Capital: A Critique of Political Economy, Vol. II. The Process of Circulation of Capital
1.  In the preface to "The Poverty of Philosophy." A Reply to Proudhon's "Philosophy of Poverty," by Karl Marx. Translated into German by E. Bernstein and K. Kautsky, Stuttgart, 1885.
2.  Roscoe-Schorlemmer. Ausuehrliches Lehrbuch der Chemie. Braunschweig, 1877, I, p. 13, 18.
3.  "Thus the concentration of wealth into the hands of a small number of proprietors narrows the home market more and more, and industry is more and more compelled to open up foreign markets, where still greater revolutions await it" (namely, the crisis of 1817, which is immediately described). Nouveaux Principes, edition of 1819, L., p. 336.
Part I, Chapter I.
4.  From Manuscript II.
5.  Beginning of Manuscript VII, started July 2, 1878.
6.  End of Manuscript VII. Beginning of Manuscript VI.
7.  End of Manuscript VI. Beginning of Manuscript V.
8.  This is true, no matter how we separate capital-value and surplus-value. 10,000 lbs. of yarn contain 1,560 lbs., or 78 pounds sterling, surplus-value; but one lb., or one shilling, likewise contains 2,496 ounces, or 1,728 pence of surplus-value.
9.  A. Cuprov: Zeleznodoroznoje chostjajstvo, Moskva, 1875, pg. 75 and 76.
Part I, Chapter II.
10.  The term "latent" is borrowed from the idea of latent heat in physics, which has now been almost replaced by the theory of the transformation of energy. Marx therefore uses in the third part, which is of later date, another term borrowed from the idea of potential energy, viz.: "potential," or, analogous to the virtual velocities of D'Alembert, "virtual capital."—F. E.
Part I, Chapter IV.
11.  End of Manuscript V. What follows to the end of the chapter is a note found in a Manuscript of 1877 or 1878 amid extracts from other works.
Part I, Chapter V.
12.  Beginning of Manuscript IV.
13.  Time of production of the means of production does not mean, in this case, the time required for their production, but the time during which they take part in the process of production of a certain commodity.—F. E.
Part I, Chapter VI.
14.  From here to 10 are statements taken from a note at the end of Manuscript VIII.
15.  See explanation 9a.
16.  "The expenses of commerce, although necessary, must be regarded as a burden." (Quesnay, Analyse du Tableau Economique, in Daire. Physiocrates, part I, Paris, 1846, page 71.) According to Quesnay, the "profit," which the competition between merchants produces, and which he sees in the fact that competition compels them "to figure a discount on their loss or gain...is really nothing but a prevention of loss for the seller at first hand or for the consuming buyer. Now, a prevention of loss on the expenses of commerce is not a real product or an increase of wealth through commerce, considering it simply as an exchange, whether with or without the cost of transportation." (Pages 145 and 146.) "The expenses of commerce are always paid by those who sell the products and who would enjoy the full prices paid for them by the buyers, if there were no incidental expenses." (Page 163, Ibidem.) The "proprietaires" and "producteurs" are "salariants," the merchants are "salaries." (Page 164, Quesnay, Problemes Economiques, in Daire, Physiocrates, Part I, Paris, 1846.)
17.  In the middle ages, we find bookkeeping for agriculture only in the convents. But we have seen in Vol. I, that a bookkeeper was installed for agriculture as early as the primitive Indian communes. Bookkeeping is then made an independent function of a communal officer. This division of labor saves time, pains, and expenses, but production and bookkeeping for production remain as much two different things as a cargo of a ship and the way-bill. In the person of the bookkeeper, a part of the labor-power of the commune is withdrawn from production, and the cost of his function is not produced by his own labor, but by a deduction from the communal product. What is true of the bookkeeper of an Indian commune, is true under changed circumstances of the bookkeeper of the capitalists. (From Manuscript II.)
18.  "The money circulating in a country is a certain portion of the capital of the country, absolutely withdrawn from productive purposes, in order to facilitate or increase the productiveness of the remainder; a certain amount of wealth is, therefore, as necessary in order to adopt gold as a circulating medium, as it is to make a machine, in order to facilitate any other production." (Economist, Vol. V, Page 519.)
19.  Corbet calculates, in 1841, that the cost of storing wheat for a season of nine months amounts to a loss of 1½ per cent in quantity, 3 percent for interest on the price of wheat, 2 per cent for warehouse rental, 1 per cent for sifting and drayage, ½ per cent for delivery, together 7 per cent, or 3 sh. 6 d. on a price of 50 sh. per quarter. (Th. Corbet, An Inquiry Into the Causes and Modes of the Wealth of Individuals, etc., London, 1841.) According to the testimony of Liverpool merchants before the railroad commission, the net expenses of grain storage in 1865 amounted to 2 d. per month per quarter, or 9 to 10 d. per ton. (Royal Commission on Railways, 1867. Evidence, page 19, Nr. 331.)
