Das Kapital II — Kap. 14

Kap. 14

Die Verkaufszeit

Chapters 12 and 13 varied the production half of turnover time. This chapter holds production fixed and varies the market half — and finds the market reaching back into production by the end.

Alle bisher betrachteten Umstände, welche die Umlaufsperioden verschiedner, in verschiednen Geschäftszweigen angelegter Kapitale differenzieren, daher auch die Zeiten, während deren Kapital vorgeschossen werden muß, entspringen innerhalb des Produktionsprozesses selbst, wie der Unterschied von fixem und flüssigem Kapital, der Unterschied in den Arbeitsperioden usw. Die Umschlagszeit des Kapitals ist jedoch gleich der Summe seiner Produktionszeit und seiner Umlaufs- oder Zirkulationszeit. Es versteht sich daher von selbst, daß verschiedne Länge der Umlaufszeit die Umschlagszeit und daher die Länge der Umschlagsperiode verschieden macht. Am handgreiflichsten wird dies sichtbar, entweder wenn man zwei verschiedne Kapitalanlagen vergleicht, worin alle andren den Umschlag modifizierenden Umstände gleich und nur die Umlaufszeiten verschieden sind, oder wenn man ein gegebnes Kapital nimmt mit gegebner Zusammensetzung aus fixem und flüssigem Kapital, gegebner Arbeitsperiode etc., und nur die Umlaufszeiten hypothetisch variieren läßt.

turnover time = production time + circulation time

Every difference we've looked at so far in how long various capitals take to complete a turnover — and so in how long capital has to be advanced — comes from inside the production process itself: the split between fixed and circulating capital, differences in working periods, and so on. But a capital's turnover time is the production time plus the circulation time added together. So it follows directly that a longer or shorter circulation time makes the turnover time, and so the whole turnover period, longer or shorter too. This shows up most clearly if you compare two capital investments where everything else that affects turnover is the same and only the circulation times differ — or if you take one given capital, with a given mix of fixed and circulating capital, a given working period, and so on, and just imagine varying its circulation time.

Der eine Abschnitt der Umlaufszeit - und der relativ entscheidendste - besteht aus der Verkaufszeit, der Epoche, worin das Kapital sich im Zustand von Warenkapital befindet. Je nach der relativen Größe dieser Frist verlängert oder verkürzt sich die Umlaufszeit und daher die Umschlagsperiode überhaupt. Es kann auch infolge von Aufbewahrungskosten etc. zuschüssige Auslage von Kapital notwendig werden. Von vornherein ist klar, daß die für den Verkauf ihrer fertigen Waren erforderliche Zeit sehr verschieden sein kann für die einzelnen Kapitalisten in einem und demselben Geschäftszweig, also nicht nur für die Kapitalmassen, die in verschiednen Produktionszweigen angelegt sind, sondern auch für die verschiednen selbständigen Kapitale, die in der Tat nur verselbständigte Stücke des in derselben Produktionssphäre angelegten Gesamtkapitals bilden. Unter sonst gleichbleibenden Umständen wird die Verkaufsperiode für dasselbe individuelle Kapital mit den allgemeinen Schwankungen der Marktverhältnisse oder mit ihren Schwankungen in dem besondren Geschäftszweig wechseln. Hierbei halten wir uns jetzt nicht länger auf. Wir konstatieren nur die einfache Tatsache: Alle Umstände, welche überhaupt Verschiedenheit in den Umschlagsperioden der in verschiednen Geschäftszweigen angelegten Kapitale erzeugen, haben, wenn sie individuell wirken (wenn z.B. der eine Kapitalist Gelegenheit hat, rascher zu verkaufen als sein Konkurrent, wenn der eine mehr Methoden anwendet, welche die Arbeitsperioden verkürzen, als der andre etc.), ebenfalls Verschiedenheit im Umschlag der verschiednen, in demselben Geschäftszweig hausenden Einzelkapitale zur Folge.

selling time: the decisive part, and it varies

One part of circulation time — the part that matters most — is selling time: the stretch during which the capital sits in the form of commodity-capital, unsold goods. How long or short this stretch is lengthens or shortens the circulation time, and with it the whole turnover period. Storage costs and the like can even force the capitalist to lay out extra capital. It's obvious from the start that the time needed to sell finished goods can differ a great deal between individual capitalists in the very same line of business — not only between the masses of capital invested in different branches of production, but between the different independent capitals that are really just separate portions of the total capital invested in one branch. Other things being equal, the selling period for the same individual capital will also shift with the general ups and downs of the market, or with the ups and downs particular to that line of business. We won't stop on this now. We just note the simple fact: whatever causes turnover periods to differ between capitals in different branches also, when it acts on an individual capitalist rather than a whole branch — say, one capitalist manages to sell faster than a competitor, or applies more methods for shortening working periods than another does — produces differences in turnover among the separate capitals within one and the same branch.

