Can capitalism be fixed?

The justified fears of a US plutocrat, and his vain hopes for a solution that will keep the system of exploitation intact.

Proletarian writers

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Proletarian writers

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Following the global stock market crash at the beginning of 2008 and the ensuing recession that left millions across the globe facing brutal austerity measures, the proclamation of an economic recovery is now resonating as triumphantly as ever across all the imperialist media.

But the reality of the matter is that whilst phony statistics are suggesting a period of solid recuperation for the likes of Britain, France, the USA, Japan, etc, more and more people are sliding further into poverty-stricken lives of misery and anguish as the inevitable consequence of capitalism’s unquenchable thirst for profit.

The rich are getting richer than ever, whilst growing numbers of the working class are facing worsening living conditions. So much so that even a lone member of the US’s wealthiest 0.01 percent is screeching for the brakes to be applied, foreseeing that such unsustainable trends will ultimately precipitate a revolution.

The pitchforks are coming …

In his recent article ‘The pitchforks are coming … for us plutocrats’, Nick Hanauer painted a picture of life in the US from the perspective of the elite.

Having asserted that the privileges of his success (namely an unspendable net wealth of $1bn) have accrued to him due to an ability to “see over the horizon, he turned his attention to his next vision, convincingly and accurately declaring, “I see pitchforks …

Although ultimately siding with the exploitative ruling class, Hanauer accurately identified that the growing chasm between the rich and the poor will ultimately doom the subjugating capitalist class to the disenthralling strength of proletarian revolution.

No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out … It’s not if, it’s when.

Class divisions approach tipping point

Wealth inequality is the most simple and accurate measurement to demonstrate capitalism’s failure to serve the masses.

According to a report this April, published on Bloomberg’s Business Week, the top 1 percent of the US population controls almost 40 percent of the national wealth, with the top tenth controlling over 20 percent and the top hundredth possessing over half of that!

It is no wonder that Hanauer is under the impression that the US “is rapidly becoming less a capitalist society and more a feudal society”, considering you have to go back that far to find such chasms between the ruling class and the exploited class.

The continuing divergence between the bourgeoisie and the proletariat spreads far beyond the borders of the US, being an inevitable trait of capitalism and its highest, most parasitic form, imperialism.

In Britain, the top 10 percent own almost half of the national wealth, whilst the bottom 50 percent of the population owns less than a tenth. Putting things into yet further perspective, the wealth of the top fifth in 2010-12 was 105 times that of the bottom, up from 92 times higher in 2008-10, according to the Office of National Statistics (ONS).

Additionally, the number of millionaires has doubled in the past four years, not despite the financial crisis but effectively because of it. The ‘recovery’ has featured tax breaks for the rich whilst the masses are increasingly compelled to choose between food, clothes or warmth, and the unemployed are forced into undertaking full-time jobs for free if they want their benefit pay-outs.

The economic ‘recovery’ following the free-market catastrophe on all fronts internationally has been nothing more than a massive shifting of wealth, guided by the interests of the most voracious fragment of society, as the burden of the overproduction crisis has been successfully passed to the workers while those at the very top of the heap have been given freer rein than ever to further satisfy their insatiable greed.

This ‘solution’ to the problem of capitalist crisis is typically short-sighted and unsustainable, however. The root cause of the crisis – the impoverishment of workers all over the world and their consequent inability to buy the products of capitalist industry – is not being addressed but only exacerbated. As workers get poorer, the crisis can only get deeper.

Pushing the burden onto our backs might seem convenient now, when we are disorganised and our resistance is muted, but eventually even the strongest back must break. And the capitalists’ other solution – war – is hardly likely to endear workers to their rule either, no matter how hysterical the propaganda that tries to sell it to them becomes. The ruling class, in short, is creating the conditions for its own overthrow.

Hanauer’s solution – an exercise in imperialist opportunism

Seeing the coming revolution for what it is – a process of gradual quantitative change that invariably leads to an abrupt systematic qualitative change – Hanauer proposes the same pre-emptive tactic that was formerly deployed globally in the years before and after the second world war.

His solution is ultimately a combination of temporary incremental improvements for the poorer majority of society and higher taxation on the rich – much in the same vein as the social programmes that were implemented by the Roosevelt administration of the US during the 1930s and the Attlee administration of Britain in the 1940s.

