Capitalist Class

Category: Fields of research

The Capitalist Class is a socio-economical grouping of people who 1) own a means of production, 2) sell goods and services produced by those means of production on the market to make a profit, and 3) employ workers who earn a wage. The capitalist class differs from landowning aristocracy because products produced on their land are usually not sold on the market, and because they employ slaves or serfs to work on the land, not waged workers.

Emergence of the Capitalist Class

Karl Marx and Friedrich Engels in The Communist Manifesto (1848) state that industrial capitalists became the dominant class in the most developed countries, replacing the aristocracy and large landowners from the top. The capitalists secured their power by introducing parliamentary democracy (in which they control parliament), legal equality, and free market principles.

Ferdinand Tönnies, in his best-known work Community and Society (1887), presents a well-known dichotomous division into "community" (Gemeinschaft) and "society" (Gesellschaft) as the two main ideal types of human groups. In the historical sense, the community was first created by the „natural will“ (Wesenwille). Society emerged with the rise of urban culture, customs, and attitudes of the capitalist class (the third class at the time of the French Revolution). Society is characterized by „rational will“ (Kürwille), and the main examples are the city, joint stock companies, scientific institutions, and the like.

In The Protestant Ethics and the Spirit of Capitalism (1920) Max Weber explores the connection between the advent of Protestantism and the rise of the capitalist class and argues that each religion has its own economic ethics and that ethics implies practical incentives to perform a certain type of social action, based on a religious view of the world and life. Capitalism is also specifically marked by the inherent capitalist spirit, the main feature of which is the opposition to traditional economic social action. The capitalist spirit contains a positive view of work and the acquisition of material wealth. Emphasis is placed on effort, thrift, discipline, and innovation, while laziness, gaining wealth without work, and hedonistic spending are viewed negatively. In pre-capitalist economies, people worked only as much as they needed to achieve a standard of living that was satisfactory to them. The capitalist spirit led to the complete rationalization of economic life.

The greatest influence on the development of the capitalist spirit and the rejection of the traditional form of doing business was the emergence of Protestant religions and their teachings in the early 16th century. Of all the Protestant currents, the most important for the development of the capitalist spirit was ascetic Protestantism, and above all Calvinism. Protestantism emphasizes the idea of "vocation", that is, that work is the most sacred duty of man because it enables salvation through the fulfillment of duty to God and therefore represents the highest expression of ethical self-affirmation. Protestantism, by treating labor as a means of salvation, directly refutes the traditional view of labor as God's punishment for original sin. Protestantism believes that success in a business is a confirmation of God's election, but that economic success must be achieved through hard work, thrift, and honesty. With this approach to economics and work, Protestantism has made a key contribution to the emergence and spread of the capitalist spirit.

In his book Memories of Class (1982), Zigmund Bauman studies the process of transition from a rank-based society to a class-based society, with the advent of industrialization. The ruling classes tried to copy the patterns of supervision and control that existed in the rank-based system into class relations. Industrialization and the formation of classes led to the "economisation" of political conflicts.

In his book Lineages of the Absolute State (1974b), Perry Anderson explores the development of the absolute state. The absolutist state implemented measures that protected the collective interests of the aristocracy, and it was these measures, although unintentional, that enabled the emergence of the bourgeoisie. The increase in the power and wealth of both the state and the bourgeoisie was made possible by the monetization of taxes and land rents, the purchase of positions within the state administration, and the protection of domestic monopolies and colonial conquests. The different paths of development of feudalism in different states depended on several factors: the strength of the aristocracy in each state, the level of autonomy of cities, and military successes and failures. In this way, Anderson explained how the bourgeoisie emerged within certain absolutist states.

In The Civilizing Process (1939) Norbert Elias shows that the development of trade and the monetary economy enabled the growth of the bourgeoisie, so the absolute monarch used this change in the relationship between the power of the aristocracy and the bourgeoisie, to increase his power even more. The development of centralized power conditioned the increase of administration and bureaucracy, which, together with the increase of the economic power of the bourgeoisie, enabled the emergence of a modern state.

