The wealth of the world
For the last 5,000 years, since the Agricultural Revolution first provided substantial accumulations of surplus wealth, humanity has been engaged in an uneven and uncertain ascent towards the abolition of want. The ascent has been driven by the three motors of history – technological progress, ruling-class competition, and the struggle between classes – and it has been uneven and uncertain because the working of these mechanisms, especially in combination, has been fraught.
Over the last 250 years, since the start of the Industrial Revolution, the pace of change has accelerated sharply. A dynamic system of competitive capital accumulation has created a global economy of rapid and incessant innovation. Humanity’s ingenuity and industry have brought us to the brink of material abundance for all.
Yet the full potential inherent in the economy remains unrealised. Instead, there is exploitation and poverty, imperialism and war, famine and disease. As I write, in Britain, the pittances paid to the disabled poor are being withdrawn so that bailed-out bankers can continue awarding themselves million-pound bonuses. At the same time, in Greece, average wages are cut by a third to keep payments flowing to billionaire speculators domiciled in offshore tax-havens. Further afield, in East Africa, pot-bellied babies scream with hunger because Mid West farmers are growing soya to burn instead of corn to eat. And in Central Asia, other babies are torn apart by high explosive because a Pentagon spook half a world away deems their village a terrorist threat.
We have created unprecedented resources of know-how and wealth – the fruit of five millennia of collective human labour – yet they are harnessed to the greed and violence of a tiny minority who do no productive work at all.
One aim of this book has been to explain why this should be so. Another has been to show that it could have been otherwise. Central to the argument has been the simple fact that human beings make their own history. They do not do it in circumstances of their own choosing. Their actions are framed by the economic, social, and political structures of their age. But, subject to these constraints – indeed, because of them – human beings face a succession of choices.
Sometimes, they choose not to act, but to acquiesce. Then they remain history’s victims, in thrall to the decisions of others, their rulers, the self-appointed arbiters of human destiny. Other times, far more rarely perhaps, they choose to organise and fight. When enough make this choice, they become a mass movement and an historical force. And then the Earth shakes.
We have arrived at a moment when great choices must be made. Either we acquiesce to austerity and poverty, to grotesque and growing social injustice, and, quite possibly, to a descent into the darkness of fascism and war. Or we decide that the latest crisis of capitalism should be its last, and that we must overthrow the rule of bankers and warlords and create a new society based on democracy, equality, and production for need not profit.
To change the world, we have to understand it. To slay the Beast, we need to know its nature. Capitalism today is different from the system analysed by Marx in the mid 19th century or Lenin in the early 20th. But it is also the same. History’s most dynamic economic and social system, it grows and morphs, engulfing the most distant corners of the globe, sucking in ever more raw human material, trampling underfoot all that stands in the path of its relentless expansion. Yet it remains what it has always been: a system of competitive capital accumulation, of wealth begetting wealth as an end in itself, without plan or purpose, forever and ever. The black heart of the Beast is ever the same: the pursuit of profit.
In the history of its development, the capitalist system has passed through five distinct phases. In each case, the transition from one to another has been mediated by acute economic, social, and political crises, and the system’s new mode of operation has been first pioneered in parts of the global economy and then generalised to the rest by the pressure of competition. Each transition, moreover, has preserved in reconfigured form the main features of the previous phase; capitalist development has been both accumulative and transformative. It can be summarised as follows:
1. Mercantile capitalism, c. 1450-1800
Most wealth was still produced by pre-capitalist classes, but merchant capitalists accumulated profit by acting as middlemen, whether in national markets, or overseas trade, or through the ‘putting-out’ system, where they organised and marketed the output of independent artisans.
The great bourgeois revolutions – the Dutch, English, American, and French – were powered by the new social forces unleashed in this period. So, too, were the successive wars of empire between Britain and France during ‘the long 18th century’ from 1688 to 1815.
2. Industrial capitalism, c. 1800-1875
Industrial capitalists created factories for mass production based on steam power and new labour-saving machines, resulting in a mass of small and medium-size firms competing in national and colonial markets.
The Industrial Revolution which brought the factory system into being was pioneered in Britain – ‘the workshop of the world’. Its advent triggered ferocious class struggles, first as independent artisans resisted their impoverishment, then as the new factory proletariat began to organise.
