1990s >> 1991 >> no-1039-march-1991

Editorial: Capitalism, War and Recession

A famine threatens in Sudan and Ethiopia. But has a mass airlift of food, tents and medicines been organised? Has the production of useful things been increased to meet this obvious need? Not at all. The only airlift that has been organised is one of troops and armaments to the neighbouring Arabian peninsula in order to wage a hi-tech war. And manufacturing output in countries like Britain and the US is actually falling as their economies enter the recession phase of the business cycle.

Over the past ten years capitalism has had a comparatively good press. Words like profit, competition and enterprise have become catch-phrases to express something desirable. The desirability of what they denote is a matter of opinion but they do describe the key features of capitalism. Under capitalism economic activity is governed by a competitive struggle for profits amongst rival enterprises. Defenders of capitalism say this is good as it leads to more and cheaper goods being produced. We are now seeing what it also means: war and recession.

Under capitalism decisions as to what, how and when to produce are taken by firms which are all competing to make profits. A recession develops when this anarchic struggle for profits leads, after a period of expansion, to a key industry overproducing in relation to the market for its goods and this having a knock-on effect on the rest of the economy. This is where we are now in Britain, the US and a growing number of other countries. Output, investment and market demand are falling while unemployment and bankruptcies are rising. It’s the old story of poverty amidst plenty being solved by abolishing the plenty rather than using it to abolish poverty. But this is how it must be under capitalism, where the profit motive means that production is not and cannot be geared to meeting needs.

On the world scale the struggle for profits is not just a peaceful, economic struggle between rival firms from different states in which those selling the best product win. It is much more than this, since not just firms are involved. States are and, as states have armed force at their disposal, this gives the struggle a completely different dimension. When states feel that their “vital” economic interests are threatened by some other state, they are always prepared to use armed force as a last resort. This is the cause of modern wars, to which the present war is no exception.

This is why no conference of capitalist states, such as that proposed for the Middle East, can remove the threat of war. The most such a conference could do would be to negotiate a new balance of armed force, an armed truce between the states competing in the region. The only way to prevent wars is to abolish capitalism on a world scale.

What is required is indeed a “new world order”, though not Bush’s mad dream of a permanent and unchallenged American world domination. Oil and all other productive resources must become the common heritage of all humanity, not the property of multi-national corporations and national states. Nothing less can provide the framework within which the problems of world poverty, disease and pollution can be tackled and finally solved. Only then can production be geared to meeting people’s needs. Only then can the obscenities of war and famine be banished for ever.

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