Theadditionalcapitalwhichisthusreplacedbelongstothecirculatingcapital，althoughthemannerofitsexpenditureisirregular。Asitisofparamountimportancetoremedyeverydamagetomachineryimmediately，everycomparativelylargefactoremploysinadditiontotheregularfactoryforcespecialpersonnel——engineers，carpenters，mechanics，locksmiths，etc。Theirwagesareapartofthevariablecapitalandthevalueoftheirlabourisdistributedovertheproduct。Ontheotherhandtheexpensesformeansofproductionarecalculatedonthebasisoftheabove-mentionedaverage，accordingtowhichtheyformcontinuallyapartofthevalueoftheproduct，althoughtheyareactuallyadvancedinirregularperiodsandthereforeenterintotheproductorthefixedcapitalinirregularperiods。
Thiscapital，expendedinrepairsproperlysocalled，isinmanyrespectsacapitalsuigeneris，whichcanbeclassedneitherascirculatingnorasfixedcapital，butbelongswithgreaterjustificationtotheformer，sinceitfiguresamongtherunningexpenses。
Themannerofbook-keepingdoesnotofcoursechangeinanywaytheactualstateofaffairsbooked。Butitisimportanttonotethatcustomarilymanylinesofbusinessfigurethecostsofrepairstogetherwiththeactualwearandtearofthefixedcapitalinthefollowingmanner:Lettheadvancedfixedcapitalbe£；10，000anditsdurability15years。Theannualwearandtearisthen£；6662/3。Butthedepreciationiscalculatedonadurabilityofonlytenyears；inotherwords，£；1，000areaddedannuallytothepriceoftheproducedcommoditiesforwearandtearofthefixedcapital，insteadof£；6662/3。Thus£；3331/3arere-servedforrepairs，etc。Thefigures10and15arechosenonlybywayofillustration。
Thisamountisspentonanaverageforrepairs，sothatthefixedcapitalmaylast15years。Suchacalculationnaturallydoesnotpreventthefixedcapitalandtheadditionalcapitalspentonrepairsfrombelongingtodifferentcategories。Onthestrengthofthismodeofcalculationitwasassumedforinstancethatthelowestcostestimateforthemaintenanceandreplacementofsteamshipswas15percentannuallythetimeofreproductionbeingtherefore62/3years。Inthesixties，theEnglishgovernmentindemnifiedthePeninsularandOrientalCo。attheannualrateof16percent，correspondingtoareproductiontimeof61/4years。Onrailwaystheaveragelifeofalocomotiveis10
years，butthedepreciation，countinginrepairsistakenas121/2percent，whichbringsdownitsdurabilityto8years。Inthecaseofpassengerandgoodscars，theestimateis9percent，oradurabilityof111/9years。
Legislationhaseverywheredrawnadistinction，inleasesofhousesandotherobjectswhichrepresentfixedcapitaltotheirownersandareleasedassuch，betweennormaldepreciation，whichistheresultoftime，theactionoftheelements，andnormalwearontheonehandandontheotherthoseoccasionalrepairswhicharerequiredfromtimetotimeformaintenanceduringthenormallifeofthehouseandduringitsnormaluse。
Asarule，theformerarebornebytheowner，thelatterbythetenant。
Repairsarefurtherdividedintoordinaryandsubstantialones。Thelast-namedarepartlyarenewalofthefixedcapitalinitsbodilyform，andtheyfalllikewiseontheshouldersoftheowner，unlesstheleaseexplicitlystatesthecontrary。TakeforinstancetheEnglishlaw:”Atenantfromyeartoyear，ontheotherhand，isnotboundtodomorethankeepthepremiseswindandwatertight，whenthatcanbedonewithout`substantial’
repairs；andgenerallytodorepairscomingfairlyunderthehead`ordinary。’
Evenwithrespecttothosepartsofthepremiseswhicharethesubjectof`ordinary’repairs，regardmustbehadtotheirageandgeneralstate，andcondition，whenhetookpossession，forheisnotboundtoreplaceoldandworn-outmaterialswithnewones，nortomakegoodtheinevitabledepreciationresultingfromtimeandordinarywearandtear。”Holdsworth，LawofLandlordandTenant，pp。90and91。
Entirelydifferentfromthereplacementofwearandtearandfromtheworkofmaintenanceandrepairisinsurance，whichrelatestodestructioncausedbyextraordinaryphenomenaofnature，fire，flood，etc。
Thismustbemadegoodoutofthesurplus-valueandisadeductionfromit。Or，consideredfromthepointofviewofsocietyasawhole，theremustbecontinuousover-production，thatis，productiononalargerscalethanisnecessaryforthesimplereplacementandreproductionoftheexistingwealth，quiteapartfromtheincreaseinpopulation，soastobeinpossessionofthemeansofproductionrequiredtocompensatefortheextraordinarydestructioncausedbyaccidentsandnaturalforces。
Inpointoffactonlythesmallestpartofthecapitalneededforreplacementconsistsofthemoneyreservefund。Themostsubstantialpartconsistsintheextensionofthescaleofproductionitself，whichpartlyisactualexpansionandpartlybelongstothenormalvolumeofproductioninthosebranchesofindustrywhichproducethefixedcapital。Forinstanceamachinefactorymustarrangethingssothatthefactoriesofitscustomerscanannuallybeextendedandthatanumberofthemwillalwaysstandinneedoftotalorpartialreproduction。
Ondeterminingthewearandtearaswellasthecostsofrepairs，accordingtothesocialaverage，greatdisparitynecessarilyappears，eveninthecaseofcapitalinvestmentsofequalsize，operatingotherwiseunderequalconditionsandinthesamebranchofindustry。Inpracticeamachine，etc。，lastswithonecapitalistlongerthantheaverageperiod，whilewithanotheritdoesnotlastsolong。Withtheonethecostsofrepairsareabove，withtheotherbelowaverage，etc。Buttheadditiontothepriceofthecommoditiesresultingfromwearandtearandfromcostsofrepairsisthesameandisdeterminedbytheaverage。Theonethereforegetsmoreoutofthisadditionalpricethanhereallyadded，theotherless。Thiscircumstanceaswellasallotherswhichresultindifferentgainsfordifferentcapitalistsinthesamelineofbusinesswiththesamedegreeofexploitationoflabour-powertendstoenhancethedifficultyofunderstandingthetruenatureofsurplus-value。
Thelinebetweenrepairsproperandreplacement，betweencostsofmaintenanceandcostsofrenewal，isratherflexible。Hencetheeternaldispute，forinstanceinrailroading，whethercertainexpensesareforrepairsorforreplacement，whethertheymustbedefrayedfromcurrentexpendituresorfromtheoriginalstock。Atransferofexpensesforrepairstocapitalaccountinsteadofrevenueaccountisthefamiliarmethodbywhichrailwayboardsofdirectorsartificiallyinflatetheirdividends。
However，experiencehasalreadyfurnishedthemostimportantcluesforthis。AccordingtoLardner，thesubsequentlabourrequiredduringtheearlylifeofarailwayforexample”oughtnottobedenominatedrepairs，butshouldbeconsideredasanessentialpartoftheconstructionoftherailway，andinthefinancialaccountsshouldbedebitedtocapital，andnottorevenue，notbeingexpensesduetowearandtear，ortothelegitimateoperationofthetraffic，buttotheoriginalandinevitableincompletenessoftheconstructionoftheline。”Lardner，loc。cit。，p。40。”Theonlysoundwayistochargeeachyear’srevenuewiththedepreciationnecessarilysufferedtoearntherevenue，whethertheamountisactuallyspentornot。”
CaptainFitzmaurice，”CommitteeofInquiryonCaledonianRailway，”publishedinMoneyMarketReview，1867。
Theseparationofthereplacementandmaintenanceoffixedcapitalbecomepracticallyimpossibleandpurposelessinagriculture，atleastwhennotoperatedbysteam。AccordingtoKirchhofHandbuchdelandwirtschaftlichenBetriebslehre，Dresden，1852，p。137，”whereverthereisacomplete，thoughnotexcessive，supplyofimplementsofagriculturalandotherimplementsandfarmappliancesofeverydescriptionitisthecustomtoestimatetheannualwearandtearandmaintenanceoftheimplements，accordingtothedifferentexistingconditions，atageneralaverageof15to25percentoftheoriginalstock。”
