Turnover Time and the Organic Composition of Capital

This article argues that Marx’s key concepts of the organic and value compositions of capital depend on his concept of the turnover time of variable capital. Methods are given for measuring these three indicators, which are applied to the US national accounts from 1947 onwards. The results show unambiguous tendencies for the organic and value compositions of capital to rise, and for the turnover time of variable capital to fall. This is consistent with Marx’s predictions in Capital and his explanation for the tendency of the rate of profit to fall.