COMPLETE abstraction from the circulation of money, though making the process of accumulation so smooth and simple in the diagram of enlarged reproduction, has great disadvantages of its own, we see. There was much to be said for this method in the analysis of simple reproduction, where consumption is the be-all and end-all of production. Money there had an ephemeral part, mediating the distribution of the social product among the various groups of consumers – the agent for the renewal of capital. In the process of accumulation, however, the money form has an essential function: it no longer serves as a mere agent in the circulation of commodities – here it has come to be a feature of capital itself, an element in the circulation of capital. Even if the transformation of the surplus value is not essential to real reproduction, it is the economic sine qua non of capitalist accumulation. In the transition from production to reproduction, the surplus product is thus subjected to two metamorphoses: first it casts off its use-form and then it assumes a natural form which is fit for the purpose of accumulation. The point here is not that the different cycles of production are counted off in units of years. It would be just as well to take the month; for that matter, the successive transformation of individual portions of the surplus value in Departments I and II may even intersect in time. Series of years here do not mean units of time but really intend the sequence of economic transformations. What matters is that this sequence must be observed if accumulation is to keep its capitalist character, whether it extends over a longer or a shorter period of time. This brings us back to the old question: How, and by whom, is the accumulated surplus value to be realized?

Marx was well aware that his seemingly water-tight scheme of accumulation did not cover this point adequately, and he himself kept reviewing the problem from various angles. What he says is this:

‘It has been shown in volume i, how accumulation works in the case of the individual capitalist. By the conversion of the commodity-capital into money, the surplus-product, in which the surplus-value is incorporated, is also monetized. The capitalist reconverts the surplus-value thus monetized into additional natural elements of his productive capital. In the next cycle of production the increased capital furnishes an increased product. But what happens in the case of tile individual capital, must also show, in the annual reproduction of society as a whole, just as we have seen it does in the case of reproduction on a simple scale, where the successive precipitation of the depreciated elements of fixed capital in the form of money, accumulated, as a hoard, also makes itself felt in the annual reproduction of society.’⁽¹⁾

He examines the mechanism of accumulation further from this very point of view, focusing on the fact that surplus value must pass through the money stage before it is accumulated.

‘For instance, capitalist A, who sells during one year, or during a number of successive years, certain quantities of commodities produced by him, thereby converts that portion of the commodities, which bears surplus-value, the surplus-product, or, in other words, the surplus value produced by himself; successively into money, accumulates it gradually, and thus makes for himself a new potential money-capital. It is potential money-capital on account of its capacity and destination, of being converted into the elements of productive capital. But practically he merely, accumulates a simple hoard, which is not an element of actual production. His activity for the time being consists only in withdrawing circulating money out of circulation. Of course, it is not impossible that the circulating money thus laid away by him, was itself; before it entered into circulation, a portion of some other hoard.’⁽²⁾ ‘Money is withdrawn from circulation and accumulated as a hoard by the sale of commodities, without a subsequent purchase: If this operation is conceived as one taking place universally, then it seems inexplicable where the buyers are to come from, since in that case everybody would want to sell in order to hoard, and no one would want to buy. And it must be so conceived, since every individual capital may be in process of accumulation.

‘If we were to conceive of the process of circulation as one taking place in a straight line between the various divisions of annual reproduction – which would be incorrect as it consists with a few exceptions of mutually retroactive movements – then we should have to start out from the producer of gold (or silver) who buys without selling, and to assume that all others sell to him. In that case, the entire social surplus-product of the current year would pass into his hands, representing the entire surplus-value of the year, and all the other capitalists would distribute among themselves their relative shares in his surplus product, which consists naturally of money, gold being the natural form of his surplus-value. For that portion of the product of the gold producer, which has to make good his active capital, is already tied up and disposed of. The surplus-value of the gold producer, in the form of gold, would then be the only fund from which all other capitalists would have to derive the material for the conversion of their annual surplus-product into gold. The magnitude of its value would then have to be equal to the entire annual surplus-value of society, which must first assume the guise of a hoard. Absurd as this assumption would be, it would accomplish nothing more than to explain the possibility of a universal formation of a hoard at the same period. It would not further reproduction itself, except on the part of the gold producer, one single step.

