(We have demonstrated above, in the development of the concept of capital, that it is value as such, money, which both preserves itself through circulation and also increases itself through exchange with living labour. That, hence, the aim of producing capital is never use value, but rather the general form of wealth as wealth. The cleric Th. Chalmers, in the otherwise in many respects ridiculous and repulsive work: On Political Economy in Connection with the Moral State and Moral Prospects of Society, 2nd. ed., Lond., 1832, has correctly struck upon this point, without at the same time falling into the asininity of types like Ferrier etc., who confuse money as the value of capital with the really available metallic money.  In crises, capital (as commodity) is not exchangeable, not because too few means of circulation are available; but, rather, it does not circulate because it is not exchangeable. The importance assumed by cash in times of crisis arises only because, while capital is not exchangeable for its value — and only for that reason does its value appear opposite it in the money form — there are obligations to pay off; alongside the interrupted circulation a forced circulation takes place. Chalmers says (Notebook IX, p. 57): 'When a consumer refuses certain commodities, it is not always, as is assumed by the new economists, because he wants to purchase others in preference, but because he wants to reserve entire the general power of purchasing. And when a merchant brings commodities to market, it is generally not in quest of other commodities to be given in return for them ... he will extend his general power of purchase of all commodities. It is useless to say that money is also a commodity. The real metallic money for which a merchant has any use does not amount to more than a small fraction of his capital, even of his monied capital; all of which, though estimated in money, can be made, on the strength of written contracts, to describe its orbit, and be effective for all its purposes, with the aid of coin amounting to an insignificant proportion of the whole. The great object of the monied capitalist, in fact, is to add to the nominal amount of his fortune. It is that, if expressed pecuniarily this year by £20,000 e.g., it should be expressed pecuniarily next year by £24,000. To advance his capital, as estimated in money, is the only way in which he can advance his interest as a merchant. The importance of these objects for him is not affected by fluctuations in the currency or by a change in the real value of money. For example, in one year he comes from 20 to 24,000 pounds; through a fall in the value of money he may not have increased his command over the comforts etc. Nevertheless, this is his interest just as much as if money had not fallen; for else his monied fortune would have remained stationary and his real wealth would have declined in the proportion of 24 to 20... Commodities' (i.e. use value, real wealth) 'thus not the terminating object of the trading capitalist.' (The illusion of the Monetary System, however, was that it regarded real metallic money (or paper, would change nothing), in short, the form of value, as real money, as the general form of wealth and of self-enrichment, whereas precisely as money increases as the accumulation of general power of purchase, it undergoes a relative decline in its specific form as medium of exchange or also as realized hoard.) As assignation in real wealth or productive power [the capitalist's money] gains a thousand forms, 'quite apart from expenditure of his revenue in purchases for the sake of consumption. In the outlay of his capital, and when he purchases for the sake of production, money is his terminating object' (not coin, nota bene). (164 6.)
'Profit,' says the same Chalmers, 'has the effect of attaching the services of the disposable population to other masters, besides the mere landed proprietors,... while their expenditure reaches higher than the necessaries of life.' (78. Notebook IX, p.53.)>
In the book just referred to, Chalmers calls the whole circulation process the economic cycle: 'The world of trade may be conceived to revolve in what we shall call an economic cycle, which accomplishes one revolution by business coming round again, through its successive transactions, to the point from which it set out. Its commencement may be dated from the point at which the capitalist has obtained those returns by which his capital is replaced to him: whence he proceeds anew to engage his workmen; to distribute among them, in wages, their maintenance, or rather the power of lifting it; to obtain from them in finished work, the articles in which he specially deals; to bring these articles to market, and there terminate the orbit of one set of movements, by effecting a sale, and receiving in its proceeds, a return for the whole outlays of the period. The intervention of money alters nothing in the real character of this operation...' (85 loc. cit.) (Notebook, p. 54, 55.)
The difference in the return, in so far as it depends on the phase of the circulation process which coincides with the direct production process, depends not only on the longer or shorter labour time required to complete the article (e.g. canal building etc.), but also, in certain branches of industry — agriculture — on the interruptions of the work which are due to the nature of the work itself, where on the one hand the capital lies fallow, and, on the other, labour stands still. Thus the example given by A. Smith, that wheat is a crop taking 1 year, the ox a crop taking 5 years, etc.  Therefore 5 years of labour are employed on the latter, only 1 on the former. Little labour is employed e.g. on cattle raised on pasture. At the same time, in agriculture, the labour applied e.g. during the winter is also little. In agriculture (and to a greater or lesser degree in many another branch of production) there are interruptions given by the conditions of the production process itself, pauses in labour time, which must be begun anew at the given point in order to continue or to complete the process; the constancy of the production process here does not coincide with the continuity of the labour process. This is one moment of the difference. Secondly: the product generally requires a longer time to be completed, to be put into its finished state; this is the total duration of the production process, regardless of whether interruptions take place in the operations of labour or not; the different duration of the production phase generally. Thirdly: after the product is finished, it may be necessary for it to lie idle for some time, during which it needs relatively little labour, in order to be left in the care of natural processes, e.g. wine. (This will be, conceptually, approximately the same case as I.) Fourthly: a longer time to be brought to market, because destined for a more distant market. (This coincides conceptually with case II.) Fifthly: The shorter or longer period of the total return of a capital (its total reproduction), in so far as it is determined by the relation of fixed capital and circulating capital, is concerned obviously not with the immediate production process and its duration, but rather takes its character from circulation. The total capital's period of reproduction is determined by the total process, circulation included.
'Inequality in the periods necessary for production.' 
'The difference of time required to complete the products of agriculture, and of other species of labour, is the main cause of the great dependence of the agriculturists. They cannot bring their commodities to market in less time than a year. For that whole period they are obliged to borrow from the shoemaker, the tailor, the smith, the wheelwright and the various other labourers, whose products they need and which are completed in a few days or weeks. Owing to this natural circumstance, and owing to the more rapid increase of the wealth produced by other labour than that of agriculture, the monopolizers of all the land, although they have also monopolized the legislation, are unable to save themselves and their servants, the farmers, from being the most dependent class in the community.' (Thomas Hodgskin, Popular Polit. Econ. Four lectures etc. London, 1827, p. 147 note.) (Notebook IX, p. 44.) 'The natural circumstance of all commodities being produced in unequal periods, while the wants of the labourer must be supplied daily... This inequality in the time necessary to complete different commodities, would in the savage state cause the hunter etc. to have a surplus of game etc., before the maker of bows and arrows etc. had any commodity completed to give for the surplus game. No exchange could be made; the bow-maker must be also a hunter and division of labour impossible. This difficulty contributed to the invention of money.' (179, 180.) (loc. cit.)
<It is already contained in the concept of the free labourer, that he is a pauper: virtual pauper. According to his economic conditions he is merely a living labour capacity, hence equipped with the necessaries of life. Necessity on all sides, without the objectivities necessary to realize himself as labour capacity. If the capitalist has no use for his surplus labour, then the worker may not perform his necessary labour; not produce his necessaries. Then he cannot obtain them through exchange; rather, if he does obtain them, it is only because alms are thrown to him from revenue. He can live as a worker only in so far as he exchanges his labour capacity for that part of capital which forms the labour fund. This exchange is tied to conditions which are accidental for him, and indifferent to his organic presence. He is thus a virtual pauper. Since it is further the condition of production based on capital that he produces ever more surplus labour, it follows that ever more necessary labour is set free. Thus the chances of his pauperism increase. To the development of surplus labour corresponds that of the surplus population. In different modes of social production there are different laws of the increase of population and of overpopulation; the latter identical with pauperism. These different laws can simply be reduced to the different modes of relating to the conditions of production, or, in respect to the living individual, the conditions of his reproduction as a member of society, since he labours and appropriates only in society. The dissolution of these relations in regard to the single individual, or to part of the population, places them outside the reproductive conditions of this specific basis, and hence posits them as overpopulation, and not only lacking in means but incapable of appropriating the necessaries through labour, hence as paupers. Only in the mode of production based on capital does pauperism appear as the result of labour itself, of the development of the productive force of labour. Thus, what may be overpopulation in one stage of social production may not be so in another, and their effects may be different. E.g. the colonies sent out in antiquity were overpopulation, i.e. their members could not continue to live in the same space with the material basis of property, i.e. conditions of production. The number may appear very small compared with the modern conditions of production. They were, nevertheless, very far from being paupers. Such was, however, the Roman plebs with its bread and circuses. The overpopulation which leads to the great migrations presupposes different conditions again. Since in all previous forms of production the development of the forces of production is not the basis of appropriation, but a specific relation to the conditions of production (forms of property) appears as presupposed barrier to the forces of production, and is merely to be reproduced, it follows that the development of population, in which the development of all productive forces is summarized, must even more strongly encounter an external barrier and thus appear as something to be restricted. The conditions of the community [were] consistent only with a specific amount of population. On the other side, if the barriers to population posited by the elasticity of the specific form of the conditions of production change in consequence of the latter, if they contract or expand — thus overpopulation among hunting peoples was different from that among the Athenians, in turn different among the latter from that among the Germanic tribes — then so does the absolute rate of population increase, and hence the rate of overpopulation and population. The amount of overpopulation posited on the basis of a specific production is thus just as determinate as the adequate population. Overpopulation and population, taken together, are the population which a specific production basis can create. The extent to which it goes beyond its barrier is given by the barrier itself, or rather by the same base which posits the barrier. Just as necessary labour and surplus labour together [are] the whole of labour on a given base.
Malthus's theory, which incidentally not his invention, but whose fame he appropriated through the clerical fanaticism with which he propounded it — actually only through the weight he placed on it — is significant in two respects: (1) because he gives brutal expression to the brutal viewpoint of capital; (2) because he asserted the fact of overpopulation in all forms of society. Proved it he has not, for there is nothing more uncritical than his motley compilations from historians and travelers' descriptions. His conception is altogether false and childish (1) because he regards overpopulation as being of the same kind in all the different historic phases of economic development; does not understand their specific difference, and hence stupidly reduces these very complicated and varying relations to a single relation, two equations, in which the natural reproduction of humanity appears on the one side, and the natural reproduction of edible plants (or means of subsistence) on the other, as two natural series, the former geometric and the latter arithmetic in progression. In this way he transforms the historically distinct relations into an abstract numerical relation, which he has fished purely out of thin air, and which rests neither on natural nor on historical laws. There is allegedly a natural difference between the reproduction of mankind and e.g. grain. This baboon thereby implies that the increase of humanity is a purely natural process, which requires external restraints, checks, to prevent it from proceeding in geometrical progression. This geometrical reproduction is the natural reproduction process of mankind. He would find in history that population proceeds in very different relations, and that overpopulation is likewise a historically determined relation, in no way determined by abstract numbers or by the absolute limit of the productivity of the necessaries of life, but by limits posited rather by specific conditions of production. As well as restricted numerically. How small do the numbers which meant overpopulation for the Athenians appear to us! Secondly, restricted according to character. An overpopulation of free Athenians who become transformed into colonists is significantly different from an overpopulation of workers who become transformed into workhouse inmates. Similarly the begging overpopulation which consumes the surplus produce of a monastery is different from that which forms in a factory. It is Malthus who abstracts from these specific historic laws of the movement of population, which are indeed the history of the nature of humanity, the natural laws, but natural laws of humanity only at a specific historic development, with a development of the forces of production determined by humanity's own process of history. Malthusian man, abstracted from historically determined man, exists only in his brain; hence also the geometric method of reproduction corresponding to this natural Malthusian man. Real history thus appears to him in such a way that the reproduction of his natural humanity is not an abstraction from the historic process of real reproduction, but just the contrary, that real reproduction is an application of the Malthusian theory. Hence the inherent conditions of population as well as of overpopulation at every stage of history appear to him as a series of external checks which have prevented the population from developing in the Malthusian form. The conditions in which mankind historically produces and reproduces itself appear as barriers to the reproduction of the Malthusian natural man, who is a Malthusian creature. On the other hand, the production of the necessaries of life — as it is checked, determined by human action — appears as a check which it posits to itself. The ferns would cover the entire earth. Their reproduction would stop only where space for them ceased. They would obey no arithmetic proportion. It is hard to say where Malthus has discovered that the reproduction of voluntary natural products would stop for intrinsic reasons, without external checks. He transforms the immanent, historically changing limits of the human reproduction process into outer barriers; and the outer barriers to natural reproduction into immanent limits or natural laws of reproduction.
