Marx, Alienation, and Capital 101 - Marcelo Vieta

Marx, Alienation, and Capital 1011 2
By Marcelo Vieta (OISE, University of Toronto)
• First draft: September 15, 2007

• Second draft: January 2, 2014
• Third draft: January 15, 2016
• Fourth draft: April 20, 2020
Karl Marx’s critical work on capitalism is important for understanding our contemporary
socio-economic system, and for thinking through alternatives to it. This is the case
because Marx was the first political economist and social theorist to thoroughly map out
the multiple socio-political and socio-economic layers of the capitalist system, its
historical roots, and its consequences for society. In my opinion—and in the opinion of
many others 3—his analysis and critique of capitalism is still the best.
Marx is relevant for today (and for our course) because, if one accepts Marx’s arguments
and critiques of the capitalist system, his dialectical and historical materialist analysis
forces the reader to ask three fundamental questions:
• How has capitalism become the predominant way of organizing the global
economic system?
• Why is capitalism the predominant way of organizing the global economic
system?
• Given capitalism’s exploitative, alienating, and environmentally unsound
tendencies, what other economic systems exist and can an alternative—a non-
capitalist—economic system be created to replace capitalism and its system(s)
of production, organizations, and institutions?
In my reading of Marx, his entire critique of the capitalist economic system can be boiled
down to the following six questions:
(1) How exactly does the capitalist system function and how does it produce
wealth and value?
(2) How and why are those that toil within the capitalist system—workers (or the
majority of us)—exploited in the processes of capitalist work and production,
1 I wrote the first draft of this essay in the fall of 2007 to introduce a fourth-year seminar I was teaching at
York University on alternative organizations and economics to Karl Marx’s fundamental critiques of
capitalism. I have been adding and amending it ever since, trying to make Marx’s general critique of
capitalism as understandable as possible to those first encountering Marx’s writings.
2 Text in bold are key concepts either used by Marx or that his writings explicate in more detail.
3 See, for instance, Paula Allman (2007); Harry Cleaver (2000); David Harvey (2010); Michael Lebowitz
(2003); David McNally (1993); Bertell Ollman (1993).
Marx, Alienation, and Capital 101 – Marcelo Vieta 1

while a small group—the owners of the means of production (i.e., the
capitalists)—live without toiling and off of the backs of workers?
(3) What are the dynamics and makeup of the two broad classes of people within
the capitalist system: the working class (those that produce “surplus-value” for the
system) and the capitalist class (those that own the means of production and
depend on the surplus-value produced by the working class)?
(4) How and why are workers (i.e., the working class) made to feel alienated
when toiling under the capitalist system to produce surplus-value?
(5) What are the socio-historical and material conditions that underscore such a
system?
(6) What kind of society could move beyond or replace the capitalist economic
system such that alienation and exploitation would be eradicated to the “rubbish-
can of history”4 and the following socialist call for a new socio-economic scenario
be guaranteed: “from each according to their ability, to each according to their
need”?5
Far from being irrelevant today, these questions are still at the heart of thinking through
the possibilities for alternative work organizations and economic democracy. They are
also relevant for a critical perspective on workplace and organizational change and for
fully understanding the socio-economic and socio-political implications of various
managerialist models of organizational design and change, especially for workers.
For Marx, his sixth major question tended to be more implicit but it nevertheless threaded
throughout his entire writings and political activity. After all, Marx was ultimately a
revolutionary who desired to see a different kind of society. For Marx, this last question
had its answer in “communism,” a more just society that would, according to him,
follow capitalism once the proletariat (i.e., the working class) became conscious of their
state of exploitation and alienation and organized to overthrow the capitalist system.
While this last question has fed most of our common views of Marx and Marxism, Marx
had surprisingly very little to say about the coming communist society when compared to
the thousands of pages he wrote analyzing and critiquing the actual capitalist system that
was emerging around him.6 As a way of discrediting his entire project, some of Marx’s
critics, however, continue to point to the failings of so-called “actual communism” in the
20th century (i.e., the socialist and communist countries that emerged in the first half of
the 20th century, and that eventually collapsed or reformed by the early 1990s). While
Marx did not live to see the contorted ways that “actual communism” was implemented
in the 20th century (which he would have undoubtedly disapproved of, I believe, since
working people did not have direct control of these societies), a strict focus on Marx’s
4 Trotsky, Leon, History of the Russian Revolution, 1932.

5 This is a traditional socialist and anarchist maxim. In The Communist Manifesto, Marx and Engels also
termed this as “the free development of each is the condition for the free development of all.”
6 Four places where Marx did begin to outline his vision for the post-capitalist society were: his tract co-
written with Friedrich Engels, The Communist Manifesto; two of his speeches, “The Critique of Gotha
Program” and “The Inaugural Address to the Workingmen’s Association;” and his essay “The Civil War in
France.”

sixth question blinds us to the first five questions that drove the bulk of his research and
writings.
In sum, Marx’s writings are still, undoubtedly, the most poignant critiques of the
capitalist system, of how the capitalist system functions, of its organizations of
production, of working within it, for what this system means to workers, and why the
working class has to overthrow capitalism ultimately and chart a different course for their
own socio-economic life.
This essay is meant to be an introduction to Marx’s key critiques of capitalism in order to

begin to think through its relevance for an alternative socio-economic system, including
alternative forms of organizational design and change and for the broader project of
democratizing the economy. In the following pages, I mostly focus on the first five
questions that drove Marx’s intellectual work. For the sake of clarity and brevity, I
purposefully stick to Marx’s major arguments and findings, glossing over some of the
details of his analysis. For a deeper study, I encourage the reader to delve into Marx’s
own writings, especially Capital, Vol. 1. 7 Throughout, I also reference key secondary
readings that delve into particular areas of his work.
Alienation
We begin with Marx’s notion of alienation—the outcome, according to Marx, of
working within the capitalist system and how workers are made to feel—and what they
actually become—when they work within it. This, for me, is the place to start reading
Marx when we are seeking to understand his conceptualizations of work and working
within capitalism; for starting to think about why we might need to, at minimum, reform,
transform, and democratize the economic realm of life (which includes how we produce
the things we need and want); and, ultimately, why we might need an alternative
economic system to capitalism.
The essay “Estranged Labour,” which has also been translated as “Alienated Labour,” is
a section of a chapter from Marx’s early manuscripts on economics and philosophy
known as the Economic and Philosophical Manuscripts of 1844. Written in Paris during a
period of much political and personal flux in the life of the young Marx, this collection of
early essays was only first published at the beginning of the 1930s and caused an
intellectual revolution amongst the Left of the inter-war years.
The essay “Estranged Labour” is, at core, about the condition of human beings and how
their capacities to be creative beings is dispossessed from them as they labour within the
capitalist system. To be alienated means to be separated, or “estranged,” from something
that is otherwise integral to our being, to human life. In a nutshell, in the essay Marx
claims that a two-folded process unfolds with the historical development of capitalist
production. (1) The domination of workers and the control of their capacities to labour by
7 I spend some time discussing the implications of Marx’s analysis of capitalism for thinking through
alternative work arrangements prefiguring paths beyond capitalism in the Preface, Introduction, and
Chapters 3, 4, 5, and 9 of my book: Workers’ Self-Management in Argentina: Contesting Neo-liberalism by
Occupying Companies, Creating Cooperatives, and Recuperating Autogestión, Brill/Haymarket, 2020.

“an alien power” (i.e., the “non-workers,” or capitalists), rooted in the wage-based system
of work, transforms the labourers’ capacities for productive creativity into something
inherently unnatural and alien to them. (2) This alienation of our capacities to work—its
commodification as “labour-power,” as Marx will refine in his more mature writings and
as we will review shortly—is core to the development and use of private property,
which made possible the capitalists’ ownership and control of the means of production.
Taken together, these two movements in the development of capital alienates the real
producers (i.e., the workers) not only from the very products they produce and the
processes of production they work with, but also from themselves and from their very
humanness.
More precisely, the capitalist system, according to Marx, estranges (or alienates) workers
from their inherently creative capacities in four main ways:
1) workers are alienated from the actual products they produce because they do
not ultimately control them but cede them to the owners of the means of
production (i.e., capitalist bosses, the “non-workers”);
2) workers are alienated from the processes of production (i.e., from the activity
of work, from their capacity to make things, including by implication from the
tools they use, from the arrangements of production they work within, from the
workplaces they work in, etc.);
3) workers are alienated from their “species-being” (i.e., their humanness, or their
very humanity as creative, imaginative, and “free beings” as their creative
capacities become mere means of subsistence and fodder for wage-labour); and
4) workers are alienated from other workers (that is, from each other, from their
capacities to cooperate creatively and be social beings).
As Marx argues in the essay, workers are alienated from their human capacities in these
four ways primarily because of how they have been integrated into the capitalist system
of production. To sustain themselves and gain a living, workers must now seek
employment within the very economic system that alienates them. They are alienated
within this system because, unlike in more traditional economic systems, workers must
legally give up all claims to the products they produce and to the tools and processes they
use to make things when they sign the labour contract and agree to give their time to the
capitalist in return for a wage. We will return to the specifics of this legal “sale” of one’s
working time and its consequences for working people in due course. For now, we should
keep this in mind: Workers are made to feel alienated in the capitalist system of
production because they actually are alienated in practice; workers actually become
mere cogs in the wheels of a greater productive machine outside of their direct control.
An extremely poignant commentary of this alienation can be gleaned from watching the
plight of the Little Tramp character in Charlie Chaplin’s brilliant film, Modern Times
(1936). There we not only get a clear picture of how the capitalist system of production
alienates workers, but also how total this alienation is as the Little Tramp struggles
throughout the film to fruitlessly gain a sense of security and control in his life via the
only avenue possible: securing a wage-based job.

