(Il Programma Comunista, No.22, 1959)

As is well known, the presentation of the formulas that Marx provides at the beginning of the Second Book of Capital, and of which an initial outline was given at the Parma meeting, where an attempt was made to harmonise the symbolic notation with that adopted in the first part of the Elements of Marxist Economics published in Prometeo (the authentic series of the post-war period), and subsequently in Programme Communiste, as has already been distributed in mimeographed form for the First Book, will soon be available for the aforementioned sequel.

In this column, we shall not repeat the symbolic section as it was discussed at the meeting, but we consider it useful to revisit some of the basic concepts on which the speaker focused when explaining the formulas, as they are very helpful in introducing the treatment of the questions relating to the accumulation of Capital.

As is well known, in the First Book Marx deals with the ‘Development of the Production of Capital’. The subject is therefore not that of the production of commodities, or consumer goods, studied in its characteristic process proper to the historical epoch of manufacturing-industrial capitalism. Such a title would have given rise to the belief that bourgeois society has, as its motive force or its aim, the satisfaction of human needs, and that it has therefore set up for this purpose a certain social machine of production. This would be as naive and incomplete as it is tainted by the influence of the false doctrines of the apologists of capitalism, which the whole of Marx’s work comes to demolish. To affirm that the motive force of the class social mechanism characteristic of the bourgeoisie is to produce not commodities, but ‘capital’, Marx rigorously adopts his title, which might well have been: development of the production of surplus value in the capitalist form. In this observation, so preliminary and elementary, there is already contained the thesis that, in order to produce objects for the satisfaction of human need, it must no longer be necessary – and here we are already in the midst of the revolutionary programme – to produce capital, to produce surplus value, or even to produce ‘value’, that is, to produce ‘commodities’. We already have the foundations upon which rest the proclamations that today, so long after those pages were written, lie at the heart of the battle we are waging: one cannot escape the bourgeois capitalist economy unless one escapes the mercantile economy – the entire immense course of the Russian economy from the civil war up to today, spanning over thirty years, is nothing but a primary historical cycle of the production of capital and surplus value – and there is not a shred of socialist economy.

The Second Book of Capital deals with the ‘process of the circulation of capital’ and therefore, once again, does not refer to the ‘circulation of commodities in the capitalist historical form’. Ninety-nine out of a hundred of Marx’s modernisers have failed to grasp that for eighty years now we have, in a step as revolutionary as it is historically irreversible, definitively moved beyond the futile dichotomy upon which bourgeois economic doctrines are constructed, which treat production and circulation as separate spheres.

For the bourgeois, the philistine professor, and the Marxist traitor, yesterday a revisionist, today an ‘enricher’, in production, capital is the active subject, the commodity the passive object; in circulation, commodities copulate with one another in every direction according to the law of equivalent exchange; for us revolutionary Marxists, the market and capital are monsters to be exterminated. Wherever the former survives, the latter looms large, a vile hermaphrodite, both passive and active, ceaselessly engaged in the obscene process of begetting itself from itself.

The First Part of the Second Book is entitled: The Metamorphoses of Capital and their Circuits. Naturally, repulsive modern ‘scientists’ have repeatedly mocked this theory of metamorphoses as a literary flourish of the eloquent author, inspired by the descriptions of poets competing in the art of magic, from Ovid to Virgil to Dante. But what is involved here is true science, free from servile shackles and capable of reaching the oppressed class and becoming a weapon for them, certainly diabolical in the eyes of conformists of every stripe. Before our eyes as ordinary men of this age, which stank just as much in the time of the text as it does today, capital appears in practical life and in everyday language in various guises and forms, which it swiftly abandons, shifting from one to another like the mythical nymphs and the restless damned of Hell. Which form characterises it, historically speaking, that is, in the presence of which of its metamorphic forms can we say it was born? The inquiry matters because this is the form in which we can trace its development, within our original economic science, and it is the form in which our revolutionary praxis must find it in order to kill it – it is the changing of the world, and not its explanation, that we first and alone have been pursuing ever since.

There are three key figures. Two of them are obvious to common sense: money and accumulated commodities. A capitalist is defined as the owner of a sum of money, and likewise the owner of stocks, reserves of commodities that can at any moment be converted into money on the market. But these two forms are not sufficient to characterise modern capitalism, and circulation limited solely to them, transforming one into the other, could not give rise to the phenomena of the First Book: the production of capital means the production of surplus value. The metamorphosis becomes ternary, and the third element has nothing abstract about it; indeed, to give the common man a concrete sense of it, one need only point to a factory with men entering and leaving it, commodities entering and leaving it.

Marx refers to this third form as the production process, and it was this very phrase that came to mind when the capitalist was no longer seen as the hoarder of gold visiting his cave or the merchant lingering in his well-stocked warehouse, but as the king of the factory, a prison-house of men, the romantic Master of the Ironworks.

These three figures, which in our little formulas were M, money, C, commodity, and P, the Production Process, appear on the screen in turn and, as if by magic, dissolve into one another. But the metamorphosis is continuous, cyclical, as the so-called gentleman-scientists say. C, P, M, P, M, C... one could go on indefinitely. Marx’s completely simple observation is that nowhere is it written that one must ‘begin’ with C as the ‘opening sequence’ of the film as it plays. No one forbids us from beginning with M, nor from beginning with P, and so there can be three ‘projections’ of the circulatory process. This may seem like a cold formal exercise, but soon the world will have seen that the resolution is simply hellish; salaried professors and sell-out demagogues will spend the coming decades dissipating the revolutionary exploration of such simple and terrible truths.

Since what needed to be written was not a dry academic treatise but the living drama of history as it unfolds, the First Book, in its presentation, had to choose an acting character: this is the capitalist, but the aim was not to identify a culprit, nor to resolve the matter through his personal execution. From the outset, the aim was to bring to full light something quite different from petty individual responsibilities, and after having cast that actor, apologies were offered for not having portrayed him in rosy colours.

