Capital, Volume II

Contents

1. Engels’s Preface (1885) 54 min 14

   Engels describes the eight manuscripts (1865–1881) from which he assembled the volume, how literally he followed them, and why Marx never finished it. Most of the preface answers the charge, raised by followers of the Prussian economist Rodbertus, that Marx took his theory of surplus-value from Rodbertus. Engels shows that Smith, Ricardo and the Ricardian socialists of the 1820s already knew surplus-value came from unpaid labour; Marx's novelty, he argues with a comparison to Lavoisier and the discovery of oxygen, was to treat it as a problem and explain it with the distinction between labour and labour-power. He ends by setting readers a challenge for Volume III: how equal rates of profit can arise from unequal amounts of living labour.

2. Preface to the Second Edition (1893) 1 min 1

   A short note to the second German edition: the text is reprinted with minor corrections, and Volume III, which has given Engels unforeseen trouble, should be ready soon.

3. Translator’s Note 1 min 1

   Ernest Untermann explains that, working far from libraries, he had to translate many English authors quoted by Marx back from the German instead of using their original words, and asks readers to send corrections.

4. I The Circulation of Money-Capital 1 h 45 min 14

   Capital moves in a circuit through three stages: money buys labour-power and means of production (M–C), production makes a new and larger stock of commodities (…P…), and their sale returns more money than was advanced (C′–M′). The purchase of labour-power is possible only because workers have been separated from the means of production, a "distribution" that precedes the circuit. The circuit of money-capital is the most one-sided and so the most revealing form of capital's movement, making money-making appear as the aim of production; Marx also treats transport as an industry that produces a change of place.

5. II The Rotation of Productive Capital 1 h 9 min 5

   The same movement seen from the point of view of productive capital (P…P): circulation now appears only as the interval between two periods of production, the form in which classical economists saw capital. Marx follows simple reproduction, where the capitalist spends his surplus-value as income, then accumulation, and explains why surplus-value often has to pile up as a hoard of money before it is large enough to be invested, and why reserve funds are needed against disturbances in circulation.

6. III The Circulation of Commodity-Capital 39 min 3

   The circuit of commodity-capital (C′…C′) starts from the finished product, surplus-value included, and so presupposes the consumption of the whole product and the existence of other capitals. Because it shows each capital's dependence on the total social product, it is the starting point for analysing society's reproduction as a whole, which is why Quesnay built his Tableau Économique on it.

7. IV The Three Diagrams of the Process of Circulation 59 min 6

   The three circuits are three aspects of one movement. A capital that produces continuously must be divided so that parts of it are always in the forms of money, production and commodities at the same time. Marx considers how changes in value disrupt the circuits, how capitalist production depends on merchants, why the old scheme of "natural economy, money economy, credit economy" is misleading, and why the capitalist's supply always exceeds his demand by the amount of surplus-value.

8. V The Time of Circulation 21 min 4

   The total time capital takes to return is the time of production plus the time of circulation. Time spent in circulation, in buying and selling, produces neither value nor surplus-value, so the shorter it is the more efficiently capital expands; perishable goods set physical limits to it.

9. VI The Expenses of Circulation 59 min 16

   The costs of circulation. Labour spent on buying and selling, and on bookkeeping and money, creates no value; it is a necessary deduction from surplus-value, however much capitalists treat it as productive. Storage costs add value only so far as stocks are a condition of continuous production common to any society. Transport, by contrast, is a branch of production that adds value to the goods it moves.

10. VII The Period and Number of Turn-Overs 11 min 2

    Part II opens with turnover: the cycle of capital considered as a repeated, periodic process. The turnover time is measured against the year, and the number of turnovers per year (n = T/t) becomes a key quantity for the rest of the Part.

11. VIII Fixed Capital and Circulating Capital 1 h 14 min 8

    Fixed capital (buildings, machines) transfers its value to the product gradually over many periods and is replaced all at once; circulating capital (materials and wages) transfers its whole value in each period. The distinction concerns how value circulates, not the physical nature of things. Long passages on railway evidence discuss wear and tear, maintenance, repairs, renewal and the "virtual" wear and tear of machinery made obsolete by cheaper new models.

12. IX The Total Turn-Over of Advanced Capital. Cycles of Turn-Over 17 min 3

    The total turnover of an advanced capital is the average of the turnovers of its parts. Because fixed capital lasting about ten years is renewed in waves, its cycle provides one material basis for the roughly ten-year cycle of industrial crises.

