Friday, October 29, 2010

Cooking the Books: Defending capitalism (2010)

The Cooking the Books column from the October 2010 issue of the Socialist Standard

Capitalism is indefensible (except if you are a capitalist). But that doesn’t stop people trying. One recent example is Lucy Turnbull, member of the Australian Liberal Party and former Lord Mayor of Sydney. “Capitalism is still the only system that works,” she asserted in the Sydney Morning Herald (9 August).

According to her, “price signals, fair markets and free trade are the cornerstones of the capitalist system for creating goods and services”. Prices, markets and trade certainly are features of capitalism but she manages to omit two other, key features: the class ownership of the places where goods and services are produced and production for profit. Without these capitalism wouldn’t be capitalism.

Prices may signal to people and firms what to buy, but it is profits that signal to capitalist firms what to produce. Unless prices are high enough to allow capitalist firms to realise a profit they can signal as much as they like but no production will be forthcoming. In addition, some needs don’t register at all if the person hasn’t got the money to pay to satisfy them. In which case they go unmet.

“Fair markets” and “free trade” are not essential features of capitalism but policy objectives that sections of the owning class sometimes want the government to pursue. At other times subsidies and tariffs have been preferred. Turnbull has made the mistake here of identifying capitalism with a particular policy.

She makes some extravagant claims for her conception of capitalism:
“It alone harnesses the reality of human nature – our continual striving for progress and our competitive instincts to do our best.”
No doubt people do want to do their best, but what has this got to do with competition? If it is part of “the reality of human nature”, then this would continue if the capitalist rat-race to avoid falling into poverty is replaced by cooperation to ensure that nobody‘s needs are neglected.

Competition in fact prevents many people from doing their best. Capitalist firms compete to make profits by trying to keep their costs below the average for their sector; the lower their costs compared with their rivals the more sales – and profits – they can expect to make. It’s a race to the bottom with speed-up and pressures to get a job done quickly taking precedence over taking the time to do it properly.

Turnbull also claims of capitalism: “It alone is compatible with political and democratic freedoms.” Capitalism may well be compatible with political democracy but it’s also compatible with a restricted franchise (as in the 19th century) and political dictatorship (as in many countries now and in the past). Capitalism impedes the carrying out of democratically-expressed wishes to improve housing, health care, education, transport and the like as the workings of its economic laws force governments to give priority to profit-making over these. When it comes to production capitalism is undemocratic. The moment a worker enters the factory gates or the office doors they stop being a “free citizen” and become subject to the authority of the employer.

Socialism alone is capable of ensuring a genuine democracy as, with the means of production the common heritage of all, everyone will be able participate on an equal basis as nobody would have a privileged say in how the means of production are used and nobody would have a privileged share of what is produced. Under democratic control the means of production can be used to satisfy people’s needs not to make a profit for the few.

Practical Politics (2010)

From the October 2010 issue of the Socialist Standard

The Socialist Party is pro real democracy. Real democracy can only be achieved by common ownership of resources and free access to goods and services, because only this provides political equality. The tyranny of money maintains injustice and division world wide. The Socialist Party is thus anti capitalist.

In capitalism, a minority owning class has vast amounts of extra power that it imposes by financial control. Socialists believe in people being able to do the work that they wish to do and directly for their communities, within a fully democratic system. The provision of goods and services can not only be achieved without capitalism – it can be achieved with a giant leap in efficiency. We will be freed from the shackles of the financial system, and we will be able to reap the benefits of everybody’s practical knowledge, because we will all be able to take part equally in decision making processes.

In capitalism, for most of us, the jobs that we have to do, and/or the way that we do them, and a lot more in our lives is not freely decided by us. Nor can it be decided by our elected government. So much that affects so many is decided by the minority of owners, who have the power to set up structures and systems for their limited self interest and to pressurise all of the rest of us to do their bidding.

For as long as there has been a ruling elite, there has been indoctrination simply by living in such a system, that it is ‘normal’ and ‘acceptable’. This is added to by propaganda that is full of lies and distortions. In ‘democratic’ countries we have thought that we are ‘free’ – but democracy has been hijacked by the capitalist class, who, via governments, and just like any other dictators, wield the power of armies and weapons of mass destruction, whilst also controlling most of the information outlets, so they can spin all the news in their favour. Even militarily imposed business expansion with hundreds of thousands of civilian casualties, is now called ‘bringing democracy’.

This is not only what capitalism allows, it is what it produces. The victories for sanity that occur are despite capitalism, because capitalism is an insane system which cannot be made fair by reform or regulation. It is a system based on competition instead of cooperation, and its only real purpose is to capitalize without conscience. If you doubt this, think about how it functions: Can’t pay? Can’t have! And: No profit? No production! Capitalism is not devoted to or intent upon supplying what we need, efficient use of resources, appreciation of beauty or being humane – its devotion and its intention is to make a financial profit. Where needs are supplied in some form this is incidental to capitalism; it happens to be necessary for the profit making.

