This Chapter begins Part 7 of volume 1 called “The Process of Accumulation of Capital” (which includes Chapters 23, 24, and 25).
For Marx, there is a process called the circulation of capital:
“The conversion of a sum of money into means of production and labour-power, is the first step taken by the quantum of value that is going to function as capital. This conversion takes place in the market, within the sphere of circulation. The second step, the process of production, is complete so soon as the means of production have been converted into commodities whose value exceeds that of their component parts, and, therefore, contains the capital originally advanced, plus a surplus-value. These commodities must then be thrown into circulation. They must be sold, their value realised in money, this money afresh converted into capital, and so over and over again. This circular movement, in which the same phases are continually gone through in succession, forms the circulation of capital.” (Marx 1906: 618).Surplus value is also split into various forms and redistributed:
“The capitalist who produces surplus-value—i.e., who extracts unpaid labour directly from the labourers, and fixes it in commodities, is, indeed, the first appropriator, but by no means the ultimate owner, of this surplus value. He has to share it with capitalists, with landowners, &c, who fulfil other functions in the complex of social production. Surplus-value, therefore, splits up into various parts. Its fragments fall to various categories of persons, and take various forms, independent the one of the other, such as profit, interest, merchants’ profit, rent, &c.” (Marx 1906: 618–619).Part 7 also assumes that capitalists sell their commodities at their labour value, and the capitalists keep the surplus value (Marx 1990: 710).
Capitalist production is continuous and repeats the same cyclical processes (Marx 1990:711):
“The conditions of production are also those of reproduction. No society can go on producing, in other words, no society can reproduce, unless it constantly reconverts a part of its products into means of production, or elements of fresh products. All other circumstances remaining the same, the only mode by which it can reproduce its wealth, and maintain it at one level, is by replacing the means of production—i.e., the instruments of labour, the raw material, and the auxiliary substances consumed in the course of the year—by an equal quantity of the same kind of articles; these must be separated from the mass of the yearly products, and thrown afresh into the process of production. Hence, a definite portion of each year's product belongs to the domain of production. Destined for productive consumption from the very first, this portion exists, for the most part, in the shape of articles totally unfitted for individual consumption.” (Marx 1906: 620).Surplus value is a form of “revenue flowing out of capital” (Marx 1906: 620).
Production is the continuous process in which its elements (variable capital/living labour and constant capital) are constantly renewed and reproduced (Brewer 1984: 67). That is, both labour and factor inputs must be reproduced for capitalism to function (Brewer 1984: 68).
Simple reproduction is a “mere repetition of the process of production on the old scale” (Marx 1906: 621), and in such simple reproduction the capitalist consumes his surplus value and the production level is constant (Brewer 1984: 68).
Marx explains the role of variable capital in this:
“Variable capital is therefore only a particular historical form of appearance of the fund for providing the necessaries of life, or the labour-fund which the labourer requires for the maintenance of himself and family, and which, whatever be the system of social production, he must himself produce and reproduce. If the labour-fund constantly flows to him in the form of money that pays for his labour, it is because the product he has created moves constantly away from him in the form of capital. But all this does not alter the fact, that it is the labourer's own labour, realised in a product, which is advanced to him by the capitalist.” (Marx 1906: 622).Surplus value becomes converted into capitalised surplus value or accumulated capital (Marx 1990: 715). That is, an original capital outlay by a capitalist, even if he did not acquire the money by exploiting workers, will be gradually transformed into capitalised surplus value, or value that should by right belong to the workers (Harvey 2010: 249).
Marx explains this as follows:
“If a capital of £1000 beget yearly a surplus-value of £200, and if this surplus-value be consumed every year, it is clear that at the end of 5 years the surplus-value consumed will amount to 5 × £200 or the £1000 originally advanced. If only a part, say one half, were consumed, the same result would follow at the end of 10 years, since 10 × £100 = £1000. General Rule : The value of the capital advanced divided by the surplus-value annually consumed, gives the number of years, or reproduction periods, at the expiration of which the capital originally advanced has been consumed by the capitalist and has disappeared. The capitalist thinks, that he is consuming the produce of the unpaid labour of others, i.e., the surplus-value, and is keeping intact his original capital; but what he thinks cannot, alter facts. After the lapse of a certain number of years the capital value he then possesses is equal to the sum total of the surplus-value appropriated by him during those years, and the total value he has consumed is equal to that of his original capital. It is true, he has in hand a capital whose amount has not changed, and of which a part, viz., the buildings, machinery, &c., were already there when the work of his business began. But what we have to do with here, is not the material elements, but the value, of that capital. When a person gets through all his property, by taking upon himself debts equal to the value of that property, it is clear that his property represents nothing but the sum total of his debts. And so it is with the capitalist; when he has consumed the equivalent of his original capital, the value of his present capital represents nothing but the total amount of the surplus-value appropriated by him without payment. Not a single atom of the value of his old capital continues to exist.” (Marx 1906: 623–624).The worker’s role is as follows:
“On the one hand, the process of production incessantly converts material wealth into capital, into means of creating more wealth and means of enjoyment for the capitalist. On the other hand the labourer, on quitting the process, is what he was on entering it, a source of wealth, but devoid of all means of making that wealth his own. Since, before entering on the process, his own labour has already been alienated from himself by the sale of his labour-power, has been appropriated by the capitalist and incorporated with capital, it must, during the process, be realised in a product that does not belong to him. Since the process of production is also the process by which the capitalist consumes labour-power, the product of the labourer is incessantly converted, not only into commodities, but into capital, into value that sucks up the value-creating power, into means of subsistence that buy the person of the labourer, into means of production that command the producers. The labourer therefore constantly produces material, objective wealth, but in the form of capital, of an alien power that dominates and exploits him; and the capitalist as constantly produces labour-power, but in the form of a subjective source of wealth, separated from the objects in and by which it can alone be realised; in short he produces the labourer, but as a wage-labourer. This incessant reproduction, this perpetuation of the labourer, is the sine qua non of capitalist production.There is “alienation” in two senses:
The labourer consumes in a twofold way. While producing he consumes by his labour the means of production, and converts them into products with a higher value than that of the capital advanced. This is his productive consumption. It is at the same time consumption of his labour-power by the capitalist who bought it. On the other hand, the labourer turns the money paid to him for his labour-power, into means of subsistence: this is his individual consumption. The labourer's productive consumption, and his individual consumption, are therefore totally distinct. In the former, he acts as the motive power of capital, and belongs to the capitalist. In the latter, he belongs to himself, and performs his necessary vital functions outside the process of production. The result of the one is, that the capitalist lives; of the other, that the labourer lives.” (Marx 1906: 625–626).
