The general rate of profit tends historically towards zero. Source: Estaban Maito
Capitalism is losing its ability to create new exchange-value and is sooner or later likely to spiral into a crisis of worldwide hyperinflation. Only socialism (the lower stage of communism), capitalism’s historically logical successor, can revive economic stability — and bring about sustainable abundant material wealth for all.
Is worldwide hyperinflation really looming?
➤ The record high aggregate global debt is unsustainable since the tax base needed to repay it is shrinking in relative terms. Global debt across all sectors increased by over $10 trillion in 2019, topping $255 trillion. At over 322% of Gross Domestic Product (GDP), that put global debt 40 percentage points ($87 trillion) higher than at the onset of the 2007–09 financial crisis. Nation-states that fail to push their debt back below 90% usually go on to default on their debt (fail to repay it) and go bankrupt. The actual figure has been reported to be 2.5 times higher (as of July 2019) and 2.5 times higher than the global money supply (as of 2015, up from two times higher in 2013).
That is despite unprecedented growth in the money supply as governments have electronically ‘printed’ money to deal with the devaluation of capital caused by technological leaps in productive capabilities and the manifesting shortage of exchange-value being created by commodity-production (see below). In the eurozone, 57% of all government debt repayments are (as of 2015) interest.
As of 23 November, 21% of all US dollars in circulation had been printed in 2020, taking the figure to 75% over the past 12 years. The dollar is being devalued at record speed, but this only reflects the devalution of commodities, driven by innovation — the quicker and more abundantly commodities are made, the less profit each commodity tends to contain.
➤ Lifting the economy out of recession has required on average since 1958 a baseline interest rate cut of 6% (in order to cheapen capital to incentivise lending and borrowing); but since the (worst ever) stock market crash in March 2020, rates are already at zero (having been cut from 0.75% in the UK and 1.75% in the US — neither country had ever gone below 1% before 2010).
Going lower still into negative rates would mean charges on bank deposits along with, quite likely: bans of high dominations of cash and charges on low dominations; wealth taxes; and ‘bail-ins’ whereby banks stave off solvency by seizing assets from customers or converting deposits into equity.
All this may reinflate the global bond (debt) bubble for another few years or so but it is a limited option since there is only so much cash that can be converted into stocks; and will also require increasingly massive amounts of central bank money printing to push up the prices of bonds (thereby lowering interest rates).
Monetary financing, as this is called, will continue to devalue the money supply and has historically led to hyperinflation after collapses in productivity relative to demand. The trillions of dollars of sovereign debt already subjected to negative rates, meaning investors are essentially paying for the privilege of lending money, has been remarkably and increasingly high since 2014. Banks, many of which are already close to going bust, have warned that making base rates too negative would make privately owned banks unviable.
‘The Buffet indicator’ – total market capital of stocks divided by GDP. The average value of the US stock markets is historically around 50–100% of GDP, but has climbed to over 200%, indicating an unprecedented financial ‘bubble’, the third ‘one-in-a-century‘ bubble in the past three decades.
“The decrease in interest rate is a symptom of the annulment of capital only inasmuch as it is a symptom of the growing domination of capital in the process of perfecting itself — of the estrangement which is growing and therefore hastening it’s annulment.” — Karl Marx // “The rate of interest is related to the profit rate in a similar way as the market price of a commodity is to its value…. The general rate of profit, in fact, reappears in the average rate of interest as an empirical, given fact.” — Henryk Grossman
➤ Eventually even the richest countries will default on their debt. Central banks such as the Federal Reserve in the US just about managed to bail out the banks in the 2007–09 crisis, thanks to a sufficient devaluation and centralisation of capital (the necessary solution to every capitalist crisis/recession), accelerating rises in monopolisation, poverty and inequality. Will it be possible for the International Monetary Fund (IMF) to bail out the Federal Reserve, let alone the world economy? And even if it can, who will bail out the IMF when an even bigger crisis emerges in another decade or so?
➤ Eventually central banks will run out of cash to convert into stocks and the debt bubble will burst as interest rates start going back up, making government debt increasingly expensive to pay-off and leading to surges in debt-to-GDP and panic selling as investors realise that the government is broke.
Eventually central banks will run out of cash to convert into stocks and the debt bubble will burst as interest rates start going back up, making government debt increasingly expensive to pay-off and leading to surges in debt-to-GDP and panic selling as investors realise that the government is broke.
➤ Bondholders will dump bonds and instead panic buy hard assets, especially precious metals, adding to the potential for hyperinflation. Central banks may be forced to purchase dumped bonds, sending national (public) debt ever-higher.
➤ Capitalists also use high/hyperinflation in a crisis anyway to effectively torch wages, debt and taxes, i.e. in order to centralise capital into fewer hands and re-widen profit margins.
Automation is abolishing the source of profit? What?!
➤ Alongside 0% interest rates, British pound sterling has lost more than 99.5% of its purchasing power since its adoption as official currency in 1694. The US dollar has lost more than 96% of its purchasing power since 1913, having barely changed in the previous 140 years when the rate of the economy’s growth (relative to its size) was much higher. The vast amount of that figure, 91%, has come since 1949, when the US supplanted Britain as the world’s imperialist superpower. The figure since 1970 is 85% (93.5% for Britain), when capitalism entered its first major post-war crisis and the technological (digital/automation) revolution really took off, with currency’s link to gold becoming a restraint on economic growth (since gold’s finite nature limited the number of dollars that could be printed).
➤ GDP growth rates are trending towards and already closing in on zero, having been around 6% in the 1960s and below 2% since 2000.
Decade-by-decade average GDP growth rates in what the World Bank defines as ‘high income countries’ are trending towards zero.