‘Before we solve this seeming difficulty, we must distinguish ...’⁽³⁾

The obstacle in the way of realizing the surplus value which Marx here calls a ‘seeming difficulty’ nevertheless is important enough for the whole further discussion in Capital, volume ii, to be concentrated on overcoming it. As a first attempt, Marx proffers the solution of a hoard which, owing to the separation of the different individual constant capitals in the process of circulation, will inevitably be formed in a capitalist system of production. Inasmuch as different capital investments have different spans of life, and there is always an interval before the parts of a plant are due for renewal, at any given moment we may find that one individual capitalist is already busy renewing his plant, while another is still building up reserves from the proceeds yielded by the sale of his commodities against the day when he will have enough to renew his fixed capital.

‘For instance, let A sell 600, representing 400c + 100v + 100s to B, who may represent more than one buyer. A sells 600 in commodities for 600 in money, of which 100 are surplus-value which he withdraws from circulation and hoards in the form of money. But these 100 in money are but the money-form of the surplus-product in which a value of 100 was incorporated.’⁽⁴⁾

In order to comprehend the problem in complete purity, Marx here assumes the whole of the surplus value to be capitalized, for which reason he ignores altogether that part of the surplus value is used for the capitalists’ personal consumption; in addition, A', A'' and A''' as well as B', B'' and B''' here belong to Department I.

‘The formation of a hoard, then, is not a production, nor is it an increment of production. The action of the capitalist consists merely in withdrawing from circulation 100 obtained by the sale of his surplus-product, in holding and hoarding this amount. This operation is carried on, not alone on the part of A, but at numerous points of the periphery of circulation by other capitalists named A', A'', A''' ... However, A accomplishes the formation of a hoard only to the extent that he acts as a seller, so far as his surplus-product is concerned, not as a buyer. His successive production of surplus-products, the bearers of his surplus-value convertible into money, is therefore a premise for the formation of his hoard. In the present case, where we are dealing only with the circulation within Department I, the natural form of the surplus-product, and of the total product of which it is a part, is that of an element of constant capital of I, that is to say it belongs to the category of a means of production creating means of production. We shall see presently, what becomes of it, what function it performs, in the hands of the buyers such as B, B', B'', etc.

‘It must particularly be noted at this point that A, while withdrawing money from circulation and hoarding it, on the other hand throws commodities into it without withdrawing other commodities in return. The capitalists, B, B', B'', etc., are thereby enabled to throw only money into it and withdraw only commodities from it. In the present case, these commodities, according to their natural form and destination, become a fixed or circulating element of the constant capital of B, B', etc.’⁽⁵⁾

There is nothing new about this whole process. Marx had already described it extensively in connection with simple reproduction, since it alone can explain how a society is able to renew constant capital under conditions of capitalist reproduction. How this process can lay the besetting problem of our analysis of enlarged reproduction is far from self-evident. The difficulty had been that for the purpose of accumulation, part of the surplus value is not consumed by the capitalists but added to capital in order to expand production, giving rise to the question of buyers for this additional product. The capitalists do not want to consume it and the workers are not able to do so, their entire consumption being covered in every case by the available variable capital. Whence the demand for the accumulated surplus value? or, as Marx would have it: Whence the money to pay for the accumulated surplus value?

If, by way of answer, we are referred to the process of hoarding attendant upon the gradual renewal of the constant capital by the individual capitalists at various times, the connection between these two points remains obscure. As long as B, B' and B'', etc., buy producer goods from their colleagues A, A' and A'' in order to renew their constant capital that has in fact been used up, the limits of simple reproduction are not transcended, and the whole thing has nothing to do with our problem. The moment the producer goods purchased by B, B', B'', etc., serve to increase their constant capital, however, for purposes of accumulation, a number of new questions clamor for attention. First and foremost where do the B’s get the cash to buy an additional product from the A’s? The only way they could have made their money is by sale of their own surplus product. Before they can acquire new means of production for expanding their enterprises, before they appear as buyers, that is to say, of the surplus product that is to be accumulated, they must first have disposed of their own surplus product – in a word, B, B', B'', etc., must have been vendors themselves. But who could have bought their surplus product? It is obvious that the difficulty is simply shifted from the A’s to the B’s without having been mastered.

