ECONOMIC AWARENESS IS CENTRAL
Having established the proletariat as the class that is destined by the inexorable march of material conditions to abolish capitalism, the question becomes, "What stimulus will activate the overthrow?" Will a decision obtained through mental exercises suddenly cause the proletariat to revolt? No, the latter will not act until material conditions within the capitalist system generate movement. Only when the material status of the masses--the decisive factor--becomes insufferable will the continued existence of private property be put in jeopardy. Only when the system is no longer able to function effectively because it has reached an impasse and, thus, can no longer provide an acceptable standard of living for the masses, will the revolutionary period have arrived.
In order to understand why this period must come, why the proletariat must someday overthrow the property owners and abolish capitalism, one must understand the nature of the capitalist economic system and its inherent contradictions. Within this system lies an irresolvable, ever-pressing contradiction from which escape is impossible and out of which emerges a multitude of potentially fatal dilemmas. To explain this contention the foremost example of capitalism in action, the American economy, 214 will be used as a model.
Before proceeding, however, it should be noted that Marx has already provided an analysis of capitalism in his voluminous work entitled Capital.
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Unfortunately, the work is too long and technical for the average person. 215 After reading all two thousand three hundred pages of Capital, one can readily understand the dilemma of people being introduced to Marxian economic ideas for the first time. The work abounds in complex thinking and unfamiliar terminology. Its applicability to today's situation is rarely apparent. Thus, a clear, concise, non-technical summary of Marxian economics should be available.216 It must assume no knowledge of economic theory on the part of the reader,217 be directly related to the reader's country or condition and, above all else, be accurate.218 The following discussion represents an attempt to fulfill these requirements. Marx gains little by being correct if few people can understand him. Accurate simplification and application to present-day society are sorely needed.
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THE BASIC CONTRADICTION OF CAPITALISM
The essence of capitalism can be shown through presenting a simple but typical employer-employee encounter. Afterwards the monumental contradiction that arises from this arrangement, as well as all others in which one individual is allowed to hire another, will be depicted. Let us assume that a man, C (a capitalist), obtained several chairs by the following process. While possessing some wood, tools (private property) and $25, he informed another person, W (a worker), that if W would use the wood and tools to produce some chairs, he would be paid the $25. Actually W had little choice in the matter. If he had gone to another property owner, the proposition would have been approximately the same. W could not have built the chairs or any other items himself because he did not own any wood, tools, or other objects used for construction and manufacturing. He was propertyless and possessed only one thing--his ability to work.219
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Very few people in W's position have been able to obtain their own wood, tools, etc. because the latter have nearly always been owned by a few property owners--the big bourgeoisie and the petty bourgeoisie. How the latter obtained the property originally is not important although the owner's labor, economic competition and/or force220 were usually the primary ingredients. W could not have refused entirely because he would have starved.221
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So he agreed. The chairs, which are owned by C because his wood and tools were used,222 possess $100 in value. Why $100? Because the value of the wood and the value that left the tools and entered the chairs (totalling $50 for the purposes of this example) plus the value put into them by W total $100. Other factors which also added value, such as planning, transportation and overhead costs (lighting, heating, etc.), could be considered but they would contribute very little and needlessly complicate the problem. One hundred dollars is the value of the chairs although any amount totalling more than what the capitalist gave the worker ($25 in our example) plus what he lost in wood and tool depreciation ($50 in our example) could be assigned. Whether the amount is $100, $180, $500, or $10,000 is not important as long as it exceeds $75. The important consideration is the problem associated with the above situation. If the value of the wood and tools consumed was $50 and another $25 was paid to W for this labor-power ($75 total), what is the source of the remaining $25 in value? Remember, the chairs are worth $100. Fifty dollars represents the value taken from the wood and tools and $25 equals the value W supposedly put into the chairs.
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From what source, then, did the remaining $25 in value emerge? It could not have come from the wood and tools since they could not have yielded more than that which they had originally. One can not obtain more than $50 from $50 worth of wood and tool depreciation.223 The property owner, C, could not have contributed $25 worth of value since he did no work whatever. So, the only other source from which the remaining $25 could have emanated is W. Close analysis will show that the worker, W, did not create just $25 in value for which he was paid; he actually created $50 in value for which he only received $25. He was deprived of the remaining $25 in value. If the chairs were later sold for $100, the capitalist would receive $25 in unearned income (surplus value or profit224 ).
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This encounter between C and W is representative of the entire capitalist system and illustrative of the fact that somebody must be robbed under capitalism; capitalism without exploitation if impossible.225 They are as inseparable as matter and motion. 226 If C had paid $50 to W which the latter should have received, since he created $50 in value, C could not realize a profit. He would have spent $50 on wood and tool depreciation and another $50 paying W's wages. His total expenses would have been $100. If the chairs were later sold for $100, he would return to his point of departure. One hundred dollars would have been spent on equipment and labor and $100 would have been regained by selling the chairs. C would have gotten nowhere and made no profit. His only accomplishment would have been to have initiated the creation of some chairs and, thus, improved, to a minor extent, the well-being of the citizenry. But C is not concerned with peoples' welfare; only obtaining money interests him.227 Parenthetically speaking, it should be noted that the latter mode of operation is the essence of socialism which Marx advocated. Seeking to eliminate surplus value, Marx felt that a worker should receive value commensurate with his labor ($50) and commodities (the chairs) should be sold for their value ($100). Of course, under this arrangement the capitalists, profits, legalized theft and all desire to possess private property would be eliminated.
