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   Chapter 4 MARX’S SCHEME OF SIMPLE REPRODUCTION

The Accumulation of Capital By Rosa Luxemburg Characters: 39981

Updated: 2017-12-01 00:04


Let us now consider the formula c + v + s as the expression of the social product as a whole. Is it only a theoretical abstraction, or does it convey any real meaning when applied to social life-has the formula any objective existence in relation to society as a whole? It was left to Marx to establish the fundamental importance of c, the constant capital, in economic theory. Yet Adam Smith before him, working exclusively with the categories of fixed and circulating capital, in effect transformed this fixed capital into constant capital, though he was not aware of having achieved this result. This constant capital comprises not only those means of production which wear out in the course of years, but also those which are completely absorbed by production in any one year. His very dogma that the total value is resolved into v + s and his arguments on this point lead Smith to distinguish between the two categories of production-living labour and inanimate means of production. On the other hand, when he tries to construe the social process of reproduction on the basis of the capitals and incomes of individuals, the fixed capital he conceives of as existing apart from these, is, in fact, constant capital.

Every individual capitalist uses for the production of his commodities certain material means of production such as premises, raw materials and instruments. In order to produce the aggregate of commodities in a given society, an aggregate of all material means of production used by the individual capitalists is an obvious requisite. The existence of these means of production within the society is a real fact, though they themselves exist in the form of purely private individual capitals. This is the universal absolute condition of social production in all its historical forms.[84]

The specific capitalist form manifests itself in the fact that the material means of production function as c, as constant capital, the property of those who do not work; it is the opposite pole to proletarianised labour power, the counterpart of wage labour. The variable capital, v, is the aggregate of wages actually paid in the society in the course of a year's production. This fact, too, has real objective existence, although it manifests itself in an innumerable mass of individual wages. In every society the amount of labour power actually engaged in production and the annual maintenance of the workers is a question of decisive importance. Where this factor takes the specific capitalist form of v, the variable capital, it follows that the means of subsistence first come to the workers in form of a wage which is the price of the labour power they have sold to another person, the owner of the material means of production who does not work himself; under this aspect, it is the latter's capitalist property. Further, v is an aggregate of money, that is to say it is the means of subsistence for the workers in a form of pure value. This concept of v implies that the workers are free in a double sense-free in person and free of all means of production. It also expresses the fact that in a given society the universal form of production is commodity production.

Finally, s, the surplus value, stands for the total of all surplus values gained by the individual capitalists. Every society performs surplus labour, and even a socialist society will have to do the same. It must perform surplus labour in a threefold sense: it has to provide a quantity of labour for the maintenance of non-workers (those who are unable to work, such as children, old people, invalids, and also civil servants and the so-called liberal professions who do not take an immediate part in the satisfaction of material[85] wants), it has to provide a fund of social insurance against elementary disasters which may threaten the annual produce, such as bad harvests, forest fires and floods; and lastly it must provide a fund for the purpose of increasing production, either because of an increase in the population, or because higher standards of civilisation lead to additional wants. It is in two respects that the capitalist character manifests itself: surplus labour comes into being (1) as surplus value, i.e. in commodity-form, realisable in cash, and (2) as the property of non-workers, of those who own the means of production.

Similarly, if we consider v + s, these two amounts taken together, we see that they represent objective quantities of universal validity: the total of living labour that has been performed within a society in the course of one year. Every human society, whatever its historical form, must take note of this datum, with reference to both the results that have been achieved, and the existing and available labour power. The division into v + s is a universal phenomenon, independent of the society's particular historical form. In its capitalist form, this division shows itself not only in the qualitative peculiarities of both v and s as already outlined, but also in their quantitative relationship: v tends to become depressed to a minimum level, just sufficient for the physiological and social existence of the worker, and s tends to increase continually at the cost of, and relative to, v.

The predominant feature of capitalist production is expressed in this last circumstance: it is the fact that the creation and appropriation of surplus value is the real purpose of, and the incentive to, production.

