Capital

Definition

Capital refers to the assets, resources, or means of production that can be utilized to generate wealth and facilitate economic activity. In the context of Marxism, capital is not just about money; it encompasses physical goods, factories, and machinery that enable the production of commodities. This term is crucial as it highlights the relationship between those who own these resources, known as capitalists, and those who work for them, typically referred to as the proletariat.

5 Must Know Facts For Your Next Test

1. In Marxist theory, capital is central to the class struggle between capitalists and workers, shaping the dynamics of society and economy.
2. Capital can exist in various forms, including physical capital (machines and buildings), human capital (skills and education), and financial capital (money and investments).
3. Marx argued that the accumulation of capital leads to exploitation of workers, as capitalists seek to maximize profit by minimizing labor costs.
4. The concentration of capital in the hands of a few individuals or corporations can lead to social inequalities and economic disparities.
5. Marxism critiques the capitalist system by proposing that ownership of capital should be collectively managed to ensure equitable distribution of resources.

Review Questions

• How does Marxism view the relationship between capital and labor?
  • In Marxism, the relationship between capital and labor is fundamentally exploitative. Capitalists own the means of production and profit from the labor of workers, who do not receive full compensation for their contributions. This dynamic creates class divisions, with capitalists accumulating wealth while the proletariat struggles for fair wages. The inherent conflict between these two classes is a central theme in Marxist theory.
• Discuss how the concept of surplus value relates to the understanding of capital in a Marxist framework.
  • Surplus value is a key concept in Marxism that illustrates how capital operates within a capitalist economy. It represents the additional value created by workers beyond their wages, which is appropriated by capitalists as profit. This idea highlights the exploitation inherent in capitalism, as workers generate wealth through their labor while receiving only a fraction of its value. Understanding surplus value helps to reveal how capitalists maintain their power and wealth at the expense of workers.
• Evaluate how the concentration of capital impacts social structures according to Marxist thought.
  • Marxist thought posits that the concentration of capital leads to significant social inequalities and imbalances in power. When a small group controls most economic resources, it can dictate societal norms, political structures, and even culture. This domination fosters an environment where wealth is increasingly inherited rather than earned, perpetuating class stratification. Such disparities can lead to unrest and challenge societal stability, as marginalized groups seek equitable access to resources and opportunities.

Related terms

Surplus Value: The difference between what workers are paid and the value of what they produce, which capitalists retain as profit.

Means of Production: The facilities and resources used for producing goods, including factories, machines, and tools owned by capitalists.

Proletariat: The working class who do not own the means of production and must sell their labor to survive.