Chapter 8

Socialism - Theory and Practice 

THE SEVERE social and economic crisis of the capitalist system is making itself felt in every aspect of our everyday life, from culture to health, environment to education to crime. Intellectuals, journalists, and even businessmen have begun to sound worried. The blatancy of the crisis is creating a turn to Karl Marx's social analysis for an explanation of how the growing wealth of capitalists -- a tiny minority in society -- can coexist with growing unemployment and destitution among the vast majority.

Ten years after declaring final victory over socialism, the capitalist system faces yet another recurrence of a crisis that it first survived early in the last century. For capitalism cannot have a final victory over socialism, any more than feudalism in its time could triumph over the then-newly-born capitalism. The old feudal monarchies succeeded in repressing the infant bourgeoisie's early attempts to take power, but monarchism's victories over bourgeois democracy were only temporary. The first French republic ended with Napoleon's empire. The bourgeois revolutions against monarchy in 1848 in Germany and Austria also ended in fiasco. But the continuation of these revolutionary attempts led finally to a qualitative historical leap that guaranteed capitalism's victory on a world scale.

That victory, too, is temporary. Almost at once, capitalism's sharp internal contradictions began causing cyclical economic, social, and political crises on a world scale. Then, early in the last century, socialist revolution in Russia gave the first of many indications that this system was no more immortal than its predecessors. By the end of the twentieth century, the capitalist system was visibly unstable.

The fundamental cause of the latest crisis of capitalism is the basic incompatibility between private control of the means of production and the present level of productive capacity. Modern technology is capable of providing for the needs of humanity as a whole. This potential will not be fulfilled, however, while the means of production remain in the hands of the capitalist minority. To secure their own profits, capitalists limit output, keeping supply low in relation to demand. "Overproduction" would lower their rate of profit. 

Capitalism, clearly, no longer has a progressive message to humanity, for it has ceased to take an interest in society's well-being. Yet it continues to insist on its old message: whatever is good for capital is good for society, because only capital turns the wheels of production and produces a living for humankind. This argument follows the logic of the slave owner justifying himself as the one who feeds the slave, or of the feudal lord imposing a levy on his serf in return for "security". The fall of the Soviet Union accelerates the collapse of capitalism 

The capitalist camp interpreted the demise of the Soviet Union as a great victory. Far from curing the ills and contradictions of capitalism, however, this event deepened them and made them more acute.

This supposedly surprising result was in fact obvious, given the trends of the preceding decades. The 1950s and 1960s were characterized by the rebuilding of the ruined economies that World War II had left in both the West and the East. When this process was completed, competition arose among the parties that had just recovered their economic strength. During the 1970s, as signs of Soviet stagnation began to appear, the U.S. dollar started to lose its value. As we mentioned in Chapter 5, the growing economic crisis forced President Nixon to abolish the link between the dollar and the gold standard. This development opened the way for the free speculation in currency values that caused monetary anarchy in the 1990s.

During the 1980s, the United States intensified its Cold War against the Soviet Union and its allies. By this time the Soviet Union was increasingly vulnerable. While the West had changed, the Soviet regime had stagnated. The Soviet people had a lower standard of living than their counterparts in the West. In addition, the fifty-year absence of democracy was claiming its price. Stalin had enjoyed public support in spite of his dictatorial practices because he succeeded in creating sustained economic growth while the capitalist system was mired in the Great Depression of the 1930s. In a stagnant economy, however, the longstanding inability of citizens to influence public decisions deadened the Soviet people to political concerns, and they ceased to support the regime.

This was the point when the capitalist system got the upper hand, overcoming its internal crisis when the Soviet system could not do so. But then, to the capitalists' surprise, the demise of the Soviet Union and its allies did not result in an economic surge for the West. It turned out that the socialist countries had been helping maintain world political and economic stability. Socialist countries' vast economic aid to poor countries in Asia and Africa had been alleviating the burden on the world capitalist economy. On the other hand, fear that Soviet ideas would gain influence among their own workers had forced capitalist countries to respect workers' rights enough, and to adopt enough of a welfare policy, to limit workers' expression of pain and outrage.

The beginning and end of state economic mediation

After World War II, capitalist states took a series of administrative and legislative measures to limit social tensions that could arise from the wide gap between the poor and the rich. While continuing to further the bourgeoisie's fundamental interests, the state played the role of a mediator between bosses and workers. It guaranteed workers' minimum social needs by providing the budgets to pay for a modicum of housing, health, and education, while minimum-wage and overtime pay laws helped maintain a standard of living that was high by world standards.

Another way the state acted to maintain stability was by providing employment. The state owned the public services and many key industries. Electricity, water, communications, transport, ports and railways, postal service, mines, and military industries were sources of employment and revenue that preserved their workers' sense of well-being.

