cript (anonymized)

The Transition to Capital in Marx’s Critique of

Political Economy

Abstract:

The introduction of the concept of capital in Capital – with the words

‘we find’ – has provoked a great deal of discussion about the precise

relation between the categories of simple circulation and the

concept of capital. In this article, I argue that Marx derives the

concept of capital by way of an analysis of the immanent

contradictions of money, and that this dialectical derivation can be

understood as a conceptual movement in which the concepts of

money and capital progressively changes their modal status.

Furthermore, I examine the development of this transition to capital

throughout Marx’s writings during the period 1857-67, arguing that

the same essential arguments can be found in all the relevant

writings. Finally, the article provides a critical review of the literature

on the transition to capital.

Key words: Marx, Capital, Dialectics, Money, Circulation

1
Introduction

In Capital, the concept and so-called general formula of capital is

introduced with these words: ‘alongside this form [C-M-C, i.e. simple

circulation] we find another specifically different form: M-C-M’

(35/158). 1 This seems to be a somewhat nonchalant way of

introducing what is arguably the most fundamental concept of the

critique of political economy, especially in comparison to the

meticulous dialectical deduction of the concept in the Grundrisse

and the Urtext.

The different ways of introducing the concept of capital in the

various manuscripts written in the period from the Grundrisse in

1857 to the publication of Capital ten years later have provoked a

great deal of discussion. Is there a necessary relation between, on

the one hand, the categories of simple circulation (for example

commodity, value, abstract labour and money) and, on the other

hand, the concept of capital? Are capitalist relations of production

the necessary presupposition for the concept of simple circulation –

or can the latter be seen as corresponding to a society with so-

called ‘simple commodity production’, as Engels argued? Do the

1 In the following, all references to writings of Marx and Engels writings will be given in the form
([Volume of Collected Works]/[Page number]).

2
words ‘we find’ in the above quoted passage indicate that Marx

reached a theoretical impasse and replaced the attempt to

dialectically deduce the concept of capital with a methodologically

superior appeal to ‘ordinary experience’, as Jacques Bidet argues?2

Or is Capital the culmination of a process of theoretical betrayal, in

which Marx sacrificed the superb dialectic of the Urtext in the name

of ‘popularisation’, as Michael Heinrich argues?3 These are some of

the most important questions contained in the problematic of the

transition to capital, and some of the questions that I will touch upon

and clarify in what follows. I will examine the transition to capital in

three parts:

The first part presents a reconstruction of what I take to be

Marx’s essential arguments with regard to the transition to capital,

that is, the dialectical deduction of the concept of capital. Drawing

on all of the writings of Marx from the period 1857-1867 – including

the 1861-3 Manuscripts, which are completely neglected with

regards to this theoretical problem – I argue that Marx unfolds a

coherent logical derivation of the concept of capital, and that this

derivation can be understood as a dialectical movement in which the

concepts of money and capital undergo successive changes with

2 Bidet 2007, p. 163.

3 Heinrich 1999, pp. 253-5.

3
regards to their modality. Furthermore, I will also show that the

derivation of the concept of capital is, in the conceptual order of

presentation, conducted before the transition from the sphere of

circulation to that of production – a distinction that is often

overlooked in the literature.

Based on this reconstruction of the transition to capital, in which

capital is revealed to be the necessary logical result and

presupposition of the categories of simple circulation, the second

part traces the development of the transition to capital throughout

Marx’s writings from the Grundrisse to Capital. In opposition to

widespread tendency to oppose these texts, I argue that the central

arguments developed in the Grundrisse can also be found in the

1861-3 Manuscripts and Capital, albeit presented in a different and

abbreviated – but nevertheless coherent – form.

Finally, the third part provides an overview and evaluation of the

literature on the transition to capital. Distinguishing between three

dominant readings – a historical, an empirical and a logical – I

separate the wheat from the chaff in light of the first and second part

and point out the widespread confusion about the transition to

capital.

4
I. The transition to capital

In the bourgeois conception of the economy, the market functions as

the prism through which society is understood. The market – or the

sphere of circulation – is where free and equal producers go to in

order to exchange their commodities, for the benefit of all – it is a

way of achieving ‘co-ordination without coercion’ 4 , as Milton

Friedman puts it. According to Friedman,

the great advantage of the market … is that it permits a wide

diversity. It is, in political terms, a system of proportional

representation. Each man can vote, as it were, for the color of

the tie he wants and get it5

Marx describes this paradigmatic imaginary of the free and pluralist

sphere of circulation in the following manner:

The busiest streets of London are crowded with shops whose

show cases display all the riches of the world, Indian shawls,

4 Friedman 2002, p. 13.

5 Friedman 2002, p. 15.

5
 American revolvers, Chinese porcelain, Parisian corsets, furs

from Russia and spices from the tropics, but all of these worldly

things bear odious, white paper labels with Arabic numerals and

then laconic symbols £ s.d. This is how commodities are

presented in circulation (29/324)

As Friedman notes, ‘no one who buys bread knows whether the

wheat from which it is made was grown by a Communist or a

Republican, by a constitutionalist or a Fascist, or, for that matter, a

Negro or a white’.6 In the same way, no one knows how and under

which conditions the bread was produced. In the market, relations of

production disappear (28/182f). Countering this disappearance by

tracing the necessary logical presuppositions of the commodity form

is precisely what the transition to capital is about. What Marx wants

to show with this transition is that

The simple circulation is … an abstract sphere of the bourgeois

process of production as a whole, which through its own

determinations shows itself to be a moment, a mere form of

appearance of some deeper process lying behind it, even

6 Friedman 2002, p. 21.

6
 resulting from it and producing it — industrial capital (29/482.

Cf. also 29/466)

From passages like this, it is clear that Marx regarded simple

circulation only as a ‘surface’ phenomenon, under which capitalist

relations of production necessarily prevail. However, this and similar

passages merely show Marx’s intention, and not his arguments.

In his theory of value, Marx argues that value must necessarily

obtain an independent and adequate form of existence in a society

in which exchange of commodities is the dominant (herrschende)

form of social reproduction. Proceeding from the commodity, i.e. ‘the

simplest social form in which the product of labour presents itself in

contemporary society’ (24/544), Marx shows that it must necessarily

double itself into commodity and money, the latter functioning as the

‘the visible incarnation, the social chrysalis state of every kind of

human labour’ (35/81). This argument about the need for an

independent and adequate form of existence of value constitutes the

background for the transition to capital.7

A dialectical transition from simple circulation to capital

essentially requires two things: first, it must be shown that value is

7 Cf. Backhaus 1997; Reichelt 1970, Ch. 3; Heinrich 2012, Ch. 3 and 1999, Ch. 6.

7
not able to obtain an independent and adequate form of existence

within simple circulation. Secondly, it must be shown that this

inability of simple circulation results in another form of circulation (M-

C-M) that overcomes the contradictions of the form C-M-C.

The possibility of capital and the impossibility of money

Value circulating in the form of capital is already possible with the

doubling of the commodity into commodity and money. With money,

the act of buying and selling is split into two separate processes, C-

M and M-C, and with this separation, the process M-C-M also

becomes (at least formally) possible:

As exchange itself splits into two mutually independent acts, so

the general movement of exchange is severed from the

exchangers, from the producers of the commodities. Exchange

for the sake of exchange is separated from exchange for the

sake of commodities. An estate of merchants intervenes

between the producers, an estate which buys only in order to

sell, and sells only in order to buy again, aiming in this

operation not at the possession of the commodities as products

8
 but merely at the acquisition of exchange value as such, of

money (28/86)

The point here is simply that, ‘if I can sell in order to buy, I can just

as well buy in order to sell’ (28/135, emphasis added). At this point,

Marx does not show that the form M-C-M is a necessary

consequence of the doubling into commodities and money – he

merely shows that capital is a possible form of circulation.

