Socialism is the answer to
Why capitalism can’t meet human needs
Published Oct 26, 2008 10:10 PM
Three-quarters of a million workers have already been laid off this year,
bringing the official total of unemployed to over 9 million. Trillions of
dollars in retirement funds have been wiped out in the stock market in the last
few months. Over 10,000 households a day are being foreclosed, and evictions
are rampant. Money for student loans has dried up. Credit card debt is at a
record high. Unemployment is rising along with food, utility and gas prices.
Production and sales are falling relentlessly. The forecast is for things to
get worse—a lot worse.
All the most powerful financial officials and political leaders of the richest
capitalist countries in the world have tried to stop the devastating advance of
this economic storm. They have failed. The crisis feels like a force of nature.
It brushes aside trillions of dollars in bailouts for the banks and keeps
going. It is taking down everything in its path–homes, jobs and
But this crisis is not a force of nature. It is the force of the capitalist
system in crisis.
This crisis began when the housing bubble burst. Capitalist banks were lending
money to profit-seeking real estate developers to build houses. The same banks
were lending money to mortgage companies to make as many loans as they could.
The goal was to boost profits.
Soon there were more houses than the workers and the middle class could buy.
The prices of homes fell. Mortgages could not be refinanced. Workers could not
pay the steep increases in interest rates built into their loans. Banks stopped
lending. Millions of households went into foreclosure.
Put simply, people became homeless because there were too many houses! Not too
many houses that were needed or already here, but too many houses that can be
sold at a profit. Furthermore, the workers who build homes and all the workers
who make the things that go into homes are losing their jobs because these
homes can no longer be sold at a profit.
That is the essence of all the capitalist crises that have occurred since the
first crisis in 1825. It is the crisis of overproduction.
The global financial meltdown was triggered by the bad mortgage debts sold
around the world. But what turned those debts into bad debts, in the final
analysis, was the overproduction of housing.
Now the crisis of overproduction is sweeping the auto industry. From the auto
industry and the housing industry it is spreading throughout the economy. The
stock markets are plummeting because the financial bailouts, the pumping of
trillions of dollars into the banks, cannot stop the capitalist economic
Capitalism reinforces exploitation, inequality
Why is this inevitable? Under the capitalist system there is private ownership
of the entire global means of production by a tiny group of millionaires and
billionaires. Production goals are set inside each corporate empire in secret
by the executives, who are their corporate agents. The goal is to amass maximum
profits. But no company knows how much can really be sold at a profit.
On a corporate level production, is planned. On a society-wide level,
production is socialized globally but completely unplanned. This is called the
anarchy of production. This is what inevitably leads to overproduction.
The crisis is also inevitable under capitalism because the workers are an
exploited class. The lower their wages are, the higher the bosses’
profits. Profits consist of unpaid labor. The bosses take the products,
services and infrastructure created by the workers, sell them on the market,
pay the workers as little as possible and keep the rest. Every capitalist tries
to lower wages to gain higher profits.
The collective action of the capitalist class, aided by the state, has driven
down the wages and living standards of the multinational working class in the
last thirty years. Under the system of capitalist exploitation wealth flows to
the top, and the level of inequality is obscene.
The top 1 percent of the U.S. population, the super-rich who have all the
levers of power in society, owned 34.3 percent of the wealth in 2004. The
bottom 90 percent owned 28.7 percent. The top 400 individuals owned $1.26
trillion in 2006, up from $470 billion in 1995.
Racism and national oppression play a major role in the distribution of wealth
under capitalism. The African-American, [email protected], Asian and Native peoples had
the least to begin with and will suffer the most under the blows of this
crisis. For example, the median wealth (that is, savings and other assets) of
households by race in 2004 was $140,700 for whites, $20,600 for African
Americans and $18,600 for [email protected] (See graphs.) This means that in this
developing capitalist economic crisis the oppressed have almost nothing to fall
back on to cushion the low wages, the layoffs and the foreclosures.
Oppression and economic discrimination also fall on women and lesbian, gay, bi
and trans people under capitalism. Like racism, the bosses use sex and gender
bias as a way to divide and conquer. The growing witch-hunt against
undocumented workers has the same poisonous, divisive goal. How else could 1
percent of the population dominate the workers and oppressed other than by
sowing division and disunity?
Class unity is the nightmare of the ruling class. As the present crisis engulfs
wider and wider sections of the workers, the potential for bringing about that
unity is growing stronger.
The drive for profit and exploitation here at home is the same drive behind
war, occupation and intervention abroad. Trillions of dollars have been given
to the military to protect corporate interests in the Middle East, Asia, Africa
and Latin America. The Pentagon is nothing more than an enforcer for U.S.
capitalism around the world–from the Persian Gulf to Southern Africa to
the Pacific and the Caribbean. And as capitalism expands, it brings
environmental destruction in its wake.
It is becoming clearer every day that capitalism as a system has got to go. A
system in which people are homeless because there are too many homes must go. A
system in which workers are losing their jobs and being plunged into poverty
because they have produced too much wealth is a system that must be destroyed.
A system which cannot provide jobs and education but imprisons 2.4 million
people, the majority of them Black and [email protected], is bankrupt and does not deserve
to continue another day.
If Cuba can do it, why not the U.S.
It must be replaced by a system where production takes place for human need,
not for profit. The class that produces the wealth, the multinational working
class, should own and distribute that wealth.
Trillions of dollars are now being used to bail out the banks and fund the
Pentagon under capitalism. Under socialism, that money would guarantee that
everyone would have a decent job and income, free health care, affordable
housing, free education, low-cost transportation, healthy, reasonably priced
food and much more. The well-being of the multinational working class would be
the goal of society, not their exploitation as it is under capitalism.
If this sounds utopian, the fact is that socialist Cuba, poor as it is, with
all its difficulties, has gone a long distance toward establishing these rights
for the Cuban people. How is it possible that a country that was impoverished
by centuries of Spanish and then U.S. colonial rule and that has lived for 50
years under a U.S. blockade, could guarantee more economic rights to its people
than U.S. imperialism with its $11 trillion economy?
Why is it that the Cuban people have a longer life expectancy and lower infant
mortality rate than oppressed people living in Harlem, Chicago’s South
Side, Los Angeles or the barrios of this country? The answer is that Cuba
abolished capitalism, destroyed the capitalist state in a revolutionary
struggle and took the road toward socialism.
The present economic crisis is bringing increased suffering to the workers in
the U.S. and is spreading around the capitalist world. It demonstrates clearly
the need for a mobilized, militant, mass working-class fightback.
The bosses want to push the crisis of their system onto the backs of the
workers and the oppressed. But the ultimate goal of the working class must be
to turn their fight into a struggle to abolish capitalist private ownership of
the tremendous wealth that the workers have created.
The end of private ownership of the means of production would mean a vast
increase in the personal property and social property of the workers. Right
now, private ownership is strangling humanity and destroying the planet.
The final goal must be to eliminate economic crises, exploitation, oppression
and war once and for all. The only way to do that is to establish a socialist
society—free from greedy bosses and inequality—here and worldwide.
Articles copyright 1995-2012 Workers World.
Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.
Workers World, 55 W. 17 St., NY, NY 10011
Email: [email protected]
Subscribe [email protected]
Support independent news DONATE