Capitalism?

[RJH-Music]

I am very new to all these great ideas yous guys and girls are giving and the ideas of communism, socialism, marxism etc... One thing that I don't understand(and I am warning you now that this may sound stupid of me) is capitalism. Can someone please explain to me what capitalism is all about? What it is?

[Bolshevist]

Capitalism

The socio-economic system where social relations are based on commodities for exchange, in particular private ownership of the means of production and on the exploitation of wage labour.

Wage labour is the labour process in capitalist society: the owners of the means of production (the bourgeoisie) buy the labour power of those who do not own the means of production (the proletariat), and use it to increase the value of their property (capital). In pre-capitalist societies, the labour of the producers was rendered to the ruling class by traditional obligations or sheer force, rather than as a “free” act of purchase and sale as in capitalist society.

Value is increased through the appropriation of surplus value from wage labour. In societies which produce beyond the necessary level of subsistence, there is a social surplus, i.e. people produce more than they need for immediate reproduction. In capitalism, surplus value is appropriated by the capitalist class by extending the working day beyond necessary labour time. That extra labour is used by the capitalist for profit; used in whatever ways they choose.

The main classes under capitalism are the proletariat (the sellers of labour power) and the bourgeoisie (the buyers of labour power). The value of every product is divided between wages and profit, and there is an irreconcilable class struggle over the division of this product.

Capitalism is one of a series of socio-economics systems, each of which are characterised by quite different class relations: tribal society, also referred to as “primitive communism”, ancient or “slave” society, and feudalism. It is the breakdown of all traditional relationships, and the subordination of relations to the “cash nexus” which characterises capitalism. The transcendence of the class antgonisms of capitalism, replacing the domination of the market by planned, cooperative labour, leads to socialism and communism.

Historical Development: Capitalism develops through various stages. Since capital is both a pre-condition and outcome of capitalism, a period of primitive accumulation marks the beginning of capitalism; this may involve outright theft and plunder, and in particular the creation of a class of people who no longer own any means of production – a proletariat.

By freeing the labour process from traditional forms and expanding labour cooperation through world trade, capitalism initiates a rapid transformation in the labour process and promotes the development of science and technology. Meanwhile, religion and kinship ties are continuously undermined. Capital is built up in a few countries at the expense of other countries which are used as sources of cheap labour and raw materials.

The competition between millions of small-scale producers which was characteristic of the early days of capitalism, leads to the concentration of capital in the hands of just a few as a more efficient means of production. At a certain point (the beginning of the 20th-century), the entire globe had been divided up between a few great powers. Thus begins the final stage in the development of capitalism, imperialism, characterised by the domination of the banks, the formation of large multi-national corporations, by war and revolution.

The free market that had been envisioned by Adam Smith was shown impossible by the late 19th and early 20th century, when monopolies dominated nations causing massive Economic collapses in the 1890s, a world production crisis during World War I, and the worldwide depression in the 1930s. Thereafter national, and later international, regulation of the capitalist marketplace became necessary (SEC, International Monetary Fund, the World Bank, etc.); while the growth of militarization remains a necessity to expend excess production. For example, the United States having overspent the Soviet Union in militarization, in the last decade of the 20th century continued to create wars throughout the world – Panama, Iraq, Bosnia, etc. – unleashing double and triple the firepower in all of World War II. After the incredible expenditure of vast munitions and weapons (over $300 billion per year), the subjugated and destroyed nations are then offered contracts and infiltrated by capitalist business for the process of "rebuilding".

The Destruction of Capitalism: In capitalist society the working-class continues to grow, and ownership over the means of production continually dwindles into fewer and fewer hands. One example of this is the stock market, where the finance banks emphasize that "all workers" can own a piece of various companies. In fact, through offering "ownership" of these companies to more people, financial oligarchies are able to gain greater control over these companies by diluting the ownership amongst an unorganized group while also extracting capital from this large group for further investment. For example, a bank need only own 10 or 15 percent of a certain company to have an enormous controlling interest over that company, so long as the vast majority of stocks in that company are owned by thousands and tens of thousands of different people, people who do not have the time to attend shareholder meetings and are not united and unorganized on how to exert control over the company.

Furthermore in capitalist society, the value of labour increases while labourers continually receive a smaller portion of that value they create. The selling of labour itself is continually reduced from something that is sold on a monthly or yearly basis to something that is sold day by day, and hour by hour, piecemeal or in short term contracts. As a result, the income gap grows continually larger. For example in the United States, from 1988-1998, income for the poorest 20 percent of the population rose a meager $110 to $12,990. For the richest 20 percent it increased by $17,870 to $137,480. (Data according to the Center on Budget and Policy Priorities and the Economic Policy Institute, checked with U.S. Census data; January, 1999).