Industrialisation also provided the context for a second phase of bourgeois revolutions – the ItalianRisorgimento, the American Civil War, the Meiji Restoration, German Unification – as competitive pressure forced the creation of modern states and unitary national markets.
3. Imperial capitalism, c. 1875-1935
The Long Depression of 1873-1896 was the forging house of an economy dominated by giant monopoly firms organised in cartels, financed by the banks, and expanding on the basis of state contracts, international sales, and the export of capital to overseas colonies and dependencies.
New centres of capital accumulation developed rapidly. German and US output surpassed that of Britain. Imperialist tensions, especially between Germany and Britain, erupted in the First World War – the first modern industrialised war of matériel (mass production of arms).
New labour movements – trade unions and socialist parties – were a product of rapid industrialisation in this period, and these became the organisational basis for successive waves of class struggle, most notably that between 1917 and 1923.
4. State-managed capitalism, c. 1935-1975
A new model of capitalist development was pioneered in Russia after the defeat of the revolution. Russia was isolated, impoverished, and surrounded by enemies, so it needed to industrialise and militarise quickly. But private capitalism was very weak, so the state itself was turned into a single giant capitalist enterprise.
This model was later replicated, in whole or in part, across the world. Three factors were decisive: the imperatives of the ‘permanent arms economy’ during the Second World War and the Cold War; the pressure of a radicalised and militant working class for full employment and welfare reform after 1945; and the desire for rapid economic development in newly independent Third World countries in the 1950s and 1960s.
State-managed capitalism underpinned the Great Boom of 1948-1973. But the world was divided into two nuclear-armed blocs and was scarred by a succession of colonial and proxy wars in the Third World. This provided the context within which formal decolonisation took place and new independent nation-states were formed in Africa and Asia. The majority of humanity remained in poverty. And the boom was unsustainable, for it was balanced on the cone of a nuclear missile.
5. Neoliberal capitalism, c. 1975 onwards
State-managed capitalism entered crisis in the 1970s. During that decade, an alternative neoliberal model began to gain support among mainstream politicians, especially in Britain and the US, where it became the basis of government policy under Margaret Thatcher in Britain and Ronald Reagan in the US during the 1980s. By the end of that decade, especially in the wake of the 1989 anti-Stalinist revolutions in Eastern Europe, it was being replicated across the world.
The essential aim was to bring about a redistribution of wealth from wages to profit, from labour to capital, from workers to the rich. This has been achieved in various ways. The internationalisation of capital, programmes of marketisation and privatisation, new forms of surplus appropriation, and the growth of precarious employment have all combined to make this shift possible. Let us define the main features of the system in a little more detail:
The centralisation and concentration of capital has developed to such a point that the dominant corporate form has burst its national limits and now operates as a multinational (or ‘de-nationalised’) firm within a worldwide market. Finance, investment, and trade, in the past more firmly anchored within individual nation-states, have become globalised. This has intensified the contradiction between international capital and the nation-state. It has also intensified conflict between states, as old self-contained blocs break up, existing alignments dissolve, and old powers decline and new ones arise. Because of this, the growing anarchy of the global market co-exists with the growing violence of imperial states.
b) Marketisation and privatisation
The direct economic role of the state has been reduced. Nationalised industries have been privatised. The ability of the state to regulate private capital has been undermined by the globalisation of finance, investment, and trade; the state has become less a manager of capital and more its client, bidding for its favour in competition with other states. This has contributed to a hollowing out of parliamentary regimes, an erosion of democratic choice, and the development of technocratic and managerial forms of politics. It has also given enhanced importance to inter-state bodies like the EU, the ECB, and the IMF, which increasingly take on the functions of capitalist super-states.
Finance (or bank) capital has become largely detached from both industrial and state capital, and now operates as an increasingly important mechanism for independent (and parasitic) surplus accumulation. The rise of finance capital is linked with the growing exploitation of workers in their roles as consumers and taxpayers. Traditional forms of surplus appropriation through exploitation at the point of production have been augmented by a relative expansion of surplus appropriation at the point of consumption. Three mechanisms of surplus appropriation are at work: monopoly pricing, where large corporations price the commodities purchased by the working class above their real value; interest, where banks and other financial institutions make profit out of working-class debt; and state taxation, where taxes paid by the working class are recycled as payments, grants, and bailouts to private business.
