Although M, as the result of C---M, represents past labour, it may, in the act M---C, represent the converted form of commodities which are not as yet in the market, but will be thrown upon it in the future, since M---Cneed not take place until C has been produced anew. M may likewise stand for commodities which are produced simultaneously with the C whose money-expression it is. For instance in the exchange M---C (purchase of means of production)coal may be bought before it has been mined. In so far as m figures as an accumulation of money, is not spent as revenue, it may stand for cotton which will not be produced until the following year. The same holds good on spending the revenue of the capitalist, m---c. It also applies to wages, to L equal to £50. This money is not only the money-form of past labour of the labourers but at the same time a draft on simultaneous and future labour which is just being realised or should be realised in the future. The labourer may buy with his wages a coat which will not be made until the following week. This applies especially to the vast number of necessary means of subsistence which must be consumed almost as soon as they have been produced to prevent spoilage. Thus the labourer receives, in the money which is paid to him in wages, the converted form of his own future labour or that of other labourers. By giving the labourer a part of his past labour, the capitalist gives him a draft on his own future labour. It is the labourer's own simultaneous or future labour that constitutes the not yet existing supply out of which he will be paid for his past labour.
In this case the idea of hoarding disappears altogether. [Here Marx made the following note in the manuscript: "All this, however, belongs to the last part of Book Two." -- Ed .]
Secondly in the circulation C---M---C< L MP the same money changes place twice; the capitalist first receives it as a seller and passes it on as a buyer; the transformation of commodities into the money-form serves only for the purpose of retransforming it from the money-form into the commodity-form; the money-form of capital, its existence as money-capital, is only a transient phase n this movement;or, so far as the movement is fluent, money-capital appears only as a medium of circulation when it serves as a means of purchase; it acts as a paying medium proper when capitalists buy from one another and therefore only have to square accounts.
Thirdly, the function of money-capital, whether it is a mere circulating medium or a paying medium, effects only the replacement of C by L and MP, i.e., the replacement of the yarn, the commodity which represents the result of the productive capital (after deducting the surplus-value to be used as revenue), by its elements of production, in other words, the retransformation of capital-value from its form as a commodity into the elements that build this commodity. In the last analysis, the function of money-capital promotes only the retransformation of commodity-capital into productive capital.
In order that the circuit may be completed normally, C' must be sold at its value and in its entirety. Furthermore C---M---C includes not merely replacement of one commodity by another, but replacement with value-relations remaining the same. We assume that this takes place here. As a matter of fact, however, the value of the means of production vary. It is precisely capitalist production to which continuous change of value-relations is peculiar, if only because of the ever changing productivity of labour that characterises this mode of production. This change in the value of the elements of production will be discussed later on, [See Section V of Chapter XV of this volume. -- Ed .] and we merely mention it here. The transformation of the elements of production into commodity-products, of P into C', takes place in the sphere of production, while the transformation from C' into P occurs in the sphere of circulation. It is brought about by a simple metamorphosis of commodities, but its content is a phase in the process of reproduction, regarded as a whole. C---M---C, being a form of circulation of capital, involves a functionally determined exchange of matter. The transformation C---M---C requires further that C should be equal to the elements of production of the commodity-quantum C', and that these elements should retain their original value-relations to one another. It is therefore assumed that the commodities are not only bought at their respective values, but also do not undergo any change of value during the circular movement.
Otherwise this process cannot run normally.
In M ... M', M represents the original form of the capital-value, which is discarded only to be resumed. In P ... C'---M'---C ... P, M represents a form which is only assumed in the process and which is discarded before this process is over. The money-form appears here only as a transient independent form of capital-value. Capital in the form of C' is just as anxious to assume the money-form as it is to discard it in M', after barely assuming that garb in order again to transform itself into productive capital. So long as it remains in the garb of money, it does not function as capital and its value does not therefore expand. The capital lies fallow. M serves here as a circulating medium, but as a circulating medium of capital. [Here Marx made the following note in the manuscript: "Against Tooke." -- Ed .]
The semblance of independence which the money-form of capital-value possesses in the first form of its circuit (the form of money-capital) disappears in this second form, which thus is a criticism of Form I and reduces it to merely a special form. If the second metamorphosis, M---C, meets with any obstacles -- for instance if there are no means of production in the market -- the circuit, the flow of the process of reproduction, is interrupted quite as much as when capital is held fast in the form of commodity-capital.