Against Wall St ....but more

There has been a series of "anti-capitalist" protests in Wall St. against the corporations who have been perceived to have caused the recession and the companies that have been bailed out, deemed too big to fail, but also "too big to jail." as Chomsky describes it . SOYMB remembers a host of other "anti-capitalist" actions from the past and posts this response.

What is anti-capitalism
"Anti-capitalism" has become a popular slogan. It seems that more and more people are interested in critiques of capitalism. Unless anti-capitalists take the time to study what exactly capitalism is and how it operates they risk not advocating a viable alternative. When people idolise "activism" at the expense of "theory" they risk failing to understand the problem and its logical direction, into the political, ideological and economic spheres, which are shunned because it doesn't fit most anti-capitalists concept of political activism. They are not even anti-capitalist, in the sense that they haven't yet agreed on a definition of capitalism. Far less is there yet any talk of "post-capitalism". Anti-capitalists have no clear end-vision of where they want to be, except away from where we are. If you proclaim yourself to be “anti-capitalist”, it is a good idea to have some idea of what capitalism is. Many are not so much anti-capitalist as anti-globalisation, or anti-neoliberal, or even just opposed to particularly malignant corporations. They assume that the detrimental effects of the capitalist system can be eliminated by taming global corporations or by making them more "ethical", "responsible", and "socially conscious". You would have thought that the main aim of an anti-capitalist movement would be to end capitalism and establish socialism. Unfortunately not. The aim seems to be to bring pressure on existing governments to introduce reforms and to change their policy so as to tame multi-national corporations and/or return to the state interventionism. Many are prepared to call themselves “anti-capitalists”, but only a few are prepared to argue for a world society of common ownership and democratic control with production directly to meet human needs without passing through money and the market. Most are literally what they say they are – anti-capitalists, i.e. opposed to the actions of capitalist corporations, and the governments that protect them and promote their interests, rather than against capitalism as a total, global system. They are engaged in a never-ending, uphill struggle to try to contain and restrain capitalist corporations and governments from pursuing profits without regard for the consequences. Some have made a virtue of their institutionalised role within capitalism, warning those responsible for running it of the long-term dangers for the system of allowing policies to be dictated by short-term profit considerations. They are not really anti-capitalist at all, just advocates of a “regulated” capitalism. It's a message capitalist governments are prepared to listen to and even welcome (which is why they subside some NGOs, which are therefore not as “non-governmental” as all that). Nevertheless, this being said, Nevertheless, the conscious recognition of the international nature of the adversary by the anti-capitalist movement and the awareness of the necessity of a global action against it is itself a very significant development.

What is capitalism?
To most people, capitalism is associated with private ownership and laissez-faire economics. Private ownership originally meant the ownership of industry by private individuals but it would be more accurate nowadays to speak of corporate ownership but this doesn’t go far enough, because it doesn’t take into account state ownership, another form of “private” ownership in the broader sense in that it is still a form of ownership (by those who benefit from it) that excludes – deprives – other people. Thus capitalism is based on the individual, corporative or state ownership of the means of production whereas, for most in the anti-capitalist movement, it means only individual or corporative ownership. Which makes a difference as to what is regarded as “anti” or “non” capitalism. For as long as capitalism has existed state “interference”, or “intervention”, in the economy has always existed so laissez-faire is more a policy, advocated by certain interest groups within capitalism at certain times and in certain places. As such it can not be described as defining feature of capitalism. Those arguing for a return to the laissez-faire policies describe it as "neo-liberalism". In the anti-capitalist movement this word “neo-liberalism” occurs again and again. In fact, so often that it gives a very strong hint that this is what the movement is really opposed to, that this is what it means by “anti-capitalism”. Not opposition to capitalism as such but opposition only to certain economic policies. The alternative they offer to neo-liberalism is not anti-capitalism. It is basically a return to state interventionism. The argument is that the state should abandon neo-liberal, laissez-faire policies and again adopt interventionist ones (finance regulations, import and currency controls, the Welfare State, re-nationalisation). "Tax the Rich and Make Them Pay" sounds anti-capitalist. The call for a Tobin (or Robin Hood) tax—a tax on financial transactions—is not as anti-capitalist, as some in the anti-globalisation movement seem to think. A demand for a minimal tax on the financial transactions in which capitalists try to swindle each other out of the proceeds of their past exploitation of the working class is one of the most pathetic reform proposals for which people have ever been called upon to demonstrate for (it is even now supported by such anti-capitalists as the likes of Bill Gates.) It's the old illusion that you can use taxes and government intervention to make the capitalist system work for everybody's benefit. You can't, as has been proved time and again. Anti-capitalists shouldn't go down that road again.

