Economic democracy and freedom

A 19th Century Protest banner

The Earth’s greatest single resource is its people. The world could be a paradise for its inhabitants but it definitely is not a paradise for the majority of people. Who and what is responsible? It is the capitalists and their profit-seeking system. Our planet is ruled for and by capitalists for their own interests. What is wrong with the world is the way society is organised, the “system of society” which prevails. Two  main features of this society are it is divided into rich and poor—a tiny handful of rich (1 per cent of the population own more than half the wealth) who need not do any work, and the overwhelming majority who toil their whole lives through and that wars,  involving incalculable suffering to the people, are a regular occurrence.

It is a system of exploitation. By exploitation we mean living off the labour of other people. There have been previous forms of exploitation. In slave society, the slave-owners lived off the labour of the slaves who were their property. In feudal society, the feudal lords lived off the forced labour of the serfs. In capitalist society the worker is neither a slave nor yet a serf, i.e. forced to do free, unpaid labour for a master. But he or she is exploited just the same, even though the form of this exploitation is not so open and clear as was the case with the slaves and the serfs. The essence of exploitation under capitalism consists in this — that the workers, when set to work with raw materials and machinery, produce far more in values than what is paid out by the capitalists in wages. In short, they produce a surplus which is taken by the capitalists and for which they are not paid. Thus they are robbed of the values they produce. This is the source of capitalist profit. It is on this surplus, produced by the workers, that the capitalist lives in riches and luxury. Capitalism is a system in which the means for producing the wealth (the land, the mines, factories, the machines, etc.) are in private hands. A tiny handful of people own these “means of production” as they are called. But they do not work them. The immense majority of the people own nothing (in the sense that they can live on what they own) but their power to work. Capitalism is a system in which the means for producing wealth are owned by a few who live by exploiting the workers, i.e. by robbing them of the values they produce over and above the value of their wages.

As we have seen, capitalism is a system in which there are different classes—exploiters and exploited, rich and poor. The interests of these two classes are clearly opposed. The exploiters try to increase the exploitation of the workers as much as possible in order to increase their profits. The exploited try to limit this exploitation, and to get back as much of the wealth as possible of which they have been robbed. This is one aspect of the class struggle which arises inevitably out of the whole character of capitalism as a class system based on exploitation. The working class has to fight both immediate and long-term struggles. The immediate struggles are those that are fought out on different aspects of the struggle within the existing capitalist order. These struggles can be victorious without a fundamental change of social system. Such struggles are those for wages or in defence of living standards by trade unions. But for a lasting solution of all these problems, it is necessary to end capitalism altogether and to replace it by a new system of society in which the working people rule.

The ending of the exploitation, the cruelty and injustice caused by class society in its various forms, has long been the dream of men. It found in the writings of men like John Ball, Robert Owen, the early English Chartists and the pioneers of the labour movement. But capitalism by itself does not “evolve” into Socialism. It has to be transformed into Socialism by the conscious action and struggle of men and women. The age-long dream of the thinkers and the fighters of the past can only be transformed into reality when the working class take political and economic power from the capitalist class and, having succeeded in this, sets about building a socialist society.

What will such a socialist society look like? The means of production—the factories, mines, land, banks and transport—are taken away from the capitalists. They are transformed into social property which means that they belong to and are worked by the whole of the people, that the fruits of production likewise become social property, used to advance the standard of life of the peoples. No longer can some men (the capitalists) by virtue of the fact that they own the means of production, live off (exploit) the labour of others (the working class). No longer are the workers compelled to sell their labour power to the capitalists in order to live. The workers are no longer property-less proletarians. They now own the means of production in common and work them in their own interests and in the interests of society. It is the only system in which the old definition of democracy as “government of the people, by the people, for the people” becomes a reality. Capitalist democracy is government of the people by the capitalists in the interests of the capitalists. Socialism cannot be imposed on the people from above. It develops from below. The state apparatus which serves capitalism will be transformed into one which serves the interests of the people. The people will play the decisive part in the running of their communities.