Marx especially used the term “alienation” to lay out the division, separation, and
contradictions (i.e., differences) in the relations between workers (i.e., the working class,
or the proletariat) and the owners of the means of production (i.e., the capitalist class, or
the bourgeoisie). This alienation of workers from their very creative capacities and
freedom to associate with others was centred on the capitalist’s private control and
ownership of the means of production. Capitalism is thus a system upheld by property
law and notions of control linked to asset ownership and monetary investment. Moreover,
claims Marx in “Estranged Labour,” it is the very the wage-based system that
fundamentally constitutes and makes possible private property. With increasingly limited
decision-making power or autonomy for workers within this system, capitalist production
processes, including workers own capacities to work, become ever more depersonalized
within increasingly fragmented technical and social divisions of labour. The result for
workers is deskilling, powerlessness, and depersonalization at work and, increasingly,
throughout all of social life touched by capitalistic logics and practices.
In short, in “Estranged Labour” Marx suggests that the historical development of

capitalist production has had very concrete and ultimately deleterious effects on workers
in particular ways. Because the “actual producers” (i.e., workers, the “real producers”
who actually make the things bought and sold in the capitalist economic system) no
longer control or own the means of production as they once did in more traditional
economic societies, they are now separated—or estranged—from fully benefitting from
and making decisions about their work and working lives.
In the process of showing us in the essay that the capitalist system is fundamentally
alienating for those that work within it for a wage, Marx also implicitly suggests a
materialist conception of an alternative socio-economic reality, what he would later call
communism. The concept of communism was not invented by Marx or his life-long
friend, benefactor, and intellectual companion, Friedrich Engels. Communism was a
political vision that was just coming of age in Europe at the time that Marx began his
intellectual and revolutionary work as a response to the plight of the proletariat (the
working class). But Marx and Engels did step up to the task of further articulating what a
future communist society might look like. The essay “Estranged Labour” itself serves as
a cogent (if implicit) contrast between the ways that workers are alienated under
capitalism and one possible alternative to it: a society where human beings can actually
self-actualize (i.e., freely develop) through collective (i.e., communal) ownership of the
means of production and associated (or cooperative) production. At the time of the
penning of “Estranged Labour” in 1844, the proletariat was mostly devoid of any labour
rights or rights to any kind of property save for a few personal belongings necessary for
daily survival and, most crucially, their capacity to labour. This was a social class that
was surging in Europe as a consequence of the Industrial Revolution. “Estranged
Labour” proved to be one of the foundational pieces of writing for Marx’s more mature
future work on capital, was, in fact, one of his first sustained analysis of the workings and
consequences of capital on society and on the working class, and was andearly and
provisional statement advocating for an alternative to capitalism.

To better understand why Marx comes to these conclusions about the alienating (and
exploitative) nature of capitalism for workers, we have to be precise about some of the
assumptions that Marx is making regarding living and working within this socio-
economic system. To accomplish this, we have to become familiar with some of the other
key concepts he is working with in his dialectical and historical materialist analytical
methodology. For this task, we need to turn to Marx’s more mature works, ultimately
taking us to his opus, Capital: A Critique of Political Economy, of which he was only
able to complete the first volume on the process of capitalist production. 8
What are some of the ideologies undergirding capitalism, and how can
we move beyond them?
Marx explores the workings of the capitalist economic system—its myriad relations and
motions—and what consequences this system has on the working class in his more
mature works such as Capital, Vol. I and his notebooks that he prepared for writing
Capital, known as the Grundrisse (or Outlines for the Critique of Political Economy in
the translation of its German title), which was only published in 1939 and in English in
the early 1970s.
Shortly, we will explore more fully some of the substructures of capitalism’s primary site
of alienation and exploitation, the workplace—or the “hidden abode of production,” as
Marx characterized it in Capital, Vol. 1. But first, let’s take a step back again and look at
some of the ideologies that underpin capitalism and its means of alienating working
people, and Marx’s always implicit or indirect (but sometimes explicit and very direct)
critiques of these ideologies.
Ideologies are the abstracted meanings and ways of thinking in a socio-political system
that often go unquestioned and create our common-sense attitude of the world. Marx
8 After decades of study and research, much experienced in near poverty, Marx laid out a plan to write
numerous volumes of his opus Capital. In his lifetime he completed the first volume of Capital on the
process of capitalist production, published originally in German. He also wrote drafts of Vol. II (on the
circulation of capital), Vol. III (on profit, money, rents, interest-bearing capital, and revenue), and was
preparing at the time of his death what is now known as Vol. IV, most commonly titled Theories of Surplus
Value. Marx’s precarious existence was in no small part due to his revolutionary views, which also meant
he had to seek exile in various countries, finally settling in London where he lived for the last half of his
life and where he wrote all of his mature works. This constant upheaval also made it impossible for Marx to
secure employment as a professor, compounding the difficult situation within which he had to conduct his
research. His need to provide for his family, which included his lifetime partner Jenny and seven children
(of which only three survived to adulthood), meant he had to take on work as a journalist, writing for
several world newspapers but most extensively for the New York Tribune. He also spent much of his time
organizing for the revolutionary working-class struggle, which included leadership in the International
Workingmen’s Association. This part of his life saw Marx spend much time reading and writing letters;
attending meetings; giving speeches; debating and critiquing the intricacies of capital, work, modern life,
and bourgeois philosophy and political economy; and in other political activities. All of this extra pressure
on Marx ultimately prevented him from completing his vision for Capital, his life’s work. Vol. II and Vol.
III of Capital would be edited and published posthumously by his lifetime friend and benefactor, Friedrich
Engels. Vol. IV was edited and published as three additional volumes by the Czech-Austrian philosopher
and Marxist theorist Karl Kautsky in the early 1900s. Much of his notes, letters, and all of his published
and unpublished books and essays have now been released in English as the Marx/Engels Collected Works,
and almost all of this can be accessed online.

most fully explored the ideological framing that shapes (and mystifies) the economic
relations of a society—capitalist society included—in another early set of manuscripts
co-written with Engels and only published in the early 1930s: The German Ideology. We
should spend some time with the grounding ideologies of capitalism because their
assumptions already have alienating qualities to them and are at the heart of the
philosophies and ways of thinking that undergird and justify the capitalist system.
For instance, capitalist thinking is grounded in the idea that individual self-interest is the
most efficient and effective way of organizing economic life. Indeed, Adam Smith, one
of the “founding fathers” of modern political economic theory, claimed that the wellbeing
of all could be secured best by the pursuit of self-interest within a competitive system of
production and distribution. This ideological assumption is related to why in a capitalist
system based on competition we—the workers—are already made to feel, before we
even step into a workplace, that we are not quite as good as those that we have to
compete with (i.e., other workers vying for the same job, for instance). We always, it
seems, fall short of our potential and for living fulfilling lives. Indeed, the ideology of
competition is always in contradiction to the prevalence of cooperation that actually still
exists between workers and in myriad realms of social life.
Concerning the latter, think of, for instance, the sphere of socio-economic activity
increasingly known as the social economy, made up of innumerable non-profit,
charitable, volunteer-based, and cooperative organizations that operate in between and in
conjunction with at times the for-profit and public sectors. However, while the social
economy exists and is even needed to fill in the gaps that capitalism leaves, capitalism
needs our consensus to be competitive in order to function while, at the same time,
seizing our capacities to cooperative with others. Because of this need, the ideologies that
undergird it, and the social science that is deployed to justify it, consistently privileges
the atomized individual and the notions and practices of competition and self-interest.
These concepts and notions, in fact, are at the heart of orthodox economics, mainstream
social theories, and, indeed, our so-called “common sense,” which are all at the heart of
what Marx called bourgeois political economic theory. Exploring the contradictions
between bourgeois political economic theories of the individual and competition and the
actual lived experiences of working people and their cooperative capacities and activities
was the kind of analysis that inspired Marx to carry out his lifelong research and political
work. Asking what capitalism is, then, according to Marx, fundamentally means that the
critical questioner will undoubtedly begin to unearth and unpack these kinds of alienating
and contradictory ideologies. Beginning with our historical … and materialist … at the
heart of critical thinking…
To understand the capitalist system, then, we most crucially have to see what kind of
thinking and practices underlie and prop up this system, such as the system’s socio-
economic structures, the way things are produced and exchanged within this system, what
aspect of these structures are understood in common sense thinking only superficially,
and what the social and political consequences are of taking this world system at face-
value. Thus, for Marx, to answer the questions “what is capitalism?” is to fundamentally
engage in a critical exercise from capitalism in its entirety (the whole of it) to its

