If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, still no surplus-value.1 Circulation, or the exchange of commodities, begets no value.2 The reason is now therefore plain why, in analysing the standard form of capital, the form under which it determines the economical organisation of modern society, we entirely left out of consideration its most popular, and, so to say, antediluvian forms, merchants' capital and money-lenders' capital. The circuit M-C-M', buying in order to sell dearer, is seen most clearly in genuine merchants' capital. But the movement takes place entirely within the sphere of circulation. Since, however, it is impossible, by circulation alone, to account for the conversion of money into capital, for the formation of surplus-value, it would appear, that merchants' capital is an impossibility, so long as equivalents are exchanged;3 that, therefore, it can only have its origin in the twofold advantage gained, over both the selling and the buying producers, by the merchant who parasitically shoves himself in between them. ! It is in this sense that Franklin says, "war is robbery, commerce is generally cheating." If the transformation of merchants' money into capital is to be explained otherwise than by the producers being simply cheated, a long series of intermediate steps would be necessary, which, at present, when 1 "L'échange qui se fait de deux valeurs égales n'augmente ni ne diminue la masse des valeurs subsistantes dans la société. L'échange de deux valeurs inégales ne change rien non plus à la somme des valeurs sociales, bien qu'il ajoute à la fortune de l'un ce pu'il ôte de la fortune de l'autre." J. B. Say, 1. c. t. I., pp. 344, 345.) Say, not in the least troubled as to the consequences of this stateinent, borrows it, almost word for word, from the Physiocrats. The following example Will shew how Monsieur Say turned to account the writings of the Physiocrats, in his day quite forgotten, for the purpose of expanding the "value" of his own. His Most celebrated saying, "On n'achète des produits qu'avec des produits" (1. c., t. II., p. 438) runs as follows in the original physiocratic work: "Les productions ne se Laient qu'avec des productions." ("Le Trosne," 1. c., p. 899.) at all upon products." 2 "Exchange confers no value (F. Wayland: "The Ele (G. * Under the rule of invariable equivalents commerce would be impossible. Opdyke: "A Treatise on Polit Economy." New York, 1851, p. 66-69.) "The difference between real value and exchange-value is based upon this fact, namely, that the value of a thing is different from the socalled equivalent given for it in trade, .e., that this equivalent is no equivalent." (F. Engels, 1. c. p. 96.) Benjamin Franklin: Works, Vol. II. edit. Sparks in "Positions to be examined concerning National Wealth," p. 376. the simple circulation of commodities forms our only assumption, are entirely wanting. What we have said with reference to merchants' capital, applies still more to money-lenders' capital. In merchants' capital, the two extremes, the money that is thrown upon the market, and the augmented money that is withdrawn from the market, are at least connected by a purchase and a sale, in other words by the movement of the circulation. In moneylenders' capital the form M-C-M' is reduced to the two extremes without a mean, M-M', money exchanged for more money, a form that is incompatible with the nature of money, and therefore remains inexplicable from the standpoint of the circulation of commodities. Hence Aristotle: "since chrema tistic is a double science, one part belonging to commerce, the other to economic, the latter being necessary and praiseworthy, the former based on circulation and with justice disapproved (for it is not based on Nature, but on mutual cheating), there fore the usurer is most rightly hated, because money itself is the source of his gain, and is not used for the purposes for which it was invented. For it originated for the exchange of commodities, but interest makes out of money, more money. Hence its name (Tókos interest and offspring). For the begotten are like those who beget them. But interest is money of money, so that of all modes of making a living, this is the most contrary to nature." 1 In the course of our investigation, we shall find that both merchants' capital and interest-bearing capital are derivative forms, and at the same time it will become clear, why these two forms appear in the course of history before the modern standard form of capital. We have shown that surplus-value cannot be created by circulation, and, therefore, that in its formation, something must take place in the background, which is not apparent in the circulation itself. But can surplus-value possibly originate anywhere else than in circulation, which is the sum total 1 Aristotle, 1. c. c. 10. Profit, in the usual condition of the market, is not made by exchanging. Had it not existed before, neither could it after that transaction." (Ramsay, 1. c., p. of all the mutual relations of commodity-owners, as far as they are determined by their commodities? Apart from circulation, the commodity-owner is in relation only with his own commodity. So far as regards value, that relation is limited to this, that the commodity contains a quantity of his labour, that quantity being measured by a definite social standard. This quantity is expressed by the value of the commodity, and since the value is reckoned in money of account, this quantity is also expressed by the price, which we will suppose to be £10. But his labour is not represented both by the value of the commodity, and by a surplus over that value, not