At one stage of the analysis it really does seem for a time as if a solution were found at last. After a short digression, Marx returns to the main line of his investigation in the following words:

‘In the present case, this surplus-product consists at the outset of means of production used in the creation of means of production. It is not until it reaches the hands of B, B', B'', etc.; (I) that this surplus-product serves as an additional constant capital. But it is virtually that even in the hands of the accumulators of hoards, the capitalists A, A', A'', (I), before it is sold. If we consider merely the volume of values of the reproduction on the part of I, then we are still moving within the limits of simple reproduction, for no additional capital has been set in motion for the purpose of creating this virtual additional capital (the surplus-product), nor has any greater amount of surplus-labor been performed than that done on the basis of simple reproduction. The difference is here only one of the form of the surplus-labor performed, of the concrete nature of its particularly useful service. It is expended in means of production for Department Ic instead of IIc, in means of production of means of production instead of means of production of articles of consumption. In the case of simple reproduction it had been assumed that the entire surplus-value was spent as revenue in the commodities of II. Hence it consisted only of such means of production as restore the constant capital of IIc in its natural form. In order that the transition from simple to expanded reproduction may take place, the production in Department I must be enabled to create fewer elements for the constant capital of II and more for that of I ... Considering the matter merely from the point of view of the volume of values, it follows, then, that the material requirements of expanded reproduction are produced within simple reproduction. It is simply a question of the expenditure of the surplus-labor of the working class of I for the production of means of production, the creation of virtual additional capital of I. The virtual additional money capital, created on the part of A, A', A'', by the successive sale of their surplus-product, which was formed without any capitalist expenditure of money, is in this case simply the money-form of the additional means of production made by I.’⁽⁶⁾

On this interpretation, the difficulty seems to dissolve into thin air at our touch. Accumulation requires no new sources of money at all. Before, when the capitalists themselves consumed their surplus value, they had to have a corresponding money reserve in hand, the analysis of simple reproduction already having proved that the capitalist class must itself put into circulation the money needed for the realization of their surplus value. Now, instead of consumer goods, the capitalist class, or rather B, B', and B'', buy an equivalent amount of means of production in order to expand their production. In this way, money to the same value is accumulated in the hands of the other capitalist group, viz. A, A', A'', etc.

‘This hoarding ... does not in any way imply an addition to the wealth in precious metals, but only a change of function on the part of money previously circulating. A while ago it served as a medium of circulation, now it serves as a hoard, as a virtual additional money-capital in process of formation.’⁽⁷⁾

And that is that! Yet this way out of the difficulty is open to us only on one condition, and that is not far to seek: Marx here takes accumulation in its first rudiments, in statu nascendi, as it begins to evolve from simple reproduction. In respect of the amount of value, production is not yet enlarged, it has only been rearranged so that its material elements are grouped in a different way. That the sources of money also seem adequate is therefore not surprising. This solution, however, is only true for one specific moment, the period of transition from simple reproduction to enlarged reproduction – in short, a moment that has no reference to reality and can only be conceived speculatively. Once accumulation has been established for some time, when increasing amounts of value are thrown upon the market in every period of production, buyers for these additional values cannot fail to become a problem. And on this point the proffered solution breaks down. For that matter, it was never more than a seeming solution, not a real one. On closer scrutiny, it fails us even at the precise instant it appears to have smoothed the way for us. For if we take accumulation just at the very moment of its emergence from simple reproduction, the prime condition it demands is a decrease in the consumption of the capitalist class. No sooner have we discovered a way to expand reproduction with the means of circulation already at hand, than we find previous consumers trickling away at the same rate. What, then, is the good of expanding production; who is there able to buy from B, B' and B'' this increased amount of products which they could turn out only by denying themselves the money they need for buying new means of production from A, A' and A''?

