Reviews of Capital by Frederick Engels 1867

Review of Volume One of Capital for the The Fortnightly Review
June 1868

Written: on about May 22 - June 28, 1868, Signed Samuel Moore;
First published: in Russian, in Letopisi marksizma, No. 1, 1926

Karl Marx on Capital


Mr. Thomas Tooke, in his inquiries on currency, points out the fact that money, in its function as capital, undergoes a reflux to its point of issue, while this is not the case with money performing the function of mere currency. This distinction (which, however, had been established long before by Sir James Steuart) is used by Mr. Tooke merely as a link in his argumentation against the “Currency men” and their assertions as to the influence of the issue of paper-money on the prices of commodities. Our author, on the contrary, makes this distinction the starting point of his inquiry into the nature of capital itself, and especially as regards the question: How is money, this independent form of existence of value, converted into capital?

All sorts of businessmen--says Turgot--have this in common, that they buy in order to sell; their purchases are an advance which afterwards is returned to them.

To buy in order to sell, such is indeed the transaction in which money functions as capital, and which necessitates its return to its point of issue, in contradistinction to selling in order to buy, in which process money may function as currency only. Thus it is seen that the different order in which the acts of selling and buying follow upon each other, impress upon money two different motions of circulation. In order to illustrate these two processes, our author gives the following formulae:

To sell in order to buy: a commodity C is exchanged for money M, which is again exchanged for another commodity C; or; C—M—C.

To buy in order to sell: money is exchanged for a commodity and this is again exchanged for money: M—C—M.

The formula C—M—C represents the simple circulation of commodities, in which money functions as means of circulation, as currency. This formula is analysed in the first chapter of our book which contains a new and very simple theory of value and of money, extremely interesting scientifically, but which we here leave out of consideration as, on the whole, immaterial to what we consider the vital points of Mr. Marx's views on capital.

The formula M—C—M, on the other hand, represents that form of circulation in which money resolves itself into capital.

The process of buying in order to sell: M—C—M, may evidently be resolved into M—M; it is an indirect exchange of money against money. Suppose I buy cotton for £1,000.--and sell it for £1,100.--; then, in fine, I have exchanged £1,000 for £1,100, money for money.

Now, if this process were always to result in returning to me the same sum of money which I had advanced, it would be absurd. But, whether the merchant, who [had] advanced £1,000, realises £1,100, or £1,000, or even £900 only, his money has gone through a phase essentially different from that of the formula C—M—C; which formula means, to sell in order to buy, to sell what you do not want in order to be able to buy that what you do want. Let me compare the two formulae.

Each process is composed of two phases or acts, and these two acts are identical in both formulae; but there is a great difference between the two processes themselves. In C—M—C, money is merely the mediator; the Commodity, useful value, forms the starting and the concluding point. In M—C—M, the commodity is the intermediate link, while money is the beginning and the end. In C—M—C the money is spent once for all; in M—C—M it is merely advanced, with the intention to recover it; it returns to its point of issue, and in this we have a first palpable difference between the circulation of money as currency and of money as capital.

In the process of selling in order to buy, C—M—C, the money can return to its point of issue on the condition only that the whole process be repeated, that a fresh quantity of commodity be sold. The reflux, therefore, is independent of the process itself. But in M—C—M, this reflux is a necessity and intended from the beginning; if it does not take place, there is a hitch somewhere and the process remains incomplete.

To sell in order to buy, has for its object the acquisition of useful value; to buy in order to sell, that of exchangeable value.

In the formula C—M—C, the two extremes are, economically speaking, identical. They are both commodities; they are, moreover, of the same quantitative value, for the whole theory of value implies the supposition that, normally, equivalents only are exchanged. At the same time, these two extremes C—C are two useful values different in quality, and they are exchanged on that very account.--In the process of M—C—M, the whole operation, at the first glance, appears meaningless. To exchange £100 for £100, and that by a roundabout process, appears absurd. A sum of money can differ from another sum of money by its quantity only. M—C—M, therefore, can only have any meaning by the quantitative difference of its extremes. There must be more money drawn out from circulation than had been thrown into it. The cotton bought for £1,000 is sold for £1,100 = £1,000 + £100; the formula representing the process, thus, changes to M—C—M, in which M'= + DM, M plus an increment. This DM, this increment, Mr. Marx calls surplus-value. The value originally advanced not only maintains itself, it also adds to itself an increment, it begets value, and it is this process which changes money into capital.

In the form of circulation C—M—C, the extremes may, certainly, also differ in value, but such a circumstance would here be perfectly indifferent; the formula does not become absurd if both extremes are equivalents. On the contrary, it is a condition of its normal character that they should be so.

The repetition of C—M—C is limited by circumstances entirely extraneous to the process of exchange itself: by the requirements of consumption. But in M—C—M, beginning and end are identical as to quality, and by that very fact the motion is, or may be, perpetual. No doubt, M + DM is different in quantity from M; but still it is a mere limited sum of money. If you spend it, it will cease to be capital; if you withdraw it from circulation, it will be a stationary hoard. The inducement once admitted for the process of making value beget value, this inducement exists as much for M' as it existed for M; the motion of capital becomes perpetual and endless, because at the close of each separate transaction its end is no more attained than before. The performance of this endless process transforms the owner of money into a capitalist.

