[77] _An Enquiry into the Nature and Causes of the Wealth of Nations_, vol. i, p. 19. [78] _Theorien über den Mehrwert_ (Stuttgart, 1905), vol. i, pp. 179-252. [79] _Capital_, vol. ii, p. 435. [80] Smith, op. cit., vol. ii, p. 148. [81] Ibid., p. 149. [82] Op. cit., vol. i, pp. 86-7. [83] In this connection, we have disregarded the contrary conception which also runs through the work of Smith. According to that, the _price_ of the commodity cannot be resolved into _v + s_, though the _value_ of commodities consists in _v + s_. This distinction, however, is more important with regard to Smith's theory of value than in the present context where we are mainly interested in his formula _v + s_. _CHAPTER IV_ MARX'S SCHEME OF SIMPLE REPRODUCTION Let us now consider the formula _c + v + s_ as the expression of the social product as a whole. Is it only a theoretical abstraction, or does it convey any real meaning when applied to social life--has the formula any objective existence in relation to society as a whole? It was left to Marx to establish the fundamental importance of _c_, the constant capital, in economic theory. Yet Adam Smith before him, working exclusively with the categories of fixed and circulating capital, in effect transformed this fixed capital into constant capital, though he was not aware of having achieved this result. This constant capital comprises not only those means of production which wear out in the course of years, but also those which are completely absorbed by production in any one year. His very dogma that the total value is resolved into _v + s_ and his arguments on this point lead Smith to distinguish between the two categories of production--living labour and inanimate means of production. On the other hand, when he tries to construe the social process of reproduction on the basis of the capitals and incomes of individuals, the fixed capital he conceives of as existing apart from these, is, in fact, constant capital. Every individual capitalist uses for the production of his commodities certain material means of production such as premises, raw materials and instruments. In order to produce the aggregate of commodities in a given society, an aggregate of all material means of production used by the individual capitalists is an obvious requisite. The existence of these means of production within the society is a real fact, though they themselves exist in the form of purely private individual capitals. This is the universal absolute condition of social production in all its historical forms.[84]