Capital (Das Kapital) | Study Guide

Karl Marx

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Capital (Das Kapital) | Overview of Volumes 2 and 3


Only Volume 1 of Capital was completed by Marx during his lifetime. Drawing on Marx's extensive notes, his friend and fellow socialist Friedrich Engels completed Volumes 2 and 3 after Marx's death. These volumes are much more economically technical than the previous volume.

Volume 2: The Process of Circulation of Capital (1885)

In this second volume of Capital, Marx shifts from the production and labor-based focus of the first volume to a focus on the circulation of capital. Here, Marx investigates the relationship between the production described in the previous volume and what happens to capital in circulation.

The first part of Volume 2 is entitled "The Metamorphoses of Capital and their Circuits." He organizes circulation into three primary circuits: money capital, productive capital, and commodity capital. The circuits are created by the cycle of labor-power, production, and the sale of the commodity. Both workers and capitalists have to buy commodities and feed the system, but they enter the market in two distinctly different classes. This circuit of capital reinforces Marx's earlier concept that capitalism is concerned with the exchange-value of what it produces—and not use-value. In the end of this part Marx examines the circuit as a whole and illustrates that these three separate circuits are actually all parts of the larger circuit of capital.

Part 2, called "The Turnover of Capital," looks at the circulation of capital over time. The time required to complete the circuit is turnover. Different elements of the cycle move at different paces. For example, different commodities take different lengths of time to manufacture, and some commodities are consumed quickly while others remain in circulation for a longer duration. Additionally, capital must be distinguished as either "fixed" or "circulating." Materials and labor-power make up circulating capital, while instruments of labor (i.e., machines) are fixed capital. This multitude of different elements affects the overall turnover of capital and thus the overall profit generated.

"The Reproduction and Circulation of Aggregate Social Capital" is the final part of this volume. Its focus is on the concept of "aggregate capital" of a society, as opposed to the capital of the individual capitalist. Aggregate social capital refers to the consideration of individual capitalists together as a whole. Within this combined social capital consumption is an important element. The capitalists not only consume the labor-power of the workers, they must also consume commodities themselves as well as buying machines and other methods of production from other capitalists. The workers themselves must purchase commodities created by capitalists for their daily living. Throughout this part Marx analyzes how individual capital and consumption is interconnected in the larger aggregate social capital.

Volume 3: The Process of Capitalist Production as a Whole (1894)

Volume 3 is divided into seven parts and investigates more concrete interactions between individual capitals. The previous volumes focused on developing the overall capitalist system, addressing its process and evolution; in Volume 3 Marx strives to "locate and describe the concrete forms which grow out of the movement of capital as a whole," meaning that his goal is to look at actual manifestations of various forms of capital.

The first two parts of the book develop the concept of profit. The cost price of profit takes Marx's earlier equation of C = (c + v) + s and tweaks it to give the cost price, so the new equation is k = c + v. The k in this equation is the cost price, and the s, or surplus-value, is removed because the capitalist does not pay for the surplus-value, only the production and labor. The rate of profit can be determined by the formula s/(c + v) and is always less than the rate of surplus-value. Moreover, the faster the rate of turnover, the higher the rate of profit. Rate of profit can also be increased by finding or making cheaper raw materials, machinery, and so on. In the following chapters Marx works to turn these foundational theories into an average rate of profit across different branches of capitalism.

The third part of the book is one of the more often discussed portions of Volume 3. Its main focus is the phenomenon of the falling profit. Marx argues that if surplus-value is taken as a constant, the rate of profit will fall in proportion with the rise of the organic composition of capital (which is how Marx refers to the value-composition, as explained in Volume 1). Rising wages is one way that composition may rise and thus profits will fall. In order to keep profits from falling and keep their surplus-value constant or increasing, capitalists continually seek to expand the market.

Marx examines merchants' capital and the connection between profit and interest. He proposes that in separating interest-bearing capital from productive capital, it appears that the capital itself generates interest and profit comes to seem even further removed from the actual production. Marx introduces the trinity formula to illustrate how capital affects class and social relations: "capital—interest, land—ground-rent, labor—wages." In this formula capital produces interest, land produces rent, and labor produces wages. Profit and wages are two forms of revenue. Profit and rent are parts of the surplus-value, while wages correspond to variable capital. Ultimately, Marx holds that there are three classes in this system: "wage-laborers, capitalists, and land-owners." Each derives their revenue from the trinity equation above, meaning wages, interest, and rent, respectively.

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