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From The Socialist newspaper, 22 January 2014

Capitalism is a system in crisis

This is the case for socialism

We are the 99% Take the wealth off the 1% , photo Paul Mattsson

We are the 99% Take the wealth off the 1% , photo Paul Mattsson   (Click to enlarge)

We say there is an alternative to endless misery. Today, more than ever before in human history, enormous wealth, science and technique exists which could, if properly harnessed, easily provide all of humanity with the necessities of life that capitalism cannot provide.

Socialist Party deputy general secretary Hannah Sell makes the case for socialism in a new pamphlet. Here is an extract.

The world economy is more than 17 times the size it was a century ago. Yet we are being told that the most basic public services can no longer be afforded.

It is not much to expect a job with a living wage, a secure and high-quality home, and a dignified retirement with a living income, yet in 21st century Britain these are becoming unobtainable luxuries for millions.

The obstacle to achieving these modest aspirations is capitalism: a system that puts the production of profit for the few - the millionaire and billionaire capitalist owners of industry and the resources of society - before the social needs of the majority - the multi-billion poor and working class throughout the world.

Capitalism is an economic system which has the exploitation of the working class at its heart. Profit, which provides its driving force is, as Karl Marx - the founder of scientific socialism - explained over 150 years ago, "the unpaid labour of the working class".

From this flows all the inequalities of capitalism, which the current crisis has laid bare.

Even in boom times the working class cannot afford to buy back the full product of its labour power. In periods of growth capitalism can temporarily overcome this problem by ploughing part of its profits into developing the means of production.

This in turn creates new factories, workplaces - the organisation of science and technique - but at a certain stage all the same contradictions reappear.

Capitalism is an inherently unstable system, which swings from boom to slump. However, in today's world the booms have become weaker and the slumps deeper. We are now in the worst crisis since the 1930s.

Drowning in profits

Yet the capitalists are literally drowning in profits. In Britain alone, the major corporations are hoarding an incredible 750 billion, which they are not investing because they do not consider they would make enough profit. The capitalists are thus betraying their historical purpose.

In the past, despite the many horrors of capitalism, it at least drove society forward by developing the means of production. Today, the sickness of the system is summed up by a failure to invest.

Even before the recession, levels of capital investment were at historically low levels. Instead of investing in manufacturing, the capitalist class tended to gamble on the world's financial markets because it was more profitable.

The bursting of the huge bubbles that were created was the trigger for the 'great recession'.

British capitalism has led the world in this process with massive de-industrialisation. For example, Germany's manufacturing base accounts for 20% of its economy but Britain's is just 10.5%.

British capitalism today is a third-class power. Only its finance and banking sector is a world 'leader', including leading the way into the catastrophic crisis of 2008.

While capitalism is driving more and more people to food banks in order to make ends meet, socialism would be able to meet people's very modest demands - for a living income, a secure home, some leisure time - and much more, by the planned use of the resources of society for the benefit of all.

By socialism we do not mean the old dictatorial regimes of Eastern Europe and the former Soviet Union, which were dominated by a privileged caste of bureaucrats, who presided over a planned economy which played a progressive role until it was strangled by bureaucratic mismanagement.

We stand for international socialism, based on mass participation in the control and running of industry and society.

For a party that stands against austerity

Hackney TUSC, photo Hackney TUSC

Hackney TUSC, photo Hackney TUSC   (Click to enlarge)

The government has no mandate for the vicious austerity it is implementing. The Tories couldn't even win a majority in the 2010 general election.

Instead they had to cobble together a coalition with the Lib Dems, who had increased their vote only by claiming to be to the left of Labour.

Since then the brutal reality of the government's policies - continued economic crisis, pay freezes and cuts, tuition fee hikes, growing unemployment and benefit cuts - has led to the governing parties plummeting in the polls.

Austerity is unpopular but there is no voice in parliament which opposes it. At every step the Labour Party has accepted the cuts agenda.

Labour leader Ed Miliband and his sidekick Ed Balls disgracefully promised to bring "iron discipline" to controls on spending by sticking with Tory spending plans at the start of a future Labour government.

Labour may well still win the next general election, but they are doing their best to throw their chances away by offering their own version of austerity gruel.

At the same time, at local level Labour councils are implementing the coalition government's cuts.

