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Socialist Party of Great Britain - Camden and North West London Branches SPGB Lectures - Is Capitalism Getting “Better and Better” or “Worse and Worse”?.

“It Can Only Get Worse” Theory of Capitalism

We often hear from some environmentalists that climate change will cause capitalism to collapse. This was the implication of a headline in the INDEPENDENT (12th July 2009) following the publication of the UN sponsored STATE OF THE FUTURE report by Jerome C. Glenn, Theodore J. Gordon, and Elizabeth Florescu. The authors claimed that if there were no immediate trans-governmental action on capitalism’s effect on the environment then there was not much time left before the lights went out.

The headline over the Independent article introducing a review of the report said “The Planet’s Future: Climate Change ‘Will Cause Civilisation to Collapse’”. What was to happen after the collapse of “civilisation” we were not told. And surely the death and destruction associated today with capitalism discounts if from being considered a “civilised” society. Can a social system be labelled “civilised” when it is shot through with war, poverty, unemployment and class exploitation? Rather than reduce their nuclear weapons both the US and Russia continue to modernise them (BBC NEWS 26th September 2013).

Four years later, THE INDEPENDENT told its readers that we were only “Halfway to catastrophe…” (20th September 2013). And to pursue their “end of the world” agenda the newspaper misrepresented scientists, like the climate change expert, Professor Myles Allen of Oxford University, to support their headline banner. However, Professor Allen did not say we were all on the way to imminent environmental destruction but that there was more to be learnt about the effects of global emissions of Co2. And he concluded that, as a scientist, he dealt in “probabilities rather than certainties’”. His caution was totally lost on the INDEPENDENT and the alarmist certainties of those who subsequently wrote in their “we’re all doomed” letters to the newspaper over the following days.

What of the environmentalists themselves? Writing in the INDEPENDENT (25th September 2013) the environmental advisor (to whom?) and activist , Tony Juniper, attacks the business interests located around major capitalist governments who do not want environmental regulations but says nothing of the business interests of those who will benefit from the “low carbon industrial revolution” of the green capitalism he advocates. If a “low carbon industrial revolution” is necessary to benefit all of society then what first is needed is a Socialist revolution; an environmental and green production and distribution can only take place within the framework of common ownership and democratic control by all of society. Juniper, like all single issue groups, believes that a reasonable case for their particular issue will be adopted by enlightened politicians serving the interests of everyone. However, capitalist politicians do not serve the interests of everyone. They are economically and politically partisan, while the profit motive is paramount.

That climate change exists is not in scientific dispute. Those who do oppose climate change are, in the main, not scientists at all, but a mixture of free market economists working in economic think tanks bankrolled by wealthy benefactors who do not want to pay the environmental taxes be bound by further regulation. Then there is the strange group of conservative journalists such as Christopher Monkton, James Delingpole, Richard Littlejohn, Dominic Lawson, Christopher Booker and the leading intellectual from David Cameron’s Chipping Norton set, Jeremy Clarkson. These climate change deniers fear that if climate change is somehow true it undermines popular faith in capitalism as a “social good”.

Such fears have been expressed in almost hysterical fashion on the internet. Lew Rockwell an “anarcho-capitalist” believes that Climate Change is “The International Communist Conspiracy of the 21st Century”. These irrational fears are expressed on an almost daily basis on his internet blog. For the politically uninitiated, Lew Rockwell is CEO and chairman of the Ludwig von Mises web site, whose evangelical mission is to “prove” Marx’s theory of value to be irredeemably flawed and Socialism to be both logically and practically impossible. To sample his crazed fiction about Climate-Change being a “communist conspiracy”, Rockwell can be read on Such is the intellectual weightlessness of the climate change deniers.

Even though global Climate change is a fact, it does not follow that if the amount of carbon burnt since the industrial revolution exceeds one trillion tonnes then capitalism will collapse in 2040, as the INDEPENDENT article claims it will do if no inter-government action takes place. Science fiction writers have long explored future worlds where capitalism still continues in an environmentally damaged planet. In the recent film ELYSIUM, set in 2054, a ruling class lives out their lives in privileged luxury on board an orbiting space station while the poor live and work on a polluted and devastated Earth below. Dystopias apart, the INDEPENDENT does not want Socialism established but instead subscribes to a highly regulated Green capitalism in which poorer countries in the world, who are affected by global warming, will be protected from the detrimental actions of other countries. Capitalism is not a benign charity but competitively ruthless.

