We have now developed a detailed definition and analysis of the capitalist mode of production as the central element in “capitalism” as an overall social order. Nevertheless, our focused exploration of the capitalist circulatory system—the circulation of money and commodities for the goal of realizing a surplus (profit)—still leaves a number of crucial areas unexplored and unexplained. While we have a sense of how a capitalist social order comes about in terms of long historical development, and while we have a more incisive grasp of the fundamental capitalist economic relations, we still have not investigated the crucial question of what causes the system to run. That is, if we refer back to our code for capitalist production, we can clearly see that it begs an absolutely essential series of questions:
What starts the process? Where does the initial 
come from in the first place? We have insisted throughout this book that there is nothing natural or inevitable about capitalist economics; a capitalist social order only first emerged in history because of changes in social, legal, and property relations that then, in turn, led both to the extended use of markets for capitalist purposes, and ultimately to the reorganization of production oriented toward the goal of market exchange for profit. Furthermore, we can now assert what should be obvious but is not often stated: capitalism is not a perpetual motion machine; once it has come into being, nothing guarantees that it will continue to run. So what makes capitalism go?
The answer can be found in the name itself: capitalism as an economic system hinges on the specific actions and the fundamental agency of capitalists. Up to this point in the book, in naming these central actors we have freely alternated between “enterprise owners” and “capitalists.” The former emphasizes the practical work process: the organization and planning aspects, the idea of running a capitalist firm, arranging production, and projecting sales. The latter stresses the fundamental monetary basis: to be a capitalist it is necessary (but not sufficient) to have money that you are free to use in the pursuit of more money. Even in a capitalist social order, the vast majority of people are not and cannot be capitalists, either because they have no money or because the only money they have must be spent on basic life necessities (food, clothing, shelter).1 When it comes to the crux of the matter that we are addressing here—the issue of initiating the circulatory process that is the capitalist mode of production—perhaps the best term is the French-borrowing “entrepreneur.” The Oxford English Dictionary’s definition of entrepreneur nicely synthesizes our two previous terms: “A person who owns and manages a business, bearing the financial risks of the enterprise.” An entrepreneur is a capitalist enterprise owner.
The continued existence of capitalism always depends, elementally and inherently, on the actions of entrepreneurs. If money is not “advanced” to begin with, then capitalist production does not occur. To expand on this idea, it can help to reiterate what occurs in this process. It actually starts in exchange: the entrepreneur begins the process by throwing money into circulation, by purchasing commodities (means of production and labor-power) on the market. These initial purchases then allow the entrepreneur to begin the concrete process of production, the process by which the initial 
(raw materials) gets transformed into 
(finished goods). At this juncture we should stress a point that we mostly skipped over in the previous chapter: in order for the capitalist system to continue running smoothly, in order for the process to continue, the value of 
(which includes surplus value within it) must be realized on the market. Under capitalism, value is only realized, only concretely manifested, when it takes the form of money. We call someone rich because of the totals in their bank accounts, not because they own factories that have filled warehouses with unsold products. The finished goods must find willing buyers in possession of money. If they do not—if value is not realized by commodities being sold—then the entire process was for naught since the entrepreneur will find herself not with the intended goal, more money, but instead with less money and with a bunch of unsellable commodities (with effectively no exchange-value).
We can reformulate this point as follows: the continued running of the capitalist system depends not only on the actions and choices of entrepreneurs (to use their money to initiate production) but also on the expectations entrepreneurs have about the possible realization of value (sales of commodities) at the end of the process. We previously underscored the fact that unlike exchange (which happens roughly instantaneously), production is a temporal process that happens over a fixed and often lengthy period. Now we can complicate that argument by seeing that capitalist production is also futural, meaning that it depends on projections and expectations about the future. The generation of surplus value occurs in production, but the realization of surplus value always depends on exchange—it is always sustained by market demand. So much so that the initial 
(and thus the initial 
) are both themselves determined by the expectation (on the part of the entrepreneur) of how much 
can be realized in exchange.
At the beginning of each potential production process, the entrepreneur must decide whether to advance the initial 
. This decision is the spark for the entire capitalist engine; or, to continue our previous vascular system metaphor, we can say that entrepreneurs are the pacemakers for capitalism because their choices determine whether the heart (capitalist production) beats and the blood (money and commodities) flows.2 A deeper understanding of capitalism requires us to explore further the many elements in, and implications of, this decision.