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Now that the essential character of world capitalism has been presented, we can begin to analyze the monumental contradiction that arises from the above situation. Although chairs were used as an example, any item produced by industry could just as easily have been selected. The industry or corporation involved is of no consequence. What is important is the fact that as a result of cheating the worker, the capitalist (C) is faced with the dilemma of selling $100 worth of chairs to a worker who received only $25 for their creation.228 Stated in broader terms and assuming C and all others in his position do sell their commodities, the problem is, "If all capitalists are taking more out of the economy ($100) than they are inserting ($25), 229 what is the source of the extra funds?" If the costs of all American companies over one year totalled $500,000,000,000 and their sales totalled $900,000,000,000 (these figures are not meant to be accurate and are only used for purposes of illustration), their combined total profit was $400,000,000,000. They put $500,000,000,000 into the economy in expenses and took $900,000,000,000 out of the economy. But from whence came the $400,000,000,000 difference? How could each and every capitalist have taken more money out of circulation ($100) than he inserted ($25)? 230
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Before the ramifications of this contradiction can be understood, the source of VALUE must be evident. Marx called the wood, equipment, and tools, used in constructing items (the chairs) the means of production. Some means of production has always been used in every situation in which commodities have been produced, even when man used his bare hands. In the latter instance, he created the entire value directly. In fact, close analysis will show that ultimately man produced all value. In the beginning he gathered the wood, picked the apples, planted the crops, caught the fish, and mined the minerals. He built all implements which were employed. Any equipment used to build equipment was created by him, no matter how primitive or advanced the society. Thus, without his labor nothing of economic value has been created. 231
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Unmined coal, for example, has no economic value until labor is applied. How much is a ton of coal worth?--$2, $12, $35. Most individuals would probably seek to pay an amount equal to its value which, in turn, is established by the cost of extracting the commodity from the ground. And what expenses are involved in extracting coal from the ground?--labor and other costs. And since whatever other costs of production (wood, tools, machinery, etc.) that are employed to obtain coal must also receive their value from man's labor, ultimately the only cost is labor and the only value creator is man. The value of all raw materials or productive factors is determined by the amount of labor-time involved in extracting, processing, transporting, and selling them.232
The above discussion is intended to show that while W created $50 worth of value in the chairs, other workers created the additional $50 of value when they cut and shipped the wood and created the tools for making the chairs. In other words, all value in the chairs ($100) is attributable to human effort. In light of this fact and for purposes of simplification, the assumption in the following pages will be that one worker (W) did all the labor. He cut and shipped the wood, made the tools, and used them to create the chairs. It is pointless to consider several workers when the problem can be most easily shown by having one worker do all the labor. 233 Thus, W's real wage is $75 and not $25 and can be changed from the latter to the former. The chairs are still worth $100 because they still possess $100 worth of labor. Their value is $100. The contradiction in regard to the chairs now is: How can C sell the chairs to W for $100 when the latter only received $75 (not $25) for constructing them? W can buy $75 worth of chairs but not the remaining $25 worth.
Have the property owners ever resolved this contradiction to any meaningful degree? Certainly, otherwise capitalism would have vanished long ago. But the number of tricks, gimmicks, and contortions that have been enacted and the number of additional problems that have been created are enormous. In essence, capitalists resemble a man at the bottom of a long, gently sloping, snow-covered, inclined plane who is repeatedly shoving a snowball back up a hill--a snowball that returns each time more ominous than ever. Although they have been able to ward off the intruder by exerting ever greater amounts of energy, someday, in the not-too-distant future, this snowball is going to come down the hill for the last time and crush their efforts like a roller flatening dough.
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ALLEGED SOLUTIONS TO THE BASIC CONTRADICTION
Having discussed the nature of C's (C represents all capitalists) predicament, let us turn to the "solutions" that are often employed. Through using the earlier example to present the mechanisms that have been devised to resolve this dilemma, the actual mechanics of the American economy, indeed, all bourgeois economies, should emerge from the capitalist-contrived fog 234 in which they dwell. The first possible remedy C could employ would be to tell W, "Give me your $75 and pay me the other $25 later." This is the essence of buying on credit which is so dominant in the United States today. Under the slogan, "Buy now, pay later," American workers have incurred debts totalling more than $400,000,000,000. If this process occurred week after week, however, W's debts would continue to rise and his weekly payments would take an ever-enlarging part of his $75 weekly paycheck. In effect, W would be forced to take more and more money out of his weekly income just to make payments on what he had already bought. Eventually he would be forced to cut back on buying in order to have sufficient funds to meet his periodic obligations.
C could respond by adopting either one or both of the following alternatives. He could lower the amount of W's weekly payments or grant a wage increase. If W's payments were lowered he would have more money to spend on the additional chairs and be able to buy more items. Although the payments would be smaller and extended over a longer period of time, they would arrive continually. (Many people never fully pay for their cars, home, furniture, and appliances.) But if the payments were steadily reduced they would eventually reach a level at which they equalled the item's depreciation in value. When use of the chairs caused their value to decrease faster than payments were being submitted, C would be in trouble. If, for example, W were making $5 weekly payments on $100 worth of chairs that were decreasing in value at the rate of $10 a week, the chairs would have no value in 10 weeks and, yet, W would have made only $50 in payments. If they were repossessed by C, he would have lost $50 because they would have no value and could not be resold. Payments, then, can only be lowered to a certain level. If, on the other hand, C granted W a wage increase, profits would be lowered unless prices were increased. If, for example, C raised W's wages from $75 to $85 for producing $100 worth of chairs, C's profits would decrease by $10 unless the total price of the chairs were raised from $100 to $110. Thus, raising wages while not simultaneously raising prices is not a viable approach, either, because profits are reduced.235
The above discussion shows that the interests of C and W are diametrically opposed. What aids one injures the other,236 which is the essence of the class struggle.237
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The interests and desires of C and W can never coalesce or coincide. 238 Approaching the problem from nothing more than a straight dollars and cents perspective, their desires can never be resolved in a private property, profit-making economy. For this reason, any belief in class harmony or the workers becoming some sort of middle class capitalists through buying 100 or 200 shares of stock is senseless. Earlier, the word "few" was stressed in regard to the number of private property owners. This is more true today than ever before.
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More than 26,000,000 people may own stock but a fraction of this number own more shares than all other investors combined.239 Those at the top of the economic pyramid know that "people's capitalism" was, is now, and always will be a myth. The workers can never have a stake in perpetuating the capitalist system and any who may believe otherwise are only being deceived. An extremely small percentage of American capitalists, less than 1%, own the United States. Discovering their identities, however, is very difficult if not impossible. Exposing the true extent to which they are dominant would require an analysis of such hidden sources as: income tax returns, balance sheets, company records, portfolios, insurance, banking, and brokerage accounts and many confidential folders. The degree to which such a perusal would be allowed would be wholly inadequate to enable one to see how wealth (private property) has been pyramided to fantastic proportions by a small coterie of financial czars in the United States.240 Gathering in colossal sums of money through owning private property is not confined to the United States. By no means! The problem exists in India, Turkey, France, Britain, Spain, New Zealand, Australia, Brazil, and all other non-socialist states. But in the United States it has attained its most staggering dimensions.
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Never in the history of mankind has so much wealth been concentrated in so few hands at the expense of so many.241 Never has the gap between the rich and poor been greater than that which currently exists in the United States.
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The average American may appear to be reasonably wealthy but if one were to compare his "affluence" with that of those dominating the financial structure of this country, the distance between them would step from behind the mountains and reveal all of its awesome magnitude. Financial chasms are unavoidable under capitalism, because those who have private property use their profits to reinvest and receive more. The greater their profits the more they reinvest, thus, giving them greater profits than ever. Their wealth increases geometrically; it snowballs. It only stands to reason that the more money an individual has the more he can receive. 242 A great deal of truth can be found in a song written many years ago in which part of the lyrics say, "For there is nothing surer than the rich get richer and the poor get poorer,"243 but in the meantime 4/5's of humanity has certainly not got fun.
