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Socialist Appeal pamphlet, March Introduction to Marxism in Our Timeby Leon Trotsky. On the threshold of the twenty-first century, humanity stands at the crossroads. On the one hand, the achievements of science, technique and industry point the way forward to a dazzling future of prosperity, social well-being and unlimited cultural advance.

The fall of the Berlin Wall and the collapse of the bureaucratic Stalinist regimes of Russia and Eastern Europe provoked a wave of euphoria in the West. The strategists of capital were exultant. Everything would be for the best in the best of all capitalist worlds. In the last few years we have witnessed an unprecedented offensive against the ideas of socialism on a world scale.

This is not the place to deal in depth with the reasons for the collapse of Stalinism. That will be done in a future work in this series. The fall of Stalinism came as no surprise to the Marxists, who had predicted it in advance.

Indeed, Leon Trotsky already analysed the bureaucratic regime in the Soviet Union in the s and, using the Marxist method, explained the inevitability of its collapse. In the first place, Stalinism and socialism or communismso far from being identical, are mutually exclusive.

The regimes in the USSR and its Eastern European satellites in many ways were the opposite of socialism. As Trotsky explained, a nationalised planned economy needs democracy as the human body requires oxygen. Without the democratic control and administration of the working class, a regime of nationalisation and planning would inevitably seize up at a certain point, especially in a modern, sophisticated and complex economy.

This fact is graphically reflected in the falling rate of growth of the Soviet economy since the early s, after the unprecedented successes of the planned economy in the earlier period.

However, what the Western critics of Marxism do not want to publicise is that the movement in the direction of a capitalist market economy in the former Soviet Union and Eastern Europe, far from improving the situation, has caused an unmitigated social and economic disaster. It is true that the productive forces stagnated under Brezhnev. But what is the position now? Every index points to a catastrophe of unprecedented dimensions.

This is a staggering collapse—far worse than the slump of in the West. The rouble has collapsed and the rate of exchange is now 1, to the dollar, and still falling. This situation can only be compared to the effect of defeat in a devastating war.

The effects on the population, which has rapidly been reduced to absolute misery, can best be shown in the sudden deterioration of life expectancy. Under the planned economy, the people of the Soviet Union enjoyed a level of life expectancy, health care and education on a level with the most developed capitalist countries, or in advance of them. What is the position now? Researches now believe that the average age for male mortality in Russia has sunk to 59—far below the average in the industrialised world and the lowest in Russia since the early s.

These figures merely confirm what is self-evident: To which we can answer in the words of Keynes: A few years ago, the Western media confidently predicted that capitalism was about to enjoy a new period of dazzling economic success, on the basis of new markets in Russia and Eastern Europe. These illusions have been rapidly shattered by reality. If that were so, then India and Africa would be huge markets. However, a market depends upon purchasing power—something which is noticeable by its absence in the ex-Stalinist countries.

Far from providing new markets for capitalism, these countries represent a colossally destabilising factor, as most clearly shown by events in former Yugoslavia and the former USSR itself.

In all its essentials, it has been brilliantly confirmed by the present evolution of capitalism on a world scale. Nevertheless, for a whole period following the Second World War, it appeared to many to have been falsified by the march of events. As Trotsky had predicted, the Second World War ended in a new revolutionary upsurge. In the periodthe working class moved time and again to transform society in Italy, France, Greece, Britain, Denmark and Eastern Europe.

The betrayal of the revolution by Stalinism and Social Democracy provided the political basis for a recovery of the equilibrium of capitalism. This was the prior condition for the economic upswing which lasted from to Marxism understands history as a struggle of living forces, not an abstract schema with a preordained result. If the working class does not overthrow it, the capitalist system will always find a way out.

The reasons for the post-war economic upswing have been explained by Marxists since the s see Ted Grant: However, the main factor which acted as a motor-force driving the world economy was the unprecedented expansion of world trade. More startlingly still, the volume of world exports of manufactures rose twenty three times, partly because this is where trade liberalisation was concentrated, while output grew eight times. These figures clearly show how the rapid expansion of world trade in the post-war period acted as a powerful motor-force which drove the growth in output.

This is the secret of the capitalist upswing from It means that, for a whole historical period, capitalism was able partially to overcome its other fundamental problem—the contradiction between the narrowness of the national market and the tendency of the means of production to develop on a global scale.

Now, however, this tendency appears to have reached its limits. While this is a lower rate than in the period of the post-war upswing, it is nevertheless historically quite high. In the period between the Wars it was nearer 2. Despite this, it did not stop Europe and Japan from sliding into recession.

In other words, the growth of world trade no longer has the same effect as in the previous period. During the period of capitalist upswing fromwe saw a staggering increase in the productive forces, fuelled and stimulated by an unprecedented expansion of world trade. The capitalists, above all in Japan, the USA and Western Europe, were prepared to invest colossal sums in expanding the productive forces in pursuit of profit. The productivity of labour increased enormously as a result of a constant revolutionising of the means of production.

New branches of industry were established—plastics, atomic energy, computers, transistors, lasers, robots, etc. From a Marxist point of view, this was an historically progressive development, which creates the material basis for a socialist society. The strengthening of the working class and the squeezing out of the peasantry in Western Europe, Japan and the United States, also changed the class balance of forces within society to the advantage of the proletariat.

