Work and the economy
• Based on private ownership of the means of production (land, raw materials, factories,
• Capitalists and workers are involved in relationships of unequal, legally free but
economically coercive exchange (capitalists control the means of production, workers
have no choice but to sell their labor).
• Workers are paid as little as possible and capitalists try to extract the most amount of
work possible in a working-day.
• Do capitalists buy and workers sell contractually specified labor or labor power (a
worker’s total capacity for labor)
• Dominant ideology denies that employees care about their work (only owner’s care).
• Goal of production: maximizing profits (surplus value), not producing use value.
• Domination of market and money as means of distribution
• Dominant form of production in capitalism
• Use of new forms of energy: water, steam, internal combustion, nuclear (manufactory
production uses only human and animal energy).
• Machine technology
• Large-scale (mass) production.
• Increasingly detailed division of labor, therefore increasing use of unqualified, cheap
labor: women and children.
• Increasing productivity of labor: the amount of goods a worker produces in a unit of time.
• Sugiman: family capitalism
• Naiman: free enterprise/ laissez-faire capitalism (state intervention limits the activity of
enterprises only minimally)
• A large number of small to medium firms compete in a market
• No buyer or seller can significantly influence prices by withdrawing from the market.
• “Honesty is the best policy” only true in early capitalism and only true in small markets,
since there will be constant communication, good reputation for many generations. You
can’t fool/ lie to anyone since the people know everything about you anyways.
• Attempts to maximize profit cause anarchy of production, which causes periodic crisis of hyper production.
• Free enterprise capitalism inevitably leads to concentration of ownership
• Naiman: monopoly capitalism
• A corporation is a legal entity (Naiman: legal fiction) distinct from the people who own
or control it. Invented for protection of owners from poor economic performance.
• Concentration of ownership continues: increased size and decreased number of
• Monopoly: a sole seller of a commodity in a market
• Oligopoly: several sellers of a commodity
• Monopsony: a sole buyer of a commodity
• Oligopsony: several buyers of a commodity
• Monopoly rent: increase in price an enterprise can charge because of its monopolistic
• Transnational corporations (TNCs) force a “race to the bottom” in a globalized economy.
Sectors of the economy
1. Primary: resource industry
• Unusually high proportion of the p