These differences in the duration of the productive act can be observed not alone between different spheres of production, but also within one and the same sphere of production, depending on the amount of product to be turned out. An ordinary dwelling house is built in less time than a large factory and therefore requires fewer continuous labour-processes. While the building of a locomotive takes three months, that of an armoured man-of-war requires one year or more. It takes nearly a year to produce grain and several years to raise big cattle, while timber-growing needs from twelve to one hundred years. A few months will suffice for a country road, while a railway is a job of years. An ordinary carpet is made in about a week, but a Gobelin takes years, etc. Hence the time consumed in the performance of the productive act varies infinitely. The difference in the duration of the productive act must evidently give rise to a difference in the velocity of the turnover, if invested capitals are equal, in other words, must make a difference in the time for which a certain capital is advanced. Assume that a spinning-mill and a locomotive works employ the same amount of capital, that the ratio of their constant to their variable capital is the same, likewise the proportion between the fixed and circulating parts of the capitals, and that lastly their working-day is of equal length and its division into necessary and surplus-labour the same. In order to eliminate, furthermore, all the circumstances arising out of the process of circulation and having no bearing on the present case, let us suppose that both the yarn and the locomotive are made to order and will be paid on delivery of the finished product. At the end of the week, on delivery of the finished yarn, the spinning-mill owner recovers his outlay for circulating capital (leaving the surplus-value out of consideration), likewise the fixed capital s wear and tear incorporated in the value of the yarn. He can therefore repeat the same circuit anew with the same capital. It has completed its turnover. The locomotive manufacturer on the other hand must lay out ever new capital for wages and raw material every week for three months in succession, and it is only after three months, after the delivery of the locomotive, that the circulating capital, meanwhile gradually laid out in one and the same productive act for the manufacture of one and the same commodity, once more exists in a form in which it can renew its circuit. The wear and tear of his machinery during these three months is likewise replaced only now. The expenditure of the one is made for one week, that of the other is the weekly expenditure multiplied by twelve. All other circumstances being assumed as equal, the one must have twelve times as much circulating capital at his disposal as the other. It is however immaterial here that the capitals advanced weekly are equal. Whatever the amount of the advanced capital, it is advanced for only one week in the one case and for twelve weeks in the other, and the above periods must respectively elapse before it can be used for a new operation, before the same operation can be repeated with it, or a different one inaugurated. The difference in the velocity of the turnover, or in the length of time for which the individual capital must be advanced before the same capital-value can be employed in a new labour- or self-expansion process, arises here from the following circumstances: Granted the manufacture of a locomotive or of any other machine requires 100 working-days. So far as the labourers employed in the manufacture of yarn or the building of locomotives are concerned, 100 working-days constitute in either case a discontinuous (discrete) magnitude, consisting, according to our assumption, of 100 consecutive separate ten-hour labour-processes. But so far as the product the machine is concerned, these 100 working-days form a continuous magnitude, a working-day of 1,000 working-hours, one single connected act of production. I call such a working-day which is composed of a more or less numerous succession of connected working days a working period. When we speak of a working-day we mean the length of working time during which the labourer must daily spend his labour-power, must work day by day. But when we speak of a working period we mean the number of connected working-days required in a certain branch of industry for the manufacture of a finished product. In this case the product of every working-day is but a partial one, which is further worked upon from day to day and only at the end of the longer or shorter working period receives its finished form, is a finished use-value. Interruptions, disturbances of the process of social production, in consequence for instance of crises, have therefore very different effects on labour-products of a discrete nature and on those that require for their production a prolonged connected period. In the one case all that happens is that today s production of a certain quantity of yarn, coal, etc., is not followed by tomorrow s new production of yarn, coal, etc. Not so in the case of ships, buildings, railways, etc. Here it is not only the day s work but an entire connected act of production that is interrupted. If the job is not continued, the means of production and labour already consumed in its production are wasted. Even if it is resumed, a deterioration has inevitably set in in the meantime. For the entire length of the working period, the part of the value daily transferred to the product by the fixed capital accumulates in layers, as it were, until the product is finished. And here the difference between fixed and circulating capital is revealed at the same time in its practical significance. Fixed capital is advanced in the process of production for a comparatively long period; it need not be renewed until after the expiration of perhaps a period of several years. Whether a steam-engine transfers its value daily piecemeal to some yarn, the product of a discrete labour-process, or for three months to a locomotive, the product of a continuous act of production, is immaterial as far as laying out the capital required for the purchase of the steam-engine is concerned. In the one case its value flows back in small doses, for instance weekly, in the other case in larger quantities, for instance quarterly. But in either case the renewal of