Most people, even some capitalists, believe in a fair distribution of wealth, but you have probably noticed that capitalists and workers understand fairness very differently. This is not surprising to Marxists because they use class analysis as their basic method for understanding society. On the basis of that method Marxists recognize that what people mean by fairness has a lot to do with their class position in society and the degree to which they are influenced by the class-based theories, intellectual fashions, and prejudices that dominate the societies in which they live. For example, slave owners in societies with slavery-based economies often try to justify the status quo by claiming that slave laborers are incapable of personal autonomy and self-government and therefore slavery is fair and beneficial both to slaves and society as a whole. Likewise, capitalists promote ideas about the absolute necessity of private property, the profit motive, and wage labor for building a modern civilization, ideas which in their minds justify the existence of the capitalist class, capitalist domination of the working class, and a lopsided distribution of wealth that creates a fabulously rich minority and an impoverished working-class majority.

Karl Marx in 1875, in a letter that is known today as the Critique of the Gotha Program formulated a famous principle about how wealth would be produced and distributed – “From each according to his ability, to each according to his needs.”

The first part of the principle—from each according to their ability—means that all members of society will have the right and the actual opportunity to develop their talents and abilities to the utmost and to use their talents to produce goods and services for the benefit of society. In other words, everyone will have an education that allows them to realize their highest potential and a job in which they will have the opportunity to give their best efforts back to society. There will be no uneducated or poorly educated people, no unemployment, and no one will be forced by economic necessity to work in fields unsuited to their abilities. The second part of the principle—to each according to their needs—explains what citizens will receive from society in return for their labor, and that will be nothing less than complete satisfaction of their material and cultural needs.

Marx also said something very interesting about the implications of a fair distribution of wealth in a socialist society. He said that the principle “to each according to their needs” actually entails that inside socialism any given individual will have the right to receive a quantity of goods and services that is unequal rather than equal to the quantity received by others. This will sound counterintuitive, or even wrong to many, because most of us have been taught to believe that equal rights are the highest form of fairness, but Marx shows that this is not the case with regard to the distribution of wealth. 

Imagine two women living in socialism. One woman is a bus driver with five children and the other is a bus driver with one child. Let’s ask ourselves a question: According to the principle “to each according to their needs” which woman should have the right to receive more goods and services (food, housing, clothing, medical and childcare services, etc.) in compensation for her labor?  You might be tempted to answer that both women should receive the same quantity because both are bus drivers, and it’s only fair that everyone be treated equally. That would be the correct answer if this society was being run on the principle “to each according to their work,” which would mean that all bus drivers would receive the same reward. But that is not what Marx had in mind for socialism. The problem is that if each woman were treated equally, the driver with one child would receive more relative to her needs than the driver with five children—the former would be objectively richer and the latter poorer. This shows that an equal distribution of wealth can actually result in a highly undesirable kind of inequality—a division between rich and poor. This happens because principles such as “to each according to their work” or “equal pay for equal work” fail to take individual needs into account.

The principle “to each according to their needs” overcomes this defect by treating individuals differently, but in a positive way that considers and meets their differing needs, rather than a negative way that ignores individual needs. In a socialist society the unique needs of every individual would be respected. Thus the answer is that the woman with five children should receive more because her needs are greater.

The principle holds true even if we compare our bus driver with her five children to a neurosurgeon with five children. Shouldn’t a neurosurgeon be entitled to more than a mere bus driver? Not at all, since it won’t matter what kind of work you do. What will matter is that you contribute to the best of your ability. In return, society will meet your needs. If the needs of an individual who happens to be a bus driver are greater than those of a neurosurgeon, then the bus driver will receive more. But the needs of both will be completely and ungrudgingly fulfilled. Who would have a problem with that except for people who want more than they need? And there’s a name for that condition; it’s called greed.

This should lay to rest the common misconception that socialism means everyone will be treated exactly the same, as in the oppressive uniformity of the anthill or the barracks. Socialism actually means the opposite: out of respect for the individual, everyone will be treated differently, but in a way that satisfies the individual’s needs. The right to an unequal share in the consumption of goods and services actually results in a higher form of equality—all people will be equal in the sense that the needs of all will be met. The capitalist principle of “fairness,” is “From each according to the capitalists’ needs, to each according to the capitalists’ greed.” But for the Socialist Party “From each according to their abilities, to each according to their needs” is our inspiration and destination.