constituent parts, forcing the questioner to carefully and historically unpack the basic
assumptions that undergird the practices and concepts used to catalogue and describe
what is commonly know as “capitalism.” That is, to understand the capitalist system the
inquirer must, for Marx, look for the moments and things that remain hidden to most of
us in our everyday engagement with the world. This he does through his method of
historical and dialectical materialist analysis. This is a method that brings to light the
relations that are embedded in the social practices of producing, distributing, and
consuming things within the capitalist system; tracing these social practices’ historical
roots; and laying bare the contradictions inherent to the things humans produce and use.
For instance, for Marx, we cannot truly understand the capitalist economic system by just
considering the things we buy and consume as they appear to us in everyday life, which
on first glance is a “an immense accumulation of commodities.”9 Take one of the most
ubiquitous of things in our contemporary world: the cell phone. While it might appear to
us, in everyday usage, as simply a tool to communicate that is contained in the thing we
hold in our hands, this is not, by far, the complete reality of the cell phone. From a
dialectically informed historical materialist perspective, we must also take into
consideration the social relations that went into getting the cell phone into your
possession. When you consider these other social aspects, the cell phone is much, much
more than a tool of communication. Cell phones are also embedded with a history rooted
in the material conditions of the society that makes them, distributes them, and consumes
them. Thus, cell phones, and any commodity we buy and sell, are much more than the
physical elements that we can sensually see and describe. They are also constituted by
many social relations of labour, power, control, environmental issues, cross-national
trade, laws and regulations, and so on. They are imbued with and constituted by, in other
words, all of the social and political dynamics of embodied work, including: the
intellectual and manual skills of its designers and the workers that put together their
components; the conditions of labour at its sites of design, resource extraction for its
components, manufacturing, shipping, and point of sale; with the organizational realities
of the workplaces that assembled them; with the environmental consequences of their
manufacturing and ultimate disposal; with the intricacies of the international trade and
distribution system that brought them to their point of sale; with their impacts on our
lives in their use, and on and on.10 That is, all of the things we buy and sell overflow any
analytical boundaries and categorical descriptions of them as they might appear to us at
any given moment. Rather than all things being congealed in what they presently are,
things, for a Marxist dialectician, are in constant change and motion, both having
originated from a multiplicity of past moments, events, and activities, and in a state of
becoming something other than they are in the now.
9 Karl Marx, Capital, Vol. I: The Process of Capitalist Production, New York: International Publishers,
1967, p. 35.
10 For a compelling historical materialist account of mobile phones, see: Enda Brophy and Greig de Peuter,
“Labours of Mobility: Communicative Capitalism and the Smartphone Cybertariat,” In Andrew
Herman, Jan Hadlaw, and Thom Swiss eds. Theories of the Mobile Internet: Materialities and Imaginaries,
New York: Routledge, 2014, pp. 60-84.

So too, for Marx, the concept of “capitalism” (although he never used this term) is
multifaceted, ideologically saturated, socio-politically entwined, and in a state of constant
motion and becoming. Indeed, capitalism is not as easy to define it as it first appears. It is
further wrought with many political inferences and unquestioned common-sense
assumptions that must first be unpacked to most fully understand it. Defining capitalism
thus also depends on which world-view and philosophical perspective you approach it
from. If one were a conservative or a liberal, for example, one would define capital and
the economic system it props up—capitalism—in ways that would serve to simply
explain how it works—usually proceeding from the parts to the whole, rather than the
stance taken in the dialectical method which is to proceed with the whole and then map
out the constituent relations of the parts to better understand the whole. Many times,
simply explaining how a thing works—as in analytical modes of thinking—is used justify
a thing or idea. This is the neoclassical economic approach to the economy and the way
most economics textbooks understanding capitalism. This approach does not question the
legitimacy of the capitalist system (i.e., does it live up to its promises of efficiently
delivering us the goods and services we need and want?) or its normative/ethical
dimensions (i.e., is capitalism a fair economic system?, should capitalism continue?,
ought we reform or transform it?). Instead, neoclassical economics sets out to explain its
mechanisms and how it fits into society today as if capitalism were the natural order of
things; as if it was the only economic system and as if no other economic system every
existed before it, or will ever exist after it. That is, this approach assumes that capitalism
is the best and only way we can organize ourselves as a society. To get a taste of this kind
of common sense thinking, open up the business pages of any mainstream newspaper, or
the pages of a first-year economics textbook.11
Moreover, conservatives and liberals do not tend to discuss the contradictions inherent
to capitalism, critique its fundamental economic models and practices, or delve too much
into the social malaise, economic inequalities, and the environmental devastation this
system might be implicated in. In sum, non-dialectical conservative or liberal thinkers
tend to set out to show, via analytical inferences from particular moments or parts of the
system, capitalism’s (theoretical if not always practical) efficiency and effectiveness to
produce and deliver us the goods and services otherwise in short supply and that we
need and seek (this is how they define the economy, by the way). They also ignore the
historical evidence that this system has developed slowly and violently over the millennia
by displacing millions of people from their traditional lands and customs, considering it
almost always the natural order of the world. Again, these are the positions taken by
most authors of the economic and business textbooks you have read or will read here at
the University of Toronto or at any other Western-based, liberal university. In sum, the
view that capitalism is the natural order of things and the best way to organize society
today is actually rooted in the liberal political-philosophical ideas that we have inherited
from the Western tradition, and that were most forcefully articulated between around
11 What makes conservative and liberal philosophies particularly susceptible to this kind of arguably
uncritical way of looking at concepts like capitalism? Think about this question with another question:
Whom does the capitalist system serve and benefit at core? Who are most of the political and business
leaders that claim to do what they do on our behalf? More on this throughout the course.

1750 and the early years of the 19th century—the era that has come to be known as the
Enlightenment.
Since this course is about the possibilities of and the potential for alternatives to our
status quo via workplace and economic democracy,12 we will be dealing with and taking
up throughout the semester, to a great degree, the social, political, and economic critiques
and perspectives that we usually—and at times crudely or derisively—consider “leftist”
or “radical.” I prefer to view the lines of inquiry that question the status quo thinking
critically (and even thinking ethically). Thinking critically—that is, thinking about the
hidden dimension of things, or the possible relational conditions and contradictions of our
social reality—is a cognitive practice that is grounded in the dialectical philosophical
tradition that has come to be known as Critical Theory, which, by the way, also has
roots in the Enlightenment’s critique of myth, and in Marx’s writings. But now we are
getting ahead of ourselves. Let’s return to Marx’s take on capitalism the ideologies
interpenetrating it.
Marx is an important thinker to start the course with because he was arguably the first
political economist and critical theorist to concretely, meticulously, and convincingly
analyze the modern capitalist system with the goal of finding alternatives to it. Indeed,
Marx spent most of his career practicing a critical theory of capitalism by unearthing
the history of capital; defining it dialectically, materially, and historically; and critiquing
the real-world consequences of emerging out of capitalism: exploited and alienated
labour. Marx made the claim early on in his career that those individuals and groups that
control the mechanisms of capitalism—especially the means of production, or the
assemblage of tools and technologies used to produce things—and that consider the
capitalist system a pre-given, irrefutable way of organizing the world are actually
upholding a world system that, at core, produces haves and have-nots. The “haves” that
Marx was referring to he called the bourgeoisie. 13 Marx fundamentally believed that this
propertied class (i.e., business and large land owners) and the social groups, philosophies,
and institutions that support it (including banks bankers, financial institutions and
financiers, public relations departments and marketers, lawyers, governments and
politicians, conservative philosophers and analytic philosophy, etc.) hegemonize (i.e.,
take over and impose ways of thinking and acting) the definitions, uses, and assumptions
of the concept of capital itself at the expense of (and, one could say based on Marx’s
analysis, on the backs of) the other class that most of us are a part of: the working class
(what he would eventually call the proletariat). This ideological, political, and
philosophical hegemonization, Marx argued, is not only a way of thinking that influences
how we perceive and engage with the world, it actually transforms, influences, and
12 This essay was originally written for students in the course that I taught and co-developed with Prof. JJ
McMurtry at York University, SOSC4041-Alternative Economic Arrangements, and further amended for
the OISE/University of Toronto course LHA1148-An Introduction to Workplace, Organizational, and
Economic Democracy.
13 In Marx’s early writings he called this class of individuals who control private property and the means of
production “the bourgeoisie” (see: the Communist Manifesto). Later, he simply called them “the class of
capitalists” (see: Capital, Vol. I).