In his book Science, Class & Society (1976), Therborn shows how the emergence of the science of economy, bourgeois sociology, and historical materialism is inextricably linked to the development of capitalism. He sees the emergence of bourgeois sociology as a consequence of French and other bourgeois revolutions. Those revolutions arose as a consequence of problems and conflicts caused by industrialization and the associated rise of the capitalist class because the new capitalist class clashed with the outmoded political structures of the aristocracy.

Capitalist Class and Innovation

In the book The Theory of Economic Development (1912), Joseph Schumpeter introduces the thesis that the basis of economic development is the actions of entrepreneurs whose main role is to be leaders in introducing innovations. Innovations introduced by entrepreneurs can be very different: new technologies, new goods, new raw materials, new markets, different organization of production, etc. Such entrepreneurial innovations deviate from established ways of producing and doing business, using new methods or an innovative combination of old methods, doing what Schumpeter calls "creative destruction" in order to create a new, better economic system. It distinguishes economic innovations made by entrepreneurs from technological inventions. In that sense, entrepreneurs differ from inventors, capitalists, bankers, managers, landowners, and workers, because only entrepreneurs introduce real innovations into the economy. Although entrepreneurs may, at the same time, have other functions (those mentioned above), they are primarily driven by the desire to innovate and take risks, and not the desire for profit or earnings. Entrepreneurial activities thus represent the basis of capitalism and its development, and in Schumpeter's theory, their activity is crucial for understanding his theories of credit, profit, capital, and economic cycles.

Political Power and the Capitalist Class

Wright Mills, in the book The Power Elite (1956) explores the capitalist class as a part of the power elite. The elite in the United States controls large bureaucratic organizations within three sectors: private corporations, state administration, and the military. Members of all three mentioned elites share many common features: they were born in the upper classes, they went to the same private schools and the most elite universities, and they belong to the same private social clubs. Members of the elite who are not from the upper classes most often perform technocratic jobs: managers, professionals, and lawyers. Elites keep their positions, intergenerationally, by mostly getting married within the elite, but also on the intergenerational level, so that the same person changes positions during his career and moves from one to the other two elites. The integration of the elite is accompanied by the growing integration of these three sectors. The elite within the state administration pursues policies that suit the economic interests of corporations, the corporate elite finances the political elite, while the military elite depends on the political elite and creates a "military-industrial complex" with the corporate elite. Of these three sectors, the sector of private corporations has the greatest power.

Conflicts within the elite take place at the middle level of power, mainly over the division of spoils, and the media and political scientists pay the most attention to these conflicts, while no one questions the fundamental basis of the system itself. Conflicts within the elites are becoming increasingly integrated into the bureaucratic state apparatus, which replaces the real political struggle between political parties. The very high concentration of power that the elites have and the apathy and powerlessness of the largest part of the population, represent an exceptional threat to democracy.

In the Social Class and Stratification (1990), Peter Saunders studies the capitalist class in Britain. He believes that several thousand individuals control most of the key financial and administrative decisions, but he sees this group as an influential economic elite, not as the ruling capitalist class. This group of people lacks control over the administration, the media, and the education system, so they cannot be called the ruling class. He believes that the capitalist class has experienced a decline in influence and ownership because a large part of the ownership of shares (company stocks) and land is in the hands of various associations and cooperatives, as well as pension funds, which means that there has been an expansion of ownership.

Pierre Bourdieu, in his book Distinction: A Social Critique of the Judgment of Taste (1979) examines what he calls the dominant class. The dominant class has different fractions, and one of them is the capitalist class, which has the biggest size of economic capital and low levels of cultural capital. The capitalist class employs symbolic violence to subjugate the working class.

