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By Karl Marx

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1. Simple reproduction. In department I, the workers buy commodities from department II to the equivalent of their wages, and the capitalists to the equivalent of their profits. Both these flows are continuous (workers and capitalists alike have to eat every day) regardless of whether department I commodities have already been sold. 26 With the money received from the sale of their commodities, the capitalists of department II buy from department I the means of production needed to reconstitute their own constant capital used up during the production process.

However, in order to grasp the deeper significance of the concept ‘process of circulation of capital’, as well as the exact place of Volume 2 in Marx’s overall analysis of the capitalist mode of production attempted in his three-volume magnum opus, we have to understand the inner connection between the production of value and its realization. Commodity production is the expression of a specific form of social organization, which encompasses a basic contradiction. On the one hand, human production has outgrown the primitive form of subsistence-farming and handicrafts, which prevailed in more or less isolated communities of producer-consumers.

Together they prepared the Manifesto of the Communist Party (1848) as a statement of the Communist League’s policy. In 1848 Marx returned to Germany and took an active part in the unsuccessful democratic revolution. The following year he arrived in England as a refugee and lived in London until his death in 1883. Helped financially by Engels, Marx and his family nevertheless lived in great poverty. After years of research (mostly carried out in the British Museum), he published in 1867 the first volume of his great work, Capital.

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