Some defenders of capitalism like to talk about a "market economy". To most people a market is a friendly place where you buy things you need so the term "market economy" is employed so as to conjure up the idea of an economy geared to serving consumer demands. It is possible to envisage such an economy on paper but it would be vastly different from capitalism. It would be an economy of self-employed farmers, artisans and shopkeepers, each producing a particular product which they would exchange on the market, via the medium of money, for the products produced by the others which they needed. There would be no profit-making, no exploitation and no accumulation, just independent producers exchanging their products for their mutual benefit. The farmers, butchers, bakers, candlestick makers and others would be producing their particular products which would sell at a price reflecting the average amount of time required to produce it. There would be no profit and no exploitation because everybody would be receiving the full value of what their labour had produced. They would just be exchanging so much labour in one form for the same amount in a different form. It is doubtful whether it has ever existed in a pure form. The nearest that may have come to it would have been in some of the early colonial settlements in North America. One danger is that the anti-capitalists will be diverted into campaigning to try to put the clock back by returning to the simple market economy that may have existed in early colonial North America. This is exemplified by the slogan "small is beautiful". We are offered the idyllic picture of an economy of self-employed smallscale producers producing for a local market. More sophisticated thinkers advocate is a steady-state market economy (a variant of Marx's "simple reproduction".) The idea is that the surplus would be used not to reinvest in expanding production, nor in maintaining a privileged class in luxury but in improving public services while maintaining a sustainable balance with the natural environment. It's the old reformist dream of a tamed capitalism. it assumes that a profit-motivated market economy can be tamed, and made to serve human and/or environmental needs. History has proved that it can't be; capitalism has shown itself to be an uncontrollable economic mechanism which operates to force economic actors to make profits and accumulate them as more and more capital irrespective of the consequences. This mechanism first came into operation in the 16th century and since then has spread to dominate the whole world in the form of the world market.

Capitalism is a market economy, but not just a simple market economy. A key difference is that under capitalism production is not carried out by self-employed producers but wage and salary workers employed by business enterprises. In other words, under capitalism, the producers have become separated from the means of production. This makes all the difference. The producers are now not bringing to market what they have produced (that belongs to their employer, the owner of the means of production) but only their working skills, so they receive the value not of their product but only of their ability to work, which is less. The product is still under normal circumstances sold at its full labour-time value but the proceeds go not to the direct producers but are pocketed by the owners of the means of production. Profit is the difference between this and what they pay, as wages and salaries, for the working skills they purchase on the labour market.

Marx and Capitalism
Marx explained the difference well when he said that what happens in a simple market economy is that the producers brought to market a product of a certain value which they sell for money in order to buy another product or products of equal value. The economic circuit is commodity-money-commodity (C-M-C), the aim being to end up with a basket of useful things. Under capitalism the economic circuit is different. A capitalist sets out with a sum of money which they use to buy commodities (factory buildings, raw materials, working skills) that can be used to produce other commodities with the aim of ending up, after these other commodities have been sold, with more money than they started off with. So the circuit is now money-commodities-more money (M-C-M'). It is now clear why capitalism cannot be described as an economy geared to satisfying consumer demands. The products of capitalist production have to find a buyer of course but this is only incidental to the main aim of making a profit, of ending up with more money than was originally invested. Production is initiated not by what consumers are prepared to pay for to satisfy their needs but by what the owners of the means of production calculate can be sold at a profit. This is what makes the wheels of capitalism grind—or not grind, or not grind so quickly, as the case may be—depending on the level of the rate of profit.

