Itspreservation——hispreservation——requiresdailyconsumption。HencepaymentforitmustbecontinuouslyrepeatedatrathershortintervalsinorderthathemaybeabletorepeatactsL——M——CorC——M——C，repeatthepurchasesneededforhisself-preservation。Forthisreasonthecapitalistmustalwaysmeetthewage-laborerinthecapacityofamoney-capitalist，andhiscapitalasmoney-capital。Ontheotherhandifthewage-labourers，themassofdirectproducers，aretoperformtheactL——M——C，theymustconstantlybefacedwiththenecessarymeansofsubsistenceinpurchasableform，i。e。，intheformofcommodities。Thisstateofaffairsnecessitatesahighdegreeofdevelopmentofthecirculationofproductsintheformofcommodities，hencealsoofthevolumeofcommoditiesproduced。Whenproductionbymeansofwage-labourbecomesuniversal，commodityproductionisboundtobethegeneralformofproduction。Thismodeofproduction，onceitisassumedtobegeneral，carriesinitswakeaneverincreasingdivisionofsociallabour，thatistosayanevergrowingdifferentiationofthearticleswhichareproducedintheformofcommoditiesbyadefinitecapitalist，evergreaterdivisionofcomplementaryprocessesofproductionintoindependentprocesses。M——MPthereforedevelopstothesameextentasM——Ldoes，thatistosaytheproductionofmeansofproductionisdivorcedtothatextentfromtheproductionofcommoditieswhosemeansofproductiontheyare。Andthelatterthenstandopposedtoeveryproducerofcommoditieswhichhedoesnotproducebutbuysforhisparticularprocessofproduction。Theycomefrombranchesofproductionwhich，operatedindependently，areentirelydivorcedfromhisown，enterintohisownbranchascommodities，andmustthereforebebought。Thematerialconditionsofcommodityproductionfacehimmoreandmoreasproductsofothercommodityproducers，ascommodities。
Andtothesameextentthecapitalistmustassumetheroleofmoney-capitalist，inotherwordsthereisanincreaseinthescaleonwhichhiscapitalmustassumethefunctionsofmoney-capital。
Ontheotherhand，thesameconditionswhichgiverisetothebasicconditionofcapitalistproduction，theexistenceofaclassofwage-workers，facilitatethetransitionofallcommodityproductiontocapitalistcommodityproduction。Ascapitalistproductiondevelops，ithasadisintegrating，resolventeffectonallolderformsofproduction，which，designedmostlytomeetthedirectneedsoftheproducer，transformonlytheexcessproducedintocommodities。Capitalistproductionmakesthesaleofproductsthemaininterest，atfirstapparentlywithoutaffectingthemodeofproductionitself。SuchwasforinstancethefirsteffectofcapitalistworldcommerceonsuchnationsastheChinese，Indians，Arabs，etc。But，secondly，whereverittakesrootcapitalistproductiondestroysallformsofcommodityproductionwhicharebasedeitherontheself-employmentoftheproducers，ormerelyonthesaleoftheexcessproductascommodities。Capitalistproductionfirstmakestheproductionofcommoditiesgeneralandthen，bydegrees，transformsallcommodityproductionintocapitalistcommodityproduction。[3]
Whateverthesocialformofproduction，labourersandmeansofproductionalwaysremainfactorsofit。Butinastateofseparationfromeachothereitherofthesefactorscanbesuchonlypotentially。Forproductiontogoonatalltheymustunite。Thespecificmannerinwhichthisunionisaccomplisheddistinguishesthedifferenteconomicepochsofthestructureofsocietyfromoneanother。Inthepresentcase，theseparationofthefreeworkerfromhismeansofproductionisthestarting-pointgiven，andwehaveseenhowandunderwhatconditionsthesetwoelementsareunitedinthehandsofthecapitalist，namely，astheproductivemodeofexistenceofhiscapital。