There are several misconceptions about what capitalism is. Many think capitalism is purely about the actions of bankers, hedge fund managers and financiers in the City, some focus on the workings of the stock market and others on the large corporations which dominate global buying and selling. Most people simply assume that this system or something very like it has existed from time immemorial, so it is likely to continue ad infinitum.
However, capitalism is a social system with a history. Capitalism came out of a previous social system known as feudalism, based on the Crown, Church and Lords on the one hand, and peasants and serfs on the other. Capitalists built up primitive accumulation through piracy, plunder, war, and the slave trade. And over time peasants were forced off the land into towns and cities as wage slaves while common land became enclosed for the use of private agriculture by landlords and ‘gentleman’ farmers. Feudalism was based upon class exploitation, and capitalism as a system of exploitation is no different.
Capitalism’s essential characteristic [cf. Marx - “an immense accumulation of commodities”] is that the means of production and distribution, that is minerals, land, farms, factories, transport, buildings, means of communication, technology, distribution networks, warehouses and shops, etc. are owned and controlled by a capitalist class who invest money in production to make commodities to sell for a profit and to make more money, i.e. more capital. Under capitalism production and distribution is globally integrated through world-wide trading networks; from the mining of ore to partial production and assembly and to the marketing of commodities for sale on the market for a profit.
To make more money from their investments capitalists have to employ workers for a wage or salary. The workers form a majority class in capitalism. They have only one commodity to sell to the capitalist and that is their ability to work or ‘labour power’. Workers are brought together in factories working with the capitalists’ materials and machinery to produce commodities for sale on the market. These commodities belong to the capitalist class which they sell for profit.
And in the productive process of producing commodities for sale on the market, the working class is exploited, producing more social wealth than they receive in their wages and salaries. Workers are forced to work both necessary labour time to produce the value of their wages and surplus labour time to produce surplus value from which derives the capitalists’ unearned income of rent, interest and industrial profit. Taxation to support the state comes out of the capitalist’s profit.
Profit made through exploiting the working class is the key to understanding capitalism. The exploitation of the working class is reflected in the division of capitalism into two antagonistic classes constantly struggling over the extent and intensity of class exploitation. Under the pressure of competition, capitalists both live off and are forced to re-invest part of their surplus value produced by workers. They are under constant pressure to increase productivity, the length of the working day and the intensity under which workers have to produce commodities. And workers, with or without trade unions, have to struggle for higher pay and better working conditions.
Many workers are conscious of being members of the working class by the fact of receiving wages and salaries. Others believe that they are not in the working class, mistakenly believing that having “professional qualifications” or high salaries they constitute a “middle class”. The error of this view is seen during an economic trade depression when architects, structural engineers and surveyors are made redundant along with bricklayers, carpenters and roof-tilers. Unemployment, whether it is short-term or long-term, is a mark of being members of the working class.
Not that being in employment is a bundle of laughs. A recent study by the International Labour Organization (ILO) found that a majority of the 3.3 billion people employed around the globe last year suffered a “lack of material well-being, economic security, equal opportunities or scope for human development.” (World Employment and Social Outlook, 13 February 2019). They also pointed out that world unemployment stood at 5% down from 5.1% in 2017. Also, the ILO stated that “a full 700 million people are living in extreme or moderate poverty despite having employment.”
As for the capitalist class, their immense wealth ownership sets them apart from the working class. Not only are capitalists visible at events such as Davos and parties thrown by government ministers but also in the statistics published by think tanks. According to Oxfam, eight billionaires were “as rich as the poorest half of the world” (BBC, 16 January 2017).
Capitalism then, is a class-divided society. Capitalism is made-up of a minority capitalist class owning the means of production and distribution to the exclusion of a working class majority. Both classes have diametrically opposed interests which are played out in the class struggle.
Confusions about capitalism
There are those who believe that capitalism is a free market devoid of state interference and regulation. But, based on this definition, capitalism has never existed. Capitalism is impossible without the support of the state. The state through the machinery of government protects the private or class ownership of the means of production and distribution from internal threats by the working class and other capitalists, and also from external threats from the capitalists of other countries. It would be as impossible for capitalism to survive without the state as for the tortoise to survive without its shell.
A further confusion about capitalism follows from the first. And that is because state-owned industries can and do exist within capitalism. Even the 18th-century economist Adam Smith recognised the need for the state to organise major public works, and in the 19th century the road network and Royal Mail were recognised as state responsibilities. Throughout the 20th century there were nationalised industries existing side by side with privately run industries.
There was even major nationalisation of industries and agriculture in Russia, China and other state capitalist countries. Even in states like Soviet Russia, which claimed to be ‘socialist’, commodity production still had to take place for profit through the exploitation of wage labour. In spite of the propaganda claims, the Soviet Union traded on the world market, and its industries were officially recorded as making profits.
Wherever workers are employed as wage-labour, this system results in the production of a surplus – surplus value, derived from their unpaid labour, i.e. the difference between what workers receive as wages and what they produce. Wages are calculated on the basis of how much it costs to feed and house and educate or train the workers, on the cost of living plus a bit more for raising the next generation of wage-slaves. But the value of their labour, their work, is the value of their output, normally rather more than the wages bill. This ‘surplus value’ created by the workers is the sole source of all the capitalists’ profits.
So, if you meet up with those who claim that in such ‘socialist’ states as Russia or China there was no exploitation, just remind these people of how millions of workers in Stalin’s Russia worked for wages, and how the surplus those workers produced enabled the privileged Party rulers, managers and the ‘nomenklatura’, to lead a life of luxury and privilege.
Workers who work in a nationalised undertaking are still just as much wage-slaves as their colleagues in private enterprise. At the end of the week, all of them go home with a pay-packet just about enough to keep body and soul together, to pay the rent, and get by on till the next payday. This is why it is a system bound to enrich the rich - why it makes sense for us to work for Socialism and to put an end to all class exploitation.
The Profit Motive versus Human Needs
The Profit Motive versus Human Needs
Capitalist production is motivated by the profit motive. If there is no realisation of profit there will be no production. So when business is slack and unsold goods are piling up as the market is glutted, factories are closed and workers are laid off. Furthermore capitalist production does not take place to directly meet human needs. A seller of commodities needs buyers for those commodities. He needs to sell the commodities for money to cover his costs. Not selling commodities for a profit means a loss and possible bankruptcy.
Commodities are sold on the market if there is more money to be made than the capital invested in the first place. Commodity production does not take place to satisfy the needs of consumers but by what capitalists believe can be sold. It does not matter whether workers can afford what the capitalist produces as long as the capitalist can find sufficient people in the market to buy the commodities at a profit.
Take as an example the housing market. There are tens of thousands of workers who need housing but they cannot afford the cost of the housing being sold on the market. The house builders are not interested in the fact that these workers cannot afford the housing and either rent, live with parents and friends, or even become homeless, or take to living rough on the streets.
The builders’ only concern is if there are enough people in the housing market who can buy the houses once they are built. The house builders are not morally disinterested but are forced to sell houses at a profit under pain of competition. The capitalists cannot lose their investments and become bankrupt.
Houses need to be sold at a profit despite the vast unmet human need for good quality housing. If a market in the South of England exists only for the construction and sale of £2.5 million houses with three en-suites in a gated estate, then these houses will be built despite the needs of thousands of workers being unmet.
What is the “solution” to the housing problem in London? The free market Adam Smith Institute says that workers should live in “micro-homes”. Micro-homes are defined by the British Property Federation as living spaces between 20 and 40 sq metre, that are either self-contained or share some amenities. The average size of a home in England and Wales is 90m2 (BBC NEWS 21 January 2019). So the market solution for the defenders of capitalism is to force workers into mean and cramped accommodation. Which is no solution at all.
There is no reason why sufficient decent and energy-efficient houses could not be constructed for everyone. The materials to build houses exist, so do the construction workers. The only barrier is capitalism, the housing market and the wages system. Under capitalism there is no market for decent and energy-efficient houses for everyone to live in. That is capitalism: a cynical system of production for exploitation and profit not to directly meet human needs.
Housing is just one aspect of the poverty problem facing the working class. The same problem applies to other social requirements such as food, clean water, clothing, education, travel and entertainment. In the face of a world of abundance, the consumption of the working class is restricted by the wages and salaries they receive.
