Introduction
Crucial historical transformations such as the back-rolling of capitalist west welfare states, decline or crucial metamorphosis of party states which were bureaucratic in the communist East, and weakening of the economic sovereignty of nation-states have demonstrated the significance of understanding abstract dynamics of capitalism. This has caused an apparent and victorious occurrence of a new global capitalist and neo-liberal society and the emergence of competition among capitalist states with competing objectives. In this paper, I explore the importance of understanding the abstract dynamics of capitalism as an explanation of daily experiences in business and society. I explore the topic by analyzing the key concept (examples), how is it effective (personal view), time crisis, free and non-free labor, imperialism, international revolution (uneven development), the international division of labor, and the oil economy (china).
Abstract dynamics of capitalism and daily experiences of business and society
According to the Marxist approach to capitalism, the historical dynamic of capitalism is based on the double-edged character of the commodity or product and ultimately that of capital. This is underpinned in the value of a product where Marx explored the temporal determination of value’s magnitude under aspects of socially-necessary labor time (Masuda 2009). According to Marx, value is peculiar as a social form and temporal measure of wealth and thus increased productivity increases the magnitude of use-values which are produced per unit time (in the short term) (Gamble 2009; Masuda 2009). This dynamic does not only depict abstract temporality as productivity shifts can change the determination of what counts as a given unit of time (Edkins & Zehfuss 2009).
However, sometimes this is not the case as productivity changes in the use-value aspect do not alter the determination of what counts as a given time unit (Coe et al. 2007). Thus the use-value and the dialectic of value have depicted historical significance, especially with the emergence of a surplus-value that is relative, and these results in a complex non-linear historical dynamic that depicts modern society and underpins the global economy (Masuda 2009). The Marxist approach to dynamics in capitalism depicts ongoing transformations of production- social- life and ongoing reconstitution of its core condition as the ever-present feature of social life i.e. labor ultimately affects social mediation, and therefore living labor is an integral part of production processes (in terms of society, this is considered as a whole) and this occurs in total disregard of productivity levels (Masuda 2009).
The dynamics of capitalism enable us to understand labor as a mediator of humans and nature, and an objective transformer of matter. In capitalism, labor depicts a double character, either concrete or abstract. Concrete highlights the basis that some form of what is considered to be laboring activity is a mediator of interactions of humans with the natural environments while abstract has a social non-intrinsic function to laboring (Masuda 2009). Therefore, people do not consume what they produce and their own labor only serves as a means of acquiring other people’s products (Coe et al. 2007; Edkins & Zehfuss 2009; Gamble 2009; Masuda 2009; Price 2003). Therefore, for one to understand the dynamics of capitalism, he needs to have a historical perspective of the causes and the consequences of a free market economy which characterizes countries such as the United States, Japan, United Kingdom, France, and other nations where existing public policies tend to uphold classic principles which are capitalist (Gamble 2009). For instance, on the macro-economic level, classic capitalist principles present in capitalist societies have caused such societies to have a tremendous and sustained increase in the annual GDP as innovative tendencies begat efficiencies in manufacture (Masuda 2009). This transforms such societies from primary agricultural economies towards economies characterized by service and manufacturing and explains the rising percentage of global trade (determined as a percentage of global production). For example, in 2003, a report by UNDP noted rising global trade where global exports were $ 7 trillion (21% of GDP in 1990 compared to 17% in the 1970s). Such expansion in worldwide trade enhances trans-national linkages in production and increase in technology due to transnational corporations’ activities in core capitalist states (Edkins & Zehfuss 2009; Gamble 2009).
The dynamics of capitalism have led the international division of labor to be increasingly dominated by Multinational Corporations. Such corporations are characterized by outsourcing production and depending on sales, marketing, research, and development which gives enormous profit (Edkins & Zehfuss 2009). In industrialized markets having a tendency to attract higher-income consumers, multinational corporations tend to exert massive power on the economy due to effective marketing coupled with huge networks, mass media, and brand names that guarantee consumer security. Therefore, improved societies have resulted in to increase in product supply which causes a subsequent increase in consumer demand. Such occurrences have been thought to fuel greater growth in the economy and a substantial increase in the prosperity of employees. For instance, in United States’ economy analyzed in 2005, an average manufacturing worker depicted the enjoyment of a real wage, which was 4.3 times compared to that of his counterpart parts in the 1980s.