Decade-by-decade average GDP growth rates in what the World Bank defines as ‘high income countries’ are trending towards zero.
➤ The aggregate global rate of profit is also trending historically towards zero, having fallen from an estimated average of 43% in the 1870s to 17% in the 2000s.
➤ Manufacturing costs and consumer commodity prices are also trending towards zero, since commodities tend to become cheaper the faster and more abundantly they are produced. For example, whereas the world’s fastest supercomputer in 1975 was worth $5m ($32m in 2013’s money), the price of an iPhone 4 released in 2010 with the equivalent performance was $400. Aerospace companies producing propulsion systems in 2010 for $24m in 24 months are now 3-D printing their engines for $2,000 in two weeks (see Aaron Bastani, Fully Automated Luxury Communism, p. 123.) Such developments mean companies are increasingly likely to find it cheaper to produce ‘at home’ instead of exploting overseas labour and transit workers. While it took 13 years and billions of dollars to sequence the first human genome, the cost had fallen to below $100 by 2017 and will soon be zero. The plummeting price of solar energy will make fossil fuel — long the driving force of capitalism due to the labour intensity of its production — obsolete within a decade. The price of oil fell below for the first time ever in April 2020.
As Rethink X states: “Our food system is being transformed as we learn how to make affordable high-quality proteins and other molecules [through lab-grown ‘cellular agriculture’ and precision fermentation] without the need to grow plants and animals. The DNA of a single soy plant or chicken will be enough to create an unlimited quantity of soy or chicken proteins. Our newfound ability to design and produce infinine organic compounds like we design apps or videos will likely distribute the power to engineer our own food cheaply, sweeping away the industrial dairy and meat industries.”
In 2000, the cost of producing one kilogram of one type of molecule through precision fermentation cost $1 million, but technological advancements and expanded production reduced that cost to around $100 in 2020. In 2020, precision fermentation was on course to become cost-competitive with bulk animal protein, which stood at around $10 per kg for casein and whey, by 2025. It is expected to fall below $10 per kg by 2025, before becoming five times cheaper than traditional animal proteins by 2030, and 10 times cheaper by 2035. As soon as a company like Nestle starts buying its milk this way — as it must to re-widen its own profit margins — the conventional farming industry will collapse.
➤ Between 1964 and 2014, the average lifespan of S&P 500 companies shrank from around 60 to 18 years.
➤ Machines cannot sell their labour power (ability to work) and are therefore unexploitable; i.e. they do not produce surplus value, the value the capitalist appropriates from the worker and realises through the sale of commodities.
The real measure of value is time. For example: If the worker creates eight hours worth of value a day, she only keeps roughly what she needs to pay to reproduce herself and her dependents (living costs/necessary labour time); three or four hours, for example, with the other four or five (surplus labour time) going to the capitalist. The capitalist continually needs to increase and maximise surplus value production, i.e. towards eight out of eight hours (in our example). Profit is therefore essentially unpaid (surplus) labour (time).
This trend of course cannot exceed 24 hours a day, making the expansion of surplus value production historically limited. Although workers cannot physically work round the clock, arguably capital’s plundering of personal/private data from smart phones and computers is now moving the dynamic rapidly towards 24/7 exploitation (and stealthily reintroducing/expanding child labour). Data is now more profitable than oil.
Capital’s exploitation of labour’s labour time is obscured by the money-wage relation, what Marx called the commodity fetish (money/gold being the money-commodity).
➤ Services workers are relatively unproductive/unexploitable, since they only tend to handle finished/near-finished commodities. Even Africa and Latin America have been deindustrialising (moving from manufacturing to predominantly services-based workforces) over the past decade. Automation, a necessary development due to capital accumulation’s ongoing need for ever-rising productivity growth, is therefore abolishing the source of surplus value, exchange value and profit. To be more precise, automation is the final expression of capitalism’s self-abolishing tendency
➤ Capital itself is a generally ever-growing fetter (restraint) on investment and productivity growth, which has spluttered below 1% in the richest countries over the past decade, since the ever-rising overaccumlation or surplus of capital becomes increasingly unprofitable to (re)invest in production (hence increasing trillions of dollars hoarded in tax havens, or chucked into speculation, waiting for profitable investment opportunities in production to turn up).
➤ Capital accumulation is approaching a historical limit and is destined to break down much earlier than a zero rate of profit, as capital’s absolute value is only preserved if it grows sufficiently:* an ever-greater proportion of surplus value has to be dedicated to accumulation, meaning the consumption funds for both the capitalist and the worker eventually begins to decline absolutely, provoking capitalists to ramp up attacks on both their competition and the working class. In such circumstances, the Canutes who do not fight for socialism can only fight for fascism, slavery and world (probably nuclear) war (since the accumulation crisis is forcing nation-states into intensified competition, as evidenced by the rising trade wars).
*If the value of capital is 100 and the surplus value is 75, there is an overaccumulation of capital of 25. By expanding production and deepening the rate of exploitation, capital can be devalued, to say 90, and the amount of surplus value needed to reproduce and expand (valorise) capital raised to 90 so that the overaccumulation is overcome. Any devaluation, however, tends to be offset by absolute growth (whereas each unit is devalued); and in the long run the growth of capital value tends to outstrip the growth of surplus value production as the pool of exploitable labour shrinks relative to capital/machinery. See Henryk Grossman, The Law of Accumulation and the Breakdown of the Capitalist System, 1992
➤ Another way of looking at the situation in historical terms: just as the number of slaves in the US declined as a percentage of the population (from approx. 25% in 1790 to 16% in 1860) before slavery ended (via civil war); manufacturing workers have declined as a percentage of the US workforce from 26.4% in 1970 to 8% in 2018.