Apparently, the formula M—C—M is applicable to merchants' capital alone. But the manufacturer's capital, too, is money which is exchanged for commodities and re-exchanged for more money. No doubt, in this case, a number of operations intervene between purchase and sale, operations which are performed outside of the sphere of mere circulation; but they do not change anything in the nature of the process. On the other hand, we see the same process in its most abbreviated form in capital lent on interest. Here the formula dwindles down to M—M', value which is, so to say, greater than itself.

But whence does this increment of M, this surplus-value arise? Our previous inquiries into the nature of commodities, of value, of money, and of circulation itself, not only leave it unexplained, but appear even to exclude any form of circulation which results in such a thing as a surplus-value. The whole difference between the circulation of commodities (C—M—C) and the circulation of money as capital (M—C—M) appears to consist in a simple reversion of the process; how should this reversion be capable of producing such a strange result?

Moreover: this reversion exists for one only of the three parties to the process. I, as a capitalist, buy a commodity from A, and sell it again to B. A and B appear as mere sellers and buyers of commodities. I myself appear, in buying from A, merely as an owner of money, and in selling to B, as owner of a commodity; but in neither transaction do I appear as a capitalist, as the representative of something which is more than either money or commodity. For A the transaction began with a sale, for B it began with a purchase. If from my point of view there is a reversion of the formula C—M—C, there is none from theirs. Besides, there is nothing to prevent A from selling his commodity to B without my intervention, and then there would be no occasion for any surplus-value.

Suppose A and B buy their respective requirements from each other directly. As far as useful value is concerned they may both be gainers. A may even be able to produce more of his particular commodity than B could produce in the same time, and vice versa, in which case they both would gain. But it is different with regard to value in exchange. In this latter case equal quantities of value are exchanged, whether money serves as the medium or not.

Considered in the abstract, that is to say excluding all circumstances which are not deducible from the inherent laws of the simple circulation of commodities, there is in this simple circulation, besides the fact of one useful value being replaced by another, a mere change of form of the commodity. The same value in exchange, the same quantity of social labour fixed in all object, remains in the hands of the owner of the commodity, be it in the shape of this commodity itself, or in that of the money it is sold for, or in that of the second commodity bought for the money. This change of form does not in any way involve any change in the quantity of the value, as little as the exchange of a five pound note for five sovereigns. Inasmuch as there is merely a change in the form of the value in exchange, there must be exchange of equivalents, at least whenever the process takes place in its purity and under normal conditions. Commodities may he sold at prices above or below their values, but if they are, the law of the exchange of commodities is always violated. In its pure and normal form, therefore, the exchange of commodities is not a means of creating surplus-value. Hence arises the error of all economists who attempt to derive surplus-value from the exchange of commodities, such as Condillac.

We will, however, suppose that the process does not take place under normal conditions, and that non-equivalents are exchanged. Let every seller, for instance, sell his commodity 10 per cent above its value. Caeteris paribus, everybody loses again as a buyer what he had gained as a seller. It would be exactly the same as if the value of money had fallen 10 per cent. The reverse, with the same effect, would take place if all buyers bought their goods 10 per cent below their value. We do not get an inch nearer to a solution by supposing that every owner of commodities sells them above their value in his quality as a producer, and buys them above their value in his quality as a consumer.

The consistent representatives of the delusion that surplus-value arises from a nominal addition to the price of commodities presuppose always the existence of a class which buys without ever selling, which consumes without producing. At this stage of our inquiry, the existence of such a class is as yet inexplicable. But admit it. Whence does that class receive the money with which it keeps buying? Evidently from the producers of commodities--on the strength of no matter what legal or compulsory titles, without exchange. To sell, to such a class, commodities above their value, means nothing but to recover a portion of the money which had been given away gratuitously. Thus the cities of Asia Minor, while paying a tribute to the Romans, recovered part of this money by cheating the Romans in trade; but after all, these cities were the greatest losers of the two. This, then, is no method of creating surplus-value.

Let us suppose the case of cheating. A sells to B wine of the value of £40 for corn of the value of £50. A has gained £10 and B has lost £10, but betwixt them, they have only £90 just as before. Value has been transferred but not created. The whole capitalist class of a country cannot, by cheating one another, increase their collective wealth.

Therefore: If equivalents are exchanged, there arises no surplus-value, and if non-equivalents are exchanged, there arises no surplus-value either. The circulation of commodities creates no new value. This is the reason why the two oldest and most popular forms of capital, commercial capital and interest-bearing capital, are here left entirely out of consideration. To explain the surplus-value appropriated by these two forms of capital otherwise than as the result of mere cheating, a number of intermediate links are required which are still wanting at this stage of the inquiry. Later on we shall see that they both are secondary forms only and shall also trace the cause why both appear in history long before modern capital.

