On Capitalism.

The mode of production now dominating global economic activity is known as capitalism. This particular mode began to dominate societies when the main means of production passed from the owners of large tracts of land (feudal aristocrats) to the owners of large amounts of money (capitalists). Beginning in the late 16th to 17th and onto the 18th century in Europe and England, capitalism continued to spread internationally throughout the 19th and 20th.

Unlike previous modes of production, from the outset, capitalism was dependent upon money for the circulation of products and services. Consequently those with sufficient financial wealth steadily dominated all aspects of economic and social life. Moreover, due to the growing size and complexity of the means of production, money (as money-capital) or credit (borrowed capital), became necessary in large quantities to purchase and operate them.

Furthermore, the capitalist mode brought with it the profit motive for engaging in production. In previous modes of production the dominant motive was need. In contrast, the primary capitalist motive is to obtain a profit on each element of capital invested. This means that human, social and environmental issues became a secondary consideration, unless profits from them can be extracted.

The process of extracting profits from production is as follows. Capitalists employ workers on a wage or salary, which is payment for a definite period of working time, usually a day, week or month. However, their contracted working period is always longer than the time necessary to produce a value equivalent to their actual wages (or salaries). The time they work in excess of this necessary-labour period (the surplus-labour) therefore becomes work they do for free.

For example; If in a 40 hour week 100 workers worked 20 hours making enough products or services to equal the value of their weeks wages and then worked a further 20 hours making more products or services and did this for a 45 week year, then 100 x 20 x 45 = 90,000 would be the total number of unpaid hours they worked. If they did this for a 40 year working life, then a total of 3,600,000 unpaid hours would be worked. Now if each worker made one product (or service) during each unpaid hour and that product sold for £1 or $1, then the monetary value produced over and above the value of their wages in 40 years would be 3.6 million pounds or dollars.

Bearing in mind that many capitalist industries employ thousand of workers who work for decades making products or services costing hundreds or thousands of pounds (or dollars), then the typical amounts of free labour provided (or surplus-value produced) can reach astronomical proportions. Assuming no tax evasion or creative accounting, the employers will not receive the whole of that monetised surplus – value.

However, what remains – after all the various deductions such as tax and interest – is the balance of the product value that employers have not paid for. Incidentally, those deductions (tax, rent and interest payments) from the astronomical levels of surplus-value produced by millions of productive workers and collected from their employers, become the source of income for the heads of states, bureaucrats, the non-industrial middle classes and public service workers.

The much abbreviated economic analysis of the capitalist mode of production outlined above also explains why capitalists like to employ cheap labour and set it to work for long hours. Indeed, the modern occurrence of child labour and trafficked labour is down to this desire to maximise surplus-labour, monetise the surplus-value created by it and thus realise profits. This monetised exploitation of human labour has always been a feature of the capitalist mode of production.

The desire of capitalists to gain the unpaid surplus – labour and its monetised product value (classed as profits) also explains why capitalists and pro-capitalist elites in general seriously resist the following; a) a radical shortening of working hours; b) increases in wages and salaries not linked to productivity; and, c) adequate health and safety conditions for all at work. All these, if seriously implemented, would reduce the time available for unpaid surplus-value and thus reduce the wealth created for them.

The effects noted above are bad enough, but there are more. The means of production are continuously improved in order to increase production levels and profits. This increase in production, leads in turn to the pressing need to sell products in more and more markets and obtain raw materials from ever wider sources. The ever increasing material and marketing needs by capitalist firms can (and does) lead to competitive trade wars and in extreme cases, nation-based military wars.

Rising production levels also create more waste materials and noxious substances used in manufacturing processes. Therefore pollution, ecological destruction, landfill dumping and health issues also multiply alongside increased production. Every shiny new commodity temptingly featured in brochures or display windows leaves behind it an open (or hidden) trail of poisons, polluting dust, harmful fumes and waste materials.

Such destructive by-products of industrial manufacture are an integral feature of all capitalist production for obvious reasons. The capitalistic desire for private profit consistently outweighs the public need for sustainable, non-polluting, non-exploitative forms of production.

Another serious problem connected to the capitalist mode of production is the fact that when profits cannot be made at levels satisfactory to the investors, then production is reduced, transferred elsewhere or ended altogether. These periodical ‘economic recessions’ leave large numbers of workers jobless and without access to alternative means of production.

Ownership and/or control of the main means of production by the relatively small class of owners/managers of capital means that the vast majority of people in global societies – white collar, blue collar, unemployed workers and non-workers – are subject to profit based, political-economy decisions. This frequently results in increased poverty, pollution, ecological destruction, trade wars or even the two 20th century World Wars, and of course, self-serving pro-capitalist denial.

R. Ratcliffe (August 2019)