Spring 1996

Capital, Volume 2

Parts One and Two


I want to look again at the large structure of the text.  Let's begin by looking at the relationship between Volume 1 and Volume 2.  The focus of Volume 1, after having completed the first two introductory parts, was primarily to analyze the immediate process of production and thus to explain how surplus value is produced.  This involved notably the analysis of the working day and of the factory system as aspects of the immediate process of production.  (Volume 1 also dealt with reproduction but not extensively and largely in terms of the reproduction of labor-power through the wage.)  Now, Volume 1 also presented several lines of argument departing from the immediate process of production.  First of all, the appendix dealt with the "results of the immediate process of production" and in large part looked back on the production process from the perspective of the entire production system (looking back on commodity production, for instance) and also periodized the production systems -- real and formal subsumption.  Part 8 on primitive accumulation was also a departure from the immediate process of production back in time, considering the historical prerequisites for capitalist production.  And finally, Part 7 on accumulation dealt with the repeated cycles of the production process.  ¿What is necessary for the production process to be repeated again and again, and what are the consequences of that repetition?  In this sense, Part 7 is the springboard that leads to Volume 2.

In Volume 1 Marx ignored the periods of the total process in which the capitalist takes his money and buys labor-power and means of production on the circulation sphere (assuming that they are readily available), the commodities he will consume productively in the production process, and then after production when the capitalist must go back to the circulation sphere and sell the product for money in order to begin the whole cycle over again.  The mandate for Volume 2, then, is to deal more closely with these other parts of the cycle that were previously ignored.

·Volume 2 is divided into 3 parts.  In Part 1 Marx deals with the three different circuits that capital passes through in succession: money capital, commodity capital, and production capital.  In Part 2 Marx is focussing on the same cycle but now looking at how capital is simultaneously divided among the three stages.  "In point of fact, if what was principally considered in Part one were the successive forms that capital constantly assumes and discards in the course of its circuit, what was considered in Part two was principally how, within this flux and succession of forms, a capital of given size is simultaneously divided, even if to a changing extent, into the various forms of productive capital, money capital and commodity capital, so that not only do these alternate with each other, but also different parts of the total capital value exist and function in these different states alongside each other at any one time" (429).

·So Vol. 2 Part 1 deals with the successive stages of an individual capital and Vol. 2 Part 2 the simultaneous distribution of various individual capitals among the stages; Vol. 2 Part 3, then, which we'll read next week, considers the interlinking of the circulation of individual capitals, or rather, the circulation of the total social capital (from individual to total or collective social capital).


So, the difference between Volume 2 and Volume 1 is primarily one of focus: production for Vol. 1 and for Vol. 2 circulation, or really the entire cycle of production, sale, and purchase.  But that's not the only difference.  There is obviously the difference in writing and the unfinished character of 2 (no footnotes, no literary references, no rhetorical flourishes).  More importantly what is lacking in 2 is antagonism.  Vol. 1 is filled with antagonism (once we get beyond the first two parts).  In the central parts about the productive process there is worker antagonism with capital regarding the working day and with/against machines in the factory.  Then also primitive accumulation is a clearly antagonistic process.  Class conflict drives the analysis in Vol. 1 and seems to pose the potentialities of revolution.

·But antagonism and class conflict disappear in Vol. 2.  Maybe that's why Engels apologizes that it "does not contain much material for agitation."  Now, I assume that antagonism and the working class itself disappear in vol. 2 not only because of the unfinished nature of the text but also because of the shift in focus.  That is, when we look at the production process the antagonism of the working class is clear, and when we look at primitive accumulation imperialism and other antagonistic relationships are revealed, but that the process of circulation does not afford a view on any such antagonisms.  (Is that right?  Is that the reason?)  So, going with this idea, if revolution was imminent in Vol. 1 in the presence of the working class, the parallel position in Vol. 2 is occupied by the permanent potential for crisis and collapse.  Here, in other words, revolution will come about when capital falls apart on its own, from its own inherent malfunctions.


Part 1: Metamorphoses of Capital and Their Circuit

Let's just lay out the basics here: there are three stages of capital (3 metamorphoses) and hence there are three circuits, each beginning in a different stage.

Stage 1: M - C , or really M - C (L+mp)

Stage 2: P

Stage 3: C - M, or really C' - M'.