Beginning in the 1970s, this kind of social contract came to an end in country after country that adopted the theories of the University of Chicago Professor Milton Friedman. The "Chicago Boys" hold that the unregulated market is the most efficient regulator of the economy because it enables the fittest to prevail, eliminating those who cannot compete. Governments under their influence privatized infrastructure and production enterprises and let the market forces of supply and demand govern economic life. Through the triumph of this ideology, society, as represented by the state, lost any power over economic decisions.

Capitalists lose control by escaping controls

Despite, or perhaps because of, its restored reliance on market forces, the capitalist system can no longer contain the deteriorating worldwide political and economic situation. The gap has grown too wide between the huge capitalist technological productive potential and the stagnation of the capitalist market's ability to absorb it. The resulting overproduction depresses prices and so constricts profits. This fundamental problem, laid out by Karl Marx a hundred and fifty years ago, remains intractable.

Contributing to the gap between productive capacity and market capacity are two widespread practices that capitalists adopt in the belief that they will increase their profits more quickly. One is the adoption of modern technology, which not only increases productivity, but saves labor expenses by eliminating the need for many hitherto indispensible labor skills. That is, it makes possible radical reductions in the labor force.

The second capitalist practice is merger between giant corporations. By preventing competition, such mergers facilitate the control of the markets and maintain the level of prices. They also save on labor costs through "downsizing" -- a euphemism for throwing millions of workers into the ranks of the jobless. 

Both technological modernization and merger, however, are self-defeating in terms of profit. To the extent that workers become unemployed and lose their purchasing capacity, companies cannot expand their markets -- the one thing necessary to maintain high profits. 

The inability of the market to absorb today's huge productive potential makes investment in industry unprofitable -- and profit is what capitalists look for. They don't care about production: that's not necessary for increasing profits. Thus, investors have turned to speculation in currencies and stock. Because of this attitude, the gap between the prices and the real value of stock has reached a level that threatens the financial markets with meltdown.

War: capitalist states' risky tactic

Capitalists instinctively turn to force when problems confront them. In the same way that they repress workers who revolt against their exploitative system, they do not hesitate to use force against any country that threatens their economic interests. The use of force in Yugoslavia was a clear sign that the architects of the U.S.-led New World Order fear a visible loss of control. So were interventions in the Caucasus and sanctions against Iraq, both designed to establish a monopoly on the world's oil resources. 

The war in the Balkans and its extension to the Caspian Sea area are signs of a different anxiety among capitalists. They point to the inevitable confrontation between corporate business, which controls the markets and enjoys economic growth, and countries like Russia, which have been excluded from the world market. Corporate executives fear Russia's economic potential, which is based on high levels of technological know-how. This may indicate why, within a decade of the fall of the Soviet Union, all promises of economic aid to Russia had vanished, so that that country remains in a state of economic and social chaos.

Wars, promoted with hollow nationalistic speeches about saving the democratic dream, can distract workers' attention from the real issues and their real enemies. A Western state will recruit working-class people --often young people with no other hope for a job -- into its military. It then sends them to fight a war for "democracy" or even for "human rights", when its real aim is to preserve an exploitative economic system. As a result, workers in Western nations are not attacking but defending people who became billionaires by exporting thousands of jobs, causing mass unemployment in their countries while keeping workers overseas barely able to live. It is in this cause that workers find themselves in aircraft of dazzling sophistication, dropping bombs on other workers and their families.

The resort to force, however, can be a dangerous tactic. Lenin described wars as catalysts of revolution because they shake society from its routine and awaken the quiescent majority. When the state demands that workers sacrifice their lives "in defense of the fatherland", workers may begin to question the nature of the system that is demanding not only their labor, but their lives. They may then discover that the reality behind the patriotic slogans is quite different.

Fascism, liberalism, and the lessons of history

Early in the last century, a crisis in the capitalist system faced humanity with a choice between fascism and socialism as the available alternatives. Nearly a hundred years later, many commentators have expressed surprise at the resurgence of fascism in Austria; their explanation is that the Austrian people "did not learn the lessons of World War II". In fact, it is those who are afraid of fascism but at the same time praise the democratic system, the free market, and the virtues of globalization who have not learned the lessons of history.

Fascism is a natural offspring of instability inherent to the Capitalist system. The middle classes bring it forth when they notice a continual lowering of the standard of living, the spread of corruption, and social problems caused by rising unemployment. In this situation, they typically accuse foreign workers and the democratically elected government of fostering society's ills. With stunning irrationality, they look for a strong fascist organization to solve their problems by destroying the unions and applying the iron fist against the government. Never mind that the hated foreign workers generally don't even get the chance to join unions, so destroying unions doesn't get at them -- any more than it raises the standard of living or combats crime.