Theactualprocesswhichthepersonalandmaterialcreatorsofcommoditiesenteruponwhenthusbroughttogether，theprocessofproduction，becomesthereforeitselfafunctionofcapital，thecapitalistprocessofproduction，thenatureofwhichhasbeenfullyanalysedinthefirstbookofthiswork。Everyenterpriseengagedincommodityproductionbecomesatthesametimeanenterpriseexploitinglabour-power。Butonlythecapitalistproductionofcommoditieshasbecomeanepoch-makingmodeofexploitation，which，inthecourseofitshistoricaldevelopment，revolutionises，throughtheorganisationofthelabour-processandtheenormousimprovementoftechnique，theentirestructureofsocietyinamannereclipsingallformerepochs。
Themeansofproductionandlabour-power，insofarastheyareformsofexistenceofadvancedcapital-value，aredistinguishedbythedifferentrolesassumedbythemduringtheprocessofproductioninthecreationofvalue，hencealsoofsurplus-value，intoconstantandvariablecapital。Beingdifferentcomponentsofproductivecapitaltheyarefurthermoredistinguishedbythefactthatthemeansofproductioninthepossessionofthecapitalistremainhiscapitalevenoutsideoftheprocessofproduction，whilelabour-powerbecomestheformofexistenceofanindividualcapitalonlywithinthisprocess。Whereaslabour-powerisacommodityonlyinthehandsofitsseller，thewage-labourer，itbecomescapitalonlyinthehandsofitsbuyer，thecapitalistwhoacquiresthetemporaryuseofit。
Themeansofproductiondonotbecomethematerialformsofproductivecapital，orproductivecapital，untillabour-power，thepersonalformofexistenceofproductivecapital，iscapableofbeingembodiedinthem。
Humanlabour-powerisbynaturenomorecapitalthanbymeansofproduction。
Theyacquirethisspecificsocialcharacteronlyunderdefinite，historicallydevelopedconditions，justasonlyundersuchconditionsthecharacterofmoneyisstampeduponpreciousmetals，orthatofmoney-capitaluponmoney。
Productivecapital，inperformingitsfunctions，consumesitsowncomponentpartsforthepurposeoftransformingthemintoamassofproductsofahighervalue。Sincelabour-poweractsmerelyasoneofitsorgans，theexcessoftheproduct’svalueengenderedbyitssurplus-labouroverandabovethevalueofproductivecapital’sconstituentelementsisalsothefruitofcapital。Thesurplus-labouroflabour-poweristhegratuitouslabourperformedforcapitalandthusformssurplus-valueforthecapitalist，avaluewhichcostshimnoequivalentreturn。Theproductisthereforenotonlyacommodity，butacommoditypregnantwithsurplus-value。ItsvalueisequaltoPs，thatistosayequaltothevalueoftheproductivecapitalPconsumedintheproductionofthecommodityplusthesurplusvaluescreatedbyit。Letusassumethatthiscommodityconsistsof10，000
lbs。ofyarn，andthatmeansofproductionworth£；372andlabourpowerworth£；50wereconsumedinthefabricationofthisquantityofyarn。Duringtheprocessofspinning，thespinnerstransmittedtotheyarnthevalueofthemeansofproductionconsumedbytheirlabour，amountingto£；372，andatthesametimetheycreated，inproportionwiththelabour-powerexpendedbythem，newvaluetotheamountof，say，£；128。
The10，000lbs。ofyarnthereforerepresentavalueof£；500。
III。THIRDSTAGE。C’——M’
Commoditiesbecomecommodity-capitalasafunctionalformofexistence——stemmingdirectlyfromtheprocessofproductionitself——
ofcapital-valuewhichhasalreadyproducedsurplus-value。Iftheproductionofcommoditieswerecarriedoncapitalisticallythroughoutsociety，allcommoditieswouldbeelementsofcommodity-capitalfromtheoutset，whethertheywerecrudeiron，Brusselslace，sulphuricacidorcigars。Theproblemofwhatkindsofcommodities，isoneoftheself-createdlovelyillsofscholasticpoliticaleconomy。
