1990s >> 1996 >> no-1104-august-1996

Capitalism is Obsolete

The historically progressive nature of capitalism came to an end a long time ago. Now the system represents nothing more than organised scarcity where there is the potential for abundance

It would be foolish to deny that at one time the capitalist system was a progressive development of society. It is doubtful if even a dedicated admirer of privilege would want to go back to feudalism. Who would want to be ruled by an absolute monarch in the shape of King Charles III, either with or without Queen Diana? If we were so ruled more than a few of us would be plotting a fate for him similar to the one that befell his unfortunate predecessor King Charles I. However, although capitalism once moved us forward, it has long since outlived its usefulness. We come here to bury the capitalist system, not to praise it.

In deciding whether capitalism, like feudalism, should be consigned to history we should apply one simple test. Is the capitalist system organised directly for the needs of all people? If it is not, that would be the best reason for getting rid of it, and replacing it with one that would. This is a choice between capitalism or socialism.

Capitalism is organised for private gain, for profit and the accumulation of capital. It works through class ownership and economic exploitation. It sets up economic antagonisms within communities and divides the world into rival capitalist states. It breeds the ideologies of hate which are expressed in many forms of religion, nationalism and racism. It is enforced through the power structures of the state. It creates vast amounts of waste and destruction. It turns all the useful things of life, including our labour, skills and talents into commodities to be bought and sold on the markets. Capitalism makes a god of money and puts this above the real needs of people, so how could anyone seriously argue that it is organised for the benefit of the community?

Some obvious examples can be given. Surely, the first thing that any decent society would do is make sure that everyone ate enough quality food to sustain good health, yet there are more people starving or seriously undernourished than ever before. In the 1980s UNICEF stated that 40,000 children die every day from malnutrition or malnutrition-related disease, and this has not improved. We were all shocked and sickened by the slaughter of 16 children and their teacher in Dunblane. We should also remember that throughout the world thousands of children are dying needlessly every day.

We are not only talking about undeveloped countries. In the so-called advanced countries there is widespread poverty. In Europe 30 million people live below the poverty line (less than half average national income). In America the number is 32 million. According to a report issued by the Department of Social Security Report: Households below average income 1994, one third of all children, that is 4.1 million, live in poverty.

Appalling neglect of needs
How has capitalism responded to this appalling picture of starvation and poverty? It cut food production because it was said there was “over-supply”. To understand this we have to understand that in the twisted language of the market system “over-supply” does not mean “more than we need”. It means that too much food was produced for the purpose of selling it at a profit. As a result food prices fell and profits were threatened. To increase prices and profits, production was cut.

In America in 1983, 82 million acres were taken out of cereal production. This was equivalent to the combined states of Iowa, Illinois and half of Indiana. Europe did a similar thing under a different name, “set aside”. Under the latest, 1992, reform of the Common Agricultural Policy, European farmers have had to take 15 percent of croplands out of production.

The Independent (18 March 1994) carried a picture of a Major Lloyd and his wife who are being paid £19,000 per year for growing nothing on their 215 acres of high quality arable land in Oxfordshire. Major Lloyd is an ex-life guards officer, a group who are not normally noted for their humanitarian sentiments but even he can’t help saying, “something is wrong when there are so many people starving in the world and we’re being paid not to grow food”.

A further example of how the priorities of profit and capital accumulation come before the needs of people is unemployment. In the 25 countries of the so-called Organisation for Economic Cooperation and Development (OECD) 35 million are unemployed. In Germany it is over 4 million. Since 1980 in Britain there has never been less than two million unemployed using the old accounting methods.

In view of all the things that need to be done would a sane society keep millions of its work-force in a state of idleness? What has been the “opportunity cost”? Two million unemployed means 10 million work-days lost every week or 500 million every year. Since 1980, in Britain alone, more than eight billion work-days have been lost because of unemployment. Think of all the useful things that could have been done with these eight billion work-days, the houses and hospitals that could have been built, the production of food, better education, a decent public transport system and a clean-up of the environment. These are all examples of how the capitalist system prevents our use of resources whilst needs are denied.

We are not only talking about material things, we are also talking about dehumanised relationships in which producers are used as objects for private gain. Profit and capital accumulation can only be achieved through the economic exploitation of one class by another. The function of workers is to create values over and above what their wages or salaries will buy. This surplus is the source of the obscene disparities in the ownership of wealth which we see all around us.

The Independent (29 February’) reported that in America “Just weeks after AT&T announced plans to shed 40,000 workers, it has emerged that its chief executive, Robert Allen, received a pay package in 1995 valued at just over $16 million, compared with $6.7 million a year earlier.” In this country, Barclays Bank has announced the loss of a further 1,000 jobs, just after posting $2 billion profits for 1995. This comes on top of its 21,000 workers sacked since 1991. Many such examples could be given and what they add up to is the fact that capitalism is ruthless in its treatment of people when pursuing its aims. By no stretch of the imagination could the capitalist system be said to be organised for the benefit of the whole community, and this is the test as to whether it has outlived its usefulness, now that a world of abundance is possible.

Practical alternative
The practical alternative which would be organised directly for the needs of all people is socialism. The challenge of working with others round the world to set up a new system is not so great as it might appear. Already we have people doing useful work in every field. In farming, mining, industry, manufacture, building and transport, and in the running of services like education, health, communications, radio and television, and the like, we have people of every skill and talent doing the useful things of life. The challenge is to free these resources from the constraints and the anti-social aims of the capitalist system. If workers around the world can run society in the interests of profit-mongers then they can surely run it in their own interests.

This would have to be based on common ownership where all resources and all means of producing and distributing goods would be held in common by all people. Then through democratic control and voluntary co-operation every aspect of society would be organised solely for the benefit of the whole community.

What can be the justification for wanting to retain a system such as capitalism, which is only distinguished by its ability to generate failure and disillusion and all its various ways of thwarting the best hopes that we have for our future? The day is long overdue for getting rid of it.

Pieter Lawrence