However, this period of capitalist expansion came to an end with the recession of Already in that period we saw the re-emergence of mass unemployment, not seen since the s. The big movements of the working class in Greece, Portugal, Spain, Italy and Britain showed that the workers were beginning to draw revolutionary conclusions from their experience.

This was temporarily cut across by the boom of However, this boom was completely different to the economic upswing of Originally sparked off by the Reagan rearmament programme, the boom of the s was of an unsound character. Whereas the parasitic service sector underwent a big expansion, the capitalists continued to close factories and lay off workers in all countries.

The boom was kept going by a massive expansion of credit, which, as Marx explains, can temporarily take capitalism beyond its limits, before bouncing back like an elastic band stretched almost to breaking-point. A further element in the situation was a colossal increase in the public deficit of the USA and other capitalist countries which fuelled the boom for a while, but which could not be sustained indefinitely.

Precisely these factors which served to prolong the boom of the s have now turned into their opposite. Part of the reason why the Western world is finding it so hard to drag itself out of recession is because they used up during the boom mechanisms which capitalism uses to get out of a slump. The uncontrolled expansion of credit has left the West with a painful hangover in the form of huge consumer indebtedness. In Japan, for example, for every yen earned, yen are owed.

In the United States, for every dollar earned, a dollar two cents are owed, and so on. The bourgeois economists failed to predict this recession, which is the longest and most severe since the Second World War. Of course, sooner or later they will get out of it.

However, it is proving to be extremely difficult. With the exception of a very shaky recovery in Britain and a rather more stronger one in the USA, the other economies of Western Europe and Japan remain stubbornly depressed. The official predictions of recovery are constantly postponed and revised downward. Some countries will fare better than others.

A solid, if unspectacular, recovery is already underway in the United States, Canada, Britain, Australia and New Zealand—the countries that dipped into recession first. It would not mean a substantial fall in unemployment. A year ago the OECD predicted that Japan would grow by 2. Even on the most optimistic estimates, unemployment in the OECD will remain officially at 8. In Europe, the average rate of unemployment will continue to rise to at least In fact, it will exacerbate them. Whereas in the period of upswing from we had long periods of boom interrupted by shallow and short recessions, a very different picture is now emerging: Such is the glittering prospect which capitalism offers to humanity on the eve of the new millennium.

One of the most malignant symptoms of the diseased state of capitalism in its epoch of senile decay is the appearance of mass organic unemployment.

During the period of capitalist upswing, mass unemployment was alleged to be a thing of the past. Marx had been shown to be fundamentally wrong! In point of fact, even in this period the capitalist cycle of boom and slump continued to exist. However, under conditions of general upswing, the small slumps or recessions which took place were generally short and shallow, and were hardly noticed by the masses.

Since the early s, unemployment in the advanced capitalist world has more than doubled. According to the official statistics, which deliberately falsify and underestimate the true levels of unemployment, a record 35 million people are our of work in the OECD.

Unemployment in the European Union EU has increased inexorably over the past two decades from 2. In the USA, 6. In fact, many economists consider that the true rate of unemployment in Japan is not the official 2. Now all that is about to change. The main point is that this unemployment is qualitatively different to anything we have seen since The system is no longer able to absorb the large numbers of workers who enter the labour market each year.

On the contrary, it cannot even keep in employment those who are already at work. Even in periods of booms, like the boom ofthe capitalists behave like Luddites, destroying the means of production, closing down factories and throwing large numbers of workers onto the streets.

In periods of slump, this situation gets worse. But even when the economy finally picks up, it is unable to reabsorb them. Unemployment is a cancer which gnaws at the bowels of society.

The atrocious waste represented by unemployment is shown by the fact that we are currently losing on official figures the equivalent of 35 million man-years of production every year. In addition to this, the money spent on unemployment benefit and social security, insufficient as it is, serves to aggravate the problem of budget deficits which plague all Western governments.

Since they cannot just let 35 million people and their dependants starve to death not out of any charitable feeling, but because of fear of the social and political consequencesthe capitalists are compelled to pay out huge sums of money for people not to work. Like some uncontrollable and terrifying epidemic, unemployment strikes the young and old, men and women, black and white, educated and uneducated, skilled and unskilled.

Even the managerial strata, professional people and white collar workers who never thought they would be out of work—find themselves unceremoniously thrown on the scrap heap in the prime of life. For many 40 year olds and even younger people who lose their jobs now may never find work again.

The capitalists have no answer to the problem of unemployment.

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The old Keynesian recipes have been shown to be bankrupt. The dominant wing of the bourgeois have unceremoniously ditched the old Keynesian nostrums which were, let us recall, supposed to have provided the definitive answer to Marxism.

In the s and s Keynesian demand management seemed to do the trick. But since the early s, it has ratcheted up in each cycle. An increasing proportion of unemployment is clearly structural. The fact is that, even in the event of a shaky recovery which seems likely in the next period, unemployment will not noticeably go down in most countries.

It will remain an ugly and chronic ulcer, sapping the strength of society. It goes on to predict that:. Innearly half the unemployed in Europe had been out of work for a year or more, with little or no prospect for improvement. The situation in Japan, where until recently most workers thought that their jobs were guaranteed for life, is no better. Although the overall unemployment figures seem low by comparison with Europe, the underlying trend is sharply up.

