Marx Vol 2

Harvey's Companion

 * This is one of the reasons that any attempt to measure falling profit rates by looking only at money profits in the production sector alone is so hazardous). Organized labor can seem to procure a larger share of the value produced through struggles at the point of production, only to have that share recuperated by the capitalist class as a whole by the money-gouging retailers, the debt-peddling bankers and financiers, the landlords and, of course, the taxman, who often seems to specialize in taxing the poor to return surplus-value to the corporations and to the capitalists in the form of lucrative tax breaks and subsidies
 * The production of surplus-value depends on its realization through consumption
 * Financiers, merchants and landlords may or may not be more powerful than industrial capitalists in particular places and times. However, Marx treats their remunerations in a pure capitalist mode of production as being exclusively made up of deductions out of the surplus-value that comes from the exploitation of living labor in production. Their rate of return is sensitive to how much surplus-value is produced, which depends in part on their own indirect contribution (or lack of it) to surplus-value production.
 * The production of surplus-value depends on its realization through consumption. Capital is treated as agnostic as to what use-values to produce to satisfy final consumption, and seems indifferent as to whether people want horses and buggies or BMWs. If a commodity is no longer wanted, needed, fancied or desired as a use-value, then it has no value. Both old and new uses and needs must therefore be stimulated to keep accumulation going.
 * The manipulation and mobilization of human desires has been central to the history of capitalism.
 * A vast industry has grown up since Marx’s time to stimulate demand through fashion, advertising, emphasis upon lifestyle choices, andthe like.
 * Maintenance of the necessary balances between the different sectors of the economy may require, Marx suggests, bourgeois manipulation of mass consumption to make the workers’ consumption “rational” in relation to accumulation. Bourgeois philanthropy is therefore often about channeling laborers’ consumption habits in ways favorable to accumulation.
 * The transformation of the elements of production into the commodity product, P into C', proceeds in the sphere of production, while the transformation of C' back into P takes place in the circulation sphere.
 * The capital as C' is anxious to assume the money form but the capital as M' is equally anxious to get rid of it, as soon as it has pupated into it. As long as it persists in the shape of money, it does not function as capital, and thus is not valorized
 * The transformation of money capital into productive capital is the purchase of commodities for the purpose of commodity production.
 * The condition for consumption to occur is that surplus-value is made by means of the commodities thus consumed. And this is something very different from production, even commodity production, whose purpose is the existence of the producers

General notes/foreword

 * Money capital, commodity capital and productive capital are simply functional forms of capital. In each of the phases the capital value is to be found in a different form, corresponding to a different and special function.
 * Commodity production is the expression of a specific form of social organization, which encompasses a basic contradiction.
 * Private appropriation is both the starting-point and the goal of all productive endeavour. Thus, while labour is objectively more and more socialized, it remains to a greater degree than ever before organized on the basis of private production. Production is impossible without social labour - without the co-operation of thousands (in some cases, hundreds of thousands) for the production of a given commodity, under optimum conditions of productivity of labour.
 * In capitalism, production is production for profit (value production oriented towards an accretion of value), and thus growth always has the meaning of accumulation of capital.
 * Without the penetration of capital into the sphere of production, the social product and surplus product can only be re-apportioned and re-appropriated, not increased by capitalist enterprise. Without the penetration of capital into the sphere of production, the social product and surplus product can only be re-apportioned and re-appropriated, not increased by capitalist enterprise. Under such conditions, capitalists would act essentially as parasites upon and plunderers of pre-capitalist (or post-capitalist) forms of production, rather than as masters of the production and appropriation of surplus-value (of the social surplusproduct). As for commodity capital, it is the basic curse of capitalism that commodities must go through the phase in which they contain - in as yet unrealized form- the surplus-value produced by the working class. In other words, before money capital can return to its original form, swollen by surplus-value, it has to go through the intermediate stage of commodity-value - of value embodied in commodities which still have to pass the acid test by being sold.
 * Money capital is not just the result of the sale of commodities; its social existence is a precondition of that sale.
 * Current production is only possible if all commodities produced during the previous turnover cycle have not already been sold to the final consumers - if, that is, stocks and reserves of raw materials, energy, auxiliary products, intermediary products and consumer goods needed to reproduce labour-power are available on a large scale. Continuity of the production process may be said to depend upon discontinuity or desynchronization of the turnover cycle of money capital, productive capital and commodity capital.
 * We can say that the dialectics of money (money capital) and commodities (commodity capital) is the basic contradiction examined in Capital Volume 2.
 * The problem of turnover of capital, of reproduction, as a dual one: In order that (at least simple, and normally expanded) reproduction may be achieved, the total value embodied in the produced commodities must be realized, that is to say, they must be sold at their value.
 * Under capitalism, income distribution has a class structure determined by the very structure of the mode of production, and governed in the medium term by the class interests of the capitalists.

