1990s >> 1996 >> no-1099-march-1996

The Case Against the Profit System

We are living in a world which has the resources to satisfy the material needs of every man, woman and child on the planet. We could produce enough food to feed everybody adequately and enough houses to house everybody properly. We could have a fully-comprehensive health care service, pollution-free industry and pollution-free towns.

All this is technically possible. The resources are there. The factories are there The people with the skills are there. But it doesn’t happen. It doesn’t happen because we are living in a class-divided society where the aim of production is not to satisfy people’s needs but to make a profit.

The basis of present-day society is the concentration of the ownership and control of productive resources into the hands of a small minority of the population, no more than 5 percent in any of the countries into which the world is artificially divided. They form a privileged class, since they are in a position to say to the rest of the population: “This is my farm, or my factory, or my office, and you can’t use it unless there’s something in it for me.”

That “something in it for them” is profit, financial profit, which is a tribute levied on labour by property. It is in fact the basis of the whole economic system that exists today. Making a profit—for the privileged few who exercise a class monopoly over productive resources—is the overriding purpose of production. It is the reason why production is undertaken. It is also the reason why production is not undertaken.

The basic economic law of the Profit System is “no profit, no production”. Defenders of profits see profit-making as an incentive to produce, as what makes the economic system go round. To a certain extent this is true, but it also restricts and distorts what is produced to what is profitable.

The reason why there are tens of thousands of homeless people in Britain and why there are millions of others who are living in accommodation which is regarded even by the government’s own low standards as “unfit for human habitation” is not because we couldn’t build or upgrade enough houses for them. It is because it is not profitable to do so.

The income of those facing an acute housing problem is too low to allow them to be able to afford even minimally adequate housing. And no building firm is going to build houses or flats if it can’t sell or rent them out at a profit. So the homeless and the badly houses go without— despite the fact that the resources to solve their problem exist. In fact, at the moment, there are huge stockpiles of unused building materials lying around and well over a quarter-of-a-million building workers who are unemployed.

On a world scale, it is for the same reason that there are millions of people who are starving or suffering from starvation-related diseases. This is not because enough food to feed them can’t be produced. After all, in Europe farmers are being paid millions to take their land out of agricultural production; in other words, not to grow food. It is, once again, because it is not profitable.

It is not profitable to produce food for people who desperately need it but cannot afford to pay for it. If you haven’t go any money, or enough money, your demand doesn’t count. You don’t constitute a market, so your needs are ignored.

That’s the way the capitalist system works and there’s nothing that can be done to change it. At one time there were people around who used to say: “the government can intervene; it can provide the things that the market won’t provide”.

To a certain extent the government does do this. It does pay for services—like roads, education and basic health care— which are essential to the smooth running of the capitalist economic system. But what these reformists overlook is that the government has no independent source of income. Every penny it spends has to come from taxation or from borrowing. And, in the end, taxes fall on property and profits.

But profits are what makes the economic system go round, so the government must allow them to be made. This places a severe restriction on how much they can raise by taxes and so on how much they can spend. This is why governments are always short of cash; why they are only able to spend minimum amounts on public services and welfare payments.

So, a crumbling health service and under-the-poverty-line payments to the old, the unemployed and the sick is another aspect of profits coming before needs under capitalism.

Profits First, People Second is not an aberration of the system. It is the system working normally. And it is why Socialists say that it is pointless trying to patch up and reform capitalism. It must be abolished altogether and replaced by a new system, founded on a completely different basis—common ownership, democratic control and production for use not profit.

Adam Buick