Nick Wrack argues that it is time to talk about ending the profit system and time to do something about it.
There are tens of thousands of socialists in Britain today without a political home. There are millions of trade union members whose jobs and conditions are being savaged. There are millions more who are being hit by the austerity policies supported by all parties – Labour, Tories and Liberal Democrats. It should be obvious to anyone who reads the papers or watches the news, or simply struggles to make ends meet, that there is something profoundly wrong with the economy.
Can it be fixed, and made to work for the majority, or does this system have to be discarded and a new one built?
Many understand that they are being made to pay for the crisis, while those responsible for it carry on as before. Yet, at a time of great economic crisis, when people are looking for answers, the socialist Left is in a state of disarray. Six years after the Great Recession, how can this be? More importantly, what can be done about it?
There is a fundamental debate that must be held within the labour movement. In fact, it’s a debate that has to be held at national and international level. How can austerity be stopped? Is there an alternative? What sort of society do people want? Is it one that acts in the interests of the few or the many? Must we accept that capitalism is the only viable system or should we argue that something else is necessary and possible?
Only profit matters
Capitalism claims to be the most efficient system; the best at allocating resources. But one only has to look at the level of mass unemployment across the world to realise the monumental waste that capitalism causes. In the European Union alone there are currently 26 million people unemployed. In Spain and Greece, more than half of all young people under 24 are out of work. Their lost production can never be recovered. It is gone forever. Yet society’s needs are apparent to all. Capitalism cares not. Under capitalism, you do not work unless you can make someone a profit. The needs of society are irrelevant.
Capitalism has enveloped the planet, reaching every single nook and cranny, integrating the world economy and tying the world’s population ever closer together. Its advance has created great wealth but untold misery for billions. It cares nothing for the terrible destruction to lives and the planet that it leaves in its tracks. Its aim is only to create more profit, no matter the consequences.
The world is divided into two main classes – those that own the means of production and those who have to sell their labour power (their ability to work) to survive. The class of owners is relatively small but rules the world. The working class comprises the majority, but allows itself to be exploited for the benefit of the ruling class.
Billions live in poverty while others spend millions on luxury yachts. Millions go hungry, go without water, without access to health care or education. Women die needlessly in childbirth. Millions live in slums not even fit for rats. Even in the more affluent western world things that have been taken for granted are being taken away. Inequality grows. Communities are uprooted to make way for the juggernaut of Capital. Our rivers and oceans are polluted, the environment poisoned, all in the great cause of Profit. Human relations are degraded. Humanity is made inhuman.
A Trojan horse
Exactly one hundred years ago, the international socialist movement, then known as Social Democracy, split. The majority of the leadership of Social Democracy abandoned their previously stated commitment to socialist change, and led their parties into siding with their own ruling classes in the imperialist slaughter of the First World War. Instead of practicing the internationalism they preached, they were revealed as petty nationalists who would rather side with their own exploiters than reach out to their fellow workers in other countries. Today, one hundred years on, humanity continues to pay for that treachery.
Since then, Social Democracy has represented alien liberal ideas within the workers’ movement, aiming to make capitalism work, albeit with a velvet glove, in contrast to the socialist objective of seeking to eradicate capitalism in the interests of humanity. Every time Social Democracy needed to reveal the iron fist within, it did. And the working class felt its blows.
The Labour Party was never a socialist party. In the inner party struggles between the more socialist membership and the liberal leaders, defence of capitalism always won out. In government it condemned and opposed strikes, supported imperialist wars, implemented cuts and acted generally in the interests of capital.
Even at Labour’s high point – the reforming 1945 government – it refused to carry through a break with capitalism. Although massive reforms were implemented, improving the lives of millions of working-class people, the power of the capitalist class remained intact. The nationalised industries were not run by or in the interests of the working class but to support and subsidise the private sector. There was a ‘mixed economy’, in other words a capitalist economy.
