Basic Definitions
What is a worker?
Somebody who must sell their labor power in order to survive.
They are free to sell it and "free" from any other means of production that would allow them to survive otherwise.
What is a capitalist?
Somebody who acts as the physical representative of capital. Their sole focus is on increasing profits via extracting surplus value from the workers.
As a class, they own the means of production and ensure that all production happens on the basis of commodity production.
What makes a worker different than a serf or a slave?
A slave is not free to do anything, much less sell their labor power. A serf still owns some means of production that they can subsist on.
Both a slave and a serf provide a different form of surplus labor than a worker does.
What is the difference between simple and expanded reproduction?
Simple reproduction: the capitalist consumes the entire surplus value as revenue.
Expanded reproduction: the capitalist only consumes some of the surplus value as revenue and invests the rest into expanding production.
What is use value
The unique, subjective aspect of a commodity that makes it useful to somebody.
What is labor power?
The aggregate mental and physical capabilities of a person to do work.
This is what the proletariat sells to the bourgeoisie, not their labor, as Ricardo and other bourgeois political economists thought.
What is the difference between a simple commodity economy and a capitalist economy?
In a simple economy the commodity owners are the producers themselves. They produce, own, and exchange their commodities. Exchange is done on a CMC basis.
Under capitalism, production is done by workers who sell their labor power to a capitalist, who owns all of the means of production and the product created. The capitalist advances value to make profit off of the workers' labor. Exchange is done on an MCM' basis.
What are the three forms that capital takes in the process of capital circulation?
Money Capital, Production Capital, and Commodity Capital
What is exchange value?
The social, abstract aspect of a commodity that is rooted in the amount of socially necessary labor time needed to produce it.
What are the means of subsistence?
They're any of the things that a worker needs to survive. This can be a physical or social need (food, clothing, shelter, transportation, education, etc.).
This is socially determined and a site of constant struggle between the proletariat and bourgeoisie.
What is money, and what are its five functions?
Money is the universal equivalent.
Its five functions are: measure of value, medium of exchange, means of hoarding, means of payment, and world currency.
Where do merchant, banker, and landlords derive their profit from?
All of them derive their profit from redistributed surplus value that the industrial capitalists must share with them due to the social division of labor.
What is surplus value?
This is the value that a worker produces through the exercise of their labor power (i.e. the labor itself) that is above the value of their wages.
This is the source of capitalist profit.
What are the two types of labor that happen during the production process under capitalism? Which two aspects of the commodity do they match up with?
Concrete and abstract labor. Concrete labor creates use value. Abstract labor creates exchange value.
Under what circumstances does money become capital?
Money becomes capital when it is advanced (rather than spent) with the intention of pulling it out of circulation in a greater quantity. "Self-expanding value".
Private ownership of MoP & surplus value are the reasons this is possible on a wide scale, but earlier forms of capital (merchant and usury) allowed for this to happen prior to wide spread wage labor.
What happens during a capitalist crisis, and why is crisis an inevitable part of capitalism?
There's overproduction of commodities, which leads to an inability for capitalists to sell and realize profits. This leads to bankruptcies, layoffs, destruction of inventory, etc.
This is the logical outcome of a social division of labor that has no coordination between the various producers. There's no way to know overproduction is happening until its too late. Expression of fundamental contradiction of capitalism.
What are the two aspects of a mode of production?
The forces of production and the relations of production.
What is the significance of average rate of profit? How is it calculated?
All capitalists expect the average rate of profit (including landlords, merchants, and financiers), regardless of their actual surplus value production. It impacts production prices and sets the upper limit on rent.
It's calculated on the level of a national economy as total surplus value divided by total capital advanced.
What are the pre-capitalist modes of production, and what distinguishes them from one another?
Primitive Communism (Hunter-Gatherer Society & Agricultural Society): No private property, relative economic equality, social production within small groups
Slave Society: production based on slavery, domination of countryside by city
Feudalism: production by peasantry, appropriation by feudal lords, domination of city by countryside
What are the interrelations between production, consumption, distribution, and exchange?
They all depend on one another and determine how the other activities function.
(Insert any examples from the introduction to Contribution to the Critique of Political Economy)