Arguments for socialism tags:
Capitalism isn't working: Time to fight for socialist change
Capitalism is crisis, photo Paul Mattsson
Unless you are part of the richest 1% then life under austerity is getting increasingly difficult. Here Peter Taaffe, Socialist Party general secretary, looks at the nature of capitalism - a system driven by the search for profit and riven by crisis - and the basis for building a socialist alternative.
"Now almost five years old, the economic crisis rumbles on. In order to assess how much economic progress it has undone, the Economist has constructed a measure of lost time for hard-hit countries.
"It shows that Greece's economic clock has been turned back furthest: it has been rewound by over 12 years.
"Elsewhere in the euro area, Ireland, Italy, Portugal and Spain have lost seven years or more. Britain, the first country forced to rescue a credit-crunched bank, has lost eight years. America, where the trouble started, has lost ten" (Economist, 25 February).
This is an astonishing admission of failure - "progress has [been] undone" - by a staunch defender of capitalism.
It bears out the contention of the Socialist that today this system - based upon production for profit and not for social need - has become a colossal obsolete machine for the destruction of wealth and the lives of working people in Britain and worldwide.
The Economist further estimates that the loss of property wealth from British households is £500 billion compared to its previous peak.
American households have lost "a whopping $9.2 trillion" (the total wealth produced in the year for the US is about $14 trillion).
Portugal and Spain have been thrust back to 2008 on this measure and Ireland "was richer in 2006".
Measured by real gross domestic product (GDP) per person, a third of the 184 countries the IMF collects data for are "poorer than they were in 2007."
But absolutely no conclusions are drawn by this august journal other than to prescribe "more of the same", brutal and "endless austerity".
Capitalist economists are like witch doctors of old, incapable of rational explanation and therefore falling back on quackery. Why has society arrived at this impasse? Where is it written that millions of workers and youth must be thrown on the scrapheap, with millions more forced into impoverishment even when they have a job, often part-time?
It is not down to an act of God or similar to a natural disaster. It is rooted in the very character of capitalism, explained very simply by Karl Marx more than 100 years ago.
Based on exploitation
Exploitation of the working class is at the heart of the system. Profit, which provides the driving force for capitalism is, in the words of Marx, "the unpaid labour of the working class".
From this flows all the inequalities of capitalism, which have been underlined dramatically even during the current crisis.
The share of wealth accruing to billionaires has increased exponentially while that of the working class quite obviously has diminished. The working class cannot buy back the full product of its labour power.
However, the system keeps going by ploughing part of the surplus extracted back into production. This in turn creates new factories, workplaces - the means of production, the organisation of science, technique, etc. - but at a certain stage all the same contradictions reappear. Hence the instability of capitalism, which oscillates between booms and slumps.
This is akin to breathing in and exhaling. In older organisms, this becomes weaker. In the modern era, the booms have become weaker while the recessions or slumps have become deeper.
This is reflected in the present crisis, the "worst ever", a "great stagnation". To maintain their profits, the bosses will shut down factories and workplaces, like opening and shutting a box of matches, if needs be.
However this crisis is not one of 'profitability'. The capitalists are literally drowning in profits.
They are hoarding cash: "almost €2 trillion in the Eurozone, and £750 billion in the UK" (Financial Times - 12 March).
They are thus betraying what Marx called their "mission" to develop the means of production.
This was the only justification of capitalism in the past which, despite all the horrors in the Industrial Revolution, the slave trade, etc., at least drove society forward.
But now they refuse to invest in factories which would at least soak up the millions of unemployed. Why? Because there are few industries to invest in and no incentive to create more factories because of the weakened state of British capitalism, arising from the massive deindustrialisation of Britain in particular, but also in the advanced industrial countries as a whole.
Germany's manufacturing base accounts for 20% of its economy but Britain's is just 10.5%!
When the capitalists resorted to a massive orgy of investment in the financial sector, it resulted in a piling up of fictitious capital which finally collapsed in 2008, wreaking havoc in the lives of millions in the process.
