Essay: Theories of capitalism

Use Value is, ‘the capacity of a commodity to satisfy human material needs and sustain life’ (Lecture, February 10th, 2014). For example, bread has use value because it has the ability to diminish hunger. However, money does not have use value because it does not directly provide a way of sustaining life. Until the development of capitalism, in the 18th century, all economies were considered ‘use-value’ economies. These economies predominated until the 19th century when a switch to exchange value economies took place. These were economies that were hand to mouth economies, where all production was for use or consumption. Since everything produced was consumed, the product did not enter into a system of exchange to be bought and sold for a money price. Therefore, in use-value economies there is an absence of a market. Use value economies still exist, as what Marx referred to as natural economies, such as in India and China. These were also the clear form of economy found in feudal society. Another characteristic of use value economies is that what is produced is not put into the circulation of exchange to be bought for money and used for the purpose of commerce since all products only have use value. There is no differentiation between production and consumption in use value economies because, as has been said, it is a hand to mouth economy were production is for consumption. Whereas in exchange value economies nothing is produced for consumption, you must pay a monetary price to get the use value of a product, so production and consumption are separate. For example, in feudal societies they used the land to grow potatoes to directly feed their family but in today’s society one must pay money in order to get the potatoes to eat to satisfy our appetites.

Natural Economies:

Natural Economies are traditional societies in the capitalist epoch that have an economy distinct from that of capitalism, where everything that is produced is consumed and used for the survival of the community. There is no system of exchange and all production is used for the immediate needs of the society. Since land is shared between everyone, no one owns the means of production and there is no class system. Natural economies are very much like feudal economies because of the fact that everything has only use value and exchange value, or relations, does not exist. Everything produced is consumed and does not get thrown into the circulation of exchange to be bought and sold. An example is the village system of India. A key point to natural economies is that the system of exchange does not form, which means it does not create social relations based on how much one can afford. When exchange emerges there is a separation between production and commerce but this does not occur in natural economies so production is for consumption and relations are based around individuals. Natural economies have natural relationships instead of class relationships and social relations instead of exchange relations; this is what makes them stand apart from economies based on exchange. Marx believed that the development of capitalist economies destroys natural economies and it is certainly obvious that much of the world has taken on capitalism. The world only consists of a limited number of natural economies still remaining, peasant communities of Central and South America and ancient agricultural economies of Peru and China.

Commodity Fetishism:

Fetishism only occurs in capitalist economies when the commodity, as soon as it enters the system of exchange, seems to be assigned a value beyond its simple use value. Fetish by definition means ‘the display of unusual devotion toward a material thing or object in the belief that it has extraordinary abilities and powers’ (Morrison, 2006, p. 396). For example, my boyfriend has a fetish with DC brand shoes and goes into stores to look at them even though they are way out of his budget. Therefore, Marx referred to commodity fetishism as the assignment of imaginary powers to commodities. The emergence of fetishism began back in tribal societies where religious objects were worshipped in the belief that they had the power of a deity and would pass that power onto themselves. So the concept came about when Marx noted the time in economic development when individuals were assigning internal powers to commodities that they formed relations with that resembled tribal fetishes. In today’s society instead of powers of a deity, we desire commodities like BMW’s, brand clothing and flat screen televisions because it is believed they have the power to increase our social standing. Women buy expensive makeup believing it has the power to make them more attractive. Marx recognized that this fetish we have for commodities brings with it a change from social relations among people to social relations among objects. People are ranked in society based on how much they possess, the more you possess the wealthier you appear. People are dominated by the things they possess and are compelled by the feeling that is created when people envision the effect that possessing these commodities has on others who see them as owners of these commodities. People become valuable only when they can purchase the fetish items of desire.

Relations of Production:

The relation of production is a concept used to describe the connection between the ways a society employs production and the social roles assigned to individuals during the production process. Therefore, when people enter into the workplace they take on a social role and develop relationships. But depending on the type of production process, the roles of production differ. For example, when at work at the movie theatre one maintains different relationships with each co-worker and manager and how one acts around each person or what kind of relationship it is reflects social standing. These roles, Marx believed, reflect the class relations that exist when the means of production fall into the hands of one class. For example, if you are the production laborer you are not making as much money as the boss therefore you will be lower with regards to social class. There always seems to be two roles in the production process, the roles of owner and worker, the roles of patrician and slave or the roles of landowner and serf. In the ancient epoch it was the patrician and the slave, in feudal epoch it was the serf laborer and the landholder, then in capitalist epoch it was the boss and the worker. The role of the boss involves presiding over the workplace and overseeing the workers. The role of the worker is to exert their physical labor into the production process. The workplace forces the two classes together and therefore, into a relationship with each other again subordinating the one group.

