December 17, 2008

The Forest Lost Among the Trees

Part One: Chapters I – VI
First, allow me a momentary tangent:

With these first chapters of Volume II I got the immediate sense that we are now going to be taken through the intricacies of capital’s multiple forms and dynamics at a depth not undertaken in Volume One. Yet, following Mandel’s argument in the introduction, I find that the conventional approach to Volume II – that this is the dry, “economic” component of the series – is somewhat misleading. Connecting Mandel’s views with the last few Harvey lectures, I think we can approach Volume Two as Marx now having to necessarily expand into the realm of multiple capital circuits in interaction (i.e., the market, not just market-consumption, but competition and the production of means of production as commodities, realization of value, labour market, etc) in order to view capitalism in its general and complicated form. The category or function of the “social” appears to be absent in this analysis, since we are not taken through factory inspector reports or Marx’s scathing indignation against the sycophants of capital. But this does not, of course, mean that we have entered into the realm of a pure, abstract economic model being constructed – Marx is still conducting an immanent critique OF political economy – or at least that is what I will argue here. Which brings us back to the earlier questions posed in this blog, ones that, I think, should be on our minds when are moving through this volume as well – i.e., is Marx developing a counter-economic model? A ‘higher’ model of political economy? Or is political economy being approached as ideology? Are the ‘appearances’ that political economy assume as its conceptual components – ones derived from the everyday dynamics of exchange, labour, money transactions, etc – point to a reality that has been only partially understood by political economy, i.e. remaining at the level of appearances? Or is political economy masking the reality of the commodity form with natural law and Crusoe?

Extension of tangent to outside reading:
I want to quickly connect this with something I just finished reading - E.P. Thompson’s diatribe against Althusser and his students (“The Poverty of Philosophy”, 1978). Thompson’s entire argument is structured around the logic/history binary that has emerged in this blog – and I think that its safe to say this is one of the major dividing points within Marx’s own writings. Thus, I think this binary IS THERE in the argument itself (whether at the mode of analysis, or method of presentation), and it will continue to be a useful entry-point into these later volumes as long as we don’t reproduce the analytical dead-ends of humanism vs. economics, or empiricism vs. theory that the Althusser/Thompson debate exemplifies.

One of the more intriguing ideas that Thompson argues is that Althusser’s privileged “later-Marx” (i.e., Capital) expresses a “trap” that Marx himself could not escape and one that Althusser reifies into a static structure. For Thompson, Marx had gotten “trapped” in the very political economic mode that he hoped to untangle – a diversion from Marx’s life-long attempt to develop historical materialism (emphasis on historical) by a detour into the conceptual realm of political economy (emphasis on static-model). In other words, once Marx entered into the realm of political economy in order to critique its constitutive concepts (value, rent, price, market, tax, wage, interest, etc), these very concepts began to drive his work into a closed conceptual system. Thompson sees this as a conflict between historical materialism, an unfinished project for Marx (and a necessarily always unfinished project because of the transitory nature of its object - history) and the closed conceptual model of poli-econ in his later work.

I bring this up because the circuits that Marx works through in the first few chapters (money, productive, and commodity capital) seem to be reified at an abstract level where necessary assumptions both internal and external to these circuits have to be accepted in order for them to be explicated within their own logic (e.g., things are sold for their value, no market limitations, that buyers are available for sellers, etc – refer to the later Harvey lectures in Volume One where he discusses the function of these assumptions). Chapter Four addresses this issue somewhat. But these necessary assumptions indicate that we are working within the self-logic of capital, not necessarily the actual manifestation of these circuits in historical time (even though time seems to be a primary concern here – e.g., “circuit”). Can the two speak to each other? Of course, or we wouldn’t even be reading this. But I am still struggling with my own understanding of the implications of Marx’s oscillation between history and logic, and where, if any, these two tendencies contradict or reinforce each other. I think this makes Capital an immensely dynamic text – one that can go in multiple directions –each productive in their own right. Ok, the tangent is over.