In the initial script, as in the formulae we have set out in our didactic Abacus, we begin with that gentleman as a holder of money. Marx therefore states that the ‘first act’ of the capitalist is that of someone who has money at their disposal. But we are not metaphysicians and we no longer need to be mythologists; it is not a matter of writing that ‘in the beginning was money’ but of faithfully tracing the cycle. It will then be a matter of grasping that link in which its reason for life is enclosed, which must become a historical reason for death.

In any case, the schema is well known. The first act is a commercial act, that is, the capitalist purchases commodities with a certain sum of money. But it concerns two quite distinct stocks of commodities, which, as is well known, in the First Book we distinguished into constant capital and variable capital, that is, c and v of the first formulas which need not be rewritten here, and which, for the purposes of the study of circulation, Marx symbolises differently by calling them the equivalent terms means of production and labour power. The market acts are complete and, as is well known, no one has yet been... cheated. The worker, on his own account, has not even received an advance on his sum v, or wage. The accounts will be settled later, at the end of the second act. Up to now, and indeed always, there has been no violation of the law of exchange between equivalent values.

As we enter the second act of the ‘functioning of productive capital’, the capitalist, or the diabolical impersonal force acting on his behalf, consumes what he has purchased: namely, the means of production and labour power. This drama has been performed and recounted millions of times, and we run the risk of being considered useless nuisances, but this will not deter us.

None of the climactic phases of the drama that is unfolding would have been possible had the capitalist buyer not found the two types of commodities he needed separated: namely, on one side, the means of production, and on the other, the labour power of the workers. Marx says that this division is a fundamental condition, and that he has elsewhere narrated how it came about. Thus, a fundamental division has taken place between the two classes, but it did not occur in the act of dividing up consumer goods or of dividing up incomes within the social sphere. It is not, as it seems to the naive and also to the philistine, that society, that cruel stepmother, has badly divided a given mass or heap of commodities or money, what modern experts on these matters call the national product or national income, between rich and poor, capitalists and workers. This would have been a vulgar little swindle, but so foolish that it would not have happened a second time. The dirty trick of capitalism is of a different kind, and it reproduces itself in a continuous stream, at an incessant rhythm.

‘The [first stage of the circulation process] historical processes are assumed by which the original connection of the means of production with labour-power was dissolved – processes in consequence of which the mass of the people, the labourers, have, as non-owners, come face to face with non-labourers as the owners of these means of production. It makes no difference in this case whether the connection before its dissolution (between worker and means of production), was such in form that the labourer, being himself a means of production, belonged to the other means of production (slavery and serfdom) or whether he was their owner (peasant and artisan societies). What lies back of [the first act] is distribution; not distribution in the ordinary meaning of a distribution of articles of consumption, but the distribution of the elements of production itself, the material factors of which are concentrated on one side, and labour-power, isolated, on the other’ (Capital, Book II).

Therefore the means of production must already have become capital, and this first act of our first performance is not really the first. In any case, in the second act, the ‘reaction’ of the two already separated elements takes place and the production process is set in motion. Two bodies cannot react with one another unless they have previously been kept well away from contact, and we are in accordance with Lady Science.

In the process of the circulation of Capital, the first act or stage, which consists in the capitalist using money to purchase two types of commodities on the market: labour power and means of production; this is followed by the second stage, which is that of the actual production process proper. Marx, as we said, denotes this stage succinctly with a capital P preceded and followed by ellipsis, that is, ...P...

As we have already noted, the two elements of production, human labour and raw materials and instruments, which previous social history has separated from one another, usually with brutal violence, come into contact in the hands of the capitalist, that diabolical figure or sorcerer, as one might call him, like two dangerous reagents in the hands of a chemist, and combine in a truly explosive manner. In Marx’s time, there was no talk of nuclear explosions, but of explosive chemical reactions there certainly was (from the one in the cauldron of the monk Schwarz that led to the discovery of gunpowder, one can move on to those in the chamber of internal combustion engines and even in that of astronautical rocket engines involving liquid oxygen and superfuels) and the series of P-processes throughout the drama of the circulation of capital, which Marx unfolds, can quite legitimately be defined as a chain reaction. The infernal and much-debated accumulation of capital, without innovating anything in its classical theory, we shall call a chain reaction. This releases a super-energy; accumulation releases a surplus value.

Marx describes the chain reaction as follows: ‘The circuit of productive capital has the general formula P ... C’ – M’ – C ... P. It signifies the periodical renewal of the functioning of productive capital, hence its reproduction, or its process of production as a process of reproduction aiming at the self-expansion of value; not only production but a periodical reproduction of surplus-value; the function of industrial capital in its productive form, and this function performed not once but periodically repeated, so that the renewal is determined by the starting-point’.

Here, Marx already anticipates that it will be his second formula, running from P to P, that is the crucial one of modern capitalism, and not what he regards as the first, from M to M (from money to money), or the third, from C to C (from commodity to commodity). Herein lies the entire development between traditional economics (in which, in addition to those known to Marx, we include all subsequent official, academic, and ultra-modern ones) and our economics, a revolutionary development that occurs once in several centuries, yet is already entirely explosively contained. ‘For one thing, while in the first form, M ... M’, the process of production, the function of P, interrupts the circulation of money-capital (and commodity-capital) and acts only as a mediator between its two phases M – C and C’ – M’ (and we are deliberately omitting for now the superscripted letters M’ – C’ – P’, of which more later), here the entire circulation process of industrial capital, its entire movement within the phase of circulation (commodity-money-commodity, the central focus of the great professors of economics), constitutes only an interruption and consequently only the connecting link between the productive capital (P), which as the first extreme opens the circuit, and that which closes it as the other extreme in the same form, hence in the form in which it starts again. Circulation proper (that is, circulation according to the law of value idolised by Stalinists and Keynesians, circulation on the market) appears but as a (passive, sterile) instrument promoting the periodically renewed reproduction, rendered continuous by the renewal’.

