MIA > English > Grossmann

Henryk Grossmann

The gold production in the reproduction

scheme of Marx and Rosa Luxemburg
(1932)

From Festschrift for C. Grünberg , Leipzig, 1932).

Thanks to Rick Kuhn.
Transcription & HTML Mark: One O'Callaghan for the Marxists' Internet Archive .

Marx's portrayal of the production of gold within the framework of his two-part reproduction
scheme has been the subject of the greatest criticism on the part of Rosa Luxemburg . In spite
of the importance of the controversial issue and the far-reaching consequences which would
arise for the Marxian system from R. Luxemburg's criticism , if it were correct, the question
raised by R. Luxemburg was not further discussed in the Marxist literature. The following is
an attempt to clarify the problem.

IR Luxembourg's position on the Marxian research method

As I have pointed out elsewhere, the Marxian method of the approximation method consists
of three members, which form an inseparable whole : namely, from an abstract scheme of
reproduction as an aid to mental analysis; As well as hypothetical, simplifying assumptions ;
And, finally, from the subsequent corrections to the provisional result obtained with the aid
of the above-mentioned means. These three elements of the Marxian procedure thus form
only parts of a unitary methodological construction of our thought, so that each part alone,
without the other two, loses all meaning for the knowledge of truth. The Marxian pattern of
reproduction alone, and the sequence of production and distribution presented in it, therefore,
do not claim to be an image of concrete capitalist reality; The schema does not apply directly
to the empirically given production mechanism, but merely describes a "normal"
reproduction process, which is carried out under fictitious, simplifying assumptions, and thus
represents only a preliminary stage of knowledge, the first stage in the process of
approximation to the real reproduction process.

Marx's methodologically deliberate method of gradual approximation, which is of decisive

importance for the understanding of Marx's system, is not seen by R. Luxemburg . Because
she disregards this connection, she breaks the pattern of reproduction out of her logical
connection with the two other components of the Marxian approach, so that in this isolation
she loses her methodological value and necessarily leads to the distortion of the results of
Marx's research. The fact that, without being aware of it, R. Luxemburg herself felt the
inadequacy of her assessment of the pattern of reproduction, she shows the fact that she
repeatedly repeated her assessment of the Marxian scheme, and gave no fewer than three
different interpretations, mutually exclusive.

She begins her book with a dithyrambus on the Marxian reproduction scheme. It is not only
because of the " position of the problem of the reproduction of total social capital contained
in it " that the schema of "the imperishable merits of Marx about the theoretical national
economy." "The capitalist reproduction problem contains within itself ... a number of exact
relationships ... their union is the problem, both in their contradiction and in their
conformity" ( Accumulation , p. 76). In the history of the national economy, RL says further,
"we only encounter two attempts at an exact representation of the problem: at its threshold, at
the father of the Physiocrats' School, Quesnay , and at its end, in Karl Marx ". But the great
historical achievement of Marx was not merely the position of the problem . "The Marxian
schema is the scientific solution of the problem " (p.76). Marx had shown that the two
divisions of his scheme are "dependent on one another" and therefore "must have certain
proportions " (p.55), namely, "the ratio of both is attributed to an exact value ratio" (p.78) ,
That I (v + m) = II c (p.57). "The figures of this (Marxian) formula express values of value ...
which are arbitrary in themselves, but their relations are exact " (p.55). Even more! R.
Luxemburg is not satisfied with the observation that the Marxian schema, under the above
assumptions, shows the solution of the problem of reproduction, that is, the fictitious
conditions under which only a "normal course" of reproduction can take place. Instead of
looking at the Marxian schema as what it really is: as a mental aid for the analysis of the
concrete reality, it hypostatizes the reproduction scheme and attributes it to an objective
existence! The exact proportions of the Marxian scheme, it says, form the "general absolute
foundation of social reproduction" (p. 56), not only for capitalist production, but, mutatis
mutandis, for every regulated, planned economic order , Eg for the socialist "(p.75, 103). The
question raised by RL as to whether the scheme is "objective, social existence (!)" (P.47) is
positively answered: "This proves the objective social validity of the schema" (p.102).

We are not interested in the strange result which R. Luxemburg made: the assertion that this
isolated and unrealistic schema already directly reflects economic reality. In fact, the
provisional simplification of the Marxian scheme goes so far that it does not take into account
the fixed capital which is so important for the real economic process, nor the commercial and
banking capital as much as the basic rent ; That there are no average pro fi cates in it, but that
different pro fi les exist in both departments; And that, therefore , there are in the schema no
production quotas but only abstract values. And such a scheme should definitely represent
capitalist reality?

What is important to us in the confusion between a preliminary methodological fiction and

reality by R. Luxemburg is the glorification of the Marxian schema, with its exact proportions
shown by Marx . For in this hypostatism of the scheme, in the objective existence ascribed to
it, the fact is expressed that R. Luxemburg assigns the highest truth to him. Let his figures be
fictitious and arbitrary, their relations, says R. Luxemburg , are exact, and remain valid not
only for the capitalist but also for socialist society.

But what a different picture of the importance of the reproduction scheme is drawn up by R.
Luxemburg where it transcends Marx "critically."
I have shown in the above-mentioned treatise on the "modification of the building stage"
(p.328, 332) that the schema, if it is to conceive of the essential conditions of capitalist
reproduction, can not grasp arbitrary branches of production; Production apparatus: I. in the
production of means of production, and II. In the production of consumer goods. This
division forms the basis and starting-point of Marx's polemic against A. Smith , D. Ricardo,
and their successors in the nineteenth chapter. Of the 2nd volume of capital ( Earlier
representation of the subject ). Also in the III. Marx has returned to this question of the
volume of his life, and says: "We have divided all capital into two great classes: Class I,
which means of production, and Class II, which produces means of individual consumption.
"Finally, Marx speaks of the" absolute correctness of this division ... It is in fact not a
hypothesis but a mere expression of a fact "(Marx, Kapital , III / 2 , p.372).

According to Marx, too, the reproduction of the money material does not alter the correctness
of this division, for Marx , as is well known, expects the production of gold for metal
production at all, and thus, as a consequence of the production of gold, To Class I, the
category which includes the production of means of production "( Kapital , II , p.

