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“The working class demands the right to make its mistakes and learn in the dialectic of history. Let us speak plainly. Historically, the errors committed by a truly revolutionary movement are infinitely more fruitful than the infallibility of the cleverest Central Committee.’’
Rosa Luxemburg

The demise of the Soviet Union and its Eastern European satellite states was greeted triumphantly by right-wing commentators the world over as evidence that capitalism, as a system, had defeated “socialism”. Francis Fukyama’s refrain, which has now become a sort of cliché, that history ended with the collapse of these states has now been shown to be remarkably short-sighted. Although socialism has yet to make much of an advance in Europe and North America, despite years of crisis, the current period is one which has exposed both the moral and financial bankruptcy of capitalism. The collapse of “actually existing” neo-liberalism has created fertile ground for progressives to offer long term solutions to the world’s political, economic and environmental problems.

The repression which occurred in the Eastern Bloc has long blackened the name of socialism. The inefficiencies of these economies, coupled with Stalinist totalitarianism, repelled many from supporting revolutionary change. The aberrations which occurred in these states are seen by a significant number of people as the natural outcome of attempts to build an alternative economic system. However mistaken this view may be, it is a genuinely held fear which needs to be addressed by socialists. Concrete alternatives, as well as a realignment of our political priorities, are required if we are to successfully renew socialism in the 21st century. These are issues I hope to address in the following articles.

The problem with capitalism

Before exploring the possibility of renewing socialism, it’s necessary to define the system we want to replace. Capitalism is an economic system in which the majority of the means of production – factories, workplaces, natural resources – are privately owned. Under this system, commodities are produced not for their use value, but to be sold in exchange for money. And because they do not own any means of production, the people who produce these commodities – workers – labour in exchange for a set wage paid by the people who do.

The case against capitalism is a strong one. The fact that 6 million children under the age of five die every year as a result of starvation and malnutrition on a planet with a food surplus should be enough to persuade anyone that the current economic is system is deeply flawed. The extreme level of inequality which exists is also disturbing. The Walton family, who own Wal Mart, possess more wealth that the poorest 40% of all Americans, while the world’s three richest individuals control more wealth than the poorest 600 million. The most pressing issue facing our species at the minute, however, is the environmental crisis. Capitalism, with its internal need to pursue unending economic growth, is unlikely to put an end to the destruction of our ecosystem. Surely humans are capable of building a better system than this?

No other system in human history has produced as many goods and as much technology as capitalism. For a minority of human beings, mostly in Europe and North America, it has improved standards of living, albeit on an extremely unequal basis. However, capitalism’s economic insanity shows that this system can no longer play a progressive role for humanity. It is a grossly illogical system, which allows thousands of people to sleep rough on the streets while countless homes lie empty. It is a system under which 200 million people are prevented from working, while those with jobs are, more often than not, overworked. It’s a system which wastes colossal amounts of human and natural resources on socially useless industries, such as advertising and, of course, war. In short, it is a system of economic anarchy.

The Soviet experience

If the left is serious about socialist ideas resonating among the general population again, a frank and honest appraisal of what occurred in the Soviet Union must take place. As well as condemning the many crimes committed under Stalinism, it’s also important to recognise the achievements of the planned economies. History is very rarely as simple as what is taught in schools. For example, life expectancy in China before the 1949 revolution was 35. Today, it is 73. Russia also went from being an underdeveloped, peasant society in 1917 to a world superpower which defeated Nazism in 1945. On top of this, free healthcare, free education, housing and full employment were provided to citizens. Even during the Great Depression, the USSR retained full employment. These things would not have happened without a centrally planned economy.

Following the October Revolution in 1917, the young Soviet State found itself in an extremely precarious position. Crippled by a world war which had taken the lives of millions of Russians, and a culturally backward society, the task of building socialism there was always going to be an uphill battle. The civil war, during which fourteen imperialist armies invaded Russia, physically decimated country’s working class, resulting in the political destruction of the institutions of workers’ democracy – the soviets. This gave rise to a powerful ‘Red’ bureaucracy which history now knows as Stalinism.

