Marx’s Economic Manuscripts of 1861-63
1) Transformation of Money into Capital

Volume 30, MECW, p. 33-42

g) Exchange with Labour. Labour Process. Valorisation Process

[I-15] In the process M—C—M the value (a given sum of value) should be maintained and increased while it enters into circulation, i.e. alternately takes on the forms of commodity and money. Circulation should not be a mere change of form but should raise the magnitude of value, should add to the value already present a new value, or surplus value. As capital the value should be, as it were, raised to the second power, potentiated.

The exchange value of the commodity is the quantity of equal social labour objectified in its use value, or the quantity of labour which has been embodied, worked up in it. The magnitude of this quantity is measured by time: the labour time that is required to produce the use value, and is therefore objectified in it.

Money is distinguished from the commodity solely by the form in which this objectified labour is expressed. In money, the objectified labour is expressed as social labour (in general), which is therefore directly exchangeable with all other commodities in proportion as they contain the same amount of labour. In the commodity, the exchange value it contains, or the labour objectified in it, is only expressed in its price, i.e. in an equation with money; it is only expressed notionally in gold (the material of money and the measure of values). Both forms, however, are forms of the same magnitude of value and, viewed in terms of their substance, forms of the same quantity of objectified labour, thus they are objectified labour in general. (As we have seen, money can be replaced in internal circulation both as means of purchase and of payment by tokens of value, tokens of itself. This in no way alters the essence of the matter, as the token represents the same value, the same labour time, as is contained in the money.)

In the movement M — C — M, and in the concept of capital in general, money is the starting-point. This means nothing more than that the starting-point is the independent form assumed by the value contained in the commodity, or by the labour contained in it: the form in which labour time is present as labour time in general, regardless of the use value in which it was originally embodied. Value, both in the form of money and of the commodity, is an objectified quantity of labour. If money is converted into a commodity, or a commodity into money, the value changes only its form, not its substance, which consists in its being objectified labour, nor its magnitude, whereby it is a definite quantity of objectified labour. All commodities therefore differ only formally from money; money is only a particular form of existence taken on by commodities in and for circulation. As objectified labour they are the same thing, value. The change of form, the fact that this value is present now as money, now as commodity, ought on our assumption to be irrelevant to capital, or it is a prerequisite — assuming that capital in each of these forms is self-maintaining value — without which money, and value in general, does not become capital at all. In general, it should only be a matter of the same content changing its form.

The sole antithesis to objectified labour is non-objectified, living labour. The one is present in space, the other in time, the one is in the past, the other in the present, the one is already embodied in a use value, the other, as human activity-in-process, is currently engaged in the process of self-objectification, the one is value, the other is value-creating. If a given value is exchanged for the value-creating activity, if objectified labour is exchanged for living labour, in short if money is exchanged for labour, the possibility seems to be available that by means of this process of exchange the existing value can be preserved or increased. Let us therefore assume that the money-owner buys labour, hence the seller sells not a commodity but labour. This relation cannot be explained on the basis of the relation of the circulation of commodities, considered previously, where the only parties confronting each other are [I-16] the owners of commodities. [20] For the moment we shall not inquire here into the conditions for this relation, and simply assume it as a fact. Our money-owner’s sole aim in buying labour is to increase the value he possesses. The particular kind of labour he purchases is therefore a matter of indifference to him. All that is necessary is that it should be useful labour, producing a particular use value, hence a specific kind of labour, e.g. the labour of a linen-weaver. We do not as yet know anything about the value of this labour; nor do we know how the value of labour in general is determined.

[I-17] It is therefore clear that the magnitude of the value of a given quantity of labour cannot be changed, let alone increased, by the mere fact of its existing first in the form of money, the commodity in which the value of all other commodities is measured, and then in any other use value; in other words, by its existing first in the form of money and then in the form of the commodity. It is impossible to conceive how a given sum of value, a definite quantity of objectified labour, should even be preserved as such via a metamorphosis of this kind. When it is in the form of money, the value of the commodity — or the commodity itself, in so far as it is exchange value, a definite quantity of objectified labour, — exists in its immutable form. The money form is precisely the form in which the value of the commodity is maintained, conserved as value or as a definite quantity of objectified labour. If I transform money into a commodity, I transform value from a form in which it is preserved into a form in which it is not preserved; and in the movement of buying in order to sell, value would first be transformed from its immutable form into a form in which it does not preserve itself, so that it could then be re-transformed into money again, the immutable form. This transformation may or may not be successful in circulation. But the result would be that I possessed the sum of value, the objectified labour in its immutable form, as a definite sum of money, both before and after the process. This is an entirely useless operation, indeed it runs counter to my purpose. If, however, I keep hold of the money as such, it is a hoard, it has a use value again, and it is preserved as an exchange value only because it does not act as such. It is preserved, as it were, as petrified exchange value, by staying out of circulation, relating to it negatively. On the other hand, in the commodity form the value perishes with the use value in which it is contained, since use value is a transitory thing and as such would be dissolved simply by the metabolic process of nature. And if it is really utilised as a use value, i.e. consumed, the exchange value contained in the use value perishes along with it.

