The Logic of Capitalism

Jasmine Hill
Feb 10, 2017 · 6 min read

This year, I’m embarking on a personal journey on exploring the nature of capitalism, how humans have attempted to escape it, and its impact on my own life. This form of reflection is inspired by the election of the 45th POTUS (I hope to use a future post to more fully detail how this reflection and the election relate for me and hopefully will accumulate into a concretized form of resistance). Every month I am investigating a question related to capitalism and capitalism’s relationship to myself and my community. For the month of January, I review what is the logic of capitalism in hopes to more expertly identify its role in my everyday life and thinking. This manuscript is a work in progress and may or may not include proper citations because you can stay mad.

Capitalism — An explanation in brief

Capitalism is “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” According to Marx, this notion of private property and the ownership of property being in the hands of the people is what makes capitalism unique. In previous economic systems, property (or, what he calls capital) was held by either the entire community, the crown or a consortium of elites. The end of the feudal system in the 15th century offered the promise that anyone with the means to afford it could purchase the means to production. With this democratized form of economic exchange in place, the bourgeoisie who came from the skilled class within feudalism, emerge as the clear winners of the capitalists system. So notably, a system with decent promises for the democratized ownership of wealth (and therefore power) quickly is manipulated by humankind to benefit a core few.

This group of benefactors, or the bourgeoisie, quickly found ways to secure their advantage in the capitalist system long term: intertwining their interests with the political system, exploiting the working class, establishing ideologies (i.e. the myth of meritocracy/mobility), and refining technologies to do work more efficiently than humans ever could (and thus undercutting their wages).

What Capitalism is and isn’t

To be clear, trade and exchange in-and-of-itself is not a unique feature of capitalism; markets, supply and demand have always existed as humans share and distribute limited resources. It is the notion that the trade is controlled by private owners that is distinct. Some ideas like beauty and desire also seem natural — people have always had preferences or been impartial to certain features. Biologically, we’ve associated features with fertility or other desirable qualities. Desire for other people or things is discussed in the Bible.

So What are the Logics of Capitalism?

Now with a working definition and history, what are core logics of this economic system?

  1. The resources are limited and so we’re all in competition. At least the American brand of capitalism seems to rely on the assumption that resources are finite. As a result, since individuals ewually hold the right to own property, it is individuals who must compete for resources. This is unique — when the state decides who gets resources, or the community, the desire to compete is minimized. The decision is already made. But capitalism which centers rights on the individual generates the opportunity for each individual to contest how finite resources might be allocated. I presume that we could’ve decided as individuals to generate a system that benefits most people. Yet in America, we’ve adopted an outlook that says each individual is gifted based on their worthiness (more on this later). In this literal struggle to survive we’ve created, capitalism says that inequality of some kind is natural since some people will win and others will lose. The idea that resources are limited leads to the next assumption that…
  2. Capital surplus accumulates in value, or, the more you have the better off you are. If resources are finite it naturally makes logical sense to take more than you need to store up for later. In fact these assets gain value over time. If the system is rigged as a competition you logically will want to save for times in which you might one day lose. Whether we’re the bourgeoisie or the proletariat, capitalism encourages us to always strive to have more for later. We cannot rely on the benevolence of the state or our community or our feudal lord. As individuals we alone are responsible for our well-being and must secure that well-being long term.
  3. Efficiency and expansion is ideal. To win the competition of limited resources, you need to outwit your opponent. Ways to produce faster or accumulate more are means to win. Values like efficiency (read technology or exploitation) and expansion (read globalization) become intelligent ways to secure an advantage. These value systems begin to outweigh others like emotional connection or equality, because they act virtually as an anti-thesis.
  4. So exploitation is justifiable. Resources are finite, efficiency is ideal, even if you have enough you need more, and every human for themselves means that using the labor power of others also is efficient. See Marx’s thoughts on alienation; this is how we are alienated from humankind. Our interest lie at the individual level not at the communal level.
  5. Owners deserve more. Since the system of capitalism indiscriminately (in quotes) offers humans equal access to ownership, those who win the game deserve their spoils. It was a fair game! You lost! Winners are more deserving of resources than losers, even if te losers were tricked ir exploited, capitalism says.
  6. Your worth is your work. Your value as a human being in this sytem is determined by how much you own or your wages. This leads to serious stress in capitalist nations because I need to keep contributing to my work in order to be worthy of resources. I do not receive resources simply for being apart of this community. What I earn through work is what determines my survival so I must constantly grind.
  7. All things can be commodities, or its human to sell. The goal of the system is to use what you own to produce goods that others will buy. But some people don’t own property. Some of us own only our time, our ideas, our bodies. Capitalism teaches that all of these things we own can become a product…sell it all.
  8. Manufacturing demand for supply. If you own a farm, and you produce food there is a natural demand for your product — people who are hungry. But there is a certain threshold to the food market. Perhaps I want to win the game but the market doesnt call for another farmer. My personal need to survive supercedes my desire to protect the market, so what do I do? I attract you to buy something from me you don’t realy need, although I convince you that you do. Consumerism is a natural consequence of capitalism as more indivisuals seek to become apart of the capital owning class. There is a limited amount of commodities we need, so owners must generate need unnaturally to sell whatever they have on their supply.


Through this reflection I’m reminded of how capitalism leads to despicable outcomes that are ever obvious in our society today. Without irony, I feel a great sense of sadness for elites who have bought into this system out of obvious fear. Going back to logic #1, the system is so fundamentally rooted in the idea that there is not enough resources to go around. That’s a scary thought! That kind of fear would naturally lead to up inconceivable behaviors. I am able to empathize with the perpetrators because I don’t see myself as morally superior or someone who couldn’t exploit or manipulate others.

I also am thinking about how our humanity led to this crisis, not necessarily the system itself. It’s been beaten like a dead horse — humans exploit feudalism, communism and socialism too. We can and could’ve absolutely made different choices as individuals under capitalism to behave in a more collaborative way. It’s almost a classic prisoner’s dilemma — we are isolated from others structurally and often choose to look out only for ourselves. We could and should do otherwise. However it is interesting to endorse a system that out of the gate places privilege at the individual rather than community level. It’s almost counter to human nature — we live in communities, no matter our attempts to isolate ourselves were influenced by others, biologically we require human interaction. So to align resources at the individual level seems almost counter-intuitive. In the weeks ahead, I hope to think more personally about how these logics shape my choices, personality and consumer habits. For those readi this, hopefully this was somewhat clear and useful to you in some way. See you in February.

Jasmine Hill

Written by | @jazdhill I'm a Ph.D candidate in Sociology at Stanford University. I write here about mobility, inequality, race and my work in the field.

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