The crisis ripping through financial markets means that thousands of people are asking whether there is an alternative to the current system – and what that alternative might be.
To begin to answer that question we must first grasp that while banking and finance might be the most visible sector of capitalism at the moment, it is not the most fundamental part of how the system works.
Karl Marx, writing some 140 years ago, called the finance economy “fictitious capital”. It is built on gambling upon the productive economy – the place where goods and profits are created by the labour of working people.
The central dynamic of capitalism is competition. This is what makes the system so unstable. Companies compete ruthlessly to grab resources, to increase their share of the market, to cut costs – all in pursuit of maximising their profits.
This drive for competition is hugely destructive – to working conditions, to the environment and to the economy itself – as investment lurches into whatever the bosses think is likely to be the next boom industry.
As we have seen by the actions of governments around the world in recent weeks, this competition between individual firms is bound up with nation states whose rulers seek to promote and protect companies based in their territory.
This is how economic competition spills over into wars, making the world increasingly unstable.
Capitalism has produced much wealth but it remains the most unequal society ever seen – and that inequality is growing the world over.
The pursuit of profit has also turned scientific knowledge from something that benefits everyone to something to be patented, profited from and kept secret from competitors.
So if capitalism is unstable, unequal, breeds war and destroys lives why do we put up with it?
For most people, most of the time, capitalism seems like the only way things could possibly be organised. We grow up forced to compete for qualifications, jobs and housing.
The current system is also based on mass powerlessness. The majority of the world’s population works to create wealth and commodities for someone else, or are employed in a service industry that helps to keep the system going.
Workers have little or no say over how their job is carried out. And despite formal political democracy in much of the world, we have no real control over the economy. We do not collectively decide what is produced, by what means and in what quantities.
This lack of control means that most people accept that if change is necessary, it can only happen within the limits of the existing system. But at times of crisis, these ideas can change very quickly.
The most pressing question about the current crisis is who will pay for it. All the measures that governments have taken in recent weeks to prop up the banking system have been about ensuring that the capitalist system survives and that profit is kept sacred.
But we must challenge capitalism and profit if we are to fight effectively to defend jobs, homes, pay and pensions.
We should also go on the offensive and ask why it is that the public has ended up being saddled with the debts of Bradford & Bingley, while the profitable parts of the business have been sold off to private hands.
We should demand a nationalisation that isn’t about bailing out the bankers or the market. Instead we should demand a cut of the profits of the banks, the energy companies and the supermarkets that have all made millions in recent years at our expense.
As long as the wealth, resources, economic decisions and labour power remain in the hands of a minority, the destructiveness and waste of capitalism will continue.
Things could be run differently. We could collectively plan our economic activity from the bottom up so that we produce what is needed.
In fact there is a great deal of planning that already happens in capitalism. Think of the complex system of collecting and treating water and the immense plumbing system that means that when you turn on a tap water comes out it.
Or consider the planning that goes into ensuring that food is harvested, processed and transported from across the world.
But the problem with planning under capitalism is that it is planning for the market – driven by demands of competition, rather than by decisions over what we need.
If planning is in the hands of a top-down state it also becomes about planning for competition. This is what happened in Stalinist Russia, where state planning was driven by economic and military competition in a world market. And that drive to compete on a national scale brings the same logic as that found in a private company – brutal exploitation of workers.
The lessons of this are twofold. First, nationalisation is not enough. Planning for need has to be linked to workers’ control – to ordinary people collectively making decisions about organisation and production.
Second, socialism cannot exist in one country alone – it will just be dragged down into the market by the brutal logic of competition.
The system today is extremely integrated globally. This is why the economic crisis has spread so rapidly. In many parts of the world there are ongoing struggles over who controls natural resources, factories and other workplaces and who determines the priorities of society.
The crisis opens up a chance for us to also put an argument about how things could be run for need not profit.
For more on workers’ control go to » What is workers’ control?