Inthecaseoftherollingstockofarailway，repairsandreplacementcannotbeseparatedatall。”Wemaintainourstockbynumber。Whatevernumberofengineswehavewemaintainthat。Ifoneisdestroyedbyage，anditisbettertobuildanewone，webuilditattheexpenseofrevenue，ofcourse，takingcreditforthematerialsoftheoldoneasfarastheygo……thereisagreatdealleft；therearethewheels，theaxles，theboilers，andinfactagreatdealoftheoldengineisleft。”T。Gooch，ChairmanofGreatWesternRailwayCo。，R。C。onRailways，p。858，Nos。
17327-17329。”……Repairingmeansrenewing；Idonotbelieveinthewordreplacement……；oncearailwaycompanyhasboughtavehicleoranengine，itoughttoberepaired，andinthatwayadmitofgoingonforever。”No。
17784。”……Theenginesaremaintainedforeveroutofthis81/2d。
Werebuildourengines。Ifyoupurchaseanengineentirelyitwouldbespendingmoremoneythanisnecessary……yetthereisalwaysapairofwheelsoranaxleorsomeportionoftheenginewhichcomesin，andhenceitcheapensthecostofproducingapracticallynewengine。”No。
17790。”Iamatthismomentturningoutanewengineeveryweek，orpracticallyanewengine，forithasanewboiler，cylinder，orframing。”No。17823。
ArchibaldSturrock，LocomotiveSuperintendentofGreatNorthernRailway，inR。C。，1867。
Thesamewithcoaches:”Inthecourseoftimethestockofenginesandvehiclesiscontinuallyrepaired。Newwheelsareputonatonetime，andanewbodyatanother。Thedifferentmovingpartsmostsubjecttoweararegraduallyrenewed；andtheenginesandvehiclesmaybeconceivedeventobesubjecttosuchasuccessionofrepairs，thatinmanyofthemnotavestigeoftheoriginalmaterialsremains……Eveninthiscase，however，theoldmaterialsofcoachesorenginesaremoreorlessworkedupintoothervehiclesorengines，andnevertotallydisappearfromtheroad。Themovablecapitalthereforemaybeconsideredtobeinastateofcontinualreproduction；andthatwhich，inthecaseofthepermanentway，musttakeplacealtogetheratafutureepoch，whentheentireroadwillhavetoberelaid，takesplaceintherollingstockgraduallyfromyeartoyear。Itsexistenceisperennial，anditisinaconstantstateofrejuvenescence。”
Lardner，op。cit。，pp。115-16。
Thisprocess，whichLardnerheredescribesrelativetoarailway，doesnotfitthecaseofanindividualfactory，butmaywellserveasanillustrationofcontinuous，partialreproductionoffixedcapitalintermingledwithrepairswithinanentirebranchofindustryorevenwithintheaggregateproductionconsideredonasocialscale。
Hereisproofofthelengthstowhichadroitboardsofdirectorsmaygoinmanipulatingthetermsrepairsandreplacementforthepurposeofextractingdividends。Accordingtotheabove-quotedpaperreadbyR。
P。Williams，variousEnglishrailwaycompanieswroteoffthefollowingsumsfromtherevenueaccount，asaveragesoveranumberofyears，forrepairsandmaintenanceofthepermanentwayandbuildingsperEnglishmileoftrackannually。
London&；NorthWestern……
£；370
Midland……£；225
London&；SouthWestern……£；257
GreatNorthern……£；360
Lancashire&；Yorkshire……£；377
SouthEastern……£；263
Brighton……£；266
Manchester&；Sheffield……£；200
Thesedifferencesariseonlytoaveryminordegreefromdifferencesintheactualexpenses；theyareduealmostexclusivelytodifferentmethodsofcalculation，accordingtowhetheritemsofexpensesaredebitedtothecapitalortherevenueaccount。Williamssayssoinsomanywordsthatalesserchargeisbookedbecausethisisnecessaryforagooddividend，andahigherchargeisbookedbecausethereisagreaterrevenuewhichcanbearit。
Incertaincasesthewearandtear，andthereforeitsreplacement，ispracticallyinfinitesimalsothatnothingbutcostsofrepairshavetobecharged。Lardner’sstatementsbelowrelativetoworksofartinrailroadingapplyingeneraltoallsuchdurablestructuresasdocks，canals，ironandstonebridges，etc。”Thatwearandtearwhich，beingduetotheslowoperationoftimeactinguponthemoresolidstructures，producesaneffectaltogetherinsensiblewhenobservedthroughshortperiods，butwhich，afteralongintervaloftime，such，forexample，ascenturies，mustnecessitatethereconstructionofsomeorallevenofthemostsolidstructures。Thesechangesmaynotunaptlybeassimilatedtotheperiodicalandsecularinequalitieswhichtakeplaceinthemovementsofthegreatbodiesoftheuniverse。
Theoperationoftimeuponthemoremassiveworksofartupontherailway，suchasthebridges，tunnels，viaducts，etc。，affordexamplesofwhatmaybecalledthesecularwearandtear。Themorerapidandvisibledeterioration，whichismadegoodbyrepairsorreconstructioneffectedatshorterintervals，isanalogoustotheperiodicinequalities。Intheannualrepairsisincludedthecasualdamagewhichtheexteriorofthemoresolidanddurableworksmayfromtimetotimesustain；but，independentlyoftheserepairs，ageproducesitseffectsevenonthesestructures，andanepochmustarrive，howeverremoteitbe，atwhichtheywouldbereducedtoastatewhichwillnecessitatetheirreconstruction。Forfinancialandeconomicpurposessuchanepochisperhapstooremotetorenderitnecessarytobringitintopracticalcalculation，andthereforeitneedhereonlybenoticedinpassing。”
Lardner，loc。cit。，pp。，38，39。
Thisappliestoallsimilarstructuresofsecularduration，inwhichcasesthereforethecapitaladvancedneednotbegraduallyreplacedcommensuratewiththeirwearandtear，butonlytheannualaveragecostsofmaintenanceandrepairneedbetransferredtothepricesoftheproduct。
Although，aswehaveseen，agreaterpartofthemoneyreturningforthereplacementofthewearandtearofthefixedcapitalisannually，oreveninshorterintervals，reconvertedintoitsbodilyform，neverthelesseverysinglecapitalistrequiresasinkingfundforthatpartofhisfixedcapitalwhichfallsdueforreproductiononlyafteralapseofyearsbutmustthenbeentirelyreplaced。Aconsiderablecomponentpartofthefixedcapitalprecludesgradualreproductionbecauseofitspeculiarproperties。
Besides，incaseswherethereproductiontakesplacepiecemealinsuchawaythatatshortintervalsnewstockisaddedtothedepreciatedoldstock，apreviousaccumulationofmoneyofagreaterorsmalleramount，dependingonthespecificcharacterofthebranchofindustry，isnecessarybeforethereplacementcanbeeffected。Notjustanysumofmoneywillsufficeforthispurpose；adefiniteamountisneeded。
Ifwestudythisquestionontheassumptionofsimplecirculationofmoney，withoutregardtothecreditsystem，ofwhichweshalltreatlater，[ThecapitalistcreditsystemistreatedinpartsIVandVofthethirdvolumeofCapital——Ed。]thenthemechanismofthismovementisasfollows:ItwasshownBuchI，Kap。III，3a[Englishedition:Ch。
III，3a，——Ed。]thattheproportioninwhichtheaggregatemassofmoneyisdistributedoverahoardandmeansofcirculationvariessteadily，ifonepartofthemoneyavail-ableinsocietyconstantlyliesfallowasahoard，whileanotherper-formsthefunctionsofamediumofcirculationorofanimmediatereservefundofthedirectlycirculatingmoney。Nowinourcasemoneythatmustbeaccumulatedasahoardinthehandsofarelativelybigcapitalistinratherlargeamountsisthrownallatonceintocirculationonthepurchaseofthefixedcapital。Itthendividesagaininsocietyintomediumofcirculationandhoard。Bymeansofthesinkingfund，inwhichthevalueofthefixedcapitalflowsbacktoitsstarting-pointinproportiontoitswearandtear，apartofthecirculatingmoneyagainformsahoard，foralongerorshorterperiod，inthehandsofthesamecapitalistwhosehoardhad，uponthepurchaseofthefixedcapital，beentransformedintoamediumofcirculationandpassedawayfromhim。Itisacontinuallychangingdistributionofthehoardwhichexistsinsocietyandalternatelyfunctionsasamediumofcirculationandthenisseparatedagain，asahoard，fromthemassofthecirculatingmoney。Withthedevelopmentofthecreditsystem，whichnecessarilyrunsparallelwiththedevelopmentofmodernindustryandcapitalistproduction，thismoneynolongerservesasahoardbutascapital；howevernotinthehandsofitsownerbutofothercapitalistsatwhosedisposalithasbeenplaced。
NOTES
