Part Three: the class character of the two circuits and their mutual contradiction

In the context of the capital social relation, C-M-C describes the characteristic participation of the working class in circulation, while M-C-M describes the characteristic participation of the capitalist in circulation. One begins the circuit C-M-C just in case he needs or wants something he does not already have. In a society in which all the products of labor appear as commodities, the majority of people begin from a position in which they do not have what they need. Therefore, they have to exchange what they have—their labor-power—for money, and with that money they thereby gain access to social wealth. M-C-M is the characteristic mode of participation of the capitalist in circulation. He is already in possession of enough money to purchase labor-power and constant capital. He then uses these to create more commodities which he then sells for a profit.

This is not to say that the capitalist never participates in the circuit C-M-C. On the contrary, the division of labor ensures that no one is in control of the entire means of production of all commodities. Even the capitalist must use some of his profit to procure his means of existence, although this is ridiculously easier for him than for the vast majority of humankind. But M-C-M is the circuit in which the capitalist participates insofar as he is a capitalist, that is, insofar as he imposes the commodity-form on labor. He may comport himself toward people in other ways, but he does not do so qua capitalist. It is for this reason that Marx calls M-C-M the “general formula of capital”. It is capital’s most primitive and general description.

Neither is this to say that the working class never participates in M-C-M. A working couple may purchase a house in order to provide themselves and their children a home. This is an example of C-M-C in which one works for money in order to use that money to buy something useful (a home). But they may also “invest” in the home in the hopes of selling it for more money in coming years. This is a form of M-C-M. Yet just as C-M-C was a process favoring the capitalist when he participated in it owing to his immense wealth, so is M-C-M a process disfavoring the working class when they participate in it. This is clear in the case of the current housing market collapse—a “crisis” disproportionately deeper and further reaching for the working class than for the capitalist class.

The two classes in the capital social relation each relate to money in their own characteristic ways, and this is also reflected in their characteristic processes of circulation. Insofar as money determines a person’s access to social wealth under the capitalist mode of production, workers fight for increases in wages (amongst other things). They want a greater share of social wealth in exchange for less work. They want to spend more time enjoying life and enriching themselves and less time serving another person. In the circuit C-M-C, M is a barrier between the working class and the fulfillment of its needs and wants. The lower that barrier, the more wealth accrues to the working class. The higher that barrier, the more wealth accrues to capital.

The capitalist by contrast pursues the circuit M-C-M’. In this circuit, C consists in (amongst other things) the labor-power the working class sells to him. The more effectively he imposes the commodity-form on labor, the greater the difference between M and M’. This means getting workers to spend more time working and to spend less time enjoying themselves. Whereas time spent working is dead time to the working class, it is living time to the capitalist. And time the working class spends enriching itself and not producing for the capitalist is dead time the capitalist wishes to eliminate. Therefore, M + ΔM is not only an increase in the capitalist’s wealth; it is also an increase in capital’s ability to impose the commodity-form on labor and to continue the general condition of forced work. The two circuits feed into and contradict one another. This contradiction is equivalent to the class struggle between worker and capitalist.

Next: the different roles of money and commodities in the two circuits

Reading Marx’s Analysis of Circulation Politically

Part Two: the goal of each circuit

The circuit C-M-C describes an interaction in which a person sells a commodity in order to buy a commodity. I exchange x commodity A for y dollars, and then I exchange y dollars for z commodity B. All other things being equal, we can assume from any transaction of this form that x commodity A has the same exchange-value (is worth as much) as z commodity B. This is given by their equation with an identical quantity of money.

Although it is rational to assume that the quantity of exchange-value is preserved in this transaction, the same does not hold true when we consider the qualitative traits of the commodities. No rational person intentionally sells a gallon of gasoline in order to use the money immediately to buy a gallon of gasoline. He takes the money and uses it to buy something he did not already have. Therefore, while the actors participating in C-M-C aim to realize identical exchange-values across their transaction, what they do makes no sense unless the first C and the second C are different sorts of things.

