Editorial: Capitalism fails again

In the 1980s the poor got poorer. This is not Marxist dogma but official government statistics. The Households Below Average Income survey, published by the Department of Social Security at the end of July, showed that between 1979 and 1989 the number of individuals in households with less than half the average income (the official Common Market measure of poverty) rose from 5 million to 12 million. The number of children affected increased from 1.4 million to 3.1 million, a quarter of all children.

Since average income increased in the same period this does not necessarily mean that those at the bottom became poorer. Nor, whatever some claim, is this what Marxists say has to happen. But it can happen. And it did. In the 1980s the average weekly income of the bottom 10 percent, after payment of housing costs and in April 1992 money, fell from £70 to £66. That of the bottom 20 percent remained static at £81. But this average figure disguises the fact that, while the income of those over pension age increased marginally, those below pension age suffered a drop except for single parent households who got a measly £1 more.

Peter Lilley, the Secretary of State for Social Security, naturally sought to emphasise another statistic: that the average income increased by 30 percent. And it is true that in the 10 years average earnings went up more than prices. So (most but by no means all) people in employment did have more money to spend. But this doesn’t mean that they were better off by that amount. There was a price to pay.

During the 1980s competitive pressures forced employers, in the public as well as the private sector to cut costs, including labour costs. This meant getting more work done by less people. Workers were sacked but the workload remained the same or was increased. Those who kept their jobs had to work harder—more labour was extracted from them. This was the story in factories, offices, hospitals and educational establishments up and down the country. In addition, more workers were required to work unsocial hours. Another official government publication Social Trends, published by the Central Statistical Office in January, recorded that, while in 1985 44.3 percent of workers were forced to work at least one weekend a month, in 1990 48.5 percent were. Similarly, those forced to do shiftwork increased from 12.3 to 13.2 percent. All this amounts to a deterioration of working conditions.

But that wasn’t the only thing to get worse. Over the same period the level and quality of public services declined, as the central government, through such devices as “charge-capping”, took steps to pass on to local authorities the capitalist market pressures to cut costs. Everywhere the provision of libraries, creches, help for the elderly and disabled, adult education, sports facilities, and the like was markedly worse in 1989 than it had been in 1979.

Unemployment increased. Homelessness increased. Pollution increased. More people got into debt. Suicides, crime and drug addiction all went up. More sites of natural and historical interest were destroyed. Housing standards were lowered. Business got into the schools. Advertising was allowed on the radio. Need we go on?

Faced with these facts only a die-hard defender could claim that capitalism is a benign system which provides steadily rising living standards for the whole working class. Capitalism never has been and never will be like that. Those in work will always be under pressure to work harder while those not in work will never get more than a pittance. That is all capitalism can offer. Which is why it must be replaced by socialism—a society where poverty will be impossible since the overriding social aim will be to satisfy everybody’s needs, not to make profits.