capital, and without any change in the general character of the economic system.” (28.)

The primary reasons the workers sells their labor power in the first place is out of compulsion. Workers don’t own means of production sufficient to where they could work on them and meet all their needs. (29.) “The class relation between capitalist and wage-labourer (…) arises out of the fact that the conditions required for the realization of labour-power” namely, “means of subsistence and means of production, are separated from the owner of labour-power, being the property of another.” (29.)

The exchange M-L is in this series “a function of money-capital or money as the form of existence of capital” but it’s not the simply fact of purchasing labor power that makes it capitalist. When M-L is a form of existence of capitalism it is “not for the sole reason that money (…) assumes the role of a means of paying for a useful human activity or service; hence by no means in consequence of the function of money as a means of payment.” (29-30.) The exchange M-L is capitalist in nature only when and “only because labour-power finds itself in a state of separation from its means of production (including the means of subsistence as means of production of the labour-power itself), and because this separation can be overcome only by the sale of the labour-power to the owner of the means of production. (…) The capital-relation during the process of production arises only because it is inherent in the act of circulation, in the different fundamental economic conditions in which buyer and seller confront each other, in their class relation. It is not money which by its nature creates this relations, it is rather the existence of the relation which permits of the transformation of a mere money-function into a capital-function.” (30.)

“What lies back”, that is, the basis of all this, “is distribution [but] not distribution in the ordinary meaning of a distribution of articles of consumption, but the distribution of the elements of production itself, the material factors of which are concentrated on one side, and, labour-power, isolated on the other.” (31.) This recalls the more extended discussion in what I believe was an unpublished preface (or is it the introduction?, in any case it’s the first bit in the Grundrisse) to Marx’s 1859 Contribution to the Critique of Political Economy, where he notes that production presupposes the distribution of class positions and of people into those class positions. Marx adds that “capitalist production, once it is established, not only reproduces this separation by extends its scope further and further until it becomes the prevailing social condition.” (31.) “[C]apitalist production does not only create commodities and surplus-value, but also reproduces to an ever increasing extent the class of wage-labourers.” (32.) Marx’s phrase – “capitalist production” – strikes me as unfortunate here. The point is that capitalism is self-reproducing as a system. That is not to say that the immediate point of production is self-reproducing or that markets are self-reproducing. Rather, the class-relation is self-reproducing in the sense that there are ongoing efforts made to maintain the “class relation between capitalist and wage-labourer,” which among other things means continually reproducing the social conditions under which “means of subsistence and means of production, are separated from the owner of labour-power, being the property of another.” (29.) Capitalism doesn’t reproduce itself in any guaranteed sense either, just as its beginning weren’t guaranteed. (On this the ending bits of v1 of Capital on primitive accumulation, from ch26 to ch29 or so, strike me as indispensable.) “[T]he formula for the circuit of money-capital, M-C…P…C’-M’, is the matter-of-course form of the circuit of capital only on the basis of already developed capitalist production.” (32.) The formula represents capitalism operating after its social conditions are in place; it doesn’t depict the origins of capitalism.