Key: (page numbers for Penguin Classics edition of Capital), [page numbers for David Harvey’s Companion to Capital]

Chapter 5: Contradictions in the General Formula

• (258) What distinguishes the form of circulation relevant to capital production (M-C-M)?
  • An inverted order of succession of the two antithetical processes: sale and purchase
  • This inversion has no existence for 2 of the 3 people involved
• [92] To answer the question, “Does capital lay its own golden eggs?,” Marx starts with examining the contradictions within M-C-M + ΔM
  • Fundamental question: where does the increment, surplus value, come from?
  • [93] Classical liberal economics holds that M-C must be equivalent to a C-M; they try to explain away the discrepancy by attributing it to the field of use-values
    • Marx rejects this, can’t appeal to use values to cure a problem that derives from the equivalence of exchange-values
• (261) All attempts to represent the circulation that produces surplus-value confuses use-value and exchange-value
• (262) Will now look at exchange of non-equivalents
  • Market for commodities is frequented only by owners of commodities — the power these people exercise over each other is the power of commodities
• (263) Apart from the difference in use-values with respect to each commodity owner, there’s the distinction between their:
  1. Natural form: commodities
  2. Converted form: money
• “In fact the net result is that all owners of commodities sell their goods to each other at 10% above their value, which is exactly the same as if they sold them at their true value”
  • Money-names/prices may vary, but relations among their values would remain the same
• Formation of capital from money via surplus-value can’t be explained by assuming commodities are sold above their value or that they are bought at less than their value
  • (268) “We have shown that surplus-value can’t arise from circulation, and therefore that, for it to be formed, something must take place in the background which is not visible in the circulation itself”
• [93] Malthus: “there is a definite tendency toward a deficiency of aggregate demand in the market for the surplus commodities that capitalists produce in order to procure surplus-value”
  • i.e. not enough demand in the market for the capitalists’ surplus-value
  • Who has the purchasing power to buy the commodities?
  • Capitalists are investing/not consuming much
  • Workers can’t consume totality of product because they’re exploited
  • Conclusion: There’s an important role for class of landowners (*i.e. “bourgeois parasites”) who did the benevolent thing of consuming as much as they could in order to keep economy stable
    • Malthus’ conclusion perpetuates a class of nonproductive consuming
• Rosa Luxemburg provides compelling challenge to Marx on this point (that value must come from somewhere), arguing that imperialism, directed against non-capitalist social formations, provided a partial answer to the effective demand problem
  • [95] Still, Marx is occupied by how surplus-value is produced, which can’t be understood by appealing to process of consumption
• So, the problem continues: how do you produce a non-equivalence (surplus-value) from the exchange of equivalents?
• [97] Sure, merchants’ and usurers’ capital predated industrial capital, but the latter is the epitome of the capitalist mode of production
  • it is within the framework of a hegemonic industrial capitalism that the question of surplus-value production had to be resolved
• [98] Capital can’t emerge from circulation, nor can it apart from circulation
  • Must have origin both in and not in circulation
  • “The transformation of money into capital has to be developed on the basis of the immanent laws of the exchange of commodities in such a way that the starting point is the exchange of equivalents”