A suggestion for those just beginning these first chapters of Vol II.; the analysis culminates in chapter four, within which the three circuits of capital come together into a theoretical whole. I had spent hours trying to understand the intricate differences of each circuit (chapters one through three), and in the end I lost sight of the forest among the trees. Anyhow, Marx’s objective is clearly expressed at the beginning of Chapter four:

“[If] we take all three forms together, then all the premises of the process appear as its result, as premises produced by the process itself. Each moment appears as a point of departure, of transit, and of return. The total process presents itself as the unity of the process of production and the process of circulation; the production process is the mediator of the circulation process, and vice versa. (180)”

Additionally, we get a further explanation of why circuit III (circuit of commodity capital: C’…C’) is the circuit that allows a fuller analysis of the total process – since it begins with the assumption of augmented capital (C’) and ends with augmented capital (C’), while encompassing the other circuits as mediating processes. This aligns with the argument posed in the first chapters of Vol. I; namely, that it is only when commodity production emerges as the universal form of production that the historical ‘moment’ of capitalism is located.

Generally speaking then, we have moved into the project of trying to think of the process as an organic, albeit contradictory, whole, one quite different from the last chapters of Vol I., consisting of an expansion into a much larger social process involving multiple and intertwined capitals. So before going any further, I want to discuss the specifics of each circuit of capital:

So the M-C…P…C’-M’ circuit of money capital expresses and/or hides certain aspects depending on where the analysis enters into the circuit – for this can be understood within its own multiple processes as:

1) M-C-L/mp…P….C’-M’
2) M-C, C’-M’
3) M….M’, C….C’
4) M-C…..P….C’(C+c)/M’ (M+m)
5) Etc.

Each of these express their own ‘appearances’ or functions within the dynamics of the circuit, and can affect the analysis when one enters into a specific level of the circuit(s). These are not isolated sub-circuits, of course, but various durations within a larger process – and moving out from the simple circuits of Vol I (individual circuit of both simple reproduction and expanded accumulation) through these more generalized circuits of Volume II, we are moving towards a complex process of that appears to be more than the sum of its individual circuits.

Here, in regards to the money-capital circuit, we return to themes that came up in Volume One: that capitalist accumulation appears as the valorization of value (M….M’), but that this requires use-values (or commodities) to bleed out of the circuit (chapter three); the fetishistic function of the money-form; etc – all of which are engaged at a much deeper logical analysis than the social manifestations discussed in Volume One.

It is important to note that Marx writes of all three of these (money, productive and commodity capital) as forms with their own unique and necessary functions. In regards to money-capital:

“As money capital, it exists in a state in which it can perform monetary functions, in the present case the functions of general means of purchase and payment….Money capital does not possess this capacity because it is capital, but because it is money. (112)”

This then produces certain fetishistic expressions, such as when money operates as wages (L-M-C); where at the level of appearance, it is an equal, monetary transaction for labour power. Yet, as Marx explored in Volume I, not only is this tautological (value being measures by value), but also that labour-power actually adds more value (surplus –value) to the commodity via production:

“This irrationality is rather overlooked. The irrationality consists in the fact that labour as the value-forming element cannot itself posses any value, and so a certain quantity of labour cannot have a value that is expressed in its price, in its equivalence with a certain definite quantity of money. We know, however, that wages are simply a disguised form, a form in which the price of a day’s labour-power, for example, presents itself as the price of the labour set in motion in the course of a day by this labour-power, so that the value produced by this labour-power in six hours’ labour, say, is expressed as the value of its twelve-hour functioning of labour. (113)”

More importantly, at the level of the total circuit, the money-form elides the other necessary components of its own transformations, appearing as M….M’:

“Since the mediating effect of its history is obliterated in the simply existence of this sum of money, and every trace of the specific difference which the various component parts of capital possess in the production process has vanished, the only remaining distinction is the crude, non-conceptual distinction between a ‘principal’….At the conclusion of its process the realized capital therefore appears as a sum of money, within which the distinction between principal and surplus expresses, in a naïve, non-conceptual manner, the capital relation. (129)”