[20]Onaccountofthedifficultyofdeterminingwhatisfixedandwhatcirculatingcapital，HerrLorenzSteinthinksthatthisdistinctionismeantonlytofacilitatethetreatmentofthesubject。
[21]EndofManuscriptIV，beginningofManuscriptII——Ed。
[22]ThequotationsmarkedR。C。arefrom:RoyalCommissiononRail-ways。MinutesofEvidencetakenbeforetheCommissioners。PresentedtobothHousesofParliament，London，1867。
Thequestionsandanswersarenumberedandthenumbersgivenhere。
1885:CapitalII——Chapter9
partII
THETURNOVEROFCAPITAL
CHAPTERIX
THEAGGREGATETURNOVEROFADVANCEDCAPITAL，CYCLESOFTURNOVERWehaveseenthatthefixedandcirculatingcomponentpartsofproductivecapitalareturnedoverinvariouswaysandatvariousperiods，alsothatthedifferentconstituentsofthefixedcapitalofabusinesshavedifferentperiodsofturnover，dependingontheirdifferentdurabilitiesandthereforeontheirdifferenttimesofreproduction。Ontherealorapparentdifferenceintheturnoverofdifferentconstituentsofcirculatingcapitalinthesamebusiness，seethecloseofthischapter，under6。
1Theaggregateturnoverofanadvancedcapitalistheaverageturnoverofitsvariousconstituentparts；themodeofitscalculationisgivenlater。Inasmuchasitismerelyaquestionofdifferentperiodsoftime，nothingiseasierthantocomputetheiraverage。But2Wehaveherenotalonequantitativebutalsoqualitativedifference。
Thecirculatingcapitalenteringintotheprocessofproductiontransfersitsentirevaluetotheproductandmustthereforebecontinuallyreplacedinkindbythesaleoftheproduct，iftheprocessofproductionistoproceedwithoutinterruption。Thefixedcapitalenteringintotheprocessofproductiontransfersonlyapartofitsvaluethewearandteartotheproductanddespitethiswearandtearcontinuesfunctioningintheprocessofproduction。Thereforeitneednotbereplacedinkinduntilthelapseofintervalsofvariousduration，atanyratenotasfrequentlyasthecirculatingcapital。Thisnecessityofreplacement，thereproductionterm，isnotonlyquantitativelydifferentforthevariousconstituentpartsoffixedcapital，but，aswehaveseen，apartoftheperennialfixedcapital，thatwhichlastslonger，maybereplacedannuallyoratshorterintervalsandaddedinkindtotheoldfixedcapital。Inthecaseoffixedcapitalofdifferentpropertiesthereplacementcantakeplaceonlyallatonceattheendofitsperiodofdurability。
Itisthereforenecessarytoreducethespecificturnoversofthevariouspartsoffixedcapitaltoahomogeneousformofturnover，sothattheywillremaindifferentonlyquantitatively，namely，accordingtodurationofturnover。
Thequalitativeidentitydoesnotcomeaboutifwetakeasourstarting-pointP……P，theformofthecontinuousprocessofproduction。
FordefiniteelementsofPmustbeconstantlyreplacedinkindwhileothersneednot。HowevertheformM……Mundoubtedlyyieldsthisidentityofturnover。Takeforinstanceamachineworth£；10，000，whichlaststenyearsofwhichone-tenth，or£；1，000，isannuallyreconvertedintomoney。These£；1，000havebeenconvertedinthecourseofoneyearfrommoney-capitalintoproductivecapitalandcommodity-capital，andthenreconvertedfromthisintomoney-capital。Theyhavereturnedtotheiroriginalform，themoney-form，justlikethecirculatingcapital，ifwestudythelatterinthisform，anditisimmaterialwhetherthismoney-capitalof£；1，000isoncemoreconvertedattheendoftheyearintothebodilyformofamachineornot。Incalculatingtheaggregateturnoveroftheadvancedproductivecapitalwethereforefixallitselementsinthemoney-form，sothatthereturntothatformconcludestheturnover。
Weassumethatvalueisalwaysadvancedinmoney，eveninthecontinuousprocessofproduction，wherethismoney-formofvalueisonlythatofmoneyofaccount。Thuswecancomputetheaverage。
3Itfollowsthatevenifbyfarthegreaterpartoftheadvancedproductivecapitalconsistsoffixedcapitalwhoseperiodofreproduction，hencealsoofturnover，comprisesacycleofmanyyears，thecapital-valueturnedoverduringtheyearmay，onaccountoftherepeatedturnoversofthecirculatingcapitalwithinthesameyear，belargerthantheaggregatevalueoftheadvancedcapital。
Supposethefixedcapitalis£；80，000anditsperiodofreproduction10years，sothat£；8，000ofitannuallyreturntotheirmoney-form，oritcompletesone-tenthofitsturnover。Supposefurtherthecirculatingcapitalis£；20，000，anditsturnoveriscompletedfivetimesperyear。Thetotalcapitalwouldthenbe£；100，000。Theturned-overfixedcapitalis£；8，000，theturned-overcirculatingcapitalfivetimes£；20，000，or£；100，000。Thenthecapitalturnedoverduringoneyearis£；108，000，or£；8，000morethantheadvancedcapital。
12/25ofthecapitalhavebeenturnedover。
4Thereforetheturnovertimeofthevalueoftheadvancedcapitaldiffersfromitsactualtimeofreproductionorfromtheactualtimeofturnoverofitscomponentparts。Takeforinstanceacapitalof£；4，000andletitturnover，say，fivetimesayear。Theturned-overcapitalisthenfivetimes£；4，000，or£；20，000。Butwhatreturnsattheendofeachturnovertobeadvancedanewistheoriginallyadvancedcapitalof£；4，000。Itsmagnitudeisnotchangedbythenumberofturnoverperiods，duringwhichitperformsanewitsfunctionsascapital。
Apartfromsurplus-value。
IntheillustrationunderNo。3，then，thesumsassumedlyreturnedintothehandsofthecapitalistattheendofoneyearareaasumofvalueamountingto£；20，000whichheinvestsagaininthecirculatingconstituentsofthecapital，andbasumof£；8，000whichhasbeensetfreebywearandtearfromthevalueoftheadvancedfixedcapital；
simultaneouslythissamefixedcapitalremainsintheprocessofproduction，butwiththereducedvalueof£；72，000insteadof£；80，000。Theprocessofproductionthereforewouldhavetobecontinuedfornineyearsmore，beforetheadvancedfixedcapitaloutliveditstermandceasedtofunctionasacreatorofproductsandvalues，sothatitwouldhavetobereplaced。Theadvancedcapital-value，then，hastopassthroughacycleofturnovers，inthepresentcaseacycleoftenannualones，andthiscycleisdeterminedbythelife，hencethereproductionorturnovertimeoftheappliedfixedcapital。
Asthemagnitudeofthevalueandthedurabilityoftheappliedfixedcapitaldevelopwiththedevelopmentofthecapitalistmodeofproduction，thelifetimeofindustryandofindustrialcapitallengthensineachparticularfieldofinvestmenttoaperiodofmanyyears，sayoftenyearsonanaverage。
Whereasthedevelopmentoffixedcapitalextendsthelengthofthislifeontheonehanditisshortenedontheotherbythecontinuousrevolutioninthemeansofproduction，whichlikewiseincessantlygainsmomentumwiththedevelopmentofthecapitalistmodeofproduction。Thisinvolvesachangeinthemeansofproductionandthenecessityoftheirconstantreplacement，onaccountofmoraldepreciation，longbeforetheyexpirephysically。Onemayassumethatintheessentialbranchesofmodernindustrythislife-cyclenowaveragestenyears。Howeverwearenotconcernedherewiththeexactfigure。Thismuchisevident:thecycleofinterconnectedturnoversembracinganumberofyears，inwhichcapitalisheldfastbyitsfixedconstituentpart，furnishesamaterialbasisfortheperiodiccrises。Duringthiscyclebusinessundergoessuccessiveperiodsofdepression，mediumactivity，precipitancy，crisis。True，periodsinwhichcapitalisinvesteddiffergreatlyandfarfromcoincideintime。Butacrisisalwaysformsthestarting-pointoflargenewinvestments。Therefore，fromthepointofviewofsocietyasawhole，moreorless，anewmaterialbasisforthenextturnovercycle。[22a]
5Onthewaytocalculatetheturnovers，anAmericaneconomiststates:”Insometradesthewholecapitalembarkedisturnedorcirculatedseveraltimeswithintheyear。Inothersapartisturnedoftenerthanonceayear，anotherpartlessoften。Itistheaverageperiodwhichhisentirecapitaltakesinpassingthroughhishands，ormakingonerevolution，fromwhichacapitalistmustcalculatehisprofits。Supposeforexamplethatapersonengagedinaparticularbusinesshasonehalfofhiscapitalinvestedinbuildingsandmachinery；soastobeturnedonlyonceintenyears；thatone-fourthmore，thecostofhistools，etc。，isturnedonceintwoyears；andtheremainingfourth，employedinpayingwagesandpurchasingmaterial，isturnedtwiceinoneyear。Saythathisentirecapitalis$50，000。