The stages have been and are presented in their order according to the notions of vulgar economists. If the first has been the transition from Money to Commodity (in its two familiar forms), the second has consisted in the explosive process P; the third stage shares with the first its unfolding within the sphere of pure, or mercantile, circulation, which is of primary concern to those gentlemen, whereas for us the circulation of capital is of primary concern. The third is given by C – M, but the effect of the explosion that occurred in the second act P is that we are dealing with C’ and M’, quantities of commodities and money equivalent to one another, but significantly greater than the initial ones: the initial money-capital advanced, and the initial two-sided commodity supplied with it. It is clear that C’ are the products sold and that M’ is their proceeds. The difference, with which we are all too familiar, is the surplus value ‘created’ in the explosion ...P...

Already at this point, Marx presents the fundamental distinction between simple reproduction and expanded reproduction, that is, accumulation, as it manifests itself in the historical reality of capitalist societies.

The distinction is obvious and, when we consider a single firm for the sake of simplicity, boils down to the use that will be given to surplus value, that is, to the difference between M’ and M, the excess of M’ over the expenditure M. If the surplus value is appropriated by the capitalist in the form of a corresponding fraction of M’ equal to M’ minus M, the cycle must begin again in exactly the same way as the first, that is, as the typical M – C ... P ... C’ – M’. We shall then have had simple reproduction.

If instead the surplus value is consumed by the capitalist only in part, or not at all (as Marx posits for the sake of theoretical inquiry, and as history demonstrated in Russia by eliminating the factory owners, thereby showing us what we had understood long before, that the true infamy of capitalism becomes apparent when there are no capitalist-persons), then all the money M’ becomes industrial productive capital and, in a subsequent cycle, re-explodes in a chain reaction, becoming C” and M” and then nth C’s and M’s, to the rhythms of peaceful and disgusting, détente competition.

This distinction between simple reproduction and expanded reproduction remains here as the basis for the study of further crucial chapters of Marxism and for understanding the historical and not merely economic aspect of the question (of which the purely economic schema was, as a ‘model’, indispensable to the life of our doctrine). But we consider far more important (if we may be so bold) the distinction that the discoverer of the ‘secret’ of the capital-form has here introduced into the very simple means of studying the cycle of circulation (of capital, gentlemen enemies, for we know not what to make of that of commodities) no longer between M and M, or between C and C (as all the so-called ‘circulationist’ gentlemen did, do, and will do, so long as we remain so insignificant as to be unable to refute the highly educated, trustified brains in the appropriate manner, as Don Karl taught, by means of a flogging of blows upon their most cuckolded skulls), but between P and P, that is, when one begins not with a stock of commodities or a monetary fund in hand, but with an infernal machine, unquantifiable according to the law of value, yet destined to be shattered by revolutionary terror.

It is with this in mind that we offer some comments – and quotations, to provide the usual proof that we have discovered nothing and will falsify nothing – on the ‘three figures’ of the circulation process brilliantly presented by Marx in this chapter, and the original symbolic form of which we have set out, along with our own translation, in accordance with the forthcoming publication to be circulated.

The stages or acts in this drama are, as we have seen, three; the first and third can be interpreted, without yet silencing the philistines, in terms of monetary-mercantile circulation; but only the second, which is stage P, defines the process of circulation that matters to us, and it is the circulation of productive capital and, by that very fact, of surplus value.

The figures represent the three ways of interpreting the ‘chain’ circuit. Once again, the first and third are important, though not revolutionary, and their control is left to the enemy ranks, in accordance with Marx’s words verbatim. They are the figure that circulates from money to money and the one that circulates from commodity to commodity (first and third, therefore). We shall deal with these two before the second, for us the last because it is the first (gentlemen, do not be dismayed; the last shall be first, as your own Jesus of Nazareth also said, though he was certainly not as foolish as you), and which is the one that moves from P and arrives at P.

The first of these three figures need not be dwelled upon at length once we have illustrated the acts that the capitalist performs when we imagine him entering the scene as a bearer of money-capital, and once we have demonstrated that the mere accumulation of money does not encompass the historical conditions of capitalist production, which lie in the rending separation between the means of production and the men endowed with labour power, and in the noble elevation of these modern slaves from the possibility of being reduced themselves to means of production, like a horse (which is why they are treated with greater consideration).

The second figure begins with C’, that is, from the mass of commodities that have already originated from a previous production cycle, which began with the sum of money M initially converted by the capitalist entrepreneur into the smaller mass of commodities C. Marx observes that C’ can be regarded as divided into two parts, such that C’ = C + c. Then, having acquired the block C’, it is thrown entirely into market circulation in order to make money. The part C will be sufficient to restore the sum M, and everything will restart again as in the first figure and first stage. It is the part c that will remain in the balance due to its dual destination: consumption or, as we say today, reinvestment, which determines the difference between simple and expanded reproduction. In any case, the text warns that, with rare exceptions (which occur in agriculture and not in industry because Agnelli, let us suppose, does not have a steak made of a steel ingot served at his table), the part c must also go to the market to become money m, forming income consumable by the capitalist. Thus, for the bourgeois, c remains in general commodity circulation even in simple reproduction, but for us it remains in the process of the circulation of capital only if it is not consumed, thanks to an abstinence not invented by Stalin, nor by Marx, but by the classical Ricardians themselves, and thus it is sacrificed to the god of expanded reproduction.

