on the other hand, never gains possession of the variable capital. His labour power is never capital to him, but it is his only asset, the power to work is the only thing he possesses. Again, if he has sold it and taken a money wage, this wage is for him not capital but the price of his commodity which he has sold. Finally, the fact that the worker buys provisions with the wages he has received, has no more connection with the function this money once fulfilled as variable capital in the hands of the capitalist, than has the private use a vendor of a commodity can make of the money he has obtained by a sale. It is not the capitalist’s variable capital which becomes the workers’ income, but the price of the worker’s commodity ‘labour power’ which he has sold, while the variable capital, now as ever, remains in the hands of the capitalist and fulfils its specific function. Equally erroneous is the conception that the income of the capitalist (the surplus value) which is hidden in machines—in our example of a machinery manufacturer—which has not as yet been realised, is fixed capital for another person, the buyer of the machines. It is not the machines, or parts of them, which form the income of the machinery manufacturer, but the surplus value that is hidden in them—the unpaid labour of his wage labourers. After the machine has been sold, this income simply remains as before in the hand of the machinery manufacturer; it has only changed its outward shape: it has been changed from the ‘machine-form’ into the ‘money-form’. Conversely, the buyer of this machine has not, by its purchase, newly obtained possession of his fixed capital, for he had this fixed capital in hand even before the purchase, in the form of a certain amount of cash. By buying this machine, he has only given to his capital the adequate material form for it to become productive. The income, or surplus value, remains in the hands of the machinery manufacturer before and after the sale of the machine, and the fixed capital remains in the hands of the other person, the capitalist buyer of the machine, just as the variable capital in the first example always remained in the hands of the capitalist and the income in the hands of the worker.
Smith and his followers have caused confusion because, in their investigation of capitalist exchange, they mixed up the use-form of the commodities with their relations of value. Further, they did not distinguish the individual circulations of capitals and commodities which are ever interlacing. One and the same act of exchange can be circulation of capital, when seen from one aspect, and at the same time simple commodity exchange for the purpose of consumption. The fallacy that whatever is capital for one person must be income for another, and vice versa, must be translated thus into the correct statement that what is circulation of capital for one person, may be simple commodity exchange for another, and vice versa. This only expresses the capacity of capital to undergo transformations of its character, and the interconnections of various spheres of interest in the social process of exchange. The sharply outlined existence of capital in contrast with income still stands in both its clearly defined forms of constant and variable capital. Even so, Smith comes very close to the truth when he states that capital and income of the individual are not strictly identical with the same categories from the point of view of the community. Only a few further connecting links are lacking for a clear revelation of the true relationship.
CHAPTER IV
MARX’S SCHEME OF SIMPLE REPRODUCTION
Let us now consider the formula c + v + s as the expression of the social product as a whole. Is it only a theoretical abstraction, or does it convey any real meaning when applied to social life—has the formula any objective existence in relation to society as a whole? It was left to Marx to establish the fundamental importance of c, the constant capital, in economic theory. Yet Adam Smith before him, working exclusively with the categories of fixed and circulating capital, in effect transformed this fixed capital into constant capital, though he was not aware of having achieved this result. This constant capital comprises not only those means of production which wear out in the course of years, but also those which are completely absorbed by production in any one year. His very dogma that the total value is resolved into v + s and his arguments on this point lead Smith to distinguish between the two categories of production—living labour and inanimate means of production. On the other hand, when he tries to construe the social process of reproduction on the basis of the capitals and incomes of individuals, the fixed capital he conceives of as existing apart from these, is, in fact, constant capital.
Every individual capitalist uses for the production of his commodities certain material means of production such as premises, raw materials and instruments. In order to produce the aggregate of commodities in a given society, an aggregate of all material means of production used by the individual capitalists is an obvious requisite. The existence of these means of production within the society is a real fact, though they themselves exist in the form of purely private individual capitals. This is the universal absolute condition of social production in all its historical forms.[84]
The specific capitalist form manifests itself in the fact that the material means of production function as c, as constant capital, the property of those who do not work; it is the opposite pole to proletarianised labour power, the counterpart of wage labour. The variable capital, v, is the aggregate of wages actually paid in the society in the course of a year’s production. This fact, too, has real objective existence, although it manifests itself in an innumerable mass of individual wages. In every society the amount of labour power actually engaged in production and the annual maintenance of the workers is a question of decisive importance. Where this factor takes the specific capitalist form of v, the variable capital, it follows that the means of subsistence first come to the workers in form of a wage which is the price of the labour power they have sold to another person, the owner of the material means of production who does not work himself; under this aspect, it is the latter’s capitalist property. Further, v is an aggregate of money, that is to say it is the means of subsistence for the workers in a form of pure value. This concept of v implies that the workers are free in a double sense—free in person and free of all means of production. It also expresses the fact that in a given society the universal form of production is commodity production.
Finally, s, the surplus value, stands for the total of all surplus values gained by the individual capitalists. Every society performs surplus labour, and even a socialist society will have to do the same. It must perform surplus labour in a threefold sense: it has to provide a quantity of labour for the maintenance of non-workers (those who are unable to work, such as children, old people, invalids, and also civil servants and the so-called liberal professions who do not take an immediate part in the satisfaction of material[85] wants), it has to provide a fund of social insurance against elementary disasters which may threaten the annual produce, such as bad harvests, forest fires and floods; and lastly it must provide a fund for the purpose of increasing production, either because of an increase in the population, or because higher standards of civilisation lead to additional wants. It is in two respects that the capitalist character manifests itself: surplus labour comes into being (1) as surplus value, i.e. in commodity-form, realisable in cash, and (2) as the property of non-workers, of those who own the means of production.
Similarly, if we consider v + s, these two amounts taken together, we see that they represent objective quantities of universal validity: the total of living labour that has been performed within a society in the course of one year. Every human society, whatever its historical form, must take note of this datum, with reference to both the results that have been achieved, and the existing and available labour power. The division into v + s is a universal phenomenon, independent of the society’s particular historical form. In its capitalist form, this division shows itself not only in the qualitative peculiarities of both v and s as already outlined, but also in their quantitative relationship: v tends to become depressed to a minimum level, just sufficient for the physiological and social existence of the worker, and s tends to increase continually at the cost of, and relative to, v.
The
