BORING.
Intro Section:
Point of chapter: examine influence of circulation time on valorization of capital.
Three examples:
1. Working period: 9 weeks; circulation time: 3 weeks. So turnover time is 12 weeks. Work has to stop for three weeks. Only two options to prevent this:
a. If you want to use the original $900, you must scale back production to have it last over 12 wks. Then you’ll have capital to keep it going over circulation period. However, the problem with this is that the industry creates a normal minimum of capital investment and a normal maximum. If a particular factory produces less than normal minimum, it won’t make enough to be profitable. It if produces too much, it won’t be able to sell it.
b. Add some capital, namely $300 in this case. Then, while the first capital is hanging out in circulation, the second capital will begin working. Once the first capital returns after three weeks, it will be added to second capital’s project.
2. Second example: working period = circulation period. New capital comes in when old one has left for circulation. Old one comes back, new one goes out.
3. Third example: working period is six weeks; circulation period is three.
Four points in comparing the examples:
1. Only in ex. 2 do the capitals take turns and act independently. This is highly exceptional.
2. Capital which has worked during working period just relaxes during circulation time.
3. Doesn’t make a difference is production time > working time.
4. Capital laid out for a working period must in part be in $ form, in order to continue to pay for wages. Additional capital must be provided up front—doesn’t come from first capital.
We see that of total social capital, there’s always some in $ form. $ reserve is constaltly increasing.
Again Marx tells us that the economists underemphasize role of $ capital.
Section I: Working Period and Circulation Period Equal
• Capitals relieve each other. Take turns.
• Only in first turnover do they kinda overlap (capitalist has to produce both capitals up front).
• Can be treated as independent capitals.
Section II: Working Period Longer than Circulation Period
• Some capital is set free. Marx makes a big deal of this. Engels explains at end of chapter that it’s not as important as Marx has claimed. Marx was apparently bad at math.
Section III: Working Period Shorter than Circulation Period
• We’ll end up having more than 2 capitals in rotation.
• Capital is set free whenever the circulation time is not a simple multiple of the working period. Then they just take turns.
Section IV: Results
• Nice summary. Emphasizes the importance of the growth in free capital as a portion of total social wealth.
• Importance of continuity as a productive force.
• Reemphasizes role of stocks (p. 357). Gotta have enough in $-stock to pay wages. Need enough productive stock to keep everything going.
• Creation of $-surplus → $ market. Is this a discussion of credit (pg. 358)
Finally, Engels tells us that M. overemphasized this “setting-free.” The real issue is continuity. Additional capital allows first capital to keep on going. In addition, it’s important to emphasize that a good part of industrial capital has to be in $ form.
Section V: Effect of Changes in Price
This really gets more boring as we go along. Where’s the exciting chapter?
I don’t think there’s anything really worth getting into here. It’s all really straightforward and unremarkable.
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Reading this nearly killed me.
ReplyDeleteI finally sweated my way to an understanding of what Marx means by capital being 'set free,' only to be told by Engels that it was all nonsense. If it weren't so dull, it may have been easier to understand...
ReplyDeleteI'm not sure if I understand why Engels says that this setting free is unimportant. Actually, this was one of the few points in the chapter that perked my interest, and then Engels de-emphasizes it. I know that in volume 3 Marx emphasizes this setting free again but in relation to appreciation and depreciation, or price changes (I think, if I'm remembering correctly. That is, if the price of inputs falls this sets free capital to become additional money capital that can be used to expand production, or form a hoard.
ReplyDeleteI think part of the strangeness of these chapters is the fact that Marx is abstracting away from the credit system here. This makes sense considering his extremely disciplined level of abstraction, but it means that we are dealing with problems (hoarding, temporal imbalances in investment and circulation, etc.) that don't actually ever occur because of the credit system. Instead the credit system both resolves and internalizes these problems and they become problems of credit, only to take the form of a crisis when the chain of payments breaks down. So the basis for an understanding of, say, the current crisis is being laid here in these discussions of the difficulties of reproduction, but the analysis is far from complete and Marx takes great pains to work out in excruciating detail rather minor points and never gets to rather enormous issues like the way credit coordinates the temporal rhythm of production and circulation...
I agree that volume 2 is living up to its reputation as being one long snore... but I think that the redeeming, big-picture, is to try to understand what Marx thinks the limits are to the reproduction of the system....: how does capital reconstitute itself and what must happen in order for it to do so.