Ch 19. Capitalism as a class society
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Terry Leahy 2025
I will now turn my attention to capitalism. Capitalism portrays itself as the overturning of previous class societies. An end to feudalism and all similar systems. Freedom, democracy, rights to private property, opportunity for anyone to do well in the marketplace. This is all very misleading. If we look more closely, we can see that capitalism is just another kind of class society, as Marx recognized. In any case this is a perspective that only seems remotely plausible if we restrict our gaze to the rich core countries of capitalism.
A basic Marxist perspective on capitalism
The following outlines a basic Marxist perspective on capitalism. A later section will expand this by considering capitalism in its global context. The ruling class are the owners of capital. Meaning basically things that have a considerable monetary value. But also, in Marx’s language, they are the owners of the ‘means of production’. The things that are used to produce the goods and services which society uses. Land, factories, buildings. The occupy movement talks about this class as the one per cent.
Money has a vast role in capitalist society. In any society, money gives you the capacity to access the products of other people’s work. Also, if you have enough money, the power to buy hours of work directly from people who need money to live. Having money is a form of autonomy. You can make choices about what things you want to buy with your money. You effectively command the work of other people to produce the things that you are buying.
Marx argues that the great mass of the population in capitalist societies are effectively slaves of the capitalist class. They are not slaves of any particular ruling class person, as were the slaves of previous class societies. But they must make their services available to some member of the capitalist class. To someone who can pay them for their work. This is because a small minority, the capitalist class, own the means of production. To get access to what these means of production create, you need money to buy products. So, you need to get money to live. You must sell your labour capacity to some capitalist or other.
When you are doing paid work, you do not control the means of production you are using. The boss owns them. He tells you what to do at work and at the end of the day, he takes control of what you have produced. His aim is to sell the products on the market.
Marx’s great discovery is that while capitalism seems to be founded on equality, this is an illusion. Let us explain this illusory appearance. Unlike in Feudal society, you are free to work for anyone you like. It is a market, and you are selling something you own (eight hours of your labour) on the market. You approach the boss, and he offers you a hundred dollars for your day’s work. You think, well that is a fair price, I cannot get any more from some other boss. Just like you might have forty oranges for sale and get a fair price when you are getting what you think is equivalent to the monetary value of those oranges. What the market is generally paying for oranges at the present time. An equal exchange, the monetary value that you are getting in your pay is what your labour is worth on the market.
However, this equality is an illusion. A day of work produces monetary value – the money that your product can get when it is sold. Or more strictly speaking, the extra monetary value you add to what is there at the beginning of the day. Imagine it as a lump of iron at the beginning of the day and a hammer at the end of the day. What is the cost of a lump of iron and what is the cost of a hammer? The difference is the value you have added. So, Marx points out that there is in fact a form of surplus extraction in this apparently egalitarian transaction. The worker is only getting some of the value of what they produce in their wage. The boss is getting the rest when he sells what you have produced. For example, you are being paid $100 for your day’s work but when the boss goes to sell what you have made, he is getting $150 from the extra value you have added in your day of work. It is this difference that is the surplus product in capitalist societies. Just like making the lord’s bed or feeding his hounds might be the surplus that is taken by the lord in a feudal society. Or a tribute in sacks of wheat. So, in capitalism, this surplus product is the extra value your labour produces that you are not getting paid for. Marx talks about it in terms of hours of work. For example. For six hours of your eight-hour day you are producing the monetary value which you get in your wage. And the other two hours of work you are producing value for the capitalist. This basic relationship enables the ruling class to accumulate capital and increase their market power over time. Because they are constantly getting this feed in of surplus value from the people they’re employing as workers, they can use that money to increase their holdings, their means of production.