But since the workforce is growing by 0. Until Septemberjob vacancies outnumbered jobs seekers: How ironic these arguments sound today! Yet, in truth, all the earlier predictions concerning the possibility for reducing the working day were correct. The potential for a universal reduction in working hours—and thereby the abolition of unemployment—is implicit in the spectacular advance of technology in the past few decades.

Let us consider the implication of industrial robots. There areof these machines in the world at the present time. Japan, with just 0. Italy, France, Spain and other countries have likewise increased their number of robots. The introduction of these machines means that the number of workers in a factory can be drastically reduced, while the productivity of those who remain, vastly enhanced by machinery, registers a substantial increase.

Similarly, the Peugeot factory in Spain reduced its 12, workforce by half over the last decade. The same technology can be applied to many other fields—the transformation of plastics, for example, or the textile industry.

Even in the food industry, such operations as the packaging of cheese is done by robots, which can also be used to eliminate human participation in dangerous occupations. Robots mean greater quality, more flexibility in production, and speed. The universal application of such technology in the context of a rational and harmonious plan of production, with the democratic involvement of the workers at all levels, would signify a complete transformation of the life of society.

The working week could immediately be reduced to a four day, thirty two-hour week without loss of pay, and at the same time production could be rapidly increased both in quantity and quality. Thereafter, the working day could be steadily reduced, thus providing the material conditions for such a flourishing of democracy, art, science and culture as the world has never seen.

This is precisely the material basis for socialism—a new and qualitatively higher form of human society. These are not utopian day-dreams, but conclusions which flow logically and inevitably from the present state of knowledge and the actual demands of the productive forces.

And yet, at every step reality knocks its head against the potential of production and technique. How to explain such a crying contradiction? In the first volume of Capital, Marx explains that the introduction of machinery under capitalism necessarily means a lengthening of the working day. The purpose of employing machinery is to cheapen the product by economising on labour. However, there is a contradiction implicit in this.

The profits of the capitalist are extracted from the unpaid labour of the working class. The increase in the productivity of labour made possible by the introduction of machinery is achieved by a heavy initial outlay on costly machinery which, in themselves, add no new value to the end product, but merely import to it, over a period, bit by bit, their own value:. The only way to ensure a greater return on this outlay, is to make his machinery work non-stop, day and night, with no interruptions, while simultaneously squeezing every atom of surplus value from the worker, both by lengthening the working day through overtime, the abolition of tea-breaks, etc.

It cannot be allowed to stand idle for an instant, partly because it deteriorates, and partly because it can quickly become obsolete. That is why, under capitalism, the introduction of machinery leads to greater exploitation and an increase in the working day. The introduction of new technology to a given branch of production means that in that branch, for a time, huge super-profits can be earned.

Later, however, the other capitalists catch up and the rate of profit is levelled out.

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Ultimately, the amount of surplus value obtained by the capitalist depends upon two things: However, the introduction of machinery tends to reduce the number of workers and therefore change the ratio of variable to constant capital. Machinery constant capitalas we have seen, does not add any new value to the final product above and beyond what is already present in it.

In the third volume of Capital, he explains the tendencies which served to counteract this law. We have seen precisely these factors operating in the recent period, as the capitalist attempt to increase their profit margins by squeezing every atom of surplus value from the sweat and nervous strain of their workers.

In other words, what we are dealing with is only a tendency which manifests itself over the whole history of capitalist development. Nevertheless, there can be long periods—even decades—in which the tendency of the rate of profit to fall is cancelled out by the counteracting tendencies already mentioned.

In his book The Current Crisis written inMark Glick publishes the following figures for the long-term rate of profit in the United States:. Thus, from an historical point of view, we see that, leaving aside the inevitable cyclical fluctuations, the rate of profit now is lower than it was a hundred years ago. However, for whole periods this tendency has been reversed. If we take the figures for the main capitalist countries during the period of the post-war upswing, when colossal sums were spent on new plant and machinery, the tendency of the rate of profit to fall is clearly revealed:.

However, the important thing is the trend, which is quite clear. In the subsequent period, particularly the s, this tendency was sharply reversed, as the capitalists of all countries took steps to restore the rate of profit. This was mainly done by drastically increasing the rate of exploitation. This was particularly true in Britain and the USA. In general, the boom of represented the weakest investment cycle since the Second World War.

Only in Japan and Germany was there a significant increase in capital investment. In the United States, investment in productive industry remained weak in comparison to the booms of the past. On the other hand, merciless pressure was exerted on the American workers to keep wages down and boost profit margins. By such means, the capitalists have succeeded in partially restoring the rate of profit. Nevertheless, the capitalists can accept, for a time, a reduced rate of profit, provided the mass of profit is maintained.

The computer and software market has also rapidly reached saturation. In two years, the cost of personal computers fell by half, and the price of related products— spreadsheets, word processors, databases and the rest, is being dragged down after it. The costs of developing complex new products are huge. This can only be offset by a rapid increase in market share and a huge volume of sales.

However, with the appearance of overproduction and falling prices, profit margins have begun to fall. The capitalists can, for a time, tolerate the tendency of the rate of profit to decline, on condition that the mass of profit is maintained. As we have pointed out, the Japanese capitalists for decades have led the world in investment in new machinery and technology.

