Capitalism

From Infoshop OpenWiki

Capitalism is 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 labor.

Wage labor is the labor 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 labor 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 labor. 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 labor is used by the capitalist for profit; used in whatever ways they choose.

The main classes under capitalism are the proletariat (the sellers of labor power) and the bourgeoisie (the buyers of labor 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. Anarchists, socialists and communists seek the transcendence of the class antagonisms of capitalism, replacing the domination of the market by cooperative labor.

[edit] 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 labor process from traditional forms and expanding labour cooperation through world trade, capitalism initiates a rapid transformation in the labor process and promotes the development of science and technology. Meanwhile, religion and kinship ties are continuously undermined. Some theorize that 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, characterized 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".