All useful machines and instruments of trade are originally derived from a circulating capital which furnishes the materials of which they are made and the maintenance of the workmen who make them. They require, too, a capital of the same kind to keep them in constant repair." (P. 188.)With the exception of that part of the product which is constantly consumed again as means of production directly by its roducers, the following general proposition applies to capitalist production: All products reach the market as commodities and therefore circulate for the capitalist as the commodity-form of his capital, as commodity-capital, regardless of whether these products must or can function in their bodily form, in accordance with their use-values, as elements of productive capital (of the process of production), as means of production and therefore as fixed or circulating elements of productive capital; or whether they can serve only as means of individual, not of productive, consumption. All products are thrown upon the market as commodities; all means of production or consumption, all elements of productive and individual consumption, must therefore be extracted from the market by purchasing them as commodities. This truism is of course correct. It applies for this reason to the fixed as well as the circulating elements of productive capital, to instruments of labour as well as material of labour in all forms. (This, moreover, ignores the fact that there are elements of productive capital which are furnished by nature, are not products.) A machine is bought in the market, as is cotton. But it does not follow from this by any means that every fixed capital stems originally from some circulating capital; that follows only from the Smithian confusion of capital of circulation with circulating or fluent, i.e., non-fixed capital. Besides, Smith actually refutes himself.
According to him himself, machines, as commodities, form a part of No.
4 of the circulating capital. Hence to say that they come from the circulating capital means only that they functioned as commodity-capital before they functioned as machines, but that materially they are derived from themselves;so is cotton, as the circulating element of some spinner's capital, derived from the cotton in the market. But if Adam Smith in his further exposition derives fixed capital from circulating capital for the reason that labour and raw material are required to build machines, it must be borne in mind that in the first place, instruments of labour, hence fixed capital, are also required to build machines, and in the second place fixed capital, such as machinery, etc., is likewise required to make raw materials, since productive capital always includes instruments of labour, but not always material of labour. He himself says immediately afterwards: "Land, mines, and fisheries, require all both a fixed and a circulating capital to cultivate them;" (thus he admits that not only circulating but also fixed capital is required for the production of raw material) "and" (new error at this point) "their produce replaces with a profit, not only those capitals, but all the others in the society ." (P. 188.) This is entirely wrong.
Their produce furnishes the raw material, auxiliary material, etc., for all other branches of industry. But their value does not replace the value of all other social capitals; it replaces only their own capital-value (plus the surplus-value). Adam Smith is here again in the grip of his physiocratic reminiscences.
Considered socially it is true that the part of the commodity-capital which consists of products that can serve only as instruments of labour must -- unless they have been produced to no purpose, cannot be sold --sooner or later function as instruments of labour, i.e., with capitalist production as their basis, they must, whenever they cease to be commodities, form real, as before they formed prospective, elements of the fixed part of the social productive capital.
But there is a distinction here, arising from the bodily form of the product.
A spinning machine for instance has no use-values, unless it is used for spinning, unless therefore it functions as an element of production and consequently, from the point of view of the capital-ist, as a fixed component part of a productive capital. But a spinning machine is movable.
It may be exported from the country in which it was produced and sold abroad directly or indirectly for raw materials, etc., or for champagne. In that case it has functioned only as a commodity-capital in the country in which it was produced, but never as fixed capital, not even after its sale.