affects the very social practices of individuals that live within it, and the institutions that
support the capitalist system.
These social practices are, in a capitalist system, influenced greatly by the ideas of private
property and exchange. To think through the concepts of capital and capitalism, then, we
also must consider how private property restructures our world and how the exchange
of commodities in order to acquire more and more commodities and, thus, more and
more wealth, is a key practice in a world dominated by capital. 14 The problem with a
world centered on capital for Marx, therefore, begins with the fact that not all of us can
own private property, control or affect the ways goods are produced and distributed, and
acquire the wealth we need or want. For Marx, the problem is not with wealth, per se, but
with the world system that predetermines in an inequitable way who controls the wealth
and the means to produce and acquire it and who doesn’t, and in a world system that has
demanded of us workers a great part of our skills, minds, and time to sustain it. Power in
a capitalist system thus ultimately rests with those that own and control the following
specific kinds of private property: the means of production and distribution and the
monetary/financial system. Power is also upheld by the political apparatus that
establishes the system’s laws—the state. These forms of private property, the legal
system, and the state apparatus that uphold them are, at core, the main means and
institutions for creating more wealth in our advanced capitalist system. They are
ultimately possible, according to Marx, because of our consensus as workers to see it
continue against our own interests, and from the value that workers pass on to
commodities, thus creating and sustaining this wealth for those in power. (I will continue
to explain the role of workers in propping up this system and in valorizing the things
produced and consumed in a capitalist society throughout the rest of this essay.)
The acquisitive capacities of the bourgeois/capitalist class, which for Marx stands in
opposition to the lack of opportunities of the working class, is also assisted by various
mechanisms of finance and geo-political power such as purchasing agents, traders,
colonial interests, banks, financial institutions, the global financial system and, of course,
the nation state and its incumbent actors and organizations, which is perhaps in many
ways the key institution in the service of capital in contemporary society. In practice, the
capitalist world system enfolds the state apparatus into its own mechanisms, which assists
individual capitalists and capitalist institutions in organizing the means of production.
Thus, the state can be seen as being harnessed by capitalism in order to enforce the
continuation of the capitalist system: in the capitalist system, many theorists like Marx
believe that the state works primarily on behalf of the elite (i.e., bourgeois) class who
own the means of production and distribution. That’s why Marx called on the workers to
organize, rise up, and overthrow the bourgeois-state system and replace it with a more
communally managed sate, a communist state. How successful or not this project has
been or could still be, especially in the face of the failure of the Soviet Union and its
satellite states at the beginning of the 1990s, is a subject of much debate amongst
contemporary Marxist scholars and other critical thinkers such as anarchists. Again, more
on this throughout the course.
14 Marx’s term “commodity fetishism” is related to these practices.

So far we’ve been looking at some of the practices, ideologies, and institutions that
undergird capitalism and use capital for its existence. So we’re back to where we started
off at the beginning of this essay with the general question of what makes capitalism an
alienating system. Before fully understanding the consequences of the social, political,
and economic dynamics that undergird this system for us workers, as well as the
alternatives to this system, we must begin to unpack the concept of “capital” itself. And
we can begin to understand what capital is by starting with what Marx called early on in
Capital, Vol. I its “cell form,” commodities, and in capitalism’s operational roots in the
difference between the use-value and exchange-value of the things that satisfy our needs
and wants. By working through this difference embedded in each commodity, we will
also be sketching out, although briefly and in thumbnail form, Marx’s political economy
of capital in the next few pages.
Marx’s political economy of capital: A thumbnail sketch
Capital and social relations

Marx reveals in his political economic analysis that capital is, at core, self-expanding
value rooted in a “social relation,” which “constitutes’ wealth” because “[c]apital
expands by entering into social relations with other commodities.” 15 What gives capital
this ability to self-expand, Marx also reveals, is its absorption of surplus-labour, which is
the “labour it extracts from the worker which is over and above the value of workers’
labour-power” (i.e., over and above the value of the wage that the capitalist must pay for
the commodity “labour-power”). In the end, we will soon find out, the value produced by
this surplus-labour—surplus-value—is what enables the capitalist to sell a commodity at
a dearer price than it costs to make, while also lying at the heart of the capitalist mode of
production.16
But what can Marx possibly mean by all of this? Why does he call capital a “social
relation” and what is the nature of this relation? And how exactly does capital “expand”
via the absorption of surplus-labour? To answer these questions, we must begin to
understand concepts such as “commodity,” “exchange,” the various forms of the “value”
of commodities, and the role of labour in creating the “surplus-value” from “surplus-
labour” that lies at the centre of how capital can “self-expand” in value. With the dialectic
method of Marx front and centre, keep in mind that all of these concepts are not causally
determined but are rather constituted as relations and, more precisely, “social relations.”
First, let’s clarify some additional basic concepts.
Economies, exchange, and commodities

An economy is, at its most basic, the work and social practices of producing, distributing,
acquiring, and consuming the goods or services we need or want. Because no one person
can self-produce everything needed or wanted, an economy also needs practices of
15 Peter Osborne, How to Read Marx, London: Granta Books, 2005, p. 94.
16 Ibid, p. 94.

exchange. In more traditional societies, or in economic activity that sits outside of our
current capitalist one, or in your household, for instance, the things or services we need or
want might be gifted or carried out without the expectation of something in return.
Additionally, goods or services might be redistributed to a population (as with some
Indigenous economic practices), or provisioned via forms of non-monetary reciprocity, or
perhaps traded via barter. These are equally economic activities rooted in economic
systems. So an economy is not exclusive to capitalism and is not even synonymous with
the market, but exists wherever things are gathered or produced and distributed within
some social process of coordinating the production and allocation of goods or services.
A market economy emerges where the production and allocation of goods and services
happen via some sort of exchange. This exchange can occur between individuals or
between various groups. In capitalist societies, they tend to happen within markets,
which were originally physical places where goods or services were exchanged or
purchased, such as in the town square. Within capitalism, the market tends to be
mystified as self-running and all encompassing, consisting of millions of self-interested
individuals or corporations, and driven by an “invisible hand,” as Adam Smith
characterized it, that somehow magically seeks equilibrium between supply and demand
and sets the price of things exchanged therein. The ostensible certainties of these
conceptualizations of capitalist market exchange and the bourgeois political economic
theories that purported to explain them were ultimately debunked by Marx’s dialectical
analysis, most forcefully in Capital.
A commodity, in turn, is anything (an object or service) that is exchanged for another
object or service. This can be any object of nature (i.e., “natural resources”) or an object
or service created and used by human beings. In capitalist market economies,
commodities are goods and services that are exchanged in the process of buying and
selling on so-called “open” and competitive markets.
Early on in Capital, Vol. I, Marx makes the very important distinction between how the
things we need and want were made and distributed before capitalism became the
predominant form of organizing the economy, and how the things we need and want are
made and distributed in capitalist societies. Understanding the differences between pre-
capitalist and capitalist economic activity and the exchanges that take place within them
is important to understanding Marx’s critique of modern capitalism, how things are
produced and distributed within it, the types of social relations it relies on and impacts,
and why these social relations are alienating and exploitative for the working class. It is
also key in beginning to think about alternatives to the capitalist system.
Use-value and exchange-value

Use-value: Most fundamentally, all things that are used and made by humans (past and
present, in pre-capitalist, capitalist, or command economies) have, at core, a “use-value”
to them. This is the value that humans place on things based on how useful they are to
them and not necessarily on how much “money” they are worth, or what can be
exchanged for them. In traditional, non- and pre-capitalist societies (or when we engage
in any do-it-yourself project today), the things humans use and need are tend to be

produced directly by those who use or need them. At times, if the user doesn’t have what
she needs and can’t produce it herself, the things she already possesses might be directly
traded for the other things she needs or wants. This trade might happen in a basic
economy of exchange when we barter with others. In a barter-based economic system, if
you have something that you don’t need anymore but that I need and want, and I have
something that you need but that I don’t need and want anymore, we can exchange them.
This, of course, is also an economic activity. If we directly exchange one commodity for
another and don’t place an extrinsic value in-between them as a mediator of their value—
often represented by money—we are exchanging use-values and we are equating the
use-value of my need and want with the use-value of your need and want. While this kind
of exchange is an exchange of commodities based on their use-values, it sits outside of a
capitalist system of exchange, as system that requires commodities to possess exchange-
values.17
Exchange-value and value: An immediate problem might quickly arise in a barter-based

economy when more complex ways of producing, distributing, and exchanging
commodities are deployed. The things that I posses and that I might be able to exchange
as commodities might be useful to me (my books, my kitchen utensils, my gold ring, my
accordion, etc.), but might not be useful to you. That is, what might have use-value to me
might not have use-value to you. So what happens when I can’t produce what I need and
want, or when I can’t find someone who has what I need and want to trade with, or when
I can’t find someone who doesn’t want what I desire to get rid of because I don’t place a
use-value on it anymore? One way that humans dealt with this problem historically was
to use specific objects as instruments of exchange, as surrogates or representations, as it
were, of value. These objects that facilitate exchange we call money. Money doesn’t
have to be gold or a rare object. Money is simply any object that is readily available and
that can represent a certain value that a society agrees on. It itself doesn’t have any value
that’s intrinsic to it. Rather we agree as a society that it is worth something. Therefore,
the value that money has is a convention. It is socially agreed upon. When two or more
people agree that this seashell is “worth” five coconuts, and if I give you this seashell and
you give me five coconuts and I can then use the coconuts to buy something else that
might be worth the equivalent of five coconuts, we begin to have a basic “money-based
exchange economy.”
Marx’s formula for this type of an economy is C->M->C, where “C” equals commodities
and “M” equals money. In other words, you sell a commodity to get money to buy
another commodity. Notice the mediating role of money in this type of an economy.
Now, facilitated by the mediating role of money, the value of objects in this economy are
not only based on use-values—after all, the five coconuts I bought are still as useful to
me as a source of nutrition or as a set of bowls as they would have been if I had picked
them myself—but they also have another added value to them: They are now also valued
in a different way based on their “exchange-value.” By putting an exchange-value on
something, we are no longer equating its value to its usefulness but are equating it to its
exchangeability, its value as exchange. Moreover, this value—that something is “worth”
17 Marx, Capital, Vol. I, pp. 40-41.

five coconuts, or three seashells, or $10—isn’t really intrinsic to the thing we are wanting
to buy or sell but rather seems to “hover above it,” or transcend the thing itself. The mode
of thinking that makes us believe that a thing is only valuable if it can be exchanged or
attached to a monetary number—a way of thinking common to capitalism—leads us to a
kind of mystical way of thinking about things. Marx called this mode of thinking and the
ideologies it creates “commodity fetishism.” As with religious icons, we now imbue an
additional value on things beyond their material usefulness and this value is considered
more important than even the usefulness of a thing. In an economy where exchange and
the structures of exchange are valued beyond the usefulness of things, we begin to
believe that things are valuable or worth something in a way that goes beyond how they
appear to us physically, or in the other things that might constitute its value. In this kind
of a society, even things are alienated from other aspects of their reality.
Can you begin to see the social relationships that might form within this type of an
economy? For example, who or what controls the supply of money, or how much
exchange-value a commodity or money itself possesses? Where are these people and
institutions located in society’s relations of ruling and hierarchies of power?
When do we have capitalism?