That solution, we see, was a mere illusion – the difficulty still persists. Marx himself at once re-opens the question where B, B' and B'' get the money to buy the surplus product of A, A' and A''.

‘To the extent that the products created by B, B', B'', etc., (I) reenter in their natural form into their own process, it goes without saying that a corresponding portion of their own surplus-product is transferred directly (without any intervention of circulation) to their productive capital and becomes an element of additional constant capital. To the same extent they do not help to convert any surplus-product of A, A', A'', etc., (I) into money. Aside from this, where does the money come from? We know that they have formed their hoard in the same way as A, A', etc., by the sale of their respective surplus products. Now they have arrived at the point where their accumulated hoard of virtual money-capital is to enter effectually upon its function as additional money-capital. But this is merely turning around in a circle. The question still remains: Where does the money come from, which the various B’s (I) withdrew from the circulation and accumulated?’⁽⁸⁾

His prompt reply again seems surprisingly simple:

‘Now we know from the analysis of simple reproduction, that the capitalists of I and II must have a certain amount of ready money in their hands, in order to be able to dispose of their surplus products. In that case, the money which served only for the spending of revenue in articles of consumption returned to the capitalists in the same measure in which the advanced it for the purpose of disposing of their commodities. Here the same money reappears, but in a different function. The A’s and B’s supply one another alternately with the money for converting their surplus-product into virtual additional capital, and throw the newly formed money-capital alternately into circulation as a medium of purchase.’⁽⁹⁾

That is harking back to simple reproduction all over again. It is quite true, of course, that the capitalists A and the capitalists B are constantly accumulating a hoard of money bit by bit so as to be able to renew their constant (fixed) capital from time to time, and in this way they really are assisting one another in realizing their products. Yet this accumulating hoard does not drop from the clouds – it is simply a natural precipitation of the fixed capital that is (in terms of value) continually being transferred in installments to the products which are then one by one realized in the process of sale. Owing to its very nature, the accumulated hoard can only cover the renewal of the old capital; there cannot possibly be enough to serve further for purchasing additional constant capital. That means that we are still within the limits of simple reproduction. Perhaps, though, that part of the medium of circulation which hitherto served the capitalists for their personal consumption, and is now to be capitalized, becomes a new source of additional money? For that to be true, however, we should have to be back at the unique and fleeting moment that has no more than theoretical existence – the period of transition from simple to enlarged reproduction. Beyond this gap accumulation cannot proceed – we are in truth going round in circles.

So the capitalist hoarding will not do as a way out of our difficulties. This conclusion should not come as a surprise, since the very exposition of the difficulty was misleading. It is not the source of money that constitutes the problem of accumulation, but the source of the demand for the additional goods produced by the capitalized surplus value; not a technical hitch in the circulation of money but an economic problem pertaining to the reproduction of the total social capital. Quite apart from the question which had claimed Marx’s entire attention so far, namely where B, B', etc., (I), get the money to buy additional means of production from A, A', etc., (I), successful accumulation will inevitably have to face a far more serious problem: to whom can B, B', etc., now sell their increased surplus product? Marx finally makes them sell their products to one another:

‘It may be that the different B, B', B'', etc., (I), whose virtual new capital enters upon its active function, are compelled to buy from one another their product (portions of their surplus product) or to sell it to one another. In that case, the money advanced by them for the circulation of their surplus-product flows back under normal conditions to the different B’s in the same proportion in which they advanced it for the circulation of their respective commodities.’⁽¹⁰⁾

‘In that case’ – the problem simply has not been solved, for after all B, B', and B'' have not cut down on their consumption and expanded their production just so as to buy each other’s increased product, i.e. means of production. Even that, incidentally, would only be possible to a very limited extent Marx assumes a certain division of labor in Department I itself: the A’s turn out means of production for making producer goods and the B’s means of production for making consumer goods, which is as much as to say that, though the product of A, A', etc., need never leave Department I, the product of B, B', etc., is by its natural form predestined from the first for Department II. Already the accumulation of B, B', etc., it follows, must lead us to circulation between Departments I and II. Thus Marx’s analysis itself confirms that, if Department I is to accumulate, the department for means of consumption must, in the last resort, increase its immediate or mediate demand for means of production, and so it is to Department II and its capitalists that we must look for buyers for the additional product turned out by Department I.

