Volume I analysed the production of surplus-value, treating circulation only where it was needed to reach the production process. Volume II takes circulation itself as its object: not the making of surplus-value but the movement of capital through the forms it must assume and shed to keep making it. Part One is the analysis of that movement in its simplest shape — the circuit of an individual capital through three functional forms, money capital, productive capital, and commodity capital, each with its own circuit, and all three united in the continuous motion of industrial capital. The through-line is that capital is not a thing but a process, a value in motion that is only capital so long as it keeps changing its form; arrest it in any one form and it ceases to function as capital. Chapter 1 traces the circuit from the standpoint of money capital (M–C…P…C′–M′), Chapter 2 from productive capital (P…P), Chapter 3 from commodity capital (C′…C′); Chapter 4 shows the three as figures of one circuit and defines industrial capital as their unity. Chapters 5 and 6 turn to circulation time and the costs of circulation, distinguishing what circulation adds to value from what it merely deducts.

The stakes are the ones the later Parts and Volume III build on: this Part supplies the categories — the functional forms of capital, the distinction between production time and circulation time, the difference between costs that create value and costs that only consume it — without which the turnover of capital (Part Two) and the reproduction of the total social capital (Part Three) cannot be stated. Figures from the reception (Heinrich, Mattick) who read these circuits against the value-form and the crisis theory are kept in view, but the brief reconstructs Marx's own text and seeks its context on its own terms.

Marx begins from the standpoint of money capital, tracing the whole circuit as it looks when money is both the starting point and the goal. The circuit has three stages, and the formula compresses them.

Thus the formula for the circuit of money capital is M–C…P…C′–M′. The dots indicate that the circulation process is interrupted, while C′ and M′ denote an increase in C and M as the result of surplus-value.

Marx, Capital II, page 109.

The first stage, M–C, is not an ordinary purchase. Its function in the circuit depends on the specific character of what is bought: the money divides into two, one part for labour-power, the other for means of production, and the two purchases go to two different markets. Marx writes the split as M–C, where C = L + mp, and stresses that the proportion between the two is fixed in advance by the surplus labour the workforce is to yield. When M–C is complete, the money-value has been converted into a form able to produce more value than it contains — productive capital.

The value that he has advanced in the form of money thus now exists in a natural form in which it can be realized as value which breeds surplus-value (in the shape of commodities). In other words, it exists in the state or form of productive capital, with the ability to function as creator of value and surplus-value. We call capital in this form P.

Marx, Capital II, page 111. The OCR-mangled phrase for the natural form is repaired to Fernbach's reading, confirmed against the EPUB.

Within this first stage it is the purchase of labour-power, not of means of production, that stamps the advance of money as an advance of capital. Marx isolates the moment precisely.

M–L is the characteristic moment of the transformation of money capital into productive capital, for it is the essential condition without which the value advanced in the money form cannot really be transformed into capital, into value-producing surplus-value. M–mp is necessary only in order to realize the mass of labour bought by way of M–L.

Marx, Capital II, page 113.

And the act M–L does not create the relation between the classes; it presupposes it.

The class relation between capitalist and wage-labourer is thus already present, already presupposed, the moment that the two confront each other in the act M–L (L–M from the side of the worker). This is a sale and purchase, a money relation, but a sale and purchase in which it is presupposed that the buyer is a capitalist and the seller a wage-labourer; and this relation does in fact exist, because the conditions for the realization of labour-power, i.e. means of subsistence and means of production, are separated, as the property of another, from the possessor of labour-power.

Marx, Capital II, page 115.