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Monday, October 10, 2016

The costs of capitalism

‘But of late, since Bismarck went in for state ownership of industrial establishments, a kind of spurious socialism has arisen, degenerating, now and again, into something of flunkeyism, that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic. Certainly if the taking over by the state of the tobacco industry is socialistic, then Napoleon and Metternich must be numbered among the founders of socialism.’ Engels, Socialism Utopian and Scientific.

The list of injustices in our society is endless; poverty, racism, homelessness, cuts in health and education, the plight of old age pensioners, the treatment of the disabled, police brutality, the oppression of women and gays and attacks on the unions. One of the crucial differences between reformists and the Socialist Party is that the former tend to regard each issue as an isolated problem capable of being solved on its own, whereas we view all of them as having a common root in the economic structure of capitalism. Our society subordinates everything to the accumulation of capital

Profit has become a “dirty word,” and quite rightly so in view of the misery and suffering inflicted on the mass of people in its name. The working class does not benefit from the pursuit of profit. Abolishing the role of profit requires production for need. Capitalism has evolved a system of economy - the anarchy of the market, within social and political conditions guaranteed by the capitalist state, accumulation of capital, money, credit, etc. This system is the fundamental basis of the maintenance of rule by the capitalist class, and the oppression of the working class; the liberation of the working class and the achievement of socialism is, of course, synonymous with the abolition of this system. The abolition of the capitalist mode of production requires the appropriation of the means of production by society. Revolutions do not take place in fact against backgrounds of poverty and recession. They take place when in a period of rising expectations the established order cannot satisfy the expectations which it has been forced to bring into being.

Capitalism is in an economic crisis and the capitalist class always reacts to an economic crisis in the same way: it attacks the working class. Because the capitalist crisis is world-wide, it is true for workers everywhere. Time and again the ruling class will return to the offensive striving to weaken union organisation, drive down wages, cut social services, slash jobs and undermine workers’ rights. All with the basic aim of increasing the share of surplus value going to profits.

The wastes of capitalism are so pervasive that the following is a sample list:
1. Cost of capitalist competition (duplication of product ranges between different firms where specialisation would be more economical, duplication of research facilities, unnecessary model changes and differentiation of products, advertising etc.)
2.  Costs of the capitalist financial system (the stock exchange, the banking system; insurance )
3. Costs dependent on the antagonistic relations between capital and labour. Any factory or office obviously requires people whose job it is to organise and supervise work, but under capitalism, there is a further function (often performed by the same individuals) of maintaining discipline. This function, as a specialised one, would disappear, as would probably the whole industrial relations department. It should not be forgotten of course that, modes of decision making within the factory would take time; one of the effects of the drastic shortening of the working week would be that workers would have the possibility of full involvement in the running of their units. Most of the repressive functions of the state (army, police, law, prisons) would cease. Another cost of capitalism which would be eliminated is the production of luxury goods for the consumption of the capitalist class. It is not possible to calculate fully what resources would be released by the elimination of these costs of capitalism. While some of the benefits would come rapidly others would inevitably take a longer time.
 4. The final and most glaring cost of capitalism is unemployment.

The full utilisation of society’s resources would allow a massive increase in production even before the longer-term advantages of a socially rational deployment of resources were realised.


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