Industrial Production and Capitalism: Drivers of social change in history Ho Xin Qian Louise In this essay, I will illustrate why industrial production and capitalism were major causes of social change in history by stating three main arguments. Firstly, I put forth the case that industrial production and capitalism have changed the role and nature of markets in history. In doing this, I trace how the market has become the central system of social coordination via market instruments, encompassing even the elements of industry like land, labor and money.
In exemplification, I explain how industrial capitalism has brought about the rise of mass production and mass markets, enabling the market system to expand its influence. Secondly, I will illustrate how industrial capitalism has changed the social relations of production, as well as the social organization of work, resulting in class struggle and socio-economic stratification in history. Lastly, I touch on the changes in norms and culture within institutions due to industrial production and capitalism.
For the purpose of this paper, I define industrial production as production brought about by mechanized technology and industrious labor in centralized locations. Capitalism is defined as a system of profit making commerce made possible by the usage of money, decentralized circulation of capital and the market exchange of commodities. I use the term industrial capitalism to denote the amalgamation of both forces. The Role and Nature of Markets in History It is my contention that industrial production has changed the role and nature of markets in history, placing it in the centre of society and economy.
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It is true that industrial capitalism presupposes the existence of a market system. However, the market system was never the dominant system of social control until the development of isolated markets by mercantilist means, and subsequently the transnational interaction and proliferation of markets into a market economy, brought about by industrialization in the 18thC. It is due to this transcendence of boundaries and displacement of market activity that gives rise to the “market” as an abstract mechanism.
According to Polyani, before the rise of markets, the society organizes itself via systems of redistribution, house-holding and reciprocity, of which operates on non-economic motives like social prestige and kinship (Polyani 1944: 46-58). After the rise of markets with long distance and local trade, markets have started to take on a more important role in providing necessities; however, they did not function for a majority of the population, who were still dependent upon common exchange and subsistence systems.
Thereafter, mercantilism created isolated national markets which consolidated local economic activity and increased trade. However, it was not until the Industrial Revolution in the mid 18thC that the market system became the main driver of social change across different countries through the creation of mass markets. The industrial revolution has brought about new forms of technology and power, transformed modes of production and created factories as centralized locations for mechanized production to take place.
Mass production techniques like specialization, standardization, time-discipline, rational capital accounting and centralization allow for production costs to decrease with volume, thus generating a high amount of output, providing goods more cheaply than one could have done outside of the factory. As a result, people buy their essentials from these mass markets rather than produce by themselves. Also, they produce solely for the market, deriving income to purchase other goods in the circulation of commodities.
Moreover, with industrial capitalism, the market mechanism has also come to allocate factors of production such as land, labor and money, which according to Polyani were not real commodities, but merely have exchange value because they become privately owned by use of legal contracts and sales (Polyani 1944: 68-76). Since then, mass markets have come to synchronize most economic activities like consumption, production, distribution and even finance in the most efficient fashion (Swedberg 2005:238-240).
These markets become far reaching and displaced in light of industrial capitalism because of communicative and transport technology, the mobility of money and relations of free trade, which re-defined the notion of markets from a place to an abstract network of actors across national boundaries. Also, the nature of markets has changed from being state-controlled to being self-regulating. The market system becomes the center of economic and social life as it coordinates most economic activities not by state regulation but by economic instruments like the price mechanism, supply and demand aggregates.
Social Relations of Production and Organization of Work Industrial capitalism has, with the change in material means of production, brought about a change in the social relations of production and organization of work. In capitalistic societies, instead of directly interacting with nature in production, human beings depend on each other by exchanging their assets in place of producing for subsistence. Hence, they inevitably enter into social relations of production between those who own the means of production (capitalist) and those who do not but are economically compelled to sell their labor power (worker) for wages.
In the circulation of capital, surplus value can be derived from the difference between capital invested and capital retrieved because capital (such as land, factory and machinery), only when combined with labor, transforms products to sell for higher exchange values, thereby generating surplus value and profit. This circulation of capital is durable because capitalists aim to invest their capital to make even more profits while workers can only increase their wages by working harder or by investing in their skills.
Since then, the relationship between capitalists have become increasingly competitive due to the drive for profits while the worker-capitalist relation has replaced family (sexual division of labor) as the primary relation of production. According to Marx, as the ownership of means of production is exclusive and alienable, the society becomes separated into two distinct classes – the bourgeoisie (capitalist) and the proletarian (or worker), where between them is a relationship of domination and exploitation.