Production process, circulation stage, and money form

 * Commodities in their combination constitute the natural form of productive capital
 * The first major precondition for the circulation of capital to occur: The class relation between capitalist and wage-labourer is already present. The second major precondition for the circulation of capital to occur is this: general commodity production for the market must already exist
 * Capitalism as a social formation is perpetually caught in this contradiction. It can either maximize the conditions for the production of surplus-value, and thereby threaten the capacity to realize surplus-value in the market; or keep effective demand strong in the market by empowering workers, and thereby threaten the ability to create surplus-value in production
 * The production that “predominates” within a capitalist mode of production is the production of surplus-value, and surplus-value is a social and not a physical, material relation.
 * The particular way that labor-power and means of production are brought together “is what distinguishes the various economic epochs of the social structure
 * Ground rent, wages, interest and profit figure under distribution while land, labour and capital figure under production as agents of production.
 * The purchaser of labor and the means of production controls the factors of production for articles of a greater value than their elements of production, for a mass of commodities containing surplus-value.
 * M-C is the transformation of capital value from its money form into its productive form. Thus, the two elements (mp + labor) exist as productive capital to the capitalist.
 * Money capital can perform different (monetary) functions than productive capital, e.g. it can function as a means of purchase and payment
 * Wage: a contract of sale which determines that a greater quantity of labour is provided than is necessary to replace the price of the labour-power
 * What is characteristic is not that the commodity labour-power can be bought, but the fact that labour-power appears as a commodity. The existence of labor-power as a commodity implies the occurrence of historic processes through which the original connection between means of production and labour-power was dissolved. M-C … P … C'-M' presupposes the availability of the class of wage-labourers in sufficient numbers throughout society. Both the class relation and generalized commodity production (and by implication the money form) must precede the rise of capital, but the rise of capital generalizes these preconditions.
 * Although in the act M-L the possessor of money and the possessor of labour-power relate to each other only as buyer and seller, the buyer appears right from the start as the possessor of the means of production which form the objective conditions for the productive expenditure of labour-power by its possessor.
 * The same circumstance that produces the basic condition for capitalist production, the existence of a class of wage labourers, encourages the transition of all commodity production to capitalist commodity production. It firstly makes commodity production universal, and then gradually transforms all commodity production into capitalist production.
 * The class relation between capitalist and wage-labourer is thus already present, already presupposed, the moment that the two confront each other in the act M-L (L-M from the side of the worker). This is a sale and purchase, a money relation, but a sale and purchase in which it is presupposed that the buyer is a capitalist and the seller a wage-labourer; and this relation does in fact exist, because the conditions for the realization of labour-power, i.e. means of subsistence and means of production, are separated, as the property of another, from the possessor of labour-power. Thus, although the two confront each other as equals in that they exchange commodities of equal values, it is clear from the start that the buyer of labor-power (the capitalist) is the only one who can realize the productive capacity of labor-power.
 * The capital relation exists implicitly in the act of circulation, in the basically different economic conditions in which buyer and seller confront one another, in their class relation.
 * It is not the nature of money that gives rise to this relation; it is rather the existence of the relation that can transform the mere function of money into a function of capital
 * Money appears very early on as a buyer of so-called services, without its being transformed into money capital, and without any general revolution in the general character of the economy”. For capital circulation truly to begin requires that labor-power first appear upon the market as a commodity. “What is characteristic is not that the commodity labour-power can be bought, but the fact that labour-power appears as a commodity.”
 * Money can be spent as capital “only because labour-power is found in a state of separation from its means of production. Money appears here as a form of existence of capital and can be spent in this form only because labour-power is found in a state of separation from its means of production (including the means of subsistence as means of production of labour-power itself). It can be only spent because this separation is abolished only through the sale of labour-power to the owner of the means of production, a sale which signifies that the buyer is now in control of the continuous flow of labour-power, a flow which by no means has to stop when the amount oflabour necessary to reproduce the price of labour power has been performed
 * The specific content of the money function that makes it simultaneously a function of capital presupposes a social relation. The purchase and sale of slaves is also in its form a purchase arid sale of commodities. Without the existence of slaves, however, money cannot fulfill this function.
 * If the sale of one’s own labor-power is the socially decisive precondition for the production of commodities, this fact implies the occurrence of historic processes through which the original connection between means of production and labour-power was dissolved; processes as a result of which the mass of the people, the workers, come face to face with the non-workers, the former as non-owners, the latter as the owners, of these means of production
 * Thus the situation that underlies the act M-C< mpL is one of distribution; not distribution in the customary sense of distribution of the means of consumption, but rather the distribution of the elements of production themselves, with the objective factors concentrated on one side, and labour-power isolated from them on the other. The means of production must thus already face the worker as such, as capital, before the act M-L can become general throughout society.
 * The presence of such 'free wage-labourers' throughout society is the indispensable condition without which M-C, the transformation of money into commodities, cannot take the form of the transformation of money capital into productive capital labor must first be fully deprived of its means of subsistence!
 * In order that the mass of direct producers, the wage-labourers, may perform the act L-M-C, they must constantly encounter the necessary means of subsistence in purchasable form, i.e. in the form of commodities. Thus this situation in itself demands a high degree of circulation of products as commodities, i.e. commodity production on a large scale. As soon as production by way of wage-labour becomes general, commodity production must be the general form of production. That is, you can't have wage-labor as the dominant form if a lot of the producers are still self-sustaining. The wage-laborer needs a developed commodity market in order to make use of his wage (i.e. buy his subsistence)
 * The capitalist form of commodity production makes the sale of the product (as opposed to other forms aimed at satisfying the direct needs of the producers, in which only the excess products are transformed into commodities) the main interest, at first without apparently attacking the mode of production itself
 * Capitalist production produces not only commodities and surplus-value; it reproduces, and on an ever extended scale, the class of wage-labourers, and transforms the immense majority of direct producers into wage-labourers.
 * Whatever the social form of production, workers and means of production always remain its factors. But if they are in a state of mutual separation, they are only potentially factors of production. For any production to take place, they must be connected. The particular form and mode in which this connection is effected is what distinguishes the various economic epochs of the social structure. In the present case, the separation of the free worker from his means of production is the given starting point, and we have seen how and under what conditions the two come to be united in the hands of the capitalist- i.e. as his capital in its productive mode of existence.
 * Labour-power's surplus labour is labour performed gratis for capital, and hence forms surplus-value for the capitalist, a vaiue that costs him no equivalent.
 * The yarn (with the surplus in it) bears its capitalist birth-mark not in the absolute magnitude of its value, but in its relative magnitude, in the magnitude of its value compared with the value of the productive capital contained in it before it was transformed into commodities.
 * Within the general circulation, C' functions for example as yarn, simply as a commodity; but as a moment of the circulation of capital it functions as commodity capital, a form that the capital value alternately assumes and discards. When the yarn is sold to the merchant it is removed from the circuit of that capital whose product it is, but still continues as a commodity in the orbit of general circulation.
 * M, as money capital, continues the circuit of capital. m, spent as revenue (m-e), goes into the general circulation, but is cast out of the circuit of capital. Only that part of it enters the latter circuit that functions as additional money capital.
 * Money capital exists from the outset neither as the original nor as the concluding form of the capital value, since it is only through repeatedly stripping off the money form that the phase M-C that complements the phase C-M can be completed
 * M' appears as the transformed form of C', which is itself the product of the past function of P, the production process; the entire sum of M' thus appears as the monetary expression of past labour.
 * In the money with which his wage is paid, therefore, the worker receives the transformed form of his own future labour or that of other workers. The money that is here advanced to the worker is only the transformed equivalent form of a portion of the commodity value that he himself produces. With one part of his past labour the capitalist gives him a draft on his own future labour. It is his own simultaneous or future labour which  forms the as yet non-existent reserve stock with which his past labour is paid for.
 * After a while, labor reproduces the equivalent of the whole value of the capital originally advanced. The value circulating should by rights, in Marx’s interpretation of Locke’s argument that property accrues to those who mix their labor with the land to create value, belong to the laborer and not to the capitalist (who has, in effect, consumed away the original capital). The M that re-enters production is, Marx notes, “an expression of past labor” and not of money capital pure and simple.
 * The transformation of the elements of production into the commodity product, P into C', proceeds in the sphere of production, while the transformation of C' back into P takes place in the circulation sphere
 * The capital as C' is anxious to assume the money form but the capital as M' is equally anxious to get rid of it, as soon as it has pupated into it, in order to convert itself once more into the form of productive capital. As long as it persists in the shape of money, it does not function as capital, and thus is not valorized; the capital remains idle. The timely conversion of money into the elements for productive consumption is a necessity for the reproduction of productive capital.
 * M-L is not simple commodity exchange, but the purchase of a commodity L that is to serve for the production of surplus-value, while M-mp is only a procedure that is materially indispensable to the accomplishment of this end.
 * A replacement of commodity by commodity conditioned by surplus-value production is something quite other than an exchange of products that is simply mediated by money. But this is how the matter is presented by the economists, as proof that no overproduction is possible.
 * Whether C' is bought by the final consumer or by the merchant who intends to sell it again does not directly alter the matter in any way.
 * The volume of the mass of commodities brought into being by capitalist production is determined by the scale of this production and its needs for constant expansion, and not by a predestined ambit of supply and demand, of needs to be satisfied.
 * Within the circuit of industrial capital, money capital performs no other functions than those of money, and these money functions have the significance of-capital functions only through their connection with the other stages of the circuit. The expression of M' as a relation between m and M, as a capital relation, is not a direct function of the money capital, but rather of the commodity capital C', which in turn expresses, as a relation between c and C, only the result of the production process, of the self-valorization of the capital value that takes place within it.
 * The persistence of money capital in its money state appears as the result of interrupted movement, whether this is expedient or inexpedient, voluntary or involuntary, functional or dysfunctional.
 * The surplus value realized, even if it is destined for capitalization, can often only grow to the volume at which it can actually function as additional capital. The formation of a hoard appears here as a moment that is comprised within the process of capitalist accumulation, accompanies it but is at the same time essentially different from it. For the reproduction process is not itself expanded by the formation of latent money capital.
 * The whole character of capitalist production is determined by the valorization of the capital value advanced, thus in the first instance by the production of the greatest possible amount of surplus-value; secondly, however (see Volume 1, Chapter 24), by the production of capital, i.e. the transformation of surplus-value into capital. Accumulation, or production on an expanded scale, which first appears as a means towards the constantly extended production of surplus-value, hence the enrichment of the capitalist, as the personal end of the latter, and is part of the general tendency of capitalist production, becomes in the course of its development, as was shown in the first volume, a necessity for each individual capitalist. The constant enlargement of his capital becomes a condition for its preservation.
 * In P ... P', P' does not express the fact that surplus-value is produced, but rather that the produced surplus-value is capitalized, i.e. that capital has been accumulated (and not spent on the capitalist's consumption), and hence P', as opposed to P, consists of the original capital value plus the value of the capital accumulated through its movement.
 * When M' or C' are depicted as M + m, C + c, i.e. as a relation between the capital value and the surplus-value as its offshoot, this relation is expressed in one case in the money form, and the other case in the commodity form, but this does not alter the matter in any way. This relation thus does not arise from properties and functions that can be ascribed either to the money or the commodity as such
 * M' is only the result of the realization of C'. Hence, as far as the difference m between M' and M is concerned, this is only the money form of c, the increment to C; M' is only equal to M+m because C' equals C+c. Both of these, C' as well as M', are only different forms, the commodity form and the money form, of the valorized capital value
 * In so far as C' and M' represent valorized value, capital active as capital, they simply express the result of the function of productive capital. They express not the movement but rather its result. But neither in the form C' nor in the form M' is the valorization that has taken place a function of the money capital or the commodity capital.
 * C' is always the product of the function of P, and M'is always simply the form into which C'has been transformed in the circuit of industrial capital.
 * The growth of capital involves a change in its value composition, in the course of which the value of mp constantly grows, while that of L always declines relatively, and often even absolutely.
 * The change in value belongs solely to the metamorphosis P, the production process, which thus appears as the real metamorphosis of capital
 * The two forms that the capital value assumes within its circulation stages are those of money capital and commodity capital; the form pertaining to the production stage is that of productive capital. This capital is industrial capital- industrial here in the sense that it encompasses every branch of production that is pursued on a capitalist basis.
 * Money capital, commodity capital and productive capital thus do not denote independent varieties of capital, whose functions constitute the content of branches of business that are independent and separate from one another. They are simply particular functional forms of industrial capital, which takes on all three forms in turn
 * If capital comes to a standstill in the...
 * 1st phase (M-C): money capital forms into a hoard
 * 2nd phase (production phase): the means of production cease to function, and labour-power remains unoccupied
 * 3rd phase (C'-M'): unsaleable stocks of commodities obstruct the flow of circulation
 * On services as commodities: The manufacturer can produce articles first and look for customers afterwards. (His product, after it is ejected in finished form from the production process, passes into circulation as a commodity separate from this process.) Production and consumption thus appear as two acts separated in time and space. In the transport industry (or many other service industries for that matter), however, which does not create new products, but only displaces people and things, these two acts coincide; the services (the change of place) are necessarily consumed the moment they are produced. People and commodities travel together with the means of transport, and this journeying, the spatial movement of the means of transport, is precisely the production process accomplished by the transport industry. The useful effect can only be consumed during the production process. The formula for the transport industry is thus M-C(L+mp)...P...M'
 * To the degree that industrial capital takes hold of production, the technique and social organization of the labour process are revolutionized, and the economic-historical type of society along with this. The other varieties of capital which appeared previously, within past or declining conditions of social production, are not only subordinated to it and correspondingly altered in the mechanism of their functioning, but they now move only on its basis, thus live and die, stand and fall together with this basis. Money capital and commodity capital, in so far as they appear and function as bearers of their own peculiar branches of business alongside industrial capital, are now only modes of existence of the various functional forms that industrial capital constantly assumes and discards within the circulation sphere
 * Money is not spent here as money, but is only advanced, and is thus simply the money form of capital, money capital.
 * Money is the independent and palpable form of existence of value, in which all trace of the commodities' use-value has been effaced.
 * Without the glittering money form there would be no motivation for the capitalist, and without the realization of capital in its money form there would be no tangible measure of reward
 * M-C (buying labour-power and MoP) as the first phase of the first circuit, simply forms an evanescent prelude to the constantly repeated circuit of productive capital, as is in fact the case when industrial capital is invested for the first time, in the form of money capital.
 * The general form of the circuit of industrial capital is the circuit of money capital, in so far as the capitalist mode of production is presupposed, i.e. within a specific state of society determined by capitalist production
 * Each “moment” in the circulation process—money, productive activity, commodity—is expressive of different possibilities. Capital is like the lifecycle of a butterfly. In each state the organism exhibits different capacities and powers: as an egg or as a chrysalis, it is immobile but growing; as a caterpillar it crawls around in search of food; and as a butterfly it can flit around at will.
 * As industrial capital within the sphere of production can exist only in the combination corresponding to the production process in general, and so it can exist in the sphere of circulation only in the two forms of commodity and money that correspond to this.
 * There is a minimum limit which m has to surpass in order for production to be expended (because to extend production, you not only need spindles but carding machines etc.). For the time being, m is only hoarded. Thus the accumulation of money, the formation of a hoard, appears here as a process that temporarily accompanies an extension of the scale on which industrial capital operates. Temporarily, because as long as the hoard persists in its state as a hoard, it does not function as capital, does not participate in the valorization process. It is latent money capital
 * The scale that it must have attained in order to enter the process is determined by the value composition of the productive capital in each particular case
 * The reserve fund (the m that has not reached a minimum size to expand production), on the other hand, is not a component part of the functioning capital, or, more precisely, the money capital, but rather capital going through a preliminary stage of its accumulation, surplus-value that has not yet been transformed into active capital. In the money accumulation fund, money already exists as latent money capital, and is thus transformed into money capital
 * The money, when in the hands of the capitalist and about to be transformed into variable capital through the purchase of labor-power, is functioning as capital. But that same money no longer functions as capital once it is in the hands of the workers. It too undergoes a metamorphosis of form, for it is now simply money in the hands of a buyer in the marketplace and, as such, can be used in any way the worker needs, wants or pleases. Once workers have spent their money on commodities and it is back in the hands of the capitalist, then it can revert to the form of capital provided the capitalist does not use it for consumption.
 * Money is not capital; money can only perform money functions. Money is a form of social power appropriable by private persons. Money cannot in itself create anything: it can only perform money functions.
 * Commodities can likewise perform only commodity functions. Commodities can exist without being products of capital. In fact, Marx argues, a whole world of commodity production and exchange, along with monetary and market forms, had to exist before capital itself could come into being. If there were no commodities already on the market, where would capitalists buy their means of production and workers the wage goods they need to survive?
 * So commodification in general, and even direct commodity production, does not define capital. What is specific is that commodities under capitalism are impregnated with surplus-value, and commodities cannot impregnate themselves.
 * If I pay a kid in my building to walk my dog in the afternoon, or if I give a case of beer to a neighbor who spends hours helping me fix up my porch, then none of this presupposes the existence or circulation of capital. Exchanges of labor services for money or other commodities, Marx notes, had to exist before capital could buy labor-power as a commodity. So while extensive proletarianization was a necessary precondition for the rise of capital, it does not define what the essence of capital is all about
 * The essence of capital, we are forced to conclude, is the class relation between capital and labor in production that facilitates the systematic production and appropriation of value and surplus-value.


 * Basically, this is the continuous flow of circulation and boxed off within it the three different circulation processes:



