Passion for Socialism

A society based on sharing and caring.

Passion for Socialism

A society based on sharing and caring.

Understanding Capitalism

 

The World Socialist Movement is part of the struggle of propertyless to end the propertied profit system. Our goal is directed against capitalism and the private property system, to uproot the economic and political power of the propertied interests. In order to keep their great power, the capitalists and their defenders teach the idea that capital and capitalism have always existed. In this way, they seek to convey the idea that capitalist class society and capitalist exploitation will continue to exist forever. In other words, that it is a system of society that is natural and eternal, and there is no use anyone thinking of making fundamental changes in it or replacing it with any other social system.

 

This idea is completely false.

 

It has been developed only to maintain the capitalist class in economic and political control. Money or some other medium of exchange, such as gold and silver, have indeed been in the hands of the few, and poverty inflicted upon the many, since society first divided into classes. But only with the rise of modern capitalism, which is only a few hundred years old, have money and the means of production been converted into what they never were before, namely, capital. It has only been under modern capitalism that capital becomes dominant, that it pervades and controls all social life. Modern capitalism arose only with the development of machinery, with the great expansion of production which this made possible, with the expropriation of the independent producers, and the concentration of the means of production in the hands of a few. The means of production became capital when they became the private property of a capitalist minority and were employed for the exploitation of the modern wage-worker. The peculiarity of capital, which distinguishes it from mere money and mere tools and mere raw materials and mere labor power, is this: All these become capital when they are used for the purpose of accumulating more capital. This is the difference between capitalism and all societies that went before it.

 

The idea that the original fortunes on which modern capital is founded were accumulated by “hard work” and “thrift” is an impudent myth. The first historical period of the accumulation of capital is sordid, thievish and bloody from beginning to end. It is the period of the primitive accumulation of capital. It was built on the seizure of the lands of peasants by powerful noblemen and landlords, who simply expropriated the small-holders of the soil by force and without fear of legal punishment and their fortunes multiplied by plundering public lands, the commons, through the process of the Enclosures Acts, often by outright corruption and bribery. It was only based on this robbery that modern capitalism became possible. Capitalism is large-scale machine production for a vast market. To set up modern factories, with costly machinery that requires a steady flow of raw materials from all corners of the world and a large supply of labor – all this needed investments that the ordinary person, no matter how hard-working and thrifty, could hardly dream of acquiring. The possessors of great fortune could do it with ease.

 

Once capitalist production is under way, however, its continued existence demands continued accumulation of more and more capital, the continued expansion of capital. The accumulation of capital is made possible only by the fact the worker produces surplus value out of which the capitalist derives his profit. In turn, a constant accumulation or expansion of capital is necessary if profit is to be maintained. This key point should be particularly noted by environmentalists that the drive to accumulate capital is specific to capitalist society. The fundamental purpose of this society is not the production of the necessities of life, but production for profit, production for the sake of accumulation, production for the sake of more production. Basically, this does not depend upon the wishes or desires of this or that capitalist. It is inherent in the system of capitalist production. There can be no sustainable “green capitalism.” Capitalist production can no more take place without constantly accumulating capital by means of extorting profit, than the human being can live without constantly breathing. The basic problem of capitalist production has nothing to do with whether this capitalist is “good” and “generous,” and that capitalist “bad” and “miserly.” It is not at all the personal character of the capitalist that is involved – his character usually merely reflects his social position. It is not at all the individual capitalist who must be “changed” in order to change conditions. It is rather the mode of production that is involved. That is what must be studied, and that is what must be changed. Capitalist accumulation is the application of wealth to the production of more wealth.

 

The capitalist produces for the market. This implies the existence of competition between different capitalists. No competition – no capitalist market. The value which the worker adds to the product by means of his surplus labor-time cannot be realized in the form of profit until the product has been sold on the market. The finest and hardest work put into making a product will not yield a profit to the employer until it has been bought and paid for. The consumer, be he a worker looking for a pair of shoes or an industrialist looking for machinery, will not pay a higher price if he can get the same article for a lower price. In competing on the market for the buyer’s favor, the winner will be the capitalist who can produce the commodity at a cheaper cost and sell it at a cheaper price. The winner in the race for the market is therefore the capitalist whose technology is better and more modern, whose management system is more efficient, who can buy raw materials in larger quantities and therefore at lower unit cost. In other words, the large-scale enterprise based on a big capital has all the advantages over the small-scale enterprise based on a modest capital. The unit cost of production is lower with the former and higher with the latter. The difference has developed and continues to develop with all the force of an economic law, which may be bent a little under certain circumstances, but which cannot be broken. The result is that the small-scale enterprise cannot stand up in the competitive race for the market. It goes bankrupt or is absorbed by the large-scale enterprise. Or it ceases to be a real competitor by being reduced to sub-contracting for the big enterprise, which places it at the mercy of the latter. Or else, by hook or crook, and most usually by squeezing its workers to the last drop of their energy, it manages to eke out a miserable and hopeless existence. In the long run, it is the business that enlarges its plant; that purchases more modern machinery; that gets its raw materials cheaper, either by agreement with the source producer or by acquiring its own sources, that is, again, by expanding; that speeds up its production to lower unit cost; that increases the working force, or intensifies its exploitation, which will succeed. All these things involve growth and expansion. An enterprise cannot survive if it just stands still or continues at the old pace. Survival under capitalism – just survival – demands expansion, demands accumulation of more and more capital, demands, therefore, more and more profit, without which accumulation is impossible. Profit makes accumulation possible; accumulation makes profit necessary. No profit – no accumulation; no accumulation – no production. That is how it is, and that is how it must be under the capitalist mode of production, entirely independent of the best wishes and intentions either of the worker or the capitalist.

 

Capitalism is production for profit, or there is no production at all! The process results in the centralization of production on an ever-increasing scale, that is, production in plants of tens of thousands of workers instead of in little shops of a dozen or a hundred workers. It results in the concentration of capital, that is, concentration of the ownership and control of the means of production in the hands of fewer and fewer capitalists, united in dominant monopolies. It results in the expropriation and ruin of the “mom and pop” small businesses for the benefit of the corporations. The old independence of the working owner disappears becoming completely dependent on his suppliers or the banks from which credit is obtained. There is a swell in concentrated, corporate power. The ranks of the working class, of the expropriated, of the propertyless, are at the mercy of capital. Nor will transforming businesses into various forms or worker-owned cooperative is going to avoid the integral features of the capitalist economy.

 

Accumulation is impossible without profit. To live, capital must accumulate. To accumulate, capital must yield profit. What is the source of profit? It comes out of the surplus value created by the worker in the surplus labor time he gives to the capitalist without recompense. This is possible only by raising the rate of exploitation, or the rate of surplus value. Not all the surplus-value goes to the capitalist as profit, by the way. Some of it does; the rest of it goes to the landlord, where there is one, as rent, and to the banker, where there is one, as interest. For the sake of simplicity, however, we can speak here of surplus value being the profit of the capitalist enterprise. Always and everywhere, the inexorable drive for profit and accumulation, expansion and profit, occurs at the expense of the worker. And if a cooperative is to thrive, it too must submit to the imperatives of capitalist economic laws.

 

Source | Socialism or Your Money Back Blog | Adapted

 

 

P4S
Passion for Socialism

 

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