George Osborne sought to justify the savaging of jobs in the public sector by claiming that the private sector would fill the gap, rising like the 'phoenix from the ashes'.
We replied that 'the phoenix' had unfortunately already flown to China and parts of Eastern Europe, precisely because of the previous policies of deindustrialisation of Thatcher, reinforced by Tony Blair and Gordon Brown.
Pigs at the trough: Obsorne's budget 2012 a hand out for the rich, photo Alan Hardman (Click to enlarge)
It is the frenetic and restless search for a 'profitable outlet' for hitherto 'idle' capital which drives the ruinous and harmful programme of privatisation of the Con-Dem government.
Working class people generally can go to hell in a handcart so long as the capitalist system finds a way out. This is why we say it puts profit before social need.
Everyone agrees that the NHS is a great historical conquest. Even the butcher of the NHS, Andrew Lansley himself, is forced, hypocritically, to pay lip service to this.
Yet it is still in the process of being privatised. The Tories deny that but, as Mandy Rice-Davies said, "they would say that wouldn't they?"
When the present bill is finally bludgeoned through parliament against the wishes of the British people, 49% of the allocation of beds will be for private patients.
As sure as night follows day, following in its wake, as former Tory Chancellor Nigel Lawson openly admitted on Newsnight, will come charges for visiting doctors and going to hospital, increases in prescription charges, etc.
In other words, we will be back to the situation of our fathers and forefathers in the 1930s when the poor and working-class did not call on the services of doctors because they could not afford to pay.
Britain will be in the same position as the US where it is quite simply a question of "no job, no money, no doctor".
The craven capitulation of some of the Liberal Democrats - Shirley Williams and her supporters - on this issue, set alongside the actions of the Tory stooge Clegg, is likely to seal the historical fate of this party.
Like the National Liberals in the 1930s, they will be absorbed by the Tories and what is left nationally will be a just a rump.
Similarly, some doctors' representatives, after admirably opposing the government on this issue, have now shown a "flexibility" of their spines, but not principle, in agreeing to now collaborate in implementing the NHS bill.
They will not bear the burden of the privatised NHS which will result from the Con-Dems' measures.
It will be up to the labour movement to resist this might and main. The poll tax was defeated after it became 'law'. Mass action - refusing to pay this hated tax - trumped 'respect' for an unjust law!
The opposition to the government measures by the New Labour front bench is hypocritical. Every time the Tories are attacked on television by New Labour spokespersons on privatisation of the NHS and the rest, they simply reply "but you started this"! Who introduced 'foundation hospitals', the 'internal market', etc., to which they have no answer!
This is because they have swallowed hook line and sinker the dirge of George Osborne: "The British government has run out of money because all the money was spent in the good years." (Telegraph, 26 Feb 2012) Arrant nonsense! What about the £750 billion cash pile, mentioned above, which the greedy bosses are sitting on and refuse to invest? Then there is the £120 billion a year in tax avoidance by the rich, which the PCS trade union has highlighted.
This is almost equal to the total government budget deficit of a £143 billion which they intend to eliminate in four years of eye-watering cuts.
There is also the 'unused capacity' which is not utilised under capitalism for one reason: it does not pay the bosses to do so.
Their press admits as much: "the cold reality... is the British economy has shrunk by more than 10%. It faces many more years of depressed living standards, high unemployment and public spending cuts. Those fabled sunlit uplands are a long way off " (Financial Times).
Cuts, cuts and more cuts
10% of the British economy - GDP stands at £1.75 trillion - probably amounts to the equivalent of the budget deficit of £143 billion.
Therefore, if this 10% could be mobilised, brought back into production, the deficit would be eliminated at one fell swoop. The only thing that stands in the way is the capitalist system itself.
If it cannot afford the basics of human existence, we cannot afford it. One thing is sure: further suffering is inevitable on a capitalist basis.
Already, the average British household is £1,000 a year worse off as a result of this government's measures.
Even the middle-class will suffer through the loss of child benefit. The poor will suffer most. The welfare changes due to the merger of several benefits into universal credit will make 150,000 of the country's poorest single parents as much as £68 a week worse off, potentially pushing 250,000 children further into poverty, reports 'Save the Children'.
