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1.

Mode of production According to Marx, history Capitalism


- The specific evolves through the interaction - Mode of production
organization of between the mode of based on private
economic production in production and the relations of ownership of the means
a given society; includes production. The mode of of production; economy
means of production production constantly evolves based on the intense
toward a realization of its fullest accumulation of
productive capacity but this commodities
creates antagonism between - Capitalists produce
the classes of capitalists and commodities for the
workers. exchange market and to
stay competitive, must
extract as much labor
from the workers as
possible at the lowest
possible cost.

2. Profit To see the source of capitalist The process of the circulation of


- The motive force of profit, it is necessary to study capital is represented by the
capitalism political economy. The worker formula M-C-M1.
sells his power to work and the
Commodities capitalist buys it. The worker The capitalist starts with
- Objects that satisfy stays poor, the capitalist money, transforms it into
human needs and becomes rich and powerful commodities, then transforms
wants. This is the those commodities into more
fundamental unit of In the very basic market money. Capital is money used
capitalism. arrangement, people produce to obtain more money. These
commodities so that they can two different arrangements are
obtain money to buy the summed up respectively in the
commodities that they need. diagrams C-M-C and M-C-M ( C
= commodity; M = money).
Capitalists are primarily
3. How the value of the interested in the accumulation
product is Made Up The basic criterion for assessing of capital and not in the
a commodity’s value is its commodities themselves.
essential usefulness, what it Capital is money used to obtain
does in the way of satisfying more capital.
need and wants.
To increase their capital,
How is it that commodities with capitalists rely on workers who
different use-values can be put their labor power at the
measurable in the same units? disposal of capitalists. Workers
His answer is that universal treat their labor power as a
measure for value, expressed commodity and sell it to factory
in terms of money, corresponds owners.
to the amount of labor time
that goes into the making of A. Use-Value
each commodity. Labor time - How a commodity
the is only thing that all satisfies needs; intrinsic
commodities with different use- B. Exchange Value
values have in common and is - Allows one to
thus the only criterion by which determine what one
they are comparable in a commodity is worth in
situation of exchange. relation to another
commodity; extrinsic
property of
4. Commodities Fetishism The social dimension of commodities
- The relationship commodities - A.K.A. monetary value =
between a commodity’s - Lies in the fact that the value in the market.
value and its social commodities exchange
dimension value is not intrinsic to The Labor Theory of Value
them but instead  Labor is the source if
depends on the value
society’s entire division  Value is not just an
of labor and system of economic relation.
economic According to Marx, it is
interdependence. a social relation
 If the condition of
Commodities reflect not only production develop,
the labor pit into the but the and the productivity of
social relations of the labor increases, the
production in which the labor value of the commodity
was performed. declines.

5. The means of Capitalism, founded on a This social aspect of


Production principle of private ownership, commodities cannot express
A. Factories, machines, has the owners of the means of itself because in capitalist
raw materials production (factories, raw society the quality of
materials) dependent on wage commodity is thought to
labor to create profits. Capital is emanate solely from its price,
money used to obtain more not from that which money
capital. expresses, namely social labor.
The fact that people are moved
M-C-M1 explained: to mistakenly reduce the quality
The process of the circulation of of a commodity to money alone
capital is represented by the leads Marx to argue that
formula M-C-M. The capitalist modern capitalist society has
starts with a sum of money (M) invested the money-form with
which he converts into mystical or magical significance.
commodities, machineries, raw
materials, and sells the product When you reduce the value of
for more money than he started commodities into money, the
with (M). This additional money social dimension of it is ignored:
that he gets from the sale of the The fact that commodities
product is his profit. emerge through an inherently
exploitative system of wage
labor

Marx’s point is that the


production of commodities is a
social process, dependent on
exploitation

The problem to be solved is The problem to be solved is


how does money turn into more how does money turn into more
money? Where does the extra money?
money come from? Where does the extra money
come from?
B. Labor Force and their
Exploitation Powerful firms use their
dominating position to gain for
themselves extra profits at the
expense