Thursday, March 10, 2011

Karl's Quote

Before capitalism could get going, it was in need of money capital to finance its operation. Primitive accumulation began with the age of exploration and continued through the mercantile period to provide the necessary capital. Marx comments, "The capitalist mode of production – since its basis is wage labour, and therefore also the payment of the worker in money and the general transformation of services in kind into money payments – can develop on a large scale and penetrate deeply only when there is a quantity of money in the country in question for circulation and for the hoard formation (reserve fund etc.) conditioned by this circulation, This is a historical precondition, even if the situation should not be conceived in such a way that a sufficient hoard has first to be formed before capitalism production can begin. The latter rather develops simultaneously with the development of its preconditions, and one of these preconditions is a sufficient supply of precious metals. Hence the increased supply of precious metals from the sixteenth century onwards was a decisive moment in the historical of capitalist production. In so far as we are dealing with the further supply of money material needed on the basis of the capitalist mode of production, we can say that on the one hand surplus-value is cast into circulation in the product without the money for its conversion, while on the other hand surplus-value in gold is cast into circulation without its previous transformation from product into money."
(Capital, Vol. II, p418 Penguin Classics edition)

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