Rarely, Marx has expressed himself as unequivocally and unambiguously as he does here.
And yet, precisely against this "absolute correctness" emphasized by Marx in the division of
the schema, Rosa Luxemburg turns . In spite of the initial apotheosis of the Marxian scheme,
she now believed she had discovered a serious constructional defect in the scheme, which led
her to "deviate from Marx ." The classi fi cation of money in the abovementioned scheme is
erroneous. Marx had committed the sin of " confusion of means of exchange with means of
production", which had led him to "unpardonable" incompatibilities (p.72). For money was
not to be attributed either to the means of production, or to the means of consumption. As an
exchange medium, it fulfills a special circulation function within the reproduction
mechanism. "Thus the (Marxian) schema must appear to be incomplete." To him, "the third
department should be the production of means of exchange, for which it is characteristic that
they are neither for production nor for consumption" (p. 72).

One must be astonished at the nature of Rosa Luxemburg's objections . Should Marx really
have confused such elementary categories as exchanges and means of production? But once
Marx failed to recognize this elementary truth as assured by R. Luxemburg , the more
complicated realization that "the classification of money production into the abbot," violates
all the factual and value proportions of the Marxian scheme, and takes its validity Would
"(p.73).

On the other hand, R. Luxemburg asserts that only the segregation of money production into
a particular third division and its representation "in its organic intertwining with the other two
departments ... would provide the exhaustive ( HG ) schema of the capitalist whole process in
its essential points" (P.71).

What remains after this criticism of the Marxian schema practiced with admirable dialectics?
Nothing but a rubble heap! What is their dialectics? First of all, R. Luxemburg, the "exact"
proportions of proportion, as revealed in the Marxian schema, are praised as the greatest
scientific achievement of the theoretical economy since Quesnay , the principle of the highest
truth-content, namely, objective existence. Subsequently, these "exact" proportions prove to
be illusory, they do not exist at all and can not even exist without a third division in the
schema! The scheme is incomplete and misleading because the division of all its "factual and
value proportions" must be "infringed", so that it loses "its validity" at all. Thus the schema of
R. Luxemburg is overthrown from the pedestal of the ingenious "scientific solution" of a
problem into a scientific nothingness, and declared unsuited to show exhaustively the
capitalist mode of production in its " essential points. " Thus, in order to save the Marxian
scheme, we must first surrender it in the old form, and preserve the dilapidated building by
the addition of a third division before the collapse. In the face of the rubble heap, which is left
over from the Marxian scheme, one wonders wonderingly what the genius Marx's "scientific
solution" to the reproduction problem actually consists of. One remembers the poetic words:
"Oh, how beautiful is the mare, unfortunately she is dead!"

But the fact that the above criticism strongly rejects the foundations of the Marxian schema is
proved by the fact that Rosa Luxemburg thinks of an improvement of the scheme and seeks to
complete it by a third section, that it is a great principle in itself as an instrument The
recognition of the economic phenomena: the schema is to be a direct mental reflection of
reality . It is true that, in this respect, there are still major, indeed essential, shortcomings, and
RL endeavors to remedy these shortcomings by means of suggestions for improvement, but
RL seems to have no doubt in the principle of a direct correspondence between the schematic
formula of reproduction and the empirical reality: Their proposals to improve the Marxian
schema to a greater degree than Marx had done with it were intended to be in harmony with
reality !

R. Luxemburg , however, does not stand by these results of her criticism of the Marxian
scheme. Their absolute misunderstanding of the scientific task which the schema has to fulfill
in Marx's analysis, their conception that the schema, isolated from the other components of
the Marxian approximation method, is already and in itself the mirror image of reality That
the scheme does not agree with the experience that there is a gaping contradiction between
the scheme and the real course of the economy. In this way, she doubts whether the scheme is
at all a means suitable for the knowledge of reality. She now confronts the Marxian schema
with "objective, social existence," and now turns to a directly opposite - now third - view of
the scheme: that the schema (the "paper" scheme, as it says, the empty mathematical formula)
Is in contradiction, indeed, contrary to real life. According to the mathematical formula ,
according to the scheme, the reproduction proceeds smoothly. But " what does the matter
look like in life ?" (P.76). Ironically she now speaks of the "astonishingly smooth results" of
the Marxian schema, "because we always make only certain mathematical exercises with
addition and subtraction" ... "because the paper can be patiently described with mathematical
equations" (p.92).

There is still no hesitation in drawing the conclusion and rejecting the scheme. The three
conceptions of the schema are still juxtaposed in their book: a stark proof of their
philosophical and methodological awkwardness.

But when R. Luxemburg was later condemned by her critics, especially by the criticism of
Otto Bauer, and by its scheme, which seemed to demonstrate the unrestrained accumulation,
she decided for the above-mentioned third conception, Predicates for the schemata "(
Anticritics , p. 6), while the schemata for the knowledge of reality are worthless because the
economic problem of accumulation" has nothing to do with mathematical formulas "(p.6).
The Dithyrambus is forgotten in the Marxian schema with its "exact relations". Now she
becomes the sharpest adversary from a friend of the scheme, who denies him any scientific
value! This turn is, of course, obscured by the fact that R. Luxemburg is fighting primarily
against the harmonistic results of the sche- matic analysis of the reproduction process by
Tugan-Baranovsky , Hilferding , Eckstein, and O. Bauer . However, the manner in which it
exercises its anticritics shows that not only the harmonistic results of the schematical
representation of its critics are questioned , but the possibility of a schematic apprehension of
reality itself.

With derision, she now speaks "of the orthodox cult of formulas " (p. 30) and of schemata
"which can be carried on infinitely on paper" (p. 58). Instead of proving objectively the errors
of construction of the Bauers scheme, it is limited, and this is the only criticism which it
exercises in the construction of Bauer's formulas as such, to raise the objection against O.
Bauer , V "as used by Marx in the abbreviated designation of constant and variable capital,"
and added a few Greek letters: "four tables, with broad and oblong, egg-shaped and four-
storey formulas" (p.32), making his tables even more discouraging (P.31). In answer to the
question whether the capitalists find a progressively expanded sales market for their
"expanded production, and where they find it," no arithmetic operations with fictitious
numbers On the paper, but only the analysis of the economic social connections of production
"( p. 32 ). It mocked "the most delightful quiproquo," the confusion of the schemata with
reality, "the naive notion that mathematical formulas are the principal object" and not the
economic reality to be explored. R. Luxemburg finally arrives at the conclusion that "
mathematical schemata can not prove anything at all on the question of accumulation, since
their" condition is untenable "(p.

In this way, a dichotomy between the scientific methods of representation and the economic
reality to be presented is reconstructed by R. Luxemburg : the papery formula is compared
with reality, whereas this formula, the schema, is merely an aid to the mental representation
of reality! The analysis of economic social relations is brought about in opposition to the
arithmetic operations of the schema, although the schema claims to be an instrument of the
required analysis of the social contexts!

