Privatising gains and socialising losses? Socialise the gains!

Submitted by cathy n on 12 September, 2008 - 12:49 Author: Editorial, Solidarity, 21 August, 2008

The massive state involvement in desperate social action on behalf of the capitalist classes to avert the collapse of their financial system is making the basic case for working-class socialism more forcefully, unanswerably, and urgently than it has been made for a very long time.

The nationalisation by the conservative George Bush administration of the two giant US financial corporations known as Freddie Mac and Fannie Mae has made the case for working-class socialism more forcefully, unanswerably, and urgently than for a long time.

In Britain recently, the same case for socialism was made in the nationalisation of the Northern Rock bank by the Brown government.

The unfolding capitalist crisis, following a long boom, makes the case too.

The US “nationalisation” of the two corporations which account for 50% of all mortgages in the USA indicates what the solution to capitalist crisis is and must be.

Not that this takeover by a bourgeois government of the two great housing-mortgage conglomerates of US capitalism is in any way a working-class or a socialist measure. That it is not.

It is the US government, a government of capitalists, by capitalists, mainly for capitalists, engaging in a piece of state-capitalist social engineering in order to maintain the conditions that the capitalist system needs to go on functioning.

There is nothing socialist or working-class about it. But it brilliantly illuminates why the belief of Marxists in the necessity and possibility of socialism is entirely rational, and the denial of that case deeply irrational and indeed “anti-social”.

Capitalism itself, in its natural course of development and growth, has already turned the economy into a sort of “social-ism” — but “social-ism” under the control of, and worked primarily in the interests of, a minority, of the capitalist class who exploit society and (the root exploitation) exploit the working class which creates and recreates the economy.

In the normal course of its development, capital becomes concentrated into great companies and corporations, first national and then global. It creates gigantic concentrations of industry and finance owned privately, and operated as giant engines of class and social exploitation regulated by what is profitable for the owners, not by what is best for society or those who they employ.

Frederick Engels described this process of capitalist “social-ism”, at a very early stage, as “the invading socialist society”. He meant that capitalism was organising the economy so as to subordinate market mechanisms to a sort of social planning, a strict limitation on the scope and function of markets. It was social planning, and action to eliminate some of the financially and socially destructive consequences of market operations — but operated in the interests of the capitalists, whose interests the governments, in the last reckoning, exist to serve.

Engels believed, and we too believe that “social-ism” in the interests of the capitalist class can be turned into socialism proper. That would happen by the working class and its social allies winning of power in society and establishing a workers’ government.

The importance of the nationalisation of Freddie Mac and Fannie Mae by the very right-wing and very bourgeois US government needs to be understood by socialists as indicative of the tendencies within capitalism explained able. What follows is an expansion of that explanation much of it in the words of Marx and Engels: it is the case for socialism.

The Basis

Capitalism creates the basis of socialism. Capitals grow by the eating up of the smaller by the bigger capitals, in a progression that has led in our time to global companies richer than many governments. Today, world-wide, the capitalist classes are dominant in a way less than ever before alloyed by old customs and compromises, and they are more closely intermeshed across national frontiers. Simultaneously, the old measures of social provision implemented by Western welfare states and Third World bureaucratic regimes are being stripped away. Inequality between rich and poor is enormous and increasing worldwide, and within most individual countries.

In his book Socialism, Utopian and Scientific educated generations of socialists in the basics of their creed Engels drew a comprehensive picture of the capitalist system and its contradictions as it developed in history.

The fundamental fault line in capitalism is the contradiction between social production and private ownership, individual or corporate.

Before capitalism, the instruments of labour — land, agricultural implements, the workshop, the tool — were instruments of the labour of single individuals, adapted for the use of one worker: they belonged as a rule to the producer himself: in the countryside, the small peasant (freeman, or serf), in the towns, of the handicraft workers.

Socialised production revolutionised all the old methods of production and soon all the old human relations within production. In the industrial revolution, the spinning wheel, the hand loom, the blacksmith’s hammer, were replaced by the spinning-machine, the power-loom; the individual workshop, by the factory, in which hundreds and thousands of workers co-operated. The articles that now came out of the factory were the joint product of many workers, through whose hands they had successively to pass before they were ready.

Here, at the start, the root contradiction, anomaly, disjunction, of capitalism had emerged. This socialised production was a new form of the production of commodities. The old forms of appropriation of the product rooted in the old single-work tool and small workshop period remained in full swing, and were applied to the products of socialised production as well.

Under capitalism, the socialised means of production and the products continued to be the property of individuals.

The product, now created by social labour, was no longer appropriated by those who produced the commodities, but by the capitalists. Where before everyone owned his own product and consumed it, brought it to market, or paid it in open tribute to an overlord, now the owner of the instruments of labour, the organiser of the new social labour, appropriated the product of the labour of others.

Engels: “This contradiction, which gives to the new mode of production its capitalistic character, contains the germ of the whole of the social antagonisms of capitalist society: the incompatibility of socialized production with private, capitalistic appropriation.”

