Magazine of Socialist Action in Australia

Capitalism doesn’t work!

Reading Time: 2 minutes

The system has to go!

While the protests like those at APEC this month, are directed at Howard, Bush and other world leaders, for many they will also be directed against the capitalist system. Capitalism is the economic system that we currently live under. It is a system that allows a tiny minority of bosses to own and control the vast amounts of wealth that is produced by millions of ordinary workers across the world.

At the moment we have a situation where 3 billion people, half of the worlds population, lives on less then $2 per day. 70% of the 1.3 billion living in absolute poverty are women and every second child that is born in the world lives in poverty. It is no wonder that more and more people are starting to ask who is actually benefiting from this system. Even in the advanced countries like Australia, most people are stuck in low paid casual jobs and are forced to get themselves into massive amounts of debt just to make ends meet.

Capitalism is a system based on profit and not human need. The fundamental problem with the capitalist system is that workers do not get paid the full amount of the wealth that they produce. Therefore working people can never afford to buy back the goods that they produce. This leads to a situation of overproduction and in turn, economic booms and slumps.

One way that this problem is overcome is by handing out cheap credit to workers. Obviously this is only a short term solution as at some stage the money will have to be paid back. As we have seen in the US recently this is becoming a massive problem. More than 20% of people in the US with mortgages have already defaulted on their loans and over 1 million Americans have already lost their homes. This unfortunately will be repeated in Australia in the not to distant future.

Capitalism is constantly looking for new sources of profit to maintain its existence. The contradiction that exists is that as bosses cut wages and conditions to increase profits they are biting the hand that feeds them. The less money that workers have in their pay packets means less money they have to spend on goods. This leads to a race to the bottom where bosses will search the globe to find workers to produce their goods more cheaply.

>At the same time as bosses are looking at better ways to exploit workers they are also in competition amongst themselves for new markets and sources of profits. This leads to economic and sometimes even military conflicts resulting in wars and occupations like that in Iraq.

Whilst we have massive levels of poverty around the world the bosses and their representatives in government are spending billions of dollars on wars and nuclear weapons. In 2005 military spending was set at $1001 billion – roughly 2.5% of world GDP! In a saner world this amount of money could wipe out poverty and make massive improvements in areas like healthcare and education.

As long as this dog eat dog system of capitalism exists we will have ongoing exploitation, poverty and environmental destruction as the bosses aim to increase their profits at the expense of ordinary people. The Socialist Party is fighting against the capitalist system. We fight for socialism – a democratic system run by the majority for the majority that will bring an end to wars, poverty and environmental destruction.

By Denise Dudley


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