Sure enough, Marx’s second attack on the problem takes up from there: the demand of capitalists in Department II for additional means of production. Such a demand inevitably implies that the constant capital IIc is in process of expanding. This is where the difficulty becomes truly formidable:

‘Take it now that A(I) converts his surplus-product into gold by selling it to a capitalist B in Department II. This can be done only by the sale of means of production on the part of A(I) to B(II) without a subsequent purchase of articles of consumption, in other words, only by a one-sided sale on A’s part. Now we have seen that IIc cannot be converted into the natural form of productive constant capital unless not only Iv but also at least a portion of Is, is exchanged for a portion of IIc, which IIc exists in the form of articles of consumption. But now that A has converted his Is into gold by making this exchange impossible and withdrawing the money obtained from IIc out of circulation, instead of spending it for articles of consumption of IIc, there is indeed on the part of A(I) a formation of additional virtual money-capital, but on the other hand there is a corresponding portion of the value of the constant capital B(II) held in the form of commodity-capital, unable to transform itself into natural productive constant capital. In other words, a portion of the commodities of B(II), and at that a portion which must be sold if he wishes to reconvert his entire constant capital into its productive form, has become unsaleable. To that extent, there is an overproduction which clogs reproduction, even on the same scale.’⁽¹¹⁾

Department I’s efforts to accumulate by selling its additional product to Department II have met with an unlooked-for result: a deficit for the capitalists of Department II serious enough to prevent even simple reproduction on the old scale.

Having got to this crucial point, Marx seeks to lay bare the root of the problem by careful and detailed exposition:

‘Let us now take a closer look at the accumulation in Department II. The first difficulty with reference to IIc, that is to say the conversion of an element of the commodity-capital of II into the natural form of constant capital of II, concerns simple reproduction. Let us take the formula previously used. (1,000v + 1,000s) I are exchanged for 2,000 IIc. Now, if one half of the surplus-product of I, or 500s, is reincorporated in Department I as constant capital, then this portion, being detained in Department I, cannot take the place of any portion of IIc. Instead of being converted into articles of consumption, it is made to serve as an additional means of production in Department I itself ... It cannot perform this function simultaneously in I and II. The capitalist cannot spend the value of his surplus product for articles of consumption, and at the same time consume the surplus-product itself productively, by incorporating it in his productive capital. Instead of 2,000 I(v + s), only 1,500 are exchangeable for 2,000 IIc, namely 1,000v + 500s of I. But 500 Ic cannot be reconverted from the form of commodities into productive constant capital of II.’⁽¹²⁾

By now, hardly anybody could fail to be convinced that the difficulty is real, but we have not taken a single step nearer a solution. This, incidentally, is where Marx has to do penance for his ill-advised continual recourse in an earlier over-simplification, to a fictitious moment of transition – in order to elucidate the problem of accumulation – from simple reproduction to enlarged reproduction, making his major premise accumulation at its very inception, in its feeble infancy instead of its vigorous stride. There was something to be said, at least, for this fiction, so long as it was just a question of accumulation within Department I. The capitalists of Department I, who denied themselves part of what they had been wont to consume, at once had a new hoard of money in hand with which they could start capitalization. But when it comes to Department II, the same fiction only piles on the difficulties. The ‘abstinence’ of the capitalists in Department I here finds expression in a painful loss of consumers for whose expected demand production had largely been calculated. Since the capitalists of Department II, on whom we tried the experiment whether they might not possibly be the long-sought buyers of the additional product of accumulation in Department I, are themselves in sore straits – not knowing as yet where to go with their own unsold product – they are even less likely to be of any help to us. There is no shutting our eyes to the fact that an attempt to make one group of capitalists accumulate at the expense of the other is bound to get involved in glaring inconsistencies.