Capitalism is incapable of meeting and satisfying human needs because of the anti-social pursuit of profit and capital accumulation. Capitalism can never be made to work in the interest of workers. Capitalism and the profit motive is based on the workers’ poverty and exploitation, and can only work in the interests of the capitalist class.
Questions of poverty, war and environmental degradation cannot be resolved within the profit system of capitalism. Between capitalism and socialism there are always social reformers claiming to be able to deal with the problems thrown up by capitalism without the necessity of socialist revolution. Yet social reformism is unable to promise ‘something now’; it is a futile and threadbare doctrine illustrated by the continual failure of past Labour Governments and its imitators abroad.
The cluster of social reformers around media outlets such as the GUARDIAN and the NEW STATESMAN constantly bewail the world in which we live and the impotency of the social reformer to affect any change to the problems of poverty, unemployment and inequality. However this is a failure of social reformism - not of socialism.
What sustains capitalism’s continued existence is the lack of class consciousness, awareness and democratic political action by the working class, those who are exploited by this global system. We have the power – if and when we choose – to change the world we live in.
When oh when will Capitalism End?
When Will Capitalism End?
A question often asked by political commentators is when will capitalism end. In recent years, a number of authors have put forward an alternative vision of the future. Paul Mason’s POST CAPITALISM (2015) and Nick Srnicek and Alex Williams’s INVENTING THE FUTURE (2015), for example, both argue that technological advancements will render most work in the future unnecessary. Human liberation from work, they believe, would come instead from a state-funded universal basic income.
Of course “state-funded” universal basic income is not socialism. There will be no ‘income’ in a socialist society. Socialism will be a classless, moneyless and wageless society of free men and women with production and distribution in common under democratic control by all of society. Socialism will mean free and direct access to the goods and services men and women need to live worthwhile lives and to take part in the democratic affairs of society.
In socialism universal basic income will be unnecessary. The socialist proposition also calls into question their rather utopian view of the state and what the state exists for. Why would the capitalist class allow their profits to be used by the state in the way the authors believe they should? They offer no justification, argument or evidence.
The state is a coercive class-based institution protecting private property ownership - not a charity. Governments exist to further the interests of the capitalist class, not to perform generous acts for the common good.
Some others believe that the increased use of robotics and artificial intelligence will sweep capitalism away. This has become a very trendy area in futurology known as ‘fully automated luxury communism’, an idea advocated by the likes of Aaron Bastani, co founder of Novara Media. He sees a future society in which all work is done by machines and people are freed from the need to work (Fully automated luxury communism, GUARDIAN 18 March 2015). Bastani says that his idea of fully automated luxury communism came from reading Marx’s GRUNDISSE and CAPITAL. Yet in CAPITAL Marx never lost sight of the working class as the agents of revolutionary change.
What is missing in Bastani’s theory is a political dimension of how the social relationship between capital and labour to the means of production and distribution fundamentally changes and through what political process. Without a concrete socialist politics getting from capitalism to socialism, fully automated luxury communism remains mere utopian speculation.
In any case, socialists resist reductionist theories of technological determinism as the driving force for revolutionary change. Technology by itself cannot end capitalism and establish socialism. The driving political force – the motor force of historical change - is the class struggle between capital and labour. There has to be a revolutionary working class to end capitalism.
A Society of Abundance
Capitalism already holds back the forces of production, including social and co-operative labour. Capitalism already prevents a world of abundance from taking place, instead imposing deliberate scarcity through the operation of the market. More robotics and Artificial Intelligence does not bring socialism/communism (both words mean the same thing) any nearer but more and more active socialists on the ground certainly would.
Marx made the point that one of society’s main wants, denied by the profit system and employment, is creative work. There is also work associated with the care of the young, the sick and the elderly which is barely recognised under capitalism but carried out selflessly by millions of largely unpaid individuals.
While robotics and artificial intelligence might support a production of abundance within socialism, why restrict work just to robots, if work is what people want to do? Why cannot socialism have the luxury of enjoyable, pleasant satisfying work?
Work can be enjoyable; even hard and repetitive work. In a socialist society there will still be work but not employment. And then there is the question of politics. The constraint imposed on the use of technology for the benefit of all society is the existence of the minority, private ownership of the means of production and distribution and its protection by the machinery of government, including the armed forces.
This fact is ignored by those believing that robotics will benefit all of society without first addressing the issue of who owns the robot and artificial intelligence and for what purpose. Society, though, does not have to wait for any further development in robotics and AI to establish socialism. Adequate technology exists now to make socialism a feasible proposition. A society of abundance is possible now with the establishment of the common ownership and democratic control of the means of production and distribution by all of society.
History has to be made by men and women and this equally applies to the abolition of capitalism and the establishment of socialism. Given the existence of few socialists on the ground, there is, at the moment little evidence to show that capitalism is coming to an end any time soon. This though does not have to remain the case. It is in the interest of workers to become socialists. Of course, capitalism has the means to destroy itself either through a nuclear war, nuclear accident or inability to effect the necessary changes to contain continued environmental degradation. It is doubtful, though; if capitalist governments would knowingly commit systemic suicide.
Capitalism Will Not Collapse
Capitalism, then, will not collapse of its own accord. Capitalism looks likely to continue from one economic crisis to another, from one war to the next, until such a time that a socialist majority consciously organises within a socialist party to abolish the profit system and replace it with socialism.
Nevertheless, in The COMMUNIST MANIFESTO, Marx and Engels did concede that a possible alternative to socialism could be the mutual destruction of the contending classes. Rosa Luxemburg, writing during the slaughter of the First World War, also anticipated the future could be a choice of either “Socialism or barbarism”. And since Luxemburg’s murder in 1919, capitalism certainly has continued to be ruthlessly barbaric with the deaths of millions of workers in capitalism’s wars and conflicts, and millions more from hunger and disease.
Yet capitalism adapts to the problems it causes, even finding ways of making profit from them. Losing 55 million potential and exploitable workers during the Second World War did not cause capitalism undue inconvenience in the production and reproduction of capital after 1945. From being broken states, Japan and West Germany were economically leading capitalist countries again by the 1960s. In fact, capitalism went through what is called “a golden period” of profitability and growth although it all ended in the economic crisis of the early 1970s. However, even with rising wages it was not “Golden” for the workers upon whose exploitation the period depended for its profits.
Capitalism has a tendency to adapt and is far more resilient than its critics will sometimes admit. Socialists, though, remain optimists. All things that are born eventually die. Capitalism has an origin, it has not existed from time immemorial, it is a historic phase, and so it will have a death. We do not even know where we are in capitalism’s anarchic history. We would surely see capitalism’s end in sight with a growing socialist movement and prevalence of socialist ideas throughout society. That is not yet the case. What alternative is there? Better be an active socialist than a disinterested worker moaning about the world and doing nothing about changing it.
The Problems Caused By Capitalism Will Not Go Away
What is certain is that the contradictions within capitalism will become greater and the problems of war, unemployment and exploitation caused by the profit system will not go away. Workers should also learn from history and past mistakes. Having nothing to do with leaders and critically thinking for oneself would be a first start on the path to becoming a socialist. Rejecting the poisons of nationalism, racism and religion would be another essential step.
The serious problems caused by capitalism constantly open up a political space allowing for questioning and dissent, and for socialist ideas being disseminated, accepted and acted upon by workers. Yet capitalism’s abolition is determined by what Marx called its gravediggers – the working class. Without a majority of workers throughout the world becoming socialists you will not get socialism. Socialists cannot force workers to become socialists; the case for socialism has to be voluntarily agreed with and accepted by workers. The scale of the realities of climate change and ecological catastrophe means an urgent need to end this disastrously wasteful and destructive, production for profit, system, and the sooner the better. It is only the working class, over 95% of the world population, who have an interest in acting to end this wage-labour system of exploitation
Today, both sense and class interest point the same way, forward towards a hopeful, brighter future in a socialist world. The alternative is downwards in a vicious spiral of warring destruction, death and disease with capitalist politicians struggling to solve insoluble problems, problems which are the effects and consequences of this commercially competitive race to the bottom.