Any benefits that are claimed for capitalism actually come from the workers, who could do a much better job without it. The rules of capitalism have been made to serve the unjust privileges of a few over the common good for people and the biosphere. It will always fix the regulations. It will always drown out calls for equitable reforms with loud demands for profit. It will always encourage us to cheat and lie and, faced with the horrors that the system creates, to not care.

As capitalism has become globally established over the last five hundred years, money has become the main controlling and deciding factor in much of our behavior. The wealthy are the ones with money to invest in new enterprises, and so capitalism generally delivers concentrations of wealth and thus power. The profit priority of the capitalist class results, amongst other things, in wages being as low as possible, and thus generally the priority for the workers is to buy the cheapest. This also leads to the dominance of big business producers and suppliers, which has profound and drastic effects on society. One effect has been a massive increase in the reliance on cars and on road, air and sea transportation of goods using fossil fuels. This is a typical example of something that is considered to be good for the economy – but is not good for communities or the health of individuals – or, as it turns out, for the environment as a whole.

The profit priority results in every form of waste and abuse; from the billions of deceptive three quarter empty plastic tubs of pills to the carnage of war. People are persuaded to buy stuff that they don’t need and/or is harmful to them, money is saved in methods of production by losing quality, by abusive treatment of workers, by cruelty to animals, by pollution of the environment and by squandering resources in manufacturing products with ‘built in obscelecence’. – Not to mention all the useless work involved in just running the financial system.

We are prevented in many ways from doing what is most beneficial and tempted into making unhealthy and unkind choices. This is very stressful - so even those with what is called a ‘good standard of living’ tend to suffer in this system. The diseases of unhealthy affluence are prevalent. At the same time, a huge and growing proportion of the world’s population is malnourished or starving and lacking even clean water. It is a measure of the unhealthiness of capitalist affluence that it is unsustainable; it is destroying the living environment that supplies it. And environmental damage is increasingly a factor in causing poverty and conflict.

This is not democracy failing us – the problem is that we do not have real democracy. What we are getting is clearly not what the majority of people want. Globally, in the twenty first century, more than ever before, war is conducted in civilian areas. More people than ever before are losing their land and communities and being forced into city slums. More people than ever before live on rubbish dumps. More people than ever before are imprisoned. More young people than ever before are imprisoned. More young people than ever before are abandoned and homeless. More young people than ever before are involved in the sex trade.

These are not just problems that capitalism hasn’t got around to solving yet. They are caused by a combination of the effects of capitalism. Neither does capitalism respond to the need to solve problems that it has produced. The issue of global warming is a prime example of this. Global warming is largely the result of the particularly polluting forms of production and organization that have developed in the capitalist system. However, for instance, large profits are being made from the production and use of oil. It is integral to the cash flow in the present situation. Because of having little choice in how our society functions, unyet having to function in it to get money - it is frequently very difficult or impossible for people to have workplaces homes close enough, or to have alternative transport arrangements, so that they do not need a car. Then society becomes arranged around car use; it fits in beautifully with big business supermarkets. Thus the whole system ferociously resists making the radical changes that are needed to protect our environment. Instead, we are taken to war to secure more oil supplies.

When it comes to creating profit for a minority, capitalism is extremely efficient. But when it comes to creating sustainable, healthy, friendly communities, capitalism is extremely inefficient. In this regard it is tragically wasteful of the abundant resources of the earth and of man made technology. - All that waste to maintain something that we don’t really want! Something that is bound to be unhealthy; the undemocratic power of a minority! This is what we agree to when we vote for any capitalist party.

By exploiting the prejudice, separation and general ignorance that capitalism breeds, the capitalist class continues to rule us with majority support. They continue to have vastly disproportionate control over how we live; to force cuts in services, to take the hearts out of our communities, to take us away from our children, to distract us from the truth, to stress us and fill us with rage that we take out on ourselves, each other and our fellow creatures, to make us depressed, to get us addicted, to wreck our environment and to take us to war – and to convince us that there is no sensible alternative! This is not democracy. This is despotism dressed up as democracy. We have to take the democratic systems that have been fought for and won through previous generations and use them to achieve our true desire.

We can change to a socialist system by using the democratic process. As socialists we do not vote for any capitalist party – and that is all of them except the Socialist Party. Other parties may have some good intentions – but in capitalism these will be lost as we have seen before. Socialism will be achieved by majority demand. The working people supply the goods and services in society. We know how to do it and we know how it can be done better, if we are not constrained by financial rules and pressures that do nothing except maintain a harmful system.

Capitalism is a perverting and corrupting influence to whatever degree it is present – and always involves deprivation, slavery and abuse in various forms. It is now in a particularly ubiquitous phase and further deterioration of the situation for humanity looks likely. Just during my life time I have seen many communities and the whole natural world becoming more and more damaged. People run gallant campaigns to help others and to protect the environment – but in capitalism, although there are some temporary successes, this is a losing battle

The battle has to be to overcome capitalism with world socialism. When we remove money from the equation, our priorities can adjust to their healthy natural state. Our priority can be to do what is good. Using truly democratic processes we can find out what is good for us and do that. Our energy will be set free to develop a healthy society and a healthy world – which is necessarily to create justice and peace.
LB