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Capitalism’s dodgy claims

To survive, a system has to have many props. A main buttress of capitalism ideologically is its claim to be by nature enterprising, with a self-generating dynamic and an entrepreneurial spirit. The claim is repeated so often and is so rarely questioned that it has assumed the guise of an indisputable truth.

But should we succumb to assertion when it comes without supportive evidence? Even worse, should workers tolerate a complete falsehood?

Undoubtedly, in the early periods of industrial capitalism, today’s claim was then a truth. All the trappings of an industrial revolution - railways, canals, etc - were produced either on the back of internally generated capital or from the expansion of joint stock companies. You will not find a better panegyric to the transformative powers of the early capitalists than in the Communist Manifesto: “The bourgeoisie has created more massive and more colossal productive forces than have all preceding generations together. The bourgeois cannot exist without constantly revolutionising the instruments of production, and thereby the means of production, and with them the whole relations of society” (Marx and Engels, 1848).

But a lot of water has flowed under the bridge since those times and the nature of capitalism has changed fundamentally. Similar claims just don’t work now. In the contemporary world when it comes to profits capitalists do not take risks; when it comes to their private profits they expect certainty; more important, they expect the certainty of provision of public funds before undertaking any substantial project.

Take the Crossrail development in London, for instance, where the £14.8 billion undertaking is entirely financed by funds provided by either government, Transport for London or Greater London Authority bonds. In one way or another, this means that the profits made by the private construction firms involved are being entirely underwritten and guaranteed ultimately by our taxes or by business rates. Again with the Private Finance Initiative (PFI) schemes, capitalist companies that build new schools or hospitals are pocketing fortunes from public money. There is no evidence of a vibrant entrepreneurial spirit at work, merely the featherbedding and propping up of a senile capitalist class by a corporate state funnelling public funds amassed largely from workers’ taxes into private coffers.

If a corporate state can direct funding capital into the hands of private companies without offending the natural order of things, then why can’t a socialist state direct funding into industrial and infrastructural projects to meet the needs of working people and be considered by the newly arranged society as entirely natural too?