Smith's belief that the creation of value is a direct physiological property of labour, a manifestation of the animal organism in man, finds its most vivid expression here. Just as the spider produces its web from its own body, so labouring man produces value--labouring man pure and simple, every man who produces useful objects--because labouring man is by birth a producer of commodities; in the same way human society is founded by nature on the exchange of commodities, and a commodity economy is the normal form of human economy.

It was left to Marx to recognise that a given value covers a definite social relationship which develops under definite historical conditions.

Thus he came to discriminate between the two aspects of commodity-producing labour: concrete individual labour and socially necessary labour. When this distinction is made, the solution of the money problem becomes clear also, as though a spotlight had been turned on it.

Marx had to establish a dynamic distinction in the course of history between the commodity producer and the labouring man, in order to distinguish the twin aspects of labour which appear static in bourgeois economy. He had to discover that the production of commodities is a definite historical form of social production before he could decipher the hieroglyphics of capitalist economy. In a word, Marx had to approach the problem with methods of deduction diametrically opposed to those of the cla.s.sical school, he had in his approach to renounce the latter's faith in the human and normal element in bourgeois production and to recognise their historical transience: he had to reverse the metaphysical deductions of the cla.s.sics into their opposite, the dialectical.

On this showing Smith could not possibly have arrived at a clear distinction between the two aspects of value-creating labour, which on the one hand transfers the old value incorporated in the means of production to the new product, and on the other hand creates new value at the same time. Moreover, there seems to be yet another source of his dogma that total value can be completely resolved into _v + s_. We should be wrong to a.s.sume that Smith lost sight of the fact that every commodity produced contains not only the value created by its production, but also the values incorporated in all the means of production that had been spent upon it in the process of manufacturing it. By the very fact that he continually refers us from one stage of production to a former one--sending us, as Marx complains, from pillar to post, in order to show the complete divisibility of the aggregate value into _v + s_--Smith proves himself well aware of the point. What is strange in this connection is that he again and again resolves the old value of the means of production, too, into _v + s_, so as finally to cover the whole value contained in the commodity.

'In the price of corn, for example, one part pays the rent of the landlord, another pays the wages of maintenance of the labourers and labouring cattle employed in producing it, and the third pays the profit of the farmer. These three parts (wages, profit, and rent) seem either immediately or ultimately to make up the whole price of corn. A fourth part, it may perhaps be thought, is necessary for replacing the stock of the farmer, or for compensating the wear and tear of his labouring cattle and other instruments of husbandry. But it must be considered that the price of any instrument of husbandry, such as a labouring horse, is itself made up of the same three parts: the rent of the land upon which he is reared, the labour of tending and rearing him, and the profits of the farmer who advances both the rent of this land and the wages of this labour. Though the price of the corn, therefore, may pay the price as well as the maintenance of the horse, the whole price still resolves itself either immediately or ultimately into the same three parts of rent, of labour, and profit.'[82]

Apparently Smith's confusion arose from the following premises: first, that all labour is performed with the help of means of production of some kind or other--yet what are these means of production a.s.sociated with any given labour (such as raw materials and tools) if not the product of previous labour? Flour is a means of production to which the baker adds new labour. Yet flour is the result of the miller's work, and in his hands it was not a means of production but the very product, in the same way as now the bread and pastries are the product of the baker.

This product, flour, again presupposes grain as a means of production, and if we go one step further back, this corn is not a means of production in the hands of the farmer but the product. It is impossible to find any means of production in which value is embodied, without it being itself the product of some previous labour.

Secondly, speaking in terms of capitalism, it follows further that all capital which has been completely used up in the manufacture of any commodity, can in the end be resolved into a certain quant.i.ty of performed labour.

Thirdly, the total value of the commodity, including all capital advances, can readily be resolved in this manner into a certain quant.i.ty of labour. What is true for every commodity, must go also for the aggregate of commodities produced by a society in the course of a year; its aggregate value can similarly be resolved into a quant.i.ty of performed labour.

Fourthly, all labour performed under capitalist conditions is divided into two parts: paid labour which restores the wages advanced, and unpaid labour which creates profit and rent, or surplus value. All labour carried out under capitalist conditions thus corresponds to our formula _v + s_.[83]

All the arguments outlined above are perfectly correct and una.s.sailable.

