Fixed capital

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The pair of terms fixed capital vs. Liquid capital is a tool for analyzing capital transformations that tries to explain the emergence and change of social wealth from the perspective of the sphere of circulation.

The term fixed capital comes from Adam Smith and describes with him and subsequently in the theory of Karl Marx the peculiarity of the part of the constant capital that functions as a means of work in the production process : this part retains the particular form of use with which it is used in the production process in relation to the products to whose formation it contributes, and accordingly a part of its capital value remains fixed in this form. This gives this part of constant capital the form of fixed capital. All other material components of the production process, on the other hand, form liquid or circulating capital .

Karl Marx understood this fixed capital that goes into the production process as wear and tear . This means that the net present value of the fixed capital is transferred piece by piece to the product during the depreciation period and is completely converted back into the original monetary form at the end of the depreciation period. The machine is then written off , its value amortized . Hence it is

  • for the total value of the machine (the purchase price) by the originally invested fixed capital,
  • while the part working in production that has not yet transferred its value to the products makes up the fixed capital employed,
  • the part that has already transferred its value to the products forms the already amortized part of the fixed capital.

Hence: The “proportion in which it gives off value is always in inverse proportion to its entire functional time” (Karl Marx, Das Kapital, Volume 2, MEW 24, p. 159). Fixed capital is therefore not characterized by its specific use value, but rather by the fact that it has a double existence as a value : one part remains tied to its "natural form, another part detaches itself from it as money" (Karl Marx, Das Kapital, 2nd volume, MEW 24, p. 164). However, according to Karl Marx's theory, work equipment is by nature just as little fixed capital as it is by nature constant capital .

A machine is not fixed capital because of its material properties, but because of the way in which its value participates in production in productive capital, piece by piece . However, this form of circulation is determined by the factual properties. The counterpart to fixed capital is circulating capital . In addition, there is money capital and commodity capital, which Marx does not attribute to either circulating or fixed capital.

The connection becomes clear if one takes as an example of fixed capital a means of production which, in contrast to actual means of labor, is also materially incorporated into the product of labor: Marx cites land improvement , the value of which is advanced all at once, but on z. B. five years distributed both materially and in terms of value in the agricultural product.

Contrary to this differentiation, according to Marx, economists like to confuse fixed capital with constant capital , and circulating capital with variable capital . Another popular misconception is to consider physical properties of work equipment, e.g. B. Their immobility in the case of buildings, to be reinterpreted as properties of fixed capital. The fact that a sum of capital is advanced for a longer period without turning over does not make it fixed capital either. In agriculture, for example, seeds are fixed for a year in the production process, but do not circulate as a value during this time.

See also