Anyone who sets out to study circulation as having commodities as its subject will never understand anything, Marx says a hundred times, and here (Chapter II, Book II) in these words: ‘And so we have premised simple reproduction, i.e., that m – c separates entirely from M – C (those dashes are not to be read as ‘less than’, but as ‘equivalent to’; hence our modest change in notation). Since both circulations, c – m – c as well as C – M – C, belong in the circulation of commodities, so far as their general form is concerned (and for this reason do not show only value differences in their extremes), it is easy to conceive the process of capitalist production, after the manner of vulgar economy (which refuses to die out!) as a mere production of commodities, of use-values designed for consumption of some sort, which the capitalist produces for no other purpose than that of getting in their place commodities with different use-values, or of exchanging them for such’.

And why on earth does capital produce? It produces because it must produce not commodities, but itself, surplus value; and it finds idiots lying about, competing with one another in consuming those senseless commodities!

The reason why our party abhors in principle the naive idea of remedying our pitifully small numbers by forming a ‘bloc’ of all those who dare not believe in the Russians, in Stalin, and in the alleged post-Stalinist successors even more disastrous than him, is precisely that they are almost all immediatist in economics, and also crypto-liberals in politics, therefore no less anti-Marxist than the worst Stalinists! This has nothing to do with the abacus of Marxist economics! one might hear people say. On the contrary, it has everything to do with it, and it is in identifying these evident relations that our inveterate sectarianism meets with the harshest curses.

The immediatist is the one who would like to balance the books without involving that terrible mediator known as the political revolution, namely the party which manages the dictatorship. Immediatism means wanting to fix the c – m – c game whilst letting the C – M – C game, which engulfs everything, run its course. What else do the Stalinists justify?

Instead, the blow of dictatorial terror against the increasingly embittered majority of bourgeois society must be struck precisely to dismantle the C – M – C formula, even when it was identified with C’ – M’ – C’. This truth will never be seen whilst remaining confined within the horizons of the factory, the trade union, or the local commune but shines forth only on the horizon of the party-form. This truth is reached when one no longer looks to the company owner and its balance sheet, in order to snatch on behalf of the workers the shareholders’ dividends, and to distribute, for example, what the FIAT ‘organisation’ swindles from poor foolish Italians, in which was the quintessence of ‘Ordinovist’ ideals. Had Marx said this? Certainly, you theorists who thought you knew better than him; and you are not even fit to lick the soles of his boots.

‘We have seen that c – m – c, representing the circulation of the revenue of the capitalist, enters into the circulation of capital only so long as c is a part of the value of C’, of capital in its functional form of commodity-capital; but, as soon as it acquires independence from m – c, hence throughout the form c – m – c, the circulation of that revenue does not enter into the movement of the capital advanced by the capitalist, although it stems from it. (And take note!). This (m, income enjoyed by the individual capitalist) circulation is connected with the movement of advanced capital (to the real movement of capital circulation which we are treating in our economic critique for the sole purpose of identifying the crux where the sword must strike) inasmuch as the existence of capital presupposes the existence of the capitalist, and his existence is conditioned on his consuming surplus-value’.

Let us read with sufficient dialectics (those who merely criticise the fact that Russian workers eat little, or that the armies sent by Moscow fired on students in Budapest on the party’s orders, should step aside). The consumption of surplus value by the person of the capitalist is a condition of the existence of the capitalist. It is not difficult theoretically: leave the capitalist without food and he will die; but in historical reality another path is followed: kill the capitalist and he will not eat. These are deductions of pure physiology. But the capitalist’s consumption is not a condition for the existence of capitalism, given that it was all capital, in the metamorphosis into commodities, both C and little c. Indeed, we have demonstrated this in a hundred quotations: the true condition for the existence of capitalism is the opposite; that is, the transfer of surplus value c into new productive capital, which metamorphoses into larger volumes of commodities (in glorious and ‘détente-style’ emulation). The Russians have realised to the highest degree the central condition for the existence of capitalism. None of those aspiring to form a bloc with us will be willing to concede this.

In other words, the scandal that the bosses consume a portion of the fruits of the workers’ labour does not lie in the moral injustice of the distribution of income; rather, it lies in the fact that by fixing the capitalist system to the schema of simple reproduction, it prevents its historical development, which is conditioned by expanded reproduction, that is, the production of such surplus value that is reconverted into new capital. The communist demand is not the distribution of surplus value amongst wage-earners, but the end of the wage system and the accursed cycle of capital circulation.

Capital must fall into the forms of all its metamorphoses: productive capital, commodity-capital, and money-capital.

In Marx’s text it is shown how it is irrelevant to know the ultimate fate of all the products of a given capitalist factory. As such, the moment they leave the production process phase, they all take the form of commodity-capital. Indeed, as is always recalled, in Marxist economics the measure of capital is given by the value of the commodities produced, the famous turnover. As commodities, the entire product enters the general circuit of commodity circulation and becomes money again. As commodities, they can become the capital of another firm or a consumer good. From this point on, in order to follow the process of capital circulation, we need only know the destination of the money M’ into which the commodity C’ has metamorphosed, so as to determine whether there will be simple or expanded reproduction. But what is important is the transition to the social scale, within whose framework there is a circulation of commodities and, far more significantly for us, a circulation of capitals. ‘The general circulation comprises as much the intertwining of the circuits of the various independent fractions of social capital, i.e., the totality of the individual capitals, as the circulation of those values which are not thrown on the market as capital but enter into individual consumption’.

In the c – m – c part, which simple reproduction excludes from the circulation of capital, ‘money serves only as coin; the object of this circulation is the individual consumption of the capitalist. It is typical of the idiocy of vulgar economy that it gives out this circulation, which does not enter into the circuit of capital – the circulation of that part of the value produced which is consumed as revenue’.

