Yan Jinggao: Marx's Critique of "Universal Prosperity" in National Economics and Its Implications: Based on the Logical Intersection of Labor, Wealth, and Capital

The realization of "universal opulence for all classes of society" (hereafter "universal opulence") is a major goal of National Political Economy ^[1]. (See Smith, 1972, p. 13) On the basis of clarifying the particularity of the capitalist mode of production, Marx revealed the impossibility of National Political Economy achieving this goal. Furthermore, by defining core concepts such as the power of capital and its limits, he mapped out a scientific blueprint for the development of communist society that includes "the wealth of all" (Marx & Engels Collected Works [MECW], Vol. 8, p. 200). Marx's scientific explanation of the logical connection between labor, wealth, and capital reveals the institutional prerequisites and basic conditions for shared wealth. It provides important theoretical support for Socialist with Chinese Characteristics in the New Era to take solid steps toward promoting the well-rounded development of individuals and the common prosperity of all people.

I. The Theoretical Presuppositions of National Political Economy Regarding "Universal Opulence"

Regarding the definitions and usage of National Political Economy and Classical Political Economy, this article will not dwell on the conceptual entanglements between them but will directly adopt Hegel's phrasing: "This science does honor to thought because it finds laws for a vast mass of contingencies" (Hegel, p. 233). Marx also referred to this science as National Political Economy ^[2]. (See MECW, Vol. 1, p. 765) As the founder of National Political Economy, Smith committed himself to the goal of "universal opulence." The internal logic of this goal manifests as "three consistencies": the consistency between the store of labor and the accumulation of wealth, the consistency between the accumulation of wealth and the accumulation of capital, and the consistency between the store of labor and the accumulation of capital.

First, the argument in National Political Economy regarding the consistency between the store of labor and the accumulation of wealth. Smith evolved the labor found in early economic thought into "labor in general," considering this "labor in general" to be the sole source of wealth creation. Based on the development of the age of navigation and the American gold and silver mining industries, Mercantilism since the 16th century followed the logical thread of labor (mining) storage—gold and silver (money)—wealth accumulation. They discovered that wealth originated from commercial circulation and believed that labor only provided certain goods for commercial circulation; in other words, labor was subordinate to commercial trade activities. The propositions of French Physiocracy can be summarized by the developmental thread of labor—agriculture (net product)—wealth, but labor here was limited to agricultural production activities or activities providing the use-value of agricultural products. Smith's "labor"—as the starting point for constructing the system of National Political Economy—was not the trade or mining activities of Mercantilism, nor the agricultural activities of Physiocracy, but rather pointed toward "labor in general."

This "labor in general" refers to productive activity that transcends the limits of "concrete labor," serves as a measure of value, and is capable of creating wages, profit, and rent. Smith liberated labor from specific fields such as mining or agriculture; labor "is neither industrial labor, nor commercial labor, nor agricultural labor" (MECW, Vol. 8, p. 28), but rather obtains its essential definition in "labor in general," which creates non-specific products and non-specific wealth. Smith believed that labor is the "fund which originally supplies it with all the necessaries and conveniences of life" (Smith, 1972, p. 1). He dissolved the specific industrial differences of labor and used this as a fulcrum to construct a relational system of labor-value-wealth, thereby linking labor with the production of objects or use-values. This prompted the transformation of labor into "labor in general" and simultaneously prompted the transformation of wealth into "wealth in general." This theory of national wealth, constructed with "labor in general" as its base, was seen—even by Hume—as having "profound thoughts, complete exposition, and acute discernment" (Mossner & Ross, eds., p. 284). It laid the theoretical foundation for the idea that labor creates and stores wealth—that is, the consistency between the store of labor and the accumulation of wealth.

Regarding the specific process of labor creating wealth, Smith believed that the division of labor plays an important role in improving labor efficiency and increasing the quantity of wealth. He conducted a comparative analysis between uncivilized societies and societies with a high degree of division of labor. "The work which, in a rude state of society, is the business of one man, being, in an improved one, generally the business of several" (Smith, 1972, p. 9). This has been the developmental state of the division of labor in civilized society since the dawn of the modern era. Why, then, does the division of labor contribute to the accumulation of wealth? (1) As laborers' dexterity increases, they can increase output while improving efficiency. (2) In this process, laborers can save time and even participate in production in other industries, increasing opportunities for wealth creation; the store of labor and accumulation of wealth appear as the same process. (3) On the premise of improved efficiency and saved time, laborers can engage in technical improvements and inventions; new technology can conversely promote efficiency, thereby creating a continuous stream of new wealth. On the basis of the division of labor and efficiency improvements, the store of labor and the accumulation of wealth naturally possess a consistency.

