DOES CAPITALISM HAVE A FUTURE? Or is a Better World Possible?

Despite the current discourse about the ‘unacceptable face of capitalism’ and the need for a ‘responsible’ or ‘moral’ capitalism, it is generally taken for granted that there is no alternative to capitalism in some form. Everyone is aware that something is seriously wrong with the way the system is working and that there is no easy fix. But discussion rarely goes beyond questions about bankers’ bonuses and how to deal with banks that have become too big to fail. There is great concern and debate about the apparently intractable problem of sovereign debt in the Eurozone and whether ever-tougher austerity is the right way to reduce deficits. Governments express concern about unprecedented levels of unemployment and a ‘lost generation’ of ‘neets’ - young people who are ‘not in education, employment or training’, but denounce ‘feral youths’ who riot in the streets, stubbornly denying that their rebelliousness is an expression of their alienation. As the bankers’ bonus bonanza goes into full swing again, public anger, fuelled by the cold pinch of austerity, shows no sign of abating. There’s a lot of political capital to be made out of all this. In the last few days, Labour’s threat of a parliamentary debate on bankers’ bonuses was sufficient to persuade RBS boss Steven Hester to waive his £1 million bonus. Today (February 1), disgraced former RBS boss, Sir Fred Goodwin, was stripped of the knighthood awarded on Gordon Brown’s advice in 2004 for “services to banking.” This is the man who, a few years later ran the bank into the ground, leading to its nationalization at a cost to the taxpayer of £450 billion.

Prime Minister Cameron is keenly aware that his government is vulnerable on this issue. In recent weeks he has won plaudits from the right-wing press (and that means most of the national newspapers) for vetoing a European treaty to impose tighter fiscal discipline across Europe and for his tough stand against those the tabloids refer to as “welfare scroungers.” He clearly hoped that waving the flag and trouncing the “undeserving poor” would take people’s minds off the complete failure of the austerity programme to stimulate economic growth. He also hoped to divert people’s minds from the growing gulf between the super rich and the severely squeezed majority facing relentless cuts to their living standards. But public anger against the fat cats of the financial sector is palpable and cannot be ignored. Neither can he ignore his Lib Dem coalition partners, who, under pressure from their restless rank-and-file, need to demonstrate some minimal inclination to rein in the bailed-out bankers. In the last few days Ed Miliband has found his populist voice again and has scored a few palpable hits against the prime minister in parliament. The hastily accomplished removal of  Fred Goodwin’s knighthood by a little known committee of senior civil servants was certainly initiated by Cameron. Whether there will be further action against others honoured for their services but equally culpable, remains to be seen. Few tears are shed for “Fred the Shred”, but this latest gesture is obviously part of a political game that is being played. Cameron needs his government to be seen as responsive to popular demands for some redress against a class of super rich billionaires who, though responsible for the financial crash of 2007-8, have got off scot-free. Upping the ante at Prime Minister’s question time, Miliband goads Cameron, demanding to know why he hasn’t made good his promise to name bankers paid bonuses over £1 million, and why he hasn’t accepted the high pay commission’s recommendation that an ordinary employee should sit on every pay committee. Cameron side-steps the questions and turns the table on Miliband by reminding him that he was part of a government that signally failed to regulate the banks and sanctioned multi-million payouts to bankers. Thus a serious issue is reduced to a point-scoring charade affording much amusement to members of parliament but doing nothing to get to the heart of the matter.


The record of the Blair-Brown New Labour government is the rod with which the Tory-led coalition can beat the opposition. And as long as there has been no decisive break with New Labour, Miliband remains vulnerable. Brown as chancellor championed “light-touch” regulation and Miliband was part of his team after he became prime minister in 2007. Like all members of the shadow cabinet he has refused to make any serious criticism of New Labour and its record in government. Shadow chancellor Ed Balls recently made clear that, if returned to power, Labour would not commit to reversing any of the cuts imposed by the present government. So there is no radical alternative to the Con Lib-Dem coalition.

