Understanding Capital Volume II, John Fox, 1985

Chapter 14: The Time of Circulation

"One of the sections of the time of circulation -- relatively the most decisive -consists of the time of selling, the period during which capital exists in the state of commodity-capital . . . . [T]he second stage of the time of circulation, the buying time [is] that period in which capital is reconverted from the money-form into the elements of productive capital."(pp. 252, 257 [326, 331])

Although Chapter 14 has the same title as Chapter 5, and though both chapters deal with the metamorphoses of capital in the sphere of circulation, each chapter has a different focus. In the earlier chapter, Marx was primarily concerned with value relations; in the present chapter, he is chiefly concerned with the effect of the process of circulation on the turnover time of industrial capital.

Turnover time, we know, consists of production time and circulation time. Circulation time, in turn, consists of the times of sale and purchase: the time during which industrial capital changes its form in the sphere of circulation, as commodity capital is exchanged for money capital, which purchases new elements of productive capital.

The time of circulation is different in different industries, but it also varies among producers in a given industry, partly fortuitously as a function of market forces, and partly as a function of systematic factors such as the proximity of markets. Transportation from the place of production to the market, then, is one component of selling time. Likewise, in the absence of a developed credit system, the money acquired by sale takes time to return to the producer. Marx emphasizes the fact that part of an industrial capital is in each of its several forms at any point in time. Part, therefore, exists continually in the form of money capital.

Considerations arising from the sphere of circulation can also exert a reactive effect on the sphere of production. For example, the necessity of filling large orders may increase the working period and, hence, the turnover time, even if the commodity produced is by its nature capable of being sold in smaller quantities.