24 February 2012

Machinery

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Marx’s Capital Volume 1, Part 7b

Comintern

Machinery

Marx begins this great chapter on “Machinery and Modern Industry” (download linked below) by developing the idea of division of labour in manufacture, to the division of processes among machines.

“A real machinery system, however, does not take the place of these independent machines, until the subject of labour goes through a connected series of detail processes, that are carried out by a chain of machines of various kinds, the one supplementing the other. Here we have again the co-operation by division of labour that characterises Manufacture; only now, it is a combination of detail machines.”

“As soon as a machine executes, without man's help, all the movements requisite to elaborate the raw material, needing only attendance from him, we have an automatic system of machinery, and one that is susceptible of constant improvement in its details.”

“Modern Industry had therefore itself to take in hand the machine, its characteristic instrument of production, and to construct machines by machines. It was not till it did this, that it built up for itself a fitting technical foundation, and stood on its own feet. Machinery, simultaneously with the increasing use of it, in the first decades of this century, appropriated, by degrees, the fabrication of machines proper. But it was only during the decade preceding 1866, that the construction of railways and ocean steamers on a stupendous scale called into existence the cyclopean machines now employed in the construction of prime movers.”

“Modern Industry raises the productiveness of labour to an extraordinary degree, [but] it is by no means equally clear, that this increased productive force is not, on the other hand, purchased by an increased expenditure of labour. Machinery, like every other component of constant capital, creates no new value, but yields up its own value to the product that it serves to beget.”

The last paragraph of Section 3 is one of the most memorable and shocking in the whole of Capital, Volume 1, and the long last paragraph of Section 4 is a denunciation of the horrors of the factory system.

Section 5 shows the brutal effect of machinery on the working class from the beginning of machine-working, which effects have been felt all along and still are felt today, two centuries after the “industrial revolution”. Marx was an eye-witness to a great expansion of this system and a true witness of its terrible consequences for the working class.




23 February 2012

Division of Labour

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Marx’s Capital Volume 1, Part 7a


Division of Labour

Karl Marx makes use of the original distinction between Manufacture, meaning the organised co-operation of many workers in a single workshop, and Industrial Production, which is the same, but with powered machinery. In modern usage, this distinction is not always clear. So, Marx Chapter 14 (downloadable below) thus:

“That co-operation which is based on division of labour, assumes its typical form in manufacture, and is the prevalent characteristic form of the capitalist process of production throughout the manufacturing period properly so called. That period, roughly speaking, extends from the middle of the 16th to the last third of the 18th century.”

The rest of Section 1 of this chapter is a description of division of labour under the early form of capitalism: Manufacture.

Then, in Section 2, Marx describes the effect on an individual or “detail labourer”, and on production, as a consequence of division of labour.

In Section 3, Marx looks at the gain that is made when serial production can be achieved, as opposed to batch or individual piece production.

“The different detail processes, which were successive in time, have become simultaneous, go on side by side in space. Hence, production of a greater quantum of finished commodities in a given time. [11] This simultaneity, it is true, is due to the general co-operative form of the process as a whole; but Manufacture not only finds the conditions for co-operation ready to hand, it also, to some extent, creates them by the sub-division of handicraft labour. On the other hand, it accomplishes this social organisation of the labour-process only by riveting each labourer to a single fractional detail.”

In Section 4, Marx compares division of labour in a factory, with division of labour in society.

Section 5 is a readable essay on division of labour as treated by the bourgeois Political Economists, including Adam Smith.

In short, this is another chapter of “Capital” that you can conquer without difficulty.

Image: Walter Crane was a 19th-century artist who illustrated many socialist pamphlets. This work was done for May Day, the Workers’ Day, in 1895.




22 February 2012

Co-operation

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Marx’s Capital Volume 1, Part 7


Co-operation

Chapters 11, 12 and 13 of Capital, Volume 1 (download linked below) which follow the enormous Chapter 10, are short, and require little introduction, because they are straightforward.

They are plain enough to provide plenty of material for study-circle discussion, especially if there are people with work-experience present.

