CHAPTER XXIV.

CONVERSION OF SURPLUS-VALUE INTO CAPITAL.

SECTION I. CAPITALIST PRODUCTION ON A PROGRESSIVELY INCREASING SCALE. TRANSITION OF THE LAWS OF PROPERTY THAT CHARACTERISE PRODUCTION OF COMMODITIES INTO LAWS OF CAPITALIST APPROPRIATION.

HITHERTO we have investigated how surplus-value emanates from capital; we have now to see how capital arises from surplus-value. Employing surplus-value as capital, reconverting it into capital, is called accumulation of capital.1

First let us consider this transaction from the standpoint of the individual capitalist. Suppose a spinner to have advanced a capital of £10,000, of which four-fifths (£8000) are laid out in cotton, machinery, &c., and one-fifth (£2000) in wages. Let him produce 240,000 lbs. of yarn annually, having a value of £12,000. The rate of surplus-value being 100%, the surplus-value lies in the surplus or net product of 40,000 lbs. of yarn, one sixth of the gross product, with a value of £2000 which will be realized by a sale. £2000 is £2000. We can neither see nor smell in this sum of money a trace of surplusvalue. When we know that a given value is surplus-value, we know how its owner came by it; but that does not alter the nature either of value or of money.

In order to convert this additional sum of £2000 into cap ital, the master spinner will, all circumstances remaining as before, advance four-fifths of it (£1600) in the purchase of cotton, &c., and one-fifth (£400) in the purchase of additional spinners, who will find in the market the necessaries of life whose value the master has advanced to them. Then the new

1"Accumulation of capital; the employment of a portion of revenue as capital.” (Malthus: Definitions, &c., ed. Cazenove p. 11.) "Conversion of revenue into capi. tal." Malthus: Princ. of Pol. Econ., 2nd Ed., Lond., 1836, p. 319.)

capital of £2000 functions in the spinning mill, and brings in, in its turn, a surplus-value of £400.

The capital-value was originally advanced in the money form. The surplus-value on the contrary is, originally, the value of a definite portion of the gross product. If this gross product be sold, converted into money, the capital-value regains its original form. From this moment the capitalvalue and the surplus-value are both of them sums of money, and their reconversion into capital takes place in precisely the same way. The one, as well as the other, is laid out by the capitalist in the purchase of commodities that place him in a position to begin afresh the fabrication of his goods, and this time, on an extended scale. But in order to be able to buy those commodities, he must find them ready in the market.

His own yarns circulate, only because he brings his annual product to market, as all other capitalists likewise do with their commodities. But these commodities, before coming to market, were part of the general annual product, part of the total mass of objects of every kind, into which the sum of the individual capitals, i.e., the total capital of society, had been converted in the course of the year, and of which each capitalist had in hand only an aliquot part. The transactions in the market effectuate only the interchange of the individual components of this annual product, transfer them from one hand to another, but can neither augment the total annual production, nor alter the nature of the objects produced. Hence the use that can be made of the total annual product, depends entirely upon its own composition, but in no way upon circulation.

The annual production must in the first place furnish all those objects (use-values) from which the material components of capital, used up in the course of the year, have to be replaced. Deducting these there remains the net or surplusproduct, in which the surplus-value lies. And of what does this surplus-product consist? Only of things destined to satisfy the wants and desires of the capitalist class, things which, consequently, enter into the consumption fund of the capital

ists? Were that the case, the cup of surplus-value would be drained to the very dregs, and nothing but simple reproduc tion would ever take place.

To accumulate it is necessary to convert a portion of the surplus-product into capital. But we cannot, except by a miracle, convert into capital anything but such articles as can be employed in the labour-process (i.e., means of production), and such further articles as are suitable for the sustenance of the labourer, (i.e., means of subsistence.) Consequently, a 'part of the annual surplus-labour must have been applied to the production of additional means of production and subsist ence, over and above the quantity of these things required to replace the capital advanced. In one word, surplus-value is convertible into capital solely because the surplus-product, whose value it is, already comprises the material elements of new capital.1

