capitalism isnt working small

Why You Should be a Socialist

capitalism isnt working smallWe have the brains to reach the most distant parts of our solar system, and even invent self-driving cars, and yet we are powerless to solve our everyday problems. The wonders of modern science are truly amazing, but we can’t provide enough homes to stop people from being forced to live on the street, or provide decent jobs for our young people.

This is not a problem being faced by a backward country starved of resources. People are suffering from this “living” crisis in Glasgow, Newcastle, and London, as well as in Sao Paulo and Cairo.

On the other hand, the likes of billionaire (and US presidential hopeful) Donald Trump and his superrich tycoon friends in London and elsewhere each own fine mansions and apartments, valuable art collections, multi-million-dollar super yachts, and fleets of luxury cars, and travel around the world in private jets. They have chauffeurs and servants at their beck and call who run around for them at all times of the day and night.

The concentration of so much wealth and power in so few hands has become truly breathtaking. A mere 85 of these billionaires own between them more than the combined wealth of the majority of the people living on the planet.

While the rich wine and dine in exclusive restaurants, a growing number of working parents miss meals in order to prevent their children going to school hungry. The majority of ordinary people are now forced to work long and unsocial hours—if they are lucky enough to have a job—just to make ends meet. While the superrich bask in luxury, rickets and tuberculosis have once again returned to our poverty-stricken cities. Welcome to society in the 21st century!

Without rhyme or reason

empty housesIn our boom-and-bust society, industries are periodically shut down or “mothballed,” and workers are thrown onto the dole, their skills no longer required. Idle workers stare at idle factories. Many more are put on short time, working with their pay cut. It is like the country has been struck by some sort of natural disaster. People are in need, but they can’t afford to buy things. Where is the rationality in all this?

Capitalist apologists say there is no alternative to this periodic “creative destruction.” This is just the way the market works—as if shutting down factories and throwing people out of work is like pruning a few dead leaves on a tree. But this is human nature, they maintain. It has always been (which is not true), and therefore always will be, they say.

But is it human nature to see people live in slum housing or struggling to survive on the street, while properties are just left empty for speculative investments? Is it human nature to see people go hungry, while farmers are paid to leave land fallow? Is it human nature to see people die just because they cannot afford the cost of medicines? Must we simply accept our lot in life, as we are repeatedly told?

Why can’t we plan or organize our lives so that everyone benefits from the wealth created, rather than just a privileged few? There are enough trained people around with all the skills needed to tackle the problem. They can even send rockets to Pluto and beyond, and do many wondrous things. There are clearly enough human resources about, including those currently on the dole. Building enough homes for people to live in should be a simple matter. We have been doing it long enough.

But wait a minute! Private landlords and building companies are businessmen. Unless they make a big fat profit, they aren’t going to build homes for those who need them. All they are interested in is making money. No profit, no homes. If fact, the fewer houses, the longer the waiting lists, the more prices rise, and the more money they make. In this topsy-turvy world, the more hardship and suffering that exists, the more profit is to be made from it.

Of course, they would not put it quite like that. Instead they try and hide what is going on.

The casino of capitalism

monopolyBut capitalists, who own pretty much everything, are interested in one thing—making money. They don’t actually work much, if at all. Most wealthy investors employ managers and accountants to invest their cash and look after it for them. But even if these capitalists did work very hard, they don’t actually produce anything of social value. They gain their wealth from the work of others. They eat food, wear clothes, and live in houses produced by the labor of others, and offer nothing in return.

Workers produce far more than they get back in wages. This is where profit comes from. Workers only get given enough to keep them going until the next pay packet. Such exploitation is not as transparent as, say, in the Middle Ages, where serfs were forced to work for free on the lord’s land, but it is the same thing. The capitalists make money in all sorts of ways. But it all comes down to receiving more labor for less.

