Free Monopoly Capital Essay Sample

It is alleged that capitalism was instigated in what is today Western Europe and that it substituted an arrangement known as feudalism. Feudalism was a form of creation based around manors, which were possessed by a party of nobles while the serfs, a kind of servant that had no rights whatsoever, executed the more disagreeable work. When they farmed the land to generate their own sustenance, they had to pay the rightful owners of the property they tilled for the use of his resources. As feudalism steadily lessened and capitalism arose, assets could be more easily sold with no obligations attached to it, a new rank of people who had no admission to any piece of land arose, workers, cropped up, and could only attain food by the selling goods to proprietors of land. The materialization of capitalism was attended by widespread unrest as serfs battled for their rights to have access to at least enough land to be able to till and feed their families. In the end, the ruling classes vigorously evicted and left them to fend for themselves.

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The extension of capitalism would influence not just Europe but Africa, Asia and the Americas, with the native inhabitants of these lands forced out of their long-held lands to make way for a ruthless invader with superior warfare weapons. Socialism, in contrast to capitalism, endorses the obliteration of the practice of personal possession of land and manages production, not for profit but for express communal use. In the world, the necessities of capitalism have resulted in nations that set off this way of living, forcing the natives of the poorer nations to supply them with minerals, farming raw materials, and in the not so distant past, slavery was even occasioned.

Capitalism brings about the experience of the under employed, individuals whose wages from their work does not cover all their needs. These crises happen many times every decade posting serious questions as to the role that capitalism can play in the destruction of society. Unemployment and underemployment squander society’s potential capital as a whole. Unemployment is likely to be more prevalent among the foreign natives of a country as well as its womenfolk. Discriminatory practices tend to occasion the unspoken belief that if there is a position for two individuals of a different race or ethnicity, the worker of the same background as the predominant race in that nation will secure the job.

With the goal of private business being the maximization of profits, companies will inadvertently seek to cut costs in labor. Skilled laborers have more facility to interfere with production procedures than do unskilled laborers. They understand everything that their employers affect, why they effect it and if it will be beneficial for workers in the long run. Seeking to protect his interests in realizing as much profit as is possible, an employer will seek to discourage the knowledge of his business practices from becoming public knowledge. This he will accomplish by not only encouraging the utilization of mainly unskilled labor in the market place but by having many run-ins with the skilled laborers, a trait that will ensure that their subsequent sacking raises no eyebrows.

The quantity and cost of each output required, as well as labor and wages of the employees are determined by the demand of merchandise that is being formed. If workers provide more than managers stipulate, an excess of labor will be present in the market place and wages will drop thus drawing demand but deterring supply until demand and supply are identical again. Capitalism, due to its uncongenial nature, does convert human beings into apparatus to be used, consumed, and discarded. Due to a drive for high proceeds, managers of business will utilize the cheapest labor they can procure for their companies. These may mean using children, illiterate workers or whichever group happens to be the most marginalized, and does not particularly care for its exploitation so long as it is paid even if meagerly. Without the enlargement of a strong personnel union that is conscious of its misuse and resolute in altering this status of affairs, the inequity of the profits brought to the capitalist in comparison to workers wages will be on the up rise. Worker’s unions, formed for the supreme purpose of checking this system of doing things, seek to address this issue.

Constant capital comprises of those inputs that lend their significance to the product without altering in their essential importance. These refer to unprocessed supplies and implements of labor. These, by their nature, are products that cannot generate any goods by virtue of their being inert. Labor comes in its intangible form to create value and induces participation by other variants in concrete labor, which will ultimately culminate in production of a precise result. For example, when an individual tirelessly models a lump of clay for days, fashions it then burns it in a kiln and a beautiful pot is the outcome. One can say that they have engaged in concrete labor and now have a result that has some value in it. That is by toiling the whole day at a factory with a multiplicity of workers. However, at the end of it, one has not benefitted themselves but primarily the factory’s owner.