But let us return to C's dilemma and a fourth solution. In effect, selling on credit, reducing payments, and raising wages have been eliminated as permanent answers.
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Another approach would be to sell the product in a foreign country 244 such as Germany. W could be paid $75 to build four $25 chairs worth $100. Three of the chairs could then be sold to W and the other sold in another country. This would be, at best, a temporary remedy because not only would German capitalists be attempting to sell their products (chairs, volkswagens, for example) in the United States, because they would have the same problem as C, but also because many foreign countries would tax (levy tariffs) the goods as they entered from the United States. Obviously, if the tariff of a foreign country were too high ($25 per chair), C would realize no profit by selling a $25 chair in that region. The profit would be immediately neutralized by the tariff payment. This would hardly be a rewarding adventure. The Kennedy Round of tariff negotiations in Switzerland in the early 1960's represented an attempt to alleviate difficulties of this nature. "Alleviate" is the correct word because the contradictions between the capitalists of various countries can never be resolved. 245
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If C could force a foreign country to completely remove its tariffs while simultaneously preventing foreign capitalists from selling in C's country (the United States), his dilemma would be greatly mitigated. But this is not easy to accomplish.
When capitalists seek to save themselves by selling their commodities in foreign countries and by lowering foreign tariffs, they produce an unstable situation. When Germany's capitalists attempt to solve their problem by selling in the United States what they can not sell in Germany because they did not pay their workers enough and American capitalists try to sell their excess in Germany, a condition is created in which something must eventually yield. If W spent his $75 on a German product, C would have to find another person with $100 who wanted to buy chairs. If W bought only German products, C would be confronted with a terrific problem. On the other hand, if a German worker who received $25 for producing a $50 item bought C's remaining chair with his $25, C's problem would be over. He would have sold all four chairs for $100 and received a $25 profit. W would have bought 3 chairs for $75 and the German worker would have bought the remaining chair for $25. But what about the German capitalist who paid the $25 wage to his worker? He would be faced with the problem of selling a $50 item (or items) to his worker who would have no money. The latter would have spent his wages on a $25 American chair. C would have shifted the burden onto the German capitalist's shoulders and increased the latter's sales problem from $25 to $50. The German capitalist could have sold $25 worth of his product to his own worker and only faced the problem of selling the remaining $25 worth. Under the new condition $50 worth of items would have to be sold to somebody other than his own laborer. If he managed to sell his $50 worth of products to a third worker, then, the employer of the third worker would have his sales problem increased by $50 and so on. If this contradiction were not remedied after a period of time, conflict would become a distinct possibility. No capitalist is willing to solve the troubles of another by sacrificing himself.
Since selling on credit, decreasing payments, raising wages, and selling in foreign markets are not permanent solutions, maybe lowering wages is a viable option. The problem lying down this path is that if W's wages dropped while his payments increased because he continued to buy chairs, his wages would be so low very quickly that all of his paycheck would be meeting obligations incurred through prior contracts. When C had reduced W's wages to the point where W was spending his entire paycheck on payments that could not be diminished, W would not be able to buy additional chairs. Every dime he earned would be meeting the installments on what he had already bought. If he purchased any more chairs they could not be paid for and C would lose money. Obviously, then, when this cut off point arrived, C would be forced to find another temporary solution or diminish production. Since W could not buy any additional chairs, C would be compelled to cut costs and reduce profit loss. Otherwise, he would continue to pay W to produce chairs which could not be marketed. If C continued to pay for the production of chairs that weren't begin sold, he, in effect, would be discarding money. A comparable situation would exist if X paid Y $500 to construct 500 chairs and finding they would not sell tossed them into the ocean. Destruction of farm produce in the United States reflects this problem. Wage reductions, therefore, are not the final answer either.
Another approach would be to raise the price. The accompanying problem, however, would be the tendency of W to buy less of C's chairs and to seek out another capitalist selling the same product for a lower price. As a result, C's sales would decline. If C raised the price of his chairs too high, he could price himself out of the market, assuming competitiveness prevailed. To cope with this problem, he could consult with all other chair manufacturers, who undoubtedly would be struggling with the same problem, and initiate an agreement whereby they all agreed to sell their chairs at 4/$150. Although activities of this nature were made illegal by anti-trust legislation, major companies have shown that these restrictions can be avoided through hiring expensive accountants and attorneys and dominating political figures through financial influence. Although variances in prices are present, they are not very great.
Unfortunately, two major problems accompany collusion at high prices. Firstly, less well off workers tend to be radicalized. Higher prices diminish the consumption of necessities, create indignation, and stimulate a search for alternatives. The growth of the Populist party (farmers and urban workers) around the end of the nineteenth century and the strong socialist party vote in the election of 1912 were, in large part, the consequence of this tactic. In both cases people were primarily reacting to the high prices of goods and services. Radicalization of large numbers of workers is a threat to the ruling class and to forestall a militant trend around the turn of the century the bourgeoisie passed two half-hearted attempts to prevent price collusion--the Sherman (1890) and Clayton (1914) Anti-trust Acts. Recent marches by American housewives to force down monopoly food prices show that worker resentment against higher prices continues. The problem with collusion, in other words, lies in the workers themselves. The higher the prices, the more politically and economically active they become. Too much working class unity, activism, and alternative-seeking could endanger the very existence of private ownership. As informed, rational men, the capitalists know there is a limit to how tight they can turn the economic screws.
Secondly, the selling of chairs would become more difficult. Eventually W would have all that he wanted at the prevailing price. Once he no longer desired chairs at the existing price, W would buy less, pay off his debts, save some money, and accentuate the sales problem. He'd buy more if his wages were raised or prices lowered, but C is not in favor of either because profits would decrease.
An eighth promising way of solving C's problem--dividing the market--will be mentioned only briefly, since it is basically a variation of collusion at high prices. One capitalist could agree to sell only on the west coast and another (C) on the east coast. C would have a market with no competition and could charge considerably more. The weakness of this approach lies in the fact that nothing prevents C's buyers from going to the west coast to purchase their chairs. If necessary they could go to foreign soil.
One should be able to visualize by now the contradiction in which C is involved and the multitude of tricks and gimmicks that must necessarily be employed for amelioration. Rest assured these are only a few; more are yet to come.
