Circulating capital is capital "employed in raising, manufacturing, or purchasing goods, and selling them again at a profit. The capital employed in this manner yields no revenue or profit to its employer, while it either remains in his possession or continues in the same shape.... His capital is continually going from him in one shape, and returning to him in another, and it is only by means of such circulation, or successive exchanges, that is can yield him any profit...." Fixed capital is capital "employed in the improvement of land, in the purchase of useful machines and instruments, or in such like things....
"...every saving in the expense of supporting the fixed capital of the undertaker of every work is necessarily divided between his fixed and his circulating capital. While his whole capital remains the same, the smaller the one part, the greater must necessarily be the other. It is the circulating capital which furnishes the materials and wages of labor, and puts industry into motion. Every saving, therefore, in the expense of maintaining the fixed capital, which does not diminish the productive powers of labor, must increase the fund which puts industry into motion...."
[ Smith, p. 257 ] It is immediately clear that the relation between fixed capital and circulating capital is much more favorable to the big capitalist than it is to the smaller capitalist. The difference in volume between the amount of fixed capital needed by a very big banker and the amount needed by a very small one is insignificant. The only fixed capital they need is an office. The equipment needed by a big landowner does not increase in proportion to the extent of his land. Similarly, the amount of credit available to a big capitalist, compared with a smaller one, represents a bigger saving in fixed capital -- namely, in the amount of money which he must have available at all times. Finally, it goes without saying that where industrial labor is highly developed -- i.e., where almost all manual crafts have become factory labor -- the entire capital of the small capitalist is not enough to procure for him even the necessary fixed capital. It is well known that large-scale [agricultural] cultivation generally requires only a small number of hands.
The accumulation of large capitals is generally accompanied by a concentration and simplification of fixed capital, as compared with the smaller capitalists. The big capitalist establishes for himself some kind of organization of the instruments of labor.
"Similarly, in the sphere of industry every factory and every workshop is a more comprehensive combination of a larger material property with numerous and varied intellectual abilities and technical skills which have as their shared aim the development of production.... Where legislation preserves the unity of large landed properties, the surplus quantity of a growing population crowds together into industry, and it is therefore mainly in industry that the proletariat gathers in large numbers, as in Great Britain. But, where legislation allows the continuous division of the land, as in France, the number of small, debt-ridden proprietors increases and many of them are forced into the class of the needy and the discontented. Should this division and indebtedness go far enough, in the same way as big industry destroys small industry; and since larger landholding complexes once more come into being, many propertyless workers no longer needed on the land are, in this case too, forced into industry."
[ Schulz, pp. 58-9 ]
"The character of commodities of the same sort changes as a result of changes in the nature of production, and in particular as a result of mechanization. Only by eliminating human labor has it become possible to spin from a pound of cotton worth 3s. 8d., 350 hanks worth 25 guineas and 167 miles in length."
[ Schulz, p. 62 ]
"On average, the prices of cotton goods have fallen by 11/12ths over the past 45 years, and according to Marshall's calculations a quantity of manufacture costing 16s. in 1814 now cost 1s. 10d. The drop in prices of industrial products has meant both a rise in home consumption and an increase in the foreign market; as a result, the number of cotton workers in Great Britain not only did not fall after the introduction of machinery, but rose from 40,000 to 1.5 million. As for the earnings of industrial employers and workers, the growing competition among factory owners has inevitably resulted in a drop in profits in proportion to the quantity of products. Between 1820 and 1833, the gross profit made by Manchester manufacturers on a piece of calico fell from 4s. 1.5d. to 1s. 9d. But, to make up for this loss, the rate of production has been correspondingly increased. The consequence is that there have been instances of overproduction in some branches of industry; that there are frequent bankruptcies, which create fluctuations of property within the class of capitalists and masters of labor, and force a number of those who have been ruined economically into the ranks of the proletariat; and that frequent and sudden restriction in employment among the class of wage-earners."
[ Schulz, p. 63 ]
"To hire out one's labor is to begin one's enslavement; to hire out the materials of labor is to achieve one's *******.... Labor is man, while matter contains nothing human."
[ Pecqueur, pp. 411-12 ]
"The element of matter, which can do nothing to create wealth without the element of labor, acquires the magical property of being fruitful for them [that is, for the property owners], as if they themselves had provided this indispensable element."
[ Pecqueur, p. 412 ]
