A methodological interpretation of the circuits of capital

Abstract

This article investigates Marx’s method in the analysis of the circuits of capital, as it is carried out in Capital vol. 2, in an attempt to clarify some key aspects of the well-known problem in Marxist literature on the relation between the logical and the historical. The central question on this topic is whether Marx’s analysis is logical/structural or historical. The approach elaborated upon in this article extends beyond the one-sidedness of both views which deny any kind of correlation between logical and historical sequences and the views claiming that the articulation of Capital’s argument exposes a set of historical stages. We will argue that dialectic, namely, the method of ascent from the abstract to the concrete, represents, first and foremost, the inner articulation of the structure of a given self-developing object, and at the same time implicitly represents its historical development. Hence, taking Marx’s analysis of the circuits of capital as a case study, this article aspires to identify the fundamental movement of the systematic dialectic, which characterizes the entire Capital and explains the fundamental function of the relation between the logical and the historical.

Introduction

In most of the literature on the dialectic of Capital, the discussion focuses on the first volume. This is mainly due to the fact that the first volume is the only one completed by Marx himself. Yet, a systematic understanding of the method of Capital cannot be achieved exclusively on the basis of the first volume. Since Marx represents capitalism as a system of internal coherence, each sphere of capitalism can only be understood in relation to the others. Hence, the examination of the logical structure of volumes two and three is mandatory. In this article, we focus on Capital vol. 2 and specifically on the circuits of capital. We will try to show that Marx’s analysis of the circuits of capital is also based on the dialectical method (cf. Reuten 1998). In this context, we will deal with one of the most crucial issues surrounding Marxist’s dialectics, the relation between the logical and the historical. Thus, we will attempt to highlight the importance of the methodological examination of the circuits of capital in understanding of Marx’s dialectical method focusing on the relationship between the logical and the historical.

The central query concerning the problem of the logical and the historical is whether the theoretical structure of Capital represents the structural aspects of the given capitalist mode of production (logical) or it depicts capitalism as a real historical process (historical). There are quite a few debates on this issue characterized by different degrees of understanding of the problem. ¹ Marx’s and Engels’ formulations on the topic are found mainly in the chapter dedicated to the method of political economy in Marx’s Grundrisse (1857–1858) as well as in Engels’ review of Marx’s (1970 [1859]) book, A Contribution to the Critique of Political Economy. We find arguments in these texts that support both coincidence and non-coincidence between the sequence of logical categories and real history. In the review of Marx’s book, Engels, focusing on the aspect of coincidence, stresses that the logical method

is indeed nothing but the historical method, only stripped of the historical form and diverting chance occurrences. The point where this history begins must also be the starting point of the train of thought, and its further progress will be simply the reflection, in abstract and theoretically consistent form, of the historical course. Though the reflection is corrected, it is corrected in accordance with laws provided by the actual historical course, since each factor can be examined at the stage of development where it reaches its full maturity, its classical form. (Engels in Marx 1970 [1859]: 225) ²

Marx (1973 [1857–1858]), in the same line of thought, writes that

money may exist, and did exist historically, before capital existed, before banks existed, before wage labour existed, etc. [. . .] To that extent the path of abstract thought, rising from the simple to the combined, would correspond to the real historical process. (p. 102)

In contrast to the above formulations which emphasize the aspect of coincidence (identity) between the sequence of logical categories and history, Marx writes the following in respect of the method of political economy:

It would therefore be infeasible and wrong to let the economic categories follow one another in the same sequence as that in which they were historically decisive. Their sequence is determined, rather, by their relation to one another in modern bourgeois society, which is precisely the opposite of that which seems to be their natural order or which corresponds to historical development. (p. 107)

Based on the above, one can rationalize that a systematic understanding of this particular theoretical problem cannot be based merely on the reading of Marx’s and Engels’ various formulations. On the contrary, a critical interpretation is required through which the theoretical problem will be explained based on the method of Capital, that is, the method of ascending from the abstract to the concrete. More specifically, the method of ascending from the abstract to the concrete and the problem of the logical and the historical are mutually interconnected. Ilyenkov (2008) correctly points out this issue:

This most important point of Marx’s logic – his view of the relation of scientific development to historical one (the relation of the logical to the historical) must be considered specially. Without it, the method of ascent from the abstract to the concrete remains inexplicable. (p. 201)

Accordingly, the theoretical debate on the topic is strictly associated with the question of the relation between Hegel and Marx and how the latter utilizes the philosophical heritage of the former (see Dafermos 2021; Smith 2014).