You might be asking yourself by now questions such as: When does capitalism occur,
then, and why? Why is Marcelo writing about exchange and money and does an
exchange-value society only happen with capitalism? When is it that we begin to call an
economy a capitalist one? Let’s answer the last question first because we’ve already
touched on it.
Economies are capitalist where the mode of production is such that commodities are
overwhelmingly created to sell in markets where their exchange-value exceeds the value
of the original commodities that went into the process of producing them. This excess
value is used to (a) give a return (i.e., salaries and earnings) to those that “invested” in the
production process and (b) to buy new commodities that are returned to the production
process or service already existing means of production in order to subsequently produce
even more commodities to sell (note that the latter also includes securing funds used to
pay wages for labour). This extra value acquired in the sale of commodities, Marx
showed, was enabled by the surplus-value generated by labour-power (which has itself
also become a commodity), since the cost of labour-power to the capitalist in the form of
the wage is less than the final value of the commodities produced by this very labour-
power. As the means of production have become more and more productive with
innovations in technology and the technical and social divisions of labour over the
decades, labour-power has, in turn, been made more and more productive and,
paradoxically, cheaper to purchase and reproduce. In short, the entire capitalist system of
production is driven by the prime drivers of exchange in order to accumulate more and
more resources—i.e., additional commodities, more money—in order to not only
continue the production cycle but to exponentially expand it. What differentiates
capitalist economies from other economic models is not the market, nor is it the
exchange-value of things; after all, markets and exchange-value have existed for
millennia, capitalism only for a few hundred years. What distinguishes capitalist

economies is, fundamentally, that they depend entirely on the production of surplus-
value, which is fundamentally rooted in the expended labour of working people. The
revelation of the central role of labour in valuing commodities in order to be exchanged
for profit has been called Marx’s the labour theory of value.18
Making us (working people) aware of the way that labour values the commodities that
are bought and sold in a capitalist system is at the heart of Marx’s critique of capital and
the capitalist system of production. We’ll explore this process step-by-step in the
remaining pages and further explain why it is labour that ultimately “valorizes”
commodities and the entire capitalist system.
Moreover, Marx showed early on in Capital, Vol I, to be exchangeable at the societal

scale required by a capitalist economy, commodities must be compared in a common
way, or “must be capable of being expressed in terms of something common to them
all.”19 What is common to all commodities—and what makes them comparable and thus
exchangeable—is not use-value, because the use-value of any one thing will always be
different depending on the individual. When the variable use-values and the physical
shape and chemical composition of commodities are left out, the only thing common to
commodities are that they are the “products of labour” and that certain amounts of
“labour-time” when into producing them. Moreover, for this comparison to happen at the
social scale required for the system to function, all commodities must be reducible to
quantifiable human labour in the abstract (p. 38). In other words, taken to a societal level,
commodities are exchangeable in the market because the entire process of production and
exchange relies on “homogeneous human labour” that averages out—or abstracts—all of
the labour-power expended in producing commodities in order for them to be comparably
exchanged at the scale required. This averaging out of expended labour-time Marx called
“socially necessary labour-time,” or the labour-time “required to produce an article
under the normal conditions of production, and with the average degree of skill and
intensity prevalent at the time.”20 This leads to one of Marx’s major critiques of the
capitalist system, and links it back to his earlier theory of alienation: In exchanging
commodities by the socially necessary labour-time embodied in them, the actual concrete
physical labour that goes into producing them, and the skills and capacities that
differentiate workers as human beings are abstracted out or, as Lucio Colletti asserts,
dehumanized.21
That this system operates off of the backs of workers, and that averages out all of their
unique skills and capacities as workers without adequately including them in controlling
this system or compensating them for the surplus value they produce is at the core of
Marx’s critique of the capitalist system. The implicit normative/ethical justification for
Marx’s entire life’s work, and his call in the Communist Manifesto for “workers of the
18 Marx borrowed some of these theories (but extended them substantially) from older political economists
such as John Locke, Adam Smith, and Riccardo. He was the first, according to Engels, to uncover the self-
expanding properties of surplus-value for capital (see footnote 23).
19 Marx, Capital, Vol. I, p. 37.
20 Marx, Capital, Vol. I., p. 39.
21 Lucio Colletti, From Rousseau to Lenin: Studies in Ideology and Society, London: Version, 1972.

world to unite” and overthrow this system, emerges from out of the very critique of the
capitalist system on its own terms. That is, Marx was committed to arriving at and
justified his revolutionary call to workers via his dialectical method of assessing and
critiquing capitalism from its own assumptions and practices as a total system—from its
ideological foundations on to its internal operations and contradictions. He was able to
show its contradictions and faults from a normative ground that begins with a meticulous
social scientific analysis made possible by the dialectic method. Even at its most cellular
level—the commodity form—Marx was able to show the inherently exploitative kinds
of social relations that constitute the entire capitalist system. From its totality as a system
down to each commodity produced, bought and sold, capitalism is fundamentally rooted
in the qualitative difference between how the system serves those that own the means of
production—the capitalists—and those that must work for a wage in this system—
workers/labourers.
Marx’s dialectically grounded political economic and historical materialist critique was
the first to most fully explore and show the different ways that the commodities that are
produced and exchanged in this system are embedded with the sweat and labour of those
workers that actually produce them. Although you can’t see it when you buy a product at
a store, this sweat and labour and the entire system within which it was produced also
(and most vitally) constitutes the thing you are purchasing. It is this fundamental fact that
Marx wants to make aware (i.e., to bring to light) to the working class he is writing for,
but that the capitalist system itself obscures. Let me put it this way: Anything you can
buy at a store or, indeed, any manufactured tool or thing we humans exchange and use,
such as a pen, or a chair, or a house, is much more than a plastic writing instrument, or
something made of wood that you sit on, or something you live in. As with our earlier
cell phone example, all of these human-made or human-manipulated things actually also
embody the sweat and labour of the hands that actually made or gathered them. And it is
this sweat and labour that adds value to (“valorizes”) the things we buy (i.e., what gives
them their exchange value) and enables the capitalist (i.e., the owner of the means of
production) to sell commodities more dearly than they cost to make. Realizing the sweat
and effort of labour in all commodities is not just a romantic way of thinking about the
stuff we buy and use. Marx is actually making the claim that every product that is made
and sold within does not just represent the labour that went into it, it is actually valued by
the sweat and labour of the workers that made it and therefore embodies these labourers’
efforts.
Thus, Marx’s ethics was not rooted simply in ideas, or a philosophy of justice. His
implicit normative evaluations and ethics, rather, begin and end with the actual material
and social conditions of production that he dialectically analyzed. It is the very
contradictory nature of production that makes capitalism unjust, since it is the labourer’s
efforts of producing surplus-value from their “free labour” that goes unrecognized and
ultimately unremunerated in any equitable fashion—an “equity” that is falsely assumed
in the first place between the sellers and buyers of the commodity labour-power in the
legal language of the wage contract. Marx was thus deeply concerned about the plight of
the working class because the very things that workers make and that their production
embodies are, in a capitalist system, torn away (i.e., alienated) from their makers and

used by capitalists for their own enrichment rather than for the enrichment of the actual
producers. Marx wants to make us aware of this because, once we come to realize this
reality, we begin to look at the stuff we buy and sell and accumulate differently. We
begin to look at them in more holistic and radical ways that might also suggest
alternatives to how we should organize our current economic system so that those that
produce goods and services can actually control the products and processes of their
labour and live better, less alienated, more fulfilled lives.
So then, what is capital?

For Marx, then, understanding the nature of capital and the system that makes it possible
is thus intimately tied to understanding the ways workers valorize the commodities that
are produced and consumed. His political economic and dialectical analysis of capitalism,
in turn, shows us how it is that the sweat, labour, and productive efforts of workers etch
themselves into the very products that get produced and distributed and how the
privileging of exchange-value in capitalist societies ultimately alienates and exploits
workers.
But we have yet to properly define the very core of the capitalist system, capital. What is
capital?
Most concisely, capital is a specific form of value that is said to “self-expand.”22 In the
business and economics textbooks you have probably all read by now, capital is defined
as being any asset or set of assets (i.e., commodities, in Marx’s language) that are used to
acquire more assets (i.e., more commodities) after the production process has been
completed. Therefore capital is at the core of wealth making in a capitalist economic
system.
For the capitalist engaged in production, the goal is to attempt to grow (i.e., expand) the
initial commodities (“C”) purchased by money (“M”) that is invested for production by
“putting it all to work,” as it were, and selling the commodities produced at a higher price
than the cost of making it. This is done by first inputting two specific types of
commodities—means of production (machines, tools, infrastructure, etc., also called
“fixed capital” by Marx), and labour-power (also called “variable capital” by Marx, or
that “certain commodity that is productive”). (Note that for Marx, fixed capital was also
called “dead labour,” which contains in it the congealed expended labour of “past
labour.” So even means of production was valued at some point by the sweat and hands
of “living labour” which passed on its value indirectly when the means of production
were finally put to use.23) For the capitalist business to survive, production must be
cyclical. That is, as products are made and sold, part of the profits are used to pay the
capitalist (to “reproduce” the capitalist), part of the profits are used to pay the worker for
their expended labour-power (to “reproduce” the worker via the wage), and part is
reinvested back into the production cycle to make new commodities (to reproduce the
22 Osborne, How to Read Marx, p. 94.

