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Politico-Economic Impacts of Capitalism

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Today, much of the world enjoys historically high living standards, and productive economic forces have caused creation of enormous amounts of wealth. However, concurrently, gross poverty and wealth inequality face the developing third world and the proletariat of the industrialized world. In addition, renascent far-right authoritarian and religious fundamentalist groups threaten democracy and climate change threatens to destroy large sections of the Earth’s ecosystem. Taken altogether, these crises constitute serious challenges to unquestioned liberal ideology and internal factors comprising the basal cause of contemporary crisis. In response, numerous reformist groups have attempted to deal with these issues within current politico-economic frameworks. Numerous groups and politicians – mostly progressive liberals – often recommend measures such as tax reform, campaign finance regulation, and minimum wage increases. However, such regulation ultimately fails to address the basic causes of these crisis – global capitalism. The profit-motive frameworks, hierarchical class stratification, and private ownership models of capitalism inexorably facilitate climate change, neo-imperialism, economic crisis, regressions in democracy, and resurgent fascism, thus ma king it the largest issue facing humanity today.

This paper utilizes Marx’s definition of capitalism, wherein the main defining feature of capitalism is control of the means of production by a single class; other subjects of Marxist critique such as wage labor result from this bourgeoisie monopolization. Importantly, although modern liberal democracies are undoubtedly based around global capitalism, capitalism and democracy are not the same. Capitalism, although married with state centralization and nationalization of some businesses and sectors, was perpetuated by decidedly anti-democratic fascist regimes in Italy and Germany during the inter-war period (Trotsky 2). Augusto Pinochet, a Chilean military dictator put into power by a US-backed military coup which overthrew the elected Allende government, was prepared to sanction mass killing and political suppression in order to maintain a US-oriented capitalist system and was advised by a group of Friedman-affiliated economists known as the Chicago Boys (Kornbluh 161-165). Capitalist systems have existed in a plethora of political systems and are fundamentally distinct from purely democratic politico-economic systems.

Nor is capitalism merely a system of market exchange. Systems of goods exchange have existed for many thousands of years of human history before capitalism, ever since early human tribes exchanged paleolithic goods with each other. Indeed, they might exist even after capitalism. Oxford Political Theory Professor David Miller gives a defense of “market socialism” in his book Market, State and Community: The Theoretical Foundations of Market Socialism. He envisions market socialism as a system where the means of production are communally owned, but where democratic collectives could compete in a market. While many Marxists question the necessity of markets, and whether collectives might regress towards pseudo-capitalist hierarchical organization, the very existence of this ideology conflicts with the equivocation of markets and capitalism. Of course, while markets of commodity exchange are an integral part of capitalism, they are not all that comprise capitalism. Any argument for capitalism which simplifies it to only a system of exchange operates on fundamentally inappropriate grounds;

Capitalism is, specifically, the mode of production characterized by centralization of ownership in the hands of the bourgeoisie. Property control firmly established by the bourgeoisie, the proletariat – who do not control the means of production – are forced to labor, as they have no other means of subsistence. Ernest Mandel, Belgian Marxist and co-founder of the International Institute for Research and Education explains, “… the capitalist mode of production is a regime in which the means of production have become a monopoly in the hands of a social class and in which the producers, separated from these means of production…are deprived of all means of subsistence and consequently must sell their labour-power[sic] to the owners of these means of production in order to subsist” (Mandel 17). Centralization was not so extensive under any previous economic system; even under feudalism, the peasants still held ownership of their land to some degree, although they were required to pay tribute to their landlords. Marx, a doctorate holder from the University of Jena, documented in his research in the British Museum reading room that capitalism is based upon centralization and, due to market organization, leads to increased centralization. In a capitalist system, profit originates from commodity exchange at a higher value, resulting in extraction of value. The value of a commodity is a function of socially necessary labor time – calculated from average intensity and duration of work required to produce a commodity in a society. The exchange value is the relative value it holds in exchange to other commodities, monetized as a price. If the worker is only appropriated a certain amount of the monetized exchange value back, part of the commodity’s labor value has been extracted and given to the bourgeoisie. Thus, commodity exchange and hierarchical ownership are inherent to capitalist organization, leading to value extraction. These set of characteristics and circumstances which characterize the mode of production of capitalism.

Needless to say, capitalism plays a large role in current politico-economic affairs. The core states comprising North America and Western Europe and rapidly industrializing Eastern Asian states are dominated by capitalist organization, as are periphery states in the global south. Periphery states are faced with the unique circumstance of economic dependency on the core states. From this organization rises a distinct set of issues; the profit-motive-based economy causes issues in production and necessitates economic and political hierarchies, thereby causally linking capitalism to several of the current world’s largest impending and contemporary crisis. Caused by the economic organization and motives of capitalism, the impacts of exploitation of the proletariat, insurgent fascism, and ecological destruction mandate proletarian revolution aimed at destruction of contemporary politico-economic frameworks and the establishment of a socialist transition state towards communism.