RL now laughs at the "orthodox cult of the formulas" and speaks of the "frightening"
Marxian schemata. In the area of methodology, this leads to the questionable proximity of R.
Liefmann and R. Wilbrandt , whose statements on the Marxian model of reproduction are
described here as a curiosity Which are characteristic of the level of the bourgeois economy
in its relation to Marxism. "It should not be thought possible," says Liefmann , "that such
equations ... can be discussed as an economic theory on the whole, and no man has so far
noticed the nonsense that lies in it." [2] Wilbrandt , on the other hand, To Marx's and Engels's
so-called 'formula of the formula', to the 'external' representations, "which are characteristic
for Marx , but which he himself" overemphasized. "One of the causes of the" turning away of
active practitioners from all Marxism. " [3]

What would one think of a physicist who wanted to bring the "formulas" of theoretical
physics "with his fictitious numbers" (to speak with R. Luxemburg ) in contrast to the
"connections of nature" to be explored? Perhaps this "formula-work" will produce a dislike of
"vital practitioners" (to use the beautiful word of Wilbrandt) against the science of physics?
In any case, science would not lose much.

Rosa Luxemburg, by the way, criticized the criticism of the scheme by not only meeting the
neo-harmonists Hilferding , Tugan-Baranowsky, and Otto Bauer , but she completely
deprecated her own remarks.

If only the analysis of the living reality, but not arithmetical schemata with fictitious figures,
can be given for the collection of the contexts of production, if the schemata are worthless for
this analysis, then it is quite immaterial whether these fictitious schemata contain only two
compartments (As in Marx, for example), or whether, as R. Luxemburg proposes, they should
have three divisions. It is also incomprehensible how the separation of gold production into a
third department (apart from the two departments for means of production and consumption)
can "supply the exhaustive scheme of the capitalist process in its essential points ." Rosa
Luxemburg has been involved in irreconcilable contradictions.

II. Division or division of the scheme?

If we had hitherto examined R. Luxemburg 's method of research , its relation to the
reproduction scheme, it is now necessary to investigate its own performance. For the purpose
of our investigation, let us examine the ground of Luxembourgish Marx criticism and
examine it. Their objections raised against the division of the Marxian scheme into their
positive content. Is it correct that the classification of gold production in Dept. I of the
Marxian scheme violates all factual and value proportions? Thus, that for the production of
gold in the schema a special third division must be separated out, and that a schema of
reproduction which is exhaustive in its "essential" points is reached?

Has R. Luxemburg proved the following for her subsequent objections? She says:

"By the way, a look at the scheme of reproduction itself reveals the incalculiencies which
would lead to the confusion of the means of exchange with means of production" (
Accumulation , p.72).

"The questionable results" of the Marxian division are described as follows:

"The workers of the department I g buy with the money received from the capitalists on
wages (5 v ) means of consumption from the department II."

But since the capitalists II do not know how to use them as a constant capital, the Marxists let
Marx ignore this amount of money. However, in order not to create a deficit in constant
capital of II, " Marx finds the way out to transfer the manko from II c to II m . Hence the
Marxian "result: a part of the surplus value is stored as money treasure" (p.73, 74).

R. Luxemburg then mockingly turns to Marx and says:

"The result is strange enough. By taking account of the reproduction of merely the annual
wear and tear of the money-material, the money was suddenly put up , an excess of money.
This surplus, it is not known why, at the expense of the capitalists of the livestock department
who are to be castigated, does not arise in order to expand their own surplus-value
production, but rather provide food enough for the workers of gold production. "

"For this Christian virtue, however, the capitalists of Dept. II are badly rewarded... Since now
part of the product of I is in money that can not be used as a means of production, II can not,
in spite of abstinence, "And the capitalists of Division II are not even in a position to
undertake their production on an earlier scale".

R. Luxembourg reaches the conclusion :

"And thus the presupposition of the schema would be simple reproduction, violated in two
directions: the estimation of the surplus-value and the deficit of the constant capital. These
results obtained by Marx themselves prove that the production of gold can not possibly be
accommodated in one of the two divisions of its scheme without rejecting the schema itself
"(p.77-75).

This is the ominous "proof" of R. Luxemburg ! This kind of criticism of Marx , which is
approaching a treatment of Marx as a "dead dog," is not without pain, that even the leading
minds of socialist theory are accustomed, with a few cheap mocking remarks to the rest of
them Even as important recognized problems! R. Luxemburg, on the other hand, feels that the
above-mentioned proof of the "invincibility" of the Marxian schema is not sufficient. Further
proof is needed. It searches and finds it also soon: from the well-known fact that the Marxian
manuscript, which deals with the production of gold, lacks a page, so that the "investigation
on the exchange of newly produced gold", which was announced by Marx (K.II, p. 472) (Ie,
the I c of gold production, HG ) has not taken place, R. Luxemburg wants to construct a
further point of support for his own conception, and says that the announced investigation
would " ) Increased the inconveniences (of the Marxian scheme) "(p.75).

It is in this complicated way of thinking that R. Luxemburg's somewhat scholastic

disconcertion: not the urge for knowledge and knowledge, but merely the will to crush the
opponent in the dispute, speaks of this argument. Hence the one-sided elimination of those
favorable to one's own conception and the concealment of unfavorable moments. Hence the
invocation of not only the present but also of the absent witness. They too are to testify to R.
Luxemburg and to Marx ! Instead of reconstructing the missing page of the Marxian
manuscript on the basis of an analysis, and thus proving the correctness of her thesis, she
demands that we should believe her insurances, the missing side would confirm her criticism.
Finally, the fact that R. Luxemburg, at the end of her biting criticism of the Marxian scheme,
confirms to no one else - as Marx himself! "By the way, Marx himself confirms our view and
exhausts the question in two words if he says just as aptly: 'Money in itself is not an element
of real reproduction'" (p.75). Thus, since Marx has observed that gold is in itself no element
of real reproduction, he has already admitted, according to R. Luxemburg, that his schema is
false with only two sections, he has admitted that the money- But to be represented in a
special third division! She sees in this the proof that Marx did not want to say what he
actually said and what makes the title of his scientific greatness, but rather what he has not
said, has rather denied! With this "analysis" R. Luxemburg has reached the summit of
sophistical interpretation. The result to which it came is expressed in a scholastic manner
from a single Marxian theorem: innocent "two words" of Marx are more relevant to it than
the whole Marxian analysis of the reproduction process of gold and commodities, and more
than all the "exact relations" of the schema Its "absolute correctness" of the division. In spite
of all Marx's arguments for the correctness of the division, Marx is, in the end, not correct,
but R. Luxemburg proper.

