One of the most fundamental aspects of society is its economics system, i.e. the mode of production. At the basic level, a mode of production is the means (physical objects) and social relations with which societies produce the material necessities for their existence. All societies must be sustained with food, clean water, shelter, etc. Attaining these basic things is the chief task facing any society.
When confronted with the task of feeding, clothing, and housing itself, all societies face two fundamental problems. First, in order to produce the necessities of life, there must be tools and raw materials suitable for the job. Second, in order to utilize tools and material for production, divisions of labor must be developed and carried out. These two properties, the physical means of production and social division of labor, are what Marxists describe respectively as the economic base and structure of society.
Implied in the mode of production is another fundamental aspect of society: how it consumes its surplus. All societies either produce a surplus, i.e. products over and above of the necessities for life, or they collapse and degenerate. Yet, as part of the mode of production, societies utilize surplus in only a few ways.
These three aspects, the mode of production, the means of production, and the use of surplus, help us define all societies which have ever existed.
The first societies were communal. They utilized basic tools for hunting and cultivation. The division of labor was minimal and structured around age and sex. The little surplus which was produced was devoted to the care of the sick and elderly, rationed away for times of scarcity, or provided for periods of leisure.
The advent of permanent cultivation, i.e., agriculture, changed society considerably. A reliance on favorable growing patterns along with a growing level of surplus allowed for the development more complex divisions of labor, including leadership and religious classes which were divorced from actual production. Artisan classes divorced from basic food production could also develop, and settlement became permanent.
In this secondary period of human economic development the state developed and took on its essential form. In this period of tributary economics, the state came to embody a class of rulers whose monopoly on violence enabled them to charge a rent on classes of productive, mostly agricultural workers. This rent, enforced to fund protection from outside aggression, was violently placed on populations whether they freely desired it or not. Not surprisingly, communal societies were frequently and quickly incorporated by tributary societies through aggressive violence.
Tributary societies produced enough surplus to sustain large non-productive ruling, bureaucratic, and serving classes. Because tributary societies relied on taxing productive workers, surplus was also invested in new means of incorporating and maintaining ever-growing numbers of productive workers into the tributary system. Under tributary systems, there is no division between the state and the economic ruling classes, as they were one in the same.
Part of the problem with tributary systems is they can be remarkably stable. Independent tributary systems could be found throughout the world for thousands of years, beginning during what once called the ‘bronze age’ and lasting through the end of the ‘middle ages.’ During this period, rule was often hereditary and cast in religious terms (i.e., ‘Divine right’ in Europe; ‘Mandate from Heaven’ in Asia), and a single ruling family might reign for hundreds of years before being deposed by another similar dynasty. Individual workers (and all of those within the sovereign territory of the tributary state) were considered subjects of the rulers. Most of the productive workers’ surplus went toward maintenancing the ruling-state and its ‘divinely sanctioned’ elite.
Capitalism involves a third major economic development. Instead of financing the ruling-state and its means of rule, surplus begins being used to develop the means of production to the aim of increased productive efficiency, i.e. the more efficient production of surplus. Over the previous system of tributary feudalism, this was a progressive step in that it contributed to a sharp increase in the social product and began to unlock the potential to eradicate scarcity.
Along with capitalist development, the means of production became the central dynamic focus. Workers in tributary systems owned the means of production and were simply forced to part with the surplus portion of their product. Under capitalism, a separate class of people who owned the means of production, i.e. capitalists, paid workers a wage while claiming control over the product created through labor. In tributary systems, use-values were directly exchanged between economic actors. For the purpose of widespread market trading under capitalism, concrete labor congeals into commodities with exchange-values corresponding to the ‘socially necessary labor’ required for their creation.
Though elements of capitalism existed elsewhere during the period (notably in India and Italy), it first developed as a dominant mode of production in the British Isles during the 1500s.
The reason capitalism developed in England was because of its instability as a tributary system and its relative disadvantage during the period. Surrounded by large, fairly developed tributary systems (e.g. Spain, Holland, Ottomans, China), the English were squeezed out of much of the initial ‘New World’ conquest and could not match the military strength of its rivals. In response to this unfavorable situation, and unlike Spain which used returns on slavery and conquest to fund large ruling-state institutions (i.e., the Monarchy and the Church), the British found it easier and more advantageous to invest surplus from conquest into domestic industries. As part of the transformation of the mode of production from tributary to capitalist in England, the Protestant reformation broke up Catholic estates, the nobility was weakened through ‘absolute’ monarchy, Ireland was maintained as a colonized territory of agricultural production, the English countryside was enclosed for sheep and livestock, and a growing urban population of ex-peasants was increasingly corralled by vagrancy laws into primitive factories. In short order, England became a dominant power because, through its utilization of a capitalist mode of production which devoted surplus towards raising productive efficiency, it came to produce much more than its rivals.
The development of capitalism also undermined the power of the state and altered its function. Because surplus was increasingly being devoted toward the development of the means of production and controlled by those who owned the same means of production, the state retained its functions as an expression of class rule but it ceased to embody the ruling class in its entirety. Whereas the state is the ruling class within tributary societies, the capitalist state is merely one instrument (though a major one) of rule by the owners of capital.
As a foundational economic system, capitalism has an internal logic which supersedes any conscious desire. Production is carried out for the sake of accumulating capital, i.e. the means of production. The means of production (which were just that under previous systems) become transformed into capital and become the central focus for the investments of surplus, i.e. increasingly embodying the portion surplus product wrestled from workers. Workers (of Europe), for their part, became freed of traditional tributary economic ties but divorced from the means of production. Instead, labor-power, i.e. the ability to work during a given period, was transformed into a commodity which workers must sell to capitalists for a wage on which to survive. Just as the products of labor comes to represent exchange-values, i.e. equivalent to the ‘socially necessary [abstract] labor’ required for their production, surplus comes to represent surplus-value. Surplus-value, now controlled by the owners of capital, represents a definitive amount of ‘socially necessary labor’ required for its production.
