Capitalism is crisis. Photo: Paul Mattsson
Capitalism is crisis. Photo: Paul Mattsson

As the cost-of-living crisis continues in Britain – with 30-year high inflation and the effects of over ten years of austerity that have decimated our public services – a growing number of people are beginning to question the profit-based capitalist system and whether it is capable of providing a decent, secure standard of living.

We live in unstable times: the Truss-Kwarteng minibudget fiasco, the chaos in America under Trump, war in Europe, climate catastrophe, and worldwide economic turmoil.

Are the ongoing crises just down to poor management, or is there something fundamentally flawed in the capitalist system that always leads to crisis? What needs to change?

Callum Joyce, Socialist Party Southern and South East regional organiser asks, ‘Can capitalism be reformed, improved to better serve the interests of workers and youth?’

Reforms like the NHS have been won in the past, isn’t that proof that things can be improved, without having to bring an end to capitalism?

75 years after its creation, the NHS, universal healthcare free at the point of use, remains a significant reform, won by working-class struggle. But, since its birth it has been under attack. Capitalists seek to spend less and less on our health, and exploit it for profit. The same goes for other public services – water privatisation for example (see ‘Thames Water crisis is capitalist failure laid bare’ at

But the circumstances in which the NHS was won are very different to those today. Following the Second World War, Britain and other western European countries saw a prolonged period of economic growth, as societies ravaged by years of fighting were rebuilt. The ‘post-war boom’ saw a general rise in living standards for the working class.

This time also saw the creation of the ‘welfare state’ in Britain, with the 1945 Labour government bringing in numerous reforms to improve the lives of ordinary people, most famously the NHS, founded in 1948.

However, these reforms and the Labour government that granted them were not brought about just because of the favourable economic situation. Following the war there was a huge increase in working-class militancy, with many people determined that they would not go back to the conditions of the pre-war period.

The presence of a strengthened Soviet Union emerging from the war also had a huge effect on working-class consciousness. Despite being run under a repressive Stalinist bureaucracy, the existence of an alternative economic system to capitalism served to increase the number of people questioning whether they had to endure the misery of capitalism in their own countries.

In the face of this anger at home and recognising the revolutionary mass movements that were taking place in other parts of the world, the ruling class was forced to grant these concessions to try and stem the tide of rising struggle. As well as reforms in Britain there was the ‘Marshall Plan’, implemented by the US to provide millions of dollars’ worth of ‘economic aid’ to western European countries, extending its economic and political influence.

Given the period of economic growth, the capitalist class could afford to give concessions while still making large profits at the same time. In the following years, even the Tories continued to build thousands of council houses every year and maintained many of the nationalised industries – something unimaginable today!

The period of the post-war boom did not last forever though. Into the 1970s, the economy went into crisis. The bosses, determined to restore their profits, attacked working-class living standards and looked to undermine the reforms that they had been forced to tolerate in previous years. Although not without facing significant working-class resistance and mass trade union struggle.

By no longer having to give up a share of their profits to fund social services or subsidise nationalised industries, they hoped to maintain profits by passing the burden onto the working class. Margaret Thatcher’s Conservative government, with its sweeping neo-liberal counter-reforms, privatised previously nationalised industries. In tandem it also sought to undermine the power of the trade unions. The trend continued under Tony Blair’s New Labour, and since.

As a system based on maintaining the maximum profit possible, capitalism is unable to uphold lasting reforms, faced as it is with inherent periodic crises.

But does capitalism always have to lead to economic crisis? Could we find a way to run the global capitalist economy stably, making it possible to bring in permanent reforms at the same time as allowing the bosses to profit?

As Karl Marx and Friedrich Engels explained over 170 years ago, capitalism is not a system that is capable of continuing for long periods without crisis. This stems from the fact that the working class cannot buy back the full product of what it produces.

In periods of economic growth, capitalist production, unplanned and based on competition, compels the capitalist to invest in new machinery, driving down costs, boosting profits and  potentially capturing a bigger share of the market. More factories and workplaces are created in turn.

The same contradiction, however – ‘who can afford to buy the ever-expanding pile of products? – remains, and a boom cannot be sustained. This is a factor leading to periodic crisis, with production scaled back, and attacks on jobs, pay and conditions the outcome.

For decades however, British capitalism has not invested. Instead, profits have been restored by driving down workers’ wages and also from financial speculation, rather than productive investment.

Today, Britain is again in the grip of economic crisis, with inflation at around 10% and well above the rate at which pay is rising. Rising interest rates are creating financial difficulties for mortgage holders and other borrowers. The share of the wealth held by the working class continues to shrink, and the capitalists’ grows.

Faced with economic turmoil, even dealing with the stark threat of climate change is deemed ‘impossible’.

Wouldn’t Labour in government be able to be at least make some positive changes?

Not if it sticks to its pledge to be ‘fiscally responsible’ – in other words, stick to the diktats of the international ‘markets’ demanding the working class is made to pay for the crisis. Sir Keir Starmer and his front bench have been at pains to use every opportunity to show that they would govern in the interests of the bosses and not the working class. Even reforms as limited as simply reversing the cruel two-child benefit limit introduced by the Tories in 2017, are ruled out.

