2000s >> 2005 >> no-1211-july-2005

Who are the anti-capitalists?

In December 1999 a meeting of the World Trade Organisation took place in America, in Seattle. Delegates were met by a large demonstration which ended in a riot both by some of the demonstrators and by the police. So was born an international protest movement that has come to be known as the “anti-capitalist” or “anti-globalisation” movement.

“Anti-globalisation” was not a very good choice of name since you can’t be against globalisation. Well you can, but it doesn’t make sense. Globalisation – in the sense of the world becoming more integrated, of the emergence of “one world” – is basically a good thing, part of the preparation of the material basis for a world socialist society. In the end, most in the movement itself came to realise this and adopted the slogan “Another World is Possible”, i.e. another sort of globalisation is possible. It is actually quite a good slogan, which we socialists can endorse – and use – too.

But what do they envisage by “another world”? We know what we mean: a world without frontiers in which all the resources of the planet, both natural and industrial, have become the common heritage of all humanity and are used, under democratic control, to turn out what is needed by people to live and to enjoy life. As far as we are concerned, that is the only framework within which can be solved the problems facing humanity, not only obviously world problems such as global warming, wars and the threat of war, but also more “local” problems such as in the fields of healthcare, education, transport and the like but which are basically the same in all countries.

That’s what we mean by “another world” but what do they mean by it? Some (a handful) may agree with us. But most don’t. Most would, however, be prepared to accept being described as “anti-capitalist”.

But what is capitalism? To most people, capitalism is associated, rightly or wrongly, with three things: private ownership, production for profit, and laissez-faire economics.

Corporate capitalism
Private ownership originally meant the ownership of industry by private individuals. But, while this may have been the case in the days of Adam Smith (in the 1770s), this hasn’t been the predominant form of ownership since the introduction and rapid spread in the second half of the 19th century of what in England was called a “limited company” and in America a “corporation”. A limited company is a separate legal entity in its own right. It is the company, the corporation, that owns the assets, the shareholders owning as a collective group not as individuals. This means that they are only personally liable, if the company goes bankrupt, for the amount of their shareholding, not their total wealth. Hence the name “limited liability company”.

So, as well as private ownership it would be more accurate to speak of capitalism as nowadays involving company or corporate ownership. And, indeed, some in the anti-capitalist movement take this into account by talking of “corporate capitalism”. Which is OK as far as it goes. Only it doesn’t go far enough – because it doesn’t take into account state ownership.  State ownership is still a form of “private” ownership in the broader sense in that it is still a form of ownership (by those who benefit from it) that excludes  – deprives – other people; it is not at all the same as common ownership, which is ownership by everybody – or nobody, since with common ownership no individual or group of individuals can say “this is my property, you can’t use it”. With state ownership, those who control the state can, and do, say this.

So, we would say that capitalism is based on the individual, corporative or state ownership of the means of production whereas, for most in the anti-capitalist movement, it means only individual or corporative ownership. Which makes a difference of course,  as to what you are going to regard as “anti” or “non” capitalism.

Production for profit
But there is no dispute, not even with avowed supporters of capitalism, that one of the key features of capitalism is production for profit. The motive for producing things under capitalism is to make a profit, as the difference in money terms between the cost of producing them and the money received when they’re sold. Differences arise of course over the origin and justification of profits, but all are agreed that seeking to make a monetary profit is what motivates production under capitalism. In fact, the “Profit System” is another – very good – name for capitalism, which we often use ourselves.

From another angle, capitalism could also be called the Wages System since most people under it get a living by working for a wage or salary. But employers are not philanthropists. They don’t employ people simply to provide them with an income to buy what they need to live. They only employ people when they calculate that they can get something out of it – profit, which is the difference between the value of what employees produce compared with what they are paid as wages and salaries. But profits are not all used up in riotous living by employers and their hangers-on. Some is of course but any employer or company that consumed all its profits in this way wouldn’t last too long. Under the pressure of competition on the market, firms are compelled to re-invest most of the profits they make in keeping the productive apparatus they control as up-to-date as possible, so that they can produce as cheaply as possible and sell their products at a price equal to or below that of their rivals. Failure to do this will lead to falling sales and lower profits and eventually either to bankruptcy or to being taken over by some rival.

So, capitalism is an economic system where, under pressure from the market, profits are accumulated as further capital, i.e. as money invested in production with a view to making further profits. This is not a matter of the individual choice of those in control of capitalist production – it’s not due to their personal greed or inhumanity – it’s something forced on them by the operation of the system. And which operates irrespective of whether a particular economic unit is the property of an individual, a limited company, the state or even of a workers’ cooperative.