Production for the sake of an increased ability the produce, i.e. the accumulation of capital, unleashed innumerable innovations over the period and a rising rate of the production of surplus. The state was reinvented, so to speak. Whereas capitalism broke down the tributary functions of the state, the state itself became an instrument of class rule by capitalists. Through colonialism, the capitalist states of the developing imperialist core also preserved tributary features within its colonies, where necessary raw materials and food stuffs were acquired for ‘upstream’ capitalist production.
Nascent capitalism was fairly competitive with different firms of capital holdings struggling against each other to secure higher rates of surplus-value than others. Those who failed to effectively utilize surplus for compounding returns of surplus inevitably got pushed down under the weight of competing capitalists, resulting in units of capital in growing size and scope. These larger firms used leverage and structured markets for ever greater rates of returns, especially relative to smaller capitalist producers, resulting in the growth of ever larger monopolies of capital. The ability of such monopolies to both hold down competitors and funnel to themselves huge concentrations of surplus-value [through control over the structure of economies] altered the structure and dynamics of the world’s economic system.
One change from capitalism to monopoly capitalism is the loss of the innovative dynamic. Through their power to structure the world economy, monopolies increasingly control, often indirectly, a majority proportion of capital and hence surplus. In turn, surplus is increasingly devoted to maintaining control over the world-economy by monopoly capital. Rather than innovation of the means of production, surplus becomes devoted to the suppression of the productive force for the benefit of monopolies.
Monopolies are based in and wholly dominate a handful of countries. These few countries receive the benefit of monopoly rates of surplus realization.
One means which by which monopoly capital has maintained itself as such is to pay a small proportion of workers a price for labor-power above abstract labor’s exchange-value. At the same time, monopolies used a portion of surplus to create and maintain large unproductive economic sectors and social-democratic welfare states in ‘their’ base-countries. In effect, surplus is ‘invested’ into the wages of ‘its’ minority of workers. By elevating and embourgeosifying ‘its’ workers with surplus, monopoly capital has created both a petty-bourgeois mass-base of support and another means to realize surplus (created in the world-economy) as surplus-value.
Capitalist-imperialism involved some basic changes in society. The means of production have advanced to the point of constructing a single world-economy. Surplus generated through high rates of exploitation of productive workers in the ‘Global South’ becomes realized as surplus-value by monopolies in the First World. This results in a great degree of material and social separation between the embourgeoisfied ‘masses’ of First World and proletarianized populations of the Third World. Finally, surplus is increasingly devoted to maintaining this structural inequality of the world-economy.
One primary result of the development of monopoly capitalism is increasing militarization of the state. Insofar as the chief problem of monopoly capital is maintaining its position as a monopoly, state-power is an effective tool against other classes. The U.S., for example, spends much more on its military than other countries by a huge margin. Imperialism also corrupts Third World states into becoming militarized proxies of monopoly capital. This increasing devotion of surplus to maintaining the social relations of imperialism amounts to a policy of “global apartheid.”
The high rate of exploitation and capital accumulation provide imperialism with an initial advantage over the global proletariat movement. For example, as part of the US policy known as the ‘Marshall Plan,’ a large portion of surplus was used following World War 2 to build up the economies of Western Europe and Japan as a social buffer against the USSR, PRC.
Most formerly-colonized regions have been trapped in imperialist maldevelopment, i.e., productive capacities and social relations designed to export surplus to imperialist countries. There are a few exceptions. In countries with large populations of productive workers, political and structural initiatives can be taken which result in a greater retention of surplus, eventually leading to a greater development of the means of production, an eventually new competing monopolies. This is obviously against the interests of existing monopoly capital, which often relies on its military apparatuses to blackmail Third World countries into adopting maldevelopment and economic dependency. Thus, this sort of independent development toward the end of establishing new national monopolies is only an option for fairly stable, large states, which are politically determined to defy established monopoly capital over a long period of time. This, for better or worse, is the path currently being adopted in China, Russia, and Brazil. The development of rival blocs of monopoly capital will assuredly awaken inter-imperialist rivalry.
The final aspect of this current imperialist mode of production is that is has effectively laid the groundwork for socialist revolutions. Whereas the colonialism of capitalist mode of production relied productive abilities of the Third World for basic agriculture and raw materials, imperialism has increasingly spread out the means of production while incorporating Third World workers into important productive roles within a global division of labor. In most countries of the Third World, the means of production are more developed than in the countries which had successful proletarian and national liberation revolutions during the 20th century. Thus, Third World revolutions, occurring in the sites where the great proportion of surplus is generated, will be of much more significance today than they were 40 or 50 years ago. The more developed means of production and high level of surplus generated in Third World countries will also set any next round of successful revolutionary movements on a much more solid material footing.
Under the present world situation, the primary task is to break the monopoly power of imperialist countries while struggling for socialism. This requires a global united front against imperialism, ideally led by those pursuing a socialist route of development. Capitalism and capitalist-imperialism have developed the means of production to the point where humanity could return to collectively producing use-values on a sustainable basis without deprivation and without permanent divisions of labor, unproductive classes, or states to enforce particular class interests. Poverty and environmental destruction could be abolished, but it will take a dedicated struggle of the world’s exploited masses for a revolution against the dominant economic structures of capitalist-imperialism.