What Is Capitalism? A Critical Analysis PDF

What Is Capitalism? A Critical Analysis  Capitalism is an economic Capitalism’s system driven by the Essence need to maximize profit. Two fundamental classes dominate society:...

What Is Capitalism? A Critical Analysis  Capitalism is an economic Capitalism’s system driven by the Essence need to maximize profit. Two fundamental classes dominate society: – A capitalist class that privately owns society’s means of production. – A working class that owns no means of production & must sell its labor power to the capitalist class to survive. Capitalists make profit by exploiting wage labor. Capitalism & the Commodity The goods & services produced under capitalism are commodities. – Commodities are “useful” things that are made to be sold in a market. Thus, commodities have a dual nature: – They have a “use value” & an “exchange value.”  Use & Exchange Value Any service, resource, or product (transformed through labor to make it useful) has a use value. ❖ A haircut, water, a sandwich. Anything with use value that is exchanged (sold for money or traded for something else) has an exchange value as well. ❖ A Supercut, bottled water, a Subway sandwich. As the capitalist market expands, the profit motive turns more & more useful activities & products into commodities with an exchange value.  What is a Commodity’s Exchange Value? The Labor Theory of Value contends that the exchange value of a commodity is based upon the average socially necessary labor-time that went into making it. Labor is the underlying element that all commodities have in common which allows people to roughly compare their relative values. – However, actual market prices are influenced by other secondary factors as well: supply & demand variations, monopolies or competition, tastes & fashion, etc. – Like all commodities, the value of labor power (wages) is based on the average socially necessary labor-time that went into training & sustaining the workers’ capacity to keep working (food, shelter, etc.). Capital (like machinery) is essentially “dead labor”—labor embodied in the machines it produced. – Thus capital is a condition where “dead labor” exploits “living labor”.  Capital & Labor Capitalism’s primary characteristic is its profit-driven need to commodify & exploit labor. This can only happen if the Once separated from their tools, workers have nothing to sell but producers (workers) can be their labor power, which they must sell to capitalists who now separated from their own the means of production. means of production – Agri-business & farm workers in the countryside. (tools, land, etc.). – Factory owners & industrial Historically, this was done workers in the city.  Capital is a Relationship Money may OR MAY NOT be capital. Capital is any form of wealth (machinery, land, resources, money) that is used to employ labor for the purpose of generating greater wealth (surplus value) for the owners of capital (capitalists). Capitalists gain profits by paying workers less for their labor power than value of the wealth they produced. This is the meaning of exploitation. – The more wealth (surplus value) workers generate above the cost of their labor, the more exploited they are…the greater the “rate of exploitation.”  Exploitation & Surplus Value: Where Multiple Profits Come From The wealth produced by workers above the value of their wages is called surplus value. For capitalism to function, this surplus value must be large enough to: Return a profit to the employer. Pay for resources & machinery. Generate interest for investors. Pay rent on property. Make profit for retailers, advertisers & other “middlemen”.  What Is Labor Power Worth? Workers are not paid the value of the products they produce. If they were, the capitalist would make no profit, which is clearly not the case: The Labor Theory of Value’s Answer: Labor power is worth the average socially necessary labor time that went into creating it. – Therefore, wages should meet the cost of the food, shelter, clothes & transportation, etc. needed to keep workers alive & returning to work (more, if labor went into some form of previous training or skill). – To maximize profit, wages must be considerably lower than the value of the products labor produces. So capitalists avoid paying the full value of labor. Wages do not cover housework or childcare, unless they are commodified. The unpaid labor of those who cook, clean, care for workers & raise future workers is externalized—usually onto women (or society, as in public education). Damages done to the environment are also externalized. We Make It, They Take It Workers receive wages for the products they produce: this is an unequal exchange. The products workers make become the property of the capitalists. Workers are “alienated” from their tools & the products of their labor, which now face them as commodities they must buy in the market. Competition also alienates them from each other. While they work, their time & energy belongs to the capitalist as well. This transforms the self-directed, cooperative, creative, life-fulfilling process of useful activity into time spent under the bosses’ control doing whatever makes him the most profit relative to what he pays his workforce. These are the conditions Marx called alienated labor. Alienation & Commodity Fetishism A fetish is the attribution of religious or mystical qualities to inanimate objects: crucifixes, worry or prayer beads, statues, talismans, etc. Marx referred to commodity fetishism under capitalism. By this he meant the way our economic system endows commodities with special qualities (like power, status, popularity, happiness, beauty, success), while disguising the alienation, exploitation, toxic conditions & environmental damage that actually produced them.  Capitalism’s Contradictions Central Contradiction: Socially Produced Wealth vs. Private Ownership & Control over the Means of Production This produces: – “Over-production” (bubbles, booms & busts) – Recessions, Depressions, Financial/Debt Crises – Centralization: oligopoly & the elimination of competition. (too big to fail?) Fatal Contradictions? So far, the serious contradictions Marx identified have not proven fatal. Capitalism has side-stepped these barriers & crises by a process of destructive regeneration. Capitalism’s “solution” to each past crisis has been to destroy & rebuild its forces of production (in wars or depressions) in an uneven process of long-term growth. It seems that as long as capitalism has the energy to regenerate itself after each collapse or war, it will continue to do so.  Dual Limits of Industrial Capitalism Energy base depletion: – There are no known substitutes for fossil fuels that will permit exponential growth. – If substitutes were discovered, they would only accelerate… Ecocide: – Climate chaos – Ecosystem destruction & biodiversity collapse – Environmental toxicity – Over-population/consumption Resource depletion