Ted Trainer

There is now increasing discontent with our economic system but I want to argue that much of it is based on a mistaken understanding of what the essential faults are.  Most critics are only calling for specific reforms, for example to the banking system or the trade imbalance or the decline of welfare and public services unemployment problem.  Many are  only making demands for better redistribution within the same old system

In my view the present economic system is fundamentally flawed.  It cannot solve our big problems because by its very nature it causes them, and it can do nothing but rapidly increase our problems from here on.  A totally different economic system is needed.  It is most important that people in ERA and similar organisations should think carefully about this claim  because I think most of us are wasting our time trying to apply bandaids to a dead horse.

I want to argue that Marx emphasised the crucial themes and that it is very important that we base our thinking more directly on some of the key elements in his theory.    Before I suggest  these I must make two points.  Firstly, in my view many of Marx’s ideas are invalid, e.g.,  to do with the “laws of history”, value, the role of the party, the place for central and authoritarian leadership, the transition to socialism, and affluence and industrialisation.  The list is so long that Marxists would probably say I can’t be a Marxist.  My concern is only  to focus attention on those  ideas that I think are important and neglected.

The second point is that we must distinguish sharply between Marx’s theory of capitalism, i.e, his analysis of the nature of capitalism and the dynamics built into it, and on the other hand all that goes under the heading of Marxist political action and ideals, including “communism” and the  Marxist  and “communist” regimes that have existed.  We can totally reject what “Marxists” have done and been for while judging Marx’s analysis of capitalism to be extremely valuable.  ( As a radically green anarchist I strongly disagree with Marx’s views on post-capitalist society and how to get to it.)

So here are some core ideas in Marx’s theory which I think are important, and not sufficiently central in the thinking of groups such as ERA.

-- This is a capitalist economy.  Most of the capital is owned or controlled by a very few.  (Half of US capital is now controlled by .5% of Americans.)  The overwhelmingly important determinant of what is done in a capitalist economy is not what is good for people or  for the public interest or for the environment, nor what morality or religion or tradition indicates should be done.  What is done is mostly what will maximise returns on investment.  That is, what is done is what is most profitable.   The more you let profit maximisation determine what is done the more you will get inequality, waste, polarisation, the destruction of the environment, social breakdown, inappropriate development, and several other nasty things.  Production for profit clashes with production to meet needs.

-- An economy in which individuals and corporations are free to trade in markets to maximise their advantage will inevitably allocate most resources to the rich because that’s the most profitable option and deprive the majority, and it will inevitably result in mostly inappropriate development.  In a satisfactory society the economy must be under social control; things must be (democratically) planned and regulated in the public interest (while giving much freedom for individuals.)  The now dominant assumption that it is best for society if all are free and encouraged to maximise their self interest and to get as rich as possible is patently absurd.

--- A capitalist economy is by nature a growth economy.   There will be constant pressure to increase productive capacity, and therefore to stimulate more consumption.

-- The basic mechanism in capitalism is the drive to accumulate; to invest in order to make as much money as possible and to invest that next year, in order to make as much as possible....in an endless spiral.  This is by far the most important factor shaping our world.  This is the main reason why the Third World has been “underdeveloped”, why most of its best land has been put into export crops, why Sydney takes the form it does, why there was a Gulf War, why globalisation is occurring, etc. etc.

-- In capitalist society governments take as their top priority helping the economy to prosper.  The welfare of the people is assumed to be best served if the economy is going well, ie., if business is prospering.  Indeed a measure of business turnover, GDP is taken as the measure of “living standards” or welfare.(...when all the measures of quality of life seem to be falling!)

-- An economy in which what is done is whatever will most increase profitable business opportunities will increasingly damage society.  More activities become commercialised.  Work in the factory mode of production is unsatisfying for most people, unemployment ruins increasing numbers of lives with serious consequences for cohesion.   Rural life withers.   Community is weakened, concern for the public good is replaced by concern for individual welfare and security in a competitive market situation that will not provide for all.  Social breakdown increases.  The  state spends less on these problems, in order to facilitate business prosperity (e.g., by making more resources available to business.)

--It is important to think in terms of classes.  The biggest mistake you could make would be to think that this is our economy and that if we could fix some of its irrationalities it would work better for us.  This economy does not work for your benefit.  It has been structured to work very well in the interests of the few who own capital, and their highly paid technocrats and lawyers.  Thus it is a mistake to talk about the irrationality of economic rationalism.  It is a very rational and effective system, very well organised to serve the capitalist class.   Did you think that the devastation caused by World Bank Structural  Adjustment Packages is an irrational oversight, an unfortunate unintended side effect?  SAPs smash up Third World economies, reallocate productive capacity from poor people to producing for export to rich countries, further impoverish desperately poor people, transfer Third World land and firms to rich world corporations, gear even more land and labour to export production, at lower wages and prices, and force countries to make repayment of debt their top priority even thought this increases death rates.  The effects on the recipient country are literally catastrophic.  The effects on the rich worlds banks and corporations and supermarket shoppers is a bonanza.   Had you assumed that these effects were accidental outcomes we could have avoided if we had been a bit more rational.?  The rules and practices of the World Bank, the IMF, the World Trade Organisation and now, the latest grab the MAI, are simply  designed to secure for the rich few as much as possible of what is left to be taken. This economy works in their interests not those of most people.   It is important to analyse it in terms of class interests.

--The system is riddled with contradictions.  For example the interests of labour contradict those of capital.  Profit contradicts need.   Very important is the contradiction that develops over time between the full application of existing technical capacity and the interests of capitalists.  For example we have the productive capacity to eliminate hunger but it is not in the interests of those who control food producing technology, including land, to apply it to eliminating hunger.

-- These simple terms explain many important phenomena, including, the catastrophe that is third World “development”.  The development that the Third World has suffered has been capitalist development;   i.e., it has been almost entirely only the development of those things  that suit people with capital.  Take a glance at Thailand and ask what has been developed.  Very little of the development has been of things that are appropriate to the needs of the majority of people or  of the environment.  As a result the poorest one third of the people on earth, 1.6 billion, are actually getting poorer according to UN figures.

            Globalisation is also basically explicable in these terms.  An economy driven by the imperative to accumulate must inevitably eventually lead to the monster that is now consuming everything.  Those with capital to invest must in time try to push down all barriers hindering their  access to more business opportunities, more resources, more cheap labour, more markets.  Globalisation is not an option or a mistake; it is the state into which a capitalist economy must eventually develop.

-- The crucial point is that these processes, developments and problems are inevitable consequences of a capitalist economy.    If you have an economy driven by accumulation, production for profit,  market forces and growth  then it will inevitably lead to the situation we are in.  (We could have prevented this situation, but only by changing to ways that were not capitalist.)  It is therefore most important that people in groups such as ERA clearly identify the capitalist system as the problem and emphasise the need for change to a totally different system.

-- There is no possibility of reforming such an economy.  If we got rid of the intolerable elements it would no longer be a capitalist economy.  There are some elements of it that are of possible value.  (I believe there could be a large role for markets and for small private firms, within democratic collective planning and regulation.)  However an economy driven by market forces, growth, profit, sales maximisation and accumulation cannot do other than create and intensify all our present global problems.  When you understand the dynamics built into this system you realise that our top priority must be to work for the log term transition to a very different system.  This does not mean there is no point working for minor reforms (bandaids are important).  It does not mean the required alternative is “communism” or big-state socialism.  It does not mean violent revolution is required.  I’ve spelled out what  many of us think it does mean in The Conserver Society and Towards a Sustainable Economy.