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(en) Ireland, Anarchist journal Workers Solidarity #105 - The system works...for the rich by Joe King

Date Tue, 30 Sep 2008 10:23:30 +0300

Unemployment has risen by a third in the last year and everyone agrees that
worse times are ahead. Worries about losing jobs and not being able to pay the
mortgage are growing. Whose fault is it? Is it the politicians administering the
economy, or is it the capitalist economy itself? ---- Recession means less is
being produced and that means more unemployment. As a result, our bargaining
position as workers is weakened and wages decline. An early sign of this is the
aggressive stance taken by the employers in the current ‘partnership’ pay talks.
Under capitalism, decisions about what to produce are made by hundreds of
competing firms. The competitive drive to grow bigger and get more market share
forces them to expand as if the market they are producing for has no limits.

There is no rational planning. Growth is not linked to people’s needs, but
simply to the expectation of profit. We get ‘overproduction’, where there are
more products than buyers. Goods pile up, unable to be sold, and the firms that
have over-produced have to cut back.

Products lie unsold and profits fall, making further investment less worthwhile.
Spending decreases and the downturn spreads throughout the economy. The first
over-producing firms cut back on investment and this leads to less demand for
their suppliers’ products, who in turn are forced to cut back, causing problems
for their suppliers' suppliers and so on.

Recessions always follow this pattern and the result is always the same one of
falling production, increased closures, lower wages and higher unemployment -
with an inevitable growth in poverty.

To get out of a slump unnecessary productive capacity has to be wiped out, less
profitable firms go out of business. Stocks of finished goods have to be bought
up cheaply or written off entirely, as investment will not restart if
overproduction still exists. And there has to be an increase in the rate of
profit, achieved by both wage cuts and falling interest rates.

Each slump helps build the conditions for future growth by ridding capitalism of
less efficient/profitable firms. Growth begins once more with capitalism
creating a boom situation which will be inevitably followed by another
recession. This has been the history of capitalism ever since it first developed.

Governments can make a small difference, they can shift investment around,
increase or reduce taxes, borrow or cutback. But today they have very limited
power because we live in a world economy where all countries import and export
and where most big companies have long outgrown national borders.

Indeed, this cycle shows how pointless are the long term economic plans of Sinn
Fein, Labour and other reformers. Far from being some sort of mistake or
mismanagement, this cycle of insecurity is the natural cycle of capitalism. It
is part and parcel of the system, and one more good reason for getting rid of it.
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