Note that the co-operation Marx writes about here is co-operation in general, whereby people work together under a capitalist. It is not about "co-ops" as such.

The following two excerpts demonstrate how well Karl Marx understood the workplace.

Rate and Mass of Surplus Value

“Within the process of production, capital acquired the command over labour, i.e., over functioning labour-power or the labourer himself. Personified capital, the capitalist takes care that the labourer does his work regularly and with the proper degree of intensity.

“Capital further developed into a coercive relation, which compels the working-class to do more work than the narrow round of its own life wants prescribes. As a producer of the activity of others, as a pumper-out of surplus labour and exploiter of labour-power, it surpasses in energy, disregard of bounds, recklessness and efficiency, all earlier systems of production based on directly compulsory labour.

“At first, capital subordinates labour on the basis of the technical conditions in which it historically finds it. It does not, therefore, change immediately the mode of production. The production of surplus value — in the form hitherto considered by us — by means of simple extension of the working day, proved, therefore, to be independent of any change in the mode of production itself. It was not less active in the old-fashioned bakeries than in the modern cotton factories.”

Co-operation

“When numerous labourers work together side by side, whether in one and the same process, or in different but connected processes, they are said to co-operate.”

“By the co-operation of numerous wage-labourers, the sway of capital develops into a requisite for carrying on the labour-process itself, into a real requisite of production. That a capitalist should command on the field of production, is now as indispensable as that a general should command on the field of battle.”

“The directing motive, the end and aim of capitalist production, is to extract the greatest possible amount of surplus-value, [14] and consequently to exploit labour-power to the greatest possible extent. As the number of the co-operating labourers increases, so too does their resistance to the domination of capital, and with it, the necessity for capital to overcome this resistance by counterpressure. The control exercised by the capitalist is not only a special function, due to the nature of the social labour-process, and peculiar to that process, but it is, at the same time, a function of the exploitation of a social labour-process, and is consequently rooted in the unavoidable antagonism between the exploiter and the living and labouring raw material he exploits.”




16 February 2012

All bounds broken down

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Marx’s Capital Volume 1, Part 6a

Innocent-looking factory

All bounds broken down

In the previous three sections of Chapter 10 of Capital, Volume 1, Karl Marx is concerned to show the unrestrained pressure for the “unnatural extension of the working day”.

“Capital cares nothing for the length of life of labour-power. All that concerns it is simply and solely the maximum of labour-power, that can be rendered fluent in a working-day. It attains this end by shortening the extent of the labourer's life, as a greedy farmer snatches increased produce from the soil by robbing it of its fertility,” says Marx.

In a notable aside in Section 5 on slavery, Marx remarks: “once trading in slaves is practiced, become reasons for racking to the uttermost the toil of the slave; for, when his place can at once be supplied from foreign preserves, the duration of his life becomes a matter of less moment than its productiveness while it lasts. It is accordingly a maxim of slave management, in slave-importing countries, that the most effective economy is that which takes out of the human chattel in the shortest space of time the utmost amount of exertion it is capable of putting forth.”

Marx uses this remark on slavery to compare with capital, which he finds equally careless of life, and narrates how workers were terrorised into accepting these terrible conditions.

In Section 6, Marx records: “After capital had taken centuries in extending the working-day to its normal maximum limit, and then beyond this to the limit of the natural day of 12 hours, [98] there followed on the birth of machinism and modern industry in the last third of the 18th century, a violent encroachment like that of an avalanche in its intensity and extent. All bounds of morals and nature, age and sex, day and night, were broken down.”

This is the Section that contains Marx’s account of the Chartists, some of whom he had befriended, and of their campaign for a Ten Hour Day.

At the beginning of Section 7 Marx writes, in case we should forget: “The reader will bear in mind that the production of surplus-value, or the extraction of surplus-labour, is the specific end and aim, the sum and substance, of capitalist production, quite apart from any changes in the mode of production, which may arise from the subordination of labour to capital.” This section, two pages long, summarises the chapter on The Working Day, while also mentioning the US agitation for the 8 Hour Day, and the support it got from the International Working Men’s Association (the First International) of which Marx had been the founding Secretary.

