First published 04/23/2008 15:32
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The most basic reason that capitalism is unable to solve its own economic problems is that the mass of workers that capitalists strive to pay less to are the same as the mass of consumers the capitalists try to sell more to.
This is one of the reasons for the restless and relentless capitalist search for new markets. It is why U. S. industry consistently runs at less than 70% of capacity, because technology enables the production of many more goods than workers can actually afford to buy (at prices that maintain profits). It is not that there is any dearth of demand or need for more goods, more food, or more infrastructure, it is that there is a limit to how much of this can be done profitably enough for the capitalists.
A related problem of capitalism is that within each industry, the major producers each plan to expand their share of the market—but they can’t all succeed at the same time—somebody will lose. Marxists call this the “anarchy of production.” This leads to overproduction of goods, to layoffs, to speed-up on the job. With fewer workers employed, fewer workers have money to buy, so effective demand goes down, leading to more layoffs, plant closings, etc. Eventually enough goods and production capacity are destroyed that industries begin to hire again, and the build-up of the economy starts over. Marxists call this a “crisis of overproduction.” Capitalist economists call this the “business cycle.” While Keynesian economic stimulus policies can delay or mute this cycle, they have proven unable to eliminate it, which leads to misery for laid-off workers and their families, to various efforts to get workers (through taxes and fees and other schemes) to pay for the capitalist’s crisis.
The shorter term economic proposals we make are for more jobs, living wage jobs, job-to-job unemployment insurance, a national health care system to cover everyone, and restrictions on the export of capital, jobs, and plants. We advocate a much more sharply progressive tax system, closing loopholes for the wealthy and corporations, exempting more people at the lower income levels from all taxation, substituting more taxes on the rich in place of regressive sales taxes. We advocate cutting the military budget in half and transferring the savings to social programs.
In the longer term, we advocate a fundamental restructuring of our economic system, to socialism. This would mean the nationalization of many large-scale businesses and financial institutions, further restrictions on capital, a radical leveling of incomes (not to the point of absolute equality, but much less than the ever-growing gap between rich and poor), massive public works jobs programs, providing free health care and education for all.
A socialist U.S. economy would include wage differentials (though much reduced from the current inequalities), a mix of nationalized industry and finance with small scale private enterprise, a variety of economic and social incentives to encourage the development of skilled workers, a modified planned economy (macroeconomic goals accomplished by macroeconomic means and controls, combined with more general goals for the economy as a whole rather than a huge centralized bureaucracy which tries to control every little detail), laws enforcing equal pay for equal work and no workplace discrimination, laws restricting the movement of capital and limiting the size of private enterprises, taxation to limit the extent of profit-taking from the exploitation of workers, free education and health care for all (relieving the burden on small business and smaller economic units and encouraging science, technology, and a highly skilled workforce), progressive taxation on the larger individual incomes, to mention some of the important features. We advocate nationalization of banking and finance, the energy industry, health care, and some transportation, to be run as public utilities.
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