Capital, Volume Three: The Process of Capitalist Production as a Whole by Karl Marx

The effect of the turnover on the production of surplus-value, and consequently of profit, has been discussed in Book II. Briefly summarised it signifies that owing to the time span required for turnover, not all the capital can be employed all at once in production; some of the capital always lies idle, either in the form of money-capital, of raw material supplies, of finished but still unsold commodity-capital, or of outstanding claims; that the capital in active production, i.e., in the production and appropriation of surplus-value, is always short by this amount, and that the produced and appropriated surplus-value is always curtailed to the same extent. The shorter the period of turnover, the smaller this idle portion of capital as compared with the whole, and the larger, therefore, the appropriated surplus-value, provided other conditions remain the same.

It has already been shown in detail in Book II [English edition: Vol. II, pp. 293-98. – Ed.] how the quantity of produced surplus-value is augmented by reductions in the period of turnover, or of one of its two sections, in the time of production and the time of circulation. But since the rate of profit only expresses the relation of the produced quantity of surplus-value to the total capital employed in its production, it is evident that any such reduction increases the rate of profit. Whatever has been said earlier in Part II of Book II in regard to surplus-value, applies equally to profit and the rate of profit and needs no repetition here. We wish only to stress a few of the principal points.