The problems in the Soviet Union were not caused by central planning per se, but by the fashion in which the bureaucracy carried out that planning. There was no democratic input on the part of the workforce and discussion was stifled. Industrialisation occurred at a rapid pace, causing much needless human misery. Socialists should not reject out of hand the idea of central planning because of the failures in the USSR. It is clearly the best way of ensuring that resources are distributed fairly and the needs of society are met. When faced with enormous difficulties, even capitalists agree with this. During the Second World War, the US and Britain planned production. Churchill and Roosevelt knew fine well that the “free market” could not meet the needs of the war effort.

Socialism, if it is to mean anything, should be about workers’ control and mass democracy. Clearly, these things did not exist for very long in the USSR, so to describe this state as “socialist”, in my view, is wrong. The tiresome argument that Marx and Engels would have endorsed this repressive system should not be taken seriously. As Tony Benn once said: “The Marxist analysis has got nothing to do with what happened in Stalin’s Russia: it’s like blaming Jesus Christ for the Inquisition in Spain.” And although it should not be regarded as socialist, neither would it be fair to describe the USSR as capitalist. Granted, there was most certainly a privileged elite at the top of Soviet society with superior access or education, health care and housing, but the means of production were controlled by the state and there was almost no inherited wealth.

What should also be acknowledged in this discussion is the devastation which the restoration of capitalism has caused in the former Soviet states. In a report for the World Bank in 1999, Nobel Prize winning economist Joseph Stiglitz, wrote: “For eighteen of the twenty five countries [of Eastern Europe and the Soviet Union] poverty on average has increased from 4% to 45% of the population…and life expectancy in these countries on average has fallen even while world life expectancy has risen by two years.” Between 1992 and 1994, Russia’s GDP collapsed by 42% – a bigger collapse than what the US experienced during the Great Depression. Suicide rates doubled and infant mortality was comparable to some third world countries. Russia’s “market reforms” had an immense human cost.

Previous attempts to build socialism failed. That does not mean, however, that future attempts are doomed to inevitable failure as well. Capitalism’s overthrow of feudalism, which required a number of revolutionary attempts, did not come about overnight. The same may be true for socialism. Rather than taking a dogmatic approach, like some on the left have done in the past, we must learn from both the mistakes as well as the achievements of history and act accordingly.

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There are many issues which lay bare the subservience of Ireland’s political elite to the edicts of international capital. The bank guarantee of September 2008; the handing over of natural resources to multinationals; the miniscule tax rate levied on corporations; a crippling austerity agenda which continues to stunt the country’s economy – the list goes on.

This week saw yet another bleak day in the state’s history when gombeenism ran roughshod over common decency. On Monday (October 1), €1 billion was handed over to unguaranteed, unsecured bondholders of Allied Irish Bank, which is 99% owned by the state, as part of a pitiful bid to appease “the markets”. The Fine Gael/Labour coalition has claimed ignorance over the identities of these and other similar recipients of Irish state funds, although the list is widely known to include financial institutions such as Goldman Sachs, Deutsche Bank and Barclay’s. By the end of this year, a total of more than €19 billion will be paid to speculators who gambled in the boom years and now refuse to take a loss. In 2013, more than €17 billion of state money will be squandered in the same way.

This enormous transfer of wealth takes place against the backdrop of the largest spending cuts in the state’s history. In the demented political sphere of Ireland, where the nation’s economy is seen as a mere tool to service the needs of multi-national corporations, closing A&Es, reducing the wages of teachers and slashing allowances for disabled people are seen as “tough” decisions. Increasing corporation tax and forcing the super-rich to take a loss on their gambles are, apparently, weak decisions. A 15% unemployment rate on top of mass emigration, it seems, is the tolerable price to pay in the appeasement of “the markets”. Sacrifices must be made to save the European financial system, we have been told.

For all their talk of “injustice” and “unfairness” earlier this year, the GAA stars who rallied behind disgraced former billionaire Séan Quinn have remained remarkably silent on this particular issue. The handing over of scarce public funds to nameless professional gamblers merits no public demonstration of anger from Joe Kernan, Mickey Harte or the others who chose to support a corrupt billionaire. Nor were they as outspoken when Ireland’s economic sovereignty was handed over to the IMF in 2010.