the steam-engine may take place only after twenty years. So long as every individual period within which the value of the steam-engine is returned piecemeal by the sale of the product is shorter than the lifetime of the engine itself, the latter continues to function in the process of production for several working periods. It is different with the circulating components of the advanced capital. The labour-power bought for a definite week is expended in the course of the same week and is materialised in the product. It must be paid for at the end of the week. And this investment of capital in labour-power is repeated every week during the three months; yet the expenditure of this part of the capital during the week does not enable the capitalist to settle for the purchase of the labour the following week. Every week additional capital must be expended to pay for labour-power, and, leaving aside the question of credit, the capitalist must be able to lay out wages for three months, even if he pays them only in weekly doses. It is the same with the other portion of circulating capital, the raw and auxiliary materials. One layer of labour after another is piled up on the product. It is not alone the value of the expended labour-power that is continually being transferred to the product during the labour-process, but also surplus-value. This product, however, is unfinished, it has not yet the form of a finished commodity, hence it cannot yet circulate. This applies likewise to the capital-value transferred in layers from the raw and auxiliary materials to the product. Depending on the length of the working period exacted by the specific nature of the product or by the useful effect to be achieved in its manufacture, a continuous additional investment of circulating capital (wages and raw and auxiliary materials) is required, no part of which is in a form capable of circulation and hence of promoting a renewal of the same operation. Every part is on the contrary held fast successively in the sphere of production as a component of the nascent product, tied up in the form of productive capital. Now, the time of turnover is equal to the sum of the time of production and the time of circulation of the capital. Hence a prolongation of the time of production reduces the velocity of the turnover quite as much as a prolongation of the time of circulation. In the present case however the following two points must be noted: Firstly: The prolonged stay in the sphere of production. The capital advanced for instance for labour, raw material, etc., during the first week, as well as the portions of value transferred to the product by the fixed capital, are held fast in the sphere of production for the entire term of three months, and, being incorporated in an only nascent, still unfinished product, cannot pass into circulation as commodities. Secondly: Since the working period required for the performance of the productive act lasts three months, and forms in fact only one connected labour-process, a new dose of circulating capital must be continually added week after week to the preceding amount. The total of the successively advanced additional capital grows therefore with the length of the working period. We have assumed that capitals of equal size are invested in spinning and machine-building, that these capitals contain equal proportions of constant and variable, fixed and circulating capital, that the working-days are of equal length, in brief, that all conditions are equal except the duration of the working period. In the first week, the outlay for both is the same, but the product of the spinner can be sold and the proceeds of the sale used to buy new labour-power, new raw materials, etc.; in short, production can be resumed on the same scale. The machine-manufacturer on the other hand cannot reconvert the circulating capital expended in the first week into money and resume operations with it until three months later, when his product is finished. There is therefore first a difference in the return of the identical quantities of capital invested. But in the second place identical amounts of productive capital are employed during the three months in both spinning and machine-building. However the magnitude of the outlay of capital in the case of the yarn manufacturer is quite different from that of the machine-builder; for in the one case the same capital is rapidly renewed and the same operation can therefore be repeated, while in the other case the renewal of the capital is relatively slow, so that ever new quantities of capital must be added to the old up to the time of its renewal. Consequently there is a difference not only in the length of time of renewal of definite portions of capital, or in the length of time for which the capital is advanced, but also in the quantity of the capital to be advanced according to the duration of the labour-process (although the capitals employed daily or weekly are equal). This circumstance is worthy of note for the reason that the term of the advance may be prolonged, as we shall see in the cases treated in the next chapter, without thereby necessitating a corresponding increase in the amount of the capital to be advanced. The capital must be advanced for a longer time, and a larger amount of capital is tied up in the form of productive capital. At the less developed stages of capitalist production, undertakings requiring a long working period, and hence a large investment of capital for a long time, such as the building of roads, canals, etc., especially when they can be carried out only on a large scale, are either not carried out on a capitalist basis at all, but rather at communal or state expense (in earlier times generally by forced labour, so far as the labour-power was concerned). Or objects whose production requires a lengthy working period are fabricated only for the smallest part by recourse to the private means of the capitalist himself. For instance, in the building of a house, the private person for whom it is built makes a number of partial advance payments to the building contractor. He therefore actually pays for the house piecemeal, in proportion as the productive process progresses. But in the advanced capitalist era, when on the one hand huge capitals are concentrated in the hands of single individuals, while on the other the associated capitalist (joint-stock companies) appears