Part of the problem for today’s workers’ movement is the persistent idea that equates state-owned with socialism, without seeing that any industry owned by the capitalist state serves the interests of the capitalists, not of the majority.
In the period of what has been called the ‘post-war boom’, international social democracy could present itself as the party that would implement reforms beneficial for its working-class supporters without ever approaching a break with capitalism. For the last forty years or so we see the consequences of the failure to make that break. The gains of the welfare state have been eroded and we are in danger of losing them all. As long as capitalism remains, any reforms won by the working class are precarious and susceptible to destruction. To maintain those past gains and to extend them permanently requires an end to capitalism and a new way of organising society.
A different way
Socialists argue that there is a different way of doing things. A society without classes, without an oppressive state – ultimately without any state at all, a society without inequality, a society of abundance, one in which we have full democracy. Socialism is a society based on the democratic common ownership of the land, its natural resources and the means of production. It means social democracy in its original sense, i.e. socialism and democracy. That democracy must extend to full economic democracy, that is, to common ownership.
These ideas have receded in society over the past thirty years or so. They have less purchase today in the Labour Party or in the trade unions and in working-class communities generally. But there remains an important layer that still holds to these ideas and a new generation that is beginning to look to Marxist ideas, as reflected in the interest in books, blogs and websites. We have to build on that and make the ideas of socialism a strong and then dominant trend within the working class.
The leaders of the Labour Party see things entirely differently. Twenty years ago the Labour Party ditched its nominally socialist Clause 4 under Tony Blair, committing itself openly to the management of capitalism. Nowadays, there is not even lip service paid to the ideas of an alternative form of society. The collapse of the Stalinist states seemed to confirm that there was no alternative to capitalism. Even though those societies were not socialist, the defenders of capitalism could point to their failure as a failure of socialism and this had a profound effect within the mass social democratic parties and in the wider working class.
There are differences between new Labour leader Ed Miliband and Blair, but they are more in appearance than substance. Now we have a ridiculous argument between Miliband and Conservative Prime Minister David Cameron about to who is better suited to make a ‘fairer’ capitalism. There is no suggestion that Miliband or any other Labour Party figure might call for the party to get rid of capitalism and create a new society. It is not enough to tack a little bit to the left occasionally to keep your voters interested. A whole new direction is required. And it’s not going to come from the Labour leaders.
All parties agree that there is no alternative to capitalism. Most of the trade union leaders also agree, though they may not say it so openly. That is why they can offer no comprehensive response to the austerity policies offered by Labour, Tories and Liberal Democrats. Miliband and shadow chancellor Ed Balls may not like making cuts but as they see no alternative they are forced to adopt all the Tory spending cuts and have committed Labour to continue them if they come to power at the next general election.
The trade union leaders don’t like this. They see the effect of the cuts and privatisation on their members’ jobs, working conditions and standards of living. They are susceptible to the anger and bitterness from below. But they have no real alternative either. This partly explains why there has been so little serious response from the trade unions to the coalition government’s attacks on jobs, pay and services. The union leaders know that an incoming Labour government will make no significant difference. But instead of going back to the socialist basics that most of them would have learned in their youth, they look to capitalist solutions, that is, policies based on the continuation of capitalism, whether that is a variant of Keynesianism or something else. In general, they cannot see beyond the remorseless defensive struggle to maintain the status quo within capitalism. They cannot see a solution beyond capitalism. To raise the morale of our class, to create confidence and a sense of purpose, we have to lift our sights and see the possibility of a life that leaves wage slavery behind.
The leaders of the Labour Party and the leaders of the trade union movement are locked in the same straitjacket – they all see no alternative to capitalism. The main weakness within our class is the hold within our class of ideas that impair its vision of the necessary and the possible. To see better we need better ideas. We need to re-discover the ideas of Marxism.
Resistance to austerity
Resistance to austerity is essential but it is not enough. The resistance to austerity must be twofold. It must be a resistance to the implementation of anti-working class policies. And it must be to call for an end to the system that causes austerity, that is, to the profit system.
