Capital: Volume 1, Chapters 4-6 by Karl Marx

Chapter 4: The General Formula for Capital

- "The circulation of commodities is the starting-point of capital...World trade and the world market date from the sixteenth century, and from then on the modern history of capital starts to unfold...money. This ultimate product of commodity circulation is the first form of appearance of capital." - 247

- Money vs. capital

1. money: direct form of circulation, C-M-C, "selling in order to buy" - 247
2. capital: M-C-M, "buying in order to sell" - 248
3. "In the cycle C-M-C, therefore, the expenditure of money has nothing to do with its reflux. In M-C-M on the other hand the reflux of the money is conditioned by the very manner in which it is expended. Without this reflux, the operation fails" - 250

- surplus value of capital: "The complete form of this process is therefore M-C-M', where M' = M + Δ M, i.e. the original sum advanced plus an increment. This increment or excess over the original value I call 'surplus-value'." - 251

- "it is only in so far as the appropriation of ever more wealth in the abstract is the sole driving force behind his operations that he functions as a capitalist, i.e. as capital personified and endowed with consciousness and a will. Use-values must therefore never be treated as the immediate aim of the capitalist; nor must the profit on any single transaction. His aim is rather the unceasing movement of profit-making." - 254

- M-M': interest-bearing loan - 257

Chapter 5: Contradictions in the General Formula

1. "all that happens in exchange...is a metamorphosis, a mere change in the form of the commodity. The same value, i.e. the same quantity of objectified social labour, remains throughout in the hands of the same commodity-owner, first in the shape of his own commodity, then in the shape of the money into which the commodity had been transformed, and finally in the shape of the commodity into which this money had been re-converted", change in form does not imply change in magnitude of value - 260
2. "In its pure form, the exchange of commodities is an exchange of equivalents, and thus it is not a method of increasing value." - 261
3. "all owners of commodities sell their goods to each other at 10 per cent above their value, which is exactly the same as if they sold them at their true value." - 263
4. circulation does not produce surplus value, "If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, we still have no surplus-value. Circulation, or the exchange of commodities, creates no value." - 266
5. surplus-value "can only be derived from the twofold advantage gained, over both the selling and the buying producers, by the merchant who parasitically inserts himself between them. It is in this sense that [Benjamin] Franklin says 'war is robbery, commerce is cheating'." - 267
6. M-C-M' = merchants' capital; M-M' = usurers' capital
7. Aristotle on usury (lending money with interest) in the Nicomachean Ethics , "the usurer is most rightly hated, because money itself is the source of his gain, and is not used for the purposes for which it was invented. For it originated for the exchange of commodities, but interest makes out of money, more money. Hence its name [toxos(Greek): interest, offspring] For the offspring resembles the parent. But interest is money, so that of all modes of making a living, this is the most contrary to Nature." - 267
8. "Capital cannot therefore arise from circulation, and it is equally impossible for it to arise apart from circulation. It must have its origin both in circulation and not in circulation. We therefore have a double result." - 268

Chapter 6: The Sale and Purchase of Labour-Power

1. labour-power: "In order to extract value out of the consumption of a commodity, our friend the money-owner must be lucky enough to find within the sphere of circulation, on the market, a commodity whose use-value possesses the peculiar property of being a source of value, whose actual consumption is therefore itself an objectification of labour, hence a creation of value. The possessor of money does find such a special commodity on the market: the capacity for labour" - 270
2. "labour-power can appear on the market as a commodity only if, and in so far as, its possessor, the individual whose labour-power it is, offers it for sale or sells it as a commodity...He must constantly treat his labour-power as his own property, his own commodity, and he can do this only by placing it at the disposal of the buyer, i.e. handing it over to the buyer for him to consume, for a definite period of time, temporarily. In this way he manages both to alienate his labour-power and to avoid renouncing his rights of ownership over it." - 271
3. "this worker must be free in the double sense that as a free individual he can dispose of his labour-power as his own commodity, and that, on the other hand, he has no other commodity for sale, i.e. he is rid of them, he is free of all the objects needed for the realization of his labour-power." - 273
4. value of labour-power: "the value of the means of subsistence necessary for the maintenance of its owner." - 274
5. "In every country where the capitalist mode of production prevails, it is the custom not to pay for labour-power until it has been exercised for the period fixed by the contract...the worker advance the use-value of his labour-power to the capitalist...Everywhere the worker allows credit to the capitalist." - 278
6. "The only force bringing them together, and putting them into relation with each other, is the selfishness, the gain and the private interest of each. Each pays heed to himself only, and no one worries about the others." - 280