Under capitalism, products and services are only produced and distributed if they can make a profit for the capitalists – those at the top of the system who own the means of producing and selling goods and services, like the factories, the call centres and the shops.
Today the capitalist system is entering a deep crisis. But even when it’s “working”, when it’s “fine”, it builds up massive inequalities between rich and poor.
The richest 1% in the world receive as much as the bottom 57%, or in other words, less than 50 million of the richest people receive as much as 2.7 billion of the poorest. Even in Britain – a country that is much wealthier than most states in the world – we live with outrageous levels of inequality. The wealthiest 10% of people in Britain control 54% of the country’s total wealth.
To enforce and defend these massive concentrations of wealth in the hands of the few, the capitalists in the world’s most powerful countries are all too happy to use force. That’s why we’ve seen the horrific and bloody occupations in Iraq and Afghanistan.
But despite all this, for years the right wing media and government told us that capitalism was not just the only way to organise the economy, it was also the best way. They said that thanks to technology and the spread of capitalism across the globe, it had become free of crises and the boom times would run forever. Never mind spiralling inequality. Never mind war without end. Capitalism was so powerful, so stable, so downright unchallengeable, it was here to stay.
But now the right-wing ideologues have suddenly piped down. This year capitalism has gone into an almighty crisis.
This crisis didn’t happen because of a global workers’ uprising against inequality, exploitation or oppression, or any other challenge to the power of the rich. Amazing as it may seem, capitalism goes into crisis on its own – because of the contradictions it builds up in the period when it is spreading and expanding.
All profit generated by the capitalists always has to be reinvested (as “capital”) to make more profit. Capital never sits still – it’s always moving. Products are made in factories, then sold on the market (exchanged for money), then some of that money pays the workers their wages, while the capitalists pocket the rest as profit. And then the “circuit of capital” begins again.
Workers are always short changed, they never realise the full value of their labour power that they put in because the capitalist always takes out the profit.
The crisis comes when too much money is made than can be re-invested at a profit and this is exactly what we are seeing now all over the world.
Once this happens, the circuit of capital breaks down. Capitalists are desperate to keep hold of their cash because if they put it into loss making industries they could suddenly find that it evaporates. This is happening in the American car industry, for example, where the three biggest companies, Crysler, Ford and General Motors, are all losing billions of dollars and are on the verge of bankruptcy.
Desperate to cut their costs, the capitalists will always try and make workers in their companies pay in order to restore their profits. That’s why now we’re starting to see companies announce redundancies, job losses, cuts in pay and hours and even factory closures. The capitalists don’t care that each job lost is someone’s food and bill money, someone’s rent check – they only care about restoring their profits.
This all suddenly seems “normal”. The media and government make it appear as “common sense” or just the way things are. But the truth is that it is quite insane. Capitalism is the only system that has ever gone into crisis for making too many things. Too many cars than can be sold for profit in declining markets. Too much money than can be reinvested into profitable businesses.
Added to this insanity is the simple injustice of this way of organising production. All the capitalists bring to the table is their legal ownership of the factories, companies and private property in general. Thanks to this or that piece of paper – a share ownership certificate or credit note in their possession – the capitalists are able to make “legal” claims on the profits generated by working people’s labour.
The bottom line is that capitalism doesn’t work. It is not only based on fundamental injustices, but it’s also a crisis-ridden system. The rule of capital is the rule of a crazy market, which creates massive wealth at one pole only to create misery at another.
There is an alternative. If only the system wasn’t run for profit, if only it was democratically controlled by working people, then we could run it on the basis of the need of all – not the profit of a few. That’s the system – socialism – that REVOLUTION is fighting for.