The unity of the three circuits

 * The greater the disturbances, the greater the money capital that the industrial capitalist must possess in order to ride out the period of readjustment; and since the scale of each individual production process grows with the progress of capitalist production, and with it the minimum size of the capital to be advanced, this circumstance is added to the other circumstances which increasingly turn the function of industriafcapitalist into a monopoly of large-scale money capitalists
 * The capitalist mode of production transforms all possible production into commodity production, and it does so b drawing this production into its circulation process. The intervention of industrial capital everywhere promotes this transformation, and with it too the transformation of all immediate producers into wage-labourers.
 * As the capitalist mode of production presupposes production on a large scale, so it also necessarily presupposes large-scale sale; sale to the merchant, not to the individual consumer
 * Capital of the same value accordingly requires less money for its circulation, the more the money functions as means of payment (e.g. the more that it is only balances that have to be settled when a commodity capital is replaced by its means of production), and the shorter the periods of payment (e.g. in the payment of wages). On the other hand, assuming that the velocity of circulation and all other circumstances remain the same, the amount of money needed to circulate as money capital, is determined by the sum of the prices of the commodities (price multiplied by the quantity of commodities), or alternatively, given the quantity and values of the commodities, by the value of the money itself.
 * The production process is the mediator of the circulation process, and vice versa. The interruptions, like those in the lifecycle of the butterfly, are omnipresent and inevitable. They threaten the continuity of capital’s motion, but they do not necessarily engender crises. A crisis might appear at one moment as a surplus of commodity capital that cannot be disposed of, or at another as an excessive hoard of money capital lacking investment opportunities, or at yet another as a scarcity of means of production or labor-power for the further expansion of accumulation. Capital flow can be blocked at any one of a number of different transitional points.
 * Continuity that is the characteristic feature of capitalist production, and is required by its technical basis, even if it is not always completely attainable. Industrial capital exists simultaneously in its various phases and functions, and thus describes all three circuits at once
 * Any individual industrial capital will typically have different portions of its capital in each of the different circuits (commodity, money, and productive capital) at any one moment. Part of it will be absorbed in production, part will be in money form, and part in commodity form. But this coexistence is itself only the result of the succession.” The necessity for continuous movement through the different circuits trumps all else.
 * Value is constituted out of the socially necessary labor deployed through the movement of industrial capital through production and circulation.
 * Individual industrial capitals then have to submit to the laws they themselves have collectively created. And in so doing, many of them end up succumbing to or being destroyed by the very value revolutions they are perpetually creating.
 * When the value of means of production falls, then money capital is set free even as the simple reproduction of productive capital is maintained. If the value of means of production rises, then more money capital is needed just to keep the same productive capital functioning.
 * The smoothness, continuity and fluidity that are so important to the circulation of industrial capital as a whole can be sustained only under conditions of zero technological change.
 * The greater the disturbances, the greater the money capital that the industrial capitalist must possess in order to ride out the period of readjustment; and since the scale of each individual production process grows with the progress of capitalist production, and with it the minimum size of the capital to be advanced, this circumstance is added to the other circumstances which increasingly turn the function of industrial capitalist into a monopoly of large-scale money capitalists, either individual or associated
 * The actual history of capitalism has often been marked by such tendencies towards centralization and monopolization, and again it is easy to see how this helps capitalists deal with the vicissitudes and uncertainties that derive from the fiercely competitive but destabilizing drive to procure relative surplus-value through technological changes. Monopoly power allows capital to control the pace of potentially disruptive technological changes
 * Capital can integrate with noncapitalist modes of production. The character of the production process from which (commodities) derive is immaterial; they function on the market as commodities, and as commodities they enter both the circuit of industrial capital and the circulation of the surplus-value borne by it.
 * What is emphasized in the categories money economy and credit economy, and stressed as the distinctive feature, is actually not the economy proper, i.e. the production process itself, but rather the mode of commerce between the various agents of production or producers that corresponds to the economy
 * Capitalist production is commodity production as the general form of production, but it is only so because labour itself here appears as a commodity, because the worker sells labour (i.e. the function of his labour-power) at a value determined by the costs of its reproduction.
 * The producer becomes an industrial capitalist to the same extent that labour becomes wage-labour; hence capitalist production (and thus also commodity production) appears in its full extent only when the direct agricultural producer is also a wage-labourer.
 * In the relation between capitalist and wage-labourer, the money relation, the relation of buyer and seller, becomes a relation inherent in production itself. But this relation rests fundamentally on the social character of production, not on the mode of commerce; the latter rather derives from the former
 * As far as his demand for labour-power is concerned, it is determined in its value by the ratio between his variable capital arid his total capital, .i.e. v:C. In capitalist production, therefore, this demand grows at a smaller rate than his demand for means of production. The capitalist buys more of mp than of L, and to a steadily increasing extent.
 * In so far as the worker converts his wages almost wholly into means of subsistence, and by far the greater part into necessities, the capitalist's demand for labour-power is indirectly also a demand for the means of consumption that enter into the consumption of the working class. The greater the percentage of s produced (the rate of profit), the smaller his demand in relation to his supply. Although, as production advances, the capitalist's demand for labour-power, and hence indirectly for necessary means of subsistence, becomes progressively smaller than his demand for means of production, it should not be forgotten that his demand for mp is always smaller than his capital, considering this day by day.
 * For capitalism is already essentially abolished once we assume that it is enjoyment that is the driving motive and not enrichment itself.

Effective demand & realization

 * The capital surplus disposal or absorption problem
 * The wants, needs and desires of the buyers have been manipulated over time by all sorts of direct and indirect means into patterns of ‘rational consumption’ as defined by capital. In some instances, there is resistance is to the very concept of commodification and market rationing of access to basic goods and services (such as education, health care and potable water).
 * The capitalist casts less value into circulation in the form of money than he draws out of it, because he casts in more value in the form of commodities than he has extracted in the form of commodities. In so far as he functions merely as the personification of capital, as industrial capitalist, his supply of commodity value is always greater than his demand for it.
 * The capitalist class demands means of production (c), so this is one source of demand. But this is much less than the value of the commodities that will be produced (c + v + s).
 * The capitalist class provides the workers with purchasing power (v). The worker converts his wages almost wholly into means of subsistence, and by far the greater part into necessities, so that the capitalist’s demand for labour-power is indirectly also a demand for the means of consumption that enter into the consumption of the working class.
 * If we ignore workers’ savings and leave the matter of credit out of consideration then the maximum limit of the capitalist’s demand is c + v, but his supply is c + v + s. This means that the greater the surplus-value produced (or the higher the rate of profit), the smaller his demand in relation to his supply

Capital & alternatives to capitalism

 * The essence of capital, we are forced to conclude, is the class relation between capital and labor in production that facilitates the systematic production and appropriation of value and surplus-value.
 * The reproduction of capital is always to be understood as the reproduction of the class relation between capital and labor
 * All of these elements of money, commodities, the buying and selling of labor services, and a given physical and technical capacity for production had to preexist the rise of capital. Together they constituted the necessary preconditions for the emergence of that class relation between capital and labor that facilitates the systematic production and appropriation of surplus-value
 * The core goal must be the abolition of this class relation in production
 * It is tempting then to conclude that it should in principle be possible to construct socialism, and even communism, in a world of monetization, commodification, and even the trading of labor services, provided that the class relation between capital and labor is erased from the world of production
 * BUT: Once the class relation between capital and labor becomes dominant in production, then it entails a transformation of the preconditions that gave rise to it. The circulation of money and commodities and the functioning of labor markets are transformed so as to support and even mandate and discipline the reproduction of class relations in production
 * While it is true that money, commodities, and the exchange of labor services logically and historically preceded the rise of capital as a class relation, these exchanges at that time functioned under radically different social conditions
 * As the class relation between capital and labor came to dominate in production (spreading far afield even in Marx’s day), so this had a transforming impact upon the form and functioning of money, commodities, and labor markets.
 * Once money becomes money capital it becomes not only the aim and object of the capitalist’s fetish desire. It also assumes very different functions and, particularly in the form of the credit system, is organized solely to support the reproduction of the class relation.
 * Exchange of commodities is one thing, but exchange-value as the regulator of all human transactions is quite another.
 * The class relation between capital and labor in production cannot be abolished without the abolition of the laws of motion of capital and the abolition of that immaterial and objective force of the law of value that anchors those laws of motion.
 * While we can remain faithful to the principle of associated workers, of worker autonomy and self-management, and honor the long history of attempts to implement such ways of producing and living, we also have to confront all the other facets of social change required to emancipate the social world from the domination of capital
 * In many parts of the world—the United States in particular—the idea of socialism or communism is associated primarily with dictatorial forms of centralized state power. A perfectly valid distrust of the state and of the exercise of state power is everywhere observable. Marx suggests that the core imaginary of an alternative communist society is that of freely associating laborers controlling their own production process and exercising autonomy in the workplace within a decentralized economy.

Circulation time/Umlaufzeit

 * The capitalist must hold in reserve a certain stock of raw and ancillary materials, so that the production process can keep going for shorter or longer intervals on the previously determined scale, without depending on the accidents of daily supply on the market
 * For example with corn that is sown or wine that ferments in the cellar, the production process continues in this case, even though the labour process is interrupted (i.e. the production time > the labour time)
 * The productive capital exists in a latent state in the production sphere, without functioning in the production process itself
 * The part of the latent productive capital (including the buildings to store the reserves) that is simply held in readiness as a condition for the production process acts neither to form products nor values. It is idle capital, although its idleness forms a condition for the uninterrupted flow of the production process. But idle capital does not produce value and surplus-value, even though it is a necessary part of the life of productive capital
 * The total value that the means of production add to the product is determined by the average length of their life; they lose value because they lose use-value, not only in the time during which they are functioning, but also in the time during which they are not.
 * Labour always carries over the value of the means of production to the product
 * in none of these cases do the means of production function to absorb labour. If they absorb no labour, then they absorb no surplus labour. Hence there is no valorization ofthe productive capital, as long as this finds itself in that part of its production time that is in excess of the working time, no matter how inseparable these pauses may be from the accomplishment of the valorization process
 * It is clear that the nearer production time and working time approach to equality, the greater the productivity and valorization of a given productive capital in a given space of time.
 * The tendency of capitalist production is to shorten as much as possible the excess of production time over working time (e.g. night work). But although the production time of capital may diverge from its working time, it always includes the latter, and the excess itself is a condition of the production process.
 * The production time is always the time that the capital takes to produce use-values and valorize itself, hence to function as productive capital, although it includes time in which it is either latent or produces without being valorized.
 * The transformation of the commodity into money is here at the same time the realization of the surplus-value embodied in the commodity
 * Circulation time is the time taken to sell the commodity and then reconvert the money capital into means of production and labor-power. Circulation time and production time are mutually exclusive; the expansion and contraction of the circulation time hence acts as a negative limit on the contraction or expansion of the production time
 * The more that the circulation metamorphoses of capital are only ideal, i.e. the closer the circulation time comes to zero, the more the capital functions, and the greater is its productivity and self-valorization
 * There is a distinction between C-M and M-C that has nothing to do with the difference inform between commodities and money, but derives from the capitalist character of production. In and for themselves, both C-M and M-C are mere translations of the given value from one form into the other. But C' -M' is at the same time the realization of the surplus-value contained in C'. Not so M-C. Hence the sale is more important than the purchase.
 * The use-values of different commodities may decay at different speeds; thus a greater or lesser interval may elapse between their production and their consumption, and they may thus persist for a shorter or longer time in the circulation phase C-M as commodity capital, endure a shorter or longer circulation time as commodities.
 * The more perishable a commodity, the more directly after its production it must be consumed, and therefore sold, the smaller the distance it can move from its place of production, the narrower therefore is its sphere of spatial circulation, and the more local the character of its market.
 * The sum of circulation and production times is defined as the turnover time of capital
 * There is a key difference between the total capital applied in production (this includes all of the fixed capital, such as machinery and buildings) and the capital actually consumed or used up (which only includes that part of the fixed capital used up in the active production process).
 * Contrary to the earlier stated ease with which to convert money into mp, Marx now introduces the difficulty of purchasing the specific mp that the capitalist needs: The means of production may not be present on the market, needing first to be produced, or they may have to be drawn from distant markets, or there may be dislocations in their normal supply, changes of price, etc. in short, a mass of circumstances that are not recognizable in the simple change of form M-C, but require for this part of the circulation phase either less time or more. Just as C-M and M-C are separated in time, so they may also be separated in space, the selling and the buying markets being in different places.
 * In short, capitalists face all sorts of potential supply constraints and costs when it comes to procuring the use-values required as a precondition of production. The longer it takes to secure those means of production, the more capital is locked up in an unproductive state.