In other passages, Marx insists on the transition from the analysis of a single firm’s economy to that of an entire country (Chapter III, where he discusses the 3rd figure of the circulation of commodity-capital, which we are considering here precisely before the 2nd, which is the figure from P to P, circulation of productive capital). ‘For instance if we regard the aggregate of commodities annually produced in a certain country and analyse the movement by which a part of it 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 a form of movement 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 joint-stock capital or the state capital, so far as governments employ productive wage-labour in mines, railways, etc., perform the function of industrial capitalists), and that the aggregate movement of social capital (the parenthesis – in the preceding text, justifies our term corporate capital and that of corporatism for the error that Marx denounces here) is equal to the algebraic sum of the movements of the individual capitals, does not in any way preclude the possibility that this movement as the movement of a single individual capital, may present other phenomena than the same movement does when considered from the point of view of a part of the aggregate movement of social capital, hence in its interconnections with the movements of its other parts, and that the movement simultaneously solves problems the solution of which must be assumed when studying the circuit of a separate, individual capital instead of being the result of such study’.

Please do not find this quotation laborious, as its meaning is clear. If the entire product is a commodity, the entire economy is a capitalist economy, even if the subject directing the enterprise is no longer an individual owner, or a collective one. When, within the cycle of an individual enterprise, we find the stage where a commodity is sold at the end of one cycle and at the start of the next, a commodity is purchased, on the one hand as means of labour and on the other as labour power, there we have a capitalist economy, for the same reason that capitalism, and not socialism, is the economy where wage labourers are paid in money by a private employer.

In the Russian structure, until yesterday, the purchase of the initial constant capital was concealed on the part of the enterprise, but not that of the labour power (apart from the fact that it is cheaper than in the West, which is not the decisive factor). With the new reforms, the final sale C’ – M’ and also the initial purchase M – C have once again become clear, in which C (commodity) is not only V but also C (constant capital, including means of production and not just labour power, always in roubles).

Stalin’s admission that the law of value prevails in Russia is an admission that a capitalist economy prevails there. Do these incurable Marxists need yet another classic passage? ‘Commodities become commodity-capital as a functional form of existence – stemming directly from the process of production itself – of capital-value which has already produced surplus value. If the production of commodities were carried on capitalistically throughout society, all commodities would be elements of commodity-capital from the outset, whether they were crude iron, Brussels lace, sulphuric acid or cigars. The problem of what kinds of commodities (remember Stalin’s dispute with the dissidents over whether industrial machinery in Russia was also commodities? After the reforms, Stalin was silenced) is one of the self-created lovely ills of scholastic political economy’.

Eighty years after the death of the author of these words, academic economics and spurious Western and Soviet statistics are still mired in such trivialities.

The first and third figure, namely the one beginning from money and the one beginning from the commodity, are incomplete figures for understanding modern capitalism. The text states this at the end of the chapter on the third figure.

‘C’ ... C’ is the groundwork for Quesnay’s Tableau économique, and it shows great and true discretion on his part that in contrast to M ... M’ (the isolatedly and rigidly retained form of the mercantile system) he selected this form and not P ... P’. At the end of the chapter, which precedes this one in the text, on the circuit of productive capital (second figure), Marx had said: ‘The circuit of productive capital is the form in which classical Political Economy examines the circular movement of industrial capital’.

It is therefore historically correct that we arrange these three figures as we have done: first, that in which money circulates; second, that in which commodities circulate; and finally, that in which enterprise capital circulates. The mercantilist school of economics reflected the interests of that early bourgeois class which enriched itself through overseas trade; in accordance with the interests of these strata, it sought to theorise that wealth is generated in every act of exchange. The mercantilist denies the law of equivalent market values because he maintains that, through buying and reselling, capital grows by a surplus value. From M to C and from C to an increased M’.

The classical Ricardians, and we along with them, maintain that no surplus value is generated in this movement.

The Physiocrats, in supporting and expressing the interests not of the feudal lords but of the bourgeois landowners, also rejected the mercantilist thesis and asserted that increased and therefore consumable wealth arises at every seasonal cycle from the land, into which ten units of seed are sown to yield a hundred units of product. Surplus value does not arise from exchange nor from manufacture, but only from agriculture, whereby the C employed becomes a greater C’ obtained. Every other account is balanced: that of the merchant as well as that of the worker and of the industrialist, who consume a portion of the products of the land without adding anything to what they have received, but providing their labour on an equal footing (‘unproductive labourers’).

Classical economists reflect the interests of manufacturers. For them, the surplus value on which humanity depends does not arise from trade or agriculture, but solely from industry. Therefore, profit belongs to the entrepreneurial class. They thus place the production process, which Marx calls P, in the foreground, and can be well represented by his second figure. This is written in simple form as P ... C’ – M’ – C ... P when reproduction is simple and, when it is expanded, P ... C’ – M’ – C ... P’, where P’ represents an intensified enterprise production that will result in an enhanced product. Marx combines the two formulas into one, which he writes roughly as follows: P ... C’ – M’ (M’ – C’) (M – C) ... P (P’).

Both versions belong to the apologetic theorists of enterprise capitalism, who have already put forward the concept that the individual capitalist prefers not to consume anything and to invest everything.

‘The entire character of capitalist production is determined by the self-expansion of the advanced capital-value, that is to say, in the first instance by the production of as much surplus-value as possible; in the second place however (…) by the production of capital, hence by the transformation of surplus-value into capital. Accumulation, or production on an extended scale, which appears as a means for constantly more expanded production of surplus-value – hence for the enrichment of the capitalist, as his personal aim – and is comprised in the general tendency of capitalist production, becomes later, however, as was shown in Book I, by virtue of its development, a necessity for every individual capitalist. The constant augmentation of his capital becomes a condition of its preservation’.