Diarmuid O’Flynn, a hurling reporter for the Irish Examiner, has filled the void left by these sports stars and, of course, many other journalists. RTÉ, the national broadcaster, failed to report on Monday’s €1 billion bond payment. O’Flynn is one of the organisers of a weekly demonstration in his home village of Ballyhea in County Cork against the bondholder bailout. Now into its 84th week, the Ballyhea protest is a small glimpse of indignation among a population which has been renowned globally for its tame acceptance of harsh cutbacks. O’Flynn’s blog, Bondwatch Ireland, is an excellent source of information for those seeking to find out the true scale of the toxic debt plunged onto the nation’s shoulders. A result of meticulous research, the site details on a weekly basis the upcoming bond payments due at Ireland’s state-owned banks. Irish journalists should be well advised to consult the site.

Many of the attempts to explain what caused Ireland’s economic collapse have been muddled, causing much confusion around the issue. Some commentators point to the “cute-hoorism” prevalent among the Irish ruling and political class, while others highlight the outright criminality which existed at the top of Ireland’s banking sector. All of these arguments carry weight, but ultimately fail to provide a thorough explanation.

Ireland’s problems transcend its own national boundaries. Although all of the above were certainly contributing factors, the country’s collapse was part of a global calamity. Since the 1970s, capitalism was transformed from its Keynesian model towards a more radical neo-liberal one. Trade union influence diminished, financial markets were deregulated and public assets were privatised. Ireland was long touted as the “success story” of this economic arrangement.

The rise of neo-liberalism saw an unprecedented concentration of the world’s wealth into increasingly fewer hands. The demise of trade union movements in much of the west resulted in falling and stagnating wages for most workers. In order to make up for the loss of income, people were forced to take on ruinous amounts of debt to secure some of life’s basics, most notably in Ireland’s case, a home. The bursting of this credit bubble was inevitable.

In 2011, the British TUC released a report revealing the extent to which the incomes of workers had stagnated. It was found that UK workers would be earning a combined total of £60 billion more had wages increased in proportion to the growth of the wider economy. The same is true in many other countries. In the United States, the Irish bourgeoisie’s ideological home, this inequality occurs to an unnerving degree. The poorest 50% of Americans own a mere 1% of their country’s wealth, while the richest 1% own more than 34%. Or, to put in another way; the richest 1% of Americans own 34 times more wealth than half of all the American population combined. One family, the Waltons, who own Wal Mart, now possesses more wealth than the bottom 40% of Americans. Such is the economic model our rulers aspire to.

During the boom years, with its unregulated financial markets and low tax rates for corporations, Ireland was held up as the poster boy of neo-liberal capitalism. The Celtic Tiger ran riot as the worst off in society were left behind. On 24 September, the Simon Community reported that homelessness has increased in Dublin, with more than 2,600 people seeking the housing charity’s assistance. This situation continues alongside the sordid spectacle of up to 400,000 empty homes scattered around the country – many of them owned by the state’s ‘bad bank’, NAMA.

Just as many of Ireland’s problems were rooted in a global system, so too do the seeds of a solution lie in other parts of the world. Although afflicted with a notoriously parochial political system, the population would do well to note the actions of people in other parts of Europe. Following its own crisis in 2008, Iceland refused to repay the debts accumulated by private banks, to the fury of the neo-liberal “experts” and “the markets”. Depositors’ money was guaranteed but private investors were forced to take a loss. These are real “tough” decisions. Iceland now has an unemployment rate which is less than half that of Ireland’s, and a growth rate of 3%. This political courage needs to be combined with the resistance of the kind shown by trade union movements in Greece, Spain and Portugal. Neutered as it is by a subservient ‘social partnership’ model, the Irish trade union movement, with honourable exceptions of course, has so far failed to inspire mass action. The leadership of the Irish Congress of Trade Unions even refused to take a position on the EU Austerity Treaty in May.

Ireland’s socialisation of private losses is a national scandal which remains so far under-reported. It’s astounding that many fail to make the connection between this and the array of cuts to public services taking place right now.