As noted, Marx’ theory of value revealed that money ‘is a

crystal formed of necessity’ (35/97). The further analysis of money,

however, reveals that money is in fact not capable of constituting an

‘adequate being of exchange value [adäquates Dasein des

Tauschwerts]’ (29/488) 8 when confined within the limits of simple

circulation:

It cannot be said that in simple circulation exchange value as

such is realised. It is always realised only in the moment of its

disappearance. If a commodity is exchanged for another

commodity by means of money, its value-character

8This is a quote from the Urtext, where Marx had not yet precisely distinguished between
exchange value and value. In this quote, as is the case in many of the following quotes in this
article, the correct term would be value. However, as Marx later wrote in Capital: ‘When once
we know this, such a mode of expression does no harm’ (35/71).

9
 [Wertbestimmung] disappears in the moment in which it is

realised, and it steps outside the relation, becomes indifferent to

it and is now only a direct object of need. … In the first case

[money as hoard] the form of exchange value is extinguished, in

the second its substance; in both, therefore, its realisation is its

disappearance. (28/191)

Money thus ceases to be the ‘direct incarnation’ (35/103) of value

whether thrown into circulation in the form of C-M-C or withdrawn as

a hoard. As a means of circulation, money is nothing but a

‘vanishing mediator [verschwindende Vermittlung]’ (28/199, 29/484),

because the form C-M-C is ultimately directed towards consumption,

in which the commodity loses its value form and becomes a mere

product or use value. As Robert Kurz puts it, ‘every commodity goes

from production over the sale to consumption, where it disappears.

The intermediary trade cannot count as a proof of a circulation of

commodities, because it only slightly prolongs the one-way street to

consumption’.9 It is equally impossible, however, for value to sustain

itself as a hoard outside of circulation – in this case, money

regresses to ‘its metallic being, with its economic being annihilated’

9 Kurz 2012, p. 160.

10
(29/479) and is reduced to ‘the inorganic ashes of the whole

process’ (28/193). The conclusion to this analysis is clear: money

cannot function as the incarnation of value, neither in simple

10
circulation, nor when it is withdrawn from circulation. This

contradicts the necessity of an independent and adequate form of

existence of value in a society in which products of labour primarily

take on the form of commodities. We are therefore left with the

contradictory conclusion that money is both necessary and

impossible.

The necessity of capital, I

Marx stresses that we cannot import arbitrary and external facts,

arguments or concepts into the transition to capital: ‘In developing

capital it is important to insist that the sole presupposition — the sole

material we start out from — is commodity circulation and money

circulation, commodities and money’ (30/33, translation modified.

See also 30/36f). On this basis, we can specify the requirements for

value in so far as it has to acquire an independent form:

10 Cf. Heinrich 1999, pp. 255f; Murray 1988, pp. 175ff and Wolf 2007, Section VI.

11
 Its entry into circulation must itself be an element of its staying

with itself [Beisichbleiben], and its staying with itself must be an

entry into circulation. That is to say, as realised exchange value

it must also be posited as process in which exchange value is

realised … In other words, exchange value is now determined

no longer as a simple object, for which circulation is only an

external movement, or which exists individually in a particular

material, but as a process, as its self-relation by means of the

process of circulation (28/167)

This process is what is formalised as M-C-M. What Marx says here

is essentially that value, which necessarily doubles itself into

commodity and money, must circulate in the form of M-C-M if it is to

acquire an ‘adequate existence’ (29/488) – or, in other words, that

value must necessarily circulate in the form of capital, ‘in which

money in its perfected determination really first develops’ (28/201).

The form M-C-M resolves the problems inherent to C-M-C by

positing value as both the beginning and the end of the process,

constituting a self-reproducing circle and giving value an

‘independent form, by means of which its identity with itself can be

established’ (35/165, translation modified). Circulating in the form M-

12
C-M, value becomes ‘the essence which remains equal to itself [das

sich gleichbleibende Wesen]’ (28/238, translation modified).

In this way, Marx deduces the concept and general formula of

capital as the necessary product of the contradictions inherent in

simple circulation. The crucial thing to note here is that, at this stage

of the argument, capital is only to be understood as a form of

circulation. In all of his manuscripts Marx is careful to use the

expression ‘form of circulation’ when introducing the concept of

capital, whereas otherwise he speaks of capital as either a mode of

production or a social relation (cf. 28/137, 40/301, 29/324, 30/10,

35/158).

The transition to capital – that is, the passing over of the form

C-M-C into the form M-C-M – is therefore entirely immanent to the

sphere of circulation. This is why Marx writes that

When we speak of capital here, it is still only a name. The only

determinateness in which capital is posited in distinction from

immediate exchange value and from money, is that of

exchange value maintaining and perpetuating itself in and by

circulation. (28/193)

13
The fact that here, capital is understood as a form of circulation,

means that it is not yet determined as industrial or productive capital

– i.e. implying specific relations of production – but can just as well

refer to the ‘antediluvian’ (35/174) forms of capital: merchant’s and

usury capital. This is why the general formula of capital is general, in

contrast to the specific formula of productive or industrial capital as

analysed in the second volume of Capital (36/47).

The impossibility of capital

In the next step of the argument, Marx shows that capital as a form

of circulation, which has just been revealed as the necessary

presupposition of simple circulation, is in fact inherently

contradictory and thus impossible.

Exchange is only undertaken in order to arrive at a different

point than the one where the process started: for the possessor of a

commodity, the ‘commodity possesses for himself no immediate use

value. Otherwise, he would not bring it to the market’ (35/95). This

means that there is an implicit difference between the first and last C

in the form C-M-C. This must also be the case in the form M-C-M –

otherwise, it would be ‘just as purposeless as it is absurd’ (35/161).

14
In both C-M-C and M-C-M, there is then an implicit difference

between the beginning and the end of the process – but whereas in

the first case we are dealing with a qualitative difference, in the

second case the difference can only be quantitative (35/161f).

Therefore ‘increase coincides with self-preservation in the case of

value which holds on to itself as value, and it preserves itself only by

constantly striving to exceed its quantitative limits’ (28/200,

translation modified). This necessary surplus value is inscribed in

the formula with a mark: M-C-M’.

The problem then becomes that this directly contradicts the

immanent law of circulation: the exchange of equivalents. This law

must generally apply in order for exchange to uphold itself as the

dominant form of social reproduction – otherwise, the sphere of

circulation would be a sphere of constant fraud, which cannot be the

basis of stable relations of social reproduction: ‘The capitalist class,

as a whole, in any country, cannot overreach themselves’ (35/173).

However, if the law of circulation is not systematically violated, then

M-C-M’ cannot possibly be the dominant form of circulation. Marx

sums up the contradiction in a clear manner:

15
 It is therefore impossible for capital to be produced by

circulation, and it is equally impossible for it to originate apart

from circulation. It must have its origin both in circulation and

yet not in circulation.

We have, therefore, got a double result.

The transformation of money into capital has to be

explained on the basis of the laws that regulate the exchange of

commodities, in such a way that the starting point is the

exchange of equivalents. Our possessor of money, who as yet

is only an embryo capitalist, must buy his commodities at their

value, must sell them at their value, and yet at the end of the

process must withdraw more value from circulation than he

threw into it at starting. His development into a full-grown

capitalist must take place, both within the sphere of circulation

and without it. These are the conditions of the problem. Hic

Rhodus, hic salta! (35/176f, translation modified)

What we are dealing with here is a clear contradiction between, on

the one hand, the necessity of value acquiring an independent form

of existence in the form M-C-M’, and, on the other hand, the

immanent laws of circulation. The form M-C-M’ is ‘utterly

16
incompatible with the nature of money, the commodity, value and

circulation itself’ (30/21). In other words, capital is both necessary

and impossible.

It is important to note that capital is here still understood only as

a form of circulation. Otherwise, the argument would not make

sense: the contradiction between the law of circulation and M-C-M’

is only a contradiction because M-C-M’ is understood as a process

only occurring within the sphere of circulation (i.e. consisting only

the acts of buying and selling).

