Capitalism in Crisis - Is a Socialist World Possible?
By Ramy Khalil
Not since the Great Depression has the global capitalist system experienced as severe a crisis as this current one.
For the first time in world history, 1 billion people will go hungry this year, too poor to afford food, despite record harvests.
Income inequality in the U.S. has reached record heights, surpassing even the Great Depression. The richest 1% of households now own more wealth than the bottom 90% combined (Business Week, 11/1/04).
Two million homes in the U.S. have been foreclosed since the economic crisis began. Meanwhile, hotel heiress Paris Hilton just spent $325,000 to build an elaborate doghouse.
The anarchy of the capitalist system is also dragging the planet into an environmental catastrophe of historic proportions.
Capitalism’s competition for power and resources has also propelled global military spending to an all-time high of $1.47 trillion in 2008 (globalissues.org). Even though U.S. voters elected an “antiwar” president and congress, the wars in Iraq and Afghanistan drag on.
These glaring contradictions, alongside the Republicans’ ludicrous claims that Obama is a “socialist,” have generated a surge of interest in socialism as an alternative way to organize society.
An April Rasmussen poll, for example, found that only 53% of Americans now say capitalism is a better system than socialism. Among people under 30, support for socialism has grown even stronger. According to the poll, 37% prefer capitalism, 33% favor socialism, and 30% are undecided. And this is with a corporate-controlled mass media that is constantly singing the praises of the “free market” and criticizing socialism.
Free-Market Failure
The ideologues of free-market capitalism have had their way for the last 30 years. Across the world, nearly every ruling party embraced the ideology that governments should refrain from regulating businesses and that everyone should fend for themselves in the “survival of the fittest” market economy.
Corporations enjoyed free trade, lower taxes, looser regulations, and weakened unions. And what was the result? They plunged the world into the worst economic crisis since the Great Depression.
When the world’s financial markets experienced a sudden meltdown in 2008, investors and regulators were caught completely by surprise. Many governments, including the Bush and Obama administrations, had little choice but to step in to bail out their banks and even nationalize some companies.
Republican free-market fundamentalists, rigidly clinging to their failed ideology, recoiled in horror at all the sudden state intervention in the economy and denounced Obama as a “socialist!”
In reality, Obama’s policies are not socialist at all. They are designed to save the capitalist system from a devastating crash like the Great Depression and social upheaval that could threaten corporate rule.
Unreformable System
However, governments that merely regulate the excesses of capitalism are incapable of escaping the system’s inherent flaws and grotesque inequalities.
Despite all the taxes and regulations on corporations, for example, global capitalism has still condemned 2.6 billion people - almost half the world’s population - to struggling to survive on less than $2/day. Meanwhile, the world’s 200 richest individuals own more wealth than these 2.6 billion people combined (World Bank Development Indicators, 2008).
With today’s modern productive technology, there is no reason why half the world should suffer in such poverty. The United Nations, in fact, "estimated that the additional cost of achieving and maintaining universal access to basic education for all, basic healthcare for all, reproductive care for all women, adequate food for all, and safe water and sanitation for all is roughly $40 billion a year.” (UN Human Development Report, 1998)
This is less than 4% of the combined wealth of the 100 richest people in the world (Forbes, 3/11/09).
This shows that poverty is not caused by a lack of resources, but by the way the capitalist system distributes those resources. Given the massive leaps forward in technology and economic productivity over the past two centuries, there is no reason why healthcare, food, and shelter should not be fundamental human rights.
But as long as corporations are privately owned, no matter how regulated they are, they will be locked into a system of cut-throat competition and our entire society will be structured around one fundamental purpose – maximizing short-term corporate profits, not the needs of humanity or the environment.
The amount of resources wasted on war is another stark example of how the needs of capitalism are directly opposed to those of the vast majority of society. The U.S. alone spent $711 billion on the military in 2008 – 48% of the world’s military spending (globalissues.org). Worldwide, nearly a third of all scientists and engineers in research and development are employed in the military.
What if all those resources were directed at wiping out poverty instead of wars like in Iraq and Afghanistan, which are only fanning the flames of terrorism? But war is inevitable under capitalism, a system based on competition for profits, power, and resources.
History shows that efforts to reform capitalism can only work for a limited time before they are undermined by the fundamental tendencies of the system.