Surplus-value, then, cannot originate from the circulation of commodities. But can it originate outside of it? Outside of it, the owner of a commodity is simply the producer of that commodity, the value of which is established by the amount of his labour contained in it and measured by a fixed social law. This value is expressed in money of account, say, in a price of £10. But this price of £10 is not at the same time a price of £11; this labour contained in the commodity creates value, but no value which begets new value; it can add new value to existing value, but merely by adding new labour. How, then, should the owner of a commodity, outside the sphere of circulation, without coming into contact with other owners of commodities--how should he be able to produce surplus-value, or in other words, to change commodities or money into capital?

“Capital, then, cannot originate from the circulation of commodities, and no more can it not originate from it. It has to find its source in it, and yet not in it. The change of money into capital has to be explained on the basis of the laws inherent to the exchange of commodities, the exchange of equivalents forming the starting-point. Our owner of money, as yet the mere chrysalis of a capitalist, has to buy his commodities at their value, to sell them at their value, and yet to extract more money from this process than he had invested in it. His development into the capitalist butterfly has to take place within the sphere of the circulation of commodities, and yet not within it. These are the terms of the problem. Hic Rhodus, hic salta” [144-45].

And now for the solution:

“The change in the value of the money, which is to be transformed into capital, cannot take place in that money itself; for, as means of purchase and means of payment, it merely realises the price of the commodity which it buys or pays for, while if it remained in its money-form, without being exchanged, it could never change its value at all. No more can the change arise from the second act of the process, the re-sale of the commodity, because this merely changes the commodity from its natural form into the form of money. The change must take place with the commodity which is bought in the first act M—C; but it cannot take place in its value in exchange, because we exchange equivalents; the commodity is bought at its value. The change can only arise from its value in use, that is from the use which is made of it. In order to extract value in exchange from the use of a commodity, our owner of money must have the good luck to discover, within the sphere of circulation, in the market, a commodity, the useful value of which is endowed with the peculiar quality of being a source of exchangeable value, the using-up of which is the realisation of labour and therefore the creation of value. And the owner of money finds, in the market, such a specific commodity. the power to work, the labour-power.

“By power to work, or labour-power, we understand the sum total of the physical and mental faculties which exist in the living person of a human being and which he puts into motion when he produces useful values.

“But in order to enable the owner of money to meet the labour-power as a commodity in the market, several conditions have to be fulfilled. In itself, the exchange of commodities does not include any other relations of dependence except such as arise from its own nature. On this supposition, labour-power can appear as a commodity, in the market, so far only as it is offered for sale, or sold, by its own owner, the person whose labour-power it is. In order to enable its owner to sell it as a commodity, he must be able to dispose of it, he must be the free proprietor of his labour-power, of his person. He and the owner of money meet in the market, and transact business, as each other's peers, as free and independent owners of commodities, so far different only, that the one is the buyer and the other the seller. This relation of equality before the law must continue; the owner of the labour-power can, therefore, sell it for a limited time only. If he were to sell it in a lump, once for all, he would sell himself, he would from a free man change into a slave, from an owner of a commodity into a commodity... The second essential condition to enable the money-owner to meet labour-power as a commodity in the market, is this: that the owner of the labour-power, instead of selling commodities in which his labour has been embodied, be compelled to sell this, his labour-power itself, such as it exists in his own personality.

“No producer can sell commodities different from his own labour-power, unless possessed of means of production, raw materials, instruments of labour, etc. He can make no boots without leather. Moreover, he requires the means of subsistence. Nobody can feed upon future products, upon useful values the production of which he has not yet completed; as on the first day of his appearance on the stage of the world, man is compelled to consume before and while he produces. If his products are produced as commodities, they must be sold after production, and can satisfy his wants after the sale only. The time of production is lengthened by the time required for sale.

“The change of money into capital, thus, requires that the money-owner meet in the market the free labourer, free in that double sense, that he, as a free person, can dispose of his labour-power; and that, on the other hand, he have no other commodities to sell; that he be entirely unencumbered with, perfectly free from, all the things necessary for putting his labour-power into action.

“The question why this free labourer meets him in the market, has no interest for the money-owner. For him, the labour-market is only one of the various departments of the general market for commodities. And, for the moment, it has no interest for us either. We stick to the fact theoretically, as he sticks to it practically. One thing, however, is clear. It is not nature which produces, on the one hand, owners of money and of commodities, and on the other, owners of nothing but their own labour-power. This relation does not belong to natural history; nor is it a social relation common to all historical periods. It is evidently the result of a long historical process, the product of a number of economical revolutions, of the destruction of a whole series of older [...] strata of social production.

