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Part 3: Capitalism and Class War

Behind what is called “globalization” behind “free trade” behind Structural Adjustment Programs and debt payments, at the root of the problem with the economy, is capitalism. Capitalism is the economic system based on accumulation of money (capital), private property, commodity production and markets.

In a capitalist society, things are produced to make a profit. These things are called commodities. In order to make a profit, there must be a “demand” for the commodities--there must be someone who wants the commodity and has enough money to pay for it. The price of the commodity must always be higher than the cost of producing it, so that the producer makes a profit. The problem is that there are many things that people need that they may not be able to pay for. If people have no money, for example, they still need food. Unfortunately, it is simply not profitable to produce food for people who do not have enough money to buy it. So it is not done. Today about 1.1 billion people in the world are undernourished. This happens not only with food, but with almost everything. In almost every area, the economy could produce much more than it does. To produce more, however, would be “inefficient”--it would not be as profitable.

It is not the actual producers who make the profit, however. Under capitalism there is a small class of people who have accumulated money (capital) and who can buy and own fields, factories and workshops. These capitalists then hire people to work for them and produce for them. They pay their workers a small amount of money to work for them and make all the profits off their work. People who work for capitalists do not do so because they want to, they are forced to. If you don’t have capital to live off of, you have no other choice but to sell your labour and your time. If you don’t, you will have no money to pay for the things you need. You will have no place to sleep and nothing to eat and eventually you will die. Capitalism forces most people to sell their labour and their time to the rich. This is both a form of slavery and a form of theft. Most people spend their whole lives working and get very little for it, at the same time as the owners of the corporations they are working for get richer and richer.

There is no democracy here. At your job, you have no say as to what will be produced or what will be done with the product. You are paid to do what you are told, and if you don’t, you are fired. You could quit, but then you would have to get a job in some other place where you have just as little say in what goes on. Decisions are made by the elite in government and business for the purpose of making profit and ensuring the climate necessary to make profit--the climate in which there is a ruling class and a working class. This means ensuring that there is enough inequality and poverty so that there is a class of people who are forced to work for others. This wage slavery and class oppression are built into the very logic of capitalism.

The main argument given to defend capitalism and “free trade” is that profits for the rich will make everyone better off, by trickling down to the rest of the population. This is utterly ludicrous. If an entire interlocking political and economic system is designed to make profit for a small rich ruling class, by exploiting the rest of the population, it should be of no surprise to anyone that this is what happens. It would be truly miraculous if taking from the poor and giving to the rich somehow made poor people better off. This Reaganite propaganda is reserved for public speeches, however. When talking internally, the ruling classes are somewhat more honest about how the logic of capitalism plays itself out.

In an internal memo in 1991, the World Bank’s Chief economist at the time, Lawrence Summers, argued that more polluting industries should be encouraged to relocate to poorer countries. A polluting industry tends to increase the chances that people in the surrounding area will have health problems. If pollution kills someone or makes them unable to work, the cost to the economy (or to the industry in the case of a lawsuit) would be roughly equal to the projected wages that that person would have earned in the rest of their life. In a country with low life expectancy and low wages, this cost will be lessened. Summers writes, “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.” Summers was later appointed United States Treasury Secretary, under the Clinton Administration and is now president of Harvard University.

