Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER III. The Fatal Flaw of Capitalism. IT CANNOT be stated too often that all analyses of recent economic development must start with the basis established by the discoveries of Marx. Capitalism is quasi-social. Each unit of society produces things which others want, and itself consumes what the others produce. There exists, however, no regulation of production and, while there is a general division of labor, the units act on their own responsibility. The division of the products is, consequently, only possible by their being universally exchanged for each other on the general basis of value or socially necessary labor time. Thus products are not merely useful things, but, owing to their value relation, commodities. To effect these numerous exchanges directly is an absolute impossibility. It was necessary for the commodity producing society, of which capitalism is the modern development, to hit on some single commodity for which the demandwas always at least equal to the supply, and which might thus be acceptable everywhere in exchange for any other product. Many things have served as such widely accepted equivalents, but finally gold proved itself to be naturally the universal equivalent. Social recognition made this particular commodity the world's money, in which all values are expressed and which can buy anything anywhere. Thus there are two categories in the process of the above mentioned process of exchange—the commodity and money. The producer sells for gold and with it buys what he needs. He effects an exchange of two commodities by means of money. It is already seen that money (which is now synonymous with gold) has here performed two functions: First, before the actual exchange it has served as a measure of value or an indication of the pr...