The long-term decline in the profitability of Japanese industry is a well-documented fact. Between late and earlycapital investment in Japan accounted for two-thirds of GNP growth.

According to investment experts Smithers and Co, the current slump in business investment in Japan is directly related to this phenomenon; the graph shows a continuing decline of the rate of return on physical capital: Business investment became even less profitable in the most recent capital-spending binge. Since then companies such as Toyota have announced steep reductions in investment.

But capital spending still accounted for Further severe cuts seem inevitable, with consequences for both employment and consumer confidence, Smithers and Co. All the big Japanese companies have seen their profits slashed.

Factories mothballed, wages frozen, bonuses paid in unsold goods and, for the first time in decades, Japanese workers sacked. The aggressive exporting methods of Japanese companies are part of an attempt to restore profitability by intensive participation on the world market.

On the other hand, together with work from home copywriter jobs uk investment in the most modern machinery, the Japanese capitalists have developed new techniques and working practices designed to squeeze the maximum productivity from the workers.

Thus, the Nissan plant in Sunderland produces 80 cars per worker per year the same as in Japan compared to an average of about 45 cars in the European car industry. However, both the stepping up of pressure on the workers and the attempt to find a way out of the crisis through exports come up against insuperable barriers.

One of the ultimate causes of capitalist crisis is over-production. The working class can never purchase lessons on trading binary options for a living total product of its labour. The capitalists cannot increase wages to the point where its surplus value is eliminated, since the pursuit of surplus value is the motor-force of the entire system.

In the recent period we have seen a ferocious struggle to push down real wages, while simultaneously forcing up the productivity of labour. In the United States, for example, real wages have not risen in twenty years. In British manufacturing industry, the workforce has been reduced from six million to four million over the past decade, yet the level of production remains the same.

And this has been achieved without the massive introduction of new machinery, which would have been a progressive development.

However, the relentless squeezing of the workers to achieve higher rates of profit is reaching its limits. The drive to go beyond these limits will inevitably produce an explosion. On the one hand, the rise in unemployment reduces demand and thereby deepens the crisis. On the other hand, since surplus value can only be produced by human labour, at a certain point the expulsion of workers from the factories must lead eventually to a fall, not only in the rate of profit, but in the mass of profit.

The attempt to find a solution by increased participation in world markets also has a limit, insofar as the capitalists of all countries are attempting to do the same thing.

We see this tendency in all countries at the present time. However, this merely gives rise to new contradictions. The attempt to solve the problem by increased participation on world markets has led to an ever fiercer struggle between the USA, Europe and Japan.

Such is the sharpness of the conflict that, in any other historical period, it would have already led to war. Instead, we have the threat of trade wars, and the increasing division of the world into rival blocs, dominated by the USA, Japan and Western Europe. The ferocious struggle for competitive advantage, the desperate attempt to boost profit margins, means that each national capitalist class will seek to put extra pressure on its workers. Wages, hours, conditions, social reforms, trade union rights—all the gains of the past—are under attack.

This is a recipe for class struggle. This wishful thinking is like the day-dreams of a decrepit old libertine who tries to forget his present ailments by recalling the vigour of youth. However, the youthful phase of capitalism is gone beyond recall. Marx explains how free competition inevitably begets monopoly. In the struggle between big and small capital, the result is always the same: Today, the vast power of the monopolies and multinationals exercises a total stranglehold on the world.

With the access to staggering sums of money, their economies of scale, their ability to manipulate commodity prices and even their power to determine the policy of governments, they are the true masters of the planet.

The last few decades have witnessed an unprecedented tendency towards the concentration of capital. The broad historical tendency towards the concentration of capital is absolutely incontrovertible.

If we take the percentage of total assets held by companies in the United States, for example, we get the following result:. A US Senate report of further revealed that the controlling interests of the stocks of these companies was in the hands of just two dozen big financial institutions.

In turn, these companies are controlled by each other. The figures for Britain are no less illuminating. Let us take the percentage share of the largest firms in manufacturing:.

The situation as regards Germany is no different. Infirms with over employees accounted for only By it was At the present time, Japanese small firms are going bust at the rate of more that 1, each month. A similar position exists in Europe.

Many small firms have collapsed as economies stagnated and the share prices of the survivors have done less well than those of the big companies. Banks have cut their lending.

Yet these figures do not tell the whole story. In the recent period, especially during the boom of the s, the tendency towards the concentration of capital has been enormously accelerated, as the big monopolies made huge fortunes out of take-over bids, often accompanied by all kinds of fraud and corrupt practices—leverage bids, junk bonds, asset stripping, insider dealing, and so on.

The same phenomenon can be seen on a global scale. In the first nine months ofthe number of world-wide mergers and acquisitions stood at 6, The following year, despite the recession, the corresponding figure was still 6, On a different level, one third of world trade is in the hands of giant multinationals with truly staggering sums of capital at their disposal.

The speculative movement of this capital around the world can make value relevance of earnings and cash flows during the global financial crisis break governments. The power of the big monopolies was revealed by the crisis of the European Monetary System EMSwhen the manipulation of billions in the international money markets compelled the devaluation of the pound, the lira, the peseta, and other currencies. In the period of capitalist ascent, the bourgeois played a progressive role in benefits of how do binary options brokers make money the productive forces, investing in industry, science and technology.