But the picture of capitalism is still not complete. Capitalist investors want to end up with more money than they started out with, but why? Is it just to live in luxury and consume in riotous living? That would suggest that they aim of capitalist production was simply to produce luxuries for the rich. Once again, it is possible to envisage such an economy on paper. Marx did, and called it "simple reproduction", but only as a stage in the development of his argument. By "simple reproduction" he meant, logically enough, that the stock of means of production was simply reproduced from year to year at its previously existing level; all of the profits (all of M' less M) would be used to maintain a privileged, exploiting class in luxury and idleness. As a result the M in M-C-M' would always remain the same and the circuit keep on repeating itself unchanged. This of course is not how capitalism operates. It is not a "steady state economy". On the contrary, it is an ever-expanding economy of capital accumulation. In other words, most of the profits are capitalised, i.e. reinvested in production, so that production, the stock of means of production, and the amount of capital, all tend to increase over time. The economic circuit is thus money-commodities-more money-more commodities, even more money (M-C-M'-C'-M''). This, however, is not the conscious choice of the owners of the means of production. It is something that is imposed on them as a condition for not losing their original investment.

So, capitalism is an economic system where, under pressure from the market, profits are accumulated as further capital, i.e. as money invested in production with a view to making further profits. This is not a matter of the individual choice of those in control of capitalist production – it’s not due to their personal greed or inhumanity – it’s something forced on them by the operation of the system. And which operates irrespective of whether a particular economic unit is the property of an individual, a corporation, the state or even of a workers’ cooperative.

Competition with other capitalists forces them to reinvest as much of their profits as they can afford to in keeping their means and methods of production up to date. As a result there is continuous technological innovation. Defenders of capitalism see this as one of its merits and in the past it was insofar as this has led to the creation of the basis for a non-capitalist society in which the technologically-developed means of production can be now—and could have been any time in the last 100 years—consciously used to satisfy people's wants and needs. Capitalism today could in fact be described as the profit-motivated, capital-accumulating world market economy. Under capitalism this whole process of capital accumulation and technical innovation is a disorganised, impersonal process which causes all sorts of problems—particularly on a worldscale where it is leading to the destruction of the environment and the absolute impoverishment of many formerly independent producers in the Third World — which have rightly ignited the anger of anti-capitalist protesters. A movement attempting to distance itself from US/EU hegemony may be anti-imperialist but it is not anti-capitalist. There are also plenty of rich people living in the so-called Third World and a regulated capitalism would only put more money into their pockets, it would not eliminate inequality.

Global capitalism is not a new creature, it is just capitalism writ large and even nastier. A return to pre-global capitalism would be no alternative, even if it were practical. Many anti-capitalist protesters see this fact that capitalism is a world system as being the problem and the solution as being to break it up into separate capitalisms operating within national frontiers behind protective tariffs walls. This hardly justifies the description "anti-capitalist" of course, and parallels a nasty strand of nationalist thinking which has always associated capitalism with a sinister "cosmopolitan" conspiracy. Indeed, the danger is that, in the absence of being presented with a credible alternative, it is here that the "anti-capitalist" protests will find the loudest popular echo. But it should now be clear beyond dispute that national-based solutions to humanity's problems are pointless, and that a world movement, leading to world socialism is urgently needed.
What is the alternative to capitalism?
It's where all the productive resources of the Earth have become the common heritage of the people of the world—"make the Earth a common treasury for all", as Gerrard Winstanley put it right at the beginning of capitalism—so that they can be used, not to produce for sale on a market, not to make a profit, but purely and simply to satisfy human wants and needs in accordance with the principle of "from each region according to ability, to each according to needs". The economic mechanism that is capitalism is just too strong and just cannot be reformed to work in any other way than it does and always has done. An effective anti-capitalist movement will have to be one that works for ending the impersonal economic mechanism that is capitalism by restoring control of production to society; which can only be done on the basis of the Earth’s natural and industrial resources having become the common heritage of all Humanity. It is all very well being anti-capitalist but if this is to mean something more than merely protesting against the effects of capitalism, it has got to also mean having an idea of an alternative to capitalism. Mere anti-capitalism is not enough. That’s why, in our view, coherent anti-capitalists should be campaigning for socialism not changes of policy. Anti-capitalism may be a start, but it’s certainly not a finish. Socialists have always known that another world is possible. The world doesn't have to be capitalist.