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The Vicious Circle Of Capitalism! We Need To Break It!
-By WPRM (Britain)
The ruling class in Britain, their think tanks and the media deceitfully insist that the reasons for the current deepening economic crisis are deregulatory financial policies and the greed of a few individuals and bankers, and this is the cause of the accumulation of “bad debt” and “credit crunch”. They deliberately conceal the truth from the people that these factors are only by-products and minor, but inseparable aspects of the economy of the monopoly capitalist system.
At first they said that this was a collapse of a few financial companies in the US, and it is only due to the corruption of their management. In autumn 2008, they said that there were a few financial problems with some banks, especially Northern Rock, but the main problem is the housing market in the US. With the collapse of many banks and financial companies they said that it was only financial crisis. But shortly afterwards they were forced to admit that it is a deepening full economic crisis, deviously avoiding the word depression. And now they are desperately trying to hide the scale and depth of the crisis and declare that it will be over in a couple of years. Pigs might fly too!
The imperialist rulers try to hide the fact that the exploitation of workers is the pumping heart of the capitalist system. Monopoly capital feeds on the exploitation of billions of workers and peasants around the world, including hundreds of millions of children. Capitalists do not pay the actual value of the commodities that workers produce and consequently the majority of workers in the world cannot afford to buy even the basic commodities they need. According to the United Nations, the income of nearly 5 billion working people per head is $3 per day or less. One billion people do not have food and tens of million, especially children, die of hunger and malnutrition every year. Nearly 3 billion people do not have access to clean drinking water, proper sanitation, medicine and electricity.
A few hundred super rich accumulate billions of dollars per day, adding to their already colossal wealth, where hundreds of millions of youth are forced to drug use and addiction and tens of millions of women into the global sex trade. In spite of massive scientific and technological advances achieved by the workers in different fields, during the last 4 decades, air quality, fish stock, arable land and forest area across the world have reduced at an alarming rate. These staggering facts and figures and many more show that the monopoly capitalist system dominating the world is destructive and harmful to the people and society. But the ruling class desperately tries to hide the root cause of poverty, destruction and war – the capitalistic mode of production.
Crisis in the monopoly capitalist economy is inevitable, because the accumulation of capital and its moribund relationship of production are based on private appropriation of the means of production. The contradiction between socialised production and capitalist appropriation manifests itself as the antagonism between billions of workers and a few big capitalists. In addition to exploiting local and migrant workers, and super exploiting tens of millions of “illegal” migrant workers in the imperialist countries, principally monopoly capital thrives on plundering the wealth of the so-called third world countries, sucking them dry and keeping their economies destitute and dependent in order to make super profits.
Also, the contradiction between socialised production and capitalistic appropriation manifests itself as an antagonism between the organisation of production in work places and the anarchy of production in society generally. It is the compelling force of anarchy in the production of society at large that leads to the crisis of overproduction. The capitalist system cannot fundamentally resolve the problems of unemployment, inflation, housing, medical care and education for the vast majority of the working people. The capitalist economy always develops through boom and bust cycles, and it is never able to get out of this vicious circle. The ruling class and the managers of the capitalist economy continuously design different policies to maximise profit as well as keeping the crisis at the level of recession, avoiding an all out depression.
Maximising profit and anarchy of production inevitably lead to the creation of bubbles. The Consumer Credit bubble is designed for the workers in the imperialist countries, who cannot afford to buy the surplus of the massive amount of commodities overproduced by China, India and other countries, where labour and raw material is extremely cheap and thus super profits can be guaranteed. However, the level of mass consumer debt has continuously increased during the last 30 years reaching an unsustainable level. The British government’s statement that they are encouraging banks to lend to kick- start demand is flawed, because people cannot afford to borrow any more.
The Government Debt bubble is based on Keynesian deficit spending, which is used to artificially increasing consumption by creating public work projects and even non-productive jobs for the unemployed. The government gets most of its income in the form of taxes obtained from the people, buys the excess commodities in bulk when the people cannot afford all that is produced, and then sell it to the people making profit. Since the economic crisis surfaced last year, the government has used hundreds of billions of pounds collected in taxes from the people to save the banks who have extracted hundreds of billions of pounds of interest every year; on the mortgages, personal loans, credit cards, etc., from the same people. Today, the British government has its biggest budget deficit in history and its finances are in too perilous a state to permit a new round of fiscal stimulus.
In addition to these, there are various kinds of speculative bubbles such as estate bubbles, stock market and other financial bubbles. Economists working for the capitalist system cannot understand the fundamental flaws in the capitalist economy. Today, some say continued reliance on bubbled-based economics is a mistake, whereas others say at this point, bubbles are the only thing keeping us floating and the need for another spontaneous make-believe source of wealth has never been more urgent. However, both groups are mistaken, because the monopoly capitalist economy inevitably creates bubbles, and bubbles have to expand and eventually burst, deepening the crisis. For example, the dot-com bubble burst in 2001, and the housing bubble burst in 2008.