At the heart of the matter is the capitalist system itself. During the last four years it has become clear beyond doubt that this system is in deep crisis. “The crisis of capitalism” is no longer a phrase confined to the lexicon of the Marxist left; it part of the vocabulary of serious discourse across the mainstream political spectrum. But, at best it is used to refer to the neo-liberalism that has been dominant since the 1970s. This, say the critics, has reached the end of the road and now it is time for capitalism to be managed in a more responsible, morally acceptable way. The idea that the neo-liberal model - unregulated capitalism, red-blooded and raw in tooth and claw, may actually represent the essential nature of the beast (as its advocates claim), is firmly rejected by the champions of “capitalism with a human face.” But, it can be argued that finance monopoly capitalism, is the essential and irreversible form the system takes in its latest, possibly final phase. If it is, then the present global crisis, however long it may last, is one from which there is no exit route into a radically reformed, humanized capitalism. And that begs the question, what, if anything is to take its place?

A socio-economic system that has survived many crises may survive this one. But it is not too pessimistically apocalyptic to conclude that if the future is to be dominated by an unreformed (and unreformable) global system driven by the dictates of profit maximization, the prospects for the survival of our own and other species on earth are bleak indeed. Whether it will be possible to change course and reverse the present drive to social and environmental disaster, is uncertain. But, if there is to be a future worth inheriting, it must be done. And this means that economic and political power must be taken out of the hands of the 1% who now wield it and transferred to those who will use it to effect a thoroughgoing democratic redistribution to serve the 99% who are now effectively powerless. This form of social organization is what has often been called socialism. One of the reasons why the concept of socialism has become so tarnished is because it became closely associated with the bureaucratic, statist dictatorships in the Soviet Union and elsewhere. Also, the right in Britain has damned as “socialist” the nationalization policies of the post-war Labour government.

The Marxist left, which almost everywhere now has only a marginal existence, must also share part of the blame for widespread public ignorance about socialism. In Britain, and throughout most of Western Europe, Marxist parties and groups have rarely devoted any time or effort to trying to explain what a socialist society might look like, and how, in the advanced capitalist world, it might be possible to bring it into being. Here it is only possible to state briefly what such a society would not look like and to mention some of the features it might possess.  The subject will receive further attention in future Letters from the UK.

  1. Such a society would bear no resemblance to the bureaucratic state-controlled dictatorship established in the Soviet Union under Stalin. Despite the abolition of private ownership in the means of production and the formal establishment of “public ownership” through state control of industry and collectivization of agriculture, these measures were imposed through a ruthless exercise of state power by a bureaucratic dictatorship over the working people. In its worst manifestations, power was exercised through terror which resulted in the deaths of millions. Such a system cannot possibly be regarded as socialist.
  2. Such a society would have no place for the medieval institution of hereditary monarchy and the aristocratic privilege of “honours” that corrupt public life in Britain today. Other, publicly sanctioned methods of recognizing public service, would be found.

  3. While recognizing that absolute social equality is not achievable, such a society would work actively towards establishing the greatest degree of social equality possible. This would be made incomparably easier as the present system of private and corporate ownership would be replaced by various forms of public and co-operative ownership in which remuneration would be democratically decided by unions and employment bodies. Education would be free for all. Privileged, fee-paying, public (private) schools would be abolished.

  4. Such a society would reject entirely both (a) state control of the media as practiced in the communist ruled countries of the Soviet Union, Eastern Europe and elsewhere, and (b) corporate, multi-millionaire control of the media such as exists in Britain and throughout the capitalist world. All mass communications media would be brought under various forms of popular democratic control. All forms of censorship and restrictions of genuine freedom of speech would be removed. However, expression and dissemination of racist, misogynistic and homophobic prejudices would be subject to prohibition, as would all forms of incitement to act on such prejudices.

These are just a few of the features we might expect to find in a society that would be part of the “better world” that must be created if we are to have a future fit for human beings.