Is the End of Capitalism Nigh?

From the Socialism Or Your Money Back blog

Our comrades in Ireland were invited to be one of the speakers in a debate last night at the Literary and Historical Society of University College Dublin on the motion 'That This House Believes that the End of Capitalism is Nigh'. Unfortunately, we were unable to send a speaker as we had done for previous debates but the organisers agreed to accept a written contribution to be read out. Here it is:

I want to oppose the motion. It would be great if the end of capitalism really was nigh but unfortunately it isn't. Capitalism is not collapsing and will never collapse of its own accord. It will have to be brought to an end. It will only end when a majority of its victims, the majority class of those who work for a wage or a salary, consciously decide to replace it with socialism.

By “socialism” I don't mean government ownership or what existed in Russia (that was state capitalism). What I mean is a society in which the means of production will belong, not to the state, but to the community as a whole, so that they can be used, under democratic control, to produce what people need and not for profit. A society in which the principle "from each according to their ability, to each according to their needs" will apply.

Many people do want socialism but at the moment we are only a relatively small minority. Before the end of capitalism will be nigh, there will have to be a lot more of us. In fact, we'll have to be the majority. It is because this is not yet the case that I say that, unfortunately, the end of capitalism is not nigh.

Every time capitalism enters a big crisis – as it has done at present and did in the 1930s and before that in the 1880s – overoptimistic people have predicted its collapse. In 1931 the British MP, James Maxton, predicted the collapse of capitalism within six months. He was wrong of course, but views like his spurred on the Socialist Party of Great Britain to publish a pamphlet called Why Capitalism Will Not Collapse that same year. In it we argued that there was no built-in flaw in the mechanism of the capitalist economy that would cause it to collapse automatically, of its own accord, for purely economic reasons.

Production under capitalism, we said (and it's still true), goes in cycles. Periods of boom inevitably ending in a slump and a period of stagnation, as capitalist firms, driven by a desire to maximise profits and assuming the boom would never end, overproduce in relation to the market for their goods. Which, in fact, is what has happened this time with regard to housing construction in the US.

But, we went on, slump conditions likewise create the conditions for a revival of profitable production. Eventually, the piled-up stocks would be sold, inefficient firms would go to the wall, capital would be depreciated, and real wages would fall, all helping to restore the rate of profit.

As Karl Marx pointed out:

“The life of industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation”.

Having said this, something has indeed collapsed, but it is not capitalism as such, it is only one form of capitalism – so-called "free market" capitalism. From the 1980s onwards we were continually told that if restrictions on short-term profit-making were removed, that's the best way for the economy to work. Let the "free market" rip, they said, and we'll all be better off. It didn't happen of course. The rich did get a lot richer and some of us did get a little more to spend, but look where it has now led. Events have proved Adam Smith wrong and Karl Marx right.

It would be appropriate indeed if people would turn to Marx’s analysis of capitalism. Some are. But others are turning back to Keynes as if his theories hadn't been proved wrong too. Thirty or so years ago when the post-war boom finally came to an end, there was a slump. In Britain the government did what Keynes said you should do in a slump: they increased government spending. But it didn't work. It didn't kick-start or pump-prime the economy. It only added inflation to the stagnation, introducing a new word into the vocabulary of economics: "stagflation”.

This, apparently, has now been forgotten and governments everywhere are trying once again to spend their way out of the depression that's already here. Once again, it won't work. Capitalism will only recover from the depression AFTER inefficient firms have gone out of business, capital values have depreciated, and real wages have fallen due to increased unemployment. Before capitalism will recover – and it eventually will, even if it takes two or three years – there's going to have to be massive job losses. And there's nothing any government can do to stop this. In fact, if they try they'll probably make things worse.

Socialists have to organize now to replace capitalism – not wait in either hope or expectation that it will collapse. But this organization has to be based on an agreed knowledge of the task ahead. It has to be based on an understanding of, and a rejection of, the failures of the past. It has to be based on a rejection of the half measures and the so-called solutions like state capitalism, political putschism, dictatorships and so-called national revolutions as well as a rejection of leaders and careerists building their lucrative careers and reputations on the naivety and goodwill of millions of workers. Most importantly, we have to end the widespread misconception that Socialism is nothing more than capitalism run by the State.

Capitalism isn’t collapsing. Capitalism won’t collapse. But even if it did, in the absence of the kind of organization I have been alluding to, it wouldn’t be collapsing into Socialism – it would be collapsing to give way to barbarism. So, in opposing the motion that "This House believes the End of Capitalism is Nigh", I would say that, until a majority take political action based on a desire for socialism, capitalism will stagger on from crisis to crisis as it always has done.