In everyday discourse we hear the word “investment” used interchangeably to describe both the entrepreneurial choice to advance money for capitalist production and the decision to place excess cash in various financial securities with the expectation that they will increase in value. A “security” is usually defined as a “financial instrument”—that is, a form of money-credit—that can be divided neatly into three categories of “equities” (i.e., stocks), “debts” (e.g., certificates of deposit, bonds), and derivatives (contracts with money value that are traded). This means that everyone from wealth managers to financial planners to the business press will use the word “investment” to mean buying securities (putting money into a different form of money), while that same business press and others will also use the word “investment” to mean expanding production.
The everyday discourse proves problematic, then, because we want to draw as stark a distinction as possible between these two broad categories of “investment.” Indeed, when it comes to understanding the key action of entrepreneurs as the pacemakers of capitalism, buying raw materials and buying a bond prove to be totally opposite actions. We will deal with financial securities in greater detail in the next chapter, but for now we can focus on a more direct point: if an entrepreneur takes their extra money and uses it to buy a stock, then they are actively not choosing to use that money to initiate their own capitalist production process.
We can extend this example in a way that helps clear up a related confusion over the term “investment.” If I have $1 million and use it to buy computer components (
) and to hire laborers (
) to assemble those components into smartphones, then I have clearly advanced 
($1 million worth). After assembly I will wind up with 
in the form of a whole bunch of smartphones, and I will market them for sale at a total market price of $1.2 million. If they all sell at the market price, I will realize $200,000 in profit (derived from the surplus value created in production).
But what if I take the initial $1 million and buy Apple stock? Many commentators on capitalism frequently suggest that this act is also capital investment. Indeed, people who trade on the stock market are commonly referred to as investors. This is not for nothing; the idea here is that in buying Apple stock, I have made $1 million available for Tim Cook to initiate the production of more iPhones. Nevertheless, this logic will not hold because my purchase of stock does not directly begin the process of producing iPhones. Yes, it is a theoretical possibility that Tim Cook could use my money to add to iPhone production, but he could also just add it to Apple’s $200 billion stockpile of cash on hand (as of late 2019). He could use it to fund a dividend paid out to shareholders. He could give bonuses to his VPs. He could do whatever he wants with my money, but ultimately the decision has now been passed off from me to Tim Cook (and as the numbers here indicate, Tim Cook hardly needs my $1 million). Perhaps Apple will eventually increase capital investment, but that is a separate question, a separate temporal decision to advance 
or not. Regardless, I have not advanced
when I buy Apple stock.
In general, money spent on a security is not
(the first term in our code for capitalist production). We will therefore distinguish rigorously from here on out between the use of money to purchase financial securities (in any form) and the direct use of money to purchase production commodities (
and 
) as the initiation of a production process. Only the latter should be considered capital investment. To be clear, in this book we will typically refer to it using our own terminology, as the advancement of 
. In the next chapter we will explore in more detail a crucial point raised here: the initiation of production processes hinges on whether entrepreneurs expect a greater return from production or from the appreciation of securities. Put simply, if expected return on capital investment is lower than the guaranteed return on government bonds, the capitalist economy is in big trouble. Hence Chapter 8 will return to the central agent of capitalist production, the entrepreneur. But now we want to take a different turn, to show that though the capitalist lives and acts at the very nucleus of capitalism, the system cannot run on capitalists alone.
We have now underlined a point often made in everyday discussions about politics and economics: capitalism depends on the actions and choices of entrepreneurs, particularly their willingness to advance money (
) to initiate the production process. But as we have shown repeatedly in this book, the capitalist mode of production proves complex and dynamic, made possible by multiple interrelated elements. For example, in this chapter we have begun with the entrepreneur’s advancement of a sum of money (
), but we should not forget that such an action requires and presupposes the existence of a viable monetary system. There is no entrepreneur without a system of money: a social system of reliable credit and debt that makes it possible for the entrepreneur to purchase raw materials and labor-power. This point can be driven home with more force when we consider that today almost all new workers are hired, contracted for wage labor, and put to work, all based on nothing more than a promise to pay from the employer.3 A stable monetary system and a reliable payments and processing system prove essential to contemporary capitalist production.
Turning again to the entrepreneur, we see that he will need more than money. The entrepreneur must find the elements needed to carry out production available for sale on the market. As we have noted, these are the overall commodities (
) that are used in production, and they can be broken down into the constituent elements—means of production (
) and labor-power (
). We can therefore create a long list of ways that the capitalist engine might grind to a halt: a shortage in the means of production, whether it be machines or raw materials, will at best lead to a slowdown in production, and at worst to a stoppage. Formulated in more general terms, we see that the production of all commodities depends on the production of all other commodities; as a system of circulation of money and commodities, all parts of the capitalist social order are connected (directly or indirectly).
