Circulating capital, which yields no revenue unless it be employed in trade--book 2 chap.
The circulating capital of a community consists, 1.
The sources which continually renew the circulating capital, as soon as it enters into the fixed capital, or the stock for immediate consumption, are, 1.
The capital of a merchant, for example, is altogether a circulating capital.
Both the price and the maintenance of the cattle which are bought in and fattened, not for labour, but for sale, are a circulating capital.
That part of the capital of the farmer which is employed in the instruments of agriculture is a fixed, that which is employed in the wages and maintenance of his labouring servants is a circulating capital.
The price or value of his labouring cattle is a fixed capital, in the same manner as that of the instruments of husbandry; their maintenance is a circulating capital, in the same manner as that of the labouring servants.
Even machinery may be circulating capital in the hands of one who manufactures or sells it, though fixed when located in its work, and for the whole community is "fixed" as soon as its destined use is determined by its form.
Money between individuals and communities ranks as circulating capital, but within any community the stock of money needed for domestic trade may be thought of as a permanent machine.
Thus interest is paid for control of circulating capital until an equivalent is returned, and rent is paid for control of fixed capital until the same articles are returned in prime condition.
Fixed capital is always secured by consumption of circulating capital.
The second is circulating capital such as raw materials, auxiliary semi-finished products, fuel and lighting--its whole value is completely absorbed by the new product in every period of production.
The position is different with regard to circulating capital.
Fixed capital is, indeed, produced and preserved by circulating capital; but it is, for the most part, transformed again into circulating capital.
In a manufactory of machines, a boiler intended for sale is circulating capital; while a similar one, held in reserve for the machines used in production, is fixed capital.
Considered from the point of view of private business or economy, money is circulating capital, but from the point of view of the world’s economy, it is fixed capital.
To return to the theoretical distinction between fixed and circulating capital.
They would be so if they took place suddenly to a great amount, because much of the capital sunk must necessarily in that case be provided from funds already employed as circulating capital.
Again two manufacturers may employ the same amount of fixed, and the same amount of circulating capital; but the durability of their fixed capitals may be very unequal.
But the capital of the fisherman being the same in quantity, and divided in the same proportion into fixed and circulating capital, and being also of the same durability, he, to obtain the same profits, must sell his goods for the same value.
This is accounted for by the fact that in such production an amount of circulating capital is invested which was saved from the net profit of previous economic times.
Footnote 179-1: In the case of fixed capital, we generally speak of rent; in the case of circulating capital, of interest.
The price paid for the use of capital naturally depends on the relation between the supply and demand, and especially of circulating capital.
That principle is not unconditionally true, even in the case of circulating capital.
Circulating capital consists of the food, clothes, fuel, and other things which are required to support labourers while they are engaged in productive work.
Flour is soon eaten up, and is circulating capital.
Capital is usually said to be either fixed or circulating capital, and we ought to learn very thoroughly the difference between these two kinds.
The crucial test of circulating capital is the question, Are the returns to be secured by the single use or single transfer of that particular product?
Circulating Capital is all those capitalized products, whether commodities or credits, the returns for the sale or use of which are derived at once and once for all.
Tools, for example, in the hands of him who has manufactured them for sale is circulating capital.
The above list will hopefully provide you with a few useful examples demonstrating the appropriate usage of "circulating capital" in a variety of sentences. We hope that you will now be able to make sentences using this group of words.