Stage 1 relies on the precondition that labor is separated from the means of production, so they can then be united productively.

p. 115: “Money can be spent . . . means of production.”


Stage 2: waged labor leads to generalized commodity production and destruction of all noncapitalist forms.

p. 119: “As soon as . . . independent ones.”

p. 120: “Once it has taken root . . . capitalist production.”


Stage 3: all commodities must be sold to realize surplus value.


So the three circuits or forms of circulation are

Form I: money capital --         M - C (=L+mp) ... P ... C' - M'

Form II: productive capital --   P ... C' - M' - C (=L+mp) ... P

Form III: commodity capital --   C' - M' - C (=L+mp) ... P ... C'


The different circuits are in effect different points of view on the continually repeating process (it really doesn't have a beginning and end).  Marx uses each to reveal something different about circulation – and different potential for interruption.

Read p. 133: “The circuit of capital proceeds normally . . . flow of circulation.”


Form I: first of all, it is from this perspective that we can recognize capital as money breeding money (128) and money "as the mother of another part of the same sum of money" (131).  Also this is where Marx locates the analysis of the service industries, in which the product is inseparable from the process: "it is the production process itself, and not a product separable from it, that is paid for and consumed" (135).  In effect, this circuit is abbreviated to M - C ... P ... M' (ie, no C').  Here production is merely an interruption of the circulation of money (self-breeding money), so any abbreviation of the production process is only an improvement.  Form I demonstrates valorization, that is M - M'.

Form II: Here circulation interrupts production.  We have to focus in the middle on whether surplus money is reinvested or drops out of the circuit.  (Hence focus on simple or expanding reproduction.)  Form II is the form of reproduction.  The issue of overproduction and crisis thus comes up (156) because the prolonged interruption of the central part of the cycle -- selling the products -- will throw the whole circuit into disarray. 

Reinvestment of surplus value is necessary.  P. 159: “Accumulation, or production on an expanded scale . . . condition for its preservation.”  Because of competition among capitalists.

However, expansion of investment cannot proceed smoothly

A) Accumulation of money – minimum required for expansion of production (p. 163).

B) Reserve fund “to cope with disturbances in the circuit” (p. 165).

Form III: "What differentiates the third form from the two earlier ones is that it is only in this circuit that the valorized capital value, and not the original capital value that has still to be valorized, appears as the starting-point of its own valorization.  C', as capital- relation, is here the point of departure, and thus has a determining effect on the whole circuit ..." (173).  The determining effect it has is to highlight the social character of circulation.

·"C' ... C', on the other hand, presupposes C(=L+mp) as other commodities in the hands of others, commodities which are drawn into the circuit and changed into productive capital by way of the opening process of circulation.  (...)  But precisely because the circuit C' ... C' presupposes in its description the existence of another industrial capital in the form C(=L+mp) (and mp comprises other capital of various kinds, e.g. in our case machines, coal, oil, etc.), it itself demands to be considered not only as the general form of the circuit, i.e. as a social form in which every individual industrial capital can be considered (except in the case of it first investment), hence not only as a form of motion common to all individual industrial capitals, but at the same time as the form of motion of the sum of individual capitals, i.e. of the total social capital of the capitalist class ..." (176-77).

·"In figure III the movement of the capital value appears from the start simply as a part of the movement of the general mass of products, while in figures I and II the movement of C' simply forms a moment in the movement of a single capital.  In figure III the commodities on the market form the permanent premise of the process of production and reproduction" (178-79).

Thinking total social capital begins to allow us to glimpse the simultaneity of these circuits.  We should not only look at the succession of the phases but their coexistence, whereby capital is distributed at any one time in a the various phases.

Read p. 184: “As a whole . . . mediated by their succession.”

Read p. 184: “It is only . . . unity of the three circuits.”


Part II: The Turnover of Capital

·The main concepts here are fixed and circulating capital -- not too difficult.  [Read p. 238]  Fixed and circulating can also be conceived in terms of turnover: circulating capital turns over each cycle; fixed takes many cycles.

·In one passage Marx relates this period turnover to crises.  [Read p. 264]

·Read Negri, "Marx on Cycle and Crisis" p. 59.  Later Marx will deal more extensively with the potential of crises as overproduction.