The initial objective is to pre-empt and further delay the revolution, ultimately prolonging the working class’s submission to the outmoded capitalist system. This is achieved by a small taste of a slightly better life, of which Hanauer’s proposed $15 minimum wage is reflective – providing just enough to keep the workers quiescent and the petty-bourgeoisie under the wing of imperialist ideology.

The overall goal however, which Hanauer himself cannot resist letting slip, is the invariable ultimate goal of capitalism and imperialism – to achieve maximum profit.

Hanauer writes, “if we adjust our policies in the way that, say, Franklin D Roosevelt did during the Great Depression … that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.

Ultimately, by stunting the revolution and suffocating the working class politically and ideologically, the imperialists would enable themselves to prepare for yet another cycle of exploitation, oppression and domination.

Meanwhile, it is worth reminding ourselves that the ‘fixing’ of imperialist economies following the great depression of the 1930s required a horrific global war to kick-start the ‘reconstruction’ boom, and that the social contract of the post-war welfare states in the West not only proved to be temporary, but was based on the increased suppression and exploitation of the peoples of the oppressed countries in Africa, Asia and Latin America.

Marxism vs liberalism

In many respects, the reforms of the Roosevelt and Attlee administrations improved the wretched lives of millions of workers within their respective states, with welfare and health care being the main significant gains for the working class.

A critical error of judgement to be found in both these imperialist states and all others, however, is the belief that this process of reform is something that can be relied upon, or that it can be fully extended into a peaceful transition to socialism.

JV Stalin discussed this fundamental question regarding the path to socialism in an interview on 23 July 1934. The interviewer, HG Wells, submitted that the reforms carried out under the Roosevelt administration were much along the lines of a planned socialist economy, and suggested that, from a different starting point, the US was following a path towards the same socialist position as the USSR.

In response, Comrade Stalin responded: “The United States is pursuing a different aim from that which we are pursuing in the USSR.

“The aim which the Americans are pursuing arose out of the economic troubles, out of the economic crisis. The Americans want to rid themselves of the crisis on the basis of private capitalist activity, without changing the economic basis. They are trying to reduce to a minimum the ruin, the losses caused by the existing economic system.

“Here, however, as you know, in place of the old, destroyed economic basis, an entirely different, a new economic basis has been created. Even if the Americans you mention partly achieve their aim, ie, reduce these losses to a minimum, they will not destroy the roots of the anarchy which is inherent in the existing capitalist system.

“They are preserving the economic system, which must inevitably lead, and cannot but lead, to anarchy in production. Thus, at best, it will be a matter, not of the reorganisation of society, not of abolishing the old social system which gives rise to anarchy and crises, but of restricting certain of its excesses.

“Subjectively, perhaps, these Americans think they are reorganising society; objectively, however, they are preserving the present basis of society.

“That is why, objectively, there will be no reorganisation of society.

“Nor will there be planned economy. What is planned economy? What are some of its attributes? Planned economy tries to abolish unemployment. Let us suppose it is possible, while preserving the capitalist system, to reduce unemployment to a certain minimum.

“But surely, no capitalist would ever agree to the complete abolition of unemployment, to the abolition of the reserve army of unemployed, the purpose of which is to bring pressure on the labour market, to ensure a supply of cheap labour. Here you have one of the rents in the ‘planned economy’ of bourgeois society.

“Furthermore, planned economy presupposes increased output in those branches of industry which produce goods that the masses of the people need particularly. But you know that the expansion of production under capitalism takes place for entirely different motives; that capital flows into those branches of economy in which the rate of profit is highest.

“You will never compel a capitalist to incur loss to himself and agree to a lower rate of profit for the sake of satisfying the needs of the people. Without getting rid of the capitalists, without abolishing the principle of private property in the means of production, it is impossible to create planned economy.” (‘Marxism vs liberalism’, 23 July 1934)

Ultimately, the goal of capitalism is and always will remain to maximise the interests and global wealth of the capitalist class. No amount of tweaking from large to small within the framework of capitalism can propel humanity forwards along the path of socialism.

The only way we can achieve our goal is to put “in place of the old, destroyed economic basis, an entirely different, a new economic basis” centrally focusing around the working class; to destroy once and for all “the roots of the anarchy which is inherent in the existing capitalist system”.