Or later:

“The formula M-C…P…C’-M’, with the result M’=M+m, contains in its form a certain deception; it bears an illusory character that derives from the existence of the advanced and valorized value in its equivalent form, in money. What is emphasized is not the valorization of the value, but the money form of this process, the fact that the more value in the money form is finally withdrawn from the circulation sphere than was originally advanced to it…(141)”

These two paragraphs, I think, summarize the most important aspect of the chapter, that in M…M’-M…M’-M….M’ circuit, whereby valorized value is perpetually recapitalized (but only in the form of M, never M’), glosses over the necessary aspect of valorization in the production process (think of this in regard to the circuit of commodity capital; C’…C’).

Two things I wanted to throw out for discussion are:

1) Its interesting to take the notion of an ‘interruption’ that appears in these first few chapters. Here, P itself is the interruption, and yet it does seem to be the necessary ‘motor’ for valorization/re-capitalization. In Chapter Two, forms the ‘interruption’ of productive capital (P….P[P’]). I wonder what other ways we might think about the notion of an ‘interruption’ beyond the theoretical function internal to Marx’s exegesis. For instance, in the discourse of “post-modernity”, post-industrial society, post-this, post-that, etc. that possibly the interruption is mapped spatially – where the analytical optic has been enamored with the service-based economies and financial windfalls of Wall Street, overlooking the fact that this is still valorized in the process of global production (special economic zones anyone?). Think of this in regards to our current financial meltdown and the necessary implication of so-called “emerging markets” in this chain-reaction. Which brings me to a related, but more complicated issue…

2) On the same page as the quotation above (p. 141), this appearance (M….M’ with P as mere interruption) is located in the specific schools of earlier economic thought, namely the Monetary System and the Mercantile System. Although this is the translator’s note, the info from the Grundrisse on these economic schools (see footnote on 141) returns us to a question posed many times before: Are these discursive systems of political economy, or are they actual economic systems (state or otherwise) that operated within their terms? If political-economists are the sycophants of capital (an actual system and a its particular conceptual express), does Mercantilism relate to, or is the ideological effect of, a unique monetary system? In other words, money is not, of course, capitalism, thus was money operating as a means of purchase and sale in a different stage of capitalist development? Marx utilizes the Monetary and Mercantile System as an example of reproducing the fetishistic character of M-C-M’ (or more particularly, M…M’) – in other words, reproducing the appearances of M…M’. But does not mercantilism constitute an ‘actual’ stage of monetary development, rather than an incomplete comprehension of the circulation of capital in its fully ‘developed’ logical form? Is this not conflating early modes of monetary theory, in relation to their own respective historical time, with the higher abstraction of capitalism’s forms, here represented by the abstract logic of the circuit of money-capital? I can feel Andy rolling his eyes 5000 miles away. Sorry Andy.

Here we move into the formula expressing the circuit of productive capital:

Which, as we saw earlier with M….M’, can be entered at specific moments, or broken down into other sub-sequences, such as:

1) Simple Reproduction:
M-C…P…C’ (C+c) – M’ (M+m) {in other words, P….P}
> where m continues into c (capitalist consumption or reserve fund)
> and C continues into the production process (C-L/mp)

a) these can themselves be isolated into their own trajectories, such as c – m – c (surplus value in commodity, realized in money form, consumed by capitalist) and C-M-C-L/mp… for the continuation into simple reproduction

2) Accumulation
P…C’-M’-C’-L/mp…P’...etc {in other words, P…P’}
> which entails that the earlier trajectory of c-m-c does not exist since surplus value is re-capitalized and not consumed/reserved.