Marx observed that the capitalists tend to exploit the workers by privately appropriating the surplus value produced by the workers, giving them much less than the use value of their time and effort invested in production (Marx 1848: 23). Also, the exploitation goes further by manifesting itself in the working conditions of factories, where workers were forced to work for long hours and children were also engaged as child labor. The exploitation and domination over workers exists because of the profit motive of decreasing costs and increasing revenue, as well as the fact that workers have less argaining power over their jobs than their employers. Capitalism has also re-defined the social organization of work by the formation of labor markets and complex division of labor. Prior to the onset of industrial capitalism, work was just defined as any effortful activity which attributes use value to commodities. However, with industrial capitalism, the formation of labor markets constituting workers, employers, jobs and networks is possible, and they function to allocate labor resources and allow capitalists to negotiate labor price and working conditions.
Here, there is a clear demarcation of what is considered paid “work” and what lies outside of the labor market in the informal economy. Within the labor market, the exchange value of labor depends on the quantity and quality of labor, which denotes different labor processes and skills. The differentiation in wages is due to the complex division of labor brought about by industrial capitalism.
Unlike the simple division of labor, where society is categorized into different occupations as in craftmanship, the capitalistic industry has a tendency to control and divide the mass production process into many simple tasks which all unskilled workers are capable of accomplishing. Workers are subdivided into different capabilities and made to specialize in simple tasks to be able to perform quickly and productively. This organization of work greatly improves the efficiency of the system, bringing costs down with more units of production.
As seen in the Fordist model of mass production, workers as such are being “deskilled” and made interchangeable to the extent that they can be fired or hired according to production requirements (Womack 1990: 19-46). Thus, the market value of such menial labor is very low as opposed to professions (doctors) and skilled labor (technicians). The way work is being socially organized into skilled and unskilled labor has thus brought about socio-economic stratification in production relations. Marx has criticized this form of organization as being “alienating”, especially for the menial workers.
As workers are being made interchangeable by the subdivided nature of production process, their labor is being looked upon only as a commodity, at their employer’s disposal. The worker loses control over his produce, the work process and his ability to creatively express himself. Moreover, their menial labor becomes cheapened in the process of unemployment and labor surplus. On the other hand, professionals are able to safeguard their interests by exclusive job administration channels, keeping their wages high due to marketable specialized knowledge.
As a result, socio-economic stratification has also become defined by consumption relations such as occupational prestige and status groups. Norms and Culture Lastly, it is clear that industrial capitalism has brought about important changes in norms and culture. Most explicitly, industrial capitalism has changed the culture of work in the society. Prior to this time, work was characterized by disparate tasks that one is required to do in the day, and is oriented to what is necessary to be attended to. There is little divide between work and life.
In industrial-capitalistic societies, work is characterized by a series of jobs which need to be synchronized in terms of sequence and speed. Time-discipline is important for work in the capitalist economies because productivity and time are highly correlated (Thompson 1967, 60:61). People are expected to use time allocated for work efficiently and solely for work. As the stimulus for work has changed from subsistence to wage incentives, there is potential of increasing wages by putting in more effort put into work.
Thus, as competition for jobs and within jobs increase, people are pushed to work harder and longer in their jobs. Also, in the 18thC, industrial capitalism has led to the trend of rapid urbanization due to rural urban migration and international migration in seek of factory jobs. This has led to a major restructuration of society within countries like England, where the working class poor tend to congregate near the city centre for employment and the more affluent middle class tend to decentralize away from these city centers, where living conditions are bad.
The result is a case of socio-economic polarization within cities, where differences in standards of living are stark between gated communities and urban slums. In all, industrial capitalism tend to generate disparate levels of wealth and poverty amongst the working and capitalist classes. Lastly, industrial capitalism is likely to produce changes in habits and lifestyle which are oriented towards the market. The culture of consumerism is prevalent in many industrial and post-industrial societies, brought about by both producers and consumers.
Producers aim to increase the capital return from their investment by either catering to existing needs or by creating new needs and wants. With the use of marketing strategies and production technology, they are able to sell their products at a high profit margin. Consumers, on the other hand, are faced with the proliferation of goods and services available at competitive prices. With the wages they have earned, they are able to afford more goods at a lower price. In all, this paper contends that industrial production and capitalism are major drivers of social change in three ways.
Firstly, industrial capitalism has changed the role and nature of markets in history, from an auxiliary mechanism to the main instrument of social coordination. Secondly, industrial capitalism has revolutionized the social relations of production, from humanity’s struggle with nature to dependency on each other. It has also changed the social organization of work, by re-defining what is work and by organizing work into skilled and non-skilled categories with varying consequences. Thirdly, industrial capitalism has influenced the norms and culture of society through “industriousness”, urbanization and consumerism. (1991 Words)
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