The ‘reserve army of labour’ – the mass of unemployed, semi-employed, and casually (or ‘precariously’) employed – has been expanded compared with the period 1948-1973. In the metropolitan economies, this has been achieved by marketisation, privatisation, and the fragmentation of large well-organised workforces, and by the systematic unpicking of the welfare ‘safety-nets’ characteristic of state-managed capitalism. Globally, it has been achieved by the internationalisation of capital, the growth of new centres of capital accumulation, and the increased opportunities for capitalists to relocate production in low-wage economies. Playing off one group of workers against another in a global ‘race to the bottom’ has become more central to the operation of the global system.
e) The coercive state
The economic management and welfare functions of the state have declined. The role of the state as a market for capital and as a conduit for the transfer of surplus from workers to capitalists has increased. Growing social inequality, the erosion of democracy, and the imposition of extreme austerity programmes mean that the role of state in policing the working class has increased. Consent remains the basis of capitalist rule, but the balance has shifted towards higher levels of coercion. This is equally true of relations between states, now defined largely in terms of the War on Terror – the ideological form of the new imperialism, in which a phantom enemy is conjured to justify high levels of arms expenditure and military aggression.
This system – neoliberal capitalism – now faces a systemic and existential crisis. The crisis has economic, imperial, social, and ecological dimensions.
We are four years into the Second Great Depression, and it appears to be the deepest and most intractable in the history of capitalism.
The declining imperial hegemon, despite massive military investment, has proved unable to impose its will on Iraq and Afghanistan, unable to prevent a wave of revolution across the Middle East, and unable to answer the challenge posed by the emergence of new economic superpowers like China.
The crash of 2008 and the programmes of bailouts and austerity rolled out since have triggered general strikes, mass demonstrations, and pitched battles in the centres of major European cities as societies are torn apart.
And all the time, the countdown continues to runaway global warming and a climate catastrophe that could destroy industrial civilisation.
Human alienation has never been greater. On the one hand, collective human labour has created productive forces with an unprecedented potential to abolish want. On the other, these same forces, operating wholly beyond our control, have been transformed into monstrous threats to the health, well-being, and very survival of us all.
What is to be done?
Revolution in the 21st century?
The global elite cannot continue to rule in the old way. But the only viable alternative to poverty, war, and global warming would be to dismantle the very system on which their wealth and power is based. This they cannot do. The ruling class can resolve the crisis only by a descent into barbarism. Their role as the lords of neoliberal capital makes them a parasitic social class without historic function.
Human progress has come to depend upon the overthrow of the neoliberal ruling class, the taking of state power by working people, and the reorganisation of economic and social life under democratic control. The lesson of 20th century history is that to succeed, this must be done on a world scale. The lesson of the last 30 years of neoliberal capitalism is that ‘socialism in one country’ is a more fantastical delusion than ever. But is world revolution really possible in the 21st century?
Revolutions tend to be sudden, highly infectious, and immensely powerful mechanisms of change.
The Great French Revolution of 1789 exploded when the people of Paris armed themselves, took to the streets, and prevented a royalist military coup. Thereafter, between 1789 and 1794, the masses intervened repeatedly in the political process to drive the revolution forwards against the resistance of half-hearted moderates, counter-revolutionaries, and foreign armies of invasion.
The revolutionary movement subsided after 1815, but then erupted again, first in 1830 in France, then in 1848 with a wave of copycat insurrections in Paris, Berlin, Vienna, Budapest, Rome, and other European cities. Though the revolutionaries were defeated, the impetus they gave to reform was unstoppable. Europe’s rulers knew they had to manage change from above or risk further explosions from below. France became a republic, Italy was united for the first time, and Germany was forged into a modern nation-state.
In February 1917, the police dictatorship of the Russian Tsar was overthrown by working-class insurrection. In October 1917, under the leadership of the Bolshevik Party, the Russian working class seized power. The factories were run by workers’ councils, the land was given to the peasants, and Russia withdrew from the First World War. For a few brief years, until the revolution was destroyed by economic collapse, civil war, and foreign invasion, Russia was the most democratic country in the world.
The Bolshevik Revolution sparked a chain reaction of revolutions from Germany to China. The revolutions in Germany and Austria-Hungary ended the First World War. The revolutionary movement as a whole, between 1917 and 1923, came close to bringing down the entire world capitalist system.
