Capital, Volume 1: Parts 2, 3, and 4


This section of the text contains the one move of economic theory at the heart of the whole project, and I want to be sure it's clear to everyone.  Part 2 really belongs with Part 1 in the sense that they are both written from the perspective of exchange and circulation.  Part 3 will bring the shift of perspective that will condition the rest of the book.

Part 2 asks on the basis of Part 1 (commodity, circulation of commodities, money), what is capital?  We will find that from this perspective we can't answer the question adequately; Part 2 exhausts this perspective.


I’ll organize the whole explanation around three definitions of capital


Chap 4: General Formula of Capital

·nb: previously Marx gave us in the 1844 ms the two-part definition: capital is (a) stored-up labor and (b) domination over labor.

·What is capital?  We use "capital" to refer to commodities or land that are of value, but here we get a different defintion.

1st definition: money is the first form of capital (p. 247).  Money is the expression of capital.  This is what is revealed in exchange and circulation.

· circulation of commodities:  C-M-C

· circulation of money: M-C-M

. M-C-M is an absurd tautology, why would anyone do that.  The difference between paths is that C-M-C refers to the same quantity but different qualities; but M-C-M refers to the same quality and thus must have different quantities.  “One sum of money is distinguishable from another only by its amount” (251).

·M-C-M' is the general formula of capital where Delta M is surplus value (p. 251).  Note: this is really industrial capital. - Merchant's capital M-C-M (p. 256, 266-67) — or should it be M-C-M’ where the commodity is not transformed?

Interest-bearing capital or usurers' capital M-M' (p. 257, 267)

These others are criminal (theft or cheating); industrial capital is productive if montrous (self-creation).

·valorization is the addition of value (p. 252), but we'll get a better definition later with respect to labor. - p. 255 note Say: "It is not the material which forms capital but the value of that material."

2nd definition: capital is self-valorizing value, "value in process", value as the subject of the process.  Read p. 257.


Chap 5: Contradictions in the general formula of capital

·In circulation only things of equivalent value are exchanged, and yet after the process the capitalist comes out with more than he put in.  Where does this increase in value come from? 

Surplus cannot arise from circulation.  “Circulation, or the exchange of commodities, creates no value” (266)

Read pp. 268-69.  “Hic Rhocus, hic salta.”  Put up or shut up.  Understand what is not what ought be.


Chap 6: Sale and Purchase of labor-power

The paradox will be resolved by anayzing the special properties of labor as a commodity.  (p. 270)  Selling labor power in the capitalist system is predicated on the freedom of labor in two senses:

1.      freely in possession of the labor-power to sell (not slave) and therefore formally equal to the capitalist in the exchange. (read p. 271).  In other words, the worker is the free bearer of labor-power.  (C.B. MacPherson, Possessive Individualism).  Note the shift from the bearer of a commodity to the bearer of labor-power.  What is the subject that is separate from its labor power?

2.       has nothing to sell but his or her labor-power. (read 272).

·Summary, read pp. 272-73.

· Aside: you might be wondering how did these conditions come about?  Capitalist cares little and we are sticking to the capitalist point of view.  Historical description of primitive accumulation to come later (p. 273).

·What is the value of labor-power?  It is determined like every other commodity by the quantity of abstract labor to make it, that is, by the value of the reproduction of the worker for a given period (p. 274 middle).  What counts as reproduction varies according to social and historical circumstances, but appears as fixed in any given social formation (English workers need beer as French workers need wine).  This makes good on the labor theory of value; this is its real importance.

·It also begins to make good on the use value/exchange value distinction.

- labor power is exchange value (the value of which is equal to the labor that went into it).  "the value of labor-power is the value of the means of subsistence necessary for the maintenance of its owner" (p. 274).

- labor is use-value.  "labor power becomes a reality only by being expressed; it is activated only  through labor" (p. 274).  Or more clearly, "The use of labor-power is labor itself." (p. 283).

     Two ways of thinking about it:

     1 - Expression / bearer : the abstract expressed in the concrete.

     2 - potential / actual: Aristotle Metaphysics.  “By working, the [seller of labor-power] becomes in actuality what previously he wonly was potentially, namely labor-power in action, a worker” (283).

·Summary: Freedom, equality, property, and Bentham (egoism).  The glory of capitalist ideology.

·Movement from circulation to production.  Read p. 279 and p. 280.  In the hidden abode of production the two actors no longer appear equal.  This shift in perspective is the central move in the book.  Parts 1 and 2 have only been in the realm of circulation.


Part 3

Chap 7: The Labor Process

·definition: means of production = instruments and objects of labor (p. 287).

·characteristics of labor under capitalist production

1) control of capitalist over the labor process (p. 291)

2) capitalist owns product (p. 292)

·What happens in labor process?  What is labor?  Worker changes nature and self (p. 283); living labor awakens things from the dead (p. 289); labor is the fermentation that transforms things (p. 292); "fire that bathes things".  Relation to Hegelian notion of labor in Phenomenology (in master/slave passage).

·Labor=value tautology: What is value? Accumulated labor-time.  What is labor? Value creating activity, activity that produces value.  The interesting point is that value and labor are socially determined.  What is labor and what is valued is a site of political struggle.  In effect the lack of ground, the tautology is what opens up the side of political struggle.