Thenhisannualexpenditurewillbe，$25，000:10=$2，500
12，500:2=6，500
12，500x2=25，000——
$33，750……themeanterminwhichhiscapitalisturnedbeingaboutsixteenmonths[InthemanuscriptMarxpointsoutthefallacyofsuchamethodofcalculatingtheperiodoftheturnoverofcapital。Themeantermofturnover16monthsgiveninthequotationwascalculatedwithaccounttakenofaprofitof7。5percentontheaggregatecapitalof$50，000。
Profitdiscounting，theturnoverofcapitalisequalto18months——Ed。]……Takeanothercase，……saythatone-fourthoftheentirecapitalcirculatesintenyears，one-fourthinoneyear，andonehalftwiceintheyear。Thentheannualexpenditurewillbe，$12，500
:10=$1，250
12，500
=12，500
25，000
x2=50，000——
Turnedoverin1year$63，750
Scrope，Pol。Econ。，edit。AlonzoPotter，NewYork，1841，pp。142，143。[ThebookreferredtoisA。Potter’sPoliticalEconomy，ItsObjects，Uses，andPrinciples，NewYork，1840。Accordingtotheauthor’s”Advertisement”，thesecondpartofthebookissubstantiallyareprintwithmanyalterationsmadebyA。PotterofG。J。P。Scrope’sThePrinciplesofPoliticalEconomy，London，1833——Ed。]
6Realandapparentdifferencesintheturnoverofthevariouspartsofcapital。
ThesameScropesaysinthesamepassage:”Thecapitallaidoutbyamanufacturer，farmer，ortradesmaninthepaymentofhislabourer’swages，circulatesmostrapidly，beingturnedperhapsonceaweekifhismenarepaidweekly，bytheweeklyreceiptsonhisbillsorsales。Thatinvestedinhismaterialsandstockinhandcirculateslessquickly，beingturnedperhapstwice，perhapsfourtimesintheyear，accordingtothetimeconsumedbetweenhispurchasesoftheoneandsalesoftheother，supposinghimtobuyandsellonequalcredits。Thecapitalinvestedinhisimplementsandmachinerycirculatesstillmoreslowly，beingturned，thatis，consumedandrenewed，ontheaverage，perhapsbutonceinfiveortenyears；thoughtherearemanytoolsthatarewornoutinonesetofoperations。Thecapitalwhichisembarkedinbuildings，asmills，shops，warehouses，barns，inroads，irrigation，etc。，mayappearscarcelytocirculateatall。But，intruth，thesethingsare，tothefull，asmuchasthosewehaveenumerated，consumedincontributingtoproduction，andmustbereproducedinordertoenabletheproducertocontinuehisoperations；
withthisonlydifference，thattheyareconsumedandreproducedbyslowerdegreesthantherest……andthecapitalinvestedinthemmaybeturnedperhapseverytwentyoffiftyyears。”[Pp。141-42。]
Scropeconfusesherethedifferenceintheflowofcertainpartsofthecirculatingcapital，broughtaboutfortheindividualcapitalistbytermsofpaymentandconditionsofcredit，withthedifferenceintheturnoversduetothenatureofcapital。Hesaysthatwagesmustbepaidweeklyoutoftheweeklyreceiptsfrompaidsalesorbills。Itmustbenotedhereinthefirstplacethatcertaindifferencesoccurrelativetowagesthemselves，dependingonthelengthofthetermofpayment，thatis，thelengthoftimeforwhichthelabourermustgivecredittothecapitalist，whetherwagesarepayableeveryweek，month，threemonths，sixmonths，etc。Inthiscase，thelawexpoundedbefore，holdsgood，totheeffectthat”thequantityofthemeansofpaymentrequiredforallperiodicalpayments”henceofthemoney-capitaltobeadvancedatonetime”isininverse[Thisisevidentlyaslipofthepen，theproportionbeingdirectandnotinverse——Ed。]proportiontothelengthoftheirperiods。”
BuchI，Kap。III，3b，Seite124。[Englishedition:Ch。III，3b，p。141——
Ed。]
Inthesecondplace，itisnotonlythenewvalueaddedintheprocessofproductionbytheweek’slabourwhichenterscompletelyintotheweeklyproduct，butalsothevalueoftherawandauxiliarymaterialsconsumedbytheweeklyproduct。Thisvaluecirculateswiththeproductcontainingit。Itassumestheformofmoneythroughthesaleoftheproductandmustbereconvertedintothesameelementsofproduction。Thisappliesasmuchtothelabour-powerastotherawandauxiliarymaterials。ButwehavealreadyseenChapterVI，II，1thatcontinuityofproductionrequiresasupplyofmeansofproductiondifferentfordifferentbranchesofindustry，anddifferentwithinoneandthesamebranchofbusinessfordifferentcomponentpartsofthiselementofthecirculatingcapital，forinstance，forcoalandcotton。Hence，althoughthesematerialsmustbecontinuallyreplacedinkind，theyneednotalwaysbeboughtanew。Thefrequencyofpurchasesdependsonthesizeoftheavailablestock，onthetimeittakestoexhaustit。Inthecaseoflabour-powerthereisnosuchstoringofasupply。Thereconversionintomoneyofthepartofcapitallaidoutinlabour-powergoeshandinhandwiththatofthecapitalinvestedinrawandauxiliarymaterials。Butthereconversionofthemoney，ontheonehandintolabour-power，ontheotherintorawmaterials，proceedsseparatelyonaccountofthespecialtermsofpurchaseandpaymentofthesetwoconstituents，oneofthembeingboughtasaproductivesupplyforlongperiods，theother，labour-power，forshorterperiods，forinstanceaweek。Ontheotherhandthecapitalistmustkeepastockoffinishedcommoditiesbesidesastockofmaterialsforproduction。Letusleavesalesdifficultiesaside。Acertainquantityofgoodsmustbeproduced，say，onorder。Whilethelastportionofthislotisbeingproduced，thefinishedproductsarewaitinginthewarehouseuntiltheordercanbecompletelyfilled。Otherdifferencesintheturnoverofcirculatingcapitalarisewheneversomeofitsseparateelementsmuststayinsomepreliminarystageoftheprocessofproductiondryingofwood，etc。longerthanothers。
Thecreditsystem，towhichScropehererefers，aswellascommercialcapital，modifiestheturnoverfortheindividualcapitalist。Onasocialscaleitmodifiestheturnoveronlyinsofarasitdoesnotacceleratemerelyproductionbutalsoconsumption。
NOTES
[22a]”Urbanproductionisboundtoacycleofdays，ruralproductiononthecontrarytooneofyears。”AdamG。Mü；ller，DieElementederStaatskunst，Berlin，1809，III，p。178。thisisthenaiveconceptionofindustryandagricultureheldbytheromanticschool。
1885:CapitalII——Chapter10
partII
THETURNOVEROFCAPITAL
CHAPTERX
THEORIESOFFIXEDANDCIRCULATINGCAPITAL。
THEPHYSIOCRATSANDADAMSMITHInQuesnaythedistinctionbetweenfixedandcirculatingcapitalpresentsitselfasavancesprimitivesandavancesannuelles。Hecorrectlyrepresentsthisdistinctionasoneexistingwithinproductivecapital，capitaldirectlyengagedintheprocessofproduction。Asheregardsthecapitalemployedinagriculture，thecapitalofthefarmer，astheonlyreallyproductivecapital，hedrawsthesedistinctionsonlyforthecapitalofthefarmer。Thisalsoaccountsfortheannualperiodofturnoverofonepartofthecapital，andthemorethanannualdecennialperiodoftheotherpart。Inthecourseofthedevelopmentthephysiocratsincidentallyappliedthesedistinctionsalsotootherkindsofcapitalandtoindustrialcapitalingeneral。Thedistinctionbetweenannualadvancesandothersoflongerdurationhasretainedsuchimportanceforsocietythatmanyeconomists，evenafterAdamSmith，returntothisdefinition。
Thedifferencebetweenthesetwokindsofadvancesdoesnotariseuntiladvancedmoneyhasbeentransformedintotheelementsofproductivecapital。Itisadifferencethatexistssolelywithinproductivecapital。
ItthereforeneveroccurstoQuesnaytoclassifymoneyeitheramongtheoriginalortheannualadvances。Asadvancesforproduction，i。e。，asproductivecapital，bothofthemstandopposedtomoneyaswellasthecommoditiesexistinginthemarket。FurthermorethedifferencebetweenthesetwoelementsofproductivecapitaliscorrectlyreducedinQuesnaytothedifferentmannerinwhichtheyenterintothevalueofthefinishedproduct，hencetothedifferentmannerinwhichtheirvaluesarecirculatedtogetherwiththoseoftheproducts，andhencetothedifferentmanneroftheirreplacementortheirreproduction，thevalueoftheonebeingwhollyreplacedannually，thatoftheotherpartlyandatlongerintervals。[23]