The costs of circulation

 * The merchant is somewhat similar to machines. While machines cannot produce value, as he argues in Volume I, they can be a source of relative surplus-value both individually (capitalists with superior machinery earn excess profits) and socially (the reduction in the cost of wage goods because of rising productivity reduces the value of labor-power). So something that is not a source of value can be a source of surplus-value.
 * In the same way that the gains to be had from rising productivity are open to being divided between workers and capitalists, so the gains from rising productivity and increasing rates of exploitation in circulation can be divided between merchant and production capitalists
 * While costs that make commodities dearer without increasing the use-value are faux frais of production from the social point of view, for the individual capitalist they can constitute sources of enrichment. This is so because these costs are actually continuations of the costs of production (e.g. refrigeration) even though they are incurred within the circulation process itself.
 * Just as the circulation time of capital forms a necessary part of its reproduction time, so the time during which the capitalist buys and sells, prowls around the market, forms a necessary part of the time in which he functions as a capitalist, i.e. as personified capital.
 * If the commodities are sold at their values, then the amounts of value in the hands of both buyer and seller remain unchanged; it is only the form of existence that has altered. If the commodities are not sold at their values, then the sum of converted values remains unaffected; what is a plus for one side is a minus for the other.
 * These business transactions do not create value. This labour-which is a necessary moment of the capitalist production process in its totality, and also includes circulation, or is included by it - behaves somewhat like the 'work of combustion' involved in setting light to a material that is used to produce heat. This work does not itself produce any heat, although it is a necessary moment of the combustion process.
 * According to Quesnay, the 'profit' that arises from competition among the merchants, in so far as this com pels them 'to reduce their reward or gain is strictly speaking only a loss avoided for the original seller and for the purchasing consumer. But this prevention of loss on the costs of trade is not a real product or an addition to wealth effected by trade
 * The merchant performs a necessary function, because the reproduction process itself includes unproductive functions
 * Let us assume that he is simply a wage-labourer, even if one of the better paid. Whatever his payment, as a wage-labourer he works part of the day for nothing. Society does not count these two hours of surplus labour, although they are spent by the individual who performs them. Society does not appropriate by this means any additional product or value.
 * If it is the capitalist who employs these agents, then the circulation costs of his capital, which form a deduction from his receipts, are reduced by the non-payment of the two hours. For him, this is- a positive profit, because the negative restriction on the valorization of his capital is reduced.
 * There is a certain distinction between the costs arising from book-keeping or unproductive expenditure of labour-time on the one hand, and those of mere buying and selling time on the other. The latter arise simply from the particular social form of the production process, from the fact that it is a process of production of commodities. Book-keeping, however, as the supervision and the ideal recapitulation of the process, becomes ever more necessary the more the process takes place on a social scale and loses its purely individual character; it is thus more necessary in capitalist production than in the fragmented production of handicraftsmen and peasants, more necessary in communal production than in capitalist.
 * Since the mass of commodities is constantly growing, so the quantity of the gold and silver that functions as a means of circulation, means of payment, reserve, etc. also increases. The commodities that function as money go neither into individual nor into productive consumption. They represent social labour fixed in a form in which it serves merely as a machine for circulation. Apart from the fact that a part of the social wealth is confined to this unproductive form, the wear and tear of money requires its steady replacement, or the transformation of more social labour- in the product form- into more gold and silver. This is a part of the social wealth which has to be sacrificed to the circulation process. The money circulating in a country is a certain portion of the capital of the country, absolutely withdrawn from productive purposes, in order to facilitate or increase the productiveness of the remainder.
 * All labour that adds value can also add surplus-value and will always add surplus-value on the basis of capitalism
 * While costs that make commodities dearer without increasing their usevalue are faux frais of production from the social point of view, for the individual capitalist they can constitute sources of enrichment.
 * The flow of the production and reproduction process, however, requires that a mass of commodities (means of production) is constantly present on the market, i.e. forms a stock.
 * Stock exists in three forms: in the form of productive capital, in the form of the individual consumption fund and in the form of the commodity stock or commodity capital.
 * In, for example, the peasant economy: Here an overwhelming part of the product was transformed directly, without forming a commodity stock, into a stock of means of production or means of subsistence, precisely because it remained in the hands of its possessor. Because it did not assume the form of a commodity stock, Adam Smith held that no stock existed in societies based on this mode of production. Adam Smith thus confused the form of stock with the stock itself
 * The storing of capital stock counts as circulation costs. These circulation costs are distinguished from those mentioned under heading 1 in as much as they do enter into the value of commodities to a certain extent, and thus make the commodities dearer. To the extent that such storing etc activities work on the use-value of the commodities, they are not entirely unproductive; but they are still only expenses
 * The calculation of the commodity values (the book-keeping for this process) and the buying and selling, on the contrary, do not operate on the use-value in which the commodity value exists
 * In order for the process to keep flowing, there must always be a greater store of raw material, etc. at the place of production than is used up daily or weekly, for example. The continuity of the process requires that the existence of its preconditions should depend neither on the possible interruption of daily purchases, nor on whether the commodity product is sold daily or weekly, and can therefore only irregularly be transformed back into its elements of production.
 * How much material has to be stored as stock depends on various conditions which essentially all derive from the greater speed, regularity and certainty with which the necessary mass of raw material can be constantly supplied in such a way that no interruption arises. The speed with which the product of one process can be transferred to another process as means of production depends on the development of the means of transport and communication (just-in-time). These conditions stand in inverse proportion to the level of development of capitalist production, and thus of the productive power of social labour.
 * The less dependent the mill·owner is for the renewal of his stocks of cotton, coal, etc. on the direct sale of his yarn - and the more developed the credit system, the smaller this direct dependence - the smaller the relative size of these stocks need be, in order to secure a continuous production of yarn independent of the accidents of its sale. For an individual country, the scale on which the quantity needed for the year, for example, must be held ready, declines with the development of the means of transport.
 * But what appears here as a decline in the stock is in part only a decline of stock in the form of commodity capital or of commodity stock proper; i.e. a mere change of form of the same stock
 * On the basis of capitalist production, the commodity becomes the general form of the product, and the more so, the more this production develops in scale and depth. Thus a far greater part of the product exists as a commodity, even at the same scale of production, in comparison either with earlier modes of production, or with the capitalist mode of production itself at a less developed stage.
 * Every commodity, in so far as it does not directly pass from the sphere of its production into productive or individual consumption, and finds itself on the market during the interval, forms an element of the commodity stock. In and for itself- assuming the scale of production is constant- the commodity stock therefore grows with capitalist production. We have already seen that this is only a change of form for the stock, i.e. that the stock increases in commodity form because it decreases in the form of direct production or consumption stock.
 * If the commodities are ready for sale but cannot be sold, not only is the valorization process interrupted but the capitalist now has to expend money for the conservation as well. The expenses it cost him to maintain it in its commodity form pertain to his own individual experience, and do not interest the buyer of the commodity. The latter does not pay him for the circulation time of his commodity.
 * There can be no stock without a delay in the circulation sphere, without the capital persisting for a longer or shorter period in its commodity form; thus there can be no stock without a hold-up in circulation, just as no money can circulate without the formation of a money reserve. That is to say, without the commodity stock, no commodity circulation.
 * C'-M' can be completed for the producer of C even though C is still on the market. The expenses of stock formation continue to be deductions from the social wealth, even though they are a condition of its existence.
 * Circulation of commodities can also take place without their physical movement. What actually moves here is the property title to the thing and not the thing itself. However, the conditions and possibilities of spatial mobility look very different within the money, commodity and productive circuits of capital, and that the circulation of both present and future property titles (and claims to future labor) on the world market was destined to become an ever more prominent feature affecting the laws of motion of capitalist development.
 * The use-value of things is realized only in their consumption, and their consumption may make a change of location necessary
 * It is a general law of commodity production that the productivity of labour and the value it creates stand in inverse proportion. This holds for the transport industry as much as any other
 * The transport industry forms on the one hand an independent branch of production, and hence a particular sphere for the investment of productive capital. On the other hand it is distinguished by its appearance as the continuation of a production process within the circulation process and/or the circulation process.
 * There is a tacit association in Marx’s thinking between transport and credit conditions in assuring the continuity and flow of continuous capital accumulation
 * Hence, the quantity of stocks producers need to keep on hand depends on the ease and cost of transportation. The development of the world market and the consequent multiplication of sources of supply for the same article has the same effect. The article is supplied bit by bit from different countries and at different points in time
 * Transportation is consumed as it is produced (it has zero circulation time) but it is productive of value. Change in spatial location is its product. The exchange value of this useful effect is still determined, like that of any other commodity, by the value of the elements of production used up in it (labour-power and means of production), plus the surplus-value created by the surplus labour of the workers occupied in the transport industry
 * The transport industry forms on the one hand an independent branch of production, and hence a particular sphere for the investment of productive capital. On the other hand, it is distinguished by its appearance as the continuation of a production process within the circulation process and for the circulation process.
 * This is so because the use-value of things is realized only in their consumption, and their consumption may make a change of location necessary, and thus also the additional production process of the transport industry.
 * The useful effect of change of location (and, hence, the production of spatial relations) applies not only to production (the movement of raw materials) but also to consumption (the movement of people). In other words, the production of change of location is itself a commodity, no matter who uses it and for what purpose (further production or final consumption)
 * The distinction between productive and unproductive activity, and hence between productive and unproductive labor, is difficult to distinguish in practice
 * Time and space relations are jointly implicated in determining the turnover time of capital in general, as well as in particular industries

The reproduction schemes of D1 & D2

 * The workers in D1 use their wages to purchase means of consumption from D2, and in so doing transform half of D2’s constant capital into a money form that can flow back to D1, where it can again function as money capital to purchase labor-power. If the capitalists delay payment to their laborers, then they delay the monetary flow that will convert into money the constant capital they have already produced and marketed to department 2.
 * For this reason, certain reserves of money—whether for capital advance or for expenditure of revenue—must always be taken as present in the hands of the capitalists alongside their productive capital. As in the case of differential turnover times and circulation times, more money has to be in circulation than the amount that matches actual production.

Turnover time & number of turnovers

 * Turnover = production time + circulation time; turnover thus measures the periodicity or interval between one cyclical period of the total capital value and the next; the period of time for which a given capital is advanced
 * The turnover time of capital is the sum of its production time and its circulation time. A lengthening of the production time thus reduces the speed of turnover as much as a lengthening of the circulation time.
 * In form III the capital value does not begin the process as capital value advanced, but as capital value already valorized, as the total wealth existing in the form of commodities, of which the capital value advanced forms only a part.
 * The turnover times of capitals differ according to their different spheres of investment.
 * For the capitalist, the turnover time of his capital is the time for which he has to advance his capital in order for this to be valorized and for him to receive it back in its original shape.
 * If the shortening of the working period is thus generally bound up with an increase in the capital advanced for this shorter time, so that the amount of capital advanced increases to the degree that the time of advance is shortened, we should remember that: it comes down to a question of the extent to which the (disposal over the) means of production and subsistence are fragmented, or united in the hands of individual capitalists, i.e. the extent reached by the concentration of capital. In so far as credit mediates, accelerates and intensifies the concentration of capital in a single hand, it contributes to shortening the working period, and with this also the turnover time.
 * Large-scale jobs needing particularly long working periods are fully suitable for capitalist production only when the concentration of capital is already well advanced, and when the development of the credit system offers the capitalist the convenient expedient of advancing and thus risking other people’s capital instead of his own

