Defenders of the capitalist class, noticeably those from the Institute of Economic Affairs and the Adam Smith Institute, have recently been rather vocal in claiming that commodity production—buying and selling and the market—represent the climax of human economic development and in asserting the uselessness of anyone seeking to establish an alternative social system.
This confident bravado coincides with the collapse of state capitalist dictatorships in central Europe. Confusing nationalisation and state planning with socialism, these ideologists present capitalism, particularly the private form they favour, as a “rational” system effortlessly drifting towards some kind of free market Utopia in which every facet of the social world will be reduced to a commodity relationship. Some even suggest that governments and their economic advisers possess the necessary management skills to avert economic problems, while politicians, journalists and academics tell us in unison to be satisfied with our lot and to realise we are living in the best of all possible worlds.
This form of blinkered conservatism miserably fails to understand the workings of capitalism and the array of contradictions to be found within commodity production and distribution.
Economic crises
Despite the political rhetoric, for the governments and the economists who frame their policy documents there remains the uncomfortable fact that the economic and social problems which are features of capitalism cannot simply be wished away. Take for example economic crises and trade depressions which express all the contradictions of commodity production and highlight the anarchy of a system whose sole aim is to produce commodities for a profit.
It was Marx who discovered that crises spring from the very character of capitalism itself. Capitalism produces commodities which have to be exchanged to realise the profit embodied in them and the medium of exchange is money. Yet in this transaction there is an implicit contradiction which Marx expressed in the following way:
No one can sell unless some one else purchases. But no one is forthwith bound to purchase because he has just sold.(Capital. Vol I. chapter 3. section 2a).
Any break in this commodity chain of buying and selling will result in a crisis in which:
The spinner cannot pay because the weaver cannot pay: both of them do not pay the machine manufacturer who does not pay the iron, timber and coal merchant. All these again cannot meet their obligations as they have not realised the value of their commodities . . . and a general crisis thus arises. (Theories of Surplus Value, vol.III pt 2 pp 284-285).
Marx's theoretical explanation of the irrationality and unpredictability of capitalism, and of its crises, small and large, national or global, has been verified empirically, not only during his life-time but afterwards too. We only have to think back to the crisis and resultant trade depression at the end of the 1970s and beginning of the 1980s to see the vindication of Marx over the dreary academic economists and their theories of capitalism as a smooth-running rational system.
Profit before Need
There is currently a slump in the housebuilding industry. Before the crisis there was a feverish boom, with developers building as fast as they could acquire land. Workers within the building industry or related to it were able to gain higher wages, estate agents were snapped up by large corporations with many trading seven days a week, while the Sunday Supplements predicted the boom would last forever.
Then the break in the chain occurred between those buying houses and those selling them. Suddenly developers found they had unsold houses on their hands with interest repayments still outstanding to the banks. Some went bankrupt bringing unemployment and disruption to the lives of their employees. Contractors and building workers found work evaporating, while materials began to stockpile and large distribution companies began to lay off workers. The government and their economic advisers were neither able to predict the depression in house-building nor do anything about it once it had occurred.
This is a classic example of the way under capitalism a contradiction develops between production for profit and social need. Because of the inability to sell houses and realise a profit, house-building is stopped or cut-back while the needs of people for housing are passed over and remain unfulfilled.
This contradiction under capitalism between production for profit and social need takes place in other spheres of commodity production too. Peter Buchanan's 'Open Space' (BBC2 29 May) recently exposed the lie of the consumer fantasy world of the advertisers—the stick which beats the bucket of swill—by showing us homeless men in Cambridge being driven off a skip full of out-of-date supermarket food. There is also capitalism's complete indifference to the needs of 1.8 billion children under the age of 16 in the world to-day. According to a recent report, 61,000 children under the age of 5 die every day in the extreme poverty-stricken areas of the world as a result of preventable diarrhoeal diseases most of which are caused by poor water (Guardian, 25 March). In a rational society producing directly for social need this problem could easily be dealt with through the use of existing technology and of the skills of people working in the field of sanitation engineering. But we don't exist in a rational society: capitalism is perverse and indifferent to anything but the making of profit.
Despite the well-meaning but totally misplaced and ineffective effort of people in charities, the problem of starvation exists side by side with food mountains and deliberate underproduction. Farmers are paid subsidies not to produce and agricultural land is taken out of production to ensure profits are maintained. It would only be someone with a profitable interest in capitalism or someone who had been bought by the capitalist class to produce ruling-class ideas who could ever depict capitalism as "rational" or as a society representing the best of all possible worlds.
To rectify the problems, both social and economic, which affect workers today throughout the world, capitalism has to be abolished and replaced by socialism. To create this new social system of common ownership and democratic control over the means to life in which these problems can be solved and the needs of society met, requires conscious political action by a working class majority. No one else can do it for us. Until we take the necessary steps to capture political power then economic depressions, unemployment poverty and unfulfilled needs will continue: to borrow a phrase from one of Mrs Thatcher s speech writers, "There is no alternative".
Richard Lloyd
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