The bankruptcy of capitalism
Britain’s Road to Socialism (BRS) begins by arguing that capitalism is economically, socially and politically bankrupt. As a system, it no longer makes a progressive contribution to human development. Capitalism’s sole purpose – to make maximum profit for the private owners of industry and commerce – is exposed, together with its deep general crisis and the suffering it causes.
Billions of the world’s people live in poverty, without access to education, medical services and sanitation. Populations starve, while food mountains are destroyed. Environmental destruction goes unchecked. Big business fails to cut carbon emissions, depletes finite resources and refuses to invest in safe, renewable energy.
Corruption discredits politics. Culture is usurped to try to ensure that selfishness and individualism permeate society. Social inequality is deep-rooted and endemic.
First, BRS outlines the development of capitalism, concentrating on its imperialist stage from the late 19th century. This provides important background for the whole of the programme that follows.
As monopolies grew, each sector of the economy came to be dominated by a handful of giant enterprises. Industrial and banking capital merged to form finance capital. Monopoly capitalists invested abroad, moving some operations overseas and forming vast trans-national corporations (TNCs).
Inter-imperialist rivalry over resources and markets intensified. State functions were enhanced during the First World War between the imperialist powers. The ruling class in each of the main capitalist countries used the power of the state to protect their monopolies. Economic and political power fused, giving birth to state-monopoly
capitalism.
But, from the 1917 October Revolution, imperialist domination was challenged by socialism. Fascism – the terroristic weapon of the most reactionary capitalists – was unleashed in Italy, Germany and elsewhere to crush the demands of working people expressed through their trade unions and communist and workers’ parties.
After the Second World War, imperialism entered its second phase. States regulated the unprecedented demand for commodities, promoted monopoly profits and coordinated international trade and currency relations. At home, working people were kept ‘on side’ through enhanced living standards. Around the world, the World Bank, the International Monetary Fund and TNCs controlled newly-free colonies.
Inter-imperialist rivalry was moderated by the need to collaborate in hot and ‘cold’ wars against the Soviet Union, the new socialist states of eastern Europe and communist regimes in North Korea, Cuba and Vietnam.
Nonetheless, despite every attempt to ‘manage’ capitalism through regulation after the 1930s Depression, economic crises returned. The long, post-war boom ended in the late 1960s. From the late 1970s, neoliberalism gained ascendancy with its ruthless agenda of lower wages, labour ‘flexibility’, the suppression of trade unionism, privatisation, banking deregulation and the free movement of capital. The dismantling of socialism in the Soviet
Union and eastern Europe allowed monopoly capitalists to seize opportunities in those countries and act with impunity to extend control over resources, labour and markets across the developing world. This heralded the beginning of imperialism’s third and present phase.
Led by the US and backed by Britain, imperialism has pursued its agenda with all ‘necessary’ force, blitzing whoever stands in the way: Afghanistan, Iraq, Lebanon, Libya, Somalia and Yugoslavia. China has been ringed with military bases. The September 2001 attacks on the US provided the pretext for a ‘war on terror’, allowing seizure of the oil, gas and strategic supply routes of the Greater Middle East. The end of the Cold War has brought intensified conflict, not peace.
Next, BRS explains the inherent contradictions and crises of capitalism. Production is privately owned by capitalists and run for the maximum possible profit. However, the interests of working people to maximise wages and improve living standards are diametrically opposed to this. Thus capitalist society is always divided between the capitalist class and the working class.
Capitalism’s drive to produce more and more commodities is the source of its cyclical crises. Workers must buy most of the goods and services but, as real wages decrease to maximise profit, they can afford less and less.
The point is reached when working people can no longer buy commodities at prices that sustain profit. Production is cut. Workers are laid-off. Demand is further depressed. The economy enters recession. Now, big companies take over failing ones, increasing productive capacity through super-exploitation and grabbing market share.
The cycle begins again, only to repeat itself in the succession of booms and crashes.
Lastly, BRS ends its first chapter with an analysis of capitalism’s general crisis. This was created by the sharpening contradictions and class conflict of the 20th century, generating the historic challenge of the forces of socialism.
Counter-revolution in the Soviet Union and eastern Europe and the liberalisation of financial markets temporarily reinvigorated capitalism. But the huge bubble burst in 2007, once again starkly revealing the underlying general crisis. Capitalist governments and central banks had to rescue their financial monopolies with the biggest bailouts in history. Millions of people were thrown out of work in the leading capitalist countries, while the drive to exploit the
developing world was intensified.
But the experience of deepening crisis has made working people aware of the inhuman nature of capitalism. They are realising that the economy can and must be run for the benefit of all, not for the few. They recognise the liberating potential of culture and that new technology can enhance life rather than reinforce the apparatus of war and oppression.
How capitalism can be overthrown and a progressive, just and peaceful society built is precisely what Britain’s Road to Socialism goes on to propose.
Video
Questions for discussion
- How is surplus value created by workers and appropriated by capitalists?
- What are the key features of imperialism and how does it differ from earlier stages of capitalism?
- In what way is the environmental crisis linked to the capitalist mode of production?
- What is the distinction between the general crisis of capitalism and periodic crises of overproduction?
Further reading
- Marx: Wages, Price & Profit (CP)
- Lenin: Imperialism
- Griffiths: Global Imperialism or Peace and Popular Sovereignty (CP).