[OPE-L:5452] Re: Re: Re: turnover time and surplus value

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sat Apr 28 2001 - 13:49:58 EDT

>Re my [5449]:
>I think I might have botched the numbers in the
>hypothetical example that I gave but the
>fundamental point remains sound. Specifically,
>one can see  that when there is a reduction in
>turnover time due to decreased circulation time
>that the mass of surplus value and profit
>can increase even where the rate of surplus value
>and the organic composition of capital remain
>In the case of a reduction of  productive capital
>in stock where there is a reduction in turnover
>time caused by a reduction in production time,
>the effect is two-fold. Firstly, this reduction in
>fallow productive capital in stock (e.g. the stock
>of  constant circulation capital not currently
>"in use") "frees up"  a quantity of money capital for
>additional investment in c and v.  This then allows
>for an increase in the mass of surplus value and
>profit. Secondly (and this is where Paul C and
>Allin are right), this reduction in constant
>circulating capital has the effect of reducing the
>organic composition of capital and thereby
>leading to an increase in the rate of profit.
>Just-in-time (kanban; flexible) production could
>be seen in this way.
>In solidarity, Jerry

Jerry, again I am going to have to think through this; in your 
example, we have a reduction in turnover due to a reduction in 
circulation, not production, time, correct? So I have to think 
through whether these two sources of reduction in turnover time have 
different effects on the OCC and the annual and real rate of surplus 

As I quickly read over your example, this is what struck me about a 
reduction in turnover time in general:

The rate of profit is calculated over some period of calendar time. 
Let's assume that there are certain minimum capital requirements for 
further accumulation of new means of production, and that this 
minimum mass of surplus value cannot be amassed out of one turnover 
of capital. So part of the depreciation fund is idle until it becomes 
big enough to be laid out again on new means of production.

Now of course the more production and circulation time is cut, the 
less time the depreciation fund which is in the form of money capital 
has to remain idle. Capitalists will have on hand sooner the mass of 
surplus value they need to accumulate new means of production  and 
with the new means of production they will be able to appropriate a 
greater mass of surplus value in a given calendar period and thus 
increase their rate of profit.

So a reduction in turnover time here reduces not so much fallow 
commodity capital but reduces how long the depreciation fund has to 
remain idle  before it can be converted into a form by which surplus 
labor can be appropriated.

Of course a further complication is that the depreciation fund (if I 
am using the correct term) is never truly idle; it may be kept in a 
money market fund.

Oh well we are in the midst of moving, so I have been very 
distracted. What I really want to talk about is the economics of 
rent! You cannot believe what rents are like here (or maybe you can 
living in NYC). Just to give you sense: a 950 sq foot cottage up the 
street is renting for $3000/mo; we were lucky to sublet from friends 
for much less this year but goddammit they are coming back.

Yours, Rakesh

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