by a price of 10 that is also a price of 11, not by a value that is greater than itself. The commodity owner can, by his labour, create value, but not self-expanding value. He can increase the value of his commodity, by adding fresh labour, and therefore more value to the value in hand, by making, for instance, leather into boots. The same material has now more value, because it contains a greater quantity of labour. The boots have therefore more value than the leather, but the value of the leather remains what it was; it has not expanded itself, has not, during the making of the boots, annexed surplus value. It is therefore impossible that outside the sphere of circulation, a producer of commodities can, without coming into contact with other commodity owners, expand value, and consequently convert money or commodities into capital. It is therefore impossible for capital to be produced by circulation, and it is equally impossible for it to originate apart from circulation. It must have its origin both in circulation and yet not in circulation. We have, therefore, got a double result. The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting point is the exchange of equivalents. Our friend, Moneybags, who as yet is only an 1 From the foregoing investigation, the reader will see that this statement only means that the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of embryo capitalist, must buy his commodities at their value, must sell them at their value, and yet at the end of the process must withdraw more value from circulation than he threw into it at starting. His development into a full-grown capitalist must take place, both within the sphere of circulation and without it. These are the conditions of the problem. Hic Rhodus, hic salta! CHAPTER VI. THE BUYING AND SELLING OF LABOUR-POWER. THE change of value that occurs in the case of money intended to be converted into capital, cannot take place in the money itself, since in its function of means of purchase and of payment, it does no more than realise the price of the commodity it buys or pays for; and, as hard cash, it is value petrified, never varying. Just as little can it originate in the second act of circulation, the re-sale of the commodity, which does no more than transform the article from its bodily form back again into its money-form. The change must, therefore, take place in the commodity bought by the first act, M-C, but not in its value, for equivalents are exchanged, and the commodity is paid for at its full value. We are, therefore, forced to the all, reduce the former to the latter, in other words treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not interfered with by disturbing circumstances that have nothing to do with the process in question. We know, moreover, that this reduction is no mere scientific process. The continual oscillation in prices, their rising and falling, compensate each other, and reduce themselves to an average price, which is their hidden regulator. It forms the guiding star of the merchant or the manufacturer in every undertaking that requires time. He knows that when a long period of time is taken, commodities are sold neither over nor under, but at their average price. If therefore he thought about the matter at all, he would formulate the problem of the formation of capital as follows: How can we account for the origin of capital on the supposition that prices are regulated by the average price, i.e., ultimately by the value of the com modities? I say "ultimately," because average prices do not directly coincide with the values of commodities, as Adam Smith, Ricardo, and others believe. 1 "In the form of money. "Princ. of Pol. Econ." p. 267.) capital is productive of no profit." (Ricardo: conclusion that the change originates in the use-value, as sach, of the commodity, i.e., in its consumption. In order to be able to extract value from the consumption of a commodity, our (friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power. By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description. But in order that our owner of money may be able to find labour-power offered for sale as a commodity, various conditions must first be fulfilled. The exchange of commodities of itself implies no other relations of dependence than those which result from its own nature. On this assumption, labour-power can appear upon the market as a commodity only if, and so far as, its possessor, the individual whose labour-power it is, offers it for sale, or sells it, as a commodity. In order that he may be able to do this, he must have it at his disposal, must be the untrammelled owner of his capacity for labour, i.e., of his person.1 Ile and the owner of money meet in the market, and deal with each other as on the basis of equal rights, with this difference alone, that one is buyer, the other seller; both, therefore, equal in the eyes of the law. The continuance of this relation demands that the owner of the labour-power should sell it only for a definite period, for if he were to sell it rump and stump, once for all, he would be selling himself, converting himself from a free man into a slave, from an owner of a commodity into a commodity. He must constantly look upon his labour-power as his own property, his own commodity, and this he can only do by placing it at the disposal of 1 In encyclopædias of classical antiquities we find such nonsense as this-that in the ancient world capital was fully developed, "except that the free labourer and a system of credit was wanting." Mommsen also, in his "History of Rome," commits, in this respect, one blunder after another. |