In September 2010 the UN General Assembly was devoted to a discussion on ending global poverty, to the fulfilment of the so-called Millennium Goals first adopted in 2000. A decade after the adoption of these goals, UN agencies reported that while 830 million people lived on the brink of starvation when the goals were first adopted, this number had soared to more than 1 billion a decade later, even though there was enough food produced in 2010 to provide everyone in the world with at least 2720 kilocalories per day.
In 2006, a report from the UN’s World Institute for Development Economics documented the staggering levels of global inequality in household wealth. According to the WIDER report, the richest 1% of the world’s population owned 40% of global assets, while the poorest 50% owned just 1%. The United States had a mean wealth of $144,000 per person, the highest in the world, while India had a mean wealth of only $6500 (the poorest of those for which data was available). However, based on data collected by the US Internal Revenue Service, in November 2006 the New York Times reported that the poorest 60 million in the US had average incomes of less than $7 a day in 2004. The 300,000 richest US residents had significantly higher combined pre-tax incomes than the poorest 120 million.
Capitalism’s abject failure to provide the vast bulk of humanity with the material means for a dignified existence is rooted in the very existence of the system. As Karl Marx noted, at the heart of this system is a fundamental contradiction between the cooperative nature of production and private ownership of the means of production. Capitalism is based on production of goods and services for the profit of a tiny minority of wealthy owners and not for social need. Through their work, working people create new value but receive only a portion of that new value back as wages. The capitalists take the rest – the surplus product. As a result, the working people collectively cannot afford to buy back all the goods they produce.
The capitalists temporarily solve this by ploughing most of the surplus back into production. But this results in periodic crises of overproduction of goods that are unable to be sold at a profit. Moreover, over the long term there is a tendency for the rate of profit to decline as capitalists replace the source of their profits – living labour with “dead labour”, i.e., with machinery.
Concentrated wealth
Marx’s prediction that capitalism would lead to an ever-increasing concentration of wealth in the hands of a tiny minority and the increased exploitation of the vast majority of the world’s people is graphically borne out by the reality at the beginning of the 21st century. Today the capitalists are a far wealthier and a far smaller class than they were in Marx’s time. Today, a few hundred billionaires dominate the world’s economy, with the largest 200 corporations accounting for 30% of global production. Any one of them sells more than any of the poorest 120 countries on the world market. On the other hand, the vast majority of people in the world today have no other option to earn a livelihood than to try to sell their ability to work to a capitalist employer. Marx also noted that a society in which every human activity is commodified is deeply alienating. He explained how this required capitalism to create “imaginary appetites” long before TV started to bombard us constantly with a thousand new products that claim to keep us young and beautiful, or that we “must” own to keep up with the Joneses.
In the early 1970s capitalism went into a prolonged international crisis. Since then the capitalists have attempted to restore their profit rates to the level of the years immediately after World War II. They have done this primarily by driving down the real incomes of the working class. As the US left-liberal economist William Greider explains: “In 1975, an average American family needed 18 weeks of earnings to buy an average-priced car; by 1995 the cost of the new car consumed 28 weeks of income”.
Greider begins his 1998 book One World Ready or Not by describing the contemporary capitalist system as follows: “A wondrous new machine, strong and supple, a machine that reaps as it destroys … Now imagine that there are skilful hands on board, but no one is at the wheel. In fact, this machine has no wheel or any internal governor to control the speed and direction. It is sustained by its own forward motion, guided mainly by its own appetites.”
Under capitalism it is the blind forces of profiteering that are in the driving seat. Pro-capitalist governments bow down before the rule of capital. Nowhere is this clearer than on the issue of the environment. Climate scientists agree that emissions of carbon dioxide and other greenhouse gases need to be cut by at least 90% by 2050. Yet all that has been agreed by capitalist governments internationally is a non-binding agreement to work towards a 50% reduction by 2050. In 1997 these governments signed the Kyoto Protocol, in which they committed to reduce greenhouse gas emissions by 2012 by 5.2% of their 1990 levels. Since then, the emissions of the developed capitalist countries have risen by 12.8%. The very survival of life on our planet is being sacrificed to the pursuit of capitalist profits.