In our approach, Capital is defined by the prevalence of the logical method. We will argue for the case, that the sequence of the categories is strictly logical, as it represents the aspects of the capitalist mode of production which exist simultaneously. On one hand, we reject interpretations, such as Meek’s, who considers that Marx’s analysis in the first parts of Capital deals with abstract precapitalist relations (Meek 1973). On the other hand, although we share too much with the views of Systematic Dialectics, we do not agree with their denial of any relevance of the dialectical method to history (Arthur 1997, 2004; Campbell 1993; Sekine 2020; Smith 1993a). ³ Our approach is inspired the most by the tradition of creative Soviet Marxism. Thinkers such as Ilyenkov and Vazjulin, while noting the systematic dialectic of Capital, at the same time conceive it as inextricably intertwined with the problem of the logical and the historical. According to Vazjulin, dialectical examination represents the structure of the subject matter, while its history is represented in an implicit way within the logical representation (Vazjulin 2006). Therefore, what distinguishes this approach is the understanding of the mutual interdependence of the logical and historical aspects. ⁴

We will focus our analysis on the first part of Capital vol. 2, titled The Metamorphoses of Capital and their Circuit, for the following reasons. First, its inner logic can reveal the basic structure of Marx’s entire dialectic in Capital. Thus, it is an ideal case study for our analysis of the relation between the logical and the historical. Second, we chose a part of Capital vol. 2 to argue that Marx’s systematic dialectic is not limited exclusively to Capital vol. 1 but rather is present in the three volumes. Third, the analysis of this part is almost absent from the existing literature on Marx’s dialectical method.

The circuits as a moment of Capital’s dialectic

The logic of Capital lies in the mechanism of ascending from the abstract to the concrete (Ilyenkov 2008; Reuten 1993; Smith 1993b; Vazjulin 2006). ⁵ Thinking starts from an abstract universal concept and proceeds to concrete ones in a deductive way. ⁶ This process of thinking is also a transition from immediacy to mediation. The initial all-embracing concept is the most immediate, while the concrete is mediated by reflection (cf. Smith 2014). More specifically, the ascent from the abstract to the concrete is determined by the logical movement ‘immediacy-mediation-posited immediacy’. Thinking starts from the immediacy of the given subject matter where the determinations of the object appear in their isolation. From the Hegelian point of view, the immediacy of the object is the sphere of being. Thinking negates the initial immediacy and the rigidity of the logical determinations and passes into the stage of mediation. In this way, it apprehends the logical determinations in their interconnection. The stage of mediation or reflection is associated with the investigation of the essence of the subject matter. From the stage of mediation, thinking returns to the immediacy grasping the concrete as a conceptual immediate. Hence, immediacy is now posited and determined by reflection, namely it is a mediated immediacy. At this stage, thinking investigates the appearance and the actuality of the given subject matter. The scientific knowledge of the given object lies in the totality of this logical movement (see. Smith 1990: 81). The logical formula ‘immediacy-mediation-mediated immediacy’ can be found in both Capital’s (vol. 1–3) overall structure and every part and chapter.

According to the above logical schema, the methodological division of Capital is as follows. Capital vol. 1 is distinguished between Parts 1 & 2 and 3–7. In the first two parts, Marx investigates the circulation process and more specifically the simple circulation as the immediacy of capital (Campbell 1993; Vazjulin 2006). In Parts 3–7, he continues with the analysis of mediation, that is, the production process and the way that surplus-value is produced. In Capital vol. 2, Marx returns to the sphere of circulation, but this time circulation constitutes a mediated immediacy, namely it is examined in light of the known sphere of production and specifically of the known process that surplus-value is produced (cf. Campbell 1998: 130–134 ). Hence, circulation does not appear anymore as an immediate or a presupposition but as something posited by the capitalist production process. This movement becomes clear in the case of the commodity, since Marx argues that ‘the commodity, as the elementary form of bourgeois wealth, was our starting point, the presupposition for the emergence of capital. On the other hand, commodities now appear as the product of capital’ (Marx in Marx and Engels 1994: 355). ⁷ In this way, Marx’s analysis corresponds to the logical movement ‘immediacy-mediation-posited immediacy’, or otherwise to the categorial structure in the spheres of being, essence and appearance (Banaji 2015; Sekine 2020; Vazjulin 2006). ⁸

In the part under consideration, capital is examined in the process of circulation. Capital is examined as an essential immediacy, namely, as an immediacy which is now posited by the essence, by the production process (cf. Hegel 1969: 479–498). Hence, the circuits of capital are determinations of the appearance of capital.