Second, the argument in National Political Economy regarding the consistency between the accumulation of wealth and the accumulation of capital. Whether considering the income of hunters in uncivilized societies or the income of farmers and landowners after land becomes private property, national economists represented by Smith were always guided by empirical observation. They believed that physical objects constitute the basic content of income (wealth) and capital. In other words, the process of a laborer accumulating wealth is the process of increasing their own capital. Smith pointed out that the "natural interests" (ibid., p. 99) of hunters in uncivilized times affected their income (wealth). Under conditions of private ownership, the farmers’ appropriation of the "natural produce of the earth" (ibid., p. 47) was regarded as the basis for paying rent to the landowner. "The income of the people from land is not proportional to the rent of the land, but to the produce of the land" (Smith, 1974, p. 382). In short, laborers in different occupations all realize the appropriation of natural objects through their own labor activities, and through this appropriation, they generate self-income (wealth), which becomes individually possessed capital.

The rent that a farmer pays to a landlord does not depend on the landlord's subjective will but on the objective quantity of the land's produce. National Political Economy views rent as income, which is still limited to the direct appropriation of natural objects by humans—a product of empiricism. Sismondi even emphasized that "what is income for one person is capital for another; the same thing changes its name as it changes hands" (Sismondi, p. 60). From this, it can be seen that in the eyes of national economists, there are only occupational differences; these differences do not affect the tendency for exchange between people, the degree of mutual satisfaction of needs, or their respective incomes. Laborers in different occupations can accumulate income to form their own wealth, which then becomes the capital for them to continue their labor. Or rather, within the limits of understanding the creation of labor as an object or use-value, the accumulation of wealth and the accumulation of capital point to the same thing; the two are consistent.

Third, the argument in National Political Economy regarding the consistency between the store of labor and the accumulation of capital. National Political Economy believes that labor and capital are consistent because the object of labor storage and the object of capital accumulation are consistent. This consistency is related to the definition of capital in National Political Economy. Smith called objects invested in productive activities that obtain expected income "capital." "Capital may be employed in improving land, in purchasing useful machines and instruments of trade, or in such-like things as yield a revenue or profit without changing masters, or circulating any further" (Smith, 1972, p. 266). Ricardo believed that "capital is that part of the wealth of a country which is employed in production, and consists of food, clothing, tools, raw materials, machinery, etc., necessary to give effect to labor" (Sraffa, ed., p. 78). From these definitions, the reason national economists combined capital accumulation with the store of labor is that they believed "capital and labor are the same thing, for the economists themselves admit that capital is 'accumulated labor'" (MECW, Vol. 1, p. 67). The newly added wealth created by labor and the content of capital accumulation both manifest as goods or products. Therefore, it can be said that labor and capital are the same thing, and further, that the laborer and the capital owner are unified—that is, they are seen as productive classes in an equal position who jointly participate in the labor activity of creating wealth. This does not differ essentially from the labor-capital synergy and equality reflected in "where labor and capital cooperate" (Clark, p. 49).

The "universal opulence" presupposed by Smith also received attention from other national economists. Sismondi advocated for the welfare of humanity, seeking to let the people enjoy "universal happiness" (Sismondi, p. 17). Ricardo pointed out that "in such an improvement, the whole society instantly derives a benefit" (Sraffa, ed., p. 286). Ricardo clarified the differences between rent, profit, and wages, and pointed out the problem of the polarization of wealth in capitalist society, yet he still firmly believed in the goal of "common prosperity" ^[3] presupposed by Smith. Say believed that laborers could lend their labor to other capital owners or landowners, thereby realizing "synergistic creation" of value among the three parties (see Say, p. 77), so that ultimately all three parties could obtain their own income. In the process of continuous income growth and the three parties synergistically creating wealth, Smith's idea of "sharing" wealth was substantiated in Say's work. To fully demonstrate that all classes of society could achieve universal opulence, Say even claimed that employers and employees shared a mutually dependent relationship "like lips and teeth" ^[4] (ibid., p. 382). List attached particular importance to natural conditions such as soil fertility and the view that capital and income are mutually transformable; in this regard, there is no essential difference between his view and Say's view of realizing synergy and mutual aid among laborers, capital owners, and landowners. List even discussed the prospects for national wealth, people's prosperity, and social development from the perspective of "mental capital" (see List, p. 193).