We Socialists are forever being challenged to justify the unjustifiable. Through most of the 20th century, whether it was the Stalinist totalitarian state said to be “actually existing Socialism” or the Fascist state of Hitler’s so-called ‘National Socialism’, or the scores of African or Asian former colonies turning into ‘Socialist’ dictatorships: the mass media and capitalist politicians seize on such regimes, again and again, as yet another proof of how Socialism must fail, wherever and whenever it is tried.
But we argue that such allegations are always false. As yet, Socialism has never been established – not anywhere. Certainly not in ‘Soviet’ Russia, not in ‘Communist’ China, not in Cuba – nor anywhere else in the world. Every time such claims are made, when you examine the situation, you will find that that country is part of the global network of capitalist world trade, and the majority of its working population are as we are – wage-slaves.
The latest example is Venezuela. Venezuela has hardly been out of the news over the last decade. The oil-rich South American country has been caught in a downward spiral of civil unrest for years with growing political discontent fuelled by hyperinflation, power cuts and shortages of food and medicine. It is thought more than three million Venezuelans have left the country in recent years. There is real poverty and hardship.
Protests and state violence in Venezuela have been increasing since Nicolas Maduro began a second term as president in April 2013. He was elected during a controversial vote in which it is claimed irregularities took place in the voting. To increase political pressure against the regime, the Trump Administration has recently recognised Mr Guaido, a member of the Venezuelan opposition, as “interim President”. The US action was later supported by Canada, France, Germany, the UK and other countries, with all of them demanding fresh elections.
As ever, with US interventions in Latin America and elsewhere, their intervention is under the cover of principles of democracy and human rights. Yet the Trump regime itself was elected in 2016 in a very murky way, and has implemented a ruthless, illegal policy of jailing refugees and separating child migrants. Pots and kettles come to mind. As for economic sanctions, these can only make a bad situation worse. US humanitarian aid is being used as a political tool and is being resisted by the regime through border closures and armed force. Meanwhile the hungry workers and their families are being held hostage to this ruthless power-play, amid desperate economic scarcity.
However, Maduro has support from Russia, China, Mexico and Turkey; many of whom have oil and mineral interests in the country. He has refused to agree to step down from the presidency and, according to one report, Kremlin-linked military ‘contractors’ have flown to Venezuela to provide security for Maduro
(INDEPENDENT, 25 January 2019).
Whether Maduro stays or leaves office largely depends on his control of the armed forces. To date, encouraged by regular wage increases and other incentives, Venezuela’s army has stood by Maduro throughout the economic chaos and civil unrest. This will not prevent the United States from making its own lucrative offers to senior officers to switch sides and support Guaido.
A Servile State: Political Discipline in the US’s Backyard
First under Obama, then under Trump, the US wanted to install a “friendly” government in the world’s most oil-rich country. A political regime was to be installed not to alleviate the problems facing the poor but to further the oil interests of US capitalism. Sanctions have now been imposed by the Trump administration on Venezuela’s state oil company PDVSA (BBC NEWS 29 January 2019). If the Trump administration’s attempt to install a compliant president fails to produce the intended result of removing Maduro’s policies, then it is likely that the U.S. will turn to other means to bring about a change in government, including the instigation of a new proxy war.
While direct military intervention by the United States has not been ruled out, it has long been seen as more probable — based on the United States’s own long history of removing leftwing Latin American governments through right-wing coups. And to do his bidding Trump has two experienced “neocons” - John Bolton and former head of the CIA, Mike Pompeo, now Secretary of State,
Who are the “neo-cons”? Neoconservatives (neocons) are a group of policy makers in Washington who believe that the United States should use its unrivalled power – forcefully if necessary – to promote its interests around the world. “Neocons” believe modern threats facing the US can no longer be reliably contained and therefore must be prevented, sometimes through pre-emptive military action.
In a propaganda exercise to garner support from within the United States, workers there are being told that Chavez and Maduro have allied with the regimes of US’s deadliest enemies – Russia, China, and Iran and by extension Hezbollah - and that Maduro is preparing to allow them an undefined “physical presence” in Venezuela. The Monroe Doctrine is being invoked to justify military incursion. The original enactment of the Monroe Doctrine in 1823 was meant to warn Europe against further attempts to colonize South America. And the Cold War extended the doctrine to cover non-European countries like Russia.
Think of the US response to Castro’s Cuba in the late 1950s and 1960s, Allende’s government in Chile in 1973, and the illegal war against the Sandinistas in Nicaragua in 1979 and the early 1980s as examples of the applications of this doctrine.
And Russia and China do have economic interests in Venezuela which go against the economic interests of the US. Russia and China have interests in mineral extraction in Venezuela including nickel, diamonds, iron ore, aluminium, and natural gas. An on-line report stated:
Over the decade ending in 2016, China loaned Venezuela approximately $62 billion, much of which Caracas could repay with oil. Moscow in the last several years gave Venezuela $17 billion in loans and investment, and in December the two governments signed a new deal in which Russia will invest $6 billion in Venezuela's oil and gold sectors... China and Russia are Venezuela's two main creditors, and they have been the principal economic force keeping the Maduro government afloat, making the difference between solvency and bankruptcy. [https://www.msn.com/en-xl/latinamerica/top-stories/russia-and-chin heavily-invested-in-venezuela-warily-watch-the-political-turmoil/ar-BBSKKhN]
So it came as no surprise that the US national security adviser, the hawkish John Bolton, said American strategic interests were in play, and expressed concerns about the presence and activities of US enemies in the region.
John Bolton told reporters:
We think stability and democracy in Venezuela are in the direct national interests of the United States right now... The authoritarian regime of Chávez and Maduro has allowed the penetration by adversaries of the United States, not least of which is Cuba... Some call the country ‘Cubazuela’, reflecting the grip that Cuba’s military and security forces have on the Maduro regime. We think that is a strategic significant threat to the United States and there are others as well, including Iran’s interest in Venezuela’s uranium deposits (GUARDIAN, 29 January 2019).
Coups and Regime Change
The US has long tried to effect regime change in Venezuela. This has been the case ever since Hugo Chávez, Maduro’s predecessor and mentor, was elected in 1998 under the banner of “21st century socialism”, a doctrine first put forward by the German academic Heinz Dietrich which influenced a number of Latin American leaders. Dietrich rejected private and state capitalism in favour of governments enacting a raft of reforms to “solve” a number of pressing social problems which included poverty, hunger, exploitation, economic oppression, racism, sexism and the destruction of natural resources. Chávez believed, erroneously, that these reforms could be implemented through the use of oil revenues. He forgot that the assets of a capitalist country have to be used for the purpose of profit and investment - not the implementation of social reforms. Nor did he understand the capitalist economy with its global price fluctuations in commodities like oil.
Prices can go up and they can come down. And in the case of oil exports, they can rise very high as in the early 1970s and fall steeply as they did at the end of 2014. This fall in the dollar price of oil exports had a catastrophic effect on Venezuela’s economy. While the mass media deplore this, they rarely if ever stop to ask what caused the oil price to fall.
Like some other commodities, the price of oil can be manipulated by reducing or increasing oil production. In recent decades, after the OPEC oil crisis, the major oil-exporting countries have regulated the amount produced so as to avoid de-stabilising the international market. But recently and especially since Trump’s election in 2016, the US has sharply increased the quantities of oil and gas produced by ‘fracking’, not just in the US itself but also in South America. The result has been to glut the international market and so force the price of oil down. To understand the crisis in Venezuela solely in terms of bad governance – corruption, dictatorship, etc. – is to ignore the economic impact of US oil policy.
As INVESTOPEDIA noted (20 September 2018):
Because of the economic crisis and shortages of food, medication and basic necessities, more than 2 million people have fled the country since 2014. This mass migration has diminished the workforce, including those who work in the oil industry. As a result of this lack of labor and other issues, Venezuela's oil production has fallen to its lowest point in more than 70 years. In June 2018, production fell to 1.34 million barrels per day, an 800,000 barrel drop from the previous year. Because the country's economy is tied so closely to its oil production, this reduction will most likely further deteriorate their economic situation
The deteriorating Venezuelan economy has been politically useful for the United States. Both Obama and Trump wanted to install a “friendly” government in the world’s most oil-rich country, someone who would be compliant with US interests and who would do as they were told.
