The Circulation of Capital-Essays on Volume II of Capital

8/2/2019 The Circulation of Capital-Essays on Volume II of Capital

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Also by Christopher J. ArthurDIALECTICS OF LABOUR: Marx and his Relation to HegelENGELS TODAY (editor)FRIEDRICH ENGELS: A Centenary Appreciation (editor)LAW AND MARXISM (editor)MARX'S CAPITAL: A Student Edition (editor)THE GERMAN IDEOLOGY (editor)

Also by Geert Reuten (in English)VALUE-FORM AND THE STATE: The Tendencies of Accumulationand the Determination of Economic Policy in Capitalist Society(with Michael Williams)

The CirculatCapitalEssays on Volume Two

Edited byChristopher J. ArthurHonorary LecturerSchool ofSocial SciencesUniversity ofSussex

and

Geert ReutenAssociate Professor in EconomicsUniversity ofAmsterdam


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66 Beyond 'Commerce and Industry'


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Postone, Moishe (1986) 'Anti-Semitism and National Socialism', in AnsonRabinbach and Jack Zipes (eds), Germans and Jews Since the Holocaust,Holmes and Meier, New York.Postone, Moishe (1993) Time, Labor, and Social Domination: A Reinterpretationof Marx's Critical Theory, Cambridge University Press, Cambridge.Rosdolsky, Roman (1977) The Making of Marx's 'Capital', Pluto Press,London.Simmel, Georg (1971) 'The Metropolis and Mental Life', trans. Edward A.Shils, in David Levine (ed.), Georg Simmel: On Individuality and SocialForms, University of Chicago Press, Chicago; appeared originally inSocial Sciences III Selections and Selected Readings, vo!. 2, 14th edn,University of Chicago, 1948.

4The CapitalRelationProduction: TRelevance nf

of CaTonyS

Many social theorists assert thaof the contemporary economy'Fordism' to the 'lean productiontribution. The present papersignificance of Volume Two of Calean production. The first task is ttransition in question.

FROM FORDISM TO LThe term 'Fordism' refers to an idof capitalism hegemonic in certaitwentieth century. This ideal typeincluding the following:1. a labor process organized arou

worker is assigned a specific ta2. an extensive system of formal


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7 Lea Pducti Ty Smh


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capital are only ideal, ie. the close the circulation time comes tozero the more the capital function, and the greater is its productivity and self-valorization (Marx 1978/1885: 203; see also 326,3889,3912)

From this angle lean production can be seen as an attempt toreduce the turnover time of capital in response to the crisis ofFordism. Many of its concrete features thus justify the emphasisMarx placed on reducing turnover time in his general theory ofcapital e ust-n-time pproach for example,is designed to makeeach stage in the production and disribution pocess respondrapidly to the demands of the succeedng stage, thereby reducingcirculation time. All of the innovations designed to reduce 'slackand make production and distribution lean such as the elimination of separate quality control departments are also clearly designed to reduce circulation time So too are general purposemachines such as robots computercontrolled machine tools andautomatic guided vehicles; they all speed up the process of trans

forming raw materials nto finished products he drive to shortenproduct cycles through concurrent engneerg is another featureof the lean production model aiming at a redution of circulationtime.

he disaggregation of production through outsourcing must beadded to this list. If the stages of production and distribution are allundertaken by a vertically integrated company, a considerableamount of capital is tied up over an extended period of time priorto final sale. In subcontractng arangements the different stages ofthe production and distribution process are assigned to differentunits of capital, each of which proceeds through its own cicuit at a

much faster rate than capital invested in the vertically integratedfirms of Fordism.B

A second issue explored in Volume Two of Captal concerns thespecific role played by inventories in the general circuit of capitalMarx established that, if inventories of unsold commodities buildup at the very least storage costs will cut into the amount ofsurplus that can be appropriated in a given time period (Marx1978/885 214ff, 32) Accmuation may even break down completely perishable inputs and otputs can spoil before playng theirrole in the accumulation process, or their pices may fallsgnifcantly between the time they are produced and the tim e they

are sold (Marx 1978/1885 312; 392).