When discussing the fundamental question of the source of capitalist wealth, the various branches or representative viewpoints of National Political Economy all took "labor in general" as the main source of wealth. When discussing the relationship between labor and capital, they elaborated on the theoretical relationships between factors such as the division of labor, wealth, income, and utility and capital. They all argued that capital accumulation is consistent with social development conditions such as increased efficiency, increased wealth, and the store of labor, laying the foundation for proposing the developmental goal of "universal opulence." Methodologically, national economists represented by Smith saw the role of the division of labor in promoting efficiency and increasing wealth, while also seeing the positive role of natural conditions such as soil fertility in wealth creation. This intuitive or empiricist method generalized the factors influencing the accumulation of national wealth, while simultaneously revealing the limitations of National Political Economy's explanation of "universal opulence."

II. The Falsity of "Universal Opulence" under Capitalist Conditions

The "universal opulence" presupposition of National Political Economy is mainly reflected through the consistency of the store of labor, the accumulation of wealth, and the accumulation of capital. In general, National Political Economy adheres to the following claim: under capitalist conditions, there is an inevitable connection between labor and capital, and even the accumulation of the entire nation's wealth. Although the various schools of National Political Economy discovered, to varying degrees, the contradiction between "universal opulence" and social reality, the national economists refused to admit the flaws in their own theoretical systems and continued to believe that the goal of "universal opulence" could be achieved under capitalist conditions. In Marx's view, the goal of "universal opulence" held by national economists was nothing more than a "fictitious primordial condition" (MECW, Vol. 1, p. 156). The root cause lies in the fact that the consistency they advocated between the store of labor, accumulation of wealth, and accumulation of capital did not conform to the capitalist relations of production and their developmental trends at the time.

First, the falsity of the consistency between the store of labor and the accumulation of wealth. Marx believed that...

"General labor" is, in reality, wage labor. That is, capitalist relations of production manifest as capital hiring labor; this further manifests as capital controlling labor and hiring workers to serve its own interests, which reveals the falsity of the claim that labor savings and the accumulation of wealth are consistent. In other words, the two sides—labor and capital—cannot participate synergistically in production, and thus cannot distribute wealth equally. National economists failed to recognize this; they merely expounded upon "general labor" within the boundaries of a natural economy, individual production, and a natural division of labor, rather than grounding their explanation of "general labor" in the specificity of the capitalist mode of production—that is, the specificity of large-scale machine industry, the social division of labor, and the maximization of value valorization. The national economists failed to recognize the essence of the valorization process, nor could they grasp the real relationship between labor and wealth, or labor and capital, because they never touched upon the essential connotation of "general labor." As Wu Xiaoming ^[5] writes, "The labor which national economics takes as its premise is a labor that negates itself and is self-contradictory, yet it is treated as 'authentic' and infinitely self-affirming labor" (Wu Xiaoming, p. 44). That is to say, national economists failed to distinguish between workers laboring for themselves (general labor) and laboring for capital under its command (wage labor). How, then, did Marx integrate "general labor" with the capitalist mode of production to demonstrate that labor savings and wealth accumulation lack an inherent consistency?

