Capitalism: Understanding Its Core Concepts and Global Impact

Capitalism: Understanding Its Core Concepts

Capitalism is a social system based on a series of habits, laws, political and economic institutions, and a culture that guarantees and legitimizes the fact that some people might deprive others of access to resources and use others for enrichment. The ruling class takes over the work of others and produces goods to sell in the market, thus accumulating wealth to maintain and increase their power.

It is an oppressive regime of class because there is a class of persons who, by their place in society, functions, or attributes, possess the power to dominate others. This class is defined by the amount and type of economic resources it controls.

  • Ruling Class: The group that directly or indirectly controls economic resources and the economic fundamentals of a society. Through this control, it manages to gain power over others.
  • Oppressive Regime: A regime is oppressive when a group of people has power over the rest. Having power means getting other people to obey and do something even if it causes them suffering. There are different types of oppression (gender, ethnicity, class, etc.).
  • Private Property: Private property is not new; since time immemorial, exclusive rights on certain goods have existed. However, under capitalism, such rights are extended to cover almost everything. Capitalism is a machine to privatize. The private ownership of anything is when someone has deprived or dispossessed others of its possibility.
  • Merchandise: Everything that is produced to sell for a profit. To access everything that is privatized, it will become increasingly necessary to buy. Even people’s time has become a commodity.
  • Surplus Value: The difference between the value of what the worker produces with their work and what they receive as wages. The ruling class appropriates the surplus value that workers and society produce.
  • Primitive Accumulation: The expropriation of land that introduced the arrival of capitalism to the peasants, who were forced to become workers. It also meant the colonial plunder of the riches of the world for centuries.

Capitalism’s Global Expansion

The Role of Nation-States and the United Nations

Capitalism has expanded by creating institutions and social forms that did not exist before. One of its first creations was borders and nation-states.

The notion that political authority must match perfectly with a clearly delimited geographical area with borders is an invention of capitalism. Also new is the idea that the space occupied by a state must match a nation. Capitalism invented nation-states to establish a unified internal market that employers could exploit without restrictions. They also served to better control the population and seize the opportunities of colonial expansion.

Imperialism

The capitalists looted gold and silver in America, enslaved millions of Africans, exploited Chinese workers, and expropriated peasants in India. Commercial companies and nation-states led this expansion. Imperialism also produced a uniform world. The stage of imperialism was also marked by war, state violence, and untold suffering for the greater part of humanity.

Globalization

The third phase of expansion of capitalism is the current globalization. Economic globalization means a much greater degree of integration of production at a global level. Each part of the same product is manufactured in different corners of the globe, and companies themselves are organized transnationally.

Investment and transnational corporations need to move freely without being affected by any national border. Therefore, it is necessary to harmonize certain rules of economic performance in the world, and with them, certain cultural patterns of all nations.

Nation-states are no longer enough to fulfill these tasks, and they lose power. To complement them, private transnational institutions and “public” organizations emerge that regulate and organize life on a global scale (e.g., the UN, NATO, IMF, CNN, FTAA, World Bank).