TheonlyprogressmadebyAdamSmithisthegeneralisationofthecategories。Withhimitnolongerappliestoonespecialformofcapital，thefarmer’scapital，buttoeveryformofproductivecapital。Henceitfollowsasamatterofcoursethatthedistinctionderivedfromagriculturebetweenanannualturnoverandoneoftwoormoreyears’durationissupersededbythegeneraldistinctionintodifferentperiodsofturnover，oneturnoverofthefixedcapitalalwayscomprisingmorethanoneturnoverofthecirculatingcapital，regardlessoftheperiodsofturnoverofthecirculatingcapital，whethertheybeannual，morethanannual，orlessthanannual。ThusinAdamSmiththeavancesannuellestransformthemselvesintocirculatingcapital，andtheavancesprimitivesintofixedcapital。Buthisprogressisconfinedtothisgeneralisationofthecategories。HisimplementationisfarinferiortothatofQuesnay。
ThecrudelyempiricalmannerinwhichSmithbroachestheinvestigationengendersattheveryoutsetalackofclarity:”Therearetwodifferentwaysinwhichacapitalmaybeemployedsoastoyieldarevenueorprofittoitsemployer。”WealthofNations，BookII，Chap。I，p。189，Aberdeenedition，1848。[WhereverMarxdidnotgiveapagereferencetoquotationsfromSmith’swork，editorialpagereferencesaregiveninsquarebracketstotheLondon1843editionofAnInquiryintotheNatureandCausesoftheWealthofNations，Aneweditioninfourvolumes。ThisandallthefollowingquotationsfromSmithhavebeencheckedwiththisedition——Ed。]
Thewaysinwhichvaluemaybeinvestedsoastoperformthefunctionsofcapital，toyieldsurplusvaluetoitsowner，areasdifferentandvariedasthespheresofinvestmentofcapital。Itisaquestionofthedifferentbranchesofproductioninwhichcapitalmaybeinvested。Ifputinthisway，thequestionimpliesstillmore。Itincludesthequestionofthewayinwhichvalue，evenifitisnotinvestedasproductivecapital，canfunctionascapitalforitsowner，forinstanceasinterest-bearingcapital，merchants’
capital，etc。Atthispointwearealreadymilesawayfromtherealsubjectoftheanalysis，viz。，thequestionofhowthedivisionofproductivecapitalintoitsdifferentelements，apartfromtheirdifferentspheresofinvestment，affectstheirturnover。
AdamSmithimmediatelycontinues:”First，itmaybeemployedinraising，manufacturing，orpurchasinggoods，andsellingthemagainwithaprofit。”[Vol。II，p。254。]Hedoesnottellusanythingelseherethanthatcapitalmaybeemployedinagriculture，manufacture，andcommerce。
Hespeaksthereforeonlyofthedifferentspheresofinvestmentofcapital，includingsuchinwhich，asincommerce，capitalisnotdirectlyembodiedintheprocessofproduction，hencedoesnotfunctionasproductivecapital。
Insodoingheabandonsthefoundationonwhichthephysiocratsbasethedistinctionswithinproductivecapitalandtheireffectontheturnover。
More。Heusesmerchant’scapitalasanillustrationinaproblemwhichconcernsexclusivelydifferenceswithintheproductivecapitalintheproductandvalue-creatingprocess，whichinturncausedifferencesinitsturnoverandreproduction。
Hecontinues:”Thecapitalemployedinthismanneryieldsnorevenueorprofittoitsemployer，whileiteitherremainsinhispossessionorcontinuesinthesameshape。”[Vol。II，p。254。]”Thecapitalemployedinthismanner！”ButSmithspeaksofcapitalinvestedinagriculture，inindustry，andhetellsuslaterthatacapitalsoemployeddividesintofixedandcirculatingcapital！Henceinvestmentofcapitalinthismannercannotmakefixedorcirculatingcapitalofit。
Ordoeshemeantosaythatcapitalemployedinordertoproducegoodsandtoselltheseataprofitmustbesoldafteritstransformationintogoodsandbymeansofthesalemustinthefirstplacepassfromthepossessionofthesellerintothatofthebuyer，andinthesecondplacechangefromitsbodilyform，goods，intoitsmoney-form，sothatitisofnousetoitsownersolongasiteitherremainsinhispossessionorcontinuesinthesameshape？Inthatcase，thewholethingamountstothis:
Thecapital-valuethatformerlyfunctionedintheformofproductivecapital，inaformpeculiartotheprocessofproduction，nowfunctionsascommodity-capitalandmoney-capital，informspeculiartotheprocessofcirculation，whereitisnolongereitherfixedorcirculatingcapital。Andthisappliesequallytothoseelementsofvaluewhichareaddedbyrawandauxiliarymaterial，i。e。，bycirculatingcapital，andtothosewhichareaddedbythewearandtearofinstrumentsoflabourhencebyfixedcapital。Wedonotgetanynearertothedifferencebetweenfixedandcirculatingcapitalinthisway。
Further:”Thegoodsofthemerchantyieldhimnorevenueorprofittillhesellsthemformoney，andthemoneyyieldshimaslittletillitisagainexchangedforgoods。Hiscapitaliscontinuallygoingfromhiminoneshape，andreturningtohiminanother，anditisonlybymeansofsuchcirculation，orsuccessiveexchanges，thatitcanyieldhimanyprofit。Suchcapitalsthereforemayveryproperlybecalledcirculatingcapitals。”[Vol。II，p。254。]
WhatAdamSmithheredefinesascirculatingcapitaliswhatI
wanttocallcapitalofcirculation，capitalinaformpertinenttotheprocessofcirculation，toachangeofformbymeansofexchangeachangeofsubstanceandchangeofhands，hencecommodity-capitalandmoney-capital，asdistinguishedfromitsformpertinenttotheprocessofproduction，thatofproductivecapital。Thesearenotdifferentkindsintowhichtheindustrialcapitalistdivideshiscapital，butdifferentformsoverandoveragainassumedandstrippedoffsuccessivelybythesameadvancedcapital-valueduringitscurriculumvitae。AdamSmithlumpsthistogether——andthisisabigstepbackcomparedtothephysiocrats——withthedistinctionsinformwhichariseinthesphereofcirculationofcapital-value，initscircularcoursethroughitssuccessiveforms，whilethecapital-valueexistsintheformofproductivecapital；
andtheyarisebecauseofthedifferentwaysinwhichthedifferentelementsofproductivecapitaltakepartintheformationofvaluesandtransfertheirvaluetotheproduct。Weshallseebelowthecon-sequencesofthisbasicconfusionofproductivecapitalandcapitalinthesphereofcirculationcommodity-capitalandmoney-capitalontheonehand，withfixedandcirculatingcapitalontheother。Thecapital-valueadvancedinfixedcapitalisasmuchcirculatedbytheproductasthatwhichhasbeenadvancedinthecirculatingcapital，andbothareequallyconvertedintomoney-capitalbythecirculationofthecommodity-capital。Thedifferenceevolvesonlyfromthefactthatthevalueofthefixedcapitalcirculatespiece-mealandthereforemustlikewisebereplacedpiecemeal，atshorterorlongerintervals，mustbereproducedinitsbodilyform。
ThatbycirculatingcapitalAdamSmithmeansherenothingbutcapitalofcirculation，i。e。，capital-valueintheformspertainingtotheprocessofcirculationcommoditycapitalandmoney-capitalisshownbyhissingularlyill-chosenillustration。Heselectsforthispurposeakindofcapitalwhichdoesnotbelongatallintheprocessofproduction，butwhoseabodeisexclusivelythesphereofcirculation，whichconsistssolelyofcapitalofcirculation——merchant’scapital。
Howabsurditistostartoutwithanillustrationinwhichcapitaldoesnotfigurealtogetherasproductivecapitalisstatedrightafterwardsbyhimhimself:”Thecapitalofamerchant，forexample，isaltogetheracirculatingcapital。”[Vol。II，p。255。]Yetwearetoldlateronthatthedifferencebetweencirculatingandfixedcapitalevolvesoutofessentialdifferenceswithintheproductivecapitalitself。OntheonehandAdamSmithhasthedistinctionofthephysiocratsinmind，ontheotherthedifferentformsassumedbycapital-valueinitscircuit。Andboththesethingsarehiggledy-piggledyjumbledtogether。
