KARL MARX

C A P I T A L

A CRITIQUE OF POLITICAL ECONOMY

Volume II

Book II :

The Process of
Circulation of Capital

Edited by Frederick Engels

PROGRESS PUBLISHERS
M o s c o w

TRANSLATED FROM THE GERMAN
EDITED BY THE LATE I. LASKER

First published 1956
Second printing 1957
Third printing 1962
Fouth printing 1967
Fifth printing 19771
Sixth printing 1974

Prepared © in its entirety for the Internet by David J. Romagnolo, djr@cruzio.com
(May 1997)

PUBLISHERS' NOTE

The second volume of Capital was put in shape and finally edited by Frederick Engels after the death of Karl Marx. The first German edition of it appeared in 1885.
The second German edition, that of 1893, was likewise prepared by Engels.
The present English edition follows the German 1893 edition carefully checked with the manuscript edited by Engels and now preserved at the Institute of Marxism-Leninism under the C.C., C.P.S.U. The few misprints and inaccuracies in the text, in figures and bibliographical data discovered in the 1893 edition, have been corrected.
The book included Engels's Prefaces to the first and second German editions of Capital, Volume II, and is provided with bibliographical, name, and subject indexes.
All quotations from English and American authors have been checked with the original sources.
An effort has been made to preserve in this volume the terminology elaborated in the Engels-authorised English translation of the first volume of Capital.
Extensive use has been made of the English translation of the second volume of Capital published by Charles H. Kerr & Co., Chicago, 1919.
All quotaions from the English text of the first volume of Capital refer to the publication: Karl Marx, Capital, Volume I, Foreign Languages Publishing House, Moscow, 1954.

C O N T E N T S

Page

Preface . . . . . . . . . . . . . . . . . . . . . .

1

B O O K II

THE PROCESS OF CIRCULATION OF CAPITAL

P A R T I

THE METAMORPHOSES OF CAPITAL AND THEIR CIRCUITS

CHAPTER I. The Circuit of Money-Capital . . . . . . . . .

25

I.
II.
III.
IV.

First Stage. M -- C . . . . . . . . . . . . . . . .
Second Stage. Function of Productive Capital . . . . .
Third Stage. C' -- M' . . . . . . . . . . . . . . .
The Circuit as a Whole . . . . . . . . . . . . . .

26
34
38
48

CHAPTER II. The Circuit of Productive Capital. . . . . . .

65

I.
II.
III.
IV.

Simple Reproduction . . . . . . . . . . . . . . .
Accumulation and Reproduction on an Extended Scale . .
Accumulation of Money . . . . . . . . . . . . . .
Reserve Fund . . . . . . . . . . . . . . . . . .

66
80
84
86

CHAPTER III. The Circuit of Commodity-Capital . . . . . .

89

CHAPTER IV. The Three Formulas of the Circuit . . . . . .

103

Natural, Money and Credit Economy . . . . . . . . . . .
The Meeting of Supply and Demand . . . . . . . . . . .

---
---

CHAPTER V. The Time of Circulation . . . . . . . . . .

124

CHAPTER VI. The Costs of Circulation . . . . . . . . . .

132

I.

II.

III.

Genuine Costs of Circulation . . . . . . . . . . .
1. The Time of Purchase and Sale . . . . . . . . . .
2. Book-Keeping . . . . . . . . . . . . . . . . .
3. Money . . . . . . . . . . . . . . . . . . . .
Costs of Storage . . . . . . . . . . . . . . . .
1. Formation of Supply in General . . . . . . . . .
2. The Commodity-Supply Proper . . . . . . . . . .
Costs of Transportation . . . . . . . . . . . . .

132
132
136
138
139
140
146
152

P A R T II

THE TURNOVER OF CAPITAL

CHAPTER VII. The Turnover Time and the Number of Turnovers

156

CHAPTER VIII. Fixed Capital and Circulating Capital . . . .

160

I.
II.

Distinctions of Form . . . . . . . . . . . . . .
Components, Replacement, Repair, and Accumulation
of Fixed Capital . . . . . . . . . . . . . . . .