The Valorization Process

·Definition: Valorization is value creation in excess.  Read p. 302.  It is not just creating value.

·Secret is that the cost of the reproduction of the worker (the value of labor) is not equal to the value created in the labor process.  The difference between these two is surplus value.  Read p. 300.

·Let's look at the difference between the value of labor-power (which will later be represented in the wage) and the value added to the product by labor.  "The only thing that interests the capitalist is the difference between the price of labour-power and the value which its function creates" (p. 682).

·How is the value of labor-power determined?  Costs of reproduction.  How are the costs of reproduction determined?  Social, historical. In order for there to be surplus value, the costs of reproduction of the worker must be less than the value created by the worker in the production process.  The process of creating more value than the cost of the labor-power is capitalist valorization.

. Why is it possible for the capitalist to pay the worker only the costs of reproduction and not the full value of what is produced?  Because labor-power is treated as a commodity.  Since it is a commodity, the capitalist only has to pay for the abstract labor objectified in it, that is, its costs of (re)production.  It is a special commodity, a living commodity, that creates more than it costs.  The capitalist buys labor-time (for a fair price) and all the value created during that time belongs to the capitalist, which the capitalist subsequently sells.  Each is a fair exchange, just on different scales.  This is how waged labor is the central element of capitalism.  (Or you might say surplus labor or surplus value or valorization or exploitation is the key to capitalism.)  “The trick has at last worked: money has been transformed into capital” (301).

·Here is where we really make good on use/exchange values.  The capitalist pays for the exchange value of labor-power, but he gets back its use-value.

·Now what is capital?  More than M-C-M'(that was only how it was seen from circulation).  It is a social relation, the social relation embodied in the system of waged labor.

3rd definition: capital is self-valorizing value, or rather it is the social relation that produces surplus value.  Vampire, read p. 342 (also p. 367).


Chap 8

Definition: Constant capital and variable capital: read p. 317. - only the human creates value; machines and raw materials only transfer their value (the labor that went into them) to the product.  Means of production absorb a certain amount of labor. 

This is important for Senior’s fallacy.  Senior thinks that the work day cannot be reduced one hour because all the profit is produced in that last hour (333).  He doesn't distinguish betweeen constant and variable capital so he doesn't understand that:

     1) if work less, less means of production (cotton) used;

     2) value of means of production doesnt' have to be reproduced, it is simply transfered to the product.


Chap 9: Rate of Surplus Value:

A series of definitions:

·C=c+v and C'=c+v+s

·Put this back in M-C-M'  (M-C-C'-M' or M-c+v-c+v+s-M')

·surplus is solely the result of the labor process s=delta v, p. 322.

·rate of surplus value = s/v, p. 324

·necessary labor is that necessary for reproduction (teminological confusion, p. 325).

·surplus labor is the excess.

·degree of exploitation is the rate of surplus value, p. 326.

·the quantitative form of this is setting up a political argument about the length of the working day in England (surplus labor -> surplus labor time).

·for Wednesday: How is "exploitation" different from "domination" or "oppression"?


Absolute and Relative Surplus Value:

These are two capitalist strategies for increasing surplus value.

·A----B----C   AB=necessary labor-time, BC=surplus labor-time

Imagine in a certain historical and social situation 8 hours is required to produce the value of reproduction of the worker (neccesary labor time) and the worker works a 10 hour day.

     1 2 3 4 5 6 7 8 9 10


The surplus labor time is 2 hours and the value created during that period is the surplus value that the capitalist gets.  Now there are two ways this surplus value can be increased.

1) Lengthen the working day to 12 hours.

     1 2 3 4 5 6 7 8 9 10 11 12


The surplus labor time (B-C) would then be 4 hours.  This is called the production of absolute surplus value.

2) Increase the productivity of labor so that the costs of reproduction can be accomplished in 6 rather than 8 hours.

     1 2 3 4 5 6 7 8 9 10 11 12


The surplus labor time (B-C) is again 4 hours.  This is called the production of relative surplus value.



In absolute surplus value the working day is the object of political struggle.  Should read factory legislation for Wednesday (Chap 10, part 6, pp. 389- 410).  Two things are particularly interesting here:

     1) role of State: capital needs aid of the State when economic power is not developed enough (382).

     2) result of class struggle (read p. 395).

   Debate over New Deal legislation (8 hour day).



·increase of productivity (p. 431) leads to fall in value of labor-power (432).

·law of value at work / productivity (p. 436-37)

·riddle: Why does capitalist work to bring down price of commodities? (437)  Really, the capitalist’s aim is to maximize surplus labor time.  He doesn’t want to bring down the price of commodities — that is an unintended consequence.


Chap 13: Cooperation

Three periods of capitalist development

·handicraft industries

·manufacture: based on division of labor

·large-scale industry: based on machines


Capitalism proper begins from large-scale industry, but quantitative become

qualitative (with increased productivity):

1. Average social labor

2. Joint use of means of production

3. Cooperation

- increased productivity

- socialization and capabilities of the species (p. 447)

Increased cooperation is perhaps the most progressive aspect of capital, and the one that points beyond it.

·Role of capitalist (p. 448-49) general, conductor.

·despotism, hiring supervisors, now purely parasitic (p. 450)



Capital is an impersonal form of domination, p. 247 note and p. 381.