Buthowaprofitistocomeintoexistencebychangesofformofmoneyandcommodities，byameretransmutationofvaluefromoneoftheseformsintoanotherismorethananyonecantell。Andanexplanationbecomesabsolutelyimpossiblebecausehestartsoutherewithmerchants’
capital，whichmovesonlyinthesphereofcirculation。Weshallreturntothislater。Letusfirsthearwhathehastosayaboutfixedcapital。
[Vol。II，pp。254-55。]”Secondly，itcapitalmaybeemployedintheimprovementofland，inthepurchaseofusefulmachinesandinstrumentsoftrade，orinsuchlikethingsasyieldarevenueorprofitwithoutchangingmasters，orcirculatinganyfurther。Suchcapitalsthereforemayveryproperlybecalledfixedcapitals。Differentoccupationsrequireverydifferentproportionsbetweenthefixedandcirculat-ingcapitalsemployedinthem……Somepartofthecapitalofeverymasterartificerormanufacturerbefixedintheinstrumentsofhistrade。Thispart，however，isverysmallinsome，andverygreatinothers……Thefargreaterpartofthecapitalofallsuchmasterartificerssuchastailors，shoemakers，weavershoweveriscirculated，eitherinthewagesoftheirworkmen，orinthepriceoftheirmaterials，andtoberepaidwithaprofitbythepriceofwork。”
Apartfromthenaï；vedeterminationofthesourceofprofitweaknessandconfusionbecomeatonceapparentfromthefollowing:Toamachinemanufacturerforexamplethemachineishisproduct，whichcirculatesascommodity-capital，orinAdamSmith’swords，”ispartedwith，changesmasters，circulatesfurther。”Accordingtohisowndefinitionthereforethismachinewouldnotbefixedbutcirculatingcapital。ThisconfusionisagainduetothefactthatSmithmixesupthedistinctionbetweenfixedandcirculatingcapitalevolvedoutofthemanifoldcirculationofthevariouselementsofproductivecapital，withdifferencesintheformassumedbythesamecapitalwhichfunctionsasproductivecapitalwithintheprocessofproductionandascirculationcapital，thatistosay，ascommodity-capitalorasmoney-capital，withinthesphereofcirculation。ConsequentlywithAdamSmiththingscanfunctionasfixedcapitalasinstrumentsoflabour，elementsofproductivecapital，oras”circulating”capital，commodity-capitalasproductsthrustoutofthesphereofproductionintothatofcirculation，alldependingonthepositiontheyoccupyinthelife-processofcapital。
ButAdamSmithsuddenlychangestheentirebasisofhisclassification，andcontradictsthetextwithwhichhehadopenedtheentireinvestigationafewlinespreviously。Thisrefersparticularlytothestatement:”Therearetwodifferentwaysinwhichacapitalmaybeemployedsoastoyieldarevenueoraprofittoitsemployer，”[Vol。II，p。254]namely，ascirculatingorasfixedcapital。Accordingtothatthesearethereforedifferentmethodsofemployingdifferentcapitalsindependentofoneanother，suchascapitalsthatcanbeemployedeitherinindustryorinagriculture。Andthenweread[Vol。II，p。255]:”Differentoccupationsrequireverydifferentproportionsbetweenthefixedandcirculatingcapitalsemployedinthem。”Fixedandcirculatingcapitalarenownolongerdifferent，independentinvestmentsofcapital，butdifferentportionsofthesameproductivecapital，whichformdifferentpartsofthetotalvalueofthiscapitalindifferentspheresofinvestment。Hencewehaveheredifferencesarisingfromanappropriatedivisionoftheproductivecapitalitselfandthereforevalidonlywithrespecttoit。Butthisrunscountertothecircumstancethatmerchants’
capital，beingmerelycirculatingcapital，isopposedtofixedcapital，forAdamSmithsayshimself:”Thecapitalofamerchantforexampleisaltogetheracirculatingcapital。”[Vol。II，p。255。]Itisindeedacapitalperformingitsfunctionssolelywithinthesphereofcirculationandassuchstandsopposedingeneraltoproductivecapital，thecapitalembodiedintheprocessofproduction。Butforthisveryreasonitcannotbecontrasted，asthecirculatingcomponentpartofproductivecapital，toitsfixedcomponentpart。
IntheillustrationsSmithgiveshedesignatesthe”instrumentsoftrade”asfixedcapital，andtheportionofcapitallaidoutinwagesandrawmaterials，includingauxiliarymaterials，ascirculatingcapital”repaidwithaprofitbythepriceofthework”。
Andsohestartsout，inthefirstplace，fromthevariousconstituentsofthelabour-process，fromlabour-powerlabourandrawmaterialsontheonehand，andinstrumentsoflabourontheother。Buttheseareconstituentsofcapital，becauseasumofvaluewhichistofunctionascapitalisinvestedinthem。Tothisextenttheyarematerialelements，modesofexistenceofproductivecapital，thatistosay，ofcapitalfunctioningintheprocessofproduction。Butwhyisoneofthesepartscalledfixed？
Because”somepartsofthecapitalmustbefixedintheinstrumentsoftrade。”[Vol。II，p。254。]Buttheotherpartisalsofixed——inwagesandrawmaterials。Machineshoweverand”instrumentsoftrade……orsuchlikethings……yieldarevenueorprofitwithoutchangingmasters，orcirculatinganyfurther。Suchcapitals，therefore，mayveryproperlybecalledfixedcapitals。”[Vol。II，p。254。]
Takeforinstancetheminingindustry。Norawmaterialatallisusedthere，becausethesubjectoflabour，suchascopper，isaproductofnature，whichmustfirstbeappropriatedbylabour。Thecoppertobefirstappropriated，theproductoftheprocess，whichcirculateslaterasacommodity，orcommodity-capital，doesnotformanelementofproductivecapital。Nopartofitsvalueisinvestedinit。Ontheotherhandtheotherelementsoftheproductiveprocess，labour-powerandauxiliarymaterialssuchascoal，water，etc。，donotentermateriallyintotheproduct，either。
Thecoalisentirelyconsumedandonlyitsvalueentersintotheproduct，justasapartofthevalueofthemachine，etc。，entersintoit。Finally，thelabourerremainsasindependentvis-á；-vistheproduct，thecopper，asthemachine；exceptthatthevaluewhichheproducesbymeansofhislabourisnowacomponentpartofthevalueofthecopper。Henceinthisillustrationnotasingleconstituentofproductivecapitalchanges”masters，”
norisanyofthemcirculatedfurther，becausenoneofthementermateriallyintotheproduct。Whatbecomesofthecirculatingcapitalinthiscase？
AccordingtoAdamSmith’sowndefinitiontheentirecapitalemployedinacoppermineconsistsoffixedcapitalandnothingelse。
Letustakeontheotherhandadifferentindustry，onewhichutilisesrawmaterialsthatformthesubstanceofitsproduct，andauxiliarymaterialsthatenterintotheproductbodilyandnotonlyassomuchvalue，asisthecasewithfuelcoal。Theproduct，forinstancetheyarn，changeshandstogetherwiththerawmaterial，thecotton，composingit，andpassesfromtheprocessofproductionintothatofconsumption。Butsolongasthecottonfunctionsasanelementofproductivecapital，itsmasterdoesnotsellit，butprocessesit，hasitmadeintoyarn。Hedoesnotpartwithit。Or，touseSmith’scrudelyerroneousandtrivialterms，hedoesnotmakeanyprofit”bypartingwithit，byitschangingmasters，orbycirculatingit。”Hedoesnotpermithismaterialstocirculateanymorethanhismachines。Theyarefixedintheprocessofproduction，thesameasthespinningmachinesandthefactorybuildings。Indeed，apartoftheproductivecapitalmustbejustascontinuallyfixedintheformofcoal，cotton，etc。，asintheformofinstrumentsoflabour。Thedifferenceisonlythatforinstancethecotton，coal，etc。，requiredforoneweek’syarnproduction，arealwaysentirelyconsumedinthemanufactureoftheweeklyproduct，sothatnewcotton，coal，etc。，mustbesuppliedintheirplace；inotherwords，theseelementsofproductivecapital，althoughremainingidenticalinkind，alwaysconsistofnewspecimensofthesamekind，whilethesameindividualspinningmachineorthesameindividualfactorybuildingcontinuesitsparticipationinawholeseriesofweeklyproductionswithoutbeingreplacedbyanewspecimenofitskind。Aselementsoftheproductivecapitalallitsconstituentpartsarecontinuallyfixedintheprocessofproduction，foritcannotproceedwithoutthem。Andalltheelementsofproductivecapital，whetherfixedorcirculating，equallyconfront，asproductivecapital，thecapitalofcirculation，i。e。，commodity-capitalandmoney-capital。