Primitive Accumulation:

Primitive Accumulation is the point in time when one class accumulated all the power. Marx believed this point in time existed in two historical stages, during the development of capitalist society in the 17th century with the coercive acquisition of feudal lands, and with the transformation of agricultural land into private property. It began precisely when evictions and foreclosures divorced the serf laborer from their land preventing them from consuming what they produced. The accumulation most certainly comes from the build up of power and wealth of the owners of the land. But Marx referred to it as primitive because it marks the historical origin of capitalism and therefore of how class distinctions between possessors and non-possessors came about and ‘wage-laborers’ were formed. This is because people were now restricted from using the means of production to produce their own livelihoods. All the capital is put into the hands of one class by taking away any form of power; the only means of survival, from the other class and this occurrence is referred to primitive accumulation. Since primitive accumulation causes division into two unequal social classes it also becomes a turning point for change in social relations and mode of production. For example, when bosses feel they are loosing money they may fire a worker, taking livelihood away from another person, in order to accumulate the money that they would have had to pay that worker for their labor and keeping it for themselves. It is an ongoing incident but divorcing workers from the land due to private ownership was the first stepping-stone.

Marx’s Theory of Capitalism

Capitalism is the term used to describe a type of economy, which emerged in the eighteenth and nineteenth centuries during a period of social and industrial development. But Marx also referred to it as ‘a system of social relations set in motion historically during the transition from feudal economies to economies of industry’ (Lecture, February 5th, 2014). Capitalism was a time of primitive accumulation when most of the wealth was placed in the hands of a select group in the population. Marx’s theory of capitalism was therefore a theory to explain how capitalism came about and what the events were that caused this change in the economy. In this essay I will cover the major points of Marx’s theory of capitalism by outlining the three conditions for its development, describing the change in value that took place after the emergence of the system of exchange, and by explaining the stage of development Marx referred to as commodity fetishism.

Essential for the transformation to a capitalist economy was the transition from a feudal society, where agricultural production was dominant and everything produced is consumed, to an industrial society where the aim was to separate production for consumption and employ workers for purposes of creating wealth. Therefore, the struggle was between the rural economy and a new economy of the city. There are three conditions, relating to this conflict between rural and urban societies, that Marx recognized as necessary for the rise of capitalism. The first condition was the separation of agricultural workers from the means of production. This allowed the land to fall into private hands, and give rise to only one group of people to monopolize the mean of production. Without the control over what they can consume and with one class owning the means of production, individuals had no choice but to sell their labor on the market for a wage in order to survive and purchase material needs. This was the start of a new form of working class for this epoch, Marx referred to these workers as ‘wage laborers’ because they sold their labor for a wage. The second condition necessary for capitalism was, ‘the separation of society into two unequal classes and these were bosses and workers’ (Morrison, 2006, p. 82). Bosses overlooked the production process and workers performed the actual labor. Due to the forced division from the means of production individuals came together to work under the same roof, which led to different classes to form within the workplace with the owners of the means of production at the top and workers under their control at the bottom. To maintain this dominance bosses use tactics such as lower wages. The third and final condition was the development of a system of exchange, or market, where commodities enter into circulation for buying and selling for money rather than being directly consumed. Economic production is now for the purpose of creating wealth whereas in earlier economies it was for sustaining life (Lecture, February 3rd, 2014).