The Working Day is a readable, prose chapter. Anyone can understand it.

Image: Johnson and Johnson factory, USA, 1886




Force Decides

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Marx’s Capital Volume 1, Part 6


Force Decides

Capital, Volume 1 has 33 chapters. After Chapters 1, 2 and 3, on Commodities, Exchange and Money, and after Chapters 4 and 5, on the general form of Capital, the remainder of the book is a continuous development of the concept of Surplus-Value.

There are two main interruptions to this steady tempo, however. One is the long Chapter 10, called “The Working Day”. We will divide this big chapter into two. Please download and read Parts 1 to 4 of Chapter 10 via the link given below.

Some notes on “The Working Day”

Marx ends the first section of the Chapter on “The Working Day” thus: “Between equal rights force decides.”

In present-day “human rights” parlance, the opposite is held to be the case, but Marx is certainly correct. Capitalism is brutal. Equal “human” rights are a fiction in class-divided society.

“Between equal rights force decides. Hence is it that in the history of capitalist production, the determination of what is a working-day, presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists, and collective labour, i.e., the working-class.”

In the second section, Marx generalises the concept of Surplus Labour to all class-divided societies, thus:

“Capital has not invented surplus-labour. Wherever a part of society possesses the monopoly of the means of production, the labourer, free or not free, must add to the working-time necessary for his own maintenance an extra working-time in order to produce the means of subsistence for the owners of the means of production, [7] whether this proprietor be the Athenian [well-to-do man], Etruscan theocrat, civis Romanus, Norman baron, American slave-owner, Wallachian Boyard, modern landlord or capitalist.”

Section 3 turns back to the most capitalist country that Marx knew, England, and tells stories of terrible horror having to do with people being worked to death, including the well-know story of Mary-Anne Walkley, 20 years of age when she died.

Section 4, called Day and Night Work, deals with the “relay system”, summed up as follows:

“The prolongation of the working-day beyond the limits of the natural day, into the night, only acts as a palliative. It quenches only in a slight degree the vampire thirst for the living blood of labour. To appropriate labour during all the 24 hours of the day is, therefore, the inherent tendency of capitalist production,” says Marx.

The vampire thirst of capital for the living blood of labour is still in evidence.

Illustration: The “Wobbly” (IWW) version of the poster originally called “The Czar’s Wedding
Cake”.




13 February 2012

The Rate of Surplus Value

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Marx’s Capital Volume 1, Part 5a


The Rate of Surplus Value

Karl Marx’s “Capital” is not a hasty book. It proceeds at a measured pace, with a degree of repetition. Some parts appear difficult, only to yield up their secrets at a second reading with ease.

The chapter on the Rate of Surplus Value (download linked below) is a good example of all this. At first reading it appears dense. It appears to contain new things unconnected to what has gone before, or to what comes afterwards. Yet nothing could be further from the truth: In this chapter are re-stated some of the simplest, basic relationships, derived from the earlier chapters, and explicitly anticipating Volume 3 of the great work.

Let us pick out some of the easier passages. Marx begins with a “tautology” – a truism, or statement of the obvious, but one that has to do with “the expansion of capital”, the secret of which is the key to the entire work. Marx writes:

“Since the value of the constituent elements of the product is equal to the value of the advanced capital, it is mere tautology to say, that the excess of the value of the product over the value of its constituent elements, is equal to the expansion of the capital advanced or to the surplus-value produced. Nevertheless, we must examine this tautology a little more closely.”

Soon he puts down an important working definition, “constant capital”. Important because similar formulations, but with different meanings, are used in bourgeois accounting. Marx says:

“Throughout this Book therefore, by constant capital advanced for the production of value, we always mean, unless the context is repugnant thereto, the value of the means of production actually consumed in the process, and that value alone.”

“Constant” is the companion of “variable” capital, which is the capital advanced for labour. Says Marx:

“From what has gone before, we know that surplus-value is purely the result of a variation in the value of v, of that portion of the capital which is transformed into labour-power; consequently, v + s = v + v, or v plus an increment of v. But the fact that it is v alone that varies, and the conditions of that variation, are obscured by the circumstance that in consequence of the increase in the variable component of the capital, there is also an increase in the sum total of the advanced capital.”