Another temporary solution would be to lower the cost of raw materials (wood, coal, ores, etc.). But if C obtained his wood from another capitalist and somehow managed to force down the price of wood, he, in essence, would be raising his profits by lowering those of his suppliers. Understandably, this approach would not be very effective or popular. C would discover that exploiting and oppressing W is far easier than injuring other capitalists by throwing his problem on their backs. Although this method has been used by various financial czars--Carnegie and Rockefeller, its strength is limited.
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One reoccurring solution used by the capitalists, especially in this century, has been war. When their predicament has reached a crisis, when they have needed not only more buyers (markets) but also much greater quantities of low cost raw materials, when the situation has reached a now or never, do or die, impasse for the capitalists of a particular country, has often been the outcome. World War I, for example, erupted because the world-wide competition for markets, raw materials, and colonies between the capitalists of Germany, Italy, France, England, Russia, the United States, and the Austro-Hungarian Empire had reached an irresolvable cul-de-sac. The war led to a redivision of the Central Powers' possessions246 and a subsequent resumption of competition with a new alignment of forces. The new competitive arrangement, like all those that have emerged from capitalist wars, was destined to be another catalyst for conflict because one group would begin to fall too far behind the others and seek to save itself at the expense of others or those needing certain markets and raw materials would seize the resources of others. All capitalist political alliances are only temporary since the positions of countries on the economic totem pole are temporary.247 Some countries have progressed faster than others, usually at the latter's expense. When economic interests and strengths have altered sufficiently, friends have become foes and foes have become friends.
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Each time this has occurred existing political and military pacts and alliances have been scrapped and new ones instituted. In World War II, for example, the United States fought Germany and assisted France. But the results produced by the war and subsequent economic activity have caused a shift in interests. Now the United States embraces West Germany and has disagreements with France. Realignments of this nature have been unavoidable. All political and military activities between various countries of the capitalist world have been nothing but a reflection of changes in material strengths and interests as every country has jockeyed for position in the economic race. Unavoidably wars have emerged from such predicaments, predicaments which could not have been avoided as long as capitalism existed. 248
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Alliances between capitalist powers have been unenforceable and every country has broken pacts deemed detrimental to its national interests without compunction. The United States, for instance, has illegally blockaded Cuba and sent reconnaissance planes over that beleaguered island contrary to international law and has broken articles 16, 17, 18, and 19 of the Geneva Agreement of 1954 which prohibited the introduction of additional men, supplies, and military bases into Vietnam. Because the end of every capitalist war has been but the prelude to the next,249 C would be very unwise to rely upon war as a permanent solution to his insurmountable difficulty.
Socialists have always recognized the cause of wars 250 and sought their elimination through exposing and eradicating their creator251 --private property, clothed in capitalism.
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They have attempted to abolish these periodical plagues upon the masses and other social ills by instituting a vast redistribution of all wealth 252 or, to be more precise, a redistribution of the geese (land, buildings, equipment, machinery, factories, etc.) rather than the golden eggs (money) laid by the geese. Seizing only the eggs and dividing them equally would not abolish inequality of wealth and the attendant problems (wars, etc.). 253 The operation of the means of production (the geese) while in private hands caused the maldistribution of possessions and a new inequitable allocation of wealth would unavoidably reemerge as long as the productive forces remained under private control.
So far, the following have been eliminated as permanent solutions: selling on credit, lowering W's payments, raising wages, selling in foreign markets, lowering wages, raising prices, agreeing on high prices, dividing the market, lowering the cost of raw materials, and war.
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When analyzing these approaches one should never lose sight of the central question: How can C sell $100 worth of chairs to W when the latter only received $75 for their construction and if C did give $100 to W for each $100 worth of chairs produced, how could he realize a profit. 254 In fact, how could C even exist as a capitalist since his source of wealth would have vanished. In order to survive he would be forced to work for a living, that is, to become another W.
Another gimmick that could be employed is the speed-up. W could be paid $75 but be required to produce 8 chairs worth $200 ($25 a piece) in the amount of time he formerly devoted to 4 chairs. Under this arrangement W would produce twice as much value in a week but receive the same wages. He would work harder and faster but his wages would not be altered. Undoubtedly profits would rise under such a situation; but this method, too, has limitations. There would be a limit to how much faster W would be willing to labor, especially if his wages were not being increased or working hours reduced. Capitalists have tried this approach on numerous occasions as union newspapers have often revealed, but it is usually ineffective and is certainly not a permanent solution to C's problem. 255
Another line of attack would be to convince W to work a longer day (twice as long, for instance).256 Not only would production and profits double but also W's daily wage. However, weakness lies in the fact that W would need adequate time to rest.
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There would be a limit to how long he could work without stopping and recuperating. 257 Moreover, a longer work period without rest would accelerate his deterioration and cause him to grow old before his time. Of course, C wouldn't care as long as younger laborers were available to act as replacements. 258
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But W would care and by uniting with others (unionizing) to oppose injustice, 259 as has been done so often in the past, would greatly restrict this solution to C's dilemma.
C could employ a technique quite prominent in the initial stage of American industrialization when the capitalists increasingly paid for the construction of ever-enlarging factories to obtain constantly expanding productivity. Since profits diminished in proportion to the amount of money put into construction and improvement, many factories were allowed to deteriorate after being constructed. 260
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The workers suffered so that the capitalists could receive ever greater wealth. But because workers have repeatedly united through the years to restrict "deplorable working conditions" as a solution to the capitalist contradiction, C would be unwise to rely on its strength alone.
Editorially speaking, if ever there was a case of "rectification by retribution," this is it. History has said to world capitalism, "Produce, produce, progress, progress, because when you stop advancing, when the palliatives have been exhausted, when sales start their final fall, when unemployment and prices begin their final ascents, I will eventually eliminate you like a whale swallowing plankton."261 When the contradictions become so accentuated that the continued existence of private property is no longer compatible with the welfare of humanity, the workers will rise in revolt and the exploiters will finally receive the long overdue justice which they so rightly deserve. What justice! An evolutionary process of this nature is almost sufficient to cause one to believe in a beneficent, all-powerful being. But all Marxists know that nothing more than the inexorable dialectic winding its way through time is responsible for the arrangement of society. The ever present contradiction (struggle of opposites) in all things must eventually be resolved by the progressive side defeating the regressive.
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That which is new, vibrant, and improved will prevail over the old, the decayed, the dying. The struggle in society between regressive C and progressive W, which is only one of millions that exist in the universe, 262 must ultimately be resolved in the latter's favor.
C could use a method that has received relatively recent application on a tremendous scale--improved technology or automation. Capitalists have been employing this tactic at an increasingly rapid rate and there is no denying its effectiveness.263 C could buy a machine with some of his profits and later recoup his loss by requiring W to produce not 4, but 5, 10, or even 20 chairs while receiving the usual $75, working the same number of hours, and putting forth the same amount of labour.