This is just one way that capitalists acquire their capital, the means of production. The other way is what Marx calls ‘primitive accumulation.’ This is when the state or the capitalist class manages to secure means of production without having to pay for them on the market. In other words, a kind of theft of the means of production, even if it is given the green light by the law applying at the time. An example that is often used is ‘the enclosures’ of common land in England in early capitalism. Land that was owned by a whole village was called ‘the commons’ because everyone in the village had a common right to use it. To graze their pigs, collect wood, or plant a crop. In the enclosures, the lords took these common lands as their own. Closing the land off from the rest of the village. By force, without asking permission. Or through an act of parliament. The term ‘primitive accumulation’ also applies to colonizing imperialism. When European states and private operators took over land in the global South, using force. Usually also legitimated by the state back in Europe. Like the white Dutch farmers who took over South Africa. Or the British crown that appropriated Australia. Fighting wars of conquest and genocide against Aboriginal people. Measures like this ended up putting the means of production in the hands of private capitalists. Clearly, their state and its armed forces backed them to enable this appropriation. Allocating conquered lands to settlers and companies. A more recent example of primitive accumulation is the fate of nationalized industries at the fall of the Soviet Union. They were parcelled off and allocated to oligarchs. To capitalist allies of the new government.
As explained above, every class society depends on an army and police force to keep control of the subordinate class and to fend off rival states and rival ruling classes. Capitalism is no exception. Just as in other societies, the surplus product that maintains this army is provided by the subordinate class. For example, the state taxes people and uses the money to pay the army. The armed forces buy the goods and services they need. Goods and services produced by the subordinate class. Just an elaborate accounting of the transfer of surplus product from the subordinate class to the armed forces. Via the interventions of the ruling class and its state. As in other class societies, the army and police enforce the system of taxes on which this arrangement depends. In the capitalist system, workers volunteer to take jobs as enforcers — as one option for people without access to goods and services except through a wage. The role of the police is largely to enforce the system of private property ownership that constitutes the capitalist economy. The role of the army is to appropriate land in primitive accumulation and to fend off rival states.
Capitalism and empire
Broadly, the picture of capitalism that I have painted so far follows Marx’s own analysis. However, from the point of view of a post-colonial critique, this analysis needs to be put in brackets. It works best if we focus on the industrial middle period of capitalism, looking at what we can now call the rich or core countries of global capitalism. I have mentioned one issue already that shows why we need to go outside these brackets. The seizure in primitive accumulation of the colonized world. Something that happens outside of the capitalist economic system as such. Conquest is not a business measure. But nevertheless, it provides necessary ingredients for actual capitalism as it takes place in the core countries. The next issue is that slavery of one kind or another takes place in the colonies, and in some capitalist countries. Both direct, legalized slavery, and debt peonage that functions as a semi-feudalism. Alongside wage labour, free labour or whatever you want to call it. This slavery is integrated into the global capitalist system. Slaves grow the cotton that is then shipped to capitalist factories. The factories turn it into clothing and sell it on as commodities to wage labourers. Latin America is an example. A whole region of the world devoted to providing resources for core capitalist countries, with slave like conditions for most of the population. Gold, silver and other minerals, rubber, coffee, sugar, cotton, chocolate.
It may appear that some of these substances are not totally necessary for an industrial capitalism in the global North. But in practice they all played a key role in making businesses work and creating industries. What is more important, this global capitalist structure dominated the lives of the people of Latin America, preventing their populations from rising to the level of affluence of the ordinary workers of the core countries. Starvation has been pervasive along with brutal repression of all attempts to make radical improvements.
This analysis asks us to consider the basic class structures of capitalism as global system. The affluent workers of the rich countries are in fact the middle class of the capitalist system. Along with comprador elites in the global South. It is this middle class from which are drawn the soldiers and police force that maintain the whole class system. While most of these people are themselves wage workers, exploited by capitalism, they are also the beneficiaries of a global system that exploits the people of the global South. Only 5 per cent of the value of coffee goes to the workers who have grown the crop. The affluent worker of Europe drinks the cup of coffee. They pay for this from their wage. Maybe they have taken five minutes to earn the cost of their cup of coffee. But the worker from the global South who grew the coffee might have spent an hour in that labour. This is a mediated exploitation. Mediated by the patchwork of ownerships linking these events. Organized through a global capitalist class. But ending up creating these affluent workers as the global middle class. Also, as the enforcers of last resort. This global structure has been maintained through the recent changes referred to as globalisation. The re-location of manufacturing from the core countries to parts of the previously colonial world.
Mythologies of the capitalist class system
In terms of ideology, capitalism creates its own mythology just like any other class society. In large part to talk up capitalism in relation to other social orders. The best possible form a society can take, the end of history.