23 Even machinery, which Marx calls “dead labour” (see the Grundrisse), transfers the surplus labour of the
“living labour” that produced it onto the product that is produced by machines (the concept of “depreciation
allowance” is related to this.)

production process). At the same time, of this reinvestment is needed for the cycle to
renew itself again and again. To make this all possible, the capitalist must sell the
produced commodity for more value at the end of the cycle than the value of the
investments at the beginning of the cycle. If the value at the end of the cycle were not
greater than the value of capitalist investments at the beginning—that is, if there was no
potential for profit—entering into risky business enterprises in competitive markets
would be futile and there would be no incentive to be a capitalist. Thus, the promise of
expanding the initial value invested and returning a portion of it to a new production
cycle—and thus producing more and more wealth in the process—is the motivational
heart of the capitalist system from the point of view of the capitalist.
The creation of more assets/commodities via the continual “investment” of production

inputs—labour-power and means of production—is called “accumulation” by Marx, and
a fundamental driver of the capitalist mode of production and the creation of wealth he
termed “the accumulation process.” When business owners and economists speak of
“reinvesting profits or revenues back into the firm” they are talking about and practicing
accumulation and taping into this “self-expanding” capacity of capital and hoping that
such reinvestments will cover the costs of doing business (including the wages of
workers), pay business owners and shareholders, and create even more commodities to
sell and, thus, also more capital (i.e., more accumulation). This investment-reinvestment-
expansion cycle basically means that the initial “inputs” into a business enterprise have
the possibility of generating greater “outputs” at the end of the production process. In
sum, in the capitalist system, a part of the wealth that capital represents is reused in order
to generate more wealth at the output stage. And part of this (hopefully) larger output is
then used again as the input for another cycle of production and expansion.
Marx mapped out this cycle in the following formulae: M (money) –> C (to by
commodities of production) –> P (to produce new things) –> C’ (to sell as additional
commodities on the market) –>M’ (to get more money) –> C” –> P” (to get more
commodities or assets of production) –> C’’’ (to produce more commodities for sale on
the market) –> M’’’ (to get even more money) ->…and so on, and so on. He called this
cycle of production the “circuit of capital.”24 In short, the circuit of capital is central to
the practice of the accumulation of wealth in capitalism.25
How capital “self expands” is the crucial question here, and one that we’ve already begun
to answer. Indeed, if all commodities are “priced” at certain market values, and if, as we
know, things tend to lose market value after we purchase them, then how is it that the
commodities that go back into the production cycle can “expand” in value? The answer to
these question is to be found in a process that we’ve already discussed: It is rooted in
Marx’s labour-theory of value and in that “certain commodity that is productive.” Marx
was the first to show that there is indeed one—and only one—commodity that “creates
more value in its use than its cost.” This commodity is labour-power.
24 Jonathan Wolff, Why Read Marx Today? Oxford: University of Oxford Press, 2002, p. 70.
25 Again, recall that that problem for Marx is that only a few can control this circuit and accumulation
process. These few, the “class of capitalists,” benefit tremendously from this controlling role when
compared to those that can’t control the process of production and the circuits of accumulation.

Labour-power: The commodity that keeps on growing in value
In the production process, the capitalist takes advantage of the “self-expanding” value of
capital by harnessing labour (in reality, exerted labour-time) so as to extract an added
value from the productive efforts of labourers. How does this happen? Well, as we’ve
already alluded to, the cost of labour-power for the business owner is always, in a
capitalist system, equal to what it costs the labourer to reproduce him or herself. This is
represented by the wage. By the worker reproducing him or herself Marx meant the cost
of buying food, paying for shelter, being allowed to sleep and take care of one’s material
and life needs to some degree. That is, to be able to do what one needs to do to survive
and live. This means that the cost of labour for the business owner (again, expressed in
the wage) only has to be whatever it costs to the worker to buy the bundle of goods and
services required to live. As Jonathan Wolff explains, “the price of the worker then, for
the day, is the cost of the commodities in the basket,” and the day’s wages will be
directly related to the amount of money needed to produce and purchase these goods. 26
The amount of time in the working day that the worker must labour to meet his or her
costs of reproduction (to produce his or her livelihood), Marx called “necessary
working-time” or “necessary labour.” In other words, necessary working-time is the
part of the working day that the labourer needs to work to be able to sustain him or
herself so that, from the perspective of the capitalist, the labourer can come back to work
the next day, and the day after that, and so on.
If it might only take the worker two, four, or six hours to work in order to produce and
buy the goods she needs to live, then why work 8 to 10 hours? In other words, if in a
working day of eight hours the value (loosely, cost) for the worker to be reproduced is 4
hours (and if that is the value of the wage), then why does she work more? And what
happens to what is produced in these extra hours of “free” work? Who gets to keep the
value produced by the worker in these “extra” labour hours? The business owner-
capitalist, of course! Whatever extra hours of labour the worker expends beyond what the
worker needs to secure a livelihood (i.e., beyond the necessary working-time of the
working day) Marx called “surplus working-time,” or “surplus labour-time.” It is this
surplus of expended effort, or extra labour expended, which is the source of the perpetual
wealth creating capacity of capital for the owner and what creates “surplus-value,” or
the source of all profit. Indeed, this is why, for Marx, “[c]apitalist production is not
merely the production of commodities, it is essentially the production of surplus-value.
The labourer produces, not for himself, but for capital. It no longer suffices, therefore,
that he must simply produce. He must produce surplus-value. That labourer alone is
productive, who produces surplus-value for the capitalist, and thus works for the self-
expansion of capital.” (p. 509). 27
26 Wolff, Why Read Marx Today? p. 72.

27 “[T]o lay bare [this] essential character of [the capitalist method of valorization],” according to Engels
“which was still a secret [before Marx],” was Marx’s main contribution to political economy. “[T]his was
done,’ Engels continues, ‘through the discovery of surplus value. It was shown that the appropriation of
unpaid labour is the basis of the capitalist mode of production and of the exploitation of the worker that
occurs under it; that even if the capitalist buys the labour-power of his labourer at its full value as a
commodity on the market, he yet extracts more value from it than he paid for, and that in the ultimate

The secret here that Marx unveiled is that the capitalist never pays a wage that exceeds
the cost of necessary labour. This necessary labour is set a the averaged out time it takes
to produce the good or service across all production units producing this good or service
in society. Taken together, the averaged out and abstracted necessary labour-time and
surplus labour-time across society is what Marx called, as we will recall, the “socially
necessary labour-time” required to produce a commodity “under the normal conditions
of production” and the averaged out skill and intensity predominant at any particular
historical moment . The wage always, at most, only ever equals the socially averaged out
costs for the worker to sustain him or herself. Roughly, this is what sets the average
wages of an industry or economic sector, and ultimately the “market price” of things.
While it is true that many factors can affect the average wage or price of things “in the
market,” they tend to be always reflected in the socially necessary labour-time required to
produce any commodity, which, we must remember, also includes “the normal”
conditions of production, skill, and intensity, including changes in production brought
forth by technological innovation, unions bargaining for higher wages, and so on.
Ultimately, for Marx, the entire process of capitalist production, including capital’s
ability to “self-expand” and the creation of profits, rests with the discovery of how this is
all based on the creation of surplus value, which is rooted in the surplus labour (recall,
“unpaid labour”) of workers. And again, this usually obscured reality means that the time
that the labourer works beyond what it takes to reproduce him or herself is taken from the
productive output of the labourer and passed on to the capitalist when the goods the
labourer produced are sold. The extra value, the surplus-value, created by the labourer is,
from the labourer’s perspective, exploitation. From the capitalist’s perspective, it is
profit.
Moreover, the degree of exploitation—the amount of surplus-value extracted—rises and

falls with the intensity of the job tasks to be done by the worker and the length of the
working day.28 While this system is always exploitative, workers begin to physically feel
this exploitation when they are forced to work longer hours to produce more surplus-
value (i.e., when the working day is extended), when they are forced to work the same
task for a lesser wage, or work at a more intense pace (like Charlie Chaplin’s character in
the film Modern Times). Because the capitalist always wants to make more and more
profit (increase surplus-value more and more, or create greater sums of M’), he or she is
always looking for ways of reducing the cost of necessary labour or increasing labour’s
efficiency and productiveness. The surplus-value that can be gained by making the life of
the worker more miserable by temporally extending the working day, or forcing the
worker to work harder, Marx called absolute surplus-value because it can only be
acquired by absolute factors such as increasing the hours worked during the working day
or intensifying work. But capitalists quickly found out that workers get tired eventually
and productivity goes down if they are overworked. They also discovered fairly quickly
analysis this surplus value forms those sums of value from which are heaped up the constantly increasing
masses of capital in the hands of the possessing classes” (Friedrich Engels, “Socialism: Utopian and
scientific,” in Robert C. Tucker ed., The Marx-Engels Reader, Melksham, UK: Norton, p. 700).
28 See: Marx, Capital, Vol. I, pp. 216-217.

