Understanding Capital Volume II, John Fox, 1985


1.1 What makes a general act of circulation of commodities simultaneously part of the circuit of an individual capital? Are there general acts of circulation that are not part of the circuit of capital?

1.2 There is a qualitative division of money capital into one part purchasing means of production and another part purchasing labor-power. Why does Marx say that this division also expresses a quantitative relation? Can this division be related to the concept of the composition of capital, introduced in Volume I?

1.3 How is it that the class relation between workers and capitalists is presupposed by the exchange of money capital for labor-power (M -L)? What is the relationship between the circuit of capital and the circulation of labor-power as a commodity?

 1.4 How can money capital be capital if it can only perform the functions of money? What distinguishes money capital from money generally?

1.5 Why does Marx say that capitalist production has a disintegrating effect on all older modes of production? In your answer you may wish to refer to material in Volume I of Capital.

1.6 What are the different roles played by means of production and labor-power in the creation of value? In the creation of surplus-value? Make reference to Volume I if necessary.

1.7    Explain how Marx employs the symbols C, c, M', M, and m. Why does he use the symbol M to represent advanced capital even when some of this advanced capital is capitalized surplus-value?

1.8 What does Marx mean when he says that M' and C' do not differ as money capital and commodity capital but as money and commodities? What is the relationship that P bears to both M' and C'?

1.9 How does Marx use the term "industrial capital"? What is the relationship between this concept and the three forms of capital discussed in this chapter: money capital, productive capital, and commodity capital?

1.10 Marx presents two examples of capitalist production that have abbreviated circuits: the production of the money commodity (gold), and transportation. Explain the two examples. What points does Marx develop from these examples?

1.11    What are the distinguishing features."9! of the circuit of money capital?

1.12 In what sense is the circuit of capital the unity of circulation and production? Why must both be included?

1.13    What is illusory about the circuit of money capital?

2.1 In discussing simple reproduction why does Marx say that m is not advanced but spent? What is the relationship between the worker's (L--M--C) and the capitalist's (c--m--c) consumption, on the one hand, and the circuit of capital on the other?

 2.2 How can the process of reproduction at times continue even when produced commodities do not really enter individual or productive consumption? How is this important to an understanding of economic crises?

 2.3 In discussing the relationship of the circuit of money capital (M . . . M') to that of productive capital (P . . . P), Marx states that the second form of the circuit is a "criticism" of the first. He explains that the circuit of productive capital reveals the dependence of money capital on the process of reproduction. Why is this an important point?

2.4 What is a hoard? What is latent money capital? How are the two concepts related? How does latent money, capital figure in the circulation of capital?

2.5 What is the difference between simple reproduction and reproduction on an extended scale? How is this difference reflected in the circuit of productive capital?

2.6 Why does Marx say that it is incorrect to derive the properties of productive capital from its mode of existence in means of production?

2.7    What is a reserve fund, and what is its relation to latent money capital?

2.8 The circuit of productive capital encompasses the same acts of exchange and production that comprise the circuit of money capital. What, then, is Marx's purpose in introducing this second form of the circuit of industrial capital?

3.1 Marx argues that the circuit of commodity capital implies the existence of other industrial capital in the form of labor-power and means of production purchased as commodities. Why is this significant? Why is it that the other two forms of the circuit do not have similar implications?

3.2 Why is the third form of the circuit particularly suited to the analysis of the total social capital, while the other forms of the circuit are better adapted to the analysis of individual capitals?

4.1 In what sense is the circuit of industrial capital the unity of production and circulation? The unity of the three forms of capital and their circuits?

4.2 Why is it important to consider capital as self-expanding value, not only in terms of class relations, but also as a circuit-describing process going through various stages?

4.3 Why does Marx distinguish between value and exchange value in his discussion of the expansion of capital-value? Why does value function as capital only in so far as it remains identical with itself and is compared with itself?

4.4 Why is it that an exchange within the circuit of an individual capital does not necessarily represent the intertwining of the metamorphoses of different capitals, even though an exchange C--M on the part of the seller implies M--C on the part of the buyer?

5.1 What is the time of production? What are its different parts? How does each of these parts figure into the production of new value? Of surplus-value? Of the transfer of value from the means of production to the product?

5.2 What is the time of circulation? What are its parts? What is the role of circulation time in the creation of value and surplus-value?

6.1 Do wage laborers engaged in buying and selling produce value or surplus-value? Do these laborers perform surplus labor? How are they paid?