But as we have shown in detail in Chapter 6, labor-power is a special commodity, a unique commodity, and it plays a fundamental role in capitalism. All capitalist production relies on the existence and availability of labor-power. Imagine an entrepreneur who goes into business manufacturing special-use lithium-ion batteries. After a brief period of success, she runs into a supply problem: due to global shortages, to environmental regulations, or to tariff wars, she can no longer access the market for a key chemical component in battery production. This forces a change in our entrepreneur’s practices: she might rework the chemical makeup of her batteries, she might alter her production process to source premade batteries that she then modifies, or, faced with no other viable options, she might cease battery production entirely. But even in this worst-case scenario, our entrepreneur does not have to stop being an entrepreneur: she could switch to another business entirely. After all, the overall production process does not depend on any particular process for the production of commodities, only on money. And assuming she has not gone bankrupt, our entrepreneur can go into a different line of business.
However, this optimistic scenario will not hold if labor-power is unavailable on the market. Without labor-power, no production processes can be undertaken. We must remind ourselves exactly what this means, so that we can grasp the reality of this potential problem. If we make the mistake of confusing labor-power with “labor” or the capacity to labor, then we would obviously conclude that we can never run out of it (as long as there are human beings, there is the capacity to labor). Yet labor-power, as we showed in detail in Chapter 6, must not be conflated with the general human ability to work; labor-power is the unique capitalist commodity, and it only appears as a commodity when workers agree to wage contracts—agree to “sell their labor-power.” In the world we live in today, this fact, the fact of ubiquitous wage labor, seems like a given, a natural condition of the world. But we know from a brief glance at history that it’s nothing of the sort: prior to the rise of capitalism, wage labor did indeed exist, but it was sporadic and limited; it was not at all the dominant form of work. Beyond history, we can also see in conceptual terms why the availability of labor-power cannot be guaranteed.
To do so, let’s take the example that often appears in political, economic, and cultural discourse today as the capitalist dream: the ideal society in which everyone is an entrepreneur. Imagine that everyone is a Silicon Valley startup founder. This example is surely a fantasy because it requires us to describe a world in which all human beings are rich enough that they do not immediately have to work for a wage in order to survive. Everyone has enough extra money available that they can feed, clothe, and shelter themselves, and they have access to enough money besides that they can choose to invest in capitalist production. But as far-fetched as that assumption might be (the assumption of global wealth for everyone), that is not even the biggest problem with this case. The problem runs deeper: if literally everyone in the world decides to make money by being a capitalist, then capitalism ceases to exist. Why? Because in such a scene labor-power disappears as an available capitalist commodity. None of our entrepreneurs can purchase labor-power, so none can initiate a production process—hence none can make money. If total capitalism means everyone is a capitalist, then total capitalism means the end of capitalism.
The capitalist mode of production can only be sustained if a huge percentage of individuals lack the ability to purchase means of production and therefore need to work for a wage in order to live. Here we see with clarity the often confused idea of “class.” Regardless of whether entrepreneurs seem relatively “poor” and workers seem relatively “rich,” we can always distinguish, in capitalism, between entrepreneurs (who can choose to initiate production processes, or choose not to initiate such processes) and workers (who may or may not be able to choose where they work, but definitely cannot choose not to work).
This means, perhaps counterintuitively, that the entrepreneur’s existence and success depend upon the existence of the worker. If there are no workers there can be no entrepreneurs, and in turn, there can be no capitalism. Throughout history this basic fact of capitalism has often manifested in significant “extra-economic” (that is, political and cultural) efforts by the entrepreneurial strata of society to create conditions in which labor-power was consistently available as a commodity. It also explains why the primary political power wielded by workers as a class manifests in their capacity (or lack thereof) to withhold labor-power from the market (particularly through strikes, but also in the form of working-day limitations, worker-safety regulations, paid time off, etc.).4 But finally, this analysis also gives us a clear sense of why any power struggle between workers and capitalists will never be carried out on a level playing field. In order to truly remove labor-power from the market (the one real blow workers can lodge against capitalists) workers must refuse to work and thereby give up their wages. Yet the basic condition of being a worker in the first place is to need a wage in order to survive, so workers could ultimately destroy capitalists (and capitalism) only at the risk of first destroying themselves.
