Friday, 28 March 2014

Capital II, Chapter 15 - Part 13

Marx then details another example where the working period is 4 weeks and the circulation period 5 weeks. This breaks down again into three capitals; Capital 1 and 2 £400 each and Capital 3 £100.

These are detailed in the following tables.
Periods of Turnover
Working Periods
Periods of Circulation
I. 1st - 9th week
1st - 4th week
5th - 9th week
II. 10th - 18th
10th - 13th
14th - 18th
III. 19Th - 27th
19th - 22nd
23rd - 27th
IV. 28th - 36th
28th - 31st
32nd - 36th
V 37th - 45th
37th - 40th
41st - 45th
VI. 46th - 54th
46th - 49th
50th - 54th

Periods of Turnover
Working Periods
Periods of Circulation
I. 5th - 13th week
5th - 8th week
9th - 13th week
II. 14th - 22nd
14th - 17th
18th - 22nd
III. 23Rd - 31st
23rd - 26th
27th - 31st
IV. 32nd - 40th
32nd - 35th
36th - 40th
V. 41st - 49th
41st - 44th
45th - 49th
VI. 50th - 58th
50th - 53rd
54th - 58th

Periods of Turnover
Working Periods
Periods of Circulation
I. 9th - 17th week
10th - 17th week
II. 18th - 26th
19th - 26th
III. 27Th - 35th
28th - 35th
IV. 36th - 44th
37th - 44th
V. 45th - 53rd
46th - 53rd

I have extended them to a full year as opposed to the 3 turnovers that Marx sets out. I've also adjusted the labelling of week numbers to conform with Marx’s previous method for consistency.

Once again, the total output is 51 weeks x £100 = £5,100, and the aggregate capital is £900. That gives 5⅔ working periods.

Looking at the capital turned over, that is

Capital 1 £400 x 5⅔ = £2266.67

Capital 2 £400 x 5 2/9= £2088.89

Capital 3 £100 x 4 7/9 = £477.78

Total = £900 x 5.37 = £4833.34

Here, the three capitals do overlap. Capital 3 has no independent existence, because its £100 is not enough to cover a working period of 4 weeks. An amount of Capital = £300 has to be added to Capital 3 to complete the working period. Having done so it sets free £100 from Capital 1, equal to the value of Capital 3. That commences the next working period.

“In all cases investigated it was assumed that both the working period and the circulation period remain the same throughout the year in any of the businesses here examined. This assumption was necessary if we wished to ascertain the influence of the time of circulation on the turnover and advancement of capital. That in reality this assumption is not so unconditionally valid, and that it frequently is not valid at all does not alter the case in the least.” (p 282) 

The capital analysed here was only the working capital, rather than the fixed capital, and for good reason. As discussed previously, a portion of fixed capital is transferred as wear and tear, to the end product, throughout the production process, and returned from circulation, as is that of the circulating capital. However, unlike the circulating capital, the fixed capital is not dependent upon the continual return. The circulating capital can only be reproduced when the capital is returned. But, fixed capital continues to function even as its value is reduced, and only needs to be reproduced when it is worn out.

“The difference is merely this: In proportion to the varying length of a single working period of each period of turnover of the circulating capital, the fixed capital gives up a greater or smaller part of its original value to the product of that working period, and proportionally to the duration of the circulation time of each period of turnover this value-part of the fixed capital given up to the product returns quicker or slower in money-form. The nature of the subject we are discussing in this section — the turnover of the circulating portion of productive capital — derives from the very nature of this portion.” (p 282-3)

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