World capitalism has remained pregnant with revolution ever since. In 1936, revolution in Spain blocked a fascist-backed military coup. In 1956, revolution in Hungary greeted a Soviet invasion. In 1968, ten million workers joined a general strike in France, hundreds of thousands occupied their factories, and students and young workers fought pitched battles with riot police in central Paris.
In 1979, revolution brought down a vicious, heavily-armed, US-backed dictatorship in Iran. In 1989, a wave of revolutions across Eastern Europe brought down a succession of Stalinist dictators, despite their networks of informers, secret police, and political prisons. On 11 February 2011, after 18 days of mass demonstrations, the 30-year-old military dictatorship of Egyptian President Hosni Mubarak collapsed in the most spectacular victory so far in a revolutionary process that is still ongoing across the Middle East.
Before all these revolutions, opponents have looked at the regimes they confront and despaired at their military power, their monolithic police control of society, the apparent ‘apathy’ of the mass of the people. Each time, the arrogance of the ruling class has continued unabated until the moment of insurrection. But ‘the old mole’ of history – as Marx put it – loves surprises.
In 1924, the Hungarian Marxist theoretician Georg Lukács, reflecting on the great epoch of war and revolution that had just passed, wrote of ‘the actuality of the revolution’. He regarded the Russian revolutionary leader Lenin as the supreme exponent of this principle. It is worth recalling, in the context of our own age of crisis, what Lukács had in mind. Marxism, he explained:
“… presupposes the universal actuality of the proletarian revolution. In this sense, as both the objective basis of the whole epoch and the key to understanding of it, the proletarian revolution constitutes the living core of Marxism… The actuality of the revolution provides the key-note of a whole epoch… The actuality of the revolution therefore implies the study of each individual daily problem … as moments in the liberation of the proletariat…”
For Lukács, international working-class revolution was a vital necessity and an ever-present possibility against which all political action should be judged. It was not inevitable. It might never happen. It could be far off. The point, however, was that the old order contained within itself the ever-present possibility of revolution, and that this was the only conceivable solution to the ever-growing sum of human suffering.
Nor did the eventual defeat of the revolutionary wave of 1917-1923 alter the essential validity of Lukács’s insight. On the contrary, it confirmed it, for the eventual result was the barbarism of Stalingrad, Auschwitz, and Hiroshima.
An ancient Biblical myth sees the end of the world heralded by the appearance of four horsemen – the Four Horsemen of the Apocalypse, representing Conquest, Slaughter, Famine, and Death.
The prospect before humanity today can seem truly apocalyptic. Neoliberal capitalism has developed the productive forces of the global economy to an unprecedented degree. But these forces are not subject to democratic control and rational planning; they are propelled by the economic and military imperatives of competitive capital accumulation. In consequence, despite their potential to emancipate the whole of humanity from material need, they now threaten to do the opposite: destroy industrial civilisation itself.
The ignorance, cupidity, and irresponsibility of our rulers in the face of this crisis are rooted in the irrationality of the system. Climate catastrophe, economic slump, and imperialist war have their roots in the madness of the market: the blind economic and military competition which propels the nation-states and mega-corporations of neoliberal capitalism. The system is deeply pathological and destructive. It has brought us to what is perhaps the most serious crisis in human history.
Another ancient Biblical myth was sometimes counterposed to that of the Four Horseman. In this version of the Apocalypse, the culmination was a popular Jubilee. Tax-collectors and landlords would be swept away. Slaves and serfs would be set free. The land would be restored to the people who worked it. A new Golden Age of freedom and plenty would begin.
To turn Apocalypse into Jubilee in the early 21st century, three things are required:
- We have to understand the necessity for total system change. Only by linking different campaigns, protests, and struggles together in a general assault on the system that is at the root of humanity’s problems can we hope to solve them.
- We have to understand the centrality of the working class to any serious strategy for system change. Only by mobilising the majority of ordinary working people can we find the power to confront and defeat corporate capital and the nation-states.
- We have to organise the revolutionaries into networks of activists able to lead and organise mass resistance from below, fanning anti-austerity anger into a wave of working-class struggle that eventually swells into a new world-revolutionary movement comparable with, but greater than, those of 1789, 1848, 1917, 1968, and 1989.
Another world has become an absolute historical necessity. Another world is possible. The revolution is, in this sense, an ‘actuality’.
But it is not a certainty. It has to be fought for. Its achievement depends on what all of us do. And the historical stakes have never been higher.