One of Karl Marx’s enduring contributions to economic theory was to pose the problem of the reproduction of total social capital. Significantly, in the history of economics, there have only been two attempts at an exact exposition of this problem: one by [François] Quesnay, the founder of the Physiocratic school,* at its very inception; and the other by Marx, at its conclusion. In the intervening period, bourgeois economics was constantly troubled by this question, and yet it was unable to formulate it consciously, let alone solve it, and certainly never in its pure form, in isolation from the interference of related problems. However, due to the fundamental importance of the question, it is to a certain extent possible to retrace the trajectory of economic science in general through these attempts.
________________
*The Physiocratic school was a movement of French economists in the mid-eighteenth century, founded by Quesnay and Anne-Robert-Jacques Turgot. It held that the wealth of nations was derived solely from agricultural labor. In representing the first modern systematic economic theory, it helped pave the way for classical political economy.
In what does this problem of the reproduction of total social capital consist? The literal meaning of “reproduction” is simply repeated production—i.e. repetition or renewal of the process of production, and at first sight it may be difficult to see how the concept of reproduction differs from that of production (the latter being generally understood), or why such a new and unfamiliar term is required. However, it is precisely the very repetition, the continual recurrence of the process of production, that constitutes an important moment in itself. In the first instance, the regular repetition of production is the general precondition and foundation of regular consumption, and is thus a prerequisite of human civilization in each of its historical forms. In this sense, the concept of reproduction contains a historical moment, one that is defined by the history of civilization. Production cannot be resumed—there can be no reproduction—unless certain preconditions are fulfilled: tools, raw materials, and labor-power must be available as the result of the preceding period of production. However, in the most primitive stages of human cultural development, at the origins of human domination over external nature, the possibility of resuming production in this way was more or less a matter of chance. So long as hunting and fishing formed the main foundations of social existence, the regular repetition of production was frequently interrupted by periods of general starvation. In the case of some primitive peoples, the exigencies of reproduction as a regularly recurring process assumed a traditional and socially binding form already at a very early stage in certain ceremonies of a religious character. Thus, according to the exhaustive research of [W. Baldwin] Spencer and [Francis James] Gillen,* the totem cult of the Australian aborigines is fundamentally merely the means for the transmission, in the petrified form of a religious ceremony, of certain practices that have been repeated since time immemorial by the different social groups in order to secure and maintain their animal and vegetable food-sources. Yet the cycle of consumption and production that characterizes reproduction became possible only with cultivation with the hoe, the taming of domestic animals, and with livestock rearing for food production. In this way, the concept of reproduction itself appears as something more than mere repetition: it encompasses a certain level of society’s domination over external nature, or, expressed in economic terms, a certain level of the productivity of labor.
________________
*See Baldwin Spencer and Francis James Gillen, The Native Tribes of Central Australia (London: Macmillan, 1899). Their work accumulated a mass of empirical data on the traditional customs, languages, and beliefs of the Australian aborigines, about which they were highly sympathetic. It has undergone many reprints, most recently by Cambridge University Press in 2010.
On the other hand, the process of production is itself a unity of two different, if closely interconnected moments: (1) technical conditions—i.e. the determinate configuration of relations between humans and nature; (2) social conditions—i.e. the determinate configuration of relations between humans themselves. Reproduction depends to the same degree on both of these moments. The extent to which reproduction is bound up with the technical conditions of human labor and is itself the result of a certain level of the productivity of labor has just been indicated. However, the corresponding social forms of production are no less decisive. In a primitive communist agrarian community, reproduction, along with the whole planning of economic life, is determined by all those who work and by their democratic organs: the decision to resume labor, its organization, the provision of its necessary conditions (raw materials, tools, and labor-power)—in sum, the determination of the scale of reproduction and its division—are the result of the planned cooperation of the whole community within its borders. In a slave economy or on a feudal estate, reproduction is enforced and regulated in all details by personal relations of domination, which implies that the scale of reproduction is constrained by the corresponding right of disposal of the ruling élites over larger or smaller pools of the labor-power of others. In a society based on capitalist production, reproduction is configured in a very particular way, as a mere glance at certain of its more distinctive moments reveals. In every other society known to history, reproduction is regularly undertaken to the extent that its preconditions—i.e. the availability of means of production and labor-power—make this possible. It is only external factors, such as a devastating war or a great plague, resulting in depopulation and consequently the massive annihilation of labor-power and of the available means of production, that cause a complete or near total interruption of reproduction for long periods of early civilizations. Similar phenomena can to some extent be brought about by despotic forms of planned production, such as when thousands of fellaheen in ancient Egypt found themselves bound to several decades’ forced labor in the construction of the pyramids by the decree of the Pharaoh; when Isma’il Pasha detailed 20,000 fellaheen to work as serfs on the Suez Canal in modern Egypt;* or when, around 200 BC, the Emperor Qin Shi Huang, founder of the Qin dynasty, caused 400,000 people to perish of hunger and exhaustion, thus sacrificing a whole generation, in order to extend the Great Wall along China’s northern frontier.† The result in all such cases was that vast stretches of arable land were left fallow and that regular economic life was interrupted for long periods. In each of these instances, the causes of the interruption of reproduction were clearly visible and transparent: the plan of reproduction as a whole was determined unilaterally by the dominant power within a relation of domination.