Public sector workers face five years of real pay cuts. Therefore, the ground is prepared for an uprising of public-sector workers and others - which will exceed the mighty pensions strikes of the past year - even if the pension struggle abates temporarily because of a lack of leadership of the trade unions.
And not just in Britain, as the events in Greece, the forthcoming social explosion in Spain, Portugal and the ongoing battle in Ireland indicate.
Therefore, this is the best time to pose a clear socialist alternative when working people are in action and on the move.
In housing, which is a disaster area for working people, particularly for young people, in 2010 only 95,000 properties were built and yet there is a crying need for a massively expanded house building and renovation programme.
In the 1930s, the number of new dwellings built each year averaged over 300,000, half a million in 1935 alone.
How easy it would be to bring together the unemployed building workers and the 'idle' capital that would be generated by increased public expenditure! This, in turn, could be paid for by the increased tax income from those drawn back into the workforce on trade union rates of pay.
Lengthening dole queues
Then there is the obscene and contradictory spectacle of lengthening dole queues - enforced idleness - alongside massive overwork.
Many workers are forced to work two or even three jobs in order to make ends meet. Young people, as we see, are forced to work for nothing, a modern form of slavery.
The immediate introduction of a 35-hour week without loss in pay would begin to overcome this 'contradiction'.
"But it didn't work in France," claim the bosses. But it did; the 35-hour week created, according to the French Socialist Party, 400,000 extra jobs between 2000 and 2006.
It was abolished by Sarkozy and with what result? A massive increase in unemployment, which in France is higher than in Britain, standing at more than 10% and climbing.
But while we demand reformist measures such as these, fighting for every improvement in the lives and conditions of working people, we realise that there is no such thing as permanent security, secure jobs, reasonable and rising living standards under capitalism.
On the contrary, what was won today and yesterday can be taken back by the capitalists tomorrow.
Under this system, the workers are like Sisyphus in Greek mythology. He toiled to push a boulder up to the top of the hill only to see it roll back down again. He was compelled to repeat this task throughout eternity!
This can only be changed by taking over the commanding heights of the economy. The centralisation and concentration of capital - the piling up of wealth and ownership into the hands of a tiny minority, of the 1%, or the 0.1%, has simplified the task of the workers' movement.
Of the hundred largest economic entities in the world, 52 are corporations and 48 are countries. The top 500 companies - a handful of billionaires - control 70% of world trade.
The top 200 companies have combined sales which are equal to 28% of world GDP but they employ only 0.82% of the world's workforce.
Goldman Sachs - "a great vampire squid wrapped around the face of humanity" - typifies the real face of capitalism of dog eat dog.
Recent revelations by an ex-employee show that there is nothing 'moral' about Goldman Sachs and the other great firms that really rule the world, as David Cameron would have us believe.
Goldman Sachs is "toxic", customers are "muppets". It helped to build the colossal debt mountain before 2007.
It 'earned' revenues of $29 billion last year and distributed more than $12 billion to its staff in pay and bonuses, as much as the GDP of Albania!
Ed Miliband's "responsible capitalism" is also a myth. The system as a whole is responsible for mass unemployment and growing poverty.
Here in Britain, 150 companies control 70 to 75% of the wealth. By taking them over - with compensation on the basis of proven need - we will begin to use all the idle capacity to get the unemployed back to work and initiate a socialist plan of production.
This, in turn, would generate increased wealth and lift millions out of poverty in Britain. Applied not just in Europe but throughout the world, it would result in undreamed of plenty.
The nightmare of one billion people on the planet who go to bed hungry every night would evaporate.
We will be able to generate extra resources through using the full potential of production but also by eliminating waste and advertising, etc., and use these for the benefit of society.
The programme for the socialist transformation of society, the initiation of the discussion to prepare the basis for a real democratic socialist plan of production, must be at the heart of discussions in and around the industrial battles currently taking place.
This version of this article was first posted on the Socialist Party website on 15 March 2012 and may vary slightly from the version subsequently printed in The Socialist.