AskProfWolff: What Exactly is 'Capital' in Capitalism

A patron of Economic Update asks: "I've just watched your video about your truer definition of Capitalism, and appreciate how you center it upon the employer-employee relationship as a more accurate measure of what distinguishes it from other economic systems. But I also feel you left out the equally important distinction that derives from the root of it, namely, the function of "Capital". For me, the aspect that most deeply defines it is the creditor-debtor relationship. That is a step up from slavery, but very much related to it. Thus, we have phrases in our vocabulary, such as "wage slavery". When there is a class of people who own no real property or "capital" of significant value, or worse, have an inverse or negative relation to it (which I think qualifies what debt is), you live in a system where that class of people have no choice but to work for wages to try and catch up with the imbalance of capital that debt creates. It is a far more subtle prod than that used to threaten disobedient slaves to get back to work in the Deep South, and far more effective. Debtors are far less likely to rebel than actual slaves were, and within the debt system we have, tend to be more self-accepting of the financial yokes they bear."

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[BartScantlin]

I recommend watching "Capitalism's Definition is NOT Innocent" by Prof. Wolff as it compliments the information he lays out in this video.

[valerieburns]

I just love listening to Mr Wolff! I feel like I’m getting a free class in economics! That’s one reason I donate to Democracy @Work!!!

[JokinJoe]

I've learned so much from this guy.

Capital acquires these forms: merchant capital; industrial capital; finance capital. In becoming autonomous n most dominant "finance capital" is killing itself.

[eliyahubenysrael]

Fantastic explanation. Thank you Professor Wolff!

[kmj]

Thanks Prof. It’s amazing how little, so many so called “experts” on capitalism, know about what capitalism really is. Time and time again, I’ve used a lot of what I’ve learned from you to school many of these so called experts including one called Peter Schiff who even went as far as suggesting that employers do employees a favor by paying them because it’s the owner who creates value, to which I replied that it is labor (supplied by the workers) that generates value, in the form of profits, from the capital that the owners provide and that profit is shared but often times not fairly

[nhkjgfxe]

"Minority of those at the top who own everything and amass the wealth and power and a majority of people who basically do what they are told..." *which is a master slave relationship.

[khaldunia]

Clear and concise as usual. Brilliant, Mr Wolff. You are the clearest economist in this world.

[thomaslai]

How I wish that I had the Professor as my lecturer during my university days!

[jamesmorton]

employee has no control or power to negotiate for more of the profits.
That was really bothering me in the years before retirement.
the company was hammering 5% growth year over year.
we were not getting wage growth even close to 5%
not happy here, leave, people did

[milesobrien]

I think "capital" is a misnomer for the way modern business works. Today, there is no handing over "capital" to finance business. Capital is now potential to repay debt. Everything is financed through debt. The actual capital is reposing in banks and financial institutions earning interest, not really at risk and earning interest on being loaned out to entities that demonstrate an ability to repay that loan. This is adequately demonstrated in the US economic crisis we are experiencing today. The "capital" held by the financial institutions have been absolved of any risk by the government, while the debtors to those institutions still have to repay their debts. It's a fiction that Elon Musk is a trillionaire. He has no way to "cash out" his wealth into real hard currency. It's based on a valuation of his stock which is the fiction.

[vanders]

Prof. Wolff masterfully teaching Ch. 1 of Capital Vol. 1.

[latetotheparty]

I love this channel. I’m always correcting other channels’ commenters’ usage of terms like Marxist, liberal, socialism. Here, I expect to be corrected. Yippee!

[coolmodelguy]

The explanation and demonstration of how capitalism works was well defined by Professor Wolff. The problem that I am having with this explanation of capitalism, is about what is not contained in the professor's example. Wealthy people "invest" their wealth for a "rate of return", most notably in the stock market. The wealthy people produce nothing, yet their wealth grows. I can see this being akin to the money lender getting both principle and interest back at the end of the year, but that is not what happens with "investment" capital. So what happens when investment capital grows to many times the size of production capital? Right now, investment capital in the form of financial assets, are nearly five times the size of our entire GDP. Given that the capital of capitalism is supposed to grow through production, how is it that investment capital is larger and grows faster?

[phyllisvalentine]

I love listening to Dr. Wolff. I learn so much!

[umasordini]

What do you think of the idea that Capital, or Currency's value is in the consensus. As in, it's because we all agree on what it's worth, that it is worth anything?

[milenmetodiev]

"Capitalism" is derived from , which evolved from , a late Latin word based on , meaning "head"—which is also the origin of "chattel" and "cattle" in the sense of movable property (only much later to refer only to livestock).  emerged in the 12th to 13th centuries to refer to funds, stock of merchandise, sum of money or money carrying interest

[meeklynobody]

Capital- Control of a regions production.

[Rick-orkq]

Capital as remember from Das Kapital simply put value in motion.

[tapdancingcowgirl]

please turn your sound up Prof Wolff. thank you.