Basic Economic Law of Capitalism

It is also called the law of surplus value. The law of surplus value is the production and capital multiplication in capitalist society. It is not a specific aspect or some individual process that determines the development of capitalist production, but all the main aspects and processes of the development of capitalist production. Therefore, it is what determines the essence of capitalist production. A social form can only have one basic economic law, and the law of surplus value plays a leading role in the economic law system of capitalist social form.

When analyzing the historical trend of capitalist mode of production, Marx pointed out: “The absolute law of this mode of production is to produce surplus value or make money.” The law of surplus value reflects the essence of capitalist production relations, that is, capitalists exploit the surplus value of workers by purchasing their labor force. Capitalists are personificiation of capital, and their soul is the soul of capital. Their direct and decisive motive of production is to extract the surplus value created by the working class. Under the capitalist system, what to produce, how much to produce and how to produce all depend on the amount of profit. When talking about the basic economic law of capitalism, Stalin pointed out: “The law of surplus value, that is, the law of the capitalist production and proliferation of capitalist profits, is the most suitable concept of the basic economic law of capitalism.”

The function of the law of surplus value, the basic economic law of capitalism, once made the capitalist mass production rapidly exclude and destroy individual small production, brought the victory of capitalist system over feudal system all over the world, and brought unprecedented rapid development of social productive forces and growth of social wealth unprecedented in the human history. However, the role of the law of surplus value will inevitably lead to the accumulation of wealth in the bourgeois pole and the accumulation of poverty in the proletariat pole, thus sharpening the basic contradiction of capitalist mode of production. Under the influence of the basic economic law of capitalism, capitalism of free competition develops into monopoly capitalism, and industrial capitalism develops into financial capitalism. Lenin said: “the conclusion that the capitalist society must be transformed into a socialist society is completely derived from the economic movement law of modern society.” Lenin’s “law of economic movement in modern society” mainly refers to the law of surplus value. The function of the law of surplus value is implemented in all the main processes and aspects of capitalist production, exchange, distribution and consumption. The upsurge and crisis of capitalist production, its advantages and disadvantages, its success and failure, its emergence, development and extinction are all the results of the law of surplus value. Therefore, the law of surplus value is the basic economic law of capitalism.