Fixed & circulating capital

 * Fixed capital: elements that remain behind after the turnover is complete, and which can be used again and again over several turnover periods (i.e. machines, buildings). In a given turnover time, only a portion of the value of these means of labor is transferred to the final product
 * Circulating capital: all those elements that transfer their value fully into the finished commodity in a given turnover time (i.e. labor, raw material, ancillaries). Their values enter into and exit the production process completely in a given turnover period
 * One part of the constant capital (the means of production) maintains the specific use-form in which it enters the production process, over and against the products that it helps to fashion. This part of the constant capital gives up value to the product in proportion to the exchange-value that it loses together with its use-value. The extent to which the value of such a means of production is given up or transferred to the product that it helps to fashion is determined by an average calculation; it is measured by the average duration of its function, from the time that it enters the production process as means of production to the time it is completely used up, is dead, and has to be replaced or reproduced by a new item of the same kind.
 * The means of production never leave the production sphere once they have stepped into it - they are fixed
 * As long as a means of labour still remains effective, and does not yet have to be replaced by a new item of the same kind, some constant capital value remains fixed in it, while another part of the value originally fixed in it passes over to the product and thus circulates as a component of the commodity stock.
 * Whatever its degree of durability, the proportion in which it gives up value is always in inverse ratio to the overall duration of its function.
 * The part of the capital value that is fixed in the means of labour circulates, just like any other part. The circulation of the part of the capital considered here (fixed capital) is a peculiar one. In the first place, it does not circulate in its use form. It is rather its value that circulates, and this does so gradually, bit by bit, in the degree to which it is transferred to the product that circulates as a commodity.
 * Ancillaries also do not enter the product in their material form. It is only their value that constitutes part of the value of the product. - they are not fixed capital though since they are completely consumed during the labor process
 * The distinction between raw materials and ancillaries, and between raw materials/ancillaries and means of production (e.g.fertilizer that stays in the ground for 4 years - partly entering the product, partly staying fixed)
 * All other things equal, the degree of fixedness grows with the durability of the means of labour. The durability determines how much capital value remains fixed and how much is transferred to the product
 * Cattle as draught animals are fixed capital; when being fattened for slaughter they are raw material that eventually passes into circulation as a product, and so not fixed but circulating capital. Seed, for example, is not fixed capital, but simply raw material that is fixed in the production process for approximately a year.
 * Dual usage/joint products: In raising oxen, both commodity forms are being produced at the same time. It is the social decision on how to use the oxen that defines whether or not they are fixed capital
 * Immobility does not give it the character of fixed capital in the one case, nor does mobility remove this character in the other.
 * The peculiar circulation of fixed capital gives rise to a peculiar tumover. The portion of value that it loses in its natural form by wear and tear circulates as a value portion of the product. Through its circulation, the product is transformed from a commodity into money, and so is the portion of the value of the means of labour that is circulated by the product; its value trickles from the circulation process as money in the same proportion that this means oflabourceases to be a bearer of value in the production process. Its value thus acquires a dual existence. A part of it remains tied to its use form or natural form, which pertains to the production process, while another part separates off from this form as money. In the course of its function, the part of the value of the means of labour that exists in the natural form steadily declines, while the part of its value converted into the money form steadily increases, until the means of labour eventually expires and its entire value has separated off from its dead body and been transformed into money.
 * Part of the productive capital is fixed in means of production
 * The machine's value circulates bit by bit as a portion of the value of the commodities that it steadily serves to produce, and is thus gradually converted into money, until finally, at the end of the ten years, it has been completely transformed into money and from money back into a machine, i.e. has completed its turnover. The capital value laid out as fixed capital does not pass through the circuit of its forms materially, but only in its value, and this only partially and gradually. That is to say, a part of its value is continually circulated and transformed into money as a part of the value of the commodity, without being transformed back from money into its original natural form. This transformation of money back into the natural form of the instrument of production takes place only at the end of the latter's period of functioning, when the instrument of production has been completely used up.
 * These components of productive capital - the portions of value spent on labour-power and on means of production that do not form fixed capital- confront fixed capital as circulating or fluid capital. Thus it is not the worker's means of subsistence that acquire the characteristic of fluid capital in contrast to fixed capital. And it is also not his labour-power, but rather the portion of the value of the productive capital that is spent on it
 * The value of the fluid capital - both in labour-power and means of production- is advvanced only for the time that it takes to produce the product, according to the scale of production which is given by the volume of the fixed capital.
 * The formal characteristics of fixed and fluid capital arise only from the different turnovers of the capital value or productive capital that functions in the production process. This difference in turnover arises for its part from the different ways in which the various components of the productive capital transfer their value to the product, though not from their different share in the production of the product's value or from their characteristic behaviour in the valorization process.
 * The turnover of the fixed component of capital, and thus also the turnover time needed by it, encompasses several turnovers of the fluid components of capital
 * A part of the capital has to be fixed in order for the rest of capital to keep in motion.
 * Money capital flits away, leaving fixed capital high and dry and subject to savage devaluation. I put the contradiction this way: capital builds a whole landscape adequate to its needs at one point in time, only to have to revolutionize that landscape, to destroy it and build another one at a later point in time in order to accommodate the perpetually expansive forces of further capital accumulation.
 * The trouble with fixed capital is precisely, in short, that it is fixed, when capital is all about value in motion
 * Crises occur when the fixity can no longer accommodate the expansionary motion. The latter has to break with the constraints imposed by that part of capital that is fixed. The result is the devaluation of large swathes of fixed capital, as circulating and highly mobile money capital moves elsewhere (deindustrialization from the mid-1970s onwards left behind abandoned factories and warehouses, decaying physical infrastructures—even shrinking cities, like Detroit).
 * Competition forces the replacement of old means of labour by new ones before their natural demise, particularly when decisive revolutions have taken place. Catastrophes, crises, etc. are the principle causes that compel such premature renewals of equipment on a broad social scale. From this derives an understandable reluctance to embrace technological changes and new forms of fixed capital until the old fixed capital has been fully amortized. Under conditions of monopoly control, this reluctance can lead to stagnation
 * Accelerated depreciation entails devaluation of the existing fixed capital whose value has not yet been fully recovered through the production and sale of commodities.
 * The implication for labor is in the form of shift- and night-work as a way to recuperate fixedcapital value as quickly as possible before the risk of moral depreciation hits home.
 * While capitalist production is marked by the waste of much material, there is also much inappropriate horizontal extension of this kind (partly involving a loss of labour-power) in the course of the gradual extension of a business, since nothing is done according to a social plan, but rather depends on the infinitely varied circumstances, means, etc. with which the individual capitalist acts. This gives rise to a major wastage of productive forces → spatial aspects of capital absorption—which are often wasteful because of capitalist competition and the failure of social planning
 * Variable capital: the purchase of the labor-power that has the capacity to create value and surplus-value
 * Constant capital (means of production): whose value does not quantitatively change even as it undergoes a change of material form
 * Hence, part of the constant capital is also circulating capital as part of the value of the machine is transferred to the product
 * Fixed capital as a highly flexible category that depends upon how things are used rather than upon their inherent physical characteristics.
 * The tension between fixity and motion in the geographical landscape of capitalist activity. Planes, ships and locomotives which move across space depend crucially upon airports, harbors and train stations that do not. The value of fixed immobile capital depends crucially upon its use: an airport to which no planes fly has no value.
 * The recuperation of the value of immobile fixed capital depends upon corralling the capital in motion to use the immobile capital in its particular location. This generates phenomena such as inter-urban competition, for example, over attracting or keeping highly mobile capital in town (often ending up with massive public subsidies to private corporations)
 * Crises in the production of space, the consequences of which we see all around us, derive ultimately from the contradictions between fixity and motion
 * In Britain, it was pretty easy to convert much of the physical infrastructure built up for consumption in Britain into fixed capital for production. The putting-out system, whereby merchants left materials to be worked up in peasant cottages, in effect turned those cottages into the equivalent of factories (in much the same way that microfinance today turns peasant huts into the fixed capital of production).
 * When microfinance is extended to peasant women in Mexico and India to buy a sewing machine, the peasant hut is simultaneously converted into the fixed capital for production for free. This is a neat way to counter any tendency for the profit rate to fall, because it dramatically reduces the value of constant rfixed capital inputs relative to labor
 * In the constant under- and over-production of modern industry, constant fluctuations and convulsions arise from the disproportion, when sometimes too little, then again too much circulating capital is transformed into fixed capital.
 * All sorts of problems obviously exist in the field of valuing fixed-capital investments, old and new. Strategies emerge to deal with some of these difficulties, such as planned obsolescence or the leasing of fixed capital on an annual basis, such that the risk shifts from the producer who uses it to the owners who lease it