(2) He stupidly relates a specific quantity of people to a specific quantity of necessaries.  Ricardo immediately and correctly confronted him with the fact that the quantity of grain available is completely irrelevant to the worker if he has no employment; that it is therefore the means of employment and not of subsistence which put him into the category of surplus population.  But this should be conceived more generally, and relates to the social mediation as such, through which the individual gains access to the means of his reproduction and creates them; hence it relates to the conditions of production and his relation to them. There was no barrier to the reproduction of the Athenian slave other than the producible necessaries. And we never hear that there were surplus slaves in antiquity. The call for them increased, rather. There was, however, a surplus population of non-workers (in the immediate sense), who were not too many in relation to the necessaries available, but who had lost the conditions under which they could appropriate them. The invention of surplus labourers, i.e. of propertyless people who work, belongs to the period of capital. The beggars who fastened themselves to the monasteries and helped them eat up their surplus product are in the same class as the feudal retainers, and this shows that the surplus produce could not be eaten up by the small number of its owners. It is only another form of the retainers of old, or of the menial servants of today. The overpopulation e.g. among hunting peoples, which shows itself in the warfare between the tribes, proves not that the earth could not support their small numbers, but rather that the condition of their reproduction required a great amount of territory for few people. Never a relation to a non-existent absolute mass of means of subsistence, but rather relation to the conditions of reproduction, of the production of these means, including likewise the conditions of reproduction of human beings, of the total population, of relative surplus population. This surplus purely relative: in no way related to the means of subsistence as such, but rather to the mode of producing them. Hence also only a surplus at this state of development.
(3) What is not actually proper to Malthus at all, the introduction of the theory of rent — at bottom only a formula for saying that in the stage of industry familiar to Ricardo etc., agriculture remained behind industry, which incidentally inherent in bourgeois production although in varying relations — does not belong here.>
<As to production founded on capital, the greatest absolute mass of necessary labour together with the greatest relative mass of surplus labour appears as a condition, regarded absolutely. Hence, as a fundamental condition, maximum growth of population — of living labour capacities. If we further examine the conditions of the development of the productive forces as well as of exchange, division of labour, cooperation, all-sided observation, which can only proceed from many heads, science, as many centres of exchange as possible — all of it identical with growth of population. On another side, it is also inherent in the condition of the appropriation of alien surplus labour that, in addition to the necessary population — i.e. that which represents necessary labour, labour necessary for production — there should be a surplus population, which does not work. The further development of capital shows that besides the industrial part of this surplus population — the industrial capitalist — a purely consuming part branches off: idlers, whose business it is to consume alien products and who, since crude consumption has its limits, must have the products furnished to them partly in refined form, as luxury products. This idle surplus population is not what the economists have in mind when they speak of surplus population. On the contrary, it — and its business of consuming — is treated by the population fanatics as precisely the necessary population, and justly logically) so. The expression, surplus population, concerns exclusively labour capacities, i.e. the necessary population; surplus of labour capacities. But this arises simply from the nature of capital. Labour capacity can perform its necessary labour only if its surplus labour has value for capital, if it can be realized by capital. Thus, if this realizability is blocked by one or another barrier, then (1) labour capacity itself appears outside the conditions of the reproduction of its existence; it exists without the conditions of its existence, and is therefore a mere encumbrance; needs without the means to satisfy them; (2) necessary labour appears as superfluous, because the superfluous is not necessary. It is necessary only to the extent that it is the condition for the realization of capital. Thus the relation of necessary and surplus labour, as it is posited by capital, turns into its opposite, so that a part of necessary labour — i.e. of the labour reproducing labour capacity — is superfluous, and this labour capacity itself is therefore used as a surplus of the necessary working population, i.e. of the portion of the working population whose necessary labour is not superfluous but necessary for capital. Since the necessary development of the productive forces as posited by capital consists in increasing the relation of surplus labour to necessary labour, or in decreasing the portion of necessary labour required for a given amount of surplus labour, then, if a definite amount of labour Capacity is given, the relation of necessary labour needed by capital must necessarily continuously decline, i.e. part of these labour capacities must become superfluous, since a portion of them suffices to perform the quantity of surplus labour for which the whole amount was required previously. The positing of a specific portion of labour capacities as superfluous, i.e. of the labour required for their reproduction as superfluous, is therefore a necessary consequence of the growth of surplus labour relative to necessary. The decrease of relatively necessary labour appears as increase of the relatively superfluous labouring capacities — i.e. as the positing of surplus population. If the latter is supported, then this comes not out of the labour fund but out of the revenue of all classes. It takes place not through the labour of the labour capacity itself — no longer through its normal reproduction as worker, but rather the worker is maintained as a living being through the mercy of others; hence becomes a tramp and a pauper; because he no longer sustains himself through his necessary labour; hence, through the exchange with a part of capital; he has fallen out of the conditions of the relation of apparent exchange and apparent independence; secondly: society in its fractional parts undertakes for Mr Capitalist the business of keeping his virtual instrument of 6IO labour — its wear and tear — intact as reserve for later use. He shifts a part of the reproduction costs of the working class off his own shoulders and thus pauperizes a part of the remaining population for his own profit. At the same time, capital has the tendency both to posit and equally to suspend this pauperism, because it constantly reproduces itself as surplus capital. It acts in opposite directions, so that sometimes one, sometimes the other is predominant. Finally, the positing of surplus capital contains a double moment: (1) It requires a growing population in order to be set into motion; if the relative population it requires has become smaller, then it has itself become correspondingly larger; (2) it requires a part of the population which is unemployed (at least relatively); i.e. a relative surplus population, in order to find the readily available population for the growth of surplus capital; (3) at a given stage of the productive forces, the surplus value may be present, but not yet in the proportions sufficient to be employed as capital. Not only a minimum of the stage of production, but posited for its expansion. In this case surplus capital and surplus population. Likewise, a surplus population may be present, but not enough, not in the proportions required for more production. In all these investigations, the variations in sales, contraction of the market etc., in short, everything which presupposes the process of many capitals, has been intentionally abstracted away.>
<A. Smith's view, [is] that labour never changes its value, in the sense that a definite amount of labour is always a definite amount of labour for the worker, i.e., with A. Smith, a sacrifice of the same quantitative magnitude. Whether I obtain much or little for an hour of work — which depends on its productivity and other circumstances — I have worked one hour. What I have had to pay for the result of my work, my wages, is always the same hour of work, let the result vary as it may. 'Equal quantities of labour must at all times and in all places have the same value for the worker. In his normal state of health, strength and activity, and with the common degree of skill and facility which he may possess, he must always give up the identical portion of his tranquillity, his freedom, and his happiness. Whatever may be the quantity or composition of the commodities he obtains in reward of his work, the price he pays is always the same. Of course, this price may buy sometimes a lesser, sometimes a greater quantity of these commodities, but only because their value changes, not the value of the labour which buys them. Labour alone, therefore, never changes its own value. It is therefore the real price of commodities, money is only their nominal value.' (ed. by Garnier, Vol. I, pp. 64-6.) (Notebook, p. 7.)  In the sweat of thy brow shalt thou labour! was Jehovah's curse on Adam.  And this is labour for Smith, a curse. 'Tranquillity' appears as the adequate state, as identical with 'freedom' and 'happiness'. It seems quite far from Smith's mind that the individual, 'in his normal state of health, strength, activity, skill, facility', also needs a normal portion of work, and of the suspension of tranquillity. Certainly, labour obtains its measure from the outside, through the aim to be attained and the obstacles to be overcome in attaining it. But Smith has no inkling whatever that this overcoming of obstacles is in itself a liberating activity — and that, further, the external aims become stripped of the semblance of merely external natural urgencies, and become posited as aims which the individual himself posits — hence as self-realization, objectification of the subject, hence real freedom, whose action is, precisely, labour. He is right, of course, that, in its historic forms as slave-labour, serf-labour, and wage-labour, labour always appears as repulsive, always as external forced labour; and not-labour, by contrast, as 'freedom, and happiness'. This holds doubly: for this contradictory labour; and, relatedly, for labour which has not yet created the subjective and objective conditions for itself (or also, in contrast to the pastoral etc. state, which it has lost), in which labour becomes attractive work, the individual's self-realization, which in no way means that it becomes mere fun, mere amusement, as Fourier, with grisette-like  naivete, conceives it.  Really free working, e.g. composing, is at the same time precisely the most damned seriousness, the most intense exertion. The work of material production can achieve this character only (1) when its social character is posited, (2) when it is of a scientific and at the same time general character, net merely human exertion as a specifically harnessed natural force, but exertion as subject, which appears in the production process not in a merely natural, spontaneous form, but as an activity regulating all the forces of nature. A. Smith, by the way, has only the slaves of capital in mind. For example, even the semi-artistic worker of the Middle Ages does not fit into his definition. But what we want here initially is not to go into his view on labour, his philosophical view, but into the economic moment. Labour regarded merely as a sacrifice, and hence value-positing, as a price paid for things and hence giving them price depending on whether they cost more or less labour, is a purely negative characterization. This is why Mr Senior, for example, was able to make capital into a source of production in the same sense as labour, a source sui generis of the production of value, because the capitalist too brings a sacrifice, the sacrifice of abstinence, in that he grows wealthy instead of eating up his product directly.  Something that is merely negative creates nothing. If the worker should, e.g. enjoy his work — as the miser certainly enjoys Senior's abstinence — then the product does not lose any of its value. Labour alone produces; it is the only substance of products as values. [*] Its measure, labour time — presupposing equal intensity — is therefore the measure of values. The qualitative difference between workers, in so far as it is not natural, posited by sex, age, physical strength etc. — and thus basically expresses not the qualitative value of labour, but rather the division and differentiation of labour — is itself only a product of history, and is in turn suspended for the great mass of labour, in that the latter is itself simple; while the qualitatively higher takes its economic measure from the simple. The statement that labour time, or the amount of labour, is the measure of values means nothing other than that the measure of labour is the measure of values. Two things are only commensurable if they are of the same nature. Products can be measured with the measure of labour — labour time — only because they are, by their nature, labour. They are objectified labour. As objects they assume forms in which their being as labour may certainly be apparent in their form (as a purposiveness posited in them from outside; however, this is not at all apparent with e.g. the ox, or with reproduced natural products generally), but in which this being has, apart from itself, no other features in common. They exist as equals as long as they exist as activity. The latter is measured by time, which therefore also becomes the measure of objectified labour. We will examine elsewhere to what extent this measurement is linked with exchange, not with organized social labour — a definite stage of the social production process. Use value is not concerned with human activity as the source of the product, with its having been posited by human activity, but with its being for mankind. In so far as the product has a measure for itself, it is its natural measure as natural object, mass, weight, length, volume etc. Measure of utility etc. But as effect, or as static presence of the force which created it, it is measured only by the measure of this force itself. The measure of labour is time. Only because products ARE labour can they be measured by the measure of labour, by labour time, the amount of labour consumed in them. The negation of tranquillity, as mere negation, ascetic sacrifice, creates nothing. Someone may castigate and flagellate himself all day long like the monks etc., and this quantity of sacrifice he contributes will remain totally worthless. The natural price of things is not the sacrifice made for them. This recalls, rather, the pre-industrial view which wants to achieve wealth by sacrificing to the gods. There has to be something besides sacrifice. The sacrifice of tranquillity can also be called the sacrifice of laziness, unfreedom, unhappiness, i.e. negation of a negative state.A. Smith considers labour psychologically, as to the fun or displeasure it holds for the individual. But it is something else, too, in addition to this emotional relation with his activity — firstly, for others, since A's mere sacrifice would be of no use for B; secondly, a definite relation by his own self to the thing he works on, and to his own working capabilities. It is a positive, creative activity. The measure of labour — time — of course does not depend on labour's productivity; its measure is precisely nothing but a unit of which the proportional parts of labour express a certain multiple. It certainly does not follow from this that the value of labour is constant; or, follows only in so far as equal quantities of labour are of the same measured magnitude. It is then found upon further examination that the values of products are measured not by the labour employed in them, but by the labour necessary for their production. Hence not sacrifice, but labour as a condition of production. The equivalent expresses the condition of the products' reproduction, as given to them through exchange, i.e. the.possibility of repeating productive activity anew, as posited by its own product.