Smith handled them in a manner which proves his scientific a.n.a.lysis consistent and undeviating, and his conceptions of value and surplus value a distinct advance on the Physiocrat approach. Only occasionally, in his third thesis, he went astray in his final conclusion, saying that the aggregate value of the annually produced aggregate of commodities can be resolved into the labour of that very year, although he himself had been acute enough to admit elsewhere that the value of the commodities a nation produces in the course of one year necessarily includes the labour of former years as well, that is the labour embodied in the means of production which have been handed down.

But even if the four statements enumerated are perfectly correct in themselves, the conclusion Smith draws from them--that the total value of every commodity, and equally of the annual aggregate of commodities in a society, can be resolved entirely into _v + s_--is absolutely wrong. He has the right idea that the whole value of a commodity represents nothing but social labour, yet identifies it with a false principle, that all value is nothing but _v + s_. The formula _v + s_ expresses the function of living labour under capitalism, or rather its double function, first to restore the wages, or the variable capital, and secondly, to create surplus value for the capitalist. Wage labour fulfils this function whilst it is employed by the capitalists, in virtue of the fact that the value of the commodities is realised in cash. The capitalist takes back the variable capital he had advanced in form of wages, and he pockets the surplus value as well. _v + s_ therefore expresses the relation between wage labour and capitalist, a relationship that is terminated in every instance as soon as the process of commodity production is finished. Once the commodity is sold, and the relation _v + s_ is realised for the capitalist in cash, the whole relationship is wiped out and leaves no traces on the commodity.

If we examine the commodity and its value, we cannot ascertain whether it has been produced by paid or by unpaid labour, nor in what proportion these have contributed. Only one fact is beyond doubt: the commodity contains a certain quant.i.ty of socially necessary labour which is expressed in its exchange. It is completely immaterial for the act of exchange as well as for the use of the commodity whether the labour which produced it could be resolved into _v + s_ or not. In the act of exchange all that matters is that the commodity represents value, and only its concrete qualities, its usefulness, are relevant to the use we make of it. Thus the formula _v + s_ only expresses, as it were, the intimate relationship between capital and labour, the social function of wage labour, and in the actual product this is completely wiped out. It is different with the constant capital which has been advanced and invested in means of production, because every activity of labour requires certain raw materials, tools, and buildings. The capitalist character of this state of affairs is expressed by the fact that these means of production appear as capital, as _c_, the property of a person other than the labourer, divorced from labour, the property of those who themselves do not work. Secondly, the constant capital _c_, a mere advance laid out for the purpose of creating surplus value, appears here only as the foundation of _v + s_. Yet the concept of constant capital involves more than this: it expresses the function of the means of production in the process of human labour, quite independently of all its historical or social forms. Everybody must have raw materials and working tools, the means of production, be it the South Sea Islander for making his family canoe, the communist peasant community in India for the cultivation of their communal land, the Egyptian fellah for tilling his village lands or for building Pharaoh's pyramids, the Greek slave in the small workshops of Athens, the feudal serf, the master craftsman of the medieval guild, or the modern wage labourer. They all require means of production which, having resulted from human labour, express the link between human labour and natural matter, and const.i.tute the eternal and universal prerequisites of the human process of production. _c_ in the formula _c + v + s_ stands for a certain function of the means of production which is not wiped out in the succession of the labour process. Whereas it is completely immaterial, for both the exchange and the actual use made of a commodity, whether it has been produced by paid or by unpaid labour, by wage labour, slave labour, forced labour or any other kind of labour; on the other hand, it is of decisive importance, as for using it, whether the commodity is itself a means of production or a consumer good. Whether paid or unpaid labour has been employed in the production of a machine, matters to the machinery manufacturer and to his workers, but only to them; for society, when it acquires this machine by an act of exchange, only the quality of this machine as a means of production, only its function in the process of production is of importance. Just as every producing society, since time immemorial, has had to give due regard to the important function of the means of production by arranging, in each period of production, for the manufacture of the means of production requisite for the next period, so capitalist society, too, cannot achieve its annual production of value to accord with the formula _v + s_--which indicates the exploitation of wage labour--unless there exists, as the result of the preceding period, the quant.i.ty of means of production necessary to make up the constant capital. This specific connection of each past period of production with the period following forms the universal and eternal foundation of the social process of reproduction and consists in the fact that in every period parts of the produce are destined to become the means of production for the succeeding period: but this relation remained hidden from Smith's sight. He was not interested in means of production in respect of their specific function within the process to which they are applied; he was only concerned with them in so far as they are like any other commodity, themselves the product of wage labour that has been employed in a capitalist manner. The specifically capitalist function of wage labour in the productive process completely obscured for him the eternal and universal function of the means of production within the labour process. His narrow bourgeois approach overlooked completely the general relations between man and nature underneath the specific social relations between capital and wage labour. Here, it seems, is the real source of Adam Smith's strange dogma, that the total value of the annual social product can be resolved into _v + s_. He overlooked the fact that _c_ as the first link in the formula _c + v + s_ is the essential expression of the general social foundation of exploitation of wage labour by capital.