“The economical categories which we have previously analysed bear in the same manner the impress of their historical origin. The existence of a product in the form of a commodity involves certain historical conditions. In order to become a commodity, the product must not be produced as the immediate means of subsistence of the producer. Now, if we had inquired: How and under what circumstances do all, or at least the great majority of products adopt the form of commodities?--we should have found that this occurs exclusively on the basis of a specific system of production, the capitalistic mode of production. But this inquiry was entirely foreign to the analysis of commodity. The production and circulation of commodities may take place, while the overwhelming mass of products--produced for immediate domestic self-use--is never changed into commodities; while, thus, the process of social production, in all its breadth and depth, is, as yet, far from being ruled by value in exchange...or, in analysing money, we find that the existence of money presupposes a certain development of the circulation of commodities. The peculiar forms of existence of money, such as the form of simple equivalent, or of means of circulation, means of payment, hoard, or universal money, as either one or the other may prevail, point to very different stages of the process of social production. Still, experience shows that a relatively crude state of the circulation of commodities suffices to produce all these forms. But with capital it is quite different. The historical conditions necessary for its existence are far from being created simultaneously with the mere circulation of commodities and money. Capital can originate when the owner of the means of production and subsistence meets, in the market, the free labourer offering for sale his labour-power, and this one condition implies ages of historical development Thus capital at once heralds itself as a specific epoch of the process of social production.” [145-149]

We have now to examine this peculiar commodity, the labour-power. It has a value in exchange, as all other commodities; this value is determined in the same way as that of all other commodities: by the time of labour required for its production, which includes reproduction. The value of labour-power is the value of the means of subsistence necessary for the maintenance of its owner in a normal state of fitness for work. These means of subsistence are regulated by climate and other natural conditions, and by a standard historically established in every country. They vary, but for a given country and a given epoch they are also given. Moreover, they include the means of subsistence for the substitutes of worn-out labourers, for their children, so as to enable this peculiar species of owners of a commodity to perpetuate itself. They include, finally, for skilled labour, the expense of education.

The minimal limit of the value of labour-power is the value of the physically absolute necessaries of life. If its price falls to this limit, it falls below its value, as the latter involves labour-power of normal, not of inferior quality.

The nature of labour makes it evident that labour-power is used after the conclusion of the sale only;--and in all countries with capitalist mode of production, labour is paid after having been performed. Thus everywhere the labourer gives credit to the capitalist. Of the practical consequences of this credit given by the labourer, Mr. Marx gives some interesting examples from Parliamentary papers, for which we refer to the book itself.--

In consuming labour-power, its purchaser produces at once commodities and surplus-value; and in order to examine this, we have to leave the sphere of circulation for that of production.

Here we find at once that the process of labour is of a double nature. On the one hand it is the simple process of production of useful value; as such, it can and must exist under all historical forms of social existence; on the other hand, it is this process carried on under the specific conditions of capitalistic production, as before stated. These we have now to inquire into.

The process of labour, on a capitalistic basis, has two peculiarities. Firstly, the labourer works under the control of the capitalist who takes care that no waste is made and that no more than the socially indispensable amount of labour is spent upon each individual piece of work. Secondly, the product is the property of the capitalist, the process itself being carried on between two things belonging to him: the labour-power and the means of work.

The capitalist does not care for the useful value, except so far as it is the incorporation of exchangeable value, and above all, of surplus-value. His object is to produce a commodity of a value higher than the sum of value invested in its production. How can this be done?

Let us take a given commodity, say cotton yarn, and analyse the quantity of labour embodied in it. Suppose that for the production of 10 lbs of yarn we require 10 lbs of cotton, value 10/- (leaving waste out of consideration). There are further required certain means of work, a steam-engine, carding-engines and other machinery, coal, lubricants, etc. To simplify matters, we call all these “spindle” and suppose that the share of wear and tear, coal, etc., required for spinning 10 lbs of yarn, is represented by 2/-. Thus we have 10/- cotton +2/- spindle=12/-. If 12/- represent the product of 24 working hours or two working days, then the cotton and spindle in the yarn incorporate two days' labour. Now, how much is added in the spinning?

We will suppose the value, per diem, of labour-power to be 3/-. and these 3/- to represent the labour of six hours. Further, that six hours are required to spin 10 lbs of yarn by one labourer. In this case 3/- have been added to the product by labour, the value of the 10 lbs yarn is 15/- or 1/6d. per lb.

This process is very simple, but it does not result in any surplus-value. Nor can it, as in capitalistic production things are not carried on in this simple way.

“We supposed the value of labour-power was 3/- per diem and that 6 hours' labour was represented by that sum. But if half-a-day's labour is required to maintain a labourer for 24 hours, there is nothing in that to prevent the same labourer from working a whole day. The exchangeable value of labour-power, and the value which it may produce, are two entirely different quantities, and it was this difference which the capitalist had in his eye when he invested his money in that commodity. That it has the quality of producing useful value, was a mere conditio sine qua non inasmuch as labour must be invested in a useful form in order to produce value. But our capitalist looked beyond that; what attracted him was the specific circumstance that this labour-power is the source of exchangeable value, and of more exchangeable value than is contained in itself. This is the peculiar 'service' which he expects from it. And in doing so, he acts in accordance with the eternal laws of the exchange of commodities. The seller of the labour-power realises its exchangeable, and parts with its useful value. He cannot obtain the one without giving away the other. The useful value of the labour-power, labour itself, no more belongs to its seller, than the useful value of sold oil to an oil-merchant. The capitalist has paid the value per diem of the labour-power; to him, therefore, belongs its use during the day, a day's labour. The circumstance that the maintenance of the labour-power for one day costs half a day's labour only, although this labour-power can be made to work a whole day; that, therefore, the value created by its use during a day, is twice as great as its own daily value--this circumstance is a peculiar piece of good luck for the buyer, but not at all a wrong inflicted upon the seller.