It is within the particularity of this circuit that we can (logically) locate simple reproduction: c-m-c (consumption), which we could not do when following the circuit of money-capital. Yet, as I will argue below, and something Marx only discusses in passing in a later chapter, simple reproduction is historically impossible yet logically necessary for the explication of capitalist accumulation (-we return to the ‘pre-history’ of capitalism: not actual history, but the ghostly logic of its dynamics when not expanding in accumulation – which of course, is impossible by its own definition).

As we saw in the circuit of money-capital, the augmented P in the second circuit never appears as P’, but as P thus {money-capital: M-C…P…C’-M’. M-C…P} and {productive-capital: P…C’-M’…P}. What happens is that as P occupied the position of an “interruption” in M-C-M’, here C’-M’/ M-C operates as a durational interruption that is not emphasized in this circuit (and yet, still necessary – as all of these circuits necessarily assume the other). Marx writes:

“…here the entire circulation process of industrial capital, its whole movement within the circulation phase [M-C and C’-M’], merely forms an interruption, and hence a mediation, between the productive capital that opens the circuit as the first extreme and closes it in the same form as the last extreme, i.e. in the form of its new beginning. (144)”

At first I assumed that the productive would be the privileged circuit – since it indicates ‘production’ and thus the site in which value becomes valorized (surplus value), but interestingly, Marx argues that just as money appears automatically augmented in M…M’, the same is assumed in P….P’, as productive capital does not necessarily express the valorization in the process of production; only that prior surplus-value has been recapitalized (in other words, indicating a prior augmentation rather than augmentation itself). To work through how Marx presents this dilemma:

“This origin [i.e., the origin of augmented money, or M’] was obliterated in its form as money capital just beginning its circuit. It is just the same with P’, as soon as it functions as the point of departure for a new circuit. (p. 160)”

And farther down the page:
“In the circuit of P...the process of valorization is already complete as soon as the first stage, the production process, has taken place, and once it has passed through the second stage C’-M’ (the first of the circulation stages), capital value and surplus-value already exist as realized money capital, as M’, which in the first circuit appeared as the final extremity. (160)”

Lastly, and important to the internal (and self-referential) logic of this circuit:
“In P…P’, P’ does not express the fact that surplus-value is produced, but rather that the produced surplus-value is capitalized, i.e. that capital has been accumulated, and hence P’, as opposed to P, consists of the original capital value plus the value of the capital accumulated through its movement. (160)”

Thus P…P’ doesn't move us any closer to how value is valorized, only that P’ stands in for more components of the production process (mp/L) set into motion due to earlier augmentation/recapitalization.

What I think is important to note in this regard is that Marx is trying to show capital in its many forms, and that its own logic is determinative, not the forms themselves (even though necessary). Capital needs to be in the form of money-capital for specific processes (wages, means of payment, purchase, etc), in productive-capital (in order to express increased mp/L) and, as we will see in the next chapter, commodity-capital. The forms do not determine this process, but are subsets within a larger dynamic of capital accumulation (see 161).

Additionally, all these forms, while isolated for analytical purposes, and each containing their own special functions and silences (e.g. fetishism of money-form, etc), each presume the others – thus they never are isolated; they merely express earlier processes or anticipate later ones – a major theme that will be further theorized in chapter four. As we saw earlier, P’ (augmented productive-capital) is merely expressing augmented capital put back into the accumulation process.

A few remaining points that I wanted to emphasize for Chapter Two:
1) Temporal dimensions of these circuits:
- See Marx’s comments on the temporality of wages and past labour/future labour on 151-152 – I think this is where we move out of a singular circuit into the larger dynamics of social relations and processes. For instance, the subsets of the circuit M-C and C-M can be separated in time and space:

“The difference in time between the execution of C-M and that of M-C may be more or less considerable. Although, as the result of the act C-M, M represents past labour, M can represent for the act M-C the transformed form of commodities that are not yet present on the market at all, but will be there only in the future, since M-C does not need to take place until C has been produced afresh. (151-152)”

