The System We Live Under: Capitalism
You hear the word everywhere…but, what is capitalism?
The simple answer is simple: it’s the system we live in.
Today, nearly everything we need to live our daily lives – from Big Macs to bus rides – has to be paid for. Water, gas, electricity, housing, transport, food, and clothing – the principle is the same: if you’re broke, you can’t have any.
Moreover, in this society there are vast divisions in wealth. A small percentage of individuals own more than the great majority combined. Millions starve while a few thousand live in luxury.
Teachers, politicians, and the media try to portray this as a “natural” state of affairs: “it’s always been like this and it always will be,” they say.
But they’re wrong. Early human societies were communal: they weren’t divided into rich and poor, and they shared property instead of having to buy and sell the things they needed.
After this, human history is a succession of different class societies: different systems of the rich exploiting the poor. We get the slavery of Ancient Greece and Rome; then the feudal system of knights, lords, and peasants; and then we get capitalism.
Class Divisions
Under capitalism, the vast majority of the world’s population is systematically deprived of any way of supporting itself other than working for an employer. Farmers are thrown off the land. The traditional “professional classes,” like office workers and teachers, are turned into wage slaves like the rest of us.
At the end of a week’s work at some service industry chain, you come away with only your wages. You do not own the equipment you use, the uniform you wear, and you have no right to consume any of the mountains of food and drink you’ve passed through the barcode. Not to mention, on minimum wage, you won’t be buying much of it either.
This makes you part of the working class – whether you like it or not.
Profits
Now let’s look at some owner, some capitalist. Say his or her annual salary is $362,000. That’s roughly $7,000 a week! “But he or she earns it,” your economics teacher might say. Of course, that’s bullshit! How are the skills of one person worth seventy-six times more than another (work it out!)?
But consider this: In addition to this $362,000 salary, the capitalist gets $37.6 million a year from share dividends. His or her real income is nearer $723,000 a week.
What are “share dividends?”
Capitalists do not just own a flashy car and a few big houses: they own and control large portions of enterprises as well. Share dividends are the shared out profits of some business. It is this very ability to make millions of dollars worth of profits from simply owning a business that make such individuals capitalists.
Where do these profits come from? Part of them comes from buying cheap and selling dear. But that is not the main source of profit. If all capitalists systematically charged too much for the things they sold, there would be spiraling inflation, and the system would collapse.
No, the real source of profit is the labor of all the people who work for the capitalists: from the fruit pickers in Africa, to the truck drivers who transport goods, to the checkout workers, and clerks in the store.
The harder a capitalist can make the workers work, and the lower the wages he or she can pay them, the bigger his or her “share dividend” will be at the end of the year.
“But it’s still fair,” says your economics teacher: “This particular individual gambled his or her savings setting up a corner shop and, anyway, he or she is doing society a service, running the business that brought you goods, services, and Sunday shopping – and he or she runs a massive charity.”
It clearly is not “fair” that one person makes millions while others work for peanuts. But that’s not the whole point. The real point is that the system does not work.
Capitalists and their marketing executives do not look at goods and services from the standpoint of their practical use. They look at them as potential profit makers. They do not look at Sunday opening as a great service for hard pressed, working families but as a way of maximizing profit.
The same goes for all production under capitalism. If it makes a profit, it will be produced. If it does not, it won’t.
If capitalism was a nice, easygoing system, where every capitalist produced a profit every year, this would not matter so much. But it is not.
Crisis
Capitalism is an anarchic, crisis-ridden system. Behind the backs of the marketing executives stalk market forces that are as unpredictable as the weather. Three times in the last 30 years, big, world economic crises have destroyed profit rates across entire industries.
Car factories have closed down, mines and shipyards shuttered, and even supermarkets – all because their owners could not make a profit.
Because of capitalism’s tendency to produce dramatic crises, millions are condemned to either low pay or long-term unemployment.
And capitalism does not just affect your income.
It affects your education – as class sizes rise, as student grants are cut – all so that the bosses do not have to pay taxes; so that they can bank more profits.
It affects your environment – as rainforests are felled so that the paper industry bosses can make easy profits, as dangerous nuclear power stations are kept running to provide cheap energy, and higher profits, for the capitalists.
It threatens your life – as the different capitalists of different countries squabble over who can make the biggest profits, they go to war. Or rather, they send the low paid, poorly educated and unemployed youth off to die while they just watch on CNN.
It destroys your mind – you are bombarded from hoardings, TV ads, and by fashion magazines with the message: buy these $100 sneakers, buy these designer-label clothes – or else you’re a nobody.
Depression, suicide, and low self-esteem are caused by capitalism – not by the individual sufferers.
But there is an answer…
Society could be organized as if people mattered.
We would have to start by taking the major industries, services, and trade networks out of the hands of the big capitalists and put them into the hands of the millions of working people.
We would have to plan production, using the latest and safest modern technology to make sure that people worked fewer and fewer hours a week, with more leisure time, more money, and more high-quality education and services to improve the quality of life.
By planning production and by common ownership of the means of production, we could begin to construct a society not based on profit but on human need.
There would still be conflicts: should we build roads, bicycle networks, or railway lines? Should rail transport be free or just cheap, with the fares used to subsidize aid to third world countries?
Dilemmas like these would be solved by workers’ democracy.
Is this utopia? No, it’s a necessity, and by creating a massive working class who have nothing to lose from ending the profit system and everything to gain, capitalism itself has created its own gravediggers.
Again and again over the last two hundred years, working-class people have entered the road of revolution. Some successes, and many failures, have littered our history, but capitalism holds no future for the human race other than the destruction of the environment, mass poverty and unemployment, disease, and war.
Capitalism’s not natural, it’s not fair, and it’s not permanent. It will produce either socialism or barbarism. Which will it be?