(The decline of slavery relative to waged labour, along with its exhaustion of the soil through extensive farming, compelled the slave-owning South to expand and export slavery, compelling the North to fight back. As the civil war progressed, it became clear that abolishing slavery throughout the US was the only way to save the Union and US agriculture. More generally, slavery was generally unenforcable in urban and factory settings — and the limits of man meant he had to be supplemented by mechanical machines, to raise productivity — necessitating the transition to waged labour.)
➤ The means of production evolve and improve ‘organically’ in order to meet the demands of capital accumulation — although innovation and the tendency for machinery to grow relative to labour is also historical; both continue under any system — but eventually demand new relations of ownership. Just as slavery and feudalism became increasingly inefficient forms of production that not only prevented countries from becoming richer but made the bulk of their populations increasingly poorer, the same is now true of capitalism and the private ownership of the means of production.
The commodity, the basis of capitalist society, is dually characterised by exchange value and use value (utility), but the evolving deindustrialisation, servicisation, automation and digitalisation of labour has created a new economic-technical basis to society whereby exchange value has withered away, leaving one that demands a new political superstructure based solely on use value; i.e., the public/human ownership of all production and services; centrally planned, break-even utility production; and the replacement of money by a (non-transferable) voucher system pegged to labour time
➤ The problem for capitalism is that it eventually runs out of labour and labour time to exploit; and land and services to privatise and atomise.
(Re. atomisation: splitting one area or thing into two enables you to charge for it twice: so splitting the road up into millions of cars instead of far more efficient trams or trains etc. is far more profitable; making and selling billions of individually-owned screens is far more profitable than encouraging the use of communal cinema screens, and so on. This is not to say that socialism will ban individually-owned cars and screens — just that they could be used a lot less (as well as made more cleanly and sustainably) with more efficient and socially rewarding alternatives).
A fully automated system of production — including the microbiolisation of production of food and fibrous (plant-based) structures that will make the labour intensity of farming and mining obsolete — will involve so little human labour per unit produced that there will be nowhere near enough surplus labour time for capital to exploit (to reproduce and expand itself). So the capitalist system will break down absolutely before production has been fully automated.
What makes socialism the economic solution?
➤ Since the private sector is increasingly monopolised and dependent on long-term central planning (budgets, forecasts, stock coding, etc.) and state (public) subsidies (including tax cuts) — trending towards 100% of income and therefore nationalisation — taking the means of production under public ownership, a ‘final merger’, and centrally planning the economy as a whole, is becoming, for the first time, an economic necessity.
Corporate tax cuts are a form of subsidy, indicating that the private sector is increasingly dependent on the state for its income.
➤ Since the private sector is losing its ability to employ value-creating (commodity-producing) labour — it does so only if profitable — society, via state enterprises, must take over responsibility for employment, enabling (almost total) full formal employment.
➤ Since the workforce is now almost entirely services-based, economic stability can only be established by an applicable system, whereby value is created not by for-profit commodity-production but by break-even utility-production.
➤ Since fiat currency is dying a natural death, with cash also disappearing in relative terms — not due to any conspiracy as such but because: only so much cash can be stored physically; accumulation demands increasing efficiency in circulation and turnover; and cash must be converted into bonds to lower interest rates) — it must be replaced by a digital voucher system, with the ‘currency’ pegged to labour time.
Workers will therefore receive all the value they create during the working day (instead of having part (most!) of it appropriated by capitalists), paid in units of labour time worked, minus taxes for universal public services, defence (while needed) and so on. A grading system will probably be needed to incentivise types of work (night shifts, for example) and productivity rates. Combined with public ownership and full employment, this system will institutionalise equality of labour (the right to receive all the value you create), underpinning equal rights (whereas rights under capitalism only really exist if you have money) and limiting economic inequality to a minimum; while consistently raising living standards for all (especially via general falling prices).
And since digital vouchers will be non-transferable, cancelled like train tickets once ‘spent’ on consumer goods, the centralisation of wealth into the hands of a few becomes impossible.
➤ In the long run, as full automation (along with 3D-printing, lab-grown food, etc) becomes increasingly diffuse and localised, so that the divide between producer and consumer increasingly disappears and bringing about abundant (plentiful) material wealth for all, class and the state will become increasingly irrelevant, and both will therefore wither away. In this way, whereas capitalism has a long-term tendency to centralise wealth and power, socialism has a long-term tendency to decentralise wealth and power.
Essentially, socialism completes what capitalism started but could not finish.
➤ Precision fermentation and 3D-printing are forms of additive manufacturing, as opposed to previously subtractive manufacturing — metal or trees subtracted from mines or land, for example. So:
Subtractive (mechanised) production = limited/scarce production (capitalism)
Additive (automated) production = unlimited/abundant production (communism)
Why not skip straight to ‘full’ communism/anarchism?
Socialism is the lower stage of communism, a transitional period between the higher stage of capitalism (monopoly capitalism, which emerged inevitably out of lower ‘free market’ capitalism around 1900) and the ‘higher stage’ of communism, when the state has withered away. Cementing the abolition of the all-capitalist state requires the establishment of an all-socialist state, which must be able to defend itself from both internal and external counter-revolution.
Furthermore, the socialised digital voucher system that needs to be introduced is inherently centralised.
Remote or poor regions, both domestically and internationally, may not have all the resources they need to eliminate poverty or build up their productive forces, also necessitating distribution through central planning, both nationally and internationally, which would also prevent (non-fraternal) competition between co-operatives and communes.
Anarchists understandably want freedom from any state, since any state is capable of imposing ‘bad’ or (say, for example, culturally) regressive policies. But so is any democratic institution or collective. Enforcing anarchist ideals can often play out badly for most people if the existing circumstances are far from ideal.
