Understanding Capital Volume II, John Fox, 1985

Chapter 5: The Time of Circulation

"A capital's time of circulation therefore limits, generally speaking, its time of production and hence its process of generating surplus-value:1(p. 128 [203-204])

In Chapter 5, Marx turns to a brief examination of the time spent by capital in executing its circuit. He returns to this subject in the second part of Volume II, which is concerned with the turnover of capital. Chapter 14, in fact, has the same title as Chapter 5.

We have examined how capital spends part of its circuit as productive capital in the sphere of production, and part as commodity and money capital in the sphere of circulation. It is only during production time that new value -- including surplus-value -- is created. Production time, however, extends beyond the time of the labor process, during which labor functions to create value. Production time consists as well of interruptions in the process of production (as, e.g., when a factory is shut down at night); of the time during which means of production are stored (stockpiled) prior to their actual employment in the labor process; and of interruptions in the labor process when the process of production continues without direct human intervention (as, e.g., in fermentation). When the labor process is interrupted in this manner, no new value is created, although the value of constant capital continues to be transferred to the product as the productive process continues in the absence of labor.

In the sphere of circulation, commodity capital is exchanged for money, and money capital is exchanged for new elements of productive capital. No value -- and, hence, no surplus-value -- is created as a consequence of these exchanges. The time of circulation, therefore, limits the expansion of capital-value, because when capital is in the sphere of circulation, it is kept out of the (value-creating) sphere of production.

Of the two transformations undergone by industrial capital in the sphere of circulation, Marx considers the exchange of commodity capital for money somewhat more problematic and, in a sense, more important: more problematic, because it is generally more difficult to sell than to buy, money being the universal equivalent. This is not to say that the capitalist is necessarily able to find on the market requisite elements of new productive capital. The exchange of commodity capital for money is more important because this exchange is at the same time the realization of surplus-value.