For the second period of 5 weeks (and thus for every succeeding 5 weeks of the year) another £500 must again be available, the same as for the first period. Hence, regardless of credit conditions, £5,000must be available at the beginning of the year as a latent advanced money-capital, although they are really expended, turned into labour-power, only gradually, in the course of the year.
But because in the case of A the circuit, the turnover of the advanced capital, is consummated, the replacement value after the lapse of the first 5 weeks is already in the form in which it can set new labour-power in motion for a term of 5 weeks -- in its original form, the money-form.
In cases of both A and B new labour-power is consumed in the second 5-week period and a new capital of £500 is spent in payment of this labour-power. The means of subsistence of the labourers, paid with the first £500, are gone; at all events their value has vanished from the hands of the capitalist. With the second £500 new labour-power is bought, new means of subsistence withdrawn from the market. In short, it is a new capital of £500 that is being expended, not the old.
But in the case of A this new capital of £500 is the money-form of the newly produced substitute for the value of the formerly expended £500, while in the case of B, this substitute is in a form in which it cannot function as variable capital. It is there, but not in the form of variable capital. For the continuation of the process of production for the next 5 weeks an additional capital of £500 must therefore be available and advanced in the her indispensable form of money. Thus, during 50 weeks, both A and B expend an equal amount of variable capital, pay for and consume an equal quantity of labour-power. Only, B must pay for it with an advanced capital equal to its total value of £5,000, while A pays for it successively with the ever renewed money-form of the value-substitute, produced every 5 weeks, for the capital of £500 advanced for every 5 weeks, i.e., never more than that advanced for the first 5 weeks, viz., £500.
These £500 last for the entire year. It is therefore clear that, the degree of exploitation of labour and the real rate of surplus-value being the same, the annual rates (of surplus-value) of A and B must be inversely proportional to the magnitudes of the variable money-capitals which have to be advanced in order to set in motion the same amount of labour-power during the year.
A: 5,000s/500v = 1,000%; B: 5,000s/5,000v = 100%. But 500v : 5,000v = 1 : 10 = 100% : 1,000%.The difference is due to the difference in the periods of turnover, i.e., the periods in which the value-substitute of the variable capital employed for a definite time can function anew as capital, hence as new capital.
In the case of B as well as A, there is the same replacement of value for the variable capital employed during the same periods. There is also the same increment of surplus-value during the same periods. But in the case of B, while every 5 weeks there is a replacement of the value of £500and a surplus-value of £500, this value-substitute does not constitute new capital, because it does not exist in the form of money. In the case of A the old capital-value is not only replaced by a new one, but is rehabilitated in its money-form, hence replaced as a new capital capable of performing its function.
The conversion, sooner or later, of the value-substitute into money, and thus into the form in which variable capital is advanced, is obviously an immaterial circumstance, so far as the production of surplus-value itself is concerned. This production depends on the magnitude of variable capital employed and the degree of exploitation of labour. But that circumstance modifies the magnitude of the money-capital which must be advanced in order to set a definite quantum of labour-power in motion during the year, and therefore it determines the annual rate of surplus-value.
III. THE TURNOVER OF THE VARIABLE CAPITAL FROM THE SOCIAL POINT OF VIEWLet us look at this matter for a moment from the point of view of society.
Let the wages of one labourer be £1 per week, the working-day 10hours. In case of A as well as B 100 labourers are employed during a year (£100 for 100 labourers per week, or £500 for 5 weeks, or £5,000for 50 weeks), and each one of them works 60 hours per week of 6 days.
So 100 labourers work 6,000 hours per week and 300,000 hours in 50 weeks.
This labour-power is taken hold of by A and B and therefore cannot be expended by society for anything else. To this extent the matter is the same socially with both A and B. Furthermore: In the cases of both A and B the 100 labourers employed by either side receive a yearly wage of £5,000 (or, together for the 200 labourers, £10,000) and withdraw from society means of subsistence to that amount. So far the matter is therefore socially the same in the case of both A and B. Since the labourers in either case are paid by the week, they weekly withdraw their means of subsistence from society and, in either case, throw a weekly equivalent in money into circulation.
But here the difference begins.
First . The money which the A labourer throws into circulation is not only, as it is for the B labourer, the money-form of the value of his labour-power (in fact a means of payment for labour already performed);it is, counting from the second turnover period after the opening of the business, the money-form of his own value (equal to the price of the labour-power plus the surplus-value) created during the first period of turnover, by which his labour is paid during the second period of turnover.