Returning to constant capital, Marx says that for the sake of particular calculations, it may be taken out of the equation. Marx did not live to see something called Value Added Tax (VAT) but if he had, he would have recognised the same move. In the calculation of VAT, that portion of money advanced that does not increase, is removed out of the calculation. Marx put it thus:

“At first sight it appears a strange proceeding, to equate the constant capital to zero. Yet it is what we do every day. If, for example, we wish to calculate the amount of England's profits from the cotton industry, we first of all deduct the sums paid for cotton to the United States, India, Egypt and other countries; in other words, the value of the capital that merely re-appears in the value of the product, is put = 0.”

Then at once Marx reminds us of the importance of the constant and apparently inert part of the capital. This is where he refers to “the third book” (Volume 3), which was not actually published until after he died, and which deals among other things with the “tendency of the rate of profit to fall”, the discovery of which depends upon these simple preliminaries:

“Of course the ratio of surplus-value not only to that portion of the capital from which it immediately springs, and whose change of value it represents, but also to the sum total of the capital advanced is economically of very great importance. We shall, therefore, in the third book, treat of this ratio exhaustively. In order to enable one portion of a capital to expand its value by being converted into labour-power, it is necessary that another portion be converted into means of production.”

There are more definitions in this chapter. Here is what Marx means by “necessary” labour-time, and incidentally, the reason why capitalists pay their labourers:

“That portion of the working-day, then, during which this reproduction takes place, I call "necessary" labour-time, and the labour expended during that time I call "necessary" labour [5] Necessary, as regards the labourer, because independent of the particular social form of his labour; necessary, as regards capital, and the world of capitalists, because on the continued existence of the labourer depends their existence also.”

Here we return to the key of the book: Surplus Value, the secret of the self-increase of capital, which Marx says “has all the charms of a creation out of nothing”. It’s what the capitalist loves and constantly seeks:

“During the second period of the labour-process, that in which his labour is no longer necessary labour, the workman, it is true, labours, expends labour-power; but his labour, being no longer necessary labour, he creates no value for himself. He creates surplus-value which, for the capitalist, has all the charms of a creation out of nothing. This portion of the working-day, I name surplus labour-time, and to the labour expended during that time, I give the name of surplus-labour.”

Marx gives a simple procedure:

“The method of calculating the rate of surplus-value is therefore, shortly, as follows. We take the total value of the product and put the constant capital which merely re-appears in it, equal to zero. What remains, is the only value that has, in the process of producing the commodity, been actually created. If the amount of surplus-value be given, we have only to deduct it from this remainder, to find the variable capital. And vice versa, if the latter be given, and we require to find the surplus-value. If both be given, we have only to perform the concluding operation, viz., to calculate s/v, the ratio of the surplus-value to the v variable capital.”

The second part of this chapter consists of examples. If time is short, it can safely be skipped. The third part, containing Nassau W. Senior’s theory of the “last hour” is easier.

This gentleman Mr Senior also appears in “Theories of Surplus Value”, sometimes called “Capital Volume 4”, which is Marx’s distilled notes from his exhaustive study of all the preceding writers about political economy, the study that allowed him to arrive at a confident position of scholarly authority.

The arguments that Senior proposes are very far-fetched, yet one would not be surprised to hear such things from employers of today, and we still rely on Marx to refute them.

The last section is a transitional paragraph leading into the next great chapter, almost a book by itself: “The Working Day”.

Illustration: The Peterloo Massacre, Manchester, England, 1819. A crowd of 60,000-80,000 gathered for a protest rally against unemployment and poverty. They were then charged by soldiers on horseback (cavalry) and cut down with sabres, killing 15 and injuring up to 700.






8 February 2012

Constant and Variable Capital

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Marx’s Capital Volume 1, Part 5


Constant and Variable Capital

This is a short chapter, easy to read, but very interesting, bearing on the reasons why fixed capital (machinery, raw materials &c.) does not yield any surplus value during production.

