THE METAMORPHOSES OF CAPITAL AND THEIR CIRCUITSTHE CIRCUIT OF PRODUCTIVE CAPITALThe circuit of productive capital has the general formula P ... C'---M'---C... P. It signifies the periodical renewal of the functioning of productive capital, hence its reproduction, or its process of production as a process of reproduction aiming at the self-expansion of value; not only production but a periodical reproduction of surplus-value; the function of industrial capital in its productive form, and this function performed not once but periodically repeated, so that the renewal is determined by the starting-point.
A portion of C' may (in certain cases, in various branches of industrial capital) re-enter directly as means of production into the same labour-process out of which it came in the shape of a commodity. This merely saves the transformation of the value of this portion into real money or token-money or else the commodity finds an independent expression only as money of account. This part of value does not enter into the circulation. Thus values enter into the process of production which do not enter into the process of circulation. The same is true of that part of C' which is consumed by the capitalist in kind as part of the surplus-product. But this is insignificant for capitalist production. It deserves consideration, if at all, only in agriculture.
Two things are at once strikingly apparent in this form.
For one thing, while in the first form, M ... M', the process of production, the function of P, interrupts the circulation of money-capital and acts only as a mediator between its two phases M---C and C'---M', here the entire circulation process of industrial capital, its entire movement within the phase of circulation, constitutes only an interruption and consequently only the connecting link between the productive capital, which as the first extreme opens the circuit, and that which closes it as the other extreme in the same form, hence in the form in which it starts again. Circulation proper appears but as an instrument promoting the periodically renewed reproduction, rendered continuous by the renewal.
For another thing, the entire circulation presents itself in a form which is the opposite of that which it has in the circuit of money-capital.
There it was: M---C---M (M---C. C---M), apart from the determination of value; here it is, again apart from the value determination: C---M---C(C---M. M---C), i.e., the form of the simple circulation of commodities.
I. SIMPLE REPRODUCTION
Let us first consider the process C'---M'---C, which takes place in the sphere of circulation between the two extremes P ... P.
The starting-point of this circulation is commodity-capital; C'
= C + c = P + c. The function of commodity-capital C'---M' (the realisation of the capital-value contained in it equals P, which now exists as the constituent part C of C', as well as of the surplus-value contained in it, which exists as a constituent part of the same quantity of commodities and has the value c) was examined in the first form of the circuit. But there this function formed the second phase of the interrupted circulation and the concluding phase of the entire circuit. Here it forms the second phase of the circuit but the first phase of the circulation. The first circuit ends with M', and since M' as well as the original M can again open the second circuit as money-capital, it was not necessary at first to see whether M and m (surplus-value) contained in M' continue in their course together or whether each of them pursues its own course. This would only have become necessary if we had followed up further the first circuit in its renewed course. But this point must be decided in the circuit of the productive capital, because the determination of its very first circuit depends on it and because C'---M' appears in it as the first phase of the circulation, which has to be complemented by M---C. It depends on this decision whether the formula represents simple reproduction or reproduction on an extended scale. The character of the circuit changes according to the decision made.
Let us, then, consider first the simple reproduction of productive capital, assuming that, as in the first chapter, conditions remain constant and that commodities are bought and sold at their values.
On this assumption the entire surplus-value enters into the individual consumption of the capitalist. As soon as the transformation of the commodity-capital C' into money has taken place, that part of the money which represents the capital-value continues to circulate in the circuit of industrial capital;the other part, which is surplus-value changed into money, enters into the general circulation of commodities, constitutes a circulation of money emanating from the capitalist but taking place outside of the circulation of his individual capital.
In our illustration we had a commodity-capital C' of 10,000 lbs.
of yarn, valued at £500; £422 of this represent the value of the productive capital and continue, as the money-form of 8,440 lbs. of yarn, the capital circulation begun by C', while the surplus value of £78, the money-form of 1,560 lbs. of yarn, the excess of the commodity-product, leaves this circulation and describes a separate course within the general circulation of commodities.
C | ---
M | --- C< L MP
C' | + | --- M' | +
c | ---
