Economics Exposed: Ownership and control
The whole of human history has consisted of a series of social systems. Each of these social systems has been seen by most of the participants as a way of meeting human needs, by producing and distributing wealth. Those who have been prominent in the introduction of new types of social relationships have claimed that their movements were a step forward for humanity, a dramatic improvement in the organisation of wealth production.
In reality, however, we can now look back and understand that in each case what was really happening was that a particular class of wealth owners or would-be wealth owners were in fact pursuing their own interests, as a class, and simply dressing up this interest as being “the public interest”. This was more than ever the case with the rise of the capitalist class in the seventeenth, eighteenth and nineteenth centuries. At that time, the conflict was between the needs of the “modernising” mercantile and manufacturing interests on the one hand and the landed aristocracy on the other.
The key choice facing humanity in the twentieth century, in contrast, is that between capitalism and socialism as systems of society. The socialist movement is unlike all previous movements for change. It emerged over the past hundred years as an expression of the interests of the working class. And unlike all previous classes, the working class forms a vast, dispossessed majority across the world which has no interest at all in developing any “property” base of its own. Indeed, any utopian schemes to turn all workers into small-time capitalists themselves, are in fact doomed to failure for just this reason; the survival of workers within capitalism depends on selling, at the best price possible, the only resource which, by definition, a wage or salary-earner can control — our own ability to work.
The interests of the majority class in society have therefore become identified more and more obviously with the destruction of all property relationships, rather than with their perpetuation. Even after decades of reformist theory and practice from both Tory and Labour parties in post-war Britain, for example, the existence of capitalism still guarantees that wealth becomes increasingly concentrated in the hands of a minority, as we shall see below.
In this column last month it was stated that this minority “possess” the working class as part of their assets. This reference to possession must, of course, be interpreted loosely, since capitalism has no use for the customs of ancient Greece and Rome, under which the wealth producers were the permanent property of slave-masters. Today, when employers invest in the productive power of wage-earners they still, like their ancient counterparts, enjoy the right of ownership over all wealth created by those wage-earners and yet they are not responsible for housing or feeding their wage-slaves outside any specific periods within which they are contracted to be employed.
What then, are the key differences between capitalism and socialism as economic systems?
1. Ownership and control
Capitalism is the dominant system of society throughout the entire world today. In every country, a minority class own and control the productive resources. Farms, factories, industrial plant and machinery, transport and communication networks; all of these are effectively in the hands of a small minority and controlled ultimately for their benefit, rather than for the free use and benefit of all. According to the official statistics published in the Social Trends survey (HMSO, 1987) the most wealthy ten per cent in Britain in 1984 owned more than half of all marketable wealth. This minority ownership and control of society’s productive resources of course takes various forms. In the case of nationalised industries, the former shareholders now enjoy regular interest on the state bonds they were compensated with, so they continue to profit from the wealth created by the workers just as they did in the days when they were explicitly the owners. And in the case of Eastern-bloc style state control, or of “nationalisation without compensation”. we see a new class of state bureaucrats, fulfilling the role of owning, controlling and profiting from production within that sector of the world capitalist system.
Socialism, by contrast, means the common ownership and democratic control of all productive resources. Factories and farms would then become the common heritage of all humanity, no more hived off or labelled with title-deeds than is the air we breathe, and freely accessible for the use of all.
2. The motive of production
On the socialist basis of placing these resources firmly in the hands of the human race as a whole, rather than allowing them to be owned and controlled by a minority group, it would then for the first time become possible for us to change the basis on which wealth is produced. At present, wealth production is likely to take place only if the goods and services which would result are likely to be profitably sold for cash on the world market. The level of production of everything across the world today is therefore tailored to meet market requirements rather than human needs.
Because the primary aim of production under capitalism is the generation of profit and the accumulation of capital, rather than purely to meet the needs of humanity as safely and comfortably as possible, it therefore follows that human life itself almost always comes a poor second to the pursuit of profit, as these two clash daily within the present. global social system. Examples of this abound, so here we present just one recent example, of the ironically named Herald of Free Enterprise:
“Commercial pressures have prevented design changes in roll-on roll-off ships which might have saved the Townsend Thoresen ferry which sank off Zeebrugge harbour last Friday . . . Captain Nic Ruthford of the International Federation of Ships’ Masters Associations, which has long expressed worries over Ro-Ro safety, said he would press for all Ro-Ros to be redesigned. He said: “The big problem is that one owner is not going to make expensive alterations that would put him at a disadvantage compared with his competitors until he absolutely has to”. (The Independent,10 March 1987)
Just like the millions who die each year of starvation or hunger-related disease while politicians dream up schemes for cutting back on production to restore profit levels, or for destroying the so-called “surpluses”, likewise those who died in the ferry disaster were also sacrificed on the altar of profit.
3. The lives of the majority
One of the most important myths of capitalist economics, which must be exploded, is that workers are free-acting, independent agents, each “seeking their fortune” as best they can within the economic competition of the capitalist jungle. In fact, it is a key feature of the economic system we currently live under that the working-class majority are forced, through economic necessity, to take their own ability to work on to the labour market to be sold as a commodity. As a result of this, we are compelled to subjugate all of our human qualities of individuality and freedom. to give up our own creative needs and impulses, to cut out any individual style we may have, and present ourselves as neatly packaged and reliably productive machines for the consumption of our employers.
Consider, for example, the following passage from an official report which was attempting to persuade international employers to invest in British workers, by stressing the exploitative potential of what is on offer:
“Not only does Britain’s work-force perform well, its costs are remarkably low for what is one of the world’s most highly developed countries. US Department of Labor figures show that British wage rates are among the lowest in the Western world. In addition, “on costs” (i.e. those labour costs which are additional to wages, such as state social security schemes and the financing of voluntary sick and pension schemes) are very low in Britain . . You will find the British work-force of today disciplined, motivated, skilled and ready for work.” (BRITAIN, The Preferred Location, prepared by the Department of Trade and Industry, and the Central Office of Information. 1985)
It would appear, from such brazenly degrading statements, that the British ruling class believes they can talk about workers “behind our backs” without our knowledge. Perhaps they were forgetting that mass literacy has been predominant in Britain for some time.
To summarise, then. Past history has been a series of conflicts between classes, with each successive system serving the needs of a different minority class. Socialism means the total abolition of all property relationships, and is therefore the solution to the problems currently facing the working-class majority. Under capitalism, a minority own and control productive resources and production is geared to their profit. In socialism, productive resources would be owned in common by the whole of humanity and democratically controlled, so that production could be geared to human needs rather than the needs of the market. Under capitalism, the lives of the majority are dominated by the need to survive by selling our working ability on the labour market. The misery which results can only be ended by socialism, in which human beings would cooperate together consciously, to produce wealth with the sole aim of meeting human needs themselves.
Next month, we shall examine the precise mechanism by which capitalism functions, the exploitation of wage-labour.
C. SLAPPER