These economists have already stated that this is the worst economic crisis since the Great Depression of the 1930s. However, the current economic recession will soon develop into a full scale depression and it will actually be developing into by far the worst economic crisis in all of capitalist history. According to the Institute of Fiscal Studies, debt crisis in Britain will continue well into 2030s. Regarding its scale and depth, this coming depression could be dated from 2008; however, it has been developing since the early 1970s. Also, for 64 years, there has been no world war to basically restructure the global monopoly capitalist economy. But, imperialism means war.
It is important to consider that policies adopted by Roosevelt to overcome the Great Depression, which started in 1929, did not really work. In fact, it was the preparation for the Second World War, and the large scale military and civil production related to the war that finally stimulated the US economy. Also, after its defeat in the First World War, it was the preparation for war that enabled Nazi Germany, to overcome its monumental economic crisis. Finally, the US strategic offensive, through war, is supposed to shape the global economy for building the US Empire of the 21st century.
After the Second World War there were nearly 28 years of worldwide capitalist boom and this was made possible by the colossal destruction of capital during the war, which cleared the ground for a long term boom. But since 1973, the growth rate of GDP in the leading imperialist countries has been reduced by 50% compared to the 1950-1973 period. In fact, overall the world GDP growth rate has declined every decade since the 1960s, and globalisation had only a short term effect on this declining trend.
Today, the ruling class in Britain is at war with the oppressed nations of Afghanistan and Iraq and supports the Israeli aggressors, but they try to hide the fact that monopoly capital is the main cause of all wars and destruction. Capitalism causes reactionary and world wars, state terrorism and military aggression to re-divide the world and make room for the dominant capital to circulate. Therefore, intensification of exploitation and oppression, accelerated destruction of the environment, more wars of aggression, military intervention and occupation, blatant political repression, naked state terrorism, the rise of fascism and perhaps world wars are all on the horizon. And only the masses can put an end to all these.
We cannot predict how long the current global economic crisis will last and how the imperialist powers can deal with it. But we need to analyse the objective situation, unite with whoever can be united and mobilise the masses for the fundamental transformation of society. The era of capitalism is over, we need a new world.
Hi Comrades,
thought you’d like the following article:
http://www.cpgb-ml.org/index.php?secName=proletarian&subName=display&art=501
Theory: Mao’s ‘On contradiction’
A masterly exposition of how to use dialectics to change the world by the leader of the Chinese revolution.
Mao wrote the article ‘On contradiction’ in 1937 to explain the dialectical method of analysis. He did this to counter the development of dogmatic approaches to study and practice that had developed within the Chinese Communist Party.
He also sought to explain international events, particularly the struggle between Marxist-Leninist leadership and the right and, later, left opportunism within the Communist Party of the Soviet Union.
Mao began by stating that “Dialectics is the study of motion.” For simplicity, he broke his article into six parts: 1) Two world outlooks; 2) The universality of contradiction; 3) The particularity of contradiction; 4) Principal contradictions and principal aspects; 5) Identity and the struggle of aspects of contradiction; 6) Antagonism in contradiction.
Two world outlooks
Mao identified two general trends in the study of the development of the universe:
1. The metaphysical conception
This view sees the world as static, fixed, with things being unrelated to each other and one-sided. Everything just ‘is’. The cause of change, according to the metaphysical view, is always external. In political terms, things or societies are said to change because of individuals, wars, famine and plagues. External appearances are everything and nothing is going on within.
2. The dialectical conception
This view is primarily concerned with internal causes for change, what effect internal contradiction has on things, what forces are at work under the surface, how things change and how they relate to other things.
Mao explained that all things contain contradictions. For example, it is the contradictions within an egg that enable it to hatch into a chicken.
This does not exclude outside factors. Warmth needs to be applied externally to the egg before the inner processes of contradiction are set into motion. But the primacy of the internal contradictions is readily seen when one realises that the same warmth applied to a stone of similar size and shape as an egg will not lead to the hatching of a chicken.
Mao stated that “the history of a society is the history of its internal contradictions” .
Feudal society becomes capitalist as class forces develop, employers begin to buy labour, and workers have wages to spend. Trade grows and so do the class forces of the proletariat (workers selling labour power) and bourgeoisie (owners of means of production and purchasers of labour power).
Famine, diseases, war and the actions of important individuals can affect this process, but they do not determine it.
The universality of contradiction
Mao explained that “contradiction is universal and absolute, it is present in the process of development of all things and permeates every process from beginning to end” . This also means that contradiction is the cause of motion.