(1) the workers’ alienation of their labour sold to capitalists;Capitalists strive to reduce the real wage to the bare minimum:
(2) there is also an alienation of product produced by the workers, which is appropriated by the capitalists.
“The consumption of food by a beast of burden is none the less a necessary factor in the process of production, because the beast enjoys what it eats. The maintenance and reproduction of the working-class is, and must ever be, a necessary condition to the reproduction of capital. But the capitalist may safely leave its fulfillment to the labourer’s instincts of self-preservation and of propagation. All the capitalist cares for, is to reduce the labourer's individual consumption as far as possible to what is strictly necessary, and he is far away from imitating those brutal South Americans, who force their labourers to take the more substantial, rather than the less substantial, kind of food.This “reproduction of the working class” also involves the teaching of the appropriate skills to the new generation (Marx 1906: 629).
Hence both the capitalist and his ideological representative, the political economist, consider that part alone of the labourer’s individual consumption to be productive, which is requisite for the perpetuation of the class, and which therefore must take place in order that the capitalist may have labour-power to consume; what the labourer consumes for his own pleasure beyond that part, is unproductive consumption. If the accumulation of capital were to cause a rise of wages and an increase in the labourer’s consumption, unaccompanied by increase in the consumption of labour-power by capital, the additional capital would be consumed unproductively. In reality, the individual consumption of the labourer is unproductive as regards himself, for it reproduces nothing but the needy individual; it is productive to the capitalist and the State, since it is the production of the power that creates their wealth.
From a social point of view, therefore, the working-class, even when not directly engaged in the labour-process, is just as much an appendage of capital as the ordinary instruments of labour. Even its individual consumption is, within certain limits, a mere factor in the process of production. That process, however, takes good care to prevent these self-conscious instruments from leaving it in the lurch, for it removes their product, as fast as it is made, from their pole to the opposite pole of capital. Individual consumption provides, on the one hand, the means for their maintenance and reproduction: on the other hand, it secures by the annihilation of the necessaries of life, the continued reappearance of the workman in the labour-market. The Roman slave was held by fetters: the wage-labourer is bound to his owner by invisible threads. The appearance of independence is kept up by means of a constant change of employers, and by the fictio juris of a contract.” (Marx 1906: 626–628).
Marx sums up the relation of labour to capitalism:
“Capitalist production, therefore, of itself reproduces the separation between labour-power and the means of labour. It thereby reproduces and perpetuates the condition for exploiting the labourer. It incessantly forces him, to sell his labour- power in order to live, and enables the capitalist to purchase labour-power in order that he may enrich himself. It is no longer a mere accident, that capitalist and labourer confront each other in the market as buyer and seller. It is the process itself that incessantly hurls back the labourer on to the market as a vendor of his labour-power, and that incessantly converts his own product into a means by which another man can purchase him. In reality, the labourer belongs to capital before he has sold himself to capital. His economical bondage is both brought about and concealed by the periodic sale of himself, by his change of masters, and by the oscillations in the market price of labour-power.So clearly Marx does not think that real wages in capitalism will rise and allow workers to become more independent of capitalists. Rather, real wages tend to the subsistence level so that the workers must sell their labour-power to capitalists again and again (Brewer 1984: 68).
Capitalist production, therefore, under its aspect of a continuous connected process, of a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capitalist relation; on the one side the capitalist, on the other the wage-labourer.” (Marx 1906: 632–633).
Cleaver, Harry. Study Guide to Capital Volume I, “Chapter 23: Simple Reproduction”
Brewer, Anthony. 1984. A Guide to Marx’s Capital. Cambridge University Press, Cambridge.
Harvey, David. 2010. A Companion to Marx’s Capital. Verso, London and New York.
Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.
Marx, Karl. 1990. Capital. A Critique of Political Economy. Volume One (trans. Ben Fowkes). Penguin Books, London.