Itisthesamewithlabour-power。Apartoftheproductivecapitalmustbecontinuallyfixedinit，anditisthesameidenticallabour-powers，justasitisthesamemachines，thatareeverywhereemployedforacertainlengthoftimebythesamecapitalist。Thedifferencebetweenlabour-powerandmachinesinthiscaseisnotthatthemachinesareboughtonceandforallwhichisnotsowhentheyarepaidforininstalments，whilethelabourerisnot。Thedifferenceisratherthatthelabourexpendedbythelabourerenterswhollyintothevalueoftheproduct，whilethevalueofthemachinesentersonlypiecemeal。
Smithconfusesdifferentdefinitionswhenhesaysofcirculatingcapitalasopposedtofixed:”Thecapitalemployedinthismanneryieldsnorevenueorprofittoitsemployer，whileiteitherremainsinhispossessionorcontinuesinthesameshape。”[Vol。II，p。254。]Heplacesthemerelyformalmetamorphosisofthecommodity，whichtheproduct，thecommodity-capital，undergoesinthesphereofcirculationandwhichbringsaboutthechangeofhandsofthecommodities，onthesamelevelasthebodilymetamorphosis，whichthevariouselementsofproductivecapitalundergoduringtheprocessofproduction。Heindiscriminatelyjumblestogetherthetransformationofcommoditiesintomoneyandofmoneyintocommodities，orpurchaseandsale，withthetransformationofelementsofproductionintoproducts。
Hisillustrationforcirculatingcapitalismerchants’capital，whichisconvertedfromcommoditiesintomoneyandfrommoneyintocommodities——
thechangeofformC——M——Cpertainingtothecirculationofcommodities。
Butthischangeofformwithinthecirculationsignifiesfortheindustrialcapitalinactionthatthecommoditiesintowhichthemoneyisreconvertedareelementsofproductioninstrumentsoflabourandlabour-power，that，therefore，thechangeofformrendersthefunctionofindustrialcapitalcontinuous，renderstheprocessofproductionacontinuousone，oraprocessofreproduction。Thisentirechangeofformtakesplaceincirculation。
Itisthischangeofformthatbringsabouttherealpassageofthecommoditiesfromhandtohand。Butthemetamorphosesgonethroughbyproductivecapitalwithinitsprocessofproductionareonthecontrarymetamorphosesthatpertaintothelabour-processandarenecessarytotransformtheelementsofproductionintothedesiredproduct。AdamSmithclingstothefactthatapartofthemeansofproductiontheinstrumentsoflabourproperserveinthelabour-process”yieldaprofittotheirmaster，”
asheerroneouslyexpressesitwithoutchangingtheirbodilyformandwearoutonlybydegrees；whiletheotherpart，thematerials，changeandbyvirtueofthisverychangeattaintheirdestinationasmeansofproduction。
Thisdifferenceinthebehaviouroftheelementsofproductivecapitalinthelabour-processformshoweveronlythepointofdepartureofthedifferencebetweenfixedandnon-fixedcapital，notthisdifferenceitself。
Thatfollowsfromthefactalonethatthisdifferentbehaviourexistsinequalmeasureunderallmodesofproduction，capitalistandnon-capitalist。
Tothisdifferentbehaviourofmaterialelementscorrespondshoweverthetransmissionofvaluetotheproduct，andtothisinturncorrespondsthereplacementofvaluebythesaleoftheproduct。Thatandthataloneiswhatconstitutesthedifferenceinquestion。Hencecapitalisnotcalledfixedbecauseitisfixedintheinstrumentsoflabourbutbecauseapartofitsvaluelaidoutininstrumentsoflabourremainsfixedinthem，whiletheotherpartcirculatesasacomponentpartofthevalueoftheproduct。”Ifitthestockisemployedinprocuringfutureprofit，itmustprocurethisprofiteitherbystayingwithhimtheemployer，orbygoingfromhim。Intheonecaseitisafixed，intheotheritisacirculatingcapital。”P。189。
Whatstrikesonehereaboveallisthatthecrudelyempiricalconceptionofprofitderivedfromtheoutlookoftheordinarycapitalist，whichwhollycontradictsthebetteresotericunderstandingofAdamSmith。
Notonlythepriceofmaterialsandthatofthelabour-powerisreplacedinthepriceoftheproduct，butalsothatpartofvaluewhichistransferredbywearandtearfromtheinstrumentsoflabourtotheproduct。Undernocircumstancesdoesthisreplacementyieldprofit。Whetheravalueadvancedfortheproductionofacommodityisreplacedentirelyorpiecemeal，atonetimeorgradually，bythesaleofthatcommodity，cannotchangeanythingexceptthemannerandtimeofreplacement。Butinnoeventcanittransformthatwhichiscommontoboth，thereplacementofvalue，intoacreationofsurplus-value。Atthebottomofitallliesthecommonlyheldideathat，becausesurplus-valueisnotrealiseduntiltheproductissold，untilitcirculates，itoriginatesonlyfromsales，fromthecirculation。Indeedthedifferentmanneroforiginationofprofitisinthiscasebutawrongwayofexpressingthefactthatthedifferentelementsofproductivecapitalservedifferently，thatasproductiveelementstheyactdifferentlyinthelabour-process。Intheend，thedifferenceisnotderivedfromtheprocessoflabourorself-expansion，notfromthefunctionofproductivecapitalitself，butitissupposedtoapplyonlysubjectivelytotheindividualcapitalist，towhomonepartofcapitalservesausefulpurposeinoneway，whileanotherpartdoessoinanotherway。
Quesnay，ontheotherhand，hadderivedthesedifferencesfromtheprocessofreproductionanditsnecessities。Inorderthatthisprocessmaybecontinuous，thevalueoftheannualadvancesmustannuallybereplacedinfulloutofthevalueoftheannualproduct，whilethevalueoftheinvestmentcapitalneedbereplacedonlypiecemeal，sothatitrequirescompletereplacementandthereforecompletereproductiononlyinaperiodof，say，tenyearsbyanewmaterialofthesamekind。ConsequentlyAdamSmithfallsfarbelowQuesnay。
SothereisthereforeabsolutelynothinglefttoAdamSmithforadefinitionoffixedcapitalexceptthatitisinstrumentsoflabourwhichdonotchangetheirshapeintheprocessofproductionandcontinuetoserveinproductionuntiltheyarewornout，asopposedtotheproductsintheformationofwhichtheyassist。Heforgetsthatallelementsofproductivecapitalcontinuallyconfrontintheirbodilyformasinstrumentsoflabour，materials，andlabour-powertheproductandtheproductcirculatingasacommodity，andthatthedifferencebetweenthepartconsistingofmaterialsandlabour-powerandthatconsistingofinstrumentsoflabourisonlythis:withregardtolabour-power，thatitisalwayspurchasedafreshnotboughtforthetimeitlasts，asaretheinstrumentsoflabour；
withregardtothematerials，thatitisnotthesameidenticalmaterialsthatfunctioninthelabour-processthroughout，butalwaysnewmaterialsofthesamekind。Atthesametimethefalseimpressioniscreatedthatthevalueofthefixedcapitaldoesnotparticipateinthecirculation，althoughofcourseAdamSmithpreviouslyexplainedthewearandtearoffixedcapitalasapartofthepriceoftheproduct。
Inopposingcirculatingcapitaltofixed，noemphasisisplacedonthefactthatthisoppositionexistssolelybecauseitisthatconstituentpartofproductivecapitalwhichmustbewhollyreplacedoutofthevalueoftheproductandmustthereforefullyshareinitsmetamorphoses，whilethisisnotsointhecaseofthefixedcapital。Insteadthecirculatingcapitalisjumbledtogetherwiththoseformswhichcapitalassumesonpassingfromthesphereofproductiontothatofcirculation，ascommodity-capitalandmoney-capital。Butbothforms，commodity-capitalaswellasmoney-capital，arecarriersofthevalueofboththefixedandthecirculatingcomponentpartsofproductivecapital。Bothofthemarecapitalofcirculation，asdistinguishedfromproductivecapital，butnotcirculatingfluentcapitalasdistinguishedfromfixedcapital。
