Capital
A critical analysis of capitalism and its socio-economic implications.
Summary of 6 Key Points
Key Points
- The Commodification of Labor
- The Labor Theory of Value
- Surplus Value and Exploitation of the Worker
- The Falling Rate of Profit
- The Accumulation of Capital
- Capitalism’s Inevitable Tendencies Toward Crisis
key point 1 of 6
The Commodification of Labor
In the commodification of labor, labor power becomes a commodity that the worker sells to the capitalist for a wage. The worker’s labor power is exchanged for a certain sum of money, which the capitalist then uses to produce commodities. The capitalist hopes to sell these commodities for more than the cost of the labor power, thereby realizing a profit. ..Read&Listen More
key point 2 of 6
The Labor Theory of Value
The Labor Theory of Value is a fundamental concept in classical economics that posits the value of a commodity can best be objectively measured by the average number of labor hours required to produce it. This theory suggests that the value of any good or service is directly related to the labor expended to make it available. Labor is considered the source of value, and thus, commodities exchange roughly in proportion to the labor time embodied in them. It is the socially necessary labor time, or the labor time required to produce a commodity under the conditions of production normal for a given society, that determines its value…Read&Listen More
key point 3 of 6
Surplus Value and Exploitation of the Worker
In the capitalist economic system, surplus value refers to the additional value created by workers in the process of production, which exceeds their own labor value. It is the value that is appropriated by the capitalist as profit when the commodity is sold. This is the crux of Marx’s theory of exploitation in capitalist society. It encapsulates how workers, while producing more than they receive in wages, inadvertently generate profit for the capitalist who owns the means of production…Read&Listen More
key point 4 of 6
The Falling Rate of Profit
The falling rate of profit is a central concept that emerges from the complex system of capitalist production. It refers to the tendency of the rate of profit to fall with the increase in capital investment in production. As capitalists continue to accumulate and invest capital in the quest to increase productivity and competitiveness, they essentially saturate the market with constant capital (machinery, raw materials) relative to variable capital (human labor). The ratio of these two types of capital forms the organic composition of capital…Read&Listen More
key point 5 of 6
The Accumulation of Capital
The Accumulation of Capital is a concept that refers to the process through which capital is generated and grows over time. This process is not stagnant but dynamic and involves the continuous flow and reflow of capital. It starts from the initial investment (money), which is used to purchase commodities or means of production, including labor power. This capital is then put into the production process, producing commodities of greater value…Read&Listen More
key point 6 of 6
Capitalism’s Inevitable Tendencies Toward Crisis
In the capitalist system, the competitive struggle between capitalists leads to an incessant drive to increase productive forces and reduce labor costs. This results in the overproduction of commodities relative to the demand, where supply exceeds the ability of consumers to consume, leading to crisis of overproduction. ..Read&Listen More