The
capital mode of production
In
a capitalist mode of production, systems are organized into production and
distribution in the societies adopting the model. There are two variables that
are encountered simultaneously in a capitalistic mode of production. Karl Max
stipulates that this production model contains the means of production. When
referring to means of production, it is worth classifying the production
requirements in the context of production. Therefore, these refers to
factories, machineries, raw materials and labor among other factors of
production that are essential for the production of a goods and products. The
produced commodity contains both value and use-value. Commodity value refers to
the merits that a user enjoys through buying the product. There are any aspects
that are used for measuring value. From the perspective of the consumer, value
is defined by the durability of the commodity relative to its price. On the other hand, the use value is the value
that is delivered from the original value. The utility of a thing makes it a
use value. A commodity, such as iron, corn, or a diamond, is therefore, so far
as it is a material thing, a use value, something useful. This property of a
commodity is independent of the amount of labor required to appropriate its
useful qualities. When treating of use value, we always assume to be dealing
with definite quantities, such as dozens of watches, yards of linen, or tons of
iron. In a capitalistic economy, goods and products must be manufactured
encapsulating the use value in order to drive sales. The utility derived from
consuming the product is what use value entails. The economic concept behind
the existence of this value is correlated to the mode of using the product.
This value is related a cash value of the same amount and cannot be defined by
an intrinsic value.
In
a capitalistic economy, the aim is driving clients to buy more products and
increase the return on investment. As such, the products and goods produced are
products of concrete and abstract labor. If on the one hand the coat ranks as
nothing but the embodiment of abstract human labor, so, on the other hand, the
tailoring which is actually embodied in it, counts as nothing but the form under
which that abstract labor is realized. Individual ownership of the means of
production is the basis upon which capitalistic economy is founded. Therefore,
the owners of the factors of production must leverage low costs of labor
production in order to stay competitive in the market. In this regard, the
capitalist only pays the worker just enough money to keep them alive and
productive. For example, cases of strikes are evident in the modern day and age
in capitalistic economies. These cases are aggravated by the lack of
satisfaction in the rate of payment of the workers. From an abstract aspect,
labor refers to the economical valuable time of the worker while from a
concrete perspective; it refers to a particular activity with a specified and
useful effect. Concrete labor becomes, therefore, the medium for expressing
abstract human labor. For example, concrete labour like tailoring, produces the
equivalent of the product of weaving. In the former, human labor is used to add
value to the commodity. The capital value of transferring from inputs to
outputs is, therefore, persevered. In a simplified context, labor from this
definition can be seen as an activity that aims at creating and maintaining the
economic value. The realization of this value is done once the product is sold,
and a monetary value is achieved. On the other hand, from the context of
concreteness, the effect of labor and its usefulness in the production of
products is visible. In this essence,
labor is stipulated as an activity that is used to create use value. Once goods
are produced using these two forms of labor, the exchange contains simple
circulation and capital.
Simple
circulation is cash float in simple terms. This is the amount acquired and is
used to learn and oversee the daily running of a business or organization. This
money has an economic value as it stipulates the success of the business in its
ability to break even, earn profit and even retain capital. When the simple
circulation float is achieved, and the business enjoys surplus earnings, this
is the beginning of the foundation of capital. Capital in this regard can be
seen as the money ploughed back to the organization to enhance its performance.
It is an essential factor of production that businesses venture to acquire in an
attempting of meeting expansion and maintenance strategic goals and objectives.
The induction and accumulation of capital and wealth start from the ability to
simply circulate the daily earnings of the business. To ensure that this loop
continues, the produced goods and services must satisfy the needs and wants of
the clients. Customers are the source of the inflowing cash and inevitably,
this cash is what converts into capital in the long run. The biggest challenge
in a capitalistic economy is meeting the needs of the clients, leveraging low
costs and accumulating capital. In an attempt to achieve this balance, an
antagonistic social relation in the production process is applied by
capitalist. Max observed that this behavior will lead to the overthrow of capitalism
by proletariat in the long ran. This model is where the means of production
will no longer be owned by individuals but a collaboration of individuals
leading to communism.
The
instances extrapolated above provide an understanding of how the capitalistic
economy works. It is depicted by a double character; from one extreme are
individuals motivated to making money at the expense and exploitation of
others. On the other lies individuals working hard to maintain their livelihood
and earn a living. The mode of production is distinctive, where profit is what
compels individuals to produce, conjure goods that meet the needs and wants of
their customers in order to accumulate capital.
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