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

The Valorisation Process

Unity of the Labour Process and the Valorisation Process.
(The Capitalist Production Process)

Volume 30, MECW, p. 92-103

The actual production process, which occurs as soon as money has been transformed into capital by being exchanged for living labour capacity and ditto for the objective conditions for the realisation of this capacity — the material and means of labour — this production process is a unity of the labour process and the valorisation process, just as its result, the commodity, is a unity of use value and exchange value.

The production process of capital, looked at from its material side, the production of use values, is, first of all, a labour process in general, and as such it displays the general factors which pertain to this process as such under the most varied forms of social production. These factors are determined, namely, by the nature of labour as labour. Historically, in fact, at the start of its formation, we see capital take under its control (subsume under itself) not only the labour process in general but the specific actual labour processes as it finds them available in the existing technology, and in the form in which they have developed on the basis of non-capitalist relations of production. It finds in existence the actual production process — the particular mode of production — and at the beginning it only subsumes it formally, without making any changes in its specific technological character. Only in the course of its development does capital not only formally subsume the labour process but transform it, give the very mode of production a new shape and thus first create the mode of production peculiar to it.[55] But whatever its changed shape may be, as a labour process in general, i.e. as a labour process viewed in abstraction from its historical determinateness, it always contains the general moments of the labour process as such.

This formal subsumption of the labour process, the assumption of control over it by capital, consists in the worker’s subjection as worker to the supervision and therefore to the command of capital or the capitalist. Capital becomes command over labour, not in the sense of Adam Smith’s statement that wealth is absolutely command over labour, but in the sense that the worker as worker comes under the command of the capitalist. For as soon as he has sold his labour capacity for a definite period of time to the capitalist in return for a wage he must enter into the labour process as a worker, as one of the factors with which capital works.

If the actual labour process is the productive consumption of the use values that enter into it through labour, hence through the activity of the worker himself, it is also just as much the consumption of labour capacity by capital or the capitalist.[74] He employs the worker’s labour capacity by having him work. All the factors of the labour process, the material of labour, the means of labour and living labour itself, as the activity, the consumption, of the labour capacity he has bought, belong to him; so the whole labour process belongs to him just as much as if he himself were working with his own material and his own means of labour. But since labour is at the same time the expression of the worker’s own life, the manifestation of his own personal skill and capacity — a manifestation which depends on his will and is simultaneously an expression of his will — the capitalist supervises the worker, controls the functioning of labour capacity as an action belonging to him. He will make sure that the material of labour is used for the right purpose: consumed as material of labour. If any material is wasted, it does not enter into the labour process, is not consumed as material of labour. The same is true of the means of labour, when, e.g. the worker wears out their material substance in a manner other than that prescribed by the labour process itself. Lastly, the capitalist will make sure that the worker really works, works the whole time required, and expends necessary labour time only, i.e. does the normal quantity of work over a given time. In all these aspects, the labour process and thereby labour and the worker himself come under the control of capital, under its command. I call this the formal subsumption of the labour process under capital.[75]

In the whole of the following investigation the labour the capitalist himself may perhaps perform is never reckoned among the components of the product’s value. If it consists of simple labour, it has nothing to do with the relation as such, and the capitalist [I-50] is not operating as capitalist, as mere personification, capital incarnate. If, however, it is a form of labour that arises from the peculiar functions of capital as such, hence from the capitalist mode of production as such, we shall subject it later on to a more specific and precise examination as “labour of superintendence”.[76]

This formal subsumption of the labour process under capital, or the command of the capitalist over the worker, has nothing in common with, e.g., the relation that prevailed in the guild industry of the Middle Ages between the master and the journeymen and apprentices.[29] It emerges instead, purely and simply, from the fact that productive consumption, or the production process, is at the same time a process of the consumption of labour capacity by capital, that the content and determining purpose of this consumption is nothing but the preservation and increase of the value of capital, and that this preservation and increase can only be attained by the most effective, most exact organisation of the actual labour process, which depends on the will, the hard work, etc., of the worker, and which is therefore taken under the control and supervision of the capitalist will.