Thus, the apparent free decision of the individual capitalist to profit in order to consume more than others is better understood as a ‘necessity’, that is, a determination external to the human will of the subject to grow his capital, or rather Capital, social capital. It does not seem absurd, as the Ricardians suggest, that the capitalist, in order to obey such a categorical imperative, abstains from consuming his profit; he does more as a person, disappears into the ranks of the majority when capital concentrates in a greater number of hands, in a greater number of joint-stock companies, in the capitalist State.

Returning to the second figure, including both simple and expanded reproduction, inasmuch as the two aspects cannot be separated, we deduced – by instead deliberately splitting it into two – the formulas that can define two other schools opposed to ours, directly generated by bourgeois economics, even if they deny it.

From P ... P, without expanding the production process, we have derived the formula of the ‘immediatists’. These propose simply that surplus value (which, in the notation of our Abacus, is denoted by lowercase s) be added to v, wage capital (i.e. distributed entirely to workers), eliminating the employer or the company’s dividends. With this, P always remains identical to itself, and there is no longer any need to expand production, but only to correct a flawed distribution. Marx also said: ‘In the relation of capitalist and wage-labourer, the money-relation, the relation between the buyer and the seller, becomes a relation inherent in production. But this relation has its foundation in the social character of production, not in the mode of exchange. The latter conversely emanates from the former. It is, however, quite in keeping with the bourgeois horizon, everyone being engrossed in the transaction of shady business, not to see in the character of the mode of production the basis of the mode of exchange corresponding to it, but vice versa’.

The immediatist whom we have thus categorised under the abbreviated formula P ... P is a workerist subject, but his soul is purely petty-bourgeois.

Instead the formula P ... P’, the flip side of the classical bourgeois formula, suits Stalinist economists very well. They too have, with the physical persons of capitalists, made surplus value s disappear, but they did not even dream of adding it to the wage v. They have channelled it entirely into new productive investment to dramatically increase the intensity of P, and in this inflation of production they claim... socialism must consist.

Having thus attributed all the formulas to our enemy schools, we had no need to choose one for ourselves. The conclusion of this exposition, which was supplemented by a more comprehensive and balanced set of symbolic formulas of the three aspects of the circulation of capital, was that in the socialist and communist economy, capital is not produced and therefore does not circulate. Nor, therefore, are commodities produced, and nor do they circulate, in the sense of exchange by means of money, and even less so by means of barter.

Since, for Marx, ‘[t]he quantity of commodities created in masses by capitalist production depends on the scale of production and on the need for constantly expanding this production, and not on a predestined circle of supply and demand, on wants that have to be satisfied’; our demand is that production be reduced to the scale of those needs that are in accordance with the best development of human society and not with the whims of the individual, and that this proportioning be achieved through physical measures and not through measures of economic value, to the point where the satisfaction of human need and the activity required to achieve it coincide in a single act and in the same human joy.

What we have discussed at length so far has presented the content of the First Part of the Second Book of Karl Marx’s Capital sufficiently to serve as a backdrop, on the one hand, to the text itself, and on the other, to our translation of the symbols developed in Milan and in the work of our organisation, as set out in the mimeographed pages of the relevant chapter of Marx’s Economic Abacus, the publication of which is also beginning in our French journal Programme Communiste.

The matter would be closed were it not useful, pending further systematic treatment, to link it with an initial presentation, which was also given in Milan, of the questions concerning the accumulation of capital originally contained in the Third Part of the Second Book. Such questions have been hotly debated within the Marxist school, and at times controversially, which is also linked to the form that – despite Engels’s admirable and strenuous efforts – was given to the text after Marx’s death, without the certainty that the order and division of the themes were precisely as he would have arranged them, and perhaps due to the same excessive concern to reproduce verbatim the troubled handwritten drafts.

In our aforementioned presentation, we have emphasised that within the ‘circuit of metamorphoses’ that capital undergoes in its circulation: money, commodity, production process, commodity, money, and so on, Marx’s originality compared to all the economists who preceded (and followed) him lies in having chosen, dramatically, we might say, the link to grasp. Not the link of money, as in the first cyclical formula, nor the link of commodities as in the third, but the link of the production process, in which the capital-form, as we would say today, explodes. In this form, for the first time in history, capital, known since ancient times as money-capital and commodity-capital, is industrial capital; it can no longer be understood as capital ‘on the head of a single person’, but has become a social form, and it is against this that the working class fights even more effectively than against the class of its owners. The battle is revolution, and after it not only will there no longer be corporate capital, but neither commodity-capital nor money-capital.

Already in paragraph IV of Chapter I, on the ‘total circulation process’, it is stated: ‘Industrial capital is the only mode of existence of capital in which not only the appropriation of surplus-value, or surplus-product, but simultaneously its creation is a function of capital’. Historically, this means that the ancient possessors of monetary and merchant capital, in pre-industrial forms, were already able to enjoy and consume part of the labour of the producing masses, appropriating it to their benefit; but only in the complete modern industrial form does capital go beyond the personal appropriation by the capitalist and, by channelling the produced surplus value into the magma of social capital, ends by eliminating from the conditions of its dynamics the existence of the capitalist-person.

The passage continues:

‘Therefore with it the capitalist character of production is a necessity. Its existence implies the class antagonism between capitalists and wage-labourers. To the extent that it seizes control of social production, the technique and social organisation of the [old] labour-process are revolutionised and with them the economico-historical type of society [the mode of production]. The other kinds of capital [monetary and merchant], which appeared before [industrial capital] amid conditions of social production that have receded into the past or are now succumbing, are not only subordinated to it and the mechanism of their functions altered in conformity with it, but move solely with it as their basis, hence live and die, stand and fall with this basis [thus industrial capitalism may be said to have fallen when the commodity and money forms have fallen]’.

‘Money-capital and commodity-capital, so far as they function as vehicles of particular branches of business, side by side with industrial capital, are nothing but modes of existence of the different functional forms now assumed, now discarded by industrial capital in the sphere of circulation – modes which, due to social division of labour [among the members of the capitalist class or among the organs of the capitalist State], have attained independent existence and been developed one-sidedly’.