Socialism and the Working Class
Regrettably, though, both Venezuela’s detractors and supporters assert that the country is “socialism in practice” and that the policies of the government are “socialist”. We have seen this from the capitalist left who denounce the “imperialist” United States but stay quiet on the plundering of Venezuela by China and Russia. Socialists oppose all forms of capitalism and do not take sides.
Left-wing nationalist populism is not socialism. Just because a political party calls itself ‘socialist’ and enacts social reforms which are intended to benefit the poor - that does not make it socialist. Nationalisation and redistributive policies retain a ruling class, class exploitation, the wages system and all the other features of capitalism, including a coercive state. And socialism could never be established just in one country, trading on world markets and operating in a capitalist world.
Also the Venezuelan government has no control over economic events such as the rapid fall in the price of oil since 2007, which caused a fall in the oil revenue on which the government based its social reform programme.
Social reforms can be watered down or taken away under subsequent governments, and when the economy is in difficulty cuts to social programmes have to be made, making the matter worse. No government can abolish poverty while maintaining and furthering capitalism.
There can be no ‘socialism in one country’ or in a region surrounded by a sea of capitalism. Socialism has to be world-wide with integrated communication, production and distribution. Venezuela fails on all counts of being socialist: there is no common ownership and democratic control of the means of production and distribution; the majority of workers are not socialists; there is no free and direct access to goods and services, and there is a labour-v- capital relationship of class struggle and class exploitation.
The only way to end poverty, hunger, exploitation, economic oppression, racism, sexism and the destruction of natural resources is to replace world capitalism with world socialism. Under the current circumstances all that will happen in Venezuela is that left wing nationalist populism will be replaced by right wing nationalist populism; a swing from right to left and, sometime in the future, back again. And all the time, the pressing social and economic problems facing the working class will remain.
Capitalism and the Environment
Capitalism causes environmental degradation and pollution
For millions of years, the Earth has sustained a wonderfully rich and interconnected web of life. Now one social system - capitalism - is putting it all at risk. Under capitalism, economics is at war with ecology and the environment. Capitalism is a social system in which the means of production and distribution are privately owned by a small capitalist minority whose only motivation is producing and selling commodities for a profit.
After several centuries of capitalism, the world’s climate is changing for the worst: air and water are no longer clean and pure, species are dying out at a rapid rate and people everywhere suffer from pollution and environmental damage caused by the profit motive.
Socialists have long pointed to capitalism and the profit imperative as the cause of environmental degradation and pollution.
Here is William Morris writing in 1877:
Is money to be gathered? Cut down the pleasant trees among the houses, pull down ancient and venerable buildings for the money that a few square yards of London dirt will fetch; blacken rivers, hide the sun and poison the air with smoke and worse, and it’s nobody’s business to see to it or mend it: that is all that modern commerce, the counting-house forgetful of the workshop, will do for us therein (‘The Lesser Arts’ - originally ‘The Decorative Arts’, 1877 – Political Writings of William Morris, ed. A L Morton, 1979, p.53).
And here is Morris again, writing in 1887 when he commented:
Shall I tell you what luxury has done for us in Europe? It has covered the merry green fields with the hovels of slaves, and blighted the flowers and trees with poisonous gases, and turned the rivers into sewers (‘The Society of the Future’, lecture, Hammersmith, 1887, on the evening of Bloody Sunday, ibid.,p 193).
According to Marx’s friend Frederick Engels:
As individual capitalists are engaged in production and exchange for the sake of the immediate profit, only the nearest, most immediate results must first be taken into account. As long as the individual manufacturer or merchant sells a manufactured or purchased commodity with the usual coveted profit, he is satisfied and does not concern himself with what afterwards becomes of the commodity and its purchasers. The same thing applies to the natural effects of the same actions
Engels pointed out the way in which this drive for profit can lead to ecological catastrophe:
What care the Spanish planters of Cuba, who burnt down the forests on the slopes of the mountains and obtained from the ashes sufficient fertiliser for one generation of very profitable coffee trees – what cared they that the heavy tropical rainfall afterwards washed away the unprotected upper stratum of the soil, leaving behind bare rock! (Marx and Engels, COLLECTED WORKS, vol.25, p 463).
And Engels concluded:
In relation to nature, as to society, the present mode of production is predominantly concerned only about the immediate, the most tangible result; and then surprise is expressed that the more remote effects of actions directed to this end turn out to be quite different, are mostly quite the opposite in character
Marx also wrote extensively on the negative aspects of capital accumulation in CAPITAL, particularly on the effects of capitalist agriculture on soil erosion (see J. B. Foster, Marx’s Ecology; Materialism and Nature, 2000).
More recently Kohei Saito, in his book CAPITAL, NATURE AND THE UNFINISHED CRITIQUE OF POLITICAL ECONOMY (2017) said that Marx’s critique of capitalism “.provides an extremely helpful theoretical foundation for further critical investigation of the current ecological crisis” (p 265). Yet Marx’s critique of political economy is still largely ignored by most environmental scientists and ecologists just when it is most needed. Global warming and pollution do not happen in a vacuum. They occur because of industrialised commodity production and exchange for profit.
Under modern capitalism, one of the greatest environmental crises facing the world today is global warming. The main cause of today's global warming is the combustion of fossil fuels like gas and coal. These hydrocarbons heat up the planet via the greenhouse effect through industrialisation processes, which is caused by the interaction between Earth’s atmosphere and incoming radiation from the sun
The term ‘global warming’ was first coined by the oceanographer, Wallace Smith Broecker, although it was first discovered over a hundred years ago by the Swedish scientist Svante Arrhenius. Global warming is already having significant and harmful effects on the countries of the world, their health, and their climate. Sea level rise is accelerating due to melting ice caps. The number of large wildfires is growing. Dangerous heat-waves are becoming more common like the recent ones in Australia and the United States. Extreme storm events are increasing in many areas of the world. More severe droughts are occurring in others. Wars, conflict, draught, loss of harvests, the flooding of crops, migration and grinding poverty are and will be consequences of global warming
Socialists hold that workers cannot be scared into political action by false propaganda and misuse or misunderstanding of statistics. Facts, reason and evidence are all we have with which to persuade someone to change their mind and to think and act differently
And a distinction must also be made between scientific papers written on the subject of global warming and the way these papers are translated and often distorted through the media where death, destruction and misery sells newspapers. As with all science, a theory such as global warming can only be accepted or rejected by the weight of evidence, and the evidence from many different areas of science supports the theory of global warming and the accumulating weight of evidence for the theory grows with each passing year.
If the environmental dystopians have little or no political influence, this is not the case with the well-financed global warming deniers defending the interests of owners of the oil, gas and coal industry and who also have the ear of the President of the US and other influential politicians. They want to project capitalism as the best of all possible worlds with no alternative to the market, buying and selling and profit-making. They want to defend their interests, protect their fossil fuel market, and avoid regulation or punitive taxes. Whether or not the capitalists within the fossil fuel industry actually believe in their own propaganda, their false ideas and beliefs about global warming fly in the face of scientific evidence.
For all industries in capitalism, for all businesses, large and small alike, what counts is the bottom line, the figure showing how profitable their operations are. It is this which enables them to compete with fellow-capitalists: falling profitability would mean a business would struggle to attract fresh capital and so would be unable to grow and expand. In time, such a business would get swallowed up by its more successful – more profitable – competitors.
Against this all-powerful profit motive, what hope can there be for the planet and its ecological needs? Saving the whale or a species of rare butterflies or the elephants of Africa is never on the agenda for the profit-savvy business world, let alone concerns about the vanishing glaciers, melting polar ice-caps and rising sea-levels. Profit? – “this is the law and the prophets”!
According to the journal CLIMATE CHANGE (13 December 2018), in all 140 foundations set-up by wealthy capitalists, like the Koch brothers, funnelled $558 million to almost 100 climate denial organizations from 2003 to 2010. Similar well-funded climate change denial organizations exist in the UK (Global Warming Policy Foundation and the Institute for Economic Affairs, for example, with a smart London address, housing a cluster of other free market pressure groups and other “think tanks” have been established elsewhere in the world
The solution to environmental problems is the same solution today as it was when William Morris, Frederick Engels and Marx were alive: the abolition of capitalism and the establishment of socialism. The problem is not the lack of information or ability to resolve environmental problems but the persistence of capitalism and the profit motive. To address the environmental harm that capitalism causes requires socialists and a growing global socialist movement. And there are very few socialists around at the moment.