Socialism is not defined by ‘good’ or ‘bad’ policies but by the socialist mode of production and the all-socialist character of the state. The working class is not monolithic and the majority of a given country’s population may at one time or another vote for ‘bad’ policies. Each socialist country will vote differently on different issues, influenced by their cultural pasts and existing circumstance and level of development.
But because socialism is driven by utility production based on needs and wants, rather than commodity production based primarily on exploitation and private profit — and removes the productivity fetter of surplus capital — socialism is a higher mode of production than capitalism that abolishes unemployment and economic crisis, enabling consistently higher productivity.
Socialism will therefore progressively and consistently improve material conditions generally along with every individual’s economic independence, thereby enabling ongoing social and cultural progress, especially since, in the long run, the demographics of populations will continue to change — over a number of generations — i.e. continue the integration/equalisation of race and gender that began in earnest in higher capitalism.
(This was especially true after the post-world war II productivity boom that enabled much higher consumption; and then rising relative living costs after the privatisation of social housing — which enabled the well off to buy up more and more housing, thereby reducing the supply relative to demand, driving up prices — generally demanding two bread winners per household. Furthermore, capital’s ongoing need to expand and cheapen the labour base; and expand and speed up (i.e. internationalise) the circulation of capital, has meant women etc. have made up an increasingly large part of the labour market, including management roles, creating the basis for rising social liberalism and the relative decline of social conservatism.
Race and gender (along with states and war) did not exist before private property (around 12,000–14,000 years ago). Living in primitive communal arrangements, adults had shared marriages and so paternity could not be determined, meaning that the male and female sexes (not the same as gender) were social equals. When the agricultural revolution brought about surplus produce and therefore birthed trade and private production, the female sex was relegated to the position of producing children to work the land and paternity had to be determined so that property could be passed on to an heir, necessitating monogamy (and the enforced fidelity of women). Indeed, numerous studies show that women — and all genders and sexualities, in fact — enjoyed better sex lives in socialist East Germany compared to West Germany, since rising individual economic independence meant sex became something to share rather than a commodity or something traded for security. Growing trends in polyamory and ‘non-binary’ attitudes, are therefore historically inevitable post-industrial, pre-socialist trends.)
Socialism, the lower phase of communism, completes the historical trend towards fully automated production, bringing about the higher stage of communism and sustainabale abundant material wealth for all.
No one can promise ultraleft fantasies to immediately abolish religion, race, gender, prisons, the nation-state, etc. Certainly the change in the class and economic character of the state, new institutions and (ongoing) repurposing reforms will transform the nature of the state considerably; but the state, etc., have to be made increasingly irrelevant — by significantly improving living standards, sustainably, both nation-wide and internationally — before most people will agree that they should be officially abolished or completely transformed. (Indeed, religion already tends to be most irrelevant where living standards are highest.) The more localised, communised and abundant production becomes, the more ‘the centrality of the state’ and the state itself will disappear.
Because ultraleft demands are too abstract, too far off from realisation, communist parties need to propose a focused programme that appeals to the immediate needs of the masses if they are to have a bigger pull than fascism. My view is that revolutionary communist parties should advocate:
➤ Full, formal employment, including large earn-as-you learn trainee schemes
➤ A reduced working week and retirement age (including good, guaranteed pensions)
➤ A green industrial revolution that is actually green (see below)
➤ A long-term programme to build highly accessible public transport in every region
➤ A digital voucher system and flat rate income tax (a percentage of value created, initially worked out by planners or even algorithms; so 40% would be 0.40 of every 1.0 labour credit) to cover state expenditure, including universally available education, health, social and child care, free at the point of access. (Income tax will likely have to be high to start with to pay, through long-term debt, for compensation for expropriations of private companies — which will make the transition much more peaceful than if compensation is not paid — but it will fall in real terms the more productivity rises.)
➤ The cancellation of all private debt and mortgages (i.e. the expropriation of houses from private banks, which are going to go bankrupt anyway). This means converting private housing property into personal property (like a car). The land will be rented from the state, set as a small proportion of income and/or according to differential convenience or amenity of land. The state will gradually buy large properties that private owners no longer require for a fair price. Compensation will also be paid to anyone required to move for environmental or infrastructural reasons; and/or they will be provided with quality new housing, as locally as possible (unless they wish to move further afield).
➤ Empty, unowned properties will be immediately converted into homes for the homeless, followed by nationwide programmes for quality, spacious, community-friendly and carbon-negative/eco-friendly house-building.
➤ If enough land owners go bust, all the land could be immediately nationalised and turned into state-run farms, etc.; if not, it is vital not to drive small farmers into a powerful alliance with large land owners; huge tax breaks for the former should be offset by a high land tax for the latter. State run farms will incentivise farmers to continue running the same farms as before so as to prevent risking collapses in productivity (and incentivise them to train new farmers).
➤ A democratically agreed new constitution in every country — involving all the people and implemented with their consent — enshrining the rights to democratic participation (in most areas of policy-making as well as elections), equality, free speech, privacy, housing, work, education, health, social and child care in a people’s democratic socialist republic.
This sounds a lot different to the ‘socialism’ advocated by Corbyn and Sanders, et al?
Corbyn and Sanders are social democrats, not socialists, representing a privileged layer of the working class (a ‘labour aristocracy’). They advocate a moderate redistribution of wealth, but this would not solve the problem of value-creation and would in fact deepen the capitalist crisis, since private capital would be denied subsidies that would instead go to the public. (This does not mean that communists oppose redistributions of wealth to workers or other genuinely progressive reforms under capitalism.) Neither do they offer popular sovereignty for the people.