This analysis raises much bigger and conceptually complex questions about the very nature of capitalism and its past and future historical trajectories. We know from a study of history what it means for one dominant mode of production to replace another. Feudalism was a long-developed mode of production when capitalism (that is, first the increasing capitalist use of markets and then the unique reorganization of production according to capitalist principles) began to erode its foundations. But we really do not have any historical examples of an advanced capitalist mode of production being replaced. Typically cited cases of modern “noncapitalist” countries—the Soviet Union, China under Mao Zedong, Cuba—are all instances of a noncapitalist social order developing out of a precapitalist system, and doing so within a context of global capital. We do not really know what a full transition out of capitalism might look like. Perhaps this is why some commentators who are most staunchly devoted to capitalism see it as the “final” historical form of a social order; they believe that historical development inevitably leads all societies to become capitalist social orders—that there are no alternatives.
However, our example above, where everyone in the world is an entrepreneur, already proves that capitalist progress cannot be unlimited in the sense that these commentators have suggested. Capitalism cannot make everyone rich, because the capitalist mode of production depends fundamentally on the existence of a majority class of people who sell their labor-power as a commodity on the exchange market (and rich people need not work for a wage in order to survive).
Today we hear many arguments about the ways in which capitalism contributes to socioeconomic inequality in terms of concrete practical results—for example, because CEO pay, financial gains on securities, and other elements of what Thomas Piketty captures in his “rate of return” variable, are increasing faster than measures of overall economic growth. And this means that the accumulation of wealth (in the form of money, of course) quickly outstrips any possible increases to wage income. Piketty expresses this conundrum through the literary motif wherein a person not born into wealth has only one real option to become wealthy: marrying into it. Our own, deeper structural analysis of how a capitalist mode of production functions allows us to make a different point than the one Piketty draws from empirical observation. Regardless of the outcomes of the running of the capitalist system (this is what Piketty’s data measures), we can already see that as an overall system of production, distribution, and exchange, as a structuring principle for an entire social order, capitalism depends on, for its very conditions of existence, a fundamental inequality.5 Not everyone can be a capitalist, and capitalists can never be economically equal to workers, since the basic difference between them is that one has access to an 
they can advance (money) and the other does not.
With our central finding that not everyone can be a capitalist, we have reached a significant conclusion with manifold implications. The capitalist mode of production can only come into being and can only continue to exist if some people have access to an 
they can advance, while some other people lack that very same access and therefore have no choice but to enter into wage contracts (the legal structure that gives rise to labor-power as a commodity). A concise way of stating this point, in a language we could have used from the start of this chapter, is to say that capitalists have access to capital and workers do not. But what is capital?
It might seem surprising that we have waited until the end of Chapter 7 to consider the definition of capital since it must be a, if not the, central term in this book. But this is not by chance. We have waited for a reason: while capital does prove to be an absolutely essential term, it cannot be defined in advance of our broad and rigorous analysis of a capitalist mode of production and its fundamental elements and concepts. Most importantly, capital is not an empirical object. We cannot define capital ostensively—that is, by pointing to its occurrence or appearance in the world (or in history). Capital is not an empirical thing. We cannot understand it by trying to count it. Indeed, although attempts to measure capital can prove very important for our understanding of a capitalist social order, those very attempts are never simple or straightforward, but always fraught (always complicated and subject to skeptical questioning).
Of course, most standard accounts of capital do define it empirically, as a “factor of production,” a produced item such as tools, equipment, or machinery. Often such accounts use the phrase capital stock to indicate precisely the idea that capital names physical items in the world. This notion is sometimes contrasted with “flows” that indicate changes in quantities or refer to monetary measures. In general these definitions of capital as capital goods call to mind factories and warehouses filled with tools, production implements, and other material items.
Such definitions are not wrong per se. Indeed, these textbook accounts often provide concrete examples of capital; nonetheless, they fail to define capital, and they come up profoundly short in providing any conceptual understanding of capital. The problem can be stated as follows: the examples given (as definitions) might be examples of capital, but they also might not be. By defining capital empirically, standard accounts assume that we will identify capital in and of itself, as an object we observe in the world. The problem here is that sometimes a thing is capital, and sometimes it is not. Capital is not a thing, but a thing can be capital. (This is why the texts offer only examples and not rigorous definitions.) The key question then becomes: When is a thing capital and when is it not?
To answer, let’s start by pointing out something you may have already observed: the standard ostensive definitions of capital all seem to be pointing to the first 
in our code for the capitalist mode of production. Assume as our example a Tesla car factory: standard accounts would identify a robot that installs a door onto the frame of a car as the “capital.” Is the robot capital? Our initial answer: probably.
However, in order to know for sure, we have to look harder—we have to widen our view beyond a frozen single image of the robot itself. We therefore start with the overall code:
We can then quickly work our way through a basic checklist:
• Elon Musk is the entrepreneur who advanced the initial 
.