The necessity of capital, II

The contradiction between the necessity of exchange of equivalents

and the necessity of surplus value can only be sublated if the

possessor of money is ‘so lucky as to find, within the sphere of

circulation, in the market, a commodity, whose use value possesses

the peculiar property of being a source of value’ (35/177). As we

know from the theory of value, this commodity can only be labour

power. With this argument, Marx has shown that if we proceed from

the exchange of commodities as a dominant social form, labour

power must be accessible in the sphere of circulation. Whether this

17
is actually the case is of course not something that can be deduced

by dialectical analysis of concepts: ‘We cling to the fact theoretically,

as he [the capitalist] does practically’ (35/179).

Here we bump into the (in)famous ‘limits to the dialectical form

of presentation’ (29/505). This limit is not a purely external one;

rather, it signifies the point at which the dialectical form of

presentation, by way of its own immanent dynamic, points towards

something outside of itself – or, as Marx puts it: ‘[O]ur method

indicates the points at which historical analysis must be introduced’

(28/388).11 The important thing to note here is that the limit of the

dialectics refers to the existence of labour power as a commodity,

and not to the transition to capital.

With the introduction of the commodity labour power into the

chain of arguments, the contradiction between the exchange of

equivalents and the form M-C-M’ is overcome. We can thus again

confirm the possibility and necessity of capital, but now the concept

of capital has acquired a new meaning: because the consumption of

the commodity labour power is what is commonly termed

production, capital is now no longer to be understood as merely a

form of circulation, but rather as mode of production. We have

11 On this point, see Heinrich 1999, pp. 177ff.

18
thereby completed the transition from the sphere of circulation to

‘the hidden abode of production, on whose threshold there stares us

in the face ‘No admittance except on business’’ (35/186). We now

see that capital can only be based upon the separation of the means

of production and subsistence from the immediate producers, or in

other words, that capital is ultimately a social relation delineating a

field of social antagonism and class struggle. Retrospectively, it then

becomes possible to see that ‘all the categories the text had

analysed up to this point, starting with the simple commodity had

involved class struggle’.12

With the transitions (a) from simple circulation to capital as a

form of circulation, and (b) from capital as a form of circulation to

capital as a mode of production, we have thereby shown that simple

circulation is nothing but ‘an abstract sphere of the bourgeois

process of production as a whole’ and that it is only ‘a mere form of

appearance of some deeper process lying behind it, even resulting

from it and producing it — industrial capital’ (29/482).13

12 Žižek 2011, p. 204.

13 The distinction between capital as a form of circulation and capital as a mode of production,
and thereby also between the transition from simple circulation to capital and the transition from
circulation to production – a distinction that is, as we have seen, crucial for correctly
understanding Marx’s line of thought – is often overlooked or blurred, especially by Bidet 2007,
pp. 153ff and Callinicos 2014, pp. 133ff.

19
II. The trajectory of the transition to capital, 1857-67

One of the areas of controversy in the literature on the transition to

capital is whether Marx made any important changes to his

arguments in the period from the Grundrisse to Capital. On the one

hand we have a scholar like Bidet, who maintains that the dialectical

arguments in the Grundrisse and the Urtext are ‘artificial, revealing

themselves according to the ‘obligatory figures’ of Hegelian Logic,

employed a priori in an almost experimental manner’.14 According to

Bidet, Marx realised the inadequacy of these dialectical experiments

and instead opted for a non-dialectical appeal to ‘ordinary

experience’ when introducing the general formula of capital. 15 On

the other hand, we have Heinrich, according to whom the Urtext is

superior to the later texts, where the transition to capital entirely

disappears.16 Heinrich here concurs with the ‘popularisation’-thesis

put forward by Helmut Reichelt and Hans-Georg Backhaus. 17 All

their important differences notwithstanding, Bidet and Heinrich, like

Alex Callinicos, Nadja Rakowitz and Reichelt agree that Capital

14 Bidet 2007, p. 153; 2005, pp. 139ff.

15 Bidet 2005 and 2007, pp. 159, 163.
16 Heinrich 1999, p. 253.
17 Reichelt 1995; Backhaus 1998.

20
does not contain the same arguments as the Grundrisse and the

Urtext.18 This has recently been contested by Martha Campbell who

argues that the same arguments can be found in both the

Grundrisse and Capital, albeit presented in different ways.

According to her, the earlier drafts are merely ‘elaborations on and

alternative statements of the same points [that] clarify Marx’s

meaning and lend additional support for interpreting Capital’.19 In the

following section, I will trace the development of the arguments

presented above throughout Marx’ writings from the period 1857-67.

Section ‘6) Transition to Capital’ in the Urtext is essentially a

collection of passages almost directly copied from the Grundrisse.

Marx seems to have simply copied all the relevant passages in the

Grundrisse and put them all together in one section. This means

that the Urtext does not contain any important arguments that

cannot also be found in the Grundrisse. Nonetheless, the Urtext

makes it clear that the relevant passages scattered across the

Grundrisse, actually constitutes something like one coherent

argument.

One obvious theoretical mistake of the Grundrisse should be

mentioned at this point – the application of the formula M-C-C-M to

18 Callincos 2014, Rakowitz 2000, Reichelt 1970.

19 Campbell 2013, p. 150.

21
money as hoard (28/150). 20 As Bidet rightly argues, ‘M–C–C–M

cannot represent the third function of money’.21 This is confirmed by

the fact that Marx from the Urtext and onwards, reserves the formula

M-C-C-M (now abbreviated as M-C-M) for capital, while hoarding is

given the formula C-M (29/489, 29/371, 30/18, 35/141). The mistake

of applying the formula M-C-C-M to money as hoard is, however,

purely formal and is not due to a conceptual conflation of money as

hoard and capital, which Marx clearly distinguishes (28/151). In

other words, Marx here makes an erroneous formalisation of a

correct concept of money as hoard.22

The impossibility of money

The exposition of the immanent contradictions of simple circulation

and the inability of money to constitute an independent form of value

within simple circulation can be found in all of Marx’s writings from

20 The same mistake can be found in Marx’s letter to Engels of 2 April 1858: ‘Money qua money.
This is a development of the formula M-C-C-M’ (40/302).
21 Bidet 2007, p. 155.
22 Tony Smith surprisingly repeats this quite obvious mistake in his reading of the transition to

capital: ‘When exchange is undertaken on order to accumulate a hoard, or in order to collect a

reserve fund to make payments as bills become due, or in order to possess a universal money
that can be used throughout the world market, the C-M-C circuit is replaced by a M-C-M circuit’
(Smith 1990, p. 89). The mistake also carries over to Endnotes, who follows Smith on this point
(Endnotes 2010, p. 119).

22
the Grundrisse to (and including) Capital.23 One especially evident

example of this continuity is the following passage:

The imperishability money strove for when it posited itself

negatively against circulation and withdrew from it, is attained

[erreicht] by capital in that is preserves itself precisely by giving

itself up to circulation (28/192, translation modified)

This quote from the Grundrisse, where Marx makes it clear that

capital achieves what money was unable to achieve within simple

circulation – that is, giving value an independent form of existence –

is copied almost without changes into the Urtext and the 1861-3

Manuscripts.24 It also appears in a reworked form in Capital, where

the economic categories are replaced with their ‘character masks’:

The restless augmentation of value, which the miser

[Schatzbildner] strives after when seeking to save his money

from circulation, is attained by the more acute capitalist by

23 Cf.: The Grundrisse: 28/151, 166, 191, 193. The Urtext: 29/479, 484, 497. Contribution:
29/365-7. The 1861-3 Manuscripts: 30/18, 36.
24 The almost identical wording is nearly impossible to tell from the English translations:

compare MEGA II/1.1, p. 185 with 28/192 (Grundrisse), MEGA II/2, p. 82 with 29/497 (Urtext)
and MEGA II/3.1: 29 with 30/20 (1861-3 Manuscripts).

