Friday, 31 October 2014

Capital II, Chapter 20 - Part 18

Marx then looks at the consequence of a more rapid rate of turnover. He supposes that instead of 1 annual payment of wages of £1,000, there are 4 payments of £250. In that case, £250 would be enough to circulate half of the constant capital component of Department 2 commodities, and for the purchase of the labour-power. In other words, £250 would be paid by Department 1 capitalists on 31st March rather than £1,000 on 31st December. Workers buy consumer goods from April 1st, which means Department 2 capitalists then buy £250 of constant capital to replace that used up. Department 1 capitalists with the returned £250, are then able to use it to pay wages again on 30th June, and so on.

“Likewise, if the circulation between I and II were to take place in four turnovers, it would require only £250, or in the aggregate a sum of money, or a money-capital, of £500 for the circulation of commodities amounting to £5,000. In that case the surplus-value would be converted into money four times successively, one-quarter each time, instead of twice successively, one half each time.” (p 422)

Department 1

Department 2
1000 wages
Consumer goods
Means Of Production
Means of Production
500 surplus value
Consumer goods
Means of Production
500 surplus value
Consumer goods

In the example, it was Department 2 capitalists that advanced £500 at (3) for additional means of production, in anticipation of future sales, but it could have been Department 1 capitalists that threw additional money into circulation to buy consumer goods to meet their needs.

Then, Department 2 capitalists would use this £500 to buy means of production to replace those consumed. The end result would be that the £500 of additional money previously thrown in by Department 2 capitalists, and in their hands again, at the end, would now end up in the hands of Department 1 capitalists, in the same way.

“The surplus-value is here converted into money by means of the money spent by the capitalist producers themselves for their individual consumption. This money represents the anticipated revenue, the anticipated receipts from the surplus-value contained in the commodities still to be sold.” (p 422)

Its not the reflux of this £500 of additional money that realises Department 1's surplus value. It is only the return of this additional money thrown into circulation. Department 1 only realises the surplus value when it sells those commodities which are the physical equivalent of that surplus value.

But, suppose after Department 1 has thrown additional money into circulation, Department 2 capitalists do not buy means of production. Thereby Department 1 will have thrown all its surplus value, amounting to £1,000 into circulation to buy consumer goods. That is made up of £500 of means of production sold to Department 2, and £500 in additional money. Department 1 capitalists are then left with £500 of means of production waiting to be sold.

Department 2 will have replaced 3/4 of its constant capital (£1500), the other £500 sitting in stock with Department 1, its equivalent being held as money-capital by Department 2 capitalists.

“... actually in the form of idle money, or of money which has suspended its function and is held in abeyance. Should this state of affairs last for any length of time, II would have to cut down its scale of reproduction by one-fourth.” (p 423)

The £500 of means of production, held by Department 1, do not constitute surplus value, for the simple reason that for so long as their equivalent, the £500 of money-capital, held by Department 2 capitalists, remains immobilised, the means of production are unsaleable.

No comments: