We may now set out the model for simple reproduction--that is, annual national income for an economy in which the stock of capital is kept intact but not increased. All output is divided into two departments: I, producing capital equipment and raw materials, (producers' goods), and II, producing consumption goods. Then we have I: _c_{1} + v_{1} + s_{1} = c_{1} + c_{2}_ II: _c_{2} + v_{2} + s_{2} = v_{1} + v_{2} + s_{1} + s_{2}_ Thus _c_{2} = v_{1} + s_{1}_ This means that the net output of the producers' goods department is equal to the replacement of capital in the consumers' goods department. The whole surplus, as well as the whole of wages, is currently consumed. Before proceeding to the model for accumulation there is a difficulty which must be discussed. In the above model the stock of capital exists, so to speak, off stage. Rosa Luxemburg is perfectly well aware of the relationship between annual wear and tear of capital, which is part of _c_, and the stock of fixed capital,[13] but as soon as she (following Marx) discusses accumulation she equates the addition to the stock of capital made by saving out of surplus in one year to the wear and tear of capital in the next year. To make sense of this we must assume that all capital is consumed and made good once a year. She seems to slip into this assumption inadvertently at first, though later it is made explicit.[14] She also consciously postulates that _v_ represents the amount of capital which is paid out in wages in advance of receipts from sales of the commodities produced. (This, as she says, is the natural assumption to make for agricultural production, where workers this year are paid from the proceeds of last year's harvest.)[15] Thus _v_ represents at the same time the annual wages bill and the amount of capital locked up in the wages fund, while _c_ represents both the annual amortisation of capital and the total stock of capital (other than the wages fund). This is a simplification which is tiresome rather than helpful (it arises from Marx's ill-judged habit of writing _s/(c + v)_ for the rate of profit on capital), but it is no more than a simplification and does not invalidate the rest of the analysis.