Not only does labor come in conceptual and a tangible capacity, but also in its implementation achieves two things, it conserves and injects significance to its applicators. A capitalist is aware that the raw resources that he has at hand are results of past toil and earlier regular investment inputs. If he does not utilize them, their value will begin to depreciate. When workers make use of labor raw materials or apparatus, they are preserving the worth of those previously static bits and pieces and converting them into saleable merchandise. Thus, the importance of a raw substance alters to that of a new-fangled product without any loss of value occurring in this course of action.

The kiln that baked the pot did not increase the pot’s overall value in the course of doing so. In reality, it did impart a share of its particular worth to the overall product, and will continue to do this to every artifact that utilizes its function. If the kiln bakes a thousand pots before breaking down, it is possible to conclude that it has transferred a thousandth of its total value yet at no time was the kiln’s overall worth increased.

Variable Capital

Variable capital differs from constant capital in that it does add to its own worth in the manufacturing procedure. Variable capital is manual effort. When they work, people replicate more than the summation of their own worth. Unlike a raw material, which once used or utilized comes to the end of its capabilities and reverts to not being of any use, laborers keep on existing even after they have created something. Labor not only produces enough value to uphold its own continued existence, it also produces extra worth that benefits the employer’s purposes, a surplus value. Each amount of the product contains a sixth of the assessment of manual labor that it possessed prior to industrial progress. Technological advancement increased the amount of surplus work that an employee could add to the capitalist’s advantage.

The portion of the day that the employee spends reproducing his own worth is necessary, as it amounts to time that he has to keep spending at work if he wishes to remain employed. After that, he will spend what remains after the necessary working time, the surplus working time producing more products for the benefit of the capitalist.

Capital Accumulation

Capital accumulation is a process that refers to the creation of assets in the form of investment in the form of resources. It is the capital because, when created, there is no intent to assist any worthwhile social causes but solely for the purposes of exchange for profit, and thereby multiplying itself for the benefit of the investor. The endless replication of trade value of products that capitalists seek with limited concern for the environmental confines as far as that growth is concerned  gives rise to contradictions the most urgent being the growing the growing of more machines in relation to workers.

 Technical progression and competition among the top investors motivates the continuous perpetuation of this cycle, which accentuates by the application, and centralization of capital. Any investors seeking to compromise by not depending too much on the present technology as on human labor risk compromising the sales and overall worth of their goods. This situation creates a constant advancement of work- saving technology as well as of firms seeking to implement the uses of that gadgetry in their outfits. This continued automation leads to the decline of profits.

This is because surplus value accrues from exploitative trends whereby increases in assessment that are a precondition in value of the trade of products have to originate from the workforce. With the constant and increasing use of machines in place of human labor in many industries, so, too, do the prospects for successfully taking advantage of the labor force. Investors, however, only invest in securing profits as that is the whole purpose of their initiating the said businesses in the first place and so those takings must issue forth from somewhere. If they cannot rip off the human labor, then they will increase the prices of the products that they produce to such an extent that while the capitalist realizes his proceeds at the end of the day, the worker cannot purchase the product that he assisted in producing.

If an investor’s goods are not being widely purchased because the prices are too high, then he has to cut even more costs in order to have his returns from somewhere! It is a vicious cycle that feeds on itself. Companies that are forever quoting their excess profits have achieved this through output gains afforded by increased mechanization, the practice of hiking product prices or the laying off of staff and other cost cutting measures, and many times they must be present in the market.

This leads to enlargement in industrious capacity far beyond what purchaser markets can stand. Subsequent over-accumulation of capital where it remains to pile up in warehouses and equipment at the plant does not get to produce anything and is thus a loss. An economy at this stage will find it difficult to cater to the societal needs of its populace. The only action that can end this deadlock and reinstate the circumstances required for a new round of accumulation is devaluation. Devaluation consists of the neutralization of trade and industry dead ends in the shape of bank crashes, depressions, factory closures, and price increases.