side by side with the individual capitalist and a credit system has simultaneously been developed, a capitalist building contractor builds only in exceptional cases on the order of private individuals. His business nowadays is to build whole rows of houses and entire sections of cities for the market, just as it is the business of individual capitalists to build railways as contractors. To what extent capitalist production has revolutionised the building of houses in London is shown by the testimony of a builder before the banking committee of 1857. When he was young, he said, houses were generally built to order and the payments made in instalments to the contractor as certain stages of the building were being completed. Very little was built on speculation. Contractors used to assent to such operations mainly to keep their men in constant employment and thus hold them together. In the last forty years all that has changed. Very little is now built to order. Anyone wanting a new house picks one from among those built on speculation or still in process of construction. The builder no longer works for his customers but for the market. Like every other industrial capitalist he is compelled to have finished articles in the market. While formerly a builder had perhaps three or four houses building at a time for speculation, he must now buy a large plot of ground (which in continental language means rent it for ninety-nine years, as a rule), build from 100 to 200 houses on it, and thus embark on an enterprise which exceeds his resources twenty to fifty times. The funds are procured through mortgaging and the money is placed at the disposal of the contractor as the buildings proceed. Then, if a crisis comes along and interrupts the payment of the advance instalments, the entire enterprise generally collapses. At best, the houses remain unfinished until better times arrive; at the worst they are sold at auction for half their cost. Without speculative building, and on a large scale at that, no contractor can get along today. The profit from just building is extremely small. His main profit comes from raising the ground-rent, from careful selection and skilled utilisation of the building terrain. It is by this method of speculation anticipating the demand for houses that almost the whole Belgravia and Tyburnia, and the countless thousands of villas round London have been built. (Abbreviated from the Report of the Select Committee on Bank Acts, Part I, 1857, Evidence, Questions 5413-18; 5435-36.) The execution of enterprises requiring working periods of considerable length and operations on a large scale does not fall fully within the province of capitalist production until the concentration of capital becomes very pronounced, and the development of the credit system offers to the capitalist, on the other hand, the convenient expedient of advancing and thus risking other people s capital instead of his own. It goes without saying that whether the capital advanced in production belongs to him who uses it or does not has no effect on the velocity or time of turnover. Conditions such as cooperation, division of labour, application of machinery, which augment the product of the individual working-day, shorten at the same time the working period of connected acts of production. Thus machinery shortens the building time of houses, bridges, etc.; mowers and threshers reduce the working period required to transform ripe grain into the finished product. Greater speed due to improved shipbuilding cuts the turnover time of capital invested in shipping. But improvements that shorten the working period and thereby the time during which circulating capital must be advanced generally go hand in hand with an increased outlay of fixed capital. On the other hand the working period in certain branches of production may be diminished by the mere extension of cooperation. The completion of a railway is expedited by setting afoot huge armies of labourer and thus tackling the job in many spots at once. The time of turnover is lessened in that case by an increase of the advanced capital. More means of production and more labour-power must be united under the command of the capitalist. Whereas the shortening of the working period is thus mostly connected with an increase of the capital advanced for this abbreviated time the shorter the term of advance the greater the capital advanced it must here be recalled that regardless of the existing amount of social capital, the essential point is the degree in which the means of production and subsistence, or the disposal of them, are scattered or concentrated in the hands of individual capitalists, in other words, the degree of concentration of capitals already attained. Inasmuch as credit promotes, accelerates and enhances the concentration of capital in one hand, it contributes to the shortening of the working period and thus of the turnover time. In branches of production in which the working period, whether continuous or discontinuous, is prescribed by definite natural conditions, no shortening by the above-mentioned means can take place. Says W. Walter Good, in his Political, Agricultural, and Commercial Fallacies (London, 1866, p. 325): The part of the value transferred in layers by the fixed capital to the product accumulates, and the return of this part is delayed, in proportion to the length of the working period and thus also of the period of time required for the completion of the commodity capable of circulation. But this delay does not cause a renewed outlay of fixed capital. The machine continues to function in the process of production, whether the replacement of its wear and tear in the form of money returns slowly or rapidly. It is different with the circulating capital. Not only must capital be tied up for a rather long time, in proportion to the length of the working period, but new capital must be continually advanced in the shape of wages, and raw and auxiliary materials. A delayed return has therefore a different effect on each. No matter whether the return is rapid or slow, the fixed capital continues to function. But the circulating capital becomes unable to perform its functions, if the return is delayed, if it is tied up in the form of unsold, or unfinished and as yet unsaleable products, and if no additional capital is at hand for its renewal in kind.
Economic Manuscripts: Capital: Volume Two