Capitalism is theft, literally. It is Labor that creates all wealth

by Richard Mellor
Afscme Local 444, Retired

We use the term capital frequently, either in reference to human capital or stocks or factory buildings and money itself. But Marx explained that capital is no one thing, it is a process. In fact he describes very clearly in his General Formula for Capital, how money is transformed in to capital through the process of production.

The source of the capitalists' profit is surplus value, that value created during the process of production that is over and above what the capitalist lays out for Labor power or wages. This is the basis of capitalist exploitation or wage slavery as the relationship has been called over the years. The capitalist hires our ability to work over a period of time and we produce more value than they compensate us for.

Once we accept understand this clearly, life becomes easier for us in a sense; coming face to face with reality is a good thing.

Your average enterprise borrows money to pay the wages of its workers. There are special loans and rates and rules for this type of bowing. That’s another thing, the policies and practices of the business world are very hidden, there’s no such thing as economic democracy. Workers rarely consider that the much praised first amendment of the US constitution, the right of free speech, does not apply in the workplace which is the domain of the capitalist.

I raise this issue because despite coming under vicious assault in an intensified class war, we tend to buy in to the argument that the capitalist has the right to the money, the right to their billions; after all, they earned it. And all the propaganda in society leads us to believe that the business exists through their efforts, they started it.

In a sense this is right of course, an individual may be able to borrow money from a bank using the home their parents left them as collateral and use this borrowed money to purchase plant and machinery, (Marx called this constant capital) and hire a worker or two (purchase human Labor power or a human’s capacity to work, “variable capital” ) and start a small business. The hundreds of millions of dollars that capitalists raise for what they call “start ups” are beyond the capacity of any worker to afford, we just don’t have the collateral for it.

But the main point is that this borrowed money to start a business, or the borrowed money to pay wages every two weeks of the workers in a firm, or the money that banks lend to each other from a reserve is accumulated capital that is the product of past Labor power, past surplus value.

The starting point for their billions

So no matter which way we look at it, the money stored in the banks, the money used to pay wages and buy plant, the surplus value from which the capitalists wealth is derived, all has its origin in the Labor Process and specifically in the surplus value created by the capitalists being able to impose an unequal relationship of exchange on the working class; surplus value is the unpaid Labor of the working class. Surplus value was produced under feudalism too, it was the property of the aristocracy and capitalism was a historical step forward from that relationship in that it advanced the ability of society to produce what we need. But it has outlived its historical usefulness.

Constant crisis is the norm for an economic system of this nature. The wars, poverty, disease and many of the so-called natural environmental disasters are all a by-product of this social relationship. The inner workings and details of the relationship are important to understand and figure out. But it is enough to understand the general processes that take place and how wealth is created because it completely discredits the ideology of the capitalist class that rules society that it is their individual efforts and hard work that creates wealth, that wealth is their creation therefore their product.

So once we get this obstacle out of the way in our own minds, we can see that that a major task ahead of us is to take collective ownership of this surplus value which would include the process of production that creates it. The capitalist would call this theft as we would be taking what they tell us is rightfully theirs. But it is no more rightfully theirs than the slave owners' wealth extracted from the slave  or the feudal Lord's from the serf. It is a right imposed by might, by force.

We are mightier and stronger than them. Through their control of the means of production and the state they use all sorts of methods to divide us and weaken the unity of workers that has the power to change this exploitative relationship. They discredit the ideas of great economists and philosophers like Karl Marx who came to understand and help us figure out how society really works. They hide worker’s history and teach us the history of capitalism, the history of ruling classes. Most importantly, they distort the ideas of scientific socialism in order to deter working class people from delving in to them, something made easier by the existence of the Stalinist regimes in the former Soviet Union and China.

The recent economic crisis has discredited capitalism in the eyes of millions of workers. Our history and the history of political ideas has been driven back but are emerging once again with the increased opposition to capitalist austerity throughout the world.

The Arab uprisings have inspired us all and opened up a new era. There is a lot to be optimistic about.