The Case for Socialism (2009)
The Case for Socialism (2009)
Marx was right
The current crisis is not just caused by the greed of the City financiers or even the domination of finance capitalism.
The deeper root cause is the very nature of capitalism itself. Brown's claim to have "abolished boom and bust" must now be deeply embarrassing to him. It is a sign of his total incomprehension of the system he lauds, that he was ever foolish enough to say it.
Karl Marx described the fundamental flaws of capitalism over 150 years ago. These include the antagonism between the social, collective nature of production, on the one hand, and private ownership of the means of production by a tiny handful of billionaires; and the antagonism between the world market and the limitations of the nation state.
Capitalism is based on production for profit and not for social need. Crucially, Marx explained that the working class can never buy back the full product of its labour, because workers' wages represent only a portion of what they produce.
That part of the product which goes to cover the workers' own subsistence is called the 'necessary product'.
What the worker produces over and above that is called the 'surplus product', which the capitalists expropriate. The momentum of capitalism is maintained by ploughing part of the surplus product back into production. But profits come from this surplus product, the unpaid labour of the working class.
When profits increase and are invested in new capital equipment, at a certain stage this must be used to produce more consumer goods.
Yet workers do not receive enough wages to buy back these 'consumer goods'. This leads to economic crisis. Over recent decades capitalism attempted to overcome this problem by injecting credit into the economy in order to prolong the boom beyond its 'natural' limit.
Millions of us have managed to buy consumer goods on plastic, or by re-mortgaging our homes.
This, however, has now turned into its opposite. The credit crunch has bitten and reality is being revealed - that the working class is even less able to buy back the goods it produces as a result of the neo-liberal era.
Capitalism in the last period has made unprecedented profits by driving down the 'necessary' product - wages - thereby increasing the 'surplus' product - profit.
Factories have been moved abroad in order to take advantage of cheaper labour. Super-exploited migrant labour has been used as a means to hold down wages in those service sector jobs that cannot be moved abroad.
The health service, welfare benefits, pensions and all the other elements of the 'social wage' have been ruthlessly privatised and cut back.
The result is that in the US, for example, wages are now the lowest share of gross domestic product (GDP) than at any time since 1947, while profits were, until the recent crisis, at an all time high.
A similar situation exists in Britain. Despite making the highest rates of profit in history during the recent boom, the parasitic nature of twenty-first century capitalism is revealed by the fact that it has not been ploughing that surplus into production.
Greater profits have been available to the capitalists through gambling on the world's stock markets than by investing in producing commodities. And for capitalism the only rule is, 'do what makes a profit'.
As the recession bit factories were closed and workplaces put on short time because the goods that they produce cannot be sold in sufficient quantities - at least not at a profit.
This is a 'classical' crisis of overproduction, as described by Marx. What a condemnation of capitalism that it is not able to fully utilise the science and technique it has brought into being because it is not profitable to do so.
Billions of people still lack the basic necessities of life but, because they lack the funds to purchase them, capitalism has no interest in providing them.
The current recession will not continue indefinitely. At a certain point sufficient capital will have been destroyed that those companies that survive will begin to make profits again.
Until that time no amount of government bailouts will make the capitalists increase investment.
Where is the bailout for the rest of us?
For millions of working class people, however, the urgent question is: where is the bailout for us? For thirty years governments have told us that the only option is privatisation of public services, and that it is sacrilegious to dare to suggest that the state might intervene to save jobs by, for example, nationalising car plants threatened with closure.
Today that no longer washes. We will see more and more workers demanding that nationalisation takes place in their interests, rather than the interests of the capitalists, and increasingly vocal support for socialist demands.
When the Vestas wind turbine factory on the Isle of Wight was facing closure the reaction of the workers was to occupy it, and demand that it was nationalised.
This demand received huge support, particularly given the desperate need for skilled jobs on the Isle of Wight and the clearly socially-useful character of a wind turbine factory.
However, the government did not nationalise, not least because it was terrified that this would lead to a snowballing of the demand for genuine socialist nationalisation.
After all, why shouldn't the nationalised banks be run in the interests of the population, rather than those of the financiers? Since Northern Rock was nationalised it has continued to repossess more quickly than any other mortgage lender! The government has made promises to help those facing repossession.
However, they have done nothing more than appeal to the better nature of the bankers not to evict until other options have been explored.
When Dai Davies, Blaenau Gwent People's Voice MP, asked whether the government had considering letting out repossessed homes as affordable, social housing for those in need, he was told firmly: "Northern Rock and Bradford & Bingley are run at arm's length from the government, on commercial principles."
As long as the decisions are left in the hands of the bankers, they will be taken on 'commercial principles' and repossessions will continue to rocket.
Yet, why is it for the bankers to decide at all? The government has used taxpayers' money to buy up 60% of the Royal Bank of Scotland (RBS), but has left the bankers in charge.
If the government chose to it could make sure that not a single person is thrown out onto the paving stones because they cannot afford to pay their RBS (or Northern Rock or Bradford & Bingley) mortgage.
Homebuyers who cannot meet their mortgage repayments should have the right to rent the property at an affordable, social rent.
The banks should provide cheap mortgages for personal homebuyers (with a ceiling to exclude luxury houses for the wealthy).
They should also provide cheap credit to small businesses serving the needs of local communities. However, these modest demands will not be achieved via New Labour's 'nationalisation lite', which are in reality state capitalist measures.
