The Twilight of Capitalism by Michael Harrington (Part I: The New Karl Marx, Chapter 4)

Chapter Four is about the Mode of Life. Originally, Marx and Engels saw production as the main feature of all civil society. Later, they realized the Capitalism is its own systems.  This is especially the case in discussing labor rent, where in feudalism, the worker pays a certain amount to the lord.  In capitalism, the worker is paid a certain amount and the capitalist gets the rest, even though in Marxian thought, the worker is the main driver of production. While that is not necessarily the case now in automated factories, in the developing world, automation is still more expensive that peasant slave labor.  Also, the service sector, including sales, is mostly worker based, even if the worker is developing content for Internet advertisements.

Chapter 1 of Capital is not a prescription or even a full theory of capitalism, rather it is an explication of the central themes of capitalism with what is external to the analysis omitted. In welfare economics, this is known as ceteris paribus, or all things being equal.  If welfare economics can do it, so can Marxian.  Marx describes a system that is self-contained and in equilibrium – in other words, a limited model, not the entire picture of capitalism. 

The development of capitalism from free labor (i.e. the ability to buy and sell) is essential, because free labor and money had to exist before feudalism and capitalism could bind that labor to land or capital.  Capital could not subsist on urban workers, it had to bring them in from the countryside by taking land from farmers and consolidating it into larger estates.

Commerce has evolved, but its main contribution is in understanding Capitalism in its modern form. Capitalism did not start when the Dutch invented the corporate form).  Other historical events, such as the colonization of Central and South America provided the gold and silver as a precursor to capitalism, but were not capitalism itself.  Indeed, that was simply biological warfare. Such colonialism also applies to current events, as the second part demonstrates in regard to oil.
Marx is not deterministic. Conditions like capitalism and technological change were found other places before and after the beginning of the Industrial Age. Control of workers by capitalists is what makes capitalism Capitalism. 

What Marx calls capitalism is determined by the commodification of goods and services and the creaction of surplus value.  Commodities are not things you make for yourself, whether labor or products, but what is sold to others.  For workers, this leads to devaluation as human beings and alienation from what is produced at the profit of others.

Surplus value is taken from the worker. In technology, the machines and computers cannot feel alienation and are certainly owned by the capitalists, however the makers of those machines are alienated from what they produce. Employee-ownership is the answer to this, since workers control machines as well and the distribution of rewards (thank you Richard Wolff for your emphasis on this). Capitalism is when workers do not.

These points are often misunderstood by Marx’s critics who think that the post-industrial society negates their usefulness. In the fullness of time, the transfer of labor to the third world (and nominally communist China) and to the services sector shows alienation and surplus value is alive and well (indeed, even maids, who would work and live in a household are now employees of cleaning services).    The same relationships occur in the post Industrial world and the modern.

Where Harrington believed that capitalism is in its twilight, these developments argue that it will keep going as long as we let it.  The question is how do we stop letting it? See Part II for some examples. See recent texts for others involving cooperation and consumption (Wolff and Alperovitz and Bindner). Marx would undoubtedly agree.