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By continuing to sell the chairs at $25 each, C would greatly increase his profits. In the first instance W would be paid $75 to produce 4 chairs that would be sold for $100. In the second instance he would be paid $75 to produce 5 chairs that would be sold for $125 and in the fourth example he would be paid $75 to produce 20 chairs that would be sold for $500. In the last instance C would pay the least money to W per chair, his costs would be lower and his profits much higher. The difference between $75 and $100 is certainly not as great as that between $75 and $500. The latter is a much greater gap (profit). Improved machinery could make a great difference. The better, faster, and longer the equipment operated, the more chairs W could produce while receiving the same wage ($75). If each chair continued to be sold for $25, profits would rise dramatically, assuming everything else remained unaltered. The greater the increase in production, assuming the goods were sold, the greater would be the profits. A wage increase would never be necessary because the amount of labour-time involved wouldn't change. There would be as much labor-time in the later 20 chairs as in the original four.
A comparable process would be the following. Suppose X gave Y $20 to manufacture a pair of shoes which were sold for $50. Because his tools and leather (private property) were employed, X received a $30 profit. Suppose, further, that he took $10 of this $30 profit and bought a machine. If, while using this new machine, Y produced 4 pairs of shoes for $20 instead of one pair and the shoes were sold for $50 a pair, X's profits would increase tremendously. Four pairs costing only $30 ($20 for wages and an additional $10 for equipment) would be sold for $200.
There are two major drawbacks, however, to relying on advanced technology for ever greater profits. Firstly, it would only endure as long as the other chair "manufacturers" did not improve their technology also. C would have the upper hand for a while but would eventually lose his lead as others followed suit by stealing the design or by copying his product with slight variations for the sake of potential legal involvements. When other capitalists improved their technology and overtook him, he would return to his point of origin, relatively speaking. Although ahead for awhile, he would eventually be back with the pack. 264 The importance of new designs has led to intense competition over patents and a staggering amount of corporate espionage. Everyone is seeking to keep his advantage or overtake those who have moved ahead. Every capitalist is in the position of either automating or suffering the consequences for having failed to adequately do so. The march of history via the dialectic is telling him, "Automate and innovate or else."
Secondly, improved technology would develop an ever widening gap between the amount of money W would be receiving and the total cost of the chairs. In the first instance there would be a difference (profit) of $25 between W's wage of $75 and the selling price of $100. In the fourth instance there would be a difference of $425 between W's $75 wage and the selling price of $500. Automation would greatly increase profits (in the above instance from $25 to $425) but also heighten the intensity of C's dilemma (capitalism's internal contradiction). It would accelerate production as well as profit growth while enlarging the gap between W's total wages and the total selling price of all the chairs. The latter could not be sold to W as fast as he would be producing them, unless C performed the unlikely act of lowering prices or raising wages.
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Eventually C would discover that increasing numbers of chairs were not selling and surpluses were mounting. If there were only 15 or 20 in inventory, he might be able to use them himself. But if the number were 10,000 or 1,000,000 this would hardly be a reasonable possibility. Giving them away, on the other hand, would be analogous to distributing free money and unquestionably C is not in business to throw away money or chairs. The only sensible alternative would be to restrict production, at least until the growing surplus were sold. But to restrict production would be to reduce W's total wages and, thus, reduce the demand for chairs even further. This would create a need to further reduce production and set in motion a downward spiral. So, in essence, since every producer can copy new methods and overproduction is a constant problem, improved technology is not the answer either.
Due to the historical failure of all the previously-mentioned responses, as well as many others, to stave off the inevitable, an immense downward spiral began in the United States and ultimately spread to the entire capitalist world in the early 1930's. The capitalists needed new and more powerful methods. Being resourceful men and following a great amount of agonizing reappraisal, they decided to employ several potent but dubious approaches which had been used earlier but on a much smaller scale. In his discussion of state-monopoly capitalism Lenin stated that the general plan by which these new techniques are employed--large scale, direct government economic intervention--is the last of the powerful and effective palliatives. 265 When these potent, temporary solutions, especially the printing of additional money and government deficit financing, have gone their limit (been used for all they are worth), upheaval will occur and the last of the exploitive systems will be replaced.
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Before proceeding it should be noted that the only major country not adversely affected by the Great Depression to any significant degree was the Soviet Union,266 because it was the only country outside the capitalist world economy. 267 This is not to praise the USSR as much as the socialist economic system. Of course, in the 1930's the two were virtually inseparable so that to praise one was to laud the other. What was done under socialism to prevent the possibility of a depression? The answer is remarkably simple. Socialist planners did not allow exploitation or profits to arise. Any socialist worker (SW) who produced 4 chairs worth $100 was paid $100, not $75, not $50, not $25. It is true, however, that he was not paid exactly $100 for producing $100 worth of chairs because production would never have expanded, but he did receive the full amount indirectly.
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If the SW had received exactly $100 for producing 4 chairs worth $100 and socialist planners had regained the $100 by selling him the 4 chairs, he would have accumulated 4 chairs and no money and the socialist planners would have regained their original $100. Conditions would have been as before except there would have been 4 chairs in existence whereas formerly there were none. Under such an arrangement productive facilities (factories, tools, equipment, etc.) could never have been expanded. 268 So, even under socialism some of the $100 which would have been paid to the SW was retained (e.g., $25) in order to pay another socialist laborer to expand the factory and increase the number of tools and other items of production. The laborer who received that which would otherwise have gone to the SW (i.e., $25) filled in the gap which was created between the price of the chairs ($100) and the wages paid to the SW (i.e., $75). No difficulty like that which faced the capitalist arose because $100 was paid out in total wages to two different workers (i.e., $75 to one and $25 to another) and $100 worth of chairs were sold. And just as importantly, the factory and other productive materials used to produce the chairs expanded. There was no profit (exploitation) since the planners emerged with no more than that which they distributed ($100). The only goals attained were the production of 4 chairs and some expansion of the productive facilities. Such a system benefited no particular individual or group, only the general welfare. The money taken from the SW was not profit because it was used to improve the welfare of all of society and not a small group. All the workers owned the productive factors so that an improvement to any productive item was an aid to all the workers, including the SW. 269
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Capitalists allege that a society of this kind only aids the state and not the people. But under socialism and only under socialism the state and the people are identical. There is no small privileged class amassing wealth at the expense of the masses, although apologists of capitalism desperately try to prove the contrary. Under socialism an improvement for all is an improvement for one and an improvement for one is an improvement for all. 270
The essential point to remember is that one should never try to sell a group of chairs or any other commodities for more money than that paid to the workers who created them. In other words, one should never try to realize a profit because forces will be set in motion that will become overpowering and crush the offender. Sooner or later unjust practices of this kind will take revenge, assuming death does not intervene. Crises (bankruptcies, mergers, and so forth) are a result of the profit motive and are not the by-product of poor administration on the part of certain individuals. Once the system is born, once negative forces are set in motion, crises become unavoidable.271
Having compared socialism to capitalism, let us return to an analysis of the methods employed by the government to solve the Depression.