//One more remark with reference to the production process: Money, in order to be transformed into capital, must be transformed into the factors of the labour process — i.e. into commodities which can figure as use values in the labour process; hence it must be transformed into means of consumption for labour capacity — i.e. the worker’s means of subsistence — or into the material and means of labour. All commodities, therefore, or all products, which cannot be employed in this manner or are not destined to be thus employed, belong to the consumption fund of society, but not to capital (here we understand under capital the objects wherein capital exists). Nevertheless, as long as these products remain commodities, they are themselves a mode of existence of capital. If capitalist production is presupposed, capital produces all products without exception, and it is entirely irrelevant whether these products are destined for productive consumption or are unable to enter into it, unable therefore to become the body of capital again. But they then remain capital as long as they remain commodities, i.e. are present in circulation. As soon as they are definitively sold, they cease to be capital in this sense. To the extent that capital is not at the stage of the labour process, it must absolutely be on hand in the form of commodity or money (if only perhaps a mere claim on money, etc.). But they cannot enter into the labour process or the production process as use values. //

In the same measure as the worker is active as a worker, i.e. externalises his labour capacity, he alienates it, since it has already been alienated by sale as a self-externalising capacity to the money owner before the labour process begins. As labour realises itself — on the one hand, as the form of raw material (as use value and product) and, on the other hand, as exchange value, objectified social labour in general — it is transformed into capital.

In general, to say that capital is a product, employed as a means for new production, is, as already remarked above, to misconstrue the capital-relation as covering the objective conditions of every labour process.[56] On the other hand, the same confusion may arise — and is even to be found in part in Ricardo himself[77] — when capital is described as accumulated labour employed for the production of more accumulated labour. The expression is ambiguous, since one needs to understand no more by accumulated labour than products which are employed for the production of new use values. But the expression can also be understood in the sense that the product (as exchange value) is, in general, nothing but a definite quantity of objectified labour, expended in order to make this quantity grow — hence the process of self-valorisation. Although the second process presupposes the first, the first process, in contrast, does not necessarily imply the second.

To the extent that the objective conditions of labour, the material and means of labour, serve directly in the labour process, they are employed by the worker. But it is not labour which employs capital, it is capital which employs labour.[78] It is this specific position taken up by value in general towards labour capacity, by objectified, past labour towards living, present labour, by the conditions of labour towards labour itself, which forms the specific nature of capital. We shall go into this in somewhat more detail at the end of this section I. 1) (Transformation of Money into Capital). Here it suffices to say, for the moment, that in the production process — in so far as this is a valorisation process and hence a process of the self-valorisation of the preposited value or money-value (i.e. objectified general social labour), past labour, [I-51] preserves and increases itself, posits surplus-value, through exchange, through the relative appropriation of living labour, an exchange mediated by the purchase of labour capacity. It thus appears as value-in-process, and preserving and maintaining itself in the process. It thus appears as a self — the incarnation of this self is the capitalist — the selfhood of value. Labour (living) appears only as the means, the agency through which capital (value) reproduces and increases itself.

* “Labour is the agency by which capital is made productive of wages, profit, or revenue” * (John Wade, History of the Middle and Working Classes etc., 3rd ed., London, 1835, p. 161).

(In the abstract economic section of his book Wade has some original points for his time, e.g. on commercial crises, etc. The whole of the historical part is, in contrast, a striking example of the shameless plagiarism that predominates among the English economists. It is in fact copied almost word for word from Sir F. Morton Eden, The State of the Poor etc., 3 vols, London, 1797 .)[79]

Value, objectified labour, acquires this relation to living labour only to the extent that it is confronted by labour capacity as such, i.e. to the extent that, conversely, the objective conditions of labour — and hence the conditions for the realisation of labour capacity — confront labour capacity itself in separation and independence, under the control of an alien will. Hence although the means and material of labour are not as such capital, they themselves appear as capital because their independence, their existence as entities in their own right vis-à-vis the worker and therefore labour itself, is rooted in their being. Just as gold and silver appear as money, and are, notionally, directly connected with the social relation of production of which they are the vehicles.[80]

Within capitalist production, the relationship between the labour process and the valorisation process is that the latter appears as the purpose, the former only as the means. The former is therefore stopped when the latter is no longer possible or not yet possible. On the other hand, it is revealed in times of so-called speculative fashions, of crises of speculation (shares and so forth), that the labour process (actual material production) is only a burdensome requirement, and the capitalist nations are seized by a universal mania for attaining the goal (the valorisation process) without using the means (the labour process). The labour process as such could only provide its own purpose if the capitalist were concerned with the use value of the product. He is, however, only concerned with alienating it by sale as a commodity, converting it back into money, and, since it was money originally, with the increase of this sum of money. In this sense it can be said:

“The value makes the product” (Say, Cours complet, p. 510),[81]

(This is in fact true for all production of commodities. On the other hand, it is also correct that only capitalist production is commodity production to the broadest extent, i.e. production for the individual’s own use entirely disappears and the elements of production, even in agriculture, are to a greater and greater degree already commodities when they enter the production process.[60])

Here, in dealing with the transformation of money into capital, we only need to point generally to the form in which money appears (since we shall be returning to this in dealing with circulation[82]). In any case this has already been done for the most part, in 1. 1) a) (The Most General Form of Capital).