After the implementation of an exchange system, society transitioned, from what Marx called a Use Value economy, to an Exchange Value economy. Earlier economies, especially feudal, consisted only of what is known as use-value because the market did not exist and everything was directly consumed. Use value comes from anything that has ‘qualities capable of satisfying human material needs’ (Morrison, 2006, p. 84) and that serve directly as a means of existence. For example, a coat has use value in that it allows us to survive the cold winters and it can do this directly but money has no use value because it cannot be used to sustain life. These economies only involve the production of necessary products and do not produce needless items not needed for life. Use-value economies are hand to mouth economies, nothing goes into a circulation of exchange, meaning in these societies there is an absence of a market system. However, with the rise of the market a new form of value economy became dominant known as an Exchange value economy. The change to a market system caused individuals to define the value of a commodity on how it is expressed in comparison to another commodity; this is what Marx referred to as exchange value. This exchange value is determined by objects or peoples ability to enter into the medium of exchange where it or they are sold for money. What differed from use value to exchange value economies is that there is no longer direct consumption. People could no longer get at the use value, the necessities of life, of commodities unless they purchased its exchange value (Lecture, February 5th, 2014). One cannot cook potatoes to feed their family at dinner without paying the price the grocery store asks them to. Another thing that became apparent is the separation of production and consumption, production in exchange value economies is for wealth rather than to satisfy material needs as in feudal society. Due to the dominance of exchange value, social relations between individuals are condensed to exchange relations. Social relations depend on individuals selling their labour on the market by engaging in circulation and setting a price for themselves, which is minimum wage or about ten twenty-five. If you cannot sell your labor then you are considered of no value. This might shape the reason we treat the homeless the way we do. Social relations are based on ‘how many transactions you make’ (Morrison, 2006, p. 88) or how much you sell yourself for, which was a major change from social relations among individuals in use value economies. Since the medium of exchange and the buying and selling of commodities only developed in capitalist society, exchange value too is only possible in capitalist economies. But the major consequence of the transition to a system of exchange is that the worker no longer owns their own labor, they must sell it on the market in order to get access to the means of production since it became private property of one class.

One other change took place when the exchange system became dominant and that is the stage of development Marx referred to as Commodity Fetishism. Fetish by definition means ‘the display of unusual devotion toward a material thing or object in the belief that it has extraordinary abilities and powers’ (Morrison, 2006, p. 97). The first act of fetishism occurred back in tribal societies when religion dominated. In totemic religions such as tribes in Australia, the totem became a great object of desire and subject to worship because it was believed that it contained internal power that the people themselves did not have. Therefore, they believed that by being around the totem its powers would pass from the object to them. For example, in today’s society an example is the cross. In capitalist society most of us do not worship a religious object but instead desire things like brand name clothing, BMW’s and apple computers. In both cases, people believe that objects show power or value in and of themselves but really the value comes from the relations we have with these objects. It is only in capitalist society that individuals believe that certain objects possess, inherently, special value. Only in capitalist society do we enter into this exchange system where we compare things, ‘where social relations falsely compel people to believe that the value of a commodity is actually part of its nature’ (Morrison, 2006, p. 99). Capitalist economy is essential for commodity fetishism because it places items into circulation that people can’t readily consume and therefore come to desire. When this happens, said Marx, we form relations with the objects we possess that often surpass the relations we form with other individuals (Lecture, February 12th, 2014). Such value doesn’t exist in feudal economies because all commodities are produced and consumed. Marx coined this term Commodity Fetishism to refer to the belief people have, since back in tribal societies, that certain objects have natural powers and therefore have a higher value placed on them over other commodities. Marx believed that when we look closer at the trivial things, like BMW’s, they do not contain power. While people believed that these objects actually have internal powers that reside in the object the true power develops external to the object in social relations. In capitalist society we now have social relations based on whether you’re a possessors of these commodities and how many of them you own. That’s where class division comes in, if one owns many of these commodities they are wealthy and if they do not they are considered impoverished. Our social relations seem to be between the objects one possess and no longer between the individuals who possess them. ‘We are worth the number of transactions we make’ (Lecture, February 12th, 2014). Commodity fetishism shows how the exchange of commodities shapes social relations between people by how much they own.

Marx narrows the development of capitalism down to the causes of its development, the outcomes of its development, approximating how it effected social relations and the structure of society, and how it compares to other economies throughout history. Individuals purchase necessities at stores because they lost their right to own the means of production, the market system arose because when the land fell into private hands individuals were forced to sell their labor in exchange for necessities, and individuals pay the high monetary value for certain objects because its believed they possess powers to move them up the social ladder. Marx was able to piece together a theory of society that makes sense of the events we see in today’s society.