In societies based on capitalist production, the reality is somewhat different. As can be observed, in certain periods all the necessary material means of production and labor-power are available, and yet the consumption needs of society are not met, reproduction being either completely interrupted, or occurring only on a much reduced scale. In this instance, it is not despotic interference with the economic plan that causes problems in the process of reproduction. It is not technical conditions that determine whether reproduction is undertaken here or not, but a purely social one—namely that only those products are produced that can be expected to be realized‡ (i.e. exchanged against money) with any certainty, and furthermore, they must not merely be realized, but at a determinate, country-specific rate of profit. In this case it is profit, as an end in itself and as the determining moment, that regulates not only production but also reproduction—i.e. it does not merely determine how the labor process is configured, what labor is carried out, and how the products are to be distributed; it also decides the question of whether, on what scale, and in which direction the labor process is to be resumed after the conclusion of a period of labor. “If production has a capitalist form, so too, will reproduction.”1
The process of reproduction as a whole in capitalist society thus constitutes a peculiar and most complicated problem as a consequence of these purely socio-historical moments. Indeed, the external character of the capitalist process of reproduction reveals its specific historical peculiarity: it comprises not only production but also circulation (the process of exchange)—it is the unity of both.
________________
*The evacuation of the Suez Canal started in 1859 and lasted ten years; modern estimates are that over 30,000 corvée laborers were employed in building it. Several thousand died while doing so.
†The wall, constructed between 220 and 206 BC, connected a large number of existing walls that had been built over the preceding centuries, some going back as far as the seventh century BC. Almost all of today’s wall was built much later, during the Ming Dynasty (1368–1644).
‡Luxemburg uses “realize” in a way that diverges from Marx, for whom it is the value of a commodity that is realized in exchange.
Capitalist production is first and foremost production by countless private producers without any planned regulation, and exchange constitutes the only social connection between them. Here, reproduction only ever has the experiences of the preceding labor period to go on as a guide in determining social needs. These experiences, however, remain the private experiences of individual producers, and they find no synthesizing social expression. Furthermore, these are never positive and direct experiences of the needs of society, but indirect and negative ones, which only allow conclusions to be drawn retrospectively from the corresponding price fluctuations as to whether there has been an excess or a deficit in the mass of products produced in relation to effective demand.
Nonetheless, reproduction is continually undertaken by the individual private producers on the basis of the experiences of the preceding period of production. As a consequence, there is inevitably an excess or a deficit again in the following period, with individual branches of production developing independently, so that an excess might be produced in one branch and a deficit in another. However, as nearly all individual branches of production are technically interdependent, an excess or a deficit in some of the larger leading branches of production generates the same phenomenon as a knock-on effect in most of the others. Accordingly there results a periodic alternation between a general surplus and a general shortfall in the mass of products relative to social demand. It follows, then, that in capitalist society, reproduction assumes a peculiar configuration—i.e. one that differs from that of all other historical forms of production. In the first place, every branch of production moves independently within certain limits, in a way that leads to periodic interruptions of reproduction of shorter or longer duration. Secondly, the deviations from social requirements in reproduction in the individual branches periodically combine so as to generate an all-round disparity, resulting in a general interruption in reproduction. Capitalist reproduction, then, presents a most distinctive figure. In all other economic forms, reproduction proceeds as a regular and uninterrupted cycle, except in cases of external, violent interference. Capitalist reproduction, however, to use a well-known expression of [Jean-Charles-Léonard] Sismondi’s, can only be presented as a continuous sequence of individual spirals coiling upwards in an increasing radius from a narrow base, and eventually becoming extremely large.* This is followed by a contraction, and a new spiral starts again with small loops, tracing the same figure until the next interruption.
