From the November 2013 issue of the Socialist Standard
‘Profit is not a dirty word, says Cameron’, read the headline in the (London) Times (2 October), anticipating what he was going to tell the Tory conference that day:
‘It is businesses that get wages in people’s pockets, food on their tables, hope for their families and success for the country,’ he will say. ‘Profit, wealth creation, tax cuts, enterprise: these are not dirty elitist words.’
Some of this is true, but some is not. It is true that businesses do pay people wages but it can be doubted that they provide ‘hope for their families’. And ‘wealth creation’ is not a dirty word as long as it is understood that it is those who work for a wage who produce wealth not the business enterprises that employ them and only pay them as wages a part of what they produce.
As far as the workings of capitalism is concerned, Cameron’s point is valid. For capitalism, profit is not a dirty word as it’s what drives the system. It is an incentive to the profit-seeking businesses which control production under capitalism to produce, but only up to a point – the point at which it is no longer profitable to produce any more, even if some people’s needs have not been met. ‘No profit, no production’ is a basic economic law of capitalism.
The pursuit of profits distorts production by only responding to what people can pay for rather than what they need, so the richer you are the more and better you get while the needs of those who can’t pay are not met. ‘Can’t pay, can’t have’ is another basic economic law of capitalism.
The pursuit of profits also leads from time to time to overproduction (in relation to the market not needs) and the sort of economic downward that we are now in. No wonder supporters of capitalism have to work hard to try to convince people that profit is not a dirty work.
A couple of days earlier the Chancellor of the Exchequer, George Osborne, also had a go at criticising socialism, saying that for Ed Miliband (as if he was a socialist):
‘the global free market equates to a race to the bottom with the gains being shared among a smaller and smaller group of people. This is essentially the argument Karl Marx made in Das Kapital.’
Actually, Marx did say something like this, but in a speech he gave on Free Trade to a meeting of radical democrats in Brussels in 1848 rather than in Capital.
Osborne implies that, like what he accused Miliband of, Marx too wanted to try to protect people from the workings of the ‘global free market’. But he didn’t. He said he was in favour of free trade as he thought, somewhat over-optimistically, that this would speed the social revolution:
‘But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade.’
Socialists still look forward to the social revolution Marx was anticipating which will replace the capitalist world market by a global socialism where, on the basis of the common ownership of the world’s resources, there would be production directly to meet people’s needs rather than for sale on a market with a view to profit.