Written more than a century ago, Jack London’s, The Iron Heel, endures as a very pertinent read. The dystopian novel, which later influenced George Orwell’s Nineteen Eighty Four depicts the tyranny of a class of nihilistic super-rich, named ‘the Oligarchy’, imposing their brutal rule on the rest of humanity. The book’s protagonist, Ernest Everhard, is a fiery socialist whose life-cause is to take on the huge capitalist monopolies and the powerful state which safeguards them. Riddled with outbursts of rage against the profit system, the book’s reader could not fail to miss the parallels between the scenario set out in this book and the world today.

Politicians from the two main parties in the US bore the brunt of one of Ernest’s wonderful tirades, an eruption of anger which could be aimed at almost any parliament in the world today:

“You pompously call yourselves Republicans and Democrats. There is no Republican Party. There is no Democratic Party. There are no Republicans, nor Democrats in this house. You are lick-spittlers and panderers, the creatures of the Plutocracy. You talk verbosely in antiquated terminology of your love of liberty, and all the while you wear the scarlet livery of the Iron Heel.”

Although it has been true for a long time, the present Eurozone crisis has brought to the fore the unspeakable fact that national parliaments are no longer the main power-holders in the world. The blackmail and intimidation of the Irish people into accepting Angela Merkel’s ‘Stability’ Treaty was but the latest instance of a rabid financial system making big decisions against the interests of the majority of humanity.

In January, under the threat of a “financial bomb” going off in Dublin, the Irish state pitifully paid €1.2 billion to unsecured, unguaranteed, faceless bondholders at the now defunct Anglo-Irish bank. Two months previously, €720 million was forked out for the same senseless purpose, at a time when billions are hacked away from public spending. The fact that the Fine Gael and Labour manifestos pledged to “burn the bondholders” did not halt this grotesque looting of scarce public funds. Terroristic warnings of financial catastrophe saw to it that the desires of the Irish electorate were overridden.

Although Ireland reluctantly bowed to the intimidation of financial terrorists, the Greek people took a stand and rejected the social vandalism of austerity, much to the annoyance of the “markets.” Christine Lagarde, the head of the IMF, let her veil slip when she declared that it was time for the Greek people to “payback” and warned them “not to expect sympathy”. The world’s media were shocked by her callous outburst. They needn’t have been surprised, however, as cold-hearted arrogance is well within the tradition of this monstrous institution whose policies have spread poverty and hardship throughout the globe.

True to her economic fanaticism, Lagarde is capable only of acknowledging hard figures, while remaining totally oblivious to the destitution millions of people now face in Greece. And destitution is no exaggeration.  It has been reported that many schools in the country are no longer able provide physical education because children are fainting in class as a result of hunger. In April, retired pharmacist Dimitris Christoulas shot himself in the main square of Athens during morning rush hour after his pension was butchered by the fanatical austerity measures imposed on Greece by the Troika.  His suicide note read: “And since my advanced age does not allow me a way of dynamically reacting… I see no other solution than this dignified end to my life, so I don’t find myself fishing through garbage cans for my sustenance.” Later the same month in Athens, a university lecturer in his 30s hanged himself from a lamp post, a young student shot himself in the head and a priest took his own life by jumping off a balcony. One can only imagine the hopelessness these people experienced to be driven to these extremes. This is the human side of economics, beyond the endless chatter about “the markets” and those frustratingly dull, lifeless figures.

Before the Troika’s diktats, Greece had one of the lowest suicide rates in the world. Since then, it has doubled and is likely to continue to rise. The country has seen a 25% increase in homelessness over the past three year and 1 in 11 people in Athens rely on soup kitchens for food. Thanasis Maniatisan, an economics professor at Athens University, told the Guardian that Greece faces “a great humanitarian crisis, similar to that suffered in advanced economies during the 1930s.” The society of an entire nation is collapsing as a direct result of the financial terrorism perpetrated by the Troika. Lagarde remains indifferent.

Back in March, ECB chief Mario Draghi revealed the sheer short sightedness and utter stupidity of the powerful when he boldly declared that “the worst of the Euro crisis is over”. The path of austerity they have chosen to travel tragically underline this folly. Their self-styled solutions merely attempt to resolve the symptoms of this crisis, rather than the causes. Such is their blind fanaticism.