Eine stetig wirkende Ursache in der Differenzierung der Verkaufszeit, und daher der Umschlagszeit überhaupt, ist die Entfernung des Markts, wo die Ware verkauft wird, von ihrem Produktionsplatz <1. und 2. Auflage: Verkaufsplatz>. Während der ganzen Zeit seiner Reise zum Markt befindet sich das Kapital gebannt in den Zustand des Warenkapitals; wenn auf Ordre produziert wird, bis zum Moment der Abliefrung; wenn nicht auf Ordre produziert, kommt zur Zeit der Reise zum Markt noch die Zeit hinzu, wo die Ware sich auf dem Markt zum Verkauf befindet. Verbeßrung der Kommunikations- und Transportmittel kürzt die Wandrungsperiode der Waren absolut ab, hebt aber nicht die aus der Wandrung entspringende relative Differenz in der Umlaufszeit verschiedner Warenkapitale auf, oder auch verschiedner Stücke desselben Warenkapitals, die nach verschiednen Märkten wandern. Die verbesserten Segelschiffe und Dampfschiffe z.B., welche die Reise verkürzen, verkürzen sie ebensowohl für nahe gelegne wie ferne Häfen. Die relative Differenz bleibt, obwohl oft vermindert. Die relativen Differenzen können aber infolge der Entwicklung der Transport- und Kommunikationsmittel verschoben werden in einer Weise, die nicht den natürlichen Entfernungen entspricht. Z.B. eine Eisenbahn, die von dem Produktionsplatz nach einem inländischen Hauptzentrum der Bevölkrung führt, mag die Entfernung nach einem näher gelegnen Punkt des Inlands, wohin keine Eisenbahn führt, absolut oder relativ verlängern im Vergleich zu dem natürlich entferntern; ebenso mag infolge desselben Umstands die relative Entfernung der Produktionsplätze von den größern Absatzmärkten selbst verschoben werden, woraus sich der Verfall alter und das Aufkommen neuer Produktionszentren mit veränderten Transport- und Kommunikationsmitteln erklärt. (Hierzu kommt noch die größre relative Wohlfeilheit des Transports für längre als für kürzre Distanzen.) Gleichzeitig mit der Entwicklung der Transportmittel wird nicht nur die Geschwindigkeit der Raumbewegung beschleunigt und damit die räumliche Entfernung zeitlich verkürzt. Es entwickelt sich nicht nur die Masse der Kommunikationsmittel, so daß z.B. viele Schiffe gleichzeitig nach demselben Hafen abgehn, mehrere Züge gleichzeitig auf verschiednen Eisenbahnen zwischen denselben zwei Punkten fahren, sondern es gehn z.B. in der Woche an verschiednen sukzessiven Tagen Frachtschiffe von Liverpool nach New York oder zu verschiednen Tagesstunden Warenzüge von Manchester nach London. Die absolute Geschwindigkeit - also dieser Teil der Umlaufszeit - wird durch diesen letztren Umstand, bei gegebner Leistung der Transportmittel, zwar nicht alteriert. Aber sukzessive Quanta Waren können in kürzer aufeinanderfolgenden Zeiträumen die Reise antreten und so sukzessive auf den Markt kommen, ohne sich bis zur wirklichen Versendung in größren Massen als potentielles Warenkapital aufzuhäufen. Es verteilt sich daher auch der Rückfluß über kürzre sukzessive Zeitperioden, so daß beständig ein Teil in Geldkapital verwandelt ist, während der andre als Warenkapital zirkuliert. Durch diese Verteilung des Rückflusses auf mehrere sukzessive Perioden wird die Gesamtumlaufszeit abgekürzt und daher auch der Umschlag. Zunächst entwickelt sich die größre oder geringre Häufigkeit, worin die Transportmittel fungieren, z.B. die Anzahl der Züge einer Eisenbahn, einerseits mit dem Grade, worin ein Produktionsplatz mehr produziert, ein größres Produktionszentrum wird, und nach der Richtung auf den bereits vorhandnen Absatzmarkt hin, also nach den großen Produktions- und Bevölkrungszentren, nach Exporthäfen usw. Andrerseits bewirkt aber umgekehrt diese besondre Verkehrsleichtigkeit und der dadurch beschleunigte Umschlag des Kapitals (soweit er von der Umlaufszeit bedingt wird) eine beschleunigte Konzentration einerseits des Produktionszentrums, andrerseits seines Marktplatzes. Mit der so beschleunigten Konzentration von Menschen- und Kapitalmassen an gegebnen Punkten schreitet fort die Konzentration dieser Kapitalmassen in wenigen Händen. Zugleich findet wieder Verschiebung und Deplacement statt infolge der mit den veränderten Kommunikationsmitteln veränderten relativen Lage von Produktions- und Marktplätzen. Ein Produktionsplatz, der durch seine Lage an Landstraße oder Kanal besondren Positionsvorteil besaß, befindet sich jetzt an der Seite einer einzigen Zweigbahn, die nur in relativ großen Intervallen fungiert, während ein andrer Punkt, der ganz von den Hauptverkehrswegen ablag, nun am Kreuzpunkt mehrerer Bahnen liegt. Der zweite Ort kommt auf, der erste verkommt. Es wird also durch die Verändrung in den Transportmitteln eine örtliche Verschiedenheit in der Umlaufszeit der Waren, der Gelegenheiten einzukaufen, zu verkaufen usw. erzeugt, oder die schon existierende örtliche Verschiedenheit wird anders verteilt. Die Wichtigkeit dieses Umstandes für den Umschlag des Kapitals zeigt sich in den Streitereien der kaufmännischen und industriellen Repräsentanten der verschiednen Plätze mit den Eisenbahndirektionen. (Siehe z.B. das oben <Siehe vorl. Band, S. 152 > zitierte Blaubuch des Railway Committee.)

distance, frequency, and the shifting map of production

One cause that constantly makes selling time — and so circulation time overall — differ is simply how far the market where the goods are sold lies from the place where they were produced. For the whole time the goods are travelling to market, the capital is stuck in the form of commodity-capital: if the goods were made to order, until the moment of delivery; if not, then the travelling time is followed by however long the goods then sit on the market waiting to be sold. Better transport and communications cut the actual travelling time in absolute terms, but they don't remove the relative difference in circulation time between different masses of commodity-capital — or between different portions of the same mass travelling to different markets. Faster sailing ships and steamships, for instance, cut the journey for near ports and far ports alike, so the relative difference remains, even if it's often smaller than before. What transport development can do, though, is shift these relative differences in ways that no longer match the actual distances involved. A railway running from the production site to a major domestic population centre, for example, can make a nearer point that the railway doesn't reach effectively more distant than a point that is naturally farther away. The same thing can shift how close production sites are, relatively, to the big markets — which is why old production centres decline and new ones spring up as transport and communication change. (Longer hauls are also, relatively, cheaper to transport than shorter ones.) Alongside this, transport development doesn't just make things move faster in space, shortening distance in terms of time. It also increases how much capacity is running: several ships may leave for the same port at once, several trains may run the same route at once — or, say, freight ships may leave Liverpool for New York on different days through the week, or goods trains leave Manchester for London at different hours of the day. This greater frequency, given a fixed capacity of transport, doesn't by itself change the absolute speed — that part of circulation time stays the same. But it does mean that successive batches of goods can set off in shorter intervals one after another and so reach the market in a steady stream, instead of piling up into one large mass of potential commodity-capital waiting to be shipped all at once. The money coming back is spread the same way, over shorter successive periods, so that part of the capital is constantly being turned back into money-capital while another part is still circulating as commodity-capital. Spreading the returns over several shorter periods like this shortens the total circulation time, and so speeds up the turnover. How frequently transport runs — the number of trains on a line, say — grows first of all as a production site produces more and becomes a bigger centre of production, and as it points toward an already-existing market: the big centres of production and population, the export ports, and so on. But the reverse also happens: this greater ease of transport, and the faster capital turnover it brings (so far as that depends on circulation time), itself speeds up the concentration of production at one end and of the market at the other. As people and capital concentrate faster at particular points this way, the capital itself keeps concentrating into fewer hands. At the same time, places shift and get displaced, because changed transport also changes the relative position of production sites and markets. A production site that once had the advantage of sitting on a highway or a canal may now find itself on a branch line that only runs at long intervals, while another place that used to lie off every main route now sits where several lines cross. The second place rises; the first declines. So a change in transport creates a local difference in circulation time — in the chances to buy, to sell, and so on — or reshuffles a difference that already existed. How much this matters for capital's turnover shows up in the disputes between merchants and manufacturers from different places and the railway companies.