Yet another attempt to get round the difficulty is subsequently mentioned by Marx who at once rejects it as a subterfuge. The unmarketable surplus value in Department II, that is the result of accumulation in Department I might be considered a reserve of commodities the society is going to need in the course of the following year. This interpretation Marx counters with his usual thoroughness:

‘(1) ... the forming of such supplies and the necessity for it applies to all capitalists, those of I as well as of II. Considering them in their capacity as sellers of commodities, they differ only by the fact that they sell different kinds of commodities. A supply of commodities of II implies a previous supply of commodities of I. If we neglect this supply on the one side, we must also do so on the other. But if we count them in on both sides, the problem is not altered in any way. (2) Just as this year closes on the side of II with a supply of commodities for the next year, so it was opened by a supply of commodities on the same side, taken over from last year. In the analysis of annual reproduction, reduced to its abstract form, we must therefore strike it out at both ends. By leaving this year in possession of its entire production, including the supply held for next year, we take from it the supply of commodities transferred from last year, and thus we have actually to deal with the aggregate product of an average year as the object of our analysis. (3) The simple circumstance that the difficulty which must be overcome did not show itself in the analysis of simple reproduction proves that it is a specific phenomenon due merely to the different arrangement of the elements of Department I with a view to reproduction, an arrangement without which reproduction on an expanded scale cannot take place at all.’⁽¹³⁾

The last remark, be it noted, is equally damaging to his own earlier attempt at resolving the specific difficulties of accumulation by moments pertaining to simple reproduction, viz. the formation of a hoard consequent upon the gradual turnover of the fixed capital in the hands of the capitalists which was previously adduced as the explanation of accumulation in Department I.

Marx then proceeds to set out enlarged reproduction in the form of diagrams. But no sooner does he begin to analyze his diagram, than the same difficulty crops up anew in a slightly different guise. Assuming that the capitalists of Department II must for their part convert 140s into constant capital so as to make accumulation possible for the others, he asks:

‘Therefore Department II must buy 140s for cash without recovering this money by a subsequent sale of its commodities to I. And this is a process which is continually repeated in every new annual production, so far as it is reproduction on an enlarged scale. Where does II get the money for this?’⁽¹⁴⁾

In the following, Marx tries out various approaches in order to discover this source. First the expenditure on variable capital by the capitalists in Department II is closely scrutinized. True, it exists in the form of money; but its proper function is the purchase of labor power, and it cannot possibly be withdrawn and made to serve, maybe, for purchasing additional means of production.

‘This continually repeated departure from and return to the starting point, the pocket of the capitalist, does not add in any way to the money moving in this cycle. This, then, is not a source of the accumulation of money.’⁽¹⁵⁾

Marx then considers all conceivable dodges, only to show them up as evading the issue.

‘But stop!’ he claims. ‘Isn’t there a chance to make a: little profit?’⁽¹⁵⁾

He considers whether the capitalists could not manage to save a little of the variable capital by depressing the wages of the workers below the normal average and thus to tap a new source of money for accumulation. A mere flick of his fingers, of course, disposes of this notion:

‘But it must not be forgotten that the wages actually paid (which determine the magnitude of the variable capital under normal conditions) do not depend on the benevolence of the capitalists, but must be paid under certain conditions. This does away with this expedient as a source of additional money.’⁽¹⁵⁾

He even explores what hidden methods there may be of ‘saving’ on the variable capital, such as the truck system, frauds, etc., only to comment finally: ‘This is the same operation as under (1), only disguised and carried out by a detour. Therefore it must likewise be rejected as an explanation of the present problem.’⁽¹⁶⁾

All efforts to make the variable capital yield a new source of money for the purpose of accumulation are thus unrewarded: ‘In short, we cannot accomplish anything with 376 IIv for the solution of this question.’⁽¹⁶⁾

Marx next turns to the cash reserves which the capitalists in Department II keep for the circulation of their own consumption and investigates whether none of this money, can be diverted to the purposes of capitalization. Yet this, he allows, is ‘still more impossible’.