A further remark needs to be made with regard to the valorisation process: It is not merely value, but a sum of value, that is preposited to it. A value of a definite magnitude, a point which will be developed still further later on. It must (even as capitalist in nuce) at least be capable of buying 1 worker and the material and instrument needed for him. In short, the sum of value is here determined from’ the outset by the exchange values of the commodities which enter directly into the labour process.

We therefore call the whole thing the capitalist production process on the basis of capital. It is not a question of producing a product but a commodity — a product destined to be sold. And it is not a question of simply producing commodities in order by selling them to gain possession in this way of the use values available in circulation, but of producing commodities in order to preserve and increase the preposited value.

[I-52] //If the labour process is viewed entirely abstractly, it can be said that originally only two factors come into play — man and nature. (Labour and the natural material of labour.) His first tools are his own limbs, and even these he must first appropriate for himself. Only with the first product that is employed for new production — even if it is just a stone thrown at an animal to kill it — does the labour process proper begin.[83] One of the first tools appropriated by man is the animal (domesticated animal). (See on this point the passage in Turgot.[84]) To this extent, from the point of view of labour, Franklin is right to define man as “a tool-making animal” or “engineer”.[85] The earth and labour would then be the original factors of production; the products destined for labour, produced material of labour, means of labour, means of subsistence, would only be derivative factors.

“The earth is necessary; capital is useful. And labour with the earth produces capital” (Colins, L'économie politique. Source des révolutions et des utopies prétendues socialistes, Vol. III, Paris, 1857, [p.] 288).a

//Colins believes that this achievement of independence by value, see VII-153, 154,[86] which is contained in the concept of capital, was invented by the economists.//

The above-mentioned ambiguity is also present in James Mill.

*"All capital"* //here capital in the merely material sense// *"consists really in commodities.... The first capital must have been the result of pure labour. The first commodities could not he made by any commodities existing before them” (James Mill, Elements of Political Economy, London, 1821, [,p.] 72).

However, this separation of production into the factors man, as vehicle of labour, and earth (actually nature) as object of labour, is also totally abstract. For man does not originally confront nature as a worker but as a proprietor, and it is not man as a solitary individual but man as member of a tribe, a clan, a family, etc., as soon as one can at all speak of man leading a human existence.[87]

// In the same Mill:

* “Labour and Capital ... the one, immediate labour ... the other, hoarded labour, that which has been the result of former labour” * (l.c., [p.] 75). //

if, on the one hand, capital is reduced in the labour process to its merely material mode of existence — if it is separated into its factors — in order in general to smuggle it in as a necessary element of all production, 16 it is, on the other hand, also conceded that capital is of a purely notional nature, because it is value (Say, Sismondi, etc. ).

If it is said that Capital is a product as opposed to a commodity (Proudhon, Wayland, etc.) or that it is the instrument of labour and the material of labour, or that it also consists of the products the worker receives, etc., it is forgotten that in the labour process labour has already been incorporated into capital and belongs to it just as much as the means and material of labour.

*"When the labourers receive wages for their labour ... the capitalist is the owner, not of the capital only” * (in this material sense), * “but of the labour also. If what is paid as wages is included, as it commonly is, in the term capital, it is absurd to talk of labour separately from capital. The word capital, as thus employed, includes labour and capital both"* (James Mill, l.c., [pp.] 70, 71).

Just as it is convenient for the apologists of capital to confuse it with the use value in which it exists, and to call use value as such capital, in order to present capital as an eternal factor of production, as a relation independent of all social forms, immanent in every labour process, hence immanent in the labour process in general, so equally does it happen that it suits Messieurs the economists when reasoning away some of the phenomena which belong peculiarly to the capitalist mode of production to forget the essential feature of capital, namely that it is value positing itself as value, hence not only self-preserving but at the same time self-multiplying value. This is convenient e.g. for proving the impossibility of overproduction.[88] The capitalist is here conceived as someone who is only concerned with the consumption of certain products (their appropriation by means of the sale of his commodity), not with the increase of the preposited value, purchasing power as such, abstract wealth as such.