So piece-meal reforms float around, like proposals for a carbon tax, but no reforms get to the root of the problem: production for profit and the private ownership of the means of production and distribution. Unfortunately, scientists do not frame the problem of global warming within the context of world capitalism; they make no criticism of the private ownership of the means of production by a small minority. Nor do they question competition and conflicting interests within the capitalist class, their politicians and governments. They remain scientists but regrettably do not become socialists. Likewise with the millions of non-socialist environmental activists seen protesting or joining environmental pressure groups.
The recent school strike in many European countries protesting at climate change, for example, had banners decrying the impotence of governments but few questioned or wanted to understand why governments have so much difficulty coming to agreements with other governments on fundamental environmental problems. Few placed global warming within the context of the capitalist system. Yes, some banners said “system change” rather than “climate change”, but it is doubtful they meant replacing production for profit for the common ownership and democratic control of the means of production and distribution by all of society. Some banners proclaimed “no planet B” but none were seen proclaiming “There is an alternative to capitalism”. Of course, there is no magic wand to wave. Instead, for change to be possible, the task ahead requires workers to become socialists. This might appear to be a tall order but once you understand the severe limitations capitalism imposes on what and what cannot be done, there really is no choice.
Until a socialist majority is prepared to take conscious, democratic political action the problem of environmental degradation will persist. The answer to the environmental problems caused by world capitalism is the establishment of the common ownership and democratic control of the means of production and distribution by all of society.
The Futility of Environmental Reforms
There is no need for continued environmental degradation just as there is no need to endure capitalism and the environmental, economic and social problems it causes. Capitalism is not a natural system. Capitalism is one of many social systems that have come and gone throughout human history - primitive communism, chattel slavery and feudalism.
A new social system responsive to the environment is possible given the right political conditions with the formation of a socialist majority within socialist parties, which is what is necessary to establish socialism.
Yet, instead of acknowledging capitalism as the cause of environmental degradation, environmental scientists, ecological pressure groups and green political parties have pursued social reforms as the answer to mitigate its worst excesses. They hold the misguided belief, one held by all reformers, that all a social problem requires to be resolved is the right campaign and strategy, the support of a benign political party or government, the correct well-drafted policy, the right piece of legislation, vigilant enforcement and, hey presto, the problem is resolved. No more so than a spokesperson for Extinction Rebellion, the social movement that takes part in passive direct action, who recently stated: “Governments across the world have completely failed to protect their citizens. Instead, they have pursued quick profit and big business” (BBC NEWS, 2 December 2018).
It is true that governments have pursued “quick profit and big business”. But this is what governments exist to do – pursue the interests of the capitalist class and capitalism’s need to make profits and to accumulate capital as anti-social pursuits in their own right. The Polish government who hosted the recent UN summit in Katowice, for example, had no intention of giving up its coal mining and be dependent on Russia for gas even though Poland has some of the most polluted air in all the European Union, and has 33 of its 50 dirtiest cities (NEW YORK TIMES 22 April 2018). No amount of direct action will change the political reality of competing interests in capitalism. Nor will they change the policies of capitalist governments in furthering the interests of the capitalist class and the need to ensure the security of the system of private ownership of the means of production and distribution within the country.
The political naivety of the environmental reformers is because they do not take into account the political and economic reality of competing vested interests, the practical problems of enacting their reform, the unintended consequences once the social reform has been passed by Parliament, and the constant threat that the social reform could be watered down, altered or abolished by another government.
The social reformers also conveniently forget the fact that the government is “the executive of the bourgeoisie” (THE COMMUNIST MANIFESTO, Marx and Engels), and exists to serve the interest of the capitalist class not of all society.
For more than a century, socialists have shown, with evidence, that social reforms, like the ones proposed by environmental groups such as Green Peace and Friends of the Earth, cannot solve the problems facing the world’s working class. Capitalism’s problems persist from one generation to the next causing frustration, dismay and a corrosive cynicism. Years of campaigning by environmental groups have not made even a dent in the capitalist cause of the environmental problems we face as a species.
There are Green capitalist organisations who erroneously believe that environmental problems can be resolved while maintaining this system of class exploitation, with nation states competing on the world market, and commodity production and exchange for profit. They believe that zero growth or negative growth can be imposed on the capitalist system which they think can be re-structured to behave in a way it clearly cannot. But capitalism is all about profit and capital accumulation. You simply cannot have the social reforms the Green Party and others want while maintaining the private ownership of the means of production and distribution by a minority class to the exclusion of the majority of society.
The Green Party’s policy document “An Economy That Works For All” has many similarities with the economic policies of Corbyn’s Labour Party. Their policy document offers a list of reforms, such as ending austerity, a wealth tax on the top 1%, increase in the minimum wage and so on. No mention is given of economic crises, trade depressions, or of capitalism and the capitalist class.
The Green Party make the same mistake as the Labour Party in believing you can have “social justice” and “environmental sustainability” while retaining the private or class ownership of the means of production and distribution and a competitive world market. You cannot. The circle cannot be squared. The profit motive wins out.
The Greens also represent powerful commercial ecological lobbies that would profit from renewable energy sources and Green commodity production and exchange for profit while maintaining the exploitative wages system. The Green Party says very little about the working class, its interests and its servile position in a class society which the Green Party has no intention of fundamentally changing. The Green Party can only ever support capitalism and is therefore useless to the working class and the problems our class faces in the world today.
“Green capitalism” they call it. The Greens have no interest in a society of free men and women in which production takes place solely to meet human need. Whether the environmental changes were to come through the division lobbies of Westminster or by gaining control of local councils or through international concord, the reality of capitalism has left the Green parties an ineffectual political minority. Campaigning for environmental changes is like trying to get a river to run uphill. Whatever is done is always too little, too late. To call capitalism “green” would be to do its lying PR job for it – it would be like labelling cigarettes and asbestos safe.
If the political energy of the Greens had not been expended and wasted in trying to reform capitalism and had gone instead into abolishing the profit system, how much nearer would we be to a solution to environmental problems now? The environmentalists say that environmental problems have to be tackled as a matter of urgency and socialists agree but these problems can only be resolved by first establishing socialism. Without the establishment of global socialism these problems will persist and get worse.
The Greens deny the urgent need to establish socialism and therefore socialists hold them just as culpable for the continuation of environmental degradation of the planet as those such as the Global Warming deniers who openly defend this production and pollution for profit system. In inserting reformist policies between the capitalist cause of the environmental degradation that human beings and other species face and the revolutionary socialist solution, the environmental lobby acts as a reactionary social barrier.
For the environmental lobby groups there is only continued disillusionment at their failure to effect any substantial change to the environmental problems they highlight in their literature. Some of these ecological groups have been around several decades but their direct action, lobbying and propaganda has had little or no effect. If environmentalists want to do something “immediate” and “now” then they have no alternative than to become socialists and work for the speedy introduction of the common ownership and democratic control of the means of production by all of society.
The problem with the Green lobby is that they just do not understand capitalism. They fail to understand the reality of competing capitalist interests and the role played by politicians in articulating these interests to the exclusion of everyone and everything else.
The existence of competing nation-states makes global agreement about reducing greenhouse gases very difficult, sometimes impossible while the United Nations is dominated by powerful nation states, particularly those dominating the Security Council at the United Nations. The countries emitting the most greenhouse gases are China and the US. Together they account for more than 60 per cent of the global total, according to the European Commission’s Joint Research Centre and PBL, the Netherlands Environmental Assessment Agency (BBC NEWS 2 December 2018). The US’s environmental policy on global warming changed with the Trump Presidency when it was announced the US would withdraw from the Paris Climate Change agreement claiming that it meant US capitalism would be at a disadvantage against other countries.