Further down, Marx discusses capitalist consumption as well as labour’s subsistence purchases in temporal terms (this is one of the most interesting passages of the chapter):

“this money [m] is not only the monetary form of the workers’ past labour, but also a draft on simultaneous or future labour that will only be realized, or is supposed to be realized, in the future. The worker may use it to buy a coat that will only be made one week later. This is in particular the case with the very large number of necessary means of subsistence that must be consumed almost immediately, the moment they are produced, if they are not to spoil. In the money with which his wage is paid, therefore, the worker receives the transformed form of his own future labour or that of other workers. With one part of his past labour the capitalist gives him a draft on his own future labour. It is his own simultaneous or future labour which forms the as yet non-existent reserve stock with which his past labour is paid for. (152)”

2) Whether or not simple reproduction can be historically understood or if this is for analytical purposes only.
- Marx stipulates that his analysis of simple reproduction rests upon certain assumptions, such as that “the entire surplus-value goes into the personal consumption of the capitalist. (145)” But in capitalism’s own definitional terms, how could this occur? I don’t think Marx is assuming this as a preparatory stage towards accumulation, but rather, as a logical hypothesis from which to then understand actual accumulation.

However, within Marx’s analysis we do learn of certain tendencies or forms based on the function of labour’s and capital’s consumption – one being mediated by wages, the other of the surplus-value produced in the production process. For instance, Marx emphasizes that, in the terms set out here (i.e. simple reproduction), crises that emerge concerning commodities in the market are not crises of demand, but of the “demand for payment” (156); in other words, a crisis within the capital circuit:

“At this point the crisis breaks out. It first becomes evident not in the direct reduction of consumer demand, the demand for individual consumption, but rather in a decline in the number of exchanges of capital for capital, in the reproduction process of capital. (157)”

Although this is in terms of simple reproduction, I wonder if this potential crisis can permeate expanded accumulation as well?

3) Expansion of Business, Latency, and Temporal Interruption
Marx begins by arguing that:
If m is to serve as money capital in a second independent business alongside the first, it is clear that is can be invested in this only if it possess the minimal magnitude required for such business. (162)”

It is interesting to note that the “required for such business” brings us back to that open question of a ‘certain stage of development’, expressed earlier at the societal level, but here as internal to a realm of industry, market conditions, etc.

More interestingly, however, is that the accumulation of money (m, not consumed, but not directly put directly back into an immediate circuit) is latent in its preparation of expansion of business, and the spatio-temporal aspects of this process. Marx writes:

“Thus the accumulation of money, the formation of a hoard, appears here as process that temporarily accompanies an extension of the scale on which industrial capital operates. Temporarily, because as long as the hoard persists in its state as a hoard, it does not function as capital, does not participate in the valorization process, but remains a sum of money that grows only because money available to it without any effort on its part is cast into the same coffer. (163)”

This money, money that is “interrupted” (163), is understood as “latent money capital” since by the terms of the circuit, it can only be that if presupposing the investment into a new outlet. This is expressed as the “reserve fund” (164), which “serves as a reserve fund to cope with disturbances in the circuit. (165)”

The reason this last section drew my attention is that what could possibly be the contemporary reserve fund within a single firm? While the idea functions at a logical level rather than an actual exposition of how to run a firm here, its interesting to tie this in with the current freezing of credit markets – where the commercial paper market acts as a ‘general reserve fund’ and points to the financialization of the process of capital innovation, etc. Maybe there is a way to think this along with Schumpeter’s earlier writings on business cycles and credit.

