3. The exchange of the Aggregate Social Commodity in the case of simple reproduction.

We shall base our study of simple reproduction on the following scheme, in which c stands for constant capital, v for variable capital, and s for surplus-value, assuming the rate of surplus-value s/v to be 100 per cent. The figures may indicate millions of marks, francs, or pounds sterling.

I. Production of Means of Production:

Capital. . . . . . . . . . . . . 4,000c + 1,000v = 5,000

Commodity-Product . . . 4,000c + 1 ,000v, + 1,000s = 6,000,

existing in means of production.

II. Production of Articles of Consumption:

Capital . . . . . . . . . . . 2,000c + 500v = 2,500

Commodity-Product . . 2,000c + 500v + 500s = 3,000,

existing in articles of consumption.

Recapitulation: Total annual commodity-product:

I. 4,000c + 1,000v + 1,000s = 6,000 means of production

II. 2,000c + 500v + 500s = 3,000 articles of consumption.

Total value 9,000, exclusive of the fixed capital persisting in its natural form, according to our assumption.

If we were now to examine the transformations necessary on the basis of simple reproduction, where the entire surplus-value is unproductively consumed, and leave aside for the present the money-circulation that brings them about, we should obtain at the outset three great points of support.

1) The 500v, representing wages of the labourers, and 500s, representing surplus-value of the capitalists, in department II, must be spent for articles of consumption. But their value exists in articles of consumption worth 1,000, held by the capitalists of department II, which replace the advanced 500v and represent the 500s. Consequently the wages and surplus-value of department II are exchanged within this department for products of this same department. Thereby articles of consumption to the amount of (500v + 500s) II = 1,000, drop out of the total product.

2) The 1,000v plus 1,000s of department I must likewise be spent for articles of consumption; in other words, for products of department II. Hence they must be exchanged for the remainder of this product equal to the constant capital part, 2,000c. Department II receives in return an equal quantity of means of production, the product of I, in which the value of 1,000v + 1,000s of I is incorporated. Thereby 2,000 IIc and (1,000v +1,000s) I drop out of the calculation.

3) There still remain 4,000 Ic. These consist of means of production which can be used only in department I to replace its consumed constant capital, and are therefore disposed of by mutual exchange between the individual capitalists of I, just as the (500v + 500s) II by an exchange between the labourers and capitalists, or between the individual capitalists of II.

3. The exchange of the Aggregate Social Commodity in the case of Reproduction on an Expanded Scale.

By the conversion of the commodity-capital into money the surplus-product, in which the surplus-value is represented, is also turned into money. The capitalist reconverts the so metamorphosed surplus-value into additional natural elements of his productive capital. In the next cycle of production the increased capital furnishes an increased product. But what happens in the case of the individual capital must also show in the annual reproduction as a whole, just as we have seen it happen on analyzing simple reproduction, namely, that the successive precipitation — in the case of individual capital — of its used-up fixed component parts in money which is being hoarded, also finds expression in the annual reproduction of society.

If a certain individual capital is equal to 400 c + l00 v , and the annual surplus-value is equal to 100, then the commodity-product amounts to 400 c + 100 v + 100 s . These 600 are converted into money. Of this money, again, 400 c are converted into the natural form of constant capital, 100 v into labour-power, and-provided the entire surplus-value is being accumulated — 100 s are converted besides into additional constant capital by transformation into natural elements of the productive capital. It is assumed in this case:

1) that this amount is sufficient under the given technical conditions either to expand the functioning constant capital or to establish a new industrial business. But it may also happen that surplus-value must be converted into money and this money hoarded for a much longer time before this process, i.e., before real accumulation, expansion of production, can take place;

2) that production on an extended scale has actually been in process previously. For in order that the money (the surplus-value hoarded in money-form) may be converted into elements of productive capital, one must be able to buy these elements on the market as commodities. It makes no difference if they are not bought as finished products but made to order. They are not paid for until they are in existence and at any rate not until actual reproduction on an extended scale, an expansion of hitherto normal production, has taken place so far as they are concerned. They had to exist potentially, i.e., in their elements, as it requires only the impulse of an order, that is, the purchase of commodities before they actually exist and their anticipated sale, for their production really to take place. The money on the one side then calls forth extended reproduction on the other, because the possibility of it exists without money. For money in itself is not an element of real reproduction.