Capitalism

Classes in Capitalist Societies

“Capital always has more power then labor”

  • Two basic classes shaping inequality → workers and capitalists

  • struggle over the rules of the game

  • means that the power of these two classes in relation to each other determines the shape and extent of inequality that exists.

Is Society Dynamic or Static and does it change (under Marx and Engels)

  • View society in general as dynamic

  • although different modes of production are more or less dynamic than others

  • Modes of production change

  • the means of production eventually come into conflict with social relations

How is Capitalism Dynamic

  • It constantly revolutions the instruments (or means, or forces) of production

  • Means of production are constantly changing (constant innovation)

  • This distinguishes capitalism from all previous modes of production, the extent to which it is dynamic

  • The constant change in capitalism fundamentally services from competition

  • Expansion of market (bourgeoisie) remakes the world in its own image → globalization

  • Continually seeking economic growth, increased profits → globalization

  • Capitalism is changing and must expand and grow

How will inequality be resolved or ended (under Marx and Engels)?

  • Will end through revolution

  • Argue that capitalism “sow the seeds of its own destruction”

  • seeds of destruction → class tension, tremendous inequality, power of capital over labor, labor exploitation

  • Means that capitalism creates its own destruction by:

  • Bringing workers together

  • Creating economic crises (overproduction)

  • Fundamental cause of destruction of capitalism (and all modes of production) → the means of production come into conflict with the social relations and the mode of production implodes

  • This means that the social relations become feeters (they say nah) on the forces of production

  • Workers get together to “revolt” against over labor

  • Overproduction is the most fundamental crisis the capitalist mode of production

  • Overcome this crisis by

  1. the conquest of new markets

  2. The destruction of a mass of productive forces

Who are the carriers of the revolution?

  • The workers BUT not automatic

  • Requires CLASS FORMATION → meaning the organization of workers into a class

  • Workers come to see their common interest and overcome divisions among workers

  • For Marx and Engels → key to understanding social inequality (within societies and across scotiwis is understanding the struggle between labor and capital

  • As the balance of power shifts, social inequalities changes

Sources of labors power

Labor has two fundamental sources of power

  1. Position in production process

  • Worker hold a key position → the control workers have over production (autonomy)

  • Strikes, other forms of work stoppage

  1. Numbers (solidarity among workers)

  • Important in 2 ways:

  1. Collective action → acting as a group, strikes, demonstrations, walkouts,

  2. Collective resources → pooling resources, strike funds, lawyers, influencing politics

  • When workers act as group they exert much more power and influence than acting as individuals

Labor Unions

  • Unions are the organizational expression of labor as a group

  • Marx and Engels note that workers must come to see their common internist

  • Goals

  • To give workers voice in workplace

  • Give workers a say over working conditions, hours, wages etc…

  • To reduce social inequality particularly between workers and employer (labor and capital)

  • Gaining a greater share of the product for workers

  • Why are workers not alway able to get together to pursue their common interests?

  • Power of capital is overwhelming → labor does not get the respect Lincoln claims it should

  • Nature of the global assembly line makes it difficult for labor to organize

  • Ethnic, racial, gender antagonism → originating among workers and stoked by capital to divide labor (divide workers by sex, or race or ethnic backgrounds to create tension)

Essential Elements of Capitalism: Capital and the Sites of Class Struggle between Capital and Labor

Sources of Capital’s Power

FOR the billionaires BY the billionaires

  • Three primary sources of power

  1. Control over the means of production

  • Control over worker’s behavior

  • Control over working conditions (pages, pace of work, hours, closing factory, who works what hours

  1. Access to resources (wealth)

  • Allows for resistance to labor

  • Private armies

  • Labor spies (Ex: Pinkerton Detective Agency)

  • Unions busting firms (PR, media anti-union propaganda)

  • Allows for influence over political policies

  • Grants influence over the political rules governing capital- labor relations

  1. Control over markets

  • supposed to be competitive markets however thats ot how it works in reality

  • tend to get oligopolistic and monopolistic markets

  • Seen when capital has more power then labor

Sites of class struggle

  • Sources of power for capital and labor → primary sites of class conflict and class struggle

  1. Production process

  • Shop-floor struggles (gain little power in workplace even if they dont seem like its exerting a lot of power)

  • The games workers play (doubling up, getting ahead to take longer breaks, harassment, surveillance by management, EXTREME: strikes, lockouts etc)

  1. The state

  • Political struggles over the rules (“of the game”; think of monopoly

  • Electing “friendly” officials (dark money in politics being spent to get friendly officials)

The Nation State in the Culture of Capitalism

  • Most important function → regulation of trade and commerce within and without its borders; to provide orderly production, distribution, and sale, of commodities.

What does the modern state need to provide economic integration for the smooth function of the economy?

  • If economy is not good → politician(s) is blamed

  • Modern state must convince popular that they share a common culture (destiny) → accomplished through state control of mandatory education

  • Greatest threat of nation state → Transnational Corporation (TNC)

What is a transnational (multinational) corporation

  • Business headquarter in one country but operate in one or more other countries

  • Most of the world's big corporations have several subsidiaries and plants in many different countries

  • EX: Ford (USA), Mazda (Japan), GM and Toyota → formed joint ventures to manufacture and sell cars all over the world

  • Same can be said for oil production banking, production of computers and software and manufactured goods (shoes, clothes, toes)

  • TNC → corporation that makes nearly all its products abroad and sells those goods in domestic and foreign marks

  • NIKE: known as American Company but most of its laborers and sales have been from abroad

Business strategies of TNCS

  • Goal is to accumulate capital (profit)

  • Must reduce production costs (overhead and labor)

  • Seek out cheaper sources of production and opportunities have presented themselves abroad (industrialization through invitation)

How they are different from standard oil

  • Earlier forms employed americans to produce their products

  • Now they employ people in other countries

  • Largely traded in natural resources/industrial goods

  • Now it is design, technical knowledge, management techniques, organizational; innovations (know how to change production line in a water of weeks)

  • Depend on domestic markets

  • Todays tncs depend on world markeys

  • Depone on advertising campaigns to make people want their products

  • Made easier by advances in technology and communication

  • Early TNCS were held accountable to national laws because they did almost everything the US

  • Today use laws mean nothing to TNC b/x they are so global

How powerful are TNCS

  • Number of TNCS

  • Renvue they generate

  • The role in global trade

  • Set wages and keep operating costs down with h impunity in host countries

  • Better ability to better compete in the world market