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Via Workers World News Service
Reprinted from the Aug. 15, 1996
issue of Workers World newspaper
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Capitalist equation:

358 billionaires = 2.7 billion people

By Gary Wilson

A United Nations report says that the last 15 years have seen a tremendous growth in wealth for some side by side with an "unprecedented decline" for others.

In the top 15 industrialized countries, there has been a dramatic surge in economic growth since 1980, according to the UN's Human Development Report 1996.

"Over much of this period, however, economic decline or stagnation has affected 100 countries, reducing the incomes of 1.6 billion people," the report says.

"In 70 of these countries average incomes are less than they were in 1980--and in 43 countries less than they were in 1970. Over 1990-93 alone, average incomes fell by a fifth or more in 21 countries." This last drop was mostly in Eastern Europe and the former Soviet Union.

The UN study finds that "the world has become more polarized, and the gulf between the poor and rich of the world has widened even further."

Some facts the UN study finds are:

• The poorest 20 percent of the world's people saw their share of global income decline from 2.3 percent to 1.4 percent in the past 30 years.
• The assets of the world's 358 billionaires exceed the combined annual incomes of countries with 45 percent of the world's people.
• During the last 30 years, the proportion of people with negative per-capita income growth tripled.
• In the 1980s, the socialist countries of Eastern Europe and the Soviet Union did much better economically than all but a handful of countries. But after the return of capitalist exploitation, these countries "suffered steep declines in per capita income-which fell on average by a third from the peaks in the mid-1980s."

The report's stark picture is a virtual condemnation of capitalism. Though that is not its authors' conclusion.

The report offers many suggestions on what could be changed in order to eliminate what is called the "rich-poor gap." But it does not say how these suggestions might be instituted. That's because it can't.

Because the report fails to clearly indicate that capitalism is the source of the problem, it cannot offer the only possible solution: the elimination of capitalism.

Karl Marx, in his classic study of the workings of capitalism, showed that the conditions of capitalist production can produce great wealth only by also creating grinding poverty. He said, in fact, that this is an "absolute general law" of capitalism. (Capital, Vol. 1, p. 644)

Marx was not saying, as some argued at the time, that capitalism would force the real wages of the workers to decline more and more. This has not happened, though even the highest-paid workers are vastly poorer than the wealthy ruling class.

The law of capitalism Marx found is that there is an absolute impoverishment of a section of the working class that the capitalist system throws out of the production process: the chronically unemployed, the elderly, disabled persons, etc. These are the permanent poor who have no chance of coming out of poverty.

This poverty pulls down the living standards of the entire working class. The permanent poor serve as a reserve labor force-workers who are forced to accept any wage, no matter how low, in order to escape this grinding poverty. This pressure is used to drive down wages for all workers.

Capitalism has never been able to eliminate poverty. It has not eliminated poverty either in the United States or around the world. Capitalism not only creates a permanent layer of poor people, but there is also the periodical impoverishment of workers hit by corporate downsizing, layoffs, cutbacks, and wage reductions.

Capitalism's failure to eliminate poverty is proof of its bankruptcy. It is an outdated economic system.

Revolutionary socialism remains the best answer.

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