C-M-C is a process conditioned by consumption—the use and using up of things that satisfy wants and needs. One participates in C-M-C only in order to consume. The first C enters circulation and becomes the property of the buyer. From there it is either consumed, sold, or used to create more value. But the second C necessarily drops out of circulation. C-M-C is a form of circulation that necessarily terminates in something other than circulation. Its entire aim and reason for existence is consumption.

The circuit M-C-M describes an interaction in which one person buys a commodity in order to sell a commodity. I exchange x dollars for y commodity A, and then I exchange y commodity A for z dollars. Whereas the extremes in C-M-C were qualitatively different use-values, in M-C-M the extremes are identical use-values. One dollar is as good as the rest. Yet while it made sense to assume exchange-value was preserved over C-M-C, it makes no sense to assume the same for M-C-M. All other things being equal, I need do nothing more than hold on to my $100 in order to preserve its exchange-value. The only reason to throw $100 into circulation is if I hope to have more on the other side. Therefore, M-C-M is really M-C-M’ where M’ = M + DM. Marx calls DM “surplus-value”.

Unlike C-M-C which aims for the realization of use-value, the purpose of M-C-M is to increase exchange-value. One participates in the interaction M-C-M in order to make more money. Yet unlike commodities, we do not consume money (except by wearing it out). Unlike food, medicine, or even a yacht, money serves no purpose outside the sphere of exchange. Therefore, M-C-M is not conditioned by consumption the way C-M-C was. Its only purpose is the expansion or realization [Verwertung] of value.

Next: the class characteristics of each circuit

Reading Marx’s Analysis of Circulation Politically

Part One: Introduction

The essence of the capital social relation consists in the imposition of the commodity-form on labor by those who own the means of production. This imposition creates by force a situation in which the only access workers have to the necessities of life is by selling their labor-power to the capitalist. This turns all the products of labor into commodities. Each has a price.

The act of buying is one in which person A gives x dollars to person B in exchange for y number of commodities. Marx represents this interaction by “M-C”, money in exchange for commodities. Yet every act of purchase by A is simultaneously an act of sale by B. Marx represents this interaction by “C-M”, commodities in exchange for money.

If we put these two primitive forms of interaction together, we generate two circuits. The first circuit is C-M-C: selling in order to buy. I sell x commodity A for y dollars, and then I use those y dollars (or some of them) to purchase z commodity B. For example, I sell my labor-power by working for two weeks, and at the end of that time I get a paycheck. I use the money from the paycheck to buy groceries, put gas in the car, buy medicine, pay for daycare for my child, etc.

The second circuit is M-C-M: buying in order to sell. I buy x commodity A for y dollars, and then I sell x commodity A for z dollars (and hopefully z is greater than y). For example, I buy a house for $200,000, and I sell it ten years later for $250,000. Or I purchase materials to make a house, I hire workers to build the house, and once the house is finished, I sell it to a family to live in.

Both C-M-C and M-C-M involve acts of buying and selling. Each involves an exchange of money for commodities and vice versa. That is where their similarities end. Their principal differences are as follows:

1. The two circuits differ in their aims: while C-M-C aims at the satisfaction of concrete human needs and wants, M-C-M aims at the generation of profit.



2. From this it follows that C-M-C best describes the characteristic behavior of the working class within the capital social relation, while M-C-M best characterizes the behavior of the capitalist class within that same relation.



3. The roles commodities and money play in each circuit are different, too: while money principally measures value and facilitates exchange in C-M-C, it is principally a vehicle for the generation of more money in M-C-M.



4. Finally, given the intrinsic class character of each of these circuits and the way capital uses money to control working class access to social wealth, the self-expansion of value in M-C-M is equivalent to the deepening and expansion of the system of forced labor.

Next: The differing aims of each circuit.