The Turnover Continuum: A Marxist Analysis of Capitalist Fluctuations

Abstract

In volume 2 of Capital, Marx investigates the process of circulation of capital. His analysis reveals that capital assumes three distinct forms throughout the course of its circuit: money capital, productive capital, and commodity capital. When discussing the turnover process of capital in part 2, Marx provides the foundation for a theory of macroeconomic fluctuations that resists formalization by means of conventional methods. This article presents a rigorous interpretation of Marx's discussion of the turnover process of capital with a system of piecewise continuous functions. On the basis of these functions, a computer program is developed using the MAPLE mathematical software program, which is then used to analyze aggregate fluctuations in the three forms of capital given hypothetical data for individual capitalist enterprises. The fluctuations resulting from the turnover process, embedded within complex actual capitalist economies, have the potential to influence the overall health and direction of the credit system. JEL classification: B51, E11