Reconceptualizing Capitalism

Abstract

This paper analyzes the nature of capitalism by critically employing Marx’s comments in Capital on forms of subsumption of labor. It argues that to the extent that property owners employ wage laborers to produce for the market for a profit, they are capitalist, even if they may not reinvest their profit in technology. In this situation, wage-labor is formally subsumed under capital. The transition from this stage to real subsumption of labor, which signifies capitalist development with technological change, is not, however, automatic, as Marx tended to assume. It is mediated by class struggle, which occurs in the context of geographically varying factors, such as state interventions. Uneven development, seen as the uneven transition to real subsumption, is partly a product of place-specific outcomes of class struggle. The paper thus emphasizes the relation between class struggle and dynamics of capitalism including technological change. The conceptual arguments are illustrated with empirical evidence from India. The implications of the arguments for radical development theory and politics are also briefly explored. JEL classification: P16, O53, O14, B24