Capitalism and the Alternative

Capitalism is a system that gives major shareholders and top corporate executives—one per cent or less of populations—the right to direct means of livelihood in their private interests. The system’s dominant institutions are corporations. Deemed in law to be individual persons, corporations actually combine the capital of numerous shareholders with the intention of dominating markets.

Corporations are privately owned capitalist collectives. The largest control more revenues than most governments.  To maximize profits, corporations expand production and introduce labour saving machinery, cut wages, and move employment to places where labour is cheaper. A recurring result is that the income of majorities who depend on labour falls as production increases. With declining markets for consumer goods, capitalist investment turns to financial speculation. Market crashes follow. Production facilities are shut down. Unemployment worsens, more jobs are lost, wages are cut further. Individual lives are disrupted. Communities are impoverished.

To deal with disaffection, the system relies on repression, militarism, and war. Within countries, surveillance is expanded and tightened. The marginalized, the dispossessed, and the disorderly are racialized and demonized as criminals. More people are jailed for longer periods. Globally, people who actively oppose the system are demonized as terrorists; countries are bombed and occupied. Wars are highly profitable for well connected corporations and divert attention from domestic divisions. Wars also glorify the violent machismo that encourages the subjugation, abuse, and marginalization of women.

Military intervention in Iraq, Afghanistan, and Libya increased sales of B-52s, guided missiles, helicopter attack ships, aircraft carriers, and drones. In the invaded countries, life was made worse. Power and water plants, bridges, railways, communications systems, schools, neighborhoods and entire towns were destroyed. Tens of thousands have been killed. Millions have become refugees. Invading countries gain no tangible benefits, but for politically influential aircraft and munitions corporations like Raytheon, Lockheed Martin, and Boeing profits did rise substantially.

Supporters of military action abroad claim it is humanitarian intervention. In Haiti the aim of “the responsibility to protect” was to make the poorest people in the western hemisphere so desperate that they would work for even less. In 2004, the U.S., France, and Canada sent troops to remove Jean Bertrand Aristide, the elected and widely popular President. Haiti was occupied in the name of the UN Security Council. Haitian government and municipal institutions were dismantled. Public workers lost their employment. The minimum wage law was abolished; so was public transit. Education was turned over to foreign aid organizations. With no functioning public institutions, Haitians were left with no means to protect themselves from hurricanes or to rebuild after major earthquakes.

Capitalism is at the root of growing environmental crises. Private capitalist entitlement allows corporations to externalize environmental costs, to pass these on to communities, workers, future generations, and other species. Science has convincingly demonstrated that rising carbon dioxide emissions from the burning of fossil fuels disrupt weather patterns, melt glaciers and polar ice caps, and acidify oceans. Still, major transnational corporations continue to fund campaigns of denial.

When the supporters of capitalism concede the seriousness of carbon emissions, they propose profit-making schemes (scams) like cap and trade, or they insist that consumers are to blame and should pay. Here in BC, corporate business supported the Campbell government’s carbon tax—paid by final users of gasoline and heating oil. This ostensibly green policy fits neatly with neoconservative plans to shift the tax burden from business to working people. Meanwhile, the government increased tax-breaks and write-offs for oil and gas exploration and development.

In capitalist rhetoric, unions, public sector workers, and local communities are reactionary vested interests, opposed to change. From a human perspective, capitalists are the most socially and environmentally destructive vested interest. They shamelessly use their wealth and political influence to increase their wealth by impoverishing others and blocking changes that undermine the profits made from fossil-fueled production and trade.

The working-class alternative

The working class—everyone who depends on labour not capital for their income—has the capacity to challenge the right of capitalists to direct social labour for their private profit. The working class includes wage and salary workers and the self-employed—shopkeepers, owner operators, farmers, and self-employed professionals, all whom depend on income from their labour. Those without capitalist entitlements also include most artists, artisans, full time parents, pensioners, students, the unemployed, and those unable to work.

Being the overwhelming majority—everyone but the one per cent, 0.1 percent or 5 percent who control and live off capital—the working class frees itself only by freeing all. So long as some are exploited and oppressed, the wellbeing of everyone who depends on income from labor is threatened. A world of human equality requires the replacing of capitalist title with human entitlement, corporate ownership with social ownership, and master-servant relations with workplace democracy.

With equal human entitlement, residents of owning communities will replace shareholders as the legal beneficiaries of means of livelihood. Social labour will be motivated and directed not for private profit but for general wellbeing. When all inhabitants including people whose livelihood depends on tourism and organic agriculture, berry and mushroom pickers, scientists, educators, parents, and students as well as manufacturing and resource workers have a voice and equal vote in economic decisions, communities will limit industrial activity to the carrying capacity of environments.

With social ownership means of livelihood will no longer be bought and sold for private gain. Social ownership must be distinguished from state ownership. State ownership as it exists continues the top-down command structures of corporate capitalism.  Social ownership means ownership by towns, neighborhoods, cities, regions, nations, and perhaps international communities. Social ownership means democratic and transparent planning by inhabitants for their wellbeing.

