What is capitalism?


3. What is capitalism?

In the previous session, we laid out the materialist conception of history. Engels stated that alongside this new understanding of history, the other great discovery modern, scientific socialism was based on was Marx’s ‘demonstration how, within present society and under the existing capitalist mode of production, the exploitation of the worker by the capitalist takes place.’ Beginning with an analysis of the simple commodity, Marx was able to lay bare the contradictions at the heart of an economic system which restricted production to the narrow limits of profit making rather than the needs of society. The theory of surplus value for the first time showed how ‘accumulation of wealth at one pole is…at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality [and] mental degradation at the opposite pole’.

Marxism arms us with a method of seeing beyond the surface phenomena of bourgeois society, those focused on today by the media, economic ‘experts’ and politicians, to the fundamental, yet hidden, social processes and relationships of exploitation. And in doing so, Marxism shows how capitalism sows the seeds of it own destruction, discussed in more detail in section four.


The Communist Manifesto (sections I & II). By Karl Marx and Frederick Engels

Value, Price and Profit. By Karl Marx

Review of Marx’s Capital. By Frederick Engels

FRFI 56-64 (1986) Marx’s critique of political economy: Value (1); Money (2); Mystical veil of commodities (3); Capital (4);  Production of surplus value (5); The accumulation of capital (6); The tendency for the rate of profit to fall (7)

Basic principles of Marxism – Part Five: The bloody origins of capitalism

Supplementary reading

‘Value & price in Marx’s Capital’,’ in Revolutionary Communist no1. By David Yaffe

Once again on productive and unproductive labour,’ in Revolutionary Communist no3/4. By Peter Howell