The panic that spread through financial markets at the start of this week exposed the volatility of the system (see page 3). For all the talk of “recovery” capitalism is fragile.
Many bosses hoped China’s seemingly strong economy would get the system out of a crisis that erupted in 2008.
But now China is producing fewer goods. Demand for materials from other countries has fallen, pushing down commodity prices. Fewer people in China are buying luxury goods imported from other countries.
All of this hits other sections of the world economy.
Investors and speculators, who gamble huge sums of money based on the state of the economy, are panicking about how much they could lose. Their gambling can spark crises and deepen existing ones—but the problems are rooted in capitalism.
The system is based on competing bosses fighting to make the most profits.
The revolutionary Karl Marx explained that there is a tendency for the rate of profit to fall over time under capitalism. Bosses get their profits by exploiting workers—hiring them and paying them less in wages than the value of what they produce.
But bosses are also pushed to cut labour costs with new machinery and equipment.
So over time they get a lower return on their investments.
Each boss tries to grab the whole market for themselves, leading to overproduction. So goods also begin to pile up unsold.
Bosses lay off workers to try and cushion any losses—meaning workers have less money to spend, deepening the crisis.
Crisis can’t be managed out of capitalism. It is part and parcel of the way the system works.
Workers in Britain and across the world have already paid a price for the crisis that erupted in 2008. We were told that job cuts, pay freezes and attacks on pensions and services would get the economy back on its feet.
But it turns out austerity hasn’t stopped the bosses’ crisis.
Now we face another one. And once again our rulers will expect us to pay the price for it.
The problem isn’t a lack of resources. It’s that capitalism works to put ever more of those resources in the hands of the rich.
The wealth of the ten richest people in Britain alone increased by £3.25 billion last year.
The richest 85 people on the planet have the same wealth as the poorest 50 percent of people.
The Tories ridicule anyone who opposes austerity, privatisation and neoliberalism. They claim that the free market is the only way to successfully run society.
Others claim that the system can be reformed to serve the interests of ordinary people.
The truth is that capitalism only works for the rich. It will never work for the vast majority of us. Their system is bankrupt—and we need to get rid of it