• The door-installing robot is a part of the 
purchased with that 
.
• The robot installs 47 doors per day in an online (currently operating) factory in California that produces 300 Model 3 cars per day.
• Tesla is currently turning over (selling) all of their inventory.
Having gone through our list—that is, having placed the robot into the context of a capitalist process of production—we can reach a final answer: yes, the door-installing robot is capital.
But our answer proves far more subtle and complex since there are many other dimensions of it. To start with, the initial sum of money that Musk advanced is also capital. What about the finished Model 3 cars available for sale? Yes, they are capital too. And the revenue generated by the sales of those cars? Yep, also capital. However, the Model 3 that has been delivered to the Silicon Valley software developer, which he drives to work to show off to his friends: that commodity has already been purchased (its value realized) and it now becomes a consumption good (used not in production but for practical enjoyment by the software developer). Once the car is purchased, it is no longer capital. And if Elon Musk decides to remove the door-installing robot from the factory floor and take it home to work on a hobby for his own personal amusement, the minute the robot leaves the factory floor, it ceases to be capital.
Capital is not a single thing or set of things. Capital is a relation. That is, capital is any element—money or commodities—within an active capitalist process of production. Any entity (commodity or money) actively taking on the role of 
, 
, 
, or 
is capital.6 Yet when the same entity exits the system (and moves outside of that production process), it ceases to be capital. Importantly, this means that the end of each production process, the moment at which value is realized as 
, proves critical. If that sum of money is thrown back into circulation (to buy production commodities) then it starts another production process and continues to circulate as capital, but if it is withdrawn from circulation (used to buy a vacation for the entrepreneur) then it no longer functions as capital. To borrow David Harvey’s phrase, capital is “value in motion.” Capital is money and/or commodities as they circulate in a capitalist process of production. This means that not all money and commodities are capital, and some money/commodities that are capital at one time will cease to be capital at a future time. Money and commodities are capital if and only if they are part of the process of capitalist production.
We close this chapter by observing the tight connection between our definition of capital as an element in the process of value production and realization, on the one hand, and our sharp distinction between the purchase of securities and the advancement of 
, on the other. The rich conceptual language that we have now developed allows us to say succinctly: buying bonds and stocks might be a form of “investment” in the sense of savings, but it is decidedly not capital investment. We now have a framework to indicate that money is sometimes capital and sometimes not: when money is moved from a bank account to a certificate of deposit, or used to purchase a bond, that money does not change form—it remains a financial asset. In contrast, when money is advanced for capitalist production, that money is/becomes capital, and can therefore be fairly categorized as a form of investment (capital investment). This account brings us to the crux of the matter in that this radical difference (between investing and not investing) comes down to a basic question: What does the entrepreneur choose to do with her money? And we cannot even begin to answer that question before exploring the business of money in more detail.
1.The idea of “human capital” suggests that spending money on yourself, especially for things like education or technical training, can be understood as a form of investment, an “investment in yourself.” Our analysis will define investment much more rigorously. Understood from the perspective of capitalist production, a student who goes into debt to earn a degree needed for being hired as a worker is not “investing” but rather subsidizing the costs of the capitalist who employs him.
2.Technically, because they can both start and stop the process, entrepreneurs are ICDs: implantable cardioverter defibrillators, fancier versions of the old-tech pacemaker.
3.In this context we should also clarify that while the standard phrase is that money is “advanced” by the entrepreneur, we know from real-world practices that the term is deceptive. The capitalist does typically advance money to purchase means of production (production commodities available for sale on the exchange market), but when it comes to labor-power, the worker in fact “advances” her labor-power to the capitalist. Actual wages are only paid afterwards. One simple but insightful way to track the power relations between economic actors in a capitalist social order is by checking the temporal lag and directionality of payment. For example, renters pay monthly rent in advance; homeowners pay their mortgage at the end of the month. Some workers are paid at the end of each week, while some are not paid until the end of the month. If you do the interest-rate math, you can see that for a large corporation the difference between weekly and monthly payment of wages can total in the tens or hundreds of thousands of dollars.
4.Workers also negotiate for better economic conditions in the form of higher wages and benefits, though these bargains actually help to preserve the general availability of labor-power on the market.
5.This is certainly an “economic” inequality since it manifests most directly in money terms, but throughout history it has also been expressed in, and been maintained by, a panoply of social, cultural, and political inequalities (e.g., property or capital requirements for voting). Put simply, one way for a social order to ensure the availability of labor-power is to create laws and norms that, in various ways, require it.
6.Production, 
, is not capital since it is not a “thing” at all, but rather a complex and dynamic process.