Last updated: 25 October 2022

What is Capitalism?

Simply put, “Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.” (Source: Wikipedia.)

What does it all mean though?

Let’s take a closer look at each of these terms.

First up, “means of production.” (AKA Capital.)

Things that can be used to produce goods, creating economic “value.” Think land, tools, factories, etc.

Then, there’s “profit.” (AKA Surplus Value)

The difference between what it took to make a product and how much it’s sold for.

Lastly, let’s look at private ownership.

It means ownership by non-governmental entities. Furthermore, it is different from collective and cooperative entities as well.

This all seems straightforward enough… But there’s a lot left unsaid in the dictionary definition of capitalism.

How do businesses get surplus value?

There’s no surplus value without the exploitation of workers.

This is what people mean when they say “profit is theft.” If workers are paid for their production, there wouldn’t be a surplus.

I highly recommend watching this video from Richard Wolff where he breaks down how capitalism works. (h/t Toi Smith.)

Throughout capitalism’s history, the goal as to pay zero or close to it. Slavery and indentured servitude were a huge reason capitalists were able to accumulate wealth.

This is still the case today as low wage labor has been outsourced to the Global South. Furthermore, wages have stagnated for decades in the Global North as well.

Note: You can’t make a billion dollars through hard work alone.

How hard do you have to work?

Let’s take a good job. Say, a cardiologist making $500k a year.

They would need to work 2,000 years to make $1 billion!!

People simply do not become billionaires because of "hard work." They become billionaires because of the exploitation of their workers.

Also, being rich doesn’t take “smarts.” Wealth has nothing to do with intelligence.

It has everything to do with cruelty.

A more accurage definition of capitalism…

“A system that allows private individuals to own the means of production, with the goal of extracting a profit from the sale of commodities produced by wage workers.

— Black Socialists in America, on capitalism

A Brief History of Capitalism

(In development. Stay tuned!)

Capitalism: Now