The clarifications in brackets in the text are our own; however, they strictly adhere to the Marxist concept that the text lapidarily develops here regarding the distinctive features of capitalist-type production in comparison with earlier forms, and therefore with the future non-capitalist form.

This point is already stated in the text as soon as the process of capital circulation is presented in its first formula or figure, from ‘money-to-money’. The historical perspective completed itself in close parallel with the economic analysis, as we progressed to the circulation of industrial productive capital, which forms the basis of accumulation. We shall now turn to page 198, now that we have clearly reconstructed the connection between the three figures and it is familiar to the reader.

‘One of the most obvious peculiarities of the movement in circuits of industrial capital, and therefore also of capitalist production, is the fact that on one hand the component elements of productive capital are derived from the commodity-market and must be continually renewed out of it, bought as commodities (raw materials and labour power); and that on the other hand the product of the labour-process emerges from it as a commodity and must be continually sold anew as a commodity’. This concept, which could be expressed by saying that capitalism is integral mercantilism – and therefore its destruction is the destruction of mercantilism – is clarified by Marx with historical examples. ‘Compare for instance a modern farmer of the Scotch lowlands with an old-fashioned small peasant on the Continent. The former sells his entire product and has therefore to replace all its elements of, even his seed, in the market; the latter consumes the greater part of his product directly, buys and sells as little as possible, fashions tools, makes clothing, etc., so far as possible himself’.

This brief dialectical contrast is enough to show how reactionary the forms and programmes of the Russian kolkhozian parcel system, or those involving the transformation of Italian sharecroppers into traditional smallholders, and worse still, of agricultural wage labourers, are. The wheel of history moves forward, as Lenin dictated at the time of the NEP, when all activities in the circuit take a mercantile form. But socialism arrives when mercantile forms, having filled the entire economic space, die and fall together with the corporate wage-form.

‘Natural economy, money-economy, and credit-economy have therefore been placed in opposition to one another as being the three characteristic economic forms of movement in social production’. Marx refutes this scholastic distinction, still adhered to today.

‘In the first place these three forms do not represent equivalent phases of development. The so-called credit-economy (the banking system) is merely a form of the money-economy, since both terms express functions or modes of exchange among the producers themselves. In developed capitalist production, the money-economy appears only as the basis of the credit-economy. The money-economy and credit-economy thus correspond only to different stages in the development of capitalist production, but they are by no means independent forms of exchange vis-à-vis natural economy. With the same justification one might contrapose as equivalents the very different forms of natural economy to those two economies’.

Marx here alludes to a wide variety of pre-mercantile forms, such as tribal communism with communal consumption and labour, the gens system with its annual division of the fields, the barter system, and so on. And he makes a second historical point.

‘since it is not the economy, i.e., the process of production itself that is emphasised as the distinguishing mark of the two categories, money-economy and credit-economy, but rather the mode of exchange – corresponding to that economy – between the various agents of production, or producers, the same should apply to the first category (the natural economy)’.

This passage (which may not be rendered most effectively in translations from the author’s original manuscript) establishes the fundamental contrast, unchanged for a century, between mainstream economics and our revolutionary school. The former still today (and up to Keynes, the American welfare economists, and the Soviet academics theorising laws concerning ‘prices in a socialist economy’ and similar museum-piece monstrosities) takes as distinguishing features of historical forms (assuming, though not necessarily conceding, that it has the power to provide a valid historical series of social modes of production) the relations of exchange, distribution, and circulation of objects already produced and which pass from hand to hand amongst men, yet it is powerless to see what relations exist amongst men who come into contact within the true ‘productive process’ – whereas it is upon this that we Marxists have constructed a key to universal economic history, including that of the future.

We concede that those who grovel before university professors may conclude that such a construction is impossible; but we demand that they, in turn, declare us, along with Karl Marx, a bunch of fools. The dispute is an old one and is the same one that arose with Tonino Graziadei when, whilst claiming to admire in Marx the great man, he wrote thousands of pages to argue that one can only make a science of prices and mark-ups of commodities on the market, but not of surplus value that arises in production.

He admired, in Marx, the discovery of the class dictatorship, and all his academic research failed to make him see the false Marxists (who at the time hypocritically condemned his heresy regarding the theory of surplus value – we are referring to the Italians and not to the Russians of the time – and who today have fallen even lower than he did in following big moustache Stalin in the crime of ‘updating’ and ‘enriching’ Marx); not only have they made a mockery of the economic doctrine, but they have renounced, as we well foresaw, the revolutionary doctrine of the dictatorship, and even of the class struggle, which had anticipated the original, inviolable substance of Marxism.

Let us return to Marx’s text with a reference to the work, long in the pipeline within our collective endeavour, of systematising the typology of social forms, which will be the subject of forthcoming elaborations and meetings and is included internationally in our organisation’s ‘work programmes’; we are aware that we can only proceed on a broader scale once we have worked in depth, without hasty hysterics.

Marx declares the categories of ‘servile science’ that distinguish between a money-economy and a credit-economy to be false, because no historical break underlies the difference, relative to the pure exchange of commodities, between the cash system and the system of current accounts or bills of exchange, which originated in Italy and Flanders in the 15th century. Both these systems emerged during the great era of modern industrial capitalism, within which contemporary Russian history, rife with bank accounts in roubles, remains confined.