Corporations’ dictatorial control over the resources of society allows them to relocate factories and investment, to control the political system through funding and lobbying, and distort public opinion through their ownership of the mass media – just like they are doing in the current healthcare reform debate.
If all else fails, the capitalist elites will resort to bloody repression or violent military dictatorships to defend their power and profits. This was most recently illustrated by the ouster of the democratically elected president of Honduras, Manuel Zelaya.
The Honduran ruling class, along with U.S. imperialism, was fiercely opposed to a series of left-wing reforms Zelaya carried out (such as raising the minimum wage, distributing some land from wealthy landowners to poor peasants, and opposing U.S. policy towards Cuba and Venezuela).
In June, the Honduran elite carried out a military coup to remove Zelaya and installed their own representatives (though this has provoked a widespread backlash among the poor in Honduras and throughout Latin America, which threatens the coup regime).
Similarly, in 1973 the CIA sponsored a violent military coup to overthrow the democratically elected socialist government in Chile. As U.S. Secretary of State Henry Kissinger famously put it, “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its own people.”
Socialists fight for every possible reform under the current system that advances the interests of the working class and the oppressed. However, at the same time we recognize that, unless the fundamental structure of society is transformed and power is taken out of the hands of big business, these reforms will never be secure or permanent.
The only way to ensure that the economy meets the needs of the whole population and the environment is to change the system that is the root cause of these problems.
This requires taking the top 500 corporations that dominate our economy (the Wal-Marts, Exxon-Mobils, United Health Groups, Halliburtons, Microsofts, etc.) into public ownership and placing them under the democratic control of elected representatives of workers, consumers, and the community at large.
On the basis of a democratically planned economy, we could finally guarantee everyone on the planet a living-wage job and high-quality healthcare, childcare, education, and housing.
Wishful Thinking?
But is a socialist world really possible? Isn’t this just a nice idea in theory but unrealistic in practice?
We already have some essential industries that are publicly owned under capitalism that provide a glimpse of how socialism could work. How absurd would it be if your house was burning down, and you could only get the fire company to put the fire out if you could afford to pay a few thousand dollars for fire insurance?
Yet this is exactly how the system was run for many years in the U.S., until the ruling class saw that fires that began in working-class areas could grow and threaten to engulf entire cities, including the wealthy districts. That’s why the fire department today is publicly owned and provided as a guaranteed public service, rather than run for profit by a private company.
A number of other essential industries are publicly owned and operated such as water, electricity, transit, and education. Why shouldn’t more industries like healthcare, energy, and the media be publicly owned rather than operated solely for the profits of wealthy investors?
Public services could also be massively improved, too, if they were properly funded (rather than the underfunded services that big business-backed governments provide) and democratically controlled by elected representatives of workers and consumers, instead of a government at the service of the rich bankers and CEOs.
Still, the defenders of capitalism and the cynics sneer that, regardless of its merits, socialism is “un-American” and will never gain mass support in the U.S.
These arguments gain credence in part because the rich history of socialist movements has been suppressed by the corporations who fund and control the universities, publishing houses, and media. Socialist organizations, in fact, have played a crucial leadership role in every progressive movement, from the labor and civil rights movements to the antiwar, women’s, and LGBT movements.
Schools don’t teach us, for example, that Eugene Debs, a railroad workers’ union leader, ran for president five times on the Socialist Party ticket, receiving nearly a million votes in 1912. He received nearly a million votes again in 1920 when he ran for president from jail after being imprisoned for speaking out against World War I!
Today, there is a growing frustration and anger building up in U.S. society at declining living standards, growing inequality, the wars in Iraq and Afghanistan, the racist criminal injustice system, and the corporate domination of our lives and the political system.
Over 6.7 million workers have lost their jobs since the beginning of the recession in December 2007. Unemployment is predicted to surpass 10% in 2010 (with some estimates putting the actual unemployment rate right now at over 16%).
This comes on top of a 30-year offensive against working people by Corporate America. Companies are now squeezing more and more profits out of their workforce, making workers work harder and faster for less pay and benefits.
Americans work six more weeks per year than in 1979, yet one in four children still grow up under the poverty level (U.S. Census Bureau).
In reality, the U.S. is a power in decline, both militarily and economically. As these trends continue, and growing numbers of working-class people see their living standards under attack, they will increasingly question the system itself.