Marx argued that the specificity of the capitalist mode of production is embodied through capitalist relations of production. What national economics describes as "trilateral synergy" or "mutually lending one's conditions of production" (see Say ^[6], p. 77) manifests in capitalist society as the transformation of the money owner into the capital owner, and the purchasing power of money into the controlling power of capital—a social power that commands all means of production. Under the absolute control of capital power, workers no longer possess the natural right to use natural resources; instead, they, along with other means of production, become objects of capital's command. In essence, the relationship between capital and labor is prominently expressed as a relationship between employer and employee. Given that wages are the worker's compensation, labor savings are essentially the savings of the worker's wages; given that capital appropriates the surplus value of wage laborers, wealth accumulation manifests as an increase in the capital owner's profits. From this, it is evident that the process by which capital owners accumulate wealth is simultaneously the process by which workers lose wealth—what Marx called the process of the "loss of the object" (Collected Works of Marx and Engels, Vol. 1, p. 157). Consequently, wealth becomes an alien entity standing in opposition to the worker. This signals that the subject of labor savings—the worker—and the subject of wealth accumulation—the capitalist—must exist in a relationship of employee and employer in the economic sphere, and in a relationship of class antagonism in the political sphere. Therefore, the premise that the two are consistent becomes an utterly absurd presupposition.

Second, the falsity of the consistency between wealth accumulation and capital accumulation.

Marx considered the consistency of wealth accumulation and capital accumulation a fiction because, once labor is transformed into wage labor, wealth accumulation and its ownership also undergo a fundamental change. The process of wealth accumulation in the era of a natural economy can be summarized as follows: based on a state of nature where humans can directly appropriate natural objects, wealth is expressed as individuals regarding the fruits of their labor as "their own things." The more wealth is accumulated, the greater the amount of capital belonging to the laborer. Thus, national economists observed an consistency between wealth accumulation and capital accumulation. However, under the conditions of capitalist wage relations, labor power is subordinate to capital and its commanding power; therefore, the new wealth created by surplus labor is transformed into "another's thing." This transition from "one's own thing" to "another's thing" indicates that the subject of wealth accumulation is not the wage laborer, but the capital owner. "Through estranged labor, man not only creates his relationship to the object and the act of production as to powers that are alien and hostile to him; he also creates the relationship in which other men stand to his production and to his product, and the relationship in which he stands to these other men" (Collected Works of Marx and Engels, Vol. 1, p. 165). The reference here to the worker producing an "object of production as a hostile power" refers to the wealth created by the worker and appropriated without compensation by the capitalist, while "his relationship to these other men" refers to the wage relationship between capital and the worker. Thus, Marx not only elucidated the specificity of capitalist relations of production but also clarified the erroneous perception of the national economists: namely, that so long as the worker loses the material wealth they create, the view of national economists regarding the consistency of wealth accumulation and capital accumulation is nothing more than an unimaginative theoretical fiction.

Compared to the massive wealth accumulated by capitalists through the appropriation of surplus labor, the worker's wage income is merely the portion used to maintain a minimum standard of living. Capitalists and workers exist in a direct relationship of confrontation. "In the state of affairs presupposed by national economics, this realization of labor appears as a loss of realization for the workers; objectification as loss of the object and bondage to it" (Zhang Xiong ^[7], p. 10). Engels's analysis of the sharp antagonism between the proletarian and the bourgeois in The Condition of the Working Class in England, and Marx's dissection of the secret of surplus value production in Capital and its manuscripts, all reflect the "inverse relationship" between the worker's wealth accumulation and the capitalist's capital accumulation. In fact, for the bourgeoisie as a whole, the consistency of wealth accumulation and capital accumulation is an objective description; but for the working class, this consistency is merely a subjective illusion.

Third, the falsity of the consistency between labor savings and capital accumulation.

National economists insisted on the consistency of labor savings and capital accumulation because they directly identified wealth created by labor—wealth as a physical object—as capital. Marx negated this consistency because capital accumulation only achieves the enrichment of the capital owner. In reality, the "labor savings" mentioned by national economics do not accumulate wealth for the workers themselves. To explain how capital accumulation degenerates into wealth accumulation for the capital owner rather than for all laborers, one must begin with the concept and essence of capital in national economics. Marx argued that viewing capital as items put into production—such as a cow for milk production becoming capital—is equivalent to viewing human hands utilized in production as capital. "According to this, the limbs of the human body would also be capital," and "capital would be only a new name for a thing as old as the human race" (Complete Works of Marx and Engels, Vol. 30, p. 213). The view that treats cattle, sheep, or hands as capital is clearly the result of direct observation of labor activity. Schumpeter ^[8] found that "people always ask the meaningless question: what is capital?" In his view, the "Classical writers'" attempt to conduct fundamental analysis using physical goods was a "serious disorientation" (see Schumpeter, pp. 400-401). In fact, equating capital with physical objects might hold true in the era of a natural economy, but it is untenable in the era of modern large-scale industry. Capital, as the starting point of modern large-scale industry, is the social power that commands all means of production, leading to the "separation of labor and ownership of the products of labor, the separation of labor and wealth" (Complete Works of Marx and Engels, Vol. 30, p. 213; p. 266). Thus, capital accumulation is the process by which capitalists appropriate the surplus labor of workers without compensation. Marx thereby negated the consistency of labor savings and capital accumulation.