> <By the way, Smith's view of labour as a sacrifice, which incidentally correctly expresses the subjective relation of the wage worker to his own activity, still does not lead to what he wants — namely the determination of value by labour time. An hour of work may always be an equal sacrifice for the worker. But the value of commodities in no way depends on his feelings; nor does the value of his hour of work. Since A. Smith admits that one can buy this sacrifice sometimes more cheaply, sometimes more dearly, it becomes distinctly peculiar that it is supposed always to be sold for the same price. And he is indeed inconsistent. Later he makes w ages the measure of va lue, not the amount of labour. The slaughter of the ox is always the same sacrifice, for the ox. But this does not mean that the value of beef is constant.> <'Now, although equal quantities of labour always have the same value as regards the worker, they appear sometimes of smaller, sometimes of larger value for him who employs the worker. He purchases them sometimes with a smaller, sometimes a larger quantity of commodities. For him, therefore, the price of labour varies like that of any other thing, although in reality it is only the commodities which are sometimes dearer, sometimes cheaper.' (p. 66 A. Smith, loc. cit. Vol. I.) (Notebook, p. 8.)>
<The way in which A. Smith lets profit arise is very naive. "In the primitive state, the product of labour belongs wholly to the worker. The quantity' (including also the greater difficulty etc.) 'of labour employed to obtain or to produce an exchangeable object is the only circumstance which governs the quantity of labour which this object can on the average buy, command or obtain in exchange... BUT as soon as a stock accumulates in the hands of private persons, the value which the workers add to the object dissolves into two parts, of which one pays their wages, the other the profit which the entrepreneur makes on the sum of the stock which has served him to advance these wages and the materials of labour. He would have no interest in employing these workers if he did not expect from the sale of their works something more than is necessary to replace this fund, and he would have no interest in employing a larger in preference over a small amount of funds if his profit did not stand in some proportion to the volume of the funds employed.' (loc. cit. p. 96, 97.) (N., p. 9.) (See A. Smith's peculiar view that before the division of labour, 'where every one produced everything necessary, no stock was necessary'. As if, in this state, while he finds no stock in nature, he would not have to find the objective conditions of life, in order to work. Even the savage, even animals, set aside a reserve. Smith can at most have in mind a situation in which the impulse to labour is still a direct, momentary instinct, and then a stock still has to be present in nature in one way or another without labour. (Notebook, p. 19.) (Smith is confused here. Concentration of the stock in a single hand then not necessary.)>
<In Vol. III of his edition of A. Smith, Wakefield remarks: 'The labour of slaves being combined, is more productive than the much divided labour of freemen. The labour of freemen is more productive than that of slaves, only when it comes to be combined by means of greater dearness of land, and the system of hiring for wages.' (Note to p. 18.) (Notebook VIII, p. 1.) 'In countries where land remains very cheap, either all the people are in a state of barbarism, or some of them are in a state of slavery.' (Note to p. 20.)>
<'Profit is a term signifying the increase of capital or wealth; so, failing to find the laws which govern the rate of profit, is failing to find the laws of the formation of capital.' (p. 55. Atkinson (W.), Principles of Political Economy, London, 1840.) (Notebook, p. 2.)>
<'Man is as much the produce of labour as any of the machines constructed by his agency; and it appears to us that in all economical investigations he ought to be considered in precisely the same point of view. Every individual who has arrived at maturity... may, with perfect propriety, be viewed as a machine which it has cost 20 years of assiduous attention and the expenditure of a considerable capital to construct. And if a further sum is laid out for his education or qualification for the exercise of a business etc., his value is proportionally increased, just as a machine is made more valuable through the expenditure of additional capital or labour in its construction, in order to give it new powers.' (McCulloch, The Principles of Pol. Econ., London, 1825, p. 115.) (Notebook, p. 9.)) <'In point of fact, a commodity will always exchange for more' labour (than it was produced by): 'and it is this excess that constitutes profits.' (p. 221, McCulloch loc. cit.) (Notebook, p. 13.) The same gentle McCulloch, about whom Malthus rightly says that he sees it as the proper task of science to equate everything with everything else, says:  'the profits of capital are only another name for the wages of accumulated labour' (p. 291) (loc. cit. Notebook, 14) and hence no doubt the wages of labour are only another name for the profits of living capital. 'Wages... really consist of a part of the produce of the industry of the labourer; consequently, they have a high real value if the labourer receives a comparatively high share of the product of his industry, and vice versa.' (295 loc. cit.) (Notebook, p. 15.)>
The positing of surplus labour through capital has on the whole been so little understood by the economists that they present striking phenomena of its occurrence as something special, as a curiosity. Thus Ramsay, with night work. Likewise John Wade e.g., in History of the Middle and Working Classes, 3rd ed., London, 1835 (p. 241) (Notebook, p. 21) says: 'The standard of wages is also connected with the hours of work and rest periods. It was the policy of the masters in recent years' (before 1835) 'to usurp on operatives in this respect, by cutting or abridging holidays and mealtimes and gradually stretching the hours of work; knowing that an increase of ¼ in the time of work is equivalent to a reduction in wages by the same amount.'
John St. Mill: Essays on Some Unsettled Questions of Political Economy, London, 1844. (The few original ideas of Mill Junior are contained in this narrow little volume, not in his fat, pedantic magnum opus.)
'Whatever is destined to be employed reproductively, be it in its existing form, or indirectly by a previous (or even subsequent) exchange, is capital. Suppose I have laid out all my money in wages and machinery, and the article I produce is just finished: in the interval, before I can sell these articles, realize the gain, and lay it out again in wages and tools, will it be said that I have no capital? Certainly not: I have the same capital as before, perhaps a larger one, but it is tied down, and is not disposable.' (p. 55.) (Notebook, p. 36.) 'At all times a very large part of the capital in a country lies idle. The annual product of a country never achieves in height what it could, if all resources were devoted to reproduction, if, in short, all the country's capital were in full employment. If every commodity on the average remained unsold for a length of time equal to that required for its production, then it is clear that at any one time not more than a half of the productive capital of the country would in reality perform the function of capital. The employed half is a fluctuating portion, composed of various elements; but the result would be that every producer would be capable of producing each year only half the supply of commodities which he could produce if he were sure of selling them at the moment of their completion.' (loc. cit. p. 55, 56.) 'This, or something similar, is, however, the usual state of a very great part of all capitalists in the world.' (p. 56.) 'The number of producers or vendors who turn over their capital in the very shortest time is very small. Few have so rapid a sale of their commodities that all goods which their own or borrowed capital can supply them can be cleared out as quickly as supplied. The majority do not have an extent of business at all adequate to the amount of capital they dispose of. It is true that in communities where industry and trade are practised with the greatest success, the contrivances of banking enable the owner of a capital greater than he can himself employ, to apply it productively and to derive a revenue from it. Still, even then, there is a great quantity of capital which remains fixed in the form of implements, machinery, buildings etc., whether only half employed or in complete employment: and every dealer keeps a stock in trade, to be ready for a possible sudden demand, although he may not be able to dispose of it for an indefinite period.' (p. 56.) 'This constant non-employment of a large part of capital is the price we pay for the division of labour. The purchase is worth what it costs; but the price is considerable.' (56.) If I have 1,500 thalers in the shop and take in 10%, while 500 lie idle to ornament the shop, it is the same as if I invest 1,000 thalers at 7½%... 'In many trades there are a few dealers who sell articles of equal quality at a lower 'price than other dealers. This is not a voluntary sacrifice of profits; from the consequent overflow of customers they expect to turn over their capital more rapidly, and to be the winners by keeping the whole of their capital in more constant employment, although on a given operation their gains are smaller.' (p. 56, 57.) 'It is questionable whether there are any dealers for whom one additional buyer is of no use; and for the great majority, this hypothesis altogether inapplicable. An additional customer is for most dealers equivalent to a growth of their productive capital. It enables them to transform a part of their capital, which lay idle (and perhaps would never have become productive in their hands until a customer had been found), into wages and instruments of production... A country's aggregate product for the following year is hence increased; not through pure exchange, but by calling into activity a portion of the national capital which, had it not been for the exchange, would have remained unemployed for some time longer.' (57, 58.) 'The advantages gained from a new customer are, for the producer or dealer: (1) say, a part of his capital lies in the form of unsold goods, producing (during a longer or shorter time) nothing at all; then a part thereof is called into greater activity and becomes more constantly productive. (2) If the additional demand exceeds what can be supplied through liberation of capital existing as unsold goods, and if the dealer has additional resources (e.g. in government bonds), but not in his own trade, then he is enabled to obtain on a portion of these, no longer interest, but profit, and thus to gain the difference between the rate of interest and of profits. (3) If all his capital is employed in his own business and no part stored up as unsold goods, then he can conduct a surplus business with borrowed capital and gain the difference between interest and profit.' (59.)
Now back to our subject.
The phases through which capital travels, which form one turnover of capital, begin conceptually with the transformation of money into the conditions of production. Now, however, that we begin not with capital in the process of becoming, but capital which has become, [we can see that] it travels through the following phases: (1) Creation of surplus value, or immediate production process. Its result, the product. (2) Bringing the product to market. Transformation of product into commodity. (3) (a) Entry of the commodity into ordinary circulation. Circulation of the commodity. Its result: transformation into money. This appears as the first moment of ordinary circulation. (b) Retransformation of money into the conditions of production: money circulation; in ordinary circulation, the circulation of commodities and the circulation of money always appear distributed among two different subjects. Capital circulates first as a commodity, then as money, and vice versa. (4) Renewal of the production process, which appears here as reproduction of the original capital, and production process of surplus capital.
The costs of circulation break down into costs of movement; costs to bring the product to market; the labour time required to effect the transformation from one state to the other; all of which actually come down to accounting operations and the time they cost (this is the foundation of a special, technical money trade). (Whether the latter costs are to be considered deductions from the surplus value or not will be seen later.)
If we examine this movement, we find that the circulation of capital, through the operation of exchanges, opens up at one point to release the product into general circulation, and to constitute itself out of the latter as equivalent in money. What happens to this product, which has in this way fallen out of the circulation of capital and into ordinary circulation, is here beside the point. On the other side, capital throws its form as money out of its circulation process again (partially, that is, in so far as it is not wages), or, after having realized itself as value in ordinary circulation and at the same time posited itself as the measure of its own realization, it then moves in the money form only as medium of circulation, and thus sucks into itself out of general circulation the commodities necessary for production (conditions of production). As commodity, capital throws itself out of its own circulation into general circulation; and, again as commodity, capital leaves general circulation and enters its own course, issuing into the production process. The circulation of capital thus contains a relation to general circulation, of which its own circulation forms a moment, while the latter likewise appears as posited by capital. This to be examined later.
