Thinking capitalism is good for you is like thinking a Big Mac is good for you because it has lettuce and a pickle. In 2008, 1.9 million Portuguese workers in the private sector were covered by collective bargaining agreements. Last year, the number was down to 300,000. Spain has eased restrictions on collective layoffs and unfair dismissal, and relaxed limits on extending temporary work, allowing workers to be kept on fixed-term contracts for up to four years. Andrew Watt, an economist who heads the Macroeconomic Policy Institute in Germany, worries that the push for labor market deregulation will cascade from one weak country to the next, as all engage in a futile race to create jobs by gaining market share from one another in a world of insufficient demand. “Whichever country is weakest at the time is forced into major cutbacks. First Germany, now Spain, next France,” he said.
Inequality across much of Europe has widened. In 1991, the richest 10 percent of Germans took in 26 percent of the nation’s income before taxes and transfers. By 2010 they took in 31 percent. Over the same period, the slice of the nation’s income taken by the bottom half of the population fell to 17 percent, from 22 percent.
Too often union leaders have prided themselves on their hard-headed "realism”, their tough “practicality”, their "pragmatic" approach of looking at each problem concretely with no “abstract theories” to block their view. They want only a “fair day’s pay for a fair day’s work.” Their “reasonableness" cover their ignorance and refusal to face the facts of life. They are indeed not idealists but firm supporters of the present capitalist system. For over two hundred years capitalism has proceeded in a jerky fashion of cyclical prosperity and depression.
The essential basic feature of the capitalist mode of production is profit; the driving motivation of capitalist society must be the relentless pursuit of an ever greater rate and mass of profit. This profit is the surplus over and above what the costs of production are, the costs of the means of production and the cost of labor power. This profit is placed in the hands of the capitalist. Part of it is spent for his enjoyment; another part is divided among different groups of society or is paid in taxes. But an essential part of the profit must be reinvested in the productive process itself on an ever increasing scale. Capital must be accumulated or it will die.
The drive to increase or maintain profit or prevent their decline means that every effort must be made to reduce the costs of production, the costs of the means of production and the cost of labour power. To do this science, engineering, technology and techniques are developed as much and as speedily as possible so that mankind can produce the goods for the needs and wants of society with the least cost possible.
Every capitalist, therefore, must throw into the market all he possibly can over and above the amount he took out of the market. This surplus must grow in ever increasing and rapid amounts. If the markets do not expand accordingly, and they do not, there must come a time when the surplus cannot be marketed and a depression occurs with consequent unemployment and suffering.
The depression, however, tends to have this historic result. The less efficient methods of production are wiped out, the more efficient prevail; and when the depression ends, there is production on a far more efficient and better scale than ever. Competition and depression have forcibly destroyed what had been allowed economically to remain too long. Depressions result in intensification of both the suffering of the people and economic progress. The capitalist is no more to blame for this situation than the worker. Both are products of the same mode of production.
In all this long cyclical history of capitalism some people have arisen in the past who have tried to see whether depressions could be prevented and yet capitalism saved. Nevertheless depressions are still with us and grow ever more intense and enduring. A far greater number of noble people, especially from the ranks of the sufferers, have clamored for some relief and academics suggest all manner of policies so that the recessions can be made more gradual and not so severe, made shorter and not so prolonged, have less fearsome effects. Perhaps the suffering could be alleviated to a degree. Certainly it is an anomaly to have lines at food banks in the midst of great piles of useful commodities lying ready to be consumed or to be produced. Indeed, advanced capitalist countries have done something along this if only to prevent riots and revolutions from the suffering victims. But for the moment, taking advantage of the weaknesses in the union movement and the lack of effective resistance, the cuts and onslaught against workers will continue unabated until that union fight-back grows in strength.
Today in the Autumn Statement the Chancellor will be setting out new cuts that will see social welfare budgets curtailed even more.
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