If we consider at first only the circulating portion of capital advanced in M, the starting-point of M---C . . . P . . . M', we find that a certain sum of money is advanced, thrown into circulation for the payment of labour-power and the purchase of materials of production. But this sum is not withdrawn from circulation by the circuit of this capital, in order to be thrown into it anew. The product is money even in its bodily form; there is no need therefore of transforming it into money by means of exchange, by a process of circulation. It passes from the process of production into the sphere of circulation, not in the form of commodity-capital which has to be reconverted in money-capital, but as money-capital which is to be reconverted into productive capital, i.e., which is to buy fresh labour-power and materials of production. The money-form of the circulating capital consumed in labour-power and means of production is replaced, not by the sale of the product, but by the bodily form of the product itself;hence, not by once more withdrawing its value from circulation in money-form, but by additional newly produced money.
Let us suppose that this circulating capital is £500, the period of turnover 5 weeks, the working period 4 weeks, the period of circulation only 1 week. From the outset, money for 5 weeks must be partly advanced for a productive supply, and partly be ready to be paid out gradually in wages. At the beginning of the 6th week, £400 will have returned and £100 will have been released. This is constantly repeated. Here, as in previous cases, £100 will always be found in released form during a certain time of the turnover. But they consist of additional, newly produced, money, the same as the other £400. We have in this case 10 turnovers per year and the annual product is £5,000 in gold.
(The period of circulation is not constituted, in this case, by the time required for the conversion of commodities into money, but by that required for the conversion of money into the elements of production.)In the case of every other capital of £500 turned over under the same conditions, the ever renewed money-form is the converted form of the commodity-capital produced and thrown into circulation every 4 weeks and which by its sale -- that is to say, by a periodical withdrawal of the quantity of money it represented when it originally entered into the process -- assumes this money-form anew over and over again. Here, on the contrary, in every turnover period a new additional £500 in money is thrown from the process of production itself into circulation, in order to withdraw from it continually materials of production and labour-power.
This money thrown into circulation is not withdrawn from it again by the circuit which this capital describes, but is rather increased by quantities of gold constantly produced anew.
Let us look at the variable portion of this circulating capital, and assume that it is, as before, £100. Then these £100 would be sufficient in the ordinary production of these commodities, with 10turnovers, to pay continually for the labour-power. Here, in the production of gold, the same amount is sufficient. But the £100 of the reflux, with which the labour-power is paid every 5 weeks, are not a converted form of its product but a portion of this ever renewed product itself.
The producer of gold pays his labourers directly with a portion of the gold they themselves produced. The £1,000 thus expended annually in labour-power and thrown by the labourers into circulation do not return therefore via this circulation to their starting-point.
Furthermore, so far as the fixed capital is concerned, it requires the investment of a comparatively large money-capital on the original establishment of the business, and this capital is thus thrown into circulation. Like all fixed capital it returns only piecemeal in the course of years. But it returns as a direct portion of the product, of the gold, not by the sale of the product and its consequent conversion into money. In other words, it gradually assumes its money-form not by a withdrawal of money from the circulation but by an accumulation of a corresponding portion of the product. The money-capital so restored is not a quantity of money gradually withdrawn from the circulation to compensate for the sum originally thrown into it for the fixed capital. It is an additional sum of money.
Finally, as concerns the surplus-value, it is likewise equal to a certain portion of the new gold product, which is thrown into the circulation in every new period of turnover in order to be unproductively expended, according to our assumption, on means of subsistence and articles of luxury.
But according to our assumption, the entire annual production of gold -- which continually withdraws labour-power and materials of production, but no money, from the market, while continuously adding fresh quantities of money to it -- merely replaces the money worn out during the year, hence only keeps intact the quantity of social money which exists constantly, although in varying portions, in the two forms of hoarded money and money in circulation.