Capital, Vol. II, Ch. VII

C A P I T A L
Vol. II Prepared © for the Internet by David J. Romagnolo, djr@cruzio.com (May 1997)

P A R T II

THE TURNOVER OF CAPITAL

C H A P T E R VII

THE TURNOVER TIME AND THE NUMBER
OF TURNOVERS

We have seen that the entire time of turnover of a given capital is equal to the sum of its time of circulation and its time of production. It is the period of time from the moment of the advance of capital-value in a definite form to the return of the functioning capital-value in the same form.

The compelling motive of capitalist production is always the creation of surplus-value by means of the advanced value, no matter whether this value is advanced in its independent form, i.e., in the money-form, or in commodities, in which case its value-form possesses only ideal independence in the price of the advanced commodities. In both cases this capital-value passes through various forms of existence during its circular movement. Its identity with itself is fixed in the books of the capitalists, or in the form of money of account.

Whether we take the form M . . . M' or the form P . . . P, the implication is (1) that the advanced value performs the function of capital-value and has created surplus-value; (2) that after completing its process it has returned to the form in which it began it. The self-expansion of the advanced value M and at the same time the return of capital to this form (the money-form) is plainly visible in M . . . M'. But the same takes place in the second form. For the starting-point of P is the existence of the elements of production, of commodities having a given value. The form includes the self-expansion of this value (C' and M') and the return to the original form, for in the second P the advanced value has again the form of the elements of production in which it was originally advanced.

We have seen previously: "If production be capitalistic in form, so, too, will be reproduction. Just as in the former the labour-process figures but as a means towards the self-expansion <"p157">

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of capital, so in the latter it figures but as a means of reproducing as capital -- i.e., as self-expanding value -- the value advanced. " (Buch I, Kap. XXI, S. 588.)[*]

The three forms (I) M . . . M, (II), P . . . P, and (III) C' . . . C', present the following distinctions: in form II, B . . . P, the renewal of the process, the process of reproduction, is expressed as a reality, while in form I only as a potentiality. But both differ from form III in that with them the advanced capital-value -- advanced either in the form of money or of material elements of production -- is the starting-point ahd therefore also the returning polnt. In M . . . M' the return is expressed by M'=M+m. If the process is renewed on the same scale, M is again the starting point and m does not enter into it, but shows merely that M has self-expanded as capital and hence created a surplus-value, m, but cast it off. In the form P . . . P capital-value P advanced in the form of elements of production is likewise the starting-point. This form includes its self-expansion. If simple reproduction takes place, the same capital-value renews the same progress in the same form P. If accumulation takes place, then P' (equal in magnitude of value to M', equal to C') re-opens the process as an expanded capital-value. But the process begins again with the advanced capital-value in its initial form, although with a greater capital-value than before. In form III, on the contrary, the capital-value does not begin the process as an advance, but as a value already expanded, as the aggregate wealth existing in the form of commodities, of which the advanced capital-value is but a part. This last form is important for Part III, in which the movements of the individual capitals are discussed in connection with the movement of the aggregate social capital. But it is not to be used in connection with the turnover of capital, which always begins with the advance of capital-value, whether in the form of money or commodities, and which always necessitates the return of the rotating capital-value in the form in which it was advanced. Of the circuits I and II, the former is of service in a study primarily of the influence of the turnover on the formation of surplus-value and the latter in a study of its influence on the creation of the product.

Economists have little distinguished between the different forms of circuits, nor have they examined them individually with relation to the turnover of capital. They generally consider the form M . . . M', because it dominates the individual capitalist <"np157">

* English edition: Ch. XXIII, p. 566. --Ed.

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and aids him in his calculations, even if money is the starting point only in the shape of money of account. Others start with outlays in the form of elements of production to the point when returns are received, without alluding at all to the form of the returns, whether made in commodities or money. For instance, "the Economic Cycle, . . . the whole course of production, from the time that outlays are made till returns are received. In agriculture, seedtime is its commencement, and harvesting its ending." S. P. Newman, Elements of Political Economy, Andover and New York, p. 81. Others begin with C' (the third form): Says Th. Chalmers, in his work On Political Economy, 2nd ed., Glasgow, 1832, p. 85 et seq.: "The world of trade may be conceived to revolve in what we shall call an economic cycle, which accomplishes one revolution by business, coming round again through its successive transactions, to the point from which it set out. Its commencement may be dated from the point at which the capitalist has obtained those returns by which his capital is replaced to him: whence he proceeds anew to engage his work men; to distribute among them, in wages, their maintenance, or rather, the power of lifting it; to obtain from them, in finished work, the articles in which he specially deals; to bring these articles to market and there terminate the orbit of one set of movaments, by effecting a sale, and receiving, in its proceeds, a return for the whole outlays of the period."

As soon as the entire capital-value invested by some individual capitalist in any branch of production whatever has described its circuit, it ends itself once more in its initial form and can now repeat the same process. It must repeat it, if the value is to perpetuate itself as capital-value and to create surplus-value. An individual circuit is but a constantly repeated section in the life of a capital; hence a period. At the end of the period M . . . M' capital has once more the form of money-capital, which passes anew through that series of changes of form in which its process of reproduction, or self-expansion, is included. At the end of the period P. . . P capital resumes the form of elements of production, which are the prerequisites for a renewal of its circuit. A circuit performed by a capital and meant to be a periodical process, not an individual act, is called its turnover. The duration of this turnover is determined by the sum of its time of production and its time of circulation. This time total constitutes the time of turn over of the capital. It measures the interval of time between one circuit period of the entire capital-value and the next, the periodicity in the process of life of capital or, if you like, the time <"p159">

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of the renewal, the repetition, of the process of self-expansion, or production, of one and the same capital-value.

Apart from the individual adventures which may accelerate or shorten the time of turnover of certain capitals, this time differs in the different spheres of investment.

Just as the working-day is the natural unit for measuring the function of labour-power, so the year is the natural unit for measuring the turnovers of functioning capital. The natural basis of this unit is the circumstance that the most important crops of the temperate zone, which is the mother country of capitalist production, are annual products.

If we designate the year as the unit of measure of the turnover time by T, the time of turnover of a given capital by t, and the number of its turnovers by n, then n = ^T/_t. If, for instance, the time of turnover t is 3 months, then n is equal to 12/3, or 4; capital is turned over four times per year. If t = 18 months, then n = 12/18 = 2/3, or capital completes only two-thirds of its turnover in one year. If its time of turnover is several years, it is computed in multiples of one year.

From the point of view of the capitalist, the time of turnover of his capital is the time for which he must advance his capital in order to create surplus-value with it and receive it back in its original shape.

Before examining more closely the influence of the turnover on the processes of production and self-expansion, we must investigate two new forms which accrue to capital from the process of circulation and affect the form of its turnover.

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