We conclude that the value of every commodity must be expressed by the formula _c + v + s_. The question now arises how far this formula applies to the aggregate of commodities within a society. Let us turn to the doubts expressed by Smith on this point, the statement that an individual's fixed and circulating capital and his revenue do not strictly correspond to the same categories from the point of view of society. (Cf. above, p. 64, no. 3.) What is circulating capital for one person is not capital for another, but revenue, as for instance capital advances for wages. This statement is based upon an error. If the capitalist pays wages to the workers, he does not abandon his variable capital and let it stray into the workers' hands, to become their income. He only exchanges the value-form of his variable capital against its natural form, labour power. The variable capital remains always in the hand of the capitalist, first as money, and then as labour power, to revert to him later together with the surplus value as the cash proceeds from the commodities. The worker, on the other hand, never gains possession of the variable capital. His labour power is never capital to him, but it is his only a.s.set, 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.

FOOTNOTES:

[77] _An Enquiry into the Nature and Causes of the Wealth of Nations_, vol. i, p. 19.

[78] _Theorien uber den Mehrwert_ (Stuttgart, 1905), vol. i, pp.

179-252.

[79] _Capital_, vol. ii, p. 435.

[80] Smith, op. cit., vol. ii, p. 148.

[81] Ibid., p. 149.

[82] Op. cit., vol. i, pp. 86-7.

[83] In this connection, we have disregarded the contrary conception which also runs through the work of Smith. According to that, the _price_ of the commodity cannot be resolved into _v + s_, though the _value_ of commodities consists in _v + s_. This distinction, however, is more important with regard to Smith's theory of value than in the present context where we are mainly interested in his formula _v + s_.

_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 ma.s.s 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 quant.i.ty 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 quant.i.ties 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 quant.i.tative 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 predominant feature of capitalist production is expressed in this last circ.u.mstance: it is the fact that the creation and appropriation of surplus value is the real purpose of, and the incentive to, production.

We have examined the relations upon which the capitalist formula of the aggregate product is based, and have found them universally valid. In every planned economy they are made the object of conscious regulation on the part of society; in a communist society by the community of workers and their democratic organs, and in a society based upon cla.s.s-rule by the nucleus of owners and their despotic power. In a system of capitalist production there is no such planned regulation. The aggregate of the society's capitals and the aggregate of its commodities alike consist in reality of innumerable fragments of individual capitals and individual items of merchandise, taken together.

Thus the question arises whether these sums themselves mean anything more in a capitalist society than a mere statistical enumeration which is, moreover, inexact and fluid. Applying the standards of society as a whole, we perceive that the completely independent and sovereign individual existence of private enterprises is only the historically conditioned form, whereas it is social interconnections that provide the foundation. Although individual capitals act in complete independence of one another, and a social regulation is completely lacking, the movement of capitals forms a h.o.m.ogeneous whole. This movement, too, appears in specifically capitalist forms. In every planned system of production it is, above all, the relation between all labour, past and present, and the means of production (between _v + s_ and _c_, according to our formula), or the relation between the aggregate of necessary consumer goods (again, in the terms of our formula, _v + s_) and _c_ which are subjected to regulation. Under capitalist conditions, on the other hand, all social labour necessary for the maintenance of the inanimate means of production and also of living labour power is treated as one ent.i.ty, as capital, in contrast with the surplus labour that has been performed, i.e. with the surplus value _s_. The relation between these two quant.i.ties _c_ and (_v + s_) is a palpably real, objective relationship of capitalist society: it is the average rate of profit; every capital is in fact treated only as part of a common whole, the whole of social capital, and a.s.signed the profit to which it is ent.i.tled, according to its size, out of the surplus value wrested from society, regardless of the quant.i.ty which this particular capital has actually created. Thus social capital and its counterpart, the whole of social surplus value, are not merely real quant.i.ties, having an objective existence, but, what is more, the relation between them, the average profit, guides and directs the whole process of exchange. This it does in three ways: (1) by the mechanism of the law of value which establishes the quant.i.tative relations of exchange between the individual kinds of commodities independently of their specific value relationship; (2) by the social division of labour, the a.s.signment of certain portions of capital and labour to the individual spheres of production; (3) by the development of labour productivity which on the one hand stimulates individual capitals to engage in pioneering work for the purpose of securing a higher profit than the average, and on the other hand extends the progress that has been achieved by individuals over the whole field of production. By means of the average rate of profit, in a word, the total capital of society completely governs the seemingly independent motions of individual capitals.

