circuit of capital

tags : [[capitalism]] [[Capital]]

Capital Vol. 1

The circuit of capital, as described in [[Capital Vol. 1]], reveals itself in two ways:

1. A laborer works to produce a commodity (C). This commodity is sold in exchange for money (M). Later, the laborer will spend that money on another commodity, thus creating the process C-M-C.
2. Alternatively, one could begin the process with money. This is how a capitalist may experience the process. Money is used to purchase commodities, which are in turn sold to make money. We call this M-C-M.

It would be ridiculous for a capitalist to not make money on this transaction, so the capitalists are able to perform a slight of hand, and the first M is necessarily less than the second M, therefore we can say the process is really M-C-M’, where M’ > M.

Capital Vol. 2

In Capital Vol. 2 Marx greatly expands on what the circuit of capital is.

The general formula for the circulation of capital is:

\(M-C…P…C’-M’\)

These phases of the circuit of capital are:

• [[commodity capital]] (C)
• [[money capital]] (M)
• [[productive capital]] (P)