Two people buy the last remaining tickets for Les Misérables at the box office. One of them passes through to the theatre and is thoroughly entertained; the other steps outside and sells the ticket to a disappointed but desperate punter for twice the face value.
What’s the difference between the money handed over at the box office by the first and second person?
In the theatregoer’s case the money served to buy some idle pleasure. But in the second case, the speculator’s money was set to work and acted as capital. At its most basic this is what defines capital – money that expands its value and breeds more money. It’s that regenerative quality of money that underlies the whole system we live in – capitalism.
Making money work in this speculative way, by buying cheap and selling dear, goes back centuries. From the twelfth century onwards in Europe a whole class of merchants sprang up. They opened up trade routes for spices and silks with the East and later for slaves and sugar with Africa and the Caribbean. This gave plenty of opportunity for those with a little money to make a lot more right into the eighteenth century.
But the capitalism that we know today has moved on from the activities of such merchants. Capitalism was transformed when the merchants’ money was first used to buy the labour power of other people, people who had nothing else to sell but their ability to work for others. This class – the working class – could now be put to work with raw materials and machinery to produce massive wealth for the capitalists.
Capital, invested in human labour power and machinery, proved to be the most effective means yet for one class to exploit another. The way exploitation works under capitalism is the subject of another article in this series.
You may be wondering how the merchants persuaded the workers to volunteer to be chained to a cotton spinning machine for 12 to 16 hours a day. Supporters of capitalism don’t like to advertise the answer.
The fact is, the working class had to be forcibly created in their millions. In England in the sixteenth and seventeenth centuries there were many small peasant farmers scratching a reasonable living out of the land. Some of them may have carried out a bit of extra labouring for a merchant or richer farmer, but they could still rely on their farm and its produce to provide basic necessities.
The governments of the day, from Queen Elizabeth onwards, set about depriving these peasants of their land. They “enclosed” common land, thereby depriving peasants of pasture land. Or they simply stole the land or kicked the peasants off to make way for more profitable sheep grazing. This turned thousands overnight into “vagabonds”. The government faced them with a stark choice: go to prison or work for someone else.
The other side of the story was no prettier. The amount of capital that existed was too small; somehow more had to be found before capitalism could really take off. Piracy, plunder and the conquest of colonies was the answer. Slavery in the Caribbean, for example, amassed huge fortunes that could be sent back to Europe to buy labour and start up production.
As Karl Marx wrote: “If money . . . ‘comes into the world with a congenital bloodstain on one cheek’, capital comes dripping from head to foot, from every pore, with blood and dirt.”
So, there is nothing at all “natural” and eternal about capitalism. It has a history created by human beings. It has a beginning, a middle and an end. Capitalism’s great merit as a system of production was that it put an end to the backwardness, localism, and narrow outlook of feudalism. In Holland, England, France and the USA, revolutions and civil wars were needed to sweep away the feudal legacy and change the system of production.
This revolutionary past of early capitalism is another thing its present day fans would like to forget. Capitalism in its maturity grew into an industrial economy, based on co-operation in production and large-scale machinery. This allowed a tremendous advance in productivity and the development of technique. Despite the suffering brought about by its birth, capitalism was therefore progressive.
But it is progressive no more. Capitalism’s success has been achieved at great social cost. Capitalism is an antagonistic class society, producing great wealth through the massive oppression of workers and ruination of whole continents.
Profit and more profit is the driving force of production and aim of all capitalists. This has ensured mass unemployment as fewer workers are forced to do increasing amounts of work and real wages are lowered to allow increased dividends for shareholders.
Capitalism has created an economy of boom and slump. Goods pile up unsold because they cannot be sold at a profit despite the fact that there is a crying need for them among millions who do not have the money. The competitive and blind nature of capitalist production contributes to anarchy in production which ensures constant disruptions, shortages and oversupply and is also wasteful and destructive of the environment. Most important of all, however, capitalism has created the conditions for its own end. It has created a working class – many millions strong throughout the whole world, concentrated and educated enough to be able to run industry and commerce without the need for bosses.
It has created a level of technology and a system of communications that makes a planned economy more feasible than ever before. And it has created semi-permanent crisis, as repression and misery force workers repeatedly to rise up against the system.
Capitalism’s beginning was bloody, violent and the product of class struggle. Its end will be the same. But the working class has no interest in creating another exploiting society. Its interest is in a classless society, in which the goal is not profit but meeting the needs of every human being on the planet. With the creation of socialism, as Karl Marx wrote, the real history of humanity will begin. n
What’s the difference between the money handed over at the box office by the first and second person?
