Friday, 14 March 2014

Capital II, Chapter 15 - Part 5

The examples given do not deal with situations where the time of production is greater than the working period, for example wine production. The additional capital cited is only to fill in the duration of the circulation time. During the production time, in excess of the working period, no additional capital is required or means of production and labour-power. Marx says,

“Interruptions arising from the specific conditions of production are to be eliminated in another way, which need not be discussed at this point.” (p 267)

But, for example, a farmer lays out capital for seed and labour-power to sow it. In the following few months of production time, while it is growing, they do not need to advance additional capital, for seed and labour-power, as was the case in the previous examples.

In such circumstances, however, the farmer may advance capital for other means of production and labour-power for the production of other commodities.

Of the productive capital advanced, over the working period, some will be constant capital and some variable capital, but the proportions of each physically available will vary over the period. For example, the workers will not be paid wholly in arrears. If they are paid weekly, in arrears, money capital for nine weeks will have to be be on hand so that it is paid out each week. This does not change the total amount advanced over the nine weeks.

Similarly, raw materials will have to be available from the beginning. Depending on conditions, the whole nine week supply may need to be bought in advance, even though only a portion is advanced in production, each week. Or, a portion may be bought say every three weeks. Again, this does not change the actual amount advanced over the nine weeks.

“The additional capital is divided exactly like the original. But it is distinguished from capital I by the fact that (apart from credit relations) in order to be available for its own working period it must be advanced during the entire duration of the first working period of capital I, into which it does not enter. During this time it can already be converted, at least in part, into constant circulating capital, having been advanced for the entire period of turnover.” (p 268)

In other words, if the working period is nine weeks and the turnover period is 12 weeks, the three weeks additional capital will be required from the start, even though its only needed from week 10. Because material will already need to be on hand for week 10, the additional capital may be used, alongside the original capital, to buy material in week 1, especially where an advantage is obtained from buying a larger quantity, or in order to save on transport costs.

“If social capital is viewed in its entirety, a more or less considerable part of this additional capital will always be for a rather long time in the state of money-capital. But as for that portion of capital II which is to be advanced for wages, it is always converted only gradually into labour-power, as small working periods expire and are paid for. This portion of capital II, then, is available in the form of money-capital during the entire working period, until by its conversion into labour-power it takes part in the function of productive capital.” (p 268)

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