circuits of capital

circuits of capital

(MARXISM) the circular movement in which, in capitalist production, CAPITAL produces SURPLUS VALUE. In this process, money capital is used first for the purchase of LABOUR POWER and raw materials and plant, then transformed into commodities (see COMMODITIES AND COMMODITY PRODUCTION), and finally, by the sale of these commodities, turned back again into money capital. In a profitable enterprise the full process leads to the return of the original money capital and the addition of surplus value, the difference between the VALUE of the goods created and the value of the labour power (and labour power embodied in the original capital) expended. With the realization of both a return of the original money capital and the accumulation of additional capital, the entire process begins again. See also CAPITALISM AND CAPITALIST MODE OF PRODUCTION, CRISES OF CAPITALISM, ACCUMULATION (OR EXPANDED OR EXTENDED REPRODUCTION) OF CAPITAL.

Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000