Marx begins by differentiating the first two forms with this last form of the commodity-capital circuit:
“C’ can therefore never open a circuit as mere C [as the others did, e.g., as M or P], as merely the commodity form of the capital value. As commodity value, it always has a dual aspect. From the point of view of use-value, it is the product of the function of P,…whose elements L and mp, emerging from circulation commodities, have only functioned to fashion this product. Secondly, from the point of view of value, it is the capital value P plus the surplus-value m produced in the function of P…It is only in the circuit of C’ itself that C=P= the capital value can and must separate itself from the portion of C’ in which surplus-value exists, from the surplus product in which the surplus-value is hidden… (169)”

Here, then, is the commodity-form analyzed in Volume One, set in motion and providing the analytical means through which to understand the perpetual valorization of value via its dialectic (use-value / exchange-value). More explicitly, Marx argues later:

“What differentiates the third form from the two earlier ones is that it is only in this circuit that the valorized capital value, and not the original capital value that has still to be valorized, appears as the starting-point of its own valorization. C’, as capital-relation, is here the point of departure, and thus has a determining effect on the whole circuit, in so far as this concludes , even in its first phase, both the circuit of the capital value and that of the surplus-value…(173)”

This is the “permanent condition for the reproduction process” (174), one that comprises the entire process of circulation and production within its internal transformations. Additionally, and most importantly, C’…C’:

“presupposes in its description the existence of another industrial capital in the form C (=L+mp)…it itself demands to be considered not only as the general form of the circuit, i.e. as a social form in which every individual industrial capital can be considered….hence not only as a form of motion common to all of the sum of individual capitals, i.e. of the total social capital of the capitalist class, a member in which the movement of any individual industrial capital simply appears as a partial one, intertwined with the others and conditioned by them. (177)”

In other words, in the circuit of C’…C’ we have the possibility of thinking of this process as a general process of interrelated capitals – a social form. It can be thought of both at the level of an individual capital circuit, but also expands outwards to enframe as well as necessarily assume, the generalized social process. This poses the question for Volume II:

“It is necessary to make clear how the metamorphoses of an individual capital are intertwined with those of other individual capitals, and with the part of the total product that is destined for individual consumption. (178)”

Marx closes this chapter with a brief mention of this circuits own, specific fetishistic effect – that it appears that valorization is merely the circulation of commodities (e.g. classical political economy). Which raises an interesting paradox – that this circuit captures, or at least opens into, the possibility of ‘thinking’ the social process in its totality, also replicates the fetish of political economy. Is this to say that political economy, at the level of its utilized ‘appearances’, posed the analysis of capitalism in a potentially correct, yet partial, form? Thus does that make Capital a ‘completion’ of political economy?

Marx puts these three circuits together and posits that, on one level, their internal differences are merely subjective (analytical?):
“the entire distinction [of the three circuits] presents itself as merely one of form, a merely subjective distinction that exists only for the observer. (181)”

But taken together, the dynamic of these three circuits is not the sum of their parts, but rather it is “the valorization of value as the determining purpose, the driving motive. (180)” By page 183 Marx develops a very interesting temporal form – succession and coexistence, wherein immediate succession (linear dynamic) is held together through a synchronic process of abstract coexistence (unity). For instance:

“All portions of the capital go through the circuit in succession, and, at any on time, they find themselves in various stages of it. Thus industrial capital in the continuity of its circuit is simultaneously in all of its stages, and in the various functional forms corresponding to them. (182)”

“The real circuit of industrial capital in its continuity is therefore not only a unified process of circulation and production, but also a unity of all its three circuits. But it can only be such a unity in so far as each different part of the capital runs in succession through the successive phases of the circuit, can pass over from one phase and one functional form into the other; hence industrial capital, as the whole of these parts, exists simultaneously in its various phases and functions, and thus describes all three circuits at once. The succession [Nacheinander] of the various parts is here determined by their coexistence [Nebeneinander], i.e. by the way in which the capital is divided…(183)”

We have, then, entered the analytical level of the process as a whole (synchronically intertwined capitals and the multiplicity of their linear circuits). Marx spends the next few pages working out the implication of this notion of simultaneity in succession, which, he argues is not solely for analytical purposes, but constitutes a social dynamic:

“It is a movement, a circulatory process through different stages, which itself in turn includes three different forms of the circulatory process. Hence it can only be grasped as a movement, and not as a static thing. Those who consider the autonomization [Verselbstständigung] of value as a mere abstraction forget that the movement of industrial capital is this abstraction in action. (185)”