Alle Produktionszweige, die der Natur ihres Produkts nach hauptsächlich auf lokalen Absatz angewiesen sind, wie Brauereien, entwickeln sich daher in der größten Dimension in Hauptzentren der Bevölkrung. Der raschere Umschlag des Kapitals gleicht hier zum Teil die Verteurung mancher Produktionsbedingungen, des Bauplatzes etc., aus.

why breweries cluster where people live

Any branch of production whose product mainly has to be sold locally — breweries, for instance — for that reason grows to its largest scale in the big centres of population. Here, the faster turnover of capital partly makes up for the fact that some of what's needed to produce there, like building land, costs more.

Wenn einerseits mit dem Fortschritt der kapitalistischen Produktion die Entwicklung der Transport- und Kommunikationsmittel die Umlaufszeit für ein gegebnes Quantum Waren abkürzt, so führt derselbe Fortschritt und die mit der Entwicklung der Transport- und Kommunikationsmittel gegebne Möglichkeit - umgekehrt die Notwendigkeit herbei, für immer entferntere Märkte, mit einem Wort, für den Weltmarkt zu arbeiten. Die Masse der auf Reise befindlichen und nach entfernten Punkten reisenden Waren wächst enorm, und daher absolut und relativ auch der Teil des gesellschaftlichen Kapitals, der sich beständig für längre Fristen im Stadium des Warenkapitals, innerhalb der Umlaufszeit befindet. Damit wächst gleichzeitig auch der Teil des gesellschaftlichen Reichtums, der, statt als direktes Produktionsmittel zu dienen, in Transport- und Kommunikationsmitteln und in dem für ihren Betrieb erheischten fixen und zirkulierenden Kapital ausgelegt wird.

the same progress that shortens also stretches

If, on one hand, the progress of capitalist production — through better transport and communication — shortens the circulation time for a given quantity of goods, that very same progress, and the possibility it opens up, works the other way too: it makes it necessary to produce for ever more distant markets — in a word, for the world market. The mass of goods travelling, and travelling to distant points, grows enormously, and with it grows, both absolutely and relatively, the part of social capital that is constantly stuck for long stretches in the stage of commodity-capital, within circulation time. At the same time, the part of social wealth that gets laid out not as a direct means of production, but in transport and communication and in the fixed and circulating capital needed to run them, grows too.

Die bloße relative Länge der Reise der Ware vom Produktions- zum Absatzort bewirkt eine Differenz nicht nur in dem ersten Teil der Umlaufszeit, der Verkaufszeit, sondern auch in dem zweiten Teil, der Rückverwandlung des Geldes in die Elemente des produktiven Kapitals, der Kaufzeit. Z.B. die Ware wird nach Indien geschickt. Dies dauert z.B. vier Monate. Wir wollen die Verkaufszeit 0 setzen, d.h. die Ware sei auf Bestellung gesandt und werde bei Abliefrung an den Agenten des Produzenten gezahlt. Die Rücksendung des Geldes (die Form, in der es zurückgesandt wird, ist hier gleichgültig) dauert wieder vier Monate. So dauert es im ganzen acht Monate, bevor dasselbe Kapital wieder als produktives Kapital fungieren, dieselbe Operation damit erneuert werden kann. Die so hervorgebrachten Verschiedenheiten im Umschlag bilden eine der materiellen Grundlagen der verschiednen Kredittermine, wie denn der überseeische Handel z.B. in Venedig und Genua überhaupt eine der Quellen des eigentlichen Kreditwesens bildet.

the return trip counts: eight months to India

The mere relative length of the goods' journey from where they're produced to where they're sold makes a difference not only in the first part of circulation time — selling time — but also in the second part: buying time, when the money is converted back into the elements of productive capital. Take goods sent to India. Say that takes four months. Suppose the selling time is nil — the goods were sent to order and get paid for the moment they're delivered to the producer's agent. Sending the money back (however it's sent doesn't matter here) takes another four months. So altogether it's eight months before the same capital can function again as productive capital and the same operation can start over. The differences in turnover this produces form one of the material foundations for the different terms of credit — overseas trade, in Venice and Genoa for example, was itself one of the sources of the credit system proper.

"Die Krisis von 1847 befähigte das Bank- und Handelsgeschäft jener Zeit, die indische und chinesische Usance" (für die Laufzeit von Wechseln zwischen dort und Europa) "von zehn Monate nach Dato auf 6 Monate nach Sicht zu reduzieren, und der Verlauf von 20 Jahren mit seiner Beschleunigung der Fahrt und Einrichtung von Telegraphen macht jetzt eine fernere Reduktion nötig von sechs Monaten nach Sicht auf vier Monate nach Dato als ersten Schritt zu vier Monate nach Sicht. Die Reise eines Segelschiffs um das Kap von Kalkutta nach London dauert durchschnittlich unter 90 Tagen. Eine Usance von vier Monaten nach Sicht würde einer Laufzeit von sage 150 Tagen gleichkommen. Die gegenwärtige Usance von sechs Monaten nach Sicht kommt einer Laufzeit von sage 210 Tagen gleich." ("London Economist", 16. Juni 1866.) -

faster crossings, shorter bill terms

"The crisis of 1847 enabled the banking and commercial world of the time to reduce the Indian and Chinese usance" (the time allowed for bills of exchange to run between there and Europe) "from ten months after date to six months after sight, and the course of twenty years, with its faster crossings and its telegraph lines, now makes a further reduction necessary — from six months after sight to four months after date as a first step towards four months after sight. A sailing ship's voyage round the Cape from Calcutta to London takes, on average, under 90 days. A usance of four months after sight would come to a running time of, say, 150 days. The present usance of six months after sight comes to a running time of, say, 210 days."

Dagegen:

on the other hand

On the other hand:

"Die Brasilische Usance steht noch immer auf zwei und drei Monate nach Sicht, Wechsel von Antwerpen" (auf London) "werden drei Monate nach Dato gezogen, und selbst Manchester und Bradford ziehn auf London auf drei Monate und längre Daten. Durch stillschweigende Übereinkunft wird dem Kaufmann so eine hinreichende Gelegenheit gegeben, seine Ware zu realisieren, zwar nicht vor, aber doch bis zu der Zeit, wo die dagegen gezognen Wechsel verfallen. Daher ist die Usance indischer Wechsel nicht übermäßig. Indische Produkte, die in London meistens auf drei Monate Ziel verkauft werden, können nicht, wenn man einige Zeit für den Verkauf einrechnet, in viel kürzrer Zeit als fünf Monaten realisiert werden, während andre fünf Monate durchschnittlich verfließen zwischen dem Einkauf in Indien und der Ablieferung im englischen Lagerhaus. Hier haben wir eine Periode von zehn Monaten, während die gegen die Waren gezognen Wechsel nicht über sieben Monate laufen." (Ibid., 30. Juni 1866.) "Am 2. Juli 1866 notifizierten fünf große Londoner Banken, die hauptsächlich mit Indien und China verkehren, sowie das Pariser Comptoir d'Escompte, daß vom 1. Januar 1867 ihre Zweigbanken und Agenturen im Orient nur solche Wechsel kaufen und verkaufen würden, die nicht über vier Monate nach Sicht gezogen wären." (Ibidem, 7. Juli 1866.)