6.2    Is bookkeeping productive labor? How does bookkeeping differ from buying and selling?

6.3 How is it possible for labor that is unproductive from the point of view of society to be productive for the individual capitalist?

6.4 Marx argues that supply formation is common to all modes of social production. What are the general characteristics of supply formation? What are the specific characteristics of supply formation under capitalism?

6.5 How, and to what extent, is the labor expended in maintaining supplies productive of value? To what extent, and under what circumstances, are the costs of supply formation unproductive?

6.6 What does Marx mean when he writes (p. 152[225-226]), "The general law is that all costs of circulation which arise only from changes in the forms of commodities do not add to their value"? In this context, what is meant by "changes in the forms of commodities"?

6.7 Is labor expended in transportation productive or unproductive? How does transportation affect the value of goods transported? Why does Marx consider transportation to be a branch of industrial capital?

7.1    What is the turnover of capital? What is the time of turnover?

7.2 Why does Marx employ the circuits of money capital and productive capital, in preference to the circuit of commodity capital, in his examination of turnover?

8.1 What is the difference between fixed and circulating capital? What is the basis for the distinction between them?

8.2 How does the distinction between fixed and circulating capital differ from that between constant and variable capital?

8.3 Why is the distinction between fixed and circulating capital applicable only to productive capital and its circuit? Why does Marx say that money capital and commodity capital are "circulation capital" but not circulating capital?

8.4 What are the different causes of wear and tear? How does wear and tear of fixed capital transmit value to the product?

8.5 How, and to what extent, do costs of maintenance and repair enter into the value of the product? Is capital employed for maintenance and repair fixed or circulating capital?

9.1 Why does Marx employ the circuit of money capital to derive the aggregate turnover of advanced capital?

9.2 Explain how the specific turnovers of the components of advanced capital are combined to obtain the aggregate turnover.

9.3 How is the turnover of fixed capital related to the business cycle?

10.1 How does the distinction between fixed and circulating capital appear in the work of the physiocrats? Why does Marx argue that they draw the distinction in an essentially correct manner?

10.2 What are the primary ways in which Adam Smith confuses the distinction between fixed and circulating capital? What are the negative consequences of Smith's confusion?

11.1 How is Smith's confusion regarding the distinction between fixed and circulating capital reflected in Ricardo's work?

11.2 What negative implications does an incorrect analysis of fixed and circulating capital have for the work of later economists?

12.1 What is the working period? How do differences in the working period affect the turnover of fixed capital? Of circulating capital?

12.2 Why is the capitalist motivated to decrease the working period? How may this purpose be accomplished?

13.1    How can the time of production exceed the working period?

14.1    Of what does the time of circulation consist? What factors affect the time of circulation?

14.2    How can the process of circulation affect production time?

15.1 Why is additional money capital for circulating capital required to insure the continuity of production during the period of circulation? How is the amount of this additional money capital determined?

15.2 Why is it the case that, during the period of turnover, a portion of industrial capital always exists in the form of money?

15.3 How is the supply of money capital affected by a change in the period of circulation? By a change in the price of materials of production (raw and auxiliary materials)? By a change in the price of the product?

16.1 What is the difference between variable capital advanced by the capitalist and variable capital employed in production?

16.2 Distinguish between the annual rate of surplus-value and the real rate of surplus-value. Explain the relations expressed in the formulas: S' = s'vn/v = s'n = sn/v.

16.3 How does a difference in their periods of turnover cause the annual rates of surplus-value of two capitals to differ, even if their real rates of surplus-value are identical? Illustrate this point.

16.4 What are the consequences of a long period of turnover from the point of view of an individual capital? From the point of view of society?

17.1 How does the accumulation of latent money capital figure in the development of the credit system?

17.2 Assuming the use of metallic money, where does the money required for the circulation of the commodities of a country come from? Where does the money required for the circulation of surplus-value come from?

17.3 Individual capitalists, and the capitalist class as a whole, obtain more money from circulation when they sell their products than they advanced for production. Who places the additional money in circulation?

17.4 How can there be a general increase in wages under simple reproduction? What is wrong with the argument that an increase in wages necessarily leads to increased demand and higher prices for subsistence goods, or to general price increases?

17.5    What is the difference between the circuit of money and the currency of money?

17.6 Where does money required for extended reproduction come from? What is the role of the credit system in decreasing the costs of circulation?

18.1 What are the components of the general circulation of commodities? Why does the circuit of individual capitals considered in the aggregate comprise not only the circulation of capital but also the general circulation of commodities?