that the worker wouldn’t be able to reproduce the surplus-value that he or she is capable
of producing day in and day out if the worker is exhausted to death. And, after all, the
day only has 24 hours, and some of it has to be dedicated to sleep and rest and eating. In
addition, workers in the mid-19th century, at the height of the Industrial Revolution,
started to resist these exploitative practices, organized into “combinations” and agitated
for the reduction of the working day from say 16 hours to 12 or 10 hours, and also
militated for raising wages and bettering working conditions. These were also the years
that saw the birth of the first labour unions in the industrialized nations of the North.
While these organized workers managed to win some vital victories that did actually
improve their lives (and that we still enjoy today, like the reduced work day, workers’
compensation, weekends and holidays off, etc.), capitalists began to explore and put into
practice ways of continuing to increase surplus-value. Capitalists began to work around
these labour inconveniences by making the working day more productive and efficient
via the use of ever-more complex and powerful technologies, or new machines of
production. This investment in new means of production increased the capacity to
produce more within the working day, effectively reducing the costs they had to incur to
ensure the reproduction of the workers (i.e., the wage to pay for necessary labour-time).
In practice, this included introducing more “finer division[s] of labour” (i.e., having
workers engaged in ever more repetitive tasks that require less skills to perform and thus
costs less in wages paid), and via the “use of better machinery, scientific discovery, and
innovation.”29 The surplus-value gained by these efficiency methods Marx called
“relative surplus-value,” which tends to be the predominant form of increasing surplus-
value (and thus exploitation) in more advanced capitalist systems of production. That is,
rather than extending the working day and making workers work longer hours, inventing
and deploying new technologies and production processes that allow workers to work
more efficiently—and with less skills—guarantees more profits via the “relative” change
in the factors of production, i.e., relative surplus-value.
To recap, for Marx labour-power (i.e., the promise to labour) is the only commodity that
continually self-expands in value, that gives capital is self-expanding power, and that
produces more value than it costs. 30 In short, labour-power and its fulfilled promise to
produce more value than it costs when labour is expended is at the core of the process of
producing things and accumulating wealth in a capitalist system. This process is, at the
same time, at the heart of the exploitation of workers. The capitalist system of
production, in Marx’s dialectical analysis, is thus already always in contradiction. As
Bertell Ollman puts it most simply: “Capitalism’s extraordinary success in increasing
production…stands in contradiction to the decreasing ability of the workers to consume
these goods,”31 and, I would add, to make more miserable the lives of more and more
workers, especially in the global South. Equally, capitalism’s astounding ability to extract
more and more natural resources, create more and more things with them, and grow in
29 Ben Fine & Alfredo Saad-Filho. Marx’s Capital. London: Pluto Press, p. 43.
30 More precisely, the commodity of labour is called “labour-power” by Marx, which is made up by the
labourer’s mental and bodily capacity to make things, be creative, and cooperative with others (i.e., skills).
Most technically, what is purchased by the capitalist at the cost of a wage is the commodity labour-
power—a worker’s promise be productive and give of his or her labour-time to the capitalist.
31 Bertell Ollman, Dialectical Investigations, New York: Routledge, 1993, p. 16.

productive capacity stands in stark contradiction to the depletion of the planet and the
environmental devastation linked to humanity’s increased abundance. For Marx, this was
part of the process the development of capitalism itself, which would ultimately seal its
own fate within its compounding “problems, problems that are internal manifestations of
what and how it works.”32
For Marx, then, the major critical rub with capitalism primarily lies with the fact that a
few at the top (business owners and the individuals and institutions that support them) do
the vast majority of all of this accumulating on the backs of the workers who actually
facilitate the accumulation of value/money/profit in the first place via their productive
efforts. This incessant chase for more and more profits (and therefore more and more
accumulating) Marx called the rising rate of exploitation as more and more surplus-
value is sought.33 At core, Marx mostly implicitly asked and attempted to answer the
following question in his critical research of the inner workings of capitalism: If it is, in
reality, labour that creates this self-expanding value that is capital (and not the innovative
capacities of owners or bosses), why is it that the capitalist can take this value from the
labourer that actually created it?
It is this fundamental question and the myriad contradictions of the capitalist system that
a dialectically informed answer points to that are at the heart Marx’s normative claims for
the creation of an alternative socio-economic reality led and controlled by workers
themselves. Thus, for Marx, any gains—surplus-value—that the capitalist acquires from
the surplus labour of the worker is fundamentally a theft because it is the labourer and
only the labourer that creates this extra value.
Recapping our discussion

Capital—and the capitalist system more broadly—tends towards perpetual expansion
with the ultimate goal of the accumulation of more and more wealth. This accumulation
always necessarily excludes the labourer that actually creates the product and its value
from ultimately benefiting from the product of his or her labours or enjoying it to the
same degree as the capitalist. This is the key contradiction of the capitalist system that
Marx wants to lay bare in Capital. This is also what causes, at core, the alienation that
Marx talks about in “Estranged Labour.”
Wealth, for Marx, within a capitalist system of accumulation is attained off the backs of
the labouring individual that works, in alienated and exploitative ways, for the capitalist
because the labourer has sold his or her promise to labour to the capitalist for a wage.
Within the legal system that frames this entire structure, this sale also means that the
32 Ollman, Dialectical Investigations, p. 16.

33 For Marx, the “rate of exploitation” was represented in the following formula: s/v, where “s” = surplus-
value and “v” = variable capital, or the amount of value of labour-power (i.e., labour). This was also
expressed as “surplus labour/necessary labour.” Thus, as “s” increases, the rate of exploitation also
increases at the expense of the value of necessary labour (i.e., at the expense of compensation to the worker
for the labour exerted.) This is, of course, directly linked to how the working day is organized: more “s”
means more of the working day is dedicated to surplus labour, and less of the working day is dedicated to
compensating the worker for necessary labour (i.e., “v”).

worker loses any property claims on the products she has produced under a wage
contract. The exclusion of the mass of workers from most of the world’s accumulated
wealth, and requisite domination of humans and nature, are thus, for Marx, core practices
of capitalism. In this respect, capitalism has historical links to the exploitation of humans
by those in power (slavery, serfdom, etc.), and genealogical links in the modern
philosophies of “possessive individualism,” “progress,” and “development” of the
Enlightenment.
Why do we, the workers, allow a capitalist system to exist then?

Given that workers too are heirs of this history and philosophical genealogy, we—the rest
of us that don’t own the means of production—allow a capitalist system to exist because
we are under the belief that it is the most efficient, effective, and, indeed, only way of
providing for our needs, wants, and desires. This common sense view is supported by the
reality that, in many ways, capitalism does “deliver the goods” to us, as Herbert Marcuse
put it. But Marx, Marxists, anarchists, social reformers, and some cooperators, amongst
others, take exception to these assumptions because, historically and in alternative
economic practices today, we can clearly see that capitalism is not necessarily the only
effective and efficient way to provision for our needs, wants, and desires (remember the
barter-based economy?). This common sense view is also further entrenched in that the
capitalist economic system tends to privilege certain wants and desires over others and
devalues the things and practices that lie outside of the capitalist marketplace (what might
these things be?). It makes assumptions about what is useful and what isn’t useful based
primarily on the exchange-value of things above and beyond their use-values. And why is
the exchange-value of a thing privileged over everything else in the capitalist system?
Because, if you recall our earlier discussion on surplus-value, the exchange of labour-
power for wages—at the heart of the extraction of surplus-value, and thus of valuing
commodities and making capital expand—is totally dependent on the practices and
ideology of commodifying all of life, that is, of making all aspects of life exchangeable.
If workers were able to make their own products in order to satisfy their own needs and
wants, they wouldn’t need to enter the labour force (i.e., the market for labour-power, or
the labour market) in the first place. And no labour-power to be bought and sold means
no self-expanding value for the capitalist, which means no surplus labour, which means
no surplus-value, which means no promise of profit, which means that all capitalists
would have to stop organizing and controlling workers and start producing things
themselves. “Whoever directly satisfies his wants with the produce of his own labour,”
writes Marx, “creates…use-values, but not commodities.”34 Thus, whenever the process
for the creation of surplus-value is curtailed, capitalism will be curtailed. “It is
clear…that in any given economic formation of society, where not the exchange-value
but the use-value of the product predominates, surplus-labour will be limited.”35 Further,
“[s]o long, therefore, as the labourer can accumulate for himself—and this he can do so
long as he remains possessor of his means of production—capitalist accumulation and the
34 Marx, Capital, Vol. I, p. 40.

