This is the second post of an extended series outlining capitalism, it's history, oppressive nature, and the fundamental problems with modern Western Christianity as its champion. This series is the result of months of hard work and research. Cited sources can be found here. Enjoy!
Capitalism is an economic system in which “people are related, particularly those relations that are mediated by money and commodities, by prices and wages, by supply and demand” (Bacher, 2005, p. 2). The economic definition of capitalism is “an economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market” (Landauer & Rowlands, 2001). A social definition in favor of capitalism states that capitalism is “a social system based on the principle of individual rights… [and] when such freedom is applied to the sphere of production its result is the free-market” (Capitalism Magazine, 2011). According to Weber (1905), “Man is dominated by the making of money, by acquisition as the ultimate purpose of his life” (p.208). While proponents argue that this acquisition and retention of wealth is the natural inclination of man (Paul, 2011), Weber argues that the notion of capitalism is only natural to those who thrive on its excess, stating that capitalism is “foreign to all people not under capitalistic influence” (Weber, 1905, p. 208).
According to Bacher (2005), “The driving force of capitalism is the attainment of increasing rates of surplus value. This is inevitably exploitative and demeaning of the human condition” (p. 2). The focus of industry is to control the means of production for creation of goods and services. Combined with private ownership within the industry, capitalism “guarantees that the outcomes, out of the productive use of the property, is allocated to the owner of the resource” (Bacher, 2005, p. 2). The wealth amassed by this system is used “not as an end in itself, but as a means for gathering more wealth. While this amounts to a legalized form of greed, proponents of the system argue that “within the systematic realm of corporations that face competition, it is the logical result of capitalism” (Bacher, 2005, p. 4). To survive the demands of the market, corporations are required to accumulate substantial profit and reinvest those profits to accumulate even more profit and a larger market share (Bacher, 2005).
As industries amass more and more wealth amid fierce market competition, they strive to create a business model that is the most cost efficient when considering labor. To maximize efficiency, a division of labor is created (Marx, 1867). Manufacturers have found a way to divide complex labor tasks into simpler ones. By combining machinery with the simpler tasks, “this increases output and reduces costs simultaneously. Wages drop because simpler tasks can be done by lower skilled workers who reflect ‘cheaper’ labor” (Bacher, 2005, p. 4). Increased output can better meet market demands for the product, while labor remains at a constant low cost, thus improving the wealth of the owners of the industry (Held, 1980). Smith (1776) warned that competitive wage labor was vital to maintain a moral capitalistic state. He said, “A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more” (Smith, 1776, p. 1293) in order raise a family. This, as will be shown later, is not the case with modern capitalism. Instead the modern laborer is exploited and underpaid, bringing about a cycle of economic oppression for the lower classes (Paul, 2011). Capitalism and its free trade is “In one word, for exploitation, veiled by religious and political illusions, naked, shameless, direct, brutal exploitation” (Marx & Engels, 1848, p. 35).