As explained above a key myth of capitalism is that there is no exploitation — although it is hard to deny a difference in material condition. We could call this myth by a popular slogan, a ‘fair day’s work for a fair day’s pay’. In fact, there is nothing fair about it. You are being exploited as much as any mediaeval peasant. While other societies create a myth of balance by supposing the ruling class brings rain and grows the crops, capitalism denies that there is any tribute to be balanced in the first place.
Another key mythology of capitalism is that you are free of control by a ruling class. Capitalism brings democracy. You are free and can vote for any economic arrangement that seems workable. That people vote for capitalist parties just shows a sensible understanding of the virtues of the capitalist system. Countries that are not yet democratic are not yet sufficiently capitalist.
In a critical analysis, the freedom of democratic choice in rich countries is a myth in this way. As an employee, you need a job to live. So, if someone comes up with a wonderful plan to improve society and you think, this will lead to unemployment, you will vote against that. A good example was the attempt by the ALP candidate Bill Shorten to become prime minister. At the time, Adani, an Indian magnate, was proposing to open a vast coal mine in Queensland. The promise was secure jobs in a highly paid industry. The union representing miners was a strong supporter of the proposal. The ALP was also under pressure from inner urban electorates to wind back the coal industry to mitigate climate change. In the preferential voting system of Australia, it was easy for these voters to put the Greens candidates at the top of their list of preferences. The ALP made an electorally fatal mistake and hedged its bets. It did not rule out the option of banning the proposed mine for environmental reasons. They were wiped out in the subsequent elections. The electorates that swung against them were working class. It is not that workers in electorates across the country hoped to get a job in the Adani mine. They voted in solidarity with workers who might conceivably have got a job in the mine. They voted against the middle-class environmentalists who had the hide to put workers’ jobs at risk for environmental reasons.
In other words, they followed the logic of the economic system to behave politically in a particular way. So, the equal democratic control of political life and making decisions for the whole of society is somewhat mythological. As Marx says, workers under capitalism may not be the slaves of any one representative of the ruling class. But they are slaves to the whole of the class that owns the means of production.
The myth of democracy is not entirely unlike the myths of ruling class benevolence that animate other class societies. Yes, we capitalists own enormous wealth. Our economic heft dwarfs what you workers own. But we are not telling you what to do. We are not pulling the strings. We are giving you the freedom to choose any policy you like. Of course, countries that do choose anti-capitalist revolution soon realize that this is a hollow promise. Coups, massacres and invasions are de rigeur. Funded and supplied by rich country governments, as Galeano’s account of Latin America makes abundantly clear.
A second key myth is that the capitalist class ‘provide jobs’ and ‘create the wealth’ on which everyone depends. My aunt was talking to a neighbour who said to her ‘What have the workers ever produced?’. It is the capitalist owners who are the ones who produce things. This is a strange fiction. In fact, they are using their money, their fictitious claim on the social product. To access the dead and living labour of other people. Their money is not physically responsible for this production. It is the work that ordinary members of the community are supplying. On the other hand, there is of course a truth in this fiction. In the context of a capitalist economy, it is only the investment of money that makes production happen. One fiction the logical consequence of another. Again, we can see this as a myth of benevolence, to be expected in a class society. The ruling class donates jobs.
Another central myth is that the market is economic democracy. Everyone can buy things on the market. By doing that you control what is produced. So, fossil fuels are what people want. They are making a choice to buy things made with cheap energy. They are choosing that option, knowing the impact of climate change. That is democracy at work. To regulate this would be to block people’s right to choose. The market is a tool for linking up preferences with production. A cornucopia of benevolence.