“The labourer, then, works 12 hours, spins 20 lbs of yarn representing 20/- in cotton, 4/- in spindle, etc., and his labour costs 3/-,--total, 27/-. But if 10 lbs of cotton absorbed 6 hours of labour, 20 lbs of cotton have absorbed 12 hours of labour, equal to 6/-. The 20 lbs of yarn now represent 5 days of labour; 4 in the shape of cotton and spindle, etc., 1 in the shape of spinning labour; the expression, in money, for 5 days' labour, is 30/-; consequently the price of the 20 lbs yarn is 30/-, or 1/6d. per lb. as before. But the sum total of the value of the commodities invested in this process was 27/-. The value of the product has increased beyond the value of the commodities invested in its production by one-ninth. Thus 27/- have been transformed into 30/-. They have produced a surplus-value of 3/-. The trick has, at last, succeeded. Money has been converted into capital.

“All the conditions of the problem have been solved, and the laws of the exchange of commodities have in no way been violated. Equivalent has been exchanged against equivalent. The capitalist, as purchaser, has paid every commodity at its value: cotton, spindles, etc., labour-power. After which, he did what every buyer of commodities does. He consumed their useful value. The process of consumption of the labour-power, at the same time process of production of the commodity, resulted in a product of 20 lbs of yarn, value 30/-. Our capitalist returns to the market and sells the yarn at 1/6 d. per lb., not a fraction above or below its value, and yet he extracts 3/- more from circulation than he originally invested in it. The whole of this process, the transformation of his money into capital, passes within the sphere of circulation, and at the same time not within it. By the intervention of circulation, because the purchase, in the market, of the labour-power was its indispensable condition. Not within the sphere of circulation, because this merely initiates the process of value begetting value, which is performed in the sphere of production. And thus tout est pour le mieux dans le meilluur des mondes possibles.” [174-176]

From the demonstration of the mode in which surplus-value is produced, Mr. Marx passes to its analysis. It is evident, from what precedes, that only one portion of the capital invested in any productive undertaking directly contributes to the production of surplus-value, and that is the capital laid out in the purchase of labour-power. This portion only produces new value; the capital invested in machinery, raw material, coal, etc., does indeed re-appear in the value of the product pro tanto, it is maintained and reproduced, but no surplus-value can proceed from it. This induces Mr. Marx to propose a new subdivision of capital into constant capital, that which is merely reproduced--the portion invested in machinery, raw materials and all other accessories to labour;--and variable capital, that which is not only reproduced, but is, at the same time, the direct source of surplus-value--that portion which is invested in the purchase of labour-power, in wages. From this it is clear, that however necessary constant capital may be to the production of surplus-value, yet it does not directly contribute to it; and, moreover, the amount of constant capital invested in any trade has not the slightest influence upon the amount of surplus-value produced in that trade. Consequently, it ought not to be taken into consideration in fixing the rate of surplus-value. That can be determined only by comparing the amount of surplus-value to the amount of capital directly engaged in creating it, that is to say, the amount of variable capital. Mr. Marx, therefore, determines the rate of surplus-value by its proportion to variable capital only: if the daily price of labour be 3/-, and the surplus-value created daily be also 3/-, then he calls the rate of surplus-value 100 per cent. What curious blunders may result from reckoning, according to usual practice, constant capital as an active factor in the production of surplus-value, is shown in an example from Mr. N. W. Senior, “when that Oxford professor, noted for his scientific attainments and his beautiful diction, was invited, in 1836, to Manchester, in order to learn political economy there (from the cotton spinners) instead of teaching it in Oxford. ”--[207]

The working-time in which the labourer reproduces the value of his labour-power, Mr. Marx calls "necessary labour”; the time worked beyond that, and during which surplus-value is produced, he calls "surplus-labour”. Necessary labour and surplus-labour combined form the "working day”.--

In a working day, the time required for necessary labour is given; but the time employed in surplus-labour is not fixed by any economical law, it may be longer or shorter, within certain limits. It can never be zero, as then the inducement for the capitalist to employ labour would have ceased; nor can the total length of the working day ever attain 24 hours, for physiological reasons. Between a working day of, say, six hours, and one of 24, there are, however, many intermediate stages. The laws of the exchange of commodities demand that the working day have a length not exceeding that which is compatible with the normal wear and tear of the labourer. But what is this normal wear and tear? How many hours of daily labour are compatible with it? Here the opinions of the capitalist and those of the labourer differ widely, and, as there is no higher authority, the question is solved by force. The history of the determination of the length of the working day is the history of a struggle about its limits, between the collective capitalist and the collective labourer, between the two classes of capitalists and working men.