If the classifications of forms are understood in terms of exchanging rather than producing, then, Marx says, the same should apply to the first of the three artificial categories. ‘Hence exchange economy instead of natural economy [named such by the gentleman scientists, he means]’. The point is that in such an even more ancient economy, a product is not exchanged for a piece of paper promising payment, nor for ready gold or circulating silver, but product for product, object for object, both in the hands of those who have made and brought them with them, and thus use-value for use-value. But does an absolute natural economy exist? asks the text, here formidably concise. Yes, it has existed, but in it the producers receive neither paper nor gold nor any other product. They produce and consume socially, communistically, thanks to a central organisation, and ignoring the infamous Khrushchev’s stercoraceous individual incentive. ‘A completely isolated natural economy, such as the Inca state of Peru, would not come under any of these categories’.

The mysterious vanished civilisation of the Incas in what is now Peru, whose marvellous ruins fell victim to the bestial savagery of primitive white and Christian accumulators, had possessed a complete central organisation of economic administration and produced according to systematic plans, thanks to a development of the sciences about which we are not informed, as they may not yet have developed writing. It appears that mathematical operations were carried out using a system of knotted strings. An evidently low population density, combined with a climate extraordinarily favourable to agricultural production requiring little energy input and therefore little labour effort, enabled a community, which certainly possessed advanced knowledge of astronomy and the natural sciences, to master the determinism of adverse factors to the point of relocating marvellous cities over the course of centuries, perhaps when the surrounding land area, the true rich nourisher of the human species, had been exploited for several generations.

A bountiful harvest, unknown to other peoples and epochs, located in far harsher geophysical conditions, must have made possible a true communism of consumption, available to the whole human mass without ownership of land, means of production, nor individual consumer goods. Such an ‘economy’ without ‘circulation’ did exist, and this is the essence of this striking observation.

There are two consequences, and they are enormous. Economies are classified according to production, and not according to circulation; it is the former that consigns all economic science to date to a limbo of impotence. And the second is even greater; an economy without circulation will exist again, with multiplied resources for the mastery of earthly physics, and for a multiplied humanity; it will be ours, communism; it will be neither barter nor money nor credit nor market, and it will not involve human enslavement. It is no dream, for it once existed, despite the Catholic and capitalist lie that seeks to dishonour it; it will be once again, and its future history was written for the first time about a century before us, and must not stray amidst a forest of questions born of cowardice and impotent faith, proceeding hesitantly and bartering away its luminous conquests at every step.

A constant method of Marxism is to clarify the programmatic content of the revolutionary transformation that will bring an end to the epoch proper to the capitalist mode of production, through the clear explanation of the characteristics of the revolutionary transformations between the socio-historical epochs and forms that preceded capitalism. The science of the transition from non-capitalist to capitalist economies, the product of the bourgeois revolution, requires no additions, nor can it draw any from the experience of the secondary phases that capitalism undergoes in its not-short life. Indeed, the only way to understand these phases and stages – to use Lenin’s terminology – is to base oneself on the fully established doctrine concerning the birth of the capitalist form, as the negation of those that preceded it.

Marx, in order to emphasise more clearly that these great upheavals in the history of human society cannot be interpreted and represented according to the forms of the circulation economy, and to demonstrate more effectively the invalidity of the distinction between the natural, money, and credit economies, returns to the most recent social revolution after his brief foray into the distant past.

‘[T]he money-economy is common to all commodity production and the product appears as a commodity in the most varied organisms of social production’. Indeed, even under slavery there are commodities that are purchased with money, namely not only the products of the slaves’ labour, but the slaves themselves. In an economy of small, free land-owning producers, a certain portion of the product circulates as a commodity; and the same holds true in an economy of free artisan producers of manufactured goods. Even in feudalism, there exists a, albeit non-primary, sphere of a general market for rural produce and manufactured goods. Thus, the category of money-economy does not characterise a historical form, but belongs to the most diverse historical forms, including the most modern forms of private and State capitalism. If, therefore, one were to define capitalism not, as we do, by the class relations within the production process, but by the phenomena (put forward by our opponents) of the sphere of circulation, how might one do so? Marx answers the question we have posed on his behalf.

‘Consequently what characterises capitalist production would then be only the extent to which the product is created as an article of commerce, as a commodity, and hence the extent also to which its own constituent elements must enter again as articles of commerce, as commodities (purchased for money), into the economy from which it emerges’.

‘As a matter of fact capitalist production is commodity production as the general form of production. But it is so and becomes so more and more in the course of its development only because labour itself appears here as a commodity, because the labourer sells his labour, that is, the function of his labour-power, and our assumption is that he sells it at its value, determined by its cost of reproduction’. Therefore, the expression of generalised mercantilism, though correct, is not sufficient to characterise capitalism; rather, the characterisation lies in the mechanism of the production process: when labour is exchanged for money, we are in total and pure capitalist production.

The reader should bear Russia constantly in mind. Marx insists that, under full-blown capitalism, all self-employed workers should be reduced to wage-earners. The fact that the societies of modern States (including the Russian one) retain strata that consume the direct product of their own activities, as in the small, parcellised enterprises, does not undermine Marx’s demonstration or his revolutionary conclusions, but merely shows that they are mixed societies of full-blown capitalism, alongside forms that are monetary and mercantile, and perhaps even natural, but pre-capitalist. And it does not deprive us of the right to continue, for the purposes of historical prognosis, the study of typical capitalism in its pure model. It is the step we wished to study in depth that leads to the final disqualification of every ‘circulationist’ economy, worse than bourgeois, petty-bourgeois, and so often in left-wing disguises, which we have discussed in relation to the figure of the P ... P immediatist process in the previous paragraph entitled: The infernal accumulation.

The objection that the Marxist characterisation of the workers’ wage as the minimum value required for the reproduction of the labour army no longer holds true today, given that wage-earners are now paid a little more, has never deterred us, if only because it is invoked with equal hypocrisy by the general staffs of the two gangs of recruiters of industrial labour-power: that of American private capitalism (though capitalism has never been ‘private’) and that of Russian state capitalism, both of which puff out their cheeks with boasts of the benefits they would grant in terms of raising the standard of living!

(To be continued)