Solving the problem of global warming will require, as the 1988 UN World Commission on Environment and Development acknowledged, “profound structural changes in socioeconomic and institutional arrangements”, that is, a complete revolution in the mode of production and the contemporary social order.
In his famous Preface to A Contribution to the Critique of Political Economy, written in January 1859, Marx specified the necessary and sufficient preconditions for a historical epoch of social revolution in the most concise way possible: “At a certain stage of their development, the material forces of production in society come in conflict with the existing relations of production, or – what is but a legal expression for the same thing – with the property relations within which they have been at work before. From forms of development of the forces of production, these relations turn into their fetters. Then begins an epoch of social revolution.”
The keystone of Marx’s materialist theory of social revolution is therefore the concept of the contradiction between production and property relations on the one hand and the productive forces on the other hand. In today’s world this conflict expresses itself in the inability of world capitalism to fully harness the science and technology it has brought into being to meet the elementary needs of billions of people in the so-called Third World. Moreover, Marx’s famous prediction, made more than a century ago, that the productive forces would transform themselves more and more into destructive forces if they were not in time liberated from the domination of capitalist ownership and the drive for private profit, is now a deepening reality. The growing pollution of the atmosphere, land and seas all testify to the realism of Marx’s prediction.
Marx’s materialist theory of social revolution is predicated upon the recognition that it is not consciousness which determines social existence, but social existence which determines social consciousness; that it is in the realm of the contradictions between human needs and capitalist relations of production that we have to look for the possibility of the emergence of revolutionary consciousness within the working class. Under normal conditions, the ruling ideology of society and the ruling pattern of behaviour of workers cannot but be determined by the ideology, the values and patterns created and promoted by the capitalist ruling class. Then, under conditions of growing social crisis, a growing part of that same working class cannot but liberate itself progressively from that same ideology and pattern of behaviour inspired by the ruling class.
A whole series of conjunctural factors is required to bring this reflection of the structural contradictions of capitalism to the threshold of workers’ consciousness. Conjunctural shifts in the trends of income and employment, for example, sharply and steadily decreasing real wages after a long period of increases; or a sudden increase in unemployment after a long period of full employment; or a deep-going political crisis as a result of foreign imperialist adventures – such factors can create a favourable climate for a growing awareness by masses of workers of their alienation as producers, and for a sudden shift of the class struggle to questioning the employers’ authority in the shops, factories and offices themselves.
Capitalism is an integral structure which can absorb many reforms (e.g. wage increases) and which automatically rejects all those reforms that run counter to the logic of the system (such as completely free public services that completely cover social needs). But you can abolish such a structure only by overthrowing it, not by gradually reforming it out of existence. An army commanded by pro-capitalist officers cannot be gradually reformed out of existence, unit by unit. It has to be disintegrated and replaced in a relatively short period of time through the organisation of its ranks, i.e., the working people in uniform, into a military force capable of defending the class interests of the working people. Similarly, a government headed by pro-capitalist politicians can not be gradually replaced with a working people’s government, i.e., a government based on the collective organisation and mobilisation of working people. This requires relatively rapid change.
The change in the mode of production – from one that is based on production for corporate profit to one that is based on the social needs of working people – would undoubtedly take more time than the change in which class rules society. This change would involve bringing the ownership of all of the big corporations (which control around 80% of the Australian economy) into democratic public ownership, that is, under the control of a working people’s government and subordinating them to a system of democratic planning.
Genuine democracy
This would not mean bringing small businesses, such as local shops, into public ownership. Nor would it mean, as opponents of socialism claim, taking away working people’s personal property. It would mean an enormous expansion of genuine democracy, extending it into all aspects of social life, including the economy. This would be much more far-reaching than the parliamentary “democracies” of capitalism where we simply get to vote every few years for MPs who serve the interests of the capitalist rulers no matter what their promises before parliamentary elections.