In the epoch of capitalist decline, we see a very different picture emerging. Speculative activity and investment in the parasitic service sector is displacing investment in productive activity as a source of profit.

When huge fortunes can be made by a single telephone call by a currency speculator, why bother to risk capital in costly machinery which may never make a profit? Gambling on the stock exchange has reached epidemic proportions. While factories were being continuously closed, in the period more than half of world-wide investment was dedicated to services.

The rest is made up of massive speculation in international currencies, where fortunes are made in a matter of hours without the need for any productive activity, whatsoever. The vast plaque forex wiki of money handled by the big banks, and used mainly for speculative purposes, is shown by the following figures.

These figures give a true picture of the power of the big banks and monopolies on a world scale. However, in reality, a handful of giant monopolies predominate. The parasitic and speculative character of these monopolies explains why the boom of had an entirely different character to the post-war upswing. The statistics show that the fever of speculation vastly exceeds the actual level of production on a world scale. Marx also warned that this process cannot be prolonged indefinitely, but as we now see in Japan, inevitably leads to a collapse of production, once the speculative bubble is burst.

The collapse of the EMS and the permanent instability of world finance markets are a graphic illustration of this power, which is an additional factor for instability, threatening at any time to engulf the world in a new financial crisis, which, given the precarious and unsound state of world capitalism, could end in a deep slump.

The sickness of the system is shown by the phenomenon of excess capacity which affects all the main capitalist economies. Under modern conditions, the big monopolies have the necessary technology to calculate in advance the available market for their products.

Therefore, they have tended to reduce production before getting to the point of actual over-production. The fact that the capitalists are not capable of fully utilising the productive capacity even in a boom is a graphic illustration of the Marxist assertion that the productive forces have grown beyond the narrow limits of private ownership and the nation state.

However, the situation at the present time is even worse. In the Communist Manifesto, written inMarx and Engels accurately described the kind of crisis which we now see:. In these crises there breaks out an epidemic that, in all earlier epochs, would does the stock market work in gta online seemed an absurdity—the epidemic of over-production.

Society suddenly finds itself put back into a state of momentary barbarism: Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend how to make a fake money wad further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property.

The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old how much money does a nuclear medicine technologist make. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.

Just take the state of the car industry, where hundreds of thousands of workers have been thrown on the scrap heap because the market is saturated. The Japanese monopolies, with their strong emphasis on modern machinery, were prepared to put up live currency rates dollar east pakistan a relatively low rate of return on investment, made up by a greater volume of sales through exports.

However, most families in Japan, the USA and Western Europe now possess at least one television, a car, a video, hi-fi equipment, etc. The tendency to expand the market artificially through credit has reached its limits, leading stock do futures trading simulation games a general crisis of debt. In this situation, there has been a fall, not of the rate, but of the mass of profit.

In the past, every Japanese car made 83, yen in profit. The figure is now about 15, yen. Only the biggest and most powerful companies can survive in such a situation, and not all of them. For a period of almost four decades after the Second World War the capitalist system experienced a new lease of life for reasons outlined above. This was reflected in increasing living standards for a large part of the population in the advanced capitalist countries.

However, Marx never denied that, under certain conditions, wages could rise. Such an assertion would be utterly childish. On the contrary, he went to some lengths to explain how wages inevitably rise in certain periods of capitalist development, and fall in others. But even in the most prosperous periods of capitalism, the relative improvement of living standards can never abolish surplus value, and can never change the social position of the worker:.

A rise in the price of labour, as a consequence of accumulation of capital, only means, in fact, that the length and weight of the golden chain the wage-worker has already forged for himself, allow of a relaxation of the tension of it.

When the capitalists are making super-profits from the labour of the working class, when demand is rising and order-books are full, and when the workers feel strong enough to combine, through their trade unions, to demand an increased share in the product of their labour-power, then the capitalist can agree to part with some of the booty. What it can never mean is the forex uk ltd of exploitation.

On the contrary, a growth in wages is frequently accompanied by an increase in the rate of exploitation, and a relative worsening of the position of the worker vis vis the capitalist. Workers are generally interested in the amount of cash they receive in wages, and what it can buy. They are not so conscious of the amount of labour they give in return, in the form of overtime, productivity deals and the rest of it.

As long as the money is there at the end of the week, workers can, for a time at least, put up with a killing pace of work, which undermines their health, family and social life. Nor are they aware that, while their wages are increasing absolutely, the profits of stock market trend like 1929 vs. today bosses are increasing relatively even more.

The fact that a worker can afford to buy a television or a second-hand car on credit does not alter his or her position vis a vis the capitalist. Marx referred to the tendency of capitalism to depend increasingly on the labour of women and children.

Nowadays, child labour is supposed to have been abolished in the advanced capitalist countries. Nevertheless, it still enters into the composition of capital through the products of the Third World, where extensive and horrific exploitation of children still exists. However, the exploitation of women and young people is an important and growing factor in the economic life of advanced capitalist countries.

How many working-class families could maintain their present standard of living without wives, sons and daughters contributing to the household income with the income from low-paid jobs?

Under modern conditions of production, sheer physical strength is frequently less important than agile minds and hands. This means the possibility of widespread exploitation of women and young people, usually taken on at low wages on the basis of part-time employment means that the clock is being put back a hundred years. Britain now has almost as many female employees as male ones, though many are part-timers. The participation of women in the productive process is the prior condition for their emancipation from the narrow confines of the home.