In previous centuries, the capitalists actually produced things. Today, they want to make money without the trouble of producing stuff. If you look at the Sunday Times Rich List, you see that most rich people get their money from inheritance, property, insurance, banking, financial services, and such like. Few actually make things. They buy and sell currencies or bonds. They even trade in junk bonds. No, they didn’t pick them up in a car boot sale or scrap yard—they are financial bonds made by institutions which are considered very high risk, as they include dodgy debts.

The stock market is pretty much like a gambling casino. Unfortunately, the livelihoods of millions are hanging on the throw of the dice by a billionaire dude. How messed up is that?

For the billionaires, they can never really lose. “Dealing” and not “producing” is the thing. That’s what makes the big bucks. Takeovers, acquisitions, buyouts: you name it, they do it. It makes no difference to them what stuff they buy or sell, be it weapons of mass destruction or anything else. They would sell their granny if they could make a profit from it. As one investment banker put it, everything is determined by the “overpowering greed that pervades our business life.”

Capitalists: wealth creators or parasites?

work-to-liveTake the billionaire Warren Buffet. His business has a cash pile of $67bn to invest in “acquisitions,” or buying up companies. He described this as like being on an “elephant hunt,” a hobby few of us know anything about. Mr. Buffet managed to turn an ailing textile company into the largest conglomerate in the United States, with a market capitalization today of $354bn. That certainly took a lot of buyouts! The company has operations that span insurance and lending, railways, manufacturing, and power companies, and maintains investments in many other large companies. He financed the merger between Kraft and Heinz and the takeover of Canada’s Tim Hortons coffee chain by Burger King. His latest acquisition was Van Tuyl, a network of US car dealerships he picked up for $4.1bn.

“With the acquisition of Van Tuyl, we now own nine-and-a-half companies that would be listed on the Fortune 500 were they independent (Heinz is the half),” Mr. Buffett wrote in his annual letter to shareholders this year. “That leaves 490-and-a-half fish in the sea. Our lines are out.”

How could Mr. Buffett make all that money single-handedly fishing for so many businesses and “interests”? The old fashioned capitalists, who not only owned but managed their businesses themselves, have almost disappeared. Today, people like Buffet employ managers to work for them instead.

But people such as Mr. Buffett still work hard, don’t they? With all this takeover stuff, they must be exhausted by the end of the day. But the question is, is this work indispensable to the task of producing real wealth?

John Strachey, a Communist and inter-war Labour MP, answered this question very well over half a century ago. Let us imagine a country, he said, in which all the roads had tollgates across them (although the roads were maintained at the public’s expense, as now). Let us suppose that the tollgate owners lived by their gates, and when the vehicles came down the road, they ran out and opened and shut their gates, while collecting a substantial toll in the bargain. The economists of such a country would certainly say that these tollgate owners were earning every penny they received. They would point to the fact that they were working very hard, going out in all sorts of weather to open and shut their gates, and allowing the traffic to pass through.

All this activity, and the very size of their toll fees, proved, the economists would say, that these hard-working tollgate entrepreneurs were absolutely indispensable. So much so, that the country could not carry on without them if we stopped paying these very large tolls to such deserving citizens. And if anybody asked whether the traffic would run just as well, or better, if there weren’t any tollgates at all, they would be told in no uncertain terms not to ask such impertinent questions.

Whether a person works hard and is paid a fortune does not mean that such work is of the slightest use. This does not only apply to the world of the tollgate owners, but today’s hedge fund managers, the currency speculators, the city con artists, fat cat bankers, and other investment sharks; namely, big business in general.

They are all the same. They just have different ways of making money. One rich executive described our times as “an era of rewarding ourselves with other people’s money.” They live a life of luxury. They keep an army of attendants, who cater for every need like the slaves of the past. The labor of hundreds of thousands of skilled workers from every continent is used to satisfy the needs of each of these parasites.