The total production process of capital includes both the circulation process proper and the actual production process. These form the two great sections of its movement, which appears as the totality of these two processes. On one side, labour time, on the other, circulation time. And the whole of the movement appears as unity of labour time and circulation time, as unity of production and circulation. This unity itself is motion, process. Capital appears as this unity-in-process of production and circulation, a unity which can be regarded both as the totality of the process of its production, as well as the specific completion of one turnover of the capital, one movement returning into itself.
The condition, for capital, of circulation time is — besides labour time — only the same as the condition of production based on division of labour and exchange, in adequate form, in the highest form. The costs of circulation are costs of the division of labour and of exchange, which are necessarily found in every previous, pre-capitalist form of production resting on this basis.
As the subject predominant [übergreifend] over the different phases of this movement, as value sustaining and multiplying itself in it, as the subject of these metamorphoses proceeding in a circular course — as a spiral, as an expanding circle — capital is circulating capital. Circulating capital is therefore initially not a particular form of capital, but is rather capital itself, in a further developed aspect, as subject of the movement just described which it, itself, is as its own realization process. In this respect, therefore, every capital is circulating capital. In simple circulation, circulation itself appears as the subject. One commodity is thrown out of it, another enters into it. But the same commodity is within it only fleetingly. Money itself, in so far as it ceases to be a medium of circulation and posits itself as independent value, withdraws from circulation. Capital, however, exists as the subject of circulation; circulation is posited as its own life's course. But while capital thus, as the whole of circulation, is circulating capital, is the process of going from one phase into the other, it is at the same time, within each phase, posited in a specific aspect, restricted to a particular form, which is the negation of itself as the subject of the whole movement. Therefore, capital in each of its particular phases is the negation of itself as the subject of all the various metamorphoses. Not-circulating capital. Fixed capital, actually fixated capital, fixated in one of the different particular aspects, phases, through which it must move. As long as it persists in one of these phases — [as long as] the phase itself does not appear as fluid transition — and each of them has its duration, [then] it is not circulating, [but] fixated. As long as it remains in the production process it is not capable of circulating; and it is virtually devalued. As long as it remains in circulation, it is not capable of producing, not capable of positing surplus value, not capable of engaging in the process as capital. As long as it cannot be brought to market, it is fixated as product. As long as it has to remain on the market, it is fixated as commodity. As long as it cannot be exchanged for conditions of production, it is fixated as money. Finally, if the conditions of production remain in their form as conditions and do not enter into the production process, it is again fixated and devalued. As the subject moving through all phases, as the moving unity, the unity-in-process of circulation and production, capital is circulating capital; capital as restricted into any of these phases, as posited in its divisions, is fixated capital, tied-down capital. As circulating capital it fixates itself, and as fixated capital it circulates. The distinction between circulating capital and fixed capital thus appears initially as a formal characteristic of capital, depending on whether it appears as the unity of the process or as one of its specific moments. The concept of dormant capital, capital lying fallow, can refer only to its barren existence in one of these aspects, and it is a condition of capital that part of it always lies fallow. This takes the visible form that a part of the national capital is always stuck in one of the phases through which capital has to move. Money itself, to the extent that it forms a particular part of the nation's capital, but always remains in the form of medium of circulation, i.e. never goes through the other phases, is therefore regarded by A. Smith as a subordinate form of fixed capital.  Capital can likewise lie fallow, be fixated in the form of money, of value withdrawn from circulation. During crises — after the moment of panic — during the standstill of industry, money is immobilized in the hands of bankers, billbrokers etc.; and, just as the stag cries out for fresh water, money cries out for a field of employment where it may be realized as capital.
Much confusion in political economy has been caused by this, that the aspects of circulating and fixed are initially nothing more than capital itself posited in the two aspects, first as the unity of the process, then as a particular one of its phases, itself in distinction to itself as unity — not as two particular kinds of capital, not capital of two particular kinds, but rather as different characteristic forms of the same capital. While some held fast to the aspect of a material product in which it was supposed to be circulating capital, others had no difficulty in pointing out the opposite aspect, and vice versa. Capital as the unity of circulation and production is at the same time the division between them, and a division whose aspects are separated in space and time, at that. In each moment it has an indifferent form towards the other. For the individual capital, the transition from one into the other appears as chance, as dependent on external, uncontrollable circumstances. One and the same capital therefore always appears in both states; this is expressed by the appearance of one part of it in one [phase], another in another; one part tied down, another part circulating; circulating, here, not in the sense that it is in the circulatory phase proper as opposed to the production phase, but rather in the sense that in the phase in which it finds itself it is in a fluid phase, a phase in-process, a phase in transition to the next phase; not stuck in one of them as such and hence delayed in its total process. For example: the industrialist uses only a part of the capital at his disposal (whether borrowed or owned is beside the point here, nor, if we consider capital as a whole, does it affect the economic process) in production, because another part requires a certain amount of time before it comes back out of circulation. The part moving [prozessierend] within production is then the circulating part; the part in circulation is the immobilized part. His total productivity is thereby restricted; the reproduced part restricted, hence also the part thrown on to the market restricted. Thus the merchant; a part of his capital is tied down as stock in trade, the other part moves. To be sure, sometimes one and sometimes another part is in this phase, as with the industrialist, but his total capital is always posited in both aspects. Then again, since this limit arising out of the nature of the realization process itself is not fixed, but changes with circumstances, and since capital can approach its adequate character as that which circulates, to a greater or lesser degree; since the decomposition into these two aspects, in which the realization process appears at the same time as the devaluation process, contradicts the tendency of capital towards maximum realization, it therefore invents contrivances to abbreviate the phase of fixity; and at the same time also, instead of the simultaneous coexistence of both states, they alternate. In one period the process appears as altogether fluid — the period of the maximum realization of capital; in another, a reaction to the first, the other moment asserts itself all the more forcibly — the period of the maximum devaluation of capital and congestion of the production process. The moments in which both aspects appear alongside one another themselves only form interludes between these violent transitions and turnings-over. It is extremely important to grasp these aspects of circulating and fixated capital as specific characteristic forms of capital generally, since a great many phenomena of the bourgeois economy — the period of the economic cycle, which is essentially different from the single turnover period of capital; the effect of new demand; even the effect of new gold- and silver-producing countries on general production — [would otherwise be] incomprehensible. It is futile to speak of the stimulus given by Australian gold or a newly discovered market. If it were not in the nature of capital to be never completely occupied, i.e . always partially fixated, devalued, unproductive, then no stimuli could drive it to greater production. At th e same time, [note] the senseless contradictions into which the economists stray —even Ricardo — when they presuppose that capital is always fully occupied; hence explain an increase of production by referring exclusively to the creation of new capital. Every increase would then presuppose an earlier increase or growth of the productive forces.
These barriers to production based on capital are even more strongly inherent in the earlier modes of production, in so far as they rest on exchange. But they do not form a law of production pure and simple; [and,] as soon as exchange value no longer forms a barrier to material production, as soon as its barrier is rather posited by the total development of the individual, the whole story with its spasms and convulsions is left behind. As we saw earlier that money suspends the barriers of barter only by generalizing them — i.e. separating purchase and sale entirely — so shall we see later that credit likewise suspends these barriers to the realization of capital only by raising them to their most general form, positing one period of overproduction and one of underproduction as two periods.
The value which capital posits in one cycle, one revolution, one turnover, is = to the value posited in the production process, i.e. = to the value reproduced + the new value. Whether we regard the turnover as completed at the point where the commodity is transformed into money, or at the point where the money is transformed back into conditions of production, the result, whether expressed in money or in conditions of production, is always absolutely equal to the value posited in the production process. We count the physical bringing of the product to market as = to 0; or, rather, we include it in the direct production process. The economic circulation of the product begins only when it is on the market as a commodity — only then does it circulate. We are dealing here only with the economic differences, aspects, moments of circulation; not with the physical conditions for bringing the finished product into the second phase, that of circulation as commodity; nor are we concerned with the technological process by which the raw material is transformed into product. The greater or lesser distance of the market from the producer etc. does not concern us here yet. What we want to determine here first of all is that the costs arising from the motion through the different economic moments as such, the costs of circulation as such, do not add anything to the value of the product, are not value-positing costs, regardless of how much labour they may involve. They are merely deductions from the created value. If, of two individuals, each one were the producer of his own product, but their labour rested on division of labour, so that they exchanged with each other, and the realization of their product depended on the satisfaction of their needs through this exchange, then obviously the time which this exchange would cost them, e.g. the mutual bargaining, calculating before closing the deal, would make not the slightest addition either to their products or to the latter's exchange values. If A were to argue that the exchange takes up so much time, then B would respond in kind. Each of them loses just as much time in the exchange as the other. The exchange time is their common time. If A demanded 10 thalers for the product — its equivalent — and 10 thalers for the time it costs him to get the 10 thalers from B, then the latter would declare him a candidate for the madhouse. This loss of time arises from the division of labour and the necessity of exchange. If A produced everything himself, then he would lose no part of his time in exchanging with B, or in transforming his product into money and the money into product again. The costs of circulation proper (and they achieve a significant independent development in the money trade) are not reducible to productive labour time. But they are also by nature restricted to the time it necessarily costs to transform the commodity into money and the money back into commodity; i.e. to the time it costs to transpose capital from one form into the other. B and A might now find that they could save time by inserting a third person C as middleman between them, who consumed his time in this circulation process — circumstances which would arise e.g. if there were enough exchangers, enough subjects of the circulation processes, so that the time needed by each pair of them alternately over a year = one year; each individual, say, had to spend 1/50 of a year alternately in circulation, and there are 50 of them, then 1 individual could spend his entire time in this occupation. For this individual, if only his necessary labour time were paid him, i.e. if he had to give up his entire time in exchange for the necessaries of life, then the reward which he would obtain would be wages. But if it amounted to his entire time, then the wage he would obtain would be an equivalent, objectified labour time. This individual then, would have added nothing to the value, but would, rather, have obtained a share of the surplus value belonging to capitalists A, B, etc. They would have gained, since, according to the presupposition, a lesser deduction from their surplus value would have taken place. (Capital is not a quantity simply, nor an operation simply; but both at the same time.) Money itself, to the extent that it consists of precious metals, or its production generally — e.g. in paper circulation — creates expense, to the extent that it also costs labour time, adds no value to the exchanged objects — to the exchange values; rather, its costs are a deduction from these values, a deduction which must be borne in proportional parts by' the exchangers. The preciousness of the instrument of circulation, of the instrument of exchange, expresses only the costs of exchange. Instead of adding to value, they subtract from it. Gold money and silver money, e.g., are themselves values, like others (not in the sen se of money), in so far as labour is objectified in them. But that these values serve as medium of circulation is a deduction from disposable wealth. The same relation holds for the production costs of the circulation of capital. This adds nothing to the values. The costs of circulation as such do not posit value, they are costs of the realization of values — deductions from them. Circulation as a series of transformations, in which capital posits itself; but, as regards value, circulation does not add to it, but posits it, rather, in the form of value. The potential value which is transformed into money through circulation is presupposed as a result of the production process. In so far as this series of processes takes place in time and involves costs, costs labour time, or objectified labour time, these circulation costs are deductions from the sum of value. When circulation costs are posited = 0, then the result of one turnover of capital, as regards value, = the value posited in the production process. That is, the value presupposed to circulation is the same as emerges from it. The most that can happen is that — owing to the circulation costs — a smaller value can come out than went in. In this respect, circulation time adds nothing to value; circulation time does not appear as value-positing time, the same as labour time. If production has created a commodity = to the value of £10, then circulation is necessary in order to equate this commodity to the £10, its value, which exists as money. The costs involved in this process, caused by this change of form, are a deduction from the value of the commodity. The circulation of capital is the change of forms by means of which value passes through different phases. The time which this process lasts or costs to bring about belongs among the production costs of circulation, of the division of labour, of production based on exchange.
