By Steve Halpern
The pandemic has exposed aspects of the capitalist system that most of us don’t usually think about. Why would the government give trillions of dollars to corporations while fifty million workers are unemployed, and hospitals have been in dire need of supplies? Why did the government invest $1.5 trillion in the F-15 fighter bomber, when they knew funds needed to be invested in public health? While the state of Pennsylvania and Cuba have similar populations, Pennsylvania has had over 7,000 COVID-19 deaths, while Cuba has had only 87 COVID-19 deaths. Why?
In order to begin to answer these questions we need to look at the capitalist system and how it functions. Karl Marx studied this question by looking at the way prices of commodities are determined. He argued that first there is constant capital that consists of all the machinery and buildings used to produce a commodity.
Then, there is what he called variable capital that consists of all the labor needed to produce a commodity. Marx used the term variable capital to distinguish this investment from constant capital. This is because while constant capital needs to be paid for in full, the labor of human beings can be discarded whenever a capitalist chooses. This means that for the fifty million workers who are now unemployed, their employers are under no obligation to support those workers. This is in spite of the fact that the laid off workers were necessary for the capitalists to profit.
Then, there is the somewhat controversial surplus capital. This is where Marx is different from pro-capitalist economists. Surplus capital consists of all the costs of capitalists not included in constant and variable capital. This includes profits, education, health care, banking, insurance, advertising, taxes, corporate law firms, and stock brokerage houses. Clearly, we are all agreed that education and health care are necessary. The controversy is about the other enterprises involved in surplus value.
Economists who support capitalism argue that what Marx refers to as surplus value is the service sector of the economy. They argue that profits, banking, insurance, corporate law, taxes, and stock brokerage houses all contribute to the common goal that keeps the economy running. Clearly this sector of the economy has grown considerably since the time of Marx. However, I believe Marx would argue that these enterprises do not serve the interests of the working class, but consistently work to undermine the interests of the vast majority of the population.
Banks and insurance companies merely move money from one place to another. Workers are the ones who provide the goods and services we all need and want. Advertising agencies merely promote commodities and attempt to create an environment that Marx called commodity fetishism. This drive is an attempt to make workers obsessed with purchasing commodities we might not need or want. Corporate law firms and the government merely serve the interests of corporations. This is becoming more and more clear every day.
So, when we add constant capital to variable capital, to surplus capital we get the average price of commodities. Looking at this formula, we see that money used for surplus capital might not be needed. This would mean that the prices we pay are too high, and that we might all be working fewer hours to attain the goods and services we all need and want.
If we look at our problems from this perspective, all that might be necessary is to have a polite discussion with capitalists arguing that it might be a good idea to redistribute wealth. As Vladimir Illyich Lenin argued: If capitalism fed hungry people, it wouldn’t be capitalism. The question is: Why?
Karl Marx and Frederick Engels gave us a clue to this problem in their Communist Manifesto. They argued that in capitalism there is a disease humanity never knew before in history. They called this the disease of overproduction. This means that before capitalism, people used to celebrate when they had an overabundance of commodities. However, with capitalism, when there are more commodities than consumers are buying, capitalists eliminate jobs.
Today, capitalists have argued that they have eliminated jobs because of the pandemic. This isn’t entirely true. There are many workers who would do the essential jobs, if they knew that employers were doing everything in their power to create a safe working environment. This isn’t happening. Why?
Marx noticed that in his day employers were driven to purchase more and more expensive machinery in order to make workers more productive. Failure to do this would make capitalists helpless to compete with their competitors. As capitalists spent more money on this machinery, they found that they would receive a declining percent of profit on their investments. In order to counteract this trend, capitalists relied more and more on loans from banks. Eventually banks began to dominate almost all corporations.
So, capitalists not only needed to purchase machinery, they also needed to pay interest to banks. Because this became increasingly risky, capitalists also purchased insurance. With all these expenses, capitalists needed to sell more and more commodities. This explains why advertising is funded to the tune of about $200 billion per year.
Then, we can say that this massive funding to keep corporations profitable might appear to be insensitive, given the conditions of dire poverty all over the world. This is why corporations routinely pay lobbyists to ensure that government officials always support the drive to maximize profits all over the world. High priced lawyers are also necessary to give the appearance that the ruthless drive for profit is legal.
