>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 >constant. > >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 value. 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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