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Capitalism Essay Robert Heilbroner is one of the prominent American writers and economists who has several classic works on economy and the development of capitalism. His book The Nature and Logic of Capitalism gives answers on many questions as to the connections between the social formation of capitalism, its nature and its logic; and, first of all, the most important one: What is capitalism? According to Heilbroner, capitalism is surrounded with the multiple ideologies. They impact greatly on the formation of opinions on capitalism. Robert Heilbroner draws the material upon Smith, Freud, Marx; he examines works of well known philosophers, economists and scholars.
Thats why the narration of the book is built on the authors attitude towards the notions of the other writers. Robert Heilbroner argues with Marx as to the definition of capitalism. As to Marx's theory it is a state; a "mere economic system." The author proves that capitalism is a process, a regime. It is described as a power which makes a man to change the world; a process which is developed deeply inside and leads a man to gain power or dominate.
Heilbroner uses various examples. He analyzes the systems in primitive tribes and proves that the creation of more surplus (as max definite capitalism) is not a driving force of the system. The philosopher discusses a topic of nature and logic of the process. According to Heilbroner, nature is the innate mans wish to make relationships; and logic is an expression of the nature. Max determined three main "factors of production" (land, labor, capital). The theory was known as the theory of the challenges of surplus value.
According to the theory, wealth is produced only when workers act upon land. Heilbroner goes further. He said the factors are primitive. He sees the logic of the nature in several distinctive factors.
First of all he calls capitalists - the holders of social power. They were independent of the state's control. They had right to control the means of production, and the socializing "nature" of the state. " To follow the matter Heilbroner examines capitalism as a system with political and psychological implications. These factors arent based on an economic system but complete it. Heilbroner agrees with Marx that "capital" itself does not mean the development of physical processes such as the amount of factories, machines and financial securities.
The nature of capital is more complicated and is established on a social relation. It is a form under which wealth is held. In the work The Nature and Logic of Capitalism the author gives two characteristics of the social relation. Under the regime of capitalism the ruling classes are the owners of the instruments which are necessary to produce society's material provisions.
Thats why wealth can be held in the form of means of production. Property rights are stressed as being of the essence of capitalism. It is a distinctive feature about capitalism. Under capitalism there was the growth of producing commodities. Max followed from the analysis of the sources of capitalists' power and profits and gave the determination to the nature of commodities. Human creative activity was Marx's central concern.
In his later works he created the theory of commodity fetishism His well-known cycle consisted of two main components: money and commodities. According to the theory relations among people take the form of relations among things. Money was used to produce a commodity which would in turn be sold for money. Marx thought that commodity fetishism is the main element in the class struggle.
But in his work Heilbroner understood capitalism as a system of social relations and political power, not just exchange. Max regarded capital as money and commodities. According Heilbroner's point of view, capital is a social formation. It inevitably leads to domination; and domination further leads to exploitation. As to Heilbroner's theory the most important distinction between capitalism and previous models of societies is based on the drive for wealth.
Under capitalism it has the form of the accumulation of capital. Heilbroner determines the forces that drive capital to accumulate. He proves that capitalists take care about winning the competitive struggle; and thats why they must accumulate their position on the market. Competition is the driving force of economic efficiency.
It causes rise of prices (money paid for commodities). Competition relates to prestige or power. They are mentioned as main means underlying accumulating process in capitalism. Prestige can help to accumulate wealth (but it is not the main condition for the process).
However, power is a form of wealth; and capitalism is ruled and dominated by power. Following Freud, Heilbroner considers human nature as a universal drive for power and domination. For example, the superiority of males over females, priests over ladies, military elites over society. Domination and power are not always, though often, based on economic domination. Heilbroner shows that processes in capitalist society are regulated by human nature (based on sex or emotion superiority). As it was pointed, the rise of capitalism was based on the rise of capitalists as a social power (according to Heilbroner).
The crucial point of his theory was that there was formal separation of governmental and economic power in capitalism. The holders of an economic power (capitalists) were independent of the state's control. In his book Heilbroner determines the possibilities for progressive political changes. He points the role of psychological factors in formation of the changes.
According to Heilbroner, under the period of capitalism education was regarded as a process of political and social changes in the system. Education showed a right concept of reality. It serves the quality of life as a social and civilization factor. The direction, it sets a man, determines his future life. Under capitalism there is a great withstanding between capital and manual power; between capitalists and workers.
Though political and social rights came first, the forefront for them were economic rights. During the period of formation of capitalist relationships several processes should be mentioned. Labor was divided and workers lost their skill differences. Later the mechanization of production did the same. Working in units at factories, workers began to understand their commonalities. Working class was not satisfied with their work (conditions, wage and their duties).
But they did not have a clear understanding of the nature of political economy of the country, though they wanted to know what was happening to them. There were preconditions for a desire to radically transform it. In his works, Marx followed the idea that the process of accumulation capital led to control labor and radicalize workers. Smith said that under capitalism material well-being outweighed moral costs. Individuals acted alone for self-centered reasons. Exploitation of working people was one of the form of domination inherent in capital system.
It led to the concentration of production in ones hands, in the hands of monopolists. Workers (whose labor was exploited by monopolists) performing the same operations for a long period of time, became stupid and ignorant (Heilbroner, 1986: 306) and lost the ability to exert their understanding. So, there was the need in a capitalist society for active state intervention, for education and the regulation of monopoly. It was necessary for prevention the growth of cowardice, gross ignorance and stupidity. Following Heilbroner, education can be determined as a rise of political consciousness of people.
Economic changes had a great influence on the development of human inner nature. Capitalism is the regime which is based on social relationships between power and labor. As a system it is more opened to social conflicts and connections. The changes inside the society (political: the control of the state over the monopolies became stronger; economic: there was the need to increase productivity of the work; and social: people wanted to be more educated to understand the lifes changes) provoked the growth of educated people with wide look at political and economical processes.
In other words if a person becomes educated and has self-worth he is raised in the self-serving capitalist model; and can improve process of labor (economical growth) or refuse to do certain jobs on which society depends (political nd social changes). So, Heilbroner showed two sides of the problem. He said that the growth of competition increased productivity and inventions. It challenged the necessity to improve productivity means.
Under capitalism education can determine the process of becoming more consciousness as well as becoming more experienced. And the main preconditions for the process are driven from socio political and / or economical changes in the society. Heilbroner pointed that science can be the driving force to some degree, but it is not the main drive. The work of Robert Heilbroner cannot be viewed as a standard work of a policy economist.
We have no idea about his political likes and dislikes from the book. He relies only on facts. Nevertheless, he is considered to be one of the most widely read writers on economic policy. It is because all his works have historical and political framework. Though his works are difficult to read, the meaning of main points is rather clear. He created so comprehensive economic model that many of todays trends seem to be predictable.
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