Through the transformation of money into capital (effected by the exchange of money with labour) the general formula for capital, M — C — M, has now acquired a content. Money is the independent existence of exchange value. Viewed from the angle of its quality, it is the material representative of abstract wealth, the material existence of abstract wealth. But, the degree [I-53] to which it is this, the extent to which it corresponds to its concept, depends on its own quantity or mass. In the increase of money corresponds to the increase of value as such — this increase is an end in itself. To make money by means of money is the purpose of the capitalist production process — the increase of wealth in its general form, of the quantity of objectified social labour which is, as this labour, expressed in money. Whether the existing values figure merely as money of account in the ledger, or in whatever other form, as tokens of value, etc., is initially a matter of indifference. Money appears here only as the form of independent value which capital assumes at its starting-point as also at its point of return, but constantly abandons again. A more detailed treatment of this belongs in II) The Circulation Process of Capital.[82]

Capital is here money-in-process, for which its forms as, money and commodity are themselves merely alternating forms. It is continuously estimated in money of account — and is only valid as this money’s material existence, even as long as it exists as a commodity; and no sooner does it assume the form of money than it must, in order to valorise itself, abandon that form again. To say the capitalist is concerned with money is to say nothing but that he is concerned purely with exchange value, with the increase of exchange value, with abstract enrichment. But this is solely expressed as such in money.

“The great object of the monied capitalist, in fact, is to add to the nominal amount of his fortune. It is that if expressed pecuniarily this year by £20,000 for example, it should be expressed pecuniarily next year by £24,000. To advance his capital, as estimated in money, is the only way in which he can advance his interest as a merchant. The importance of this object to him is not affected by fluctuations in the currency or by a change in the real value of money. For instance, he may have advanced his fortune, by the business of one year, from £20,000 to £24,000; and vet, from a decline in the value of money, he may not have increased his command over the comforts, etc. Still it was as much his interest [to have engaged in the business], as if money had not fallen; for else, his monied fortune would have remained stationery, and his real wealth would have declined in the proportion of 24 1 o 20.... commodities are, therefore, not the terminating object of the trading capitalist, save in the spending of his revenue, and when he purchases for the sake of consumption. In the outlay of his capital, and when he purchases for the sake of production, money is his terminating object” (Thomas Chalmers, On Political Economy in Connexion with the Moral State and Moral Prospects of Society, 2nd ed., London, 1832, [pp.] 165-66).

//Another point in relation to the formula M — C — M. Value as capital, self-valorising value, is value raised to a second power. Not only does it have an independent expression, as in money, but it compares itself with itself (or is compared by the capitalist), measures itself at one period (the magnitude of value in which it was preposited to the production process) against itself in another period, namely after its return from circulation — after the commodity has been sold and re-converted into money. Value therefore appears as the same subject in two different periods, and indeed this is its own movement, the movement that characterises capital. Only in this movement does value appear as capital. See in opposition to this “A Critical Dissertation on the Nature, Measures, and Causes of Value; Chiefly in Reference to the Writings of Mr. Ricardo and His Followers. By the Author of Essays on the Formation and Publication of Opinions.” //S. Balley,// London, 1825.//

Bailey’s main argument against the whole determination of value by labour time is this: Value is only the relation according to which different commodities are exchanged. Value is only a relation between 2 commodities.

* Value* is nothing * “intrinsic or absolute” * (l.c., p. 23). * “It is impossible to designate. or express the value of a commodity, except by a quantity of some other commodity” * (l.c., [p.] 26). * “Instead of regarding value as a relation between 2 objects, they” * (the Ricardians) (and Ricardo himself) * “consider it as a positive result produced by a definite quantity of labour” * (l.c., [p.] 30). * “Because the values of A and B, according to their doctrine, are to each other as the quantities of producing labour, or ... are determined by the quantities of producing labour, they appear to have concluded, that the value of A alone, without reference to anything else, is as the quantity of its producing labour. There is no meaning certainly in the last proposition”; * (pp. 31-32). They speak of * “value as a sort of general and independent property” * (l.c., [p.] 35). * “The value of a commodity must be its value in something” * (l.c.)

As objectification of social labour the commodity is expressed as something relative. For [If the] [MS damaged here] labour contained [in A] is equated to all others, this is only as a particular form of existence of social labour. In this, however, the individual is already not viewed in isolation, but if Bailey wishes it, his labour is posited relatively and the commodity is itself posited as the form of existence of this relative thing.

