Circulation System Reference

API reference for the Capital Volume II circulation layer (Feature 023).

The circulation system models capital as a process cycling through Money, Productive, and Commodity forms (M-C-P-C’-M’). It adds turnover time, fixed/circulating capital decomposition, reproduction schema checks, inventory tracking, and integrated crisis detection.

Module: babylon.economics.circulation

Enums

CapitalForm

Value	Description
money	M: Liquidity, purchasing power
productive	P: Capital engaged in production
commodity	C: Finished goods awaiting sale

ReplacementCyclePosition

Classifies where an economy sits in the fixed capital replacement cycle.

Value	Threshold	Description
investment_boom	replacement / depreciation > 1.5	Excess investment drives replacement wave
expansion	ratio > 1.0	Investing more than depreciation
maintenance	ratio > 0.7	Covers basics, gradual decline
disinvestment	ratio <= 0.7	Capital stock deteriorating

InventoryDiagnosis

Value	Condition	Description
normal	raw >= 7 days, finished <= 60 days	Healthy inventory levels
overproduction	finished > 60 days	Cannot sell: realization problem
supply_crisis	raw < 7 days	Cannot produce: input shortage

CrisisSeverity

Realization crisis severity based on realization rate (realized / produced).

Value	Realization Rate	Description
normal	> 95%	Healthy demand
mild_slowdown	> 85%	Emerging demand deficiency
recession	> 70%	Significant demand destruction
crisis	<= 70%	Systemic realization failure

Data Models

CircuitState

Distribution of an entity’s capital across the three forms at a given tick.

Field	Type	Description
fips_code	str[5]	County FIPS code
year	int >= 2010	Data year
money_capital	Currency	M: cash, deposits, receivables
productive_capital	Currency	P: fixed + working capital in production
commodity_capital	Currency	C: finished goods awaiting sale
fixed_capital	Currency	Durable means of production (subset of P)
circulating_capital	Currency	Raw materials + labor power (subset of P)

Computed properties (not stored):

• total_capital: money + productive + commodity

• liquidity_ratio: money / total (0.0 if total = 0)

• commodity_overhang: commodity / total (0.0 if total = 0)

TurnoverProfile

Temporal characteristics of capital circulation for an industry.

Field	Type	Description
naics_code	str	2-6 digit NAICS industry code
working_period_days	int > 0	Days of actual labor per production cycle
non_working_production_days	int >= 0	Days capital sits without labor (drying, aging)
purchase_time_days	int >= 0	Average days to acquire inputs
sale_time_days	int >= 0	Average days to sell output
fixed_capital_ratio	float [0, 1]	Fraction of constant capital that is fixed

Computed properties:

• production_time: working_period + non_working_production

• circulation_time: purchase_time + sale_time

• turnover_time: production_time + circulation_time

• turnovers_per_year: 365 / turnover_time (0.0 if turnover_time = 0)

• production_ratio: production_time / turnover_time

AnnualSurplusValue

Annual surplus value accounting for turnover speed.

Field	Type	Description
fips_code	str[5]	County FIPS code
year	int	Data year
variable_capital_advanced	Currency > 0	v: wages for one production cycle
surplus_value_per_cycle	Currency	s: surplus extracted per cycle
turnover_time_days	int > 0	Days per complete circuit

Computed properties:

• rate_of_surplus_value: s / v (per cycle)

• turnovers_per_year: 365 / turnover_time_days

• annual_surplus_value: s * turnovers_per_year

• annual_rate_of_surplus_value: (s/v) * turnovers_per_year

FixedCapitalItem

A durable means of production with per-item depreciation tracking.

Field	Type	Description
item_id	str	Unique identifier
category	str	machinery, buildings, vehicles, etc.
initial_value	Currency > 0	Original cost
service_life_years	float > 0	Expected productive lifetime
current_age_years	float >= 0	Time since acquisition

Computed properties:

• annual_depreciation: initial_value / service_life_years (straight-line)

• remaining_value: max(0, initial_value - annual_depreciation * current_age_years)

• depreciation_fund_required: initial_value - remaining_value

DepreciationFundState

Economy-level tracking of fixed capital depreciation and replacement.

Field	Type	Description
fips_code	str[5]	County FIPS code
year	int	Calendar year
total_fixed_capital	Currency	Gross value of fixed capital stock
accumulated_depreciation	Currency	Total depreciation fund accumulated
annual_depreciation_flow	Currency > 0	Current year’s depreciation charges
replacement_expenditure	Currency	Actual fixed capital purchases this year

Computed properties:

• fund_adequacy: accumulated_depreciation / annual_depreciation_flow

• replacement_cycle_position: ReplacementCyclePosition based on replacement_expenditure / annual_depreciation_flow ratio

CirculationCrisisAssessment

Integrated crisis assessment combining all Volume II signals.