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Again, the original problem of selling chairs to a worker with inadequate funds will be used as a model. What C needs and has always needed is a buyer who is always willing to purchase chairs that are difficult to sell, someone who will take up the slack, someone who will always fill the gap. And to the extent that his unknown buys more chairs than he needs, uses, or can sell, he must also have more money than financial intelligence and responsibility. W, of course, would never knowingly and purposely buy more chairs than he needed simply to pacify C, but the federal government, because of its subservience to the wealthy, could be required to sacrifice funds and alleviate the dilemma. It should be quickly noted, however, that taxation is not the mechanism by which the government could effectively intervene. Disbursing tax money collected from W would be useless, since total demand would not be increased. The portion W could spend would drop by an amount equal to that which the government could spend. If the government put the same amount into circulation by allocating it to a federally financed program and a government employee used the money to buy C's chairs, $75 would still have been spent. If, for example, W were taxed $25 he could buy only two $25 chairs worth $50. If the government worker who received this amount bought the third chair, C would have sold the same number of chairs and in no way relieved his problem. In effect, the government can not solve C's dilemma through taxation.
Once taxation has been excluded two other basic alternatives remain. Either more money could be printed by running the presses faster or the needed funds could be borrowed (government debt). Under the first of these methods, to return to our original problem, the government could manufacture $25 and buy the remaining chair for which C could find no buyer. The money would not be borrowed from C but created by a machine. Like all prior gimmicks this one also has limitations, but to understand them requires an analysis of the nature of money, because if the government manufactures currency the latter's value is simultaneously being changed.
Centuries ago men obtained what they needed by trading items. Money was not involved. Goods were merely exchanged. However, too often a trade was impossible because one of the two people involved did not want the other's product. For example, Joe wanted Ed's wheel but Ed did not want Joe's hammer, although they were equal in value. Consequently, no trade occurred. In light of such difficulties, private property owners decided that if they circulated an item acceptable to everybody, trade would increase tremendously. Although many items were tried, gold and also silver was eventually accepted as the item of common desire. The reasons gold was selected are not important for our purposes. 272 In referring back to the above example we find that although Ed did not want Joe's hammer, he would accept Joe's gold. Ed realized he could nearly always trade gold to anyone, anywhere. The capitalist analysis of the situation proved correct because trade accelerated tremendously. As more and more products were produced, commerce rapidly expanded. Eventually, however, traders were confronted with another problem. Gold was not increasing with sufficient rapidity to keep up with the increasing volume of trade. Its scarcity was hindering the number of exchanges, especially in capitalist Europe. Hoping to solve this difficulty, European businessmen sent out explorers (Pizarro, Cortez, Coronado, etc.) to search the planet for gold.273
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Unfortunately for the capitalist world, early explorers, as well as those who searched later, were not able to find adequate quantities of this precious metal.274 As a result, trade contracted and the capitalists were compelled to take additional measures. The ruling class of each country ordered their respective governments to step in, collect all gold in circulation and give every person so much paper currency for each ounce of gold submitted. Twenty-one dollars for each ounce of gold will be used for our example because this was the actual figure used by the United States government prior to 1933). Henceforth, the vast bulk of the money in circulation was to be paper currency, while all gold was to be kept in government vaults. In effect, the capitalists had changed from using gold as money to using paper currency and a small volume of adulterated coins, because gold was scarce and could not be mined in sufficient quantities. The new situation was much better. Paper money could be produced quickly and in great quantities.
Theoretically, after all the gold was safely stored away, any American possessing $21 in paper currency could exchange it at his convenience for an ounce of gold. Although the government should allow this, in reality, it will not because of the following. If, for example, 1,000,000 ounces of gold have been turned in, there should be only $21,000,000 in paper currency in circulation.275 In truth, this is not the case. Under capitalist orders the government continued to operate the printing presses and issued far more than $21,000,000 worth of currency. If the capitalists allowed people to exchange their paper currency for gold, the consequences could be tragic for many.
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If everybody decided to trade his dollars for gold, those who arrived late at the government vaults would be left with money having no gold backing. To employ a cliche, "They would be left holding the bag." Latecomers would not be able to buy products easily because others would not accept their currency, unless the latter know they could pass it on without sustaining a loss.
Keeping the above in mind, we can now discuss "running the presses faster" as an answer to the original problem of selling $100 worth of chairs to a worker with $75. Three chairs were sold to W but one chair remained. Under the new solution the government would simply manufacture $25 and buy the remaining chair. But suppose this happened repeatedly, while the supply of gold remained fairly stable. Suppose, further, that because of poor quality, low quantity or other negative aspects in American products, C or W (primarily C) decided to buy increasing amounts of foreign items and foreigners spent less of their money on American products. C would be putting more and more money into the hands of foreigners and the latter would eventually possess an extremely large amount of dollars. According to current estimates Europeans have in excess of $25,000,000,000 while the United States has approximately $10,000,000,000 in gold--an ominous situation. If a foreigner decided to exercise his legal right to exchange dollars for gold, others might also cash in their dollars for gold, even if they did not so desire, in order to make sure they were not left "holding the bag." 276 Unless someone interfered, a major gold rush could occur. The more money in circulation, the greater the amount that could fall into foreign hands and the greater the possibility of a large gold drain. The latter's magnitude would be greatly dependent upon the quantity, quality, and prices of American products.
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If their quality was not good, if their prices were higher and their amounts smaller than those of other countries, a foreigner with American money might be inclined to exchange dollars for American gold rather than buy American products. With the gold he could obtain the currency of another country, for instance, Japan, and buy better Japanese products. The Japanese would not accept American dollars but they would accept gold, not only because they realize dollars would only buy inferior American products but also because fewer people around the world would accept dollars. On the other hand, if American products were grade-A on all counts, foreigners would not be inclined to exchange dollars for gold. In fact, they might return the dollars by buying American products. The more competitive the position of the United States in world markets, the less possibility of a gold drain and the more money that could be printed and circulated.