The synchronic dimension of the circuits

From the point of view of the overall process of circulation and independently of the particular form, which is specifically examined, each form of capital is in mutual and inseparable unity with the others. In other words, money, production and commodity capital exist simultaneously. Alternatively and from the perspective of the forms of capital, each form implies the exclusion of the others, since capital cannot take the form of money, productive and commodity capital at the same time. As Marx (1978 [1885]) points out,

the circuit of capital is a constant process of interruption; one stage is left behind, the next stage embarked upon; one form is cast aside, and the capital exists in another; each of these stages not only conditions the other, but at the same time excludes it. (p. 182)

Thus, capital appears as a negative unity, ⁹ passing from one form to the other while at the same time remaining identical to itself. Accordingly, the forms of capital (money, productive and commodity) manifest themselves as mutually presupposed and mutually excluded. For this reason, Marx argues that

all the premises of the process appear as its result, as premises produced by the process itself. Each moment appears as a point of departure, of transit, and of return. The total process presents itself as the unity of the process of production and the process of circulation; the production process is the mediator of the circulation process, and vice versa. (p. 180)

Remaining exclusively within the framework of the above, it can be argued that Marx’s analysis of the functional forms of capital is not historical but logical/structural. In other words, the forms of existence of capital within the process of circulation are examined in their synchronicity and they depict the logical structure of circulation of the given capitalist mode of production.

The formula for money capital

Marx starts the examination of the three formulas with the analysis of money capital. The circuit of money capital has the formula M–C . . . P . . . C′–M′. ¹⁰ This formula represents the following moments: (1) the capitalist comes into the sphere of circulation as a buyer, (2) the transition to the productive process, during which the purchased commodity is consumed (productive consumption), creating a commodity of greater value than the prepaid value for the purchase of the components of its production and (3) the return to the sphere of circulation, where the capitalist now appears as a seller, in which the conversion of the commodity into money takes place. Marx notes that the act M–C is subdivided into two distinct and independent acts, the M–Mp and the M–L, where Mp = means of production and L = labour power. These are two purchasing acts, on which the conversion of money into a commodity is based; the first lies in the purchase of the means of production and the second in the purchase of labour power. As a result, the more detailed illustration of the first act of money capital takes the form M–C < ^L_Mp. Although these acts are sub-moments of the single act M–C, Marx distinguishes them in time. Moseley (1996) argues that "Marx’s circuit of money capital refers to a real process, which takes place in real historical time. (p. 11). During the birth of each individual capital, the act M–Mp necessarily precedes the act M–L. In this context, Marx writes,

If money is to be transformed for the first time into productive capital, or to function as money capital for the first time for its possessor, then he must first buy the means of production, i.e. buildings, machines, etc. before he buys labour-power; for when the labour power passes into his control, the means of production must also be present before it can be applied as labour-power. (p. 114)

The following acts of the formula represent the successive transformations of capital until the final form of money in which the capital value and the surplus-value are included. Thus, the circuit of money capital represents, in a more detailed manner, the general formula for capital M–C–M, as it is exposed in Capital vol. 1. Sekine (2020) notes upon this matter that

the circuit of money-capital (M–C . . . P . . . C′–M′) is formally identical to the already familiar circulation formula for industrial capital, first introduced in the doctrine of circulation. In simple circulation, however, the production process of capital could only be anticipated. By now, its reality has been fully exposed. (p. 271)

The general formula displays the feature of capital in its immediacy, ¹¹ namely, the fact that value in the form of capital has the capacity for self-valorization (cf. Smith 2014). However, in the circuit of money capital, it is now revealed that self-valorization is no more an enigmatic capacity but is grounded on the production of surplus-value.

From the perspective of the relation between the logical and the historical, the first act M–C < ^L_Mp of the formula for money capital is exposed based on the structure of the already developed capitalist mode of production. Therefore, from the aspect of its subdivision into M–C < ^L_Mp, the logical sequence M–C represents a predominantly structural relation of the capitalist mode of production. Nonetheless, the distinction in time of the acts M–Mp and M–L represents the historical sequence of their emergence in a sublated form. By sublated form we mean a state that something exists as preserved within its negation. For Hegel to sublate (Aufheben) means at the same time to overcome, to annul and to preserve. Sublation (Aufhebung) is a fundamental function in dialectical methodology, since it is internally interwoven with the deduction of logical categories. When something is represented in a sublated form it means that it is not represented as such but as a survived and preserved moment within an advanced form after its negation. ¹²

From the historical point of view, the act M–Mp precedes the act M–L and it is exactly this sequence that represents the historical emergence of the capital-relation, namely the fact that the separation of the immediate producers from the means of production is a necessary condition for the emergence and establishment of the relation between the money-owner, as a buyer of labour power, and the free workers, as sellers of their labour power. For this reason, Marx (1978 [1885]) writes that ‘the means of production, the objective portion of productive capital, must thus already face the worker as such, as capital, before the act M–L can become general throughout society’ (p. 116). So, for act M–L to become a general social act, the means of production must constitute a capitalist property and at the same time be opposed to a free labour force available in the market. Consequently, there exists an implicit parallel between the logical sequence and history.

