ABSTRACT
Capitalism is by definition a wage-labor system of commodity production driven by the implacable search for private profit, a system that nowadays operates on a global scale and thus is constituted as a world system. As a system, capitalism is constituted by four fundamental institutions: (1) private property in the means of production, a key institution of the capitalist state; (2) the social relation of wage labor, a social institution that defines two basic classes-the owners of the means of production, or the capitalist class (the ‘bourgeoisie’), and the proletariat: workers who own nothing but their capacity to labor, which they are therefore compelled to exchange against capital for a living wage; (3) the state, a complex of institutions designed and serving to create the necessary conditions of capital accumulation, including minimally (other institutions can be and have been added as needed) the provision of an economic and social infrastructure for the capital accumulation process and for reproducing the system, i.e. legitimating its basic arrangements; a mechanism for the authoritative allocation of society’s productive resources and determining ‘who gets what’ share of national income; a legislature, or a law-making system; the government of the day, with decisionmaking and administrative apparatus; and a repressive apparatus, serving to reconcile any conflicts over property and to preserve order; and (4) the market, an economic institution that serves as a mechanism of economic exchange among individuals and for an non-authoritative allocation of society’s resources and income distribution (the market in theory can be ‘free’ but more often than not is state-regulated).
