## Wednesday, 12 March 2014

### Capital II, Chapter 15 - Part 3

In this example, the production time, and the circulation time, are both 5 weeks (p 265).

 1st wrkg. period 1st-5th wk. (£500 in goods) returned end of 10th wk. 2nd wrkg. period 6th-10th wk. (£500 in goods) returned end of 15th wk. 3rd wrkg. period 11th-15th wk. (£500 in goods) returned end of 20th wk. 4th wrkg. period 16th-20th wk. (£500 in goods) returned end of 25th wk. 5th wrkg. period 21st-25th wk. (£500 in goods) returned end of 30th wk.

Here, it is clear that the turnover period overlaps, because the capital is returned at the end of each 5 week production period, not 10 week turnover period. However, what is returned on each occasion is only 50% of the total capital advanced (500/1000), just as in the previous example, on each occasion 75% of the total capital advanced was returned.
Assuming a 50 week year, on the basis of the example above, the capital would turn over ten times, if there were no circulation time, i.e. at the end of 5 weeks, the product would be sold, and used to replace the productive capital. The total value of the product would also equal in a year £5,000 (£500 x 10). However, the capital advanced is not £500, but £1,000, because £500 has to cover the circulation period. Dividing the value of the output by this advanced capital - £1,000 – then gives us the number of times it has been turned over during the year, which equal five. That is because the turnover-time is ten weeks, not five. It is equal to the working period plus the circulation time.

That is the case, because, in each payment above, only half the advanced capital is returned. It is as though, each payment, were only half a turnover, just as in the first example, each payment was just 75% of a turnover. It appears as a full turnover, because all the capital advanced for the actual working period preceding it, is returned.

So, in the above, £500 is advanced each working period, and when payment is made in week 10, 15,20 and so on, it is £500. Similarly, in the first example, £900 was advanced in each working period, and when payment was received in week 12, 21, 30, and 39, it was also £900.

So, if we were to look at things from the standpoint of the actual turnover periods, based on the production time plus the circulation time, we would have, in each of these periods except the first, a return of the whole capital advanced i.e. £1,200 for example 1, and £1,000 for example 2. Put another way, for example 1, in each of these turnover periods, we would have 1 1/3 times the capital advanced in the working period returned, and in example 2, we would have double the capital advanced in each working period returned.

If we assumed a 48 week year, for example 1, that would give us 4 turnovers per year. So, the total value of capital laid out would equal 4 x £1,200 = £4,800. Looking at the value of the output, it equals £100 per week, so £100 per week x 48 weeks = £4,800.

“In our table, in which we have assumed a circulation time of 5 weeks, the total value of the commodities produced per year would also be £5,000, but one-tenth of this, or £500, would always be in the form of commodity-capital, and would not return until after 5 weeks. At the end of the year the product of the tenth working period (the 46th to the 50th working week) would have completed its time of turnover only by half, and its time of circulation would fall within the first five weeks of the next year.” (p 265)