It might, however, be permissible to assume the defect to lie in a rather unhappy choice of example. Marx himself, dissatisfied with the diagram quoted above, proceeded forthwith to give a second example in order to elucidate the movements of accumulation, where the figures of the equation run in the following order:

I.5,000c+1,000v+1,000s=7,000
II.1,430c+285v+285s=2,000
Total:9,000

In contrast to the previous example, the capital of both departments is here seen to have the same composition, i.e. constant and variable capital are in a ratio of 5 to 1. This already presupposes a considerable development of capitalist production, and accordingly of social labour productivity—a considerable preliminary expansion of the scale of production, and finally, a development of all the circumstances which bring about a relatively redundant surplus population in the working class. We are no longer introduced to enlarged reproduction, as in the first example, at the stage of the original transition from simple to enlarged reproduction—the only point of that is in any case for the sake of abstract theory. This time, we are brought face to face with the process of accumulation as it goes on at a definite and rather advanced stage of development. It is perfectly legitimate to assume these conditions, and they in no way distort the principles we must employ in order to work out the individual loops of the reproductive spiral. Here again Marx takes for a starting point the capitalisation of half the surplus value in Department I.

‘Now take it that the capitalist class of I consumes one-half of the surplus-value, or 500, and accumulates the other half. In that case (1,000v + 500s) I, or 1,500, must be converted into 1,500 IIc. Since IIc amounts to only 1,430, it is necessary to take 70 from the surplus-value. Subtracting this sum from 285s leaves 215 IIs. Then we have:

‘I. 5,000c + 500s (to be capitalised) + 1,500 (v + s) in the fund set aside for consumption by capitalists and labourers.

‘II. 1,430c + 70s (to be capitalised) + 285v + 215s. As 70 IIs are directly annexed by IIc, a variable capital of 70 : 5, or 14, is required to set this additional constant capital in motion. These 14 must come out of the 215s, so that only 201 remain, and we have:

‘II (1,430) + 70c + (285v + 14v) + 201s.’[105]

After these preliminary arrangements, capitalisation can now proceed. This is done as follows:

In Department I the 500s which have been capitalised are divided into five-sixths (417c) + one-sixth (83v). These 83v withdraw a corresponding amount from IIs which serves to buy units of constant capital and thus accrues to IIc. An increase of IIc by 83 involves the necessity of an increase in IIv by 17 (one-fifth of 83). After the completion of this turnover we therefore have:

I.(5,000c+417s)+(1,000v+83s)v=5,417c+1,083v=6,500
II.(1,500c+83s)+(299v+17s)=1,538c+316v=1,899
Total:8,399