160

172

CHAPTER IX. The Aggregate Turnover of Advanced Capital.
Cycles of Turnover . . . . . . . . . . . . . . .

186

CHAPTER X. Theories of Fixed and Circulating Capital. The
Physiocrats and Adam Smith . . . . . . . . . . .

193

CHAPTER XI. Theories of Fixed and Circulating Capital. Ricardo

219

CHAPTER XII. The Working Period . . . . . . . . . . . .

232

CHAPTER XIII. The Time of Production . . . . . . . . . .

242

CHAPTER XIV. The Time of Circulation . . . . . . . . . .

252

CHAPTER XV. Effect of the Time of Turnover on the Magnitude
of Advanced Capital . . . . . . . . . . . . . . .

261

I.
II.

III.
IV.
V.

The Working Period Equal to the Circulation Period . .
The Working Period Greater Than the Period of Circula-
tion . . . . . . . . . . . . . . . . . . . . . .
The Working Period Smaller Than the Circulation Period
Conclusions . . . . . . . . . . . . . . . . . . .
The Effect of a Change of Prices . . . . . . . . . .

270

274
279
283
289

CHAPTER XVI. The Turnover of Variable Capital. . . . . . .

297

I.
II.
III.

The Annual Rate of Surplus-Value. . . . . . . . . .
The Turnover of the Individual Variable Capital . . .
The Turnover of the Variable Capital from the Social
Point of View . . . . . . . . . . . . . . . . . .

297
312

316

CHAPTER XVII. The Circulation of Surplus-Value . . . . . .

323

I.
II.

Simple Reproduction . . . . . . . . . . . . . . .
Accumulation and Reproduction on an Extended Scale . .

329
348

P A R T III

THE REPRODUCTION AND CIRCULATION OF THE AGGREGATE
SOCIAL CAPITAL

CHAPTER XVIII. Introduction. . . . . . . . . . . . . . .

355

I.
II.

The Subject Investigated . . . . . . . . . . . . . .
The Role of Money-Capital . . . . . . . . . . . . . .

355
358

CHAPTER XIX. Former Presentations of the Subject . . . . .

363

I.
II.

III.

The Physiocrats . . . . . . . . . . . . . . . . . .
Adam Smith. . . . . . . . . . . . . . . . . . . .
1. Smith's General Points of View. . . . . . . . . . .
2. Adam Smith Resolves Exchange-Value into v+s . . . .
3. The Constant Part of Capital. . . . . . . . . . . .
4. Capital and Revenue in Adam Smith . . . . . . . . .
5. Recapitulations . . . . . . . . . . . . . . . . .
Later Economists . . . . . . . . . . . . . . . . .

363
366
366
374
377
382
389
393

CHAPTER XX. Simple Reproduction . . . . . . . . . . . .

396

I.
II.
III.
IV.

V.
VI.
VII.
VIII.
IX.
X.
XI.

XII.
XIII.

The Formulation of the Question . . . . . . . . . .
The Two Departments of Social Production . . . . . . .
Exchange Between the Two Departments I(v+s) versus IIc .
Exchange within Department II. Necessities of Life and
Articles of Luxury . . . . . . . . . . . . . . . . .
The Mediation of Exchange by the Circulation of Money . .
The Constant Capital of Department I . . . . . . . . .
Variable Capital and Surplus-Value in Both Departments .
The Constant Capital in Both Departments . . . . . . .
A Retrospect to Adam Smith, Storch, and Ramsay . . . .
Capital and Revenue: Variable Capital and Wages . . . .
Replacement of the Fixed Capital . . . . . . . . . . .
1. Replacement of the Wear and Tear Portion of the Value
in the Form of Money . . . . . . . . . . . . . . .
2. Replacement of Fixed Capital in Kind . . . . . . . .
3. Results . . . . . . . . . . . . . . . . . . . .
The Reproduction of the Money Material . . . . . . . .
Destutt de Tracy's Theory of Reproduction . . . . . . .

