Capitalism is an economic system in which trade, industry, and the means of production are privately owned by individuals and used to accumulate capital, money or assets that contribute to a person’s overall wealth.
The Central Characteristics:
Capitalism means the commodification of everything.
Private property is the legal ownership of various entities by non-government individuals and/or organizations. It is different from public property, which is owned by a government to serve the needs of its citizens. Under capitalism, private property operates as wealth that is gained through purchase. An individual’s private property and money combined constitute their capital. Private property can also be the means of production – all non-human entities that manufacture products. Private property is defined through commodification, a system by which goods, services, and things that normally would not (or should not) be considered as such are rendered purchasable. Example: A refrigerator in Home Depot, or Black individuals being purchased as slaves in the United States.
Labor power is a person’s capacity to do work. Under the capitalist system, those who have not accumulated enough capital to sustain themselves over a lifetime are forced to sell their creativity, physical ability, and intellectual capacity to a member of the bourgeoisie, a class of people owning most of society’s wealth and means of production.
The bourgeoisie provide capital and purchase labor power to create a product that they then sell.
Capitalism’s beneficiaries and victims share one goal: profit. The bourgeoisie accumulates capital by exploiting the proletariat – the class of people selling their labor-power –Although the proletariat are rewarded with a wage when products are sold, this wage is not the full value of their power; the bourgeoisie keep a portion of profit for themselves to gain surplus capital, augmenting the poverty of workers, who receive few economic benefits from the sales.
The purchase of goods for all people in economic systems depends on prices. In the capitalist system, prices are determined by the unregulated competition between privately owned businesses in free markets. In theory, if markets remain unregulated, supply and demand for products will reach equilibrium. People will pursue their own interests, make businesses out of them, and if the idea is beneficial to society, then they will profit. The harder they work to find the perfect supply for society’s demand, the more profit they will accumulate. Any social inequality that is generated by such a system can therefore be chalked up to “natural” differences; put differently, if some people are poor it is because they have been deemed to be worth less while those who make billions must work more and be worth more.
profit flowed into the hands of wealthy nations.
“Pure capitalism” (i.e. a system in which the state has no influence over the market) does not exist anywhere in the world, but forms of capitalism certainly influence the global economic and political system. Globalization is essentially capitalism on a global scale, which has been enabled by the increased technological innovations and relationships between nations enabled by imperialist pasts. With the rise of imperialism and the Iindustrial Rrevolutions, wealthy, industrialized nations began to compete with each other to gain control over natural resources and labor power across the globe; in doing so, they created a centripetal economy in which profit flowed into the hands of wealthy nations, especially in the West. The so-called “Rest,” or the “Third World,” was left to bear the burden of decimated local economies, labor exploitation, civil war, brain drain, poverty, famine, ecological disaster, mass emigration, and mass death that accompanied this new, exploitative system
Where did this crazy system come from anyway?
In the Medieval Period, feudalism was the dominant social system. The monarch gave nobility land – the most important source of wealth – in exchange for military service. The land was managed by tenants who squeezed peasants for labor and a portion of produce. The church was the other major landholder under feudalism.
Increased corruption of the church, the efficiency of the new market economy that favored merchants, and a general distaste for living in poverty under nobility triggered the collapse of the feudal system in the 17th century. English puritans beheaded King Charles; Bourgeois, French revolutionaries demanded liberté, egalité, and fraternité. The new system that took feudalism’s place, however, had narrow ideas of who was deserving of such equality -- e.g. Straight, white, Christian, non-poor men.
THUS, RACISM, SEXISM, HOMOPHOBIA, CLASSISM, AND CAPITALISM ARE INEXTRICABLY INTERWOVEN AND CAPITALISM WILL NEVER SERVE THOSE WHO IT DID NOT RECOGNIZE AS PART OF HUMANITY AT ITS INCEPTION.
