Capitalism

Tarun Patel

18685457

Exam #2

“A capitalist economy may turn out factory goods for farm products, tanks or teletubbies. What is capitalist about it is how it is organized.”

First, capitalism is an economic system where the private owners of capital goods, employers, hire wage labor to produce commodities for the intention of making a profit. In this system, there are two main classes, workers and capitalists, even though there are other classes such as middle class. A commodity is any good or service that is produced with the purpose of selling it in order to make a profit. Privately owned capital goods are machines, buildings, offices, tools, and other things needed in production and whose owner, due to a property right, decides how the property will be used. Profit comes in a form of surplus product in a capitalist economic system. It is what is left over, out of sales revenue after all the wages, the costs of materials used up, and wear and tear on machines have been paid. Secondly, a class is a group of people who share a common position in the economy with respect to the production and control of the surplus product. In a capitalist society, there are two classes, those that produce the surplus product and those that control its use of the product. So, a class relationship exists between the producers of the surplus product and those who control the use of the surplus product.

This quote means that a capitalist economy is a capitalist system because of how it produces a product, not what it produces. Slavery, feudalism, self-sufficient households, and capitalism are economic systems because they organize labor processes. That is the main factor that makes an economic system. These economic systems are different from one another because each of them has a unique set of class relationships and differ in organization of labor. Each set of class relationship is identified with a specific way of organizing and controlling the system’s processes. Also, in each of these economic systems, there are different set of procedures and class relationships that decide how social decisions were made. In slavery, it was the class relationship between slaves and slaveholders. In feudalism, it was the class relationship between noble class and peasants. In capitalism, it is the class relationship between the capitalist and the workers (labor). Capitalism is defined by three characteristics of its labor processes. One is that the labor must produce commodities. Second, the capital goods used in production of commodities are privately owned. Finally, the labor devoted to purchasing commodities is purchased in labor markets. Capitalism involves all three of these characteristics in order to be called capitalist production. Capitalism leads to employers hiring workers to produce commodities, which the employers then own. The employers then sell the commodities that the workers have produced to make profit.

Again, capitalism is an economic system where the private owners of capital goods, employers, hire wage labor to produce commodities for the purpose of making a profit. This involves two classes, the employers and the labor. The employers