Economic Manuscripts of 1861–1863

In 1859, Marx published A Contribution to the Critique of Political Economy (First Instalment), and after that, he intended to continue writing the second instalment, Capital in General, and set the Draft Plan of the Chapter on Capital, divided into four major parts: I. The Process of Production of Capital; II. Circulation Process of Capital; III. Capital and Profit; IV. Varia (miscellany). Marx included the contents of his previous manuscripts in each of these four major parts, forming a broad structural outline. The writing of the manuscripts consisted roughly of three stages: The first stage was from August 1861 to the spring of 1862, and the content written was equivalent to the first half of Capital, Vol.1, (up to “Machinery”) and the first three parts of Capital, Vol.3, i.e., “The Conversion of Surplus-Value into Profit and of Rate of Surplus-Value into the Rate of Profit”, “Conversion of Profit into Average Profit”, and “The Law of the Tendency of the Rate of Profit to Fall”. The second stage was from the spring 1862 to December 1862, and the content written included “Theory of Surplus-Value” as well as the second half of Capital, Vol. 3, such as commercial capital, money-capital, ground-rent, etc., and in addition, there were some theoretical fragments of Capital, Vol. 2. At the end of December 1862, Marx came up with a new idea in his research, and prepared first to publish the part “Capital in General” as an independent work, under the title Capital and under the subtitle A Critique of Political Economy. The third stage was from January to July 1863, and the content of research involved the second half of Capital, Vol. 1 as well as the manuscripts on the question of reproduction. Thus, by July 1863, Marx has completed the writing of the manuscripts and gave the manuscripts the title “A Contribution to the Critique of Political Economy Third Chapter (Capital in General)”.

The Economic Manuscripts 1861–1863 is massive in its volume, totaling 23 notebooks, and includes four parts: (1) Chapter Three. Capital in General, in the first part, “The Production Process of Capital,” of which, Marx examined three questions: transformation of money into capital; absolute surplus-value; relative surplus-value. (2) Capital and Profit, which is the content of the third part in the draft plan that Marx turned to writing after the interruption of the first part of the manuscript. (3) Theories of Surplus-Value, which is a very voluminous part of the draft. (4) Other contents.

In the first part of this manuscript, Marx elucidated the concept of capital from the relationship between commodity and money and revealed the characteristics of the commodity labor-power of being capable of creating surplus-value. He held that the determination of the value of labor-power value is of utmost importance for the understanding of capital relations. The manuscript for the first time systematically studied and expounded the production of absolute and relative surplus-value, for the first time analyzed in detail the three chief forms of raising the productive power of labor within the scope of capitalist production: co-operation, division of labor, or the application of scientific power, and for the first time examined in detail the forms and substance of the subordination of labor to capital. The manuscript first expressed the law of relative surplus-value and scientifically demonstrated that the development of the productive forces results in an intensified contradiction between bourgeoisie and proletariat. In the chapter, Capital and Profit, Marx studied the concrete forms of appearance of value and surplus-value, and further elaborated on the causes of the law of the tendency of the general rate of profit to fall and the point of view of the mode the law of the tendency of the general rate of profit to fall comes into play. In Theories of Surplus-Value, through the analysis and critique of classical bourgeois economics, Marx conducted a new theoretical study and further expounded a series of important questions: average profit and price of production, market value, interest, ground-rent, especially absolute ground-rent, reproduction of aggregate social capital, accumulation of capital, the question economic crises, and productive and unproductive labor. The research yielded a number of important results, such as the theory of profit, the law of the tendency of the rate of profit to fall, the theory of commercial and interest-bearing capital, theory of ground-rent, the Trinity Formula, the theory of the circuit and turnover of capital, theory of reproduction, and the theory of wages. The opening part of Theories of Surplus-Value deals with the period from the upward development of bourgeois political economy up to its peak, focusing on the theories of Adam Smith, the foremost economist of the period of manufacture, and chiefly involving the relations that take place between capital and labor as they exchange with each other on the basis of the law of value. The middle part deals with the theories of Ricardo, the perfecter of bourgeois classical economics, mainly involving the completion of the theory of value in the wider sense and expounding on various particular forms in which surplus-value manifests itself on the surface of capitalist society. In the ending part, the manuscript analyzed the process of decline of bourgeois political economy as a science and its inevitable transformation into vulgar economy.

Economic Manuscripts 1861–1863 is of milestone significance in the history of creation of Capital and in the history of development of Marxism. It made a more profound and comprehensive elucidation of some fundamental principles of Marxist political economy and made a systematic critique of bourgeois political economy in the aspect of the history of theories, and put forth a lot of scientific innovations, reflecting Marx’s brand-new theoretical discoveries and research results in a concentrated manner. As Marx said in a letter to Engels, this instalment was “of crucial importance. It does, in fact, contain the pith of all the bourgeois stuff.”