This mode of thinking of R. Luxemburg is still evident in another very important direction. It
is to be expected that R. Luxemburg will not be left with the merely negative result of her
Marxist criticism. If the classification of gold production into Division I of the scheme
violates all its proportions, if, by the introduction of gold production as a third division, "the
exhaustive scheme" of the capitalist reproduction process would have been delivered, the
conclusion is self-evident It would be worthwhile to undertake the reconstruction attempt of
such an exhaustive scheme. Paris vaut bien une messe!
Here are the three departments of R. Luxemburg (p.72):

I 4000 c + 1000 v + 1000 m = 6000 production means

II 2000 c + 500 v + 500 m = 3000 consumer goods
III 20 c + 5 v + 5 m = 50 funds.

How do the sales take place in such an "exhaustive" scheme? Here we find something
unexpected: in the extensive, almost 450-page book of R. Luxemburg , the opportunity for
long, more than a third of the book was filled with historical conflicts. Only for the cardinal
task formulated by R. Luxemburg himself, for the demonstration of the organic intertwining
of the gold production with the other two production departments, she has found neither
space nor time! In fact, their book does not contain a single word of the Enlightenment on
how the exchange conditions of a three-part scheme would be mutually dependent and
realized. This fact already shows the infertility of Luxembourgish criticism, proving that this
criticism is purely verbal and formal, and is not supported by any deeper thought, and that it
was not only able to produce a positive counter-proof of its insufficiency against the Marxian
schema but also That she did not even try to make it! If, however, she were to undertake him,
mere experiment would have had to show her-and we shall now give a more detailed
explanation-that her three-part schema is basic.

In order to reduce the problem of gold production, as a partial problem of the capitalist
reproduction problem at all, to its simplest and clearest expression, our analysis must be
restricted to gold production for monetary purposes ( Marx also bases this assumption on his
analysis, Capital II, p.314) Since the production of gold as a material for industrial purposes
is by no means different from any other metal production (which is included in Division I of
the scheme) and is therefore not a problem . The only problem is the monetary gold
production. Only with regard to these did R. Luxemburg raise her critical objections to Marx .
We also have to deal with their examination.

One is to be "admitted" in advance: through the classification of the gold production into the
department I difficulties arise . If we consider that the production of gold in the range of 20 c
+ 5 v + 5 m = 30 is included in the abovementioned scheme, the product of Division I (means
of production) of the order of 30 is gold in the year Only 5970 in the form of means of
production. Since, however, the consumed means of production of Dept. I (= 4000 c ) and
Dept. II (= 2000 c ) must be replaced from the annual product of Division I, it is clear that a
deficit of constant capital arises Constant capital of both departments can not be replaced in
the amount of 30, since no production means (machines, buildings, etc.) are produced from
gold, or as Marx says "money is not itself an element of real reproduction". This difficulty,
however, has not been discovered by R. Luxemburg, but Marx himself has referred to it and
has declared its solution . But since, as Engels observes, they are not found in the manuscript,
the real task of the Marxists was to reconstruct the lost part of the Marxian manuscript on this
point. On the other hand, R. Luxemburg negates the possibility of solution on the basis
announced by Marx, and prefers to abolish this basis, namely, the two-part reproduction
scheme.

But like all its problems and solutions, the "solution" given in this case is purely external,
mechanical . If commodities appear indispensable to capitalism, it simply adds to the
capitalist world from the outside the non-capitalist space as a commodity consumer, and the
difficulty is "solved". Similarly, in relation to our problem. If difficulties arise in the
production of gold on the basis of a duplicate scheme for the reproduction problem, a third
department for gold production is simply added instead of the attempt at a solution, and the
difficulty is thus "settled".

But can the difficulty be solved by the mere mechanical-formal separation of the gold
production into a special third division? Will the mentioned deficit of constant capital
disappear by changing the technical representation? How so? In what way? This is what we
learn from RL with no syllable.

For the Marxian problem of the reproduction process, the formal argument, whether the
schema should be two or three parts, is without

Matter For it is not important to construct classifications, but to get clear concepts about the
essence of the problem . If one is clear about the differences in the function of gold as
commodity and as money (circulation means), then it is easy to deal with the problem both in
a two- and three-part scheme. The problem itself, the "difficulty," is much greater than RL,
and it must be explained from the character of money as a means of circulation , but not from
the formal two- or three-part presentation.

III. Gold as a commodity and as a means of circulation

Before we proceed to the representation of the production of gold, let us first discuss the
preliminary question: what are the relative quantities of gold, the problem of the reproduction
of money? The answer is given by the Marxian Circulation Law ( Zur Kritik , p. 149): the
money required for the circulation is determined at the given speed of the money by the
commodity and the commodity prices which are to be realized minus the equilibrium which is
compensated by one or another Period (credited) payments. In addition, the money supply
must be sufficient for fluctuations in the circulation of money, which arise partly from
fluctuations in the average rate of circulation, and partly from the various and changing
proportions, in which money functions in cash transactions or in credit transactions ( K. II,
313).

In the above-mentioned Marxian scheme of simple reproduction, the annual product to be

sold in each department is 9,000 units of value. If this commodity was to be sold at once (eg
abroad), the foreign buyer would have to have a capital of 9,000. If the turnover were tenfold,
the amount of money required would be reduced to 900.

For our analysis, let us suppose that there are four transactions per year in the scheme, that a
quantity of money of 2250 is sufficient for the sales of 9,000. However, there must also be a
reserve reserve for the abovementioned fluctuations in the circulation of money. If it is
assumed to be one-ninth of the total quantity of 2250, that is to say, 250, (the ratio is
arbitrarily chosen), the total quantity of money required for circulation is 2500. Let us assume
for the sake of simplicity that the annual loss of money (The actual coefficient of wear is
considerably smaller), the production of gold must replace only this quantity of 25 g. A year ,
on condition of the simple reproduction where the quantum of the annual product is
circulated yearly with the same amount of money. (Marx, K.I. , 314, 325.)

From the viewpoint of gold reproduction, the question now arises as to which money mass
belongs to the reproduction scheme: 2500 g or only 25 g ? Does the scheme include all the
masses of money that have been accumulated for centuries, or only the new product of gold,
obtained last year, for the replacement of money-making?