An increase in value means nothing other than an increase in objectified labour; but it is only through living labour that objectified labour can be preserved or increased.

[I-18] Value, the objectified labour which exists in the form of money, could grow only by exchange with a commodity whose use value itself consisted in the ability to increase exchange value, whose consumption would be equivalent to the creation of value or the objectification of labour. (No commodity has any direct use value at all for the value which is to be valorised, except in so far as its use itself constitutes the creation of value; in so far as it is useful for increasing value.) But such use value is only possessed by living labour capacity. Value, money, can therefore only be transformed into capital through exchange with living labour capacity. Its transformation into capital requires that it be exchanged, on the one hand, for labour capacity and, on the other, for the material conditions prerequisite to the objectification of labour capacity.

Here the basis is the circulation of commodities, in which absolutely no dependency relations between the participants in exchange are presupposed apart from those given by the process of circulation itself; the exchangers are distinguished solely as buyers and sellers.[20] Accordingly, money can only buy labour capacity to the extent that the latter is itself offered for sale as a commodity, sold by its owner, the living possessor of labour capacity. The condition for this is first of all that the possessor of labour capacity should have the disposition of his own labour capacity, that he should be able to dispose of it as a commodity. For this to be possible, he must be its proprietor. Otherwise he could not sell it as a commodity. But a second condition, already contained in the first, is that he himself must bring his labour capacity as a commodity to the market, and sell it, because he no longer has labour to sell in the form of another commodity, another use value composed of objectified labour (labour existing outside his subjectivity). Instead, the sole commodity he has to offer, to sell, is precisely his living labour capacity, present in his own living corporeity.[21] (Capacity is here absolutely not to be conceived as fortuna, fortune, but as potency, dynamis.

Instead of selling a commodity in which his labour is objectified, he must be compelled to sell his own labour capacity, that commodity which is specifically distinct from all other commodities, whether they exist in the commodity form or the money form. A prerequisite for this is the absence of the objective conditions for the realisation of his labour capacity, the conditions for the objectification of his labour; these must have been lost to him, becoming instead subject to an alien will, as a world of wealth, of objective wealth confronting him in circulation as the property of the commodity owners, as alien property. Later on we shall be able to be more precise about the kind of conditions required for the realisation of his labour capacity, i.e. the objective conditions for labour, labour in processu, conceived as activity realising itself in a use value.

If then the condition for the transformation of money into capital is its exchange with living labour capacity, or the purchase of living labour capacity from its proprietor, money can, in general, be transformed into capital, or the money owner turn into a capitalist, only to the extent that the free worker is available on the commodity market, within circulation; free, that is, in so far as he, on the one hand, has at his disposal his own labour capacity as a commodity, and, on the other hand, has no other commodity at his disposal, is free, completely rid of, all the objective conditions for the realisation of his labour capacity; and therefore, as a mere subject, a mere personification of his own labour capacity, is a worker in the same sense as the money owner is a capitalist as subject and repository of objectified labour, of value sticking fast to itself.

This free worker, however, is evidently himself the product, the result, of a prior historical development, the summation of many economic transformations; and his existence presupposes the fall of other social relations of production and a definite development of the productive forces of social labour. The same is therefore also true of the exchange between the money owner and the owner of labour capacity, between capital and labour, between capitalist and worker. The definite historical conditions [I-19] associated with the relation presupposed here will emerge of themselves from the later analysis of that relation.[22] In any case, capitalist production proceeds from the presupposition that free workers, i.e. sellers who have nothing but their own labour capacity to sell, will be found available within the sphere of circulation, on the market. Thus the formation of the capital-relation demonstrates from the outset that it can only enter the picture at a definite historical stage of the economic development of society — of the social relations of production and the productive forces. The capital-relation appears straight away as a historically determined economic relation, a relation that belongs to a definite historical period of economic development, of social production. [21]

We started out from the way the commodity appears on the surface of bourgeois society, as the simplest economic relation, the element of bourgeois wealth. The analysis of the commodity showed that definite historical conditions were wrapped up in its existence, too. For example, if the products are only produced by the producers as use values, the use value does not become a commodity. This presupposes that the relations among the members of society are historically determined. If we had pursued the question further, asking under what circumstances the products are generally produced as commodities, or under what conditions the product in its existence as commodity appears as the universal and necessary form of all products, it would have turned out that this only takes place on the basis of one particular historical mode of production, the capitalist one. But this way of looking at things would not have been relevant to the analysis of the commodity as such, for in that analysis we were only concerned with the products, the use values, to the extent that they appeared in the commodity form, and not with the question of the socio-economic basis for the appearance of every product as a commodity. We were proceeding instead from the fact that the commodity is found to be present in bourgeois production as such a universal elementary form of wealth .20 The production and therefore the circulation of commodities can, however, take place between different communities or between different organs of the same community, even though the major part of what is produced may be produced as use values, for the producers’ own direct personal requirements, and therefore may never take on the commodity form. The circulation of money, for its part, and hence the development of the different elementary functions and forms of money, presupposes nothing more than commodity circulation itself, and crudely developed commodity circulation at that.[23] Of course, this is also a historical prerequisite, but owing to the nature of the commodity it may be fulfilled at very different stages of the social production process. A closer analysis of the individual forms of money, e.g. the development of money as a hoard and of money as means of payment, pointed to very different historical stages of the social production process. These are historical differences, arising out of the sheer form of these different functions of money [24]; but the mere existence of money in the form of a hoard or of means of payment was shown to be in equal degree a feature of every halfway developed stage of commodity circulation. Money is therefore not restricted to a particular period of production, being as characteristic of pre-bourgeois stages of the production process as of bourgeois production. Capital, however, steps forth from the outset as a relation which can only be the result of a definite historical process and the basis of a definite epoch in the social mode of production.

