Karl Marx Question #3
Capitalism refers to a political and economic system in which a country or state’s a trade and production industry are privately controlled for profit-making motives (Jahan & Ahmed). The system can also be referred to as a free enterprise or private enterprise.
There are various features that distinguish a capitalistic system from other systems. Firstly, there is private ownership of means of production such as land. Secondly, the motive of production is profit-making. Thirdly, the economy is a two-sector economy consisting of the capitalist (bourgeoisie) and the workers (proletariat). Fourthly, the capitalists pay wages to the workers who help convert the factor of production into final commodities (Dillon 36). Lastly, there is a division of labor which leads to specialization among workers.
The system of unequal private ownership of property and means of production separated the bourgeoisie from the proletariat and brought about the concept of classism and stratification. Moreover, since the production was profit-oriented, the interaction between classes was based on economic interests. Workers were paid the minimum amount necessary for survival. The surplus-value they created during production was not catered for. In other terms, workers were exploited by the capitalists who would earn profits and keep it for themselves. Therefore, the workers languished in poverty struggling to satisfy their basic needs while the capitalists grew wealthier.
The society in a capitalistic system was characterized by a large gap between the poor who had no choice but to sell their labor to the rich who owned means of production. As the capitalists concentrated fully on profit-making any decline in profit could lead to retrenchment of workers or reduced wages. This in turn resulted in an increase in social and economic inequality.
Dillon, Michele. Introduction to sociological theory: theorists, concepts, and their applicability to the twenty-first century. 2nd ed., John Wiley & Sons, 2020.
Jahan, Sarwat, and Ahmed S. Mahmud. “What Is Capitalism? – Back to Basics – Finance & Development, June 2015.” International Monetary Fund – Homepage, June 2015, www.imf.org/external/pubs/ft/fandd/2015/06/basics.htm.