Socialist Studies Socialist Studies

Can Capitalism ever change?

Can capitalism ever change? The answer is yes and no.

In one fundamental way capitalism cannot change. Capitalism cannot be anything but a class divided society in which a capitalist class minority in society exploits a working class majority. Workers produce more social wealth than they receive in wages and salaries. And the capitalist class live off the unearned income of rent, interest and profit.

Can the capitalist stop making money and accumulating capital? Can capitalism be changed to serve the needs of all society? Or are profit-making, class exploitation and destroying competitors so inherent and intrinsic to capitalism that to all intents and purposes capitalism and the profit system cannot change?

As per usual, the great and the not-so-good of world capitalism assembled in January this year for their yearly exclusive, invitation-only gathering at the luxury ski resort at Davos in Switzerland. Representatives of the capitalist class are worried by capitalism and the direction it is taking, both in terms of inequality and environmental degradation. But above all the need to seem to do something - anything - about climate change.

At Davos "Stakeholder capitalism" is the new buzz word. The idea of "stakeholder capitalism" is that commodity production and distribution changes capitalism from being primarily profit driven to become something inclusive of all society.

A believer that capitalism can fundamentally change is Professor Schwab, head of the World Economic Forum. In his address at Davos, he said:

"Generally speaking, we have three models to choose from. The first is "shareholder capitalism," embraced by most Western corporations, which holds that a corporation's primary goal should be to maximize its profits. The second model is "state capitalism," which entrusts the government with setting the direction of the economy, and has risen to prominence in many emerging markets, not least China. But, compared to these two options, the third has the most to recommend it. "Stakeholder capitalism," a model I first proposed a half-century ago, positions private corporations as trustees of society and is clearly the best response to today's social and environmental challenges." Davos"
https://www.thenational.ae/world/world-economic-forum-2019-davos-chief-klaus-schwab-sends-environmental-warning-in-opening-address-1.816483

Socialists would agree that "shareholder" capitalism and state capitalism have failed to meet the needs of all society. However "stakeholder" capitalism is a non-starter. Capitalism has to be about making profit and exploiting the working class, otherwise it is not capitalism. Professor Schwab is a utopian thinker erroneously believing that changing words can change reality.

It was Marx who got capitalism right. He wrote of the capitalist's need to maximise profits and increasing control over workers. In Marx's words:

"To accumulate, is to conquer the world of social wealth, to increase the mass of human beings exploited by him, and thus to extend both the direct and the indirect sway of the capitalist" (CAPITAL, Volume 1, Ch. XXIV, p. 592)

And Marx went on to conclude:

"Accumulate, accumulate! That is Moses and the prophets!...Accumulation for accumulation.s sake, production for production's sake" (CAPITAL, volume 1, Ch. XXIV, p. 595).

Marx showed that workers not only produce value that cover their wages and salaries but a surplus value. Labour is exploited in capitalism because the worker is paid the value of his or her labour-power and the employer gets the use value of this peculiar commodity. It is the exploitation of labour power in generating a surplus value which is the basis of capitalist profits. Under capitalism, workers can never be "stake-holders" only an exploited class.

The capitalist system drives the capitalist to make profit, accumulate capital and expand capital. Competition forces the capitalist to accumulate to survive. The law that governs life in a capitalist jungle is the law of "survival of the fittest". Profit-seeking and wage exploitation is not from choice but the result of the logic of the system. To not behave like a ruthless profit-seeking capitalist is to die.

What Professor Schwab ignores is the possibility of a fourth "model" and that is replacing capitalism in all its forms with a new social system based upon the common ownership and democratic control of the means of production and distribution by all of society. This would be a truly all-inclusive society. Socialism would mean production for use, not profit, and so would be able to resolves the pressing problems caused by the profit system, from hunger, ill-health and homelessness, to crime war, climate change and environmental problems.

But as capitalism, like the proverbial Leopard, cannot change its spots, it will always be profit-driven, a system run in the interest of the investors, the capitalist class. However, capitalism can be changed in a revolutionary way. Capitalism can be replaced by socialism. And this involves the world's working class taking democratic and political action within a principled class'conscious socialist political movement: not to rely any longer on reforms and other quack cures for capitalism’s ills, but to tackle the task that confronts us all, to put an end to a system of class exploitation, by democratic class political action. Only by ending this class system can we build a world where all are equally able to thrive, and the natural world protected. That is something you will not be found being discussed at Davos.

Back to top

Socialist Studies

email: enquiries@socialiststudies.org.uk | www.socialiststudies.org.uk