The first large impact of capitalism is impending, irreversible climate change and the resulting ecological destruction politico-economic crisis that warming would cause. Addressing climate change requires attacking the economic frameworks of capitalism because class and national relations under capitalism rely on exploitation of natural resources – constant capital – to maintain the current system. Economics Professor Minqi Li writes, “The global climate crisis is just one of these fundamental contradictions… Because of inter-state competition and geopolitical conflicts under the capitalist system, climate stabilization efforts are confronted with insurmountable political obstacles…even with wildly optimistic assumptions, there is no way for climate stabilization to be made compatible with rates of economic growth required for capitalist economic and political stability” (Li, 1057). Li’s conclusion is firstly based on an analysis of contemporary politico-contemporary affairs. Using Wallerstein’s World-Systems Model – which separates the world into economic zones based on political and industrial power – as a framework for analysis of the capitalist system, Li notes that core states – countries of the industrialized west – have not funded domestic efforts, this issue being exacerbated by the industrialization of the periphery and global south. Li notes that the periphery’s elite – China being a poignant example – focus on industrialization over carbon reduction. Not only do the divisions of the world necessitated by capitalism preclude coordinated change, so does capitalism’s inherent need for capital accumulation and growth. Growth patterns are impossible without a continuing increase in carbon emissions, because fundamentally, capitalism’s profit motive drives resource depletion. This is particularly due to the increase in concentration of organic capital, wherein development requires increasing investment in the means of production as a ratio to labor capital. Li cites figures indicating requisite renewable investment of USD 2.8 trillion per year to change the worldwide energy grid and given that non-renewables form a key part of the current energy system, such funding would destabilize the capitalist system and encounter vigorous resistance from ruling elites. We can add on to Li’s analysis that it is not only contemporary political frameworks which preclude change, but profit-motive based economic logic. It is necessary to abandon such logic and move towards an ecologically-based framework and logic, and given the impending approach of irreversible climate change, quickly and through revolutionary means.

Technological development will not solve the climate crisis. Firstly, Li’s analysis already demonstrates how the current structure of the system precludes funding for any large-scale implementation of changes; the more necessary change of the fossil fuel system is, the stronger the economy of the grid resists renewables. Secondly, mere efficiency is insufficient for stopping change and is not concordant with principles of growth regulation. Michael H. Huesemann of the Pacific Northwest National Laboratory writes, “…considering that the very foundations of western industrial societies are based on the exploitation of non-renewable minerals and fuels, it will be extremely difficult to switch to an industrial and economic system based solely on renewable resources…unless growth in both population and consumption is restrained, these technological improvements only delay the onset of negative consequences that, as a result, will have increased in severity, thereby reducing our freedom to choose satisfying solutions…the present goal is clearly still economic growth, and improvements in eco-efficiency actually promote this growth…no improvement in technological efficiency will ever bring about the opposite” (Huesemann, 31-32). Technological means are presently concordant with economic growth as opposed to sustainability, and thus will never solve the climate crisis. Furthermore, as technological discussion diverts from politico-economic-based discussion, pursuing technological means would merely exacerbate the climate crisis vis a vis timeframe and available resources to invest into politico-economic change.

Even granting ad arguendo that technological means would allow sustainability, a simple summation of empirical evidence demonstrates capitalist complacency; despite promises and declarations by much of the core states, treaties like the Kyoto Protocol and Paris Treaty lack enforceable and specific measures, and the EU’s reductions – the strongest of the core states – do not come close to the estimated 87% reduction by 2050 necessary to prevent two-degree climate change, as estimated by the IPCC. This is paradigmatic of lack of efforts in all fields to prevent climate change, including in technological means. Technology efforts have received little requisite funding, and because of the profit-motive structure of capitalism, will likely not receive necessary funding. Fossil fuel developments have not ramped down, especially in the US, where most efforts to revamp the energy grid with nuclear, solar, or wind, have been both limited in scope and short-lived due to counter-action by fossil fuel groups, which possess enormous politico-economic clout (Kang 27). Thus, the only option for countering climate change is complete politico-economic restructuring and establishment of a socialist transition state.