23
 constantly giving it up to circulation (35/164, translation

modified)

Though the passages are not identical, the operative opposition

between ‘striving’ and ‘attaining’ remains the same, and the same

essential idea is clearly present in the various texts: that money

cannot maintain itself as the independent form of existence of value

when it is hoarded. We can also see the continuity of this analysis of

hoarding in the words used to characterise money as hoard:

inorganic or burnt-out ‘ashes’ and ‘a sheer figment of the

imagination’ [ein reines Hirgespinst] are used in the Grundrisse

(28/193, 166), the Urtext (29/484, 479) and Contribution (29/365,

367), ‘caput mortuum’ in the Urtext (29/497) and Contribution

(29/365) and ‘petrified’ (versteinern) in the Urtext (29/492)

Contribution (29/367), the 1861-3 Manuscripts (30/36) and Capital

25
(35/141). The same thought is also implied when Marx

characterises hoarding as ‘Sisyphus-like labour [Sisyphusarbeit]’

(35/144) in Capital: like Sisyphus, the miser fails to achieve his

impossible goal.

25For the possible Hegelian source of inspiration for these expressions, see Murray 1988, p.
175.

24
 The same is true with regard to the analysis of the

contradictions of money as a means of circulation. In all of the

various manuscripts, Marx repeatedly writes that value ‘disappears’

(verschwinden) when money functions as a means of circulation.

Compare, for example, the following passages from the Grundrisse,

the 1861-3 Manuscripts and Capital:

It cannot be said that in simple circulation exchange value as

such is realised. It is always realised only in the moment of its

disappearance. (28/191)

In simple circulation, in contrast, exchange value is not realised

as such. It is always realised only in the moment of its

disappearance. (30/20)

The independent form, i.e., the money form, which the value of

commodities assumes in simple circulation only mediates the

exchange of commodities and disappears in the final result of

the movement (35/164, translation modified)

25
Again, the same thought is clearly expressed all the way from the

Grundrisse to Capital: value disappears and is not able to maintain

an independent and adequate form in simple circulation (Cf. also the

Urtext, 29/479, 488 and Contribution, 29/362).

The necessity of capital

The form of presentation of the argument revealing the necessity of

the form M-C-M, and not only the inadequacy of C-M-C, undergoes

a change with the 1861-3 Manuscripts. In the Grundrisse, the Urtext

and Contribution, the arguments that reveal the inadequacy of

simple circulation are more separated from the argument that shows

the necessity of the form M-C-M than in the 1861-3 Manuscripts and

Capital. In short, the former adopts a form of presentation in which it

is shown firstly that value cannot uphold itself within simple

circulation and then why value must circulate in the form M-C-M. In

contrast to this procedure, the 1861-3 Manuscripts and Capital

merge these arguments and adopt a form of presentation in which

the two forms of circulation are presented at the outset. A

subsequent comparison then reveals the impossibility of C-M-C and

the necessity of M-C-M or, in other words, that capital logically is the

26
necessary outcome of the necessity of an independent form of

value. It does so, as we have seen, by pointing out that value

‘disappears’ in the form C-M-C and ‘petrifies’ in the unsuccessful

attempt of the miser to hold onto value. In contrast, value assumes

an adequate form of existence and a higher degree of

independence in M-C-M, where it becomes the ‘overarching subject

[übergreifendes Subjekt]’ of the process of circulation (35/165). 26

The use of the concept of ‘subject’ to point to the autonomous form

of existence assumed by value when it circulates as capital, can be

found in all of the relevant writings of Marx,27 thereby once again

pointing to continuity in Marx’s conception of the transition to

capital.28

The comparison of C-M-C and M-C-M in 1861-3 Manuscripts

and Capital thus reveals that ‘the autonomisation of value

[Verselbständigung des Werts] is raised to a much higher potency

[in capital] than in money’ (32/318, translation modified).

What happens in the course of presentation in the beginning of

the 1861-3 Manuscripts and chapter Four of Capital is therefore that

the modality of the two forms of circulation (C-M-C and M-C-M)

26 In the Collected Works, übergreifendes Subjekt is translated as ‘the active factor’.

27 With the exception of Contribution, which does not contain anything about capital. See
28/196, 237, 399 (Grundrisse), 29/493 (Urtext), 30/12f (1861-3 Manuscripts).
28 Cf. Wolf 2007, p. 16.

27
changes. At this stage, C-M-C is presented as a necessary form,

whereas M-C-M is only a possible form of circulation. The

comparison then shows the former to be impossible and the latter to

be necessary. This means that M-C-M does not have to be deduced

as a necessary form of circulation in order to justify its introduction

into the argumentative progression – it is sufficient to have shown

that the concepts already developed makes it a possible form

without introducing arbitrary theoretical assumptions.

To put it in terms of the structure of Capital: in the beginning of

chapter Four, C-M-C and M-C-M has the status of being necessary

and possible, respectively. The comparison shows that in fact, C-M-

C is an impossible form and M-C-M is necessary. Hence, in order for

the introduction of M-C-M to be justified, Marx does not need to

prove the necessity of M-C-M, but only its possibility – and as we

have seen, this has already been accomplished with the argument

concerning the necessary doubling of the commodity into commodity

and money.

The much debated and criticised introduction of M-C-M in

Capital – the (in)famous ‘we find’ – is therefore perfectly justified,

28
inasmuch as the deduction of its necessity is not to found at the

outset, but in the subsequent comparison with C-M-C.29

The transition to production

In the Grundrisse and the Urtext, the transition from circulation to

production is presented in quite a different manner than in the 1861-

3 Manuscripts and Capital. In the former, Marx argues that in order

for (exchange) value to sustain itself in the form M-C-M’, it has to

integrate the consumption of the commodity into its own process

without losing its value form. Money, as objectified labour, can only

do this by exchanging with its opposite, i.e. living labour:

For money, use value is now no longer an article of

consumption in which it loses itself, but only a use value

through which it preserves and increases itself. No other use

value exists for money as capital. That is precisely the relation

of capital as exchange value to use value. Labour is the only

use value which can present an opposite and a complement to

money as capital, and it exists in labour capacity, which exists

29 Cf. also Wolf 2007, pp. 115, 120f.

29
 as a subject. Money exists as capital only in connection with

non-capital, the negation of capital, in relation to which alone it

is capital. Labour itself is the real non-capital (29/503)

Labour power – or ‘labour capacity’, as Marx calls it at this stage – is

thus the only commodity that can be consumed without resulting in

the disappearance of value, and capital can therefore only become

a dominant form of circulation on the condition that it consumes

labour power, that is, in so far as it is not merely a form of

circulation, but also a mode of production. In other words, the

argument corresponds broadly to what is presented in the beginning

of the section ‘γ) Exchange With Labour. Labour Process.

Valorisation Process’ in the 1861-3 Manuscripts (30/33ff) and

chapter Six in Capital (35/177).

What Marx does not explicate in the Grundrisse and the Urtext,

is the contradiction between the exchange of equivalents and the

necessity of surplus value in the form M-C-M’. Presupposing this

contradiction in an implicit manner, he does not explicitly show why

capital cannot be the dominant form of circulation in the form of

merchant’s capital or usury capital. In this regard, the 1861-3

Manuscripts and especially Capital constitutes a theoretical

30
improvement with the adding of the sections ‘b) Difficulties Arising

From the Nature of Value, etc.’ and chapter Five with the

unambiguous heading: ‘Contradictions in the General Formula of

Capital’. In an extremely clear way it is here shown how the M-C-M’,

which has been revealed as the necessary logical consequence of

generalised commodity exchange, cannot possibly be reconciled

with the laws of circulation, and that merchant’s capital and usury

capital cannot expand into the entirety of social reproduction – only

industrial or productive capital can do that.

In contrast to the dense and experimental reasoning of the

Grundrisse and the Urtext, which can at times be quite difficult to

decipher, the arguments in Capital are presented in a crystal clear

and accessible manner. Here we are obviously dealing with both a

popularisation and an improvement.30

***

The metamorphosis of the ways of presenting the transition to

capital throughout the writings of Marx can be summed up in the

following way. We can already find the necessary arguments in the

30Concerning the so-called ‘popularisation thesis’, see Backhaus 1997 and 1998; Reichelt
1995; Heinrich 1999.