The formula _c + v + s_ thus applies to the aggregate of commodities produced in a society under capitalism no less than to the value composition of every individual commodity. It is, however, only the value-composition for which this holds good--the a.n.a.logy cannot be carried further.

The formula is indeed perfectly exact if we regard the total product of a capitalistically producing society as the output of one year's labour, and wish to a.n.a.lyse it into its respective components. The quant.i.ty _c_ shows how much of the labour of former years has been taken over towards the product of the present year in the form of means of production.

Quant.i.ties _v + s_ show the value components of the product created by new labour during the last year only; the relation between _v_ and _s_ finally shows us how the annual labour programme of society is apportioned to the two tasks of maintaining the workers and maintaining those who do not work. This a.n.a.lysis remains valid and correct also with regard to the reproduction of individual capital, no matter what may be the material form of the product this capital has created. All three, _c_, _v_, and _s_, appear alike to a capitalist of the machinery industry in the form of machinery and its parts; to the owner of a music hall they are represented by the charms of the dancers and the skill of the acrobats. So long as the product is left undifferentiated, _c_, _v_, and _s_ differ from one another only in so far as they are _aliquot_ components of value. This is quite sufficient for the reproduction of individual capital, as such reproduction begins with the value-form of capital, a certain amount of money that has been gained by the realisation of the manufactured product. The formula _c + v + s_ then is the given basis for the division of this amount of money; one part for the purchase of the material means of production, a second part for the purchase of labour power, and a third part--in the case of simple reproduction a.s.sumed in the first instance--for the capitalist's personal consumption. In the case of expanding reproduction part three is further subdivided, only a fraction of it being devoted to the capitalist's personal consumption, the remainder to increasing his capital. In order to reproduce his capital actually, the capitalist must, of course, turn again to the commodity market with the capital he has divided in this manner, so that he can acquire the material prerequisites of production such as raw materials, instruments, and so on. It seems a matter of course to the individual capitalist as well as to his scientific ideologist, the 'vulgar economist', that he should in fact find there just those means of production and labour power he needs for his business.

The position is different as regards the total production of a society.

From the point of view of society as a whole, the exchange of commodities can only effect a shifting around, whereby the individual parts of the total product change hands. The material composition of the product, however, cannot be changed by this process. After this change of places, as well as before it, there can be reproduction of total capital, if, and only if, there is in the total product of the preceding period: first, a sufficient quant.i.ty of means of production, secondly, adequate provisions to maintain the same amount of labour as. .h.i.therto, and, last but not least, the goods necessary to maintain the capitalist cla.s.s and its hangers-on in a manner suitable to their station. This brings us to a new plane: we are now concerned with material points of view instead of pure relations of value. It is the use-form of the total social product that matters now. What the individual capitalist considers n.o.body else's business becomes a matter of grave concern for the totality of capitalists. Whereas it does not make the slightest difference to the individual capitalist whether he produces machinery, sugar, artificial manure or a progressive newspaper--provided only that he can find a buyer for his commodity so that he can get back his capital plus surplus value--it matters infinitely to the 'total capitalist' that his total product should have a definite use-form. By that we mean that it must provide three essentials: the means of production to renew the labour process, simple provisions for the maintenance of the workers, and provisions of higher quality and luxury goods for the preservation of the 'total capitalist' himself. His desire in this respect is not general and vague, but determined precisely and quant.i.tatively. If we ask what quant.i.ties of all three categories are required by the 'total capitalist', the value-composition of last year's total product gives us a definite estimate, as long, that is, as we confine ourselves to simple reproduction, which we have taken for our starting point. Hitherto we have conceived of the formula _c + v + s_ as a merely quant.i.tative division of the total value, applicable alike to total capital and to individual capital, and representing the quant.i.ty of labour contained in the annual product of society. Now we see that the formula is also the basis of the material composition of the product. Obviously the 'total capitalist', if he is to take up reproduction to the same extent as before, must find in his new total product as many means of production as correspond to the size of _c_, as many simple provisions for the workers as correspond to the sum of wages _v_, and as many provisions of better quality for himself and his hangers-on as correspond to _s_. In this way our a.n.a.lysis of the value of the society's aggregate product is translated into a general recipe for this product as follows: the total _c_ of society must be re-embodied in an equal quant.i.ty of means of production, the _v_ in provisions for the workers, and the _s_ in provisions for the capitalists, in order that simple reproduction may take place.