35 Ibid, p. 235.

capitalist mode of production are impossible.” 36 One example where workers are
infinitely more in control of the means of production and where this type of an worker-
led and -controlled economy begins to be mapped out—despite some of its
shortcomings—are with worker cooperatives, where workers do own and control the
means of production (although are still limited by having to produce for competitive
markets).37
Assumptions about what is useful based primarily on the exchange-value of things also
obscures the fact that those that work for owners of the means of production are always
going to be worse off than those that own the means of production and distribution
themselves. Workers that work for a wage necessarily have less time, less money, and
less life choices than those that own and control the processes and means of production. It
is this reality that the system needs to obscure from you so you can work for it without
questioning it, so that you can give consent to the system and continue to go to work for
it, day in and day out.
Starting to think about alternatives

By now you might be saying to yourself, “But I like my job and it allows me to buy the
things I want to buy. So what is so wrong with this? What is so wrong with my boss
making more money than I do as long as I can buy the things I want and live
comfortably?” You might even be questioning Marx’s assumption that workers are
constantly being exploited or are alienated within the capitalist system, even if you agree
in principle with Marx’s labour-theory of value. Maybe you don’t feel exploited or
alienated. Further, why should we be thinking of alternatives to this system if it is so
efficient and if it “delivers us the goods” so well?
When asking these questions, think about these other questions and our discussion about
the nature of capitalism thus far:
• What are the consequences of the capitalist system for those that labour within it?
• What happens when, for example, we don’t feel like working or when we can’t
work? Do workers have a choice? Is it good enough to tell our boss that we’re too
tired to work today, or that we’d rather do something else today?
• What happens to those that remain at the margins of this system, that can’t find
work, that were born with disadvantages that are in some way not “useful” for the
functioning of the system (i.e., for the creation of surplus-value)?
• What happens to the desires and wants that this system also produces? Do you
think you are in control of deciding what you need and want or does the system
somehow influence your decisions? Do you need everything that you see on ads?
Do we need everything that is currently being produced? Why are the things that
36 Ibid, p. 767 (emphasis added).

37 For more on this tension with worker cooperatives that must continue to work within capitalist markets,
see: Maurizio Atzeni and Marcelo Vieta, “Between Class and the Market: Self-Management in Theory and
in the Practice of Worker-Recuperated Enterprises in Argentina,” in Martin Parker, George Cheney,
Valerie Fournier, and Chris Land, eds., The Routledge Companion to Alternative Organization, London:
Routledge, 2014, pp. 47-65.

are being produced today being produced at all? Did we need them in the past to
live happily?
• And, what is happening to the environment? Can we keep on producing
everything that we currently produce and not exhaust the earth in the process? If
capital needs to grow and expand in order for the system to work, can it expand
and accumulate too much?
• And who is doing the accumulation, anyway? Who is becoming richer and who is
becoming poorer? And if we produce so many things today, certainly enough to
meet all of our needs and wants, why then are there so many poor and
marginalized people? If the system is so efficient, why does poverty still exist?
Why can’t we deliver the goods to everyone?
• Are there other ways of organizing our economy? Can the workers, for example,
collectively own the means of production? Can workers be as “efficient” as
capitalists in organizing and managing the means of production?
• Can consumers own the means of distribution?
• Think about this following question and I bet you will have a hard time thinking
about ways of doing it: Can we exit the capitalist system today?
These are all questions we will be looking at closely, both theoretically and historically,
in this course. We’ll be thinking about the viability of alternatives to the capitalist system,
or at ways of reforming it, and looking at actual attempts at practicing alternatives
economies and alternative ways of organizing work around the globe and in Southern
Ontario in particular.
In this course, we will be asking ourselves constantly what things we need to change of
this capitalist system. Do we reform it, re-organize it, or attempt to replace it altogether?
Do we only need to reform the system, make it more environmentally sound, less
exploitative, and less alienating? Can we still be workers working for a boss and live less
alienating and more authentic lives? What does this mean? The liberal position that was
first put forward in the 18th and 19th centuries by thinkers such as Kant, J.S. Mill, Smith,
Ricardo, and others, believes that we can reform the system so it works better and in a
more egalitarian way. We can use the most efficient parts of the capitalist system and
merge it with the individualistic desires of human beings’ own self-interests, mediated by
reason and balance, in order to effectively and humanely manage the processes of
production and distribution. Do you believe we can?
Or, do we have to change how we organize the system so that workers have more
control over the means of production and distribution? Can the that state—say via the
welfare state--or perhaps more democratic and participatory work organizations manage
the basic needs that we have (health, education, housing, safety, etc.) in order to facilitate
the management of the means of production and distribution by the community of
workers who, after all, are the ones who actually value the things they make? Can a more
communally managed and democratic society meet all of our needs and desires as
effectively and efficiently as the capitalist system claims to be able to do? The socialist
position answers these questions affirmatively and believes that the workers can

collectively own and manage the means of production and distribution if there are good
institutions and a well thought out means of organization in place that will coordinate and
facilitate this worker-managed society. This is the position, in varying degrees, of
socialists such as Robert Owen, Charles Fourier, Marx and Engels, and, in theory
anyway, the central ideas that guide modern forms of communist and socialist societies.
There are many ways that socialist and communist forms of economic organization have
been thought through and actually practiced, and we will be exploring some of these
socialist alternatives in this course. Do you agree with the socialist or communist
perspective?
Or, do we have to fundamentally get rid of the capitalist system and organize a new
society “from below”? Does the capitalist system need to be overthrown and gotten rid
of in its entirety? Is reforming it enough? Can workers both manage and organize the
economy themselves without the need of “official,” representative institutions? Can
workers self-manage every aspect of their lives both individually and collectively,
including the processes of production and distribution? Do we after all not know what is
best for us without the mediation of a state or any other form of representative social
organization? Can we educate ourselves, collectively? Can we produce for ourselves,
communally? Can we come to a consensus as to what is best for us and our communities?
Can we live—and live well and even abundantly—with what we can produce and
distribute within our local spaces? Do we need to be told what we are to like and desire,
or can we decide this for ourselves? These are some of the questions that the anarchist
alternative addresses in all of its multifaceted and nuanced forms, and we will also be
exploring some of these questions in this course. What are your answers to the questions
of the anarchists?

Marx, Alienation, and Capital 101 - Marcelo Vieta

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Marx, Alienation, and Capital 1011 2

By Marcelo Vieta (OISE, University of Toronto)

• First draft: September 15, 2007

Marx, Alienation, and Capital 101 – Marcelo Vieta 1

4 Trotsky, Leon, History of the Russian Revolution, 1932.

Marx, Alienation, and Capital 101 – Marcelo Vieta 2

This essay is meant to be an introduction to Marx’s key critiques of capitalism in order to

Marx, Alienation, and Capital 101 – Marcelo Vieta 3

Marx, Alienation, and Capital 101 – Marcelo Vieta 4

In short, in “Estranged Labour” Marx suggests that the historical development of

Marx, Alienation, and Capital 101 – Marcelo Vieta 5

Marx, Alienation, and Capital 101 – Marcelo Vieta 6

Marx, Alienation, and Capital 101 – Marcelo Vieta 7

Marx, Alienation, and Capital 101 – Marcelo Vieta 8

Marx, Alienation, and Capital 101 – Marcelo Vieta 9

Marx, Alienation, and Capital 101 – Marcelo Vieta 10

14 Marx’s term “commodity fetishism” is related to these practices.

Marx, Alienation, and Capital 101 – Marcelo Vieta 11

Marx’s political economy of capital: A thumbnail sketch

Capital and social relations

First, let’s clarify some additional basic concepts.

Economies, exchange, and commodities

Marx, Alienation, and Capital 101 – Marcelo Vieta 12

Use-value and exchange-value

Marx, Alienation, and Capital 101 – Marcelo Vieta 13

Exchange-value and value: An immediate problem might quickly arise in a barter-based

17 Marx, Capital, Vol. I, pp. 40-41.

Marx, Alienation, and Capital 101 – Marcelo Vieta 14

When do we have capitalism?

Marx, Alienation, and Capital 101 – Marcelo Vieta 15

Moreover, Marx showed early on in Capital, Vol I, to be exchangeable at the societal

Marx, Alienation, and Capital 101 – Marcelo Vieta 16

Marx, Alienation, and Capital 101 – Marcelo Vieta 17

So then, what is capital?

22 Osborne, How to Read Marx, p. 94.

Marx, Alienation, and Capital 101 – Marcelo Vieta 18

The creation of more assets/commodities via the continual “investment” of production

Marx, Alienation, and Capital 101 – Marcelo Vieta 19

26 Wolff, Why Read Marx Today? p. 72.

Marx, Alienation, and Capital 101 – Marcelo Vieta 20

Moreover, the degree of exploitation—the amount of surplus-value extracted—rises and

Marx, Alienation, and Capital 101 – Marcelo Vieta 21

Marx, Alienation, and Capital 101 – Marcelo Vieta 22

Recapping our discussion

32 Ollman, Dialectical Investigations, p. 16.

Marx, Alienation, and Capital 101 – Marcelo Vieta 23

Why do we, the workers, allow a capitalist system to exist then?

34 Marx, Capital, Vol. I, p. 40.

Marx, Alienation, and Capital 101 – Marcelo Vieta 24

Starting to think about alternatives

36 Ibid, p. 767 (emphasis added).

Marx, Alienation, and Capital 101 – Marcelo Vieta 25

Marx, Alienation, and Capital 101 – Marcelo Vieta 26

Marx, Alienation, and Capital 101 – Marcelo Vieta 27

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