Markets and the Rise of the Ruling Class

The ruling class of today are the worst of humanity, and markets are the reason

Under Capitalism markets dictate the vast majority of the production throughout the world. Through private ownership of capital the world has split into a working class and an “owning” class, which is more commonly called the ruling class. Through the process of markets, owners are weeded out until only those who make the most profit

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The Workers vs The Owners and Those In Between

The working class draws all of its wealth through its own labor. These are the common wage laborers, that make up the majority as well as the backbone of society.

People can become rich through their labor as well. Through the use of markets these laborers may indirectly be taking from the rest of the workers. These rich laborers are called the labor aristocrat. These are not the focus of this essay, although, like in all capitalist economics their existence is inseparable with the existence of the ruling class. This category most accurately describes the economic position of those who are famous for their skills, like actors or sports players. (Eventually this could include steem writers.) [1]

There are those who draw some of their wealth from others, but nowhere near enough to support themselves. This is done through “passive” income, as in income made without doing labor. This income can come from a variety of different places, from a savings accounts, to owning a small business, to self-voting through steem. These people are able to purchase the labor of others, but often have to work alongside them. These are the petit bourgeois. They seek to model the ruling class, but don’t have enough power yet to do so. This category mostly includes small business owners or those with small personal investments.
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The last category is those who can draw all of their wealth from the labor of others. These are the ruling class, also known as the bourgeoisie. This is done through ownership of private property, either directly or indirectly. Often the bourgeoisie chooses to make a show of working alongside their laborers, but it is unneeded and they would earn the same whether or not they do so. The bourgeoisie subsist purely off the labor of others, and are the ones in control of society. They seek the greatest profit to secure their position at the top. This profit is gained through how they manage their property, not their labor itself. This means they play by a different set of rules from the workers. The members of the petite bourgeoisie replace this group and vice versa. This is thought of one of the driving forces of change in capitalism, but to remain in this group each member must still compete in a market. The theory and outcome is the same regardless of the individual. [3] [4]

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The Source of Profit

Markets thrive and die off of the amount of profit. This means different thoughts about profit bring about different arguments. Here I will be using the Marxist understanding of profit, through the Labor Theory of Value (LTV for short). The LTV states that all value comes from labor. The logic behind the LTV is that when human resources are distributed based on need the only thing holding them back is how much that can be produced. Since resources are essentially infinite, the only thing holding us back is the amount of labor it takes to access and then produce objects with the resources. Some more basic ideas disguise some of this labor as “startup cost”, but the machines and buildings bought only require labor to produce.In a society where production is based on need. When labor is allocated based on need all labor must be treated equally, and thus labor also becomes the best unit of value for societies.

When measuring the value of everything in labor, anything outside labor with value is simply dead labor. This most importantly includes currency and the means of production. Ownership of the means of production and profit from the holding of currency is simply manipulating dead labor, otherwise known as capital. The control of this dead labor allows the capitalist (owner of private capital in this case) to gain a profit. Since all profit comes from living labor, the profit is the difference between what is earned by the business and the wages of the producers.

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Profit Motive and Capital Accumulation

Capital accumulation is a redistribution of wealth from those who produce to those who control dead labor. The action through which this happens is investment. Investment costs no labor, but through the inner workings of society is entitled to labor of others. Workers are forced to spend the majority of their earnings to survive, while the bourgeoisie have enough left over after this to re-invest for profits. In general these profits only increase as more investment is made.

Capital accumulation has another effect on the operation of companies, not just the owners. Larger amounts of capital tend to create more efficient business and machines. This was first observed in regard to the industrial revolution. As machines got bigger they got more efficient with their resources. A train with one or two engines worked better than a train with a hundred small ones. This gave larger businesses an edge. This is still true today, for example, a large freezer is more efficient at cooling than multiple smaller ones. This means any small business with a small freezer will be less efficient than a large business with a large freezer room. This means as one earns capital, their capital becomes more efficient. With that their earning of capital tends to accelerate. When the acceleration of earnings becomes exponential, even over long periods of time, any small loss of profit could hurt in the long term. That turns out to be a large problem in markets.

The problem of capital accumulation has multiple effects in markets. The largest company tends to go towards a monopoly. This is because higher efficiency means they can sell for lower and make more profit, and through that slowly out-compete other businesses. This goes until new technology is developed, and all that does is start that cycle over again.

The most oppressive tactics and the tactics worst in the long-term are often the cheapest. Oil companies vs renewable energy is an example of this. Using cheaper labor found in third world countries is another. The usage of coal leads to climate change, which will have devastating consequences for all of humanity. The bare minimum wages keeps the entire working class of that country just above starvation. There are often other businesses competing with these that do not use this type of resource or labor. They may do well off of this, but without major advances in technology it will always cost more. This means any person or business that decides to use these will have lower profit to reinvest, meaning it will lose market share and become weaker. As it loses market share its impact lessons. Markets give an advantage to the most exploitative of society and paves the way for short-term profit over long term planning.

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Markets naturally lead towards monopoly and exploitation. Even with governments this can not be contained and naturally consumes all of economics.

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