II. The Two Departments of Social Production

   The total product, and therefore the total production, of society may be divided into two major departments:

   I. Means of Production, commodities having a form in which they must, or at least may, pass into productive consumption.

   II. Articles of Consumption, commodities having a form in which they pass into the individual consumption of the capitalist and the working-class.

   All the various branches of production pertaining to each of these two departments form one single great branch of production, that of the means of production in the one case, and that of articles of consumption in the other. The aggregate capital employed in each of these two branches of production constitutes a separate large department of the social capital.

   In each department the capital consists of two parts:

   1) Variable Capital. This capital, so far as its value is concerned, is equal to the value of the social labour-power employed in this branch of production; in other words, it is equal to the sum of the wages paid for this labour-power. So far as its substance is concerned, it consists of the labour-power in action, i.e., of the living labour set in motion by this capital-value.


   2) Constant Capital. This is the value of all the means of production employed for productive purposes in this branch. These, again, are divided into fixed capital, such as machines, instruments of labour, buildings, labouring animals, etc., and circulating constant capital, such as materials of production: raw and auxiliary materials, semi-finished products, etc.

   The value of the total annual product created with the aid of this capital in each of the two departments consists of one portion which represents the constant capital c consumed in the process of production and only transferred to the product in accordance with its value, and of another portion added by the entire labour of the year. This latter portion is divided in turn into the replacement of the advanced variable capital v and the excess over and above it, which forms the surplus-value s. And just as the value of every individual commodity, that of the entire annual product of each department consists of c + v + s.

   Portion c of the value, representing the constant capital consumed in production, does not coincide with the value of the constant capital employed in production. True, the materials of production are entirely consumed and their values completely transferred to the product. But only a portion of the employed fixed capital is wholly consumed and its value thus transferred to the product. Another part of the fixed capital, such as machines, buildings, etc., continues to exist and function the same as before, though depreciated to the extent of the annual wear and tear. This persistent portion of the fixed capital does not exist for us, when we consider the value of the product. It is a portion of the capital-value, which exists independently and alongside of this newly produced commodity-value. This was shown previously in the analysis of the value of the product of individual capital (Vol. I, Ch. VIII.). However, for the present we must leave aside the method of analysis employed there. We saw in the study of the value of the product of individual capital that the value of which the fixed capital was shorn through wear and tear is transferred to the product created during the time of wear, irrespective of whether or not any portion of this fixed capital is replaced in kind during this time out of the value thus transferred. At this point in the study of the total social product and of its value, however, we are compelled, at least for the present, to leave out of account that portion of value which is transferred from the fixed capital to the annual product by wear and tear, unless fixed capital is replaced in kind during the year. In one of the following sections of this chapter we shall discuss this point in particular.

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   We shall base our study of simple reproduction on the following scheme, in which c stands for constant capital, v for variable capital, and s for surplus-value, assuming the rate of surplus-value s/v to be 100 per cent. The figures may indicate millions of marks, francs, or pounds sterling.

I. Production of Means of Production:
      Capital. . . . . . . . . . . . . 4,000c + 1,000v = 5,000
   Commodity-Product . . . 4,000c + 1,000v, + 1,000s = 6,000,

   existing in means of production.

II. Production of Articles of Consumption:

      Capital . . . . . . . . . . . 2,000c + 500v = 2,500
      Commodity-Product . . 2,000c + 500v + 500s = 3,000,
existing in articles of consumption.

   Recapitulation: Total annual commodity-product:

      I. 4,000c + 1,000v + 1,000s = 6,000 means of production
      II. 2,000c + 500v + 500s = 3,000 articles of consumption.

   Total value 9,000, exclusive of the fixed capital persisting in its natural form, according to our assumption.

   If we were now to examine the transformations necessary on the basis of simple reproduction, where the entire surplus-value is unproductively consumed, and leave aside for the present the money-circulation that brings them about, we should obtain at the outset three great points of support.

   1) The 500v, representing wages of the labourers, and 500s, representing surplus-value of the capitalists, in department II, must be spent for articles of consumption. But their value exists in articles of consumption worth 1,000, held by the capitalists of department II, which replace the advanced 500v and represent the 500s. Consequently the wages and surplus-value of department II are exchanged within this department for products of this same department. Thereby articles of consumption to the amount of (500v + 500s) II = 1,000, drop out of the total product.

   2) The 1,000v plus 1,000s of department I must likewise be spent for articles of consumption; in other words, for products of department II. Hence they must be exchanged for the remainder of this product equal to the constant capital part, 2,000c. Department II receives in return an equal quantity of means of production, the product of I, in which the value of 1,000v + 1,000s of I is incorporated. Thereby 2,000 IIc and (1,000v +1,000s) I drop out of the calculation.

   3) There still remain 4,000 Ic. These consist of means of production which can be used only in department I to replace its consumed constant capital, and are therefore disposed of by mutual exchange between the individual capitalists of I, just as the (500v + 500s) II by an exchange between the labourers and capitalists, or between the individual capitalists of II.
Let this serve for the moment to facilitate the understanding of what follows