The AWL Basic Education Programme

Second edition.

Issued 1997

HTML version issued 1998


"Why capitalism should not survive" - Published by the AWL in 1991

"I don't want you to believe that the system that produced Barbara Hutton [a famous heiress] can survive more than ten years, any more than French monarchy could survive 1789."

So wrote the novelist F Scott Fitzgerald to his daughter in 1938. In fact the system that produced vast luxury for a few and poverty for millions has survived many decades. It has survived not because it fixed itself up - it still produces the likes of Barbara Hutton, and terrible suffering in the slums just a few miles away from their mansions - but because no social system collapses of its own accord. A social class has to be ready, capable and mobilised to replace it with a new system; and the working class, largely because of the malign effects of Stalinism, has not yet been ready to replace capitalism.

Today in Britain the top 10% own 50% of marketable wealth, and the bottom 50% own 8%. (The figures are for 1991.) In the ownership of the property that brings power and influence - land and shares, as distinct from such property as a family home - the inequality is even greater. The top 3% own about 75% of privately-owned land and shares.

Wealth not privately-owned is controlled by a small elite, tied to and much overlapping with the top 3% who own most private wealth. Ten men - bosses of the big fund management companies, highly-paid and wealthy men - control œ100 billion of assets held by insurance companies and pension funds, or 25% of all shares in Britain. State-owned businesses are run by people from the same class.

At the opposite pole from the immense, concentrated wealth and power of the top 3% is immense poverty. The top 20% in Britain get 41% of all income. The bottom 20% get 7%. And the inequality is increasing. Real incomes for the poorest 20% of families, after housing costs, fell 3% between 1979 and 1990-1. Real incomes for the top 20% (after housing costs) rose 50%.

As a result many people do not even have the basics of life. 400,000 people are officially homeless in Britain - but young single people have little chance of being accepted by a council as officially homeless, so the real figure of homeless is much higher. A survey published in June 1991 found that in low-income families one child in ten under the age of five goes without enough to eat at least once a month. Over half the children and parents regularly had "nutritionally poor" diets. Two and a half million children live in families on income support. There is even worse inequality in the United States, a richer country and one closer to the "ideal" of capitalism since it has had relatively little of a state welfare system imposed on its private-profit core by the labour movement.

The top 10% in the US own 65% of all marketable wealth. The top 5% get 26% of pre-tax income; the bottom 20% get 4%. 32 million people in the US are officially "poor"; of those, 45% spend 70% or more of their incomes on the basics of housing, water, lighting and heating. About 20 million do not get enough to eat; maybe 3.5 million (estimates vary wildly) are homeless. Around 35 million people have no health insurance, which means that for them any extensive medical treatment is either impossible or will leave them with crippling debts.

But capitalism is a world system, and most of its poor are not in Britain, the US, or similar countries. They are in the Third World, in the countries which were maimed and stunted economically by capitalist colonial rule and which now serve, to a large extent, as reservoirs of cheap labour power for the more developed countries. In those countries about 800 million people regularly have not enough to eat - and the number is growing. The relentless squeeze by the wealthy bosses of the big international banks, demanding interest payments on their loans to Third World countries, translates into real wage cuts of 25% to 50%, increased unemployment in countries where scarcely half the workforce have regular jobs anyway, and millions of malnourished or starving children.

Why does capitalism create such inequality alongside its promises of democracy, freedom and equality? The flipside of capitalist freedom and equality in the marketplace is enslavement and inequality in the workplace.

The assortment of individuals, all buying and selling on terms of freedom and equality in the market place, is in fact made up of two classes - one the owners of the means of production (factories, offices, mines, etc.), the other those who have nothing to sell but their labour-power.

And the system reproduces those classes. For the owners it makes profits which add more wealth and power to their position as owners; for the workers it yields only wages, which do no more than enable them to scrape a living and continue as workers.

At work - that is, where the worker expends most of her or his energy, skill and creative capacity - there is no freedom, equality or democracy. The capitalist owner is a dictator, the worker is a wage-slave. If you work a week for a wage of œ150, you have produced new value to cover not only that œ150 but also extra - maybe another œ150 - for the owners of the means of production. The market transaction between capital and labour-power, formally free and equal, is in fact lop-sided: in return for a routine pittance - however much is necessary, with the given customs and standards, to maintain the working class - the capitalist receives control of the whole power of society to create new value.

From the viewpoint of workers in the production process, therefore, capitalism is not at all a system of automatic mutual advantage. It is a system of class struggle in which capital strives to drain their nerves and vitality and health.