the counter-case: usances still run long

"The Brazilian usance still stands at two and three months after sight; bills drawn from Antwerp" (on London) "run three months after date, and even Manchester and Bradford draw on London at three months and longer. By tacit agreement, the merchant is thereby given enough time to turn his goods into money — not before, but at least by the time the bills drawn against them fall due. So the usance on Indian bills isn't excessive. Indian goods, which in London mostly sell on three months' credit, can't — allowing some time for the sale — be turned into money in much under five months, while another five months on average pass between the purchase in India and the delivery at the English warehouse. So here we have a period of ten months, while the bills drawn against the goods run no more than seven. On 2 July 1866, five large London banks that deal mainly with India and China, along with the Paris Comptoir d'Escompte, gave notice that from 1 January 1867 their branches and agencies in the East would only buy and sell bills drawn at no more than four months after sight."

Diese Herabsetzung mißglückte jedoch und mußte wieder aufgegeben werden. (Seitdem hat der Suezkanal dies alles revolutioniert.)

the attempt failed

This cut, though, didn't hold, and had to be abandoned again. (Since then the Suez Canal has turned all of this upside down.)

Es versteht sich, daß mit der längern Umlaufszeit der Waren das Risiko eines Preiswechsels auf dem Verkaufsmarkt steigt, da die Periode wächst, innerhalb deren Preiswechsel stattfinden können.

longer circulation, more price risk

Naturally, the longer goods' circulation time is, the greater the risk that prices will change on the market they're sold in, since the period during which prices can move grows too.

Eine Verschiedenheit in der Umlaufszeit, teils individuell zwischen verschiednen Einzelkapitalen desselben Geschäftszweigs, teils zwischen verschiednen Geschäftszweigen nach den verschiednen Usancen, da wo nicht gleich bar gezahlt wird, entspringt aus den verschiednen Terminen der Zahlung bei Ein- und Verkauf. Wir halten uns bei diesem für das Kreditwesen wichtigen Punkt hier nicht weiter auf.

payment terms add their own differences

A difference in circulation time — partly between individual capitals within the same line of business, partly between different lines of business with their different usances, wherever payment isn't simply made in cash — also comes from the different terms on which purchases and sales are paid for. We won't stop on this point here, important as it is for the credit system.

Aus dem Umfang der Liefrungskontrakte, und dieser wächst mit Umfang und Stufenleiter der kapitalistischen Produktion, entspringen ebenfalls Unterschiede in der Umschlagszeit. Der Liefrungskontrakt als Transaktion zwischen Käufer und Verkäufer ist eine dem Markt, der Zirkulationssphäre angehörige Operation. Die hieraus entspringenden Unterschiede in der Umschlagszeit entspringen also aus der Zirkulationssphäre, schlagen aber unmittelbar auf die Produktionssphäre zurück, und zwar abgesehn von allen Zahlungsterminen und Kreditverhältnissen, also auch bei barer Zahlung. Kohle, Baumwolle, Garn usw. sind z.B. diskrete Produkte. Jeder Tag liefert sein Quantum fertiges Produkt. Übernimmt nun aber der Spinner oder der Grubenbesitzer Liefrungen von Produktenmassen, welche eine sage vier- oder sechswöchentliche Periode nacheinanderfolgender Arbeitstage erheischen, so ist das mit Bezug auf die Zeitlänge, wofür Kapital vorzuschießen ist, ganz dasselbe, als ob eine kontinuierliche Arbeitsperiode von vier oder sechs Wochen in diesem Arbeitsprozeß eingeführt wäre. Es wird hier natürlich vorausgesetzt, daß die ganze bestellte Masse Produkt auf einmal zu liefern ist oder doch erst gezahlt wird, nachdem sie ganz geliefert. So hat denn, einzeln betrachtet, jeder Tag sein bestimmtes Quantum fertiges Produkt geliefert. Aber diese fertige Masse ist immer nur ein Teil der kontraktlich zu liefernden Masse. Befindet sich in diesem Fall der bereits fertige Teil der bestellten Waren nicht weiter im Produktionsprozeß so liegt er doch als nur potentielles Kapital auf dem Lagerhaus.

a contract acts like one long working period

Differences in turnover time also come from how large delivery contracts are — and these grow as the scale of capitalist production grows. A delivery contract, as a deal between buyer and seller, belongs to the market, to the sphere of circulation. The differences in turnover time that come out of it start in the sphere of circulation, but strike straight back at the sphere of production — and this holds quite apart from any payment terms or credit arrangements, so even where payment is in cash. Coal, cotton, yarn, and the like are goods produced in discrete daily amounts: each day delivers its quantum of finished product. But suppose the spinner, or the mine owner, takes on a delivery contract for a mass of product that needs, say, four or six weeks of successive working days to produce. Then, as far as the length of time capital has to be laid out, it is exactly as if a continuous working period of four or six weeks had been introduced into this labour process. This assumes, of course, that the whole ordered mass has to be delivered all at once, or at least isn't paid for until it's all been delivered. So, taken day by day, each day still delivers its fixed quantum of finished product. But that finished amount is always only part of the mass still owed under the contract. And if the part that's already finished is no longer, strictly, in the production process, it still sits in the warehouse as nothing more than potential capital.

Kap. 14

Die Kaufzeit und das Geldkapital

Selling time filled the first half; the buying time closes the loop — and leaves a portion of every capital permanently in money form, which is exactly the portion the economists forget.

Kommen wir nun zur zweiten Epoche der Umlaufszeit: der Kaufzeit oder der Epoche, während deren das Kapital sich aus Geldform in die Elemente des produktiven Kapitals rückverwandelt. Während dieser Epoche muß es kürzre oder längre Zeit in seinem Zustand als Geldkapital verharren, also ein gewisser Teil des vorgeschoßnen Gesamtkapitals sich fortwährend im Zustand des Geldkapitals befinden, obgleich dieser Teil aus beständig wechselnden Elementen besteht. Es muß z.B. in einem bestimmten Geschäft von dem vorgeschoßnen Gesamtkapital n × 100 Pfd.St. in der Form von Geldkapital vorhanden sein, so daß, während alle Bestandteile dieser n × 100 Pfd.St. sich fortwährend in produktives Kapital verwandeln, diese Summe dennoch durch den Zufluß aus der Zirkulation, aus dem realisierten Warenkapital sich ebenso beständig wieder ergänzt. Ein bestimmter Wertteil des vorgeschoßnen Kapitals befindet sich also beständig im Zustand von Geldkapital, also in einer nicht seiner Produktionssphäre, sondern seiner Zirkulationssphäre angehörigen Form.

buying time: money-capital always tied up

Now to the second stage of circulation time: the buying time — the stage in which capital changes back from money form into the elements of productive capital. During this stage, capital has to sit for a while, shorter or longer, in the state of money-capital. That means a certain part of the whole capital advanced is always in the state of money-capital, even though the actual pounds making up that part keep changing. Say a business needs n × £100 of its total capital to be sitting there as money-capital at any given moment. Every pound in that n × £100 is constantly being turned into productive capital, and yet the sum stays just as constantly topped back up, by money flowing in from circulation, from the commodity-capital that has been turned back into cash. So a definite portion of the value of the advanced capital is always there in the state of money-capital — in a form that belongs not to its sphere of production, but to its sphere of circulation.

