Crazy capitalism and an alternative

by Anna Pha

The small decline in the official unemployment rate in September to 6.7 per 
cent masks a rapidly deteriorating economic situation. The figure has been 
used by the media to shore up the prospects of the Coalition Government's 
re-election on November 10. Don't be surprised if after the elections a 
completely different picture emerges.

Prime Minister John Howard is either lying or deluded when he says that the 
slump is "just a hiccup" and that talk of a recession is "ridiculous".

Out there in the real world the corporate collapses, the takeovers, and the 
restructuring continue to destroy jobs.

In September alone, Coles Myer cut back its workforce by 1000. Ansett was 
grounded and less than half of its 16,000 employees are expected to find 
re-employment in the airline industry. Those to be reemployed will do so on 
worse conditions.

During the same month South Pacific Tyres sacked 900 workers, Amcor 1000, 
Daimaru 1010, Pasminco 1800, and many other smaller companies also laid off 
staff.

Before that there were the collapses of HIH Insurance, OneTel, Harris 
Scarffe and hundreds of smaller businesses around Australia.

Companies continue to go under or cut back on staff as demand for their 
goods and services fails to match output. Profit forecasts are being 
lowered as demand does not match supply. Workers simply do not have the 
means to buy all that is produced.

Last year the major retail outlets were struggling to make small increases 
in sales. As electricity, gas, phone bills and the costs of transport, 
clothing, books and many food products rose, the ability of workers and 
pensioners to buy goods and services declined. By putting prices up the GST 
eroded the purchasing power of wages and pensions. There was little 
increase in actual goods and services produced.

Workers have eaten into savings, and are spending heavily on credit. The 
amount outstanding on Credit Cards continues to grow rapidly. This cannot 
go on forever.

Coles Myer which takes in around 18 per cent of every retail dollar spent 
in Australia is feeling the pinch.

It is just one of a number of major companies like Harvey Norman, 
Woolworths, the Strathfield Group, Boral and James Hardy whose sales are 
declining and profits with them.

Many economists are now beginning to admit that there is the likelihood of 
a global recession, triggered by the economic slowdown in the US.

Major corporations around the world have laid off in total hundreds of 
thousands of workers. The box opposite lists some recent examples.

There are a number of factors contributing to this situation. They include:

* wage reductions (e.g. through individual contracts, non-union 
agreements);

* failure of government to fully compensate low and middle wage earners for 
GST;

* wages for young workers and women have been lowered;

* the widespread payment of below award wages;

* longer working hours and unpaid overtime;

* loss of penalty rates;

* price rises;

* under-employment — casualisation, enforced part-time work;

* unemployment;

* the declining purchasing power of pensions, unemployment benefits, 
student allowances and sickness benefits;

* speed-ups, downsizing, technological and other changes in work practices;

* privatisation and user pays creating additional costs and new layers of 
profits, extracting even more money from the pockets of workers.

All of these factors in one way or another increase the proportion of the 
cake flowing to profits. They are the deliberate policies of our 
governments and the corporations they serve.

The irony is that their greed creates the crisis of over-production that in 
turn undermines the stability of the capitalist economic system and creates 
the resistance of the working people and their struggle to improve their 
situation. That is why Marx and Engels declared that capitalism "creates 
its own gravediggers".

This crisis, which could lead to a full-blown depression results from the 
basic production relations of capitalism.

On the one hand, there is the private ownership of the means of production 
and what is produced, based on the achievement of maximum profit.

On the other hand there is the exploitation of workers who make the goods 
and provide the services for the market. Employers continually attempt to 
force down by various means, some of which are listed above, the proportion 
paid to workers.

This is the basis of the class struggle that has been waged for hundreds of 
years between employers and workers.

Ending this crazy system can eliminate the boom and bust cycles of 
capitalism. This can be done by substantially increasing the proportion of 
the means of production and service providers that are publicly rather than 
privately owned.

This creates the possibility for publicly owned enterprises to implement 
social responsibilities and progressively pass on the benefits of increased 
productivity to the working people and their families.

This can be done by way of wage increases, shorter working hours, the 
provision of cheap or free kindergartens at work for the children of 
workers' families, the provision of low cost meals at work and other 
similar benefits.

The drive for maximum profits is replaced by these social responsibilities.

Furthermore, the predominance of production enterprises and services being 
publicly owned also creates the possibility and the necessity for economic 
planning thereby eliminating the waste of anarchistic capitalism.

The bankruptcies of the last period have suddenly thrown thousands of 
workers out of their jobs. This could be avoided by publicly owned 
enterprises having an obligation to find alternative work, reduce working 
hours and take other steps to bring an end to the horror of unemployment 
which is a permanent feature of all capitalist economies.

The program of the Communist Party opposes the policies of privatisation 
and contracting out and calls for "the return to public ownership of public 
services and enterprises, including transport, health, education, social 
services and social security, banking, insurance, pharmaceutical production 
and all key industries such as power generation and the mining of natural 
resources. A national investment policy that outlaws control of the 
national economy by foreign investors" would also be implemented.