Capitalism, Socialism, and Leftist Political Economy (Pt. 1): Basics of Capitalism

(image: maGe workers toiling in a Levi's factory in Ethiopia)

In this series of articles we are going to review the main lines of critique and inquiry that make up the current canon of Left and Socialist movements, and how they relate to and can be critically applied to our contemporary world. The first entry in this series will deal specifically with the basic Marxist analysis and critique of capitalist political economy.

Social Labor and its Products

We start our analysis with the concepts of labor and value. Labor in the most general sense is any form of work or effort expended by a human. Labor becomes Social Labor instead of Individual Labor when it, or its products, enter into the web of interactions and relations that we call society, and there has been some interaction between individuals within a society or community, which has involved as a component, a common or connected interaction with that item or service. This is direct social labor. To give an example, if i merely work hard to dig a hole at the beach, for no real purpose, that work was indeed hard, and required individual labor, yet it was not social. But if i build a sand castle for the enjoyment of my family unit, that labor has become social. The latter is an example of Direct Social Labor. That is, working directly to meet a need, or produce a social result from the product of my labor. Cooking food for your family, growing your own vegetable garden, these are all forms of direct social labor. It's clear to see the direct worth or use for this labor, it's clear to see who it goes to, and the people performing and/or managing the labor are directly aware of these things. The labor is organized and done by the actor or social unit, first and foremost to produce items for use by a direct beneficiary.

Social Value

Yet much of the labor across different societies for some time has not been limited to direct social labor. In our modern time especially, much of the social labor undertaken is indirect; undertaken not because the unit organizing it wishes to meet some need, but because by organizing the process of social labor, some other end than meeting a direct need is served, be that accumulation of wealth, power, or service to a 'higher' cause (like a bureaucracy, an army, or a state). In these cases, the use of the labor and its products are indirect, in that they are not organized by the performing social unit to fit a direct need, and their worth or use is not as directly perceptible or accessible to those undertaking the labor process. In these cases the worth and social necessity of social labor are abstracted away from directly perceptible need, into social value.

Social value is an abstract concept of worth assigned to commodities or items which are produced by social labor and thus involved in social/material relations between two or more people. Within capitalism, social value is approximated and appraised using money as a numeraire (a unit of accounting for value). Yet the price of a good is not the totality of or direct measure of what its social value is. It is merely an appraisal of worth that is informed and shaped by the more complex mechanisms that come together to form social value. Social value in capitalism is determined and made up of several specific types of valuation, in interplay with one another, the most important of which are use value and exchange value.

Use Value

Use value is value that a product is assigned or acknowledged to be imbued with, based on its potential for use by a human in a given community or society. Use value, and degrees of usefulness may in some way be reflected in the pricing of an item. However, use value exists before any price tag is assigned to an item. Rather it is a prerequisite for an item to be brought into a system of social relations and made socially useful.

In most analyses of use value, what matters is not the degree to which something is useful, but whether it possesses ANY use value at all, or if it is socially useless, a binary yes or no. Food, for example, has some degree of objective use to nearly all humans, and there is therefore a shared use value to it among societies, regardless of whether it is grown for free consumption, or it is sold at a store. Regardless of the price or cost of acquiring it, there is always objectively some degree of use for Food that makes it worth interacting with, seeking out, bringing into the social system of production, distribution and trade, and consuming. This is what it means for something to have a use value.

It would be simple to then assume that the degree to which something is useful is what determines the full scope of its value and therefore its price. However, use value is merely one component or type of value, that interplays with many others to determine the totality of social value of an object. Use value can be understood as a more timeless or universal basis for the potential of greater social value. A form of value which gives a reason to include an item or commodity in a socioeconomic system, based on the fact that some numerous individuals in that system have use for it, and have use to interact with each other and/or their shared world in relation to this item. It is in a sense, a prerequisite for an item to have the potential to be imbued with any other form of importance or value within a social system, as there is little reason for many members of a society to continuously interact each other about the affairs of an individual item, if there is not some broad use for it, be it spiritual, productive crafts, artistic etc.