31
Grundrisse, albeit scattered across the text and intertwined with

other arguments – hence the need of careful reconstruction in order

for them to be presented as a coherent argument. This is what the

Urtext does by compiling the various passages from the Grundrisse

and adding a few clarifying comments under the heading ‘Transition

to Capital’, placed within the chapter on money at the threshold to

the section on the transformation of money into capital. The Urtext

still has the character of a draft – as Heinrich puts it: ‘Supreme

presentation and argumentative self-forgetting replaces each other,

which leads to a great number of new beginnings and repetition’.31

When reading the Urtext, it is clear that the argument did not need

the 22 pages that it takes up in the Collected Works. This might be

the reason why it was abbreviated in the 1861-3 Manuscripts and

especially in Capital. The 1861-3 Manuscripts adopts the

aforementioned new form of presentation, and the transition to

capital is moved into the section of capital (though still at the

beginning of it, and therefore at a kind of threshold, as in the Urtext).

The presentation in the 1861-3 Manuscripts clearly resembles

Capital, though as we have seen, there are several passages and

expressions from the Grundrisse and Urtext that disappear in

31 Heinrich 2013, p. 177.

32
Capital, but can still be found in the 1861-3 Manuscripts. Finally,

Capital maintains the new form of presentation and abbreviates the

transition to capital to the point of being ‘extremely compact’.32 Even

so, the essential arguments can still be found in chapter Four of

Capital. The tendency to oppose the Grundrisse and the Urtext on

the one hand and Capital on the other – which is widespread in the

literature – is therefore misguided.33

III. Review of the literature

In this section, an overview of the literature on the transition to

capital will be provided. This can be divided into three readings: (1)

the historical reading, which conceives the transition from simple

circulation as a historical process, (2) the empirical reading,

according to which Marx introduces the concept of capital as an

empirical fact, and (3) the logical reading, which insists that there is

a necessary logical connection between the categories of simple

circulation and the concept of capital.

32Campbell 2013, p. 155.

33This view, which for the most parts completely disregards the 1861-3 Manuscripts, can be
found in Heinrich 1999, pp. 253ff and 2013, p. 176; Reichelt 1970, pp. 219, 244; Bidet 2007, pp.
153ff and 2005, pp. 139ff; Murray 2009, p. 176; Callinicos 2014, pp. 133ff.

33
The historical reading

Engels famously wrote in his review of Contribution that the

succession of categories ‘simply [is] the reflection, in abstract and

theoretically consistent form, of the course of history’ (16/475).

Simple circulation thus corresponds to a ‘simple commodity

production’, a pre-capitalist society of independent commodity

producers, not (yet) separated from the means of production.34 This

idea became common doxa in traditional Marxism, propagated by

for example Lenin35 (1977) and Karl Kautsky: ‘[I]n the course of time

a new form of movement develops from this form of the circulation of

commodities: buying in order to sell’.36

Not only does the Engelsian reading clearly contradict Marx’s

intentions – on the basis of the reading of the transition to capital

presented in this article, we can also see that it was, as Backhaus

puts it, a ‘grave misunderstanding’. 37

Consequently it is, as

Callinicos notes, ‘rejected by virtually every contemporary

34 As Chris Arthur notes, the phrase ‘simple commodity production’ was never used by Marx
himself (Arthur 2004, p. 19). Cf. also Rakowitz 2000 and Heinrich 1999, pp. 164ff.
35 Lenin 1977.
36 Kautsky 1922, p. 52.
37 Backhaus 1997, p. 11.

34
commentator on Capital’.38 However, what many critics of Engels fail

to reflect upon is how this misunderstanding could arise and appear

as a plausible interpretation. We cannot simply write off Engels as a

bad reader of Marx.

There are plenty of passages in Marx’ writings which suggests

that commodities and money are the historical presuppositions of

capital – that is, that money and commodities pre-dates capital, and

that capital could only come into being on this basis. Consider, for

example, the first sentence of chapter Four of Capital:

The circulation of commodities is the starting-point of capital.

The production of commodities, their circulation, and that more

developed form of their circulation called commerce, these form

the historical ground-work from which it rises (35/157)

Passages like this can be found in many places in Marx’s writings,

but they are often glossed over or left unmentioned in the effort to

refute the Engelsian logico-historical reading. There is no need,

however, to evade these passages in order to argue for the logical,

in contrast to historical or empirical, character of the transition to

38 Callinicos 2014, p. 42.

35
capital. When Marx speaks of pre-capitalist trade, money and

commodities, he is always careful to point out that we are dealing

with marginal social processes. He repeatedly underlines that in pre-

capitalist societies, only surplus products (Überschuss) were traded

as commodities. Capital in the form of merchant’s capital thus also

pre-dates capitalism:

This movement can take place within peoples and between

peoples for whose production exchange value has by no means

yet become the prerequisite. The movement only touches the

surplus of their output, which is still directed towards the

satisfaction of their immediate needs, and takes place only on

the boundary of production (28/184. Cf. also 28/160)

There is, then, a sense in which the production and circulation of

commodities, money and ‘antediluvian’ forms of capital pre-dates

the capitalist mode of production – but only in the precise sense that

the production and circulation of commodities were a marginal social

phenomenon, and not the dominant form of social reproduction.

On this basis, it is possible to clarify precisely what Engels’

misreading consists in: Possibly taking his cue from passages as the

36
ones quoted,39 Engels seems to have read the theory of value as

proceeding from the exchange of commodities, regardless of

whether this is understood as a dominant or merely a marginal

social process. He did not see that in order for the theory to work,

the commodity must have the status of being the dominant form of

the products of labour, and not merely a marginal form.40

It is therefore not wrong to speak of a historical transition from

simple circulation to capital in the (rather banal) sense that simple

circulation, understood as a marginal social phenomenon, pre-dates

capitalism. This is, however, not what the transition to capital as

outlined above depicts – here, we are dealing from the start with

simple circulation as a dominant social form, which turns out to be

inherently contradictory, leading dialectically to the concept of

capital.

The empirical reading

39 Cf. also Marx’s letter of 2 April 1858 to Engels: ‘The principle of self-reproduction is not
intrinsic to simple money circulation, which therefore implies something extrinsic to itself. Implicit
in money — as the elaboration of its definitions shows — is the postulate capital, i.e. value
entering into and maintaining itself in circulation, of which it is at the same time the prerequisite.
This transition also historical. The antediluvian form of capital is commercial capital, which
always generates money. At the same time the emergence of real capital, either from money or
merchant capital, which gains control of production’ (40/303, emphasis added).
40 Cf. Heinrich 1999, ch. 6.

37
One of the first commentaries on the transition to capital was Evald

Ilyenkov’s, which has exerted a lasting influence on later readings.

According to Ilyenkov, Marx simply introduces the formula M-C-M’

as an empirical fact: ‘An objective inquiry into the commodity-money

circulation has shown that this sphere does not contain in it any

conditions under which an obvious, unquestionable, and

omnipresent economic fact is possible, nay necessary: the

spontaneous growth of value’.41 The form M-C-M’ is here taken to be

‘a pervading fact not only under capitalism but in all the earlier

systems, too’.42

The view that Marx refers to an empirical phenomenon when

introducing M-C-M’ is also held by such otherwise different scholars

as Bidet, 43 Callinicos, 44 Alfredo Saad-Filho, 45 Duncan Foley 46 and

John Rosenthal. 47 I will not go into a discussion of whether it is

possible to integrate M-C-M’ as an empirical fact without violating

the methodological framework of the critique of political economy, as

this would require an extensive discussion about Marx’s method.