Without contradiction, nothing would exist. This is literally true in the sense of quantum mechanics – everything is made up of atoms. Atoms only exist due to the contradiction between positive (protons) and negative (electrons) moving around the neutral (neutrons). Without this movement, the atom would not hold together – nothing would exist!
Lenin shared this dialectical analysis, which is common to all real Marxists. He also emphasised the need to analyse the movement of opposites from beginning to end. This is the basis of the Marxist-Leninist method of study. It can be seen in the works of Marx, Engels, Lenin, Stalin and Mao.
The particularity of contradiction
Each type of motion has its own particular expression or form (the particularity). The particularity is the qualitative difference between one form of motion and another. They are all interdependent in nature and yet contain their own particular contradiction and particular essence.
For example, motion can be light, sound, electricity, etc. All are present during a thunderstorm, yet each has a separate form. Mao pointed out that sciences are determined by the particularities of motion: mechanics is the study of action/reaction, physics is the study of positive/negative, chemistry is the study of the movement of atoms, and so on.
Mao further explained that understanding particularity is essential to understanding the universal. Think of how the particularity of motion/contradiction allows for a scientific explanation of the thunderstorm. The friction between the air currents (the contradiction) produces an electrical discharge sound, a discharge light and a discharge to earth. A process containing particularities. The metaphysical outlook could never give this full understanding! It would be ‘an act of god’.
Particularity is therefore what defines the distinctness of an individual thing.
Principal contradictions and principal aspects
It is important to recognise the principal contradiction in any given situation. Within a given developed capitalist country, for example, the principal contradiction is generally that between the proletariat and the bourgeoisie. There are, however, also other contradictions, such as that of the proletariat with the peasantry or petty bourgeoisie.
In the oppressed nations, the situation is more complex. As Mao put it: “When imperialism launches a war of aggression against such a country, all its various classes, except for some traitors, can temporarily unite in a national war against imperialism. At such a time, the contradiction between imperialism and the country concerned becomes the principal contradiction, while all the contradictions among the various classes within the country (including what was the principal contradiction, between the feudal system and the great masses of the people) are temporarily relegated to a secondary and subordinate position.”
Hence, the principal contradiction is not static – indeed, part of the difficulty in making sense of history, and, more importantly, of actually making history, is understanding how the contradictions change in their inter-relationship with each other. But there must always be one contradiction that is principal at any given time: “Hence, if in any process there are a number of contradictions, one of them must be the principal contradiction playing the leading and decisive role, while the rest occupy a secondary and subordinate position.”
Understanding this phenomenon, and analysing and acting on it correctly, goes to the very heart of the strategy and tactics of making a successful revolution.
Identity and the struggle of aspects of contradiction
‘Identity’ here refers to the existence of two aspects of contradiction, one presupposing the other, which coexist in a single entity. In given circumstances, each aspect can transform itself into its opposite.
Lenin stated that “Dialectics is the teaching which shows how opposites can be and how they happen to be (how they become) identical – under what conditions they are identical, transforming themselves into one another – why the human mind should grasp these opposites not as dead, rigid, but as living, conditional, mobile, becoming transformed into one another.” (Note from Lenin’s philosophical notebooks)
This part takes some understanding! First, contradiction contains opposites – high and low, or black and white, for example. These opposites are interlinked and cannot exist without each other.
Think of a magnet: it is an iron bar with positive and negative polarity at either end. There can be no positive polarity without negative polarity. Neither could have polarity without being contained within the iron bar. At the point of connection (the centre of the bar), the two must become identical, otherwise the bar would split into two parts. By adding another magnet, the negative and positive polarities become the ends of the two bars combined. These force the previous bar ends to become changed; they become their opposites.
Hydrogen is an explosive gas, while oxygen is a catalyst for burning and explosion. When hydrogen is ignited in oxygen, it combines to form water. Water does not support burning, nor is it explosive. The two elements, through contradiction, become their opposite.
In this process of becoming, it is possible for new things to be created. The proletariat are ruled by the bourgeoisie, yet, after a socialist revolution, they become the rulers.
All contradictory things are interconnected: not only do they coexist in a single entity in given conditions, but in other given conditions they also transform themselves into each other. This is the full meaning of the ‘identity of opposites’. That is what Lenin meant when he talked of how opposites “happen to be (how they become) identical – under what conditions they are identical, transforming themselves into one another” .
In our example, the proletariat will always struggle against the bourgeoisie (as long as the two classes continue to exist), but the form of the struggle will change. Once again, Lenin made this clear: “Unity (coincidence, identity, equal action) of opposites is conditional, temporary, transitory, relative. The struggle of mutually exclusive opposites is absolute, just as development and motion are absolute.” (‘On the question of dialectics’, Collected Works , Vol 38)
The classes will always struggle, even if this does not appear obvious.
