This diary series is a slightly edited version of Contradictions of Capitalism, a book that I wrote in the early 90's which is still available now on Amazon. I have updated some parts of it to reflect the very important changes in the corporate economy since the mid-1990s with the appearance of a global economy rather than a national, which has important effects which much of the socialist movement has still not fully grasped.
Previous entries in this series can be found here:
Part One: http://www.dailykos.com/...
Part Two: http://www.dailykos.com/...
Part Three: http://www.dailykos.com/...
Part Four: http://www.dailykos.com/...
Part Five: http://www.dailykos.com/...
Part Six: http://www.dailykos.com/...
Part Seven: http://www.dailykos.com/...
Part Eight: http://www.dailykos.com/...
Part Nine: http://www.dailykos.com/...
TEN: The Rise of Socialism
In the past few chapters, we have examined the effects which the economic development of monopoly capitalism has had on the development of the neo-colonial countries. To complete this picture, we must now consider the effects which the development of the neo-colonies has had on the monopoly capitalists.
The twin crises of overproduction and falling profits leave the monopolists in a dilemma. In order to avoid the lethal stagnation caused by the overproduction crisis, the monopolists are forced to expand their markets into the neo-colonies as an outlet for their surplus capital. This will increase effective demand and allow the monopolists to escape, at least temporarily, from the ravages of overproduction.
From this point on, we leave the empirical observation of the world and enter the future. Just as Marx ended his study of capitalism with an introduction of the concept of monopoly capital, but was unable to empirically analyze the phenomenon of monopoly capitalism because it had not yet been fully developed at the time he examined it, so must we in our present analysis end our empirical observations with the onset of the capitalist monopoly crisis. We cannot empirically examine the future development of capitalism, but we can nevertheless make some informed guesses about what lies ahead.
Our starting point for these projections is the trend towards the development of consumer markets in the neo-colonies. Since this is the only practical way out of the overproduction problem, we can be fairly certain that this trend will continue.
This “cure” is, however, only temporary. No matter how far the monopolists may be able to expand their markets, the planet is only so big. Once the monopolists have turned the whole globe into their market, they can expand no more. Once again, the capacity to produce will outrun the ability of the world market to absorb these commodities profitably, and the global market will be engulfed in the stagnation and depression which are typical of late monopoly capitalism.
In order to increase their own profits, the monopolists may in desperation resort once again to all-out competition, which will eliminate all but a tiny number of global corporate empires, in essence putting the entire world economy into the hands of a small clique of capital-owners. Nevertheless, this will do nothing to halt the deadly effects of the monopoly crises.
The steady increase in productive capacity acts, slowly, to erode the basic pillars of capitalism by undermining the market system. The capitalist economy is based, in theory at least, on the “scarcity of resources”. Since the economy does not possess sufficient productive ability to produce all of the things we would like to have, a mechanism must be found to allocate resources to the most beneficial areas, at the expense of other less-important sectors which go neglected. In the capitalist system, this is done through the interaction of supply and demand in the marketplace. The most important sectors of the economy (as determined by higher demand) attract investments to supply these needs while less-important areas (with lower demand) attract correspondingly fewer resources to meet this supply.
In the capitalist system, people “compete” for scarce resources through the price system. When the supply of a commodity is scarce, Consumer X is willing or able to pay more than Consumer Y in order to obtain it, and the marketplace is capitalism’s method of determining this relationship. As potential productive capacity continues to expand, however, the need for this mechanism steadily erodes.
In modern monopoly capitalist countries, humankind has assembled the most awesome and powerful productive capabilities ever before seen. In fact, these economies are capable of turning out so many commodities that they are strapped for a place to get rid of them all. In such an abundant economy, the notion of “scarcity” is a thing of the past; the only scarcity which exists results from the monopolist’s attempts to deal with the overproduction problem by idling progressively larger portions of productive capacity. These economies are capable of producing incredible wealth even when functioning at just 60% or 70% of capacity.
In the neo-colonies, commodities are scarce, but this is because their productive capabilities have been deliberately crippled by monopoly capitalism. If the undeveloped productive capacity of the neo-colonies were to be combined with the “excess” un-utilized capacity of the industrialized nations, total human productive ability would be staggering. Such productive capacity would be capable of eliminating material want from the face of the earth forever, and “scarcity” would be an outmoded concept that belonged to our barbaric and undeveloped past.
In these super-abundant economies, the role of marketplace allocation becomes less and less important. Instead of determining whether Consumer X or Consumer Y will obtain this scarce commodity, the super-productive economy is faced with the problem of devising the most efficient way to distribute commodities to both X and Y. Thus, in a post-scarcity economic system, the allocation and distribution of resources is a social process based on need, not a market process based on supply and demand.
Of course, under monopoly capitalism, the full development and utilization of productive abilities is hampered by the monopolists, who are forced by their class interests to cut back on the utilization of productive forces in order to avoid producing more commodities than they can make a profit with. Thus, rather than producing an economy in which full productive ability is utilized for everyone’s benefit, monopoly capitalism produces a situation in which productive ability is deliberately stunted and limited to protect the interests of a small minority. As Marx so accurately foresaw, the capitalist system itself becomes a “fetter on production”, and must be broken if the full productive abilities of the economy are to be realized.
As capitalism develops, the share of wealth and income which go to the working class tends to become less and less. Despite what some have assumed, Marx never asserted that the working class would become absolutely impoverished in terms of real income. Critics of Marx have pointed out, correctly, that, rather than declining, the standard of living of the working class has steadily grown.
What has become apparent, however, is that the share of wealth which goes to the workers tends to shrink in comparison with the share of wealth that goes to the capitalists. Thus, even when the actual purchasing power of the working class tends to rise over time, that of the capitalists rises even more; no matter how much the workers receive, the bosses receive still more. Thus, even though the working class is not absolutely impoverished, it tends to become more and more relatively impoverished.
As the overproduction tendency forces the monopolists to cut back more and more on productive forces, the ranks of the unemployed grow, pushing more of the working class into idleness and poverty. In the neo-colonies, the population continues to grow poorer and poorer as profits and wealth flow out of the country and into the monopolist’s pockets.
The exploited neo-colonies and the growing number of unemployed workers in the imperialist countries thus develop mutual interests. They are both dependent on the full utilization of productive forces to lift them out of relative poverty and stagnation, but this is made impossible by the monopolist’s control over the economy. The enormous benefits which would result from the full utilization and equitable distribution of the world’s productive ability—virtually wiping out poverty and material want at a stroke—are instead being monopolized by a small handful of private capital-owners. The image of a tiny wealthy elite existing alongside a growing tide of deprivation and want is striking.
Inevitably, the toilers realize that the monopoly capitalists are not at all necessary for the process of production and are, in essence, social parasites. They do not labor to produce anything, they do not manage their own enterprises; instead, they hire others to do this for them. In short, they do nothing to earn their keep, and live solely by forcing others to make their living for them.
These subjective and objective conditions insure that, not only will the monopolist stranglehold on productive forces be smashed, but the capitalist class itself will be smashed. The workers and toilers rise together and destroy capitalist property relationships—the expropriators are themselves expropriated.
The productive forces which have been assembled by monopoly capitalism are seized by the toilers, raised to their full potential and turned towards filling the needs of the global population rather than towards filling the pockets of the monopolist minority. Hunger, material want and poverty are abolished. The socialist mode of production is born.