In addition, attempts to reduce growth within the current socio-economic framework might lead to adverse consequences. Political Economy and Development Professor Massimo De Angelis writes in agreement with Li, “capital seems to be at an impossible crossroad. On one hand, it needs nonfinancial growth to buffer, accommodate and decompose struggles, and, at the same time, to fulfill its drive for accumulation and allow some debt to be repaid…If on one hand [growth reduction] would somehow mitigate the pressures on climate change, in so far as capitalist relations remain dominant in articulating and valuing social co-operation, it would do so with heavy social costs and at a likely intensification of precarity, social injustice and social conflict against these.” (De Angelis 2). De Angelis’ analysis is concordant with both Marxist analysis and empirical evidence. The Marxist analysis maintains that the extraction of surplus capital is directly linked to the reinvestment of that capital, exacerbated by the increasing concentration of organic capital – the ratio of value invested in the means of production compared to variable capital (labor costs) – as capitalism progresses (Mandel 33). Thus, a Marxist analysis predicts that a rapid drop in production not related to the main inherent crisis would have destabilizing effects on the economic stability. Empirical analysis provides further support; economics doctorate Edgardo Zablotsky writes, “…countries that experience a high number of revolutions and coups tend to be countries that invest less of their resources domestically than countries with stable political environments…the relation between political stability and economic growth has to be understood as a two way relation” (Zablotsky 24). The conclusions of this paper provide modern examples to support the idea that growth is necessary for stability in a profit-motive economy, concordant with Marxist analysis. Finally, examples of regulation and corporate response support De Angelis’ theory. Jonathan T. Park brings up the example of the Australian carbon tax; the law was quickly quashed, as opposition from the oil lobby emphasized the economic impacts to Australia. Park’s analysis also demonstrates that the issue is structural; capitalist exploitation of constant capital is based on beliefs in eternal growth and a short-term cost-benefit model, both of which preclude attempts to stop climate change (Park 198). Based on both hard empirics and theoretical models, it is evident that climate change is a causal result of capitalism’s profit-based economy. In addition, while requisite sharp reductions in growth are necessary, such changes lead to political instability and thereby repression in the current socio-political climate.

Impacts from climate change are potentially catastrophic; according to a report by the World Economic Forum, climate change poses the largest impacts to human life, especially in matters of trade, agriculture, and environment. The report found it would have a greater potential impact than weapons of mass destruction, water crisis, forced emigration, and energy price shocks. This is echoed by a Stern Review report to the UK government, which states, “the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever…the estimates of damage could rise to 20% of GDP or more” (Stern Review 6). The report also emphasizes the possibility of effects such as huge harms to agriculture, shifting of wind and rainfall patterns leading to drought and other human costs, and the projected doubling of atmospheric carbon levels in less than twenty years, at current rates. This will lead to intense desertification, increases in extreme weather patterns, and destruction of natural ecosystems. The impending nature of climate change impacts and their potential for complete disruption of world economy necessitates urgency in action, which is itself precluded by current capitalist politico-economic organization.

The second impact of capitalism is neo-colonial dominion over the periphery states and exploitation of their raw resources. Professors James Petras and Henry Veltmeyer write, “[Development of the means of production and class struggle], which we have traced out in the Latin American context, are both internal and international, implicating both the capital-labour relation and a north-south divide in the world capitalist system…Whereas in the 1980s imperialism was called upon to remove the obstacles to the advance of capital and to facilitate the flow of productive investment into the region in the new millennium it has been called upon to assist capital in its relation of conflict with the communities directly affected by the operations of extractive capital, as well as cope with the broader resistance movement” (Petras and Veltmeyer 32). Professors Petras’ and Veltmeyer’s analysis is based on US foreign policy in Latin America, a region which the US has viewed as part of its dominion due to the Monroe doctrine – this belief was a particularly salient part of US foreign policy during the cold war (Wilson 329-332). The US’ foreign policy in Latin America aimed to maintain a network of dominion, colony-like states for resource extraction and to solidify US neo-imperialism.

Resource extraction occurs because neoliberal ideology both requires and facilitates US political, military, and economic intervention to further its own imperial interests. Author David Slater develops this argument in his book, Geopolitics and the Post-Colonial, roughly summarized by Dennis Chapman of the University of Hull. Chapman writes, “Slater…argues that [globalization is merely US imperialism masked as neoliberalism] …the United States (with the aid of such neoliberal organizations as the International Monetary Fund, the World Bank. and the World Trade Organization) has sought to liberate the Third World from its indigence for the purpose of establishing a Southern hemisphere of “quasi-sovereignties” (see Jackson 1996:60) that can be easily manipulated politically… the neoliberal project in Latin America helps sustain the wealth of the United States by importing raw materials from the South and exporting processed goods from the North…Neoliberals take for granted the inherent goodness of the free market, yet, the neoliberal promise of wealth for all has largely failed … imperialism a la Ronald Reagan (that is, “neoimperialism”) is tolerated because any activity that supports the free market is assumed to be legitimate…” (Chapman 1). The neoliberal aims that Slater – and by extension Chapman – refer to comprise core principles of neoliberal ideology; oligarchic and hierarchal dominion facilitating capitalist management of resources. This is demonstrated particularly well by examples like Chile, Guatemala, and Nicaragua. In these cases, the US supported coups, and a right-wing paramilitary group, in attempts to stave off leftist groups such as the democratically elected Allende government. These three movements came to a head with the 1973 Chilean coup where dictator Augusto Pinochet seized power, the 1954 Guatemalan coup, where a dictatorship took power to stop collectivization attempts and facilitate United Fruit Company’s resource extraction, and with the illicit funding of the Contra groups in Nicaragua, respectively. In each of these cases, the US aimed to establish politically subservient and capitalist nations in Latin America (Kornbluh, 157). However, as the report notes, this is acceptable in liberal hegemony due to the utilization of indirect hegemony as opposed to previous direct control. This liberalization makes economic imperialism far more dangerous and subversive, as indirect measures are far more difficult to detect and counter.