[II-54] The same Bailey says (l.c., p. 72):

* “Value is a relation between contemporary commodities, because such only admit of being exchanged for each other; and if we compare the value of a commodity at one time with its value at another, it is only a comparison of the relation in which it stood at these different times to some other commodity.” *

He says this as an argument against “comparing commodities at different periods” as if for example in the turnover of capital the capitalist had not continuously to compare the value of one period to the value of another period. [38]

// It could now be asked, what is the relationship in which capital’s monetary expression stands to capital itself. Once money exists in the form of money, the constituent elements for which it is exchanged in its transformation into productive capital confront it as commodities. Here, therefore, the laws developed in the metamorphosis of the commodity or in the simple turnover of money are valid. If tokens of value circulate, whether they serve as means of circulation or means of payment, they merely represent the value of the commodities estimated in money or they directly represent money, which is equal in quantity to the amounts of money expressed in the prices of the commodities. As such they have no value. They are therefore not yet capital in the sense that the latter Is objectified labour. They represent instead in full the price of the capital, as they previously represented that of the commodity. If real money circulates, this is itself objectified labour — capital — (because commodity).

If we divide the total sum of money turning over by the number of times it turns over, we get the quantity of money really engaged in the process of turning over, and this is a constituent element of the capital, fixed or circulating according to the view one wishes to take of it. I can buy commodities for 120 thalers with the same 6 thalers if they turn over 20 times in a day: they represent the value of 120 thalers in the course of a day. But the 6 thalers themselves must be added to this. So the whole amount of capital turning over in the course of the day = 126 thalers.

If a capital = 100 thalers, and it buys commodities with those 100 thalers, then the same 100 thalers now represent a 2nd capital of 100 thalers and so on. If they turn over 6 times in the day, they have successively represented a capital of 600 thalers. How much or how little capital they represent on a given day therefore depends on their velocity of turnover = the speed of the commodity’s metamorphosis, which appears here as the metamorphosis of capital, alternately assuming and abandoning its forms of money and commodity. If the money functions as means of payment, 600 thalers of money can pay for any amount of capital, since its negative and positive charges cancel out, leaving a balance of 600 thalers.

Whereas originally, in the simple circulation of commodities, money appears as a point of transition, the metamorphosis of the commodity, the commodity transformed into money appears as the point of departure and conclusion of the movement of capital, and the commodity appears as metamorphosis of capital, as a mere point of transition.

The only distinguishing marks of money in so far as it appears as a form of capital — as real money, not as money of account — are these: 1) It returns to its point of departure, and in increased quantity. Money expended for consumption does not return to its point of departure; capital — money advanced for the purpose of production — returns in increased quantity to its point of departure. 2) Money which has been expended remains in circulation, from which it withdraws the commodity; capital throws back into circulation more commodities than it withdrew and it therefore also constantly withdraws anew from circulation the money it has expended. The more rapid this cyclic movement, i.e. the more rapid the circulation or metamorphosis of capital, the more rapid the turnover of money, and since this movement of capital is many-sided, the more does money serve as means of payment and the more do debts and assets balance each other.//

Capital transformed into money in the way we have described becomes productive capital in so far as it has subsumed the production process, functions as buyer and employer of labour. Only where capital has subjected production itself to its control, hence where the capitalist produces, does capital exist as the dominant, specific form of a period of production. Formally speaking, it may already have emerged previously in other functions, and it appears in these functions in its own period too. But then these are only derivative and secondary forms of capital, such as commercial and interest-bearing capital, etc.[15] So when we speak of productive capital, the whole of this relation is to be understood, not as if one of the forms of use value in which it appears in the labour process were in itself productive, with the machine or the material of labour producing value, etc.[89]

From the valorisation process, whose result is the value advanced and a surplus, a surplus value (in the labour process itself capital appears as a real use value; i.e. as real consumption, for only in consumption is [II-55] use value realised as use value, this process of the consumption of capital itself forms an economic relation, has a definite economic form and is not indifferent, falling outside the form, as in the concept of the mere commodity[39]; these use values of which capital consists are conceptually determined by the activity of labour capacity, which consumes them) it follows that the actual specific product of capital, so far as it produces as capital, is surplus value itself and that in production by capital the specific product of labour, so far as capital incorporates labour, is not this or that product but capital. The labour process itself appears only as the means of the valorisation process, just as, in general, use value appears here as only the repository of exchange value.