The Market as a Social Institution — Sociology STD 12 Humanities — Question
CBSE BoardEnglish MediumSTD 12 HumanitiesSociologyThe Market as a Social Institution4 Marks
Question
Explain capitalism as a social system.
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Answer
Karl Marx understood capitalism as a system of commodity production, or production for the market, through the use of wage labour. According to Marx, all economic systems are also social systems.
Each mode of production consists of particular relations of production, which in turn give rise to a specific class structure. He emphasised that the economy does not consist of things (goods circulating in the market), but is made up of relations between people who are connected to one another through the process of production.
Under the capitalist mode of production, labour itself becomes a commodity, because workers must sell theirlabour power in the market to earn a wage. This gives rise to two basic classes - capitalists, who own the means of production (such as the factories), and workers, who sell their labour to the capitalists.
The capitalist class is able to profit from this system by paying the workers less than the value of what they actually produce, and so extracting surplus value from their labour.
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