Man hat bereits gesehn, daß die durch Entfernung des Markts bewirkte Verlängrung der Zeit, in der das Kapital in die Form des Warenkapitals gebannt ist, direkt verspäteten Rückfluß des Geldes bewirkt, also auch die Verwandlung des Kapitals aus Geldkapital in produktives Kapital verzögert.

distant markets delay the switch back

We have already seen that when the market is far away, the time capital spends locked in commodity form gets longer, and this directly delays the money flowing back — which in turn delays capital's conversion from money-capital into productive capital.

Man hat ferner gesehn (Kap. VI), wie mit Bezug auf den Einkauf der Waren die Kaufzeit, die größre oder geringre Entfernung von den Hauptbezugsquellen des Rohmaterials es nötig macht, für längre Perioden Rohmaterial einzukaufen und in der Form von produktivem Vorrat, latentem oder potentiellem produktivem Kapital, verwendbar zu halten; daß sie also die Masse des Kapitals, das auf einmal vorgeschossen werden muß, und die Zeit, für die es vorgeschossen werden muß, bei sonst gleicher Stufenleiter der Produktion vergrößert.

distant raw materials mean bigger stockpiles

We have also seen (Chapter VI) that, when it comes to buying materials, the buying time — how near or far the main sources of raw material are — can force a business to buy raw material for longer stretches ahead and keep it on hand as productive stock, as latent or potential productive capital. That means, for the same scale of production, both the amount of capital that has to be advanced at once and the length of time it has to be advanced for get bigger.

Ähnlich wirken in verschiednen Geschäftszweigen die Perioden - kürzre oder längre -, worin größre Massen Rohmaterial auf den Markt geworfen werden. So finden z.B. in London alle drei Monate große Wollversteigerungen statt, die den Wollmarkt beherrschen; während der Baumwollmarkt von Ernte zu Ernte im ganzen kontinuierlich, wenn auch nicht immer gleichmäßig, erneuert wird. Solche Perioden bestimmen die Haupteinkaufstermine dieser Rohstoffe und wirken namentlich auch auf die spekulativen, längre oder kürzre Vorschüsse in diesen Produktionselementen bedingenden Einkäufe, ganz wie die Natur der produzierten Waren auf die spekulative, absichtliche, längre oder kürzre Zurückhaltung des Produkts in der Form von potentiellem Warenkapital wirkt.

seasonal buying rhythms shape purchases

Something similar happens with the periods, shorter or longer, in which different branches of business see large amounts of raw material thrown onto the market. In London, for instance, big wool auctions happen every three months and set the pace for the wool market, while the cotton market is renewed more or less continuously from one harvest to the next, though not always evenly. These periods fix the main dates on which such raw materials get bought, and they also shape the speculative purchases — buying further or less far ahead of need — in these materials. In just the same way, the nature of the goods a business produces shapes how far, and for how long, it deliberately holds the finished product back from sale as potential commodity-capital.

"Der Landwirt muß also auch bis zu einem gewissen Grade Spekulant sein und daher nach Maßgabe der Zeitverhältnisse mit dem Verkauf seiner Produkte zurückhalten ... "

the farmer as speculator

"The farmer, then, must also be something of a speculator, and hold back from selling his produce according to how the times stand..."

Folgen einige allgemeine Regeln.

a few rules follow

(A few general rules follow.)

"Indessen kommt doch bei dem Absatz der Produkte das meiste auf die Person, auf das Produkt selbst und auf die Lokalität an. Wer bei Geschick und Glück (!) mit hinreichendem Betriebskapital versehn ist, wird nicht zu tadeln sein, wenn er seine gewonnene Fruchternte bei ungewöhnlich niedrigem Preise einmal ein Jahr liegen läßt; wem es dagegen an Betriebskapital oder überhaupt (!) an Spekulationsgeist fehlt, der wird die laufenden Durchschnittspreise zu erreichen suchen und also absetzen müssen, sobald und sooft er dazu Gelegenheit hat. Wolle länger als ein Jahr liegen zu lassen, wird fast immer nur Schaden bringen; während Getreidefrüchte und Ölsaat ein paar Jahre ohne Nachteil für Beschaffenheit und Güte aufbewahrt werden können. Solche Produkte, welche für gewöhnlich einem großen Steigen und Fallen in kurzen Zeiträumen unterworfen sind, wie z.B. Ölsaat, Hopfen, Karden und dergl., läßt man mit Recht in den Jahren liegen, wo der Preis weit unter den Produktionspreisen steht. Am wenigsten darf man mit dem Verkauf von solchen Gegenständen zögern, welche tägliche Unterhaltungskosten verursachen, wie ausgemästetes Vieh, oder welche dem Verderben unterliegen, wie Obst, Kartoffeln usw. In manchen Gegenden hat ein Produkt zu gewissen Jahreszeiten im Durchschnitt seinen niedrigsten, zu andern Zeiten dagegen seinen höchsten Preis; so steht z.B. das Getreide um Martini im Durchschnitt an manchen Orten niedriger im Preise als zwischen Weihnachten und Ostern. Ferner sind manche Produkte in manchen Gegenden nur zu gewissen Zeiten allein gut zu verkaufen, wie das z.B. mit der Wolle auf den Wollmärkten in solchen Gegenden der Fall ist, wo außerdem der Wollhandel gewöhnlich stockt usw." (Kirchhof, p.302.)

Kirchhof's rules, mocked

"Still, when it comes to selling produce, most depends on the person, on the product itself, and on the locality. A man with skill and luck (!) and enough working capital behind him can't be blamed if he lets a harvest sit for a year when the price is unusually low; but a man short of working capital, or simply (!) short of the speculative instinct, has to aim at the going average prices and sell whenever and as often as he gets the chance. Wool that sits unsold for more than a year almost always comes to harm, while grain and oilseed can be kept a couple of years without losing quality. Products that usually swing sharply up and down over short periods — oilseed, hops, teasels, and the like — are rightly held back in years when the price sits well below the production price. Least of all should one delay selling things that cost money to maintain day by day, like fattened livestock, or things that spoil, like fruit or potatoes. In some districts a product is on average cheapest at certain times of year and dearest at others — grain, for instance, is often cheaper around Martinmas than between Christmas and Easter in some places. And in some districts certain products, wool for example, can only be sold well at certain times, in wool markets where trade otherwise tends to be slack." (Kirchhof, p.302.)