Capitalist ideology attempts to refute Marxism on the basis that the biggest class in capitalist society is the "middle-class". This class conception however is based purely on economic wealth (two cars in the garage, an income of x amount of dollars, etc.) and not on that person's actual relations to the means of production (See definition on class). The enormous majority of the population in a capitalist society is proletarian – however through imperialism some highly specialized proletarians (from executive officers to autoworkers, information technology workers to industrial foremen, etc.) are paid very well (not by the full value of what they actually produce, but by a higher percentage of that value when compared to unskilled workers and workers in nations subjugated to imperialist exploitation).

In order for capitalism to function correctly, the petty-bourgeois class must be in existence. This is one of the great contradictions in capitalist society, because on the one hand while capitalist production continually pushes small-business people out of the market (for example, the owner of the general store, vegetable shop, small grocery store owner – all are wiped out by corporations who establish enormous shopping centers to meet a large variety of consumer needs, with products of higher quality at a cheaper price); while on the other hand capitalism cannot survive without a class of people establishing new businesses to fill new consumer needs; and from a very select few of those businesses to recruit new bourgeois, forming large corporations (in United States this is referred to as the "American dream").

The ultimate failure of capitalism is brought about by capitalist production itself – the further technology advances, the more expensive and powerful are the machines needed for production, while at the same time, as a result of technological advances, products produced by more efficient machines become cheaper and cheaper. This has the effect of firstly driving the petty-bourgeoisie into extinction (who cannot afford to constantly upgrade their productive forces, while their products continually become cheaper (the reason they are heavily subsidized by advanced capitalist governments); and further the creation of larger corporations, which in turn must not only shrink internally to maintain "efficiency", but must also merge with other companies, forming multinational conglomerates, etc. The further this process continues, production becomes increasingly centralized, and when controlled by the capitalist, the more oppressive and backward production becomes (Microsoft at the end of the 20th century). These technological advances will inevitably lead to either the common destruction of humanity (a third world war) or socialist revolution, a democratic society where the means of production and distribution will be controlled by the majority.

Further Reading: For a detailed description of the fundamentals and early development of capitalism see: Marx, Wage labour and Capital, and Capital Volume 1 & Volume 2 – on the Process of Production, Circulation and of Capital respectively), Capital Volume 3 on capitalist production in whole.

For a detailed description of the beginning of the later stage of development of capitalism, see: Lenin, Imperialism: the Highest Stage of Capitalism.

From the Marx.org encyclopedia.

Hope it helps.

[RJH-Music]

Thankyou. So, based off what I got from this, and example of a capitalist country would be the USA because of it's exploitation of slave labourers in foreign countries to create its product to therefore sell to the masses? It economy based around the "dog eat dog" theory were the bigger dog crushes the little dog in the case of competion between companies and feuds? Capitalism is, in a nutshell, when the lower class of people are exploited as slave labour to create profit for the higher class? Am I right?

[Zingu]

Originally posted by RJH-[email protected] 2 2005, 07:42 PM
Thankyou. So, based off what I got from this, and example of a capitalist country would be the USA because of it's exploitation of slave labourers in foreign countries to create its product to therefore sell to the masses? It economy based around the "dog eat dog" theory were the bigger dog crushes the little dog in the case of competion between companies and feuds? Capitalism is, in a nutshell, when the lower class of people are exploited as slave labour to create profit for the higher class? Am I right?
The first part you described a little of what Imperialism is; as Lenin titled his book; "Imperialism, the Highest Stage of Capitalism".

The second part, basically, yes; the process of wage slavery through exploitation and alienation.

[Djehuti]

Wage labour + production of commodities = Capitalism.
To oversimplify it a bit.

[Super Mario Conspiracy]

In addition, copyright is a newly added toutch to the capitalist system. It is even going against capitalism.

[Karl Marx's Camel]

How is this relevant, and... How is this "going against capitalism"?

[ComradeChris]

Originally posted by [email protected] 2 2005, 08:49 PM
Wage labour + production of commodities = Capitalism.
To oversimplify it a bit.
What if you have some people working for money, and some not? Is a slavery based economy capitalism?

And if we keep the simple dictionary definition of capitalism?:

n : an economic system based on private ownership of capital

It would encompass far more time, and far more wrongs under capitalist societies to fuel the left in the information war.