There are a variety of reasons why this is a myth. Most obviously, because the freedom to express your desires through your purchases varies with wealth. It is not an even playing field at all. The other thing is. Things that cannot make a profit are not on the market, or at least they do not do well on the market. Sometimes these are things which are useful to people, but because they cannot make a profit for any capitalist, there is no point in marketing them. So, what does that mean? It means that there are various desires that people have that are not expressed in the choices that come out of the market process. For example, in an ideal world, people would like to be able to commute to work as quickly as possible. If everyone walked to a nearby stop for public transport and went by public transport, that would be the quickest option. But it is also the cheapest option. The one that does not allow a lot of profit for an investor. Instead, if all the commuters buy a private car, there are lots of profits to be made. People are spending lots of money and there are lots of jobs and profits. But of course, the effect is traffic jams and long commuting times. Which nobody wants. But for any individual commuter it is always quicker to take their car. The most profitable option is crowding out the less profitable, but more satisfactory, option. In the recent COVID crisis, suddenly we found there were not enough labs to make all the vaccines we would need. There were not enough supplies of personal protective gear for health workers. Providing these things for a possible pandemic had never been a profitable option for private companies. Governments had not wanted to increase the tax burden to cover the costs. With climate change, we are still hanging on to fossil fuels because the alternative is less profitable or requires considerable government spending. Even though most people would like their grandchildren to survive. There are persistent differences between what people would ideally like and the preferences that get translated into market decisions.
A final myth worth mentioning is the myth of global ‘development’. In this myth the countries of the global South were undeveloped at the time of colonisation. It takes time for capitalist industrialism to bring about a transition to affluence. The kind of affluence we see in the rich core countries. Along with democracy. This is mythological in treating these different countries as having an independent history and trajectory. In reality, the capitalist class of the global core countries exploited the global South, blocking the development of an industrial base. After independence, a local elite worked hand in glove with the global capitalist class to ensure that demands for higher wages and democracy were blocked. That these countries could function as low-cost suppliers of raw materials and agricultural products. For example, deals between Latin American countries and American capitalists banned Latin America from processing its own coffee for export. Making sure this profitable venture took place in the United States. Coinciding with this arrangement, the working class of the global North used their industrial muscle to raise real wages in their own countries. Through unions, left parties and the threat of revolution. Consolidating their role as a global intermediate class. Since globalisation and the export of manufacturing to parts of the global South this deal is in jeopardy. The working class of the rich countries is losing their power to dictate terms. Real wages stagnate, housing prices go up, government services are in decline, employment is less secure.
In the mythology of ‘development’, the core countries are bringing the technological knowledge necessary to create affluence. By doing this they are also spreading democracy, freeing people of the global South from their feudal and authoritarian past. A sad travesty.
Ruminations on Class Society
I will finish these three chapters with a few ruminations about class society.
Once it has been created, class society appears to be very hard to eliminate. There have been many revolutions and revolts. Almost all of these have been unsuccessful in the long term. Successful demolitions of class power have almost always ended up with a new version of class society taking over. In a few cases, there has been a collapse followed by at least a period of classless stateless society. For example, the Maya collapse or the collapse of the Cahokia in the Mississippi valley. Even the Roman empire. As James Scott points out, a common phenomenon has been states that do not actually control all the territory they claim. With stateless territories on their periphery. For example, in South Asia, Southeast Asia.
Nevertheless, taken as a whole, if we look through from 10,000 years ago to now, we have a gradually encroaching class society taking over the whole world. Class society takes over classless, Indigenous societies and destroys them, or at least takes control of their land. Class is a mechanism that is massively difficult to undo.
There have been five or six independent inventions of class. Strangely, these are all in the same period, from 5,000 BC to 1000 AD. The Middle East and later Europe, East Asia, the Indus River valley, the Americas. This remains a puzzle. So is the invention of agriculture in different and unconnected sites just a few millennia prior to this development.
Class societies have several features in common. Most obviously an agriculture that permits storage and distribution of staple crops. Another part of the material structure is urban centres that are the organizational headquarters of the ruling class. Using that centre to reach out to siphon off a surplus from rural areas and protect a border against rival states.
More bizarre are the common features of the ideologies of class societies. I take it that it is part of human nature to expect that when you provide something to someone, that they will provide something in return. At least in the long run there will be some reciprocity. The exploitation that is central to class societies contradicts that basic premise of human sociality. Typical mythologies of class societies imagine the ruling class providing the subordinate class with an ultimately magical gift in return for a very material gift of tribute. They say they are doing things they cannot possibly do. Like preventing a drought. Or they are giving a magical gift. Such as an eternity in heaven. If you do as you are told on earth. These magical gifts balance the exploitation that is being carried on at the same time. There are even myths like this in supposedly rational capitalist society.
