Capitalism

The bosses like to call it “free enterprise.” But for the millions who do the work — who keep society running and still can’t keep up with the rent, the bills and the price of everything — the system is neither free nor enterprising. What makes capitalism tick, and why does it so often bring war and economic catastrophe?

Capitalism is a society divided into classes, where a few fabulously rich parasites are supported by the sweat and labor of a vast number of working and oppressed people.

In every class society, it is human labor that has sustained society and created its wealth. What sets capitalism apart is the form its exploitation takes. Its typical worker is legally “free”: owning nothing but the ability to work, and forced to sell that ability — labor power — to the owners of capital (the capitalists, the bosses, the bourgeoisie) simply to live. Unlike the open bondage of the slave or the serf, this bondage is concealed. The worker looks free and looks fully paid, while the unpaid labor that becomes the capitalist’s profit stays hidden inside the wage. This is wage slavery.

But capitalism did not rise after slavery and leave it behind. It rose on slavery. The plantations that worked millions of enslaved Africans were modern enterprises, and their cotton and sugar built the fortunes and fed the factories of the rising bourgeoisie. Some of the largest workplaces in the world then were the slave plantations — a Caribbean sugar estate might drive 200 enslaved people or more, more than the average English cotton mill of the day. “Without slavery you have no cotton,” Marx wrote in 1847; “without cotton you have no modern industry.” The enslaved belonged to the modern working class — and were among the first anywhere to turn the mass strike into a weapon, from the plantations to the revolution in Haiti.

Marx had a name for this founding robbery. The economists called it “original accumulation,” as if the first great fortunes had been saved up by men more frugal than the rest. Marx tore up that fairy tale and named it for what it was: original expropriation — open robbery. The seizure of the common lands, the conquest of the Americas, the plunder of India, the trade in enslaved Africans: these, he wrote, were its “chief moments.” Expropriation is robbery in broad daylight; exploitation, the daily taking of surplus value, is robbery hidden inside the wage. And expropriation did not end once capitalism stood on its own feet — capital still tears people from the land and the means of life wherever it can.

The boss, who buys the workers’ labor power in exchange for wages, always pays the workers less than the value they have added through their labor. The difference is surplus value, from which the capitalist extracts profits.

Capitalism has been very dynamic in developing the means of production. Unlike feudalism, where the land owned by the lord or king was used to produce mainly what the nobleman and his court could consume themselves (with a bare subsistence going to the peasants), capitalist production is mainly for exchange. This means finding markets to sell what is produced.

Capitalist competition for markets means that every effort is made to increase production and make it more efficient — most often at the direct expense of the workers themselves, who are exploited at an intensity and efficiency unknown under earlier systems.

The drive for efficiency in order to gain a competitive edge has led to a greater and greater concentration of production under the control of giant enterprises. Increasingly, corporations emerge that employ thousands of workers and control every step in the production of goods, from extracting the raw materials to delivering the finished product. In this way production becomes more and more socialized.

The development of capitalism has also produced the force that must overthrow it — the working class, or proletariat. Thousands of workers are now brought together to labor cooperatively, often under the same roof.

But this social character of work and production is completely at odds with the individual ownership of production. There is a constant struggle going on between the workers and the bosses over the division of surplus value, with the workers trying to raise their standard of living and the bosses trying to maximize their profits.

Capitalism also breaks down from within. Because each owner produces for profit, with no plan for society as a whole, more goods pile up than can be sold at a profit. This is what Marxists call overproduction — not too much for people to use, but too much to sell. When it hits, the factories close and workers are thrown into the street, not because too little has been produced but because too much has. The warehouses stay full while the people who filled them go without. It is poverty in the midst of plenty, and it returns with every slump.

Capitalist efficiency, too, exists only within each corporate enterprise. Taken as a whole, the system is horribly inefficient, with millions of worker-hours poured into parasitic industries like armaments and advertising. Arms production is not a waste the system could simply cut away; it is driven by the rivalry among the big capitalist powers for markets and domination. There is duplication and waste of effort because of secrecy and competition (patents, for example, and 40 different brands of toothpaste).

Moreover, as the world economy becomes more complex, it becomes ever clearer that humanity must plan production to use raw materials wisely and keep the earth beautiful and habitable.

But overall planning is impossible under capitalism; production is geared to making profits, and every other consideration is sacrificed to this underlying motive. And capitalist rivalries and the need for markets lead inevitably to war — the greatest destroyer and polluter of all, threatening the very foundations of life on this planet.

Additional reading

  • Marx’s Economic Doctrine – by V.I. Lenin
  • Value, Price and Profit – by Karl Marx

    From 1865.”Value, Price, and Profit” is based on a speech Marx gave while he was completing Capital. The first five chapters answer the claim that “wage increases only cause prices to rise,” still a familiar viewpoint. From chapter six on, you could call it a condensed version of Marx’s “Capital.” Those chapters can be categorized as
    1. The value of a commodity (Chapter 6)
    2. The source of profit (Chapters 7 to 11)
    3. Wages and profits (Chapters 12 to 14)

  • Also see Capital, Chapter 31: Genesis of the Industrial Capitalist
    Marx concludes: “If money ‘comes into the world with a congenital blood-stain on one cheek,’ capital comes dripping from head to toe, from every pore, with blood and dirt.”
  • The Meaning of ‘So-Called Primitive Accumulation’ — by Ian Angus. Why Marx wrote “so-called”: the term should be original expropriation — open robbery — and it did not end with capitalism’s birth but goes on still.
  • Black Reconstruction in America, 1860–1880 — by W.E.B. Du Bois (1935). Its account of the general strike of the enslaved — hundreds of thousands withdrawing their labor from the plantations and crossing to Union lines — shows the enslaved as agents of their own emancipation and a force in the class struggle.
  • The Black Jacobins: Toussaint L’Ouverture and the San Domingo Revolution — by C.L.R. James (1938). The history of the Haitian Revolution, whose enslaved plantation workers James described as closer to a modern proletariat than any other workers of their day.
  • Capitalism and Slavery — by Eric Williams (1944). The classic study of how Atlantic slavery and the triangular trade helped build British industrial capitalism, and how changing capitalist interests shaped the abolition of slavery.
  • Slavery and Capitalism: A New Marxist History — by David McNally (2025). Picks up the thread from Du Bois and James: the New World plantation was a capitalist enterprise, and the enslaved were part of the modern working class — a “chattel proletariat.”