Previous Labour leader Jeremy Corbyn did however pledge a large number of reforms, on a scale not seen in the lifetimes of many young people, with a plan to increase taxes on the wealthiest in society in order to fund them.

A Corbyn government, elected on Labour’s 2019 general election manifesto, would have come into government with huge expectations. Corbyn’s policies – for free education, a £15-an-hour minimum wage, public ownership of mail, rail and utilities, and his anti-austerity stance – won widespread popular support, particularly among young people.

Corbyn lost the 2019 general election, attacked ruthlessly by the capitalist establishment, media and even the right-wing in his own party. How could all that be overcome?

The groundswell of support for Corbyn was a threat to the capitalist bosses. The confidence a Corbyn government would have given to workers and youth to raise their sights in terms of what reforms they might demand would have threatened the bosses’ profits. This was what was behind attacks on Corbyn from all corners of the capitalist establishment.

To deal with this, Corbyn should have adopted a strategy to transform the Labour Party, as the Socialist Party advocated at the time, by removing the pro-capitalist right-wingers who were openly attempting to sabotage his leadership. This, combined with adopting a full socialist programme, could have attracted a huge layer of workers and young people to join the party and make it into a genuinely democratic, socialist organisation.

But with Corbyn and other left-wingers now blocked from standing again for Labour, and even expelled from the party in some cases, Labour remains an out-and-out capitalist party under the leadership of Sir Keir Starmer.

The ‘markets’ and financial institutions would likely have rallied against a Corbyn government too – inflicting economic pain in an attempt to prevent any policies that they deemed too radical being implemented. Even previous Tory Chancellor, Kwasi Kwarteng, triggered the markets to increase government borrowing costs and sell off large sums of British currency after he promised unfunded tax cuts against the wishes of the more ‘sensible’ capitalists. Any government promising reforms in the interests of the working class would need to prepare to face the same, or worse.

Even ahead of winning an election, the threats to Corbyn came from beyond just the media or the right wing of the Labour Party. Even some British Army generals expressed worry about Corbyn’s programme should it ever be implemented, concerned as they were about defending capitalist interests.

The new Tory anti-trade union legislation, introducing minimum service levels, is an example of how another part of the capitalist state, the courts, can be used to try and combat growing working-class organisation, which the bosses fear could represent a threat to their system.

Any government promising reforms in the interests of the working class would need to be prepared to mobilise the working class in support of its programme, or be forced to back down and institute counter-reforms. The defeat of the Greek Syriza government is one recent example. (see ‘Taking on ‘the markets’ – lessons from a Greek tragedy’ at

In the face of economic sabotage, a government would need a socialist programme to nationalise the banks and the major companies under democratic workers’ control and management, in order to ensure production of necessities can continue and be properly funded. This would be coupled with a refusal to pay any debts to foreign capitalists who may try to raise the price of repayments. A state monopoly of foreign trade to ensure reasonably priced access to required goods, and capital controls to prevent huge amounts of money being removed from the country, would also be necessary.

Then, crucially, if elements of the capitalist state were used to attack such a government, then mass mobilisations of the working class would be necessary to defend the actions of this government from sabotage outside of parliament as well.

To win lasting, substantial reforms today means fighting for such a programme. By taking big business and the banks out of the hands of a few individuals, and instead putting the commanding heights of the economy into public ownership, under the democratic control and management of the working class, the basis would be laid for society to be transformed along socialist lines.

How can we fight for socialism? What needs to be done?

The Socialist Party believes in fighting for every immediate improvement in the lives of ordinary people, be that trade union action for better pay, a raising of the minimum wage, or implementing democratic rent controls.

In the 1980s, Liverpool’s Labour City Council, led by Militant (forerunner of the Socialist Party), fought for and won millions of pounds from Margaret Thatcher’s government to build thousands of council homes, schools, and leisure centres. In the words of Tony Mulhearn, one of the heroic 47 socialist councillors, it “translated socialism into the language of jobs, housing and services”.

Winning reforms builds the confidence of workers, and can raise the sights of what greater reforms can be won through collective struggle. Even defensive struggles to prevent attacks on existing conditions or winning improvements to pay offers, even if they remain below-inflation, can show how workers’ action gets results.

The working class in Britain today has no mass political party. The Socialist Party fights for every step forward towards the creation of a new mass workers’ party, in which millions of workers could be brought together to discuss and develop the policies needed to transform the lives of working-class and young people.

The Socialist Party also makes clear that any reforms which are granted cannot be made permanent under capitalism. Whatever the bosses give with one hand they will take with the other. So it is necessary to fight for such a workers’ party to be armed with a socialist programme.

Only a society run along socialist lines would be able to guarantee permanent reforms where the wealth in society is democratically controlled by the working class and invested where it is needed rather than just where it is profitable.

Only through fighting for immediate reforms linked to the need for the socialist transformation of society to make them permanent, can we end the capitalist system of poverty and exploitation. Then it will be possible to provide a decent standard of living for everyone and create a world where humanity’s full potential can be harnessed for the good of all.