Now in order to allow of these elements actually functioning as capital, the capitalist class requires additional labour. If the exploitation of the labourers already employed do not increase, either extensively or intensively, then additional labour-power must be found. For this the mechanism of capitalist production provides beforehand, by converting the working class into a class dependent on wages, a class whose ordinary wages suffice, not only for its maintenance, but for its increase. It is only necessary for capital to incorporate this additional labour-power, annually supplied by the working class in the shape of labourers of all ages, with the surplus means of production comprised in the annual produce, and the conversion of surplus-value into capital is complete. From a concrete point of view, accumulation resolves itself into the reproduction of capital on a progressively increasing scale. The circle in which simple reproduction moves, alters

1 We here take no account of export trade, by means of which a nation can change articles of luxury either into means of production or means of subsistence, and vice ersâ. In order to examine the object of our investigation in its integrity, free from. all disturbing subsidiary circumstances, we must treat the whole world as one nation, and assume that capitalist production is everywhere established and has possessed teslf of every branch of industry.

its form, and, to use Sismondi's expression, changes into a spiral.1

Let us now return to our illustration. It is the old story: Abraham begat Isaac, Isaac begat Jacob, and so on. The original capital of £10,000 brings in a surplus-value of £2000, which is capitalised. The new capital of £2000 brings in a surplus-value of £400, and this, too, is capitalised, converted into a second additional capital, which, in its turn, produces a further surplus-value of £80. And so the ball rolls on.

We here leave out of consideration the portion of the surplus-value consumed by the capitalist. Just as little does it concern us, for the moment, whether the additional capital is joined on to the original capital, or is separated from it to function independently; whether the same capitalist, who accumulated it, employs it, or whether he hands it over to another. This only we must not forget, that by the side of the newly-formed capital, the original capital continues to reproduce itself, and to produce surplus-value, and that this is also true of all accumulated capital, and the additional capital engendered by it.

The original capital was formed by the advance of £10,000. How did the owner become possessed of it? "By his own labour and that of his forefathers," answer unanimously the spokesmen of political economy.2 And, in fact, their supposition appears the only one consonant with the laws of the production of commodities.

But it is quite otherwise with regard to the additional capital of £2000. How that originated we know perfectly well. There is not one single atom of its value that does not owe its existence to unpaid labour. The means of production, with which the additional labour-power is incorporated, as well as the necessaries with which the labourers are sustained, are nothing but component parts of the surplus product, of the tribute annually exacted from the working class by the capi

1 Sismondi's analysis of accumulation suffers from the great defect, that he con tents himself, to too great an extent, with the phrase "conversion of revenue into capital," without fathoming the material conditions of this operation.

2 "Le travail primitif auquel son capital a dû sa naissance." Sismondi, 1. c., ed. Paris, t. I., p. 109.

talist class. Though the latter with a portion of that tribute purchases the additional labour-power even at its full price, so that equivalent is exchanged for equivalent, yet the transaction is for all that only the old dodge of every conquerer who buys commodities from the conquered with the money he has robbed them of.

If the additional capital employs the person who produced it, this producer must not only continue to augment the value of the original capital, but must buy back the fruits of his previous labour with more labour than they cost. When viewed as a transaction between the capitalist class and the working class, it makes no difference that additional labourers are employed by means of the unpaid labour of the previously employed labourers. The capitalist may even convert the additional capital into a machine that throws the producers of that capital out of work, and that replaces them by a few children. In every case the working class creates by the surplus-labour of one year the capital destined to employ additional labour in the following year. And this is what is called: creating capital out of capital.

The accumulation of the first additional capital of £2000 presupposes a value of £10,000 belonging to the capitalist by virtue of his "primitive labour," and advanced by him. The second additional capital of £400 presupposes, on the contrary, only the previous accumulation of the £2000, of which the £100 is the surplus-value capitalised. The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.

In so far as the surplus-value, of which the additional capital, No. 1, consists, is the result of the purchase of labourpower with part of the original capital, a purchase that conformed to the laws of the exchange of commodities, and that, from a legal stand-point, presupposes nothing beyond the free disposal, on the part of the labourer, of his own capacities, and

1 "Labour creates capital before capital employs labour." E. G. Wakefield, Eng land and America. Lond., 1833, Vol. II., p. 110.