We have examined the relations upon which the capitalist formula of the aggregate product is based, and have found them universally valid. In every planned economy they are made the object of conscious regulation on the part of society; in a communist society by the community of workers and their democratic organs, and in a society based upon class-rule by the nucleus of owners and their despotic power. In a system of capitalist production there is no such planned regulation. The aggregate of the society's capitals and the aggregate of its commodities alike consist in reality of innumerable fragments of individual capitals and individual items of merchandise, taken together.

Thus the question arises whether these sums themselves mean anything more in a capitalist society than a mere statistical enumeration which is, moreover, inexact and fluid. Applying the standards of society as a whole, we perceive that the completely independent and sovereign individual existence of private enterprises is only the historically conditioned form, whereas it is social interconnections that provide the foundation. Although individual capitals act in complete independence of one another, and a social regulation is completely lacking, the movement of capitals forms a homogeneous whole. This movement, too, appears in specifically capitalist forms. In every planned system of production it is, above all, the relation between all labour, past and present, and the means of production (between v + s and c, according to our formula), or the relation between the aggregate of necessary consumer goods (again, in the terms of our formula, v + s) and c which are subjected to regulation. Under capitalist conditions, on the other hand, all social labour necessary for the maintenance of the inanimate means of production and also of living labour power is treated as one entity, as capital, in contrast with the surplus labour that has been performed, i.e. with the surplus value s. The relation between these two quantities c and (v + s) is a palpably real, objective relationship of capitalist society: it is the average rate of profit; every capital is in fact treated only as part of a common whole, the whole of social capital, and assigned the profit to which it is entitled, according to its size, out of the surplus value wrested from society, regardless of the quantity which this particular capital has actually created. Thus social capital and its counterpart, the whole of social surplus value, are not merely real quantities, having an objective existence, but, what is more, the relation between them, the average profit, guides and directs the whole process of exchange. This it does in three ways: (1) by the mechanism of the law of value which establishes the quantitative relations of exchange between the individual kinds of commodities independently of their specific value relationship; (2) by the social division of labour, the assignment of certain portions of capital and labour to the individual spheres of production; (3) by the development of labour productivity which on the one hand stimulates individual capitals to engage in pioneering work for the purpose of securing a higher profit than the average, and on the other hand extends the progress that has been achieved by individuals over the whole field of production. By means of the average rate of profit, in a word, the total capital of society completely governs the seemingly independent motions of individual capitals.

The formula c + v + s thus applies to the aggregate of commodities produced in a society under capitalism no less than to the value composition of every individual commodity. It is, however, only the value-composition for which this holds good-the analogy cannot be carried further.

The formula is indeed perfectly exact if we regard the total product of a capitalistically producing society as the output of one year's labour, and wish to analyse it into its respective components. The quantity c shows how much of the labour of former years has been taken over towards the product of the present year in the form of means of production. Quantities v + s show the value components of the product created by new labour during the last year only; the relation between v and s finally shows us how the annual labour programme of society is apportioned to the two tasks of maintaining the workers and maintaining those who do not work. This analysis remains valid and correct also with regard to the reproduction of individual capital, no matter what may be the material form of the product this capital has created. All three, c, v, and s, appear alike to a capitalist of the machinery industry in the form of machinery and its parts; to the owner of a music hall they are represented by the charms of the dancers and the skill of the acrobats. So long as the product is left undifferentiated, c, v, and s differ from one another only in so far as they are aliquot components of value. This is quite sufficient for the reproduction of individual capital, as such reproduction begins with the value-form of capital, a certain amount of money that has been gained by the realisation of the manufactured product. The formula c + v + s then is the given basis for the division of this amount of money; one part for the purchase of the material means of production, a second part for the purchase of labour power, and a third part-in the case of simple reproduction assumed in the first instance-for the capitalist's personal consumption. In the case of expanding reproduction part three is further subdivided, only a fraction of it being devoted to the capitalist's personal consumption, the remainder to increasing his capital. In order to reproduce his capital actually, the capitalist must, of course, turn again to the commodity market with the capital he has divided in this manner, so that he can acquire the material prerequisites of production such as raw materials, instruments, and so on. It seems a matter of course to the individual capitalist as well as to his scientific ideologist, the 'vulgar economist', that he should in fact find there just those means of production and labour power he needs for his business.