________________
*See Jean-Charles-Léonard Simonde de Sismondi, Nouveaux principes d’économie politique, ou de la richesse dans ses rapports avec la population (New Principles of Political Economy, or Wealth in its Relationship with Population), Vol. 1 (Paris: Delaunay, 1819), p. 119. For the English version, see New Principles of Political Economy, translated by Richard Hyse (New Brunswick, NJ: Transaction Publishers, 1991).
This periodic fluctuation between the extreme expansion of reproduction and its contraction to the point of partial suspension—i.e. what is described as the periodic cycle of recession, boom, and crisis—is the most striking peculiarity of capitalist reproduction.
It is very important, however, to establish from the outset that although the periodic economic cycle (i.e. the cycle between phases of economic expansion and contraction) and crisis are essential moments of reproduction, they do not constitute the problem of capitalist reproduction in itself—they are not the actual problem. The periodic economic cycles and crises are the specific form of the movement that characterizes the capitalist mode of production, but they are not the movement itself. In order to present the problem of capitalist reproduction in its pure form, it must instead be considered quite apart from this periodic cycle and crises. Strange as this may appear, the method is quite rational; it is indeed the only investigative method that is scientifically viable. In order to present and solve the problem of value in its pure form, price fluctuations must be disregarded. The vulgar economic conception always attempts to solve the problem of value in terms of fluctuations in supply and demand. Classical economists, from Adam Smith to Karl Marx, tackle the problem in the opposite way, pointing out that fluctuations in the reciprocal relation between demand and supply can merely explain deviations of price from value, not value itself. In order to discover the value of a commodity, it must be initially assumed that demand and supply are in a state of equilibrium—i.e. that the price and value of commodities coincide. Thus, the scientific problem of value begins at the very point where supply and demand cease to have an effect. The same is valid for the problem of the reproduction of total social capital in the capitalist economy.* The periodic economic cycle and crises have the effect that capitalist reproduction fluctuates as a rule around the level of the total requirements of society that are backed by the ability to pay (the total effective demand of society), sometimes rising above and sometimes falling below this level, contracting occasionally to the point of an almost complete interruption of reproduction. However, if a longer period is considered, spanning a whole cycle with its alternating phases of expansion and contraction, it will be seen that the boom and the crisis—i.e. the most extreme overextension of reproduction and the low-point of its contraction, or its interruption—offset each other, such that an average, a mean volume of reproduction can be worked out for the whole cycle. This average is no mere theoretical construct; it is also a real, objective fact. For in spite of the sharp rises and falls in the course of a cycle, in spite of crises, the needs of society are always more or less satisfied, reproduction continues on its winding course, and there is a continuous development of productive forces. Yet how does this occur, if cycles and crises are disregarded? The real question begins here, and fundamentally, the attempt to solve the problem of reproduction in terms of the periodicity of crises represents just as vulgar an economic approach as the endeavor to solve the problem of value in terms of fluctuations in supply and demand. Nevertheless, it will be seen that, as soon as it has established the problem of reproduction in a halfway conscious manner or at least has some intimation of it, economic theory consistently reveals an unwitting tendency to transform it into the problem of crises, thus barring its own way to a solution. In what follows, capitalist reproduction is always to be understood as the average, or the mean, given over the course of the alternating phases of expansion and contraction within an economic cycle.
________________
*This sentence was left out of Agnes Schwarzschild’s translation of The Accumulation of Capital.
Aggregate capitalist production is carried out by an unrestricted and constantly changing number of private producers, who produce independently of one another, without any social control other than the observation of price fluctuations, and without any social connection between them other than the exchange of commodities. How is actual total production constituted out of these innumerable, disconnected movements? If the question is posed this way—and this is the first general form in which the problem presents itself directly—what is overlooked is that the private producers in this case are not simply producers of commodities but capitalist producers, and that the total production of society is not simply production for the sake of satisfying social needs per se, nor is it simple commodity production; instead it is capitalist production. It can now be observed how the problem is altered by these facts.