The entry of women workers into the ranks of industry represents a new and vital source of strength for the working class and the labour movement. But then 22 long rifle ammo in stock for sale lets the cat out of the bag: Men are less willing to work for very low pay.

The inexorable spread of unemployment means that even the relative gains of the past, the little pleasures which afford some consolation, which make life more civilised, are threatened.

Thus, society is afflicted by an increasing sense of insecurity and skype video call option disabled. All the gains of the past are under threat, as the capitalists try to boost their profit margins at the expense of the working class and the poorest sections of society.

The unemployed, the aged, the sick are faced with the continuous attacks on the welfare state. In Britain, which once boasted one of the most developed welfare systems, the Tory government has abolished the Wages Councils, established by Winston Churchill inwhich were intended to protect the wages of millions of low-paid workers.

Everywhere, the employers take advantage of anti-trade union laws to push down wages. A recent report by Dr. The study suggests the sharp decline in workplace trade unionism since with a fall from 58 per cent to 40 per cent in membership has not led to any spontaneous move by employers to introduce alternative forms of worker representation publicly traded companies on new york stock exchange joint consultation.

Since when have workers been treated as anything else? According to figures published recently by Mr. The abolition of wages councils in has resulted in a substantial drop in pay rates, according to the Low Pay Network, which found that In some sectors, the position was much worse: According to the official figures, the average Briton saw his or her real income rise by But this disguises a huge increase in living standards for the better-off, and, at the other extreme, a rapid process of impoverishment.

It is true that many workers, in the last period, have been able to purchase things like videos, dishwashers, hi-fi equipment and the like which would have been unthinkable for an earlier generation. On the other hand, the consumer boom of the s was achieved at the cost of a colossal increase in indebtedness through credit which, as we lync call button greyed out seen, is one of the reasons why the present recession has been prolonged.

Take Japan, for instance. The figure for the USA was about the same. But the trouble with credit, as every worker knows, is that eventually it has to be paid back—and with interest. It is a way of taking capitalism beyond its normal limits. But at the end of the day, the price must be paid in the form of a deepening of the crisis.

Britain and America experienced a similar phenomenon earlier on. In other words, the absolute increase in living standards during the boom was achieved in the advanced capitalist countries, on the one hand by workers toiling extra, stretching themselves to the limit, working overtime, week-ends and so on. On the other hand, it was achieved by the cheap labour and exploitation of women and young people.

In London and Paris we have the scourge of homelessness and a large number of young people with no job, living on the streets in conditions reminiscent of Victorian times—easy prey to crime, drug addiction and prostitution. The statistics speak plainly of how 50 years of public housing has failed to help those it was meant to help: Nine-tenths of households have a single parent, so parental authority is spread thin.

Nearly everyone depends upon government assistance of some sort. This housing was meant to provide shelter of last resort. Yet many families have lived in it for three generations.

The article goes on:. But the growth in poverty outstripped the growth in Federal Resources. Over 5 million renters and 4 million home owners live, unassisted, below the poverty level. In poor neighbourhoods, even more housing promised landlords so little prospect of return that buildings have been abandoned, reinforcing urban decay. More than three quarters of renters bellow the poverty level and more than half of poor home owners spend more than half their income on housing costs.

The disparity is absurd, visibly so. Yet the disease has already reached epidemic proportions in New York city: The long decline in TB stopped in New York at the end of the s, but it is only in the last couple of years that the disease has one more spread rapidly.

The HIV virus, homelessness, poverty, and drug abuse all make people more vulnerable. Two out of three sufferers are young blacks or Hispanics. New Yorkers have a worse record than the people of most Third World countries when it comes to completing treatment. The article goes on to point to the risk of court actions against the New York City council, and comments: Even less, however, can it afford to let TB spread—as it will—to plush offices and nice homes. Marx wrote about the terrible conditions of the mainly women workers in the garment trade in the East End of London.

The abolition of the wages councils and the drastic reduction of factory inspection under the Tory government means that, in all probability, the conditions of the mainly Asian women workers in these trades will be all too similar.

And not only in Britain. Sewing jobs for Esprit, Liz Claiborne, Izumi and other glittering names were being done by underpaid workers. It tends to be forgotten that all the gains made by the working class in the past were obtained through struggle. The ruling class has never conceded anything without a fight. It is true that, in a period of economic upswing, the capitalists can afford to part with a small part of their profits, so long as they continue to enrich themselves at the expense of the working class.

But now that the period of upswing has ended, they have launched an all-out offensive to eliminate the conquests of labour. In Germany and Japan they rose 4.

But now the German and Japanese capitalists want to pursue the same policy. The capitalists of all other countries are singing the same song. In Belgium, the imposition of a series of austerity plans provoked a general strike in November The attempt of the Spanish government to impose deregulation of the labour market also provoked a hour general strike.

Everywhere you look, the capitalists and their governments are attempting to find a way out of the crisis at the expense of the working class. The illusions in a future based upon full employment and prosperity which became widespread in the advanced capitalist world on the basis of nearly four decades of economic upswing, are swiftly disappearing:.

