Understanding Capital Volume II, John Fox, 1985

Part III

The Reproduction and Circulation of the Aggregate Social Capital

Chapter 18: Introduction

"But in both the first and the second Parts it was always only a question of some individual capital, of the movement of some individualised part of social capital. However the circuits of the individual capitals intertwine, presuppose and necessitate one another, and form, precisely in this interlacing, the movement of the total social capital." (p. 357 [429])

In the first two parts of Volume II of Capital, Marx investigated the processes of circulation and reproduction primarily from the point of view of an individual capital. At points, however, Marx introduced the concept of the aggregate capital of society, and he briefly considered the interrelationships among different individual capitals, between capital and labor, and between production and consumption. These topics now take center stage. In many respects, the concluding section of Volume II is the most creative part of the volume, and, indeed, is often considered among the most important of Marx's contributions. It is in this part of Capital that Marx constructs what would today be called macroeconomic models, formal systems displaying the interrelations among the various parts of the economy.

Individual capitals taken together comprise the aggregate ssocial capital; the circulation and reproduction of the aggregate social capital entails not only the circulation of capital itself, but also the circulation of commodities generally. Furthermore, in the analysis of social reproduction, not just production, but consumption as well must be considered. These points were touched on in Chapter 4. Labor-power is a commodity purchased by capital, but labor-power is not produced on a capitalist basis. Laborers and capitalists purchase their consumption goods from capitalists, spending wages and surplus-value derived from capital. Finally, capitalists purchase means of production from each other. All these exchanges are involved in the analysis of the circulation of the aggregate social capital, although only the last represents exchange between different functioning individual capitals.

Considered socially, as well as individually, money capital is required to set capitalist production in motion and to continue the process of reproduction. Money is required because capital must circulate: productive capital is purchased as commodities, and the product of capitalist production is sold as commodities. As was explained in the analysis of turnover, the amount of money capital required is dependent upon the scale of production, and on the length of the turnover period for which capital must be advanced.

This is not to say, however, that the amount of money capital available places absolute limits on the scope of capitalist production. Marx enumerates a number of previously considered factors here: for example, with wages fixed, labor-power may be exploited to a greater or a lesser extent. Furthermore, the use of natural materials in production may be increased without additional expenditure of capital. The employment of additional auxiliary materials may have a greater than proportional effectiveness. Similarly, elements of fixed capital may be used more effectively; although they then would wear away more quickly (i.e., their turnover would be shortened), their value would return to the capitalist more quickly as well. Natural forces, the accumulated skill of individual laborers, and the productive power of social labor are all free to the capitalist!. Finally, shortening the turnover period allows a given money capital to set in motion more productive capital.