The aim of Merkel’s Treaty is to minimise state debt and restrict public spending deficits. Although these issues were not the causes of the Great Recession, and tackling them will certainly not improve the situation as Greece has shown, the austerity gang insists on continuing on its failed path. Far from being a problem of the public sector, the current crisis was caused by the excesses of the private sector. Before the notorious bank guarantee, Ireland ran budget surpluses every year for the previous five years. Even the usually right-wing Economist magazine commented:

“This fiscal focus gets things exactly backwards. Spain’s poor public finances, unlike those of Greece, are a symptom rather than the cause of the country’s economic woes. Before the crisis Spain was well within the euro zone’s fiscal rules. Even now its government debt, at around 70% of GDP, is lower than Germany’s. As in Ireland, the origins of Spain’s debt problems are private, not public.”

This crisis, particularly in Ireland, Spain and the United States, was caused by an uncontrolled housing boom, unregulated private banks and the 30-year long suppression of wages. The austerity zealots have turned a crisis of a runaway private sector into a crisis of public spending. This situation urgently needs reversed.

Doubtless, there are millions who would agree with Jack London’s character Ernest Everhard when he raged:

“The capitalist class has mismanaged. In face of the facts that modern man lives more wretchedly than the cave-man, and that his producing power is a thousand times greater than that of the cave-man, no other conclusion is possible than that the capitalist class has mismanaged, that you have mismanaged, my masters, that you have criminally and selfishly mismanaged.”

 

– This article was published in The Morning Star.

 

 

 

It’s almost inevitable that in any discussion about socialism someone will claim that “humans are simply too selfish”. “We have always been like that and we always will be,” they would say. “That’s just the way things are, and you can’t change it”.

This argument is as hallow as it is predictable. It’s based on the false notion that humans are born inherently evil, selfish and violent. It’s a shallow argument which serves the ruling class well. After all, their system requires selfishness and extreme violence on a mass scale in order to operate effectively, for which the ‘human nature’ argument is intended to provide some sort of justification. Indeed, there were times in the past when slavery, racism and discrimination against women were all justified by the same ‘human nature’ argument.

The proponents of this argument associate ‘human nature’ exclusively with negative things, such as selfishness and greed. But they are far from the only characteristics that define our species. The more positive, and equally as important, ones such as co-operation, solidarity and friendship are generally ignored. If people’s actions were solely motivated by greed and selfishness there would be no such thing as charity; there would have been no money raised for the victims of the 2004 Asian Tsunami or other disasters; there would be no such thing unconditional parental love; there would be no friendship; people would not give up their lives for something they believe in; people would not protest against injustices on the other side of the planet. The list goes on.

The reason many people falsely associate ‘human nature’ with greed and selfishness is because the current mode of production encourages these features. Those who are wicked, ruthless and selfish do well under capitalism. Those who aren’t are usually disadvantaged. Because capitalism is the only system most people have ever experienced, they are lead to believe, wrongly, that greed and selfishness are the only human characteristics we can harness in order to run an economy. Attempts to organise society in a different way are simply “utopian” (Ironically, the people who attack us for being “utopian” also accuse us, at the same time, of wanting to subjugate humanity under some form of Stalinist dictatorship).

The ‘selfish’ argument also presumes that ‘human nature’ is something which is set in stone; that we are genetically programmed to be a certain way and nothing can change the way we are. Of course, this view is not one based on any form of evidence. ‘Human nature’ is not something static; our behaviour is almost entirely influenced by our social surroundings, and is in a state of constant change. That’s why a person alive today would be nothing like someone who lived 5,000 years ago. It’s also why someone brought up in a western society is nothing like a member of an Amazonian tribe. As Harry Magdoff and Fred Magdoff, of Monthly Review, said: “If human nature, values, and relations have changed before, it hardly needs pointing out that they may change again”.

