The contradictions of capitalism

In their competitive drive to maximise private profits, the capitalists are forced to continually socialise the process of material production, binding the labour of an ever growing number of workers together through an expanding social division of labour. Branches of production that were previously independent from each other are transformed into a series of interdependent networks, binding companies, regions, and countries.

But this socialisation of labour, of production, occurs within the framework of private, capitalist, appropriation (ownership) of the means of production under which, through competition, smaller, weaker firms are eliminated by larger, more technically advanced firms. Capital thus becomes increasingly concentrated and centralised. Consequently, as capitalism develops, its fundamental contradiction is continually accentuated — production takes on an increasingly social, cooperative, character at the same time as society's productive wealth is concentrated in the hands of a smaller and smaller number of capitalists.

From this fundamental contradiction of the capitalist mode of production flow a series of others:

  • The contradiction between the increasingly planned and conscious organisation of production within each capitalist firm resulting from the socialisation of labour, and the unplanned, anarchistic nature of capitalist production as a whole. The allocation of capitalist society's productive resources is not governed by any conscious plan but rather, by variations in the rate of profit and the competitive drive of capitalist firms to maximise their profits.
  • The contradiction between the tendency towards unlimited expansion of production and the restrictions capitalism imposes on the individual and social consumption of the workers. Capitalism is obliged to impose these limits because the aim of capitalist production is to maximise surplus value, and this necessitates limiting the growth of real wages.
  • The contradiction between the potential of enormous leaps in science and technology to ensure the fulfilment of social needs and the harnessing of these potential productive forces to the capitalists' drive for private enrichment (accumulation of capital).
  • The contradiction between the drive by each capitalist firm to maximise its profits by increasing labour productivity through increased mechanisation, and the tendency for the average rate of profit to fall, due to growth in the organic composition of capital (the ratio between the amount of capital expended on machinery and raw materials and the amount of capital expended on wage labour).
  • The contradiction between the internationalisation of the productive forces (creation of a world market, objective socialisation of labour on an international scale) and the division of the world into separate nation-states.

All the inherent contradictions of the capitalist mode of production explode in more or less regular crises of overproduction of commodities and over-accumulation of capital. These crises are characterised by a generalised decline in investment, production, employment, the income and purchasing power of working people, and economic activity as a whole.

The private, capitalist, form of appropriation of the socially produced wealth makes private profit the only aim and driving force of production. Production develops by leaps and bounds, not in the sectors where the most urgent real social needs are to be found, but rather in those where the highest profits can be achieved. Underproduction in one sector regularly coincides with overproduction in another. The distribution of human labour between different branches of production never corresponds exactly to the distribution of purchasing power for the products of those branches. When this disproportion becomes generalised, it is resolved by a crisis, which leads to a new equilibrium, itself temporary and ephemeral. Thus the capitalist economy expands in an uneven and disharmonious manner, through "boom and bust" cycles, through the periodic waste and destruction of part of society's accumulated productive forces.

While it is based on private ownership of the means of production, the inevitable concentration and centralisation of capital that accompanies the development of the capitalist mode of production continually reduces the proportion of the population that owns means of production. As a result, the proportion of wage workers grows continually as more and more producers are dispossessed of their means of production (subsistence) and are forced to rely on selling their labour power to the capitalists. The class structure of capitalist society becomes increasingly polarised between a small handful of capitalist magnates at one end and a growing mass of wage workers at the other.

As the unique product of the capitalist socialisation of production, the working class is trained by the system of capitalist exploitation to act cooperatively, and to see that the individual interest of each worker can only be realised through collective action. It is these qualities, plus its power to halt capitalist production, that make the working class the social force that can put an end to capitalism's contradictions and their anti-social consequences through the collective appropriation of the means of production, and their management according to a conscious plan by the associated producers themselves.