The logic of the circuits of capital can be also understood from the perspective of its causality (cf. Reuten 2014). The circuit of money capital is a completed cycle, in which the initial amount of money, in the form of capital value, is converted into increased money. Due to its complete form, the renewal of the circuit exists only as a possibility. It is uncertain whether the circuit will take place again or not. For this reason, Marx (1978 [1885]) stresses that ‘M . . . P . . . M′ may just as well be the final circuit, concluding the functioning of the individual capital, which is then withdrawn from the business, or else the first circuit of a capital that newly enters into its function’ (p. 172). In this way, the motion of capital is characterized by contingency (cf. Hegel 1969). Vazjulin (2011) notes that the self-movement of an object becomes prevalent only gradually during its development. This means that at the birth of a historical process contingency prevails. Hence, the inherent causality of the first formula implicitly depicts the element of contingency that prevails at the birth of capitalism. ¹³

We conclude that the first formula strictly depicts the capitalist process of circulation and at the same time it depicts the process of the birth of capital through its historical conditions in a sublated form. However, Marx’s analysis aims first and foremost at depicting the structural aspects of capitalist circulation and not the historical process of the emergence of capital-relation. A more detailed analysis shows that the first act M–C, which, as has been said, is characteristic of the birth of each individual capital, presupposes both its moments, the acts M–Mp and M–L. Hence, the act Μ-Mp is taken as an internal moment of the wider act M–C and not as its historical condition. ¹⁴ What is revealed here is that the aspects of the object under consideration, namely the capitalist mode of production, acquire another order and sequence in its already developed form from the order that they historically emerged (See. Marx 1973 [1857–1858]: 107). The aforementioned aspects of capital, which arose non-synchronically throughout its historical emergence, are revealed to be synchronic in the already developed capital.

From the analysis of the formula for money capital, we conclude that the relation between the logical and the historical is neither an identity, that is, a complete coincidence of the logical with the historical development, nor a difference, that is, indifference or even opposition between the logical and the historical sequence. What is specifically established here is the mutual interpenetration of the logical and historical aspects under the prevalence of the logical. The circuit of money capital represents the movement that each individual capital goes through during its birth, but also implicitly represents the historical process through which the capitalist mode of production has emerged. Marx emphasizes this twofold character in Capital vol. 1 where Marx (1976 [1867]) notes,

Historically speaking, capital invariably first confronts landed property in the form of money; in the form of monetary wealth, merchants’ capital and usurers’ capital. However, we do not need to look back at the history of capital’s origins in order to recognize that money is its first form of appearance. Every day the same story is played out before our eyes. (p. 247)

In this way, a parallel between phylogenesis and ontogenesis of capital is highlighted, that is, the fact that each individual capital, in the process of its birth, recapitulates the wider historical process of the birth of the capitalist mode of production. Systematic Dialectics’ interpretation neglects this fundamental aspect of the dialectical method. For instance, Reuten argues that dialectic should be understood as completely different from a theory of dialectical historical development (Reuten 1993). Systematic Dialectics’ interpretation does not see that the parallel between the logical and historical sequence results from the motion of capital itself. In other words, the movement of the already developed capitalist mode of production reproduces its historical development in a sublated form. Hence, the scientific representation of capital’s motion recapitulates its history in a sublated form.

The formula for productive capital

The next circuit in Marx’s analysis is that of productive capital and has the formula P . . . C′–M′–C . . . P. This formula is the direct negation of that of money capital (Marx 1978 [1885]). In the formula for money capital, production is the middle term of the circuit while in the formula for productive capital circulation is the middle term. Moreover, circulation in the circuit of money capital has the type M–C–M, something that results by subtracting the moment of production from the formula M–C . . . P . . . C′–M′. In the circuit of productive capital, circulation has the type C–M–C, which corresponds to the formula for simple circulation (Marx 1976 [1867]: 247–258). In the formula for productive capital, M′ includes both capital value and surplus-value. In the process of circulation of productive capital, the act M′–C is subdivided into two distinct acts, M–C and m–c. The first act (M–C) represents the conversion of capital value into a commodity (Mp and L) for productive consumption while the second act (m–c) represents the conversion of surplus-value into commodities for capitalist’s individual consumption. Thus, the second act (m–c) exits the circuit of productive capital, since it ends up with individual consumption. Hence, the movement of surplus-value from the form of commodity, which came out of the production process, to the form of money and again to the form of commodity, has the type c–m–c. ¹⁵ The movement c–m–c constitutes a simple circulation because it results in individual consumption. However, its first act (c–m) is an internal moment of the circulation process of commodity capital C′–M′ and for this reason is a moment of the whole circuit, while its second act (m–c) exits the circuit of capital (Marx 1978 [1885]: 147).

