Wednesday, 24 July, 2024


As one firm increases productivity or offers new products, all its competitors are pressured to innovate and develop even more efficient forms of production and better products. The pressure to succeed in competition has also been transferred to employees, whose prospects and social status depend on their success in the labor market.


Competition forces them to acquire and maintain marketable skills by anticipating and adjusting to new labor market demands. The pressure extends also to consumers, in that they express their social status through the purchase of ever- new consumer items. The “expansive dynamism of capitalism” (Sewell 2008) is also institutionalized through the credit- based financing of investments. Credit provides access to resources to which no “normal claim” (Schumpeter 1934: 107) exists. The claim is only justified through future success.


Credit is a central pillar of capitalist growth because it allows firms to engage in economic activities that could not other wise be undertaken, using resources they have yet to earn. At the same time, the interest charged for credit forces firms to produce products of higher market value than the investments being made in them. The “claim” to capital must be earned through the expansion of economic value.