What is Capitalism? Capitalism as a mode of production.

in economics •  last year 

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When you are either supporting or criticizing something it helps to know precisely what that thing is. The issue I've found with much of my discourse with the right(both on this website and in the real world) as well as the left is that there is some confusion about what exactly Capitalism is. I hope to maybe clarify somethings about it so we can help further a productive discourse between individuals, and maybe grow our collective understanding of the idea.

To begin there are two main things we talk about when we talk about Capitalism. Capitalism as a mode of production, and Capitalism as an ideology. Understanding how Capitalism functions in both facets is integral for either it's praise or its critical analysis.

So let us look at Capitalisms' material expression as a mode of production. The prominent features of Capitalism are as follows*

1 )Private Property

2 )Capital accumulation

3 )Wage Labor

4 )Voluntary Exchange

5 ) A price system

6 ) Competition in the market place

So already we can see that Capitalism meaning," Exchanging goods" is a gross misunderstanding of the system entirely, but I'll go over that more when we discuss the ideology behind capitalism.

So lets go over private property as an expression, shall we.(I'll stave of my criticism of private property for a later post).

Private property is a form of ownership where the owner takes possession of anything that is produced with said property. Consider the factory worker and the factory owner. The commodity that is produced in the factory(what the commodity is isn't important in this example) by the labor of the worker isn't his. In other words worker creates thing, capitalist owns thing(which he then sells it on the market).

So already we see that when people say,"Private property is anything that belongs to you", they are either grossly misinformed, or purposely trying to deceive you.

Now we are onto capital accumulation, before we can understand how capital accumulates, we need to understand just what capital is. This is what this "ism" is all about, so let us not dilute ourselves with any illusions.

The confusion that often arises when we wish to undergo an analysis of capital is this concept that ,"capital is another word for money", which simply isn't the case. To clarify money is a universal commodity used(in at least the capitalist mode of production) as a quantitative measurement of value of goods and services. If that is money, then what is capital. To put it as technically as I can capital is a form of money that is used to buy something in order to then sell it on the market, it is wealth that increases with the process of circulation.

Now here there are three distinguishable forms of capital that arise in the capitalism economy. Constant capital, variable capital and imaginary capital.

Constant capital could be three thing.

  1. Machinery, Land, Buildings or Plants used in the productions process

  2. Raw materials used in the production process

  3. Incidental operating expenses

Variable Capital is a little easier to understand. Variable capital is the purchase of labor power(in the form of a commodity) on the market.

Imaginary Capital is essentially what is know today as stocks, shares and bonds.

So in capitalism(it in indeed a defining feature of the system) Capital accumulates into the hands of those who already own capital, because of the nature of capital(wealth that is used to increase wealth) those who already own capital seek out more capital in order to continue their increase of wealth. This is not only why, but also how, there are the ultra wealthy in capitalist society, in fact the ultra wealthy are indeed a foundational aspect of the capitalist mode of production.

Now lets go over wage labor. In the capitalist mode of production the working class are indeed forced to sell their labor on the market(due to the private ownership of the means of production) for a wage. This alienates the worker from their labor. So what does this mean? This means that a fundamental aspect of capitalism is that a worker must sell their labor to someone else, which means that the notion that under capitalism you get," the value of your labor" is unequivocally false. When you sell your labor on the market(as I personally do) you objectively do not own your own work.

Now lets go over "voluntary" exchange. Now I think that calling it "voluntary" is quite misleading. In fact I just think of it as exchange(I'll go over this in a later post). Now exchange is fairly straight forward. Exchange can be summed up as trading a commodity for money, or money for a commodity. That's fairly straight forward. So far we've already shown that exchange isn't the defining feature of capitalism.

Now in capitalism there is a system of setting prices. I personally subscribe(just like Adam Smith) to the labor theory of value. Meaning that the determining aspect of price is the average labor time spent on the creation of a commodity. Now this is very nutshell type explanation, but there are many different ideas on how price arises. I'm sure anyone actively participating in political discourse has something to say about it. (fell free to try and explain how value is subjective in the comments, it's not, but feel free to try)

Now this last aspect of capitalism is one that i find is probably why i'm so anti-capitalist in my ideas(once again I've planned a whole post just about this, this post isn't for criticism) So capitalism is built upon competition in the markets place. Meaning that various different firms produce the same thing in hopes to sell it to you. Simple enough for now.

Okay so I've gone over capitalism as a mode of production, and this post has gotten way longer then I thought it was going to be, so I'll save Capitalism as an ideology for my next post.

Stay revolutionary comrades.