396
399
402

406
415
426
429
433
437
441
453

457
462
471
473
484

CHAPTER XXI. Accumulation and Reproduction on an Extended
Scale . . . . . . . . . . . . . . . . . . . . . .

493

I.

II.
III.

IV.

Accumulation in Department I . . . . . . . . . . . .
1. The Formation of a Hoard . . . . . . . . . . . . .
2. The Additional Constant Capital . . . . . . . . . .
3. The Additional Variable Capital . . . . . . . . . .
Accumulation in Department II . . . . . . . . . . . .
Schematic Presentation of Accumulation . . . . . . . .
1. First Illustration. . . . . . . . . . . . . . . . .
2. Second Illustration. . . . . . . . . . . . . . . .
3. Replacement of IIc in Accumulation . . . . . . . . .
Supplimentry Remarks . . . . . . . . . . . . . . .

496
496
500
505
506
510
514
518
523
526

Name Index (not available -- DJR)

529

Index of Authorities Quoted in Capital, Vol. II (not available -- DJR)

531

Subject Index . . . . . . . . . . . . . . . . . . . . .

535

From Marx
to Mao

Marx and Engels
Collection

Reading
Guide

	*Page*
Preface . . . . . . . . . . . . . . . . . . . . . .	1

CHAPTER I. The Circuit of Money-Capital . . . . . . . . .		25
I. II. III. IV.	First Stage. M -- C . . . . . . . . . . . . . . . . Second Stage. Function of Productive Capital . . . . . Third Stage. C' -- M' . . . . . . . . . . . . . . . The Circuit as a Whole . . . . . . . . . . . . . .	26 34 38 48
CHAPTER II. The Circuit of Productive Capital. . . . . . .		65
I. II. III. IV.	Simple Reproduction . . . . . . . . . . . . . . . Accumulation and Reproduction on an Extended Scale . . Accumulation of Money . . . . . . . . . . . . . . Reserve Fund . . . . . . . . . . . . . . . . . .	66 80 84 86
CHAPTER III. The Circuit of Commodity-Capital . . . . . .		89
CHAPTER IV. The Three Formulas of the Circuit . . . . . .		103
Natural, Money and Credit Economy . . . . . . . . . . . The Meeting of Supply and Demand . . . . . . . . . . .		--- ---
CHAPTER V. The Time of Circulation . . . . . . . . . .		124
CHAPTER VI. The Costs of Circulation . . . . . . . . . .		132
I. II. III.	Genuine Costs of Circulation . . . . . . . . . . . 1. The Time of Purchase and Sale . . . . . . . . . . 2. Book-Keeping . . . . . . . . . . . . . . . . . 3. Money . . . . . . . . . . . . . . . . . . . . Costs of Storage . . . . . . . . . . . . . . . . 1. Formation of Supply in General . . . . . . . . . 2. The Commodity-Supply Proper . . . . . . . . . . Costs of Transportation . . . . . . . . . . . . .	132 132 136 138 139 140 146 152

CHAPTER VII. The Turnover Time and the Number of Turnovers		156
CHAPTER VIII. Fixed Capital and Circulating Capital . . . .		160
I. II.	Distinctions of Form . . . . . . . . . . . . . . Components, Replacement, Repair, and Accumulation of Fixed Capital . . . . . . . . . . . . . . . .	160 172
CHAPTER IX. The Aggregate Turnover of Advanced Capital. Cycles of Turnover . . . . . . . . . . . . . . .		186
CHAPTER X. Theories of Fixed and Circulating Capital. The Physiocrats and Adam Smith . . . . . . . . . . .		193
CHAPTER XI. Theories of Fixed and Circulating Capital. Ricardo		219
CHAPTER XII. The Working Period . . . . . . . . . . . .		232
CHAPTER XIII. The Time of Production . . . . . . . . . .		242
CHAPTER XIV. The Time of Circulation . . . . . . . . . .		252
CHAPTER XV. Effect of the Time of Turnover on the Magnitude of Advanced Capital . . . . . . . . . . . . . . .		261
I. II. III. IV. V.	The Working Period Equal to the Circulation Period . . The Working Period Greater Than the Period of Circula- tion . . . . . . . . . . . . . . . . . . . . . . The Working Period Smaller Than the Circulation Period Conclusions . . . . . . . . . . . . . . . . . . . The Effect of a Change of Prices . . . . . . . . . .	270 274 279 283 289
CHAPTER XVI. The Turnover of Variable Capital. . . . . . .		297
I. II. III.	The Annual Rate of Surplus-Value. . . . . . . . . . The Turnover of the Individual Variable Capital . . . The Turnover of the Variable Capital from the Social Point of View . . . . . . . . . . . . . . . . . .	297 312 316
CHAPTER XVII. The Circulation of Surplus-Value . . . . . .		323
I. II.	Simple Reproduction . . . . . . . . . . . . . . . Accumulation and Reproduction on an Extended Scale . .	329 348

