The Economic Doctrines of Karl Marx

2. The Revenue of Capital

We have seen how money is turned into capital, and how the wage worker by his labour not only reproduces the value of that portion of capital expended upon the necessary instruments of production, but also creates new value, which is equivalent to the value of his labour-power plus a surplus-value.

The movement of capital, however, does not terminate with the appearance of surplus-value.

Just as a commodity which does not succeed in converting itself into money misses its vocation, so also does the surplus-value which coagulates in a certain quantity of commodities, in surplus-produce. After the surplus-value has been produced in the form of surplus-produce, its value must be realised in money, the commodities produced must be brought to the consumer. On the way to realisation, surplus-value, like every other value, meets with a number of adventures, partly of an amusing, partly of a sorrowful character. To-day it may be realised at an excessively high price, to-morrow at a considerably lower price, or not at all. Sometimes the commodity in which it is embodied is sought after by a buyer before it reaches the market, at other times it remains in a shop window for years, and so on. And both after and during this peril it is threatened with other dangers. There is the merchant who attends to the sale of commodities, in return for which he abstracts a piece of the surplus-value and pockets it as commercial profit. There is rent to pay to the landlord, then taxes, then interest on borrowed money, and so on, until what remains over disappears as profit into the pockets of our capitalist.

We are not here concerned with all the adventures which befall surplus-value and the transformations which it undergoes on this journey. They belong partly to the sphere of the circulation process of capital, which is dealt with by Marx in the second volume of his book, and are partly developed in the analysis of the process of capitalist production as a whole, which he undertook in the third book. The first volume of Capital only deals with one side of the total process, the immediate process of production; only so far as this is affected by surplus-value have we to occupy ourselves with the fate of surplus-value after it has once been produced. We shall therefore assume, as all along where the contrary has not been expressly presupposed, that the capitalist sells his commodities in the market at their full value; we shall further assume that the surplus-value returns to the pockets of the capitalist without any subtraction. The opposite assumption would merely complicate the investigation without altering anything in its essential result.

Surplus-value can only exercise an influence upon the production process in reproduction, or the repetition of the production process.

Every social process of production is at the same time, a process of reproduction. In every form of society production must either proceed uninterruptedly, or periodically repeat itself. Consequently every form of society is placed under the necessity of continuously producing, not only the means of consumption, but also the means of production.

When production assumes a capitalist form, so also does reproduction. If it is necessary for every society to produce use-values continuously or at regularly recurring intervals, so is it necessary for capital continuously to produce surplus-value, constantly to reproduce surplus-value, if it is to remain capital. Once it has hatched surplus-value, it must be employed to hatch it a second time. Capital is therefore for ever producing fresh surplus-value. The latter appears as the periodically ripening fruit of the tree of capital, as constant income from capital, as revenue.

So much for surplus-value as far as it originates from reproduction. But the process of reproduction also offers the surplus-value an opportunity to re-enter the process of production. Suppose a capitalist employs a capital of £5,000, which yields him a yearly revenue of £1,000. What will he do with this revenue? Two extreme cases are possible: he would either consume the whole annual amount of the surplus-value, or augment his capital by this amount. In the majority of cases neither the one nor the other of these extreme contingencies would arise, but the surplus-value would be partly consumed and partly added to the initial capital.

If the whole of the surplus-value be consumed, the amount of capital would remain unaltered. Simple reproduction has taken place. If the surplus-value has been added wholly or in part to the capital, accumulation of capital has occurred, and reproduction proceeds on a more extensive scale.