A producer who produces not only commodities, but also capital, must above all generate surplus value. Surplus value is the capitalist producer’s final goal—it is the motive that drives him. The commodities produced must, once they have been realized, cover his expenses and, in addition, yield him a sum of value that does not correspond to any outlay on his part, and that is pure surplus. From the standpoint of this generation of surplus value, the capital advanced by the capitalist is divided into two parts, even if he does not know it himself and despite the nonsense about fixed and circulating capital with which he deludes himself and the world: one part represents his expenses on means of production such as buildings, raw materials, auxiliary materials, and machinery, and the other part is spent on wages. Marx calls this first part, whose value is transferred unchanged to the product through its utilization in the labor process, constant capital; the second part, which leads to an increase in value, to the creation of surplus value through the appropriation of unpaid wage-labor, he terms variable capital. From this standpoint, the value composition of every commodity produced by capitalist production may normally be expressed by the formula: c + v + s, where c stands for the value of the constant capital—i.e. the portion of value that is transferred to the commodity corresponding to the consumption of means of production, v stands for the value of the variable capital advanced in the form of wages, and s stands for the surplus value—i.e. the increase in value deriving from the unpaid part of wage-labor. Each of the three components of value are contained together in the concrete form of the produced commodity—in each individual commodity and in the total mass of commodities viewed as a unity, no matter whether the commodities in question are cotton textiles or ballet performances, cast-iron pipes or liberal newspapers. The production of commodities is not an end in itself for the capitalist producers: it is a mere means to the appropriation of surplus value. As long as this surplus value is contained in the form of the commodity, however, it is useless to the capitalist. Once it has been produced, it must be realized, transformed into the pure form of its value—i.e. into money. For this to occur, and for surplus value to be appropriated in the form of money by the capitalist, his total capital expenditures must shed their commodity-form and return to him in the form of money. Only when this has been achieved, when the total mass of commodities has been exchanged for money according to their value, has the aim of production been fulfilled. Just as it previously corresponded to the value-composition of commodities, the formula c + v + s now refers to the quantitative composition of the money that proceeds from the sale of the commodities: one part, c, recompenses the capitalist for his expenditures on the means of production which have been used up; another part, v, covers his expenses on wages; the final part, s, forms the anticipated surplus, the “pure profit” of the capitalist in cash.2 However, this metamorphosis of capital from its original form, which represents the starting point of all capitalist production, into dead and living means of production (i.e. raw materials, machinery, and labor-power), then from these into commodities through the living labor process, and finally from commodities back into money (in fact into more money than at the outset) through the process of exchange—this turnover by capital is not sufficient for the production and appropriation of surplus value. The aim and driving motive of capitalist production is not surplus value per se, in whichever amount, but unconfined surplus value, ceaselessly expanding into an ever-larger quantity. This can only be achieved repeatedly through the same magical means: through capitalist production—i.e. through the appropriation of unpaid wage-labor in the process of production of commodities and through the realization of the commodities so produced.
In capitalist society, then, constantly renewed production, or reproduction as a regular phenomenon, is thus driven by a completely new motive, one unknown to any other form of production. In every other form of economy known to history, the determining moments of reproduction are the unremitting consumption requirements of society, whether these are the democratically determined consumption requirements of all the workers taken together in an agrarian communist rural commune or the despotically determined requirements of an antagonistic class society, a slave economy, a feudal estate, or similar. In the capitalist mode of production, the consumption requirements of society have no bearing on the motive driving production by the individual private producer—the only figure relevant here. For him, there is only effective demand, and this only as an indispensable means to the realization of surplus value. The manufacture of products for consumption that satisfy those requirements of society that are backed by the ability to pay—the effective demand in society—is thus in fact a law of necessity for the individual capitalist, just as much as it is a detour from the standpoint of the actual motive: the appropriation of surplus value. Furthermore, it is this motive that drives the continual resumption of reproduction. In capitalist society it is the production of surplus value that transforms the reproduction of life-needs as a whole into a perpetuum mobile. Reproduction, for its part, whose starting point in the capitalist mode of production is always capital, and, more precisely, capital in its pure value-form (i.e. in the money-form) can evidently be undertaken only if the products of the preceding period—commodities—have been transformed into their money-form (i.e. if they have been realized). Thus the successful realization of the commodities produced in the preceding period of production appears as the first condition of reproduction for the capitalist producers.