And who does the government act for? It is not for society as a whole but for the interests of a capitalist class minority. So environmental reform is only enacted where there is a demonstrable threat to the profits of some or all of the capitalist class. Then governments impose environmental reforms on the capitalist class for their own good, forcing industries and manufacturers to make changes to their designs and productive processes, and stop harming the property of other capitalists and the health of the workforce. However, such legislation is often limited and localised, and not effectively enforced.
The capitalists and their businesses are very well represented at environmental conferences. According to THE ECOLOGIST, writing of the Bonn conference in May 2017:
In the lead-up to the Bonn conference, the international think-tank Corporate Accountability International (CAI) released a report on the involvement of more than 250 Business and Industry Non-Governmental Organizations (BINGOs) that are currently admitted to the climate talks. Many of these BINGOs represent corporations that have consistently used their presence at the UNFCCC to weaken policy rather than strengthen it.
This would not be the case for a socialist society which will use science and technology to create conditions for ecological harmony, uninhibited by the constraints imposed by capitalist competition, nation-states and business interests. Assessments of what technologies could be safely introduced in the most efficient and speedy manner would be a priority. It would also help if scientists actually accepted capitalism as the problem.
Some options for a socialist society to tackle climate change could be more efficient use of fuel, reduced reliance on cars, more efficient buildings, improved power plant efficiency, eliminating coal for other energy sources, storage of carbon captured in power plants, wind power, solar photovoltaic power, nuclear energy, renewable hydrogen, biofuels, forest management and agricultural soils management. Socialism will open up possibilities which capitalism closes down. After all, Marx pointed out that capitalism was a “fetter on production?” in 1848, how much more so now in 2019? And tackling climate change in socialism would not have the competing national and commercial interests holding back robust solutions to the environmental problems.
On the world stage, where dominant countries hold sway, it is even more difficult to get agreements on environmental reform since profitability is always high on the agenda. A look at the time it has taken to get various multi-lateral agreements on global warming agreed, the continued use of coal fired power stations by China, and the Trump administration’s refusal to ratify previous protocols illustrate the difficulties only too well. In fact, Trump once tweeted: “The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive” (Keith Khan-Harris, THE UNSPEAKABLE TRUTH, 2018). As ever, competition - not co-operation!
At the recent G20 summit in Buenos Aires, the assembled political leaders agreed to disagree about the need to combat global warming by reducing carbon emissions and greenhouse gases. The gap between what leaders of countries say they are doing and what needs to be done is hugely wide. Until socialism is established, governments will continue to consider only whether the environmental legislation they enact or are being asked to enact internationally will undermine and damage the competitive edge of businesses within their country. What governments concentrate on is calculating whether commercial advantages will be given to businesses operating in other countries where the legislation does not apply.
All the more reason for us to argue that the working class should consider the establishment of socialism as a matter of urgency, rather than be sidetracked by the futility of reformism. Unlike the environmental pressure groups, socialists do not take part in direct action, single-issue campaigns, political stunts, asking for money and lobbying governments. We want to make socialists. We want to persuade workers to join us to work to end capitalism as a matter of urgency. We want to see growing numbers of active socialists, capable of thinking and acting for themselves.
This is the only way to achieve a future free from pollution caused by the anti-social interests of a small capitalist minority supported by their political agents. A small minority capitalist class whose drive to make a profit has left a world vulnerable, its inhabitants exploited, and the future looking bleak and inhospitable. Become socialists and establish socialism now and look forward to a better environmental future.
AN UGLY AND UNHEALTHY WORLD
“I feel sure that the time will come when people will find it difficult to believe that a rich community such as ours, having such command over external Nature, could have submitted to live such a mean, shabby, dirty life as we do.
And, once for all, there is nothing in our circumstances save the hunting of profit that drives us into it. It is profit which draws men into enormous unmanageable aggregations called towns, for instance; profit which crowds them up when they are there into quarters without gardens or open spaces; profit which won’t take the most ordinary precautions against wrapping a whole district in a cloud of sulphurous smoke; which turns beautiful rivers into filthy sewers, which condemns all but the rich to live in houses idiotically cramped and confined at the best, and at the worst in houses for whose wretchedness there is no name. ”
HOW WE LIVE AND HOW WE MIGHT LIVE
William Morris (lecture, 1884)
The Demons of Invention
One of the most distinctive features of capitalism is one which Marx and Engels noted in THE COMMUNIST MANIFESTO, back in 1848. That is its restless questioning and inventiveness.
Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones.
The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere...
.. All old-established national industries [are] destroyed ... dislodged by new industries ... by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones.
As if to illustrate this point, at the start of the New Year space exploitation achieved two notable firsts. The American NASA’s New Horizons sent back flyby pictures of a very remote space object, Ultima Thule. But this achievement was dwarfed by the Chinese successful soft landing on the dark side of the moon, with a rover and robotic implements, communicating data and pictures back to earth via a ‘halo’ orbiting satellite.
At once the experts commented with excitement that space was now open to becoming industrialised, especially as now several commercial companies are interested. There has long been talk of colonising Mars, and the geology of the unknown, dark side of the Moon is of real interest. Whenever this sort of excitement is in the air, the next thing is anticipation of ways to exploit the raw materials and natural resources of the planets. Yet it is only in recent decades that so-called ‘rare earths’ had been found to be of use, e.g. in making ‘smart phones’ and other digital gadgets. First found in China, these have also been found in quantities in Africa – and the result there seems to be never-ending civil wars.
Consider how recent space exploration has been. The first missile into space was in 1944, and the German engineers were then employed by the US for their new space programme, especially for Cold War missiles. By 1957, the Soviet Union had sent up the first orbiting spacecraft, Sputnik, followed by a dog, and the first astronauts, Yuri Gagarin in 1961 and later Valentina Tereshkova. America sent men to the moon – and of course planted a flag there.
But nationalism seems to evaporate when people are in space and see how beautiful and fragile our little blue planet looks, seen from such a huge distance, where national borders cannot be seen.
Later, the International Space Station was established, in orbit, manned by international crews. For once co-operation took the place of international rivalry and enmity. But most space satellites are there for military reasons and purposes. In the 19th century, capitalism had still not even explored all of planet earth – the first explorers to reach the South Pole only managed this on the eve of the First World War. By the end of the 20th century, computers, the Internet, and even robotics have all become part of the everyday world – first for advanced research, and now for consumers and even for very young children. With these new technologies, the speeding up of new inventions is growing apace.
But why? Why is it that, in a capitalist world, everything is forever changing? Why is it that capitalism – unlike previous social systems – is forever discontented, driven as if by demons to drive forward, to seek out and conquer unknown new lands and new worlds? Why is it that homo capitalisticus, not content with trashing planet earth, filling the oceans with plastic, polluting the atmosphere, destroying the habitats of so many species – including that of homo not so sapiens: why is there this frenzied drive to explore and discover, develop and pollute, not just this planet but even far away planets?
In the last issue of SOCIALIST STUDIES we quoted from Marx’s argument that for a capitalist “the restless never-ending process of profit-making is alone what he aims at" (CAPITAL VOL. 1 part 2, chap 4). But in this passage, like the well-known passage from the COMMUNIST MANIFESTO, Marx is here simply describing how capitalism works.
He is not here explaining why it works and has to work this way, not explaining why it is forever restless, forever innovating, forever destroying the old and discovering the new. But he did address this question and found the answer.
Marx had worked out that the ‘classical’ economists, from Adam Smith to Ricardo, had failed to see that workers sell not their labour but their labour power – their physical and mental abilities. It is the difference between the value of labour power and the greater value created which is termed surplus value. And it this which is carved up as Rent, Interest and Profit. From all the values created in production, the workers have to support not just their employers but a host of unproductive drones – those involved in wholesale and retail trading, in marketing and advertising and PR, in the political sphere, and to cap it all a royal family.
The commodities produced by workers have values made up in part from the ‘constant capital’ employed, the raw materials, and the wear and tear on premises and machinery; and from the ‘variable capital’ - human labour. This last is the only source from which new value is created in the production process: with the machinery and other overheads, existing value is transferred but not newly created.
Marx’s detailed explanation of this question can be found in CAPITAL VOL. III – chapter IX The Formation of a General Rate of Profit... and Transformation of the Values of Commodities into Prices of Production.