Merchant capital

 * Merchant’s or trading capital is divided into two forms or sub-species, commercial capital and money-dealing capital
 * The surface appearance of market exchange signals (such as prices and profits), to which we must all perforce react, conceals the real content of our social relations. We necessarily act upon the basis of these market signals no matter whether we recognize that they mask something else or not.
 * The money and commodity circuits (the monetization and commodification of exchange relations) had to preexist the rise of a distinctively capitalist mode of production driven by the logic of surplus-value production and appropriation
 * Merchant capital as fundamentally different activities deriving from their relation to the flow of capital in the circulation sphere, rather than in production.
 * Commodity-dealing and money-dealing capital, forms which arise from the specific form of the capitalist mode of production (which presupposes as its initial basis the circulation of commodities, and hence of money), as forms which necessarily arise from the production process as such.
 * Trade promotes the generation of a surplus product designed to go into exchange, so as to increase the consumption or the hoards of the producers. It thus gives production a character oriented more and more towards exchange-value
 * Commercial capital thus simply mediates the exchange of commodities, though it should be understood right from the start that this is not just an exchange between the immediate producers (in the case of the slave relationship, it is the slaveowner that is the owner of the product and therefore its seller)
 * All that is required for the existence of trading capital is the simple circulation of commodities and money. Whatever mode of production is the basis on which the products circulating are produced, this in no way alters their character as commodities and commercial capital simply mediates the movement of these commodities
 * The merchant buys and sells for many people. Sales and purchases are concentrated in his hands, and in this way buying and selling cease to be linked with the direct need of the buyer (as merchant)
 * The merchant's wealth always exists as money wealth and his money always functions as capital.
 * Commodity exchange becomes simply a means of increasing wealth, and not just wealth, but wealth in its general social form as exchange-value.
 * The merchant's M-C-M', as the characteristic movement of commercial capital, is distinguished from C-M-C, commodity trade between the producers themselves, with the exchange of use-values as its ultimate purpose.
 * The less developed production is, the more monetary wealth is concentrated in the hands of merchants and appears in the specific form of mercantile wealth.
 * Commercial capital appears simply as capital in a particular function. In all earlier modes of production, however, commercial capital rather appears as the function of capital par excellence, and the more so, the more production is directly the production of the producer's means of subsistence
 * Commercial capital appears as the historic form of capital long before capital has subjected production itself to its sway. Its existence, and its development to a certain level, is itself a historical precondition for the development of the capitalist mode of production (1) as precondition for the concentration of monetary wealth, and (2) because the capitalist mode of production presupposes production for trade, wholesale outlet rather than supply to the individual client, so that a merchant does not buy simply to satisfy his own personal needs, but rather concentrates in his act of purchase the purchase acts of many
 * Commercial functions simply as the agent of productive capital. Actually, where commercial capital predominates, obsolete conditions obtain. Trading cities also appear to be politically reactionary and in league with the landed and financial aristocracies against industrial capital.
 * If independent mercantile wealth is the prevailing form of capital, this means that the circulation process has attained independence vis-a-vis its extremes, and these are the exchanging producers themselves. These extremes remain separate from the circulation process, and this process from them. Here the product becomes a commodity through trade. It is trade that shapes the products into commodities; not the produced commodities whose movement constitutes trade.
 * Commercial capital, in the first instance, is simply the mediating movement between extremes it does not dominate and preconditions it does not create
 * In the stages that preceded capitalist society, it was trade that prevailed over industry; in modern society it is the reverse. It subjects production more and more to exchange-value, by making consumption and existence more dependent on sale than on the direct use of the product.
 * It no longer just takes hold of surplus production, but gradually gobbles up production itself and makes entire branches of production dependent on it. Trade naturally reacts back to a greater or lesser extent on the communities between which it is pursued; it subjects production more and more to exchange-value. In this way it dissolves the old relationships. Trade always has, to a greater or lesser degree, a solvent effect on the pre-existing organizations of production, which in all their various forms are principally oriented to use-value.
 * The development of trade and commercial capital always gives production a growing orientation towards exchange-value, expands its scope, diversifies it and renders it cosmopolitan, developing money into world money.
 * As soon as specifically urban industry separates off from agriculture, its products are commodities from the start, so that their sale requires the mediation of trade. The dependence of trade on urban development is to this extent self-evident, as is the conditioning of the latter by trade
 * The great revolutions that took place in trade in the sixteenth and seventeenth centuries, were a major moment in promoting the transition from the feudal to the capitalist mode of production. The sudden expansion of the world market, the multiplication of commodities in circulation, the competition among the European nations for the seizure of Asiatic products and American treasures, the colonial system, all made a fundamental contribution towards shattering the feudal barriers to production
 * The sudden expansion of trade and the creation of a new world market had an overwhelming influence on the defeat of the old mode of production and the rise of the capitalist mode, this happened in reverse on the basis of the capitalist mode of production, once it had been created. The world market itself forms the basis for this mode of production. On the other hand, the immanent need that this has to produce on an ever greater scale drives it to the constant expansion of the world market, so that now it is not trade that revolutionizes industry, but rather industry that constantly revolutionizes trade. Moreover, commercial supremacy is now linked with the greater or lesser prevalence of the conditions for large scale industry.
 * The transition can thus take three forms: First, the merchant becomes an industrialist directly; Second, the merchant makes the small masters into his middlemen, or even buys directly from the independent producer; he leaves him nominally independent and leaves his mode of production unchanged. Third, the industrialist becomes a merchant and produces directly on a large scale for the market
 * When the producer becomes a merchant: Whereas before the master-weaver gradually received his wool from the merchant in small portions and worked along with his journeymen for the merchant, now the weaver buys wool or yarn himself, and sells the merchant his cloth. The elements of production go into the production process as commodities that he has himself bought. And instead of producing for the individual merchant or for particular customers, the weaver now produces for the entire world of commerce. The producer is his own merchant.
 * At first, trade is the precondition for the transformation of guild and rural domestic crafts into capitalist businesses, not to mention feudal agriculture. It develops the product into a commodity, partly by creating a market for it, partly by supplying new commodity equivalents and new raw and ancillary materials for production, and thereby opening new branches of production that are based on trade from the very beginning - both on production for the market and world market, and on conditions of production that derive from the world market
 * Trade now becomes the servant of industrial production, for which the constant expansion of the market is a condition of existence.
 * There occurred at some point a historic reversal in which it was no longer the expansion of trade and the world market that provided the impetus for capitalist production, but a shift in which the latter became the driving force, such that an industrializing nation (Britain) assumed a hegemonic role in capitalist development displacing commercial power (that of Holland).
 * As the factory system did indeed proliferate and grow, putting sometimes incredible competitive pressures on these other systems of production, then workers began to organize on the basis of factory labor, as Marx predicted. They formed unions and exerted political pressures of the sort that became generalized toward the end of the 1960s in many parts of the advanced capitalist world. It was under such political conditions that the turn toward older commercial forms of super-exploitation became far more attractive. Hence the rebirth of the merchant capitalists (and even the renewal of mercantilist practices and theories) and the proliferation of their super-exploitative networks and chains of dispersed and subcontracted production.
 * Competition between different labor systems remains a vital aspect of contemporary global capitalism, which in turn implies different relative roles for producers vis-à-vis merchants. There are certain sectors, as well as certain spaces in the global economy, in which it would seem that the producers do indeed dominate the merchants, whereas there are other places and sectors where the opposite is true. In the automobile industry, for example, producers tend to dominate distributors, but in textiles it is almost always the other way round these days
 * Commercial capital, therefore, is absolutely nothing more than the commodity capital of the producer which has to go through the process of transformation into money, to perform its function as commodity capital on the market; only instead of being an incidental operation carried out by the producer himself, this function now appears as the exclusive operation of a particular species of capitalist, the merchant, and acquires independence as the business of a particular capital investment
 * Financial instruments anticipated: "If his money had functioned merely as means of payment when he bought the linen, he would only have needed to pay six weeks later, and if he had sold before this time, he could have paid the linen producer without himself having to advance any money capital."
 * The merchant's M-C-M, in other words, simply represents a mediatory process for the C-M between two producers (the second being the one who buys from the merchant)
 * It is only the commercial capital's C-M that is the decisive C-M for the functioning commodity capital. M-C-M is only two C-M's performed by the same commodity capital, it consists simply of two successive sales
 * The turnover of industrial capital is restricted not just by the circulation time, but also by the production time. The turnover of commercial capital, in so far as it deals with just one particular kind of commodity, is not restricted by the turnover of a single industrial capital but rather by the turnover of all industrial capitals in the same branch of production.
 * The important functions of the rise of a form of capital exclusively devoted to buying and selling: By selling the products of several different producers or of several different lines of production within the division of labor, they can compensate for and smooth out different turnover times while achieving certain economies of scale.
 * The more efficient they are and the faster their own turnover time, the less capital they will require. They also have a role to play in increasing the velocity of circulation of their own money capital and of influencing the speed of consumption.
 * The velocity of circulation of the money capital advanced by the merchant depends (1) on the speed with which the production process is repeated and the various production processes are linked together; (2) on the speed of consumption
 * If the use of money as means of circulation is combined with its use as means of payment and the credit system that grows up on this basis, there is still a further reduction in the money capital portion of the commercial capital in relation to the volume of transactions that this commercial capital performs. If I buy £1,000 worth of wine on three months' credit and I sell this wine for cash before the three-month period expires, not a single penny has to be advanced for the transaction.
 * The amount of money the merchant has is all the smaller in relation to the total capital, the quicker the reproduction process and the more developed the function of money as means of payment, i.e. the credit system.
 * Commercial capital thus creates neither value nor surplus-value, at least not directly. In so far as it contributes towards shortening the circulation time, it can indirectly help· the industrial capitalist to increase the surplus-value he produces. In so far as it helps to extend the market and facilitates the division of labour between capitals, thus enabling capital to operate on a bigger scale, its functioning promotes the productivity of industrial capital and its accumulation. In so far as- it cuts down the turnover time, it increases the ratio of surplus-value to the capital advanced, i.e. the rate of profit. And in so far as a smaller part of capital is confined to the circulation sphere as money capital, it increases the portion of capital directly applied in production.
 * All the industrial capitalist does in circulation is realize a surplus-value or profit that has already been produced; the merchant, on the other hand, does not merely realize his profit in and through circulation, he also makes it there.
 * It appears as if the merchant is simply sharing in the surplus-value and surplus product by making a nominal increase in the prices of commodities. In actuality, however, the merchant bought the commodities from the industrial capitalists below their value or price of production. His share of the surplus is already subtracted from the s involved in calculating C
 * The price of production, i.e. the price at which the industrial capitalist sells as such, is therefore less than the real production price of the commodity; or, if we consider all commodities together, the price at which the industrial capitalist class sells them is less than their value. The real price of the commodity = its production price + the commercial profit. Just as industrial capital only realizes profit that is already contained in the value of the commodity as surplus-value, so commercial capital does so only because the whole of the surplus-value or profit is not yet realized in the price of the commodity as realized by industrial capital. The merchant's sale price is higher than his purchase price not because it is above the total value, but rather because his purchase price is below this total value.
 * The general rate of profit thus already takes account of the deduction from the surplus-value which falls to commercial capital, i.e. a deduction from the profit of industrial capital.
 * The rate of profit is always expressed in a lower figure than the rate of actual surplus-value, i.e. it always underestimates the exploitation of labour. If we have 720c + 180v + 180s, a rate of surplus-value of 100% expressed in a profit rate of only 20%. The rate of surplus is calculated with respect to v (how much more work than the necessary part of work time) while the rate of profit is calculated with respect to c+v (how much surplus in relation to my expenses). On top of this: the average profit itself, taking into account the share that accrues to commercial capital, is that much smaller, here 18 per cent instead of 20 per cent. The average rate of profit for the directly exploiting capitalist thus makes the rate of profit appear smaller than it actually is.
 * All these costs are incurred not in the production of the commodities' use-value, but rather in the realization of their value
 * Remember: The labour-time that these operations (of circulation) cost is being employed on necessary operations in the reproduction process of capital, but it does not add any extra value.
 * The division between commercial and industrial capital involves a centralization of trading costs and a consequent reduction in them.
 * Commercial capital's relationship to surplus-value is different from that of industrial capital. The latter produces surplus-value by directly appropriating the unpaid labour of others. The former appropriates a portion of this surplus-value by getting it transferred from industrial capital to itself.
 * Commercial capital is nothing at all but the form in which a part of the industrial capital functioning in the circulation process has become autonomous
 * For the individual merchant, the amount of his profit depends on the amount of capital that he can employ in this process, and he can employ all the more capital in buying and selling, the greater the unpaid labour of his clerks. The very function by virtue of which the commercial capitalist's money is capital is performed in large measure by his employees, on his instructions. Their unpaid labour, even though it does not create surplus-value, does create his ability to appropriate surplus-value, which, as far as this capital is concerned, gives exactly the same result; i.e. it is its source of profit.
 * As with production, commercial capital profits from economies of scale
 * The commercial worker proper belongs to the better paid class of wage labourer; he is one of those whose labour is skilled labour, above-average labour. His wage, however, has a tendency to fall, as the capitalist mode of production advances, even in relation to average labour


 * As the turnover of commercial capital accelerates, the same quantity of money also circulates more quickly.
 * The repeated turnover of commercial capital, however, is never anything more than a repetition of buying and selling; whereas the repeated turnover of industrial capital expresses the periodicity and renewal of the entire reproduction process (including the process of consumption).
 * Commercial capital's turnover is decisively restricted by the speed and volume of the total individual consumption
 * Historically, it has been very much the role of the commercial capitalist to stimulate consumer desires, titillate the public with the wares the industrial capitalist might have to offer, and ensure, as far as possible, that potential customers have the money (usually credit) at their disposal to absorb the product speedily and keep the consumption dynamic expanding at a pace consistent with the endless accumulation sought by industrial capital.
 * Despite the autonomy it has acquired, the movement of commercial capital is never anything more than the movement of industrial capital within the circulation sphere. But by virtue of this autonomy, its movement is within certain limits independent of the reproduction process and its barriers, and hence it also drives this process beyond its own barriers. This inner dependence in combination with external autonomy drives commercial capital to a point where the inner connection is forcibly re-established by way of a crisis → commercial capital is autonomous, and can drive the whole system well beyond its limits (in particular with the help of credit).
 * Crises do not first break out and are not first apparent in the retail trade, which bears on immediate consumption, but rather in the sphere of wholesale trade, as well as banking, which places the money capital of the entire society at the wholesalers' disposal
 * The two limits to his sale price are, on the one hand, the production price ofthe commodity, which he has no control over; and on the other hand the average rate of profit, which he has no control over either.The only thing on which he can make a decision, though the size of his available capital and other circumstances play a part here too, is whether he wants to deal in expensive commodities or in cheap ones
 * Remember: a high or low level of commodity prices determines neither the mass of surplus-value that a given capital produces nor the rate of surplus-value; even though according to the relative quantity of commodities that a given amount of labour produces, the price of the individual commodity will be higher or lower, and therefore also the surplus value component of this price. The rate of surplus value does not depend on the absolute size of the surplus-value, but rather on its relative size, its relationship to the wages that went into the commodity in question.
 * The high level of commercial commodity prices at an earlier period was due (1) to the high level of production prices, i.e. the low productivity of labour; (2) to the absence of a general rate of profit, since commercial capital drew a far higher proportion of the surplus-value than would accrue to it in conditions of general mobility of capital.
 * The greater the number of turnovers made by an industrial capital the greater is the mass of profit that it forms. Now it is true that the establishment of a general rate of profit means that this total profit is divided among the various capitals not according to the ratio in which they directly participate in its production, but rather according to the aliquot parts that they form in the total capital, i.e. in proportion to their size.
 * If the number of turnovers of an industrial capital is greater, so is the mass of profit, the mass of surplus-value annually produced, and hence, with other circumstances remaining the same, also the rate of profit. It is different with commercial capital Here the rate of profit is a given magnitude, determined on the one hand by the mass of profit that industrial capital produces and on the other by the relative size of the overall commercial capital, by its quantitative proportion in the total capital advanced in the production and circulation process.
 * Circumstances that shorten the average turnover of commercial capital, such as the development of means of transport, for example, reduce in the same proportion the absolute magnitude of this commercial capital and hence raise the general rate of profit → better transport reduces the turnover time of commercial capital which in turn makes the realization of the same number of commodities possible in a shorter time → i.e. less commercial capital is required for realization
 * The merchant's profit is determined not by the mass of commodity capital he turns over, but rather by the amount of money capital he advances in order to mediate this turnover.
 * From the standpoint of commercial capital, therefore, turnover itself seems to determine price. On the other hand, while the speed of industrial capital's turnover, in so far as it enables a given capital to exploit more or less labour, has a determining and delimiting effect on the mass of profit, and hence on the general rate of profit as well, commercial capital is faced with the rate of profit as something external to it
 * Reducing the turnover time of industrial capital by reducing circulation time can raise the rate of profit. Commercial capital receives (in theory) the general rate of profit no matter what its turnover time. So, while commercial capital cannot increase its own rate of profit by accelerating its turnover time, it can affect the general rate of profit because less commercial capital is required for realization to be completed
 * Commercial capital, however, goes through- the acts C-M and M-C simultaneously. That is, it is not just that one capital is in the C-M stage while the other is in the stage M-C, but rather that the same capital is always buying and selling at the same time
 * The rate of profit is determined not simply by the ratio of the profit made in one individual turnover to the capital value advanced, but also by the length of this turnover time itself, i.e. as the profit that industrial capital yields in particular periods of time.
 * Commercial capital presents itself as the product of a social relation, not the product of a mere thing. The form of commercial capital still exhibits a process,
 * Capital is not a simple quantity. It is a relation of quantities, a ratio between the principal as a given value, and itself as self-valorizing value, as a principal that has produced a surplus-value.