Capitalintheformofcommoditieshastoperformthefunctionofcommodities。Thearticlesofwhichcapitaliscomposedareproducedespeciallyforthemarketandmustbesold，transformedintomoney，hencegothroughtheprocessC——M。
Supposethecommodityofthecapitalisttoconsistof10，000lbs。
ofcottonyarn。If£；372representthevalueofthemeansofproductionconsumedinthespinningprocess，andnewvaluetotheamountof£；128
hasbeencreated，theyarnhasavalueof£；500，whichisexpressedinitspriceofthesameamount。SupposefurtherthatthispriceisrealisedbythesaleC——M。Whatisitthatmakesofthissimpleactofallcommoditycirculationatthesametimeacapital-function？Nochangethattakesplaceinsideofit，neitherintheuse-characterofthecommodity——foritpassesintothehandsofthebuyerasanobjectofuse——norinitsvalue，forthisvaluehasnotexperiencedanychangeofmagnitude，butonlyofform。
Itfirstexistedintheformofyarn，whilenowitexistsintheformofmoney。ThusasubstantialdistinctionisevidentbetweenthefirststageM——CandthelaststageC——M。Theretheadvancedmoneyfunctionsasmoney-capital，becauseitistransformedbymeansofthecirculationintocommoditiesofaspecificuse-value。Herethecommoditiescanserveascapitalonlytotheextentthattheybringthischaracterwiththeminreadyshapefromtheprocessofproductionbeforetheircirculationbegins。Duringthespinningprocess，thespinnerscreateyarnvaluetotheamountof£；128。Ofthissum，say£；50representtothecapitalistmerelyanequivalentforhisoutlayforlabour-power，while£；78——whenthedegreeofexploitationoflabour-poweris156percent——formsurplus-value。Thevalueofthe10，000lbs。ofyarnthereforeembodiesfirstthevalueoftheconsumedproductivecapitalP，theconstantpartofwhichamountsto£；372andthevariableto£；50，theirsumbeing£；422，equalto8，440lbs。ofyarn。NowthevalueoftheproductivecapitalPisequaltoC，thevalueofitsconstituentelements，whichinthestageM——Cconfrontedthecapitalistascommoditiesinthehandsoftheirsellers。
Inthesecondplace，however，thevalueoftheyarncontainsasurplus-valueof£；78，equalto1，560lbs。ofyarn。Casanexpressionofthevalueofthe10，000lbs。ofyarnisthereforeequaltoCplusDC，orCplusanincrementofCequalto£；78，whichweshallcallc，sinceitexistsinthesamecommodity-formasnowtheoriginalvalueC。
Thevalueofthe10，000lbs。ofyarn，equalto£；500，isthereforerepresentedbyCc=C’。WhatturnsC，theexpressionofthevalueof10，000lbs。ofyarn，intoC’isnottheabsolutemagnitudeofitsvalue£；500，forthatisdetermined，asinthecaseofanyotherCstandingfortheexpressionofthevalueofsomeothersumofcommodities，bythequantityoflabourembodiedinit。Itisitsrelativevalue-magnitude，itsvalue-magnitudeascomparedwiththatofcapitalPconsumedinitsproduction。Thisvalueiscontainedinitplusthesurplus-valuesuppliedbytheproductivecapital。Itsvalueisgreater，exceedsthatofthecapital-valuebythissurplus-valuec。The10，000lbs。ofyarnarethebearersofthecapital-valueexpanded，enrichedbythissurplus-value，andtheyaresobyvirtueofbeingtheproductofthecapitalistprocessofproduction。
C’expressesavalue-relation，therelationofthevalueofthecommoditiesproducedtothatofthecapitalspentontheirproduction，inotherwords，expressesthefactthatitsvalueiscomposedofcapital-valueandsurplus-value。
The10，000lbs。ofyarnrepresentcommoditycapital，C’，onlybecausetheyareaconvertedformoftheproductivecapitalP，henceinaconnectionwhichexistsoriginallyonlyinthecircuitofthisindividualcapital，oronlyforthecapitalistwhoproducedtheyarnwiththehelpofhiscapital。