He pointed out that how values are created varies from one industry or firm to another: some industries and firms are more labour-intensive than others. This difference in the ‘organic composition’ of capital results in differences in the rate of surplus value, the rate of profit, and the rate of exploitation. If this seems confusing, just remember there are many different ways of calculating how successful a business is. And above all, remember that in a capitalist world competition is king.
When businesses compete, each seeks to outsell the competition, and above all to sell their commodities at a price which ensures a good profit. That is essential since, only by re-investing in the latest new production processes, in Research and Development, can they hope to grow their businesses. If they stand still for a moment, their competitors will surely get ahead, and then their business will struggle to attract new capital investment, and sooner or later will go down.
It is one thing to calculate how profitable a production process is in one firm or industry by itself – taking account of the amount of variable capital used and surplus value created in the process. Added together with the constant capital, you can calculate the cost price.
But to sell the commodities produced; these will have to be sold competitively. As a result the cost price has to be adjusted to a market price. This is done by adding in not the actual surplus value created in each enterprise or industry but the average surplus value in the market conditions of the time. This then gives an average rate of profit. The result of this is that while some firms will gain – their products will sell at a price above their value – other firms will struggle as their cost price is below their value. The average value and rate of profit has shifted but their costs have not been adjusted, so now these firms are lagging behind. The reason for this is that labour costs only count so far as they represent necessary labour: any ‘above average’ costs are inefficient and uncompetitive.
The effect of market competition is to drive down labour costs and drive out of business any uncompetitive laggards. In Marx’s table he showed how this effect of market competition worked out for capitals with differing organic composition: competition advantaged those capitals where labour-saving technology had speeded up the production process and cut labour costs, and at the same time disadvantaged those firms or industries which for whatever reason had not kept up with the latest technological developments.
The priority for all capitalists is to keep their labour costs as low as possible, hence they are driven constantly to speed up the rate of production. An obvious example is how the highly automated car industry has gone, from the conveyor-belt assembly-line integrated factory system, to one relying on robots, the complexity of an international supply chain and the computerised ‘efficiencies’ of JIT, the Just in Time deliveries of spare parts from faraway factories.
In all industries there is constant pressure to reduce labour costs by increasing the amount of constant capital. It is the different ratios between constant capital and variable capital, the different organic composition of the capitals employed, that determine whether the costs of production of one enterprise are above or below the average costs compared with the costs of competing producers. In recent decades, both in Europe and the US, competition and the growth of container ports has led to whole industries being moved to countries with cheaper labour costs, where they can then undercut older industries.
Along with the drive for technological innovation, capitalism also has another basic drive, the drive to cheapen labour costs. To speed up production, you can of course sweat the workforce. Some capitalists have become notorious for this, e.g. Jeff Bezos of Amazon. In Japan workers are still reportedly dying of overwork. In China workers are housed in dormitories, their whole lives controlled by the employers, and only get home to see their families at the New Year. In India and Bangladesh, women and children work in appalling and dangerous conditions.
Capitalism’s capacity for ruthless inhumanity seems as unlimited as its capacity for invention and innovation. The result is the pollution of the planet, the creation of junk food, and innovation being used to deliver bombs - not aid to the starving victims of their endless pointless wars. It is surely high time to say R. I. P. – rest in peace! - to this rip-off system, the Rent, Interest and Profit system, based on careless, greedy and irresponsible exploitation of this possibly unique planet, its resources, its living species and interdependent ecosphere, and its people.
Marx - on how ‘history’ gets made
History does nothing; it ‘does not possess immense riches’, it ‘does not fight battles’. It is men, real, living men, who do all this, who possess things and fight battles... History is nothing but the activity of men in pursuit of their ends.
The Holy Family, 1845
Malthus, Over-Population and Pauperism
Why is Malthus’s wretched ‘theory’ never out of vogue – recurring like dog’s vomit, generation after generation? Like another bad theory, Fukuyama’s The End of History, its success was because it came at a time of reactionary politics. As August Bebel argued in WOMAN AND SOCIALISM(1883):
... the ruling classes ... were forced to look about them for an explanation of such contradictory facts as the pauperisation of the people in the midst of increasing wealth and a flourishing industry ... nothing could be more convenient than to seek the cause in the too rapid growth of workmen’s families ... the “immature, superficial, pompous and priestly plagiarism”... by Malthus was a book which gave drastic expression to the most secret thoughts and wishes of the ruling classes, and justified their course of action... Malthus had spoken the right word at the right moment for the English bourgeoisie, and thus, although his book “did not contain a single sentence thought out by himself“, he became a great and celebrated man and founded a school called after his name.
Malthus’s Essay on the Principle of Population, as it Affects the Future Improvement of Society, first edition 1798, came soon after the French Revolution at a time of fears of this dangerous egalitarian spirit crossing the Channel and infecting the ‘lower classes’. Who knew how that would end? As Malthus was a Church of England parson, his argument carried the authority of the state religion, and as it was mathematical, it also had the authority of science. What’s not to like? His patrons, landowners and gentry, loved this theory.
Ten years after the new Poor Law, in his book THE CONDITIONS OF THE WORKING CLASS IN ENGLAND IN 1884 Engels quoted from the 1835 Report of the Poor Law Commissioners which had argued:
[The old Poor Law system was] a check upon industry, a reward for imprudent marriages, a stimulus to increased population, and a means of counter-balancing the effect of an increased population upon wages; a national provision for discouraging the honest and industrious, and protecting the lazy, vicious, and improvident; calculated to destroy the bonds of family life, hinder systematically the accumulation of capital, scatter that which is already accumulated, and ruin the taxpayers.
Engels commented sarcastically:
Convinced with Malthus and the rest of the adherents of free competition that it is best to let each one take care of himself, they would have preferred to abolish the Poor Law altogether.
Since, however, they had neither the courage nor the authority to do this, they proposed a Poor Law constructed as far as possible in harmony with the doctrine of Malthus, which is yet more barbarous than that of laissez-faire. We have seen how Malthus characterises poverty, or rather the want of employment, as a crime under the title “superfluity”, and recommends for it punishment by starvation. The commissioners were not quite so barbarous; death outright by starvation was something too terrible even for a Poor Law Commissioner.
In an article Social Reform (1844), Marx wrote:
As regards pauperism in general, it is looked upon as an eternal law of nature, according to the theory of Malthus: “Since population is constantly tending to overtake the means of subsistence, charity is folly, a public encouragement of poverty. The State can therefore do nothing but leave the poor to their fate, at the most making death easy for them.” With this humane theory the English Parliament combines the view that pauperism is poverty which the workers have brought on themselves, and that it should therefore be regarded .... as a crime to be suppressed and punished.
See MARX AND ENGELS ON MALTHUS ed. Ronald L Meek, 1953, pp 66-7
True to the teachings of the pious Parson Malthus, the Poor Law Commissioners decreed in their Report that: “The first and most essential of all conditions ... is that [the pauper’s] situation on the whole shall not be made really or apparently so eligible as the situation of the independent labourer of the lowest class.” And to this day, that remains the guiding, punitive and deterrent principle of state benefits systems, under all governments: “The 1834 Poor Law principle of less eligibility lives on in the definition of levels and conditions of social security benefits”, wrote Peter Townsend (POVERTY IN THE UNITED KINGDOM, Penguin, 1979, p 923).
Today, that mean Malthusian principle is still at the heart of state policy. Behind the punitive and mean-spirited, means-testing, snooping, and all the many humiliations of so-called ‘welfare’, is the ‘moral hazard’ argument. Whatever the state does to soften the brutal hardships of poverty or unemployment, it must never be “lavish or over-generous” (Beveridge). To do that would only encourage skiving and fake claims from ‘scroungers’. Always there is the assumption that if workers become unemployed or unemployable, it is not from misfortune, disability, ill-health etc., but from laziness, fecklessness and choice.
That myth of the ‘undeserving poor’ was always a falsehood, as was argued in an official American report: Poverty Amid Plenty: the American Paradox- The President’s Commission on Income Maintenance Programs, 1969:
Poverty is not a chosen way of life... With so many working at jobs that are both unpleasant and financially unrewarding, one wonders how the stereotype of the malingering poor can be sustained [report of The President’s Commission - POVERTY, Penguin Sociological Readings, 1972, p 121].