Finally，owingtothewhollyerroneousexplanationthatprofitismadebyfixedcapitalstayingintheprocessofproduction，andbycirculatingcapitalleavingitandbeingcirculated，andalsoonaccountoftheidentityofformassumedintheturnoverbythevariablecapitalandthecirculatingconstituentoftheconstantcapital，theiressentialdifferenceintheprocessofself-expansionandoftheformationofsurplus-valueishidden，sothattheentiresecretofcapitalistproductionisobscuredstillmore。Thecommondesignation”circulatingcapital”abolishesthisessentialdifference。PoliticalEconomysubsequentlywentstillfartherbyholdingfastnottotheantithesisbetweenvariableandconstantcapitalbuttotheantithesisbetweenfixedandcirculatingcapitalastheessentialandsoledelimitation。
AfterAdamSmithhasdesignatedfixedandcirculatingcapitalastwoparticularwaysofinvestingcapital，eachofwhichyieldsaprofitbyitself，hesays:”Nofixedcapitalcanyieldanyrevenuebutbymeansofacirculatingcapital。Themostusefulmachinesandinstrumentsoftradewillproducenothingwithoutthecirculatingcapitalwhichaffordsthematerialstheyareemployedupon，themaintenanceoftheworkmenwhoemploythem。”P。188。
Hereitbecomesapparentwhatthepreviouslyusedexpressions”yieldarevenue，””makeaprofit，”etc。，signify，viz。，thatbothpartsofcapitalserveascreatorsofproduct。
AdamSmiththengivesthefollowingillustration:”Thatpartofthecapitalofthefarmerwhichisemployedintheinstrumentsofagricultureisafixed，thatwhichisemployedinthewagesandmaintenanceofhislabouringservantsisacirculatingcapital。”Herethedifferencebetweenfixedandcirculatingcapitaliscorrectlyappliedonlytodifferenceincirculation，totheturnoversofdifferentconstituentpartsofproductivecapital。”Hemakesaprofitoftheonebykeepingitinhisownpossession，andoftheotherbypartingwithit。Thepriceorvalueofhislabouringcattleisafixedcapital”hereheisagaincorrectwhenhesaysitisthevalue，notthematerialelement，towhichthedifferenceapplies”inthesamemannerasthatoftheinstrumentsofhusbandry；theirmaintenance”
thatofthelabouringcattle”isacirculatingcapitalinthesamemannerasthatofthelabouringservants。Thefarmermakeshisprofitbykeepingthelabouringcattle，andbypartingwiththeirmaintenance。”Thefarmerkeepsthefodderofthecattle，hedoesnotsellit。Heusesittofeedthecattle，whileheusesusthecattlethemselvesasinstrumentsoflabour。
Thedifferenceisonlythis:Thefodderthatgoesforthemaintenanceofthelabouringcattleisconsumedwhollyandmustbecontinuallyreplacedbynewcattlefodderoutoftheproductsofagricultureorbytheirsale；
thecattlethemselvesarereplacedonlyaseachheadbecomesincapacitatedforwork。”Boththepriceandthemaintenanceofthecattlewhichareboughtinandfattened，notforlabourbutforsale，areacirculatingcapital。Thefarmermakeshisprofitbypartingwiththem。”[Vol。II，pp。
255-56。]Everyproducerofcommodities，hencelikewisethecapitalistproducer，sellshisproduct，theresultofhisprocessofproduction，butthisisnoreasonwhythisproductshouldformapartofeitherthefixedorthecirculatingcomponentofhisproductivecapital。Theproductnowexistsratherinthatforminwhichitisthrustoutoftheprocessofproductionandmustfunctionascommodity-capital。Thefattenedstockfunctionintheprocessofproductionasrawmaterial，notasinstrumentsoflabourlikethelabouringcattle。Hencethefattenedcattleenterintotheproductassubstance，andtheirwholevalueentersintoit，justasthatoftheauxiliarymaterial[itsfodder]。Thefattenedcattlearethereforeacirculatingpartoftheproductivecapital，butnotbecausethesoldproduct，thefattenedcattle，havethesamebodilyformastherawmaterial，thecattlenotyetfattened。Thisisaccidental。AtthesametimeAdamSmithmighthaveseenbythisillustrationthatitisnotthematerialformoftheelementofproductionbutitsfunctionwithintheprocessofproductionthatdeterminesthevaluecontainedinitasfixedorcirculating。”Thewholevalueoftheseedtooisproperlyafixedcapital。Thoughitgoesbackwardsandforwardsbetweenthegroundandthegranary，itneverchangesmasters，andthereforeitdoesnotproperlycirculate。Thefarmermakeshisprofitnotbyitssale，butbyitsincrease。”[Vol。II，p。256。]
AtthispointtheutterthoughtlessnessoftheSmithiandistinctionrevealsitself。Accordingtohimseedwouldbefixedcapital，iftherewouldbeno”changeofmasters，”thatistosay，iftheseedisdirectlyreplacedoutoftheannualproduct，isdeductedfromit。Ontheotherhanditwouldbecirculatingcapital，iftheentireproductweresoldandwithapartofitsvalueseedofanotherownerwerebought。Intheonecasethereisa”changeofmasters，”intheotherthereisnot。Smithoncemoreconfusesherecirculatingandcommodity-capital。Theproductisthematerialvehicleofthecommodity-capital，butofcourseonlythatpartofitwhichactuallyentersintothecirculationanddoesnotre-enterdirectlyintotheprocessofproductionfromwhichitemergedasaproduct。
Whethertheseedisdirectlydeductedfromtheproductasapartofitortheentireproductissoldandapartofitsvalueconvertedinthepurchaseofanotherman’sseed——ineithercaseitismerereplacementthattakesplaceandnoprofitismadebythisreplacement。Intheonecasetheseedentersintocirculationasacommoditytogetherwiththeremainderoftheproduct；intheotheritfiguresonlyinbook-keepingasacomponentpartofthevalueoftheadvancedcapital。Butinbothcasesitremainsacirculatingconstituentoftheproductivecapital。Theseedisentirelyconsumedtogettheproductready，anditmustbeentirelyreplacedoutoftheproducttomakereproductionpossible。”Hencerawmaterialandauxiliarysubstanceslosethecharacteristicformwithwhichtheyareclothedonenteringthelabour-process。Itisotherwisewiththeinstrumentsoflabour。Tools，machines，workshops，andvessels，areofuseinthelabour-process，onlysolongastheyretaintheiroriginalshape，andarereadyeachmorningtorenewtheprocess，withtheirshapeunchanged。Andjustasduringtheirlifetime，thatistosay，duringthecontinuedlabour-processinwhichtheyserve，theyretaintheirshapeindependentoftheproduct，sotoo，theydoaftertheirdeath。
Thecorpsesofmachines，tools，workshops，etc。，arealwaysseparateanddistinctfromtheproducttheyhelpedtoturnout。”BuchI，Kap。VI，S。
192。[Englishedition:Ch。VIII，p。203——Ed。]
Thesedifferentwaysinwhichmeansofproductionareconsumedtoformtheproduct，someofthempreservingtheirindependentshapevis-á；-vistheproduct，otherschangingorlosingitentirely——thisdifferencepertainingtothelabour-processassuchandthereforejustaswelltothelabour-processesaimedatsatisfy-ingmerelyone’sownneeds，e。g。，theneedsofthepatriarchalfamily，withoutanyexchange，withoutproductionofcommodities——arefalsifiedbyAdamSmith。Hedoesso1byintroducingherethetotallyirrelevantdefinitionofprofit，claimingthatsomeofthemeansofproductionyieldaprofittotheirownerbypreservingtheirform，whiletheothersdosobylosingit；2byjumblingtogetherthealterationsofapartoftheelementsofproductioninthelabour-processwiththechangeofformpurchaseandsalethatischaracteristicoftheexchangeofproducts，ofcommoditycirculation，andwhichatthesametimeincludesachangeintheowner-shipofthecirculatingcommodities。
Theturnoverpresupposesreproductioneffectedbycirculation，hencebythesaleoftheproduct，byitsconversionintomoneyanditsreconversionfrommoneyintoitselementsofproduction。Butsinceapartofthecapitalistproducer’sownproductserveshimdirectlyasmeansofproduction，heappearsasasellerofittohimself，andthatishowthematterfiguresinhisbooks。Inthatcasethispartofthereproductionisnotbroughtaboutbycirculationbutproceedsdirectly。Howeverthepartoftheproductthusservingagainasmeansofproductionreplacescirculating，notfixedcapital，since1itsvaluepasseswhollyintotheproduct，and2ititselfhasbeenwhollyreplacedinkindbyanewspecimenoutofthenewproduct。