This he says against the comparison of commodity-values of different epochs, a comparison which amounts only to comparing the expenditure of labour required in various periods for the production of the same sort of commodities, once the value of money has been fixed for every period. This comes from his general misunderstanding, for he thinks that exchange-value is equal to value, that the form if value is value itself; consequently commodity-value can no longer be compared, if they do not function actively as exchange-values and thus cannot actually be exchanged for one another. He has not the least inkling of the fact that value functions as capital-value or capital only in so far as it remains identical with itself and is compared with itself in the different phases of its circuit, which are not at all "contemporary"but succeed one another.
In order to study the formula of the circuit in its purity it is not sufficient to postulate that commodities are sold at their value;it must also be assumed that this takes place with other things being equal.
Take for instance the form P ... P, disregarding all technical revolutions within the process of production by which the productive capital of a certain capitalist might be depreciated; disregarding furthermore all reactions which a change in the elements of value of the productive capital might have on the value of the existing commodity-capital, which might appreciate or depreciate if a stock of it is on hand. Suppose the 10,000 lbs. of yarn, C', have been sold at their value of £500; 8,440 lbs. equal to £422, replace the capital-value contained in C'. But if the value of cotton, coal, etc., has increased (we do not consider mere fluctuations in price), these £422 may not suffice for the full replacement of the elements of productive capital; additional money-capital is required, money-capital is tied up. The opposite takes place when those prices fall. Money-capital is set free. The process takes a wholly normal course only when the value-relations remain constant; its course is practically normal so long as the disturbances during the repetitions of the circuit balance one another. But the greater these disturbances the greater the money-capital which the industrial capitalist must possess to tide over the period of readjustment; and as the scale of each individual process of production and with it the minimum size of the capital to be advanced increases in the process of capitalist production, we have here another circumstance to be added to those others which transform the function of the industrial capitalist more and more into a monopoly of big money-capitalists, who may operate singly or in association.
We remark incidentally that if a change in the value of the elements of production occurs a difference appears between the form M...M' on one side and of P ... P and C' ... C' on the other.
In M ... M', the formula of newly-invested capital, which first appears as money-capital, a fall in the value of the means of production, such as raw material, auxiliary material, etc., will permit of a smaller expenditure of money-capital than before this fall for the purpose of starting a business of a definite size, because the scale of the process of production (productive power development remaining the same) depends on the mass and volume of the means of production which a given quantity of labour-power can cope with; but it does not depend on the value of these means of production nor on that of the labour-power (the latter value affects only the magnitude of self-expansion). Take the reverse case. If there is a rise in the value of the elements of production of the commodities which constitute the elements of the productive capital, then more money-capital is needed for the establishment of a business of definite proportions. In both cases it is only the amount of the money-capital required for new investment that is affected. In the former case money-capital becomes surplus, in the latter it is tied up, provided the accession of new individual industrial capital proceeds in the usual way in a given branch of production.
The circuits P ... P and C' ... C' present themselves as M ...
M' only to the extent that the movement of P and C' is at the same time accumulation, hence to the extent that additional m, money, is converted into money-capital; here, too, we do not take into consideration the reaction of such changes in value on those constituent parts of capital which are engaged in the process of production. It is not the original expenditure which is directly affected here, but an industrial capital engaged in its process of reproduction and not in its first circuit; i.e., C' ... C< L MP , the reconversion of commodity-capital into its elements of production, so far as they are composed of commodities. When value (prices) fall three cases are possible: The process of reproduction is continued on the same scale; in that event a part of the money-capital existing hitherto is set free and money-capital is accumulated, although no real accumulation (production on an extended scale) or transformation of m (surplus-value) into an accumulation-fund initiating and accompanying such accumulation has previously taken place.
Or the process of reproduction is carried on a more extensive scale than ordinarily would have been the case, provided the technical proportions admit it. Or, finally, a larger stock of raw materials, etc., is laid in.