The end of capitalism

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When I left school nearly 50 years ago, my first two jobs were in the accounts departments of a couple of small, family-owned and run engineering companies. In both of them, there were three generations of several families on the factory floor, and wives and daughters from the same families in the office and canteen. The owners set a profit target for the year that would allow them to live in the manner to which they had become accustomed, and if the company managed to beat that target, as they did every year I was there, they paid bonuses to the staff. One year that was two weeks extra wages. The family attended staff funerals, weddings, and christenings: the workers were paid well, the partners made their profits, the government got its taxes, and everyone was happy. That's what I understand as free market capitalism. By the 70s, theoretical economists, may they rot in hell, began pushing the barrow of constant growth, in turnover and profit, as the only relevant indicator of business success. Small and medium size businesses began to amalgamate into medium and large businesses in the name of economy of scale. Someone realised, as the domestic markets of these companies began to shrink, that it was unwise to make good quality products that would last for years, and that abomination called 'planned obsolescence' came into being, the manufacturing of shoddy, short shelf-life products to encourage the customer base to return for new products. But soon even this began to fail, so they set their eyes on new markets, and so began what is now called globalisation. But to create new markets in Third World countries meant dragging them, kicking and screaming, into the 20th century, and in the process of modernising them, dozens of eminently viable and successful subsistence economies were destroyed, creating the roots of what we now call 'global poverty'. The Green Revolution is one of the biggest snow jobs in modern history. But since the West controls 90% of the wealth, even these mew markets quickly became saturated, leaving the now large and superlarge international companies seeking new ways of increasing profits. If markets cannot be increased, all that is left is cost-cutting, which almost invariably means cutting wages and employment. Automation, where possible, was introduced, putting many people out of work. Then the unskilled and semi-skilled jobs were relocated off-shore, in Third World countries where the companies could get away with substandard wages, substandard safety practices, and no job security. The third process was to prune down the skilled staff by making fewer people do more work. The results of this last effort are becoming clear: Australia's largest airline, for instance, has one of the best air safety records in aviation history, yet three times in the past year alone there have been close misses that could have turned into major disasters. Once the self-serving, a$$-covering BS is pushed aside, we find the major problem is poor maintenance, because the reduced maintenance staff is simply not able to do its job properly. It is only a matter of time before it will be as risky flying with Qantas as it is with some shoe-string operation in SE Asia. In the meantime, all those staff put off in the name of cutting costs are having trouble finding new jobs. Most who do are forced to accept substandard wages, substandard safety practices, and no job security, just like their colleagues in the long-suffering Third World. The rest can't find jobs at all, and so we are now developing in the world's richest countries a poverty-stricken sub-class identical, in relative terms, to the sub-class in the Third World. And what is worse, this sub-class were once not only workers, but consumers. Big business is destroying its own customer base in the search for greater profit, a contradiction which even Marx saw 150 years ago. Communism collapsed 20 years ago: it seems likely that Capitalism won't survive it by much more than 25 years. What prompted this essay length discussion post is the number of hysterical discussions begun by the loony American Right bltching about the government bailouts in the US, and along the way, criticising the Poverty Relief Bill on the grounds that the US has enough poverty of its own - er funny, didn't I just say that? But I have to ask this question: if this poverty-stricken underclass has developed as a direct result of the SUCCESSFUL operation of America's giant corporations, what on earth is it going to be like if they actually collapse? The Great Depression is going to look like the Teddy Bears' Picnic. Lash