This holds for one turnover of capital, i.e. for the single course of capital through this, its different moments. The process of capital as value has its point of departure in money and ends in money, but in a greater quantity of money. The difference is only quantitative. M-C-C-M has thus obtained a content. If we examine the cycle up to this point, we stand at the point of departure again. Capital has become money again. But it is now at the same time posited, it has now become a condition for this money that it becomes capital again, money which preserves and multiplies itself through the purchase of labour, by passing through the production process. Its form as money is posited as mere form; one of the many forms through which it moves in its metamorphosis. If we regard this point now not as a terminal point, but rather — as we must now regard it — as transition point, or new point of departure, itself posited by the production process as a vanishing terminal point and only a seeming point of departure, then it is clear that the retransformation of value, posited as money, into value-in-process, into value entering into the production process, can only proceed — that the renewal of the production process can only take place — when the part of the circulation process which is distinct from the production process has been completed. The second turnover of capital — the retransformation of money into capital as such, or the renewal of the production process — depends on the time capital requires to complete its circulation; i.e. on its circulation time, the latter here as distinct from production time. But since we have seen that the total value created by capital (reproduced value as well as newly created), which is realized in circulation as such, is exclusively determined by the production process, it follows that the sum of values which can be created in a given period of time depends on the number of repetitions of the production process within this period. The repetition of the production process, however, is determined by circulation time, which is equal to the velocity of circulation. The more rapid the circulation, the shorter the circulation time, the more often can the same capital repeat the production process. Hence, in a specific cycle of turnovers of capital, the sum of values created by it (hence surplus values as well, for it posits necessary labour always merely as labour necessary for surplus labour) is directly proportional to the labour time and inversely proportional to the circulation time. In a given cycle, the total value (consequently also the sum of newly posited surplus values) = labour time multiplied by the number of turnovers of the capital. Or, the surplus value posited by capital now no longer appears as simply determined by the surplus labour appropriated by it in the production process, but rather [it is determined] by the coefficient of the production process; i.e. the number which expresses how often it is repeated in a given period of time. This coefficient, in turn, is determined by the circulation time required by the capital for one turnover. The sum of values (surplus values) is thus determined by the value posited in one turnover multiplied by the number of turnovers in a given period of time. One turnover of capital is = to the production time + the circulation time. If circulation time is presupposed as given, then the total time required for one turnover depends on the production time. If production time is given, the duration of the turnover depends on the circulation time. Hence, to the extent that circulation time determines the total mass of production time in a given period of time, and to the extent that the repetition of the production process, its renewal in a given period depends on the circulation time, to that extent is it itself a moment of production, or rather appears as a limit of production. This is the nature of capital, of production founded on capital, that circulation time becomes a determinant moment for labour time, for the creation of value. The independence of labour time is thereby negated, and the production process is itself posited as determined by exchange, so that immediate production is socially linked to it and dependent on this link — not only as a material moment, but also as an economic moment, a determinant, characteristic form. The maximum of circulation — the limit of the renewal of the production process through it — is obviously determined by the duration of production time during one turnover. Suppose the production process of a specific capital, i.e. the time it needs to reproduce its value and to posit surplus value, lasts 3 months. (Or, the time required to complete a quantity of product = to the total value of the producing capital + the surplus value.) Then this capital could under no circumstances renew the production or realization process more often than 4 times a year. The maximum turnover of this capital would be 4 turnovers per year; i.e. if no interruptions took place between the completion of one production phase and the renewal. The maximum number of turnovers would be = to the continuity of the production process, so that, as soon as the product was finished, new raw material would be worked up into product again. This continuity would extend not only to the continuity within a single production phase, but to the continuity of these phases themselves. But supposing now that this capital required one month of circulation time at the end of each phase — time to return to the form of conditions of production — then it could effect only 3 turnovers. In the first case the number of turnovers was = 1 phase×4; or 12 months divided by 3. The maximum value-creation by capital in a given space of time is this space of time divide d by the duration of the production process (by production time). In the second case, the capital would effect only 3 turnovers a year; it would repeat the realization process only 3 times. The sum of its realization process would be, then, = 12/4 = 3. The divisor here is the total circulation time it requires: 4 months; or the circulation time required for one circulation phase, multiplied by the number of times this circulation time is contained in a year. In the first case, the number of turnovers = 12 months, a year, a given time, divided by the time of one production phase, or by the duration of production time itself; in the second case, it equals the same time divided by circulation time. The maximum realization of capital, as also the maximum continuity of the production process, is circulation time posited as = 0; i.e. then, the conditions under which capital produces, its restriction by circulation time, the necessity of going through the different phases of its metamorphosis, are suspended. It is the necessary tendency of capital to strive to equate circulation time to 0; i.e. to suspend itself, since it is capital itself alone which posits circulation time as a determinant moment of production time. It is the same as to suspend the necessity of exchange, of money, and of the division of labour resting on them, hence capital itself. If we ignore for a moment the transformation of surplus value into surplus capital, then a capital of 100 thalers, which produced a surplus value of 4% on the total capital in the production process, would, in the first case, reproduce itself 4 times and would at the end of the year have posited a surplus value of 16. At the end of the year, the capital would be = 116. It would be the same as if a capital of 400 had turned over once a year, likewise with a surplus value of 4%. As regards the total production of commodities and values, these would have quadrupled. In the other case, a capital of 100 thalers only created a surplus value of 12; the total capital at the end of the year = 112. As regards total production — in respect of either values or use values — the difference still more significant. In the first case e.g. a capital of 100 transformed 400 thalers of leather into boots, in the second only 300 thalers of leather.
The total realization of capital is hence determined by the duration of the production phase — which we posit as identical with labour time, for the moment — multiplied by the number of turnovers, or renewals of this production phase in a given period of time. If the turnovers were determined only by the duration of one production phase, then the total realization would be simply determined by the number of production phases contained in a given period of time; or, the turnovers would be absolutely determined by production time itself. This would be the maximum of realization. It is clear, therefore, that circulation time, regarded absolutely, is a deduction from the maximum of realization, is absolute realization. It is therefore impossible for any velocity of circulation or any abbreviation of circulation to create a realization that posited by the production phase itself. The maximum that the velocity of circulation could effect, if it rose to [infinity], would be to posit circulation time = 0, i.e. to abolish itself. It can therefore not be a positive, value-creating moment, since its abolition — circulation without circulation time — would be the maximum of realization; its negation = to the highest position of the productivity of capital. [*] The total productivity of capital is = the duration of one production phase multiplied by the number of times it is repeated in a certain period of time. But this number is determined by circulation time.
Let us assume a capital of 100 turned over 4 times a year; posited the production process 4 times; then, if the surplus value = 5% each time, at the end of the year the surplus value created by the capital of 100 would = 20; then, for a capital of 400, which turned over once a year at the same percentage, would likewise = 20. So that a capital of 100, circulating 4 times, would give a gain of 20% a year, while a 4 times greater capital with a single turnover would give a profit of only 5%. (We shall see shortly, in more detail, that the surplus value is exactly the same.) It seems, therefore, that the magnitude of the capital can be replaced by the velocity of turnover, and the velocity of turnover by the magnitude of the capital. This is how it comes to appear as though circulation time were in itself productive. We must therefore clarify the matter by discussing this case.
Another question which arises: If the turnover of 100 thalers 4 times a year brings 5% each time, say, then at the beginning of the second turnover, the production process could be begun with 105 thalers, and the product would be 110¼; at the beginning of the third turnover, 110¼, of which the product would be 115 61/80 at the beginning of the fourth turnover, 115 61/80, and at its end, 121 881/1600. The number itself here is beside the point. The point is that, in the case of a capital of 400 which turns over once a year at 5%, the total gain can only be 20; while, by contrast, a 4 times smaller capital turning over 4 times at the same percentage makes a gain of 1 + 881/1600 more. In this way it appears as if the mere moment of turnover — repetition — i.e. a moment determined by circulation time, or rather a moment determined by circulation, not only realized value, but brought about an absolute growth of value. This also to be examined.
Circulation time only expresses the velocity of circulation; the velocity of circulation only the barrier to circulation. Circulation without circulation time — i.e. the transition of capital from one phase to the next at the speed of thought — would be the maximum, i.e. the identity of the renewal of the production process with its termination.
The act of exchange — and the economic operations through which circulation proceeds are reducible to a succession of acts of exchange — up to the point at which capital does not relate as commodity to money or as money to commodity, but as value to its specific use value, labour — the act of the exchange of value in one form for value in the other, money for commodity, commodity for money (and these are the moments of simple circulation), posits the value of one commodity in the other, and thus realizes it as exchange; or, also, posits the commodities as equivalents. The act of exchange is thus value-positing in so far as values are presupposed to it; it realizes the value-character of the subjects of exchange.  But an act which posits a commodity as value, or, what is the same, which posits another commodity as its equivalent — or, again the same, posits the equivalence of both commodities, obviously for its part adds nothing to value, as little as the sign + increases or decreases the number coming after it. If I posit 4 as plus or as minus — through this operation, 4, independently of the sign, remains equal to itself, 4, becomes neither 3 nor 5. Likewise, if I exchange a lb. of cotton with an exchange value of 6d. for 6d., then it is posited as value; and it can equally be said that the 6d, are posited as value in the lb. of cotton; i.e. the labour time contained in the 6d. (here 6d. regarded as value) is now expressed in another materialization of the same amount of labour time. But, since through this act of exchange the lb. of cotton as well as the 6d. of copper are each posited at = to their value, it is impossible that through this exchange the value either of the cotton, or of the 6d. or of the sum of both values should increase quantitatively. As the positing of equivalents, exchange only changes the form; realizes the potentially existing values; realizes the prices, if you like. To posit equivalents, e.g. A and B as equivalents, cannot raise the value of A, for it is the act in which A is posited as = to its own value, hence not as unequal to it; unequal only where the form is concerned, in so far as it was previously not posited as value; it is at the same time the act by means of which the value of A is posited as = to the value of B, and the value of B as = the value of A. The sum of the values transposed in the exchange = value A + value B. Each remains = to its own value; hence their sum remains equal to the sum of their values. Exchange as the positing of equivalents cannot therefore by its nature increase the sum of values, nor the value of the commodities exchanged. (The fact that it is different with the exchange with labour arises because the use value of labour is itself value-positing, but is not directly connected with its exchange value.) And if a single operation of exchange cannot increase the value of the thing exchanged, neither can a sum of exchanges do it.[*] Whether I repeat an act which creates no value once or an infinite number of times, the repetition cannot change its nature. The repetition of a non-value-creating act can never become an act of value-creation. E.g. ¼ expresses a specific proportion. If I transform this ¼ into a decimal fraction, i.e. posit it = 0.25, then its form has been changed. This transformation leaves the value the same. Similarly, when I transform a commodity into the form of money, or money into the form of the commodity, then the value remains the same, but the form is changed. It is clear, therefore, that circulation — since it consists of a series of exchange operations with equivalents — cannot increase the value of circulating commodities. Therefore, if labour time is required to undertake this operation, i.e. if values have to be consumed, for all consumption of values reduces itself to the consumption of labour time or of objectified labour time, products; i.e. if circulation entails costs, and if circulation time costs labour time, then this is a deduction from, a relative suspension of the circulating values; their devaluation by the amount of the circulation costs. If one imagines two workers who exchange with each other, a fisherman and a hunter; then the time which both lose in exchanging would create neither fish nor game, but would be rather a deduction from the time in which both of them can create values, the one fish, the other hunt, objectify their labour time in a use value. If the fisherman wanted to get compensation for this loss from the hunter: demand more game, or give him fewer fish, then the latter would have the same right to compensation. The loss would be common to both of them. These costs of circulation, costs of exchange, could appear only as a deduction from the total production and value-creation of both of them. If they commissioned a third, C, with these exchanges, and thus lost no labour time directly, then each of them would have to cede 'a proportional share of his product to C. What they could gain thereby would only be a greater or lesser loss. But if they worked as joint proprietors, then no exchange would take place, only communal consumption. The costs of exchange would therefore vanish. Not the division of labour; but the division of labour founded on exchange. It is wrong, therefore, for J. St. Mill to regard the cost of circulation as necessary price of the division of labour. It is the cost only of the [not-] spontaneous division of labour resting not on community of property, but on private property.