We need much more determined, militant action to prevent the implementation of the austerity measures. We need coordinated strike action, occupations, demonstrations, pickets and other protests linking the workplaces with the communities and colleges to stop cuts to jobs and services. Socialists must be part of that action, building it, supporting it, giving material and practical aid to it. But socialists also have a responsibility and an obligation to explain the causes of the attacks and to point out the solution. That solution has to be the creation of a different society, where the few cannot dictate to the many. Socialists, that is, have to argue for socialism. If we want to get rid of austerity, then we have to fight against the system that causes it.
The response of many on the left to austerity is to look back to the reforming Labour government of 1945 for answers, without recognising that circumstances are completely different. A series of factors combined to create the conditions for the post-war economic upswing. In the immediate aftermath of the Second World War, international capitalism was faced with a working class that did not want to go back to the despair and misery of the 1930s. It was faced with a rival power in the Soviet Union and its satellite Stalinist states. It feared losing other countries to ‘communism’. There had been a massive destruction of capital in the course of the pre-war depression and in the war itself, which enabled new investment to take place and massive profits to be made. The USA was rich and powerful enough to provide massive loans to assist the redevelopment of Europe, Japan and elsewhere. Concessions were made to the working class in order to buy social peace. That period has ended. Those conditions do not exist now.
Anti-working class offensive
For 40 years or so the capitalist class has been on the counter-attack. This period, categorised as ‘neo-liberalism’, has been a concerted attempt to restore the levels of profitability for international capitalism. To do this it had to reassert its dominance and emasculate the working class. As profit is the unpaid labour of the working class, to restore profitability wages have to be attacked or productivity increased. The unions have to be shackled so that they could not resist speed-ups, closures, erosion of conditions, the loss of pensions and other entitlements. The social wage – that share of public spending that benefits the working class – has to be reduced, so health, pensions, education and so on are have to be cut. The capitalists don’t want to be paying taxes to support the welfare state because it eats into their profits. They want a leaner state, spending much less. They see potential profits to be made by opening up the state sector to private exploitation.
Right-wing conservative parties and traditional social democratic ones have both implemented austerity policies. Social democracy has moved further to the right over the course of the last thirty years, openly embracing neo-liberal ideas, because there has been little if any economic room for reforms. It didn’t take these steps because it wanted to – it undermines its traditional working-class base – but because they had no alternative.
Profit – only profit
Capitalism can’t be made to work in the interests of the working class. Capitalism exists only to make a profit. That is its raison d’être. It isn’t interested in producing for people’s needs save in so far as that makes a profit. Capitalists will invest in manufacturing plastic frogs rather than building homes if that is more profitable. The driving force is profit, not need.
It works only in the interests of those who own capital – the capitalist class. If the driving force of the system is profit then governments that seek to manage capitalism must ensure that the conditions are created in which more profit can be made. As profit is the unpaid labour of the working class – it derives from the surplus value created by the worker for the boss – this means acting against the interests of the working class. It means removing all impediments to making more profit.
So, trade union laws, which restrict the ability of workers to resist, have to be implemented. Thatcher’s anti-trade union legislation remained in place throughout 13 years of a Labour government and still remains. Miliband and the rest of the Labour leaders have no intention of removing them if they are elected. Laws are passed that undermine or destroy the right to protest, the right to free speech and assembly, gains hard-won by struggle in the past. To create the conditions for investment business taxes are cut, business subsidies are doled out and generally every effort is made to ensure that workers can be exploited as much and as easily as possible.
No amount of ‘regulation’, or making the market work ‘fairer’ can remove the fundamental element of capitalism – the exploitation of labour for profit. Any modifications, such as alterations to taxation, will still leave that basic capitalist-worker relationship at the heart of the system.
It’s the system not the symptoms
It is wrong to see the problem simply in terms of neo-liberalism, as though it’s just the last thirty or forty years that is the problem. It is the entire profit system that is the problem. That is what we must challenge, not just the latest manifestation of it.