The position is different as regards the total production of a society. From the point of view of society as a whole, the exchange of commodities can only effect a shifting around, whereby the individual parts of the total product change hands. The material composition of the product, however, cannot be changed by this process. After this change of places, as well as before it, there can be reproduction of total capital, if, and only if, there is in the total product of the preceding period: first, a sufficient quantity of means of production, secondly, adequate provisions to maintain the same amount of labour as hitherto, and, last but not least, the goods necessary to maintain the capitalist class and its hangers-on in a manner suitable to their station. This brings us to a new plane: we are now concerned with material points of view instead of pure relations of value. It is the use-form of the total social product that matters now. What the individual capitalist considers nobody else's business becomes a matter of grave concern for the totality of capitalists. Whereas it does not make the slightest difference to the individual capitalist whether he produces machinery, sugar, artificial manure or a progressive newspaper-provided only that he can find a buyer for his commodity so that he can get back his capital plus surplus value-it matters infinitely to the 'total capitalist' that his total product should have a definite use-form. By that we mean that it must provide three essentials: the means of production to renew the labour process, simple provisions for the maintenance of the workers, and provisions of higher quality and luxury goods for the preservation of the 'total capitalist' himself. His desire in this respect is not general and vague, but determined precisely and quantitatively. If we ask what quantities of all three categories are required by the 'total capitalist', the value-composition of last year's total product gives us a definite estimate, as long, that is, as we confine ourselves to simple reproduction, which we have taken for our starting point. Hitherto we have conceived of the formula c + v + s as a merely quantitative division of the total value, applicable alike to total capital and to individual capital, and representing the quantity of labour contained in the annual product of society. Now we see that the formula is also the basis of the material composition of the product. Obviously the 'total capitalist', if he is to take up reproduction to the same extent as before, must find in his new total product as many means of production as correspond to the size of c, as many simple provisions for the workers as correspond to the sum of wages v, and as many provisions of better quality for himself and his hangers-on as correspond to s. In this way our analysis of the value of the society's aggregate product is translated into a general recipe for this product as follows: the total c of society must be re-embodied in an equal quantity of means of production, the v in provisions for the workers, and the s in provisions for the capitalists, in order that simple reproduction may take place.

Here we come up against palpable differences between the individual capitalist and the total capitalist. The manner in which the former always reproduces his constant and variable capital as well as his surplus value is such that all three parts are contained in the same material form within his homogeneous product, that this material form, moreover, is completely irrelevant and may have different qualities in the case of each individual capitalist. The 'total capitalist', for his part, reproduces every component of the value of his annual product in a different material form, c as means of production, v as provisions for the workers, and s as provisions for the capitalists. In the case of the reproduction of individual capitals, there is no discrepancy between relations of value and material points of view. Besides, it is quite clear that individual capital may concentrate on aspects of value, accepting material conditions as a law from heaven, as self-evident phenomena of commodity-exchange, whereas the 'total capitalist' has to reckon with material points of view. If the total c of society were not reproduced annually in the form of an equal amount of means of production, every individual capitalist would be doomed to search the commodity market in vain with his c realised in cash, unable to find the requisite materials for his individual reproduction. From the point of view of reproducing the total capital, the formula c + v + s is inadequate. This again is proof of the fact that the concept of total capital is something real and does not merely paraphrase the concept of production. We must, however, make general distinctions in our exposition of total capital: instead of showing it as a homogeneous whole, we must demonstrate its three main categories; and we shall not vitiate our theory if, for the sake of simplicity, we consider for the present only two departments of total capital: the production of producer goods, and that of consumer goods for workers and capitalists. We have to examine each department separately, adhering to the fundamental conditions of capitalist production in each case. At the same time, we must also emphasise the mutual connections between these two departments from the point of view of reproduction. For only if each is regarded in connection with the other, do they make up the basis of the social capital as a whole.