Petras and Veltmeyer draw another conclusion; “It is unlikely that Latin American countries that are pursuing an extractivist[sic] strategy of national development based on the extraction of natural resources and the export of primary commodities will be able to sustain the rapid growth in the context of contradictions that are endemic to capitalism” (Petras-Veltmeyer 33). These strategies are a direct consequence of the economic model which Chapman summarizes, which is termed by Wallerstein and Slater as “dependency theory”, wherein the south exports raw goods and the north exports manufactured goods. Periphery countries, industrializing in patterns dictated by the hegemonic industrialized countries, were forced into colonial-style resource creation. The unstable growth patterns that they have today, are a direct consequence of the neoliberal hegemony that was forced upon them. This effort to maintain a neoliberal group of periphery states continues to this day, necessitated by global capitalism. Joy Asongazoh Alemazung, PhD, concludes from a case study of numerous African countries, “This foreign aid was and is still seen intended to promote or support economic social and political development on the continent…foreign aid has fostered autocracy (Easterly 2006) supported tyrants and encourage poverty… ethnic division also “emerged” or became “evident” from inherited colonial arbitrary borders and was not addressed constitutionally and institutionally during statebuilding” (Alemazung 79). As opposed to direct imperialism, Alemazung finds that modern efforts are mainly directed through neo-liberal means, such as the World Bank and IMF. Policies such as loans and structural adjustment programs merely serve to maintain periphery dependence on core capital. In addition, the issues that Africa faces today – political instability and civil war, famine and lack of rounded resource production, and ethnic tensions – are based in colonialism, modern capitalist frameworks, and will continue unless a system is created to end neo-colonialism and allow economic balancing.

Contrary to popular belief, western foreign policy in periphery countries in the post-war era was not motivated by any credible Soviet hegemony. As Edme Dominguez of the University of Gothenburg writes, “…Soviet foreign policy was relatively haphazard…a sort of “geographic fatalism” led the USSR to believe that American hegemony made it impossible for any revolution to succeed in Latin America…efforts to develop political and trade relations with larger countries such as Argentina and Brazil generally failed …Ideological solidarity with Allende’s Chile was very limited and, in the case of the Sandinista revolution in Nicaragua, such solidarity disappeared after negotiations with the United States” (Dominguez 2). Dominiguez goes on to explain two continuities; firstly, limited Soviet support of the more conservative Communist Parties directly clashed with and limited soviet support for more revolutionary groups which were responsible for any leftist movements in the USSR; second, the Soviets had limited interest in the first place, with Kruschev’s ignoring of Latin America in his “zone of peace” proposal being paradigmatic of such pessimism. Crucially, Castro’s successes were not initially anticipated by the Soviets, who failed to react to US involvement with a similar degree of alacrity. Soviet foreign involvement was simply never as large-scale or pervasive as that of the US.

Nor was western involvement a factor of human rights. Take the following case studies; first, the US had no qualms backing and advising Augusto Pinochet, a military dictator responsible for political repression through violence and tens of thousands killed for the purpose of maintaining his right-wing rule, among other military dictatorships such as the one in Guatemala, the Iranian Shah, or Suharto’s regime in Indonesia (responsible for the genocide of East Timorese people). Nor does the US see issue with supporting regimes such as Egypt and Saudi Arabia. Egyptian President Abdul Fattah el-Sisi has presided over mass imprisonment of political opponents and political instability and violence, facilitated by US Aid which The Nation journalist Rula Jebreal describes as “the necessary diplomatic and material support [to ensure] Cairo’s regression to the capital of Arab repression” (Jebreal 3). Saudi Arabia continues to perpetrate a bloody war in Yemen, again facilitated by US Aid, which has led to what the UN has termed as the “worst humanitarian crisis” in the world. The only model in which this support can be rationalized is one where the US pursues a model of hegemony and neo-colonial dominion necessitated by capitalism.

