While production started out with

I. 4,000c + 1,000v = 5,000

II. 1,500c + 750v = 2,250

= 7,250

Now, if actual accumulation takes place on this basis, that is to say, if production really goes on with this augmented capital, we obtain at the end of the following year:

I. 4,400c + 1,100v + 1,100s = 6,600

II. 1,600c + 800v + 800v = 3,200

= 9,800

Then let accumulation in I continue in the same proportion, so that 550s are spent as revenue and 550s accumulated. In that case 1,100 Iv are first replaced by 1,100 IIc, and 550 Is must be realized in an equal amount of commodities of II, making a total of 1,650 I(v + s). But the constant capital II, which is to be replaced, is equal to only 1,600; hence the remaining 50 must be supplemented out of 800 IIs. Leaving aside the money aspect for the present, we have as a result of this transaction:

I. 4,400c + 550s (to be capitalized); furthermore, realized in commodities IIc, the consumption-fund of the capitalists and labourers 1,650(v + s).

II. II. 1,650c (50 added from IIs as indicated above) + 800v + 750s (consumption-fund of the capitalists).

But if the old ratio of v:s is maintained in II, then additional 25v must be laid out for 50c, and these are to be taken from the 750s. Then we have II. 1,650c + 825v + 725s.

In I, 550s must be capitalized. If the former ratio is maintained, 440 of this amount form constant capital and 110 variable capital. These 110 might be taken out of the 725 IIs, i.e., articles of consumption to the value of 110 are consumed by labourers I instead of capitalists II, so that the latter are compelled to capitalize these 110s which they cannot consume. This leaves 615 IIs of the 725 IIs. But if II thus converts these 110 into additional constant capital, it requires an additional variable capital of 55. This again must be supplied by its surplus-value. Subtracting this amount from 615 IIs leaves 560 for the consumption of capitalists II, and we now obtain the following capital-value after accomplishing all actual and potential transfers:

I. (4,400c + 440c) + (1,100v + 110v) = 4,840c + 1,210v = 6,050

II. II. (1,600c + 50c + 110c) + (800v + 25v + 55v)

= 1760c + 880v = 2,640/8,690

If things are to proceed normally, accumulation in II must take place more rapidly than in I, because otherwise the portion I(v + s) which must be converted into commodities II will grow more rapidly than IIc, for which alone it can be exchanged.

If reproduction is continued on this basis and conditions otherwise remain unchanged we obtain at the end of the succeeding year:

I. 4,840c + 1,210v + 1,210s = 7,260

II. 1,760c + 880v + 880s = 3,520

= 10,780

If the rate of division of the surplus-value remains unchanged, there is first to be expended as revenue by I: 1,210v and one half of s, or 605, a total of 1,815. This consumption-fund is again larger than IIc by 55. These 55 must be deducted from 880s, leaving 825. Furthermore, the conversion of 55 IIs into II implies another deduction from IIs for a corresponding variable capital of 27½, leaving for consumption 797½ IIs.

I has now to capitalise 605s. Of these 484 are constant and 121 variable. The last named are to be deducted from IIs, which is still equal to 797½, leaving 676½ IIs. II, then, converts another 121 into constant capital and requires another variable capital of 60½ for it, which likewise comes out of 676½, leaving 616 for consumption.

Then we have the following capitals:

I. Constant: 4,840 + 484 = 5,324

Variable: 1,210 + 121 = 1,331

II. Constant: 1,760 + 55 + 121 = 1,936

Variable: 880 + 27½ + 60½ = 968

Totals:

I. 5,324c + 1,331v = 6,655

II. 1,936s + 968v = 2,904

= 9,559