Circulation costs as such, i.e. the consumption of labour time or of objectified labour time, of values, in connection with the operation of exchange and a series of exchange operations, are therefore a deduction either from the time employed on production, or from the values posited by production. They can never increase the value. They belong among the faux frais de production, and these faux frais de production belong to the inherent costs of production resting on capital. The merchant's trade and still more the money trade proper — in so far as they do nothing but carry on the operations of circulation as such, e.g. the determination of prices (measurement of values and their calculation), these exchange operations generally, as a function which has gained independence through the division of labour, in so far as they represent this function of the total process of capital — represent merely the faux frais de production of capital. In so far as they reduce these faux frais, they add to production, not by creating value, but by reducing the negation of created values. If they operate purely as such a function, then they would always only represent the minimum of faux frais de production. If they enable the producers to create more values than they could without this division of labour, and, more precisely, so much more that a surplus remains after the payment of this function, then they have in fact increased production. Values are then increased, however, not because the operations of circulation have created value, but because they have absorbed less value than they would have done otherwise. But they are a necessary condition for capital's production.
The time a capitalist loses during exchange is as such not a deduction from labour time. He is a capitalist — i.e. representative of capital, personified capital, only by virtue of the fact that he relates to labour as alien labour, and appropriates and posits alien labour for himself. The costs of circulation therefore do not exist in so far as they take away the capitalist's time. His time is posited as superfluous time: not-labour time, not-value-creating time, although it is capital which realizes the created value. The fact that the worker must work surplus labour time is identical with the fact that the capitalist does not need to work, and his time is thus posited as not-labour time; that he does not work the necessary time, either. The worker must work surplus time in order to be allowed to objectify, to realize the labour time necessary for his reproduction. On the other side, therefore, the capitalist's necessary labour time is free time, not time required for direct subsistence. Since all free time is time for free development, the capitalist usurps the free time created by the workers for society, i.e. civilization, and Wade is again correct in this sense, in so far as he posits capital = civilization.
Circulation time — to the extent that it takes up the time of the capitalist as such — concerns us here exactly as much as the time he spends with his mistress. If time is money, then from the standpoint of capital it is only alien labour time, which is of course in the most literal sense the capitalist's money. In regard to capital as such, circulation time can coincide with labour time only in so far as it interrupts the time during which capital can appropriate alien labour time, and it is clear that this relative devaluation of capital cannot add to its realization, but can only detract from it; or, in so fat as circulation costs capital objectified alien labour time, values. (For example because it has to pay someone who takes over this function.) In both cases, circulation time is of interest only in so far as it is the suspension, the negation of alien labour time; either because it interrupts capital in the process of its appropriation; or because it forces it to consume a part of the created value, to consume it in order to accomplish the operations of circulation, i.e. to posit itself as capital. (Very much to be distinguished from the private consumption of the capitalist.) Circulation time is of interest only in its relation — as barrier, negation — to the production time of capital; this production time, however, is the time during which it appropriates alien labour, the alien labour time posited by it. To regard the time the capitalist spends in circulation as value-creating time or even surplus-value-creating time is to fall into the greatest confusion. Capital as such has no labour time apart from its production time. The capitalist absolutely does not concern us here except as capital. And he functions as such only in the total process we are examining. Otherwise, it could still be imagined that the capitalist draws compensation for the time during which he does not earn money as another capitalist's wage labourer — or that he loses this time. [Or] that it belongs together with the costs of production. The time which he employs or loses as capitalist is lost time altogether, sunk and unrecoverable from this standpoint. We will later look at the capitalist's so-called labour time as distinct from the worker's labour time, which former is alleged to form the basis of his profits, as a wage of its own type.
Nothing is more common than to bring transport etc., to the extent that they are connected with trade, into the pure circulation costs. In so far as trade brings a product to market, it gives it a new form. True, all it does is change the location. But the mode of the transformation does not concern us. It gives the product a new use value (and this holds right down to and including the retail grocer, who weighs, measures, wraps the product and thus gives it a form for consumption), and this new use value costs labour time, is therefore at the same time exchange value. Bringing to market is part of the production process itself. The product is a commodity, is in circulation only when it is on the market.
<'In every species of industry, the entrepreneurs become sellers of products, while the entire remainder of the nation and often even other nations are the buyers of these products... the constant and incessantly repeated path which circulating capital describes in order to take leave of the entrepreneur and in order to return to him in the first form is comparable to a circle; hence the name circulant given to this capital, and the use of the word circulation for its movement.' (p. [404,] 405.) (Storch. Cours d'économie politique, Paris, 1823, Vol. I, p. 405, Notebook, p. 34.) 'In the broad sense, circulation includes the motion of every commodity exchanged.' (p. 405, loc. cit.) 'Circulation proceeds by exchanges... from the instant of [the introduction of] currency, they [the commodities] are no longer exchanged but sold.' (p. 406, loc. cit.) 'For a commodity to be in circulation, it is sufficient that it be in supply... Wealth in circulation: commodity.' (p. 407, loc. cit.) 'Commerce only a part of circulation; the former includes only merchants' purchases and sales; the latter, those of all entrepreneurs and even of all... inhabitants.' (p. 408, loc. cit.) 'Only so long as the costs of circulation are indispensable to allow the commodities to reach the consumers is circulation real, and does its value increase the annual product. From the instant when it exceeds this degree, circulation is artificial and no longer contributes anything to the wealth of the nation.' (p. 409.) 'In recent years we saw examples of artificial circulation in St Petersburg in Russia. The slack state of foreign trade had led the merchants to realize their unemployed capitals in another way; no longer being able to employ them to bring in foreign commodities and to export domestic ones, they decided to take advantage of this by buying and reselling the commodities on hand. Monstrous quantities of sugar, coffee, hemp, iron etc. rapidly passed from one hand to the other, and a commodity often changed proprietors twenty times, without leaving the warehouse. This kind of circulation offers the dealers all manner of speculative opportunities; but while it enriches some, it ruins the others, and the nation's wealth gains nothing thereby. Likewise with the circulation of money... This kind of artificial circulation, based simply on a variation of prices, is termed agiotage.' (p. 410, 411.) 'Circulation brings no profit for society except in so far as it is indispensable to bring the commodity to the consumer. Every detour, delay, intermediate exchange which is not absolutely necessary for this purpose, or which does not contribute to diminishing the circulation costs, harms the national wealth, by uselessly raising the prices of commodities.' (p. 411.) 'Circulation is the more productive the more rapid it is; i.e. the less time it requires to relieve the entrepreneur of the finished product and bring it to market, and to bring the capital back to him in its first form.' (p. 411.) 'The entrepreneur can begin production again only after he has sold the completed product and has employed the price in purchasing new materials and new wages: hence, the more promptly circulation acts to bring about these two effects, the sooner is he in a position to begin his production anew, and the more profits does his capital bring in a given period of time.' (p. 412.) 'The nation whose capital circulates with a proper speed, so as to return several times a year to him who set it into motion, is in the same situation as the labourer of the happy climates who can raise three or four harvests in succession from the same soil in one year.' (p. 412, 413.) 'A slow circulation makes the objects of consumption more expensive (1) indirectly, through diminution of the mass of commodities which can exist; (2) directly because, as long as a product is in circulation, its value progressively increases by the interest of capital employed on its production; the slower the production, the more do these interest charges accumulate, which uselessly elevates the price of commodities.' 'Means for the abbreviation and acceleration of circulation: (1) the separating-out of a class of workers occupied exclusively with trade; (2) ease of transport; (3) currency; (4) credit.' (p. 413.)>
Simple circulation consisted of a great number of simultaneous or successive exchanges. Their unity, regarded as circulation, was actually present only from the observer's standpoint. (The exchange can be accidental, and it more or less has this character where it is restricted to the exchange of the excess product, and has not seized upon the totality of the production process.) In the circulation of capital we have a series of exchange operations, acts of exchange, each of which represents a qualitatively different moment towards the other, a moment in the reproduction and growth of capital. A system of exchanges, changes of substance, from the standpoint of value as such. Changes of form, from the standpoint of use value. The product relates to the commodity as use value to exchange value; thus the commodity to money. Here one series attains its peak. Money relates to the commodity into which it is retransformed as exchange value to use value; even more so, money to labour.
In so far as capital in every moment of the process is itself the possibility of going over into its other, next phase, and is thus the possibility of the whole process, which expresses capital's act of life, to that extent each of the moments appears potentially as capital — hence commodity capital, money capital — along with the value positing itself in the production process as capital. The commodity can represent money as long as it can transform itself into money, i.e. can buy wage labour (surplus labour); this in respect of the formal side, which emerges from the circulation of capital. On the material, physical side, it remains capital as long as it consists of raw material (proper or semi-fabricated), instrument, or necessaries for the workers. Each of these forms is potential capital. Money is in one respect the realized capital, capital as realized value. In this respect (regarded as a terminal point of circulation, where it then has to be regarded as a point of departure as well), it is capital, cat exohn. It is then especially capital again in regard to the part of the production process in which it exchanges itself for living labour. By contrast, in its exchange for the commodity (new purchase of raw material etc.) by the capitalist, it appears not as capital, but as medium of circulation; merely a vanishing mediation, through which the capitalist exchanges his product for the latter's original elements.
Circulation is not merely an external operation for capital. Just as it only becomes capital through the production process, in that value immortalizes and increases itself through that process, so does it become retransformed into the pure form of value — in which the traces of its becoming, as well as its specific presence in use value, have been extinguished —only through the first act of circulation; while the repetition of this act, i.e. the life process [of capital] is made possible only through the second act of circulation, which consists of the exchange of money for the conditions of production and forms the introduction to the act of production. Circulation therefore belongs within the concept of capital. Just as, originally, money or stockpiled labour appeared as presupposition before the exchange with free labour; the seeming independence of the objective moment of capital towards labour, however, was suspended, and objectified labour, become independent as value, appeared on all sides as the product of alien labour, the alienated product of labour itself; so does capital only now appear as presupposed to its circulation (capital as money was presupposed to its becoming capital; but capital as the result of value which has absorbed and assimilated living labour appeared as the point of departure not of circulation generally, but of the circulation of capital), so that it would exist independently and indifferently, even without this process. However, the movement of the metamorphoses through which it must pass now appears as a condition of the production process itself; just as much as its result. Capital, in its reality, therefore appears as a series of turnovers in a given period. It is no longer merely one turnover, one circulation; but rather the positing of turnovers; positing of the whole process. Its value-positing therefore appears as conditioned (and value is capital only as self-immortalizing and self-multiplying value) (1) qualitatively; in that it cannot renew the production phase without passing through the phases of circulation; (2) quantitatively; in that the mass of the values it posits depends on the number of its turnovers in a given period; (3) in that circulation time appears in both respects as limiting principle, as barrier of production time, and vice versa. Capital is therefore essentially circulating capital. While in the workshop of the production process capital appears as proprietor and master, in respect of circulation it appears as dependent and determined by social connections, which, from our present standpoint, make it enter into and figure in simple circulation alternately as C towards M and M towards C. But this circulation is a haze under which yet another whole world conceals itself, the world of the interconnections of capital, which binds this quality originating in circulation — in social intercourse — to itself, and robs it of the independence of self-sustaining property, as well as of its character. Two vistas into this presently still distant world have already opened up, at the two points at which the circulation of capital pushes the value posited and circulated by it in the form of the product out of its path, and, secondly, the point at which it pulls another product out of circulation into its own orbit; transforms this product itself into one of the moments of its presence [Dasein]. At the second point it presupposes production; not its own immediate production; at the first point it may presuppose production, if its product is itself raw material for other production; or consumption if it has obtained the final form for consumption. This much is clear, that consumption need not enter into its circle directly. The actual circulation of capital, as we shall see later, is still circulation between dealers and dealers. The circulation between dealers and consumers, identical with the retail trade, is a second circle which does not fall within the immediate circulation sphere of capital. An orbit which it describes after the first is described, and simul taneously alongside it. The simultaneity of the different orbits of capital, like that of its different aspects, bec omes clear only after many capitals are presupposed. Likewise, the course of human life consists of passing through different ages. But at the same time all ages exist side by side, distributed among different individuals.
