Capitalism. By Victor D. Lippit. (Routledge Frontiers of Political Economy. £65.)
Lippit’s main theme is that capitalism — as a system in which “a portion of the profits reaped through the sale of goods and services is reinvested, swelling the capital stock, incorporating new techniques in the process, and permitting larger sales and profits in the future” — could well continue for another three and four hundred years but that it will ultimately prove incompatible with human life on Earth. This is because its dynamic of continuous expansion and accumulation will come up against the fact that the Earth’s resources and capacity to reabsorb waste are finite. This, according to him, is the basic contradiction of capitalism, not anything within its own economic mechanism or social relationships.
Lippit argues that up to now capitalism has always been able to overcome periods of slump and stagnation resulting from profits falling or markets shrinking. Such periods have always proved to be temporary and in time have always been overcome by the emergence of new favourable social, political and economic conditions for capital accumulation. Much of the book is devoted to describing what these have been over time in America, Europe and Asia. He expects this pattern to be repeated in the future and sees no internal economic or social contradiction within capitalism that will prevent it continuing for centuries. In fact, he expects it to do so. Meanwhile the global environment will continually deteriorate until human life as we know it becomes impossible (he speculates that, with the ozone layer destroyed, humans may have to live and work underground).
It’s a pessimistic scenario, but how realistic is it? We ourselves have long held the view that capitalism will never collapse of its own accord for purely economic reasons and that it will continue to go through its cycle of booms and slumps until the working class put an end to it. So, in theory, capitalism could indeed continue for centuries. Obviously, we don’t think it need do, or will, since we think that the class struggle between workers and capitalists built in to capitalism will lead to the workers putting an end to it before then. Lippit says that this is utopian as workers, and even the destitute populations of the Third World, will continue to support capitalism as long as it continues to improve their living standards, however slowly (as he thinks it will). The crunch will only come, he contends, when capital accumulation, and the slow long-run improvement in living standards it brings, will no longer be possible for ecological reasons but that this won’t be for several centuries.
So what are we supposed to do in the meantime? And what sort of system will then replace capitalism? Lippit’s view is that, when the time comes, capitalism will have to be replaced by “a social formation that is consistent with a modified stationary state”, by which he means one with stable population, production and consumption levels. This implies “first and foremost”, he says, that “production must be undertaken for the use values it affords, rather than for profit”:
“The focus of innovation would be on minimizing throughputs rather than on maximizing output. The point would not be to bring an end to scientific creativity and innovation, but to channel it in directions that maintain and hopefully improve the ecological balance on which the maintenance of human life depends”.
We would argue that this “social formation” could only be one based on the common ownership of the Earth’s productive resources, natural and industrial, by the whole of humanity, i.e. world socialism, for how could production be reoriented towards use instead of profit unless the means of production had first ceased to be the exclusive property of individuals, corporations or states? But we don’t see why humanity has to wait till capitalism has nearly destroyed the planet to institute this.
It could be instituted now, so avoiding not only the environmental degradation that will occur if capitalism continues for another three or four centuries but also all the wars and the destruction and misery they bring that will occur during this period too; at the same time, world hunger could be eliminated much more quickly within this framework than Lippit thinks will eventually happen under capitalism.
Adam Buick
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