To think about this practically, if i really love a random speck of dirt i've found, no matter how much i appreciate it, i would have quite a hard time finding someone who would make some use of it, and go on to pay for it; or take the time and care to diligently store it as a singular speck of dirt. In other words, the lack of it having a use value for others within the system makes it impossible to make that speck of dirt social, to involve it in relations between members of the system. It would be quite difficult to assign a price in money to that object at which anyone would think it worth buying without some magic of marketing. It would be equally difficult to receive an item in exchange for it in barter, or informal gift reciprocity. In other words, because it has no understood use value, we cannot even get to the additional step of quantifying its value in more specific forms like price, or reciprocation, as we have no justification to have others involved in the marketing, sale, or use of this item.

Exchange Value

Exchange value is the main component or form of social value that matters within capitalism. It is the value that an item could fetch in exchange for switching its possession. In capitalism this is most often appraised via looking at pricing and cost analysis. An item must have and be in a form in which it has a recognized use value, before anyone would exchange something for it. The potential for exchange value is determined by the recognition of a use value. If i sell you a phone, the sum of the values of what i would typically receive in exchange for that phone, and that i would consider worthy enough or economically sustainable enough to make the deal, can be said to be its exchange value. You have made the deal because you recognize some use value for the phone, which makes you pursue it, and consider exchanging possessions you have for it.

Within capitalism, the pursuit of exchange value is the leading force in society. What does this mean? Consider the economy of money and sales that is central to our lives. All of the objects which have some volume of trade in the marketplace, by evidence of their involvement in the market, have social value and therefore must have some use value. But is it merely the potential to use the objects which guides the market? Do we produce items and then spend all day looking for any and everyone who can use them to give them for free? No, the interactions between people and items in the marketplace are guided by the potential to receive money in exchange for a product of labor, or a commodity – money which one can use to reliably acquire some other commodity.

Money intermediates an exchange of value between commodities and their holders, and supplants directly social labor, as the performance of labor for money, mystifies and makes abstract the actual use of that labor's product for the producer. The gain of money in exchange for the product of one's hand becomes the main end for which labor is performed, not the laboring unit seeing or directly partaking in the efficient use of its products, as is the case with a community garden, or cooking for one's family. In a system guided by the pursuit of exchange value, most businesses do not actually make direct use of the items they are creating, but are seeking others who recognize a use value in their wares, so that they can obtain money for them. In this way they hope to accumulate a stockpile of money, which effectively is a stockpile of the potential to receive other items or services.

The pursuit of this stockpile of money, and of the means to make it, in other words the pursuit of Capital, is an end in and of itself in this system, and the most important end at that. Social power is sealed inside of money, the marker of exchange value; the pursuit of the marker, and therefore pursuit of exchange value, guides not just the interactions at the point of sale, but the entire web of interactions and systems which produces or obtains items, primes [prices?] them, and brings them to market in the first place. The pursuit of capital through engaging in capture of exchange value is thus in its simplest and most widely understood terms, the pursuit of power. This system, guided by the pursuit of social power through exchange as an ends in and of itself, is called Production for Exchange.

Labor Theory of Value, Surplus Value

Within capitalism, the processes needed to create or obtain a commodity, prepare it for use, make the potential for its use known via marketing, and bring it to market, are almost never undertaken mainly by the owners of the firm or business, nor by the guiding panel or executive committee of the social formation involved in production, but by the laborers. Laborers are either paid a wage in exchange for involving their own labor directly in the production process, as another commodity; or their labor is taken from them by compulsion, in a manner that reduces their bodies to commodities, resembling pack animals (i.e., slavery).

Thus we can say the existence of most use value- holding items in society, as marketable commodities ready for exchange, is only due to the commodified labor of these waged and forcibly compelled workers. This is the labour theory of value, as applied by socialist critique to the activity of the working classes. Yet when exchange value is fetched for the sale of the commodity that they produced or brought to market, it is the firm, and its owners whom the firm is merely an extension of, who hold legal possession of that value. If workers are paid at all, it is only the minimum that the firm can get away with while keeping them as workers. The firm, in the pursuit of accumulating capital as fast and steadily as possible, aims to pay as little as possible for the necessary labor for producing a given item, and the resources needed to bring its products to market (or the means of distribution) .

In doing this, the firm aims to ensure solvency, that the exchange value it is capturing in sale is more than the exchange value it expends in the process of acquiring and utilizing labor and supplies. In simple terms, it aims to run a surplus, and therefore to profit from its activities. This surplus above the cost of labor and activity is known as surplus value. If we understand that labor is what brings all of the value of society to the marketplace, then we understand that to obtain surplus, one must pay workers less than the value they truly produce, if one pays them at all; otherwise the value left over for the firm would be nothing. Breaking even would be the best the firm could do without outside investment or reinvestment from those workers. The cost of labor is thus intimately tied to the pricing of most commodities, as compensation (or non-compensation) for all forms of labor across the productive process, is across all industries, directly tied to the potential for firm solvency.

