A Manifesto For The 21^st Century

The Triumph of Capitalism

The overriding feature of the second half of the 20^th century was the Cold War. Often characterised as a struggle between the democratic Free World and the communist Evil Empire, it was a battle between two socio-economic systems – one based on private, the other rooted in state ownership. The battle ended in the 1990s with the collapse of the Soviet Union. For the last two decades capitalism has held sway in the world. Even those states which remain with communist governments have, to a greater or lesser degree, adopted the capitalist road. Market economics prevail and influence social and political development in almost every corner of the globe.

Globalisation and markets, so proclaimed the advocates of capitalism, would produce the best of all possible worlds. Yet, in less than twenty years after the fall of the Berlin Wall heralded the triumph of capitalism, we have experienced a near cataclysmic financial meltdown and a continuing economic crisis, the deepest for almost a century. The problems which the 1917 Russian Revolution sought to eliminate – war, poverty, discrimination and social injustice - are as prevalent as ever.

The Crisis of Capitalism

The 1990s triumphalism of the heralds of free enterprise is no longer. The system which was predicted to usher in a brave new world in which the dynamism of the private entrepreneur, unbridled by state interference would ensure prosperity for all, has developed problems unforeseen by most political leaders and economists alike. Boom has turned into bust and everywhere economies are depressed.

Economic pundits are at loggerheads as to how this is to be reversed. Almost all put their faith in growth but contradictory solutions are proposed as the way to achieve it; more market regulation and less regulation; more public investment and sovereign debt reduction; more private investment and less public expenditure; more tax and less tax; all are suggested as remedies for ailing economies. Few, if any, of the experts are prepared to suggest that the crisis might be inherent in capitalism itself.

Undoubtedly, the rich are getting richer - immeasurably so - but the poor have got poorer. The wealth which was supposed to trickle down from the coffers of the rich has remained firmly under lock and key and almost everywhere in the developed world working people are getting poorer. This is not a temporary phenomenon but has been evident since the 1980s.[1]

The Limits to Growth

Even if growth is achieved, as it may be, it can only be temporary for there are two fundamental difficulties which cannot be overcome. The first is that there are limits to growth. Almost all informed opinion is that economic development is adversely affecting the environment at a rate never previously experienced. Global warming is now recognised as a fact and growth, particularly if it is based on energy derived from fossil fuels, will further accelerate climate change. Material resources of all types are limited and will become increasingly scarce, even if the rate of recycling is increased. Markets react to scarcity by increasing prices and even more millions of people will be unable to afford the necessities of life.

Competition and Technology

The second limit to growth results from capitalist competition. Each capitalist enterprise seeks to maintain a competitive edge over its rivals by reducing the amount of labour involved in production so that, even when growth is achieved, the number of jobs may fall. The long-term effect is for a permanent reduction in the number of jobs. At the beginning of the 19th century, in what are now the advanced nations, some 80% of the population was involved in agriculture. Today, the figure is closer to 2% despite the fact that vastly more food is produced. Today, increases in productivity brought about by technical innovation are a feature of every sector of economic activity. As the rate of innovation accelerates the amount of labour in each unit of production correspondingly decreases. The net result is that even if growth is achieved, the number of people in employment will decrease. The idea, current in the 1960s, that automation would lead to a reduction in working hours and increased leisure time has not been fulfilled. For many now in employment, the eight-hour working day is as far from being attained as it was at the start of the 20th century. It is clear that it will never be possible to provide paid employment for the entire population of the world.

Technology has transformed production and will continue to do so at an ever-increasing rate. It is a process which cannot be stopped. The changes which have taken place in the last fifty years could not have been foreseen, so far-reaching have they been. It is equally true that we cannot visualise the world fifty years from now. But what we can say is that if capitalism continues as now, there will be fewer and fewer jobs. We may already have an indication of what things will be like. It is entirely probable that a high proportion of the young people of southern Europe who are currently unemployed, will never find jobs. The application of technology to capitalist production is bound to produce social unrest.

