Crisis within Capitalism

national | miscellaneous | news report Saturday March 08, 2003 19:47 by the Pragmatist

The economic system we live in, is based on shaky foundations, conflicting concepts of value and will ultimately fail as it has in the past.

"The collapse of the global marketplace would be a traumatic event with unimaginable consequences. Yet I find it easier to imagine than the continuation of the present regime."

These are the words of George Soros, financial speculator, profiteer and die-hard supporter of capitalism. Why would a man who earned millions through his knowledge of money markets, stocks and shares and all that nonsense about the FTSE and NASDAQ make such an assertion?
Well, largely because it is true. Capitalism, besides being a big word thrown around by people who should know better, is the situation where the means of producing wealth (machines, factories etc.) are in the hands of a minority of the populace. These factory owners (capitalists) proceed to live off the wealth generated by the workers who are poorer than them, who need money and who have to sell their labour (agreement to work) to the capitalist so they can live. There are smaller employers, entrepreneurs, government jobs and people who move up and down the scale every so often but the above example is what defines the system we live in.
This situation has not occurred because certain people are naturally more intelligent than others, as capitalist propaganda would have you believe. No, largely rich people inherit most their wealth and have made contacts with other rich people to keep their offspring rolling in it. No one would claim that Tony O'Reilly or Dermot Desmond would beat a scientist or teacher at Countdown. The overwhelming majority of people are products of their environment and keep in the same social class of their parents. How far you succeed in life depends on the chances you were given.
This is how people stand in capitalism. However it is the way in which the system is measured, which is entirely fictional, based on intangible and invisible sources of value and controlled by nameless men in suits. If you listened to the news over the summer you heard about stock market crashes that would have collapsed the economy 50 years ago, monies valuing and devaluing and people losing jobs due to a lack of demand in the sector.
Enron and the like had a certain share price one day and the next day nothing. Why? Because the way they were valued was simply made up. Fictional. The same thing happened in Weimar Germany in the 1920's, the Mark had a good value one day (Germany being one of the richest countries in the world) the next day it was worth nothing. The same amount of people, same amount of workers, machines, agriculture everything needed to produce wealth was the same. Only the way in which the economy was measured changed. Some fat cats on the US stock market decided one thing one day, and the next a whole nation couldn't afford to buy bread.
Odd, isn't it?
An assertion you would have made very early in your life was that (capitalist) economics makes sense, the punt had a certain definite value and the economic system you lived in was logical. Sure anyone could take economics in school or University and there were men in suits speaking in technical terms on TV about the economy. As long as the economy didn't fail (things built on solid foundations don't) and you buying a house, apartment, or anything you may want wasn't too difficult or taxing it was unlikely you would consider that one of your basic assumptions about money, that you'd never question, was wrong.
The capitalist system will fail in the future, not due to the masses rising up against injustices, a brave new communist leader or political pressure. No, the imperfect system we live in will fall due to the major and most simple human error: confusion. The money valuers, stock market speculators and Volvo driving toffs who read the Financial Times will bring about and point out the failure of the capitalist system bit by bit through being confused about the conflicting theories of value they have invented for themselves.
There are very basic economic laws in agriculture and machine production, which are applicable every where. They must be remembered as economics depends more on credit (money that doesn't exist), international markets with fictional ways of valuing company performance and glossy thin strips of a tree (paper money).
The aim of all socialists must be two-fold: to apply political pressure to change the system and to set up business ourselves to compete and eventually knock out the capitalists from the ‘market’. In doing this we must show how a very well paid work force who own the company collectively can all share in the profits made while charging low prices and providing good quality commodities to consumers. The essential difference will be that the board of directors will not be paid huge salaries and their workforce paid nothing. The workforce will be the board of directors and will be paid relative to productivity.
As capitalists exert increasing influence over governments this can be our only remedy to checking the power of the private sector over the people.