Nationally, regionally and locally – at every level – elected representatives would be accountable and subject to instant recall. Therefore, if the working people who had elected them did not like what their representative did, they could make
them stand for immediate re-election and, if they wished, replace them with someone else.
Elected representatives would also receive only the average wage. Today MPs are a privileged section of society. Their lives are remote from those of ordinary people. This is no accident: a high salary, a very comfortable lifestyle and the ceaseless flattery about how “sensible” and “wise” it is to be “moderate” and “realistic” ensure that “our” elected representatives serve the interests of the capitalist ruling class.
There is another crucial sense in which democracy would be far fuller under a socialist government. Under capitalism most of the important decisions are not taken in parliament or local council chambers, but in the boardrooms of the big corporations. By contrast, a socialist government would bring major industry into democratic public ownership.
It would be necessary to draw up a plan, involving the whole of society, on what industry needed to produce. At every level, in communities and workplaces, committees would be set up and would elect representatives to regional and national government – again on the basis of recall at any time if they disagreed with their decisions. In addition, for a planned economy to work, it would be vital that working people had the time to take part in the running of society. Measures such as a shorter working week and decent, affordable childcare would be a prerequisite for society to develop towards socialism.
Another argument against a planned economy is that society is now too complicated to be planned. Some people argue that, in the past, when the majority of people’s aspirations were more limited, it might have been possible to plan an economy, but that today, when people want washing machines, videos and fashionable clothes, democratic planning just would not work.
Why socialism failed in Russia
In Russia, following the revolution in 1917 – when working people took power for the first time – an attempt was made to build a new society in a situation of extreme economic and cultural backwardness. The Russian people faced a desperate situation. Illiteracy was widespread and most workers lacked administrative skills. This meant that in many cases, the organs of popular power (the soviets or councils of working people’s delegates) had no choice but to keep on the specialists and administrators of the old regime, even at the cost of bribing them with privileges. In the town of Vyatka in 1918, for example, no fewer than 4476 out of 4766 officials were the same individuals who had previously served the tsar.
The Russian economy had been highly distorted by Russia’s participation in the first world war. It was then devastated by a civil war and invasion by 14 capitalist armies, including from the US, Japan, Britain, France and Australia. Under these conditions, the soviet system degenerated and a hideous bureaucracy usurped political power. The Soviet economy was, therefore, a mangled distortion of a planned economy. Decisions, far from being taken by society as a whole, were taken by a small number of privileged officials at the top.
Nonetheless, up until the early 1970s, the centrally planned economies of the Soviet Union and Eastern Europe produced impressive advances, though consumer goods were generally in short supply and of poor quality. Despite their many shortcomings, however, they also provided free education, free health care, low-cost housing, guaranteed employment and other social amenities to the majority of the population. The restoration of capitalism in Russia, by contrast, has been an unmitigated disaster. Within a decade, the economy collapsed by 50% and life expectancy has fallen in 10 years to the same level it was in the 1950s. The human suffering that has resulted from the reintroduction of capitalism has been immense.
While there was widespread dissatisfaction in the Soviet Union because of the system of bureaucratic rule, at least it provided the basics. In a negative sense, the reintroduction of capitalism has shown how much better a planned economy (even a fatally distorted one) was in providing a far higher standard of living for ordinary people than capitalism has been able to accomplish.
Capitalism today has provided the tools which could enormously aid the genuine, democratic planning of an economy. Firstly, there is a far higher level of education among working people than there was in Russia at the beginning of the last century. And capitalism has developed all kinds of technologies that could be used to assist in planning. In any case, big business itself plans its operations, but it does so in the service of maximising corporate profits, not meeting social needs. By contrast, a democratically run planned economy would be able to take rational decisions on the basis of aiming to meet the needs of humanity.
[This is a heavily abbreviated version of a Marxism Lecture presented in Sydney on May 21.]