But there is a problem: they cannot personally consume their ever increasing pile of wealth, however much they gorge in caviar and champagne—even this has its limits. You can only live in one mansion or drive one limo at a time. Therefore, most of their money is invested to earn even more money. Through the work of others, they have acquired riches beyond anyone’s wildest dreams. They take all the top positions in business, state, and politics. They are the top one percent of society, the robber barons of old. They are members of the upper class.

The vast majority of the rich have become rich, not through work, but through fortune of birth and inheritance. The rags-to-riches story is the oldest myth in town.

“Work hard and one day you too will be rich,” so we are told. A few individuals may manage to crawl out of the working class and away from poverty. But given the way capitalism operates, workers can work as hard and as long as they physically can, but they will always remain workers. Hard work won’t improve their lot, but it will make the bosses even richer. Today, the share of national income going to labor is continually decreasing, while that going to capital is rapidly increasing.

The average US chief executive earned 295.9 times as much as a typical American worker in 2013, compared with 20 times as much in 1965. In Britain, average top boss’s pay has surged to almost £5 million—183 times that of workers, up from 160 times in 2010. The top ten highest chief executives earned over £156 million between them. These are the inevitable consequences of capitalism.

The laws of the system operate in and through the anarchy of the market, as Marx explained long ago. These laws operate behind the backs of society, where everyone thinks for themselves, but nobody thinks for all. As a result, crisis is inherent in the capitalist system. The main contradiction is that the working class cannot buy back all the wealth it produces. Overproduction is inherent in the system. Capitalism has managed to overcome this problem temporarily, in fits and starts, through investment, but this too has now reached its limits. More and more productive capacity means more commodities produced for a shrinking market. Hence the present crisis.

Automation and unemployment

Mass unemployment has become the norm. Over 10% unemployment is considered a problem, but 5% is considered “full employment”! Millions, especially of young people, are allowed to rot on the dole, their talents wasted. Millions of person-years of potential production are wasted every year due to unemployment. The system is stuck in a blind alley . . . and things are getting worse. A 2013 report by the Oxford Martin School estimated that half the jobs in the US are at high risk of vanishing within a decade or two. Imagine, half the jobs! Gone!

This is linked to the introduction of automation and the spread of robots. What a condemnation! The incredible advance of robotics could open a vista of freedom from toil, but under capitalism it serves the opposite end. Machines replace labor, making people “redundant,” while those who remain in work are forced to toil even harder. You no longer work to live, but live to work. Everyone is on a treadmill that is getting faster and faster. Some actually work themselves into an early grave. In the past, one person working could earn enough to provide for the entire family. Now, it is two or even more, each with several part-time jobs on the go. While work gets harder and harder, the billionaire class become even more fabulously rich.

“We must raise our productivity,” they say. In other words, we need to produce more with fewer workers! Of course, this is very profitable for the bosses. Again, fewer workers producing more commodities appear very “productive”; but who is going to buy these commodities when workers are out of work? Robots or new machines can’t buy or consume the stuff. We end up again in a crisis of overproduction—the economics of today’s madhouse.

Paradoxically, we have more time-saving gadgets than ever before, and yet we end up with less free time than ever before. If used properly, automation and robotics could do away with most manual work and abolish the burden of long hours of work for all of us. Instead of working longer, as now, imagine working just three hours a day in a five-day working week, with increasing pay? Again, why not work a 10 or 5 or even a 1-hour working week?

There is nothing to stop us—the resources are there. But to do this we would need to nationalize—not the small shops (who we would help to escape the grip of the landlords and banks)—but the 150 major monopolies that completely dominate the economy, along with the banks and finance houses. We would not compensate these fat-cat owners, as they have been bleeding us for far too long. We would then draw up a democratic plan of production based on peoples’ needs, and harness all the resources to get the job done. Production based on need, not greed, would increase production by 20% or 25% every year! The billions of extra wealth created could be used to launch a mass home building program, slash rents to no more than 2% of income (instead of 50% today), introduce a living wage for all, provide free gas and electricity, free public transport, which would cut pollution and improve our health (and would dramatically reduce pressure on the health service). We would build more schools and hospitals and make all education free, with grants for those who wish to go to continue their studies in university.

