On Apr 17, 2011, at 4:46 PM, Lakshmi Rhone wrote:
... if financial firms, broadly conceived, reduce the time that it takes for industrial capital to secure financing to commence or recommence production or to book sales (think here of the bill of exchange) and if commercial firms also reduce the time it takes to realize the final product, then turnover times are reduced and the annual production of surplus value is thereby increased.
"Turnover time" is best defined as the ratio of inventories to final sales (given the difficulty of estimating the turnover time--real rates of depreciation and obsolescence--of fixed capital). While reduction in turnover time always increases the rate of profit, an increase in surplus-value would result only if the capital "freed" by that reduction is used to employ more productive labor, and in that case it is produced, not by reducing unproductive but necessary expenses in commerce, administration, or finance but by exploiting a larger labor force. Whether or not financial firms reduce the time needed to startup a new business is uncertain. What is certain is that, *if* finance becoming more "efficient" reduces the interest rates charged to commercial firms, it *increases* turnover time by making it possible for businesses to carry larger inventories.
Shane Mage "All things are an equal exchange for fire and fire for all things, as goods are for gold and gold for goods." Herakleitos of Ephesos, fr, 90
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