means to say that the production of commodities must not develop, if it wishes to remain unadulterated. To the same extent that it continues to develop by its own inherent laws into a capitalist production, the property laws of the production of commodities are converted into the laws of capitalistic appropriation.

We have seen that even in the case of simple reproduction, all capital, whatever its original source, becomes converted into accumulated capital, capitalised surplus-value. But in the flood of production all the capital originally advanced becomes a vanishing quantity (magnitudo evanescens, in the mathematical sense), compared with the directly accumulated capital, i.e., with the surplus-value or surplus product that is reconverted into capital, whether it function in the hands of its accumulator, or in those of others. Hence, political economy describes capital in general as "accumulated wealth" (converted surplus-value or revenue), "that is employed over again in the production of surplus-value," 2 and the capitalist as "the owner of surplus-value." 3 It is merely another way of expressing the same thing to say that all existing capital is accumulated or capitalised interest, for interest is a mere fragment of surplus-value.*

SECTION 2.-ERRONEOUS CONCEPTION BY POLITICAL ECONOMY OF REPRODUCTION ON A PROGRESSIVELY IN

CREASING SCALE.

Before we further investigate accumulation or the reconversion of surplus-value into capital, we must brush on one side an ambiguity introduced by the classical economists.

1 Admire, therefore, the craftiness of Proudhon who wishes to abolish capitalist property by enforcing against it-the eternal property laws of the production of commodities.

"Capital, viz., accumulated wealth employed with a view to profit." (Malthus, 1. c.) "Capital consists of wealth saved from revenue, and used with a view to profit." (R. Jones: An Introductory Lecture on Polit. Econ., Lond., 1833, p. 16.)

"The possessors of surplus produce or capital." (The Source and Remedy of the National Difficulties. A Letter to Lord John Russell. Lond., 1821.)

"Capital, with compound interest on every portion of capital saved, is so all engrossing that all the wealth in the world from which income is derived, has long ago become the interest on capital." (London Economist, 19th July, 1859.)

Just as little as the commodities that the capitalist buys with a part of the surplus-value for his own consumption, serve the purpose of production and of creation of value, so little is the labour that he buys for the satisfaction of his natural and social requirements, productive labour. Instead of converting surplus-value into capital, he, on the contrary, by the purchase of those commodities and that labour, consumes or expends it as revenue. In the face of the habitual mode of life of the old feudal nobility, which, as Hegel rightly says, "consists in consuming what is in hand," and more especially displays itself in the luxury of personal retainers, it was extremely important for bourgeois economy to promulgate the doctrine that accumulation of capital is the first duty of every citizen, and to preach without ceasing, that a man cannot accumulate, if he eats up all his revenue, instead of spending a good part of it in the acquisition of additional productive labourers, who bring in more than they cost. On the other hand the economists had to contend against the popular prejudice, that confuses capitalist production with hoarding,1 and fancies that accumulated wealth is either wealth that is rescued from being destroyed in its existing form, i.e., from being consumed, or wealth that is withdrawn from circulation. Exclusion of money from circulation would also exclude absolutely its self-expansion as capital, while accumulation of a hoard in the shape of commodities would be sheer tomfoolery.2 The accumulation of commodities in great masses is the result either of overproduction or of a stoppage of circulation.3 is true that the popular mind is impressed by the sight, on the one hand, of the mass of goods that are stored up for gradual consumption by the rich, and on the other hand, by the for

It

1 "No political economist of the present day can by saving mean mere hoarding: and beyond this contracted and insufficient proceeding, no use of the term in reference to the national wealth can well be imagined, but that which must arise from a different application of what is saved, founded upon a real distinction between the different kinds of labour maintained by it." (Malthus, 1. c., p. 38, 39.)

2 Thus for instance, Balzac, who so thoroughly studied every shade of avarice, represents the old usurer Gobsec as in his second childhood when he begins to heap up a hoard of commodities.

In this sense Necker speaks of the "objets de faste et de somptuosité," of which

mation of reserve stocks; the latter, a phenomenon that is common to all modes of production, and on which we shall dwell for a moment, when we come to analyse circulation. Classical economy is therefore quite right, when it maintains that the consumption of surplus-products by productive, instead of by unproductive labourers, is a characteristic feature of the process of accumulation. But at this point the mistakes also begin. Adam Smith has made it the fashion, to represent accumulation as nothing more than consumption of surplusproducts by productive labourers, which amounts to saying, that the capitalising of surplus-value consists in merely turning surplus-value into labour-power. Let us see what Ricardo e.g., says: "It must be understood that all the productions of a country are consumed; but it makes the greatest difference imaginable whether they are consumed by those who reproduce, or by those who do not reproduce another value. When we say that revenue is saved, and added to capital, what we mean is, that the portion of revenue, so said to be added to capital, is consumed by productive instead of unproductive labourers. There can be no greater error than in supposing that capital is increased by non-consumption." 1 There can be no greater error than that which Ricardo and all subsequent economists repeat after A. Smith, viz., that "the part of revenue, of which it is said, it has been added to capital, is consumed by productive labourers." According to this, all surplus-value that is changed into capital becomes variable capital. So far from this being the case, the surplus-value, like the original capital, divides itself into constant capital and variable capital, into means of production and labour-power. Labour-power is the form under which variable capital exists during the process of production. In this process the labourpower is itself consumed by the capitalist while the means of production are consumed by the labour-power in the exercise of its function, labour. At the same time, the money paid for the purchase of the labour-power, is converted into necessaries,