20.  Wealth of Nations, Book II, Introduction.
21.  Instead of a supply arising from the conversion of the product into a commodity, and of the supply of articles of consumption into commodities, as Adam Smith thinks, this transformation, on the contrary, causes violent crises in the economy of the producer during the transition from production for use to production for sale. In India, for instance, the custom of storing up large quantities of grain in years of superfluity, when little could be gotten for it, was observed until very recent times. (Return. Bengal and Orissa Famine. H. of C., 1867, I, page 230, Nr.74.) The sudden increase in the demand for cotton, jute, etc., led in many parts of India to a restriction of rice culture, a rise in the price of rice, and a sale of old supplies of the producers. Then followed the unexampled export of rice to Australia, Madagascar, etc., in 1864-66. This accounts for the acute character of the famine of 1866, which cost the lives of more than a million inhabitants in the district of Orissa alone (1. c. 174, 175, 213, 214, and III. Papers relating to the Famine in Behar, pages 32, 33, where the "drain of the old stock" is emphasized as one of the causes of the famine).—From Manuscript II.
22.  Storch calls this circulation factice.
23.  Ricardo quotes Say, who considers it one of the blessings of commerce that it increases the price, or the value, of the products by transportation. "Commerce," writes Say, "enables us to obtain a commodity at its original place of production and to transport it to another place for consumption; it enables us, therefore, to increase the value of commodities by the entire difference between their price at the first and that at the second place." Ricardo remarks with reference to this: "True, but how is the additional value given to it? By adding to the cost of production, first, the expenses of conveyance, secondly, the profit on the advances of capital made by the merchant. The commodity is only more valuable, for the same reason that every other commodity may become more valuable, because more labor is expended on its production and conveyance before it is purchased by the consumer. This must not be mentioned as one of the advantages of commerce." (Ricardo, Principles of Political Economy, 3rd ed., London, 1821, pp. 309, 310.)
24.  Royal Commission of Railways, p. 31, No. 630.
Part II, Chapter VIII.
25.  On account of the difficulty of determining what constitutes the distinguishing mark of fixed and circulating capital, Mr. Lorenz Stein thinks that this distinction is suitable only for lighter study.
26.  End of Manuscript IV, beginning of Manuscript II.
27.  The quotations market R. C. are from the work: Royal Commission of Railways. Minutes of Evidence taken before the commissioners. Presented to both house of Parliament, London, 1867. The questions and answers are numbered, as indicated above.
Part II, Chapter IX.
28.  "Municipal production is bound to a cycle of days, agricultural production to one of years." (Adam G. Mueller, Die Elemente der Staatskunst. Berlin, 1809, II, page, 178.) This is the naive conception of industry and agriculture held by the romantic school.
Part II, Chapter X.
29.  Compare with regard to Quesnay the Analyse du Tableau Economique in Physiocrates, edition of Daire, part I, Paris 1846. There we read, for instance, that the annual advances consist of the expenses incurred annually for the work of cultivation; these advances must be distinguished from the primitive ones, which form the funds for the establishment of the farming business." (Page 59.) In the works of the later physiocrats, these advances are sometimes termed capital, for instance by Dupont de Nemours in his Origine et Progres d'une Science Nouvelle, 1767, Daire edition, I, page 291, where he speaks of "capital or advances," furthermore by Le Trosne: "As a result of the longer or shorter duration of the employment of manual labor, a nation possesses a considerable fund of wealth independent of its annual reproduction, and this fund is a capital accumulated in long periods and originally paid by productive acts, which are always continued and increased." (Daire, II, page 928.) Turgot employs the term capital more regularly for advances, and identifies the advances of the manufacturers still more with those of the tenants of land. (Turgot, Reflexions sur la Formation et la Distribution des Richesses, 1766.)
30.  To what extent Adam Smith has blocked his own way to an understanding of the role of labor-power in the process of self-expansion is proven by the following sentence, which places the labor of human laborers on the same level with that of laboring cattle, after the manner of the physiocrats. "Not only his (the farmer's) laboring servants, but his laboring cattle are productive laborers." (Book II, chap. V, p. 243.)
Part II, Chapter XI.
31.  Observations on the Circumstances Which Influence the Condition of the Labouring Classes of Society, London, 1817.
Part II, Chapter XV.
32.  The weeks falling within the second year of turn-over are placed in parentheses.
Part II, Chapter XVI.
33.  In the manuscript, the following note is here inserted for future elaboration: "Contradiction in the capitalist mode of production; the laborers as buyers of commodities are important for the market. But as sellers of their own commodity—labor-power—capitalist society tends to depress them to the lowest price. Further contradiction: The epochs in which capitalist production exerts all its forces are always periods of overproduction, because the forces of production can never be utilized to such a degree that more value is not only produced but also realized; but the sale of commodities, the realization on the commodity-capital, and thus on surplus-value, is limited, not by the consumptive demand of society in general, but by the consumptive demand of a society in which the majority are poor and must always remain poor. However, this belongs into the next part."