There are, of course, vested economic interests in the movement for a Green capitalism particular those constructing wind farms and non-carbon producing energy systems. However, there are also economic winners already exploiting the consequences of global climate change. Russia, for example, is using the melting of the North Pole to its advantage both in terms of opening up the region for the exploration of a potential supply of raw resources as well as for providing quicker access for the shipping of its commodities to world markets. Putin will not lose much sleep over the vanishing Polar Bears if there are economic and military advantages of a melting polar ice cap. And developing countries like China and India will carry on pumping Co2 into the atmosphere because it is in their interests to out-compete other capitalist countries on the world market.

Our late comrade Hardy used to refer to the environmentalists, along with the neo-Malthusians and the anti-nuclear war group, CND, as “the worse and worse” School of capitalism. He also added two more political pessimists to this group. There were those, he said, who believed that the pay and working conditions of the working class would, historically, get worse and worse. And there were those who thought that capitalism would eventually grind to a halt as capitalists found that they could no longer find markets for their commodities.

In order to gain attention from the politicians, this pessimistic School states that something has to be “done now” otherwise the world would end in either an environmental Armageddon or with population outstripping food supply or in a nuclear holocaust. And that “something now”, proposed by these political Jeremiahs, is never the establishment of Socialism but the enactment of the social reforms favoured by one or another of these groups. These harbingers of doom do not want to abolish capitalism but to save it.

The cry of the political jeremiahs that “we’re all doomed” if immediate further climate change legislation is not enacted or that enforced sterilisation, eugenic programmes and withdrawing food from the poor with large families in Africa must be immediately carried out to stem the rise in global population or that nuclear weapons must be taken out of commission to avert human oblivion, should come with a political health warning. The propaganda mirrors the alarmism of the capitalist Left during the depression of the 1930’s.

During the Great Depression members of the Communist Party and others claimed capitalism was going to collapse due “to the weight of its own contradictions”. They favoured either a regulated capitalism along the lines proposed by Keynes in his GENERAL THEORY (1936) or a version of a State capitalist dictatorship found at the time in Stalin’s Russia. However, those who believed capitalism was going to collapse either had misread Marx’s writings on the tendency of the rate of profit to fall (see CAPITAL VOL. 3 ch. XIII to XV) or erroneously subscribed to the many theories of underconsumption doing the rounds at the time which said that markets would get smaller and smaller and the unemployed would get bigger and bigger in size year by every year.

Both collapse theories of capitalism went against Marx’s observation that capitalism has a trade cycle which passes from a boom to an economic crisis, to a trade depression and then onto an up-turn. In reality markets increase in an anarchic way; some disappear and new markets are created while the unemployment level generally follows the trade cycle with the industrial army of the unemployed, as Marx put it, rising in a depression and falling in an economic boom.

This did not stop the capitalist Left in the 1930’s stating that capitalism was on the brink of collapse. Take, as an example, Goldsworthy Lowes Dickinson, one of Keynes’s colleagues at Kings College Cambridge, a member of the Bloomsbury Group and proponent of the establishment of League of Nations as a bulwark against war.

In one of his last entries before his death in 1932, Dickinson observed that everyone was waiting for the economic crisis to develop into “universal anarchy and war” because “The capitalistic order has broken down [so] completely and hopelessly…” (Richard Overy: THE MORBID AGE, BRITAIN AND THE CRISIS OF CIVILIZATION 1919-1939, The Death of Capitalism, ch. 2, 2009, p. 69). Had Nicholson lived long enough, he might have read, “WHY CAPITALISM WILL NOT COLLAPSE” (1932) published by The Socialist Party of Great Britain. The SPGB showed, on a sound reading of Marx, that capitalism would not collapse but merely pass from one economic crisis to the next.

Why the belief in the collapse of capitalism? One reason was the hope that when capitalism was on the verge of collapse the millions and millions of unemployed workers would somehow be more amenable towards Socialism. It was said that the existence of millions of unemployed would lead a questioning of commodity production and exchange for profit. This was false.

The Social Democratic Federation tried to gain support from the 19th century unemployed with calls for “A Right to Work” but it came to nothing. One demonstration, by the unemployed in 1887, now known as Bloody Sunday, led to a riot. Engels reported that the rioters sang out “God Save the Queen” as they carried their spoils on their way back to the East End of London. Engels severely criticised Hyndman, the leader of the SDF, for encouraging unemployed workers to take part in riots that he hoped would lead to revolution

In the Great depression of the 1930’s and again during the trade depressions of the 1980’s and 1990’s, when unemployment was over three million, there was no revolt by the unemployed. And there was no appreciable rise in Socialist consciousness. Capitalism survived the depression of the 1930’s and most non-socialist workers went on to support the subsequent war with Germany in 1939.