*I'm taking these straight from Wikipedia https://en.wikipedia.org/wiki/Capitalism

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A good intro post for any anti-capitalist to look at. One thing I would’ve added would be fictitious capital (id est debt and credit) wherein the thing stops being fictitious once actualized. The actualization happening as it gets circulated through the MCM’ cycle. Otherwise, interested in seeing yer insight on Capitalism qua ideology; here here to you connecting the two and showing the base-superstructure interdependency (or how the economy relies on its own creation, as politics, to live as does the creation, as culture, needs the economy to live) of Capitalism in a post.

Thank you comrade. I'm hoping that the right wing people might read this so that can atleast get an idea of what the system that they so vehemently support is all about. Which is part of ideology I suppose. I'm hoping to start posting more here, both my music and my political writings. Hell maybe I'll post some of my crappy short stories I like to write.


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Keep working, stop paying.

I really wish it was that easy.

But it IS that easy.
On any given Tuesday.

" In the capitalist mode of production the working class are indeed forced to sell their labor on the market"

You have options, its just that working is a whole lot easier than being self-sustaining but co-operating with like-minded people is a third option - Like the agorist collectives that did/do some pretty cool stuff together and live in a counter-economy.

Again, agorism can't compete on the effectiveness of a market economy by any means but it doesn't have to: Supporting yourself and your friends through a network and working towards personal goals outside the state-controlled economy and having a more fulfilling life as an effect is much more valuable.

I consider myself a proponent of parallelism, which I suppose agorism would be considered part of. The issue I find with it is two fold.

I'll expalin both briefly.

The first being that just moving outside of the current system doesn't solve any of the problems that have arose out of capitalism. Just living with your friends in the woods won't stop capitalism rampant destruction of the biosphere. You can't get away from the reality that we encompass.

The second being is it denies the interconnectedness that individuals have. Even if you manage to move away from society and build your parallel economy, you'll still be dependent upon the capitalist mode of production. The tools you bring with you would have been manufactured in the capitalist mode of production, etc.

All in all I find much of the Market oriented Anarchism to totally miss the point. If we don't challenge and change the superstructure of society directly, it won't change at all and Markets themselves are in large part of the reason why the planet is in such disarray.

Idk, maybe I'm arguing against a straw-man, but I hope I've conveyed my point articulately.

You made your points very well and we are on the same page (the same side is a bit daring to say this early haha), but I believe our differences are deeply rooted in our different views on accountability and personal responsibility, I will try and explain this to the best of my ability:

We can both recognize the horrors of the "cancer cities" in China and the absolute devastation this has on the environment where these cities puke out plastic crap that gets sold on apps like Wish, marketed to westerners that support this despicable concept through monetary means that oils the machinery.

It is my firm belief that you can preach all day to people about this kind of things, editing up a viral video for your facebook friends that show the terrible correlation between the bright green toilet-roll holder they bought as a funny joke for someones birthday is responsible for killing people through tumors, but the total disconnect of how global trade is networked will still be present and where their personal responsibility for the production is just "forget about it" levels of denial.

Sure, living in a community that is self-sustaining on ecological crops and green energy isn't solving the destruction of the biosphere (maybe on a micro level, but that is trivial in comparison) but it is also not supporting it directly - It is changing hearts over changing minds, because that is the path of less resistance.

I like what you said about the disconnection between consumers and the production process.

I also agree that propaganda only goes so far(I'm referring to the viral video concept you mentioned)

Here is my overall point. Making isolated agrarian towns will only go so far. Look at the tolstoy experiments in the UK. Sure they've lasted 100 years or so, the issue with them is their isolation. They never were affecting the super structure of society. I still support them in their efforts, but the idea will do nothing in the grand scheme of things.

Instead I look to examples like Fred Hampton and The Black Panther Party. While short lived comparatively speaking (mainly due to Fred Hamptons' assassination) the black panther party drastically affected the material conditions of the poor in the communities.

They set up food banks, they set up free health clinics, they had their own community self defense and United street gangs to end the street violence.

Which is why Fred Hampton was killed by the FBI.

I look at the whole "none participation" idea you're presenting as problematic for two reasons.

The first being that the option to opt out isn't available to the poor and working classes. The second being that it is extremely individually centered, I don't mean that individuality is bad, but rather that when individuals are considered only in isolation it's a purely egotistical trip that you're going on.

"When you are either supporting or criticizing something it helps to know precisely what that thing is. The issue I've found with much of my discourse with the right(both on this website and in the real world) as well as the left is that there is some confusion about what exactly Capitalism is."

Exactly. It's the same issue with criticizing socialism and communism. In my experience, "critics," and I surround it with quotes because their "criticisms" are frequently simplistic and cliche rather than elaborate or thought-out, almost invariably fail to know what they even are.

Exactly, the image the right presents the left as is a strawman.

They can't argue against the left, so the make up stuff to argue against, declare themselves intellectually superior and give themselves applause.

This is exactly why Jordan Peterson refuses to debate any actual leftist, because he knows he won't do well.