U 
The department scheme was applied by Marx first to simple 
reproduction where it does not raise any problems. The 
economy is divided into two departments, investment goods 
(dep I ) and consumption goods ( dep II ). In each the 
value of the product ( 0 ) is composed of ‘materials 
and replacement of capital ( constant capital, C ), 
of wagespaid ( variable capital, W ) and the remaining 
value, surplus ( M ) which corresponds to net profit. 
Thus 
C-| + W-| + M-| = 0-| j 
II 
C2 Wg + M2 — O2 
The product of dep II must be bought up by the sum of 
wages and surplus of the two depaartments: 
w i + 3_ 
+ M 1 + m 2 =3 
C 1 + C 2 
= 0. 
G 2 = w, + Mj 
In his arithmetical examples Marx fixed first a certain 
rate of exploitation M * W and a certain "organic 
composition" C -f W , and tried to constrain his choice 
of concrete numbers by this assumptions. 
When Marx tried to apply hisschemata to the case of 
accumulation ("extended reproduction" ) he ran into 
difficulties. His procedures and examples have been 
analysed and criticised at great length by Rosa Luxemburg 
( Akkumulationdes Kapitals)