Understanding Capitalism

Understanding Capitalism

This page helps us understand the economic system that we operate within.

Defining capitalism

Max Weber (a sociologist who analysed modern western society) provided a useful definition of capitalism:

'the pursuit of profit, and forever renewed profit, by means of continuous, rational, capitalistic enterprise’

After a lifetime of teaching Marx's 'Capital', David Harvey diagrammed how capitalism works:

The Origin of Capitalism

It is important to explore the genesis of capitalism. As political theorist Ellen Wood puts it, "thinking about future alternatives to capitalism requires us to think about alternative conceptions of its past."

One way to do this is to consider the way capitalism limits our experience of space and time.

  • From a geographical point of view, capitalism is not as ubiquitous as it has been primarily implemented in Western societies.
  • From a temporal perspective, it has not existed since time immemorial but from the 17th century onwards.

Such reminders remedy the dominant narrative of capitalism as a natural, eternal and universal system of socio-economic organisation.

The 'Plagues' of Capitalism

In 1993, the philosopher Jacques Derrida outlined 10 problems with the capitalist system in his book 'Spectres of Marx'. Almost thirty years later, do they show any sign of slowing?

  1. Structural unemployment
  2. Homelessness and deportations
  3. Economic war
  4. Uncontrollable market
  5. Foreign debt
  6. Arms industry
  7. Nuclear proliferation
  8. Interethnic war
  9. Mafia/drug cartels
  10. International law

Contemporary Critiques of Capitalism

These can be triangulated into three broad categories:

1. The social critique of inequality
2. The artistic critique of inauthenticity
3. The ecological critique of despoliation

However, capitalism's innate ability to subsume its critique means for every new form of critique, there is a new spirit of capitalism.

The 'x-ations' of Capitalism

These are the processes that become habitual within a capitalist mindset. Combined, they form capitalism's 'way of seeing':

  • Abstraction: creating general rules and concepts to simplify reality
  • Aestheticisation: co-opting radical theories and reducing them to mere aesthetics to create profit
  • Ahistoricisation: proposing ideological structures are the logical conclusion to historical development
  • Alienation: disconnecting people from their workplace creations
  • Atomisation: destruction of community support networks and the creation of loneliness
  • Bureaucratisation: creating organisation with rules, regulations and authority
  • Commercialisation: seeing things in terms of how it may provide gain
  • Commodification: transforming things into objects of trade
  • Deterritorialization: displacing peoples from their habitats to expropriate their land
  • Flexibilization: firms having loose relationships with their workers
  • Interpellation: the process of being convinced to internalise values  
  • Institutionalisation: creating norms that restrict independent thought
  • Globalisation: the integration of world cultures
  • Naturalisation: positing ideologies are not socially manufactured but organically emerge
  • Offshorisation: moving production processes to cheaper or more efficient locations
  • Privatisation: transferring services from public ownership to private control
  • Rationalisation: viewing reality through a mathematic lens
  • Reification: giving human attributes to non-human things
  • Standardisation: making things the same so that they are easier to produce
  • Segmentation: grouping people together and giving them labels
  • Subsumption: the process of absorbing critiques to produce new iterations of capitalism
  • Territorialisation: putting people and ideas within boundaries

Case Study: Second Hand Time by Svetlana Alexievich

In this book, Alexievich depicts life in 90's Russia after the fall of communism. The book is a series of interview transcripts.

We hear accounts of how capitalism ripped the fabric of intellectual and communal life. Ideas were replaced by market opportunism. Desire moved to consumer goods: chewing gum, jeans and Marlborough cigarettes.

The book presents: multiple narratives that end in suicide; the transformation of money into something important; how quickly organised crime manifested itself.

“Today, no one has time for feelings, they’re all out making money. The discovery of money hit us like an atom bomb…”  - 'Second Hand Time'  

Creative Destruction: Capitalism's 'essential fact'

"The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. (p. 83)" - From Joseph Schumpeter, Capitalism, Socialism, and Democracy (1942):


Capitalism is in the process of finding a place for the anger against it: colonial, gender, psychological, environmental...will it address or assimilate the critiques?

Capitalism affords an increase in convenient ways of living life, the development of trading partnerships, and the exploration of identity through lifestyle and fashion...but for who?

The market self-organises itself into a complex system without the need for central planning or external guidance...until it implodes

We are in 'late' or 'post' capitalism. This reflects the new reality that, in the digital economy, there is no scarce resources to compete over...and yet inequality proliferates


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