The Structures of Capitalist Society

Marx wrote in response to the rapid changes taking place in Europe in response to industrialization, particularly in Germany. This period of dislocation and poverty is the context for Marx's notion of alienation, and his critiques were designed to show that capitalism was the basis for alienation and to develop a plan for action for overcoming the structures of capitalism. Marx understood that inherent within capitalism was also a system of power: it is both economic and political; it both coerces and exploits workers. Actions undertaken in the name of economic necessity disguise political decisions For example, although it is an accepted economic method for dealing with inflation, raising interest rates protects the wealthy, while causing unemployment among the poor. The political decision to privilege the wealthy at the expense of workers is hidden behind economics.

Commodities

Marx's understanding of commodities (products of labor intended for exchange) is central to understanding his ideas about the nature of capitalism. Commodities produced to subsist and to satisfy their needs have use value. Under capitalism, where workers produce for others and exchange commodities for money, products have exchange value. Because it is often unclear where a commodity's value comes from, it takes on an independent, external reality. Marx called this the fetishism of commodities, when the value of an object or commodity is believed to be tied to something "natural" or independent of human action, such as markets. Thus, the reality that value originates from labor and the satisfaction of needs is obscured. Marx used the term reification to describe the process whereby social structures become naturalized, absolute, independent of human action, and unchangeable. Just as the fetishism of commodities obscures the relationship between commodities, value, and human labor, reification obscures the underlying relationships within the capitalist system and allows supposedly natural and objective social structures to dominate people.

Capital, Capitalists, and Proletariat

Under capitalism, there are two main groups: the proletariat, who are wage-laborers, and the capitalists, who own the means of production. Whereas workers are wholly dependent upon wages, capitalists are dependent upon money invested to create more money. Capital is unique to the circulation of commodities under capitalism. Under non-capitalist forms of exchange, commodities are traded for money, which is then traded for another commodity (C1 - M - C2). The primary reason for exchange is to obtain a commodity for use. Under capitalism, money is used to purchase a commodity, which is then sold to create a greater amount of money (M1 - C - M2). The purpose of this form of exchange is to create greater and greater sums of money.

Exploitation

Exploitation is a set of social relations on which capitalism is built. Capitalists exploit workers by paying them less in wages than the value they produce. While a worker may earn eight dollars a day in wages, s/he may produce ten dollars a day worth of value, creating what Marx called surplus value. Capital grows by exploiting workers to generate ever greater amounts of surplus value, usually by lowering workers' wages. In addition, capitalists constantly compete with one another over capital by finding new ways to generate profit and surplus value in order to maintain an edge. Marx calls this drive the general law of capitalist accumulation. Capitalism is not the only historical epoch in which individuals are exploited, but it is the only one in which the mechanisms of exploitation are hidden behind independent, objectified, and reified structures, such as the market.

Class Conflict

The conflict created by the contradictory positions of two groups, the proletariat and the capitalists, is at the heart of capitalism. Because these represent groups in conflict, Marx called them classes. For Marx, every period of history contained fault lines upon which potential conflict could result, and, thus, every historical period had its own class formations. Because capitalists are continually accumulating capital while also competing with other capitalists, Marx believed that more and more members of society would eventually become proletarians in a process he called proletarianization. Society would then be characterized by a very small number of capitalists exploiting a large number of poor proletarians subsisting on low wages. Marx called this group of proletarians the industrial reserve army. Thus, the normal operation of the capitalist system, through competition and exploitation, produces an ever greater number of workers who will eventually rise up to overthrow the system.