Different Capital Compositions
The ratio, c/v is one measure of the organic composition of capital.
As noted above, the distinction between constant and variable capital overlaps with the distinction between fixed capital and circulating capital. Constant capital has both fixed and circulating components: for example, the fixed constant capital would include a factory and the machinery in it, while the circulating constant capital would include the raw matericals used and the intermediate inputs produced by the factory.
Variable capital is almost exclusively a component of circulating capital. However, the salaries of some "overhead" employees (who have long-term security from being fired or laid off) are in effect, fixed elements of variable capital.
Read more about this topic: Constant Capital
Famous quotes containing the word capital:
“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
—Abraham Lincoln (1809–1865)