Their projects are also based on the expanded extraction-based plunder of the neo-colonies of Ireland, Africa, Latin America and Asia, which is not only morally reprehensible but potentially suicidal for all humanity with regards to the apparent climate crisis (see below).
What about the Soviet Union? Socialism didn’t work?
Having inherited a fairly undeveloped/unindustrialised peasant-based economy decimated by WWI and then a counter-revolutionary civil war — aided by 13 western countries that invaded immediately after the Bolsheviks took power — the Soviet Union faced many extreme problems, including widespread illiteracy, cultural/social conservatism and better-off peasants who hoarded grain. Sometimes the leadership pushed too hard for progress (overshooting capacity) and sometimes too softly (emboldening counter-revolutionaries). In extremely challenging conditions, some mistakes were made.
But overall, there were many phenomenal successes, including the abolition of illiteracy and (outside of war time) unemployment and economic recession, not to mention the stunning lead the Soviet Union initially took in the space race. Far from ‘killing tens of millions’ of people, as claimed by counter-revolutionary revisionists (who ignore the anyway much higher number of victims of capitalism) the quality of life and therefore life expectancy rose dramatically. Furthermore, it was the Russian Bolshevik/Communist Party that ended both WWI and WWII. Socialism saved millions of lives.
But the constant aggression the Soviet Union faced from western capitalist powers — which increasingly needed to exploit the Soviet Union’s labour — forced it to spend heavily on defence at the expense of its civilian economy and again decimated its party cadre, population and infrastructure during WWII.
The situation combined with the scarcity that arose from this was bound to bring about a centralisation of power to a greater degree than desired and at times also manifested in what would usually be considered regressive social policy (such as restrictions on abortions due to war-time depopulation and contraception shortages).
That the Soviet Union, where it could circumvent sanctions, had to import various goods and raw materials from capitalist countries also meant it could never fully plan its economy, since it could not predict volatile foreign prices. For the same reason, nor could money be abolished. This also meant there was some logic to allowing a black market to flourish, in order to build up foreign currency (upon which it eventually became too dependent).
The fear of invasion combined with the denial of some technologies — and the historical stage of technological development in general, which manifested in the domination of ‘command and control’ style planning that overlooked the finer details — held back the Soviet Union’s ability to transition to the higher stage of communism, resulting in relative economic stagnation and a growing pressure in the direction of capitalist reform, especially from skilled workers and intellectuals who benefited from the black market and wanted higher incomes. This latter problem understandably convinces many people that socialism cannot work because of ‘human nature’/greed, but as capitalism is now abolishing itself for good such a problem will soon no longer exist.
Now that computing power is exponentially faster and a digital currency is viable, the problems formally associated with planning can be much more easily overcome. Stock control coding means the finer details can be planned, and production is increasingly integrated anyway.
Once the whole world is socialist, with capitalist competition abolished, world peace will reign, ending the need for defence spending. Furthermore, trade will be actually free, since under a socialist union of nations, no exchange of ownership takes place.
Cuba, the world’s most sustainably developing nation and with a world-class health care system, continues to show that socialism works, even in the face of the US economic blockade, which has cost the island nation more than a trillion dollars (although, it must be admitted, that Cuba has begun to privatise not insignificantly around the edges of its economy in order to survive the blockade).
As outlined above, world socialism is becoming an economic necessity for the first time, and has therefore arguably not been possible before now. The Soviet Union, if we are honest, did emerge prematurely in historical-technological terms, making its survival incredibly difficult to sustain in a world dominated by capitalism.
What about one-party dictatorship, censorship and free speech?
Communists, like individuals in every other political tendency, have differing views on different issues.
While any government has to respond differently to different situations as they emerge — wartime and conditions of scarcity are bound to be more authoritarian and centralised than libertarian and decentralised, as we are now already experiencing — my general view (although I agree that almost everything in the capitalist media aims to keep its audience as depressed, desensitised, deceived and ‘dumbed down’ as possible) is that censorship aids and inspires opposition and becomes too costly to enforce; and that reactionary views arise primarily from scarce material conditions (which even, perhaps even especially, the richest capitalists are subjected to since their wealth tends to devalue and becomes harder and harder to sustain).
In the past, the counter-revolutionary press has been censored during revolutions for the purpose of self-defence and then increasingly less as communist parties have become more empowered to confront it polemically. How much this is actually possible in the internet age is not my area of expertise. But, furthermore, actual disinformation and hate speech are not forms of free speech.
In the long run, we should be confident that we have the best and most persuasive arguments. We do not need to burn books but write new introductions to future editions explaining how their content was once used to justify exploitation.
Once in power, we should trust that the key to overcoming reactionary media is to provide better, more enjoyable alternatives that therefore ‘become mainstream’, pushing the reactionary press to the margins that we presently operate in. Ultimately, reactionary and conservative views will wither away as living standards improve in a way that progressively eliminates inequality and socialises and communalises work, child and social care, etc.
The working class is not monolithic and so freedom of speech is important both inside and outside the party. (The party operates with the principle of democratic centralism — criticism and debate before democratic decision-making followed by adherence to the outcome of democratic decisions.) Social policies and budgets should be voted on in democratic referenda. And there should be absolute primacy of the democratic, publicly-elected legislative power over the executive branch of government.
It should be stressed that we already live with widespread censorship, mostly by omission and through the bewildering amounts of disinformation from the capitalist-owned state and press. Reality is pushed to the margins.
On free speech laws, I would more or less keep them as they are — punish hate speech that is likely to incite violence that isn’t self-defence. I would also advocate an independent judiciary, with the rights of claimants and victims balanced. But all this should be decided democratically in a new constitution.