In the formula for productive capital the two extremes, P . . . P, represent the reproduction process of capital. Given that the total amount of surplus-value is spent entirely on individual consumption of the capitalist, the circuit of capital constitutes a process of simple reproduction without any change to the other economic factors. The production process, the locus of production of surplus-value, is at the end of the circuit. Therefore, the circuit itself appears as a recurrent movement that takes place on the same scale. Marx notes that this circuit

signifies the periodically repeated function of the productive capital, i.e. reproduction. In other words it signifies that its production process is a reproduction process in respect of valorization; not only does production occur, but also the periodic reproduction of surplus-value. It signifies that the function of the industrial capital that exists in its productive form does not take place once and for all, but is periodically repeated, so that the new beginning is given by the point of departure itself. (p. 144)

The renewal of the circuit P . . . P has the invariability of the economic factors as a necessary condition. However, in the case of fluctuations and changes in the factors of production (such as an increase or decrease in the value of raw materials, means of production, wages and the like), it may, on one hand, make the renewal of the circuit with an equal amount of capital value impossible, and on the other hand, lead to reproduction on an extended scale with the same amount of capital value. In the first case, the renewal of the circuit of capital can take place only if a part of the amount of surplus-value will be added along with the capital value – and given the fact that this total amount is sufficient for the renewal of the production process – or if the capitalist has this necessary extra amount of money in the form of reserve capital. So, in the first case, the simple reproduction of capital is not certain. The second case, in which a production process of an extended scale takes place with the same amount of capital value, makes clear that the formula for productive capital implies the potential of reproduction on an extended scale. Thus, the schema P . . . P becomes P . . . P′. In this context Marx notes the following:

In P . . . P′, P′ does not express the fact that surplus-value is produced, but rather that the produced surplus-value is capitalized, i.e. that capital has been accumulated, and hence P′, as opposed to P, consists of the original capital value plus the value of the capital accumulated through its movement. (p. 160)

The logical sequence of the second formula is also related to historical processes. We have noted that in the first formula, circulation is represented as both an immediate condition of each individual capital and an implicit historical presupposition of the capitalist mode of production. On the contrary, in the formula P . . . C′–M′–C . . . P, circulation is the middle term, which means that it no longer appears as a condition of capital but as its result, namely as an aspect that is reproduced and is posited by the movement of capital itself. The second P, whether it is P (simple reproduction) or P′ (extended reproduction), has circulation as its immediate condition, that is the relation C′–M′–C. However, the latter is a condition that has arisen and been posited from an earlier production process. In this way, the formula for productive capital represents the process of accumulation of capital. Yet, the accumulation of capital is the mechanism through which capitalism is gradually formed. This means that the logical sequence of the second formula implicitly displays the historical process of transformation of precapitalist commodity relations into capitalist ones.

In the second formula both the first and the second extreme do not express the value of the components of production but their use-value. The first P is capital within the production process with its components as use-values. The second P, whether as merely P or P′, signifies the return of industrial capital in the form of productive capital, that is in the form of use-values. In this way, in the second extreme P, the valorized capital value has not yet taken the form of money and therefore is incomplete. For this reason, the circuit of capital must continue. In this way, the logical structure of the formula for productive capital implies the process of reproduction (simple or extended). From the perspective of causality, the formula for productive capital represents the necessity of the reproduction process of capital. ¹⁶ Moreover, the necessity of capital’s movement manifests as a relative because the individual capital is still the subject matter and not the totality of social capital (cf. Hegel 1969: 546–550). The necessity of reproduction appears more when the second extreme has the form P′, that is, a part of the surplus-value has been added to P. However, this circuit, taken as reproduced, necessarily presupposes the conversion of a part of the surplus-value into capital value, since the change of the value of the factors of production disturbs the equivalence between the initial and the final P. Given that, the interconnection of the surplus-value produced with the circuit of productive capital becomes necessary. Hence, the second formula implicitly depicts the necessity of capitalist accumulation.

The recognition of the coincidence between the logical sequence of this formula and capitalism’s historical formation does not mean that the two orders are identical. Murray recognizes that there is a coincidence between conceptual developments and historical stages in some parts of Capital and he correctly suggests that the two orders should not be conceived as identical. However, he rejects the idea of interaction between the two orders, conceiving them as mutually exclusive (Murray 2003). According to our interpretation, Marx’s analysis of the circuit of productive capital remains first and foremost logical, that is, it aims primarily at depicting the structural aspects of the circulation process of the already developed capitalist mode of production. Yet, the logic of this circuit implicitly represents the historical process of formation of the capitalist mode of production.

