chapter  5
Two Views of the Evolution of Modern Capitalism: Capitalism as a “Pressure” Economy
Pages 41

With the advent of modem capitalism and the widespread harnessing of inor­ ganic power, industry assumed primacy over agriculture and the basic factors of production became labor and capital rather than labor and land, which had been the basic factors in previous agrarian societies. The latter point is crucial both in grasping Marx’s theory of the evolution of capitalism and in understanding why he foresaw a future classless society within which scarcity would have been eliminated. Since capital is reproducible, the possibility exists of expanding it until it is no longer scarce. Moreover, capital is a carrier of technology. As it increases in quantity and improves in quality, the average product of labor rises. By comparison with the systems of previous epochs, modem capitalism has an enormous power to expand production. But its key contradiction, according to Marx, is that it is eventually unable to expand the demand for goods and services at the same pace. Therein lie the seeds of its destruction.