Capitalism

"Pyramid of Capitalist System" from a publication by the Industrial Workers of the World in 1911.

Capitalism is a mode of production in which the wage relation is the most important or most prevalent productive relationship. Karl Marx pioneered the study of capitalist society when he began to materially analyze the social system which had spread from its origin in Europe to become the first world system. Capitalism is a central concept in Marxist economic, philosophical, historiographic, and political thought.

Although wage labor and markets have existed around the world for thousands of years, these forms of social interaction remained dependent on other productive relationships—usually peasant farming, slave labor, or simple hunting and gathering. For example, the Roman Empire was not a capitalist system because its developed network of trade was dependent on slave agriculture and almost disappeared when the slave economy collapsed. In contrast, the American slave system of the 19th century produced goods such as cotton and rice which were destined for industrial wage laborers in Britain and New England to turn them into cheap finished goods. Europe had a unique combination of factors, including the colonization of the New World and a high degree of political fragmentation, which allowed for the rapid growth of capitalist elements and, in turn, a release of unprecedented productive capacity that secured European domination of the globe.

Other factors which define capitalist society include factory production, market exchange by the use of money, private ownership of the means of production, profit as the prevalent form of surplus value, and production for the sake of exchange. Standardizations of Marx's theory of history typically place capitalism in a sequence between feudalism and socialism, but this can be misleading, generalizing Marx's study of European history into global categories rather than focusing on the real history of capitalism's spread into tribal, clan-based, and monarchist societies across the world. The rise of capitalism has brought about mass poverty, exploitation, and later ecological destruction.

Development

Emergence

The emergence of capitalism was prepared by the social division of labor and the development of a commodity economy within the womb of feudalism. As capitalism emerged, the class of burghers (the predecessors of modern capitalists), which concentrates money capital and the means of production in its own hands, forms at one pole of society, and the mass of people deprived of the means of production and thus forced to sell their labor power to the capitalists forms at the other pole.

Advanced capitalism is preceded by a period of the primitive accumulation of capital, the essence of which is the exploitation of peasants and small artisans and the seizing of overseas colonies. The development of labor power into a commodity and of the means of production into capital signified the transition from simple commodity production to capitalist production.

Over the course of centuries, capitalist relations develop to where their develops a contradiction between the bourgeois economic base of society and the feudal political superstructure, the latter of which becoming a hindrance to the further development of capitalism. This discrepancy is rectified by bourgeois revolutions — a social revolution led by the capitalists which overthrow the feudal nobility and establishes a dictatorship of the bourgeoisie.

Characteristics

Class composition

Under the developed capitalist mode of production, there are two distinct classes, each of which contain sub-strata.

Proletariat

Main article: Proletariat

The proletariat is the exploited, lower class under capitalism. They became in the majority of the population in countries which had undergone industrialization and its results such as the socialization of labor, factory system, etc. Proletarians do not own any of the means of production and must subsist via selling their labor to the capitalists.

Lumpenproletariat

Main article: Lumpenproletariat

The lumpenproletariat is composed of proletarians who are made outcasts and criminals in capitalist society. They are lacking in proletarian class consciousness and are often recruited by reactionary movements, although elements of them can be incorporated into the proletarian movement.

Bourgeoisie

Main article: Bourgeoisie

The bourgeoisie is the ruling, possessing, and exploiting class under capitalism. They own significant amounts of productive forces and hire large amounts of proletarians to work them and produce commodities. The bourgeoisie exploit the workers in the form of wage labor to attain profits.

Petite bourgeoisie

Main article: Petite bourgeoisie

The petite bourgeoisie is a sub-stratum of the bourgeoisie which, although possessing small amounts of means of production, directly operate it themselves and do not primarily subsist off exploitation of hired laborers. The petite bourgeoisie are the most numerous grouping of the bourgeoisie as well as the oldest.

See also

• Bourgeoisie, the ruling class under capitalism.