For a democratic and rationally planned economy

A socialist planned economy would be able to not only cut the working day, but reduce the age of retirement. The Russian economy after 1917, despite the monstrous bureaucratic regime of Stalinism, gave a glimpse of the colossal possibilities of a planned economy. For instance, in the ten years from 1958 to 1968, 100 million homes were built in Russia, more than the whole of Western Europe, Japan, and the United States put together. Imagine, with the democratic traditions of British workers and the high level of culture and technique, what could be achieved here in a democratic, socialist Britain.

Ah, that is a mad idea, say the capitalists. True, under capitalism, we are stopped from doing these wonderful things. They contradict the whole idea of production for profit. So why not ditch the profit motive? The use of automation and the free time it provides could give people the opportunity to develop themselves to the full. For the first time, it would free people to become involved in the running of industry and society. Genuine workers’ democracy, freed from bankers and capitalists, would thrive.

But workers can’t run society, they say. Why not, we say? Working people are the ones that do all the real work around here. The workers will tell you exactly how best to run their own workplace. They could run it far better than the current bosses. They never make such suggestions to their boss, as they would find themselves out of work! “Efficiency” today means how best to make more money for the capitalists, with fewer workers doing more work. Under a rationally planned society, efficiency would mean massive benefits for all. Of course, we would welcome the help of technicians, computer analysts, and engineers in this enterprise. Scientists could help to build a better world with new inventions that could save labor and reduce the working week even further.

If production was planned, there would be no unemployment. Everyone would be guaranteed a decent job on a proper wage. As production increased, so would wages.

The colossal wastage under capitalism would be done away with under a socialist planned economy. Today, for example, arms expenditure, which has become a massive drain on society. There are now 15,700 known nuclear warheads on the planet, with enough power to destroy us several times over. Governments intend to spend one trillion dollars on weapons of mass destruction in the next decade. What a scandalous waste! It would be far better to convert factories producing bombs to producing socially useful things, and so raise our standard of living.

We would use our potential resources, not for wars and conflicts, but to increase our well-being. The talent of scientists would not be wasted on building bigger bombs or more sophisticated weapons of destruction, but put to productive use for all.

From each according to their ability; to each according to their need

Our democracies are increasingly captured by a ruling class that seeks to perpetuate its privileges,” explained Steve Hilton, a leading Tory political strategist. “Regardless of who’s in office, the same people are in power. It is a democracy in name only, operating on behalf of a tiny elite no matter the electoral outcome.” There we have it; straight from the horse’s mouth. Capitalism is a system for the rich, by the rich, and of the rich. In place of this dictatorship of bankers and capitalists, we will have the democratic rule of working people. A society run by working people for working people.

Socialist planning of our resources is the way forward. Even the capitalists, who preach the virtues of the market, do not apply the market in their own factories and workplaces. Here everything is planned down to the last item, using the latest technology. That is the only way production in a factory can be organized. There is no market system here! All we are saying is that the whole economy should be run on such a planned basis, rather than being left to the vagaries of blind market forces. Of course, by planning, we do not mean the dictates of unelected managers, but the democratic involvement of all.

The economic levers of society—the banks and giant industries—should be taken over, without compensation, and run under democratic workers’ control and management. Power would finally be in the hands of ordinary people. This will allow us to democratically plan the economy, and finally live our lives to the full. Art and culture, which was the preserve of a privileged minority, would now be available to the mass of people.

Eventually, as productivity expands and the last remnants of capitalism are eradicated, society will be based on the principle “from each according to their ability, to each according to their need.” In other words, a classless society based upon solidarity and the harmonious satisfaction of everyone’s needs. The miseries of capitalism could finally end up in the dustbin of history and we could finally progress to a new future of peace and prosperity for all.

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