Part II, Chapter XVII.
34.  Although the physiocrats still intermingle these two phenomena indiscriminately, they are nevertheless the first who emphasize the reflux of money to its starting point as the essential form of circulation of capital, as that form of circulation which promotes reproduction. "Throw a glance at the Tableau Economique, and you will see that the productive class gives the money with which the other classes buy products from it, and that they return this money to it when they come back next year to make the same purchases.... You see, then, that there is in this instance no other cycle but that of expenditure followed by reproduction, and of reproduction followed by expenditure. And this cycle is described by the circulation of money, which is the measure of expenditure and reproduction."—Quesnay, Problems Economiques, Daire edition, Physiocrats, I, pages 208, 209.) "It is this continual advance and return of capitals which must be called the circulation of money, this useful and fertile circulation, which gives life to all the labors of society, which maintains the activity and life of the social body, and which is with good justification compared to the circulation of blood in the animal body." (Turgot, Reflexions, etc, Daire edition, I, page 45.)
Part III, Chapter XVIII.
35.  From manuscript II.
Part III, Chapter XIX.
36.  Beginning of manuscript VIII.
37.  "Capital," volume I, page 647, footnote.
38.  Some physiocrats had paved the way for him even here, especially Turgot. This author uses more frequently than Quesnay and the other physiocrats the term capital instead of avances and identifies still more the avances or capital of the manufacturers with those of the capitalist farmers. For instance: "Like these (the manufacturing entrepreneurs), the capitalist farmers must secure, over and above the return of their capitals, etc." (Turgot, Oeuvres, Daire edition, Paris, 1844, vol. I, page 40.)
39.  In order that the reader may not be in doubt as to the meaning of the phrase "the price of by far the greater part of the commodities," the following lines may show how Adam Smith himself explains it. For instance, no rent passes into the price of sea fish, only wages and profit; only wages pass into the price of Scotch pebbles. He says: "In some parts of Scotland poor people make it their business to gather on the sea shore the varicolored pebbles, known as Scotch pebbles. The price which the stone cutters pay for them consists only of their wages, as neither ground rent nor profit constitute any part of it."
40.  I reproduce this sentence verbatim from the manuscript, although it seems to contradict, in its present connection, both the preceding and the following statements. This apparent contradiction is solved farther along in (4). Capital and Revenue in Adam Smith.—F. E.
41.  We do not make anything of the fact that Adam Smith was here particularly unlucky in the choice of his example. The value of the corn resolves itself into wages, profit, and rent only, because the food consumed by the laboring cattle is regarded as wages, and the laboring cattle as laborers, so that, on the other hand, the wage laborer also appears in the role of the laboring cattle. (Note added from manuscript II.)
42.  From here to the end of the chapter, an extract from manuscript II is presented.
Part III, Chapter XX.
43.  From manuscript II.
44.  From manuscript VIII.
45.  Mainly taken from manuscript II; the diagrams from manuscript VIII.
46.  Here manuscript VIII is resumed.
47.  Advocates of the theory of crises of Rodbertus are requested to make a note of this.
48.  This presentation differs somewhat from that given in another place of this section farther along. There I throws likewise an additional amount of 500 p. st. into circulation. Here II alone supplies the additional money for the circulation. But this does not alter the final result.—F. E.
49.  Manuscript II resumed here.
50.  The following is from manuscript VIII.
51.  "When a savage manufactures bows, he carries on an industry, but he does not practice any abstinence." (Senior, Principes foundamentaux de l'Economie Politique, traduction Arrivabene, Paris, 1836, page 308.) "The more society advances, the more abstinence it requires." (Ibidem, page 342.) Compare "Capital," volume I, chapter XXIV, 3, page 608.
52.  E. B. Tyler, Forschungen ueber die Urgeschichre der Menschheit, translated by H. Mueller. Leipsic, no date, page 240.
53.  These figures do not coincide with those previously assumed. But this does not alter the substance of the argument, since it is merely a question of proportions.—F. E.
54.  Ad. Soetbeer, Edelmetall-produktion. Gotha, 1875.
55.  "A considerable quantity of gold bullion...is taken by the gold diggers directly to the Mint in San Francisco."—Reports of H. M. Secretaries of Embassy and Legation. 1879. Part III, p. 337.
56.  The analysis of the exchange of newly produced gold within the constant capital of department I is not contained in the manuscript.—F. E.
Part III, Chapter XXI.
57.  From here to the end manuscript VIII.
58.  This puts an end, once for all, to the feud over the accumulation of capital between James Mill and S. Bailey, which we have discussed from our point of view in volume I, chapter XXIV, section 5, foot notes on pages 622 and 623, namely the feud concerning the extensibility of the effects of industrial capital without changing its magnitude. We shall revert to this later.