Editorial from the Winter 1984 issue of the World Socialist
It is an undeniable fact that throughout its history capitalism has been unable to meet the needs of the world's population. It has not done so in the past, it does not do so now, and it is not going to do so in the future.
We are interested in the needs of the community. Capitalism does provide for, and more than provides for, the needs of those who are rich enough to buy all they want. Nor are we interested in the total production achieved under capitalism, but only with that part that meets human needs. We are not interested for instance in armaments production, the vast allocations of resources and labour throughout the world given to the military. Tanks, guns, nuclear weaponry and their delivery systems do not contribute to meeting human needs as socialists understand them. We are interested in production which provides for life and not for the destruction of life.
Over one hundred years ago Marx wrote that "it is not a fact that too many necessities of life are produced in proportion to the existing population. The reverse is true. Not enough is produced to satisfy the wants of the great mass decently and humanely" (Capital, Vol III).
In modem terms, what is meant by providing for needs "decently and humanely" can be put in the form of a question. Does capitalism produce everywhere in the world enough good quality food, clothing, housing, water and sewage systems, energy for heating and lighting, health services and education facilities, books, radio and TV services, entertainment, means of travel recreation and so on? The answer is emphatically that it does not.
In the chapter from which the above statement was taken, Marx was dealing with the confusion which existed then, and still exists now, about the fact that periodically capitalism enters depressions in which it is found that some commodities have been "overproduced". But, as Marx showed, overproduction of a commodity for its particular market has nothing to do with the important question about whether capitalism produces enough to meet the needs of the great mass of the world’s population.
Frederick Engels put the position well in a letter he wrote in 1865:
Too little is produced, that is the cause of the whole thing. But why is too little produced? Not because the limits of production are exhausted. No—but because the limits of production are determined not by the number of empty bellies but by the number of purchasers able to buy and pay.
This is still the case. At the present time not only are productive resources not being used, but production is being cut back. In spite of the need for more food, the US and European governments are restricting food production because of limited market capacity for sales at a profit.
This difference between overproduction for the market and insufficient production for human needs demonstrates the contradictory way in which capitalism operates. When farms or industries have overproduced for their particular markets and have accumulated unsold stocks, it is precisely at that point that the ability of workers to buy decreases because of unemployment.
There are still many people who think that the appearance of unsold commodities is evidence that capitalism does produce enough to meet all needs. This is not only factually untrue but it would be a contradiction of the basic principle on which capitalist production is carried on.
In every country throughout the world, including the state capitalist countries of Russia and China, companies and governments own and monopolise means of production and distribution such as land, factories, shops, transport, communication systems, and so on. They employ workers to produce commodities to be sold in the market for profit. Selling at a profit is what the whole economic arrangement is all about. When, periodically, some industries find that they have produced more than can be sold in their particular markets at a profit, their reaction is immediate. They don't go on producing goods which they cannot sell. They curtail production and stand off workers they no longer need.
Capitalism does not go on producing commodities which it knows it cannot sell at a profit. The many millions of unemployed throughout the world are unemployed because they cannot be employed at a profit. Even at peak production during market booms capitalism never produces enough for the whole population, and in the recurrent market depressions it produces still less.
An accumulation of unsold products means that those who control them have a number of options. They can hold them at some expense until the market recovers. They can sell them at cut rates in order to get cash. In some cases they will be destroyed. There is one exception to these options about accumulated unsold stocks. World capitalism is not just a collection of industrial and trading organisations. It is also, of necessity, a collection of armed capitalist states with overriding political and military objectives. Governments, for political and military reasons, promote the production of some commodities beyond the demand of the market and accumulate stockpiles of petrol, food and strategically important metals. They do this because they are in constant conflict with each other over the acquisition and defence of sources of raw materials, trade routes and markets.
It is true that capitalism has greatly increased mankind's powers of production, but this has not been for the object of providing for human needs The economic stimulus has been profit and the accumulation of capital, and though these increased powers of production exist they are not available for the benefit of mankind. Quite apart from armaments production, they have been dissipated by the creation of a vast number of unproductive employments such as finance and banking which are essential to a profit system but which would be completely unnecessary in socialism which would be concerned with useful work producing useful goods and services.
Throughout the world today we find that powers of production are not being used to anything like their full capacity. Even in relation to existing market possibilities there is at the present time unused productive capacity in almost every line of commodity production.
The structure of capitalism and the way it operates always prohibits the full use of productive capacity. For a very short time at the peak of a market boom it is sometimes used to its full extent, but this can never last. But in any event such productive capacity as exists under capitalism is never in relation to the needs of the population. It is fixed at a level in relation to market capacity for the object of selling goods at a profit and this remains far below what would be required to meet the needs of the whole population.
Capitalist production is regulated by its own economic laws and cannot be controlled by any policy of so-called economic management. Nor is this position affected by the political complexion of particular governments, who for the most part remain in the powerless position of having to react to economic conditions which they cannot control. The conscious direction of production for human needs is only possible with the establishment of socialist society on the basis of common ownership, democratic control and production for use.