R. Luxembourg generally speaks of "funds" or "means of exchange", which are part of a third
section of the scheme (p.72). In this way, however, she furnishes the proof that she has been
unclear with regard to the fundamental tasks and functions of the Marxian scheme of
reproduction. If, on the part of R. Luxemburg, the objection is raised that the Marxian scheme
treats gold production only as a metal production (within department I), but does not consider
gold in its special function as a means of circulation, New gold (= 25 g ), but the whole mass
of money (= 2500 g ), which has been accumulated over the course of centuries, because all
this money is the means of circulation . The reproduction scheme would therefore have to
look as follows from its own point of view (the fractions in Dept. III have been omitted):

I 4000 c + 1000 v + 1000 m = 6000 production means

II 2000 c + 500 v + 500 m = 3000 consumer goods
III 1668 c + 416 v + 416 m = 2500 money.

Against this consequence, R. Luxemburg frightens back, and in contravention of her own
demands, she merely places the newly produced gold in the third section, namely III. 20 c + 5
v + 5 m = 30, thus gold is not in its character as a circulating medium , but gold in its
commodity character , as part of the new-produced and sales-seeking total annual product.
And rightly so. For the Marxian schema, the task is to give a picture of the annual product
and its paragraph , similar to the tableau économique Quesnays ( K. I, 604, K. II, 300, 362).
Only the newly produced gold (= 25 g ) has this characteristic, which does not differ in this
respect from the other products of the annual product. [4] On the other hand, the issue of
money is a means of circulation . This money accumulated over the course of centuries is not
the product of the last year of production, it does not act as a commodity , it is not deducted ,
it only conveys the sales of the newly produced commodities, and thus does not belong to the
scheme . (Marx, K. II, p. 478). Thus " money" was not included by Marx in his scheme at all,
either in the abbot, or in the abbot, and, as we shall see at once They do not represent Marx
as a component of the schema. [5] The money is used but not consumed; They are therefore
not reproduced, but merely reckoned . Thus what is captured in gold in the Marxian
reproduction scheme (in Dept. I) is merely the gold quantum necessary to replace the wear
and tear of the money.

If R. Luxemburg merely substitutes the newly produced gold (25 g ) in the scheme, it grasps
the gold in its product character, but not as a circulating agent (2500 g ). But if this is the
case , then the only economic reason to which it refers is to separate the gold as a special
third division of the scheme. For gold as a commodity need not be separated from the other
commodities of the scheme, and belongs, like the rest of the metal production, to the abbot I.

IV. Impossibility of an exact quantitative determination of the size between the "funds"
and the other two departments of the reproduction scheme

We shall now prove that the demand of Rosa Luxemburg, after the separation of the "funds"
as a third division of the scheme, is in contradiction with the logical assumptions on which
the scheme is based. The scientific task of the scheme is, as we know, in the investigation of
the qualitative and quantitative relations of magnitudes between the various elements of the
annual product , relations of size, which are the condition for the disturbance of the
reproduction. It is clear now that only the c , v , and m components of the annual product of
the last production cycle of the two divisions I and II, and therefore the newly produced gold
as part of this year 's product, have such quantitative relationships. Such quantitative
relations of size, however, do not exist and are also impossible between the elements of the
scheme on the one hand, and the total mass of money necessary for the circulation on the
other. It is clear from the Marxian Circulation Law that "the scale of production on a
capitalist basis, independent of its absolute limits, is independent of the amount of the capital
of capital " ( Capital , II, p.345), that is, a production apparatus of given Step ladder can be
set in motion by a greater or lesser amount of money depending on the speed of the
circulation or the organization of the compensation calculation. (Marx, Capital , II, 314, 333,
348, cf. also Sismondi , Nouveaux Principes , LV, Ch.1.). We have seen that the annual
product of our scheme can be sold at a value of 9,000 depending on the annual turnover, with
a monetary weight of 9,000, 2,500 or 900. In other words, the mass of the money required for
the circulation, although calculable according to the respective scale of production, the rate of
conversions, etc., is by no means fixed in proportion to the total mass of the annual product ;
It is variable , and precisely for this reason Marx did not include the money in the scheme of
reproduction with its exact quantitative relations, and was not allowed to interfere with it if he
did not want to violate the logical foundations of the scheme, the exact magnitudes.

V. Money circulation as a faux frais of commodity production

In addition to the productive capital of society, part of the total society's capital must always
function as money. This amount of money depends, of course, on the scale of production and
the rate of circulation of money, which in turn is determined by the length of the turnover
period, ie the ratio of the working period to the actual circulation period. "Whatever this
proportion is, under all circumstances, is that part of the processive value of capital, which
can always function as productive capital, limited by that part of the ... capital value, which
must constantly exist alongside the productive capital in money form " (Marx, K. II, 245). In
our scheme, for example, the total capital of society is 10,000. The portion of money, which
is in money form, 2,500 g , limits the productive , ie, the value-creating, total capital to 7500,
namely, Division I to 4000 c + 1000 v ; Dept. II to 2000 c + 500 v .

What has been said here in relation to the whole circulating quantity of money also applies to
the quantity of gold newly produced every year, and used to replace the money-abatement:
the production of gold means a restriction of the scale of the production of commodities . If
the production of gold is 25 g , the productive capital must be further restricted, ie, from 7500
to 7475, ie a capital of 25 must be transferred from productive industry into gold production
for unproductive purposes of circulation . If the volume of gold production were 200,
production production would have to be reduced from 7500 to 7300. Or, as Marx says, "part
of the social labor power and a part of the social means of production must therefore be
expended annually in the production of gold and silver" ( Kapital , II, p.314).

The use of part of productive capital in gold production occurs in reality, since not all
countries have their own gold mines, by direct or indirect exchange of a part of the annual
land product, eg of German chemicals, coal, etc., against the product of the gold-producing
countries. This international character of the transaction, however, hides its simple core. In
order not to complicate the problem and reduce it to its most transparent expression, we
presuppose with Marx that gold production takes place in the country itself and forms part of
the total social production of each country. (Marx, Kapital , II, p.314). By such a condition,
the real conditions of reproduction, as Marx emphasizes explicitly ( Capital , II, p.325), are
not modified in any way: they correspond to the real facts.

In fact, it can be said that every country procures its money supply , if not in technical terms,
at least in the economic sense, by means of its own gold production . For the production of
chemicals, machinery, coal, etc., in addition to the other requirements of these articles,
whether for domestic or export, they must use an additional part of their means of production
and labor for the sole purpose of making use of this To produce an equivalent stock of gold
for export purposes. To supplement it.