No wonder that workers' most common response to elections is to sit on their hands and abstain. Some have tried to kick the government by voting for Ukip - which poses as the voice of opposition, though in reality stands for even more brutal austerity than the Tories.

The stockbrokers and millionaires who lead Ukip have won votes by posing as being 'against the big three parties'.

They are tapping into the deep-rooted suspicion of 'parties' and 'politics' in society - an inevitable consequence of having all the major parties stand for the 1% rather than the 99%.

All the same

It shows great sense to be cynical about political parties when faced with the pro-rich, pro-banker, sleazy and corrupt parties of Westminster, which really are 'all the same'.

We understand why people draw the conclusion that it is better to ignore politics and declare a plague on all their houses.

The problem with this is that it lets the various brands of self-serving careerists continue to run the show, abusing the rest of us.

There are many examples of this. In Spain in 2010 a mass movement - the 'indiginados' - burst onto the scene, struggling against austerity.

But, because the movement in the main stood aside from the electoral field, it allowed the PP (equivalent of the Tory Party) to come to power.

Egypt has been shaken repeatedly by mass revolutionary uprisings. However, the lack of a mass party of the working class and poor means that the forces that are making the revolution have so far not been able to take the power.

The Socialist Party is fighting for a party of a completely different type. We need a party that stands for the interests of the overwhelming majority: the working class.

Such a mass party would not exist only to stand in elections, but to unite the different sections of the working class - young and old, working and unemployed, black and white - in a common struggle for its collective interests.

Standing in elections is one important aspect of that struggle. In England and Wales the Socialist Party helped to found the Trade Unionist and Socialist Coalition (TUSC) which provides a banner under which different workers, anti-cuts, anti-bedroom tax, 'save our services' campaigns and youth organisations can stand in elections on a clear socialist platform.

TUSC also involves the RMT (the rail and transport workers' union) led by Bob Crow, and leading trade unionists from the civil servants' union (PCS), the teachers' union (NUT), and others. We see this as a step towards building a mass party of the working class.

A few examples of socialist policies

Construction electricians protest at Kings Cross Project against de-skilliing and attacks on wages, terms and conditions, photo Paul Mattsson

Construction electricians protest at Kings Cross Project against de-skilliing and attacks on wages, terms and conditions, photo Paul Mattsson   (Click to enlarge)

Unemployment and the working week

As unemployment and underemployment increase, Britain's full-time workers still have one of the longest average working weeks in the European Union.

More than four million workers officially work more than 48 hours a week (and many more do so in reality) in order to make ends meet. At the same time workers are being told that they have to retire later and later.

This is the lunacy of capitalism - millions thrown on the scrapheap while others work their fingers to the bone.

By introducing a 35-hour week with no loss of pay - in other words sharing out the work - it would be possible to dramatically decrease the number of unemployed while simultaneously improving the quality of life of working class people.

If this was combined with, not only an immediate halt in cuts to public services, but a massive increase in them, it would be possible to eliminate unemployment.

This would allow us to develop a vastly improved health service, education system and childcare.


There are five million people, two million households, who are desperate for social housing. The pipe dream propagated by Thatcher of a 'home owning democracy' lies in ruins.

The average house deposit is now 27,500 (and twice that in London) whereas the median wage is only 26,500.

More and more people are being forced into the private rented sector which is almost always expensive and insecure, and often substandard.

As the benefit cuts and bedroom tax bite, increasing numbers of people are facing homelessness - turfed onto the street because they cannot afford to pay their rent.

A socialist government would immediately institute a mass programme of building of high-quality, affordable council houses.

In the past even Tory governments, under mass pressure from the working class, supported a mass house-building programme. From 1949-54 an average of 230,000 council houses were built each year.

There are more than 150,000 skilled unemployed building workers in London alone. A house-building programme would provide work for building workers, but would also immediately halve or more the amount of money spent on housing benefit, which is currently handed to the private landlords.

Of course, a socialist government would have to take the protection of the environment into account when building housing.

At the moment the big construction companies build purely for profit with little concern for the environment, the standard, or affordability of the housing.

A mass house-building programme would mean careful planning to ensure the protection of green spaces.