How is this anything other than the greatest scam of all history? The system is predicated on people who do effectively nothing, skimming profit by paying those who do all the work less than they are worth, and using this profit to control society and all its resources. It could not exist as it does without some form of exploitation or trickery. Furthermore, these people who do nothing, sell you back the same thing that you and and your fellow workers produced; so not only are you getting skimmed, you are also then paying the money you did get back to the same scammer, for the thing that you produced yourself, with the help of other workers. This grand class of scammers is the bourgeoisie, and their hapless victims are the proletariat, the peasantry, the slaves, and the other representatives of the underclasses.

Mechanics of Production for Exchange

As mentioned earlier in the section on exchange value, under capitalism, economic production is primarily undertaken by firms, not to directly meet the needs of a social unit or community they belong to, but to acquire profit in the form of money by exchanging products/commodities within the marketplace. "They" produce on the assumption that someone out there needs the commodity, but has more than just need. The firm works on the assumption that the person or business in need has the money required to turn that need into demand, and return profit in the exchange. Within the workplace segment of a capitalist society, the individual engages in production or economic activity, not to directly use a product they make, or to directly meet the needs of themselves or those around them, but to indirectly acquire products that meet their needs by acquiring money as a wage, and then using this money to satisfy those needs.

If i am a plumber, most jobs i do are not because i know that person and want to fix their plumbing. Few plumbers are part of a non-business organization trying to directly reduce the amount of plumbing issues in society; and even if they are, they're probably getting some form of wage in money for their time. If i am a plumber, on a practical level, i work the jobs i do for the hours i do in order to acquire money so that i can buy food, as i am not a farmer and don't have a social relation to a farmer which will have them give me food for free. I work so that i can pay rent because i do not have a social relation that lets me reside somewhere without purchase or payment. In a system of production for exchange, if you are a worker, someone who directly engages in labor within the workplace and marketplace, you most likely work to get money to pay for labor or commodity to meet your needs, rather than working and producing items and services to meet your own needs and that of the community directly.

Conversely, outside of certain scenarios, institutions and close relations (family, close friends), your own needs will only be met via the indirect social relations of the use of money, not direct relations in which people appraise your need and attempt to directly satiate it in the most effective way, or freely gift you assistance for some sense of reciprocity. Thus money, beyond being a holder of value and the social power to obtain goods and services, functions most basically as a way of making indirect, depersonalized and quantifiable, social relations, decision making, and value judgements about what is to be done as a society, how to value resources, and whose needs deserve to be met. It is a decision making device for organizing indirectly social labor, for deciding how to apportion resources within the larger system of social relations and value that is production for exchange. Like a fetish, it dominates a system of relations that restricts access to most resources and useful labor, enclosing them within the marketplace and the vaults of capitalist firms, making them available only as abstract, exchangeable commodities, so that the firms controlling the marketplace can accumulate capital.

The exchanges carried out in commodity production, and the prices set in those exchanges, are informed by and situated within a larger system, that aggregates the terms of all production and exchanges carried out via that modicum of exchange or market of value, and the terms of exchanges and production involving other modicums and social units that it interacts with. This indirect aggregation of relations facilitates the particulate, decentralized administration of what is now a globalized and unequal system for making decisions about the allocation and consumption of social wealth. This system is often referred to as "the market".

While the market is often ascribed a godlike quality by capitalist economists, it is merely humans making decisions on a grand scale, using markers of value to communicate and signal decisions of exchange to each other, rather than collective conversation and reasoning about decisions, and consciously cooperating and directly working to implement them.

To put some of the insights of the prior segments into plain words: if i'm starting a capitalist business to sell a product and make a profit, and i'm going about it rationally, i'm going to ask a few questions. Does anyone besides me have any use for this item at all (use value)? how much money or value will i receive from the average person paying in exchange for it (exchange value)? how many people do i have access to who can pay relative to average prices (demand)? how much of the product do i have and can i produce, and at what rates ( supply and average productivity)? will what i get in exchange for it it exceed the value of what i pay in labor and resources i commission to produce it (profit, exchange value, surplus value)?