Today, the capitalist class has largely bought-off the unemployed costing them some £1 trillion in social security benefits since 2000 (MAIL ON SUNDAY 22nd 2013). When there is high unemployment or in areas of the country where one generation of unemployed follows another into unemployment, the capitalist class is not faced with potential Socialist revolutionaries. Instead the unemployed live off the dole, unpleasant at is it; some forced into crime, casual violence and drug abuse, but not a threat to capitalism. Sadly, some of the unemployed blame foreign workers for their plight and are themselves blamed by other workers for being “scroungers” or “shirkers” as George Osbourne has vindictively put it when playing to the gallery at Tory Party conferences.

Of course capitalism despoils the planet, causes pollution, poverty and war. However, the answer is not poor and alarmist propaganda but to patiently explain to the working class that capitalism can never work in the interest of all society. You cannot frighten the working class into becoming Socialists. Sober senses and reasoned argument is required to persuade workers that to end pollution, waste, poverty, unemployment and war requires establishing Socialism in which democratic decisions can take place within the framework of the common ownership of the means of production and distribution by all of society. And this requires the conscious and political action of a Socialist majority within a Socialist Party with Socialism and only Socialism as its aim.

“It can only get better” School of Capitalism

Opposed to the “worse and worse” school of capitalism is the “better and better” school of capitalism. “Things can only get better” was a pop song by Howard Jones and associated with the Labour Party celebrations after winning the General Election in May 1997. Things only got better for Mr Blair and his cronies when, on leaving office, a fast-running stream of money flowed into their bank accounts making them exceedingly rich. Blair may have made his millions but he gave the working class three wars in which to kill and be killed in.

Capitalism can only get better” is the politics of the Conservative, Liberal Democrat and Labour Parties. Mr Cameron says “Vote for us” and we will create a wealthy country with sustained economic growth benefiting everyone. And Ed Miliband says something similar to the electorate when he says that he will deliver a “fairer society”. They tell the working class that there will “be no more boom and bust”, “there will be increasing prosperity for everyone” and capitalism can become a “fair and equitable society”.

In particular, the Conservatives offer the working class a “property owning democracy”, and a “popular capitalism”. The Liberal Democrats say they can give everyone “a fair society” by making all workers have shares in the company they work for based on the model of co-operatives and the John Lewis Partnership while the labour Party offers “hard working people” – never working class -a vision of a “One Nation” capitalism based on “social justice” and the “discipline of the market”.

However, after over a hundred years, the many social problems the main capitalist parties propose to solve and make Socialism unnecessary are still there. Class exploitation, trade depressions, poverty, a housing crisis, social alienation, stress and unpredictability caused by employment as well as high levels of unemployment, all still exist and do not appear any nearer being solved than then they did in 1900, 1950 or 2000.

There is even one social problem that has got worse; war. At the establishment of the Labour Party, its leaders, like Keir Hardie, said that would get rid of armaments and war. Throughout the entire 20th century Labour governments not only signed armament contracts and supported the war industry by selling guns and planes to other countries and signing arms contracts with dictators, mass murders and torturers, but also took part in two major world wars and dozens of smaller ones. During the centenary of it birth, in 2006, the Labour government was engaged in wars in Iraq and Afghanistan.

Capitalism can never give permanent peace because no capitalist country, in intense competition with other capitalist countries over raw resources, trade routes and strategic spheres of influence, will ever give up their weapons. What they are saying, instead, is that they want to have armed forces more cheaply. Permanent peace was supposed to be the dividend at the end of the cold war. This idealism is not new.

In 1899 the Tsar’s army was very large and found to be too expensive. The cost of the Russian army at the time equalled the combined cost of the armies of France and Germany. So the Tsar organised a peace conference at The Hague for countries to agree to cut the cost of armaments and to reduce the size of their respective armies. Twenty eight countries attended the conference and passed a series of pious resolutions. Fifteen years later the First World War began, costing the capitalist class billions of pounds in lost profit and setting in motion a train of events leading to the end of the Tsar as well as the Austo-Hungarian Empire. These events also led to the dictatorships in Russia under Lenin and in Germany under Hitler and eventually another World War in 1939.

Since 1899 there have been countless wars and the cost of military expenditure has gone on rising to a rate many times more than it was at the end of the 19th century. And the cost to the capitalist class for World War II alone was 1 trillion dollars with some 54 million deaths –dead workers who would have normally been used to generate surplus value (Wikipedia 2013).Such is the contradictions to be found in capitalism.

There is just one area where there has been an improvement for the working class in Britain and that is over the question of inequality. Workers often hear from politicians that workers today are better off than their great grandparents living in the 19th century. Even though they are right to make this statement it is something no government, Labour, Liberal or Tory can take credit for.