Many on the left are pessimistic about the prospects for struggle in this country. Yet just a few years ago, the corporate media and political establishment were predicting decades of right-wing Republican domination. But Bush went down as the most hated president in history, replaced by Obama and the Democrats who were swept to power promising change.
The failure of the Obama administration and the Democrats to deliver on these promises will create a growing sense of the need for independent movements from below. At a certain stage, a mass upsurge in struggle will inevitably take off in the U.S.
The experience of other countries shows how this is possible. This year witnessed an eruption of nationwide strikes and revolts in Iran, Greece, France, Iceland, and beyond. In Latin America, there have been mass movements in Venezuela, Bolivia, Mexico, Ecuador, Argentina, Chile, and elsewhere over the past few years and a re-emergence of anti-capitalist and socialist ideas.
The U.S. has also seen important struggles recently, including the historic 1999 WTO protests (sparking an international movement against corporate globalization), the mass protests against the war in Iraq, and the huge immigrant rights movement in 2006, which saw a national strike of hundreds of thousands of immigrant workers on May 1, 2006. These movements are only the tip of the iceberg of what we’ll see in the coming years.
There has been challenge after challenge to capitalism by the working class in the 19th and especially the 20th Centuries, although you'd never know it from most textbooks.
There were revolutions in Russia in 1905 and 1917, throughout Europe from 1918-21, Spain from 1936-39, France and Italy in 1945, China in 1949, Cuba in 1959, France again in 1968, and Portugal, Greece, Italy, Chile, and Nicaragua in the 1970s. And this is by no means a complete list, particularly in the third world, which experienced a wave of revolutions in the past 60 years.
None of these struggles came about spontaneously, however. All of them were the product of years of organizing by ordinary workers and youth who devoted their lives to fighting for a better future.
The current economic crisis is further proof that capitalism is incapable of providing a decent life for the mass of humanity. It has condemned the world to environmental catastrophe, wars, mass poverty, and racist and sexist inequalities.
The only solution is to fight to change this system, and replace the profit-driven, exploitative system of capitalism with a democratic socialist society. Join us in the struggle for a socialist alternative, to liberate the world from poverty, exploitation, and war.
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Is Socialism Against Human Nature?
“Wherever socialism’s been tried, it always results in a dictatorship because humans are greedy by nature.”
This is a common refrain activists hear when they raise the ideas of socialism. Marxists reject the notion that human nature is fixed or set in stone. In reality, human nature is distinguished by its variability and adaptability. For most of human history, we lived in egalitarian hunter-gatherer societies.
Capitalism pits us all against one another and brings out our competitive, selfish sides. Nonetheless, it is precisely because capitalism does not work in the interest of the vast majority of the world’s population that it compels workers to unite and fight for greater equality and ultimately a new system that will work in the interests of the majority.
A socialist society based on justice and equality – where all our basic needs are provided for, with no ruling class dividing us and pitting us against one another – will be much more conducive to cooperation and solidarity.
A socialist democracy would have nothing in common with the dictatorships in Russia and other “communist” countries (which arose for a variety of historical, economic, and political reasons, not because human nature is “inherently greedy”
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Although these Stalinist countries had elements of a planned economy, working-class people did not democratically control society. Instead, the corruption and repression by the ruling bureaucracy ultimately led to economic collapse and mass rebellion by workers and youth.
To avoid corruption, socialists believe all leaders and officials in workplaces and the government need to be elected, subject to immediate recall by their constituents, and receive the same wage and benefits of the average worker they represent. The workweek needs to be shortened so people have time to democratically participate in the running of society, and the vast gap between rich and poor needs to be eliminated.
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IN THEIR OWN WORDS
“The movement to date has done much for the middle class but little for the black underclass. We are dealing with class issues. Something is wrong with capitalism...maybe America must move toward democratic socialism.”
– Martin Luther King, Jr.
“The few who profit from the labor of the masses want to organize the workers into an army which will protect the interests of the capitalists. With the silence and dignity of creators, you can end wars and the system of selfishness and exploitation that causes wars. All you need to do to bring about this stupendous revolution is to straighten up and fold your arms.”
- Helen Keller, Socialist Party activist and fighter for the rights of the disabled, women, and workers (1880-1968)
“This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy.”
– Albert Einstein