18.2 What are the two aspects of money capital revealed by the study of the turnover of an individual capital?

18.3 Why does Marx say that the amount of functioning money capital does not place absolute limits on the scale of capitalist production?

19.1 What are the contributions of the physiocrats to an understanding of the process of reproduction? Why does the limited horizon of the physiocrats enable them to formulate an essentially correct conception of reproduction?

19.2 Explain Adam Smith's argument that all commodity-value "resolves" itself into variable capital and surplus-value. What happens to constant capital? What are the difficulties with Smith's thesis? Is there a sense in which Smith is correct?

19.3 Why does Marx say that Smith confuses the value of the annual product with the newly produced annual value?

19.4,    What are the positive contributions of Smith's analysis of reproduction?

20.1 What are the components of the annual social product? Why does the annual product include both productive and individual consumption?

20.2 Why does Marx choose to employ the circuit of commodity capital (C' . . . C') for the analysis of the reproduction of the aggregate social capital?

20.3 In studying the process of reproduction at the level of the aggregate social capital, why is it necessary to examine not only the replacement of the value of the parts of the annual product, but as well the replacement of their substance (i.e., their use-value)?

 20.4 How does Marx define the two departments of social production? What are the components of the value of the total annual commodity product of each department?

20.5 Under the assumption of simple reproduction, why must the variable capital plus surplus-value in Department I equal the constant capital in Department II (Iv+s = IIc)? Note that Iv+s is newly created value incorporated in means of production, and IIc is the value of pre-existing means of production used in producing articles of consumption. Keeping in mind what simple reproduction means, does this equality of values make sense?

20.6 On what basis, and to what purpose, does Marx divide Department II into two parts? Why does he say that part of the working class depends for its livelihood on the prodigality of the capitalist class?

20.7 Why is it tautological to say that crises are caused by a lack of effective consumption? What is the relationship between the business cycle and the consumption of the working class?

20.8 What role does money play in the process of reproduction? Who advances the money necessary to circulate the annual product?

20.9 Why is it the case that the money advanced for wages by capitalists in Department I returns to them not directly but indirectly?

20.10 What is the nature of the exchanges that take place within Department I? What is the value of the commodities exchanged?

20.11 How is it possible for the entire value-product of the total social working day to be consumed, at the same time that a part of this working day (2/3, in Marx's illustration) is spent in Department I for the production not of consumption goods, but of means of production? Why, in this context, does Marx refer to the exchange between departments (IIc = Iv+s) that takes place under simple reproduction as an exchange of part of this year's working day for part of last year's?

20.12 Why does it appear as if new elements of constant capital are produced without any of society's labor being expended in their production? Why is this appearance false?

20.13 Distinguish between the year's value-product and the value of the year's product. What is the significance of this distinction for understanding the process of simple reproduction?

20.14 What is the nature of the exchanges that take place between the working class and the capitalist class? Row is the class relation between workers and capitalists reproduced as part of the process of simple reproduction?

20.15 What does Marx mean when he says that variable capital always stays in the hands of the capitalist? What, then, is the relationship between the variable capital of the capitalist and the revenue (wages) of the worker?

20.16 How can simple reproduction take place if only some elements of fixed capital need to be replaced at the end of a given year, while all fixed capital contributes wear and tear to the value of the product?

20.17 Suppose that different amounts of fixed capital wear out in different years. Why does this circumstance create a disproportion between production of fixed and circulating capital, and, therefore, conflict with the requirements of simple reproduction?

20.18 In de Tracy's theory of reproduction, what are the sources of profit for industrial capitalists? Explain Marx's criticism of this theory.

21.1 What new considerations are introduced when extended reproduction is investigated not from the perspective of an individual capital, but for the aggregate social capital?

21.2 What is potential money capital? Is it different from latent money capital, discussed in Chapter 2? What is the role of potential money capital in, the process of extended reproduction?

21.3 Why is it that the balance of circulation can be maintained only on the assumption that the value of capitalists' one-sided purchases and that of one-sided sales tally? Is such an equivalence inevitable or accidental?

21.4 What is virtually additional productive capital? Where is it produced? What is its relation to potential money capital? What is its role in extended reproduction? Why is not only the value, but also the use-value, of virtually additional productive capital important?

21.5 Why must the amount of money available for circulation be larger under conditions of extended reproduction? What is the role of the credit system in this context?

21.6 If reproduction on an extended scale has nothing to do with the absolute volume of the product, what does it entail?