In the theatregoer’s case the money served to buy some idle pleasure. But in the second case, the speculator’s money was set to work and acted as capital. At its most basic this is what defines capital – money that expands its value and breeds more money. It’s that regenerative quality of money that underlies the whole system we live in – capitalism.
Making money work in this speculative way, by buying cheap and selling dear, goes back centuries. From the twelfth century onwards in Europe a whole class of merchants sprang up. They opened up trade routes for spices and silks with the East and later for slaves and sugar with Africa and the Caribbean. This gave plenty of opportunity for those with a little money to make a lot more right into the eighteenth century.
But the capitalism that we know today has moved on from the activities of such merchants. Capitalism was transformed when the merchants’ money was first used to buy the labour power of other people, people who had nothing else to sell but their ability to work for others. This class – the working class – could now be put to work with raw materials and machinery to produce massive wealth for the capitalists.
Capital, invested in human labour power and machinery, proved to be the most effective means yet for one class to exploit another. The way exploitation works under capitalism is the subject of another article in this series.
You may be wondering how the merchants persuaded the workers to volunteer to be chained to a cotton spinning machine for 12 to 16 hours a day. Supporters of capitalism don’t like to advertise the answer.
The fact is, the working class had to be forcibly created in their millions. In England in the sixteenth and seventeenth centuries there were many small peasant farmers scratching a reasonable living out of the land. Some of them may have carried out a bit of extra labouring for a merchant or richer farmer, but they could still rely on their farm and its produce to provide basic necessities.
The governments of the day, from Queen Elizabeth onwards, set about depriving these peasants of their land. They “enclosed” common land, thereby depriving peasants of pasture land. Or they simply stole the land or kicked the peasants off to make way for more profitable sheep grazing. This turned thousands overnight into “vagabonds”. The government faced them with a stark choice: go to prison or work for someone else.
The other side of the story was no prettier. The amount of capital that existed was too small; somehow more had to be found before capitalism could really take off. Piracy, plunder and the conquest of colonies was the answer. Slavery in the Caribbean, for example, amassed huge fortunes that could be sent back to Europe to buy labour and start up production.
As Karl Marx wrote: “If money . . . ‘comes into the world with a congenital bloodstain on one cheek’, capital comes dripping from head to foot, from every pore, with blood and dirt.”
So, there is nothing at all “natural” and eternal about capitalism. It has a history created by human beings. It has a beginning, middle and an end. Capitalism’s great merit as a system of production was that it put an end to the backwardness, localism, and narrow outlook of feudalism. In Holland, England, France and the USA, revolutions and civil wars were needed to sweep away the feudal legacy and change the system of production.
This revolutionary past of early capitalism is another thing its present day fans would like to forget. Capitalism in its maturity grew into an industrial economy, based on co-operation in production and large-scale machinery. This allowed a tremendous advance in productivity and the development of technique. Despite the suffering brought about by its birth, capitalism was therefore progressive.
But it is progressive no more. Capitalism’s success has been achieved at great social cost. Capitalism is an antagonistic class society, producing great wealth through the massive oppression of workers and ruination of whole continents.
Profit and more profit is the driving force of production and aim of all capitalists. This has ensured mass unemployment as fewer workers are forced to do increasing amounts of work and real wages are lowered to allow increased dividends for shareholders.
Capitalism has created an economy of boom and slump. Goods pile up unsold because they cannot be sold at a profit despite the fact that there is a crying need for them among millions who do not have the money. The competitive and blind nature of capitalist production contributes to anarchy in production which ensures constant disruptions, shortages and oversupply and is also wasteful and destructive of the environment. Most important of all, however, capitalism has created the conditions for its own end. It has created a working class – many millions strong throughout the whole world, concentrated and educated enough to be able to run industry and commerce without the need for bosses.
It has created a level of technology and a system of communications that makes a planned economy more feasible than ever before. And it has created semi-permanent crisis, as repression and misery force workers repeatedly to rise up against the system.
Capitalism’s beginning was bloody, violent and the product of class struggle. Its end will be the same. But the working class has no interest in creating another exploiting society. Its interest is in a classless society, in which the goal is not profit but meeting the needs of every human being on the planet. With the creation of socialism, as Karl Marx wrote, the real history of humanity will begin.