Considering that the production process of capital is at the same time a technological process — production process absolutely — namely [the process] of the production of specific use values through specific labour, in short, in a manner determined by this aim itself; considering that the most fundamental of these production processes is that through which the body reproduces its necessary metabolism, i.e. creates the necessaries of life in the physiological sense; considering that this production process coincides with agriculture; and the latter also at the same time directly (as with cotton, flax etc.) or indirectly, through the animals it feeds (silk, wool, etc.), furnishes a large part of the raw materials for industry (actually all except those belonging to the extractive industries); considering that reproduction in agriculture in the temperate zone (the home of capital) is bound up with general terrestrial circulation; i.e. harvests are mostly annual; it follows that the year (except that it is figured differently for various productions) has been adopted as the general period of time by which the sum of the turnovers of capital is calculated and measured; just as the natural working day provided such a natural unit as measure of labour time. In the calculation of profit, and even more of interest, we consequently see the unity of circulation time and production time — capital — posited as such, and as its own measure. Capital itself as in process — hence, as accomplishing one turnover — is regarded as working capital, and the fruits, which it is supposed to yield, are calculated according to its working time — the total circulation time of one turnover. The mystification which thereby takes place lies in the nature of capital.
Now, before we go more closely into the above-mentioned considerations, we want to see what distinctions the economists draw between fixed capital and circulating capital. We have already found, above, a new moment which enters with the calculation of profit as distinct from surplus value. Likewise already at this point a new moment has to arise between profit and interest. Surplus value in connection with circulating capital obviously appears as profit, in distinction to interest as the surplus value in connection with fixed capital. Profit and interest are both forms of the surplus value. Profit contained in the price. Hence, profit comes to an end and is realized as soon as capital has come to the point of its circulation where it is retransformed into money or passes from its form as commodity into the form of money. The striking ignorance on which Proudhon's polemic against interest rests, later. (Here one more time, so as not to forget, in regard to Proudhon: the surplus value which causes all Ricardians and anti-Ricardians so much worry is solved by this fearless thinker simply by mystifying it, 'all work leaves a surplus, 'I posit it as an axiom ...'  The actual formulation to be looked up in the notebook. The fact that work goes on beyond necessary labour is transformed by Proudhon into a mystical quality of labour. This not to be explained by the mere growth of the productive force of labour; this may increase the products of a given labour time; but it cannot give a surplus value. It enters only in so far as it liberates surplus time, time for labour beyond the necessary. The only extra-economic fact in this is that the human being does not need his entire time for the production of the necessaries, that he has free time at his disposal above and beyond the labour time necessary for subsistence, and hence can also employ it for surplus labour. But this is in no way something mystical, since his necessaries are small to the same degree that his labour power is in a primitive state. But wage labour as such enters only where the development of the productive force has already advanced so far that a significant amount of time has become free; this liberation is here already a historic product. Proudhon's ignorance only equalled by Bastiat's decreasing rate of profit which is supposed to be the equivalent of a rising rate of wages.  Bastiat expresses this nonsense, borrowed from Carey, in a double way: first, the rate of profit falls (i.e. the proportion of surplus value in relation to the employed capital); secondly: prices decline, but value, i.e. the total sum of prices, rises, which is only another way of saying that the gross profit rises, not the rate of profit.)
Firstly, in the sense used by us above, of fixated capital, John St. Mill (Essays on some Unsettled Questions of Political Econ., Lond., 1844, p. 55), [speaks of it] as tied-down, not disposable, not available capital. Stuck in one phase of its total circulation process. In this sense he says correctly, like Bailey in the above quotations, that a great part of the capital of a nation always lies idle.
'The difference between fixed and circulating capital is more apparent than real; e.g. gold is fixed capital; floating only in so far as it is consumed for gilding etc. Ships are fixed capital, although literally floating. Foreign railway shares are articles of commerce in our markets; so may our railways be in the markets of the world; and so far they are floating capital, on a par with gold.' (Anderson, The Recent Commercial Distress etc., London, 1847, p. 4.) (Notebook I, 27.) 
According to Say: capital 'so much involved in one kind of production that it can no longer be diverted from it to be devoted to another kind of production'.  The identification of capital with a specific use value, use value for the production process. This quality of capital, being tied down as value to a particular use value — use value within production — is, however, an important aspect. This expresses more than the inability to circulate, which actually only says that fixed capital is the opposite of circulating capital.
In his Logic of Political Economy (p. 114) (Notebook X, 4), de Quincey says: 'Circulating capital, in its normal idea, means any agent whatever' (beautiful logician) 'used productively which perishes in the very act of being used.' (According to this, coal would be circulating capital, and oil, but not cotton etc. It cannot be said that cotton perishes by being transformed into twist or calico, and such transformation certainly means using it productively); 'capital is fixed when the thing serves repeatedly always for the same operation, and by how much larger has been the range of iterations, by so much more intensely is the tool, engine, or machinery entitled to the denomination of fixed.' (p. 114.) (Notebook X, 4.) According to this, the circulating capital would die out, be consumed in the act of production; the fixed capital — which, for greater clarity, is characterized as tool, engine, or machinery (thus improvements incorporated in the soil are, for instance, excluded) — would serve repeatedly, always for the same operation. The distinction here concerns only technological differences in the act of production, not in the least the form-relation; circulating and fixed capital, in the differences here indicated, do have distinguishing features by means of which one particular agent is fixed and the other circulating, but neither of them any qualification which would entitle it to the 'denomination' of capital.
According to Ramsay (IX, 84)  only 'the approvisionnement is circulating capital, because the capitalist must part with it immediately, and it does not enter into the reproduction process at all, but is rather exchanged directly for living labour, for consumption. All other capital (including raw material) remains in the possession of its owner or employer until the produce is completed.' (loc. cit. p. 21.) 'Circulating capital consists only of subsistence and other necessaries advanced to the workman, previous to the completion of the produce of his labour.' (loc. cit. p. 23.) In regard to approvisionnement he is correct in so far as it is the only part of capital which circulates during the production phase itself, and which is in this respect circulating capital par excellence. In another respect it is false to say that fixed capital remains in the possession of its owner or employer 'until the produce is completed' and no longer than that. He consequently also later explains fixed capital as 'any portion of that labour (bestowed upon any commodity) in a form in which, though assisting to raise the future commodity, it does not maintain labour'. (But how many commodities do not maintain labour! I.e. do not belong among the workers' articles of consumption. These, according to Ramsay, are all fixed capital.) (If the interest on £100 at the end of the first year or of the first 3 months is £5, then the capital at the end of the first year 105 or 100(1 + 0.05); at the end of the 4th year = 100(1 + 0.05)4 = £121. £55/100 and £1/1600 = £121 11s. 3/20 farthing or £121 11s. 0.15 farthing. Hence £1 11s. 3/20 farthing more than 20.)
(In the question posed above, assume that a first capital of 400 turns over only once a year, a second [capital of 100,] 4 times, both at 5%. In the first case the capital would make 5% once a year, = 20 on 400; in the second case 4×5%, likewise = 20 per year on 100. The velocity of turnover would substitute for the size of the capital; just as in simple money circulation 100,000 thalers which circulate 3 times a year = 300,000, while 3,000 which circulate 100 times = 300,000 also. But if the capital circulates 4 times a year, then it is possible that the surplus gain itself is ploughed into the capital for the second turnover, and turned over with it, producing thereby the difference of £l 11s. 0.15 farthing. But this difference in no way follows from the presupposition. All that is there is the abstract possibility. What would follow, rather, from the presupposition is that 3 months are required for the turnover of a capital of £100. E.g. therefore, if the month = 30 days, then for £105 — with the same turnover relation, with the same relation between the turnover time and the size of the capital — not 3 months are required, [*] but rather 105:x = 100:90; x = (94 x 150) ÷ 100 = 9450÷100 = 94 5/10 days = 3 months, 4½ days. With that, the first difficulty is completely solved.)
(From the fact that a larger capital with a slower turnover does not create more surplus value than a smaller with a relatively more rapid turnover, it does not in the least automatically follow that a smaller capital turns over more rapidly than a larger. This is indeed the case in so far as the larger capital consists of more fixed capital and in so far as it has to search out more distant markets. The size of the market and the velocity of turnover are not necessarily inversely related. This occurs only as soon as the present, physical market is not the economic market; i.e. as the economic market becomes more and more distant from the place of production. To the extent, by the way, that [this relation] does not arise purely from the distinction between fixed and circulating capital, the moments which determine the circulation of different capitals cannot be at all developed yet here. An incidental remark: to the extent that trade posits new points of circulation, i.e. brings different countries into intercourse, discovers new markets etc., this is something entirely different from the mere costs of circulation required to carry out a given mass of exchange operations; it is the positing not of the operations of exchange, but of the exchange itself. Creation of markets. This point will have to be examined in particular before we have done with circulation.)