Impacts from neo-imperialism are immense. Firstly, the direct intervention necessitated by neoliberal ideology has, and is already causing death and impoverishment in periphery countries. In Chile, the US-backed military dictator Augusto Pinochet presided over an authoritarian government which suppressed political opposition through violence and was prepared to – and did – order mass killing to maintain a capitalist economy. While Chile experienced economic growth, advice of the Friedman-associated “Chicago Boys” meant that most of the capital was directed into the hands of corporations. In Guatemala, another US-backed military coup ended hopes of democratic governance in Guatemala and led to thirty years of civil war and instability, wherein US-backed forces committed atrocities against the civilian population. Second, refer to Petras-Veltmeyer’s thesis that resource-extraction and export states will be unable to maintain growth. Lack of growth will cause breakdowns in political order in the periphery states, as both De Angelis and Li stated in their papers on climate change and capitalism. Capitalism, being directly responsible for the perpetuation of this model, must be eliminated and replaced with a system which allows periphery states to grow in a sustainable fashion.

The third impact of capitalism is an undermining of democratic participation and preclusion of a free press. First, capitalist organization structurally facilitates media self-censorship. Economist Edward Herman writes with Professor Noam Chomsky, “the media… serve to mobilize support for the special interests that dominate the state and private activity…their choices, emphases, and omissions can often be understood best, and sometimes with striking clarity and insight, by analyzing them in such terms…Most biased choices in the media arise from the preselection of right-thinking people, internalized preconceptions, and the adaptation of personnel to the constraints of ownership, organization, market, and political power. Censorship is largely self-censorship, by reporters and commentators who adjust to the realities of source and media organizational requirements, and by people at higher levels within media organizations who are chosen to implement, and have usually internalized, the constraints imposed by proprietary and other market and governmental centers of power” (Herman and Chomsky 8-10). Herman and Chomsky apply this analysis to explain patterns in US reporting of the wars in Laos and Cambodia, as well as linguistical analysis of US reporting of third world developments such as elections and foreign policy. Their analysis demonstrates that a structural necessity arises out of capitalism to support those who are in control. This is a direct consequence of capitalist accumulation first predicted by Marxian class theory and dialectical materialism, and, as it is a structural issue, cannot be solved by a change of intent or any viewpoint which ultimately cannot confront the structural realities of media reporting, including any individualistic liberal analysis.

Second, class hierarchies inherent to capitalism damage democratic principles. Political Science Professor Thomas Ferguson develops this theory in The Investment Theory of Party Competition. In essence, parties in power require money to function and run, and thus must appeal to wealthy donors in order to function. The Investment Theory accepts that voters can, on some occasions become investors, however Ferguson demonstrates the low probability of such an occurrence. The voting populace must not only be interested and invigorated but must make a decision which supports their interests based on available information, which is made more difficult by lack of individual wealth (Ferguson 29-30). Ferguson also concludes that due to the prevalence of “soft money” and non-direct-monetary influence, campaign finance regulations are ineffective and would simply make labor organization more difficult. Once again, the wealth of the upper class means that Ferguson concludes that they “would be little affected in the long run” (Ferguson 351). Regulation simply harms the ability of the lower organization to organize and counter influence. Empirics support this. Professors Martin Gilens and Benjamin Page find, “the preferences of economic elites have far more independent impact upon policy change than the preferences of average citizens do…our findings speak most directly to the “first face” of power: the ability of actors to shape policy outcomes on contested issues. But they also reflect—to some degree, at least—the “second face” of power: the ability to shape the agenda of issues that policy makers consider … the majority does not rule—at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it” (Gilens and Page 576-577). The case study of the US is paradigmatic of the impacts of hierarchization and class divide, which is as demonstrated by Ferguson’s analysis is structural to capitalism. As with many other issues, attempts to give a human face to capitalist organization simply fail to confront the deeply structural issues present. Regulation would only harm the working class, and as such, revolutionary change is required to create a society where the working class is informed and represented.

The final impact of capitalism is economic instability leading to crisis, which gives rise to fascism unless a socialist alternative is adopted. First, capitalism results in monopolization which damages markets and leads to centralization. Nikolai Bukharin, based on early 20th century statistics on monopolization, writes in Imperialism and World Economy, “industry is being moulded to an ever growing degree into one organised system. The most modern types of capitalist monopoly in their most centralised form… enjoy a more or less monopolistic ownership of the capitalist property” (Bukharin 34). This is due to numerous factors in the capitalist mode of production. Marx notes in his Economic and Philosophical Manuscript that economies of scale result in centralization, as a factor of the amount of initial costs which bar entry into the market for newer economies, referred to as “economies of scale”. Economies of scale not only make it harder for entries into market, they also make the costs of market operation higher and limit options as a factor of the size of the business. Economics doctorate Keith Cowling writes, “there has undoubtedly been a very substantial general increase in market concentration, and such an increase will tend to imply an increase in the share of profits, and therefore a reduction in the share of wages…This will come about directly, but also indirectly via the impact of concentration on the degree of collusion…Much investment will be directed towards acquiring and maintaining dominant positions [which] would lead to a reduction in the level of profits in the total system, which would lead to further cutbacks in investment, and so on” (Cowling 148-149). Thus, analysis of empirical realities demonstrates that monopolization occurs. Of note is the chain of impacts that Cowling traces; reduction in wages, maintenance of monopoly, and thus a reduction of total profit. Referring back to De Angelis and Li, this reduction of profits will inevitably lead to an economic crisis, once again being exacerbated by the aforementioned increase in concentration of organic capital. In addition, monopolies preclude the existence of a competitive market, a thesis particularly prominent in market-socialist circles, and thus without competition, monopolization continues. The end result is a runaway monopolization effect, which has the effect of disparity of wealth and income.