Large parts of the population are now faced with the reality of being poorer than their parents, or even their grandparents. The price of industrial competitiveness may thus be the lowering of expectations, not only for wages but for working hours and conditions. In the US, the lesson is proving painful. Europe, for the most part, has yet to confront it. The period since the Second World War has been one of uninterrupted turmoil in the underdeveloped capitalist countries.

Value relevance of earnings and cash flows during the global financial crisis: Review of Accounting and Finance: Vol 12, No 3

The people of Africa, Asia and Latin America, amounting to two thirds of the human race, derived little benefit from the fireworks display of economic growth in the industrialised West.

They remained hungry spectators at the feast of world capitalism. Even the relative development of industry made possible by the world economic upswing of did not prevent a fall in national income for most of these countries, leading to a general economic and social crisis. Nominally independent, they are even more enslaved than before.

The economies of these countries are tied by a million chains to the chariot of world imperialism, which exercises its domination through international trade and the mechanisms of the world market based on the exchange of more labour for less. According to figures published by the UN Development Programme forthe gap between rich and poor countries has increased inexorably over the past decades.

The gap between the two has doubled in the last thirty years. However, even these figures understate the reality. In the advanced countries of capitalism, millions live in poverty, while the Third World has its share of wealthy parasites and exploiters. In the last decade of the 20th Century, despite all the wonders of modern science, two thirds of humanity live on the border line of barbarism. Common diseases, such as diarrhoea and measles kill seven million children a year. Yet this can be prevented by a cheap and simple vaccination.

According to United Nations reports, more than 6 billion people will inhabit the earth by the year 2, About half of them will be under the age of Yet most suffer from unemployment, lack of basic education and health care, overcrowding and bad living conditions. An estimated million children aged 6 to 11 are not in school.

Two thirds are girls. However, the situation in third world countries has reached a horrific level. As many as a million children live on the streets. Similar atrocities are being carried out against homeless people in Colombia. One million children have been killed, 4 million seriously injured, and 5 million have become refugees or orphaned as a result of wars in the past decade. In many ex-colonial countries, we have the phenomenon of child labour, often amounting to slavery.

A typical example was the recently published case of a match factory where children, mostly girls, work a 6 day hour-week, with toxic chemicals, for three dollars.

A letter to the Economist of the 15th September pointed out that: The main reason for the grinding poverty of the third world is the two-fold looting of the resources through the terms of trade, and the trillion dollars debt owed by the third world to the big western banks.

Just to pay the interest on the debt, these countries have to export food needed by their own people and sacrifice the health and education of the people. Despite the hypocritical outcry against the destruction of the Amazonian rainforest, Brazilian economists have proved that this is mainly motivated by the need to raised cash for agricultural exports, such as beef, raised on reclaimed land.

The financing for such export projects comes from the World Bank and other international financial organisations. Since World War Two, bourgeois governments have tried everything from Keynesianism to Monetarism, and every conceivable combination in between.

The Keynesian experiment was responsible for an explosion of inflation at the end of the s and forced them to beat a hasty retreat. Since then, we have seen the monetarist reaction, which was allegedly going to restore sound finance and balanced budgets. What was the result? In Britain, the application of monetarist policies under Thatcher led to a collapse of industry, from which it has still not recovered. Those employed in manufacturing fell from 8. On the other hand, the parasitic banking sector increased from 9.

At the same time, in all the advanced capitalist countries, there has been an inexorable rise in budget deficits, and this in spite of sharp cut-backs in state expenditure. Last year, the average budget deficit of the OECD countries stood at 4. The interest on this debt alone represents a colossal drain on the resources of society.

Given this situation, a return to Keynesian methods of deficit financing would provoke an explosion of inflation. On the other hand, attempts to cut the deficit will decrease demand, thereby aggravating the crisis. The fact that these staggering deficits were piled up during the boom of is a further indication of the sickness of the system. Far from increasing public spending, they are continually cutting back, despite the fact that in countries such as Britain, the infrastructure health, schools, roads, railways, housing is falling to pieces.

And still the budget deficit continues to grow, as a result of the fall in production and huge interest repayments. The bourgeois economists contradict themselves continually. Wherever they turn, they are trapped between the twin evils of inflation and deflation.

In other words, whatever they do will be wrong. In the long term, the outlook for capitalism is hopeless. However, that does not mean that it will automatically disappear. Capitalism always moves through booms and slumps.

It is like breathing in and out. It accompanies capitalism from the cradle to the grave. However, the vigorous respiration of a healthy child is not the same as the painful wheezing of senile decrepitude. The capitalist system is sick, and the sickness is terminal. Karl Marx explained over a hundred years ago that the final barrier to capitalist production is capitalism itself.

It is true that, until it is overthrown by the working class, it will always find a way out. But, in finding a way out, the bourgeois always increase the contradictions of the system and ultimately make matters worse. For reasons which we have outlined above, the capitalist system, after four decades of expansion, is now reaching its limits.

The long period of relative peace and prosperity in the advanced capitalist countries is drawing to a close. Halfway through the last decade of the twentieth century—a century already characterised by two world wars and untold calamities for the human race—the world is faced with a new period of wars, civil wars, revolution and counter-revolution.

In the course of this period, the destiny of humanity will be settled, one way or another. As Lenin used to say, the truth is always concrete. The bourgeois have tried Keynesianism and Monetarism. Both ultimately failed—the second far more quickly than the first.