Today's fascism is not restricted to Austria and Germany; it has spread into Russia. There it feeds on feelings that the country has become a victim of the New World Order. Frustration caused by the anarchy of the Yeltzin regime provided fertile ground for the growth of extreme nationalist tendencies and feelings of hatred towards the West. Many Russians feel nostalgia for their recent past, when the Soviet Union was a superpower. The fascists among them want to go back to past glories, but this time without the socialist content. 

Some elements in the new Russian bourgeoisie -- former officials in the Red Army, past members of the Communist Party -- want to force open a place for their country in the New World Order. They would like to rely on Russia's nuclear power to fulfill their aim. They are also staunch opponents of the Mafia's grip on the economy and of the circle around Yeltsin, and they resist the policy of submitting Russia's foreign policy to the strategic interests of the U.S.
 

Socialism is the only solution to the present crisis

The socialist alternative to the capitalist system is by no means an intellectual exercise. It is as relevant as it was when Russia took the socialist path a century ago. It offers humanity a way out of the present political, social, and economic dead end. The standard objections -- that a planned socialist economy is an obstacle to technological advancement and human welfare, and that unfettered competition for profits guarantees continuous progress -- are not valid.

The second rationale, in fact, is not even relevant to the present situation. Through coordination and mergers, the multinational corporations have divided among them the global market and suppressed free competition. The capitalist economy has become in reality a planned economy, though not one planned to provide the greatest good. Multinational corporations control the market worldwide. They plan and coordinate the quantities, the qualities, and the prices of the goods they will introduce into the market. They decide what we will consume and what kind of life we will have. The consumer has no way of knowing whether what is being offered fulfills an essential need or is intended only to make corporate profit -- or even of knowing whether it is safe to use.

The same technology that is used to plan the capitalist economy and is now preventing many millions from working could -- if released from the grip of corporations and transformed into public property - propel humanity as a whole into a modern society. The material means to provide everyone on earth with basic necessities already exists. If the factories and the natural resources were devoted to benefiting those who are in desperate need, modern society could turn to the spiritual and intellectual activity Marx describes when he talks about the socialist stage of history. This idea may seem farfetched, since most human society lives in poverty, disease, hunger, and illiteracy. Nevertheless, it is the only alternative to dissolution into destitution and war.

Turning the world from its present path will not be easy; the bourgeoisie will defend its privileges with grim determination and immense productive, military, and communications resources. Only a social revolution in which workers lead and all humanity participates will have a chance against these enormous capabilities.

Long ago, Marx and Lenin asserted that the dictatorship of the proletariat represents the will of the absolute majority of society. This is the only political regime that can destroy the foundations of the dictatorship of the bourgeoisie. The main task of the proletariat, they said, is to take power from the bourgeoisie's hands by revolutionary violence -- a violence that the bourgeois minority themselves used to seize power over the vast majority of society. The most known examples were when the French Revolution determined its fate by using the guillotine against the king, or when the American Civil War resorted to war in order to abolish slavery. If the capitalist system was capable of avoiding the social maladies it produces and overcoming poverty, unemployment and wars, the socialist revolution would be impossible. After all, capitalism was able to appease the workers in the industrialized centers for a relatively long time by maintaining social programs that guaranteed a high standard of living. But that time is past.

Seemingly inextinguishable wars have broken out from the Balkans to the Caucasus, while poverty and unemployment invade the industrialized countries themselves. Under these circumstances, only establishing socialism can prevent the kind of catastrophe that took place fifty years ago.

Capitalism has united the world's working class by constructing the Global Village. It created the information revolution that is bringing cultures closer to each other. Production has become international, and so has consumption. Corporate capitalism has united in order to exploit the working class; workers, too, can unite, to confront the world bourgeoisie.

A victory of the working-class anywhere in the world would be a victory for the working class worldwide. There can be no solution to the national question separated from a world socialist revolution. This was true at the beginning of the twentieth century, when the Russian socialist revolution took place. Today, however, the rules of ruthless globalization reign and a few powerful people control a high proportion of the means of production worldwide. The socialist revolution will need a collective effort from all the peoples of the world if it is to create a new, socialist society.
Socialist revolution is thus the only option for peoples that are seeking to end their national oppression. The proof is the tragic case of the Palestinian national movement, which tried to solve its problem within the framework of the present capitalist system. This attempt, whose latest and most extreme stage is known as "the Oslo process", threw the Palestinians further into the power of the Israeli state, making it far more difficult for them to build a sovereign national state of their own.n

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