13. X Theories of Fixed and Circulating Capital, the Physiocrats and Adam Smith 1 h 15 min 5

    A critique of how Quesnay and Adam Smith treated fixed and circulating capital. The Physiocrats grounded the distinction in reproduction (annual versus primitive advances). Smith confused circulating capital with capital in circulation and lumped wages in with raw materials, so that the special role of capital spent on labour-power, the source of surplus-value, disappeared.

14. XI Theories of Fixed and Circulating Capital. Ricardo 37 min 4

    Ricardo inherited Smith's confusion and used the fixed/circulating distinction only to explain exceptions to the law of value, mixing it up with the distinction between constant and variable capital. The result, Marx argues, buried the origin of surplus-value and encouraged the fetishism that treats economic forms as natural properties of things.

15. XII The Working Period 28 min 5

    The working period is the number of connected working days a product needs before it is finished: a day for yarn, months for a locomotive or a ship. Long working periods tie up more capital for longer. Capitalism shortens them through co-operation, machinery and credit, and large projects such as railways become capitalist only when capital is concentrated enough to undertake them; Marx cites London speculative house-building and English livestock breeding.

16. XIII The Time of Production 30 min 4

    Time of production can exceed working time when natural processes (fermentation, drying, the growth of crops, cattle or timber) continue without labour. This makes agriculture's capital lie idle for much of the year and makes forestry, where trees take decades to grow, a poor field for private capital, which, Marx notes, has always destroyed forests far faster than it has replanted them.

17. XIV The Time of Circulation 24 min 2

    Circulation time consists of selling time and buying time. Distance from markets, the speed of transport and communication, the size of contracts and seasonal supplies of raw materials all lengthen or shorten it, and longer circulation adds risk and requires larger stocks.

18. XV Influence of the Time of Circulation on the Magnitude of an Advance of Capital 1 h 44 min 6

    Through long numerical examples (which Engels reworked and comments on), Marx shows how the relation of working period to circulation period determines how much capital must be advanced to keep production continuous, and how capital is periodically "set free" in money form. Engels concludes that this release of money-capital, together with the reflux of fixed capital, is one source of the large sums that feed the credit system; changes in turnover time and in prices can produce a plethora or a shortage of money-capital.

19. XVI The Turn-Over of the Variable Capital 1 h 18 min 4

    Turnover affects the annual rate of surplus-value: a variable capital that turns over ten times a year yields an annual rate ten times its rate per period, though the exploitation of each worker is the same. Marx then looks at the social side. Long-term projects such as railways withdraw labour and means of subsistence from the market without supplying any for years; in a communist society the problem would remain, but money-capital and its disguises would disappear, and society would plan such work in advance.

20. XVII The Circulation of Surplus-Value 1 h 30 min 5

    How surplus-value is realised in money. Marx asks where the money comes from to buy the extra commodities that embody surplus-value, and answers that the capitalist class itself throws it into circulation, partly through its own consumption, with the gold industry supplying additions to the money stock. He discusses hoards, banks and securities, and rejects the argument that higher wages simply raise prices.

21. XVIII Introduction 22 min 5

    Part III turns from individual capitals to the social capital as a whole, whose circulation includes the circulation of revenue and of the workers' and capitalists' consumption. On money-capital, Marx notes that capital can expand beyond the money advanced, and that under socialised production money-capital would disappear: society would directly allocate labour and means of production to long-term projects.

22. XIX Former Discussions of the Subject 1 h 34 min 11

    A history of earlier attempts to analyse social reproduction. Quesnay's Tableau Économique was a brilliant first attempt. Adam Smith's dogma that the price of every commodity, and of the whole annual product, resolves into wages, profit and rent "forgot" the constant capital used up in production, a mistake repeated by Ricardo, Say, Storch, Ramsay and J. S. Mill, which made it impossible to explain how the means of production are replaced.

23. XX Simple Reproduction 4 h 59 min 24

    The reproduction schemes. Society's product is divided into Department I (means of production) and Department II (means of consumption), each with constant capital, variable capital and surplus-value. Simple reproduction requires that I(v + s) equal IIc. Marx follows the money that mediates these exchanges, the division of II into necessities and luxuries, the replacement of fixed capital (whose uneven renewal can cause crises even without growth), the production of gold, and Destutt de Tracy's confusions.

24. XXI Accumulation and Reproduction on an Enlarged Scale 1 h 42 min 7

    Accumulation on an enlarged scale. Surplus-value saved as money forms "virtual" money-capital; expansion requires that Department I produce more means of production than simple replacement needs. In numerical schemes Marx shows how both departments can grow year after year if proportions are kept, and how growth depends on the accumulation of Department I. The manuscript breaks off: the chapter is unfinished, and the schemes became the starting point for long debates on crises, imperialism and economic planning.