A journalist who spent some six months in a Japanese car factory tells this story: "It's like I imagine hell to be. The line is a machine, and for eight hours the humans working at it are required to operate with machine-like accuracy. The line demands speed - relentless, mechanical and unchanging... After work, I climb the stairs on all fours, stagger to my room, open the door and fall in... My back aches... my wrist aches... my right arm is swollen."

Japan's industry squeezes workers harder than in most other advanced countries. But that is why Japanese capitalists are so successful. The capitalists of countries like Britain and the US want to make their factories "Japanese" - they say so openly. The relentless enslavement of the worker to the machine in Japan is what all capitalists are striving for - and with forever faster, "smarter" machines. The workers with older, slower, less capable machines - in less developed countries, for example - then suffer because of competition.

The ideal of mutual advantage resulting automatically from the market breaks down between countries and regions as well as between capitalists and workers. For new investments capitalists choose the most profitable areas. Those are usually not the areas with the lowest wages, but the areas with the best (and safest) nearby markets, the best supply and repair networks, the best transport and telecommunications, and the best supplies of adequately educated and healthy workers. Thus investment clusters in the advanced countries, and in a few areas in a few undeveloped countries, leaving the bulk of the world to suffer, as Marx put it, "not only from the development of capitalist production, but also from the incompleteness of that development."

Even better-paid workers in countries like Britain and the US have no secure guarantees of decent housing, decent food, adequate leisure, and personal dignity. A survey in June 1991 found that 50% of people in Britain thought their families would soon be affected by unemployment, or didn't know whether they would or not. 31% of workers in jobs said their jobs were not safe. And losing a job can mean losing a great deal more. Many families lose their homes because they cannot keep up the mortgage payments.

A society where private profit rules will always grudge resources for public health provision, public transport, education, nurseries - everything for which the long-term social benefits are much greater than the short-term profits anyone can make in the market place. Even the better-paid workers must spend much time and energy grappling with grim, meagre, inadequate public services; only the rich escape, with private hospitals, chauffeur-driven cars, private schools, private nurseries.

Worse: the protection of the environment, its maintenance in such condition as not to endanger future generations, yields no short-term private profits at all. Capitalism's inbuilt tendency is to plunder the environment without thought for the future.

The capitalist market economy systematically alienates the product of labour, and the production process, from the worker; it also alienates people from each other. Its motto is Margaret Thatcher's: "There is no such thing as society. There are only individuals and their families." It turns, or tries to turn, people, social beings, into competitors and rivals communicating only by means of hard cash.

Blighting lives with loneliness and alienation when it does not blight them with poverty, capitalism incites us to seek consolation in consuming more and more things. Alongside and in the midst of poverty, capitalism develops not only genuine luxury but sheer waste, sheer acquisition. The US financier Ivan Boesky - once a high-flier, now convicted of illegal dealings - was only candid when he proclaimed the basic rule: "Greed is good."

"Individuals and their families", said Margaret Thatcher, not just "individuals." In its basic transactions of buying and selling and producing, capitalism recognises no families. There are only individuals. In reality, however, it presupposes the family household as the means for reproducing the working class. People doing housework and child-care - usually women - work for capital, reproducing its workforce, even though they seem to be doing it all for love. Thus capitalism seizes upon, and continues (though transforming it), the oppression of women it inherits from older forms of economy.

Any division in the working class is of use to the capitalists in their struggle to gain bigger profits at lower cost. They use prejudices about women's role in society, and racist prejudices against black people, rooted in capitalism's slave-trade, colony-grabbing past, to make women and black people into a cut-price workforce, for use in marginal, part-time, and lower paid work.

Capitalism means that the things we make - and in the first place, money - rule over us. To expand the wealth of a capitalist from £100 million to £101 million is more important than the nerves, health or even life of a worker, and not because the capitalist has consciously chosen that way (asked, he or she would probably say no more than "that's business"), but because the system makes wealth all-important. The capitalist must promote the self-expansion of wealth - or opt out and cease to be a capitalist.

The rhythm of wealth's self-expansion dictates the rhythm of capitalist society, and leads it through a succession of booms and slumps. The deployment of new investments is not planned, but rises and falls with the ebbs and flows of credit and business confidence. The flows of credit outstrip the real possibilities of the market; the ebbs come suddenly and drastically.

At the ebb, it matters not if thousands are homeless. They have no cash, so they have no "effective demand" for housing, and open no prospect of profits for building companies. Building workers remain jobless.

The system that produces Mark Thatcher and BCCI, Robert Maxwell and Rupert Murdoch, alongside 800 million people with not enough to eat, does not deserve to last.


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