As for commodity capital, it is the basic curse of capitalism that commodities must go through the phase in which they contain – in as yet unrealized form – the surplus-value produced by the working class. In other words, before money capital can return to its original form, swollen by surplus-value, it has to go through the intermediate stage of commodity-value – of value embodied in commodities which still have to pass the acid test by being sold.

Marx used the formula ‘metamorphosis of capital’ to indicate that, like a butterfly passing through the successive stages of larva, chrysalis and moth, capital takes on the forms of money capital, productive capital and commodity capital, before returning to the stage of money capital. While these three forms are to a large extent successive in the process of rotation of capital, they are also co-existent with one another. One of the most important and brilliant sections of Volume 2 is that which stresses again and again the discontinuous nature of reproduction of the three forms of capital, and the organic link of this discontinuity with the very essence of the capitalist mode of production.

Precisely because the capitalist mode of production is generalized production of commodities, money capital cannot and does not merely precede and succeed the widespread appearance of capital; it has to exist side by side with it. Similarly, money capital is not just the result of the sale of commodities; its social existence is a precondition of that sale. Finally, commodity capital is not simply the outcome of the functioning of productive capital; it is also its necessary basis. Indeed, current production is only possible (and this applies especially to commodities with an above-average life span or production period) if all commodities produced during the previous turnover cycle have not already been sold to the final consumers – if, that is, stocks and reserves of raw materials, energy, auxiliary products, intermediary products and consumer goods needed to reproduce labour-power are available on a large scale. Continuity of the production process may be said to depend upon discontinuity or desynchronization of the turnover cycle of money capital, productive capital and commodity capital.

Furthermore, the very nature of capitalist relations of production requires the existence of money capital prior to the initiation of the production process. The separation of ‘free’ workers from their means of production and livelihood implies a constraint upon the owners of the means of production to purchase labour-power before the commencement of productive operations. And they must have at their disposal adequate money capital to effect the transaction: ‘In the relation between capitalist and wage-labourer, the money relation, the relation of buyer and seller, becomes a relation inherent in production itself.’13

Thus, to a large extent, Volume 2 examines the constant intertwining of appearance and disappearance of money capital, productive capital and commodity capital – from the sphere of circulation into that of production, and back into the sphere of circulation, until the commodity is finally consumed. Each form passes over into the other, without expelling it entirely from the sphere of circulation, let alone from the overall social arena. Indeed, we can say that the dialectics of money (money capital) and commodities (commodity capital) is the basic contradiction examined in Capital Volume 2. Here again Marx’s ‘modernism’ is particularly striking.

These considerations show the crucial importance of the ‘time factor’ in Marx’s analysis of the capitalist mode of production. Its functioning cannot be understood if complete abstraction is made of time sequences and schedules, the duration of the production and turnover cycles of commodities, and the length of the turnover period of capital. Marx’s important distinction between circulating capital and fixed capital is based exclusively on the amount of time required for each of these two parts of money capital to revert to its original form. Circulating capital (spent on raw materials and wages) is recovered by the capitalist firm after each production cycle and circulation cycle of commodities. Fixed capital, however, is recovered in its entirety only after n cycles of production and circulation, whose number depends on the longevity of machinery and buildings. As is well known, Marx worked on the hypothesis that the average longevity of machinery (not, of course, buildings) is equivalent to, and indeed determines, the average duration of the trade cycle. It would be a fruitful task for Marxist scholars to deepen our understanding of the role and function of this ‘time dimension’ in Marx’s Capital. For time appears there as the measure of production, value and surplus-value (labour time); as the nexus connecting production, circulation and reproduction of commodities and capital (cycles of turnover and reproduction of capital); as the medium of the laws of motion of capital (trade cycles, cycles of class struggle, long-term historical cycles); and as the very essence of man (leisure time, life span, creative time, time of social intercourse).

The study of the process of circulation of commodities and capital is concerned essentially with metamorphosis – the change from one form to another which we have just mentioned. But this analysis, starting from a high level of abstraction and drawing nearer and nearer to the everyday ‘phenomena’ of capitalist life, itself represents this process of circulation in successive stages of concreteness. First there is the circulation of (money) capital in its most general form as we encountered it in Volume 1:

M–C–M′(M+AM)

Money buys commodities so that they may be sold with an accretion of money – a profit – part of which will be added to the initial money capital.

If we translate this formula into the real operations of the capitalist mode of production, we have to replace C, the commodities bought, with the specific operation of the industrialist, namely, the purchase of means of production and labour-power in order that the labour-power may produce additional value, surplus-value. This combination of means of production and labour-power gives rise, through the process of production, to new commodities embodying additional value which have to be sold to result in the formation of accumulated capital. Thus the initial formula becomes:

Image… production… C′–M′ (M+AM, where AM = accumulated surplus-value)

3. THE DUAL ASPECT OF CAPITAL TURNOVER IN MARX’S ECONOMIC THEORY

Basing himself on the contradiction between use-value and exchange-value inherent in the commodity, Marx considered the problem of turnover of capital, of reproduction, as a dual one:

(a) In order that (at least simple, and normally expanded) reproduction may be achieved, the total value embodied in the produced commodities must be realized, that is to say, they must be sold at their value. Contrary to assumptions made by some of his most astute followers, principally Rudolf Hilferding, Otto Bauer and Nikolai Bukharin, Marx did not regard this process of realization as ‘automatic’; nor did he derive it ‘from his reproduction schemas’, as some have naively suggested.14 Indeed, a substantial section of the final Part of Volume 2, and most of the controversies which have been raging ever since Rosa Luxemburg raised the issue, have turned around a more or less detailed examination of how the value embodied in commodities as represented by the famous reproduction schemas could be realized by purchasing power generated in the production process.

(b) At the same time, at least simple – and normally expanded – reproduction require for their success that the use-value of the commodities produced should fulfil the material conditions for restarting production on either the existing or a broader scale. Reproduction could not take place in a situation where, on a technological base lower than total automation and in the absence of food reserves, the commodity package consisted entirely of raw materials and machinery; the workers and capitalists would starve and disappear before the available machinery could be used to restart agricultural production, or the existing stock of raw materials could be transformed into synthetic food. Similarly, reproduction would be impossible where the entire output of current commodity production, carried out with the large-scale use of sophisticated machinery, was composed of consumer goods and raw materials; if there were no stocks of machinery or spare parts, then machinery and production would break down before the well-fed workers could build new machines out of simple raw materials.

We should add in passing that expanded reproduction, which is ‘the norm’ under capitalism, does not demand merely the existence (i.e. previous production) of use-values representing the necessary objective elements of reproduction (means of production to replace used-up equipment and raw materials; further means of production required to enlarge the scale of operation of material production; consumer goods to feed both already employed workers and additional recruits to the work force). Expanded reproduction also demands the presence of a potential source of additional labour.