Bei Betrachtung der zweiten Hälfte der Umlaufszeit, worin das Geld in die Elemente des produktiven Kapitals zurückverwandelt wird, kommt in Betracht nicht nur dieser Umsatz selbst, für sich genommen; nicht nur die Zeit, worin das Geld zurückfließt, je nach der Entfernung des Markts, auf dem das Produkt verkauft wird; es kommt auch vor allem in Betracht der Umfang, worin ein Teil des vorgeschoßnen Kapitals sich beständig in Geldform, im Zustand von Geldkapital befinden muß.

what really matters in this half

Looking at the second half of circulation time — the stage in which money turns back into the elements of productive capital — what matters is not just this exchange on its own, and not just how long it takes the money to flow back, depending on how far away the market is where the product was sold. What matters above all is how large a part of the advanced capital must constantly sit in money form, in the state of money-capital.

Abgesehn von aller Spekulation hängt der Umfang der Einkäufe derjenigen Waren, die beständig als produktiver Vorrat vorhanden sein müssen, ab von den Zeiten der Erneuerung dieses Vorrats, also von Umständen, die wieder von Marktverhältnissen abhängig, daher für verschiedne Rohstoffe etc. verschieden sind; es muß hier also von Zeit zu Zeit Geld in größren Mengen auf einmal vorgeschossen werden. Es fließt, je nach dem Umschlag des Kapitals, rascher oder langsamer, stets aber bruchweis zurück. Ein Teil davon wird ebenso beständig wieder in kürzern Zeiträumen ausgegeben, nämlich der in Arbeitslohn rückverwandelte Teil. Ein andrer Teil aber, der in Rohmaterial etc. rückzuverwandelnde, ist für längre Zeiträume aufzuhäufen, als Reservefonds, sei es für Ankauf, sei es für Zahlung. Er existiert daher in der Form des Geldkapitals, obgleich der Umfang wechselt, worin er als solches existiert.

the reserve fund, not speculation

Set speculation aside for now. How much a business has to buy of the goods that must always be on hand as productive stock depends on how often that stock needs renewing — and that in turn depends on market conditions, which differ from one raw material to the next. So money has to be advanced, from time to time, in larger amounts all at once. It flows back — faster or slower depending on how the capital turns over — but always in pieces. Part of it is spent again just as constantly, in short intervals: this is the part that goes back into wages. But another part — the part that has to go back into raw material and the like — has to be built up over longer stretches, as a reserve fund, whether for buying or for paying. This part therefore exists in the form of money-capital, though how large it is at any moment keeps changing.

Wir werden im nächsten Kapitel sehn, wie andre Umstände, ob sie nun aus dem Produktions- oder Zirkulationsprozeß entspringen, dies Vorhandensein einer bestimmten Portion des vorgeschoßnen Kapitals in Geldform ernötigen. Allgemein aber ist zu bemerken, daß die Ökonomen sehr geneigt sind zu vergessen, daß ein Teil des im Geschäft nötigen Kapitals beständig nicht nur die drei Formen von Geldkapital, produktivem Kapital und Warenkapital wechselweis durchläuft, sondern daß verschiedne Portionen desselben beständig nebeneinander diese Formen besitzen, wenn auch die relative Größe dieser Portionen beständig wechselt. Namentlich ist es der beständig als Geldkapital vorhandne Teil, den die Ökonomen vergessen, obgleich gerade dieser Umstand zum Verständnis der bürgerlichen Wirtschaft sehr nötig ist und daher auch in der Praxis als solcher sich geltend macht.

economists forget the money-capital portion

We shall see in the next chapter how other circumstances, whether they come from the process of production or from circulation, also force a definite portion of the advanced capital to sit in money form. But here is the general point: economists are very apt to forget that a part of the capital a business needs doesn't just pass through the three forms — money-capital, productive capital, commodity-capital — one after another. Different portions of that capital constantly hold all three forms side by side at once, even though the relative size of those portions keeps shifting. It is above all the part that is always there as money-capital that economists forget — even though grasping exactly this is essential to understanding how bourgeois economy works, and it makes itself felt as such in practice too.

Kap. 14

The Selling Time

Chapters 12 and 13 varied the production half of turnover time. This chapter holds production fixed and varies the market half — and finds the market reaching back into production by the end.

All the circumstances so far considered as differentiating the circulation periods of different capitals invested in different branches of industry, and hence also the times for which capital has to be advanced, such as the distinction between fixed and fluid capital, the difference in working periods, etc., arise within the production process itself. But the turnover time of capital is the sum of its production time and its circulation or rotation time. It is self-evident, therefore, that circulation times of varying length make for different times of turnover and thus different turnover periods. This becomes most readily apparent either when we compare two different capital investments in which all other circumstances modifying the turnover are equal and only the times of circulation are different, or when a given capital is taken with a given composition in terms of fixed and fluid capital, a given working period etc., and only the circulation time is hypothetically varied.

turnover time = production time + circulation time

One section of circulation time - and relatively the most decisive one - consists of selling time, the period in which the capital exists in the state of commodity capital. According to the relative extent of this interval, the circulation time in general, and hence also the turnover period, is lengthened or shortened. An additional outlay of capital may also be necessary for costs of storage etc. It is clear from the start that the time required for the sale of the finished product may be very different for individual capitalists in one and the same line of business; i.e. not only for the quantities of capital that are invested in different branches of production, but also for the various independent capitals invested in a particular sphere of production, which in actual fact simply constitute bits of the total capital which have attained an independent position. With other circumstances remaining the same, the selling period required by the same individual capital changes with the general fluctuations in market conditions, or with fluctuations in the particular line of business in question. We shall not deal any further here with this point. We need only establish the simple fact that all circumstances that generally produce a variation in the turnover periods of capital invested in different lines of business may operate individually (e.g. if one capitalist has the occasion to sell more quickly than his competitor, if one applies more methods that shorten the working period than the other does, etc.), and effect a similar variation in the turnover of the various capitals inhabiting the same line of business.