A Spectre is haunting the Planet …

Wages are the means by which capitalism distributes to workers some of the wealth created in production. Without a job there is no wage. Without a wage, poverty looms. As the proportion of wealth distributed in wages decreases, the proportion which is retained by the owners of capital increases. Thus the rich become richer and the poor become poorer. In most advanced countries unemployment and poverty are on the increase. The market - a euphemism for the owners of capital - demands that the economic crisis be resolved at the expense of the poor whose living standards are to be driven down. The consequence of making a relatively few people filthy rich is that millions around the globe become dirt poor.

… It is the Spectre of Poverty

Capitalist economics requires that everything has a price except human life which is valueless. In the developing world the situation is already dire. According to the United Nations, 868 million people around the globe are undernourished.[2] The cries of the deprived fall on deaf ears because, while we already possess the technical skills and resources needed to provide everyone on the planet with an acceptable life, capitalism requires that everything has to be paid for.

As the proverb says, God help us if the deprived ever get the taste. But the deprived have already developed the taste. Through television and the internet, they know how the developed world lives and they want some of the bread. Millions of workless, hungry people are on the move in Europe, Asia, Africa and the Americas, risking their lives to break through the legal and physical barriers built by the advanced nations against their arrival. The UN estimates that there are 214 million migrants across the globe, an increase of about 37% in two decades.[3] In the advanced nations, immigrants, with a few exceptions, are regarded as a malignant virus, to be kept at bay at all costs. Few measures are proposed to make life more acceptable in the immigrants’ homelands; even fewer are introduced. Malnutrition, disease and ignorance are everywhere rife. Finding no way of ameliorating their conditions, many are driven to religious fanaticism, communal strife, piracy and terrorism.

The Values of Capitalism

If the major capitalist nations cannot keep the poor in their place by soft power then hard power is to be employed. In the view of Tony Blair, The frontiers of our security no longer stop at the Channel. What happens in the Middle East affects us. What happens in Pakistan; or Indonesia; … in Sudan or Somalia. The new frontiers for our security are global. Our Armed Forces will be deployed in the lands of other nations far from home, with no immediate threat to our territory, in environments and in ways unfamiliar to them. They will usually fight alongside other nations, in alliance with them; notably, but probably not exclusively with the USA. … in order for us to protect our security and advance our interests and values in the modern world.[4]

For the United States, global domination is a matter of policy: We are shaping a Joint Force for the future … it will have global presence emphasizing the Asia-Pacific and the Middle-East while ensuring our ability to maintain our defense commitments to Europe , and strengthening alliances and partnerships across all regions. It will preserve our ability to conduct the missions we judge most important to protecting core national interests: …deterring and defeating aggression by adversaries, including those seeking to deny our power projection;.... This was endorsed by President Obama who wrote: I am determined that we meet the challenges of this moment responsibly and that we emerge even stronger in a manner that preserves American global leadership, maintains our military superiority and keeps faith with our troops, military families and veterans.[5]

While paying lip service to democracy and human rights, the leaders of the Free World - the world where nothing is free - threaten all who might challenge their global domination. To this end, billions of dollars are squandered annually on war, on preparations for war and on propping up despotic regimes so that free marketeers can exploit the world’s resources and labour. Only the interests and values of the rich and powerful are advanced by this expenditure. Global annual expenditure on arms in 2011 was more than USD1600 billion[6]; sufficient to transform the lives of the world’s poor. Over half of this expenditure (USD865.9 billion) was made by the USA, France, Germany and the UK alone. By contrast, the amount given in overseas development aid by all nations in 2010 was USD128.7 billion[7], about eight percent of the total spend on the military.

At a time when nearly half the people in the developing world are suffering from one or more of the main diseases associated with dirty water and inadequate sanitation[8]; when 783 million people, roughly one in eight of the world’s population, do not have access to safe water[9], it is obscene that Western leaders should suggest that economic growth should be stimulated by exporting luxury cars, and that billionaires should be free to build yachts and swimming pools for their personal use while millions are forced to live alongside open sewers.

