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Capitalism summary
James Fulcher
A Very Short Introduction
25 mins
Brief summary
Capitalism by James Fulcher offers an accessible and comprehensive overview of the history, theories, and realities of capitalism. It explores its positive aspects and critiques the problems that arise in the pursuit of profit, making it a must-read for anyone seeking to understand this complex economic system.
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Capitalism
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Capitalism is a socioeconomic system where money is used to make more money.
The majority of the world runs, to varying degrees, on capitalism. But while there is no monolithic form that governs everyone who lives under a capitalist system, there are a number of common principles that all varieties of capitalism share.
Put simply, capitalism’s most characteristic feature is the investment of money to make more money. This sort of invested money is known as capital. Those who use money in this way are capitalists, and the excess money made out of this process is profit.
Capital can be anything that can somehow be transformed into money. Take homeowners, for example. They can choose to sell their homes for money, rent it out to others, or use it as collateral for a mortgage.
Another characteristic of capitalism is its reliance on wage labor. Combined with capital such as machines, buildings and raw materials, labor is necessary for the production of goods and services. In return for their work, laborers receive wages from employers.
Wage labor isn’t only important for production under capitalism, however – it’s integral to capitalist consumption.
As individual workers cannot produce all the goods or services they might require, such as food, or a place to live, they have to purchase it. This drives demand for the goods and services resulting out of capitalist production, thus providing jobs for wage laborers in the first place!
Wage labor therefore constitutes a fundamental interaction between capitalist production and consumption.
Finally, capitalist consumption and production all take place within the confines of capitalist markets.
Unlike in pre-capitalist times where much of humanity only consumed what they produced – and produced what they themselves consumed – today’s dynamic capitalist markets allow the consumption and production of practically anything, as long as there is demand for it.
Markets can take the form of the traditional marketplace, grocery store or, more recently, online spaces, where people buy and sell goods electronically.
Within markets, capitalists seeking to make more profit than others generates competition. This is a key tenet of capitalism.
Competition can take many forms, including cost reduction. One way of reducing costs is to lower workers’ wages. Another might be to increase innovation through creating machines that can replace human labor.
By lowering costs, capitalists can sell their products for less money than their competitors, thus generating more profit for themselves.
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What is Capitalism about?
Capitalism (2015) chronicles the history of the dominant socioeconomic system that society runs on today. From its humble beginnings in medieval Europe to its present global dominance, capitalism’s history is marked by its dynamic – and sometimes unstable – nature. Nevertheless, its influence on how society has developed over the last 200 years is paramount to understanding the modern human condition.
Best quote from Capitalism
[Elizabethan Englands] openness to refugees contributed significantly to the development of capitalist production in England.
—James Fulcher
Who should read Capitalism?
- Anyone hoping to understand our modern, capitalist world
- Those affected by the 2007-2008 financial crisis and wondering how it came about
- Students of political science or history
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