The prerequisite for our own gold production in all countries with a gold currency allows us
to grasp immediately the characteristic features of this production. It has already been
emphasized that in the scheme the gold is not considered as money, but merely as
commodity. But the newly produced gold as commodity differs substantially from the other
goods of the yearly product. While in the case of any other commodity production (coal,
machinery) the capitalist entrepreneur, by throwing the annual product on the market at the
end of the productive period, increases the volume of goods circulating at the beginning of
the period of production by the magnitude of the newly produced surplus value Equivalent
money is withdrawn, the thing is the reverse in gold production. Here the entire annual
product (ie, not just the surplus-value part, but also the c- and v- part) exists in gold form, and
all these parts are thrown into the circulation at the end of the year to give it for the amount of
the whole year's production of gold ( Capital , II, S.316, 325, 477). The production of gold,
like the reestablishment at all, although a necessary and constitutive element of the capitalist
mechanism, means for society the loss of a part of the available production elements, a
"demolition of the extent of social production" (Marx, K.II, P.348). For this reason, Marx
reckons money to the unproductive circulation costs of society, to the "faux frais of
commodity production ... It is a part of the social wealth that must be sacrificed to the
circulation process" ( Kapital , II, 112, 113). He "withdraws from social exploitation a
corresponding sum of possible, supplementary means of production and consumption, that is,
of real wealth" ( Kapital , II, p.336). Hence the capitalists' endeavor to reduce the amount of
money necessary for the circulation, ie, this dead fund, if absolutely absolutely, so at least
relative to the size of the transactions, by increasing the maturity of the available money.

VI. The error source of the R. Luxembourg schema: addition instead of subtraction.

The fact that gold production limits the volume of total social production is also not unknown
to R. Luxemburg ( accumulation , p.73). It, however, writes Marx this principle
mechanically, without drawing the slightest conclusions from the point of its practical
application in the schema. On the basis of our scheme the use of 20 c + 5 v + 5 m = 30 g in
gold production would have to be a demolition of the volume of social commodity
production. Consequently, this production, resp. (As soon as the production of gold is
separated as a separate division) can be limited to 5980 c + 1495 v + 1495 m = 8970, that is
to say, by the amount shown in the figure of the Marxian model: 6000 c + 1500 v + 1500 m =
Gold production used productive forces. By the use of the quantity of circulating water of
2,500 per annum, according to circumstances, 1 per cent. = 25 g., The society must, in order
to compensate for this loss, withdraw yearly a part of its productive capital from the same
level of commodity production and turn to gold production.
In contrast to this, R. Luxemburg leaves the volume of social commodity production, in spite
of the separation of gold production, at its original level, and adds to the production of the
production of gold:

6000 c + 1500 v + 1500 m = 9000

20 c + 5 v + 5 m = 30
6020 c + 1505 v + 1505 m = 9030

In fact, the total production of the society is not restricted , but grown by the amount of gold
production !

In the Marxian assumption that the social scale of production is given , and the annual
product is in all 9000, the production of gold can be opened by simple means, provided that a
part of the means of production and the labor of other commodity production Eg the coal
mines) and transferred to gold production. The proportionality relations of the scheme are
thereby and can not be infringed as the total scope of the social productive forces remains the
same and only its distribution to individual branches of production has changed: less coal is
produced instead of gold.

On the other hand, the growth of the social productive forces within the simple reproduction
is an unexplained mystery, a birth ex nihilo, the means of production and the labor of the
production of gold.

The fact that the exact proportionality of the schema must be disturbed by such an addition of
a third series is clear. Not the criticism criticized by R. Luxemburg arises from the
"inconveniences" of the reproduction scheme: it is only the procedure of R. Luxemburg ,
described here, the application of addition, where subtraction was necessary, the source of all
its errors and contradictions in the treatment of the Gold production.

VII. Gold Production and the Transition to Socialism

R. Luxemburg has a further "weighty reason" for the segregation of gold production in a
special, third department, which we now intend to envisage. The production of gold for
circulation purposes, the character of which is derived from the anarchic mode of economic
development of capitalism, finds the most exact expression as a separate division "( R.
Luxemburg , Accumulation , p . 75 ). Since, in the transition to the planned socialist
economic order, the production of gold for monetary purposes ceases, the Marxian schema of
simple reproduction would retain its validity also for the socialist economy, simply by cutting
the third division of the scheme.

In this line of thought, we have a striking example of those mechanical "solutions" in R.

Luxemburg , of which we spoke earlier. The scheme of capitalist production required three
departments, the third division (gold production) expressing the specifically capitalist of
reproduction. After the transition to socialism, it is obviously sufficient to simply decree the
abolition of the third division in order to make the old scheme, with two departments,
applicable to the new socialist economic order. The "weighty reason" for the segregation of
the gold production thus consists in the... Comfort, for the socialist reproduction no new
schema have to construct!
Can such mechanical-formal representations be taken seriously? It is obvious that R.
Luxemburg does not present any concrete terms under "the abolition of gold production,"
since this elimination does not produce any visible effects in the world of real phenomena. In
reality, the abolition of gold production would lead to the release of production resources and
labor, and the use of others. If the transition from the fiction of the moneyless economy to the
production of gold meant a restriction of the scale of the production of commodities from
7500 to 7475, the abolition of the production of gold would have to lead to a widening of the
production of goods,

1. By the liberation of the productive forces bound up in the production of gold, which
are now used in the production of commodities ( Marx , K. II, p.349), their size would
grow from 7475 to 7500,
2. By the abolition of the circulation of money at all, the money capital of 2500, which
had accumulated during long epochs, would no longer function (as far as it would not
be required as a world money for international payments) ( Marx , K. II, pp.302, 349)
and by his transformation into Production units by means of exchange with other
capitalist countries, the scale of goods production could be expanded from 7,500 to
10,000.

While, in reality, the abolition of the circulation of money would have to lead to the extension
and systematic reorganization of the entire production of commodities, the volume of
commodity production always remains the same in both cases, both in the transition to gold
production and in the absence of socialism Unchanged .

VIII. Accumulation of money despite simple reproduction

It seems almost paradoxical to say that, although we had assumed simple reproduction in both
the production of goods and in gold , that is, although it is assumed that the volume of gold
production remains unchanged from year to year, there is a gradual accumulation of gold . It
was precisely these results of Marx 's analysis that attacked Luxemburg. Nevertheless, we
shall show not only that such accumulation takes place in the schema, but that it must
necessarily take place under the conditions made.

The loss of money in the two departments of the production of commodities is 25 g , in the
abovementioned division, I 16 2/3 g , in the abode II 8 1/3 g . Under the assumption that
commodities are sold and bought at their value , the capitalists of the production of
commodities must pay an equivalent amount of the means of production to the entrepreneurs
of gold production for the purchase of the missing money of 25 g .