This also opens into possibilities of thinking systemic crisis simultaneously at the level of the individual circuit and its relation within the total process:
“Every delay in the succession brings the coexistence into disarray, every delay in one stage causes a greater or lesser delay in the entire circuit, not only that of the portion of the capital that is delayed, but also that of the entire individual capital. (183)”

Crisis, which was located at specific points of individual (logical) processes in Volume One (refer to Harvey’s last lecture) are now posed at the level of the entire process. In addition, Marx enters this total process through the question of value (assumed as expressed in its price) and the systemic effect of a fall or rise. (187-188) and the abstraction into money/world-money (189-190).

One aspect that I found very interesting was that even products produced in other modes of production enter into the production/circulation process of capitalism (i.e., as raw material, consumption items, etc), it does not matter to capital’s logic – i.e., capitalist forms obliterate this (external) difference:

“Whatever the origin of the commodities that go into the circulation process of industrial capitalism…whatever therefore may be the social form of the production process which these commodities derive – they confront industrial capital straight away in its form of commodity capital, they themselves having the form of commodity-dealing or merchant’s capital; and this by its very nature embraces commodities from all modes of production. (190)”

One final note on this chapter is that Marx (belatedly) states that reproduction (surplus being consumed by capitalist) is impossible both theoretically (“For capitalism is already essentially abolished once we assume that it is enjoyment that is the driving motive and not enrichment itself” 199) and technically (the necessity of a reserve fund to counteract market fluctuations).

If we accept that a circuit’s turnover time is “equal to the sum of its production time and its circulation time (200)”, then the problem of circulation time needs to be posed. Mutually exclusive to production time, Marx argues that:

“it is clear that the longer [capital’s] aliquot parts remain in the circulation sphere, the smaller must be the part that functions at any time in the production sphere. The expansion and contraction of the circulation time hence acts as a negative limit on the contraction or expansion of the production time, or of the scale on which a capital of a given magnitude can function. (203)”

From this comes political economy’s misrecognition of the circulation process as the site of valorization via circulation time. In other words, by posing the question as a related, yet mutually exclusive aspect in regards to valorization, Marx has both accounted for why political economy has only assumed the appearances of circulation, as well as the “actual” process of valorization in relation to circulation time. This does not mean that circulation is secondary – since Marx does concede the agents of circulation (merchants, or lets say, the sales department) are “just as necessary” to the total process (205).

The last paragraph of this chapter re-states the argument so-far in the terms of the commodity-form analysis of Volume One (the dialectic between use-value and exchange-value) – see 205-206.

This chapter is divided up between “pure circulation costs” (buying and selling time, book-keeping, replacement of money in circulation), “costs of storage” (stock formation and the commodity stock proper) and finally transportation costs.

Pure Circulation Costs:
Buying and Selling Time: The labour involved in the buying and selling of commodities (i.e., traders), this labour – which should be painfully obvious by this point – does not create any value, although they do provide the necessary function of realizing the value of a commodity. This is understood as a functional mediation between two forms of value (commodity form – money form). For Marx’s long exposition of the merchant’s function, see 208-211.

Book-Keeping: Firstly, Marx discusses the conditions in which book-keeping emerges:

The movement of production, and particularly of valorization – in which commodities figure only as bearers of value, as the names of things whose ideal value-existence is set down in money of account – thus receives a symbolic reflection in the imagination. (211)”

Compared to selling/buying, or what Marx deems “unproductive expenditure of labour-time” (212), book-keeping becomes more necessary as commodity production becomes the general form since it is the “supervision and the ideal recapitulation of the process. (212)”

Money: Secondly Marx goes into a discussion of metallic money and that as a necessary form within the circulation of commodity production/circulation, a “part of the social wealth [e.g., metallic money]…has to be sacrificed to the circulation process. (214)” This line of reasoning could open into an interesting discussion of national-space and currency policies, but as it is posed here, there’s not much here to tease out.