On the party: there are actually multiple parties in Cuba and the Democratic People’s Republic of Korea; and parties do not stand in elections, members of parties do. The communist parties, however, are the biggest parties because they represent the largest proportion of the population: the working class. Just as most people find it pointless to join or vote for anyone outside the Republicans or Democrats in the US (or the Conservatives or Labour in the UK) (since the capitalist class is biggest in those countries), most people in communist countries don’t see the point of joining or voting for anyone outside the communist party.
Communists consider socialism to be ‘the dictatorship of the proletariat’ (as opposed to the dicatorship of capital/the bourgeoisie). But dictatorship in this phrase merely means ‘rule’.
We already live in de facto one party states under capitalism, since all the main parties are parties of capital, merely representing different factions of capital.
Arguably, when the ultimate role of the communist party is to oversee the withering away of the state, there seems little point in having more than one party.
What is communist ideology then?
Capitalist and communist ‘ideology’ flow from their economic-technical bases.
Capitalist production is mechanistic (mechanical mechanisms) and dualistic (a labour process and an accumulation process/use value vs exchange value/owner-producer vs worker-consumer). It therefore produces an ideology that is mechanistic and dualistic. Capitalist ideology sees ‘nature’, for example, as merely a machine for capital accumulation and somehow separate from the ‘I think, therefore I am’ sentient human, for example. The civilised are pitted against ‘the savage’, justifying colonialism. The reproduction of ‘race’ justifies ‘white’ vs ‘black’ notions serving divide and conquer ruling class objectives, and so on.
In contrast, communist production is automated. Automation literally means ‘one/self action’. It enables, by abolishing the particularity of class, the true self-determination of the universality of humanity. Since the socialisation of production and automation ‘heals’ the divides in production — the source of all division in capitalist society — communism’s ideology is therefore holistic and humanistic.
Nature is not separate from humans but, in all its glorious diversity, one, interconnected whole. Humanity is not really made up of races and nations — all humans are 99.9% genetically identical. There are not simply ‘good’ and ‘bad’ germs, but trillions of bacteria and viruses regulating our immune systems in variable environments and contexts. And so on.
Clearly, during the transition between mechanical and automated production — comprising higher capitalism and lower communism — there is some, on the one side, overlap, and, on the other, intensification, of ideologies. So capitalism is increasingly two-faced, increasingly professing humanistic ideals — as production becomes increasingly integrated and scientific theories in general more systematic and holistic and therefore ‘pre-socialist’ — while throwing more and more of the (human) labour force onto the scrapheap of unemployment, starvation and war. At the same time, communist ‘ideology’ — Marxism is really a science — cannot possibly be so holistic as to include ruling class capitalists in its humanistic project (although Marx did predict that a portion of the ruling class would eventually cross over to the side of the proletariat, just as a portion of the feudal nobility crossed over to the side of the then usurping, revolutionary capitalist class).
Similarly, we do not take a ‘colour blind’ approach to race, and so on. We cannot ignore that capital encourages certain prejudices and discriminations to divide and rule the masses and so we have to take into account that certain races and genders generally face more oppression and discrimination than, for example, white men — not to the exclusion of white men, of course — but then women and black people, for example, make up a bigger proportion of workers than they do capitalists. Nor, like liberals, do we weaponise any type of oppression (‘pinkwashing’, for example) to justify capitalist goals.
Ultimately we stress the importance of working class unity across genders and races, with the knowledge that their differences must be worked out democratically (i.e. their actual democratic participation in policy-making) in the short term and through evolutionary demographic shifts over the coming generations.
We may be very divided now but through division grows unity — humans can only tolerate so much division for so long.
Were the Nazis socialist?
No. They used the term ‘National Socialism’ to dupe bigoted workers, but they privatised everything and were funded by capitalists (in the US and Britain and elsewhere as well as Germany) who needed a mass party to roll back the huge gains made by the working class in the wake of WWI.
Controversially, Stalin signed a peace pact with Hitler to buy the Soviet Union time to prepare for Nazi invasion after his approach to the US, France and Britain to sign an anti-Nazi pact was rejected. The pact with Hitler was for 10 years but the Nazis broke it after only two.
Is China socialist?
In my view, no, not anymore. China has the same problem as the US and Europe, a massive overaccumulation of capital/debt crisis; a growing housing market and financial bubble; and falling interest rates. It is in a potentially healthier state than the US, but only because its capital is younger/its overaccumulation of capital is relatively smaller than the US.
The Communist Party of China claims to be taking a ‘capitalist road’ to socialism. While it is unsurprising that social democratic liberalisers rose to the top of the party in the face of the US’s monopolisation of raw materials in the surrounding parts of South-East Asia, the only capitalist road to socialism is that of breakdown and barbarism. In 2020 alone, Chinese billionaires reportedly doubled their share of Chinese GDP from 10 to 20%.
Cuba and North Korea are arguably the only two actually socialist countries left, although even they may have been colonised by China to some degree. Again, this is unsurprising given their isolation and need to trade.
How can the masses be convinced to fight for socialism? Won’t revolutions be extremely violent?
Through class struggle. This starts with the capitalist class’s continual attacks on wages (which includes ‘benefits’ and pensions), working conditions and living standards eventually and increasingly going into overdrive — up to and including sending more and more people to their deaths in wars — along with anything else that eats into profit margins or slows down the centralisation of capital into yet fewer hands (meaning that (violent) competition between capitalists also intensifies, both domestically and internationally). Most of the working class and other oppressed peoples will then be increasingly compelled to fight back just to survive, firstly through protests, strikes, etc.; but, probably once the economy collapses altogether, or to prevent or end wars, by building ‘dual power’ (a national network of workers’ councils (soviets), effectively a competing state).
