by Stephanie McMillan
(Last edited 3/9/13)
To eliminate capitalism, we have to develop a strategy that goes beyond resisting its painful effects, that targets its underlying mechanisms. This is a very brief and preliminary introduction to several concepts that can help us understand the nature of our enemy, which is in many ways obscured. These definitions are extremely limited and constantly evolving (interpretations of reality are always constrained by the boundaries of our own thinking; in addition they can never catch up to reality itself, which is ever-changing).
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Mode of production: The matrix of social relations (economic, political, ideological) that define the nature of a social formation, determined by the dominant ways that items for social consumption are produced, accumulated and distributed. Capitalism is the dominant mode of production in the world today, developed from 10,000+ years of class-divided society.
Social formation: All of the internal contradictions within the structures and practices (economic, political, ideological) comprising a coherent group system that reproduces itself in a constant dynamic of construction and destruction. Social formations include nations, businesses, families, etc.
Capitalism: a mode of production in which the social product is produced through the exploitation of workers as they convert natural materials into commodities through the application of labor power, plus the private ownership of the means of production and private appropriation of surplus value by non-producers (capitalists).
Classes: Dynamic social forces engaged in struggle determined by the antagonistic relations of production. The fundamental contradiction under capitalism is wage labor vs. capital, which is manifested by constant struggle between the two fundamental and polarized classes: the working class and the capitalist class. This struggle occurs within a matrix of economic, political and ideological relations (ultimately determined by the economic). (This is in contrast to a sociological view of classes that categorizes individuals using specific criteria or attributes, such as income).
Economic base: The economy of any class-divided social formation consists of the combination of and relations between laborers (labor power), the means of production, and non-laborers (who appropriate surplus product).
Superstructure: The dominant ideology and the exercise of political power, that together justify, sustain, support, protect, and perpetuate the economic base.
Social surplus: Wealth or products that are not consumed by a social formation (society), nor are necessary for its reproduction, but can be used for exchange (trade) with other social formations.
Use-value: The quality of fulfilling a need. Many things have use value but no exchange value (examples: fresh air, intuition, a hug, a haircut, a family meal). The number of these is dwindling as capitalism relentlessly strives to impose exchange value on everything. For example, potable water no longer makes the list.
Exchange value: Standardized worth in the context of the market, relative to the worth of other items it can be traded for.
The Labor Theory of Value: The exchange value of a product is based on the socially necessary amount of labor power (measured in time) that is generally required to produce it. For example, if one person spends an hour catching a fish, they might trade it for an amount of blueberries it took an hour to collect. Absent other factors, it wouldn’t make sense to trade the results of a day’s worth of fishing for the results of an hour’s worth of blueberry picking.
Commodity: A product manufactured primarily for its exchange value, from natural materials using human labor power. (Its use value is secondary, required only enough to make it sellable, i.e.: someone has to feel a need to buy it). Commodities are fungible, which means they’re standardized for the purposes of exchange, and have little or no qualitative variation (one ton of steel is reliably similar to another ton of steel). Examples of commodities are grains, lumber, iPads, fuels, currencies, frozen waffles, and labor power itself (sold by the worker in units of time).
Expropriation/extraction (aka: original, primary or primitive accumulation): Obtaining control of natural resources to continuously feed the productive process. This is done through various coercive means of dispossession, from conquest and overt theft to more subtle forms of domination and extortion. Examples include invading a country and seizing their forests or oil fields, dumping grain to ruin farmers and then buying their land at firesale prices, using eminent domain to obtain drilling rights under someone’s land, and using drag nets in non-territorial ocean waters.
Surplus Value: The residue of the social process (involving the economic, political and ideological spheres) of capitalist production, which manifests as the theft of labor power (exploitation) during the conversion of natural materials into commodities. Only human labor power produces new, material surplus value. The buyer of labor power (the capitalist) appropriates the surplus value generated in the process of commodity production.
Reduced to its economic essence, surplus value is the portion of exchange value of a commodity that exists as labor power crystallized in it, above the item’s production cost. The capitalist pays workers less than the value of what they produce. What’s left after paying their wages, and after paying fixed costs such as machinery and inputs, is surplus value. For example, if a worker is paid $2 an hour to produce t-shirts that are sold to a retailer for $10, and fixed costs associated with their production are $3, then the surplus value is $5. (The retailer will add an additional amount to the final price, which is not surplus value but mercantile profit).
Capitalists can pay less than labor power is worth because of the relations of production: their private ownership and control over the means of production, which forces the working class to sell their labor power for survival. Private ownership is accepted by the members of a society because of a combination of ideological domination (the cultivation of belief in the “right” to private property) and coercive force.
Capital: The social (economic, political, ideological) process of the production of surplus value. It is ever-expanding because surplus value must be re-invested and becomes new capital. The production of surplus value is how capital reproduces itself.
Profit: The revenue accumulated by an exchange of values.
Surplus value and profit are not identical. Surplus value is the productive form of profit, which is crystallized as new material value. Profit can also be generated in other ways, which do not directly involve (though they do, as a whole, ultimately rest upon) commodity production. Non-productive profit (or fictitious value) is the result of the circulation of capital (in the form of interest, the sale of services, or unequal exchanges). Fictitious value becomes toxic when speculation overinflates it to a point that it can begin to destabilize an economy.
The production, accumulation and re-investment of surplus value is the essence and purpose of capitalism, the way that capital reproduces itself. As it grows, capital pushes itself into every investment opportunity it can possibly locate within the global economy, and violently opens up new opportunities when necessary. When inevitable crises of overproduction occur, capital increasingly relies on non-productive (fictitious, and ever more toxic) means of self-reproduction (such as financial speculation), putting the system ever-deeper into an unsolvable predicament.