Marx’s Materialist Theory of History

Inspired by Darwin, that all species follow an evolutionary pattern and the species able to adapt successfully reproduce to live on, Marx viewed the evolution of the social world rather than the natural. Marx tried to find a historical and economic pattern of development that shapes societies throughout history. First, recognizing that ‘the very first act of all societies was always economic because human beings had to satisfy material needs’ (Morrison, 2006, p. 37). Leading to a pattern persisting throughout history of unequal class division as people are forced to produce to satisfy their material needs. Explaining why this pattern of social inequality exists is key to what Marx referred to as the Materialist Theory of History. This essay will explain in greater detail the Materialist Theory of History by drawing on three concepts Marx used to discuss the causes of social inequality, referring to laws of historical development and the relations of subordination that arise in productive relations.

Social inequality is caused in every epoch by the monopoly of the means of production by one class. The means of production are anything that is used to produce material needs of food, shelter and clothing. For example, a part-time job is considered a means of production because it provides us with a means of having money to buy food to satisfy our needs. ‘The condition of ownership over the means of production is the single most fundamental fact of the materialist theory of history since it is this that leads to the division of society into economic classes’ (Morrison, 2006, p. 45). This class that owns the means of production is respectively classed as the owners and the subordinated class is rightfully the non-owners or workers. The owners had control over all aspects of production whereas the workers had obstructed access to the means of production. Therefore, when the means of production fell into the hands of one class it became privatized and the worker could no longer freely employ the means of production. The worker no longer employed the means of production but the means of production employed the worker. Restrictions were then placed on the working class’s use of the means of production that further put them in a position of subordination. Marx referred to two categories of restrictions, restrictions on entering into the means of production and regulations on how workers may conduct themselves while in the workplace. By setting these restrictions the owners gain advantage and the workers gain a disadvantage because they make it harder for individuals to satisfy their material needs. Restrictions to entering the workplace included hiring policies, periods without pay while being trained and the requirement of having a higher education. As for restrictions on the worker during the workday, owners maintain their power and governed how workers used the means of production by penalizing the worker for being late or not performing properly. By cutting wages below the level of subsistence, owners are able to collect more of the money brought in by the production process and leaving only a little to the workers.

‘In every economic epoch, history unfolds as the two classes come together in the workplace to carry out economic production’ (Lecture, January 13th, 2014). As soon as two classes come together class division and social inequality arise because each becomes economically binded and must carry out differing roles in the production process. Roles are based on their relations with one another and are enter into against their will. The role one partakes in during the production process seems to directly reflect class relationships that occur when only one class consistently owns the means of production. Bosses preside over the production process and oversee the workers while the worker physically labors in the production process. The separation of these two classes into these roles causes workers and bosses to engage in relationships of inequality and dependency with one another. ‘Workers enter into relations of dependency because they become personally dependent on their bosses for their livelihood’ (Lecture, January 15th, 2014). Due to these social relations in the workplace, workers have no choice but to follow the authority of their boss in order to survive. Since workers tend to be subordinate to their bosses, they are compelled to labor both for themselves in terms of their own livelihood and for their bosses. Marx noticed the tendency for this development of social relations in all epochs but each with slightly different intensity; in ancient society such as Rome the slave was treated brutally and had absolutely no freewill or rights when it came to the means of production. In this epoch the wealthy legally took no part at all in labor activities, whereas in today’s society the boss does perform some labor tasks. Then in the feudal epoch there was a class of landholders who in relation to a class of serfs dominated production. In the capitalist epoch the social relation was the boss who ruled over the workers. These relations of production in each epoch ensures the consumption of wealth to remain in the hands of the very few. These relations of production become relations of dominance and subordination that are backed up by political and legal sanctions (Morrison, 2006, p. 48). The relations of production are similar to relations of subordination because productive relations result in one class being subordinated. Relations of subordination refer to the relations that exist between classes when one becomes the owner of the means of production. ‘The relations of subordination existing in societies of the past thus pinpoint the different degrees of subjection and dependency that exist in society and the use of force over an individual that may exist when a system of social relations assigns powers of rank and privilege to classes or castes in positions of dominance’ (Morrison, 2006, p. 58). Dependencies on the dominant class emerge in societies because of the control they have to block people from sustaining a livelihood. Subordination arises for purposes of economic production when the dominant class refuses to use their own labor and the remaining people offer or are forced to use their labor to survive. The relations of subordination first emerged in the ancient world, a world consisting of slavery, the most extreme case of subordination since slaves had absolutely no control over production or over their labor. Although most apparent in the form of social relations between bosses and workers relations of subordination also exist within family, political and school institutions as long as one group of people have dominance over the other. This concept of subordination, relationships among a dominant and subordinate class, was important to the materialist theory of history as it was the main pattern or law that seemed to arise when societies formed.