A second important circumstance can now be considered. In a private economic system, it is the individual capitalist who determines the scale of reproduction at his own discretion and as he sees fit. His driving motive, however, is the appropriation of surplus value, or rather, the fastest possible appropriation of surplus value. An acceleration in the appropriation of surplus value is only possible, however, through the expansion of capitalist production, which is what generates surplus value. In terms of surplus value production, a large-scale enterprise enjoys advantages over a small one in every respect. Thus the capitalist mode of production does not merely generate a constant incentive to reproduction in general, but also a drive to continually expand reproduction—i.e. to resume production on a greater scale than previously.
This is not the end of the story. The capitalist mode of production does not merely generate the drive to endless expansion of reproduction through the hunger for surplus value of the capitalist, but it also transforms this expansion into a veritable law of necessity, an economic condition of existence for the individual capitalist. Under the rule of competition, the most important weapon of the individual capitalist in the struggle for market share is to cheapen his commodities. However, all lasting methods for reducing the costs of production of commodities—in contrast to those that bring about an additional increase in surplus value through depressing wages or extending labor-time, and that can themselves run into various obstacles—result in an expansion of production. Whether it is a question here of savings on buildings and tools, or the use of more efficient means of production, or the wide-ranging replacement of manual labor by machinery, or the timely exploitation of favorable market conditions for the procurement of cheap raw materials—in all these cases, the large-scale enterprise has advantages over its small- and medium-scale counterparts.
Within very broad limits, these advantages increase in direct proportion to the expansion of the enterprise. Competition itself forces any expansion by some capitalist enterprises to be matched by the others as a condition of their existence. In this way is constituted an unremitting tendency toward reproduction at an ever-increasing scale, endlessly spreading automatically, wavelike, across the entire surface of private production.
For the individual capitalist, the expansion of reproduction is expressed as his transformation of a portion of the appropriated surplus value into capital, such that he accumulates. Accumulation, the transformation of surplus value into active capital, is the capitalist expression of expanded reproduction.*
Expanded reproduction is no discovery of capital. On the contrary, it has been the rule throughout history in every form of society that has been characterized by economic and cultural progress. Simple reproduction—the mere constant repetition of the production process on an unaltered scale—is in fact possible, and can be observed over long periods in the history of social development. This is the case in the ancient agrarian communist village communities, for example, in which the increase in population is not met by a gradual expansion of production, but rather by the periodic expulsion of offspring and the founding of equally tiny and self-sufficient offshoot communities. Ancient forms of small-scale handicraft production in India and China provide similar instances in which production is repeated in the same forms and on the same scale as a tradition handed down from one generation to the next. In all these cases, however, simple reproduction is both the source and reliable indication of a general economic and cultural stagnation. None of the decisive progress in production or the great monuments of civilization, such as the great waterworks of the East, the Egyptian pyramids, Roman military roads, Greek arts and sciences, or the development of handicrafts and cities in the Middle Ages would have been possible without expanded reproduction, since only a progressive expansion of production beyond immediate requirements and a constant increase in the population and in its needs form the economic foundation and the social impetus for significant advances by civilization.
In particular, exchange, the concomitant emergence of class society and its historical progress up to the capitalist form of economy, would have been unthinkable without expanded reproduction. In capitalist society, however, expanded reproduction acquires some new characteristics: in the first instance, as has been shown, it becomes a necessary law for the individual capitalist. Simple reproduction, or even reduced reproduction, are in fact not excluded by the capitalist mode of production—indeed they constitute periodic manifestations of crisis after the equally periodic overextension of reproduction in the expansionary phase of the cycle. Nonetheless, the general movement of reproduction (over and above the periodic fluctuations corresponding to the alternating phases of the economic cycle) is in the direction of an endless expansion. For the individual capitalist, the inability to keep pace with this general movement implies elimination from the competitive struggle, and economic death.
________________
*This paragraph was left out of Schwarzschild’s translation of The Accumulation of Capital.