Money capital

 * It is only where capital is newly invested that capital in its money form appears as the starting-point and finishing-point of the movement. For any capital that is already in its process, both starting-point and finishing-point appear as simply points of transition.
 * Money-changing and the bullion trade are thus the original forms of the money business and arise from the double function of money: as national coin and as world money.
 * The movement of the quantities of money circulating as means of purchase and payment is determined by the volume and speed of the metamorphosis of commodities
 * Money-dealing does not form hoards, but it supplies the technical means for hoard formation, thus reducing it to its economic minimum; for the reserve fund of means of purchase and payment, if managed on behalf of the capitalist class as a whole, does not need to be so great as if each capitalist had to keep his fund separately.
 * The money trade does not buy precious metals, but only mediates their distribution after the commodity trade has bought them. Money-dealing mediates the settlement of accounts, in so far as money functions as means of payment, and by the mechanism it creates for these settlements it reduces the quantity of money these require; but it determines neither the relationship nor the volume of these mutual payments.
 * The mass of money capital which the money dealers operate with is the circulating money capital of the merchants and industrialists, and the operations the money dealers perform are simply the operations of the merchants and industrialists, mediated by the former
 * Money capital has both an exchange-value (a price, namely its interest) and a use-value (creates surplus)
 * Interest-bearing money capital is the capital mystification in the most flagrant form
 * Interest as paying for the use-value of money, i.e. its potential to be capital and hence produce surplus. If I lend you money, I give you the potential power to produce profit
 * Capital functions in the circulation process as commodity capital and money capital. In neither of these two forms, however, does capital as capital become a commodity. In the act of circulation the commodity capital functions simply as a commodity, not as capital. It is commodity capital as distinct from a simple commodity (1) because it is already pregnant with surplus-value, so that the realization of its value is at the same time the realization of surplus-value
 * Money as capital becomes a commodity. If this money is also money capital, a form of capital, this is not the result of the act of purchase, the actual function that it performs here as money, but rather of the way in which this act is connected with the overall movement of capital, in that this act, which it performs as money, introduces the capitalist production process.
 * Commodity and money are capital here not because commodities are turned into money and money into commodities, not in their actual relationships to buyers or sellers, but simply in their ideal relationships, either to the capitalist himself (considered subjectively) or as moments of the reproduction process (considering it objectively). It is not in the process of circulation that capital exists as capital in its real movement but only in the process of production, the process of exploiting labour-power
 * The money is alienated only on condition that it is, first, returned to its starting-point after a definite period of time, and second, is returned as realized capital, so that it has realized its use--value of producing surplus-value
 * When money is given out in the form of interest-bearing capital, no equivalent for it is received in return.
 * It is true that in any act of buying and selling, in fact whenever an exchange process takes place, the object is given away. But the value is never given away. On purchase, money is given away, but not its value, which is replaced in the form of commodities. The industrial capitalist keeps the same value in his hands throughout the reproduction process
 * The return of capital to its point of departure is always the characteristic movement of capital in its overall circuit. This is in no way something exclusively distinctive of interest-bearing capital.
 * The lending capitalist parts with his capital, transfers it to the industrial capitalist, without receiving an equivalent. But this is in no way an act of the actual cyclical process of capital; it simply introduces this circuit, which. is to be effected by the industrial capitalist. This first change of place on the part of the money does not express any act of metamorphosis, neither purchase nor sale. Ownership is not surrendered, since no exchange takes place and no equivalent is received.
 * The point of departure and point of return, the lending-out of the capital and its recovery, thus appear as arbitrary movements mediated by legal transactions, which take place before and after the real movement of capital and have nothing to do with it as such.
 * The return does not appear as a consequence and result of a definite series of economic processes, but rather as a consequence of a special legal contract between buyer and seller.
 * The lender of money does not spend this on purchasing a commodity; he rather advances it as capital, as M-M', as value which returns again to its point of departure at a definite date. Instead of buying or selling, he lends. This lending is thus the appropriate form for its alienation as capital, instead of as money or commodity.
 * In order to flow back as capital, the sum of value advanced must not only have maintained itself in the movement, but valorized itself, it must have increased its value, so as to return with a surplus-value as M + 'M+', where this M+ is interest, or that part of the average profit which does not remain in the hands of the functioning capitalist, but falls rather to the money capitalist
 * What is alienated in the case of ordinary sale? Not the value of the commodity sold, for this only changes its form.The same value and the same magnitude of value here undergo only a change of form. At one point they exist in the commodity form, at another point they exist in the money form. What is really alienated by the seller, and thus transferred to the individual or productive consumption of the buyer, is the use-value of the commodity, the commodity as a use-value.
 * With other commodities, the use-value is ultimately consumed, and in this way the substance of the commodity disappears, and with it its value. The commodity of capital, on the other hand, has the peculiar property that the consumption of its use-value not only maintains its value and use-value but in fact increases it
 * The money loaned in this way is to a certain extent analogous in this respect to labour-power, in its position vis-a-vis the industrial capitalist
 * The difference in the case of the loan is that in this transaction the money capitalist is now the only one who gives out value; but he preserves this by the subsequent repayment. In the loan, only one party receives value, since only one party gives value out. Secondly, one party alienates a real use-value, and the other party receives and uses it.
 * It must never be forgotten that capital as capital is a commodity here, and that the commodity we are dealing with is capital.
 * The value of money or commodities as capital is not determined by their value as money or commodities but rather by the quantity of surplus-value that they produce for their possessor.
 * On the basis of capitalist production, the difference between money spent as money and money advanced as capital is simply a difference of application.
 * Money or a commodity is already potential capital in itself, just as labour-power is potential capital. For (1) money can be turned into elements of production, and is already, just as it is, simply an abstract expression of these elements, their existence as value and (2) the material elements of wealth possess the property of being already potential capital, because their complementary antithesis, the thing that makes them capital - namely wage-labour - is present as soon as capitalist production is assumed
 * '''Money, and likewise commodities, are in themselves latent, potential capital, i.e. can be sold as capital; in this form they give control of the labour of others, give a claim to the appropriation of others' labour, and are therefore self-valorizing value.
 * Production time and circulation time come into play in determining the prices of commodities, and how it is precisely in this way that the rate of profit is determined for a given period of turnover of capital, while interest is determined precisely by this determination of profit for a given period.
 * Since interest is simply a part of profit, a part which we have assumed the industrial capitalist has to pay to the money capitalist, the maximum limit of interest would seem to be the profit itself
 * The rate of interest depends (1) on the rate of profit; (2) on the proportion in which the entire profit is divided between the lender and borrower
 * Since we have seen that the level of the profit rate stands in inverse proportion to the development of capitalist production, it follows that the higher or lower rate of interest in a country stands in the same inverse proportion to the level of industrial development, particularly in so far as the variation in the rate of interest expresses an actual variation in the profit rate
 * Ceteris paribus (i.e. excluding e.g. Fed intervention to lower interest rates) a low level of interest generally corresponds to periods of prosperity or especially high profit, a rise in interest comes between prosperity and its collapse, while maximum interest up to extreme usury corresponds to a period of crisis. The rate of interest reaches its highest level during crises, when people have to borrow in order to pay, no matter what the cost.
 * The rate of interest is fixed by competition between these two class factions (money and industrial capitalists). The determination of the rate of interest is rather accidental. In contrast: with the division between surplus-value and wages, on which the determination of the profit rate essentially depends, two quite different elements are involved, labour-power and capital.
 * There are some independent reasons (other than that given by the tendency of the profit rate to fall) for the rate of interest to fall. To begin with, there is a perpetual temptation for those who make money out of the production of surplus-value to retire. This tendency is exacerbated by the development of the credit system, the ever growing control this gives industrialists and merchants over the monetary savings of all classes of society through the mediation of the bankers, as well as the progressive concentration of these savings on a mass scale, so that they can function as money capital
 * The role of the financial system in mobilizing the savings of all classes and deploying those savings as money capital has been of increasing importance throughout the history of capitalism.
 * The prevailing average rate of interest in a country, as distinct from the constantly fluctuating market rate, cannot be determined by any law.
 * If we go on to ask why the limits of the average interest rate cannot be derived from general laws, the answer simply lies in the nature of interest. It is merely a part of the average profit. The same capital appears in a double capacity, as capital for loan in the hands of the lender, and as industrial or commercial capital in the hands of the functioning capitalist. But it functions only once, and produces profit only once.