Here, too Volume wo povide theotc forcomprehending contemporary developments in apili An ex-plicit goal of the justin-time system is to educe inveno tevery step in the process of production and distiution Teamount of raw materials and partially completed pars sd suppliers re reduced buffers of pats used in roduction aereduced relations with distributors are oordinated in order tomnimize stocks of unsold inventories. All these measures confirmMarxs thesis in Volume Two that nventories play a crucial role inthe process of capital accumulation

Final sale, the culmnation of the C'-M' stage, is, of course, a partof the general circulation of capita hus the general drive toreduce circulation time includes the specific imperative to reducethe time taken up by sales

According to the varying speed with which the capital sheds itscommodity form and assumes its money form, i.e according tothe briskness of the sale, the same capital value will serve to avery uneven degree in the formation of products and value, andthe scale of the reproduction will expand or contract. (Marx,1978/1885 124)

he general importance of inventories in the circulation processlikewise holds in this particular context

he ciuit of capital proceeds normally only as long as itsvarious phases pass into each other without delay If capitalcomes to a standstill n the .. las phase, C'M, unsaleale stocksof commodities ostruct the fow of circulation. (Marx1978/885 133 see also 183f, 222ff, 331)

Furthe, fixed capital vestment is lost whenever fixed capital isdepreciated (physically or morally) prior to the

.time wen it hs

been fully amortized, and so sales must occur por to th depreCation if the investment is to be recouped (Marx, 1978/1885 153,185, 250, 24). An analogous point holds for circulating constantcapital if raw materia prices declne before a stock of commoditiesproduced with those raw materials is sold, the capital invested nthose raw m aterials is devalued (Marx, 1978/1885 1889)

As we shall see below, lean production incorporates a continuous

feedback loop between capitalist enterprises and consumers


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5The Fluidity othe Logic of

Christophe'Capital can be understood only

INTRODUCapital, Volume Two (Book 11,Capital) is the site of a key featurportance of his introduction of th(outlined in Part One, chs 1-4) caneoclassicals explicitly, and the cplicitly), as well as many Marxisconstruct the notion of equilibriumcircuit that characterizes his grasp a special case, the circuit does nopart of a spiral of accumulation, thappropriate to the study of the rearium but is strongly marked by grIt should be more widely recogndown the wrong line when it becequilibrium. We must reverse the plained about Marx's 'successivistsivism is just what is profound anthe life and reproduction of capitcircuit. This itself may be viewedcuits, according to Marx. Philoso


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7


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Marx's RepSchemes anDogFred M

The best-known part of Volume Tschemes in Part Three. Marx's rewidely interpreted to be essentiaoutput tables, or the technology neo-classical growth theory (for ex1973; Howard and King, 1985; Genology matrices consist of physicafor the various sectors in the ecpretation, Marx's reproduction tabphysical quantities of inputs andinto departments by means of laMarx's reproduction tables, accoanalyze the conditions for balanbetween the physical inputs andthe economy which are necessaryThis interpretation of Marx's rethe main supports for the currentpretation of Marx's theory of valthe logical method of Marx's theological method of Sraffa's theory duction theory. Specifically, accortheory takes as given the physicalas in Marx's reproduction table


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8The Status


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ReproductioConventional LogGeert R

INTRODUMarx's Capital is an unfinished proplan for the work with this title, dso in the wider sense of a theory oand state and of the developmentation of what is there obviously deMarx, bu t opinions diverge on theSome prefer to read Marx in a 'cmethod of inquiry in line with forprinciple from approaches of modcase one has to 'neglect', 'de-emphposedly superfluous ja rgon of Mawith an obscure dialectics. One finranging from adversaries and symselves working in the Marxian trada systematic-dialectical method, inily the same as - Hegel's dialecticcommentators agree that Marx's Catic-dialectical presenta tion and ttion and further development.3


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214 The Status of Marx's Reproduction SchemesA Formal Recapitulation of the Model for ExpandedReproduction: ConclusionsMarx's main tool, as has been indicated, is numerical schemes withsome elementary formalization. Thus, a lthough we do not find theformalization given below in the text, this type of formalization ma ybe said to be in there spirit.