This capital of 20 c + 5 v is invested in the production of gold, and an annual product of 30 g

, since the value of the gold production is added , so that a gold consumption of 5 g . This,
despite the assumption of simple reproduction, that is, the assumption that the surplus-value
is consumed. This result, as "strange" it appeared to R. Luxemburg , has nothing strange. R.
Luxemburg has clearly forgotten that, contrary to all the conditions of simple reproduction,
the surplus-value of gold production can not be consumed in society, and must therefore
necessarily be estimated. Gold producers can "consume" their value. Since this is not feasible
in nature, they must buy food from the Department II. In this way, however, the social stock
of money from commodity producers increased from 2,500 to 2505. R. Luxemburg believed
that Marx had to raise the objection that he had not complied with the assumption of simple
reproduction made by him. It overlooked the fact that the genius of Marx's work is shown in
this. With a rare ingenuity, he realized that this assumption can not be met historically . Even
though, with a scientifically permissible approximation, we should be able to speak of a
simple fixed capital for the period of antiquity and of the Middle Ages, and the relative
constancy of technology, even in longer periods of simple reproduction in gold production
From centuries a gold collection , which forms one of the prerequisites of the capitalist mode
of production:

"It shows itself, as in the case of simple reproduction, although here accumulation in the true
sense of the word, ie, reproduction on extended scale, is excluded, and money accumulation
or treasure formation is necessarily included. And since this is repeated anew annually, this
explains the assumption from which a capitalist production is considered: when the
reproduction begins, a mass of funds corresponding to the sales of commodities is in the
hands of capitalist classes I and II. Such accumulation takes place even after deduction of the
gold lost by the wear of the circulating money "(Marx, K. II, p.472).

IX. The organic interlacing of the gold production with the two departments of the
commodity production

If one is clear about the economic categories and contexts presented above, the demonstration
of the relations between the production of gold and the production of goods no longer
presents any difficulties. It is absolutely irrelevant whether we formally separate the gold
production as a third division from the production of goods, and becomes a question of
technical representation . What matters is the real conditions under which this separation
occurs, that is, the modifications which the extent of the production of goods in I and II is
caused by the fact of the production of gold.

For the sake of clarity, we will first consider gold production separately. If the connections
between it and the production of goods are recognized, the results of our analysis do not
change when gold production is subsequently presented as part of Section I of the scheme.

The starting-point for our representation is the scheme known to us at the time when the
turnover of commodities was reduced to 2500 by wear and tear. This loss is distributed
proportionally to the capital size of both divisions, and in I 16 it is 2/3 g , in II 8 1/3 g . We
have thus:

1650 (in money)

I 4000 c + 1000 v + 1000 m = 6000 (in goods) and
825 (in money)
II 2000 c + 500 v + 500 m = 3000 (in goods) and
2475

Since the money-stock 2475 is inadequate for circulation, the commodity producers are
obliged to replace the missing 25 g by gold production. In both departments of the production
of commodities money is thus made to the gold producers, and the department is given 1 16 g
/ g , and the department 2 g is 1 / g , so that the money capital of the commodity producers
temporarily increases by 25 g reduced.

By purchasing 25 g for the production of gold for production and food from the producers of
the goods, the gold producers immediately return to them with 25 g . However, the reflux of
these 25 g to the product producers is in a different proportion from the previous advance.
Since in the production of gold, in the assumption that the composition of the capital has the
average ratio of c to v as in Dept. I (in our example, therefore 4: 1), the gold producers must
deduct from the 25 g Production means for the product producers of the department I 20 c
and for the purchase of food at the department II 5 v . These producers can satisfy the needs
of gold producers in production and food only from their added value if they do not want to
affect the extent of their own production. Thus the value added by the gold producers in
Division I is reduced to 980 m , and in Division II to 495 in. By this sale, Department I has
retained 20 grammes of money, while originally paid to gold producers only 16 2 / 3 g . So
you get 3 1/3 g of money too much . On the other hand, this is the case in Dept. II; It
originally projected for the gold production of money at 8 1/3 g , but it received only 5 g , ie
3 1/3 g too little .

From this fact it follows that the capitalists of Division I, who have put too much money into
their money from their surplus-value 3 1/3, must consume this 3 1/3 g , since simple
reproduction is the prerequisite From the abbot II, whereby the surplus 3 1/3 g to the
capitalists II flow back into I. These cover their deficit and money of 3 1/3 g , and at the same
time they give food from the value added in the form of commodities to the capitalists I by
the same amount, thereby reducing their value to 491 2/3 .

The scheme has undergone the following changes as a result of the completed conversions
which are intended to prepare gold production:

A. Production of goods
+ 1650 money
I 4000 c + 1000 v + 980 m (means of production) + 3 1/3 m foodstuffs + 825 money
II 2000 c + 500 v + 491 2/3 m (foodstuff)
For example, gold production

20 c + 5 v (in product form).

The scheme shows us that the capitalists of commodity production have provided for the
replacement of the loss of gold, and for this purpose have given production and food to the
gold producers in proportion to the size of their capital in both divisions I and II. At the same
time, however, it shows that the proportionality relations of the scheme of commodity
production are disturbed by these levies. For between I ( v + m ) = 1980 and II c = 2000 there
can be no complete exchange. Does this not confirm the correctness of R. Luxemburg's
objections?

If, by establishing the deficit of constant capital in the production of commodities, R.

Luxemburg sees a contradiction to the Marxian assumption of simple reproduction, it proves
that for her the concept of simple reproduction has actually become an empty "formula-
work". For no prerequisite for simple reproduction can bring about the fact that the deficit of
constant capital disappears in the production of commodities, if at the same time it is assumed
that this is the constant capital of the gold producers. One can not be two. The deficit of
constant capital in commodity production is a self-evident and necessary consequence of its
shift into gold production.

What is of interest to us here and what is important for the understanding of reproduction are
the consequences of this deficit. The restriction in I ( v + m ) = 2000 to 1980 must necessarily
lead to a corresponding restriction in II c, just as long as the assumption of simple
reproduction is held, also from 2000 c to 1980 c , Since otherwise a complete exchange could
not take place. Consequently, the 500 v in the Department II must also be restricted to 495 v .
The amount of reproduction in Dept. II must therefore be reduced by a total of 25, ie the
foodstuffs in the amount of 25, since no other buyers are present, must be consumed by the
capitalists II. Of course! As a next and unique consequence of the opening of the gold
production-which is only possible by taking the constant capital from I m- there would be an
increased consumption of food in II. At the same time, as a sustainable consequence for the
future - in accordance with the earlier presentation of sub-V - a restriction of the production
range in II from 2000 c + 500 v to 1980 c + 495 v .