The formula for commodity capital

Marx continues the analysis of circulation with the circuit of commodity capital, the formula for which is C′–M′–C . . . P . . . C′. In the circuit of money capital, circulation is distinguished by two phases, one that precedes and the other that follows production. In the circuit of productive capital, circulation follows production and is the middle term between the two extreme P’s. In the circuit of commodity capital, circulation precedes the production process. Furthermore, circulation in the first circuit, given that it is interrupted by the production process, has the type M–C–M′ and in the second circuit has the type C–M–C (Marx 1978 [1885]). In the formula for commodity capital, the first C′ is the commodity product which contains both capital value and surplus-value. Thus, the circuit of commodity capital constitutes a circuit of capital value and surplus-value. In the case of reproduction on an extended scale, the second C′ becomes C″, namely, a commodity product of greater value than the initial. Moreover, the C′ which is the starting point of the circuit of commodity capital is the fourth moment of the circuit of money capital and the second moment of the circuit of productive capital. This means that C′ presupposes the completion of the third act and the completion of the first act of money and productive capital respectively. At the same time, the first two formulas presuppose the third one because a part of the means of production is the commodity product of the circuit of other individual capitals. In other words, for the different capitalists that come to the market as sellers of the means of production, the latter are their commodity product (C′). For this reason, Marx writes that ‘C′ does not just appear as the product of the two earlier circuits, but also as their premise’ (p. 167). Hence, the act M–C (M–C < ^L_Mp) presupposes its opposite, C′–M′, as an act belonging to the circuit of other individual capitals.

What differentiates the circuit of commodity capital from that of money and productive capital respectively, is that its starting point is an already valorized capital value. So, we do not have to deal with the initial capital value which is going to be valorized but rather with an already valorized capital value that is going to be valorized once again. Moreover, the second extreme in each one of the previous circuits, M′ and P (or P′) respectively, is a result of the circulation process. The transformation of C′ into M′ and C into P (or P′) respectively takes place through a mere act of exchange. On the contrary, in the circuit of commodity capital the second extreme C′ is the result of the production process and therefore it is something that differs in terms of value from its previous moment (P). What becomes apparent in the third circuit is the entanglement and the essential interconnection between the circuits of individual capitals. In the formula for commodity capital, the essential interaction between the process of production and the process of circulation of the total social capital comes to the foreground. Marx explains that the circuit C′ . . . C′

it itself demands to be considered not only as the general form of the circuit, i.e. as a social form in which every individual industrial capital can be considered (except in the case of its first investment), hence not only as a form of motion common to all individual industrial capitals, but at the same time as the form of motion of the sum of individual capitals, i.e. of the total social capital of the capitalist class, a movement in which the movement of any individual industrial capital simply appears as a partial one, intertwined with the others and conditioned by them. (p. 177)

In the formula for commodity capital, we examine each act from the point of view of its necessary opposite act, which must be carried out for the outcome of the first. We have the following: the first act C′–M′ presupposes the opposite act M–C, which means a buyer that will change their money with the commodity is required. Thus, the opposite act belongs to another circuit. Here, it does not matter if the purchased commodity will be consumed for productive or individual consumption. Whatever the purpose of the purchase of C′, the opposite movement M–C takes out C′ from the process of circulation and enables the completion of the first transformation of C′ into M′. The next act, M′–C (Mp + L) . . . P, presupposes C as a commodity that comes to the market through another circuit, in which the specific act is C′ (Mp)-M′. Hence, the means of production (Mp) is the C′ of the circuit of other individual capitals while the labour-power (L) must be available in the market. Because the formula for commodity capital has the valorized capital value as a starting point and not simply the capital value, the completion of its circuit presupposes the consumption of the total commodity product (p. 173). In this context, Marx writes that

the division of the total social product, as well as the particular division of the product of every individual commodity capital, into an individual consumption fund on the one hand and a reproduction fund on the other, is included in this form of the circuit of capital. (p. 174)

The formula C′–M′–C . . . P . . . C′ is crucial for the mediating role of C. This means that the circuit of commodity capital cannot be completed if the middle C (Mp) has not yet been produced. C (Mp) must therefore take the form of C′ in the circuit of another individual capital. In this way, the circuit of another capital is revealed as a necessary condition for the circuit of commodity capital. For this reason, Marx notes that in this circuit ‘C′ exists as the point of departure, the point of transit and the conclusion of the movement; in other words it is always there. It is a permanent condition for the reproduction process’ (p. 174). Hence, this formula shows that the production process and circulation process constitute a mutual and contradictory unity (see Arthur 1998b).