What many people fail to recognise is the fact that capitalism is a relatively new historical phenomenon. Of the 150,000 years humans have populated this planet, industrial capitalism has been around for only 200 of those years. Indeed, capitalism in its modern, neo-liberal, form is only 30 years old. Many people find it difficult to understand that past societies were organised in countless different ways, many of them co-operatively, before the rise of capitalism. Likewise, we can organise ourselves differently after it goes. Throughout most of our history, humans have lived in hunter-gatherer societies, where there were no ruling classes. People who lived during these times would have viewed as totally alien the idea of a small number of individuals controlling a surplus produced by a larger group. Perhaps the most well-known case of a common ownership society (or primitive communism, as Marx described it) is that of the Native Americans. Here’s what Christopher Columbus had to say about them before their culture was destroyed by European settlers:

“Nor have I been able to learn whether they held personal property, for it seemed to me that whatever one had, they all took shares of….They are so ingenuous and free with all they have that no one would believe it who has not seen it; of anything they possess, if it be asked of them, they never say no; on the contrary, they invite you to share it and show as much love as if their hearts went with it.”

Many Native American tribes celebrated a festival known Potlatch. The ceremony involved the wealthiest in a certain area giving possessions away to the less well-off. The more you gave away, the higher your social status. Today’s culture of defining someone’s social standing by the number of flashy cars they own or how big their house is would be unfathomable to most Native Americans. In 1884, Potlatch was banned by the Canadian government after it was deemed to go against the Christian values of ‘civilized’ capitalism.

With the current economic system facing its biggest crisis since the 1930s, the ‘human nature’ argument is being raised now as much as ever. And it’s even more ridiculous at a time when working people are being asked to “tighten their belts” and sacrifice their living standards to pay back the debts of private banks. The fact is, only a relatively tiny number of people actually benefit from capitalism. How does it benefit anyone to work 60 hours a week for minimum wage just to pay their bills? How does it benefit anyone to have a boss? How do you benefit from capitalism when you are constantly threatened with unemployment? How would paying a high rent to a landlord for a run-down, inner city hovel benefit you? In my last article I showed how wages for the vast majority of people have stagnated over the past three decades, with many workers being left more than £10,000 a year worse off. How does capitalism serve the interests of these people?

Even more serious and disturbing is that more than 30,000 children have died over the past 24 hours because of preventable diseases. Another 30,000 died yesterday, and the day before that. They died because the capitalist market could not provide for even their most basic needs. Is dying from starvation or preventable disease in childhood just part of “human nature”?

Contrary to what is popularly believed, most people have a lot to gain from the replacement of capitalism with an economy based on common ownership. They will not have to labour half of their working lives to bankroll a class of idle rich. They will be able to run their own workplaces according to how they see fit and they will not be threatened with the destitution of unemployment.

Socialism is not about charity. It’s about the majority of humans taking control of their own lives. It would provide a massive increase in living standards for the majority of humanity and aims to promote the more positive human traits, rather than selfishness and greed.

Certainly, it would be true to say that socialism is the political self-interest of all working people.

The news that RBS chief Steven Hester has turned down his obscene £1 million bonus has been welcomed by all shades of political opinion. “Banker bashing” has transcended the narrow boundaries of the left and is now part of mainstream discourse, with even millionaire David Cameron spouting populist rhetoric attacking certain behaviour in the City. Mr Hester, however, will have little difficulty getting by on his modest salary of £1.2 million. Perhaps this is the “restraint” that David Cameron is referring to when he harps on about “moral” capitalism.

It might well feel good to attack the activities of “reckless bankers”. However, the problems inherent in the economic system we currently live under run far deeper than that. Certainly, lending huge amounts of money to people who could never afford to pay it back and subsequently selling that debt on to other financial institutions is irresponsible, but this does not address what it is that is wrong at the very core of capitalism.

One glaring absence in most public debates about the economy is the key issue of what actually caused the current crisis. It’s almost taboo to highlight the fact that wages in general have been stagnating since 1980. With the advent of Thatcherism/Reaganism, the assault on organised labour became ever more intense. The defeat of the British miners and American air traffic controllers in the 1980s marked the beginning of the decline of the trade union movement in the two countries. This was mirrored across the world, not least here in Ireland. These anti-union assaults heralded the birth of the most modern form of capitalism; neo-liberalism.