Labor theory of value, value, and prices

As previously mentioned, price is not so much a direct representation of social value as it is an appraisal informed by it. Furthermore, the labor theory of value, while maintaining a connection between labor and value, and therefore labor and prices, does not assert a neat correlation between labor times and prices. As we will discuss in the latter sections, there are a lot of dynamics of value and productivity informed by the labor process which occur beyond prices, and influence the ability to set and take certain prices. Yet few of these mechanics function as simply as a universal direct correlation between labor time and prices.

What is most important to remember about the labor theory of value is that regardless of an item's pricing, its potential to be priced and sold in any capacity, depends on social labor; and the specific conditions that govern the use of social labor in capitalism necessarily exploit this labor for the ends of profit, by skimming value from what it produces.

More mechanics of value within capitalism

Within capitalism there is often a difference between the resources an individual needs; how capable an individual is at producing types of resource which can meet their needs, at a rate acceptable for their own need; and the types and amounts of resource production, and the rate of efficiency the productive process of a firm would have to attain in order to competitively meet the same need of the larger society, expressed through demand, and thus justify and necessitate the allocation of social resources to them by purchasing their services at their listed or accepted prices. Your family unit may be a decent enough cooking operation to make food for yourself, but it might not operate quickly or cleanly enough to run a restaurant that can compete in the New York restaurant industry, and turn a profit after operational costs and rent.

To begin to understand these mechanisms of productivity and efficiency, and how they relate to our analysis of capitalism, we must first make distinctions between the forms of social value we have discussed earlier, and two related concepts of value that we will be discussing: 1) individual value, or the value of an individual market actor's own utilized labor times and resources, within their own sphere and needs, and 2) money price, an expression and appraisal of the exchange value aspect of a commodity's social value, relative to all other commodities in the system, using a mutually recognized modicum of purchase and selling exchange (a numeraire).

The key to efficiency for all sectors is most often found in the apportioning, productivity, and exploitation of labor. Any labor power indifferently expended does not create social value, even if the individual worker values their effort. Labor only creates social value if the product of the labor has a recognized use value causing it to be involved in a social or material interaction between two people. The individual value assigned to the productive process is only realized as social value to the degree that the item has its use value created or primed, recognized and used to field exchange value.

It is important to note an implication of this fact. Regardless of the difference between individual value and labor put into a hypothetically identical commodity of two competing firms, if those firms were to bring their product to market at the same time under the same seller and circumstances, they would realize the same social value regardless of one firm putting in more labor hours. This means if one actor has to put more individual value in to produce a product, but the social value realized is the same between the two, one firm is capturing more value per sale, in the form of money, at the same price when balancing out the costs. For example, if i take 5 hours to produce something that it takes an average worker 1 hour to make, people won't pay more for the commodity i make solely because the value of my individual labor time to create it was greater. If it is identical in every other way, and the same purchaser was unable to distinguish any difference in the nature of the productive process behind it, the individual value of my 5 hours of labor time, will be translated to the same social value as the average worker's 1 hour, or at the very least, evaluated against the same market rate for said commodity. This is the concept of average productivity.

Average productivity is a determinant of what Marx calls socially necessary labor time, that is the labor time that society (via the market) effectively deems necessary and appropriate to produce a corresponding commodity, based on the aggregation and averaging of all labor times and productive processes in the system, in order to produce a use value. If many firms begin to produce above an existing average level of productivity, the socially necessary labor time to produce an object will decrease. This creates a social force that punishes the below- average productivity of some producers and marketers. It does so through lowering their profit margins by diminishing how much social value can be realized from the labor time put into each commodity.

For example, let's say my wage is a dollar an hour, and i harvest a dozen apples at a cost of 50 dollars a month, for 50 labor hours, producing a one- dozen batch. This rate is the standing average of productivity. And since i can sell those dozen apples at a market rate of 100 dollars a month for 1 batch, my profit margin is 50 dollars a month and i can stay in business. All of a sudden, a big company comes to my market; and at the same labor pay of a dollar an hour, using better facilities and technology, they can yield a dozen batch of apples at a cost of 10 dollars a month for 10 labor hours. Working at a greater productivity, and paying less labor hours for the same output, they can realize 90 dollars of profit a month. This averages out with all the other producers in the market to double average productivity.