selling time: the decisive part, and it varies

A permanently effective cause of differentiation in the selling time, and hence in the turnover time in general, is the distance of the market where the commodities are sold from their place of production. For the whole period of its journey to the market, capital is confined to the state of commodity capital; if it is produced to order, then there is added to the time of the journey to the market the time in which the commodity is up for sale on the market. Improvement in the means of communication and transport shortens absolutely the period in which commodities migrate in this way, but it does not abolish the relative difference in the circulation time of different commodity capitals arising from the migration, or even that of different bits of the same commodity capital that migrate to different markets. Improved sailing ships and steamships, for instance, which shorten the journey, shorten it just as much for nearby ports as for distant ones. The relative difference remains, even though it is often reduced. The relative differences may however be displaced by the development of the means of communication and transport in a way that does not correspond to the natural distances. For instance, a railway leading from the place of production to a major inland centre of population may lengthen the distance to a nearer inland point which is not served by a railway, absolutely or relatively, in comparison to the one naturally more distant; similarly the relative distances of places of production from the major market outlets may be altered as a result of the same circumstances, which explains the demise of old centres of production and the emergence of new ones with changes in the means of transport and communication. (In addition to this there is the relatively cheaper cost of transport for longer distances as compared to shorter.) With the development of the means of transport, the speed of movement in space is accelerated, and spatial distance is thus shortened in time. In addition to this, the mass of means of communication develops, so that for instance many ships depart for the same port at the same time, several trains run between the same two points along different railways, and, above all, freight ships leave Liverpool for New York, for example, on different successive days of the week, and goods trains run at different hours of the day from Manchester to London. Admittedly, the last-mentioned development does not alter the absolute speed, and so neither this part of the circulation time, if the effectiveness of the means of transport remains at a given level. But successive quantities of goods can now start their journey at more closely spaced intervals, and thus arrive on the market one after the other without accumulating in great masses as potential commodity capital until they are actually dispatched. Hence the reflux is distributed over shorter successive periods of time, so that one part is steadily being transformed into money capital while another part circulates as commodity capital. By this distribution of the reflux over several successive periods, the total circulation time is shortened, and hence also the turnover. At first the greater or lesser frequency with which the means of transport function, e.g. the number of trains on a railway, develops with the degree to which a place of production produces more, and becomes a major centre of production, and this is a development in the direction of the already existing market, i.e. towards the major centres of production and population, towards export ports, etc. On the other hand, however, and conversely, this particular ease of commerce and the consequent acceleration in the turnover of capital (in as much as this is determined by the circulation time) gives rise to an accelerated concentration of both the centre of production and its market. With this accelerated concentration of people and capital at given points, the concentration of these masses of capital in a few hands makes rapid progress. There is simultaneously a further shift and displacement as a result of the change in the relative situation of production and market places which itself results from the changes in the means of communication. A place of production which possessed a particularly advantageous position through being situated on a main road or canal now finds itself on a single railway branch line that operates only at relatively long intervals, while another point, which previously lay completely off the major traffic routes, now lies at the intersection of several lines. The second place rises, the first declines. The changes in the means of transport therefore bring about local variations in the circulation time of commodities, in the opportunities to buy and sell, etc., or else they alter the distribution of already existing local variations. The importance of this factor in the turnover of capital is evinced by the disputes between the mercantile and industrial representatives of different places and the directors of railways. (See for example the above quoted Blue Book of the Railway Committee.)

distance, frequency, and the shifting map of production

All branches of production which, owing to the nature of their product, are oriented principally to local outlets, such as breweries, thus develop to their largest dimensions in the major centres of population. Here the rapid turnover of capital partly balances out the increase in the cost of many conditions of production, building land, etc.

why breweries cluster where people live

If the progress of capitalist production and the consequent development of the means of transport and communication shortens the circulation time for a given quantity of commodities, the same progress and the opportunity provided by the development of the means of transport and communication conversely introduces the necessity of working for ever more distant markets, in a word, for the world market. The mass of commodities in transit grows enormously, and hence so does the part of the social capital that stays for long periods in the stage of commodity capital, in circulation time - both absolutely and relatively. A simultaneous and associated growth occurs in the portion of social wealth that, instead of serving as direct means of production, is laid out on means of transport and communication, and on the fixed and circulating capital required to keep these in operation.

the same progress that shortens also stretches

Merely the relative length of the journey of commodities from their place of production to their outlet gives rise to a difference not only in the first part of the circulation time, the selling time, but also in the second part, the transformation of money back into the elements of productive capital, the purchasing time. Say that the commodity is sent to India. This takes maybe four months. Let us take the selling time as zero, i.e. assume that the commodity is shipped to order and paid for on delivery to the producer's agent. A further four months is required to send back the money (the form in which it is remitted is immaterial here). It is thus altogether eight months before the same capital can function once again as productive capital, and can be used to renew the same operation. The variations in turnover brought about in this way form one of the material bases for differing periods of credit, just as overseas trade in general, in Venice and Genoa, for instance, formed one of the original sources of the credit system in its true sense.

the return trip counts: eight months to India

'The crisis of 1847 enabled the banking and mercantile community of that time to reduce the India and China usance' (time allowed for the currency of bills of exchange between there and Europe) 'from ten months' date to six months' sight, and the lapse of twenty years with all the accelerations of speed and establishment of telegraphs . . . renders necessary . . . a further reduction' – from six months' sight to four months' date as a first step to four months' sight. 'The voyage of a sailing vessel via the Cape from Calcutta to London is on the average under 90 days. An usance of four months' sight would be equal to a currency of say 150 days. The present usance of six months' sight is equal to a currency of say 210 days' (Economist, 16 June 1866).

faster crossings, shorter bill terms

On the other hand:

on the other hand

On the other hand:

'The Brazilian usance remains at two and three months' sight, bills from Antwerp are drawn ' (on London) ' at three months' date, and even Manchester and Bradford draw upon London at three months and longer dates. By tacit consent, a fair opportunity is afforded to the merchant of realizing the proceeds of his merchandise, not indeed before, but within a reasonable time of, [when] the bills drawn against it fall due. In this view, the present usance for Indian bills cannot be considered excessive. Indian produce for the most part being sold in London with three months' prompt, and allowing for loss of time in effecting sales, cannot be realized much within five months while another period of five months will have previously elapsed (on average) between the time of purchase in India and of delivery in the English warehouse. We have here a period of ten months, whereas the bill drawn against the goods does not live beyond seven months' (ibid., 30 June 1866).

the counter-case: usances still run long

On 2 July 1866, five big London banks dealing mainly with India and China, and the Paris Comptoir d'Escompte, gave notice that 'from the 1st January 1867, their branches and agencies in the East will only buy and sell bills of exchange at a term not exceeding four months' sight ' (ibid., 7 July 1866). However this reduction miscarried, and had to be abandoned. (Since then the Suez Canal has revolutionized all this.)

the attempt failed

This cut, though, didn't hold, and had to be abandoned again. (Since then the Suez Canal has turned all of this upside down.)

