Capitalism is, at its base, an irrational system. It creates the crisis of imperialist war, environmental degradation, credit collapse, cyclical booms and busts, and the proletarianization of society as it concentrates wealth into the hands of few. Humans need clothing, water, shelter, and healthy ecosystems, but capitalism is woefully incapable of providing these basic necessities. While humanity has the material capability of providing these necessities, capitalism cares little and demands profit above all else. The more efficient humanity becomes at providing for itself, with greater and more productive tools for commodity creation, the more capital relies on attacks on working people, the destruction of natural resources and eco-systems, implementation of neo-liberal policies, and fictionalized capital to create profit.
Written by J.P. / from lavozlit.com
Marx outlined this process with a materialist approach. One concept central to understanding ongoing crises in our society is the tendency of the rate of profit to fall (TRPF). TRPF occurs because of the relationship between constant capital, things such as machines used in production and raw materials, and variable capital, such as wages. Capitalism is effective at bringing ever more efficient modes of production that lowers the amount of money capitalists spend on raw materials, machinery, and businesses’ infrastructure. These cheaper modes of production tend to lower the price of any given commodity. At the same time wages can only decline through attacks on workers and our organizations. Absent these attacks, wages increase as a ratio to the total input cost of capitalist production. This dynamic is critical in understanding why TRPF is a tendency and not a rule.
Capital moves wide spheres of society and government to combat the fall in profit. When more efficient machinery is created or mechanizes a productive process, workers are laid off. While this creates more profit on the books of capitalists it also creates surplus workers. These workers, rendered “obsolete” according to the capitalists, then often have to access social services, a retirement, or education to change professions. Capital and their governments then attack once again these services to further erase any net loss from the initial improvements in constant capital. This process does not occur slowly in stages, but rather exists as a constant simultaneously occurring in various arenas.
Neo-Liberalism is the front line in capital’s attack on TRPF. Neo-Liberal policy is based on the opening up of markets, deregulation, privatization, and austerity. While the first two help to lower the input costs of constant capital the latter two serve to attack the cost of the workers as variable capital. Neo-liberalism hopes to find the most exploitable worker and the cheapest raw materials. It also demands of whole nations to implement austerity and allow multi-nationals to operate without any obligation to the betterment of society and workers. Further, it demands that increasing sectors of society are privatized in newly created markets and opened up to the process of profit making.
At its most basic, crises in capitalism are caused by this profit making. Where a worker can build a house for another, capital demands profit in what is otherwise a simple exchange. Capitalism then inserts layers of profit making in economic exchange separating the product from its use. Not enough to coercively extract the added value created by the worker to the timber and plaster, capital financialized the process. Land is privatized and speculated upon, insurance is sold, and loans are made with interest. Even entire industries are created to manage the pathways of profit creation for capitalists. This distance between the production and consumption of commodities makes volatile otherwise harmonious exchange. Moreover these created markets often collapse.
Major crises occur when a multitude of such disasters, brought on by capitalism’s contradictions driven by profitmaking, occur simultaneously. The conjunctural crises of the destruction of natural ecosystems, industrial agricultures creation of ripe environments for disease, and the demand in the circulation of commodities releases a pandemic such as COVID onto society. Capitalism’s method of administrating healthcare is financialized, woefully under invested in, unaffordable for most workers, and is unprepared and unable to effectively deal with this crisis. The crisis grows and expands to other political, economic, and social spheres. Instead of investing in society, worker’s rights and pay are attacked to save money for the capitalist. New markets in health care are created, nerved with credit and fictional capital, as capitalist again demand to create profit out of misery as opposed to ending it. The political system closes ranks, protecting the interests of capitalism and profit making.
This moment in which we live is part of the greater historic crisis of capitalism. In order to consolidate the interests of capital during crisis, more neo-liberal policies are put forward and attacks on unions and workers are waged. Workers are laid off or asked to work more for less. Benefits are cut and any social safety net disappears. Workers are left to die without appropriate medical care or saddled with debt for the crime of persisting. Capitalism historically not only destroys the environment and attacks the wellbeing of its inhabitants, but additionally shifts the burden of crisis to the working class while attempting to create profit. This, in part, is the historical crisis of capitalism that socialism combats.
The creation of a new system of production and social relations can be realized through the self-organization of the working class. The capitalists’ organizations and forces of coercion that enforce their political and legal systems must be replaced through workers organizations and power. Production for profit, with its layers of volatility, needs to be replaced with socialized production for use. The degradation of the earth must be replaced with the preservation of the planet we need to survive. We can and must replace systems that enforce private property, create financial instruments, and coercively subvert the working class to the capitalists.
Capital’s infrastructure should be replaced through a new political system based on community organizations and workers unions, asserting the self-determination of the working class and oppressed peoples. While we as militants can only achieve this one sphere at a time, this system must be replaced in its entirety. As our class organizations grow so will our strength, effectiveness, and capability. Capitalism will not, and cannot, provide for humanity in its entirety. We will fight the divisive attacks of capital with workers solidarity. Crises and the contradictions of capitalism will continue to show the working class that it is a class in itself with our needs in opposition to the capitalists. It is not until we build workers organizations and power that we can become a class for itself capable of leading the way forward to a new day.