Today the United States is so completely dominant in the entire capitalist world in nearly every aspect of production that even if its gold supply dropped to nearly zero, which is not likely, there would be no collapse of American capitalism. Because the latter produces the best goods, at the lowest prices and in the greatest amounts, foreigners buy United States products rather than exchange their dollars for gold. The American economy is too strong at this time.277 If America had very little gold, foreigners would still want to buy American products rather than seek an exchange. Since the late 1950's, however, foreign products have been improving in quality, decreasing in price, and increasing in amount. As a result, the United States has been increasingly undermined by the competition. Demand for some American products has not been rising fast enough vis a vis those of some other countries. Foreigners selling products to Americans have been exchanging dollars for gold and fueling a steady gold drain rather than buying American goods. If the competitive status of the United States continues to deteriorate, the gold drain will continue, unless foreign capitalists agree to hold their dollars at some risk to themselves.
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Without such an agreement the American government could very well be forced to slow down the presses so that less money would fall into foreign hands. This would only intensify the contradiction, since American capitalists would experience more difficulty in selling their extra commodities.
Another problem associated with an increase in the amount of money in circulation is the tendency of prices to rise. Knowing that if more and more money were printed while the supply of gold remained stable, each dollar would represent less and less gold and diminish in real value, each capitalist would raise his prices in order to receive as much gold in the form of dollars as previously. The competitive struggle for survival, the fear of falling into the exploited proletariat, and the desire to continue receiving the same value for his commodities would force him to increase prices. Instead of allowing governmental action to alleviate the problem, he would aggravate it by increasing prices. For this reason, such governmental groups as the Council of Economic Advisors often become disheartened whenever the "captains" of an industry, especially one which is basic, announce a price increase. While trying to lessen their particular problems, they are undermining American capitalism as a whole. When the votes are counted, the only allegiance capitalists show is to the almighty dollar. From their perspective nationalism ends where their bankroll begins. They teach patriotism to the masses but that doesn't mean they believe or adopt it personally.278 Because foreigners may react negatively and prices will rise, the printing of additional money is not a viable response to the capitalist dilemma.
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Having discounted "speeding up the printing presses" as the final answer, we can now discuss governmental borrowing as a possible solution. As a result of using this approach governments (federal, state, and local) have borrowed considerably more than $5 trillion from the ruling class and a sizable part of the workers' taxes have been used to pay the interest. 279 According to conservative government statistics, the interest on the national debt has been costing over $400 billion a year. Moreover, those who have been receiving interest payments have been lending them to the government and further increasing their profits.280 Although some workers have made loans to the state and own government bonds of one kind or another, all their credits combined are insignificant when compared to that which the government owes a few economic czars.
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Of all the tactics ever devised by the capitalists, deficit financing has been one of the most effective, comprehensive, and enduring. There are several reasons for this. Firstly, the financial elite has been furnished a sizable market. Secondly, the market has been expandable almost to any degree necessary depending on the needs of the overall economy. And thirdly, a significant degree of much-needed economic planning has been provided. By buying and selling a tremendously large number of items from various companies at different times, the government has been able to provide American capitalism with a limited degree of guidance and stability. What, then, are the deficiencies of deficit financing or is it the long sought final solution.
Despite being a major contribution to American prosperity, deficit financing has several weaknesses which can be exposed by re-examining the original problem. If this approach were adopted, the following would occur. After C had sold 3 of the chairs to W for $25 each, the government would buy the remaining chairs with $25 borrowed from C. Realizing that it's now possible to sell his extra chairs with little difficulty and driven by the competitive, expansive nature of capitalism, C would increase production by expanding facilities and hiring additional laborers. Again, the government would buy the surplus and go further into debt. As the cycle reoccurred at an accelerating pace, C would realize ever greater profits while the government would go further and further into the red. But eventually the slow growth of government collateral would begin to worry the government's creditors. As the financial status of the government became more insecure because the latter failed to increase its useful wealth, the possibility of the state's creditors repossessing loans of real substance would decrease. Judging from past experience, the state would purchase many items that are weak security for a loan. Few capitalists would like to be repaid with guns, tanks, planes, bombs, etc. What would a major insurance company, for example, do with 100 F-105 Thunderchiefs put forward to repay the debt? 281
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Capitalists would have no use for these objects because they are not productive and workers would not buy them because they are virtually useless in satisfying their needs. In light of these facts and the difficulties that would arise in any attempt to resell such commodities, interest in loaning money to the government would decline. Doubts concerning the government's reliability would fade significantly if land, buildings and other useful items were purchased with borrowed funds. If the state decided to use them to repay its debts, they would be far more acceptable to the capitalists. Unfortunately, much of that which the government has purchased throughout the years has been of little economic value and there is little reason to expect a change in policy. Consequently, government creditors would become progressively more concerned if government borrowing increased.
Secondly, as the sheer size of the debt continued to climb, so would the interest charges. More and more money would have to be taken out of taxes to pay the interest on that which had been borrowed previously--the national debt.282 It's conceivable that if the debt became sufficiently large, the government would be forced to use every tax dollar just to pay the interest on the national debt. Such a possibility would be extremely remote, however, since all government spending, even that of a military nature, would be eliminated.
The major difference between a rising debt and rising interest charges is that under the former the government can increase its credit standing to some degree by purchasing items capitalists can productively employ when they demand repayment of the loan. When the state buys useful commodities, its collateral increases.
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But when taxes are used to pay interest costs, security declines and capitalists are less inclined to make loans. To relieve this dilemma all the major capitalists could ban together and each agree to loan his share to the government, even though risks would be greater and profits lower than elsewhere, in order to keep the entire capitalist economy on track. But such an alliance would be nothing more than a union of the unscrupulous in which each agreed to take a loss for the benefit of all. The agreement could not be enforced and if the financial status of a government creditor began to rapidly deteriorate, the temptation for him to undermine the others by having the government repay the loan would be tremendous. Any desperate capitalist might so act.
The only practical approach to the problems arising from deficit financing is to keep expanding the overall economy. If the latter can be quickly expanded through using several previously mentioned methods, as well as deficit financing, tax revenues could be increased because of the increased wages which would be generated, and interest on the debt would take proportionately less and less of the state's income, providing all other relevant factors remained relatively stationary. At the same time the government would have additional funds to spend and could avoid borrowing. Since the amount of money owed to capitalists would be increasing less rapidly, the state's creditors would be less inclined to repossess their money or seek higher interest rates. The entire process would depend on the speed with which the economy progressed. If it could be enlarged quickly there would be no problem. But if there were a slowdown and the amount of tax money collected by the government began to taper off, borrowing would increase, uneasiness would increase and interest rates and total costs would rise. In recent years capitalists have been increasingly relying upon deficit financing as a major stimulant to the economy and there is little reason to doubt that the trend will continue. But unless the bourgeoisie can find new approaches or more effective ways to employ the old ones, a crisis appears unavoidable. Even borrowing has limitations.