The combined effects of the new market economy, imperialism, and the industrial revolution made the powerful even stronger and wealthier more powerful at the expense of everyone else. Industrialists profited from low worker wages and few regulations protecting worker’s rights; the free-market economy crushed the livelihoods of local farmers, fishermen, and artisans; colonial empires exploited the labor and resources of the colonized,destroying local economies and cultures along the way. By the 19th century, European countries were not the only capitalist powers. The United States—once a colony itself—built a capitalist economy on the backbone of ethnic cleansing of indigenous people and slavery and began to plunder its Caribbean and Latin American neighbors for labor and resources.
In the political geography of 19th century capitalism we can easily see the world we live in today. Technological innovations have led to a restructuring of production and labor among large corporations, who can capitalize on cheap labor in other countries to increase profits. For example, cotton is grown in India, used in China to manufacture shirts, which are sold in the United States for $200, most of which goes into the pockets of the American leaders of the corporation that sells them. Local economies are unable to compete with this model and collapse under the pressure; laborers are then employed by some of the largest companies around – Western business – for depressed wages and unthinkable conditions. Thus, while the technologies are shinier, the profits larger, the number of parties in the system ever increasing, the power dynamics are the same: racism, sexism, homophobia, and classism ensure that the profits continue to find Western, white, wealthy hands.
Why does the world stick with such an unjust system?
Despite the structural violence inherent to capitalism, it persists due to powerful myths. Capitalists posit that capitalism can create wealth for all, that it guarantees personal freedom, that any who work hard can accumulate wealth, and that democracy can only exist under a capitalist economy. Capitalism’s genius is that it has almost completely succeeded in naturalizing itself, telling its victims that a society without it is not a society at all.
Additionally, the capitalist system is insidious. It infiltrates almost every aspect of society. The bloody and colonialist expansion of capitalism across the globe has only fueled the capitalist system. The so-called need for wealth accumulation in the capitalist system and control over natural and labor resources has led to the most violent conflicts of all time and given way to war - or “defense” - industries that stimulate multiple sectors of the capitalist economies, develop technologies, and can even pull nations out of recessions.
The wealth gap between industrialized nations and the nations that they—as Cuba has said—underdeveloped has been maintained at gunpoint. World War I was precipitated in part by German land grabs. The interwar booms and busts across the globe led to World War II, in which extremist regimes rose out of economic ruins, committing genocide, bombing civilians, torturing, and terrorizing in the name of empire-building. The Allies in turn fought to maintain the status quo and leveraged new technology to engage in the most destructive warfare of all time, finally dropping an atomic bomb to end the war and maintain dominance through technological superiority.
In the postwar era, capitalism became even more ingrained across the globe. Colonial empires appeared to be broken down, but new nations began to buy into the mad logic of capitalism or were bent to the will of wealthy, industrialized powers throughout the Cold War and after it. Neo-liberalism undid welfare states across the world, deregulating domestic and global economies such that free market chaos could continue its tyranny to an extent never seen before. Cheap loans to the so-called developing world placed them in unpayable debt to the West; institutions such as the International Monetary Fund that were designed to rescue impoverished nations ultimately demanded a kind of belt tightening to pay back large banks that undercut nations’ abilities to provide basic resources to their inhabitants. Neoliberalism nevertheless continues to be promoted by partners to multinational corporations and those who profited off of negotiating with those in power. Wealthy nations used military intervention, covert assassinations, orchestrated coup d’états to convince those who would not buy into the new (or old depending on how one sees it) system into doing so.
Neoliberalism is little more than a transformed version of imperialism.
Upholding complex domestic and international networks of capitalism is the commodification of nearly everything. Among the most repulsive systems of oppression that capitalism has spawned are the poisoning of the environment [+Pia do you know any really great resources here? I have an article, but I think you can do better], social inequality along gender, race, and sexual orientation lines, the prison industrial complex, the medical industrial complex, and many, many more.
There must be alternatives...
Want to Read More?
The Free Market Fantasy -- We’ve been conditioned to see the market as an inevitable force of life for a long time. This great article breaks that down and deconstructs the myths of the free market solving all of our problems through an ‘efficient’ allocation of resources
Moving Toward the Ugly: A Politics beyond Desirablity - On Ableism and the ways our bodies and minds are policed to fit into certain power dynamics and social norms.