Capital is an accumulative right of exploitation that guarantees its holder the use of a certain amount of social resources and working hours. Its system of circulation and accumulation ensures that those applications that contribute most to the increase in unpaid work overall dispose of a greater proportion of resources and work to be exploited in every cycle.
Capital as money and as commodities
Capital is therefore first and foremost a social institution, a set of social relations and “rights” guaranteed to its holders. That is why, throughout its process of accumulation, capital alternately takes the form of money and commodities. It can be the money with which the commodities necessary for the production process are bought, including the labor power or the machine and the tools, material or immaterial, that are used in it.
If we fix the particular forms of manifestation adopted alternatively in their life cycle by the self-valorizing value, we will arrive at the following statements: capital is money, capital is commodities. But, in reality, value here becomes the subject of a process in which, by continually changing the forms of money and commodities, it modifies its own magnitude, insofar as surplus value is detached from itself as original value, it becomes self-valorized. The movement in which it adds surplus value is, in effect, its own movement, and its valorization, therefore, self-valorization. It has obtained the occult quality of adding value because it is value. It gives birth to living offspring, or at least lays golden eggs.
Karl Marx, “The Capital”, book I, chapter IV, 1856
Fixed and variable capital
Capital used in production can be broken down into two parts, both in the production process and in the value creation process. If in the production process we have an objective component (machines, land, money…) and another subjective component, inseparable from physical people (labor power), in the process of valorization the former components become “constant capital” (or “fixed”) and the latter “variable capital”. The first is the part of the capital that becomes useful objects for production, the second that becomes labor force, living labor that generates value.
The part of capital that is transformed into means of production, that is, into raw materials, auxiliary materials and means of work, does not change its value in the production process. That’s why I call it a constant part of capital or, more concisely, constant capital. On the contrary, the part of the capital converted into labor force changes its value in the production process. It reproduces its own equivalent and a surplus above it, surplus value, which in turn can vary, be greater or lesser. This part of capital is continuously converted from a constant to a variable magnitude. That is why I call it the variable part of capital, or, more briefly, variable capital. The same components of capital that from the point of view of the labor process were distinguished as objective and subjective factors, as means of production and labor power, are differentiated from the point of view of the process of valorization as constant capital and variable capital.
Karl Marx, “Capital”, book I, chapter VI