Field	Type	Description
realization_crisis	bool	C’ -> M’ failing (commodity overhang > 0.3)
turnover_crisis	bool	Circuit interrupted (liquidity < 0.1 and circulation > production time)
reproduction_crisis	bool	Departments out of balance
vulnerabilities	list[str]	Active vulnerability labels

Vulnerability derivation rules:

Vulnerability	Derived From	Condition
REALIZATION_CRISIS	CircuitState.commodity_overhang	> 0.3
SUPPLY_CHAIN_CRISIS	InventoryState.inventory_problem	== SUPPLY_CRISIS
LABOR_SHORTAGE	ReproductionAnalysis.sustainability	== False
MONETARY_CRISIS	CircuitState.liquidity_ratio	< 0.1

Functions

Circuit State (circuit.py)

advance_circuit(state, turnover, surplus_value, elapsed_days) -> CircuitState

Advances capital through the M-C-P-C’-M’ circuit. Capital transfers fractionally between phases based on elapsed days relative to phase duration. Surplus value is created proportionally during the production phase. Raises ValueError if elapsed_days is negative.

initialize_circuit_state(fips_code, year, total_capital, turnover) -> CircuitState

Distributes initial capital across M/P/C forms proportional to phase durations. Money fraction = (purchase + sale) / turnover_time. Splits productive capital into fixed/circulating per the profile’s ratio.

Turnover (turnover.py)

compute_annual_surplus_value(variable_capital, surplus_per_cycle, turnover_time_days, ...) -> AnnualSurplusValue

Constructs an AnnualSurplusValue with turnover-amplified surplus.

compare_turnover_advantage(fast, slow) -> float

Returns fast.annual_surplus_value / slow.annual_surplus_value.

get_weighted_turnover_profile(industry_weights, source) -> TurnoverProfile | None

Computes county-level turnover from employment-weighted industry profiles. Returns None if no profiles resolve.

Fixed/Circulating Capital (fixed_circulating.py)

decompose_constant_capital(total_c, fixed_capital_ratio) -> tuple[Currency, Currency]

Splits constant capital into (fixed, circulating) portions. Raises ValueError if ratio is outside [0, 1].

update_depreciation_fund(previous, annual_depreciation, replacement_expenditure) -> DepreciationFundState

Advances depreciation fund state by one period.

compute_moral_depreciation(naics_code, physical_remaining_life, economic_remaining_life) -> MoralDepreciation

Creates a MoralDepreciation instance.

Reproduction Schema (reproduction.py)

combine_departments_ii(dept_iia, dept_iib) -> DepartmentRow

Sums IIa + IIb into a single Department II row.

check_simple_reproduction(dept_i, dept_ii, tolerance=0.01) -> ReproductionBalance

Checks I(v + s) = IIc. Reports gap and direction of imbalance.

check_extended_reproduction(dept_i, dept_ii, dept_iii) -> ReproductionAnalysis

Checks if Dept III can reproduce all departments’ labor power.

compute_disproportionality(dept_i_output, dept_ii_output, dept_i_share_required) -> DisproportionalityCrisis

Computes departmental output imbalance metrics.

Inventory (inventory.py)

compute_realization_metrics(value_produced, value_realized, fips_code, year) -> RealizationCrisis

Constructs a RealizationCrisis with computed gap, rate, and severity.

detect_realization_crisis(inventory_trend, production_trend) -> bool

Returns True if finished goods are rising while production is flat or falling. Returns False if either list has fewer than 2 elements.

Crisis Assessment (crisis.py)

assess_circulation_crisis(circuit_state, turnover, inventory, reproduction_balance, reproduction_analysis) -> CirculationCrisisAssessment

Detects realization crisis, turnover disruption, and reproduction failure independently. Generates vulnerability strings per the derivation rules above.

Threshold Constants

All constants are Final[float] values defined in types.py with data source traceability.

Constant	Value	Source
OVERPRODUCTION_DAYS_THRESHOLD	60.0	Census M3: avg inventory-to-shipments ~1.3 months; 60 = 1.5x normal
SUPPLY_CRISIS_DAYS_THRESHOLD	7.0	Standard JIT minimum buffer (BLS lead time 5-10 days)
COMMODITY_OVERHANG_CRISIS	0.3	Marx Capital II Ch. 16-17: >30% in C form = realization dominates
LIQUIDITY_CRISIS_RATIO	0.1	Marx Capital II Ch. 15: <10% liquid = cannot purchase inputs
REALIZATION_RATE_NORMAL	0.95	>95% realization = normal friction losses
REALIZATION_RATE_SLOWDOWN	0.85	NBER recession classification thresholds
REALIZATION_RATE_RECESSION	0.70	<70% = systemic realization failure
REPLACEMENT_BOOM_RATIO	1.5	BEA Fixed Asset Tables historical correlation
REPLACEMENT_EXPANSION_RATIO	1.0	Investment = depreciation = simple reproduction
REPLACEMENT_MAINTENANCE_RATIO	0.7	<70% of depreciation = active capital destruction

Graph Bridge Integration

The circulation state is serialized to territory nodes as tick_-prefixed attributes by write_tick_state_to_graph() in tick/graph_bridge.py.

Node Attribute	Source
tick_liquidity_ratio	circulation_state.circuit_state.liquidity_ratio
tick_commodity_overhang	circulation_state.circuit_state.commodity_overhang
tick_replacement_cycle	circulation_state.depreciation_fund.replacement_cycle_position.value
tick_inventory_diagnosis	circulation_state.inventory_state.inventory_problem.value
tick_realization_crisis	circulation_state.latest_assessment.realization_crisis
tick_turnover_crisis	circulation_state.latest_assessment.turnover_crisis
tick_reproduction_crisis	circulation_state.latest_assessment.reproduction_crisis

See Also

• Capital Volume II: The Circulation of Capital — Theoretical rationale for Volume II

• Capital Volume I Production Dynamics Reference — Volume I production dynamics reference

• Economics Pipeline Reference (Features 012–016) — Economics pipeline overview

• Capital Volume I: The Production of Surplus Value — Volume I theoretical explanation