Capital II, Chapter 16 - Part 1

The Turnover of Variable Capital

I. The Annual Rate of Surplus Value

Assume we have a circulating capital of £2,500 - £2,000 Constant Capital and £500 Variable Capital. The working period is 4 weeks, and circulating period 1 week, giving a turnover period of 5 weeks.

	Capital 1	Capital 2	Total
Constant Capital	1600	400	2000
Variable Capital	400	100	500
Total	2000	500	2500

£500 per week is laid out. Over 50 weeks that equals 50 x £500 = £25,000.

The total capital advanced = £2,500, so the number of turnovers is 25000/2500 = 10. Both the variable capital and the circulating constant capital can only function when their entire value has been realised in the commodity, transformed into money-capital and used to buy new materials and labour power.

It is this which distinguishes this circulating capital from the fixed capital. The fixed capital, transfers a portion of its value, as wear and tear, which, like the circulating capital, is circulated by the commodity. But, unlike the circulating capital, the fixed capital continues to function in the labour process, without the need for all of its value to be reproduced, and thrown back into it.

The value, circulated by the commodity, includes that created by the labour-power, that transferred from the materials and from the wear and tear of the fixed capital. The money-capital realised in its sale goes in different directions. A portion is hoarded to cover wages for the next working period; a portion may be laid out to buy materials, some of which then form a productive supply; and another portion may form a hoard built up to replace fixed capital when it is worn out.

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