“Capital, as has been stated before, has not invented surplus-labour. Wherever a portion of society holds the exclusive monopoly of the means of production, there the labourer, slave, serf, or free, has to add, to the labour necessary for his own subsistence, an increment of labour in order to produce the means of subsistence for the owner of the means of production, be that owner an Athenian kalos kaloqos, an Etruscan theocrat, a civis Romanus; a Norman baron, an American slave-owner, a Wallachian boyar, a modern landlord or capitalist.” [218].

It is, however, evident that in any form of society where the value in use of the product is more important than its value in exchange, surplus-labour is restrained by the narrower or wider range of social wants; and that under these circumstances there does not exist necessarily a desire for surplus-labour for its own sake. Thus we find that in the classical period surplus-labour in its extremist form, the working to death of people, existed almost exclusively in gold and silver mines, where value in exchange was produced in its independent form of existence: money.

“But wherever a nation whose production is carried on in the more rudimentary forms of slavery or serfage, lives in the midst of a universal market dominated by capitalist production, and where therefore the sale of its products for exports forms its chief purpose--there to the barbarous infamies of slavery or serfdom are superadded the civilised infamies of over-working. Thus in the Southern States of America slave-labour preserved a moderate and patriarchal character while production was directed to immediate domestic consumption chiefly. But in the same measure as the export of cotton became a vital interest to those states, the over-working of the negro, in some instances even the wearing-out of his life in seven working years, became an element in a calculated and calculating system... Similar with the corvees of the serfs in the Danubian principalities.” [219]

Here the comparison with capitalist production becomes particularly interesting, because, in the corvee, surplus-labour has an independent, palpable form.

“Suppose the working day counts six hours of necessary and six hours of surplus-labour; then the labourer furnishes the capitalist with 36 hours of surplus-labour a week. He might as well have worked three days for himself and three days for the capitalist. But this is not at once visible. Surplus-labour and necessary labour are more or less mixed together. I might express the same relation thus, that, in every minute, the labourer works 30 seconds for himself and 30 more for the capitalist. But with the serfs' corvee it is different. The two kinds of labour are separated in space. The labour, which, for instance, a Wallachian peasant performs for himself, he performs on his own field, his surplus-labour for the boyar he performs on the boyar's estate. The two portions of his labour exist independent of each other, surplus-labour, in the shape of corvee, is completely separated from necessary labour.” [219-220]

We must refrain from quoting the further interesting illustrations from the modern social history of the Danubian principalities, by which Mr. Marx proves the boyars there, aided by Russian intervention, to be quite as clever extractors of surplus-labour as any capitalist employers. But what the Reglement organique, by which Russian General Kisseleff presented the boyars with almost unlimited command over the peasant's labour, expresses positively, the English Factory Acts express negatively. “These acts oppose the which the Russian almost unlimited inherent tendency of capital to an unlimited exploitation--we ask pardon for introducing this French term, but there does not exist any English equivalent--of the labour-power, by forcibly putting a limit to the length of the working day by the power of the State, and that a State ruled by landlords and capitalists. Not to speak of the working class movement which was daily gaining greater dimensions, this limitation of factory labour was dictated by the same necessity which brought Peruvian guano on the fields of England. That same blind rapacity which in the one case had exhausted the soil, in the other case had attacked the vitality of the nation at its root. Periodical epidemics here spoke as plainly, as in France and Germany, the necessity for constantly reducing the standard of height for soldiers.” [229]

To prove the tendency of capital to extend the working day beyond all reasonable limits Mr. Marx quotes amply from the Reports of the Factory Inspectors, of the Children's Employment Commission, the Reports on Public Health and other Parliamentary Papers, and sums up in the following conclusions:

"What is a working day? How long is the time during which capital may be allowed to consume the working power on paying for its value per diem? How far may the working day be extended beyond the time necessary for reproducing the working power itself? Capital, as we have seen, replies: the working day counts full 24 hours, excepting those few hours of rest without which the labour-power absolutely refuses to renew its services. It is a matter of course that the labourer during the whole of the live-long day is nothing but labour-power; that ail his disposable time is working-time and belongs to value-begetting capital... But in this madly blind race after surplus-labour, capital outruns not only the moral, but also the purely physical maximum limits of the working day... Capital does not care for the duration of life of the working power... it produces its premature exhaustion and death, it effects the prolongation of the working-time during a given period by shortening the labourer's life.” [249-251]

But is not this against the interest of capital itself? Has capital, in the long run, not to replace the cost of this excessive wear and tear? That may be the case theoretically. Practically, the organised slave trade in the interior of the Southern States had raised the practice of using up the working power of the slave in seven years to an acknowledged economical principle; practically, the English capitalist relies upon the supply of labourers from the agricultural districts.