Instead, I will simply point out that Marx, as we have seen, actually

41 Ilyenkov 2008, p. 274.

42 Ilyenkov 2008, p. 273.
43 Bidet 2007, pp. 153ff.
44 Callinicos 2014, pp. 133ff.
45 Saad-Filho 2002, pp. 13f.
46 Foley 1986, p. 33.
47 Rosenthal 1997, pp. 161f.

38
develops the concept of capital on the basis of simple circulation

without recourse to empirical observations – and that the empirical

introduction of M-C-M’ therefore seems superfluous.

The logical reading

One of the first commentaries on the transition to capital, besides

Ilyenkov’s, can be found in Roman Rosdolsky’s classic study of the

Grundrisse and the Urtext.48 Though it is not formulated in the same

terms and is flawed by a few ambiguities,49 Rosdolsky’s reading is

essentially compatible with the one developed in the first section of

this article – i.e., he argues that an analysis of the immanent

contradictions of simple circulation leads dialectically to the concept

of capital, albeit without commenting on the relation between the

different texts of Marx’s.50

This ‘logical’ reading of the transition has been repeated and

further developed along the same lines by Reichelt, Projektgruppe

48 Rosdolsky 1977.
49 For example: ‘However, which of the two forms of circulation which we already know (C-M-C
and M-C-M) is involved here? In which can value become capital?’ (Rosdolsky 1977, p. 185).
Here one gets the impression that the concept of capital is introduced before the formula M-C-M
and then functions as the standard by which the two forms of circulation can be measured.
50 Rosdolsky 1977, pp. 183-93. When Rosdolsky writes that ‘this is the same solution to the

problem which we have already encountered in Volume I of Capital’, he is referring to the

derivation of the necessity of the commodity labour power, not the transition to capital
(Rosdolsky 1977, p. 189).

39
zur Kritik der Politischen Ökonomie, Patrick Murray, Heinrich,

Rakowitz, Arthur and Dieter Wolf.51 They all draw primarily on the

Grundrisse and the Urtext, and in the case of the Projektgruppe,

Arthur and Murray without discussing the relations between the

various manuscripts. Reichelt notes that the transition to capital is

more ‘smooth’ in the Grundrisse than in Capital, 52 and Rakowitz

likewise holds that ‘the necessity of the transition to capital is more

clear [in the Grundrisse] than in the presentation in Capital’. 53

Finally, as mentioned earlier, Heinrich argues that the introduction of

the general formula of capital in Capital (‘we find’) signifies that the

transition to capital has altogether disappeared in both the 1861-3

Manuscripts and Capital, resulting in ‘a breach in the dialectical

presentation’. 54 As we have seen, this is not a very convincing

reading, neither of the 1861-3 Manuscripts nor of Capital, and it is

perhaps symptomatic that Heinrich brushes aside both texts without

engaging in a serious reading of them. Although the above-

mentioned scholars present the arguments in a coherent and

51 Reichelt 1970, pp 243-9; Projektgruppe zur Kritik der Politischen Ökonomie 1973; Murray
1988; Heinrich 1999 and 2013; Rakowitz 2000; Arthur 2004; Wolf 2007.
52 Reichelt 1970, p. 244.
53 Rakowitz 2000, p. 148.
54 Heinrich 199, p. 257 and 2013, pp. 177ff.

40
convincing manner, we do not find any serious engagement with

neither (and especially) the 1861-3 Manuscripts nor Capital.55

Martha Campbell

To my knowledge, the only thoroughgoing comparison of the

Grundrisse and the Urtext on the one hand, and Capital on the

other, is Campbell’s article on ‘The Transformation of Money into

Capital’.56 Against the tendency to dismiss Capital on the grounds

on the ‘we find’-sentence, she rightly notes: ‘For some scholars, the

abruptness of this introduction is evidence that parts one and two of

Capital are logically discontinuous. Marx, however, neither just

drops simple circulation once he introduces M-C-M nor leaves M-C-

M just as we find it’.57

55 This is only partially true of Wolf, who rightly argues that the same arguments are present in
the Grundrisse, the Urtext and Capital, but does not consider the 1861-3 Manuscripts.
56 Campbell 2013. Repeating a mistake widespread in the literature, Campbell uses the

expressions ‘the transformation of money into capital’ and ‘the transition to capital’ as
synonyms. Though not entirely consistent, Marx actually designates two different things with
these expressions, which is indicated by the fact that they figure as the headlines of two
successive sections in the Urtext. Generally, the term ‘transition to capital’ refers to the
dialectical, conceptual operation by which the concept of capital is deduced as a form of
circulation by way of an analysis of the contradictions of money within simple circulation. By
using the term ‘transition’ (Übergang), Marx implicitly refers to Hegel, who uses this term to
designate the dialectical movement from one concept to another. ‘The transformation of money
into capital, on the other hand, refers to the real process by which the possessor of money turns
money into capital. See for example this passage from the 1861-3 Manuscripts: ‘The whole
movement that money performs to transform itself into capital therefore falls into two distinct
processes: the first is an act of simple circulation, purchase on one side, sale on the other; the
second is the consumption of the purchased article by the buyer, an act which lies outside
circulation, takes place behind its back’ (30/105, translation modified).
57 Campbell 2013, p. 154.

41
 In a detailed reading of chapter Four of Capital, Campbell

argues that the same central arguments are present in the

Grundrisse, the Urtext and Capital. According to Campbell, Capital

introduces both forms of circulation at the outset and then compares

them in three ‘rounds’, disclosing the necessity of M-C-M. 58 The

comparison reveals what Campbell takes to be the central

argument: ‘Because circulation is a permanently existing process

but is unable to recreate itself, it presupposes capital’.59 According to

this reading, the crucial argument in the transition to capital is, in the

words of the Urtext, that the ‘repetition of the process … does not

spring from the conditions of circulation itself. … [Simple] Circulation

does not, therefore, carry within itself the principle of self-renewal’

(29/479). This is in contrast to M-C-M’, which ‘is all-encompassing,

enclosing both commodities and money in its circulation, it relates

only to itself … and it has the capacity to reproduce itself’.60

While admirably clear and illuminating, Campbell’s reading

focuses on the wrong argument and therefore ultimately fails to

account for the transition to capital in a satisfying manner. 61

Neglecting the analysis of the immanent contradictions of money,

58 Campbell 2013, p. 156.

59 Campbell 2013, p. 151.
60 Campbell 2013, p. 171.
61 The same mistake also made by Banaji 1979, pp. 37f.

42
which is only mentioned en passant, 62 Campbell tries instead to

derive the concept of capital from the inability of the form C-M-C to

reproduce itself. The latter argument can be reduced to the rather

banal fact that something must be produced in order to circulate,

which could also be said about the form M-C-M (being at this point

of the argument merely a form of circulation). This does not mean,

however, that Marx’s comments about the ‘immediate being’ of

simple circulation being ‘pure appearance [reiner Schein]’ (29/479)

is entirely unimportant. The function of the comments about

absence of ‘the principle of self-renewal’ (29/479) in the form C-M-C

is, in the larger theoretical context, to point towards the transition

from circulation to production, which is developed in the subsequent

sections. In other words: the argument that Campbell focuses on

does not constitute the transition from simple circulation to capital,

but rather prepares the transition to production by pointing out that

circulation presupposes specific relations of production. Another way

to put this is that the transition to capital is not a result of the inability

of the form C-M-C to sustain itself, but the inability of value to

sustain itself in the form C-M-C.

62 Campbell 2013, pp. 160, 163, n. 51, 169, n. 70.

43
 As Campbell shows, a comparison between C-M-C and M-C-M

reveals that in the latter, value reaches a higher degree of

independence. This, however, is not sufficient to conclude that value

must necessarily assume the latter form. In order to get from C-M-C

to M-C-M, we need to show not only that value reaches a higher

degree of ‘autonomisation’ [Verselbständigung] in the latter than in

the former, but also that value cannot reach a high enough degree

of autonomisation in the former. And this is precisely what the

analysis of the immanent contradictions of money shows.