The effects of the dynamics of capitalism on society have also been pointed out by Coe et al. (2007) that while capitalism and its dynamics are “not without problems… it is hard to conceive of a practical economic system exhibiting superior dynamic performance, notably, in the opportunity and incentive free markets provide to capitalistic entrepreneurs for technological innovation — more efficient production processes, new products conferring superior consumer utility, and better methods of business organization — which in turn has raised living standards by astonishing amounts” (Coe et al. 2007, p. 32).
Such effects highlighted above have been felt from the 14th century and have been characterized by emerging institutions of transnational nature, shifting associations among sovereign nations, states, and multinational corporations, and the emergence of a worldwide and almost one culture of consumption. On the contrary, however, research has raised concern over the ever-increasing gap between and within nations as a negative effect of capitalism and its dynamics on the economy. This is further worsened by the rising trends in environmental degradation, upsurge in extreme nationalism, diminishing state sovereignty, and cultural imperialism (Coe et al. 2007).
According to Price, “the economics of globalization represents the contemporary process of capitalist accumulation” causing “world-wide commodity chains and division of labor, capital mobility and an upsurge in the formation of multinational corporations and global regulatory institutions and alteration of world trade from products and services to monetary instruments” (Price 2003, par. 6). Such dynamics of capitalism have myriad effects on the economy, e.g. the emergence of international elites who focus on maintaining the national economic priorities of nations or corporations they lead. Though the associations between core nations and international elites are thought to be harmonious, sometimes differences ensue, thus causing tension and blatant differences or disagreements which may cripple the global economy (Masuda 2009).
The political aspect of globalization and its institutions have been characterized by an upsurge in worldwide governance and increasing conflicts within nation-states due to their pursuance of a capitalist society. Nations that strive to dominate worldwide capitalism and its landscape have caused political tensions instigated by influential transnational institutions (e.g. International Monetary Fund, multinational corporations, United Nations, World Bank, and World Trade Organization) (Price 2003). The dynamics of capitalism entails a swing in the level of an organization i.e. from a nation-state to intra-regional and even trans-continental ranks in terms of political organization (Coe et al. 2007). In this regard, the jurisdictional areas of sovereign nations have been characterized by modification, because the market needs governance to guarantee the security and reliability of operations that sovereign nations engage in (Gamble 2009). For instance, the Chinese national oil policy purely depicts the framework of state capitalism as institutions that shape Chinese overseas oil acquisitions are Chinese policy banks having their own necessities e.g. when they issue energy-based loans to their trade associates in other nations. Thus the Chinese economy e.g. oil investments are an example of how state capitalism influences politically or commercially established investments (Coe et al. 2007; Edkins & Zehfuss 2009; Gamble 2009; Masuda 2009). In addition, institutions of global governance such as the World Bank and the International Monetary Fund have been subjected to a disproportionate degree of control by core nations that entirely control capitalist processes. As a result, the existence of tension has a tremendous effect on political processes within the nation-states as interested groups strive to engineer favorably national action in line with global governance (Masuda 2009).
Conclusion
The continued existence of the capitalist system is dependent on its capacity to vigorously accumulate capital. This not only includes economic expansion but also technological advancement (Coe et al. 2007). Therefore, the aggressive composition and dynamics of capitalism have changed the political posture of large economies with reference to economic policies and the function of the state. This and other myriad effects (explored above) have had a tremendous effect on the global economy (Coe et al. 2007; Edkins & Zehfuss 2009; Masuda 2009; Price 2003).
List of References
Coe, M et al. 2007, Uneven development: Why is economic growth and development so uneven?, Web.
Edkins, J & Zehfuss, M 2009, Global politics: A new introduction, Routledge, London.
Gamble, A 2009, The spectre at the feast: Capitalist crisis and the politics of recession, Palgrave MacMillan, New York.
Masuda, M 2009, International division of labor under global capitalism, Hosei UniversityPress, Vietnam.
Price, V 2003, Globalization: Understanding contemporary social processes, Web.