This is in turn the reason for the tendency of the rate of profit to be less in “capital-intensive” as opposed to “labour-intensive” industries; and why, as industries become more capital-intensive, their rate of profit tends to fall.

You can be confident that the capitalists can never do away with workers. They are compelled, unless they are to perish altogether as capitalists, to employ people.

Capitalists are compelled to continue to extract Surplus-Value from human workers because it is the only way that their Capital can be sustained. Without the constant extraction of Surplus-Value from people, Capital is bound to shrivel away to nothing.

It is useful to read this chapter together with the previous one. There, it was shown that value comes from human labour. Here, it is shown how the labour contained in the makings of a product, such as machinery and raw materials, is transferred from the original products into the new ones without being increased.

The graph, above, is a standard type of illustration in capitalist accounting theory, to show how the cost of a fixed asset, such as a piece of machinery, can be “written off” over, say, five years, for example. Such an asset is said to “depreciate”. It is used up, at a constant rate.

The concept of Surplus Value is the same as the concept of Value Added, which is the basis of Value Added Tax, or VAT. For VAT, the inputs are deducted and only the increase in their value gained through the application of labour to the inputs, is taxed.

These things (Value Added and Depreciation), which are commonplace in capitalist accounting, show that at the practical level, the basic facts of business life have to be recognised, even while the ideologues and theorists of capitalism deny them.

The source of increase of capital is labour (that is labour expended, minus labour power paid for, creating Surplus Value). Machines do not, and cannot, produce Surplus Value. As businesses employ relatively more machinery and relatively less labour, so their rate of profit must fall.

Says Marx:

“That part of capital then, which is represented by the means of production, by the raw material, auxiliary material and the instruments of labour does not, in the process of production, undergo any quantitative alteration of value. I therefore call it the constant part of capital, or, more shortly, constant capital.

“On the other hand, that part of capital, represented by labour-power, does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value, and also produces an excess, a surplus-value, which may itself vary, may be more or less according to circumstances. This part of capital is continually being transformed from a constant into a variable magnitude. I therefore call it the variable part of capital, or, shortly, variable capital.”




4 February 2012

Surplus Value

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Marx’s Capital Volume 1, Part 4b

Increase in value

Surplus Value

In Chapter 6 we discovered the mechanism of Surplus-Value, consequent upon the buying and selling of Labour Power, by which the overall increase in wealth, that takes place under capitalism, is achieved.

Chapter 7 (click to download it, below) begins with a short summary of the book thus far, as follows:

“The capitalist buys labour-power in order to use it; and labour-power in use is labour itself. The purchaser of labour-power consumes it by setting the seller of it to work. By working, the latter becomes actually, what before he only was potentially, labour-power in action, a labourer.”

The production of surplus value in the dynamic relationship between the capitalist and the working proletarian provides the answer to the question that the book is intended to answer, before any other: 
  • Where does the wealth generated by capital come from?


Or: 
  • How, precisely, and exactly where, is the surplus taken?


Or, using Marx’s words: 
  • What is the secret of the self-increase of capital?


For, early on in his deliberations, Marx had determined that the observed general increase of wealth under capitalism could not have been coming from overcharging (cheating) in trade, because in a market of pure trading, one person’s loss is another’s gain, and all such losses and gains cancel out in any general summing up of wealth.

The answer is that the surplus arises in the workplace, and not in the market place, and the only source of surplus is this: that a worker can give up more in the fruits of his labour than it costs to develop and to maintain his labour-power.

This applies equally as much to women as to men.

One of the conclusions to be drawn from this is that capitalists make their money from employing people. It is the people that they employ, and not the machinery that the workers use, that makes the money. Therefore the bosses’ threat to sack all the people and to substitute them all with machinery is always a hollow threat. 


Labour Power: The potential for work

The illustration shows labour-power outside the door of the workplace. The potential workers will get paid in full for what they are (i.e. for the labour that went into their existence). But once inside the door, all the labour that they give, and all of the fruits of that labour, will belong to the capitalist.

Human beings can give up more labour than went into their own creation. This is the special characteristic of labour – different from all other inputs – that the capitalist exploits, and it explains how the capitalist surplus is made.

