The second volume of Das Kapital is a strange book, because it has been published posthumously, two years after the death of Karl H. Marx. He died in 1883, and the second volume only appeared in 1885. Friedrich Engels has edited it, that is to say, he has ordered the material and prepared it for the printer. According to Engels the concept was mainly complete, and he has added merely ten pages. That is somewhat surprising, because two years is a long time for such a small intervention. Moreover, Engels states in his preface, that in the concept some important paragraphs were merely available as sketches, and that much data were present only in a raw form. According to Engels, since 1870 Marx suffers from various diseases, which hinder him from writing much.
Despite his diseases, after 1867 (the year in which volume 1 is published) Marx has yet published several books. However, these were purely political documents, without economic analyses1. It can not be deduced from the publications during his final years of life how his economic ideas developed. Therefore the only source of information are the books, which Engels has published posthumously (although in the twentieth century many more texts appeared posthumously, after editing by others). Because of all these circumstances your reviewer believes that it is justified to identify Engels as the principal author of Das Kapital volume 2. Then Marx is the second author, who has collected the material and prepared the contents of the book2. Incidentally, at the time the social-democratic movement had already grown significantly, so that is seems obvious that various people have contributed with ideas and material to Das Kapital3.
Your reviewer has read the second volume of Das Kapital six years ago, as an illustrious edition of the Central Committee of the East-German Leninist party. Volume 2 describes the distribution process of the generated products, which is called the circulation by Engels. Thus the second volume presents a theory of the commodity exchange on the markets. The quality of the contents of the second volume is less steady than those of the first volume. Most of the chapters are dull reading-matter, and do not really help in increasing the insight and knowledge of the economic system.
Fortunately, in the last hundred pages an interesting model of the economic structure is presented. This subtle theory is the qualitative "salvation" of the second volume, at least in the eyes of your reviewer. It analyzes the economy at the branch level, and in this way shows that the system only remains stable, as long as the sizes of the branches are tuned well to each other. Deviations from the proportions in the equilibrium will disturb the exchange of commodities. In that situation some commodities can not be sold, and therefore the economic crisis emerges. And since the capitalist production is chaotic, the crises are pre-programmed in the system, as it were.
What does the second volume say about the circulation? Both the money G and the commodities W are in a circulation. The entrepreneur sells his commodity W for a sum G (schematically W-G). The sum G is his entrepreneurial capital, which maintains the production. The entrepreneur uses it to pay his production factors: the means of production Pm, and labour A. Besides he will spend a part of G for his true consumption. Marx introduces in his theory the hypothesis, that only the production creates value, but not the circulation. However, the circulation is indispensable, because the value of the commodity must flow back to the producer (the realization of the commodity). In the volume Engels pays much attention to the time phases. He calls the time to complete the whole circulation the time of apportionment. It is composed of the production time and the circulation time (needed for the circulation of the commodity). Nevertheless, this does not contribute much to the insight.
The factors Pm and A together form the productive capital. Marx refers to the means of production Pm as the constant capital. They form the costs, which must be compensated in the sale of the generated commodities. A part of it is the basic (raw) material. The means of labour (equipment, machines and the like) also are a part of the constant capital, but are identified with the term fixed capital. Other economists prefer the expression investment goods. Similarly, the factor A is called the variable capital (instead of wage sum). The theory of Marx indeed distinguishes itself from the others by the use of deviating terms. This is obviously not a merit. It does not yield new insights, but does hinder the comparison with other theories. Engels regularly cites Adam Smith and David Ricardo, economists who died for over sixty years ago.
The yearly profit will be larger according as more can be produced during a year. Engels uses tens of pages for explaining, that therefore the entrepreneurs prefer to shorten the time of apportionment. Subseqently there is fortunately the description of the mentioned structure model. Engels divides the system into two branches (called sections by him), namely the section I where Pm is produced, and section II where the end products are generated. The end products are traded on the market, which satisfies the personal consumption of all (workers, entrepreneurs and capitalists). In this scheme the total product value is presented, so not merely the added value. The two sections must mutually exchange their commodities in order to maintain their production. For, the section I itself does not generate end products, but her workers do naturally need them. Similarly, the section II does not generate the means of production, but she does need them.
Durable production implies for Engels, that the system materially reproduces as a whole. In a static economy the reproduction is called simple, and in a growing economy it is expanded. In this model mathematics is applied at a high level, which is not found in other works of Marx. Moreover, the model is new, and therefore it truly enriches economics. Subsequent generations of economists have elaborated on this find. Here, notably Vassily Leontief can be mentioned, who generalized this two-sector model to a model with an arbitrary number of branches. Also M. Kalecki and J.M. Keynes copy in their theory the division into consumer- and investment-goods. Crises can emerge because the entrepreneurs hoard their capital, or because the proportions of the branches are distorted.
With this impressive finale the second volume ends. The volume has in common with the first volume, that the text is disfigured by almost endless repetitions. This is more confusing than clarifying. The historical descriptions, present in volume 1, are almost absent. Therefore volume 2 is more a textbook than a fierce protest. Here Marx and Engels invent their own professional expressions, which deviate from the common ones. That isolates. Their theory makes strange assumptions, such as that trade can not generate value. All in all, it requires quite an effort to completely read the volume4. Interested people who do not want to digest it all, could consider to merely read the 20th chapter, about reproduction, and the 21th chapter, about accumulation and the expanded reproduction.