CHAPTER XVIII. Introduction. . . . . . . . . . . . . . .		355
I. II.	The Subject Investigated . . . . . . . . . . . . . . The Role of Money-Capital . . . . . . . . . . . . . .	355 358
CHAPTER XIX. Former Presentations of the Subject . . . . .		363
I. II. III.	The Physiocrats . . . . . . . . . . . . . . . . . . Adam Smith. . . . . . . . . . . . . . . . . . . . 1. Smith's General Points of View. . . . . . . . . . . 2. Adam Smith Resolves Exchange-Value into v+s . . . . 3. The Constant Part of Capital. . . . . . . . . . . . 4. Capital and Revenue in Adam Smith . . . . . . . . . 5. Recapitulations . . . . . . . . . . . . . . . . . Later Economists . . . . . . . . . . . . . . . . .	363 366 366 374 377 382 389 393
CHAPTER XX. Simple Reproduction . . . . . . . . . . . .		396
I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII.	The Formulation of the Question . . . . . . . . . . The Two Departments of Social Production . . . . . . . Exchange Between the Two Departments I(v+s) versus IIc . Exchange within Department II. Necessities of Life and Articles of Luxury . . . . . . . . . . . . . . . . . The Mediation of Exchange by the Circulation of Money . . The Constant Capital of Department I . . . . . . . . . Variable Capital and Surplus-Value in Both Departments . The Constant Capital in Both Departments . . . . . . . A Retrospect to Adam Smith, Storch, and Ramsay . . . . Capital and Revenue: Variable Capital and Wages . . . . Replacement of the Fixed Capital . . . . . . . . . . . 1. Replacement of the Wear and Tear Portion of the Value in the Form of Money . . . . . . . . . . . . . . . 2. Replacement of Fixed Capital in Kind . . . . . . . . 3. Results . . . . . . . . . . . . . . . . . . . . The Reproduction of the Money Material . . . . . . . . Destutt de Tracy's Theory of Reproduction . . . . . . .	396 399 402 406 415 426 429 433 437 441 453 457 462 471 473 484
CHAPTER XXI. Accumulation and Reproduction on an Extended Scale . . . . . . . . . . . . . . . . . . . . . .		493
I. II. III. IV.	Accumulation in Department I . . . . . . . . . . . . 1. The Formation of a Hoard . . . . . . . . . . . . . 2. The Additional Constant Capital . . . . . . . . . . 3. The Additional Variable Capital . . . . . . . . . . Accumulation in Department II . . . . . . . . . . . . Schematic Presentation of Accumulation . . . . . . . . 1. First Illustration. . . . . . . . . . . . . . . . . 2. Second Illustration. . . . . . . . . . . . . . . . 3. Replacement of IIc in Accumulation . . . . . . . . . Supplimentry Remarks . . . . . . . . . . . . . . .	496 496 500 505 506 510 514 518 523 526

Name Index (not available -- DJR)	529
Index of Authorities Quoted in Capital, Vol. II (not available -- DJR)	531
Subject Index . . . . . . . . . . . . . . . . . . . . .	535