We made a start by investigating individual capital. But we must approach the demonstration of total capital and its total product in a somewhat different manner. Quantitatively, as a quantity of value, the c of society consists precisely in the total of individual constant capitals, and the same applies to the other amounts, v and s. But the outward shape of each has changed-the c of constant capitals re-emerges from the process of production as an element of value with infinitely varied facets, comprising a host of variegated objects for use, but in the total product it appears, as it were, contracted into a certain quantity of means of production. Similarly with v and s, which in the case of the individual capitalist re-emerge as items in a most colourful jumble of commodities, being provisions in adequate quantities for the workers and capitalists. Adam Smith came very close to recognising this fact when he observed that the categories of fixed and circulating capital and of revenue in relation to the individual capitalist do not coincide with these categories in the case of society.

We have come to the following conclusions:

(1) The formula c + v + s serves to express the production of society viewed as a whole, as well as the production of individual capitalists.

(2) Social production is divided into two departments, engaged in the production of producer and consumer goods respectively.

(3) Both departments work according to capitalist methods, that is to say they both aim at the production of surplus value, and thus the formula c + v + s will apply to each of them.

(4) The two departments are interdependent, and are therefore bound to display a certain quantitative relationship, namely the one department must produce all means of production, the other all provisions for the workers and capitalists of both departments.

Proceeding from this point of view, Marx devised the following diagram of capitalist reproduction:

I. 4,000c + 1,000v + 1,000s = 6,000 means of production

II. 2,000c + 500v + 500s = 3,000 articles of consumption.[86]

The figures in this diagram express quantities of value, amounts of money which are chosen arbitrarily, but their ratios are exact. Each department is characterised by the use-form of the commodities produced. Their mutual circulation takes place as follows: Department I supplies the means of production for the entire productive process, for itself as well as for Department II. From this alone it follows that for the undisturbed continuance of reproduction-for we still presume simple reproduction on the old scale-the total produce of Department I (I 6,000) must have the same value as the sum of constant capitals i

n both departments: (I 4,000c + II 2,000c). Similarly, Department II supplies provisions for the whole of society, for its own workers and capitalists as well as for the workers and capitalists of Department I. Hence it follows that for the undisturbed course of consumption and production and its renewal on the old scale it is necessary that the total quantity of provisions supplied by Department II should equal in value all the incomes of the employed workers and capitalists of society [here II 3,000 = I(1,000v + 1,000s) + II(500v + 500s)].

Here we have indeed expressed relationships of value which are the foundation not only of capitalist reproduction but of reproduction in every society. In every producing society, whatever its social form, in the primitive small village community of the Bakairi of Brazil, in the oikos of a Timon of Athens with its slaves, or in the imperial corvée farm of Charlemagne, the labour power available for society must be distributed in such a way that means of production as well as provisions are produced in adequate quantities. The former must suffice for the immediate production of provisions as well as for the future renewal of the means of production themselves, and the provisions in their turn must suffice for the maintenance of the workers occupied in the production alike of these same provisions and of the means of production, and moreover for the maintenance of all those who do not work.

In its broad outline, Marx's scheme corresponds with the universal and absolute foundation of social reproduction, with only the following specifications: socially necessary labour appears here as value, the means of production as constant capital, the labour necessary for the maintenance of the workers as variable capital and that necessary for the maintenance of those who do not work as surplus value.

In capitalist society, however, the connections between these two great departments depend upon exchange of commodities, on the exchange of equivalents. The workers and capitalists of Department I can only obtain as many provisions from Department II as they can deliver of their own commodities, the means of production. The demand of Department II for means of production, on the other hand, is determined by the size of its constant capital. It follows therefore that the sum of the variable capital and of the surplus value in the production of producer goods [here I(1,000v + 1,000s)] must equal the constant capital in the production of provisions [here II(2,000c)].

An important proviso remains to be added to the above scheme. The constant capital which has been spent by the two departments is in reality only part of the constant capital used by society. This constant capital is divided into two parts; the first is fixed capital-premises, tools, labouring cattle-which functions in a number of periods of production, in every one of which, however, only part of its value is absorbed by the product, according to the amount of its wear and tear. The second is circulating capital such as raw materials, auxiliary semi-finished products, fuel and lighting-its whole value is completely absorbed by the new product in every period of production. Yet only that part of the means of production is relevant for reproduction which is actually absorbed by the production of value; without becoming less correct, an exact exposition of social circulation may disregard the remaining part of the fixed capital which has not been absorbed by the product, though it should not completely forget it. This is easy to prove.