Let us now look at labour capacity itself in its antithesis to the commodity, which confronts it in the form of money, or in its antithesis to objectified labour, to value, which is personified in the money owner or capitalist and in this person has become a will in its own right, being-for-itself,[25] a conscious end in itself.

Labour capacity appears on the one hand as absolute poverty, in that the whole world of material wealth as well as its general form, exchange value, confronts it as alien commodity and alien money, whereas it is itself merely the possibility of labour, available and confined within the living body of the worker [subject], a possibility which is, however, utterly separated from all the objective conditions of its realisation, hence from its own reality, denuded of them, and existing independently over against them. To the extent that all the objective conditions for labour to come to life, for its actual process, for really setting it in motion — all the conditions for its objectification — mediate between the capacity for labour and actual labour, they can all be described as means of labour. In order that labour capacity may as an independent factor come to meet the [I-20] objectified labour represented by the owners of money and commodities, that it may confront the value personified by the capitalist, it must be denuded of its own means of labour and step forth in its independent shape as the worker who is obliged to offer his labour capacity as such for sale as a commodity. Since actual labour is the appropriation of nature for the satisfaction of human needs,[26] the activity through which the metabolism between man and nature is mediated, to denude labour capacity of the means of labour, the objective conditions for the appropriation of nature through labour, is to denude it, also, of the means of life, for as we saw earlier, the use value of commodities can quite generally be characterised as the means of life. Labour capacity denuded of the means of labour and the means of life is therefore absolute poverty as such, and the worker, as the mere personification of the labour capacity, has his needs in actuality, whereas the activity of satisfying them is only possessed by him as a non-objective capacity (a possibility) confined within his own subjectivity. As such, conceptually speaking, he is a pauper, he is the personification and repository of this capacity which exists for itself, in isolation from its objectivity.

On the other hand, since material wealth, the world of use values, exclusively consists of natural materials modified by labour, hence appropriated solely through labour, and the social form of this wealth, exchange value, is nothing but a particular social form of the objectified labour contained in the use values; and since the use value, the real use of labour capacity is labour itself, i.e. the activity which mediates use values and creates exchange value, it follows that labour capacity is, just as much, the general possibility of material wealth and the sole source of wealth in the particular social form wealth has as exchange value. Value as objectified labour is after all only the objectified activity of labour capacity. Hence, if in dealing with the capital-relation one starts from the presupposition that objectified labour is preserved and increased, that value is preserved and increased, by the fact that the owners of money or commodities continuously find available in circulation a section of the population who are mere personifications of labour capacity, mere workers, and therefore sell their labour capacity as a commodity, continuously offering it on the market, then the paradox which seems to be the starting-point of modern political economy stems from the nature of the case.[27] While on the one hand political economy proclaims labour to be the source of wealth, in both its material substance and its social form, as regards both use values and exchange values, on the other hand it proclaims, just as much, the necessity for the worker to be in absolute poverty, a poverty which means nothing else than that his labour capacity is the sole remaining commodity he can sell, that he confronts objective, real wealth as mere labour capacity. This contradiction is present in the fact that, whether value appears in the form of the commodity or of money, it confronts labour capacity as such as a special kind of commodity.

A further antithesis is this: in contrast to money (or value in general) as objectified labour, labour capacity appears as a capacity of the living subject; the former is past labour, labour already performed, the latter is future labour, whose existence can only be the living activity, the currently present activity of the living subject itself.[28]

Just as on the side of the capitalist there stands value as such, which has its social, universally valid, general existence as objectified labour in money, and for which every particular form of existence, existence in the use value of every particular commodity, only means a particular and in itself indifferent embodiment, value as such being wealth in the abstract, so he is confronted, in the shape of the worker as the mere personification of labour capacity, by labour as such, the general possibility of wealth, value-creating activity (as a capacity) in general. Whatever the particular kind of actual labour the capitalist may wish to buy, this particular kind of labour capacity only retains its validity to the extent that its use value is the objectification of labour in general, hence value-creating activity in general. The capitalist, who represents value as such, is confronted by the worker, as labour capacity pure and simple, as worker in general, so that the antithesis between [I-21] self-valorising value, self-valorising objectified labour, and living value-creating labour capacity forms the point and the actual content of the relation. They confront each other as capital and labour, as capitalist and worker. This abstract opposition can be found for example in industry under the guild system, where the relation between master and journeyman is of an entirely different nature.[29] //This point, and probably the whole of this passage, should be put in first in the section “Capital and Wage Labour”. [30]//