‘Here the capitalists of the same department are standing face to face, heavily buying and selling their articles of consumption. The money required for these transactions serves only as a medium of circulation and must flow back to the interested: parties in the normal course of things, to the extent that they have advanced it to the circulation, in order to pass again and again over the same course.’⁽¹⁷⁾

The next attempt to follow belongs, as was to have been expected, to the category of those ‘subterfuges’ which Marx ruthlessly refutes: the attempt to explain that money-capital can be formed in the hands of one capitalist group in Department II by defrauding the other capitalists within the same department – viz. in the process of the mutual selling of consumer goods. No time need be wasted on this little effort.

Then comes a more sober proposition: ‘Or, a certain portion of IIs, represented by necessities of life, might be directly converted into new variable capital of Department II.’⁽¹⁸⁾

It is not quite clear how this can help us over the hurdle, help to get accumulation going. For one thing, the formation of additional variable capital in Department II is not much use if we have no additional constant capital for this department, being in fact engaged on the task of finding it. For another thing, our present concern is to see if we can find in Department II a source of money for the purchase of additional means of production from I, and Department II’s problem how to place its own additional product in some way or other in the process of production is beside the point. Further, is the implication that the respective consumer goods should be used ‘direct’, i.e. without the mediation of money, in the production of Department II, so that the corresponding amount of money can be diverted from variable capital to the purpose of accumulation? If so, we could not accept the solution. Under normal conditions of capitalist production, the remuneration of the workers by consumer goods direct is precluded, one of the corner-stones of capitalist economy being the money-form of the variable capital, the independent transaction between the worker as buyer of commodities and producer of consumer goods. Marx himself stresses this point in another context:

‘We know that the actual variable capital consists of labor power, and therefore the additional must consist of the same thing. It is not the capitalist of I who among other things buys from II a supply of necessities of life for his laborers, or accumulates them for this purpose, as the slave holder had to do. It is the laborers themselves who trade with II.’⁽¹⁹⁾

And that goes for the capitalists of Department II just as much as for those of Department I, thus disposing of Marx’s last effort.

Marx ends up by referring us to the last part of Capital, volume ii, chapter 21, the ‘Concluding Remarks sub iv, as Engels has called them. Here we find the curt explanation:

‘The original source for the money of II is v + s of the gold producers in Department I, exchanged for a portion of IIc. Only to the extent that the gold producer accumulates surplus value or converts it into means of production of I, in other words, to the extent that he expands his production, does his v + s stay out of Department II. On the other hand, to the extent that the accumulation of gold on the part of the gold producer himself leads ultimately to an expansion of production, a portion of the surplus-value of gold production not spent as revenue passes into Department II as additional variable capital of the gold producers, promotes, the accumulation of new hoards in II and supplies it with means by which to buy from I without having to sell to it immediately.’⁽²⁰⁾

After the breakdown of all conceivable attempts at explaining accumulation, therefore, after chasing from pillar to post, from A I to B I, and from B I to A II, we are made to fall back in the end on the very gold producer, recourse to whom Marx had at the outset of his analysis branded as ‘absurd’. The analysis of the reproductive process, and the second volume of Capital finally comes to a close without having provided the long sought-for solution to our difficulty.

Footnotes

⁽¹⁾Capital, vol.ii, p.571.

⁽²⁾Ibid., p.576.

⁽³⁾Ibid., pp.573-4.

⁽⁴⁾Ibid., p.375.

⁽⁵⁾Ibid., pp.575-6.

⁽⁶⁾Ibid., pp.579-81.

⁽⁷⁾Ibid., p.581.

⁽⁸⁾Ibid., pp.583-4.

⁽⁹⁾Ibid., p.584.

⁽¹⁰⁾Ibid., p.585.

⁽¹¹⁾Ibid., pp.586-7.

⁽¹²⁾Ibid., pp.588-9.

⁽¹³⁾Ibid., pp.590-1.

⁽¹⁴⁾Ibid., p.593.

⁽¹⁵⁾Ibid., p.594.

⁽¹⁶⁾Ibid., p.595.

⁽¹⁷⁾Ibid.

⁽¹⁸⁾Ibid., p.596.

⁽¹⁹⁾Ibid., p.601.

⁽²⁰⁾Ibid., p.610.