Marx explains all this patiently and with good humour in this chapter. Please read as much of it as you possibly can, because at this point we have come close to the heart of the matter.




2 February 2012

Labour Power

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Marx’s Capital Volume 1, Part 4a


Labour Power

Chapter 6 of Capital, Volume 1 is the one where Karl Marx pops out the secret of the whole deal – the Buying and Selling of Labour Power. The “Hic Rhodus, Hic Salta” finishing the previous chapter was fair warning: This is it. This is the heart of the matter.

Here are some highlights:

“In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value..

“By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description.

“…The second essential condition to the owner of money finding labour-power in the market as a commodity is this — that the labourer instead of being in the position to sell commodities in which his labour is incorporated, must be obliged to offer for sale as a commodity that very labour-power, which exists only in his living self.

“…For the conversion of his money into capital, therefore, the owner of money must meet in the market with the free labourer, free in the double sense, that as a free man he can dispose of his labour-power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realisation of his labour-power."

The first three paragraphs on page 3 of the downloadable extract linked below are also crucial, and are very surprising at the first reading. And then:

“…Accompanied by Mr. Moneybags and by the possessor of labour-power, we therefore take leave for a time of this noisy sphere, where everything takes place on the surface and in view of all men, and follow them both into the hidden abode of production, on whose threshold there stares us in the face ‘No admittance except on business.’ Here we shall see, not only how capital produces, but how capital is produced. We shall at last force the secret of profit making.

“He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but — a hiding.”




Capital

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Marx’s Capital Volume 1, Part 4

Mr Moneybags, the capitalist

Capital

Chapter 4 of Karl Marx’s Capital Volume 1, called “The General Formula for Capital”, is one of the short chapters in the book. It is immediately followed by “The Contradictions in the General Formula of Capital” which is Chapter 5, also short; so here they are given together (see the link for download, below).

Chapter 4 introduces the distinction between selling an unwanted commodity to get money to buy another commodity for use (C-M-C); or otherwise purchasing a commodity for re-sale with the intention of getting back the money, plus a surplus (M-C-M’).

This distinction is made as a preparation for the definition of Surplus-Value that is coming. “Capital” is not a hasty book. It is well paced so as to be friendly to any kind of reader, including worker readers.

In spite of its name, Chapter 4 is not a general definition of capital. This “general formula” is only an outline of “capital as it appears prima facie within the sphere of circulation”. The chapter does not explain how a surplus is obtained, or where it comes from. That explanation is reserved for later.

Chapter 5 of Capital Volume 1 finds Karl Marx at his most relaxed. He knows very well that C-M-C and M-C-M are formally no more than portions of, or extracts from, a series with no end and no beginning, as: …MCMCMCMCMCMCMCMCMCMCMC…. He flaunts the absurdity of the distinction, asking: “How can this purely formal distinction between these processes change their character as it were by magic?”

He proceeds to state directly that: “The inversion… of the order of succession does not take us outside the sphere of the simple circulation of commodities, and we must rather look, whether there is in this simple circulation anything permitting an expansion of the value that enters into circulation, and, consequently, a creation of surplus-value.”

But now we begin to see what Marx is getting at. He is trying to find out how, in the process of exchange, a real increase can be found. He already has the answer but he is content here to have the groundwork of his argument tested against the ideas of others, such as Monsieur Condillac and Colonel Torrens, as well as “Vulgar-Economy”, and so by degrees to refute “the delusion that surplus-value has its origin in a nominal rise of prices or in the privilege which the seller has of selling too dear.”

Marx shows that: “It is… impossible for capital to be produced by circulation, and it is equally impossible for it to originate apart from circulation. It must have its origin both in circulation and yet not in circulation.”

Marx finishes the chapter like this: “Our friend, Moneybags, who as yet is only an embryo capitalist, must buy his commodities at their value, must sell them at their value, and yet at the end of the process must withdraw more value from circulation than he threw into it at starting... These are the conditions of the problem. Hic Rhodus, hic salta!

This is Marx’s way of saying “Here we are,” or “This is it!”

The problem is set. The solution is going to follow soon enough.