Alistair Darling has even said he is powerless to limit top bankers' pay, even in the nationalised banks! Now, under huge pressure and desperate to get re-elected, Darling and Brown have both attacked excessive bankers' pay, but New Labour, or the Tories, will do no more than trim the worst excesses of the bankers.
The trade unions and organisations of the working class should demand nationalisation of all the financial institutions, with compensation paid only to small shareholders and depositors on the basis of proven need.
This should be just a first step to the unification of all the banks into one democratically controlled system.
The labour movement should demand majority representation at all levels of these banks, drawn from workers including from the unions in the banking industry and the wider working class and labour movement, with the government also represented.
There should be a complete opening of the books and a rejection of 'business secrets', which the bosses say should be kept hidden to maintain 'competition', so as 'not to frighten the market'.
A cold winter
Nor are workers' demands limiting themselves to the finance sector. Rising prices mean that millions of people struggle to find the money to heat their homes. Meanwhile, BP made record profits, £6.4 billion from July to September 2008, up 148% from a year earlier.
Yet New Labour has refused to even implement a windfall tax on the energy and oil companies, never mind nationalise them.
We demand that they are immediately renationalised, alongside transport and other privatised services, under workers' control and management.
Similar demands will also be increasingly raised in manufacturing plants that are threatened with cutbacks or closures.
In 2008 JCB workers voted to accept a £50 a week pay cut rather than see jobs go. Disgracefully, the only option on the union ballot paper was to lose pay or see 500 redundancies. As we predicted, despite voting for the pay cut redundancies still took place. Why should workers have to choose between "death by hanging or the firing squad", as one JCB worker put it, especially when they actually ended up with both?
As a starting point the unions should demand that JCB and other companies making cuts open their books to the workforce for scrutiny.
Where have all the profits gone for the last ten years or more? The unions should also demand that, instead of cutting jobs, hours and pay, the work should be shared out without loss of pay for any worker.
If these companies argue that 'normal' production is impossible in the current economic crisis then an alternative plan of production could be drawn up in these threatened plants.
In car plants, for example, this could be linked to developing improved, and more environmentally-friendly, means of public transport.
The Visteon car component workers, who were laid off with six minutes notice and forced to occupy their plants before they could even get paid redundancy, pointed out a whole number of ways in which their plants could easily be retooled.
The Enfield plant, for example, could have made 'wheelie bins' currently in short supply.
Where the capitalists refuse to provide the necessary investment to keep the plants open we should demand that the government steps up and nationalises them, with compensation only on the basis of proven need, and places them under workers' control and management.
Unfortunately, the majority of the trade union leaders have accepted the 'realities of the market' over the last decade.
They are entering this new period completely unprepared for the determined struggles that will be necessary to defend workers from the onslaught we are facing.
It is down to rank and file trade unionists to develop a fighting strategy to defend jobs.
Big business consistently tries to play off workers in one country against workers in another. But we have more in common with each other, regardless of nationality, than we do with big business.
The capitalists are attempting to come together on an international basis to defend their system. The working class must do the same to defend our interests.
What we think
In the Socialist Party we link the immediate demands such as those listed above to the need for a socialist transformation of society.
While we would welcome the nationalisation of individual companies they would still operate within the framework of capitalism.
As long as this profit-hungry capitalist system exists, we will always face a constant struggle to defend our living conditions.
Under mass pressure the capitalist class can be forced to grant significant concessions to the working class, but it will always attempt to recoup them when it gets the chance.
That is one reason why we argue for the nationalisation of the major corporations that dominate the economy - around 150 - with compensation paid on the basis of proven need only, and under workers' control and management - as a basis for developing a democratic, socialist plan of production.
A socialist plan of production is also the only means by which it will be possible to save and restore our environment.
Capitalism is incapable of putting the long-term interests of the planet, and therefore humanity, before its own immediate profits.
Of course, a genuine socialist government would not be interested in nationalising every corner shop.
In fact, because a socialist government would nationalise the banks it would be possible for small businesses to receive cheap credit which they are currently denied.
Nor would it, as opponents of socialism claim, stand for the taking away of personal 'private property' including houses, cars and so on.
But how many people under capitalism are without a secure home? A socialist government would make providing the necessities of life for everyone, including a decent home, its top priority.
The political representatives of capitalism are on the defensive. Socialist ideas are resurging. With their backs to the wall the spokespeople of capitalism are reduced to trying to frighten workers by raising the spectre of the former Soviet Union.
The Socialist Party completely opposed Stalinism, which was based on a one-party dictatorial regime.
Nonetheless, we defended the planned economy. Despite the bureaucratic top-down way in which the planned economy was run in the Stalinist countries, the reintroduction of capitalism after 1989 led to an appalling fall in the living standards of the working class.
In the former Soviet Union, for example, average male life expectancy fell by a decade. A genuine socialist government would extend and deepen democracy enormously. This would be much more far-reaching than the current situation, where the major companies that dominate all our lives are owned by a tiny, unaccountable handful of people, and we only get to vote every few years for MPs who do whatever they like once elected.
Instead, at every level, in the workplace, locally and nationally, elected representatives would be accountable and subject to instant recall and would also only receive a worker's wage, unlike today's privileged and cheating MPs.
At the same time it would create genuine 'freedom of the press'. Is it democratic for the press in this country to be controlled by a tiny number of billionaires? We propose the nationalisation of all major printing press facilities, TV and radio under democratic workers' control and management.
All political parties and trends would then be granted access to the press in proportion to their support in the population as shown in elections.
In other words a socialist government would give far greater press freedom to New Labour and the Tories than socialists and the trade unions currently receive.