- Wednesday, 27 November 2013
- Written by Michael Allan, Glasgow Marxists
To understand what socialism would look like, what it actually is, and present the case for it, it is essential to look at the present economic
- Wednesday, 27 November 2013
- Written by Michael Allan, Glasgow Marxists
To understand what socialism would look like, what it actually is, and present the case for it, it is essential to look at the present economic system – capitalism – and understand its nature. Karl Marx and Freidrich Engels did this over 150 years ago. They developed a thorough understanding of the nature of the capitalist system and their writings are still an incredibly – almost eerily – accurate analysis and critique of capitalism.
Marxism is often referred to as ‘scientific socialism’, as it is based upon a materialist analysis of history and society, looking at social and economic systems in their historical development. This materialist understanding of capitalism underlines why socialism isn’t just a nice idea or an ‘alternative’ to capitalism, but is actually an essential solution to the problems inherent in the capitalist system.
Capitalism: an ‘efficient’ system?
The dominant narrative of the past three decades is that the free market is the most efficient economic system available, and, whilst not flawless, has nevertheless allowed for greater production and year-upon-year increases in living standards.
The collapse of the Soviet Union in 1991, and with it a living alternative to capitalism, was hailed as the ‘end of history’ by US academic Francis Fukuyama. Western ‘liberal democracy’ and the market economy were heralded as the crowning achievement of mankind and the pinacle of human development.
In Fukuyama’s own words, “…what we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such.... That is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government.”
This encapsulated the triumphant mood of the capitalist class in this period. Twenty years later, with the greatest crisis of capitalism in history, with the ruling class at a complete impasse over how to get out of the crisis, and with revolutions and mass dissent across the world, we can see that the notion of “the end of history” has been proven to be utterly false.
On the one hand, it is true that the capitalist system has created an enormous level of productive forces. Historically, capitalism can be seen as an economic system that grew out of the late Middle Ages and cast aside the old feudal system, leading to a massive economic and social development of Europe. This led to a constant expansion of not just the productive forces of the economy, but of significant social and cultural progress also.
Initially the Renaissance, or ‘rebirth’, of the 15th and 16th centuries saw the rediscovery of arts and science that had been lost since the days of ancient Greece and Rome. Likewise the European ‘Enlightenment’ of the 18th and 19th centuries can be seen as a flowering of new, radical thought, from which many of the concepts of modern capitalism, such as that of the parliamentary democracy, or the free market – as envisaged in Adam Smith’s Wealth of Nations – were born. The massive expansion of the productive forces which came to be known as the Industrial Revolution saw the development of the major cities of Europe and ultimately what is modern society.
In these regards capitalism has played a historically progressive role. But as Marx and Engels outlined, each historical mode of production has within it a set of contradictions that limits its productivity to the point that it eventually will be unable to expand any further. These ‘fetters’ on economic development are the catalyst for social and economic revolution.
As feudalism stagnated, the emerging merchant and banking class – the bourgeoisie – was the engine of social change, but only so far as this aided its material interests. Thus the power of the church was diminished, parliaments formed to allow for the political representation of this new class, and the archaic system of serfdom – of ‘tying’ people to the land – phased out in order to allow for waged labour. From this, modern class society developed.
The accumulation of capital by the bourgeoisie through profits and property, previously impossible under feudalism, facilitated the further expansion of productive forces. Over the course of two centuries, small workshops creating a few items per day were replaced as the dominant means of production by large factories producing goods at a rate many thousands of times faster. For example, in 1900, 40% of the US population was involved in agriculture. Today that figure is only 1.9%. Yet the US now produces many more millions of tons of grain that it did in 1900.
This shows how technology and techniques have evolved, and underlines the immense productive capability that capitalism has developed. Yet with these developments comes the accumulation of contradictions that hinder the further development of the productive forces – of industry, science, and technique.
First of all, whilst the bourgeoisie owns and controls these means of production – whether they are gigantic rolling mills for steel or a call centre – it is the working class who operates them and who therefore produce commodities - services or products - that the company can then sell on to produce a profit.
The ability of a worker to perform useful work – i.e. labour – is a commodity that can be sold and used like any other commodity. Marx called this commodity ‘labour power’. However, the working class is paid in wages a lower sum than the value of the work they do. This is how a company turns around a profit. Profit is nothing m