Examining the Structure of Capitalism
Capitalism is an economic system widely adopted around the world, forming the economic foundation of modern society. At its core lies the relationship between capitalists and workers, with capitalists pursuing profits by owning capital and utilizing labor. However, the system harbors serious inherent problems, particularly the structure of exploitation by capitalists. This article analyzes the roles of capitalists and the structure of exploitation in capitalism and explores strategies for challenging capitalism.
The Roles of Capitalists and Workers and the Basic Structure of Capitalism
In a capitalist economy, capitalists drive economic activities by owning and operating the means of production. They promote economic growth by investing capital, running enterprises, and creating jobs. Capitalists seek profits by employing workers and investing capital to produce goods and services. Conversely, workers offer their labor to capitalists in exchange for wages. Lacking ownership of the means of production, workers depend economically on capitalists, relying solely on their labor for income. This dynamic between labor provision and capital operation forms the foundation of capitalism.
However, an imbalance exists in this relationship. Capitalists control capital and direct economic activities, while workers remain dependent on wage labor.
The Structure of Exploitation: The Contradictions of Capitalism
Many people misunderstand the term “exploitation.” In capitalism, exploitation primarily stems from the labor value theory proposed by Adam Smith and David Ricardo and later expanded by Karl Marx. According to this theory, a commodity’s value depends on the amount of labor invested in it. Capitalists pay workers wages that often fall below the value workers produce. This difference, known as surplus value, constitutes the capitalist’s profit and establishes the exploitation of workers.
Moreover, capitalism relies on competition, driving capitalists to continually reduce costs and maximize profits. This pressure suppresses workers’ wages and worsens working conditions, strengthening the capitalist mechanism to extract additional surplus value from workers. Understanding this premise is crucial for workers striving to overcome capitalist exploitation.
Today, more individuals have the opportunity to become capitalists than ever before.
Compared to the feudal and aristocratic societies of the past, modern capitalist society has undergone a significant change in the distribution of power and wealth in its structure. In former royal and aristocratic societies, political and economic power was concentrated in the hands of a few ruling classes, with the lower classes, such as peasants and laborers, enjoying few of the benefits. Kings and aristocrats controlled the land, and it was almost impossible to overturn their rule. The revenues and tax revenues generated from such control were used exclusively for their benefit, leaving the masses in a situation where they had to earn their income from limited products and labor.
However, since the Industrial Revolution and especially with the development of global capitalism in the 20th century, the structure of exploitation has undergone a major transformation. It can be said that exploitation, once monopolized by a few classes, has been “liberalized” through the expansion of stock markets and capital markets more broadly. This was due to the shift to a system in which many people were directly and indirectly involved in the structure of corporations and markets, competing and pursuing profits under the rules of capitalism in various forms.
In modern capitalist societies, capital is widely dispersed, and ordinary citizens are now able to capitalize on corporate activities through stock markets and mutual funds. While this seemingly “democratic” system provides opportunities for many people to earn capital, the philosophy of maximizing shareholder value has created new forms of exploitation for many workers. And while those with capital can benefit from the fruits of capital, those without capital or without knowledge of such social mechanisms are still forced to earn money through the sale of their own labor. Although it is often said that the wealthy have greatly increased their wealth since the COVID19 disaster and the general population has not, in reality, those who own “capital” such as stocks and real estate have greatly increased their wealth.
Strategies for Challenging Capitalism at the Individual Level
So, how can we survive capitalism?
Start Your Own Business: One of the quickest paths to becoming a capitalist involves launching your own business. By establishing a business, you can directly invest your capital and pursue profits.
Manage Your Assets Through Investments: To succeed as a capitalist, you must effectively manage your assets. Investing is the primary method for growing your assets, so consider a variety of investment options.
Study Laws and Taxes: To operate effectively within capitalism, you need to understand laws and tax issues and handle them appropriately.
While capitalism fosters economic growth and technological innovation, it also perpetuates the serious problem of worker exploitation by capitalists. Conversely, recognizing capitalism’s structure early and developing strategies to overcome it can enhance the possibility of living a prosperous life. We will continue to examine capitalism in the future.