Let us assume that the constant capital, 6,000c, in the two departments, which is in fact absorbed by the annual product of these departments, consists of 1,500c fixed and 4,500c circulating capital, the 1,500c of fixed capital representing here the annual wear and tear of the premises, machinery and labouring cattle. This annual wear and tear equals, say, 10 per cent of the total value of the fixed capital employed. Then the total social capital would really consist of 19,500c + 1,500v, the constant capital in both departments being 1,500c of fixed and 4,500c of circulating capital. Since the term of life of the aggregate fixed capital, with a 10 per cent wear and tear, is ten years ex hypothesi, the fixed capital needs renewal only after the lapse of ten years. Meanwhile one-tenth of its value enters into social production in every year. If all the fixed capital of a society, with the same rate of wear and tear, were of equal durability, it would, on our assumption, need complete renewal once within ten years. This, however, is not the case. Some of the various use-forms which are part of the fixed capital may last longer and others shorter, wear and tear and duration of life are quite different in the different kinds and individual representations of fixed capital. In consequence, fixed capital need not be renewed-reproduced in its concrete use-form-all at once, but parts of it are continually renewed at various stages of social production, while other parts still function in their older form. Our assumption of a fixed capital of 15,000c with a 10 per cent rate of wear and tear does not mean that this must be renewed all at once every ten years, but that an annual average renewal and replacement must be effected of a part of the total fixed social capital corresponding to one-tenth of its value; that is to say, Department I which has to satisfy the needs of society for means of production must reproduce, year by year not only all its raw and partly finished materials, etc., its circulating capital to the value of 4,500, but must also reproduce the use-forms of its fixed capital-premises, machinery, and the like-to the extent of 1,500, corresponding with the annual wear and tear of fixed capital. If Department I continues in this manner to renew one-tenth of the fixed capital in its use-form every year, the result will be that every ten years the total fixed capital of society will have been replaced throughout by new items; thus it follows that the reproduction of those parts disregarded so far is also completely accounted for in the above scheme.

In practice, the procedure is that every capitalist sets aside from his annual production, from the realisation of his commodities, a certain amount for the redemption of his fixed capital. These individual annual deductions must amount to a certain quantity of capital, therefore the capitalist has in fact renewed his fixed capital, that is, he has replaced it by new and more efficient items. This alternating procedure of building up annual reserves of money for the renewal of fixed capital and of the periodical employment of the accumulated amounts for the actual renewal of fixed capital varies with the individual capitalist, so that some are accumulating reserves, while others have already started their renewals. Thus every year part of the fixed capital is actually renewed. The monetary procedure here only disguises the real process which characterises the reproduction of fixed capital.

On closer observation we see that this is as it should be. The whole of the fixed capital takes part in the process of production, for physically the mass of usable objects, premises, machinery, labouring cattle, are completely employed. It is their peculiarity as fixed capital, on the other hand, that only part of the value is absorbed in the production of value, since in the process of reproduction (again postulating simple reproduction), all that matters is to replace in their natural form the values which have been actually used up as means of subsistence and production during a year's production. Therefore, fixed capital need only be reproduced to the extent that it has in fact been used up in the production of commodities. The remaining portion of value, embodied in the total use-form of fixed capital, is of decisive importance for production as a labour process, but does not exist for the annual reproduction of society as a process of value-formation.