With workplace democracy workers in all occupations—machine operators, clerical workers, trades people, administrators, professionals—will have a voice and equal vote in the direction of their labour time. All occupations will be self-regulated professions. Assembly line workers will have a voice and vote in the direction of assembly-line work. Skilled trades people, clerical workers, engineers, and administrators will democratically direct their labour time. General assemblies of workers in all occupations may elect managers; owning communities will elect or appoint auditors and perhaps the directors of enterprise boards.

When capitalism is replaced with economic democracy, social labour and economies will no longer be directed in the interests of capitalist profit. When everyone is equally entitled to participate in economic decisions, communities will aim to provide acceptable employment opportunities for all available labour. No longer pressed to give priority to private profit, communities will be freed to balance industrial activity with the carrying capacity of environments.  The financial costs of social services will be balanced with revenues generated in exchange. The cost of needed imports will be balanced with exports.

Capitalism is based on market exchange, but capitalism should not be confused with the latter. Markets flourished long before capitalism. Ending capitalism does not mean abolishing market exchange. The working class has an obvious interest in democratic control of means of livelihood and labour time.  Majorities have an equally obvious interest in expanding social entitlements—employment at decent wages, education, food, housing, health care, child care,  leisure. However, people who depend on wages and salaries cannot reasonably be expected to support the abolition of market exchange. Half and more of working people are employed in the production and distribution of goods and services for exchange.

The right of individuals and communities to freely exchange goods and services with others—subject to democratically agreed taxes and regulations—is and will remain a basic human right. The widest practical access to supplies and markets is a major source of material wellbeing. Perhaps when capitalist entitlement has become a distant memory, exchange values and market forces will be anachronisms. Until then, communities from the local to the international will aim to base trade on the exchange of equivalents in labour time.

Three twentieth century dogmas have obscured the working-class alternative. The first narrowly defined the working class as blue-collar industrial workers. The second held that the alternative to competitive capitalism is centralized state control. The third is that ending capitalism requires armed revolution to seize state power.

Factory workers have a vital role in production and in mass movements against the system, but production workers alone do not provide an alternative to capitalism. The working class is far broader. It includes blue collar, pink collar and white collar wage and salary workers—service providers, skilled trades people, clerical workers, and professionals as well as assembly line workers. When the self-employed are included, the class of people without capitalist entitlement unquestionably does everything necessary to initiate, plan, produce, transport, distribute, and sustain the production of goods and services required for human wellbeing.

In the twentieth century, top-down centralized state control was generally viewed as the alternative. The collapse of the Soviet Union and China’s adoption of capitalist policies, did embolden corporate oligarchies. From a working-class perspective the demise of what was called actually existing socialism was not entirely negative. We no longer have to answer for external alternatives that divide people. We can look for the alternative within, in the working class, in the collective capacities and human aspirations of overwhelming majorities everywhere.

The twentieth century identification of fundamental social change with armed revolution did not inspire working-class opposition to capitalism. Violence and disorder damage immediate and long-term working-class interests, undermining employment, democracy, and human rights. Young men are maimed and killed. Women and children are victimized, terrorized, and killed.  An anti-capitalist working class will look not to armed struggle but to strategies and tactics that rely on the energy, spirit, and knowledge of men and women, on workplace organization, political action, and community mobilizations

Extremists among wealth-holding minorities may initiate or provoke violence to protect and advance their privileges. While people have an inherent human right to defend themselves and their interests, the working-class response is to look to mass support and to winning soldiers and police—who are themselves wage and salary workers—to the side of working-class majorities. Venezuela, Bolivia, Egypt, and Tunisia provide recent evidence that police, soldiers and officers can be won to the side of majorities.

From gross production to human wellbeing

So long as capitalism is unopposed, the working class appears dependent on capital, but it is capital that depends on labour. Capitalists as capitalists are drones; their function is to appropriate values produced by others. Every activity required for human wellbeing is now done by the working class—including the self-employed, as well as wage and salary workers. What the working class lacks is the understanding that capitalism is a house of paper entitlements that rests on the acquiescence of majorities.

Ideally, people who depend on labour for their livelihood would overwhelmingly refuse to accept rule by, and in, the narrow interests of a wealthy minority. Everyone would continue doing the work they now do, but instead of submitting to master-servant relations, people in all occupations—production, transportation, distribution, and sales people, professionals, managers, day care workers, service providers, teachers, accountants, nurses, and doctors—would democratically direct their labour time. Instead of working for the profit of shareholders, they would work in the interests of their communities.

Realistically, so long as capital is dominant substantial numbers will believe that their relative wellbeing and status depend on capitalism. Many will ignore capitalist privilege and see the enemy as the state, big government, foreign countries, unions, the poor, minorities, immigrants, liberals, Ivy League elites, feminists, older white men, communists, anarchists, criminals, Jews, Christians, Muslims, Hindus.