Competition for capital and the capitalization of landed property eventually caused capital to become "the power of command over labor and its products" (Collected Works of Marx and Engels, Vol. 1, p. 130). Under the control of capital, labor is transformed into wage labor, workers into wage laborers, and the egalitarian relationship of labor-capital synergy into a class relationship of labor-capital antagonism. Workers' wages are not the result of the "tripartite sharing" of newly created wealth, but merely the part of income required to maintain the minimum needs of labor power. Marx emphasized: "Labor is the constantly renewed condition and the constantly renewed means of the worker obtaining, under the name of wages, a part of the value he has created, and thus a part of the social product measured by this part of value: namely, the necessary means of subsistence" (Collected Works of Marx and Engels, Vol. 7, p. 931). Consequently, the essence of capitalist relations of production is not the relationship of "unity of labor and capital" or "synergistic creation" of wealth described by national economics, but a coercive relationship wherein capital commands labor and drives it to serve capital's own ends. The "general labor" of national economics is thoroughly transformed into wage labor under the control of capital—an inevitable result of the exercise of capital's power of command.

From these "three falsities," it can be seen that the goal of "common prosperity" presupposed by national economists cannot be realized. National economists believed capitalism could achieve "common prosperity" because they thought there was no essential difference between the worker, the capital owner, and the landowner; all three participated in the wealth creation process together as factors of production. Marx, however, argued that equating the social status of these three was itself an abstract theoretical fiction. The reality is that the power of capital command leads to the antagonistic nature of capitalist relations of production. In the Economic and Philosophic Manuscripts of 1844, Marx elucidated the fundamental opposition between labor and capital. Given this fundamental opposition, achieving common prosperity for all classes of society is impossible. In the Economic Manuscripts of 1857–1858, he further pointed out that capital, "as dominion over living labor capacity, as value endowed with its own power and will, stands opposed to labor capacity in its abstract, deprived of objective conditions, purely subjective poverty" (Complete Works of Marx and Engels, Vol. 30, p. 444). Workers use their "living labor capacity" to produce the valorized amount of capital and continuously drive the increase of that valorization, while themselves receiving only wages for subsistence. Marx emphasized: "In the capitalist mode of production and in capital, which constitutes its dominant category and its determining relation of production, this enchanted and inverted world develops much further" (Collected Works of Marx and Engels, Vol. 7, p. 936). The increasing gap between the rich and the poor is the inevitable consequence of the power of capital rule.

Marx also analyzed the impact of the capitalization of landed property on capital competition to illustrate the basic state of class antagonism in capitalist society. Marx argued that increasingly fierce market competition and the trend toward the concentration of large landed property would lead to monopoly. Consequently, the whole of capitalist society would necessarily split into two classes: "the property owners and the propertyless workers" (Collected Works of Marx and Engels, Vol. 1, p. 155). After investigating the history of the development of the British working class, Engels concluded that the property owners or petty bourgeoisie, represented by yeoman farmers, gradually sold or lost their means of production during the process of industrialization, and the proletariat became "the most important product of this industrial revolution" (ibid., p. 402). By integrating the history of human survival, the history of wage labor, and the world-historical development of capital, Marx and Engels clarified the specificity of capitalist relations of production and revealed the impossibility of national economics achieving the goal of "common prosperity."