Wage-Labour

Before capitalism, wage-labour was exceptional, complementary, accessory, transitory wage-labour. The agricultural labourer, though, upon occasion, he hired himself out by the day, had a patch of his own land on which he could live. The journeyman of today became the self-employed master craftsman of tomorrow. All this changed, as soon as the means of production became socialised and concentrated in the hands of capitalists.

Wage-labour, hitherto the exception and accessory, now became the rule and basis of all production. The wage-worker for a time became a wage-worker for life. There was a complete separation between the means of production concentrated in the hands of the capitalists who owned them and the producers, possessing nothing but their labour-power. The contradiction between socialised production and capitalistic appropriation manifested itself as the antagonism of worker and capitalist.

The capitalist bought workers’ labour power, set them to work with his equipment on his raw materials, appropriated what their labour-power in action produced. What they produced was more value than he had paid out for wages and raw material — because it embodied the new, additional human labour of his wage-hired workers. Capital took society a giant step forward, but it would forever remain incompatible with the civilised society its coming into existence made possible for humankind.

Engels: “Every society based upon the production of commodities has this peculiarity: that the producers have lost control over their own social inter-relations. No one knows how much of his particular article is coming on the market, nor how much of it will be wanted…”

“It is the Darwinian struggle of the individual for existence transferred from Nature to society with intensified violence. The conditions of existence natural to the animal appear as the final stage of human development.”

In our own time we see the glorification of “The Market” as the God to which everything else is ultimately subordinate.

By the end of the 19th century a gigantic development and concentration of the means of production had come about. Whole industries within each country had come under the control of a few, or one, joint-stock companies.

Engels: “Freedom of competition changes into its very opposite — into monopoly; and the production without any definite plan of capitalistic society capitulates to the production upon a definite plan of the invading socialistic society.”

Frederick Engels spotlighted in advance what would be the dominant trend of much of the twentieth century: “The official representative of capitalist society — the state — will ultimately have to undertake the direction of production. This necessity for conversion into state property is felt first in the great institutions for intercourse and communication — the post office, the telegraphs, the railways.

Today, with “globalisation”, giant international capitalist enterprises have outgrown states and taken over the role of governments as Engels described things before the 20th century, undoing much statification. And yet, the nationalisations in the USA show that the government is the safety net of the bourgeoisie.

The State

“The transformation — either into joint-stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces. In the joint-stock companies and trusts, this is obvious. And the modern State, again, is only the organization that bourgeois society takes on in order to support the external conditions of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists. The modern state, no matter what its form, is essentially a capitalist machine — the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with.”

Engels thought that this situation must quickly lead to revolution. “The exploitation is so palpable, that it must break down. No nation will put up with production conducted by trusts [conglomerates], with so barefaced an exploitation of the community by a small band of dividend-mongers.”

In the 20th century, attempts at working-class revolutions were made many times, and defeated for reasons we cannot discuss here.

The solution, however, remains this: practical recognition of the social nature of the modern forces of production, in the only way possible — by society openly and directly taking possession of the productive forces which have outgrown all control, except that of society as a whole. Now, even more emphatically, “society” means world society — the whole of humankind.

Engels: “The capitalist mode of production, by transforming the great majority of the population into proletarians, creates the power which, under penalty of its own destruction, is forced to accomplish this revolution.”

“The bourgeoisie broke up the feudal system and built upon its ruins the capitalist order of society, the kingdom of free competition, of personal liberty, of the equality, before the law, of all commodity owners, of all the rest of the capitalist blessings. Since steam, machinery, and the making of machines by machinery transformed the older manufacture into modern industry, the productive forces, evolved under the guidance of the bourgeoisie, developed with a rapidity and in a degree unheard of before.

Now modern industry, in its complete development, comes into collision with the bounds within which the capitalist mode of production holds it confined. The new productive forces have already outgrown the capitalistic mode of using them. And this conflict between productive forces and modes of production is not a conflict engendered in the mind of man, like that between original sin and divine justice. It exists, in fact, objectively, outside us, independently of the will and actions even of the men that have brought it on.

“Modern socialism is nothing but the reflex, in thought, of this conflict in fact; its ideal reflection in the minds, first, of the class directly suffering under it, the working class.”

Engels summed it up:

“The proletariat seizes the public power, and by means of this transforms the socialised means of production, slipping from the hands of the bourgeoisie, into public property. By this act, the proletariat frees the means of production from the character of capital they have thus far borne, and gives their socialised character complete freedom to work itself out. Socialised production upon a predetermined plan becomes henceforth possible. The development of production makes the existence of different classes of society thenceforth an anachronism.... Man, at last the master of his own form of social organisation, becomes at the same time the lord over Nature, his own master — free...

“To accomplish this act of universal emancipation is the historical mission of the modern proletariat. To thoroughly comprehend the historical conditions … to impart to the oppressed proletarian class a full knowledge of the conditions and of the meaning of the momentous act it is called upon to accomplish — this is the task of the theoretical expression of the proletarian movement, scientific socialism.”

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