“He sees a constant over-population, that is, an over-population as compared with the capacity of capital to absorb living labour, though this over-population be formed by a constant current of crippled, quickly fading generations of men, pressing upon their successors and plucked before maturity. Certainly, to an uninterested observer, experience would show on the other hand how soon capitalist production, though dating, historically speaking, from yesterday only, has attacked the vital root of national strength, how the degeneration of the industrial population is retarded only by the constant absorption of agricultural elements, and how even these agricultural labourers, in spite of fresh air and that principle of natural selection which is so specially powerful amongst them, have already begun to decline. Capital, which has such capital motives to deny the sufferings of the working classes in the midst of which it exists, capital will be disturbed in its practical activity as little and as much by the prospect of future degeneracy of the human race and of inevitable ultimate depopulation, as by the possible fall of the earth into the sun. In every joint-stock 'limited' swindle, every participator knows that the thunderstorm will come sooner or later, but every one expects that the lightning will fall on the head of his neighbour, after he himself shall have had time to collect the golden rain and store it up safely. Apres moi le deluge! is the battle-cry of every capitalist and of every capitalist nation. Capital, therefore, is reckless of the health and life of the labourer, unless society compels it to act otherwise [...] And, upon the whole, this disregard of the labourer does not depend upon the good or bad will of the individual capitalist. Free competition imposes the immanent laws of capitalist production upon every individual capitalist in the shape of extraneous compulsory laws.” [254-255]

The determination of the normal working day is the result of many centuries of struggle between employer and labourer. And it is curious to observe the two opposing currents in this struggle. At first, the laws have for their end to compel the labourers to work longer hours; from the first statute of labourers 23rd Edward III (1349) up to the eighteenth century, the ruling classes never succeeded in extorting from the labourer the full amount of possible labour. But with the introduction of steam and modern machinery, the tables were turned. So rapidly did the introduction of the labour of women and children break down all traditional bounds to working hours, that the nineteenth century began with a system of overworking which is unparalleled in the history of the world, and which, as early as 1803, compelled the legislation to enact limitations of working hours. Mr. Marx gives a full account of the history of English factory legislation up to the Workshops Act of 1867, and draws from it these conclusions:

1) Machinery and steam cause overwork, at first, in those branches of industry where they are applied, and legislative restrictions are, therefore, first applied to these branches; but in the sequel we find that this system of overwork has spread also to almost all trades even where no machinery is used, or where the most primitive modes of production continue in existence. (Vide Children's Employment Commission's Reports.)

2) With the introduction of the labour of women and children in the factories, the individual “free” labourer loses his power of resistance to the encroachments of capital and has to submit unconditionally. Thus he is reduced to collective resistance; the struggle of class against class, of the collective workmen against the collective capitalists begins.

If we now look back to the moment when we supposed our “free” and “equal” labourer to enter into a contract with the capitalist, we find that, under the process of production, a good many things have changed considerably. That contract, on the “part of the labourer, is not a free contract. The daily time during which he is at liberty to sell his working power is the time during which he is compelled to sell it; and it is merely the opposition of the labourers, as a mass, which forcibly obtains the enactment of a public law to prevent them from selling themselves and their children, by a “free” contract, into death and slavery. “In the place of the grandiloquent catalogue of the inalienable rights of man, he has now nothing but the modest Magna Charta of the Factory Act.”--[288]

We have next to analyse the rate of surplus-value and its relation to the total quantity of surplus-value produced. In this inquiry, as we have done hitherto, we suppose the value of labour-power to be a determinate constant quantity.

Under this supposition, the rate of surplus-value determines at the same time the quantity furnished to the capitalist by a single labourer in a given time. If the value of our labour-power be 3/- a day representing six hours' labour, and the rate of surplus-value be 100 per cent, then the variable capital of 3/i- produces every day a surplus-value of 3/-, or the workman furnishes six hours of surplus-labour every day.

Variable capital being the expression in money of all the labour-power employed simultaneously by a capitalist, the sum total of the surplus-value produced by the labour-power is found by multiplying that variable capital by the rate of surplus-value; in other words it is determined by the proportion between the number of working powers simultaneously employed, and the degree of exploitation. Either of these factors may vary, so that the decrease in the one may be compensated by the increase of the other. A variable capital required to employ 100 labourers with a rate of surplus-value of 50 per cent (say 3 hours of daily surplus-labour) will produce no more surplus-value than half that variable capital, employing 50 labourers at a rate of surplus-value of 100 per cent (say six hours of daily surplus-labour). Thus, under certain circumstances and within certain limits, the supply of labour at the command of capital may become independent of the actual supply of labourers.

