Working period(9 weeks) and circulation period (3 weeks)
9 weeks – Productive capital turned into commodity capital.
Continuity of capital. Continuity is itself a productive force of labour. Any break in that is a loss of capital.
The 3 weeks cannot produce.
Rs 900 in the beginning. Need another Rs 300 to cover 3 weeks period.
You get money back at 9+3 = end of 12th week
Got 900 surplus. Need 600 for next.
Money capital. With the availability of surplus money capital you can ensure continuity of production process. In this process some part of money capital is set free.
Credit system need for the continuity. If its not there it has to be created.
Working period and circulation period
600/- in Money market for 1 weeks, 400/- stays for 4 weeks, instead of 3 weeks.
Means of transportation.
Opening suis canal. Trade with India 3 months become 3 weeks. Reduction in circulation time. Less money rapped in production process.
French and british tried to re occupy suis canal. Then it was blocked. It affected money market.
Dramatic shift in circulation time.
Engel’s comment. Marx’s trivial example here is missing the bigger argument.
As soon as the merchant’s capital arrives,
900 goes to labour
Variable circulating capital. Came from commodity capital and becomes money capital.
Annual rate of surplus value = ratio of total surplus value annually produced to the value of the variable capital advanced.
This phenomenon makes it appear, moreover, as if the rate of surplus value did not depend only on the amount of variable capital and the rate of exploitation of labour power set in motion by it, but also on inexplicable influences deriving from the circulation process.
In the beginning of the 1820s this phenomenon has led to the complete destruction of the Ricardian school.
It looks like the surplus value is originating from the circulation process. Attack Ricardo and preserve Marx’s own theory of value.
Variable capital applied and variable capital advanced.
Annual rate of surplus value = Rate of surplus value (s1) x no of turnovers.
Velocity of money
Turnover time on profit rate. Marx’s notebook was empty. Engels wrote that in vol3.
Reduction of circulation time relative to working period has an impact on capital advanced. Profit rate goes up.
Any reduction in turnover time raises profit rate.
Circulation time reduction – revolutions in transportation and communication
Rail road, steam engine
Telegraph vs post – communication efficiency 2500 times increases.
Internet vs Fax – only 5 times increase.
The communication revolution that we talking about the internet etc is nowhere close to that in the 19th century.
That has tremendous amount of impact in profit.
Turnover time in vol 3 is inserted by Engels.
Capital working in MCM circuit and workers are worming in CMC circuit.
Means of subsistence
length of circulation time
why certain things happens?
The whole acceleration of turnover time in the history of capitalism. Where is that come from? The common tendency is to treat it as natural.
Circulation of surplus value
“The annually produced and consumed masses, like the eternal and incalculable waves of mighty river, roll on and are lost in the forgotten ocean of consumption. On this eternal consumption however are dependent not only for almost all gratifications, but even for existence, the whole human race.. In comparison to the preservation of this actual distribution (wealth of capitalistic class), the ever-recurring misery or happiness of the whole human race has been considered as unworthy of regard. To perpetuate the results of force, fraud and chance has been called security; and to the support of spurious security , have all the productive power of the human race been unrelentingly sacrificed “ 1820s not marx. Thomson?
Simple reproduction and
900 keeps going – simple reproduction
Capitalist has to live and consume.
Even if the capitalist brings their own money, after a short while they will be just consuming the surplus value produced by the labour.
Credit system came to help capitalist for long period of production
Capitalists are not against trade unions. They use any increase in wages to raise commodity prices to a far greater degree, and thus tuck away a greater profit. This will cause inflation. The inflation crisis of 1970s was because of this.
Monopoly capital. Big 3 in Detroit used that.
1945-70 era. good growth, high tax, high tax rate was 92%, trade unions are tolerated.