In the last analysis, there is therefore no dialectical transition to

be found in Campbell’s reconstruction of Marx’s argument. Instead

of the form M-C-M being derived out of the immanent contradictions

of C-M-C, the two forms are related to each other in a purely

external way by being measured against ‘the principle of increasing

independence of value’.63

David Harvey

In another attempt at a logical reading of the transition to capital,

Harvey argues that capital can be derived from money in its function

as a means of payment. This involves a grave misunderstanding of

63 Campbell 2013, p. 152.

44
what the means of payment is, which is clear from his comments to

Marx’s introduction of the character masks creditor and debtor:

So what is the role of credit in the general circulation of

commodities? Suppose I am a creditor. You are in need of

money, and I lend it to you now with the idea that I will get it

back later. The form of circulation is M-C-M, which is very

different from C-M-C64

The problem with this reading is quite straightforward: the means of

payment is not credit. Even though Marx writes that credit has its

‘root’ in the means of payment, he is very clear about the fact that

credit money implies ‘conditions, which, from our standpoint of the

simple circulation of commodities, are as yet totally unknown to us’

(35/137). Furthermore, the situation Marx describes in the passage

Harvey refers to is not that money is lent out, but a situation in which

there is a temporal separation between the handing over of a

commodity and the payment. We are therefore not dealing with the

process M-C-M. The seller turns into a creditor because the buyer

owes the creditor money for a commodity that has already been

64 Harvey 2010, p. 75.

45
handed over, not because the creditor lends out money. Harvey’s

misunderstanding can also be seen from his reading of a passage in

Capital in which Marx writes that the debtor turns commodity into

money ‘in order to be able to pay’, which means that money

becomes an end in itself (Selbstzweck) (35/147). To this, Harvey

comments:

Decoded, this means that there needs to be a form of

circulation in which money is going to be exchanged in order to

get money: M-C-M. […] This is the moment in Capital when we

first see the circulation of capital crystalizing out of the

circulation of commodities mediated by the contradictions of

money-forms65

Once again, Harvey misunderstands the situation Marx describes

with the words ‘the debtor [turned his commodity into money] in

order to be able to pay’: what this describes is that the debtor, who

has been handed over a commodity (and not money), must now

raise money (by selling a commodity) in order to pay the creditor.

The sale undertaken by the debtor in order to raise money does

65 Harvey 2010, p 76-

46
therefore happen not in order to buy a new commodity, but in order

to pay – i.e., it has the form C-M, and not M-C-M. The form M-C-M

can thus not be derived from money as means of payment.

Moishe Postone

According to Postone, Marx derives the concept of capital from

money as a hoard. He argues that hoarding is necessary in a

commodity economy, because ‘not every purchase can be affected

by a simultaneous sale’.66 This entails the separation of purchase

(M-C) and sale (C-M), which leads to money becoming a goal in

itself, in the process C-M:

At this point Marx begins his transition to the category of capital

… Marx argues that hoarding money is not a mode of

accumulation that is logically adequate to value, to an abstract

general form which is independent of all qualitative specificity.

Marx elaborates a logical contradiction between the

boundlessness of money, when considered qualitatively as the

universal representation of wealth that is directly convertible

66 Postone 1993, p. 266.

47
 into any other commodity, and the quantitative limitation of

every actual sum of money67

This contradiction in money as a hoard constitutes the transition to

capital, because capital is the solution to this contradiction. Here is

the passage in Capital that Postone refers to:

The desire after hoarding is in its very nature unsatiable

[maßlos]. In its qualitative aspect, or considered according to its

form, money has no bounds to its efficacy, i.e., it is the

universal representative of material wealth, because it is directly

convertible into any other commodity. But, at the same time,

every actual sum of money is quantitatively limited, and,

therefore, as a means of purchasing, has only a limited efficacy.

This contradiction between the quantitative limits of money and

its qualitative boundlessness, continually drives the hoarder

back to his Sisyphus-like labour of accumulating (35/143f,

translation modified)

67 Postone 1993, p. 267.

48
The last sentence in this quote is crucial: what Marx describes here

is why there is no natural limit for the activity of hoarding – not that

money must necessarily circulate in the form M-C-M. Endless

hoarding does not necessarily turn into the form M-C-M, but only

consists of an infinite series of repetitions of the formula of hoarding,

C-M, which is why it is characterised it as Sisyphusarbeit. There is

therefore no ‘dialectical reversal’ here, as Postone claims.

Concluding remarks

As we have seen, the movement from the commodity to capital can

be understood as a process in which money and capital undergo

changes in modality. To put it in terms of the structure of Capital: we

begin with the exchange of commodities as the dominant form of

social reproduction, or in other words: ‘a society in which the great

mass of the produce of labour takes the form of commodities’

(35/70). On this basis, the analysis of the value form in chapter One

and the analysis of the process of exchange in chapter Two reveals

the necessity of money, in contrast to the classical political

economists, for whom money was merely a useful tool, that is, a

mere helpful possibility but not a necessity. The necessity of money,

i.e. the necessity of the doubling of the commodity into commodity

49
and money, also reveals the possibility of capital. The further

analysis of simple circulation shows that money is, within the sphere

of circulation, in fact impossible and that capital is on the contrary

necessary (chapter Four). The analysis of capital as a form of

circulation, however, reveals that this form is also impossible

(chapter Five), and that the only way to overcome this is for capital

to be a mode of production (chapter Six), which is thereby shown to

be the necessary result and presupposition of the starting point:

exchange of commodities. What we see here is a gradual change of

the modality of money, from possibility to necessity and impossibility

– and in the same way, capital is first posited as a mere possibility,

which then shows itself first to be necessary and then to be

impossible, only to arrive at necessity again (though now in a

different meaning: as a mode of production, and not a form of

circulation).

As Kurz puts it, the form C-M-C has its only place in ‘the

bourgeois social science ideology, which proceeds from

independent commodity producers as the presupposition of the

universal market, thereby making the capital relation

50
[Kapitalverhältnis] disappear’. 68 At the kernel of the bourgeois

fantasy of capitalism as a system of freedom and equality, is the

idea of an autonomous sphere of circulation free of coercion, in

which commodity producers exchange equivalents. By revealing the

necessity of the transition to capital, Marx showed that the sphere of

circulation, in which ‘Freedom, Equality, Property and Bentham’ rule

(35/186), is nothing but the surface of relations of production based

on exploitation, dispossession and coercion: ‘the system of

exchange values … reveals as its concealed background, the

appropriation of alien labour without exchange, the total separation

of labour and property’ (28/433).

The transition to capital also reveals the utopian character of

every form of proudhonianism, that is, the belief that a society of

freedom and equality can be created merely by changes in the

sphere of circulation. 69 As Marx put it in quite a direct manner a

propos the French socialists: ‘It is an aspiration as pious as it is

68 Kurz 2012, p. 158. Kurz does not go into a discussion about the transition to capital, which he
would probably dismiss as an exercise in marxology and ‘pure logicism’. He does, however,
fiercely reject the conception of simple circulation and the ‘idiot formula C-M-C’ (Kurz 2012: 156)
as depicting an actual (contemporary or historical) social phenomenon. This rejection is
grounded partly in a critique of the concept of circulation, and partly in references to the
historical emergence of capitalism (Kurz 2012: ch. 7, 8). According to Kurz, the concept of
simple circulation is therefore ‘only a heuristic tool in the Marxian theoretical reconstruction of
the actual circumstances [wirklichen Verhältnisses]’ (Kurz 2012: 158) – a conception in
accordance with the reading of the transition to capital presented in this article.
69 Cf. Rakowitz 2000, ch. 2, 3.

51
stupid to wish that exchange value would not develop into capital’

(28/180).

The conclusion of the analysis of the transition to capital in this

article is that capitalist relations of production are the necessary

basis of a society based on the commodity form. There are two

important comments to be made to this conclusion.