Every pound/dollar/euro etc. spent on the attacks on democracy, competitors and the working class is one that cannot be put towards capital accumulation, so the capitalist state will eventually exhaust its ability to go on the offensive — the economy will collapse and the state’s ability to buy fuel, or pay and feed its police, soldiers and state officials will dry up. At that point mass defections may become possible (as happened with the 1917 Bolshevik revolution, when even many high-ranking imperial officers defected to the side of the revolution; although many had been promoted from the lower ranks to replace their slain seniors, of course). The greater and swifter the number of defections, the quicker and more peaceful revolutions will be. The Bolsheviks had only 8,000 members just four months before they seized power.
When this could happen exactly is impossible to say, and there is some chance governments will be able to temporarily fire and rehire police and soldiers on reduced wages to a limited extent once states default on their debt; but there is already a long-term trend in states cutting the numbers of their police and soldiers significantly (CCTV, digital scanning and AI drones are cheaper and therefore eat less into taxes that eat into profits), especially relative to population size, so this trend is likely to accelerate greatly.
Communists have to respond to spontaneous demonstrations etc. by helping to turn them into well organised movements with clear demands and capable of defending themselves. Since most workers are presently pro-capitalist reformists to one degree or another, communists must use the ‘united front from above’ tactic of addressing reformist leaders in calls for joint action in order to address the members of reformist parties, supporting and fighting for reforms that improve the conditions of workers and/or ‘minorities’ (most of whom are working class) or at least limit the brutal and anti-democratic potential of ruling class attacks, in order to win them over by showing they are the ones willing to fight hardest for their rights and conditions. The more communists do this, the more they will expose the reformist leaderships as capitulators, and the larger their ranks will grow.
It is possible that communist parties will need to give critical support to very ‘left-wing’ social democratic governments (probably without entering them) at some point to prove to the people that even this solution cannot resolve the crisis in their favour.
(The united front ‘from below’, where reformist leaders are not addressed, has always had far less success. Recommended reading: The Lost Revolution by Chris Harman.)
As outlined above, communist parties should also keep decent compensation packages on the table for expropriations of the last capitalists (most will have gone bust by then, anyway), and allow them to keep their houses in order to minimise conflict as much as possible. Given that communism will build abundant material wealth for all, confiscating personal property would be a waste of time and effort. Another way of minimising conflict as much as possible will be through truth and reconciliation amnesties and rehabilitation programmes.
There is no such thing as a pure revolution. Given the reckless viciousness of the capitalist class — see what they have done just recently to Afghanistan, Iraq and Libya, for example — and the general lack of understanding about the approaching historical situation, protracted wars, although preferably avoidable, certainly cannot be ruled out.
Because of the bind capital is now in, the ruling class will try to prevent or limit high/hyperinflation by curtailing demand — that is, by slashing capital’s overall outlay on wages, welfare and public services. This cannot be done by simply cutting production, since this effectively raises demand per unit produced and therefore prices — although this is, of course, a limited option, since inflation has the advantage of centralising capital into fewer hands and torching wages, debt and taxes. That means the capitalist class must pursue an intertwined strategy of, on the one hand, justifying publicly/tax-funded enforced consumption (since capital needs to increase the number of commodities it makes and sells and increasingly via state contracts); and, on the other, increasingly immiserating and culling the masses (through as deceptive and ‘gentle’ means as it can possibly manage, of course — see, for example, ‘austerity’). This is a recipe for state medical abuse on an even — much greater — scale than, for example, the US opioid epidemic.
The ruling class will resort to all sorts of ‘psycological operations’ such as manufacturing the perception of spikes in violent crime in order to create a public clamour for handing the (capitalist) state more power at the expense of civil rights and liberties; and to justify de facto segregation and martial law for the purposes of divide and rule in anticipation of mass revolt.
Capitalists will likely start to resort to commodifying the human body (on a much greater scale) — human trafficking, chattel slavery, concentration camps, etc. This will fail for the same reasons as in Nazi Germany: the resistance and lethargy of slaves makes them very unproductive; and the costs of transporting, housing and exterminating slaves becomes the opposite of profitable. The market for selling slaves is also very limited — slavery can only serve to centralise capital into yet fewer hands.
Capitalists also use the destruction of war to create new profitable opportunities. Hence the post-WWII productivity boom — it was only the destruction of WWII that ended the Great Depression.
This option is increasingly unlikely to work, however, since the building back process would be done with the same, increasingly advanced contemporary technology — which would be accelerated by the capitalist state through the arms race — that produced the crisis in the first place. (Production by the state is cheaper as this removes the burden of upfront costs from capital. Most innovation has long been done by the state for this reason. The risk is socialised, the reward privatised.)
Given that the working class is now billions of times stronger than it was a mere century ago, the relatively dwindling capitalist class will at some point ‘bite off more than it can chew’. Once the masses, in sufficient numbers, find the courage and gumption to unite, fight and commit to winning, they will win. But people tend not to be radicalised en masse until they have experienced the violence and oppression inflicted by the ruling class en masse to a particularly intense degree.
How can socialism overcome the environmental and climate crises if it promises even greater levels of production? Don’t we need less economic growth?
Since value-creation under capitalism is ever-more dependent on the exploitation of labour and expansion of commodities, growth under capitalism is increasingly dependent on the intensity of deforestation, intensive farming (which tends to exhaust the soil) and mining fossil fuels and metals that pollute the air, environment and products we consume.