Similar to the examination of the previous formulas, the analysis of the circuit of commodity capital concerns primarily the structural functions of the circulation process of the already developed capitalist mode of production. This formula shows that the permanent existence of commodities in the market is a necessary condition for both the production and reproduction processes. Nonetheless, the entanglement of the circuits of different capitals already shows that this formula implicitly depicts the stage of maturity of the capitalist mode of production.

More specifically, this circuit starts and ends with C′ in which the capital value and the surplus-value are included. Like the second formula, the circuit of commodity capital is not completed because it does not end in the form of money, so it must continue. For this reason, the third formula also implies the process of reproduction. Nevertheless, as we have discussed, the third formula depicts not only the process of reproduction of an individual capital but also that of total social capital. Hence, the specificity of the third formula lies in the fact that the movement of an individual capital is internally interwoven with the circuits of the other capitals and presupposes them. Marx points out that ‘in form I, M may be the only money capital, and in form II P may be the only productive capital, that appears on the historical scene. In III, however, . . . C is twice presupposed outside the circuit’ (p. 175). This means that the logical structure of the third formula implies the movement of total social capital. Consequently, the formula for commodity capital depicts the universal necessity ¹⁷ of the motion of the capitalist mode of production, namely it represents capital as a self-moving totality. ¹⁸

The implicit historical aspect of the third formula lies in the fact that the market appears as completely transformed by the movement of capitalism and, therefore, constitutes a strictly capitalist market. In this way, the representation of the mutual intertwining of circulation and production in light of the movement of total social capital implicitly displays the historical stage of maturity of the capitalist mode of production. ¹⁹ According to the above, the third formula reveals that the various economic factors and components have been subsumed into the logic of the capitalist mode of production, something which features the historical stage of machine production.

In conclusion, the examination of the circuits of capital shows that Marx’s analysis remains first and foremost logical (synchrony), which means it constitutes an examination of the circulation process of the capitalist mode of production. Yet, the logic of presentation of the three formulas implicitly depicts the different historical stages (diachrony) of capitalism and the process of formation of its self-movement. The process of gradual formation of capitalism’s self-movement is related to the development of the different types of causality as discussed previously. Hence, the first circuit represents the movement of capital as a process of enrichment of an individual money-owner. In the second circuit, the movement of capital appears as a process of accumulation of wealth of an individual capital. The third circuit represents the movement of an individual capital only as a part of the movement of the total social capital. The unity of the three circuits represents the contradictory self-movement of capital and at the same time depicts the historical process of formation of this self-movement in a sublated form.

Dialectical argument and historical representation

We have previously indicated that each formula represents different functions and relations of the already capitalist mode of production and at the same time recapitulates its broader historical development. This ‘recapitulation’ is produced by the inner structure of the dialectical argument. In broad terms, the stages of the historical process are sublated in the moments of the dialectical argument. Immediacy refers to the historical presuppositions of the subject matter, mediation to its process of formation and mediated immediacy to its historical maturity. Marx’s exposition of the circuits is based on this logical sequence. Thus, in each circuit, thinking refers in a different way to immediacy and mediation. The form of thinking that corresponds to each circuit can be understood through the spectrum of the figures of syllogism as presented by Hegel ²⁰ (see Arthur 1998b; Smith 1993a).

If we consider each formula from the point of view of its purely functional aspects, we end up with the formula of functional circuits. Tombazos (2014) points out that ‘the passage from a “formal” circuit to a “functional” circuit is very simple. We just need to eliminate the terms that appear twice’ (pp. 134–135). Thus, the active aspects of each formula will be preserved while those moments that belong to the circuit of other capitals as well as the moments that do not play an active role in the circuit will be removed. Therefore, we come to the following: 1) M-C…P…C′-M′= M…P…C′, 2) P…C′-M′-C…P= P…C′-M′, 3) C′-M′-C…P…C′= C′-M′…P. The erased terms correspond to the commodity that belongs to the circuit of another capital and the second extreme which does not play an active role in the circuit (see. Tombazos 2014: 135).