Besides, this process which is here expressed by relations of value applies equally to every society, even to a community which does not produce commodities. If once upon a time, for instance, say ten years' labour of 1,000 fellaheen was required for the construction of the famous Lake Moeris and the related Nile canals-that miraculous lake, which Herodotus tells us was made by hand-and if for the maintenance of this, the most magnificent drainage system of the world, the labour of a further 100 fellaheen was annually required (the figures, of course, are chosen at random), we might say that after every hundred years the Moeris dam and the canals were reproduced anew, although in fact the entire system was not constructed as a whole in every century. This is manifestly true. When, amid the stormy incidents of political history and alien conquests, the usual crude neglect of old monuments of culture set in-as displayed, e.g. by the English in India when the reproductional needs of ancient civilisations were understood no longer-then in the course of time the whole Lake Moeris, its water, dikes and canals, the two pyramids in its midst, the colossus upon it and other marvellous erections, disappeared without a trace, as though they had never been built. Only ten lines in Herodotus, a dot on Ptolemy's map of the world, traces of old cultures, and of villages and cities bear witness that at one time rich life sprang from this magnificent irrigation system, where to-day there are only stretches of arid desert in inner Lybia, and desolate swamps along the coast. There is only one point where Marx's scheme of simple reproduction may appear unsatisfactory or incomplete in relation to constant capital, and that is when we go back to that period of production, when the total fixed capital was first created. Indeed, society possesses transformed labour amounting to more than those parts of fixed capital which are absorbed into the value of the annual product and are in turn replaced by it. In the figures of our example the total social capital does not consist of 6,000c + 1,500v, as in the diagram, but of 19,500c + 1,500v. Though 1,500 of the fixed capital (which, on our assumption, amounts to 15,000) are annually reproduced in the form of appropriate means of production, an equal amount is also consumed by the same production each year, though the whole of the fixed capital as a use-form, an aggregate of objects, has been renewed. After ten years, society possesses in the eleventh, just as in any other year, a fixed capital of 15,000, whereas it has annually achieved only 1,500c; and its constant capital as a whole is 19,500, whereas it has created only 6,000. Obviously, since it must have created this surplus of 13,500 fixed capital by its labour, it possesses more accumulated past labour than our scheme of reproduction warrants. Even at this stage, the annual labour of society must be based on some previous annual labour that has been hoarded. This question of past labour, however, as the foundation of all present labour, brings us to the very first beginning which is as meaningless with regard to the economic development of mankind as it is for the natural development of matter. The scheme of reproduction grasps the social process as perpetually in motion, as a link in the endless chain of events, it neither wants to demonstrate its initial origin, nor should it do so. The social reproductive process is always based on past labour, we may trace it back as far as we like. Social labour has no beginning, just as it has no end. Like the historical origin of Herodotus' Lake Moeris, the beginnings of the reproductive process in the history of civilisation are lost in the twilight of legend. With the progress of techniques and with cultural development, the means of production change their form, crude paleoliths are replaced by sharpened tools, stone implements by elegant bronze and iron, the artisan's tool by steam-driven machinery. Yet, though the means of production and the social organisation of the productive process continually change their form, society already possesses for its labour process a certain amount of past labour serving as the basis for annual reproduction.

Under capitalist methods of production past labour of society preserved in the means of production takes the form of capital, and the question of the origin of this past labour which forms the foundation of the reproductive process becomes the question of the genesis of capital. This is much less legendary, indeed it is writ in letters of blood in modern history. The very fact, however, that we cannot think of simple reproduction unless we assume a hoard of past labour, surpassing in volume the labour annually performed for the maintenance of society, touches the sore spot of simple reproduction; and it shows that simple reproduction is a fiction not only for capitalist production but also for the progress of civilisation in general. If we merely wish to understand this fiction properly, and to reduce it to a scheme, we must presume, as its sine qua non, results of a past productive process which cannot possibly be restricted to simple reproduction but inexorably points towards enlarged reproduction. By way of illustration, we might compare the aggregate fixed capital of society with a railway. The durability and consequently the annual wear and tear of its various parts is very different. Parts such as viaducts and tunnels may last for centuries, steam engines for decades, but other rolling stock will be used up in a short time, in some instances in a few months. Yet it is possible to work out an average rate of wear and tear, say thirty years, so that the value of the whole is annually depreciated by one thirtieth. This loss of value is now continually made good by partial reproduction of the railway (which may count as repairs), so that a coach is renewed to-day, part of the engine to-morrow, and a section of sleepers the day after. On our assumption then, the old railway is replaced by a new one after thirty years, a similar amount of labour being performed each year by the society so that simple reproduction takes place. But the railway can only be reproduced in this manner-it cannot be so produced. In order to make it fit for use and to make good its gradual wear and tear, the railway must have been completed in the first place. Though the railway can be repaired in parts, it cannot be made fit for use piecemeal, an axle to-day and a coach to-morrow. Indeed, the very essence of fixed capital is always to enter into the productive process in its entirety, as a material use-value. In order to get this use-form ready in the first place, society must apply a more concentrated amount of labour to its manufacture. In terms of our example, the labour of thirty years that is used for repairs, must be compressed into, say, two or three years. During this period of manufacture, society must therefore expend an amount of labour far greater than the average, that is to say it must have recourse to expanding reproduction; later, when the railway is finished, it may return to simple reproduction. Though we need not visualise the aggregate fixed capital as a single coherent use-object or a conglomeration of objects which must be produced all at once, the manufacture of all the more important means of production, such as buildings, transport facilities, and agricultural structures, requires a more concentrated application of labour, and this is true for the modern railway or steamship as much as it was for the rough stone-axe and the handmill. Therefore it is only in theory that simple reproduction can be conceived as alternating with enlarged reproduction; the latter is not only a general condition of a progressive civilisation and an expanding population, but also the sine qua non for the economic form of fixed capital, or those means of production which in every society correspond to the fixed capital.