Second, the increasing concentration of organic capital seen in capitalism leads to an intensification of class conflict and economic crisis through the Tendency of the Rate of Profit to Fall. The Marxist theory of crisis notes several contradictions in capitalist economy. First, that as the means of production are developed, an increase in the amount of constant capital – investment into the means of production – is required as a ratio to the amount of variable capital – labor costs. Value being derived from labor, as labor decreases, so does value, and thus both value and surplus value decreases. Once again, empirics prove that this is true. Economic Professors Richard Wolff and Stephen Resnick write, “The failure of U.S. capitalism in 2008–9 has deep class roots in the previous 120 years… The other side of the workers’ rising real wages was deepening exploitation. The ever louder nationalist celebration of a merely formal democracy …served ideologically to obscure—an ever widening real divide between a growing mass of exploited workers and an ever more concentrated elite of multinational corporate capitalists” (Resnick and Wolff 6-17). Wolff and Resnick trace a causal link between centralization and accumulation of capital and the Great Depression and 2008 Recession. This observation fully supports the Marxist theory of crisis, which is that capitalism leads to accumulation, decrease in value, intensification of class conflict, and ultimately to economic crisis. The observation also demonstrates currently increasing inequality as an inherent result of capitalism, thus fully supporting the thesis that concentration and increasing ratio of organic capital lead to crisis and are inherent to capitalism.

The aforementioned economic crises have real consequences, as they give an opportunity for the rise of fascism and direct centralization of capital into the state apparatus. Fascism is a direct control of the state by the bourgeoisie, direct centralization of control into the upper class, and destruction of the proletarian organizations such as labor unions. Leon Trotsky’s contemporary analysis of the Italian example demonstrated that fascism arose merely as a result of state-capitalist response to politico-economic crisis. Trotsky writes, “At the moment that the “normal” police and military resources of the bourgeois dictatorship, together with their parliamentary screens, no longer suffice to hold society in a state of equilibrium – the turn of the fascist regime arrives…capitalism sets in motion the masses of the crazed petty bourgeoisie and the bands of declassed and demoralized lumpenproletariat [sic]– all the countless human beings whom finance capital itself has brought to desperation and frenzy… the workers’ organizations are annihilated; that the proletariat is reduced to an amorphous state; and that a system of administration is created which penetrates deeply into the masses and which serves to frustrate the independent crystallization of the proletariat…” (Trotsky 12). Trotsky supported this statement with analysis of the Italian example; when post-war production shocks affected the semi-industrialized nation and exacerbated post-war stresses, a clear path was set for fascism. With the crown complacent and unable to deal with the economic crisis due to the crisis resulting in political instability and lack of capital, populist anger and lack of a strong leftist alternative led to the population by-and-large supporting the fascist movement.

Modern analysis also supports this; in a case study of the US, Professors William Robinson and Mario Barrera write, “We should recall that fascism is a particular response to capitalist crisis that seeks to contain any challenge to crisis that may come from subordinate groups. In this regard, central to the story of global capitalism and global crisis, as well as to the spectre of neo-fascism, is a mass of humanity involving hundreds of millions, if not billions, of people who have been expropriated from the means of survival, yet also expelled from capitalist production as global supernumeraries or surplus labour, relegated to scraping by in a ‘planet of slums’ and subject to all-pervasive and ever more sophisticated and repressive social control systems…the state’s ability to function as a ‘factor of cohesion’ within the social order breaks down to the extent that capital has globalised and the logic of accumulation or commodification penetrated every aspect of social life – the ‘life world’ itself – so that ‘cohesion’ requires more and more social control in the face of the collapse of the social fabric” (Robinson and Barrera, 19). Within frameworks of global capitalism not only is fascism a matter of inevitable economic collapses in core states, but also a function of – as Li’s analysis once again supports – a core-periphery paradigm necessitated by capitalism. Even in a supposedly modern, industrialized capitalism, fascism still presents itself whenever there is crisis, reflective of fascism being the bourgeoise’s response to a crisis in capitalism. However, the Marxist critique demonstrates that crisis, as a function of class conflict, is inevitable; modern day market shocks and political radicalization demonstrate that it is impending. Thus, capitalist crisis and organization inevitably lead to fascism, and unity of the bourgeoisie and state. Fascism, as an ideology involving state control and increasing social control, leads to authoritarian dominion over the general populace and the elimination of all their rights. Furthermore, totalitarian governments are far more likely to commit democide, and thus the internal contradictions of capitalism which give rise to fascism are the root causes of greatly increased chances of genocide, extrajudicial killing, and executions (Rummel 20-23). To not fight for and strengthen a communist alternative is to risk irreversible violence on a massive scale, perpetrated through war, genocide, and totalitarian suppression.