There are yet further dimensions to be considered here. In every mode of production based on a purely or predominantly natural economy—in the agrarian communist village community in India, the Roman villa with its slave labor, or the medieval feudal estate—expanded reproduction is only related in its concept and its aim to the volume of products, the mass of objects that are produced for consumption. The goal of consumption governs the scale and character of the individual labor process as well as of reproduction in general. Things are different in a capitalist economy. Capitalist production is not production for the purpose of consumption, but the production of value. Value relations govern the entire production process as well as the reproduction process. Capitalist production is not the production of consumer goods, nor is it merely the production of commodities: instead it is the production of surplus value. Expanded reproduction, in capitalist terms, means the extension of surplus value production. Surplus value production does indeed proceed in the form of commodity production, and thus, in the last instance, as the production of consumer goods. During the course of reproduction, however, discrepancies between these two facets are continually caused by variations in the productivity of labor. As productivity increases, the same amount of capital and of surplus value represents a progressively larger volume of consumer goods. The expansion of production in the sense of the production of a larger mass of use-values does not necessarily imply expanded reproduction in the capitalist sense. Conversely, capital may, within certain confines, extract a greater surplus value through an increase in the rate of exploitation (e.g. through depressing wages) without producing a larger volume of goods. However, in both of these cases, the elements of expanded reproduction are produced as capital, since these elements are surplus value both as a magnitude of value and as a quantity of material means of production. As a rule, an increased production of surplus value is brought about by an expansion in capital, which in turn is the result of the process whereby a part of the appropriated surplus value is turned into new capital supplementing the original capital, no matter whether the capitalist surplus value is used for the expansion of the old enterprise or to start up a new one as an independent offshoot. Expanded reproduction in the capitalist sense thus has a specific expression as the growth of capital through the progressive capitalization of surplus value or, to use Marx’s term, the accumulation of capital. The general formula of expanded reproduction under the rule of capital can be expressed as follows: (c + v) + s/x + s′, where s/x stands for the capitalized part of the surplus value appropriated in the earlier period of production, and s’ stands for the new surplus value generated by the expanded capital. A part of this new surplus value is itself capitalized. This constant flux between the mutually conditioning processes of surplus value appropriation and the capitalization of surplus value forms the process of expanded reproduction in the capitalist sense.
So far, however, only the general, abstract formula for reproduction has been attained. What follows is a closer examination of the concrete conditions that are necessary for this formula to be realized.
Once it has successfully shed its commodity-form on the market, the appropriated surplus value presents itself as a determinate sum of money. This form is the absolute form of its value, in which it can begin its circuit as capital. At the same time, however, in this form it is only on the cusp of its circuit. Money itself creates no surplus value.
In order that the part of surplus value allocated to accumulation can actually be capitalized, it must assume the concrete form that first allows it to act as productive (i.e. surplus value–generating) capital. Therefore, like the original capital, it, too, must be divided into two parts: a constant part, in which it presents itself as dead means of production; and a variable part, and in which it takes the form of wages. Only then can it instantiate the formula c + v + s, following the example of the original capital.
However, neither the capitalist’s good intention to accumulate, nor his “thrift” or “abstinence” in allocating the larger part of his surplus value to production rather than squandering it on personal luxuries, are sufficient for this purpose. The concrete forms that he intends to give to his additional capital must also be available to him on the market, i.e. in the first place, precisely those material means of production—raw materials, machinery, etc.—that he requires for the kind of production he has chosen and planned, in order to give the constant part of capital its productive form. Secondly, however, it must also be possible to carry out the transformation of the portion of capital that has been designated as variable capital, and for this, there are two prerequisites. Above all, there must be sufficient additional labor power available on the labor market in order to set the additional capital in motion, and furthermore, since workers cannot live on money, sufficient additional means of subsistence must be available on the commodity market for the newly employed workers to acquire in exchange for the variable part of capital they have received from the capitalist. If all of these preconditions are given, then the capitalist can set his capitalized surplus value in motion in order to generate new surplus value as capital-in-process. However, his task is still not complete. The new capital, including the surplus value that has been generated, is still for the time being contained in the form of a new, additional mass of commodities of whichever kind. In this form, the new capital is still only advanced, and the surplus value it has generated remains in a form that is useless to the capitalist. In order for the new capital to fulfill its vocation, it must slough off its commodity-form and, together with the surplus value it has created, revert to the capitalist in the pure form of value, as money. If this is not successfully completed, then the new capital and the surplus value are completely or partially lost, the capitalization of surplus value is miscarried, and accumulation does not taken place. So that accumulation can actually occur in practice, an absolutely essential requirement is that the additional mass of commodities produced by the new capital win a place on the market for itself, so that it can be realized.