Seeing human equality, cooperation, and democracy as a realistic alternative will encourage the disaffected to look to human solidarity, to respect diversity and each other. It will deepen opposition to a system that gives the interests of wealthy minorities priority over human and environmental wellbeing. It will encourage community mobilizations, workplace organization, and political action for gains and reforms that weaken capitalist title and strengthen human entitlement. As such gains are made, more men and women will be inspired to mobilize against the system.

In the second half of the twentieth century, a time of virulent anti-communism, Keynesian reforms that improved living conditions did dampen opposition to capitalism.  When motivated by visions of economic democracy, movements for reforms that improve the quality of life can convince more people that opposition to capitalism is practical.

The exact issues that will inspire mass mobilization against the system cannot be predicted. We can start by campaigning for steeply graduated income taxes. Rates of 75 per cent or higher on incomes over $250,000 a year could increase government revenues by an equivalent of five per cent or more of gross national income. The revenues raised would eliminate government deficits and provide needed funding for social services, health care, education, public transit, and renewal of needed public infrastructure.  Higher wealth and inheritance taxes can be similarly beneficial. Tobin taxes on financial transactions and the re-regulation of international currency and interest rates would reduce the negative impact of financial speculation and raise more public revenues. Increasing tariffs enough to encourage domestic production would further increase government revenues and weaken the power of transnational capital over markets.

Supporters of the system claim that attempts to increase taxes on the rich inevitably backfire because capital will move elsewhere. In fact, capitalists invest where it is profitable. Capital does move in response to marginal changes in profitability, but wherever we are, we are not alone. Raising taxes on capital can inspire similar movements elsewhere, potentially limiting the threat of capital flight and weakening the power of capital to play regions and countries against others for their private benefit.

Public ownership of banks would direct savings away from speculative manias to socially useful investments. Reversing privatizations, renewing public ownership of utilities, transportation and communications systems, and natural resources could methodically weaken the power of capital and strengthen democratic control of means of livelihood.  Reforming political campaign finance rules, lobbying regulations, electoral laws would reduce the control capital now has over political agendas.

Local communities can take initiatives to set up cooperatives and community owned financial institutions, social housing, electrical power and communications utilities. Public support for local food production can make people less dependent on the vagaries of capitalist markets.  Environmental action can help ensure a better human future. Local, national, and international mobilizations can help reduce dependence on fossil fuel and replace automobiles with public transit and bicycles. Cities can be reconfigured so that walking once again is a pleasant, healthy mode of daily transportation.

Community and workplace mobilizations in solidarity with First Nations, racialized minorities, the marginalized, women, and immigrants will build human bonds and help expose the mean-spirited divisiveness of wealth-holders’ privilege. Support for policies that are intended to reduce disparities increase global human cooperation. These include the right of people to democratically direct their domestic markets as well as international funding with no strings attached for education, housing, health care, and infrastructure. Development should be directed not by foreign agencies but people themselves. The aim is to help provide people with capacity to help themselves.

The capacity of capitalists to use violence against working-class gains can be reduced. Vocally supporting the work police do in protecting persons and property, while exposing covert politically motivated policing, demanding public accountability of the criminal justice system, and mobilizing against police assaults on opponents of the system can help win police to the side of the people. Supporting soldiers in the sacrifices they make while opposing militarism and war can expose capitalist profiteering at the expense of soldiers as well as of people abroad.

Unions will have critical roles in movements against capitalism. Workers not represented by unions have no means to formulate their workplace interests independent of capitalists.  Unions were organizing centres of campaigns for freedom of assembly, association, speech, and the press, as well as the right to vote for men and women. Unions are largely responsible for the wages and working conditions that allow capitalism to claim it provides rising living standards. Now in a time when capitalist interests are eroding collective bargaining rights, unions have been preoccupied with conserving past gains. Still unions have provided critical support for First Nations, racialized minorities, women, gays and lesbians, and immigrants.

Revived opposition to capitalism may begin with the unemployed, marginalized, dispossessed minorities, immigrants, or students. Wherever it begins, rising opposition to capitalism will encourage workers already organized for collective bargaining to join in solidarity. As opposition to capitalism grows, more wage and salary workers will demand collective bargaining rights. Revived unionism will convince more people that a working-class alternative is practical.

Recent mass protests in Egypt, Tunisia, Wisconsin, Greece, and Israel show that people will rally against repression, privatizations, public sector layoffs, cuts to social programs, rising food costs and the high cost of for-profit housing.  Immediate results may be disappointing, but as people come to see that they are not alone in opposition to a system directed by and for super-wealthy minorities, mass protests can turn into general strikes and workplace occupations as well as into electoral gains for democracy and equality.

Before retiring Al Engler was president of Local 400, Marine Section, International Longshore and Warehouse Union-Canada. He has written two books and numerous articles on capitalism, economic democracy, and the environment. His grandsons, age two and five, live on Westminster Quay directly across from the Fraser-Surrey docks. Read other articles by Al.