In many cases, it would be possible to build on fully decontaminated brownfield sites. Moreover, pleasant and safe homes for all form a crucial part of a decent environment.

Manufacturing jobs

In a world of crisis, there is a particular crisis of British capitalism, which is paying the price for its refusal to invest in industry over decades.

Despite the CBI calling for the government to find ways to increase investment in manufacturing, there is no prospect of rebuilding Britain's feeble manufacturing base.

On the contrary, manufacturing shrank by 2.1% in the first three quarters of 2012 and exports continue to decline. At the end of last year industrial output reached its lowest level since 1992.

Both Tory and Labour governments have done nothing but stand aside and wring their hands as factories and steel plants have closed or had their workforces cut to the bone.

In the past, even Tory governments intervened in the economy occasionally. Tory Prime Minister Ted Heath, for example, nationalised Rolls Royce in the early 1970s.

Clearly, the Tories were acting in the interests of big business, propping up industries before selling them back to the fat cats at rock bottom prices, similar to the way the banks have been propped up by government money today. However, manufacturing industry, by contrast, is allowed to go to the wall.

Hundreds of millions of pounds of public money are being spent picking up the pieces in Dagenham, Birmingham, Yorkshire, Scotland and Wales and all the other places where factories have closed or jobs have been slashed.

The cost comes from the loss of tax and National Insurance income, the increase in benefit claimants, and the unquantifiable social costs such as the extra strain on the health and welfare system.

Rather than spend that money dealing with the aftermath of cuts and closure, it would be far better to invest it in keeping the industry concerned alive and, if necessary, developing new, more socially useful production.

For example, there is no need for all car plants to continue with their current production. Workers should be asked what the best use of their skills would be.

Options might include environmentally friendly cars, buses or trams or the development of green technologies.

In the mid-1970s, workers at Lucas Aerospace, the weapons manufacturer, produced an alternative plan of production.

They worked out that their production lines could easily be altered to produce kidney machines, electronic wheelchairs and a number of other products far more useful to humanity than weaponry.

But such huge public investment should not be yet another subsidy to private companies' profits. Government intervention and public investment should be matched by public ownership and control.

It would then be possible for workers in individual plants, together with representatives of workers throughout industry, to draw up a new plan of production to better meet the needs of the whole of society.

Join us!

If you agree with these ideas, then join the fight for socialism - join the Socialist Party.

The struggle for socialism needs your talents and abilities. The Socialist Party is at the forefront of every struggle against austerity - from the campaign against the bedroom tax to the struggle to save the NHS. We also fight for improvements for the working class under capitalism.

We also recognise that capitalism will never accept permanent or lasting reforms that significantly improve the living conditions of the working class.

The battle against austerity therefore has to be linked to the socialist transformation of society.

Our struggle does not stop at the shores of Britain. Capitalism is an international economic system. Multinational companies exploit the entire world in pursuit of profit.

The struggle for socialism is an international struggle. That is why the Socialist Party is affiliated to the Committee for a Workers' International, which fights for socialism worldwide.

The Case for Socialism - Why you should join

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In The Socialist 22 January 2014:

Socialist Party news and analysis

Real living wage now

Capitalism is a system in crisis

Pay me - I'm a banker!

What exactly is the point of Labour?

Stop the NHS sell-off

Bedroom tax loophole: Can legal tactics be effective?

Fracking - profiting from environmental destruction

Them & Us

International socialist news and analysis

Egypt referendum: no enthusiasm for new constitution

"Ireland is a success story" rhetoric is based on spin


Stop the student debt spiral - day of action 6 February

Youth Fight for Jobs campaign in Croydon

An open letter to Tristram Hunt

Socialist Party workplace news

Transport workers have power to defeat cuts

Teachers need a date for national action

Teachers strike against threatened redundancies

NUT strikes against management "observations"

More action needed to defend Probation Service

Publicity alone can't save sacked union branch official

Workplace news in brief

Socialist Party reports and campaigns

Lincoln marches against racism and fascism

Protest against Atos 'assessments' on 19 February

Salford workers and environmentalists challenge council

Stop cuts in Kent

Carlisle petition

Readers' comments and reviews

Benefits Street: A caricature of poverty

Leeds' forgotten dispute: The 1913-14 Corporation Strike

Robert Burns, insurrectionary poet


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