"le temps a grossi l'accumulation," and which "les lois de propriété ont rassemblés dans une seule classe de la société." (Oeuvres de M. Necker, Paris and Lausanne, 1789, t. ii. p. 291.)

1 Ricardo, 1. c., p. 163, note.

that are consumed, not by "productive labour," but by the "productive labourer." Adam Smith, by a fundamentally perverted analysis, arrives at the absurd conclusion, that even though each individual capital is divided into a constant and a variable part, the capital of society resolves itself only into variable capital, i.e., is laid out exclusively in payment of wages. For instance, suppose a cloth manufacturer converts £2000 into capital. One portion he lays out in buying weavers, the other in woollen yarn, machinery, &c. But the people, from whom he buys the yarn and the machinery, pay for labour with a part of the purchase money, and so on until the whole £2000 are spent in the payment of wages, i.e., until the entire product represented by the £2000 has been consumed by productive labourers. It is evident that the whole gist of this argument lies in the words "and so on," which send us from pillar to post. In truth, Adam Smith breaks his investigation off, just where its difficulties begin.1

The annual process of reproduction is easily understood, so long as we keep in view merely the sum total of the year's production. But every single component of this product must be brought into the market as a commodity, and there the difficulty begins. The movements of the individual capitals, and of the personal revenues, cross and intermingle and are lost in the general change of places, in the circulation of the wealth of society; this dazes the sight, and propounds very complicated problems for solution. In the third part of Book II. I shall give the analysis of the real bearings of the facts. It is one of the great merits of the Physiocrats, that in their Tableau économique they were the first to attempt to depict the annual production in the shape in which it is presented to us after passing through the process of circulation.2

In spite of his "Logic," John St. Mill never detects even such faulty analysis as this when made by his predecessors, an analysis which, even from the bourgeois standpoint of the science, cries out for rectification. In every case he registers with the dogmatism of a disciple, the confusion of his master's thoughts. So here: "The capital itself in the long run becomes entirely wages, and when replaced by the sale of produce becomes wages again."

In his description of the process of reproduction, and of accumulation, Adam Smith, in many ways, not only made no advance, but even lost considerable ground, compared with his predecessors, especially the Physiocrats. Connected with the

For the rest, it is a matter of course, that political economy, acting in the interests of the capitalist class, has not failed to exploit the doctrine of Adam Smith, viz., that the whole of that part of the surplus product which is converted into capital, is consumed by the working class.

SECTION 3.-SEPARATION OF SURPLUS-VALUE INTO CAPITAL' AND REVENUE. THE ABSTINENCE THEORY.

In the last preceding chapter, we treated surplus-value (or the surplus product) solely as a fund for supplying the individual consumption of the capitalist. In this chapter we have, so far treated it solely as a fund for accumulation. It is, however, neither the one nor the other, but is both together. One portion is consumed by the capitalist as revenue,1 the other is employed as capital, is accumulated.

Given the mass of surplus-value, then, the larger the one of these parts, the smaller is the other. Cæteris paribus, the ratio of these parts determines the magnitude of the accumulation. But it is by the owner of the surplus-value, by the capitalist alone, that the division is made. It is his deliberate act. That part of the tribute exacted by him which he accumulates, is said to be saved by him, because he does not eat it, i.e., because he performs the function of a capitalist, and enriches himself.

Except as personified capital, the capitalist has no historical value, and no right to that historical existence, which, to use an expression of the witty Lichnowsky, "hasn't got no date,"

illusion mentioned in the text, is the really wonderful dogma, left by him as an inheritance to political economy, the dogma, that the price of commodities is made up of wages, profit (interest) and rent, i.e., of wages and surplus-value. Starting from this basis, Storch naively confesses, "Il est impossible de résoudre le prix nécessaire dans ses éléments les plus simples." (Storch, 1. c. Petersb. Edit. 1815, t. i. p. 140, note.) A fine science of economy this, which declares it impossible to resolve the price of a commodity into its simplest elements! This point will be further investigated in the seventh part of Book iii.

1 The reader will notice, that the word revenue is used in a double sense: first, to designate surplus-value so far as it is the fruit periodically yielded by capital; secondly, to designate the part of that fruit which is periodically consumed by the capitalist, or added to the fund that supplies his private consumption. I have retained this double meaning because it harmonises with the language of the English and French economists.