Capitalism is a type of society in which the private ownership of the means of production is the dominant form of providing the means to live. What distinguishes capitalism from Marxism is the emphasis on the rights of property and the individual owner’s right to employ capital as he or she thinks fit.
According to Karl Marx, the bourgeoisie, also known as the capitalist or ruling class, are those who own the means of production and monopolize wealth and stand in contrast to the working-class proletariat majority, whose labor-power is exploited by the bourgeoisie majority.
The transformation of society into socialism and ultimately to communism is the philosophy of Marxism.
What is Capitalism?
Capitalism is a social and economic system based on the idea that private individuals or businesses have ownership in which the free market controls the production of goods and services.
Capitalism is often considered an economic system in which individuals privately own and control property according to their interests. In a capitalist economy, assets such as factories, railroads, and mines can be privately owned and controlled, for instance.
The essential feature of capitalism is the motivation to make a profit. Labor is purchased for money wages, capital gains accrue to private owners, and prices allocate capital and labor between competing uses (Jahan & Mahmud, 2015). The production of goods and services in a capitalist economy is based on supply and demand in the general market.
In a capitalist economy, a market mechanism determines the prices through interactions between buyers and sellers. In return, prices allocate resources that naturally seek the highest reward for goods, services, and wages (Jahan & Mahmud, 2015).
What Was Karl Marx’s View Of Capitalism?
Marxism is a conflict perspective that argues that the working-class, the proletariat, is exploited by the capitalist class, who profit off of their labor.
Karl Marx asserted that capitalism is a system that alienates the masses and that workers do not have control over the goods they produce for the market.
Marism is critical of capitalism because the people who are the laborers behind the goods and services lose their value over time. When once the workers would have crafted the whole product, they may now be reduced to producing one component on the production line.
Capitalism predisposes societies to unjust systems favoring a small group of people, the ruling class bourgeoisie, over the majority, the working class proletariat.
In capitalism, the bourgeoisie, sometimes called the capitalists, own the means of production. They are the owners of capital and are able to acquire the means of creating goods and services, such as natural resources or machinery.
With their capital, the bourgeoisie can purchase and exploit labor power, using the surplus value that their employees generate to accumulate or expand their capital (Wolf & Resnick, 2013).
The key differentiation between the bourgeoisie and other social elites is this ownership of the means of production. Managers of the state or landlords, for example, are not part of the bourgeoisie because capitalists must be actively involved in capital accumulation by using money to organize the means of production and employ and exploit labor to further generate capital.
Marx believed that the bourgeoisie began in medieval Europe with traders, merchants, craftspeople, industrialists, manufacturers, and so on who could increase wealth through industry. These individuals employed labor to create capital (Wolf & Resnick, 2013).
The second major class in Marxism is the proletariat, who own their labor, but none of the means of production. Because these workers have no property, they must find employment in order to survive and obtain an income.
The exploitation of the proletariat by the capitalist, however, means that the proletariat is unable to earn enough to acquire his own means of production.
Because he does not own the means of production, he does not have all of the factors of production. This keeps him in a continual cycle of exploitation by capitalists (Wolf & Resnick, 2013).
Being confined to a component means that workers lose value and are potentially less skilled when seeking other employment (Chiapello, 2013).
Marxists see capitalism as an unstable system that will eventually result in a series of crises. The more that capitalism grows, the more people take advantage of it, and the more oppressed, degraded, and exploited the proletariat will be (Marx, 1873).
Eventually, capitalism will result in a revolt by the proletariat, according to Marxists. This will lead to the dismantling of capitalism to make way for a socialist or communist state.
In the Communist Manifesto, written in 1848, Marx and Engels proposed that the proletariat revolution was inevitable and would be caused by the continued exploitation of the capitalists. The workers will eventually revolt due to increasingly worse working conditions and low wages.
Marx argued that a social revolution would mean changing the existing social and political system from a capitalist to a communist society. A communist society means there are no social classes or private property.
The result of the revolution is that capitalism will be replaced by a classless society in which private property will be replaced with collective ownership. This will mean that society will become communist.
Communism refers to a political and social arrangement in societies characterized by State control of the means of production and a monopoly of political power by the Communist party.
Communism is a system under which the means of production are publicly owned and controlled by the government to meet the people’s needs.
Derived from the work of Marx, the implementation of communism involved totalitarian control of society. The empirical manifestation of communism was in the Soviet Union and the socialist organizations of eastern Europe until their collapse in 1989-90. Communism continues to dominate China (People’s Republic of China), North Korea, Laos (Lao People’s Democratic Republic), and Cuba.
Under capitalism, private owners produce goods and services they can sell in an open market, with prices and wages set by supply, demand, and competition. Under socialism, however, the means of production are commonly owned, and the government controls part or all of the economy.
Capitalists argue that private ownership allows individuals to use resources more efficiently than the government, meaning that the free market decides who receives profits and who does not.
However, communists argue that capitalism’s private ownership allows relatively fewer wealthy people to control most of the properties, meaning that the rich get richer while the poor get poorer.
A communist society would mean there would be no inherited wealth, there would be steeply graduated income tax, centralized control of the banking, communication, and transport industries, as well as free public education (Marx & Engels, 2019).
Instead, private property will be replaced with collective ownership, meaning that the means of production will come to a common agreement. Under communism, there would be no exploitation of the labor of others. Instead, accumulated labor is a means of widening and enriching the workers’ existence (Marx & Engels, 2019).
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