Capitalism does not help the poor. It creates poverty and inequality. (*1) Since 1950, the total dollar value of the world economy has increased 5-fold, while the number of people in absolute poverty has doubled. The 3 wealthiest people on the planet are now wealthier than the 48 poorest countries. In the past few decades, almost every country in the world has seen a decrease in real wages and an increase in income inequality. From 1994 to 1998 the total wealth of the 200 richest people in the world more than doubled to about $1 trillion ($1000 billion). Today about 1.3 billion people survive on less than a dollar a day, and about the same number do not have access to clean drinking water. Approximately 3 billion people (half the population of the world) live on less than 2 dollars a day; and 2 billion people (a third of the world) are suffering from anaemia. The state of the world today is not the result of some abstract natural laws. It is the result of a specific set of interlocking institutions. These institutions are designed to generate massive wealth for the few and poverty for the rest. Capitalism is and has always been in league with the state, not opposed to it. The same people who make the decisions make the profit. The same small class of wealthy capitalists and bureaucrats run the governments and the corporations. They create a tight concentration of power. The current trend that is called “globalization” is really just a further concentration of that power. The IMF, through Structural Adjustment Programs, now directly runs the economies of over 70 countries. That means that about 1000 capitalist economists control the economic policies for 1.4 billion people in these countries. This tight cooperation between bureaucrats and capitalists is nothing new. Not that long ago, the state was killing off the native population of North America from east coast to west coast and maintaining millions of Africans in slavery in the United States and Canada--all to fuel profits.

Then as now, the oppression caused by capitalism and the state overlapped and reinforced other oppressive structures in society, such as racism and sexism. Of the millions put in jail today in the United States, a hugely disproportionate amount are African Americans. Black people make up less than 15% of the United States population, and yet about half of the United States prison population is Black. 1 in 14 Black men in the United States are currently in jail, and about 1 in 3 Black men in the US will go to jail at some point during his life. There is a racist dynamic to the increase in economic inequalities. They follow old colonial patterns. The people that profit most from the global economy are white people. The people who are most oppressed by the global economy are people of colour.

Similarly, the people who profit from capitalism are overwhelmingly men, while women are the most oppressed by capitalism. In 1997, Zimbabwe had a Structural Adjustment Program imposed on it. As school fees doubled, female children were the first to drop out. As health spending by the government was cut by a third, the number of maternal deaths during childbirth doubled.

In many cases, as men become unemployed, women have to get a paying job, in addition to doing the unpaid labour to maintain the household. In the world today, women do 2/3 of the work hours and yet receive only 5% of the wages and own less than 1% of the property. Of the 1.3 billion people living on less than a dollar a day, 70% are women.

The entire planet is in a state of low intensity civil war. The ruling elite profit off of the exploitation of the rest of the world. When hundreds of Mexicans die every year, trying to get across the US-Mexico border--many dying of thirst in the desert--that is an act of aggression. When 30,000 people a day die easily preventable deaths, that is an act of aggression. When people’s housing is taken away and they are forced into the street, that is an act of aggression. When people are forced to work under totalitarian conditions, that is an act of aggression. When toxic chemicals are dumped where people are living, that is an act of aggression. When people are denied basic necessities, that is an act of aggression. When protesters in Quebec, Gothenburg, Genoa or Washington D.C. are beaten, tear-gassed or shot, that is an act of aggression. In 1989, there was a huge protest in Caracas, Venezuela, against the IMF, after the price of bread rose 200%. The police and military were called in and opened fire on the crowds. More than 200 people were killed before the Caracas morgue was filled up and stopped keeping track.

Unofficially probably more than a thousand people were killed. That is war, class war. It is not something new. It has been going on so long as there have been rich people and poor people, so long as there has been a class of people who make the decisions, and a class who have no control over their lives. And it will continue and intensify with the expansion of “free trade”. When US Space Command issued a document called Vision 2020, calling for orbital gun platforms with laser weapons that can fire on the earth below, the report said that the weapons would be necessary as “the globalization of the world economy will continue, with a widening between ‘haves’ and ‘have-nots.’” US Senator Bob Smith summed it up when he said, “It is our manifest destiny... You know we went from the East Coast to the West Coast of the United States of America settling the continent and they call that manifest destiny and the next continent if you will, the next frontier, is space and it goes on forever.”

Go to the Forum for Political Discussion to discuss what you just read.

An alternative view of capitalism found on this site:
"Chocolate Chip Cookies, My Hippy Cousin, and Capitalism" by Sean Joyce

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