That is also why the political response of the left trade union leaders for some form of Keynesian policy is also not only inadequate but ultimately counter-productive, as Michael Roberts sets out in his article. The Keynesian model essentially looks to the state as the investor of last resort, stimulating the economy by investing money in jobs and services, when the private sector won’t.
Of course, the workers’ movement must demand that money is invested in jobs and services. Its task is to defend the working class against all attacks from the capitalists. We should argue for more progressive taxation and an end to indirect taxation that falls more heavily on those at the bottom. We should demand greater state expenditure on our class and its needs – health, education, social care, public transport. We should make the capitalist class pay as much as we can force from it. But it is wrong to believe that the fundamental causes of capitalist crisis would be resolved by investment by the capitalist state.
If the capitalists won’t invest unless they can make the profit they want, then no amount of investment by the state is going to make up for that or prod them into investing when it is not profitable for them to do so. Where is the money going to come from to make that investment? If it comes from taxation on the big companies, it will eat into profits and there will be less reason to invest. If it comes from increased tax on the working class, it rather defeats the object if the purpose is to defend working class living standards.
Without answering these questions, the arguments of Osborne and his Labour reflections that cuts have to be made, that the deficit has to be reduced and the national debt has to be brought under control, will have a certain resonance with people’s common sense. People will say, ‘Well, of course we don’t like austerity but what else can they do? They have to cut the debt and get rid of the deficit otherwise the crisis will be even worse.” The failure to make the argument for a complete break with capitalism leaves the arguments of the capitalists unanswered.
And those who advocate greater taxation of the big corporations don’t explain why we should allow profits to be made so that we then have to tax the rich, rather than getting rid of private ownership of the means of production so that there are no private profits to be taxed at all. Collective ownership, democratically planned, would enable society as a whole to determine how much of production went to meet current needs and how much went to provide for the future. In other words, why don’t we set our sights on abolishing the profits system completely? As we build up our strength, to have the capacity to overthrow this system, we will fight determinedly now for resources to be diverted from the rich to the rest, through taxation and public spending. But it’s not the ultimate answer we require.
Need not profit
The only realistic way to answer this argument is to argue for a completely new system. We must argue that it’s not about trying to make capitalism work – it can’t work in the interests of the working-class majority. We must argue for a socialist government, with the active participation and support of the working class, to break with the profit system. This would mean socialising the means of production, i.e. bringing into democratic public ownership transport, industry, technology and science, banking and finance and drawing up a plan of production for need not for profit. The huge riches accumulated by the parasitic capitalist class would be expropriated. The national debt owed to this class would be cancelled, immediately removing the obligation to pay huge sums of money in perpetuity to this tiny parasitic few.
This could not be achieved on a national basis. Socialism has to be international. As a first step there needs to be much more cooperation between workers’ organisations at a European level, as well as beyond.
The answer is not just economic. To implement such a change and to defend it would require a fundamental political change as well. The institutions of the present capitalist state have been honed and refined over centuries to represent the interests of the ruling capitalist class. The state is not neutral. It is there to protect the interests of those who benefit from the profit system.
The judiciary, the senior civil service, the armed forces, the police, the security services, the prisons are all there to defend the status quo and the individuals would all have to be removed and the institutions dismantled. A new socialist government would have to carry through a root and branch change to all existing institutions and new ones will have to be created on a democratic basis that represent the interests of the new society – the first class society in which the majority truly rules. Officials would be elected and subject to recall. Positions would be rotated so that no bureaucracy could develop; no one person or group could rise above the rest.
Over time, as the new society re-organised production and implemented its plans of production for need rather than profit, a society of abundance could be achieved. The need for any repressive state apparatus would recede and eventually society would arise at a stage in which there was no state at all but simply a democratic administrative apparatus involving the whole of society.