The third popular idea of capitalism – laissez-faire economics – is more controversial as a defining feature of capitalism. Laissez-faire – from the French for “let it take place” or “leave it alone” – is basically a call for governments not to interfere in the operation of the market, to let market forces operate unhindered. It was first coined by some 18th century French economists opposed to the restrictions on trade and industry inherited from feudal times that then still existed. And was taken up by Adam Smith and in the 19th century by the mill-owners of Lancashire – hence its one-time other name of “Manchesterism”. It has also been called “liberalism”, associated as it was with the policy of Free Trade advocated and defended by the British Liberal Party in its hey-day. But it has never really existed in anything like a pure form.

For as long as capitalism has existed (and Marx and others date the beginning of capitalism to the middle of the 16th century) state “interference”, or to use a neutral word state “intervention”, in the economy has always existed. So laissez-faire is more a policy, advocated by certain interest groups within capitalism at certain times and in certain places. As such it can’t be said to be a defining feature of capitalism.

With the Great Slump of the 1930s, state intervention grew continuously. Economic teachings were changed to take this into account and to justify it – the so-called Keynesian Revolution. In fact state intervention was growing to such an extent that, in the 1940s, many thought that the trend was towards a completely statized economy. Witness books such as James Burnham’s The Managerial Revolution and George Orwell’s 1984. There were also optimists who thought that the gradual extension of nationalisation and the Welfare State would eventually end in socialism. But this was not to be: neither full state capitalism nor socialism resulted. Except in places like Russia (and later China) and its satellites where there already existed more or less full state capitalism, this process stopped at a so-called mixed economy of individual, corporate and state enterprises.

Then came the crisis that broke out in the early 1970s, from which the world economy has still not fully recovered (growth rates are nothing like they were in the 40s, 50s and 60s). But the political reaction to this prolonged period of relative stagnation was the opposite to what it had been in the 1930s. Unproductive state spending had to be cut back in order for a country’s industries to remain competitive on world markets. It resulted in a retreat, not an extension of state intervention. In the 80s under Reagan in America and Thatcher in Britain and others in other countries, privatisation, deregulation, cuts in the Welfare State, were the order of the day. Keynesian economics was dethroned and replaced by Monetarism. Opponents called these policies “neo-liberalism”, by which they mean a return to the laissez-faire policies advocated by Adam Smith, the Manchester cotton-lords and the 19th century British Liberal Party.

In the literature of the anti-capitalist movement this word “neo-liberalism” occurs again and again. In fact, so often that it gives a very strong hint that this is what the movement is really opposed to, that this is what it means by “anti-capitalism”. Not opposition to capitalism as such (as we would understand it: the economic mechanism of production for sale with a view to profit) but opposition only to the policies currently pursued by nearly every country in the world and imposed by the IMF and the WTO on those who might be tempted not to.

Another policy
The alternative they offer to neo-liberalism is not anti-capitalism, at least only insofar as capitalism is identified with liberalism (which as we saw is wrong). It is basically a return to the State interventionism of the 1950s and 1960s. The argument is that the State could, if it so chose (or if enough popular pressure was brought to bear on it), abandon neo-liberal, laissez-faire policies and again adopt interventionist ones (import controls, currency controls, restore and extend the Welfare State, regulate corporations, even re-nationalise industries). More that “Another Policy” than “Another World” is possible. But there’s nothing anti-capitalist about import controls, currency controls, etc. In fact they were practised before the 1980s by openly pro-capitalist governments just as much as by pseudo-socialist Labour governments.

There is some parallel between the old Labour movement and the new anti-capitalist movement. For the old Labour movement too, capitalism was essentially private capitalism. In its declarations it was “private profit” and “profiteering” (i.e. making too much profit) rather than profit as such that was denounced; the alternative promised was state capitalism (nationalisation and state control). It, too, set out to tame and humanise capitalism – and failed utterly, so utterly in fact that Labour and similar parties now openly embrace the market, competition and profit-making, the whole “enterprise culture” package. Instead of them changing capitalism, capitalism has changed them into a mere alternative team of managers of the capitalist system. The anti-capitalist movement is not likely to be any more successful in taming capitalism. In fact, following this road, it is doomed to failure.

The economic mechanism that is capitalism is just too strong and can’t be overcome either by government action or by lobbying or by political pressure in the streets. Capitalism just cannot be reformed to work in any other way than it does and always has done. An effective anti-capitalist movement will have to be one that works for ending the impersonal economic mechanism that is capitalism by restoring control of production to society; which can only be done on the basis of the Earth’s natural and industrial resources having become the common heritage of all Humanity.

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