Thus it can be seen that expanded reproduction under capitalist conditions, i.e. as the accumulation of capital, is bound up with a whole series of circumstances peculiar to this form. A closer examination can now proceed. The first condition is that production must generate surplus value, for surplus value is the elementary form that increased production must take in order to be possible at all in a capitalist economy. This condition must be fulfilled in the production process itself, in the relation between capitalist and workers, in the production of commodities. The second condition is the following: so that the surplus value which has been allocated to the expansion of reproduction can be appropriated, it must, after the first condition has been met, first be realized, i.e. transformed into the money-form. This condition leads the investigation to the commodity-market, where the contingencies of exchange determine the subsequent fate of the surplus value, and thus also that of future reproduction. The third condition is that, once the precondition has been fulfilled that the surplus value must be successfully realized, and a part of the realized surplus value has been allocated for the purpose of accumulation, the new capital must first assume its productive form—i.e. the form of dead means of production and labor-power; furthermore, the part of capital exchanged against labor-power must take on the form of means of subsistence for the workers. This condition leads the analysis back to the commodity market and to the labor market. If the necessary requirements are given here, and expanded reproduction of commodities takes place, then the fourth condition arises: the increased mass of commodities in which the new capital, including the new surplus value, presents itself, must be realized—i.e. it must be transformed into money. Only when this transformation has been successfully completed has expanded reproduction in the capitalist sense taken place. This last condition leads once again back to the commodity market.
Thus capitalist reproduction, like production itself, is played out as a constant back and forth between the point of production and the commodity market, between the private office or factory-floor, where “unauthorized access is strictly prohibited,” where the sovereign will of the individual capitalist is the highest law, and the commodity market, which is a law unto itself, impervious to will or reason. However, the very arbitrariness and anarchy prevalent in the commodity market make the individual capitalist painfully aware of his dependence on society, on the ensemble of its individual producing and consuming members. For the expansion of his reproduction, the individual capitalist requires additional means of production and labor-power along with means of subsistence for the latter, and yet the availability of these depends on moments, circumstances, and processes that occur behind his back, completely independently of him. In order to realize his increased mass of products, he requires a greater market for his wares; however, the actual increase of demand in general, and of demand for his kind of commodity in particular, is something he is completely powerless to determine.
The conditions enumerated here, all of which are expressions of the immanent contradiction between private production and consumption and their social interconnection, are not new moments, only emerging in reproduction. They are rather the general contradictions of capitalist production. However, they present themselves as particular difficulties of the process of reproduction for reasons that can now be elucidated. From the perspective of reproduction, and specifically that of expanded reproduction, the capitalist mode of production does not merely reveal its general fundamental character, but it also appears as a continuous process moving according to a determinate rhythm: what comes to the fore here is the specific way in which the various cogs of its production periods interlock. From this perspective, the general question is not how each individual capitalist is able to find the requisite means of production and labor-power available on the market, and how he can sell the commodities he has had produced on the market, when there is a complete absence of social control or planning to harmonize production and demand. The answer to this question is that, on the one hand, the drive of the individual capitals to extract surplus value and the competition between them, along with the automatic effects of capitalist exploitation and capitalist competition, provide for the production of all kinds of commodities, including means of production, and also have the effect that a growing class of proletarianized workers in general lies at the disposal of capital. On the other hand, the unplanned character of these interconnections is expressed in the fact that supply and demand are only brought into line with one another through constant deviations from their equilibrium—through hourly price fluctuations, through periodic alternations between the phases of the economic cycle, and through periodic crises.
From the perspective of reproduction the question is posed differently: how it is possible that the unplanned supply of means of production and labor-power on the market, and the unplanned and incalculably fluctuating market conditions for the sale of commodities, can secure for the individual capitalist his accumulation requirements—i.e. the additional amounts and different types of means of production and labor-power he needs, along with the requisite growth in the market for his commodities, all in the appropriate quantitative ratios? The problem can be stated more precisely. Consider a capitalist whose production is expressed in the previously given formula in the following proportions: 40c + 10v + 10s, so that the constant capital is four times as large as the variable capital, and the rate of exploitation is 100 percent. The mass of commodities thus represents a value of 60. It will be assumed that the capitalist is in a position to capitalize half of his surplus value, and that he adds this to his original capital according to the same composition of capital. The following production period would then be expressed according to the formula as follows: 44c + 11v + 11s = 66. It will be further assumed that the capitalist is still in a position to capitalize half of his surplus value, and indeed continues to do so each year. For him to accomplish this, it is essential not only that he find generally available to him means of production, labor-power, and markets for his wares, but also that these be given in the definite proportions that correspond to the progress of his accumulation.