3.11 Capitalism must die if people are to live

Capitalism represented symbolically

The following, in outline, derives from Karl Marx, Capital, Vol. 1.

A capitalist market economy can be considered analytically by first assuming that all goods and services created in the process of capitalist production (that is production for profit) are sold.

It goes without saying that everything not provided for free from nature is created by human labour, utilizing goods and services from nature, where human labour is self-evidently also a natural process.

Implicit in Volume 1 of Marx's Capital is that the exchange of goods and services occur in the absence of capitalists large enough in relation to their competitors to control the prices paid for goods and services. Marx considered the likely effect of monopolistic practices in later volumes of Capital.

Marxian analysis after Marx has largely focussed on monopoly capital, that is, capital in its contemporary stage, rather than the idealized versions of capitalism still fed to the public by its proponents. But the core of capitalism was already revealed in Volume 1 of Marx's Capital.

On the basis of the assumptions made by Marx in Volume 1 of Capital, and with all the following variables as functions of the time, t, during which a capitalist productive process takes place:

We have the Value Equation:

V = c + v + s and, therefore, s = V – c – v

where V is the total exchange value (sale price) of the goods and services produced,

c is the cost of depreciation of the means of production (for example, tools, machines, buildings) and the cost of the materials consumed (also means of production).

v is the cost of living labour required during the process of production, sold by the employed workers to the employing capitalists.

s is the surplus value, created by living labour in the capitalist productive process and appropriated by the capitalist class.

Comments:

  1. People usually buy goods and services for the use they can make of them, that is, their use value. However, what they pay for is their exchange value, expressed in the form of money. This exchange value is represented in the formula above by the capital letter, V. It is the value of all the labour that has been expended in the chain from the extraction of materials and services from nature through to the sale of the produced goods and services. This sale might be directly to the ultimate consumer (increasingly common with the advent of digital technology) or, still common, to an intermediary, usually a retail capitalist business.
  2. The cost to the employer for producing a certain value of goods and services includes the amount of past labour, for example in the form of the wear and tear of buildings and machines (measured as depreciation) and the cost of the extraction, reworking and transportation to the employers of the materials consumed in the process of producing new goods and services. Marx called the sum of this the cost of "dead labour" or fixed capital, represented above by the small letter c.
  3. The cost to the employing capitalist(s) also includes the cost of the labour power purchased from the employed worker(s). Marx called this variable capital, represented above by the letter v. Presumably this would include any necessary contribution to the labouring process made by the employers, although this is sometimes mistakenly included, especially by small businesses, in their declared "profits".
  4. If the exchange value includes a surplus value, there is only one place it could come from, given that all other labour costs have been accounted for. It must be the difference between what employees are paid and employers retain as surplus value, which they usually call profits.
  5. So before even considering the current stage of capitalism, dominated by a decreasing number of ever more powerful multinational corporations, the relations between Capital, Labour and Nature are already made clear by Marx's analysis in Volume 1 of Capital. Capitalism is the system of producing a surplus for the capitalists from the exploitation of people and nature. People are exploited through the surplus value they render to the capitalists. The otherwise free goods and services are provided by nature in the form of the degradation of nature through unsustainable capitalist exploitation of nature's free goods and services. Capitalism's ultimate gift to people is a degraded natural environment. If people are to survive, then capitalism must be replaced by a more sustainable economic system, one that prioritizes the health of people and nature over private profits.

The Capitalist Justification for Capitalism Owes to Labour Productivity

P = V/t

Where Pis the productivity of labour,

V is the exchange value produced

t is the labour time expended in the production of this exchange value.

Comments:

  1. Labour productivity owes to the accumulated history of human invention.
  2. However, unsustainable exploitation of nature can drive up the costs of production, for example the extraction of ever more costly to mine minerals and the additional costs of the damage done by climate change.
  3. Moreover, the employment of productive labour by capital results not only in goods and services needed by people, but also in the production of goods and services that are both unnecessary and destructive of the natural environment upon which all economic activity depends.
  4. The alternative is an economic system that prioritizes human and environmental health over private profit. This will be an economy that focuses on use values, not exchange values.

The "Moral" Intent of a Capitalist Market Economy

M' = M + S

Where M is the money value of invested capital,

M' is the goal of capital investment.

S is the unsustainable increment stolen by capitalism at the expense of people and nature.

Comment: A sustainable economy is likely one in which S is equal to or less than zero, that is, a steady-state economy at most. This cannot happen in an economy dominated by capitalism. Capitalism must die for people to live.

Welcome!

This website was launched September 1, 2010 in support of a green social democratic alternative to neoliberal capitalist policy and practice. The primary result is a work by Charles and Karen McFadden of seven chapters, grouped under the title, Towards a Green Social Democratic Alternative to Capitalism available here in pdf and html formats.

Below under the heading What’s New can be found the most recent materials posted on this website, including opinion pieces, book reviews, articles and selections from the 2017 edition of the main work.  For the interest of new and returning visitors, new materials will be included quarterly.

What's New

NEW & REVISED

Authors' Preface

1.6 The epochal nature of the period we are entering

6.0 The socialism we need against the "socialism" of the 20th century

6.8 Additional concerns about 20th century variants of "socialism"

6.9 The people united!

7.1 Policy alternatives and political movements to advance them

OPINION

Charles and Karen McFadden, Is revolutionary transformation on the agenda

Charles and Karen McFaddenHumanity on the Brink

Charles and Karen McFaddenMovements of Resistance to Movements for System Change

Charles McFaddenTranslating Green Principles into Education Policy and Practice

Charles and Karen McFadden, The Role of Revolutionaries in the Labor Movement

REVIEWS

Charles McFadden, The People United for a More Just Sustainable Future

Karen and Charles McFaddenCan emergent early 21st century neo-fascism be defeated without coming to grips with late 20th century restructuring of capitalism into a global system

Karen and Charles McFaddenA Dominant Capitalism or a Sustainable Environment? Why we can't have both.

US CORNER

William I. RobinsonThe Crisis of Global Capitalism and Trump's March to War

William I. RobinsonTrumpism, 21st Century Fascism, and the Dictatorship of the Transnational Capitalist Class

CANADA CORNER

George HewisonWINNIPEG 1919 & THE COLD WAR

George HewisonArt Manuel - "Unsettling Canada

George HewisonThe NDP and LEAP

RECOMMENDED

Albert Einstein, David Swanson, Jill Stein, Chris Hedges, William I. Robinson, and others Selected articles for Winter 2018

FEATURED WORK

ECONOMICS

1.7 The dynamics of capitalism as a system and the limits of single issue reforms

2.11 The economy in transition towards a new deal for labor and the community

3.1 The challenge of a moribund economic system

3.7 Public banking: A cornerstone of a green social democracy

4.7 Economics and culture

6.5 Using the non-market economy as an opportunity to begin moving beyond capitalism

HISTORY

1.6 The epochal nature of the period we are entering

2.0 Theoretical Perspective: Defining Green Social Democracy

2.5. Socialism and green social democracy in historical materialist theory

4.3 Culture in historical perspective

5.1 Contrasting a green social democratic world with the currently prevailing, but challenged neo-liberal one

6.2 Socialism and capitalism as coexisting social systems

LABOR

2.11 The economy in transition towards a new deal for labor and the community

5.7 Defeating neo-liberal capitalism: The role of social movements

7.3 Justice: Creating a just society, based on the right of all to a dignified, secure existence

Creative Commons License

Creative Commons License: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) applies to all work posted on this website except that which appears with authors whose last name is other than McFadden, in which case standard copyright should be assumed to apply.