In his book The Post-Industrial Society (1969), Alain Touraine states that in the industrial society, the main representatives of the ruling class were the capitalists, and the main representatives of the popular class were the workers, so class conflicts were characterized by a conflict between workers and capitalists. In postmodern society, the most important representatives of the ruling class are politicians, bureaucrats, and managers, and the main force of resistance to the ruling class is no longer workers and the labor movement, but new social movements - environmental, student, anti-nuclear, feminist and the like.

Capitalist Class and Imperialism

Vladimir Lenin, in his book Imperialism, the Highest Stage of Capitalism (1916) portaits imperialism is a consequence of the problem of declining demand, on the one hand, and the need for capitalists to increase profits, on the other. The imperial wars provided an opportunity to acquire new markets for the placement of goods, and also to create markets for new investments. The imperial wars themselves were not profitable for the states that waged them, but only for the capitalists and financiers for two reasons: increasing profits and pacifying the working class. The impact of the wars on the pacification of the working class was twofold. By spreading nationalism and militarism, the capitalists diverted the attention of the working class from its catastrophic position, while, on the other hand, by gaining new markets, they solved the problem of reducing demand without making economic concessions to the working class. In the end, imperialism led to the First World War.

Ideology of the Capitalist Class

Antonio Gramsci argues that the relations of production in capitalism create a specific type of social superstructure that aims to preserve the reproduction of such relations of production. Hence, in addition to direct political control, the capitalist class creates an ideology that aims to justify and legitimize existing relations of production and capitalist exploitation and domination. The capitalist class, with its ideology that uses the ideas of equality and freedom, achieves to disguise, to other members of society, the basis of exploitation and domination on which that class rests. However, equality, freedom, and civil rights are an illusion, because the worker is neither free nor equal to the capitalist. The worker is not free, because he is forced to work for the capitalist in order to survive. The worker is not equal either, because all political power and ideological narrative are created, and held by the capitalist class. That is why Marx sees ideology as a „false consciousness“, that is, a false image of society and the world. Marx believes that capitalist control over political power and ideological narrative will not be able to prevent the collapse of the capitalist system when the contradictions within the social base become too great.

The emphasis on the importance of social development is best seen in Gramsci's conception of "cultural hegemony". The ruling class in capitalist societies does not rule only through force and repression but imposes its own ideological system, which defends the interests of the ruling class, and other subordinate classes. This imposed value system is what Gramsci calls "cultural hegemony." Hegemony is a synthesis of political, intellectual, and moral leadership within the ruling class. This leadership justifies its interests by creating an image of the world that presents those interests and the economic and political relations that sustain those interests as positive for the entire population. When other classes (which Gramsci calls "subaltern") accept such a picture of the world as normal and common sense, or even better, as the only possible one, then those classes become integrated into that ruling cultural hegemony.

The capitalist class integrates subaltern classes in two ways. On the one hand, it gives them small concessions - workers' rights, allows the work of trade unions, creates a social security system, and the like. On the other hand, the state and civil society create institutions and organizations - educational institutions, the press, churches, and civil associations - that promote this cultural hegemony. In addition, the state creates institutions - police, army, prisons, psychiatric institutions - that carry out repressive measures against those who do not accept hegemony. The capitalist class also has its independent ways of achieving obedience, through the realization of control and punishment in the workplace itself, but also through employment itself, because most workers without capitalist employment cannot even survive.

According to Oliver Cox, racism in the United States is analogous to racism in Nazi Germany concerning the Jews. He believed that the cause of racism towards Jews was not in the authoritarian personality of members of the working class. Fascism acts as a politically organized aspect of capitalist class consciousness, and it arose as a reaction to economic problems, and it served to divert the anger of workers from capitalists to the members of other races.

Bryan S. Turner in Religion and Social Theory: A Materialist Perspective (1983), presents a materialist theory of religion. In modern society, the importance of preventing the division of property to preserve the economic power of the capitalist class is diminishing, and thus religion loses the significance it had for the ruling classes.