Even given the overwhelmingly pressing nature of the transition to communism, opposition still exists. Many today claim that global capitalism is simply too varied, too facilitating of social mobility, and to dissimilar from early industrial capitalism to be addressed by a Marxist critique. However, the Marxist critique is a broad-ranging critique of the very frameworks of economic organization in the means of production. Professor Terry Eagleton writes, “manufacturing was outsourced to cheap wage locations in the ‘‘underdeveloped’’ world, leading some parochially minded Westerners to conclude that heavy industry had disappeared from the planet altogether. Massive international migrations of labour followed…and with them a resurgence of racism and fascism as impoverished immigrants poured into the more advanced economies. The income of a single Mexican billionaire today is equivalent to the earnings of the poorest seventeen million of his compatriots…the cost— not least in the near-destitution of billions—has been astronomical. According to the World Bank, 2.74 billion people in 2001 lived on less than two dollars a day. We face a probable future of nuclear-armed states warring over a scarcity of resources; and that scarcity is largely the consequence of capitalism itself” (Eagleton 6-8). The illusion of class blurring goes away once a more complete picture is received. While free-market dogma might have created deals like NAFTA, which have led to a desecration of the manufacturing industry, industrial production has simply moved to the periphery countries. There, the early-industrial vices of child labor, poor working conditions, and long hours continue. Furthermore, as Marx’s critique of capitalism is based on an analysis of class, so long as the means of production are alienated from the proletariat, Marxist critique remains valid. As Eagleton shows, inequality of capital and ownership continues to follow. His satirical conclusion is apt; “to claim that Marxism was finished was rather like claiming that firefighting was out of date because arsonists were growing more crafty and resourceful than ever” (Eagleton 8). Capitalism is as entrenched and exploitive as ever, and it is imperative to adopt a leftist alternative.

However, the most prevalent argument posits that given historical examples, attempts at socialism will lead to authoritarian governments. However, this view is based on a complete misconception on Marx’s conception of revolution. Herbert Marcuse, a prominent member of the Frankfurt School, wrote, “According to Marx, the new stage of the historical process is the “determinate negation” of the preceding stage—that is, the new stage is determined by the social structure which prevailed at the preceding stage. For example, the transition from capitalism to socialism is preconditioned by the following features of capitalist society: In their historical continuity, capitalism and socialism are joined by far stronger links than those necessitated by a period of adjustment” (Marcuse 13). The conditions for creation of a transition state simply did not exist in the USSR or China, both of which were unindustrialized, semi-feudal, and relatively primitive. Marx recognized capitalist industrialization was a prerequisite to a transition state; indeed, no communist thinker believed that a transition state could be created out of impoverished conditions and in an isolated state until Stalin; Marxist theory is not merely an absolute call for socialization, but a complex economic critique and theory of history. Exacerbating this issue was the USSR’s economically and politically isolation. Without the global resources to abolish scarcity, a country attempting a transition period will inevitably twist itself into an authoritarian, poverty-stricken state. Again, this was an issue predicted by Marx; Stalin’s novel concept of “socialism in one country” was merely a cynical response to the failure of the USSR to start revolutions in Europe. These issues were further worsened – in the USSR especially – by World War II; the industrial destruction wreaked on the populated regions of the central European plain and human cost both in soldiers and civilians were largely unheard of for any combatant of World War II, with estimates ranging from twenty to thirty-million dead, or one in six killed. This undoubtedly decreased population growth and economic potential to an exponentially increasing degree. Marxist theory avoids obscurantism but possesses a degree of nuance not seen in capitalist theory; it contains not only economic critique, but also a complex theory of history and revolution with preconditions as a recognition of the material continuities of material development and revolution. China and the USSR are patently unrepresentative of Marxist theories of revolution, and therefore do not constitute a relevant attack on a socialist alternative.