Now that i'm below average productivity, and there is an increased misalignment or gap in the socially necessary labor time needed to produce the use value, and the individual labor times and values my firm puts into producing the commodity, a series of market forces will create negative outcomes for my business if i can't compensate with new production processes or marketing strategies. Other firms will be realizing more profit per purchase than i am, positioning them to make more investments and upgrades, and improve their marketing and infrastructure. They will have more cash on hand and may invest some of it in other assets or sectors. This will make them more competitive and capable of surviving economic shocks. They may underprice me because they can sell at a lower minimum price to realize a net profit (after taking into account labor and input costs) and stay solvent, taking market share from my firm and further depleting my funds as customers flock to them; making it harder for me to realize any exchange value and profit at all from the individual value put in.

In response to these pressures, firms fight to advance new ways of exploiting and skimming more from their workers, to better market their products; and to increase the productivity per labor time of their workforce so as to stay profitable, by staying in line or ahead of the socially necessary labor time relative to their competition. The forces of the market are making a society level decision which rewards certain firms for productivity, increased capacity to cheaply exploit labor, and ability to market products, and punishes other firms for not competing at an average standard. In this way they choose which productive process, and which people involved in it, are important and deserving of resources, and which people and productive processes deserve exclusion and marginalization.

The market is in fact this very abstraction of societal decisions: about the material/economic empowerment and marginalization of labor processes, and of the laborers themselves. These pressures impact priming strategies, profit margins, etc.; and thus play a central role in determining pricing. Yet we can see that there is a step of separation between the mechanics of market-wide social value at play for a commodity, and what its price and profits may end up being for each individual firm or at each point of sale.

Supply and Demand

We now well understand some dynamics of the market process from the scale and scope of the firm. We must examine more closely the interaction of production, value, supply and demand.

The realization of social value is not only guided by the processes and mechanisms of average productivity outlined above, but by the mechanisms of supply and demand. Supply refers to the supply side, the amount of the commodity in circulation within the marketplace, and conditions on the side of the seller, while demand refers to the expression of interest in obtaining a commodity, through the use of money.

In a basic economics class, you may have learned about some of the basic ideas behind the interaction between supply and demand. The more demand there is relative to supply, the higher the degree of value and the price of the commodity is expected to go; and the lower the demand is relative to the supply, the lower the degree of value and price of the commodity is expected to go. When demand outstrips supply, it creates an incentive for production of said commodity to be accelerated to match and capture this demand. When supply outstrips demand, it puts pressure on the sector to lower production, punishing less efficient and less solvent firms who are unable to capture enough exchange value to offset costs for products they have already produced. This is often presented to younger folks going through the US education system, as the single most important factor guiding the market; with only passing mention of the role of labor, or concepts of value larger than just pricing, having a role or impact in their godlike concept of the "market".

First let us look at the marketplace. In order for the market to register a commodity or productive process, and thus appraise its value and productivity, that commodity must be brought into the arena of exchange. Sellers list their good at a price they think is appropriate, informed not by random subjective value judgements, but observations of how much went into a productive process, and what the good tends to sell for – hence a general idea of the price level at which its social value is generally appraised, and what value they can rationally expect to attain from it, and thus plan their actions around. Buyers consider what other prices the good can fetch, how many of that commodity type are on the market, the markup on the commodity, its quality compared to other goods in the marketplace, their appraisal of its usefulness, how much money they have in general, how they feel physically, the rumble in their stomach.

The total demand expressed by buyers is not solely or even primarily tied to the use the item can bring. Again, it is not just the use value of objects that determines the totality of social value in capitalism, but also the exchange value one can capture for them as part of meeting demand in the interaction of market exchange. Need and want are only recognized as demand when there is money, the marker of exchange value, put behind them. This necessarily limits how demand can be expressed, taking it from a realm random abstracted judgements of need and usefulness, to the grounded realm of the quantifiable limits to and capacity for putting capital behind that need relative to other competing needs.

If demand can only be expressed in the language of pricing, which is an appraisal of exchange value, then in fact, supply and demand are but another mechanism within this larger system which finds the origin of all of its value in labor. A system which organizes labor to create use values that are then put on the market to capture exchange value. We can then expect how supply and demand actually plays out to be yet another reflection of the decision making and class structure of capitalism.