In conclusion, the most important capitalist contradiction among many 283 should be apparent and additional approaches need not be presented. As long as temporary remedies are operative and the economy is expanding, difficulties will be minimal and most people will be content. But as each business attempts to save itself through raising prices, dismissing workers, lowering wages, etc., because the major national palliatives (printing additional money and raising the debt) are becoming less effective, the laboring masses and proletarianized petty bourgeois will be required to bear a growing burden and the possibility of nation-wide upheaval will loom ever larger on the horizon. In large measure the future of private ownership depends upon the resourcefulness and ingenuity of those in command. They can not prevent the inevitable, but they can prolong its arrival for decades. 284
Although palliatives are extremely important for the prolongation of capitalism, they can not prevent the exacerbation of its Achilles heel--the most crucial contradiction of all. The dilemma which will decide the final fate of capitalism arises out of the very core of the system itself. It hearkens back to the very reason for which the system was created in the first place--to produce wealth for the few at the expense of the many. Oddly enough, the very success of the system in fulfilling its original mandate will be its own undoing. If ever there was poetic justice this is it! This supreme contradiction arises from the fact that increasing amounts of goods cannot be sold because the rich have an ever-growing overabundance of every commodity imaginable and the masses are unable to buy an ever-expanding supply of commodities. The rich have a vast supply of cars, planes, homes, boats, televisions and every other commodity available and instead of buying additional items of that which they already have in abundance they opt for the more practical approach of investing their wealth in that which will bring them greater wealth. They choose to build factories, machinery, tools, and other means of production and distribution or purchase those which already exist in order to increase their wealth, which only increases the amount of commodities available in a market that is already saturated because they chose not to buy but to invest. As the technology and productivity of world capitalism improve, this problem grows exponentially. It worsens at an ever-accelerating pace. The more wealthy and contented members of the ruling class become the more they tend to invest and the less they tend to buy. More and more goods become unsaleable because the rich don't need them and the masses can't buy them. The more saturated the rich become, the greater the problem grows. In simple terms, the rich don't want it and the masses can't buy it. Or, stated differently, the masses need it but can't buy it, and the rich can buy it but they don't need it. If that isn't a prescription for disaster, nothing is.
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CONCEPTS NEEDED FOR A CORRECT ECONOMIC ANALYSIS
In order to analyze the capitalist economic structure correctly, the following considerations must be taken into account. Firstly, one should repeatedly seek an answer to the problem of selling items for more than was paid those who created them. Secondly, reasoning should proceed on the propositions that there are only two basic classes in society with a relatively sharp division between them and that "middle class" individuals are nothing more than workers with what they sincerely but mistakenly believe to be substantial wealth who feel they have a stake in maintaining the system. Thirdly, as "solutions" to the capitalist contradiction repeatedly reappear, one should weigh them against the unwillingness of the ruling class to sacrifice profits. The latter's propensity to avoid any method which adversely affects its income will somehow nullify their tendency to relieve the pressure. And lastly, reflective thinking (analyzing one's basic ideas) and self-criticism should be used to perform the difficult process of discarding all economic theories learned from capitalist media,285 such as the law of diminishing returns and the alleged determination of value by supply and demand.286
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If these four considerations are given maximum priority, an understanding of the capitalist system should materialize. The whole economic world should emerge from the fog in which it has long dwelled for so many. 287
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287 (a) You will receive, "...an understanding of the essence of things, an understanding of 'what it is all about."
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THE COLLAPSE OF CAPITALISM IS INEVITABLE
In large measure the failure of American capitalism is already apparent. In view of productive capacity, Americans should be enjoying a standard of living considerably higher than that presently existing without public and private debts totalling well over $6 trillion; unemployment should be minuscule; automation should be a blessing instead of a curse; the federal budget should always be in the black and the Gross National Product should be skyrocketing. Yet, none of those conditions has materialized. Why? Haven't the rulers of America had enormous freedom to exploit the world's resources (Bolivia's tin, Chile's copper, Venezuela's oil and iron, Brazil's coffee and rubber, British Guiana's bauxite, the Middle East's oil, etc.), the assistance and compliance of European capitalists as well as scores of puppet dictators (Cuba's Batista, The Dominican Republic's Trujillo, Taiwan's Chiang Kai-shek, South Vietnam's Diem and Thieu, Greece's Papadopoulis, Turkey's Menderes, South Korea's Rhee, Paraguay's Stroessner, Argentina's Ongania, Nicaragua's Somoza, Spain's Franco, Portugal's Salazar, Haiti's Duvalier, etc.), 288 enormous markets, and only token opposition in their sphere of economic control? Haven't they had nearly complete freedom to conduct the Cold War as they so desired with little internal opposition from Marxists? Why are they plagued by so many problems? If any non-capitalist leaders had had over 40 years in which to utilize a nearly infinite supply of natural resources and markets, scores of compliant governments, millions of rationalizations and improvements in the productive processes, a numerous and well-trained citizenry, a favorable climate and geographical location, a stable government and investment climate, and scores of other aids, most assuredly none of the previously-mentioned problems would exist to any significant degree and certainly not growing as they are in the United States. Although most Americans are living better than people in other countries, over 40,000,000 can be counted among the poverty-stricken289 and millions are using commodities bought with borrowed funds (credit). If the American populace were as rich as many believed, retiring the national debt290 of approximately $4.5 Trillion,291 state and local debts of $1 Trillion,292 non-governmental debts o $11 Trillion (including financial debts of $3 Trillion, corporate debts of $2.5 Trillion and individual debts o $5.5 Trillion)293 and a total credit market debt of $15 Trillion 294 should be no problem whatever.
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292 Source 78 , page 399
293 Source 78 , page 504
294 Source 78 , page 504
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The failure of world capitalism is also evident in the fact that the number of countries seeking to escape from the steel grip of capitalism by the only means possible--revolution295 --will resume its progressive increase296 as soon as the current temporary setbacks are reversed.
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An entirely new group of citizens have arisen in the Soviet Union and Eastern Europe who must relearn the lessons taught to their ancestors earlier in this century. Many people and nations of the world will awaken to the fact that they have been, and continue to be, little more than colonial vassals of the major imperialist powers.297 Increasing numbers of people will accept Marxian socialism because it not only represents a tremendous improvement over that which they are experiencing but also exposes the nature of private property systems and their ideological superstructure.298
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Even though the ruling class and their agents have financed thousands of anti-Marxist "experts" and the printing of millions of books to discredit its accuracy and beneficence,299 young Americans will live to see the world's exploited masses seek socialism as desperately as did the Vietnamese.300
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