Another feature of class societies distinguishes them from stateless classless societies. Apart from the Incas, class societies have writing and use it keep records. Along with more artistic uses. Even the Incas had a system of knotting (quipus) that achieved the same effect. This writing is also linked to systems of quantification and to calendars of days and years. These technologies of symbolic coding are necessary for the ruling class to run the mechanism of a class society, to extract the surplus product in predictable ways. To pay their armies. There is a huge administrative apparatus of accounting to make all this work. Also absent in Indigenous societies, that keep track through their memories and oral culture.
Monumental architecture is not entirely absent in stateless societies, but class societies develop it to a fine art. Monumental buildings are often made of stone, but also mud, wood and earth. They demonstrate the amazing power of the ruling class. They feature in the ideological construction of the ruling class. Sites where the ruling class join the gods after death or make offering to get the favour of the gods. Ceremonies in class society always include regalia. Again, a feature of ceremonies in stateless societies. The difference is that these costumes are used to express the roles of the class system. Kings, princesses, priests. Clothing expresses the class system, with certain garments for everyday wear banned for the subordinate class and expected for the ruling class. This regalia demonstrates the superiority of the ruling class, the status of the ruling class. Spectacles of this kind are very elaborate in class societies. The technological power of the surplus product is turned into glitzy ornamentation.
Clearly, all these features of class society contribute to the prestige of a ruling class. Itself, a reward in relation to the human desire for social approval. But of course, linked to this for men is success in the competitive status stakes of toxic masculinity. As with the other exploitations of class society, this transfer of status is all one way. The subordinate classes are painted as stupid and ‘common’. Even disgusting. If amusing at times.
Class societies generally have some form of money. The Incas are again an exception. This use of money in pre-capitalist societies is marginal in relation to the main form of surplus extraction. The means of production are not for sale. Labour services are allocated rather than paid for. Nevertheless, a monetary economy exists. Merchants and the very poor operate with money. Payment for labour services from those who have no rights to any part of the production of basic needs. The exchange of trade goods for money. Cashed in with the purchase of other traded commodities. This should not be considered an innocent paradise of monetary exchange. Debt crises were a common feature in ancient class societies. People were often imprisoned for not paying their debts. Things could get so extreme that a debt cancellation, a jubilee was the only solution to maintain social order. The explanation of money given by David Graeber goes like this. To maintain an army a ruling class could provision it directly with goods appropriated from the subordinate class. An economy in kind as in the Inca empire or Ancient Egypt. Alternatively, the government could pay the army in money and demand taxes in money from the subordinate class. The effect would be to establish a market in food. The soldiers would buy food from the peasants who would then be able to pay their taxes in money. The soldiers would use force if necessary to ensure taxes were paid and debts serviced. Such an arrangement would not preclude other kinds of extraction of surplus in kind. For example, forced labour services or payment of a tribute in grains to the local aristocrat.
A sense of the uncanny pervades these accounts of class societies. There is something spooky about people being trapped in arrangements that are so bad for their wellbeing. Lifetimes spent doing what you are told. Monocultures that leave people stunted and perpetually hungry. Famines and plagues. Boring tasks designed to be easy to supervise, rather than fun. This sense of the uncanny gets worse as you get to understand the delusions of the ruling class. That they control the climate. That they go after death to live with the gods in heaven. That they are the sons of the sun. That they operate a regime of largesse in the best of all possible worlds. When the reality is so obviously far from that. That this regime has now existed for one twentieth of our history on this planet and seems impossible to shake off. For me the epitome of all this is a documentary on the Cahokia civilisation of the Mississippi valley. The grave of a king was discovered in the temple mound constructed to survey his kingdom. His skeleton is surrounded by shiny shells, traded from the distant coast. They are arranged about him in the image of a falcon. Outside this display are the skeletons of eighteen young women, sacrificed to be his companions after death. Meanwhile our own class society seems hell bent on destroying the whole of the earth with climate change.
The next chapter will look at why class society comes about. How and why ordinary people who were living in egalitarian, communal societies ended up with this disaster.