Here we come up against palpable differences between the individual capitalist and the total capitalist. The manner in which the former always reproduces his constant and variable capital as well as his surplus value is such that all three parts are contained in the same material form within his h.o.m.ogeneous product, that this material form, moreover, is completely irrelevant and may have different qualities in the case of each individual capitalist. The 'total capitalist', for his part, reproduces every component of the value of his annual product in a different material form, _c_ as means of production, _v_ as provisions for the workers, and _s_ as provisions for the capitalists. In the case of the reproduction of individual capitals, there is no discrepancy between relations of value and material points of view. Besides, it is quite clear that individual capital may concentrate on aspects of value, accepting material conditions as a law from heaven, as self-evident phenomena of commodity-exchange, whereas the 'total capitalist' has to reckon with material points of view. If the total _c_ of society were not reproduced annually in the form of an equal amount of means of production, every individual capitalist would be doomed to search the commodity market in vain with his _c_ realised in cash, unable to find the requisite materials for his individual reproduction. From the point of view of reproducing the total capital, the formula _c + v + s_ is inadequate. This again is proof of the fact that the concept of total capital is something real and does not merely paraphrase the concept of production. We must, however, make general distinctions in our exposition of total capital: instead of showing it as a h.o.m.ogeneous whole, we must demonstrate its three main categories; and we shall not vitiate our theory if, for the sake of simplicity, we consider for the present only two departments of total capital: the production of producer goods, and that of consumer goods for workers and capitalists.

We have to examine each department separately, adhering to the fundamental conditions of capitalist production in each case. At the same time, we must also emphasise the mutual connections between these two departments from the point of view of reproduction. For only if each is regarded in connection with the other, do they make up the basis of the social capital as a whole.

We made a start by investigating individual capital. But we must approach the demonstration of total capital and its total product in a somewhat different manner. Quant.i.tatively, as a quant.i.ty of value, the _c_ of society consists precisely in the total of individual constant capitals, and the same applies to the other amounts, _v_ and _s_. But the outward shape of each has changed--the _c_ of constant capitals re-emerges from the process of production as an element of value with infinitely varied facets, comprising a host of variegated objects for use, but in the total product it appears, as it were, contracted into a certain quant.i.ty of means of production. Similarly with _v_ and _s_, which in the case of the individual capitalist re-emerge as items in a most colourful jumble of commodities, being provisions in adequate quant.i.ties for the workers and capitalists. Adam Smith came very close to recognising this fact when he observed that the categories of fixed and circulating capital and of revenue in relation to the individual capitalist do not coincide with these categories in the case of society.

We have come to the following conclusions:

(1) The formula _c + v + s_ serves to express the production of society viewed as a whole, as well as the production of individual capitalists.

(2) Social production is divided into two departments, engaged in the production of producer and consumer goods respectively.

(3) Both departments work according to capitalist methods, that is to say they both aim at the production of surplus value, and thus the formula _c + v + s_ will apply to each of them.

(4) The two departments are interdependent, and are therefore bound to display a certain quant.i.tative relationship, namely the one department must produce all means of production, the other all provisions for the workers and capitalists of both departments.

Proceeding from this point of view, Marx devised the following diagram of capitalist reproduction:

I. _4,000c + 1,000v + 1,000s = 6,000_ means of production II. _2,000c + 500v + 500s = 3,000_ articles of consumption.[86]