B. Initial Scheme for Reproduction on an Extended Scale

I. 4,000c + 1,000v + 1,000s = 6,000

II. 1,500c + 750v + 750s = 3,000

= 9,000 Total

Assuming that in scheme B one half of surplus-value I, i.e., 500, is accumulated, we first receive (1,000v + 500s) I, or 1,500 I(v + s) to be replaced by 1,500 IIc. There then remains in I:4,000c and 500s, the latter having to be accumulated. The replacement of (1,000v + 500s) I by 1,500 IIc is a process of simple reproduction, which has been examined previously.

Let us now assume that 400 of the 500 Is are to be converted into constant capital, and 100 into variable capital. The exchange within I of the 400s, which are thus to be capitalised, has already been discussed. They can therefore be annexed to Ic, without more ado and in that case we get for I: 4,400c + 1,000v + 100s (the latter to be converted into 100v).

II in turn buys from I for the purpose of accumulation the 100 Is (existing in means of production) which now form additional constant capital II, while the 100 in money which it pays for them are converted into the money-form of the additional variable capital of I. We then have for I a capital of 4,400c + 1,100v (the latter in money), equaling 5,500.

II has now 1,600c for its constant capital. In order to put them to work, it must advance a further 50v in money for the purchase of new labour-power, so that its variable capital grows from 750 to 800. This expansion of the constant and variable capital of II by a total of 150 is supplied out of its surplus-value. Hence only 600s of the 750 IIs remain as a consumption-fund for capitalists II, whose annual product is now distributed as follows: II. 1,600c + 800v + 600s (consumption-fund), equal to 3,000.

The 150s produced in articles of consumption, which have been converted here into (100c + 50v) II, go entirely in their bodily. form for the consumption of the labourers, 100 being consumed by the labourers of I (100 Iv), and 50 by the labourers of II (50 IIv), as explained above. As a matter of fact in II, where its total product is prepared in a form suitable for accumulation, a part greater by 100 of the surplus-value in the form of necessary articles of consumption must be reproduced. If reproduction really starts on an extended scale, then the 100 of variable money-capital I flow back through the hands of its working-class to II, while II transfers 100s in commodity-supply to I and at the same time 50 in commodity-supply to its own working-class.

The arrangement changed for the purpose of accumulation is now as follows:

I. 4,400c + 1,100s + 500 consumption-fund = 6,000

II. 1,600c + 800v + 600 consumption-fund = 3,000

= 9,000 Total, as before

Of these amounts, the following are capital:

I. 4,400c + 1,100v (money) = 5,500

II. 1,600c + 800v (money) = 2,400

= 7,900