Capital II, Chapter 14 - Part 2

The improvements in transport and communication also have other effects. For example, with regular shipments made possible as multiple ships follow each other across the ocean, just as multiple trains follow each other from city to city, a regular supply of goods can be fed into markets, thereby removing the need to hold large stocks. In part, its such improvements that have made “Just In Time” systems possible, which in themselves increase the rate of turnover of capital, by reducing the time of circulation.

Alongside the development of faster forms of transport, and more regular transport, also comes greater capacity of transport. Ships become bigger, trains become longer, and able to haul more weight and so on. The Internet has followed exactly the same course. The same has also happened with mobile communication.

“Hence the return of capital likewise is distributed over shorter successive periods of time, so that a part is continually transformed into money-capital, while the other circulates as commodity-capital. By spreading the return over several successive periods the total time of circulation and hence also the turnover are abridged. The first to increase is the frequency with which the means of transportation function, for instance the number of railway trains, as existing places of production produce more, become greater centres of production. The development tends in the direction of the already existing market, that is to say, towards the great centres of production and population, towards ports of exports, etc. On the other hand these particularly great traffic facilities and the resultant acceleration of the capital turnover (since it is conditional on the time of circulation) give rise to quicker concentration of both the centres of production and the markets. Along with this concentration of masses of men and capital thus accelerated at certain points, there is the concentration of these masses of capital in the hands of a few.” (p 254)

At the same time, the changes noted previously occur as some centres of production develop as a result of new transport facilities, whilst others decline. A similar thing can be seen today with those companies that have been able to develop an on-line presence and those that have not. Business models based on town centre retailing have declined as e-tailing has risen.

“All branches of production which by the nature of their product are dependent mainly on local consumption, such as breweries, are therefore developed to the greatest extent in the principal centres of population. The more rapid turnover of capital compensates here in part for the circumstance that a number of conditions of production, building lots, etc., are more expensive.” (p 255)

But, the development of transport also exerts a dialectical influence. The more transport develops, the more each firm is led to seek to expand its market ever further afield. In other words, at the same time that this development reduces the time of circulation it also lengthens it! The more firms seek to ship their goods not just to local markets, but to markets all over the globe, the more absolutely, and relatively, of their capital is tied up in the form of commodity-capital, in the process of being shipped and sold in those markets. Alongside this creation of a world market also goes the increasing amount of capital required for transport, and all the attendant provision of ports, stations etc.

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