III. Contemporary Implications of the Critique of "Common Prosperity" in National Economics

The goal of "common prosperity" presupposed by national economics became a "theoretical fiction," highlighting the limitations of the national economic theoretical system itself. A more urgent question is: Marx’s blueprint for the development of communist society contains the vision of achieving "prosperity for all" ^[9]. Since the internal logic of "labor savings–wealth accumulation–capital accumulation" presupposed by national economics does not align with the production conditions of the capitalist era, and since modern capitalist relations of production contain sharp labor-capital antagonism within the narrative context of "labor savings–wealth accumulation–capital monopoly," under what conditions is the vision of "prosperity for all" in a communist society possible? What does capital ultimately mean for "prosperity for all"? Or, how can the role of capital be utilized scientifically and rationally? What is the difference between the "common prosperity" of national economics and Marx’s "prosperity for all"? In the process of responding to these questions, the contemporary implications of Marx’s critique of national economics' "common prosperity" gradually emerge.

First, promoting "prosperity for all."

Marx scientifically analyzed the historical movement of capital, arguing that capital manifests different social functions at different stages of social development. Marx pointed out: "Capital adds this: it uses all the means of art and science to increase the surplus labor time of the masses." (^[10] Collected Works of Marx and Engels, Vol. 8, p. 199) What does it mean for capital to employ advanced scientific means? First, the greater the extent and scope to which laborers use advanced scientific means, the shorter the necessary labor time becomes, and the more capital "creates time for the development of [all members of society] themselves" (Ibid.). Second, the universal improvement of productive forces no longer takes the appropriation of the worker's surplus labor time as its fundamental means. As the disposable time of laborers increases, "production will aim at the prosperity of all, and the freely disposable time of all will still increase" (Ibid., p. 200). At this point, what needs fundamental change is the redirection of the "capitalist application of machinery" ^[11] towards serving the laborers; accordingly, private ownership of the means of production shifts to social ownership, eliminating the social power of capital to dominate everything. This is one and the same process as achieving "the prosperity of all."

Compared to the "universal affluence" of National Economics, Marx’s conception of "the prosperity of all" possesses significant advantages. The "universal affluence" presupposed by National Economics refers essentially to "universal affluence" in the material realm, while other realms of social reality—such as the spiritual, developmental, ideological, and moral realms—failed to receive the same level of demonstration as material affluence. The blueprint for future social development envisioned by Marx was not limited to the material realm but involved all spheres of society. When discussing the comprehensive liberation of humanity, Marx believed liberation referred not only to the liberation of labor but also to liberation in other fields. In the Manifesto of the Communist Party, Marx proposed transforming social production and lifestyles to realize the conditions for "the free development of all" (Collected Works of Marx and Engels, Vol. 2, p. 53). The "free development of all" mentioned here must by no means be understood merely as free development in the material realm, but rather as free development in all realms of society. In other words, the contemporary value of Marx's critical theory lies in its comprehensiveness when charting the blueprint for future social development.

However, as long as social development remains within the limits of capital's dominance and laborers have yet to achieve free labor, the measure of wealth still depends on the ratio between necessary labor time and surplus labor—that is, it depends on the control of capital. In Marx’s words, "to take labor time as the measure of wealth is to show that wealth itself is founded on poverty" (Collected Works of Marx and Engels, Vol. 8, p. 200). Although advanced systems of machinery continuously shorten necessary labor time, the "presence" of capital's control remains powerful. The "increase in surplus labor time" under capital’s control is fundamentally the same thing as laborers increasingly falling into a state of "relative poverty." Is capital, then, irreconcilable with "the prosperity of all"? Within the structure of social ownership of the means of production, the answer is no. Marx's scientific planning for the future society has already been made manifest through his theory of the critique of capital: with the demise of capitalist private ownership, the social power of capital to dominate everything gradually disappears. When capital functions merely as a factor of production, the means of production will be transferred back into the embrace of the laborers. What was once wage labor is restored to labor itself, serving as the "first premise of all human existence" (Collected Works of Marx and Engels, Vol. 1, p. 531) throughout the survival and development of humanity. The accumulation of labor, wealth, and capital (as a factor of production) can achieve genuine consistency in a socialist society, thereby pushing "the prosperity of all" toward reality.

Secondly, surpassing the limitations of the "welfare society."