While Malthus and his followers condemned the poor to a state of semi-starvation and the workhouse rules forcibly separated men from women to prevent them breeding, now the Tory ‘Bedroom Tax’ penalises those on benefits with more than two children, and modern neo-Malthusians promote birth control, and even state policies like forced sterilisation, as in India under Rajiv Gandhi, and China’s one-child policy.
Today, the reality of species extinctions, climate change, the acidification and warming of the oceans, with a growing multitude of ecological problems, means there is a renewed focus on the huge growth of human populations. An influential neo-Malthusian pressure group, POPULAYION MATTERS, argues:
Today, humanity uses the resources of 1.7 Earths to provide the resources we use and absorb our waste [Royal Society]... The Sixth Mass Extinction is already under way, and the pressures on our planet’s biodiversity, renewable resources, habitats and species can only multiply as [human] population and consumption increase....“We can restore the planet’s health but only through addressing the root causes, population growth and overconsumption” – Jonathan Baillie, Zoological Society of London, [www.wwf.org.hk/Living Planet Resource].
There is a strong focus on ‘overpopulation’. Their leaflet ‘Welcome to the Anthropocene’ includes a graph showing the growth of the global human population which, since 1945, has grown exponentially – the graph looks like a very steep, almost vertical, ‘hockey stick’ curve. At the end of feudalism the world population was about half a billion, rising to 1 billion about 1850, then doubling again to 2 billion in 1950. Currently the world population is 7.7 billion and by 2050 is expected to rise to 10 billion, increasing by 1 billion every 12-15 years.
The speed of population growth is clearly increasing, though not in all regions. The dates of this explosive growth clearly show it to be a consequence of industrial capitalism. It was not produced by chattel slavery or feudalism, and could not have been caused by any sort of prehistoric society. This rapid increase, especially in the last 70 years, is clearly linked to the recent spread of industrial capitalism, and the inequality and poverty of the class system. In short, it is a by-product of capitalism.
Also, there is an inverse ratio between family size and living standards - the better-off communities have small families, the poorest have large ones. The evidence is that hunger and poverty are involved in population growth. In more affluent communities, where women have better diets, fertility rates are lower and, in many such states, populations are static or declining.
At the end of the 19th C, long before birth control and women’s education, the link between fertility and diet was noted by Bebel though he could not explain just how human reproduction is affected by diet. Later, Josue de Castro, chairman of FAO (the UN Food and Agriculture Organisation), argued that where women have a good diet with high quality protein, their reproductive rate falls, and vice versa. His argument was based in part on the role of the liver in controlling women’s oestrogens:
Protein deficiency leads to deficiency in the functions of the liver; this results in a reduction or loss of the liver’s ability to inactivate oestrogens; the excess of oestrogens increases the woman’s fertility (Josue de Castro, THE GEOGRAPHY OF HUNGER, 1953, p 141).
More recent science (2011) has supported his argument, showing from studies with mice the role of amino acids in this process. So, when poverty declines, with better food the rate of population growth flattens out. But where there is poverty and food is scarce, women would lack high-quality protein, and larger families would result. With chronic hunger, families are larger, and vice versa.
What if the Malthusians are wrong? A recent book argues that “in three decades... the global population starts to decline” (Darrell Bricker and John Ibbitson EMPTY PLANET, 2019). But this would not be good for future capitalist growth and profits, as David Goodhart pointed out:
A shrinking global population will make labour scarcer, shifting economic power “back from capital to labour”, helping to “reduce inequality”... [Also] the “well-known” negatives of smaller (and generally older) populations, chief among them a reduction in “energy, innovation and optimism”.
SUNDAY TIMES - summary in The Week, 23 Feb. 2019
Not for the first time, the “dismal science” - economics - is in conflict with ecology. Capitalist economics requires growth so needs a growing population, and competition forces many workers into direst poverty. But the ecological sustainability of this capitalist ‘business plan’, with its insistence on growth at all costs, must be increasingly questioned. In many countries, once they became exploited colonies of capitalist states producing cash-crops like cotton and tobacco for export, hunger and famines went with fast-rising populations.
With commodity production and wage-labour, with globalisation now spreading the ‘blessings of civilisation’ far and wide, and with a rapidly growing population, over half living in cities, there can be few communities untouched by this chronic, systemic, man-made hunger and poverty.
Malthus’s ‘eternal’ law of Nature
Malthus argued that the tendency for population to outgrow the “means of subsistence” was because population increased faster than the yield from land: this he argued was an “eternal law of Nature”. But if this was the case, we would expect that this exponential growth of population would have long predated the relatively recent arrival of the capitalist mode of production.
Socialists point to the historical aspect of this population growth. We also ask the question the ecologists and neo-Malthusians never ask: why is there this exponential increase in population. What drives this?
The fact is that this growth can be fairly precisely dated to recent human history: first the industrial revolution, but especially in the last half-century as capitalism became globalised. This means that this out-of-control growth of the human population is historically a by-product of the capitalist system.
As Engels argued (letter to Lange, 1865): “To us so-called economic laws are not eternal laws of nature but historic laws which arise and disappear”. Marx also argued that the economists’ theories were not universal (THE POVERTY OF PHILOSOPHY, 1847):
Social relations are intimately connected with the forces of production. In acquiring new forces of production, men change their mode of production, their way of earning a living; they change all their social relations ... The same men who establish social relations in conformity with their material power of production, also produce principles, laws, and categories, in conformity with their social relations. Thus, these ideas and categories are no more eternal than the relations which they express. They are historical and transient products.
We could point out that Malthus’s thesis not only confuses the ‘means of subsistence’ with the means of employment, it also omits the real importance of science and technology in increasing the yield and productivity of the land. It also fails in that, as the human population rises, this increased and enlarged force of production, labour, will tend to increase what is produced. If, as Malthus argued, human numbers increase geometrically, then so too does their output, especially with the aid of science and technology. So his argument fails even as a mathematical equation.
Capitalism’s Relative Surplus Population
Uniquely the capitalist mode of production relies on a surplus in the working class, a “relative surplus population” which is essential for the periodic resurgence of a boom in the economy. Those laid off in yesterday’s slump are later eagerly recruited by employers, desperate to be first to dominate a now growing market. In his description of the ‘reserve army of the unemployed’ (THE CONDITION OF THE WORKING CLASS IN ENGLAND IN 1884 from Meek, op cit, p78) Engels could almost have been writing of England now:
... English manufacture must have, at all times save the brief periods of highest prosperity, an unemployed reserve army of workers... This reserve army ... is the “surplus population” of England, which keeps body and soul together by begging, stealing, street-sweeping, collecting manure, pushing hand-carts, driving donkeys, peddling, or performing occasional small jobs. In every great town a multitude of such people exist [our emphasis].
Marx also argued that Malthusian lecturing was pointless as the ‘relative surplus-population’ is an inevitable by-product of the capitalist mode of production:
The folly is now patent which preaches to the labourers the accommodation of their numbers to the requirements of capital... The first word of this adaptation is the creation of a relative surplus-population, or industrial reserve army. Its last word is the misery of constantly extending strata of the active army of labour, and the dead weight of pauperism.
CAPITAL VOL I - from Meek, op cit, p 102
Among the arguments for ending capitalism and establishing world socialism, the planet’s current biological and ecological man-made mess is a very powerful and urgent one. As a mode of production, capitalism is destructive, a disaster for Earth, and for a great many humans. With market fluctuations and its incessant demand for growth as the driver behind the huge growth of the global human population, with its persistent and ineradicable poverty, the capitalist ‘production for profit’ system is clearly not sustainable.
[To be continued]
Q. What is a man? A. “An Appendage of a Machine”!
Within the capitalist system all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer... they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work, and turn it into a hated toil... they distort the conditions under which he works, subject him during the labour-process to a despotism the more hateful for its meanness; they transform his life-time into working-time.
Marx, CAPITALVOL. I - from Meek, op. cit, p 102-3
Object and Declaration of Principles
The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.
Declaration of Principles
THE SOCIALIST PARTY OF GREAT BRITAIN HOLDS:
1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.
2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.
3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.
4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.
5. That this emancipation must be the work of the working class itself.
6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.
7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.
8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.