Capitalism, Surplus value, Inflation and Bitcoin

The highlight of the capitalist system, and what Marx heavily criticized, is the exploitation of labor.

The question is, how is labor exploited? Coercion by force or authority alone is neither sustainable nor safe, as it risks mass resistance, which would ultimately harm the capitalists themselves.

This brings us to the concept of surplus value. Imagine producing a single product. The price of that product consists of two components: one, the initial capital or raw materials, and two, the wages paid to the laborers. The tension in the capitalist system arises not from these two components, but from the introduction of a third component: surplus value, commonly known as profit.

Marx warned that surplus value would lead to laborers becoming alienated from the products they produce. The labor they invest (or income) in creating the product ultimately does not allow them to purchase that product with their wages because the price includes this surplus value.

This leads to Marx's prediction that this tension would cause the working masses to "suffer" from a production system where prices are artificially inflated by surplus value, beyond what labor can reasonably accept.

The suffering results from wages (in the form of currency) being insufficient to purchase the products created by their own labor, as each step in the production process compounds the surplus value. Imagine workers receiving banknotes or coins that buy less and less over time.

However, the problem wouldn't be so severe if the currency in circulation was limited. If the money workers receive remained constant in value, it would act like a limited resource, and prices would not decrease over time. Workers would not struggle if their wages retained their value.

But capitalism does not allow this. If currency had stable value, surplus value could not function effectively within capitalism, as people would use their money only for fairly priced goods, not inflated by capitalist greed. Ultimately, capitalism would collapse.

To avoid this, the system debases currency by continually printing more, using state power. A clear example is when the U.S. detached its currency from the gold standard. Without the need to back money with gold, which is finite, money can be printed indefinitely, leading to inflation.

Marx's prophecy that capitalism would cause ongoing worker suffering remains unresolved as states do not maintain currency value. Stable currency would undermine surplus value, a core capitalist feature.

When the state does not protect workers from exploitation, an alternative to currency is needed—something finite, state-independent, non-producible, transparent, and fair, yet easily transferable for goods and services.

Although gold meets most criteria, its physical limitations make it difficult to transfer, and it attracts corrupt state power.

This brings us to the only remaining option: Bitcoin. It is finite, immutable, transparent, fair, easily transferable, and state-resistant (if keys are kept private).

While Bitcoin could move humanity closer to Marx's ideals without needing collective resistance or rebellion, humanity has shown a tendency to oppress the majority for the unlikely hope of becoming the wealthy minority.

#Bitcoin #BTC #nostr