The general rise in civic income in modern welfare capitalist states seems to prove that capitalist society can achieve "universal affluence," thereby "falsifying" Marx’s view that capitalist society and a state of "universal affluence" cannot coexist. Currently, a small number of capitalist countries have entered the welfare society stage. While some scholars research "the three worlds of welfare capitalism" and similar topics, they also discuss to what extent the welfare state is transforming capitalist society. Some argue that this issue shows the "legacy of classical political economy"—namely, the goal of "universal affluence" in National Economics—has achieved a fundamental breakthrough in welfare capitalist states. John Kenneth Galbraith used the "utility function of supply" to identify changes in modern society: "In modern America, the supply of bread is abundant, and the supply of wheat to make bread is even excessive" (Galbraith, p. 123). Western scholars view the "welfare society" as the inevitable result of the significant increase in capitalist productive capacity, selectively ignoring the "siphon effect" of the capitalist production system—the extractive accumulation carried out through external expansion and global unequal exchange. In fact, within the system of capitalist globalization, a few central countries control high-value segments domestically through industrial outsourcing, capital export, and technological monopolies, while moving low-value, labor-intensive segments abroad, thereby realizing the international transfer of surplus value. This mechanism of "externalizing exploitation" means that the construction of an affluent society by welfare capitalist states is predicated on expanding the space of exploitation.

In fact, the welfare capitalist states within the post-industrial structure are full of contradictions and conflicts. (1) The service economy of the post-industrial era exhibits obvious bipolarization; the degree of inequality in wages and benefits is increasingly evident. For example, in the United States, at the "bottom of the service economy, wages approach the poverty line and fringe benefits are almost non-existent" (Esping-Andersen, p. 289). (2) To maintain the normal operation of welfare capitalist states, some governments require employees to pay heavier tax burdens. The result is that a shrinking active workforce is forced to support a bloated non-productive population. Germany's development faces such a dilemma, where employees' "resentment toward taxes may rise, especially when transfer payments flow so visibly from the socially productive parts to the non-productive parts" (Ibid.). (3) To maintain the overall employment level of the welfare state, other governments have had to implement wage caps on public employees, leading to intensified conflicts between public sector unions and private sector unions. In Sweden, for example, "the centrally controlled policy of solidarity wages meant that such restrictions had to be extended to the entire economy, but the fact is this is almost impossible to achieve" (Ibid., p. 288). From this, it is clear that although welfare capitalist states in the post-industrial era have significantly improved the quality of life and level of affluence for laborers, the aforementioned social conflicts are becoming solidified as their long-term structural features.

In Marx's view, a general rise or even great improvement in the living standards of laborers cannot be simply equated with "universal affluence." Marx argued that capital's infinite pursuit of valorization must be predicated on the comprehensive development of productive forces: "The universal development of productive forces—wealth in general—from the perspective of trend and possibility, becomes the foundation" (Complete Works of Marx and Engels, Vol. 30, p. 541). The development of productive forces in capitalist society indeed holds the possibility of promoting a general increase in the income of wage laborers. Marx once used the comparison of a cottage, a small house, and a palace to illustrate the gap between the income of wage laborers and capital profits: even when a wage worker’s income or accumulated labor allows them to afford a small house and thus abandon the cottage, the capitalist is already living in a palace. By the change from the cottage to the small house, Marx intended to show the growth of the wage worker's income; but compared to the increase in capital profits—that is, comparing the small house to the palace—the gap between the two has not narrowed but widened. Within the limits where capital possesses the social power to dominate everything, no matter to what extent the accumulation of labor grows, it can only signify a general increase in laborers' income. It cannot be said that the subjects of labor accumulation—the wage laborers—and the subjects of capital accumulation—the capitalists—have joined hands to achieve a cross-class "universal affluence."

Thirdly, viewing the role of capital dialectically.

Starting from the dominant power of capital, Marx analyzed the specificities of capitalist production, or rather, revealed the fundamental characteristic of social production under the conditions of capitalist private ownership: the accumulation of wealth belongs to the owners of capital, while the accumulation of poverty becomes the destiny of the laborers. The inspiration drawn from this antagonism between the phenomenon of wealth polarization and the goal of "universal affluence" lies in how it is possible for capital to drive the realization of "universal affluence." National Economics attached great importance to the role of capital in the process of achieving "universal affluence." When discussing capital's participation in modern capitalist production and wealth creation, Marx noted: "One of the civilizing aspects of capital is that the way and conditions under which it extracts this surplus labor are more favorable to the development of productive forces, social relations, and the creation of various elements for a higher new form, compared to previous forms such as slavery or serfdom" (Collected Works of Marx and Engels, Vol. 7, pp. 927-928). Marx believed that modern large-scale industrial production is inseparable from the power of capital, yet he also believed that modern production under capital's control, while creating immense wealth, leads to poverty, thereby revealing the impossibility of "universal affluence" during the process of capitalist modernization. In reality, to leverage capital's role in promoting "the prosperity of all," one must oppose a dogmatic interpretation of the concept of capital, thereby promoting the healthy development of modern society while reasonably utilizing the power of capital.