Historian Eric Hobsbawm developed the concept of "invented traditions". With the creation of new bourgeois societies in Western Europe in the 18th and 19th centuries, it was necessary to create a basis for solidarity between workers and capitalists, and for that purpose, bourgeois intellectuals invented and promoted the ideology of common ethnocultural identity and common past. Unlike customs that were changeable, traditions were portrayed as constant and unchanging. These fictional traditions were supposed to create public symbols that would be the basis of national identity and national project. As an empirical example of a fictional tradition, Hobsbawm describes the emergence of kilts in Scotland, which were introduced by the English capitalist, as well as the use of turbans in India, which was also introduced by the English.

Capitalist Class and the State

Anarchistic theorist Peter Kropotkin states that the capitalist class monopolizes political power and creates laws that protect its (capitalist) property, as well as its class interests and thus dominates the working class. In this sense, the entire capitalist state and its institutions are only a reflection of the interests of the ruling capitalist class. One of the main instrument that states used to subjugate society were laws, which always function only in the interest of the privileged classes. Customs and taboos that regulate relations in traditional societies have been replaced by laws in states. There are three types of laws: 1) laws that protect property - they serve to appropriate the products of workers and regulate relations between capitalists, 2) laws that protect the government - this category consists of constitutions and similar laws that establish administrative mechanisms of government to protect the interests of ruling classes, 3) laws that protect people - they are the most important because they serve to protect the security of the ruling classes.

In the book, The State and Revolution (1917) Vladimir Lenin sees the inherent nature of the State to be a tool for the capitalist class to oppress other classes. Even in democracies with universal suffrage capitalist class retains its power.

In his book The State in Capitalist Society (1969), Ralph Miliband challenges the idea that power in capitalist society is divided between a large number of groups fighting among themselves. He states that the ruling class possesses a great concentration of power and that it has a decisive role in creating ideology and politics. He believes that the ruling class has control over state institutions (police, army, judiciary, central and local government, and state administration) and that through the control of these institutions that class maintains its power. The ruling class is made up of those who possess economic power and who use that power to take control over state institutions, in order to maintain that economic power and stabilize capitalist relations. In that sense, people who directly manage state institutions, even when they themselves are not part of the capitalist class, mostly work for the benefit and in the interest of the capitalist class. When politicians and state bureaucrats come from a working-class background, they work in the interest of capitalists because they have accepted the values of the capitalist class and are therefore co-opted into the bourgeoisie.

In his book Political Power and Social Classes (1968), Poulantzas develops the idea of the relative autonomy of the state. Unlike the earlier Marxists, he believes that the (liberal-democratic) state has a broader role than just expressing the class interests of the capitalist class. The state possesses relative autonomy from the individual interests of individual capitalists. As capitalists fight among themselves, the state must secure their general class interests, not side with individual capitalists. Precisely because the state acts as a mediator and arbiter between the various factions of the capitalist class, which gives it autonomous power.

The capitalist class and other influential classes are creating long-term strategies and alliances that Poulantzas calls "power bloc." The state mediates in all class relations and all aspects of those relations - economic, political, and ideological. The state in capitalism does not rule through repression, but by creating an ideological consensus between the capitalist and other subordinate classes. The state controls workers by isolating them into separate individuals (citizens) and thus producing what he calls the " effect of isolation". This concept refers to the phenomenon that individuals from subordinate classes enter into competitive relationships with other individuals from subordinate classes, or are part of a political faction, and thus remain isolated from the rest of their own class. By mediating and reducing class conflicts, both between and within classes, the state creates long-term stability and the illusion of pluralism.

In his book What Does the Ruling Class do When it Rules?: State Apparatuses and State Power under Feudalism, Capitalism and Socialism (1978), Therborn uses the categories of systems analysis to give a Marxist understanding of state power and the state apparatus. In the process, he constructed a systematic typology of differences between the feudal, capitalist, and socialist states. In analyzing the strategies that the ruling class pursues in capitalism in order to rule, he concluded that the ruling class uses mostly state apparatus and economic exploitation and domination as ruling strategies, rather than ideology.

