The political economy is the study of social institutions, particularly the interplay between the economy, politics and society within the capitalist system. Although social relations are critical components of capitalism, so are physical forces. Specifically, geography is a major factor because it influences the speed of capital accumulation.
Capitalism is the pursuit of capital; capital is the process of creating surplus value (Marx 1867). The capitalist production process starts with a capitalist with a certain amount of money. The capitalist uses the money to buy commodities, specifically labor power and the means of production (money capital). Labor power then transforms the means of production to create a new commodity (productive capital). The capitalist must end up with more money than she/he started out with by selling the commodity for more than the production costs (commodity capital). The surplus is then reinvested in the production process to facilitate capital growth (Marx 1885).
Geography plays a primary role influencing the flow of capital at each stage of its productive circuit. First of all, geography is related to the availability of the means of production. Secondly, geography affects the relationship between labor power and the means of production. Finally, geography matters in how quickly the capitalist can sell his/her productive for the most amount of profit. As such, geography is a key component of capitalism.
Geography influences the relations of money capital. During this first stage, the capitalist appears as a buyer in commodity and labor markets. Geography affects the relations both among capitalists and between capitalists and laborers. For example, if the commodity is rare in the surrounding geographic region, it will be more valuable and require more money capital than if the commodity were more available. The same could be said about the labor market: when there is a large number of unemployed workers, labor value decreases. In short, geographic forces influence the availability (and therefore value) of commodities in the money capital stage.
Geography also affects productive capital relations. The spatial division of labor influences organizational capacities. When laborers are dispersed due to the geographic distribution of the means of production, they have less opportunities to organize. As such, they are less likely to organize against capitalists. This is why the power of labor has significantly decreased with the rise of the global economy. It is much easier for workers to organize when the means of production and labor power is in a centralized location. However, advanced information technology allows capitalists to decentralize operations by minimizing the costs of dispersing the means of production and labor power across large geographic areas. For this reason, within the globalized economy, labor is more easily exploited. Geography affects class conflict by influencing the ability of laborers to organize against capitalist domination.
Commodity capital is also related to geography. This is more easy to see since people are more familiar with the relationship between place and rent price. Retail locations with more traffic are able to sell items quicker and thus have a higher rent price. For example, a merchant can sell more items on Madison Avenue in New York than in a small downtown area. As such, retail rent prices are significantly higher at Madison Avenue. Geographic location is directly associated with this rent value and the flow of commodity capital. To summarize, geography influences capital rhythms and the speed of capital flow.
In conclusion, the study of capitalism requires understanding of both social and physical forces. As such, sociologists should follow Dunlap and Catton's (1979) call for a "new ecological paradigm." Social theory must account for geography in its analysis.
REFERENCES
Dunlap, Riley and William Catton. 1979. "Environmental Sociology." Annual Review of Sociology 5: 243-273.
Marx, Karl. 1867. Capital: A Critique of Political Economy, Vol. 1. New York, NY: Penguin Books.
Marx, Karl. 1885. Capital: A Critique of Political Economy, Vol. 2. New York, NY: Penguin Books.
Capitalism is the pursuit of capital; capital is the process of creating surplus value (Marx 1867). The capitalist production process starts with a capitalist with a certain amount of money. The capitalist uses the money to buy commodities, specifically labor power and the means of production (money capital). Labor power then transforms the means of production to create a new commodity (productive capital). The capitalist must end up with more money than she/he started out with by selling the commodity for more than the production costs (commodity capital). The surplus is then reinvested in the production process to facilitate capital growth (Marx 1885).
Geography plays a primary role influencing the flow of capital at each stage of its productive circuit. First of all, geography is related to the availability of the means of production. Secondly, geography affects the relationship between labor power and the means of production. Finally, geography matters in how quickly the capitalist can sell his/her productive for the most amount of profit. As such, geography is a key component of capitalism.
Geography influences the relations of money capital. During this first stage, the capitalist appears as a buyer in commodity and labor markets. Geography affects the relations both among capitalists and between capitalists and laborers. For example, if the commodity is rare in the surrounding geographic region, it will be more valuable and require more money capital than if the commodity were more available. The same could be said about the labor market: when there is a large number of unemployed workers, labor value decreases. In short, geographic forces influence the availability (and therefore value) of commodities in the money capital stage.
Geography also affects productive capital relations. The spatial division of labor influences organizational capacities. When laborers are dispersed due to the geographic distribution of the means of production, they have less opportunities to organize. As such, they are less likely to organize against capitalists. This is why the power of labor has significantly decreased with the rise of the global economy. It is much easier for workers to organize when the means of production and labor power is in a centralized location. However, advanced information technology allows capitalists to decentralize operations by minimizing the costs of dispersing the means of production and labor power across large geographic areas. For this reason, within the globalized economy, labor is more easily exploited. Geography affects class conflict by influencing the ability of laborers to organize against capitalist domination.
Commodity capital is also related to geography. This is more easy to see since people are more familiar with the relationship between place and rent price. Retail locations with more traffic are able to sell items quicker and thus have a higher rent price. For example, a merchant can sell more items on Madison Avenue in New York than in a small downtown area. As such, retail rent prices are significantly higher at Madison Avenue. Geographic location is directly associated with this rent value and the flow of commodity capital. To summarize, geography influences capital rhythms and the speed of capital flow.
In conclusion, the study of capitalism requires understanding of both social and physical forces. As such, sociologists should follow Dunlap and Catton's (1979) call for a "new ecological paradigm." Social theory must account for geography in its analysis.
REFERENCES
Dunlap, Riley and William Catton. 1979. "Environmental Sociology." Annual Review of Sociology 5: 243-273.
Marx, Karl. 1867. Capital: A Critique of Political Economy, Vol. 1. New York, NY: Penguin Books.
Marx, Karl. 1885. Capital: A Critique of Political Economy, Vol. 2. New York, NY: Penguin Books.
RSS Feed