With socialism, exchange-value does not exist because there is no exchange of commodities; value only exists as a measurement of labour time, thereby measuring labour’s usefulness, its utility, instead of its exploitability/profitability, meaning all labour becomes formal and productive of value, not just commodity production.
Because the labour intensity of mining and deforestation will no longer be absolutely necessary to create new value, this will therefore enable a transition from extractive production to, for example, hemp-based production, a green industrial revolution that is actually green. Hemp is the most prolific and versatile crop on Earth, but it has been prohibited because it threatened the more profitable extractive industries; i.e., because farming and processing hemp is not very labour intensive, and therefore relatively unprofitable. It is only now that the extractive industries are becoming so capital-intensive and unprofitable that hemp and cannabis production, being cheap, are starting to be re-legalised. (Shell says that its oil production peaked in 2019 and is now in terminal decline, with solar expected to be cheaper for consumers some time this decade. McKinsey estimates that Saudi Arabia’s $900bn fossil fuel industry assets will be worth $2 trillion in debts by 2030.)
Hemp can be turned into over 50,000 applications, including relatively clean biofuel; very strong but light biodegradable bioplastic; paper at higher rates and quality than from trees, allowing reforestation; and computer chips and batteries that may outperform graphene and lithium, seriously reducing the need for metal mining. Hemp grows quickly with little water, is drought resistant, heals the soil, and rapidly draws down carbon. It also sequesters that carbon indefinitely in the products it is turned into, including highly insular buildings made out of hempcrete that are carbon-negative.
A hemp-based industrial revolution would solve the plastic crisis without imposing some kind of indefinite and unenforcable asceticism on people.
This of course is only one solution. Banana peel can be made into sodium-ion batteries, for example. Scientists at MIT, meanwhile, have made solar panels from plants and grass.
Similarly to hemp, mycelium (a type of fungus) can be coaxed, using temperature, CO2, humidity and airflow, to rapidly build fibrous structures for things such as “packaging, clothing, food and construction — everything from leather to plant-based steak to scaffolding for growing organs” and even computers; all with minimal (mostly compostable) waste and energy consumption.
There is also the potential for microbial tech to supply a near-infinite source of energy. In 2018, scientists in the US confirmed a theory first proposed by Soviet geologists when they found huge populations of bacteria living in the extreme temperatures of Earth’s crust, despite the lack of photosynthesis and nutrients, living solely from chemical reactions fuelled by geothermal energy. They estimated that up to 23 billion tonnes of micro-organisms live in this “deep biosphere”, making it the largest ecosystem on the planet and accounting for nearly 400 times the amount of carbon found in all living humans. Here lies a potential source of non-finite, abundant energy (although we will have to assess whether the benefits outweigh the impacts of drilling).
Other scientists have even found that the Geobacter bacteria found in human waste can convert sewage into fresh water and produce electricity in the process. It is now thought that one day microbial fuel cells could power our phones, household appliances — and even spaceships.
Investment in hemp, mycelium and microbial fuel cells will remain seriously limited, however, until value-creation is based solely on utility instead of exploitation and profit, since capital cannot exploit the labour time of plants and microbes!
Emissions-free, energy-dense nuclear power, now apparantly one of the safest and cleanest forms of energy production is also an option, although the impacts of the initial mining will again have to be carefully assessed. Increasingly unprofitable for capital, nuclear could be re-embraced – and in the superior form of (additive) fusion over (subtractive) fission) – to supply the abundant energy the masses need for cheap energy consumption (especially considering the rising demand for air conditioners in a warming world).
Hydroponics, permaculture and ‘carb-fixing’ (turning carbon emissions into basalt rock) are among the other practices that socialist states of the future should probably scale up. Meat, fish, leather and jewellery that are lab-grown on a mass scale – and which will increasingly enable people to grow their own food at home – will also smooth over the transition of decarbonising production and resocialising and reviving the land, while massively reducing emissions. Much production, as devices continue to shrink, may even be moved almost entirely underground, allowing all kinds of opportunities for revitalising the ‘overground’ environment.
There may need to be hard legal limits on pollutants and fossil fuels even during this transition, meaning we may have to make only what is absolutely necessary or clean at first.
All this will also help to detoxify the products we consume that presently increasingly diminish human immunity and fertility.
Consumption should also be made more efficient by incentivising, through tax breaks and rent reductions (as well as the high quality on offer), a transition to communal or at least community-friendly ways of living (that embrace individuality and privacy), thereby pooling resources.
Obviously climate change is a controversial topic and as well as deniers (even some on the left) there are differences of opinion in the scientific community about how hot the Earth is set to become and how quickly. While the climate should be monitored seriously, we cannot rule out the possibility that the monopoly capitalist class is now at least exagerrating the immediacy of the crisis in order to promote ascetism (to justify slashing wages and public spending) and the privatisation/enclosure of land to expand rents that centralise capital into fewer hands. Departments are also likely to hype things to justify extended budgets. While deniers point to warmer climates in the past few hundred years, what is certain now is that warming is taking place at the fastest rate ever. Hardly surprising given the amount of fossil fuel we are burning, trees we are cutting down and soil we are degrading through monoculture and toxic fertiliser use.
All forms of scientific consensus will need to be reassessed once science is liberated from the profit motive, of course.
Clearly though, even if the climate crisis is not as serious as advertised, world socialism is needed to address the very real problems of desertification, biodiversity loss, and the plastic and pollution crises — and the same goes for if it is.
Ted Reese is the author of: Socialism or Extinction: Climate, Automation and War in the Final Capitalist Breakdown | Humanising Production: The Second (Not Fourth) Industrial Revolution and The Bio-Economic Necessity of Socialism | The End of Capitalism: The Thought of Henryk Grossman (out May 2022). linktr.ee/grossmanite
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