Capital II, Chapter 15 - Part 15

A large part of the released capital, i.e. that required to make up the turnover time, will be in the form of money-capital. That is naturally so, as it is held ready to buy labour power.

Assuming £100 is laid out per week, and a 6 week working period, and 3 week circulation time, at the end of week 9, £600 returns, only £300 of which is required to complete the second working period.

Marx says,

“At the end of the second working period, £300 are therefore released.” (p 285)

In a sense this is wrong, because it is really half way through the second working period that it is released. At that point, it is already surplus to requirements, to complete the working period. Once the second working period has ended, and the third is just starting, the £300 is already required for it. In fact, it may already have had to be used to purchase materials, so that it can begin seamlessly.

If, for whatever reason, production was to cease, at the end of a working period, there would be sufficient capital available to do so. The capital set free, in that case, does not have to wait until the end of the working period before it is employed.

As soon as the capital is returned, it could be used to establish some other form of business, or the capital could be used for some other form of investment.

“In what state are these £300? We shall assume that ⅓ is invested for wages and ⅔ are for raw and auxiliary materials. Then £200 of the returned £600 exist in the form of money for wages and £400 in the form of productive supply, in the form of elements of the constant circulating productive capital. But since only one half of this productive supply is required for the second half of the second working period, the other half exists for 3 weeks in the form of a surplus productive supply, i.e., of a supply exceeding the requirements of one working period. But the capitalist knows that he needs only one half, or £200, of this portion (£400) of the returned capital for the current working period. It will therefore depend on market conditions whether he will immediately reconvert these £200, in whole or in part, into a surplus productive supply, or keep them entirely or partially in the form of money-capital in anticipation of a more favourable market. On the other hand it goes without saying that the portion to be laid out for wages (£200) is retained in the form of money.” (p 285)

Labour-power cannot be hoarded, but only used when required, and the capitalist will not lay out money for wages in advance of that labour being performed.

“The capital released in the form of money-capital must therefore be at least equal to the variable portion of capital invested in wages. At a maximum, it may comprise the entire released capital. In reality it fluctuates constantly between this minimum and maximum.” (p 286)

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