Friday, February 11, 2011

Capital Versus Capitalism

The original sense of the word "capital" is that of "money begetting money," which is fairly equivalent to the concept of investment.  There are several ways in which capital may be generated: 

1.  Trade monopolies and unequal exchange
2.  Finance and speculation
3.  Production organized for profit and not for the fulfillment needs

All of these forms of capital accumulation existed, in some form or another, for much of human history.  However, it was not until the past couple hundred years or so that they constituted the basis of the world economy.  On the contrary, this role had long belonged to subsistence agriculture (peasants working plots of land and engaging in handicrafts to satisfy their own needs, while relinquishing their surplus to landlords and other parasitic powers that be).  Even wage labor, which I have just held to be the primary characteristic of capitalism, existed, to a limited degree, prior to emergence of capitalism as a system.  However, it was not until a substantial monopolization of ownership of the means of production (raw material, tools, machines, land, etc.) and formation of a "reserve army of labor" (a mass of unemployed and landless people) - which are two sides of the same coin - had taken place that wage labor came to constitute the basis of the acquisition of surplus value, and hence profit.  Thus, capital and other associated elements of capitalism existed long before capitalism.  This is an important distinction to make

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