The opposite occurs if the value of the elements of replacement of a commodity-capital increases. In that case reproduction no longer takes place on its normal scale (e.g., the working-day gets shorter); or additional money-capital must be employed in order to maintain the old volume of work (money-capital is tied up); or the money-fund for accumulation, when one exists, is employed entirely or partially for the operation of the process of reproduction on its old scale instead of for the enlargement of this process. This is also tying up money-capital, except that here the additional money-capital does not come from the outside, from the money-market, but from the means of the industrial capitalist himself.
However, there may be modifying circumstances in P ... P and C'
... C'. If our spinning-mill proprietor for example has a large stock of cotton (a large proportion of his productive capital in the form of a stock of cotton), a part of his productive capital is depreciated by a fall in the prices of cotton; but if on the contrary these prices rise, this part of his productive capital appreciates. On the other hand, if he has tied up huge quantities in the form of commodity-capital, for instance of cotton yarn, a part of his commodity-capital, hence of his circuit describing capital in general, is depreciated by a fall of cotton, or appreciated by a rise in its prices. Finally take the process C'---M---C< L MP .
If C'---M, the realisation of the commodity-capital, has taken place before a change in the value of the elements of C, then capital is affected only in the way indicated in the first case, namely in the second act of circulation, M---C< L MP ; but if such a change has occurred before C'---M has been effected, then, other conditions remaining equal, a fall in the price of cotton causes a corresponding fall in the price of yarn, and a rise in the price of cotton means conversely a rise in the price of yarn. The effect on the various individual capitals invested in the same branch of production may differ widely, according to the circumstances in which they find themselves.
Money-capital may also be set free or tied up on account of differences in the duration of the process of circulation, hence also in the speed of circulation. But this belongs in the discussion on turnover. At this point we are only interested in the real difference that becomes evident, with regard to changes of values of the elements of productive capital, between M ... M' and the other two circuit forms.
In the circulation section M---C< L MP , in the epoch of the already developed and hence prevailing capitalist mode of production, a large portion of the commodities composing MP, the means of production, is itself functioning as the commodity-capital of someone else. From the standpoint of the seller, therefore, C'---M', the transformation of commodity-capital into money-capital, takes place. But this is not an absolute rule. On the contrary. Within its process of circulation, in which industrial capital functions either as money or as commodities, the circuit of industrial capital, whether as money-capital or as commodity-capital, crosses the commodity circulation of the most diverse modes of social production, so far as they produce commodities. No matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots).
of communes (Dutch East Indies), of state enterprise ( such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc. -- as commodities and money they come face to face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue; hence they enter in both branches of circulation of commodity-capital, The character of the process of production from which they originate is immaterial. They function as commodities in the market, and as commodities they enter into the circuit of industrial capital as well as into the circulation of the surplus-value incorporated in it. It is therefore the universal character of the origin of the commodities, the existence of the market as world-market, which distinguishes the process of circulation of industrial capital. What is true of the commodities of others is also true of the money of others. Just as commodity-capital faces money only as commodities, so this money functions vis-á-vis commodity-capital only as money.
Money here performs the functions of world-money.
However two points must be noted here.
First: As soon as act M---MP is completed, the commodities (MP)cease to be such and become one of the modes of existence of industrial capital in its functional form of P, productive capital. Thereby however their origin is obliterated. They exist henceforth only as forms of existence of industrial capital, are embodied in it. However it still remains true that to replace them they must be reproduced, and to this extent the capitalist mode of production is conditional on modes of production lying outside of its own stage of development. But it is the tendency of the capitalist mode of production to transform all production as much as possible into commodity production. The mainspring by which this is accomplished is precisely the involvement of all production into the capitalist circulation process.
And developed commodity production itself is capitalist commodity production.
The intervention of industrial capital promotes this transformation everywhere, but with it also the transformation of all direct producers into wage-labourers.