Profit of enterprise vs. interest

 * The rate of interest is related to the profit rate in a similar way as the market price of a commodity is to its value. In so far as the rate of interest is determined by the profit rate, this is always through the general rate of profit and not through the specific profit rates that may prevail in particular branches of industry, still less by the extra profit that the individual capitalist might - make in a particular sphere of business
 * The interest rate itself is always different according to the class of security provided by the borrowers according to the duration of the loan as well
 * In any given country, the average rate of interest is constant over long periods, because the general rate of profit changes only in the long run- despite constant change in the particular rates of profit, a change in one sphere being offset by an opposite change in another.
 * Again, the rate of interest is different from the rate of profit. This process of fixing the rate by supply and demand (for the rate of interest) does not apply to the equalization that produces the general rate of profit. If the prices of commodities in one sphere are below or above their price of production an equalization takes place by the expansion or contraction of production, i.e. an increase or decrease in the quantity of commodities that these industrial capitals put on the market, mediated by the immigration or emigration of capital with respect to these particular spheres of production. It is the equalization brought about in this way, whereby the average market prices of commodities are reduced to their prices of production, that corrects divergences between the particular rates of profit and the general or average profit rate. The general rate of profit is determined, of course, by the factors that determine the surplus-value (the mass of surplus-value, the mass of capital advanced, and the state of competition). Average profit does not appear as a directly given fact, but rather as the end-product of an equalization of opposing tendencies that can only be established by investigation
 * The rate of profit can vary even within the same sphere, given the same market price, according to the different conditions in which individual capitals produce the same commodity; for the profit rate on an individual capital not determined simply by the market price of the commodity, but rather by the difference between market price and cost price.
 * Factors, which favour the consolidation of the interest rate: (1) the historical pre-existence of interest-bearing capital and the existence of a general rate of interest handed down by tradition; (2) the far stronger direct influence that the world market exerts on the establishment of the interest rate, independently of the conditions of production in a country, as compared with its influence on the profit rate.
 * Competition between particular spheres now ceases; they are all thrown together as borrowers of money, and capital confronts them all in a form still indifferent to the specific manner and mode of its application. Here capital really does emerge, in the pressure of its demand and supply, as the common capital of the class, whereas industrial capital appears like this only in the movement and competition between the particular spheres
 * With the development of large-scale industry money capital emerges more and more, in so far as it appears on the market, as not represented by the individual capitalist, the proprietor of this or that fraction of the mass of capital on the market, but rather as a concentrated and organized mass, placed under the control of the bankers as representatives of the social capital in a quite different manner to real production
 * Changes in the value of money do not prevent it from having the same value in relation to every commodity
 * The interest that the functioning capitalist pays to the lender appears therefore as a part of the gross profit that accrues to property in capital as such.
 * Interest appears as the mere fruit of property in capital, of capital in itself, abstracted from the reproduction process of capital in so far as it does not 'work', i.e: function; whereas profit of enterprise appears to him as the exclusive fruit of the functions he performs with the capital, as the fruit of capital's movement and process, a process that appears to him now as his own activity, in contrast to the non-activity and non-participation of the money capitalist in the production process. This qualitative separation between the two parts of gross profit, so that interest is the fruit of capital in itself, of property in capital without reference _to the production process, while profit of enterprise is the fruit of capital actually in process, operating in the production process, and hence of the active role that the person who uses capital plays in the reproduction process
 * One part of the profit now appears in and of itself as the fruit that accrues to capital in one capacity, as interest; the other part appears as a specific fruit of capital in an opposite capacity, and hence. as profit of enterprise: one as the simple fruit of property in capital, the other as the fruit of merely functioning with capital, as the fruit of capital as capital in process, or of the functions that the active capitalist exercises
 * The categories of profit that capital yields, breaks down into owned capital, capital outside the production process, which yields an interest, and capital in the production process, which yields profit of enterprise as capital in process
 * It is not simply various quotas of the profit distributed to different persons, but two different categories of profit, which stand in different relationships to capital, i.e. in a relationship to different capacities of capital
 * Interest-bearing capital exists as a ready-made form handed down, and hence interest as a ready-made subordinate form of the surplus-value produced by capital, long before the capitalist mode of production and the conceptions of capital and profit corresponding to it come into existence.
 * From the qualitative point of view, interest is the surplus-value supplied by capital as simple ownership, which capital yields in itself, even if its owner -remains outside the reproduction process; surplus-value therefore yielded in separation from its process. From the quantitative point of view, the part of the profit that forms interest seems to be related not to industrial and commercial capital as such but rather to money capital, and the rate of this part of the surplus-value, the interest rate, confirms this relationship.
 * As soon as a part of the profit generally assumes the form of interest, the difference between the average profit and the interest, or the part of profit over and above the interest, is transformed into a form antithetical to interest, that of profit of enterprise. It is because one part of profit has been turned into interest that the other part accordingly appears as profit of enterprise (i.e. antithetical). Taking the average profit as given, the rate of profit of enterprise is determined not by wages but rather by the rate of interest
 * Interest is the net profit yielded by property in capital as such, whether to the mere lender who remains outside the reproduction process or to the owner who employs his capital productively himself.
 * Interest-bearing capital is capital as property as against capital as function.
 * In the reproduction process, the functioning capitalist represents capital against the wage-labourers as the property of others, and the money capitalist participates in the exploitation of labour as represented by the functioning capitalist.
 * Whereas the lines of opposition and struggle between workers and functioning capitalists are clear both in the labor process and in the labor market, the relation between workers and money capital as property is far more abstract and opaque. Worker mobilization against the power of money capital and its mode of circulation is much more problematic. Small businesses are much more likely to oppose the power of banks and financial institutions than are workers
 * Interest-bearing capital puts pressure on productive capital to produce surplus-value, and the higher the interest rate the more pressure it exerts. Producers can then say to workers that the high rate of exploitation they have to impose upon them reflects high rates of interest, and so divert attention from themselves to the greed and power of the bankers. The dynamics of class struggle can thus be displaced, and even distorted
 * The internalization of the two different roles of money capitalist and production capitalist within the same person naturally leads the functioning capitalist to interpret his profit of enterprise as independent of his property in capital and rather as the result of his functions as a non-owner, as a worker. He inevitably gets the idea into his head that his profit of enterprise is rather itself a wage, “wages of superintendence of labour”, a higher wage than that of the ordinary wage labourer (1) because it is complex labour, and (2) because he himself pays the wages. Once things are conceptualized in this way, however, the capitalist can choose between doing the work himself (and paying himself the wages of superintendence), or paying someone else to do that work.
 * Interest represents mere ownership of capital as a means of appropriating the product of other people's labour. But it represents this character of capital as something that falls to it outside the production process and is in no way the result of the specifically capitalist character of this production process itself. It presents it not in direct antithesis to labour, but, on the contrary, with no relationship to labour at all, merely as a relationship between one capitalist and another.
 * The functioning capitalist obtains surplus-value not because he works as a capitalist but rather because, leaving aside his capacity as a capitalist, he also works. This part of surplus-value is therefore no longer surplus-value at all, but rather its opposite, the equivalent for labour performed. Since the estranged character of capital, its antithesis to labour, is shifted outside the actual process of exploitation, i.e. into interest-bearing capital, this process of exploitation itself appears as simply a labour process, in which the functioning capitalist simply performs different work from that of the workers.
 * The labour of exploiting and the labour exploited are identical, both being labour.
 * The work of supervision and management, in so far as it arises from the antithetical character, the domination of capital over labour, and is therefore common to all modes of production which are based on class opposition
 * In the case of the cooperative factory, the antithetical character of the supervisory work disappears, since the manager is paid by the workers instead of representing capital in opposition to them.
 * Joint-stock companies in general (developed with the credit system) have the tendency to separate this function of managerial work more and more from the possession of capital, whether one's own or borrowed
 * The confusion between profit of enterprise and the wages of supervision or management originally arose from the antithetical form that the surplus of profit over interest assumes in opposition to this interest. It was subsequently developed with the apologetic intention of presenting profit not as surplus-value, i.e. as unpaid labour, but rather as the wage that the capitalist himself receives for the work he performs.
 * On the basis of capitalist production, a new swindle with the wages of management develops in connection with joint-stock companies, in that, over and above the actual managing director, a number of governing and supervisory boards arise, for which management and supervision are in fact a mere pretext for the robbery of shareholders and their own enrichment.
 * The balance of power between owners and superintendents can shift around in all manner of ways. In the case of joint-stock companies the superintendents—the CEOs and the management—have increasingly succeeded in feathering their own nests at the expense of owners
 * The conflict in our own times between owners and managers of corporations is plainly of great significance economically, socially and politically. The evolution of wages of superintendence as a form or remuneration for capital is a mask for the extraction of surplus-value from the laborer engaged in production
 * In M-M' we have the irrational form of capital, the misrepresentation and objectification of the relations of production, in its highest power: the interest bearing form, the simple form of capital, in which it is taken as logically anterior to its own reproduction process
 * Money is in fact the very form in which the distinctions between commodities as different use-values are obliterated
 * M-M’: It is capital in its finished form, the unity of the production and circulation processes
 * Capital in this form it no longer bears any marks of its origin.
 * As in the case of labour-power, here the use-value of money is that of creating value, a greater value than is contained in itself.
 * The demand for money as such always consists simply in the desire to convert value from the form of commodities or creditor's claims into the form of money
 * Bankers become accustomed to the view that any function in which he hands out money appears to him as a loan. All money that he pays out appears to him as an advance. If the money is directly given out as a loan, this is literally correct. If it is used to discount bills of exchange, it is in fact an advance for him until the bill falls due. If the advance is made against securities (the recipient in fact receives less capital value than he deposits), which have to be deposited with the bank, it is an advance in the sense that money is paid to him under condition of its repayment, but it is not an advance of capital - he does not undertake the transaction because he needs capital, but rather because he needs money (i.e. an advance of money here, but not an advance of capital)

Usury/Pre-capitalist relations

 * Usury thus works on the one hand to undermine and destroy ancient and feudal wealth, and ancient and feudal property. On the other hand it undermines and ruins small peasant and petty bourgeois production, in short all forms in which the producer still appears as the owner of his means of production
 * Where the means of production are fragmented, usury centralizes monetary wealth. It does not change the mode of production, but clings on to it like a parasite and impoverishes it. It sucks it dry, emasculates it and forces reproduction to proceed under evermore pitiable conditions
 * It is only where and when the other conditions for the capitalist mode of production are present that usury appears as one of the means of formation of this new mode of production, by ruining the feudal lords and petty production on the one hand, and by centralizing the conditions of labour on the other.
 * Usury has a revolutionary effect on pre-capitalist modes of production only in so far as it destroys and dissolves the forms of ownership
 * Usurer's capital has capital's mode of exploitation without its mode of production.
 * Usury is historically important, in contrast to wealth devoted entirely to consumption, as being itself a process giving rise to capital. Usurer's capital and mercantile wealth bring about the formation of a monetary wealth independent of landed property.
 * With trade and the generalization of commodity production, purchase and payment become separate in time. Money has to be provided at a particular date. The modern money crises show how even today this can lead to circumstances in which money capitalist and usurer merge into one
 * The credit system develops as a reaction against usury. It means neither more nor less than the subordination of interest-bearing capital to the conditions and requirements of the capitalist mode of production.
 * Credit is given to potential capitalists: What distinguishes interest-bearing capital from usurer's capital is in no way the nature or character of this capital itself. It is simply the changed conditions under which it functions, and hence also the totally transformed figure of the borrower who confronts the money-lender.
 * The cry for a compulsory reduction in the interest rate had as its aim the subordination of interest-bearing capital to commercial and industrial capital, instead of vice versa
 * Modern banking robs usurer's capital of its monopoly, since it concentrates all dormant money reserves together and places them on ·the money market, while on the other hand restricting the monopoly of the precious metals themselves by creating credit money
 * Usury, just like trade, exploits a given mode of production but does not create it; both relate to the mode of production from outside. Usury seeks directly to maintain this mode of production, so as constantly to exploit it anew; it is conservative, and simply makes the mode of production more wretched.
 * Usury, by its double effect, is a powerful lever in forming the preconditions for industrial capital. Firstly, it always forms an autonomous monetary wealth alongside the class of merchants, while secondly it appropriates the conditions of labour, by ruining the owners of the old conditions of labour.

Credit

 * Credit means the subordination of interest-bearing capital to the conditions and requirements of the capitalist mode of production.
 * Money is increasingly used as “money of account,” as the practices of buying now and paying later become more common.
 * By and large, money now functions only as means of payment, i.e. commodities are not sold for money, but for a written promise to pay at a certain date
 * Refer to all these- promises to pay as bills of exchange. Until they expire and are due for payment, these bills themselves circulate as means of payment; and they form the actual commercial money.
 * As these mutual advances by producers and merchants form the real basis of credit, so their instrument of circulation, the bill of exchange, forms the basis of credit money proper, banknotes, etc.
 * This collection of small amounts, as a particular function of the banking system, must be distinguished from the banks' function as middlemen between actual money capitalists and borrowers.
 * The banknote merely represents a circulating token of credit (i.e. credit itself becomes money). All these forms are ways of making claims for payment transferable. There is scarcely any shape into which credit can be cast, in which it will not at times be called to perform the functions of money; and whether that shape be a banknote, or a bill of exchange, or a banker's cheque, the process is in every essential particular the same, and the result is the same
 * Whatever gives facilities to trade gives facilities to speculation. Trade and speculation are in some cases so nearly allied, that it is impossible to say at what precise point trade ends and speculation begins
 * Neither the lender nor the user of this capital are its owners or producers. It thereby abolishes the private character of capital and thus inherently bears within it, though only inherently, the abolition of capital itself. Through the banking system, the distribution of capital is removed from the hands of the private capitalists and usurers and becomes a special business, a social function.
 * Credit offers the individual capitalist, or the person who can pass as a capitalist, an absolute command over the capital and property of others … and through this, command over other people’s labour. It is disposal over social capital, rather than his own, that gives him command over social labour

Business cycle & monetary policy

 * In periods of expanding credit the velocity of currency increases faster than the prices of commodities, whereas in periods of contracting credit the velocity of currency declines faster than the prices of commodities
 * It is in no way the strong demand for loans that distinguishes the period of stagnation from that of prosperity, but rather the ease with which this demand is satisfied in the time of prosperity and the difficulty of satisfying it once stagnation has set in. The two periods are distinguished in the first place by the fact that in the period of prosperity it is the demand for means of circulation between consumers and dealers that is dominant, while in the period of depression it for the demand for means of circulation between capitalists.

Fictitious capital

 * Fictitious capital is title to value rather than the value itself
 * In bond, security and other markets, what is being traded are property rights over different income and revenue streams, which have been capitalized and sold as capital. It is not the capital itself that is being traded (except when securities purport to be ownership titles representing a share in the real capital that was advanced e.g. for a joint-stock company, i.e an ownership title, pro rata, to the surplus-value which this capital is to realize.)
 * All these securities actually represent nothing but accumulated claims, legal titles, to future production
 * In all countries of capitalist production, there is a tremendous amount of so-called interest-bearing capital or 'moneyed capital' in this form. And an accumulation of money capital means for the most part nothing more than an accumulation of these claims to production, and an accumulation of the market price of these claims, of their illusory capital value.
 * Bank deposits themselves play a double role. On the one hand, as already mentioned, they are lent out as interest-bearing capital and are thus not to be found in the banks' safes, figuring instead in their books as credits held by the depositors.
 * Extractive as opposed to productive activities have long predominated within these credit markets. There is no firewall within the banking system between the activities of lending to produce surplus-value, lending to realize surplus-value, and lending to fictitious capital markets

Marx's theory of interest

 * Under capitalism, interest acquires a new social and economic significance because it is now paid out of surplus value, which requires the circulation of money through industrial production.