Now let us continue with our review of the opinions about 'fixed' and 'circulating capital'. 'Depending on whether capital is more or less transitory, hence must be more or less frequently reproduced in a given time, it is called circulating or fixed capital. Furthermore, capital circulates or returns to its employer in very unequal times; e.g. wheat which the farmer buys to sow is relatively fixed capital compared to the wheat a baker buys to make bread.' (Ricardo VIII, 19.) Then he remarks also: 'Different proportions of fixed capital and circulating capital in different trades; different durability of fixed capital itself.' (Ricardo, loc. cit.)  'Two kinds of commerce can employ a capital of equal value, but which may be divided in a very different way as regards the fixed part and the circulating part. They may even employ an equal value of fixed capital and circulating capital, but the durability of the fixed capital may be very unequal. For example, one a steam engine of £10,000, the other, ships.' (This out of Say's translation of Ricardo, Vol. I, p. 29, 30.) The error from the outset is that, according to Ricardo, capital is supposed to be 'more or less transitory'. Capital as capital — value — is not transitory. But the use value in which the value is fixated, in which it exists, is 'more or less transitory', and must therefore be 'more or less frequently reproduced in a given time'. The difference between fixed capital and circulating capital is therefore reduced here to the greater or lesser necessity for reproducing the given capital in a given time. This is one distinction made by Ricardo. The other distinction concerns the different degrees of durability, or different degrees of fixed capital, i.e. different degrees, relative durability of the relatively fixed. So that fixed capital is itself more or less fixed. The same capital appears in the same business in the two different forms, the particular modes of existence of fixed and circulating, hence exists doubly. To be fixed or circulating appears as a particular aspect of capital apart from that of being capital. It must, however, proceed to this particularization. Finally, as for the third distinction, 'that capital circulates or returns in very unequal times', what Ricardo means by this, as his example of the baker and the farmer shows, is nothing more than the difference in the time during which capital is fixed, tied up in the production phase as distinct from the circulation phase, in different branches of business. Hence, fixed capital occurs here in the same way as we had it previously, as being fixated in each phase; except that the specifically longer or shorter fixation in the production phase, this phase in particular, is regarded as a peculiarity, particularity of capital [as value-] positing. Money attempted to posit itself as imperishable value, as eternal value, by relating negatively towards circulation, i.e. towards the exchange with real wealth, with transitory commodities, which, as Petty describes very prettily and very naively, dissolve in fleeting pleasures.'  Capital posits the permanence of value (to a certain degree) by incarnating itself in fleeting commodities and taking on their form, but at the same time changing them just as constantly; alternates between its eternal form in money and its passing form in commodities; permanence is posited as the only thing it can be, a passing passage — process — life. But capital obtains this ability only by constantly sucking in living labour as its soul, vampire-like. The permanence — the duration of value in its form as capital — is posited only through reproduction, which is itself double, reproduction as commodity, reproduction as money, and unity of both these reproduction processes. In its reproduction as commodity, capital is fixated in a particular form of use value, and is thus not general exchange value, even less realized value, as it is supposed to be. The fact that it has posited itself as such in the act of reproduction, the production phase, is proved only through circulation. The greater or lesser perishability of the commodity in which value exists requires a slower or faster reproduction; i.e. repetition of the labour process. The particular nature of use value, in which the value exists, or which now appears as capital's body, here appears as itself a determinant of the form and of the action of capital; as giving one capital a particular property as against another; as particularizing it. As we have already seen in several instances, nothing is therefore more erroneous than to assert  that the distinction between use value and exchange value, which falls outside the characteristic economic form in simple circulation, to the extent that it is realized there, falls outside it in general. We found, rather, that in the different stages of the development of economic relations, exchange value and use value were determined in different relations, and that this determination itself appeared as a different determination of value as such. Use value itself plays a role as an economic category. Where it plays this role is given by the development itself. Ricardo, e.g., who believes that the bourgeois economy deals only with exchange value, and is concerned with use value only exoterically, derives the most important determinations of exchange value precisely from use value, from the relation between the two of them: for instance, ground rent, wage minimum, distinction between fixed capital and circulating capital, to which he imputes precisely the most significant influence on the determination of prices (through the different reaction produced upon them by a rise or fall in the rate of wages); likewise in the relation of demand and supply etc. One and the same relation appears sometimes in the form of use value and sometimes in that of exchange value, but at different stages and with a different meaning. To use is to consume, whether for production or consumption. Exchange is the mediation of this act through a social process. Use can be posited as, and be, a mere consequence of exchange; then again, exchange can appear as merely a moment of use, etc. From the standpoint of capital (in circulation), exchange appears as the positing of its use value, while on the other side its use (in the act of production) appears as positing for exchange, as positing its exchange value. Likewise with production and consumption. In the bourgeois economy (as in every economy), they are posited in specific distinctions and specific unities. The point is to understand precisely these specific, distinguishing characteristics. Nothing is accomplished by the [assertions of] Mr Proudhon or of the social sentimentalists that they are the same.
The good thing in Ricardo's explanation is that it begins by emphasizing the moment of the necessity of quicker or slower reproduction; hence that the greater or lesser durability — consumption (in the sense of self-consumption), slower or more rapid — is regarded in connection with capital itself. Hence a relation of use value for capital itself. Sismondi by contrast immediately introduces a determinant initially exoteric to capital; direct or indirect human consumption: whether the article is a direct or an indirect necessary of life for the human consumer; he thereby joins this with the quicker or slower consumption of the object itself. The objects which serve directly as necessaries of life are more perishable, because designed to perish, than those which help to produce the necessaries of life. With the latter, their duration is their character; their transitoriness — fate. He says: 'Fixed, indirect capital is slowly consumed, in order to assist in consuming that which man destines for his use; circulating capital does not cease to be directly applied to the use of man... Whenever a thing is consumed, it never returns for him who consumes it; while a thing consumed for reproduction is there for him at the same time.' (Sismondi VI.) He also presents the relation in such a way that: 'the first transformation of annual consumption into durable foundations, suitable for increasing the productive powers of future labour — fixed capital; this first labour always accomplished by labour, represented by a wage, exchanged for necessaries which the worker consumes during labour. Fixed capital is consumed slowly' (i.e. is slowly worn out). Second transformation: 'Circulating capital consists of labour-seeds (raw material) and of the worker's consumption.' (loc. cit.)  This is more concerned with the origin. Firstly the transformation, that fixed capital is itself only circulating capital which has assumed a stationary form, fixated circulating capital; second, the destination: the one destined to be consumed as means of production, the other as product; or the different mode of its consumption, determined by its role among the conditions of production in the production process. Cherbuliez simplifies the matter to the point where circulating capital is the consumable, fixed capital the not consumable part of capital.  (One you can eat, the other not. A very easy method of taking the thing.) In a quotation already given above  (29 in the Notebook), Storch vindicates for circulating capital generally the circulating nature of capital. He contradicts himself by saying: 'all fixed capital comes originally from a circulating capital, and needs continually to be maintained at the latter's expense' (hence comes out of circulation, or is itself circulating in its first moment and constantly renews itself through circulation; thus although it does not go into circulation, circulation goes into it). As for what Storch adds further: 'No fixed capital can give a revenue EXCEPT by means of a circulating capital' (26a. Notebook),  we shall return to that later.
<'Reproductive consumption is not properly an expense, but only an advance, because it is reimbursed to its agent'; p. 54 in Storch's polemic against Say  (p. 5b. Second notebook on Storch). (The capitalist gives the worker a part of the latter's own surplus labour in the form of advance, as something for which he must reimburse the capitalist not merely with an equivalent, but with surplus labour as well.)>
(The formula for computing compound interest is: S = c(1 + i)n. (S, the total magnitude of capital c after n years at an interest rate i.)
The formula for computing an annuity is:
|x (the annuity) =
| _________c(1 + i)n__________
1 + (1 + i) + (1 + i)2 + (1 + i)n - 1
We divided capital above into constant and variable value; this is always correct as regards capital within the production phase, i.e. in its immediate realization process. How it is that capital itself, as presupposed value, can change its value as its reproduction costs rise or fall, or as a consequence of a decline in props also etc., evidently belongs to the section where capital is regarded as real capital, as the interaction of many capitals on one another, not here in its general concept.
<Because competition appears historically as the dissolution of compulsory guild membership, government regulation, internal tariffs and the like within a country, as the lifting of blockades, prohibitions, protection on the world market — because it appears historically, in short, as the negation of the limits and barriers peculiar to the stages of production preceding capital; because it was quite correctly, from the historical standpoint, designated and promoted by the Physiocrats as laissez faire, laissez passer; it has [therefore] never been examined even for this merely negative side, this, its merely historical side, and this has led at the same time to the even greater absurdity of regarding it as the collision of unfettered individuals who are determined only by their own interests as the mutual repulsion and attraction of free individuals, and hence as the absolute mode of existence of free individuality in the sphere of consumption and of exchange. Nothing can be more mistaken. While free competition has dissolved the barriers of earlier relations and modes of production, it is necessary to observe first of all that the things which were a barrier to it were the inherent limits of earlier modes of production, within which they spontaneously developed and moved. These limits became barriers only after the forces of production and the relations of intercourse had developed sufficiently to enable capital as such to emerge as the dominant principle of production. The limits which it tore down were barriers to its motion, its development and realization. It is by no means the case that it thereby suspended all limits, nor all barriers, but rather only the limits not corresponding to it, which were barriers to it. Within its own limits — however much they may appear as barriers from a higher standpoint, and are posited as such by its own historic development — it feels free, and free of barriers, i.e. as limited only by itself, only by its own conditions of life. Exactly as guild industry, in its heyday, found in the guild organization all the fullness of freedom it required, i.e. the relations of production corresponding to it. After all, it posited these out of itself, and developed them as its inherent conditions, and hence in no way as external and constricting barriers. The historical side of the negation of the guild system etc. by capital through free competition signifies nothing more than that capital, having become sufficiently strong, by means of the mode of intercourse adequate to itself, tore down the historic barriers which hindered and blocked the movement adequate to it. But competition is very far from having only this historic significance, or merely being this negative force. Free competition is the relation of capital to itself as another capital, i.e. the real conduct of capital as capital. The inner laws of capital — which appear merely as tendencies in the preliminary historic stages of its development — are for the first time posited as laws; production founded on capital for the first time posits itself in the forms adequate to it only in so far as and to the extent that free competition develops, for it is the free development of the mode of production founded on capital; the free development of its conditions and of itself as the process which constantly reproduces these conditions. It is not individuals who are set free by free competition; it is, rather, capital which is set free. As long as production resting on capital is the necessary, hence the fittest form for the development of the force of social production, the movement of individuals within the pure conditions of capital appears as their freedom; which is then also again dogmatically propounded as such through constant reflection back on the barriers torn down by free competition. Free competition is the real development of capital. By its means, what corresponds to the nature of capital is posited as external necessity for the individual capital; what corresponds to the concept of capital, is posited as external necessity for the mode of production founded on capital. The reciprocal compulsion which the capitals within it practice upon one another, on labour etc. (the competition among workers is only another form of the competition among capitals), is the free, at the same time the real development of wealth as capital. So much is this the case that the most profound economic thinkers, such as e.g. Ricardo, presuppose the absolute predominance of free competition  in order to be able to study and to formulate the adequate laws of capital — which appear at the same time as the vital tendencies governing over it. But free competition is the adequate form of the productive process of capital. The further it is developed, the purer the forms in which its motion appear. What Ricardo has thereby admitted, despite himself, is the historic nature of capital, and the limited character of free competition, which is just the free movement of capitals and nothing else, i.e. their movement within conditions which belong to no previous, dissolved stages, but are its own conditions. The predominance of capital is the presupposition of free competition, just as the despotism of the Roman Caesars was the presupposition of the free Roman 'private law'. As long as capital is weak, it still itself relies on the crutches of past modes of production, or of those which will pass with its rise. As soon as it feels strong, it throws away the crutches, and moves in accordance with its own laws. As soon as it begins to sense itself and become conscious of itself as a barrier to development, it seeks refuge in forms which, by restricting free competition, seem to make the rule of capital more perfect, but are at the same time the heralds of its dissolution and of the dissolution of the mode of production resting on it. Competition merely expresses as real, posits as an external necessity, that which lies within the nature of capital; competition is nothing more than the way in which the many capitals force the inherent determinants of capital upon one another and upon themselves. Hence not a single category of the bourgeois economy, not even the most basic, e.g. the determination of value, becomes real through free competition alone; i.e. through the real process of capital, which appears as the interaction of capitals and of all other relations of production and intercourse determined by capital. Hence, on the other side, the insipidity of the view that free competition is the ultimate development of human freedom; and that the negation of free competition = negation of individual freedom and of social production founded on individual freedom. It is nothing more than free development on a limited basis — the basis of the rule of capital. This kind of individual freedom is therefore at the same time the most complete suspension of all individual freedom, and the most complete subjugation of individuality under social conditions which assume the form of objective powers, even of overpowering objects — of things independent of the relations among individuals themselves. The analysis of what free competition really is, is the only rational reply to the middle-class  prophets who laud it to the skies or to the socialists who damn it to hell. The statement that, within free competition, the individuals, in following purely their private interest, realize the communal or rather the general interest means nothing other than that they collide with one another under the conditions of capitalist production, and hence that the impact between them is itself nothing more than the recreation of the conditions under which this interaction takes place. By the way, when the illusion about competition as the so-called absolute form of free individuality vanishes, this is evidence that the conditions of competition, i.e. of production founded on capital, are already felt and thought of as barriers, and hence already are such, and more and more become such. The assertion that free competition = the ultimate form of the development of the forces of production and hence of human freedom means nothing other than that middle-class rule is the culmination of world history — certainly an agreeable thought for the parvenus of the day before yesterday.>