Theda Skocpol, in the book Bringing the State Back In (1985), argues that states always have significant autonomy and the ability to achieve their own political goals, which may differ from the interests and goals of individual classes or society as a whole. The goal of every state is to increase its own power and influence. They achieve this by increasing the power and sphere of influence of the state administration and other state institutions. To achieve this, states must establish stable budget revenues through taxes and other revenue streams. States often increase their own power by recruiting the most capable and educated individuals as their cadres. A large and strong army is also a source of state power. Skocpol believes that the state structure can significantly influence the ability of different classes, even the most economically powerful ones, to pursue their own interests. In recent works, Skocpol recognizes the influence social movements and citizen associations can have on shaping the democratic process and social policy. In addition, classes can have a big impact, which is evident in the difference between social policy in the United States and Europe. The welfare state is much more developed in Europe, because in the United States, the capitalist class has enormous power, while the working class is divided by ethnic and racial differences.

in How Class Works (2003) Aronowitz states that the labor movement in the US still struggles over working conditions, like working hours and overtime pay. But in the class struggle between workers and capitalists, capitalists hold the majority of power and are subjugating the working class by dividing them based on citizenship status, race, and gender. For the labor movement to gain power back, it should forgo divisions and unite to fight for common goals.

Consumption of the Capitalist Class

Thorstein Veblen is best known for his book The Theory of the Leisure Class (1899), which studies the status consumption of the "leisure class", which consists of renters and absent property and business owners. Veblen rejects the idea of completely rational economic behavior and believes that a large part of consumption, and thus production, can be explained by the desire of people to increase their own social status and reputation. To achieve this higher status, individuals, especially those belonging to the upper classes, indulge in the wasteful consumption of luxury goods. In countries that have great social and geographical mobility, such as the United States, luxury spending is the fastest and safest way to confirm one's social status. The wasteful spending of the leisure class has no function other than creating a social distinction that allows that class to reproduce the social hierarchy.

Transnational Capitalist Class

Leslie Sklair researches globalization and transnational capitalist practices. He found that the most important product of transnational practice in the sphere of politics is the creation of the "transnational capitalist class". This class does not only contain the owners of capital but consists of four separate "fractions", which act more or less uniquely. What unites these four fractions is that: they have more global than local economic interests; they have political control, both at the state and world level; they spread the same cultural and ideological matrix; they see themselves more as citizens of the world than as citizens individual states, and they share a similar luxury lifestyle. The four fractions of the transnational capitalist class, according to Sklair's interpretation, are: 1) the corporate fraction - directors and managers of transnational corporations; 2) the state fraction - politicians and appointed bureaucrats who control state policy, but also international political institutions (UN, EU, etc.); 3) the technical fraction - globalized professionals; 4) the consumerist fraction - key individuals who control the media and the trade sector.

Books:

Anderson, P. Lineages of the Absolutist State (1974);

Barrett. Women’s Oppression Today: The Imagination in Theory: Culture, Writing, Words, and Things (1980b,);

Bourdieu. Reproduction in Education, Society and Culture (1977, in French 1970);

Engels. Essential Writings of Friedrich Engels: Socialism, Utopian and Scientific; The Principles of Communism; And Others (2011);

Gramsci. Prison Notebooks (Volumes 1, 2 & 3) (2011);

Marx. Capital Vol. 1, 2, & 3: The Only Complete and Unabridged Edition in One Volume, (2020, in German 1867, 1885, 1894);

Miliband. The State in Capitalist Society (1969);

- Capitalist Democracy in Britain (1982);

- Divided Societies: Class Struggle in Contemporary Capitalism (1989);

Poulantzas. Classes in Contemporary Capitalism (1975, in French 1973);

Saunders. Social Class and Stratification (1990);