A case for socialism


In December 2006, when Kevin Rudd was elected leader of the federal Labor Party, he held a press conference about his personal values where he stated the obvious: "I am not a socialist. I have never been a socialist and I never will be a socialist." His argument against socialism was basic — it is a "19th-century arcane view".

If Rudd's critique of socialism — as an outdated and irrelevant idea — sounds familiar. it's because you've heard it so many times before. Who hasn't heard their teacher or lecturer or friend make the claim that socialism is a thing of the past? We're constantly told that terms like "working class" and "capitalist class" are no longer relevant. We're meant to learn that socialism is undemocratic and be able to repeat the cliche "socialism works in theory but not in practice".

What if we apply these criteria to capitalism? Is capitalism outdated? Does capitalism work in practice?

The 2006 UN Human Development Report exposed the water crisis facing the world. It revealed that more than 1 billion people do not have access to safe water and 2.6 billion (almost a third of the world's population) lack adequate sanitation. The report rejects arguments that the water crisis is primarily a result of the physical scarcity of water or of "overpopulation". Rather it argues that it is a crisis "rooted in power, poverty and inequality".

Around 1.8 million children die each year as a result of diarrhea. The rate of progress in reducing child mortality globally has slowed in many underdeveloped countries. Had progress continued at rates registered in the 1980s, there would have been 1.5 million fewer child deaths in 2004 alone. Some progress has been made but, according to the advocacy organisation DATA, at current rates even the UN's Millennium Development Goal of halving the proportion of people without sustainable access to safe drinking water and basic sanitation by 2015 will not be met until 2050!

The UN report looks at the historical significance of clean water and sanitation for the human development of the industrialised world. It explains that the expansion of sanitation in Britain contributed to a 15-year increase in life expectancy in the four decades after 1880.

If capitalism was able to achieve this for part of the world in the 19th and early 20th centuries, why hasn't it done so most of the rest since? Surely this is a sign of an outdated system.

The UN report observes: "Over the past decades there have been unprecedented increases in material wealth and prosperity across the world. At the same time, these increases have been very uneven, with vast numbers of people not participating in progress. Mass poverty, deeply entrenched inequality and lack of political empowerment contribute to deny a large share of the world's population the freedom to make real choices."

Entrenched debt

This is capitalism working. The wealth needed to industrialise the Third World is monopolised by transnational companies based in the rich countries, the developed capitalist countries. The Third World is kept in an economically backward state through a system of entrenched debt. According to figures published by the International Monetary Fund, in the period from 1980 to 2006 the combined external debt of the Third World rose from US$618 billion to $3150 billion. In the same period, these countries paid a cumulative $7673 billion to service this debt!

Across Africa alone, this has meant an average of $25 billion a year, almost double what is currently being spent across the continent to improve access to clean water.

This isn't the result of a lack of wealth. You only have to look at global military spending, which reached $1204 billion in 2006, according to the Stockholm International Peace Research Institute — 48% of it by just one country, the United States.

Global inequality results from the capitalist system's need to maintain the Third World as a source of cheap labour and raw materials.

Defenders of capitalism argue that things are getting better for just about everyone and what the capitalist market can't fix, aid from rich countries can. An article in the January/February 2003 New Internationalist looked at the phenomenon of "dumping" whereby food produced in developed countries that cannot be sold at a profit is given (or sold below cost) to the Third World as aid, often undermining the livelihoods of local farmers.

"World Food Programme figures show that food aid peaks in years when world cereal prices are low and stocks are high" the NI article reported. "Ironically this means that food aid is most readily available in overproduction years — when it is least needed.

"USAID's own website reads: 'The principal beneficiary of America's foreign-assistance programs has always been the US. Close to 80 per cent of the USAID contracts and grants go directly to American firms. Foreign-assistance programs have helped create major markets for agricultural goods.'"

Inequality growing

Capitalism today is a brake on human progress. Decisions about the production and supply of goods and services are made on the basis of corporate profit not on meeting human needs. Yes, capitalism "works" — for a minority, especially the world's 946 billionaires. (When I looked at the latest billionaire list on the Forbes magazine website a Nokia advertisement popped up with the slogan "Great in theory, better in practice". No doubt, that's what these billionaires think about capitalism.)

According to the World Bank's 208 World Development Report, 2.1 billion people live on less than $2 a day.

Even in the world's richest country, the US, held up as the model of capitalism, 37 million people — 12% of the population — live below the official poverty line, not much different from 1973 (11%). But these bare figures hide the growth of inequality in the US.

A June 2005 New York Times study, based on taxation figures, found that from 1950 to 1970, for every additional dollar earned by the bottom 90% of taxpayers in the US, those in the richest 0.01% of households brought in an additional $162. From 1990 to 2002, for every extra dollar earned by those in the bottom 90%, every taxpayer in the top 0.01% brought in an extra $18,000.

In "egalitarian" Australia there are more than 2 million people living below the poverty line and 100,000 are homeless. Meanwhile, annual military spending reached $22 billion this financial year.

What could be more timely and relevant than a system — socialism — that would allow a democratically planned use of the world's resources to eradicate inequality, poverty and preventable diseases? In the context of global climate change, what could be more "21st century" than having ordinary people, rather than the "hyper-rich" minority, decide the priorities for humanity? What could be less "arcane" than using the wealth generated by working people to meet human needs rather than to increase corporate profits?

[Simon Cunich is the Resistance organiser in Newcastle.]