Antagonism in contradiction
Antagonism is one form, but not the only form, of the struggle of opposites. Classes within society coexist for a long time within a society, and struggle takes place, but this only becomes antagonistic at a certain stage, under certain conditions, when the contradiction cannot be resolved except by the elimination of one side or the other. At this point, the only resolution is through revolution.
The bourgeoisie and proletariat were always in contradiction with each other, but that contradiction did not become inherently antagonistic until feudalism was overthrown. After feudalism was overthrown, then the interests of the bourgeoisie and of the proletariat were in irreconcilable antagonism to each other, an antagonism that is only solved through the overthrow of the bourgeoisie and its elimination as a class.
Of course, just because a contradiction is an antagonistic one (such as that between the bourgeoisie and the proletariat in Britain today), it does not express itself at all times in the form of open conflict. The USSR and Nazi Germany were able to co-exist relatively peacefully for a while, although the contradiction between a socialist state and a bourgeois one cannot but be antagonistic, but this antagonism broke out eventually into open conflict, as in the end inevitably it must.
Mao likened this underlying potential to that of a bomb: “Before it explodes, a bomb is a single entity in which opposites coexist in given conditions. The explosion takes place only when a new condition, ignition, is present. An analogous situation arises in all those natural phenomena which finally assume the form of open conflict to resolve old contradictions and produce new things.”
The important thing to note is that the struggle appears latent, noticed only at the point of open conflict, yet the struggle was continuing even as things from the outside seemed stable. Just because developments are not obvious to every casual observer, it should not be assumed they are not taking place!
Mao considered the history of the Communist Party of the Soviet Union: “the contradictions between the correct thinking of Lenin and Stalin and the fallacious thinking of Trotsky and Bukharin and others, did not first manifest themselves in an antagonistic form, but later they did develop into antagonism”.
Lenin himself said that “Antagonism and contradiction are not at all one and the same. Under socialism, the first will disappear, the second will remain. That is to say antagonism is one form, but not the only form, of the struggle of opposites; the formula of antagonism cannot be arbitrarily applied everywhere.” (‘Remarks on N I Bukharin’s Economics of the Transitional Period’, Selected Works , Vol 11)
Mao’s article reveals to the reader that contradiction is present everywhere. He explained what its forms and aspects are and how the process works. In distinction to the metaphysical approach of bourgeois philosophers, dialectics show that everything is changing; all is pregnant with possibility.
The latent class struggle is ready to burst into open conflict under given circumstances; the opportunities to build for revolution are ever-present, and humankind can change and form its own destiny.
As Marx famously wrote: “The philosophers have only interpreted the world, in various ways; the point, however, is to change it!” ( Theses on Feuerbach . 1845)
Even in Adam Smith’s time people could recognise the risks of the Prodigal culture of Capitalism, our leaders in the “developed world” (developed through the military oppression of others) have such undeveloped morals that they have profited throughout history by engineering a conformist consumer society that had already failed its people in the 18th century.
Their answer to “recovery” is not only further public borrowing (public debt), but also to inspire public spending – thus generating a need for further debts.
The illusion of development that arose at the time of New Labour’s early rule, came about by the increased access to labour and production from industrialising nations. Yet this exploitative supply of luxury consumer products, which have comforted us Westerners whilst we have lost many of our basic freedoms and liberties, have become relatively unprofitable. Partially due to the rulers of these recently industrialised nations, generating Prodigal cultures of their own.
To ensure they profit whilst others bare the burden of loss, they tell us to spend, spend, spend… if you do not feel you have the freedoms required to take action, then at least save, save, save (but not in the banks)… we can’t vote out the capitalist system, but we can cut it’s profits.
Stand up for Ian Tomlinson, you may feel safe if you do not protest, but so did he. Do not let the Police make this a precedent.
Capitalism – the system that has been sucking the blood of working class for centuries – is on the brink of collapse. All we need now is a revolutionary communist party that can lead us in burying this rotten system and building a just society where there is no hunger no poverty no wars no nuclear weapons no discrimination against women no place for racism and where mother nature is preserved and protected from the greedy big business. LONG LIVE THE UNITY OF WORKERS OF ALL COUNTRIES!
‘the greed of a few individuals and bankers, and this is the cause of the accumulation of “bad debt” and “credit crunch”. They deliberately conceal the truth from the people that these factors are only by-products and minor, but inseparable aspects of the economy of the monopoly capitalist system’.
Yes, it is very important that we raise systemic level questions about monoply capitalism which requires systemic level solutions and not let the discussion be about bad bankers but a rooten system.
Good article.