Firstly, the necessity of capital is, as Marx expresses it, a

‘transitory necessity’ (35/587). Capitalist relations of productions are

necessary within a framework that is itself not necessary, and as

Marx wrote in his dissertation, freely quoting Epicurus (through

Seneca): ‘It is a misfortune to live in necessity, but to live in

necessity is not a necessity. … It is permitted to subdue necessity

itself’ (1/43).

Secondly, it is important to stress that the transition to capital

only marks the beginning of Marx’s analysis of capital. The further

analysis of the capitalist mode of production reveals that capital is

not a harmoniously self-reproducing process. As the transition from

circulation to production displays, capital is in the last instance a

social relation based upon the separation of the producers from the

immediate access to the means of production and subsistence – in

other words, it points towards the reality of class struggle and

52
delineate a field of social antagonism. Furthermore, the analysis of

the dynamics of capital reveals that it is a process that in and of

itself undermines the conditions of its own reproduction. Capital is

the ‘processing contradiction [prozessierende Widerspruch]’ (29/91),

a permanent state of crisis that points towards the need for creating

a society in which freedom is not only the name for the appearance

of violence and coercion.

References

Arthur, Chris 2004, The New Dialectic and Marx’s Capital, Leiden:

Brill

Backhaus, Hans-Georg 1997, Dialektik der Wertform, Freiburg: Ca

Ira

Backhaus, Hans-Georg 1998, ’Über die Notwendigkeit einer Ent-

Popularisierung des Marxschen ”Kapitals”’, in Kein Staat zu

machen. Zur Kritik der Socialwissenschaften, edited by

53
 Christoph Görg and Roland Roth, Münster: Westphälisches

Dampfboot

Banaji, Jairus 1979, ’From the Commodity to Capital: Hegel’s

Dialectic in Marx’s Capital’, in Value: The Representation of

Labour in Capitalism, edited by Diane Elson, London: CSE

Books

Bidet, Jacques 2007 [1985/2000], Exploring Marx’s Capital.

Philosophical, Economic and Political Dimensions, Leiden: Brill

Bidet, Jacques 2005, ’The Dialectician’s Interpretation of Capital’,

Historical Materialism, 13: 2, pp. 121-46

Callinicos, Alex 2014, Dechipering Capital. Marx’s Capital and its

destiny, London: Bookmarks

Cambell, Martha 2013, ‘The Transformation of Money into Capital’,

in In Marx’s Laboratory – Critical Interpretations of the

Grundrisse, edited by Riccardo Bellofiore, Guido Starosta and

Peter D. Thomas, Leiden: Brill

Endnotes 2010, Endnotes No. 2. Misery and the Value-Form,

London

Foley, Duncan 1986, Understanding Capital: Marx’s Economic

Theory, Cambridge, MA: Harvard University Press

54
Friedman, Milton 2002 [1962], Capitalism and Freedom, Chicago:

The University of Chicago Press

Harvey, David 2010, A Companion to Marx’s Capital, London: Verso

Heinrich, Michael 1999, Die Wissenschaft vom Wert. Die Marxsche

Kritik der politischen Ökonomie zwischen wissenschaftlicher

Revolution und klassischer Tradition, Münster: Westphälisches

Dampfboot

Heinrich, Michael 2012, An Introduction to the Three Volumes of

Karl Marx’s Capital, New York: Monthly Review Press

Heinrich, Michael 2013, Wie das Marxsche «Kapital» lesen?

Leseanleitung und Kommentar zum Anfang des «Kapital» Teil

2, Stuttgart: Schmetterling Verlag

Ilyenkov, E.V. 2008 [1960], The Dialectics of the Abstract and the

Concrete in Marx’s Capital, New Delhi: Aakar Books

Kautsky, Karl 1922 [1887], Karl Marx’ Ökonomische Lehren.

Gemeinverständlich dargestellt und erläutert, Stuttgart

Kurz, Robert 2012, Geld ohne Wert. Grundrisse zu einer

Transformation der Kritik der politischen Ökonomie, Berlin:

Horlemann

55
Lenin, V.I. 1977 [1913], The Three Sources and Three Component

Parts of Marxism, in Collected Works of V.I. Lenin, Moscow:

Progress Publishers

Marx, Karl and Engels, Friedrich 1975-, The Collected Works of

Marx and Engels, Moscow: Progress Publishers

Murray, Patrick 1988, Marx’s Theory of Scientific Knowledge,

Altlantic Highlands: Humanities Press

Murray, Patrick 2009, ‘The Place of ‘The Results of the Immediate

Production Process’ in Capital’, in Re-reading Marx: New

Perspectives after the Critical Edition edited by Riccardo

Bellofiore and Roberto Fineschi, London: Palgrave Macmillan

Projektgruppe zur Kritik der Politischen Ökonomie 1973, Zur Logik

des Kapitals, Hamburg: VSA

Postone, Moishe 1993, Time, Labor and Social Domination: A

Reinterpretation of Marx’s Critical Theory, Cambridge:

Cambridge University Press

Rakowitz, Nadja 2000, Einfache Warenproduktion. Ideal und

Ideologie, Freiburg: Ca Ira

Reichelt, Helmuth 1995, ’Why did Marx Conceal his Dialectical

Method?’, in Emancipating Marx. Open Marxism 3, edited by

56
 Werner Bonefeld, Richard Gunn, John Holloway and Kosmas

Psychopedis, London: Pluto Press

Reichelt, Helmuth 1970, Zur logischen Struktur des Kapitalbegriffs

bei Karl Marx, Frankfurt: Europäische Verlagsanstalt

Rosdolsky, Roman 1977 [1968], The Making of Marx’s ’Capital’,

London: Pluto Press

Rosenthal, John 1997, The Myth of Dialectics. Reinterpretating the

Marx-Hegel Relation, London: Palgrave Macmillan

Saad-Filho, Alfredo 2002, The Value of Marx. Political Economy for

Contemporary Capitalism, London: Routledge

Smith, Tony 1990, The Logic of Marx’s Capital, New York: SUNY

Press

Wolf, Dieter 2007, ’Übergang vom Geld zum Kapital. Warum ist die

„dialektische Form der Darstellung nur richtig, wenn sie ihre

Grenzen kennt“?’, Beiträge zur Marx-Engels-Forschung,

Hamburg

Žižek, Slavoj 2011 [2010], Living in the End Times, London: Verso

57
emental (not for publication)

Søren Mau
Ph.D-fellow
Department of Philosophy
University of Southern Denmark

Research interests: Marx, Marxism, German Idealism

Recent publications:
- (Forthcoming, 2016) “Communal Oaths” [“Kommunale eder”], in Den Blå Port, Copenhagen:
Lindhardt & Ringhof (in Danish)
- (2016) (with Henrik Jøker Bjerre), ”It is not Necessary to Live in Necessity” [“Det er ikke
nødvendigt at leve i nødvendighed”], in System, Freedom and Actuality. The Main Positions of
German Idealism [System, frihed og virkelighed. Den tyske idealismes hovedpositioner], Aarhus:
Philosophia Press (in Danish).
- (2016) “Freudomarxism – What Was It? What Went Wrong?” [Freudomarxisme – Hvad var
det? Hvad gik galt?], in Lamella. Journal of Theoretical Psychoanalysis [Lamella. Tidsskrift for
teoretisk psykoanalyse], Copenhagen: Society of Theoretical Psychoanalysis (in Danish)
- (2015) Raise Your Voice! [Hæv stemmen!], Copenhagen: Nemo (in Danish)
- (2015) “On the Potentials of the Critique of Parliamentarism” [“Om parlamentarismekritikkens
potentialer”], in Slagmark. Journal for the History of Ideas, Aarhus: Slagmark (in Danish)
- (2013) “The Universal Invitation – Kierkegaard and Badiou” [“Den universelle indbydelse –
Kierkegaard og Badiou”], in Kierkegaard Repeated [Kierkgaard gentaget], Aarhus: Philosophia
Press (in Danish)

Adress:
Søren Mau
Wesselsgade 18B, 2. Tv.
2200 Copenhagen N
Denmark

Email: smau@sdu.dk
Phone: +45 20358357