In form III, or C'—M'—C...P...C', the two phases of the circulation process open the cycle, in the same order which obtains in form II, or P...P; next follows P with its function, the productive process, the same as in form I; the cycle closes with the result of the process of production, C'. While form II closes with P, the return of productive capital to its mere form, so form III closes with C', the return of commodity-capital to its form. Just as in form II the capital, in its concluding form of P, must renew its cycle by beginning with the process of production, so in this case, where the industrial capital re-appears in the form of commodity-capital, the cycle is re-opened by the circulation phase C'—M'. Both forms of the cycle are incomplete, because they do not close with M', that is to say with capital-value retransformed into money and utilized. Both cycles must, therefore, be continued and include the reproduction. The total cycle of form III is represented by C'...C'.
The third form is distinguished from the two first by the fact that it is the only one in which the utilized capital-value appears as the starting point of its utilization, instead of the original value which is to be utilized. C' as a capital-relation is the starting point and has a determining influence on the entire cycle, for it includes the cycle of capital-value as well as that of surplus-value in its first phase, and the surplus-value is compelled to act partly as revenue by going through the circulation c—m—c, partly to perform the function of an element of capital accumulation, at least in the average of the cycles, if not in all of them.
In the form C'...C' the consumption of the entire commodity-product is assumed as the condition of the normal course of the cycles of capital itself. The individual consumption of the laborer and the individual consumption of the unaccumulated part of the surplus-product comprise the entire individual consumption. Hence the consumption in its totality—individual as well as productive consumption—are conditional factors in the cycle C'. Productive consumption, which includes the individual consumption of the laborer as a corollary, since labor-power is a continuous product of the laborer's individual consumption, within certain limits, is performed by every individual capital itself. Individual consumption, in so far as it is not required for the existence of the individual capitalist, is here only regarded as a social act, not as an act of the individual capitalist.
In forms I and II, the aggregate movement appears as a movement of advanced capital-value. In form III, the utilized capital, in the shape of the total commodity-product, is the starting point and has the nature of moving capital, commodity-capital. Not until the transformation into money has been accomplished, does this movement separate into movements of capital and revenue. The distribution of the total social product as well as the special distribution of the product of every individual capital for purposes of individual consumption or for reproduction, is included in the cycle of capital under this form.
In M...M', the possible expansion of the cycle is included, and depends on the volume of m entering into the renewed cycle.
In P...P, the new cycle may be started by P with the same, or even with a smaller, value, and yet may represent a reproduction on an enlarged scale, for instance in the case where certain elements of commodities become cheaper by increased productivity of labor. On the other hand, a productive capital which has increased in value may, in the opposite case, represent a reproduction on a decreased scale with less raw material, for instance, if some elements of production have become dearer. The same is true of C'...C'.
In C'...C' capital in the form of commodities is the premise of production. It re-appears as a premise within this cycle in the second C. If this C has not yet been produced or reproduced, the cycle is arrested in its course. This C must be reproduced, for the greater part as C' of some other industrial capital. In this cycle, C' is found as the point of departure, of transit, and of conclusion; it is always there. It is a permanent condition of the process of reproduction.
C'...C' is distinguished from forms I and II by still another feature. All three cycles have this in common, that capital begins its course in the same form in which it ends the cycle, and thus re-assumes the original form whenever it renews the same cycle. The initial form M,P,C', is always the one in which capital-value (in III together with its increment of surplus-value) is advanced, in other words always the original starting form of this cycle. The concluding form M',P,C', on the other hand, is always a changed form of a functional one, which preceded the final form in the circulation and is not the original one.
Thus M' in I is a changed form of C', the final P in II is a changed form of M, and this transformation is accomplished in I and II by a simple transaction in the circulation of commodities, by a formal change of position of commodity and money; in III, C' is a changed form of the productive capital P. But here, in III, the transformation does not merely concern the functional form of capital, but also its magnitude as a value; and in the second place, the transformation is not the result of a formal change of position pertaining to the circulation process, but of an actual modification experienced by the use-form and value of the commodity parts of productive capital in the process of production.
The forms m,P,C', at the starting end, always precede every one of the cycles I, II, III. The return of these forms at the terminal end is conditioned on the series of metamorphoses in the cycle itself. C', as the terminal product of an individual cycle of industrial capital, presupposes only that form P of the industrial capital which does not belong to the circulation, M', since the terminal point of representing the changed form of C' (C'—M'), presupposes the existence of M in the hand of the buyer, that is to say outside of the cycle M...M', but drawn into it and made it its terminal form by the sale of C'. In the same way, the final P in II presupposes the existence of L and PM(C) outside of II, but incorporated as its final form by means of M—C. But apart from this last extreme, neither the cycle of individual money-capital presupposes the existence of money-capital in general, nor the cycle of individual productive capital that of productive capital, in these cycles. In I, M may be the first money-capital; in II, P may be the first productive capital appearing on the historical scene. But in III,
C is presupposed twice outside of the cycle. The first time, it is assumed to exist in the cycle C'—M'—C{LPm. The C in this formula, so far as it consists of Pm, is a commodity in the hands of the seller; it is itself a commodity-capital, in so far as it is the product of a capitalist process of production; and even if it is not, it appears as a commodity-capital in the hands of the merchant. The second time it is assumed in c, in the formula c—m—c, where it must likewise be at hand in the form of a commodity, in order to be available for purchase. At any rate, whether they are commodity-capital or not, L and Pm are commodities as well as C' and maintain towards one another the relation of commodities. The same is true of the second c in the formula c—m—c. Inasmuch as C' is equal to C (L plus Pm), it is composed of commodities and must be replaced by equal commodities in the circulation. In the same way, the second c in c—m—c must be replaced by equal commodities in the circulation.
With the capitalist mode of production for a basis, as the prevailing mode, all commodities in the hands of the seller must be commodity-capital. And they retain this character in the hand of the merchant, or assume it, if they did not have it before. Or they would have to be commodities, such as imported articles, which replace some original commodity-capital by bestowing