After completion of the above-mentioned adjustments in the conversion period, the

production process may be disturbed. We have:

A. Production of goods = 6000 + 1650 (in money)

= 2970 + 825 (in money)
I 4000 c + 1000 v + 1000 m 8970 2475 (in money)
II 1980 c + 495 v + 495 m
For example, gold production = 30 + 30
9000 2505 (in money)
20 c + 5 v + 5 m

The total circumference of production is still 9000. The prerequisite for simple reproduction
was not violated. However, as a result of the opening of gold production, the volume of
production of goods has been reduced to 8970.

At the same time we see that the production of gold takes place only apparently at the
expense of the capitalists of Dept. II. The restriction of the scope of production in II was
merely a one- off effect of the transition to gold production. In the long run, however, the
replacement of the wear and tear of money is not effected at the cost of only one of the two
sections of the scheme, as R. Luxemburg asserts. On the contrary, the capitalists of both
sections of the scheme are uniformly proportional to taxes on the exchange of money To the
size of their capital. The capitalists of Dept. 1 give every year 20 m of means of production of
their surplus value, and the capitalists of Dept. II of 495 m annually 10 m of food for the
purpose of gold production, without the "factual and value proportions" Balance needs to be
disturbed .

Finally, the estimation of money is a necessary consequence of the production of gold, even
under the conditions of simple reproduction. The capitalists I have, instead of the actual
money-shedding of 16 2/3 g 20 g , ie 20/6 more money back. The capitalists II, instead of their
consumption of 8 1/3 g 10 g , ie 10/6 more money back, increased the total stock of the
company from money from 2475 to 2505. [6]

Thus the result of our analysis confirms that the representation of the reproduction of money
as given by Marx in the second chapter of Capital (K.II, p. 488) is perfectly correct, and that
the criticism of R. Luxemburg, Has proved to be completely wrong.

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Footnotes

1. H. Grossmann , The Accumulation and Collapse Law of the Capitalist System ,

Leipzig, 1929, pp., And The Change of the Original Structure of Marx's Capital and its
Causes ( Archiv fur Sozialismus , Jahrg . XIV, 1929) . - The closures in the quotations
usually come from me. The first volume of Marx's capital is quoted after the third edition ,
the accumulation and anti-criticism of R. Luxemburg after the first edition.

2. R. Liefmann , Participating and financing companies , 4th ed. Jena 1923, p.19.

3. R. Wilbrandt , Karl Marx , 4th Ed., 1920, p.

4. "As regards the procurement of money-gold and silver-from its sources of production, it
dissolves in the immediate exchange of commodities, in the exchange of gold and silver as
commodities against other commodities, and so is itself a moment of commodity exchange
Procurement of iron or other metals. "(Marx, K. III / 1., P. 304.) See K. II., P.470.

5. Moreover, money, even if it acts as a means of circulation, can not be ranked as an

equivalent third sphere alongside the other two spheres of production. For money circulation
does not constitute a particular , independent sphere, but is a function which is also exercised
within the two spheres mentioned. The capitalists of these two spheres must have, besides
their productive capital, a certain financial capital.

I 4000 c + 1000 v = 5000 productive capital, and 1668 in money

II 2000 c + 500 v = 2500 production capital and 832 in money

The existing money capital of 2500 is not included in the scheme by Marx because the means
of circulation circulate the goods turnover not only between I and II, but also within it , ie, "
circulate in both spheres of the reproduction process" (Marx, K. III / 1. , P.431, 433).

6. The results of our investigation will not change if, after the production of gold has been
separately presented, we will now show it as part of Division I. " We then obtain the
following scheme:

I 4020 c + 1005 v + 1005 m = 6030 Money supply 1650 g

II 1980 c + 495 v + 495 m = 2970 Money stock 825 g
6000 c + 1500 v + 1500 m = 9000 Money stock 2475 g

First of all, it is important to note that the whole yearly product of Division I 6030 consists of
means of production , of which there are only 6000; The remainder of 30 consists of gold and
is therefore not a substitute for c , either in Division I or Section II. We must, therefore,
divide Department I into two sub-divisions, namely gold production and the actual
production of goods And then obtain the following form of the scheme:

20 c + 5 v + 5 m = 30 (in gold form)

I{
4000 c + 1000 v + 1000 m = 6000 (in production equipment)
II 1980 c + 495 v + 495 m = 2970 (in foodstuffs)
We now briefly explain the sales of this scheme. The II v = 495 consume their own food. The
II c = 1980 (foodstuffs) have to be exchanged for production means I ( v + m ) against I v =
1000, consisting of means of production (the remainder in I v = 5 ordered from gold) and I m
= 980 Likewise have the form of means of production. A remainder of 20 m (production
medium) and 5 m (gold) remains in I m . - Since the assumption according to I v = 5 (gold)
and I m = 5 (gold), are therefore to be exchanged for foodstuffs for the time being, since these
foodstuffs are not available in II c or II v , , From II m = 495. As a result, the value added by
the capitalists II falls to 485, but remains in its hands as a counter value 10 m in gold form. -
Thus it follows that the 15 v + 5 m of the gold production does not exchange for II c , as is
normally the case in the production of products; On the contrary, we see that the food for
laborers and capitalists of gold production must be taken from the surplus value of Division II
of commodity production.

How is the replacement of I c = 4020? According to the scheme of simple reproduction, the
value of the consumed I c is transferred to the annual product, and the consumed I c can
normally be renewed from the annual product of their own department. In our scheme,
however, which also includes the production of gold, I c = 4020 can not be completely
replaced by the c part of the annual product, since, as we know, only the I 4000 c is the form
of production, C gold form . Thus, there would be no possibility of replacing the means of
production 20 c intended for gold production. For this reason the capitalists, I c, of gold
production buy with their 20 c, in gold form, the necessary means of production at I m of
commodity production, in whose hands, as we know, an unsold remainder of their surplus
value remained 20 m . This completely replaces the constant capital of department I both in
product production and gold production, but at the same time remain in the hands of the
capitalists I (commodity production) as a counterpart to the means of production assigned to
the gold producers. Here again, as regards the renewal of gold production, there is a
difference from the normal pattern of production. The production of gold is not derived from
the c- part of the annual product of its own department corresponding to it, but from the
surplus-value of department I of the production of commodities.

As a result of the transactions, a surplus-value in gold form = 20 is left in the hands of the
capitalists I (means of production), and a surplus value in gold form = 10 is raised in the
hands of the capitalists II (food), thus increasing the existing money mass 2475 g to 2505 g .
Finally we have here reconstructed the representation of the particular movements missing in
his manuscript, in the replacement of the constant capital of gold production, I c , as well as
its I ( v + m ) part, and thus solved the problem posed to us .

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Last Updated on 27.11.2008