Marx deals with this conflict between the formation of fixed capital and simple reproduction but indirectly, in connection with fluctuations in the wear and tear of the fixed capital, more rapid in some years than in others. Here he emphasises the need for perpetual 'over-production', i.e. enlarged reproduction, since a strict policy of simple reproduction would periodically lead to reproductive losses. In short, he regards enlarged reproduction under the aspect of an insurance fund for the fixed capital of the society, rather than in the light of the actual productive process.[87]

In quite a different context Marx appears to endorse the opinion expressed above. In Theories on the Surplus Value, vol ii, part 2, analysing the conversion of revenue into capital, he speaks of the peculiar reproduction of the fixed capital, the replacement of which in itself already provides a fund for accumulation. He draws the following conclusion:

'The point we have in mind is as follows: even if the aggregate capital employed in machine manufacture were just large enough to make good the annual wear and tear of the machines, many more machines could be annually produced than are required, since the wear and tear is in parts merely idealiter and must be made good realiter, in natura, only after a certain number of years. Capital so employed supplies each year a mass of machinery which becomes available for, and anticipates new, capital investments. Let us suppose, for instance, a machine manufacturer who starts production this year. During this year, he supplies machines for £12,000. If he were merely to reproduce the machines he has manufactured, he would have to produce, during the subsequent eleven years, machines for £1,000 only, and even then, a year's production would not be consumed within the year. Still less could it be consumed, if he were to employ the whole of his capital. To keep this capital working, to keep it reproducing itself every year, a new and continuous expansion of the branches of manufacture that require these machines, is indispensable. This applies even more, if the machine manufacturer himself accumulates. In consequence, even if the capital invested in one particular branch of production is simply being reproduced,[88] a continuous accumulation in the other branches of production must go with it.'[89]

We might take the machine manufacturer of Marx's example as illustrating the production of fixed capital. Then the inference is that if society maintains simple reproduction in this sphere, employing each year a similar amount of labour for the production of fixed capital (a procedure which is, of course, impossible in practical life), then annual production in all other spheres must expand. But if here, too, simple reproduction is to be maintained, then, if the fixed capital once created is to be merely renewed, only a small part of the labour employed in its creation can be expended. Or, to put it the other way round: if society is to provide for investment in fixed capital on a large scale, it must, even assuming simple reproduction to prevail on the whole, resort periodically to enlarged reproduction.

With the advance of civilisation, there are changes not only in the form of the means of production but also in the quantity of value they represent-or better, changes in the social labour stored up in them. Apart from the labour necessary for its immediate preservation, society has increasingly more labour time and labour power to spare, and it makes use of these for the manufacture of means of production on an ever increasing scale. How does this affect the process of reproduction? How, in terms of capitalism, does society create out of its annual labour a greater amount of capital than it formerly possessed? This question touches upon enlarged reproduction, and it is not yet time to deal with it.

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