To clarify the relation of the three formulas from the perspective of the syllogisms, the correspondence between the terms money, production and commodity (M, P and C) and the categories of universality, particularity and singularity must be defined. This becomes possible by comparing the broader logical development of these terms (M, P and C) in the first part of Capital vol. 2, with their development in the first two parts of Capital vol. 1. In the first two parts of vol. 1, the examination begins with the commodity, passes to labour (abstract/concrete) as the substance of values and concludes with money. Based on this logical movement, commodity corresponds to the singular, labour or production/value ²¹ to the particular and money to the universal. This movement of thinking can be exposed further by the sequence of examination in the second part of vol. 1, titled The Transformation of Money into Capital, where the first formula for simple circulation C–M–C precedes the general formula for capital M–C–M. In other words, in the first two parts of Capital vol. 1, thinking moves from commodity to money. On the contrary, the course of thought in the first part of Capital vol. 2 has the opposite direction. The analysis of the circuits of capital begins with the formula for money capital, continues with the productive capital and ends with the commodity capital. This contradictory movement of thinking is fundamental in the dialectical examination. The first direction consists in the course from immediacy to essence while the second transitions from essence to immediacy. In the first course, thinking starts from the singular and moves towards the universal while in the second course, it begins with the universal and moves towards the singular. Hence, the logical development in the analysis of the simple circulation in Capital vol. 1 has the general form of singular–particular–universal, while in the analysis of the circuits of capital, it has the form of universal–particular–singular. ²² From the totality of the two opposite movements, it becomes clear that M (money), P (production) and C (commodity) correspond respectively to U (universal), P (particular) and S (singular) (see Arthur 1998b). ²³

Based on the above, the correspondence between the functional circuits and the figures of syllogism is as follows: the first functional circuit M . . . P . . . C′ = U–P–S, the second P . . . C′–M′ = P–S–U and the third C′–M′ . . . P = S–U–P. ²⁴ In the first syllogism, productive capital, as the particular, mediates money and commodity capital and consequently mediates the valorization process. Given that the second extreme is the valorized value, the whole process reveals the objective movement from the capital value to the valorized capital value, namely, the process of self-valorization of value. It is a qualitative syllogism that represents capital in its immediacy and for this reason, corresponds to the general formula for capital. The second functional circuit has the form of a syllogism of reflection because the whole relation displays the connection of the terms from the point of view of the capital value and the surplus-value. Commodity capital C′ is the middle term that divides and mediates the two opposite sides; the capital value in the form of P and the valorized value in the form of M′. On one hand, P is the immediate premise, that is, the stage that surplus-value is added to the capital value. On the other hand, M′ is the aspect of mediation because it is the completion of the process of valorization. Hence, the capital value and the surplus-value is the determinateness through which C′ is related to its others. The third syllogism, which is a syllogism of necessity, reveals the mediation of the functional forms of capital and no longer has any immediate premise. The middle term is the valorized value in the form of money capital and indicates the mutual presupposition of each functional form. In this syllogism, money is revealed as the substance that determines the motion of commodity and production and it appears as the universal principle of the capitalist mode of production. In this context, Arthur notes that similar to the Hegelian system of syllogisms, ‘capital as valorizing value unfolds itself in a system of circuits in which its form determinations mediate themselves and the whole’ (Arthur 1998b: 116).

The consideration of the circuits from the viewpoint of the figures of syllogism indicates the gradual negation of immediacy throughout the development of thought. At the same time, the gradual negation of immediacy implicitly represents the historical process of transformation of the natural (naturwüchsig) preconditions of capital into predominantly historical (Marx 1973 [1857–1858]). Marx apprehends immediacy not only as a logical function through the ascend from the abstract to the concrete but also as an actual historical precondition of his subject matter. The logical process of the negation of immediacy corresponds also to the actual historical process in which capitalism gradually transforms its natural preconditions. Hence, the functional circuits implicitly represent the historical process through which capitalism gradually produces its preconditions by its own movement.

Conclusion

In this article, we have exhibited the basic aspect of the relation of the logical and the historical that characterizes the dialectic of Capital and we have presented in detail its function through the examination of Marx’s analysis of the circuits of capital. Marx’s method in Capital is predominantly logical, since the analysis focuses on the sides of capital that exist simultaneously. This aspect of Marx’s analysis is manifested through the mutual interdependence of the functional forms of capital. However, this logical examination simultaneously constitutes an implicit representation of the historical development of the object under investigation. In other words, the dialectical examination of a self-moving object, precisely because it depicts the object’s self-movement, reproduces, in a sublated form and within the framework of the prevalence of the logical method, the wider historical course of its development. ²⁵ (Marx in Marx and Engels 1994) quite clearly stresses the methodological aspect of the dialectic since he notes that ‘this circular course taken by our presentation . . . corresponds to the historical development of capital’ (p. 355). This coincidence between the logical and the historical aspect was revealed by the analysis of the three circuits of capital.

In the 21st century, modern technologies associated with artificial intelligence, Big Data, automation and the like, are reshaping fundamental aspects of the global capitalism. Globalized production and circulation are acquiring new characteristics and becoming increasingly complex. Therefore, the scientific examination of the current stage of capitalism requires a highly complex research methodology. In this context, the systematic assimilation of the dialectic of Capital and its further development become crucial. Thus, the further study of this topic seems to be of great importance both for addressing today’s social challenges as well as for shaping future prospects for emancipation.