As Marx sets out, in the next chapter, in discussing Ramsay, this fact, in bringing about a release or tie up of capital, also creates the illusion of additional profits or losses.
These considerations of value, however, are not the same as the consideration of prices that can change wildly, as a consequence of blockages in the process of circulation itself.
“If the intermediate stage is prolonged so that the commodities which emerge anew from the sphere of production find the market still occupied by the old ones, then it becomes overcrowded, a stoppage occurs, the market is glutted, the commodities decline in value, there is overproduction. Where, therefore, the intermediate stage of circulation acquires independent existence so that the flow of the stream is not merely slowed down, where the existence of the commodities in the circulation phase appears as storing up, then this is not brought about by a free act on the part of the producer, it is not an aim or an immanent aspect of production, any more than the flow of blood to the head leading to apoplexy is an immanent aspect of the circulation of the blood. Capital as commodity capital (and this is the form in which it appears in the circulation phase, on the market) must not become stationary, it must only constitute a pause in the movement. Otherwise the reproduction process is interrupted and the whole mechanism is thrown into confusion.” (p 282)
In other words, in systems of barter, and even in systems of petty commodity production, or even early forms of capitalist production, based on handicraft or manufacture, if producers find that it is taking longer to sell the commodities they take to market, they can simply slow down the flow of commodities. That way, conditions of glut leading to dramatic falls in prices are avoided. The producers then also slow down their own production, and their own demand for inputs. They may look for alternative commodities to produce that may sell, or they may devote more of their time to production to meet their own needs.
Large-scale industrial capital cannot do that, because it is premised on mass production to meet demand from mass markets, and, as such, it is production undertaken speculatively, in the expectation that the demand that existed yesterday will exist today, and will exist to a greater extent tomorrow. If, for any reason, a blockage arises in the circulation, the prices of commodities fall dramatically, not because their value or current reproduction cost has fallen, but because the excess supply can only be cleared at these lower prices. It represents a condition in which social labour was expended unnecessarily.
“This materialised wealth which is concentrated at a few points is—and can only be—very small in comparison to the continuous stream of production and consumption. Wealth, therefore, according to Smith, is “the annual” reproduction. It is not, that is to say, something out of the dim past. It is always something which emerges from yesterday.” (p 282-3)
The indication of that is that if some disruption of production occurs, the stores rapidly empty. It's only necessary to consider a strike by tanker drivers to see how quickly petrol stations run out of fuel to see that point.
“... and it would soon be evident that the permanency which the existing wealth appears to possess, is only the permanency of its being replaced, of its reproduction, that it is a continuous materialisation of social labour.” (p 283)
This illustrates the point made by Marx, in Capital II, that for industrial capital the circuit of capital is P … C` - M`. M – C … P. And, similarly, as Marx describes in Capital II, for merchant capital, the circuit is C` - M`. M – C`.
“The movement C—M—C also takes place in the transactions of the shopkeeper. Insofar as he makes a “profit”, it is a matter which does not concern us here. He sells goods and buys the same goods (the same type of goods) over again. He sells them to the consumer and buys them again from the producer. Here the same (type of) commodity is converted perpetually into money and money back again continuously into the same commodity. This movement, however, simply represents continuous reproduction, continuous production and consumption, for reproduction includes consumption. (The commodity must be sold, must reach the sphere of consumption in order that it can be reproduced.) It must be accepted as a use-value. (For C—M for the seller is M—C for the buyer, that is, the conversion of money into a commodity as use-value.) The reproduction process, since it is a unity of circulation and production, includes consumption, which is itself an aspect of circulation. Consumption is itself both an aspect and a condition of the reproduction process.” (p 283)
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