The mode of production was another concept that Marx used in his Materialist Theory of History to uncover the pattern showing how people earn their livings through economic production over time. Mode of production is exactly that, it is how production is put forth. How production takes place is a combination of productive forces, the tools or machinery available to put to work for purpose of producing a livelihood, and social relations. With time, however, new productive forces are invented and with this change, a change in social relations and the mode of production will change too. With the invention of the steam mill, to replace the hand mill, how many workers were needed, where the production would occur and the beginning of social relations based on domination and subordination also evolved. As Morrison summarizes, ‘the way people actually produce and enter into social relations with one another is called a mode of production and this comprises the total way of life of society, its social activities and its social institutions’ (Morrison, 2006, p. 49). The mode of production in place in a society determines the way of life of a society because it shapes how much time and money workers will have outside of the workplace. For example, if the society has weak productive forces then it may take longer hours to produce forcing people to come home late and take away from family time. Another major trait of the mode of production is its ability to define the social relations resulting from it. The types of social relations that arise determine how the means of production are put to work or who has dominance. Therefore since social relations are determined by mode of production, then social inequality, or the idea that one class naturally dominates over a subordinating class, is also a function of the mode of production.

A law is something that persists over time and is almost always obeyed. So the division of society into two distinct classes, every time a society forms, seemed to Marx as a law of social and historical development. This division into separate unequal classes occurs because as a new society develops people must employ the means of production in order to sustain their livelihoods. It was then the belief that, ‘The first act of every society is economic’ (Morrison, 2006, p. 51). To provide historical evidence for this, history was divided into three economic epochs; ancient, feudal and capitalist societies. In each of these historical stages three characteristic similarities proved that the first step is always economic and how engaging in economic acts in every society causes unequal class and labor division. Each stage or epoch has a system of production and division of labor; different forms of property ownership; and a system of class relations that emerge from the ownership over the means of production, giving rise to the productive relationships (Morrison, 2006, p. 52). In the ancient epoch, the system of production was primarily slave labor; a great example is the Graeco-Roman world. Private ownership of property existed and was in the hands of the patrician class. Therefore, the division of labor involved a dominating class with control over the means of production and a class of slaves forced into brutal labor till their death. Knowing that production relations reflect class relations it is clear that class relations in ancient society were set in a state of dominance and subordination between the patrician and slave. In this epoch the dominant class seeks to find new land to extend their rule and maintain their economic existence. ‘The class of patrician and slave grew directly from the structure of the economy and the social relations of production’ (Morrison, 2006, p. 53). In contrast, the feudal epoch was based primarily around agrarian culture. With no city or market people survived off what was produced from the land. Agricultural work was therefore the major system of production. The owners of production were those that owned the land and were sole possessors over the means of production. The division of production and the division of classes was between a peasant class, who performed necessary physical labor to supply for the landowner in order to have access themselves to produce, and the landowners who had control of the serf and the economic production. Whereas in ancient society when military powers were used for coercion over the subordinated class, in feudal society legal and political institutions are the source of this coercive power. The final epoch was industrial capitalism, where agricultural mode of production was demolished for a city economy. The system of production was one of industry and where individuals sell themselves to partake in the means of production. Change in mode of production caused by separation of serf laborers from the land created a division of labor between those who were bosses and workers who were forced to sell their labor to these bosses, referring to themselves as wage-laborers. Individuals could no longer perform the means of production alone or consume what they produced. In comparison to the other epochs, the means of production in capitalist society become more widely diverse and comprised of machinery and technology which through laws of private property became the monopoly of one class. With the existence of wage laborers bosses are able to remain in power by lowering the wage paid to individuals for their labor below the amount responsible for subsistence. In this scenario the bosses profit from selling the products and let the workers receive only a small share.

Throughout societies the economies change, means of production change, relations of production change and mode of production change. However, although economies differ widely there always remains one group that privately owns the means of production and gains control over another. This pattern of unequal class division arises as soon as people are forced to sell their labor simply to satisfy their material needs. People enter into the means of production as soon as societies developed so Marx’s theory that the first step in the historical development of society is economic seems accurate and has proven the existence of historical laws of development throughout society.

References

Morrison, K. (2006). Marx, Durkheim, Weber: Formations of modern social thought. London: Sage Publications.

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