They can try a mix of both these witches brews. That will bring them the worst of all worlds—a mixture of inflation and deflation, which will rapidly provoke new social and political convulsions. Over many decades, all the contradictions have been piling up. Now they must pick up the bill. In andthey took to the path of war to attempt to resolve their problems. But the existence of terrifying weapons of destruction—nuclear, chemical, biological—means that an all-out war between the major powers would necessarily end in mutual annihilation.

Since the capitalists do not wage war for the fun of it, but in order to conquer markets, raw materials, territory and spheres of influence, this road is effectively blocked, at least as long as the working class and its organisations remain intact.

This means that the contradictions of capitalism must express themselves in an ever sharper conflict between the classes. The bourgeois of every country are agreed on one thing: That means that they threaten to eliminate all those things which make life bearable for the majority of people, all those elements which make for at least a semi-civilised existence.

The counter-offensive of capital will have a profound effect on the working class, which has accumulated colossal power over the past few decades. The general strikes in Spain, Belgium and Italy are a warning that the workers will not stand idly by to watch their living standards destroyed.

The next period will see big battles between the classes that will put the struggles of the past in the shade. Once again, the workers will begin to move through the mass organisations of the class, beginning with the trade unions, to attempt to transform society.

Sooner or later, they will take power in one country or another, as they did in Russia in When that happens, it will transform the world far more quickly than in The basis will be laid for the victory of socialism on a world scale. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily required knack, that is required of him. Not only the deadly monotony and exhausting work of the production line, but also the soul-destroying nature of the work of many white-collar workers working with computers in large offices which, in effect, increasingly resemble factories.

And this is the way most people spend their lives, if they are lucky enough to find work at all! Yet the development of technique means that it is possible to abolish, or reduce to a minimum expression, this kind of inhuman toil. They do not sleep, they do not stop for a tea-break or lunch, they work ceaselessly 14 hours a day, performing their tasks with great flexibility and to the highest standard.

In fact, just as the boss would like the worker to be! It is quite possible nowadays to have big factories with no workers at all, other than those required for maintenance. The general introduction of industrial robots to large-scale industry therefore potentially represents the greatest labour-saving revolution in history.

Under capitalism, such a development would lead to unemployment on an unimaginable scale, and ultimately provoke the collapse of the whole system. Hence, although the technology exists and also, as we have seen, huge amounts of capital which is not being put to productive use, the introduction of the new technology has been extremely slow and uneven.

The same economic system which dooms 50 million people in the industrialised countries, and further hundreds of millions in Africa, Asia and Latin America to a life of enforced idleness and misery, and which systematically destroys the means of production, closing down factories like so many matchboxes, also prevents the utilisation of technology which could transform the lives of the peoples of the world. One of the most striking features of modern capitalism is the way in which it has united the whole world under its control.

The prediction of the authors of the Communist Manifesto has been borne out in an almost laboratory pure fashion. The international division of labour has been carried to an extreme.

The world market exercises an irresistible pull on all national economies. No power, not the USA, not Russia nor China can tear itself free from it. Yet the case for a genuine New World Order is really unanswerable. It is not only the means of putting an end to the crazy economic imbalances and the crying social injustices which are an endless source of human misery, wars and conflicts. It is a matter of absolute necessity for the very survival of the planet.

Not just the felling of rain-forests, but the systematic poisoning of the food we eat, the water we drink, the air we breathe. In the first volume of Capital, Marx already pointed to this destructive tendency of the profit system. But now it has reached a critical point. If this rampage is allowed to continue unchecked, the future not just of the human race, but possibly of life on earth could be placed in terrible danger. The reality is that the productive forces have long outstripped the limits of private ownership and the nation state.

In order to realise the astonishing potential of modern industry, science and technique, it is necessary to achieve a system based upon the harmonious planning of production on a global scale. The development of production and new techniques enters in contradiction with the old idea of the worker as a mere appendage of the machine.

In order to make the best use of sophisticated techniques, and achieve a high level of quality, it is necessary to achieve the conscious participation of the workers at all levels. In effect, this fact is recognised, although in a distorted way by the latest Japanese production concepts.

Even the most sophisticated robots can never attain the same level of creative consciousness as a human being, although it may be far more efficient at performing mechanical tasks. People are so much dexterous, flexible and inventive than robots—which is why the Japanese believe that automation should help people to work in factories rather than replace them. Robots alone could not achieve the Holy Grail of flexible production.

Of course, in practice, the intention of the Japanese monopolies is to invent a new way of squeezing more surplus value out of the workers. Despite the fine words printed above, about robots helping people to work in factories, the big Japanese car-makers did not hesitate to lay-off workers once their profits were affected. In a genuine socialist planned economy, the general introduction of the new techniques would be used to reduce the working day to a minimum expression.

This would provide the material basis for a qualitative advance of human civilisation. In present-day society, the minds of men and women are oppressed by the struggle for survival—whether or not they will find work, whether they will be able to pay the bills at the end of the month, find a roof over their heads, obtain provision for sickness and old age. Only when these degrading obsessions are eliminated will men and women become genuinely free human beings, able for the first time to realise their full potential.

Trotsky once asked the question: How many swineherds are sitting on thrones? It is a crime of class society that such a vast reservoir of human talent is wasted. By releasing it, socialism would prepare the way for such a blossoming of culture, art and science as has never been seen in human history.

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