Geert Reu


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Apart from the properties of the model for expanded reproduc-tion described below, we have the following assumptions, as discussed earlier on:prices do no t change (or prices are equa l to values) (assump-tion b); there is no fixed capital (or it is used up within the productionperiod) (assumption d); there is no foreign trade (assumption g);monetary accommodation is sufficient (assumption i);sufficient labour power is available (assumption j).

(Assumptions and equations marked' are identical to the ones forsimple reproduction.)

We have the system:

C2 + V2 + S2 = X2c+ v+ s= x

There are three definitions for aggregation:Cl + C2 = C

SI + S2 = S

(1)*(2)*(3)*

(4)*(5)*(6)*

We have four equations fixating the dynamics of the structure of

(These 10 equations, together with tprise the model for simple reprodusection). The ratios I' and e may inhowever, they are fixed, for analytica

The crucial element is a, the rate ovalue (commented upon below), whi

Where I::!c and llv have the same prop

Thus there is no technical change -composition of capital (assumption bThe remainder of (potential) surpconsumption' (u) by or via capitalist

Thus 'hoarding' is abstracted from.The rates of accumulation, a1 anmated (elsewhere Marx further theocapitalism). Here, however, a1 is fix


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Author Adorno, T., 82, 91Aoki, M., 68Aristotle, 40Arthur, CJ., 9,11-13,64,89,128,222-3,227

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Babson, S., 89Backhaus, H.-G., 223Baudrillard, J., 62Bailey, S., 40, 97,152-3Benjamin, W., 82Bentha m, J., 57Bohm-Bawerk, E. von, 152Bonefeld, W., 68Bortkiewicz, L., 95, 184Boumans, M., 223, 226Brenner, R., 68de Brunhoff , S., 153Byrne, J.,78Campbell, M., 12-13,30,64,152-3,

200,207,223,225Carchedi, G., 64, 223Caston, A., 71, 76-8, 90Clark, K., 78Clarke, S., 183-4Cia using , D., 90Davidow, W., 76, 79-80, 90Davis, S., 76, 81, 85, 90Dertouzos, M., 68Destutt de Tracy, A., 178Devine, P., 90Desai, M., 15, 225-6Domar, E.D., 14,203Dow, A., 156Dow, S., 156Edelman, D., 76Eldred, M., 223EIson, D., 90

FFGGGGHHHHHHHHHHHHH

IJJJ

232 Author IndexKleiber, L., 223Klein, L.R., 191Kline, So, 84Koike, Ko, 69Korsch, K., 183Koshimura, So, 225Kugelmann, L., 14, 30Kurz, H.Do, 14, 159,223Lakatos, I., 70

Oakley, Ao, 14, 189Ohno, To, 88Polanyi, Ko, 39Postone, Mo, 61-2Quesnay, Fo, 12, 47, 127, 161, 163-4 ,

166-71,183,189,191,194,200,223-4

Author IThompson, Wo, 196, 224Toffier, A., 77Tooke, R., 134-5, 142, 178Tugan-Baranowski, Mol., 9, 31,184Untermann, Eo, 8

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Lange, 0o, 15, 159Lassalle, F., 18, 30Lavoie, Mo, 156Len in, Vol.,184Leontief, Wo, 9, 159, 172, 190Lester, R., 68Levine, No, 125, 128Louca, Fo, 223Lowe, A., 154Luxemburg, Ro, 9, 184, 224Lyotard, Jo-Fo, 62Maki, Uo, 151Maleki , R., 88Malone, Mo, 76, 79-80, 90Mandel, Eo, 1, 11, 14-15, 30-1,