Costs of Storage:
The key to this section is that while the previous aspects were merely phenomena of the circulation sphere (i.e., unproductive), costs of storage can be extensions of the production process and thus could be approached as anticipated within the surplus-product/surplus value. A huge theoretical lacunae arises here, since now we have two qualitatively different types of value-adding labour – one in production, and one an extension of production, but without the logical exegesis performed in Vol I. is what I understood from this section….

Stock Formation in General: Stock formation is merely the commodity-stock within the C-M and M-C circuits – and since the production circuit requires that a “mass of commodities (means of production) is constantly present on the market” this commodity stock is a necessary (and a re-occurring) condition of production – this, again, is a logical premise posed internal to the logic of the circuits rather than a historically understood point.

Furthermore, as Marx stipulated in the introduction of this section, costs of storage are anticipated in the value of commodities – in their necessary delay within the transformation from commodity value into money value (i.e. circulation, C-M):

“the value of commodities is conserved, or increased, only because the use-value, the product itself, is transferred under certain objective conditions that cost an outlay of capital, and subjected to operations in which additional labour works on the use-values. The calculation of the commodity value (the book-keeping for this process) and the buying and selling, on the contrary, do not operate on the use-value in which the commodity value exists. (216)”

And later….
“The use-value is not increased or raised; on the contrary, it declines. But its decline is restricted, and it itself is conserved. The value that is advanced and exists in the commodity is also not increased here. But new labour, both objectified and living, is added to it. (217)”

Marx then moves into a discussion of how the commodity stock has been misunderstood by Adam Smith and Lalor – see 217-220. This opens into spatio-temporal considerations of production and circulation, as well as national magnitude of social wealth (see 220) which I won’t get into. But what is important is that Marx has differentiated between the general commodity stock (and its three forms: productive stock, individual consumption fund and commodity stock) and the commodity stock proper. The general commodity stock of a society or nation is assumed to be locatable and understood in its three relative forms through history, or as a index of a social/historical form of production – i.e., how these are understood and measured give certain indices of spatio-temporal aspects of what went into the production of a specific commodity as well as its circulation within a larger space (or, in individual consumption, restricted space). Compare this with…..

The Commodity Stock Proper: Here, the difference is that:

“the commodity stock therefore grows with capitalist production. We have already seen that this is only a change of form for the stock, i.e. that the stock increases in commodity form because it decreases in the form of direct production or consumption stock. There is simply a changed form of the stock.” But as “capitalist production develops, the scale of production is determined to an ever less degree by the immediate demand for the product, and to an ever greater degree by the scale of the capital which the individual capitalist has at his disposal, by his capital’s drive for valorization and the need of his production process for continuity and extension. (221)”

I may be wrong, but it seems that the same analytical logic that we saw in Volume One, where by at a certain quantitative level we get a qualitatively different form (Hegel) is applied here as well – in the differentiation between the general commodity stock (and its three forms) and the commodity stock proper. In other words, with the magnitude, speed and spatial dispersion of production and commodity circulation that results from capitalist production, we now are supplied with a new category – the commodity stock proper.

But this is not Marx’s objective here – this is to discover to what extent the expenses accrued as “stocks are socially concentrated (222)” and as the interruption and spatio-temporal distanciation within the value transformation (C-M) goes back into the value of commodities.

He answers this with a general law on 225: “all circulation costs that arise simply form a change in form of the commodity cannot add any value to it.” He continues that they “are simply costs involved in realizing the value or transferring it from one form into another. The capital expended in these costs (including the labour it commands) belongs to the faux frais of capitalist production. The replacement of these costs must come from the surplus product, and from the standpoint of the capitalist class as a whole it forms a deduction of surplus-value or surplus product (226).

Ok, I feel I lost sight of the forest amongst the trees again, but what can you do. Now onto section two…….