Within circulation as the total process, we can distinguish between large-scale and small-scale circulation. The former spans the entire period from the moment when capital exits from the production process until it enters it again. The second is continuous and constantly proceeds simultaneously with the production process. It is the part of capital which is paid out as wages, exchanged for labouring capacity. The circulation process of capital, which is posited in the form of an exchange of equivalents, but is in fact suspended as such, and posited as such only formally (the transition from value to capital, where the exchange of equivalents turns into its opposite, and where, on the basis of exchange, exchange becomes purely formal, and the mutuality is all on one side), is to be developed in this way:
Values which become exchanged are always objectified labour time, an objectively available, reciprocally presupposed quantity of labour (present in a use value). Value as such is always an effect, never a cause. It expresses the amount of labour by which an object is produced, hence – presupposing the same stage of the productive forces – the amount of labour by which it can be reproduced. The capitalist does not exchange capital directly for labour or labour time; but rather time contained, worked up in commodities, for time contained, worked up in living labour capacity. The living labour time he gets in exchange is not the exchange value, but the use value of labour capacity. Just as a machine is not exchanged, paid for as cause of effects, but as itself an effect; not according to its use value in the production process, but rather as product – definite amount of objectified labour. The labour time contained in labour capacity, i.e. the time required to produce living labour capacity, is the same as is required – presupposing the same stage of the productive forces – to reproduce it, i.e. to maintain it. Hence, the exchange which proceeds between capitalist and worker thus corresponds completely to the laws of exchange; it not only corresponds to them, but also is their highest development.
For, as long as labour capacity does not itself exchange itself, the foundation of production does not yet rest on exchange, but exchange is rather merely a narrow circle resting on a foundation of non-exchange, as in all stages preceding bourgeois production. But the use value of the value the capitalist has acquired through exchange is itself the element of realization and its measure, living labour and labour time, and, specifically, more labour time than is objectified in labour capacity, i.e. more labour time than the reproduction of the living worker costs. Hence, by virtue of having acquired labour capacity in exchange as an equivalent, capital has acquired labour time – to the extent that it exceeds the labour time contained in labour capacity – in exchange without equivalent; it has appropriated alien labour time without exchange by means of the form of exchange. This is why exchange becomes merely formal, and, as we saw, in the further development of capital even the semblance is suspended that capital exchanges for labour capacity anything other than the latter’s own objectified labour; i.e. that it exchanges anything at all for it. The turn into its opposite [Umschlag] therefore comes about because the ultimate stage of free exchange is the exchange of labour capacity as a commodity, as value, for a commodity, for value; because it is given in exchange as objectified labour, while its use value, by contrast, consists of living labour, i.e. of the positing of exchange value. The turn into its opposite arises from the fact that the use value of labour capacity, as value, is itself the value-creating force; the substance of value, and the value-increasing substance. In this exchange, then, the worker receives the equivalent of the labour time objectified in him, and gives his value-creating, value-increasing living labour time. He sells himself as an effect. He is absorbed into the body of capital as a cause, as activity. Thus the exchange turns into its opposite, and the laws of private property – liberty, equality, property – property in one’s own labour, and free disposition over it – turn into the worker’s propertylessness, and the dispossession [Entäusserung] of his labour, [i.e.] the fact that he relates to it as alien property and vice versa.
Karl Marx, Grundrisse
social and political theory 