Understanding this reality, we see that capitalist greed is only a natural outcome of a system driven to maximize profits. When there is a capitalist obsession to drive down costs, sell increasing numbers of commodities, as well as going into astronomical debt, there can only be one ultimate result. That is a complete economic collapse. We are beginning to see this collapse today.
In somewhat normal times, capitalist economists look at the supply and demand, as well as the occasional crisis that will result because of the natural functioning of the system. Today, those economists look at the increasing or decreasing death toll of the pandemic, to determine if and when the economy will reopen.
We might consider that the economy never fully recovered from the crash of 2008. The federal government merely printed trillions of dollars and gave that money to banks. They called this quantitative easing. Well, today the pandemic has compounded the crisis and there is no end in sight.
Capitalism and alienation
So, the working class all over the world not only creates all profits, but we also create all the wealth that finances the entire service sector of the economy. However, we have no control over all that wealth we produce. Yet, the government claims we live in a democracy. In the twelve years I attended public schools, every day my teachers asked me to stand up, place my hand on my heart, and pledge allegiance to the flag they claimed represented “liberty and justice for all.”
Understanding this reality, we can see why Marx argued that it is normal for workers to feel alienated, given the fact that we have no control over the wealth we produce. In my day to day life, I see this alienation in the profanity people use on a regular basis. This was especially true in the years when I worked in factories, where the wealth of the world is produced.
Clearly, there are many words in the English language. However, many people in all classes feel the need to use profanity because we become enraged at aspects of the environment we experience. Clearly, one of the reasons for this rage comes from the fact that workers have no control of the wealth we create.
James Baldwin argued that Black people almost always have feelings of rage. Baldwin also argued that much of the wealth in this country came from the institutionalized discrimination against Black people in employment, housing, health care, education, and with routine police brutality. Yet, as I mentioned, the government claims there is “liberty and justice for all.”
Clearly, the pro-capitalist press has had numerous articles about ways to deal with the pandemic. However, none of those articles mention the fact that workers are normally alienated because we have no control over the wealth we produce.
This means that employers expect workers to risk our lives at alienating jobs so they can maximize profits on their investments. These are some of the reasons why masses of people from all over the world have been protesting the effects of the crisis of capitalism.
Cuba and the pandemic
As I mentioned, the nation of Cuba has a tiny percentage of COVID-19 deaths, as compared to this country. Yet, while this country has enormous resources, Cuba is a relatively underdeveloped. When we see how capitalism works, we can begin to see how a socialist political economic system can have a profoundly different response to fighting the effects of the pandemic.
Today, Cuba has about three times more doctors per capita as the United States. During the first weeks of the pandemic, Cuban doctors, nurses, and medical students visited literally everyone on the island to determine who had COVID-19 symptoms. I am unaware of any pro-capitalist media source in this country that even suggested that this might be a possibility here.
Cuba also developed their interferon drug Alpha 2B. This drug stimulates the immunological system to fight COVID-19. This drug has been effective in preventing COVID-19 patients from getting pneumonia. Alpha 2B is being manufactured in China and is being sold all over the world. The United States is not purchasing Alpha-2B because of the trade embargo against Cuba. While Cuban researchers have studied interferon for over thirty years, the pharmaceutical companies of the United States haven’t been doing this research because they didn’t think it would be profitable.
Cuba has also sent its doctors all over the world to aid in the fight against the pandemic.
Conclusion
When we see the contrast in how the socialist and capitalist systems are dealing with the pandemic, there is one inescapable conclusion. In order to deal effectively with the pandemic, we need a completely different political economic system.
A worker’s government in this country would make it their top priority to ensure that the needs of literally everyone are provided for. This government would do everything in its power to create safe work environments. Then, it would ask for volunteers to carry out the essential tasks. However, we might ask the question, if work was voluntary, why would anyone choose to work?
The point here is that if workers began to have real control over the wealth we produce, then a new attitude would eventually become the norm. Instead of producing for the wealth of an employer, we would be working to ensure that everyone has the means to live a fruitful life. Under those conditions the alienation people feel towards work would wither away.
Today demonstrations are erupting all over the world demanding safe working environments and an end to institutionalized racial discrimination. These demonstrations have the clear potential to grow into a movement that puts in place a government that makes human needs and not profits its top priority. As Malcolm X once said: “Either we will all be free, or no one will be free.”
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