There is, however, an absolute limit to this increase of surplus-value by increasing its rate. Whatever may be the value of labour, whether it be represented by two or by ten hours of necessary labour, the total value of the work performed, day after day, by any labourer, can never attain the value representing 24 hours' labour. In order to obtain equal quantities of surplus-value, variable capital may be replaced by prolongation of the working day within this limit only. This will be an important element in explaining, hereafter, various phenomena arising from the two contradictory tendencies of capital: 1) to reduce the number of labourers employed, i.e. the amount of variable capital, and 2) yet to produce the greatest possible quantity of surplus-labour.

It follows further: “The value of labour being given, and the rate of surplus-value being equal, the quantities of surplus-value produced by two different capitals are in direct proportion to the quantities of variable capital contained in them. [...] This law flatly contradicts all experience founded upon the appearance of facts. Everybody knows that a cotton spinner who [...] works with a relatively large constant, and a relatively small variable capital, does not, on that account, obtain a lesser ratio of profit than a baker who puts in motion relatively little constant and relatively much variable capital. To solve this apparent contradiction, a good many intermediate links are required, just as, starting from elementary algebra, a great number of intermediate links are required in order to understand that o/o may represent a real quantity.” [293]

For a given country and a given length of working day, surplus-value can be increased only by increasing the number of labourers, i.e. by an increase of population; this increase forms the mathematical limit for the production of surplus-value by the collective capital of that country. On the other hand, if the number of labourers be determined, this limit is fixed by the possible prolongation of the working day. It will be seen hereafter that this law is valid for that form only of surplus-value which has been hitherto analysed.

We find, at this stage of our inquiry, that not every amount of money is capable of being converted into capital; that there is an extreme minimum for it: the cost of a unit of labouring power and of the means of labour necessary to keep it going. Suppose the rate of surplus-value to be 50 per cent, our infant-capitalist would be required to be able to employ two workmen in order to live, himself, as a workman lives. But this would prevent him from saving anything; and the end of capitalist production is not merely preservation, but also and chiefly increase of wealth.

“To live twice as well as a common labourer, and to retransform one half of the surplus-value produced into capital, he would have to be able to employ eight workmen. He might certainly take his share of the work, along with his workmen, but be would still remain a small master, a hybrid between capitalist and labourer. Now, a certain development of capitalist production renders it necessary that the capitalist should devote the whole of the time during which he acts as a capitalist, as capital personified, to the appropriation and control of other people's labour, and to the sale of its products. The restrictive guilds of the Middle Ages attempted to check the transformation of the small master into a capitalist by fixing a very low maximum to the number of workmen which each was allowed to employ. The owner of money or commodities changes into a real capitalist only then, when he is able to advance, for the purpose of production, a minimum sum far higher than this medieval maximum. Here, just as in the natural sciences, the correctness is proved of the law discovered by Hegel that mere quantitative changes, at a certain point, imply a qualitative difference.” [295-296]

The minimum amount of value required to change an owner of money or commodities into a capitalist varies for different stages of the development of capitalist production, and for a given stage of development, it varies for different branches of industry.

“During the process of production detailed above, the relation of capitalist and labourer has changed considerably. First of all, capital has been developed into command of labour, i.e. into command over the labourer himself. Personified capital, the capitalist, takes care that the labourer performs his work regularly, carefully and with the required degree of intensity.

“Further, capital has been developed into a compulsory relation which obliges the working class to perform more labour than is prescribed by the narrow circle of their own requirements. And as a producer of other people's industry, as an extortioner of surplus-labour and exploiter of labour-power, capital far exceeds in energy, recklessness, and efficiency all former systems of production, though they were based upon direct forced labour.

“Capital, at first, takes the command of labour under such technological conditions as it finds historically established. It does not, therefore, necessarily at once change the mode of production. The production of surplus-value, in the form hitherto analysed, that is to say by mere prolongation of the working day, appeared independent of every change in the mode of production itself. It was quite as efficient in the primitive baking trade as in modern cotton-spinning.

“In the process of production considered as a mere process of labour, the relation between the labourer and his means of production is not that of labour and capital, but that of labour and the mere instrument and raw material of productive action. In a tannery, for instance, he treats the skins as a mere object for labour. It is not the capitalists whose skin he tans. But things change as soon as we look upon the process of production as a process of creating surplus-value. The means of production at once change into means of absorbing other people's labour. It is no longer the workman who employs the means of production, it is the means of production which employ the workman. It is not he who consumes them as material elements of his productive action; it is they which consume him as the ferment of their own vital process; and the vital process of capital consists in nothing but its progressive motion as value begetting value. Furnaces and workshops which have to stand idle at night, without absorbing labour, are a pure loss to the capitalist. Therefore furnaces and workshops constitute a 'title upon the night-work of the hands'. (See Reports of Children's Employment Commission, 4th Report, 1865, pages 79 to 85.) The mere change of money into means of production changes the latter into legal and compulsory titles upon other people's labour and surplus-labour.” [296-297]

There is, however, another form of surplus-value. Arrived at the utmost limit of the working day, another means remains to the capitalist for increasing surplus-labour: by increasing the productivity of labour, by thereby reducing the value of labour, and thus shortening the period of necessary labour. This form of surplus-value will be examined in a second article.