The so-called dogmatic interpretation of the concept of capital refers to the tendency, when grasping Marx's critical theory, to conclude that capital possesses the social power to dominate everything as soon as the word is mentioned; conversely, it assumes that capital that has lost such dominant power is no longer capital. This view, which equates capital with capital's absolute power, misreads Marx's elucidation of the essence of capital. In fact, Marx explained capital as a "social relation"; or rather, within the context of capitalist relations of production, he explained capital as a monopoly power that dominates everything. By virtue of this power, capital seizes ownership of the means of production, the right to use labor-power, and the power to manipulate the market. In this context, productive forces are essentially the productive forces of capital, and relations of production are social relations constructed around the monopoly power of capital. Capital possesses absolute dominant power, as Marx pointed out: "Capital is the economic power that dominates everything in bourgeois society" (Complete Works of Marx and Engels, Vol. 30, p. 49). At the same time, Marx emphasized the limits of capital's own development, which in the future society could reach a point where it "drives people to use capital itself to abolish capital" (Ibid., pp. 390-391). This shows that the absolute power of capital is not "eternal"; capital contains factors within itself that negate its own development, and this dynamic process of development influences the trends of capitalist society.

Developing a socialist market economy is a great innovation of the Communist Party of China. How to harness capital and better play its role is a new problem faced in the development of the socialist market economy with Chinese characteristics. We must fully recognize and accurately grasp the status, function, and essence of capital within the socialist market economy with Chinese characteristics. General Secretary Xi Jinping has pointed out: "Capital is an important factor of production in the socialist market economy," and "we must deepen our understanding of various types of capital and their roles in China under the new conditions of the era, regulate and guide the healthy development of capital, and give play to its positive role as an important factor of production." (Selected Economic Works of Xi Jinping, Vol. 1, p. 448) Capital has become an important factor of production in the socialist market economy with Chinese characteristics and is actively involved in socialist market economic activities. From this, it can be seen that as a socialist factor of production, capital can promote the development of social productive forces under the guidance of socialist relations of production.

At present, our country has established the basic socialist economic system, which includes the mainstay status of public ownership with diverse forms of ownership developing together, the mainstay status of distribution according to work with diverse modes of distribution coexisting, and the socialist market economy system. Capital no longer possesses the social power to dominate everything, nor does it hold a status of monopolizing all means of production and social resources; instead, it has been transformed into—

Similar to "land, labor power, technology, data, and other" ^[15] factors of production, capital collectively serves the development of the socialist market economy with Chinese characteristics. Engels once pointed out that "the relationship between capital and labor is the axis around which our entire modern social system revolves." ^[16] In the practical process of Chinese-path modernization to promote common prosperity, capital likewise plays an important constructive role; we adhere to the "two unswervinglys" ^[17] to mobilize the initiative of all factors of production, including the factor of capital. Within the context of socialist relations of production, when the factor of capital is transformed into a factor of production and exerts a constructive influence, the consistency between the accumulation of labor, the accumulation of wealth, and the accumulation of capital becomes possible. Consequently, the goal of "wealth for all" can be transformed into the real-world process of "common prosperity for all the people."

Capital initiated the development process of modern large-scale industry and became the starting point for the development of modern capitalism; therefore, it is a historical necessity to discuss capital accumulation in connection with "universal prosperity." Marx believed that in order to carry out social production "with the aim of wealth for all," it was necessary to abolish capitalist relations of production. This scientific conclusion has obtained innovative development within the practice of Chinese-path modernization. Under the socialist system, capital no longer possesses the social power to dominate everything; rather, it has been transformed into a factor of production within the socialist market economy with Chinese characteristics. This requires us to utilize all factors of production (certainly including the factor of capital) scientifically and rationally, giving full play to their positive roles to lay a solid foundation for solidly promoting common prosperity for all the people.