The degree of inequality was greater in Marx’s Day. Marx gave figures in 1865 showing that the poorest 80 percent of the population received just 33 per cent of national income. In 1905, Sir Leo Chiozza Money published his RICHES AND POVERTY in which he said that the poorest 80 percent got 47% of the national income and these figures were used by the Socialist Party of Great Britain at the time. In 1976 the Royal Commission on Wealth and Income published a report which said that in 1974 the poorest 80 per cent of the population had got some 57% of national income.

The upward trend from 1865 to 1974 was wholly due to the effectiveness of the trade unions not the policies of capitalist governments. From the late 19th century there had been a greater efficiency of trade union action with the formation of the New Unions in the late 1880’s. Between 1888 and 1918 trade unions grew at a faster rate than at any other time in their history. Membership figures stood at roughly 750,000 at the beginning of the period, rising to six and a half million in 1918. They were able to gain higher wages and a greater proportion of the national income.

Of course that trend in income distribution has not continued. Nor could it; capitalist companies are in business to make a profit, so wages can never go up beyond a certain point where it is then unprofitable for capitalists to produce commodities and sell them at a profit. The class struggle is also a two-way process and since the 1980’s there has been a sustained attack against trade unions, particularly from free market institutes informing government policy and legislation. When the Labour Party came to power in 1997 they retained the previous Tory government’s anti-trade union legislation.

Several closely spaced economic trade depressions in the 1980’s and 1990’s severely affected the number of trade unionists and the effectiveness of trade unions. The current trade depression has seen a cut in the earnings of the working class as a whole particularly in terms of real wages where wages of 1 to 2 percent have not kept up with inflation. In a recent report by the High Pay Centre, figures were given indicating that Britain has returned to levels of income inequality last seen in the 1930s, with the share of the national income going to the top 1 per cent more than doubling since 1979, to 14.5 per cent (INDEPENDENT 3rd March 2013).

There is, in some quarters, a tendency to belittle trade unions as being wholly ineffectual in the class struggle but it remain a credit to trade unions that they were able to increase wages and working conditions at the expense of profit for so long. Yet, the Trade Unions did not heed the sage advice given to them by Karl Marx as far back as the middle of the 19th century.

In owning the means of production and distribution and enjoying the support and protection of capitalist politicians and the government, the employers politically have the class struggle in their favour. Marx said that workers and trade unions only dealt with the effects of the class struggle and were therefore limited in what they could and could not do, particularly in trade depressions or against governments determined to break a strike and prepared to use force. Marx said that workers had no choice but to recognise the position they were in under capitalism and the economic and political forces directed against them and instead “abolish the wages system” (VALUE, PRICE AND PROFIT).

As for governments, did they welcome this trend in equality of national income from the late 19th century to the mid 1970’s? Every week politicians, whether Labour or Tory, would be seen on television, on the radio or in the newspapers complaining that that wages were increasing faster than prices. All political parties claim they are sympathetic with trade unions but in practice none are and that particularly is so of the Labour Party who has, on several occasions, tried to impose on the working class a pay and incomes policy restraining wage and salary increases.

The last time a Labour government tried such a policy was under the Callaghan government. Over one million workers went on strike during 1978 and 1979 in what was known as “the winter of discontent”. Past Labour governments have also used troops against striking workers particularly after the Second World War.

Troops intervened in civilian industrial disputes at least 14 times between 1945 and 1951, with at least two interventions in each year. Seven disputes were in the docks and a further three also involved the transportation of handling of essential supplies. Of the remaining four, two were by energy workers, one by the operators of Tower Bridge and the last was at Buckingham Palace, where the Royal family was without hot water (Steve Peak, TROOPS IN STRIKES: MILITARY INTERVENTION IN INDUSTRIAL DISPUTES, 1984 p. 87) The 1945 Labour Government was not Socialist nor did they introduce Socialist policies but were ready to break strikes with equal resolve as if they were a Tory administration. Never vote for capitalist politicians and distrust what they say. Avoid political leaders particularly those with “visions”. And if you ever shake the hand of a politician always count how many fingers you have left when you leave the room.

The case for Socialism does not rest on the redistribution of social wealth within a class divided society. There can be no equality based on the private ownership of the means of production and distribution. For equality to hold there has to be “from each according to ability to each according to need”. There has to be free access to goods and services to enable people to lead decent, creative and worthwhile lives. All redistribution policies within capitalism fail precisely because capitalism is retained and commodity production and exchange takes place for profit not n meeting human need. And capitalism can only work in the interests of the minority capitalist class and it is in their interests that capitalist politicians and governments have to administer the profit system to the detriment of the majority of society.

Politicians have not been able to get rid of poverty, unemployment and war. Things can only get better for the working class when they have consciously and politically abolished capitalism and replaced the profit system with Socialism.

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