It is clear that with the longer circulation time of commodities, the risk of a change of price on the selling market rises, owing to the lengthening of the period in which this price change can occur.

longer circulation, more price risk

Naturally, the longer goods' circulation time is, the greater the risk that prices will change on the market they're sold in, since the period during which prices can move grows too.

A difference in circulation time, both individually between different capitals in the same branch of industry, and between different branches of industry according to the different usances, when payment is not immediately made in cash, arises from the different terms of payment in purchase and sale. We shall not dwell any longer on this point here, although it is important for the credit system.

payment terms add their own differences

The size of delivery contracts, which grows with the volume and scale of capitalist production, also gives rise to differences in the turnover time. The contract of delivery, as a transaction between buyer and seller, is an operation pertaining to the market, to the sphere of circulation. The differences in turnover time arising from it thus arise from the circulation sphere, but they react directly back on the production sphere, quite apart from all terms of payment and credit conditions, i.e. even with cash payment. Coal, cotton, yarn, etc. are discrete products. Each day provides its quantity of finished product. But if the spinner or mine-owner agrees to deliver quantities of products which require, say, a four-week or six-week period of successive working days, it is just the same, with respect to the length of time for which capital has to be advanced, as if a continuous working period of four to six weeks was introduced into his labour process. It is of course assumed here that the entire quantity of products ordered is to be delivered at once, or at least is paid for only after it has all been delivered. Each day, then, considered in isolation, has provided its particular quantity of finished products. But this finished quantity is still only a part of the quantity contracted for. If the already finished part of the commodities ordered is no longer in the production process, it is still merely lying in the warehouse as potential capital.

a contract acts like one long working period

Kap. 14

The Buying Time and the Money-Capital Portion

Selling time filled the first half; the buying time closes the loop — and leaves a portion of every capital permanently in money form, which is exactly the portion the economists forget.

We come now to the second stage of the circulation time, the time of purchase, or the period in which the capital is transformed back from the money form into the elements of productive capital. In the course of this period it must persist for a shorter or longer time in its state of money capital, and thus a certain part of the total capital advanced always exists in the state of money capital, although this part consists of constantly changing elements. In a particular business, for instance, n × £100 of the total capital advanced has to be present in the form of money capital; this is continuously being transformed into productive capital, but just as constantly being added to again by the influx from circulation, from the realized commodity capital. Thus a definite portion of the capital value advanced always exists in the state of money capital, i.e. in a form pertaining not to its sphere of production but rather to its sphere of circulation.

buying time: money-capital always tied up

We have already seen how, when the time in which capital is confined to the form of commodity capital is prolonged, by the greater distance of the market, this directly gives rise to a delayed reflux of money, and thus also delays the transformation of capital from money capital into productive capital.

distant markets delay the switch back

We also saw (Chapter 6), with respect to the purchase of commodities, how the time of purchase, and the greater or lesser distance from the major sources of raw material, makes it necessary to buy raw materials for longer periods and keep them available in the form of productive stock, latent or potential productive capital; how this increases the mass of capital that must be advanced at one stroke, and the time for which it must be advanced, the scale of production being otherwise the same.

distant raw materials mean bigger stockpiles

In different branches of industry, the shorter or longer periods for which large quantities of raw materials are thrown onto the market have a similar effect. In London, for instance, major auctions of wool take place every three months, and these dominate the wool market, whereas the cotton market is on the whole supplied continuously from harvest to harvest, even if not always evenly. Periods of this kind determine the major terms of purchase for these raw materials, and particularly affect speculative purchases, making necessary longer or shorter advances in these elements of production, just as the nature of the commodities produced affects the speculative and deliberate withholding of products from the market for longer or shorter periods in the form of potential commodity capital.

seasonal buying rhythms shape purchases

'The agriculturalist must therefore also be a speculator to a certain extent, and hold back the sale of his products according to the conditions of the time . . .'

the farmer as speculator

"The farmer, then, must also be something of a speculator, and hold back from selling his produce according to how the times stand..."

(A few general rules follow: F.E.)

a few rules follow

(A few general rules follow.)

'Marketing the products, however, mostly depends on the person, the product itself and the locality. Someone who, besides being skilful and fortunate (!), is endowed with sufficient operating capital, is not to be blamed if he sometimes lets the crops he has obtained lie for a year when prices are unusually low; someone who has insufficient operating capital, on the other hand, or who completely lacks the spirit of speculation (!), will seek to obtain the current average price, and will thus have to sell as soon and as often as he has the opportunity. To let wool lie for longer than a year will almost always involve a loss, while corn and oil-seed can be kept for a few years without any detriment to their quality and properties. Products that are generally subject to a substantial rise and fall in price over short periods of time, such as for example oil-seed, hops, teasels and the like, are rightly left to lie in the years when their prices stand far below the prices of production. One should least delay the sale of such objects as give rise to daily costs of maintenance, such as fattened cattle, or are liable to spoil, such as fruit, potatoes, etc. In many districts, a product generally has at certain times of the year its lowest price, at other times its highest; grain, for instance, is in many places generally lower in price at Martinmas than between Christmas and Easter. There are also many products in several districts that are only good for sale at certain times, as is the case with wool in the wool markets of those districts where at other times the wool trade is generally dull, etc.' (Kirchhof, p. 302).

Kirchhof's rules, mocked

In considering the second half of the circulation time, during which money is transformed back into the elements of productive capital, it is not only this conversion alone that is involved, nor only the time in which the money flows back, according to the distance of the market where the product is sold. What is also and especially involved is the extent to which a part of the capital advanced must always exist in the money form, in the state of money capital.

what really matters in this half

If we leave out of consideration all speculative activities, the scale of purchases of those commodities that must be constantly present as a productive stock depends on the latter's periods of renewal, i.e. on circumstances that in turn depend on market conditions, and hence vary for different raw materials, etc. Here, therefore, money must from time to time be advanced in large amounts at once. But whether it flows back quicker or more slowly, according to the turnover of the capital, it always flows back bit by bit. One part of it is just as regularly spent again at short intervals, i.e. the part transformed back into wages. Another part, however, that transformed back into raw materials, etc., has to be accumulated for a longer period of time as a reserve fund, either for purchase or for payment. It therefore exists in the form of money capital, although the extent to which it exists in this form changes.

the reserve fund, not speculation

We shall see in the next chapter how other circumstances, arising both from the production and the circulation processes, require this presence of a definite portion of the capital advanced in the money form. It should generally be noted, however, that the economists are much inclined to forget not only that a part of the capital needed in a business is constantly passing alternately through the three forms of money capital, productive capital and commodity capital, but that it is always different portions of this that possess these forms alongside each other, even if the relative magnitudes of these portions are in constant flux. It is particularly the part always present as money capital that the economists forget, although precisely this circumstance is very necessary for the understanding of the bourgeois economy, and makes itself felt as such in practice as well.

economists forget the money-capital portion