But these ideas hardly ever get a hearing in the workers’ movement. Sadly, long gone are the days when older socialists would encourage apprentices to read The Ragged Trousered Philanthropists. The various small socialist groups tirelessly put the arguments forward but we need something much more substantial. We need a mass, unified, socialist party based on and in the working class to argue for an end to capitalism and the establishment of a new society based on common ownership and solidarity.
There have been many attempts over the last 20 years to set up a new party but all have failed. To succeed, any new party has to fulfil some basic requirements: it must be openly and avowedly socialist; it must be an active, campaigning party, involved in all working-class struggles on a daily basis; it must have an international outlook, rejecting any idea of a national solution; it must be democratic, allowing open debate and discussion about how to achieve our aims; and there must be control and accountability of its leaders.
Building such a new party will not be easy. It will take time and patience. But there are no shortcuts. The party will have to be built all year round.
Elections are an essential part of the party building process and the party will have to put its ideas – its programme – to the working class for its votes. Activity between elections is, of course, essential. Without it any party will find it difficult to raise its profile and win support for its programme at election time. This is even more the case for a small new socialist party. But socialists have generally underestimated the importance of elections for a long time. Elections provide an opportunity to present socialist ideas in a sharp way, contrasting them against those of all other parties. And the votes received indicate the level of support for socialist ideas. A poor result only reveals the work that still has to be done.
Founded in November 2013, Left Unity is the latest in a line of left-wing parties, following on from the Socialist Labour Party, the Socialist Alliance, Respect, No2Eu and the Trade Unionist and Socialist Coalition.
The Left Unity constitution describes it as a socialist party. But there is an on-going debate about what is meant by socialism and what prominence should be given to it. The current leadership majority argues that the orientation and direction of the party should be in line with the left social democratic parties in Europe such as Die Linke. This approach is fundamentally flawed, as these parties fail to chart a clear way forward to the ending of capitalism and the inauguration of socialism. They leave open the idea of managing capitalism, with all the inevitable problems that would then arise. Die Linke has participated in a coalition government in Berlin, implementing cuts precisely because it has not rejected the idea of managing capitalism.
The Independent Socialist Network’s Statement of Aims and Principles began life as the Socialist Platform in Left Unity and was written to counter this approach. It is designed to guide and direct the party. It succinctly sets out the basic requirements for any new party that wants to begin the difficult task of winning working-class support. It set out the party’s principles against which the actions of its leaders and representatives can be measured.
Link today’s struggle to tomorrow’s new society
On its own, the Statement is inadequate. It requires the addition of some basic or minimum demands around which the party can campaign together with its socialist vision. All Marxists support the struggle for reforms that will benefit the working class, and that will improve democratic rights. But as we have seen with the gains of the welfare state, all reforms can be taken back as long as capitalism remains. Over the last thirty years we have seen very few real reforms. Our struggle in that period has been to resist a counter-attack, to resist counter-reforms.
We need to set out a programme of demands that we need now and that we will fight for now. That programme of demands would obviously include a defence of all the past gains – access to health, education, etc. – and an extension of them. It would demand a living wage, affordable decent housing for everyone, a decent pension for a dignified life in retirement. Full trade union freedom and the repeal of the anti-trade union legislation. It must also include the extension of democracy, with the abolition of the monarchy, the House of Lords and an end to all unelected positions within government. Of course, there are other demands that can be added as the result of debate and discussion across the workers’ movement.
But if we left our programme at this list of basic or minimum demands it would also be completely inadequate. We need to marry this programme with a vision of the future society we set as our goal – a classless society, one without exploitation; a society of abundance rather than want; a society in which production is planned for need rather than for profit.
In the course of our day-to-day campaigning we need to link the struggle for these reforms with the struggle to change society fundamentally.
Capitalism exists on the basis of the exploitation by the smallest class of the largest class. Wage labour conceals the exploitation of billions in the interest of the few. We need to break with the profit system if we want to liberate humanity and create a society in which all can develop to their full potential. Socialism is our goal and we should proudly proclaim it.