The different considerations that go into each exchange are material considerations flowing from circumstance and the conditions of the entire society, not just atomistic appraisals of individual use, nor subjective judgements of quality. But because the processes of labour and the market are not directly social and therefore actors are not directly aware of all of them, and because actors are working from different individual conditions and knowledges, actors do differ in how their considerations translate to the exchanges they make, and the prices they list or buy at.  It is not as a simple as some bourgie economists would have us believe, that everyone is an enlightened actor pulling out a supply and demand chart, and doing a utility quantification before they make a decision on what price is appropriate to buy or sell at, yet it is also not a subjective chaos of random likes and wants. The marketplace and point of exchange are a core link, but still just a single link, in the network of social formations and societal conditions that make up capitalism; and the rules of supply and demand within that marketplace, do not alone carry the explanatory power to understand the market system in general, nor many of the decisions made within any particular exchange.

To elucidate the idea that there are greater social forces behind each market exchange: in a system where such exchange is primary, there must be a constantly recurring process of buying and selling. For there to be constant buying and selling, there must be a consistent supply and demand. For there to be a consistent supply and demand, there must be a consistent need; a group of people who consistently have the use values in their possession to meet that need; and a group of people who do not, but have some means to exchange for those use values. Within capitalism, there are classes of people who do not have the ability to meet the most recurring needs and wants possible, for food, shelter, and comfort, and must constantly find ways to acquire money to exchange for satisfaction of these needs; and a class of people who have control of the use values to meet these needs. The conditions that allow for such constant buying and selling within capitalism rely on this asymmetrical power dynamic, and on its propagation of consumers. After all, if a society is to be based on continuous compulsion into exchange, what need is more consistent and therefore reliably profitable, than those of shelter and food? These are use values with universal and ever present appeal, which across most nations, make up the bulk of consumer spending: that is to say, demand generated by individuals and not by firms, or for the purpose of engaging in a broader economic process.

If one looks to the early years of capitalism in any society on this planet, its introduction centrally relied on making these basics for life unavailable to a segment of the population. In Europe this was the process of classical enclosure. In Africa this was process of imperialist enclosure of land and water, and the restriction of free movement and association. In the Western hemisphere entire continents were turned into rectangular parcels of land owned by settlers and firms, from which native people and to a much lesser degree, even some workers of the settler states, are legally forbidden to reside without land purchase, and therefore are prevented from using to house and feed themselves without involvement with the market.

These enclosures, restrictions, and subjugations require their targets to engage with the conquering market system to get access to resources that otherwise had sustained, or have the potential to sustain their needs, without having to engage in buying. Thus they have no option but to enter the system of production for exchange. As we know, the apportioning of money and value within production for exchange, centers around the exploitation, through scamming or enslavement, of labor, in order to apportion value towards the treasuries and facilities of firms and their owners.

Thus there is a class of people who have large or sufficient amounts of resources or capital, to own land and firms, and not have to work/have their labor exploited; who can acquire the money to continuously express demand both as individuals and as firms, both for necessities and for luxuries. On the other hand, there is a class of people who only receive as much money as is possible to continue their own exploitation, and who can mostly only afford to express demand to meet the most minimal of their needs, like housing, food, and water and, if they're lucky, some paltry luxuries; who can't afford to not continuously sell their own labor to acquire money, because they must survive somehow, but do not possess sufficient means to meet their needs otherwise.

There is, furthermore, a class of people who are wholly excluded from the prior two classes, who neither hold possession of firm ownership or sufficient capital, nor have opportunities to sell their labor for money within the normal system; for whom attaining any money at all to express demand is a daunting task; for whom the only options are to survive through alternative systems, be they extralegal or informal, or to be conscripted into the most exploitative niches of the market to have some basic shot at survival: the so-called lumpenproletariat. Finally, there is a class of people who may be involved in formal market and productive processes, but not as a legally recognized human being, rather as a slave, a commodity among all the others available for use and exchange, with no rights of their own.

There is more than enough housing, food, and water for most people on the planet. But many do not have these things because they do not have money, and thus their needs and the use value required to meet them, do not translate to market demand. These needs are not met, because firms cannot accumulate a net profit through exchange with the people that have these needs. These people do not have the money to express demand because the exploitation of their labor, and enclosure of resources they can access without having money to start with, have left them with nothing, while firms appropriate the gains their labor and lands. It is along these lines, that the narrow mechanic of supply and demand plays itself out. We see that within all the mechanics of capitalism, the core conditions guiding and informing the decision making of different actors, circle back to these fundamental inequities in labor, and power over enclosed resources.

In the next entry of this series, we will move from this basic analysis of capitalism and its fundamental inequities, to an analysis of what socialism is, in relation to capitalism.