Squandering capital, the government’s expenditures on irrelevant projects become acceptable as a way for the authorities to deal with the excesses of industries as price increases eat away at purchasing power. When over accumulation becomes stretches over many areas, extreme forms of devaluation, such as wars, which in truth, can bring a release to the overburdened system but are morally reprehensible ways of achieving catharsis, are customarily opposed by local or nationalized coalitions and unions.

As over accumulation sets in, most entrepreneurs seek to retrieve their utilizable finances from corporation, gear and manual labor power to monetary assets. This culminates in financial markets over- investment by capitalists from other branches of currency. These branches must be progressively more able to spawn their own growth, and which are sheltered from deflation measures. Such a prospect causes financiers, who are now also competing with other capitalists for liquid resources, to stimulate an alteration in the purpose of economics away from merely acceding to capital flow through manufacture to espousing exploratory and management functions.

Where overpricing may be a threat, the defensive and replicative character of economic markets often results in protracted interest rates and a devaluing of manual labor power. When insolvencies threaten to multiply as an effect of the further surging of dynamic capital, the function of shielding fiscal markets endeavors to swing those costs to another place. Capitalism commences as a structure of the small-scale invention for a partial number of unidentified clientele on an unmanageable and broad market. Because of emergent hi-tech advancement and application of capital and larger markets, a course of socialization of the workforce is set in motion. Capitalist trade and industry calamities are always crises of overproduction of merchandise contrasting from those of pre-capitalist and post-capitalist eras, which is under- production of goods.

Expanded reproduction of merchandise and profitable growth ceases to flow in a uniform manner because heaps of goods do not have any customers and this gives a free rein to the destruction of both constant capital and the existences of the variable capital. At the last part of this twist, supplies reduce in worth beyond buying influence. Production will commence once more as the calamity boosts the rate of surplus value through a turn down of wages and with the worth of capital diminished; the standard rate of profit increases. Investment is encouraged, there is a creation of jobs, and general revenue rises as a new phase of opulence and revitalization initiates with vigor once more.

No amount of self-supervision of companies by entrepreneurs or state intrusion is able to alter this sequence of industrial production. Capitalists utilize this development with the intention of attaining profit margins and for its competitive role as well. By promoting this outlook means that sometimes the investor will not be able to avoid the usual mistakes of spending too little or too much in his business. The only way to circumvent a crisis of overproduction is by abolishing the imbalance between productive capabilities and buying power of the customers. To achieve this, large-scale production of goods would have to cease, so would the function of possessing personal assets as well as the subsistence of dissimilar societal classes. Indeed, capitalism, as a way of living would have to cease to exist.

Indeed, in spite of all its inequalities, Capitalism does have its fair share of advantages. It provides society with important goods and services while rewarding the hard work of determined individuals with success. While constructing a higher standard of living for the public of any given nation, it also provides determined citizens with the avenue to realize their goals. The world is a much better place today than it was 1000 years ago largely due to the efforts of capitalists. People have a longer life span and do not unnecessarily suffer from preventable illnesses.

Capitalism promotes economic growth by guaranteeing open competition in the market. It accentuates a decentralized market where individuals are exposed to more options in business and to many challenges on a large scale. Only those who learn quickly, who are highly innovative and bent on success can succeed in this atmosphere; but the competition is advantageous because it assures that consumers receive the highest caliber of products in the final analysis.

Capitalism also allows the purchaser to control the market, which, in turn assures the production of a wide range of products and services from which to select according to individual taste. Social states, which do not promote capitalism among their citizenry, portray how important it is to society.


In Socialist states, the government distributes money for the purchasing of products and services. This can influence the entrepreneurial spirit of prospective investors because they will not secure any profits after they produce their best products but receive their regular portion, just like everybody else. There is no motivation to foment the desire to do even better than one’s competitors or improve one’s products. Along with providing jobs for the betterment of a country, capitalism also supports self-organization. As rivalry levels increase, merchants are bound to manage themselves and set a practical charging method that profits them all. Capitalism also allows people to focus in an area that they feel they can outperform the competition.


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