Ending the Wages System

Ending the Wages SystemDiseases related to malnutrition are once again appearing in the developed world. Lack of affordable homes, reduced welfare services and pensions, longer working lives and wage cuts are now the order of the day. For those who would seek to make poverty history, the lesson is clear: charity, aid, good works, fair trade, sovereign debt relief and prayers are not enough. Such measures can treat some, but only some, of the festering sores of capitalism. They can never cure the disease. Endemic poverty and a world increasingly divided between rich and poor is the future unless a new way is found to distribute wealth more equitably.

That means changing the present system whereby wealth is distributed through wages with those who are unemployed receiving little or nothing, unless they happen to be employers or shareholders, in which case they will increasingly receive the lion’s share. The responsibility of the directors of every capitalist firm is first and foremost to their shareholders; to the world at large it is a minor consideration, if at all.

Wages are the manifestation of the relationship between employer and employee. Ending the wages system means ending the private ownership of industry, finance and communications upon which that relationship is based. It needs to be replaced by social ownership, the reverse of what is now being imposed on almost every nation, where public assets are being or have been sold to the private sector. Private ownership is being promoted as good and public ownership as bad, even as the free market is driving us to disaster.

Once again it is evident that even between major crises the market has no answer to the major problem confronting the twenty-first century: that unlimited and high tech economic growth in the pursuit of unsustainable profit produces global wealth, but at the cost of an increasingly dispensable factor of production, human labour, and one might add, of the globe’s natural resources. Economic and political liberalism, …cannot provide the solutions to the problems of the twenty-first century. Once again the time has come to take Marx seriously. [10]

Instead of the conservative motto A fair day's wage for a fair day's work, they (the working class) ought to inscribe on their banner the revolutionary watchword, Abolition of the wages system! (Value, Price and Profit, Karl Marx 1865).

A Programme for a Better World

A Programme for a Better WorldWhat is needed is a programme of demands around which those who seek a better world can campaign, the essentials of which must be social ownership of capital and the distribution of wealth according to need and not through wages. To provide reasonable living standards in the developing world and yet remain within the parameters of sustainable growth, living standards in the advanced nations may have to be reduced. However, the transfer of production from armaments to socially useful products could help to keep this reduction to a minimum.

The burden of drawing up this programme and acting upon it rests with the next few generations. There are positive signs that this will be done. The youth of today have demonstrated in their anti-capitalist protests, a willingness to participate in political life although not through conventional channels. They recognise that the democracy promoted by the Western elites is little more than a cloak to hide the levers of power in the hands of those who own and control the accumulated wealth of nations. They see the policies of national governments being dictated by the hidden hand of market forces operating through unelected bureaucrats of the IMF, the World Bank and state bodies, all determined to preserve the status quo with little regard for the needs of working people and almost no regard for those too down-trodden and too demoralised to protest.

We have seen the future and it works, wrote Sidney and Beatrice Webb after visiting the Soviet Union in the 1930s. It could be that the Webbs glimpsed the essentials of the best of all possible futures for the 21st century. For the first time in history, an attempt then was made to place the wealth of a nation in the hands of a whole nation. It was a flawed project which paid little or no regard for individual freedom and stultified the creativity of its citizens. It did not deserve to survive but it did prove that an advanced economy could be run without private ownership.

Capitalism is the most dynamic and productive social system yet devised. It has developed science, medicine and technology to the point where it is possible to provide everyone with an adequate income and security in a sustainable environment. It is, however, inherently incapable of achieving that goal. Only by changing the social system can this contradiction be resolved and the spectre of poverty exorcised from the planet.

How the change from private to social ownership is to be accomplished is unclear but it will require the combined efforts of all people of goodwill who wish to see a world free of disease, hunger, poverty and ignorance. These people constitute the majority of the world’s population and the internet provides the means of co-ordinating their actions. Just as people have made their history they can, by collective action, determine their future. That is the choice and challenge which faces the generations of the 21st century.

RDL, January 2013