II. Means -of "COiTsuTTiption, /. e. commodities in a shape

in which they are consumed by the capitalist* and labourers,
CRISES. 267
(or, in other words, in which they are absorbed by individual consumption).
In each of these divisions, capital falls into two parts:
1. Variable capital. Considered from the point of view of value, this capital is equal to the value of the labour power employed in the division, consequently it is equal to the sum total of wages paid for such labour power. From the point of view of material, it consists in the active labour power itself.
2. Constant capital. The value of all the means of pro- duction employed in the division. The means of production themselves fall into two parts: fixed capital (machines, tools, buildings, cattle, etc.)'; and circulating constant capital (raw and auxiliary materials for production, semi-manufactured articles, etc.).
The value of the annual product produced in each of the two divisions, falls itself into two parts; one represents the constant capital (c), which has been consumed and its value transferred to the product; the other represents the supplementary value due to the year's labour. This- latter part, in its turn, is subdivided; one fraction of it replaces the variable capital (v), which has been advanced; and the •other is the surplus-value (s). Thus, just like the value of every individual commodity, that of the annual product of each division falls into c + v + s.
The value of c, representing the constant capital con- sumed in the process of production, is not identical with the value of the constant capital applied to that process. True, the materials necessary for production have been completely consumed and their value has been, in consequence, com- pletely transferred to the product. But only a part of the fixed capital employed has been consumed and its value transferred to the product. Another part of the fixed capi- tal (machines, buildings, etc.) still exists and functions - although we must make a deduction for wear and tear during the year. When we consider the value of the pro- duct, this part of the fixed capital, which continues to func- tion, does not enter into our calculations. But we must also, at least provisionally, make abstraction of the value trans- ferred, through wear and tear during the year, by fixed ca- pital to the product — in so far as such fixed capital has
268 ' • CHAPTER XXIV
not been, in the course of the year, replaced in natura. We shall discuss this point separately later on.
For the purpose of our investigation of the process of simple reproduction, we shall adopt the following formula as basis, in which
c — constant capital v — variable capital s — surplus value
- the ratio of utilisation, assumed at 100 %. v
/. e. it is assumed that the surplus-value is exactly equal to the outlay for labour-wages. (We may suppose the figures to represent millions of pounds sterling or dollars).