THE TURNOVER OF CAPITAL
THE AGGREGATE TURNOVER OF ADVANCED CAPITAL, CYCLES OF TURNOVERWe have seen that the fixed and circulating component parts of productive capital are turned over in various ways and at various periods, also that the different constituents of the fixed capital of a business have different periods of turnover, depending on their different durabilities and therefore on their different times of reproduction. (On the real or apparent difference in the turnover of different constituents of circulating capital in the same business, see the close of this chapter, under 6.)1) The aggregate turnover of an advanced capital is the average turnover of its various constituent parts; the mode of its calculation is given later. Inasmuch as it is merely a question of different periods of time, nothing is easier than to compute their average. But 2) We have here not alone quantitative but also qualitative difference.
The circulating capital entering into the process of production transfers its entire value to the product and must therefore be continually replaced in kind by the sale of the product, if the process of production is to proceed without interruption. The fixed capital entering into the process of production transfers only a part of its value (the wear and tear) to the product and despite this wear and tear continues functioning in the process of production. Therefore it need not be replaced in kind until the lapse of intervals of various duration, at any rate not as frequently as the circulating capital. This necessity of replacement, the reproduction term, is not only quantitatively different for the various constituent parts of fixed capital, but, as we have seen, a part of the perennial fixed capital, that which lasts longer, may be replaced annually or at shorter intervals and added in kind to the old fixed capital. In the case of fixed capital of different properties the replacement can take place only all at once at the end of its period of durability.
It is therefore necessary to reduce the specific turnovers of the various parts of fixed capital to a homogeneous form of turnover, so that they will remain different only quantitatively, namely, according to duration of turnover.
The qualitative identity does not come about if we take as our starting-point P ... P, the form of the continuous process of production.
For definite elements of P must be constantly replaced in kind while others need not. However the form M ... M undoubtedly yields this identity of turnover. Take for instance a machine worth £10,000, which lasts ten years of which one-tenth, or £1,000, is annually reconverted into money. These £1,000 have been converted in the course of one year from money-capital into productive capital and commodity-capital, and then reconverted from this into money-capital. They have returned to their original form, the money-form, just like the circulating capital, if we study the latter in this form, and it is immaterial whether this money-capital of £1,000 is once more converted at the end of the year into the bodily form of a machine or not. In calculating the aggregate turnover of the advanced productive capital we therefore fix all its elements in the money-form, so that the return to that form concludes the turnover.
We assume that value is always advanced in money, even in the continuous process of production, where this money-form of value is only that of money of account. Thus we can compute the average.
3) It follows that even if by far the greater part of the advanced productive capital consists of fixed capital whose period of reproduction, hence also of turnover, comprises a cycle of many years, the capital-value turned over during the year may, on account of the repeated turnovers of the circulating capital within the same year, be larger than the aggregate value of the advanced capital.
Suppose the fixed capital is £80,000 and its period of reproduction 10 years, so that £8,000 of it annually return to their money-form, or it completes one-tenth of its turnover. Suppose further the circulating capital is £20,000, and its turnover is completed five times per year. The total capital would then be £100,000. The turned-over fixed capital is £8,000, the turned-over circulating capital five times £20,000, or £100,000. Then the capital turned over during one year is £108,000, or £8,000 more than the advanced capital.
1 + 2/25 of the capital have been turned over.
4) Therefore the turnover time of the value of the advanced capital differs from its actual time of reproduction or from the actual time of turnover of its component parts. Take for instance a capital of £4,000 and let it turn over, say, five times a year. The turned-over capital is then five times £4,000, or £20,000. But what returns at the end of each turnover to be advanced anew is the originally advanced capital of £4,000. Its magnitude is not changed by the number of turnover periods, during which it performs anew its functions as capital.
(Apart from surplus-value.)