The commodity-elements L and Pm, of which the productive capital is composed, do not possess the same form as modes of existence of P, which they have on the various commodity-markets where they are gathered. They are now combined, and so combined they can perform the functions of productive capital.
C appears as the premise of C within the cycle III, because capital in commodity-form is its starting point. The cycle is opened by the transformation of C' (in so far as it performs the functions of capital-value, whether increased by surplus-value or not) into those commodities which are its elements of production. And this transformation comprises the entire process of circulation, C—M—C (equal to L plus Pm), and is its result. C here stands at both extremes, but the second extreme, which receives its form C by means of M—C from the commodity-market on the outside, is not the last extreme of the cycle, but only of its two first stage comprising the process of circulation. Its result is P, which then performs its function, the process of production. It is only as the result of this process, not as that of the circulation, that C' appears as the terminal point of the cycle and in the same form as the starting point, C'. On the other hand, in M...M' and P...P, the final extremes M' and P are the immediate results of the process of circulation. In these instances, it is only M' and P which are supposed to exist at the end in the hands of another. So far as the process of circulation takes place between the extremes, neither M in the hands of another as money, nor P as the productive process of another, are the premises of these cycles. But C'...C' requires the existence of C (equal to L plus Pm) as commodities in the hands of others who are their owners. These commodities are drawn into the cycle by the introductory process of circulation and transformed into productive capital, and as a result of the functions of this capital, C' once more appears at the end of the cycle.
But just because the cycle C'...C' presupposes for its realization the existence of some other industrial capital in the form of C (equal to L plus Pm)—and Pm comprises various other capitals, in our case machinery, coal, oil etc.,—it demands of itself that it be considered not merely as the general form of the cycle, that is to say as a social form common to every industrial capital (except when it is first invested). It is not merely a common mobile form of all industrial capitals, but also the sum of all industrial capitals in action. It is a movement of the aggregate capital of the capitalist class, in which every individual capital appears only as a part whose movements intermingle with those of the others and are conditioned on them. For instance, if we regard the aggregate of commodities annually produced in a certain country, and analyze the movements by which a part of this aggregate product replaces the productive capital in all individual businesses, while another part enters into the individual consumption of the various classes, then we consider C'...C' as the formula indicating the movements of social capital as well as of the surplus-value, or surplus-product, generated by it. The fact that the social capital is equal to the sum of the individual capitals (including the stocks and state capital, so far as governments employ productive wage-labor in mining, railroading, etc., and perform the function of capitalists), and that the aggregate movement of social capital is equal to the algebraic sum of the movements of individual capitals, does not militate against the possibility that this movement, seen as the movement of some individual capital, may present other phenomena than the same movement studied as a part of the aggregate movement of social capital. In the latter case, when studied in connection with all its parts, the movement simultaneously solves problems, the solution of which does not follow from the study of the cycles of some individual capital, but must be taken for granted.
C'...C' is the only cycle, in which the originally advanced capital-value constitutes only a part of the value opening the movement at one extreme, and in which the movement thus reveals itself at the outset as the total movement of the industrial capital. It includes that part of the product which replaces the productive capital as well as that part which creates a surplus-product and which is on an average either spent as revenue or employed as an element of accumulation. In so far as the expenditure of surplus-value in the form of revenue is included in this cycle, the individual consumption is likewise included. The latter is furthermore included for the reason, that the starting point C, commodity, exists in the form of some article of use; but every article produced by capitalist methods is a commodity-capital, no matter whether its use-form destines it for productive or for individual consumption, or for both. M...M' indicates only the quality of value, the utilization of the advanced capital-value for the purposes of the entire process; P...P (P') indicates the process of production of capital in the form of a process of reproduction with a productive capital of the same or of increased value (accumulation); C'...C', while it indicates at the outset that it is a part of the capitalist production of commodities, comprises productive and individual consumption from the start, and productive consumption with its implied generation of more value appears only as one branch of its movement. Finally, since C' may have a use-value which cannot enter any more into any process of production, it follows as a matter of course, that the different elements of value of C' expressed by parts of the product must occupy a different position, according to whether C'...C' is regarded as the formula for the movement of the total social capital, or for the independent movement of some individual industrial capital. All these peculiarities point to the fact that this cycle implies more than the mere cycle of some individual capital.
In the formula C'...C', the movement of the commodity-capital, that is to say of the total product created by capitalist methods, appears simultaneously as the premise of the independent cycle of individual capital and as its effect. If this formula is grasped in its peculiarities, then it is no longer sufficient to be content with the knowledge that the metamorphoses C'—M' and M—C are on the one hand functionally defined sections in the metamorphoses of capital, on the other links in the general circulation of commodities. It becomes necessary to follow the ramifications of the metamorphoses of one industrial capital among those of other individual capitals and with that part of the total product which is intended for individual consumption. In the analysis of an individual industrial capital, we therefore base our studies mainly on the two first formulas.
The cycle C'...C' appears as the movement of an individual and independent capital in the case of agriculture, where calculations are made from crop to crop. In figure II, the sowing is the starting point, in figure III the harvest, or, to speak with the physiocrats, figure II starts out with the avances, and figure III with the reprises. The movement of capital-value in III appears from the outset only as a part of the movement of the general mass of products, while in I and II the movement of C' is only a part of the movement of some individual capital.
In figure III, the commodities on the market are the continuous premise of the processes of production and reproduction. If this formula is regarded as fixed, all elements of the process of production seem to originate in the circulation of commodities and to consist only of commodities. This one-sided conception overlooks those elements of the processes of production, which are independent of the commodity-elements.
Since C'...C' has for its starting point the total product (total value), it follows that (making exception of foreign trade) reproduction on an enlarged scale, productivity remaining otherwise the same, can take place only when the part of the surplus-product to be capitalized already contains the material elements of the additional productive capital; so that a surplus-product is at once produced in that form which enables it to perform the functions of additional capital, so far as the production of one year can serve as the basis of next year's production, or in so far as this can take place simultaneously with the simple process of reproduction in the same year. Increased productivity can increase only the substance of capital, but not its value; of course, it creates additional material for the generation of more value.
C'...C' is the basis of Quesnay's Tableau Economique, and it shows great discrimination on his part that he selected this form instead of P...P as opposed to M...M' (which is the isolated formula retained by the mercantilists).
4. The Three Diagrams of the Process of Circulation
The three diagrams may be formulated in the following manner, using the sign Tc for "total process of circulation":