Trade union membership in the UK peaked in 1979, with just over 12 million members. This number has fallen year on year since the beginning of Margaret Thatcher’s deliberate destruction of the British manufacturing industry. Today, just over 6 million UK workers are unionised. The picture in Ireland shows a similar trend. Irish trade union membership peaked in 1980, claiming 62% of the country’s workforce. In 2010, just before the Troika’s “bailout”, less than 25% of Irish workers were in a union. Young people, especially, are less likely to even know what a union is, let alone join one.

The effect decreasing union membership has had on society was entirely predictable; wages fell in real terms and working conditions deteriorated. Last week, a TUC report revealed a number of startling findings. The main one was this; had wages grown at the same rate that the economy was growing over the past three decades, workers in the UK would be collectively earning £60 billion more than they are earning today. The TUC’s Touchstone Blog has a very useful tool on its site called the ‘Incomes Tracker’, which all workers might want to have a look at. It helps put this great robbery into perspective. Say you are earning £21,000 per year. Had your wage risen at the same rate the economy was growing (and remember, workers create all wealth in any economy) you would be taking home a handsome annual salary of more than £32,000. Or, if you are taking home a modest wage of £14,000; you would actually be on a wage of £24,000 had your wages grown in line with the wider economy.

When the economy was growing, the rich were increasing their income accordingly. However, those who were actually working and producing things to make the economy grow received nothing extra for their labour. Despite becoming more productive, workers’ income stayed the same. In many cases, wages actually decreased in real terms. In the US, this reached extraordinary levels. Between 1979 and 2007, the richest 1% of Americans increased their income by 275%. In contrast, the bottom 20% increased their income over the same period by a mere 20%. While some union activists were preaching class war, the ruling class were busy practicing it.

And don’t think for a minute that the pain is now being shared out proportionally just because there is a recession; far from it. Last year the income of the directors of the top 100 companies in the UK increased by 43%. The thousand richest people in the UK fared even better. According to the Times Rich List the total wealth owned by this group of people has increased by 53% since 2009. They now own a combined wealth of more than £400 billion.

It’s increasingly likely that this deep inequality will lead to social catastrophe. There has been only one other period in modern history when inequality was as great as it is now; the decade immediately before the Great Depression.

The race to attack the incomes of workers highlights the sheer irrationality of capitalism. When wages are repressed, demand collapses, as the working class as a whole are unable to buy back to goods it collectively produces. This leads to millions of useful products rotting unsold in warehouses and factories. This is known as a crisis of overproduction. The solution of the capitalist class to overcome this problem is an inherently unstable one; pumping out credit. Instead of raising the income of those who create the products they want to sell, the capitalist class encourage workers to obtain credit cards and stack up mountains of personal debt. Rather than actually overcoming it, the best capitalism can offer is the postponement of a crisis. With personal, commercial and public debt all spiralling upwards over the past three decades, it was only a matter of time before this system collapsed.

However, things are likely to get worse. A lot worse. The internationally coordinated attacks on wages and working conditions, coupled with the destruction of the old social democratic welfare states, will cause consumer demand to collapse. This will lead to a vicious cycle of ever more job losses and company closures, which will collapse demand still further. Even Mervyn King, the Governor of the Bank Of England, has warned of the coming depression being worse than the 1930s. The coming years will see thousands defaulting on personal debts. House repossessions will become more common as people struggle to meet ruinous mortgage payments. The Euro is also on the verge of collapse, with some countries veering towards default. The fact is, the crisis of 2008 was merely a forerunner of a larger crisis about to come.

Tumultuous historical periods such as the current one often witness great calamity. In times like these, the stupidity of those in power should not be underestimated. Just look at the political response to the crisis. Almost all commentators are calling on governments to “get the economy growing again”, regardless of the impact perpetual growth will have on this planet’s fragile environment. We also hear politicians urging the banks to “start lending again” without questioning why we need to run an economy built upon colossal amounts of debt. And the best our geniuses in Stormont can come up with is a proposal to reduce corporation tax.

Despite the frantic efforts of the world’s leaders, no solution will be found to this crisis within the current economic structures. A radical reorganisation of society is the very least that is required to guarantee a decent standard of living for every human being on this planet. Anything less will bring us back to the conditions of the 1930s.