In addition, capitalism’s natural and historical development left behind a legacy of death and destruction. Professor Terry Eagleton writes, “Modern capitalist nations are the fruit of a history of slavery, genocide, violence and exploitation every bit as abhorrent as Mao’s China or Stalin’s Soviet Union…tens of millions…died as a result of entirely preventable famine, drought and disease in the late nineteenth century. Many of these catastrophes were the result of free market dogma, as (for example) soaring grain prices thrust food beyond the reach of the common people…This is not only a matter of genocide, famine, imperialism and the slave trade. The system has also proved incapable of breeding affluence without creating huge swathes of deprivation alongside it” (Eagleton 12-22). Early industrial capitalism was pockmarked with child labor and horrid working conditions, and it was only through centuries of liberalization that neoliberal global capitalism arose, and social and ecological destruction still continue under liberal ideological hegemony. Wanton suffering is not unique to attempts at forced collectivization, but a tragic inevitability in history. Throughout history, untold millions have been left by the metaphorical roadside, as the ruthless profit-motive in capitalism continues exploitation and the figurative train of historical development marches on. Historical development through all phase of organization of the means of production – the phases of prehistory – has left a legacy of suffering for billions. The only true revolutionary step would be to end hierarchy and dominion and establish frameworks of democratic ownership and egalitarian society.

Unfortunately, however, Marx wrote comparatively little on how such a revolution would take place, or what specific caveats a post-capitalist society might have. Notably, Marx remains silent on any specific caveats that a communist society might have, beyond a central transition state which dissolves into self-governing communes. However, we can draw several broad theorems based on Marx’s writings on revolution as well as the historical contexts in which Marx wrote developed his critique. The most complete example that Marx noted was the Paris Commune, where during political crisis following the Prussian invasion, Parisians rose up in anger and created a new, democratic government with recallable councilors (Marx 11-16). Thus, a revolution would have to be led by mass movement following exacerbated class conflicts.

In terms of historical context, Marxist theory reflected a distinct break from earlier utopian thought, in which it was envisioned that the power of argument alone could compel societal change. Instead, Marx’s theory of revolution was realistic even in its optimism; change had to start with tools of revolution provided in the contemporary society, and change would be developed from the contemporary circumstances. As opposed to envisioning change deriving from an educated, noble, and nonviolent governing elite class, Marxist theory clashed with utopian tradition and emphasized the proletariat’s role in self-emancipation. For Marx, all historical theory had to begin with the present – as opposed to utopian theory’s idealistic sketches of the future – and with humans as agents (Eagleton, 68-73). If a revolution is to happen, it must begin in current circumstances, and with change originating in organizations such as labor unions, political parties, protest, and so on, even if the final means are ultimately revolutionary. To abandon a realistic outlook is to doom the leftist movement to the furthest fringes of utopian thought, and ultimately, to failure. A communist movement must begin as a grassroots movement towards the empowering of labor unions, workers, and the creation of a leftist presence in parliamentary systems, with an emphasis upon the split between bourgeoisie liberalism, and revolutionary leftism. The opportunity for change lies with the industrialized proletariat of the first world, who have the opportunity to seize control of the tremendous political power and capital of the core states to create a better society. The workers certainly have a world to gain from revolution.

Capitalism is the root cause of several of the largest impacts which society must deal with today. Climate change cannot be addressed without destroying the profit motive economy; capitalism necessitates division of the world and exploitation of periphery countries; capitalism causes parties to be beholden to the wealthy, and capitalism will lead to economic crisis and authoritarianism. Marxist critique focuses on the contradictions of systems; in capitalism, while tremendous wealth is generated, the profit motive means that that capital stays in the hands of the bourgeoisie class. In 2008, a growing capital bubble came to a head, as economic crisis shook the global financial economy, which could only be bailed out by instituting welfare for the wealthiest. These crises in the politico-economic system are both inherent to capitalism and give legitimacy to a fascist narrative which claims that liberalism has failed. However, Trotsky’s analysis and the Italian example demonstrate that times of crisis provide opportunities for not just fascism, but a communist counter-alternative. A strong leftist alternative is not only suitable to countering fascist narratives, but itself provides the pathway towards a sustainable, democratic society. Without the profit motive, ecological destruction would cease, and attempts to address climate change would be freed of the economic constraints and political opposition they now face. Without the economic exploitation inherent to capitalism, the cycle of dependency and neo-colonialism would be ended, and the economic control of the periphery states eliminated. Democratic systems free of power inequalities inherent in a class society would flourish and create a more representative public sphere, and economic instability inherent to capitalism would be ended. Crisis is impending on the contemporary political structure – millions suffer in wretched conditions as of now, and in future, the entire global population is endangered by an impending climate crisis. The communist movement must begin with an increase in leftist parliamentary power, but political means inevitably become more extreme, including worker revolts and likely direct counter-action, once parliamentary means have been exhausted. Capitalism’s catastrophic impacts cannot be ignored any longer; the way to address them and create a better society is through worker takeover of the entire socio-political order. Workers of the world, unite!

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