57-61,63-5,226Marx, Ko, passimMatsu, K., 84Mattick Po Jr, 7, 10, 30, 32, 64,223Mattick Po Sr, 29-30, 32Mayer, Mo, 86McDonough, Jo, 85Meyer, So, 14Minsky, Ho, 154Moggridge, DoEo, 14Moore, Bo, 153, 155Morgan, Mo, 223Morishima, Mo, 159, 225Morrison, Mo, 223Moseley, Fo, 12-14, 64, 182-3,

223-4Murray, Po, 3,10-11,14-15,62,127,

223-4

Ramsay , 171, 177Rank, Ho,84Reich, R., 88-89Reuten, Go, 13-14, 64, 220-1, 223,227Ricardo, Do, 47, 63,153,171,191Robinson, Jo, 14-15, 191,224Roderick, Jo, 62Rogers, c., 154-5Roos, Do, 70-71, 77-8, 90Rosdolsky, Ro, 30-1, 35, 61,183Roth, Mo, 223Rubel, Mo, 17, 30-1, 125Rubin, I.I., 183Sawyer, MoC., 14Say, JoBo, 63,171Schott,14Schrage, Mo, 91Schweickert, Do, 90Shaiken, Ho, 88Simmel, Go, 44, 63Sismondi, Joc.L. de , 152Smith, A., 12, 14-15, 38, 40, 47,63-5, 123-4 , 127, 153-5, 160-1,163-78, 182-4, 189Smith, To, 7, 11, 64, 70-71, 83, 85,

127,223Solow, R., 68Sraffa, Po, 109, 183Steuart, Jo, 153-5Stone, Go, 15Stone, R., 15Storch, Ho, 177Sweezy, Po, 10,34, 184

Subjectabstraction, 37, 42, 132-3, 192, 194determinate, 195general, 39,194

level of, 100,220in practice, 97


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i

abstract categories, phenomenalexpressions of, 7accumulation, 41 et passimrate of: ou t of surplus value, 206,226 (n.25); decreasing, 213advertisement, 84appearance, as form, 31 (n.14)assumption(s)general, for Capital Il, 130-1'normal', 130-4precious metal money andMarx's method, 134-6for simple reproduction, 192-6

balance, accidental, 143-4, 181,202-4,210buying time, 50capital, 106-8, 161-3 et passimanalysis of, and Marx's goal, 19

circulating, 46-7, 49, 63 (n.33)circulat ion of, 3-5, 25, 42, 52, 96,132, 161-2, 182, 189:continuity of and hoards,137; and reproduction, 189of circulation, 47, 63 (n.33)circuit(s) of (see also circuit), 3, 22,56,95-7, lOO, 106-8, 199:fourth, 119-24; and Hegel'sLogic, 110-13, 116-18; Marx'ssummary of, 101; momentsof, 107; and unity-indifference, 113; anduniversality, particularityand individuality, 113-16;unity of, 107-8


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240 Subject Indx

wofold chaacter,see capitalsteconomy, dualiy

undeconsumpion, 28, 32(n.32)

use-value, 346,1,43and cicuation costs, 5and ormal ad eal

subsumpion, 53and so cia om, 56

utiity, 63 (n 30

valosaton passimof apita 4

dea and endogenous money,53 (n.2

intinsc,97labor eory o, 52 (n5'objectve' caacte of, 1, 36,

52 (n9and pces, 73standard masr o,vaoized,1

value fom(s et passm, 20, 35,37,556,9

wage labor,see labou,wagealt an d apta 20 33


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of capita,4i ts form,1pocess 1

value pass (see lso economcvaue 97, 33,53 (n2

added, 98200and captal, 967and cculaion costs,46exchage,

wealt an d capta,20 33walh, 0,5, 62 (n.6, 38

geneaised ccuaton o, 33wealt ism, , 56wealth fetishs m wdows c se,200 20wokers, sepaation om means of

producon,35,3,38wokng time, , 52 (n5

The Circulation of Capital-Essays on Volume II of Capital

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