Itis，sotosay，onlyaninternal，notanexternalrelationthatturnsthatturnsthe10，000lbs。ofyarnintheircapacityofvehiclesofvalueintoacommodity-capital。Theyexhibittheircapitalistbirthmarknotintheabsolutemagnitudeoftheirvaluebutinitsrelativemagnitude，inthemagnitudeoftheirvalueascomparedwiththatpossessedbytheproductivecapitalembodiedinthembeforeitwastransformedintocommodities。If，then，these10，000lbs。ofyarnaresoldattheirvalueof£；500，thisactofcirculation，consideredbyitself，isidenticalwithC——M，ameretransformationofanunchangingvaluefromtheformofacommodityintothatofmoney。Butasaspecialstageinthecircuitofanindividualcapital，thesameactisarealisationofthecapital-valueembodiedinthecommoditytotheamountof£；422plusthesurplus-value，likewiseembodiedinit，of£；78。ThatistosayitrepresentsC’——M’，thetransformationofthecommodity-capitalfromitscommodity-formintothemoneyform。[4]
ThefunctionofC’isnowthatofallcommodities，viz。:totransformitselfintomoney，tobesold，togothroughthecirculationstageC——M。
Solongasthecapital，nowexpanded，remainsintheformofcommodity-capital，liesimmovableinthemarket，theprocessofproductionisatrest。Thecommodity-capitalactsneitherasacreatorofproductsnorasacreatorofvalue。Agivencapital-valuewillserve，inwidelydifferentdegrees，asacreatorofproductsandvalue，andthescaleofreproductionwillbeextendedorreducedcommensuratewiththeparticularspeedwithwhichthatcapitalthrowsoffitscommodity-formandassumesthatofmoney，orwiththerapidityofthesale。ItwasshowninBookIthatthedegreeofefficiencyofanygivencapitalisconditionalonthepotentialitiesoftheproductiveprocess，whichtoacertainextentareindependentofthemagnitudeofitsownvalue。[Englishedition:KarlMarx，Capital，Vol。I，pp。602-08——Ed。]Hereitappearsthattheprocessofcirculationsetsinmotionnewforcesindependentofthecapital’smagnitudeofvalueanddeterminingitsdegreeofefficiency，itsexpansionandcontraction。
ThemassofcommoditiesC’，beingthedepositoryoftheexpandedcapital，mustfurthermorepassinitsentiretythroughthemetamorphosisC’——M’。Thequantitysoldishereamaindeterminant。Theindividualcommodityfiguresonlyasanintegralpartofthetotalmass。The£；500worthofvalueexistsinthe10，000lbs。ofyarn。Ifthecapitalistsucceedsinsellingonly7，440lbs。attheirvalueof£；372，hehasreplacedonlythevalueofhisconstantcapital，thevalueoftheexpandedmeansofproduction。Ifhesells8，440lbs。herecoversonlythevalueofthetotalcapitaladvanced。Hemustsellmoreinordertorealisesomesurplus-value，andhemustselltheentire10，000lbs。inordertorealisethesurplus-valueof£；781，560lbs。ofyarn。In£；500inmoneyhereceivesmerelyanequivalentforthecommoditysold。HistransactionwithinthecirculationissimplyC——M。Ifhehadpaidhislabourers£；64inwagesinsteadof£；50hissurplus-valuewouldonlybe£；64insteadof£；78，andthedegreeofexploitationwouldhavebeenonly100percentinsteadof156。Butthevalueoftheyarnwouldnotchange；onlytherelationbetweenitscomponentpartswouldbedifferent。ThecirculationactC——Mwouldstillrepresentthesaleof10，000lbs。ofyarnfor£；500，theirvalue。
C’isequaltoCcor£；422at£；78。CequalsthevalueofP，theproductivecapital，andthisequalsthevalueofM，themoneyadvancedinM——C，thepurchaseoftheelementsofproduction，amountingto£；422inourexample。Ifthemassofcommoditiesissoldatitsvalue，thenCequals£；422andcequals£；78，thevalueofthesurplus-productof1，560lbs。ofyarn。Ifwecallc，expressedinmoney，m，thenC’——M’=Cc-Mm，andthecircuitM——C……P……C’——M’，initsexpandedform，isthereforerepresentedbyM——C