• The Left Chapter

Monopoly capitalism and economic crisis

Excerpts from The Road to Socialism in Canada, Program of the Communist Party of Canada, 1972.

Part of the Toronto Stock Exchange frieze designed by Charles Comfort with the infamously placed hand of the capitalist.


Excerpts from The Road to Socialism in Canada, Program of the Communist Party of Canada, 1972:


The economic system under which Canadians live is capitalism. Under this system the large-scale means of wealth production are privately owned; the capitalists operate their factories, mines, forest operations, transport, etc., in order to extract profits. The source of profits and accumulation of capital is the exploitation of the working class, all those who work by hand and brain, whose labor is the source of all material wealth and cultural values.


The workers own no means of production, they have no source of income beyond their capacity to work — their labor power. This they must sell for a price — wages — to the capitalists in order to live.


This is the source of the conflict of interests between capital and labor inherent in the capitalist system. The capitalists, who have appropriated the social means of production, employ wage workers only so long as their labor produces profits for them. They hold down wages so as to squeeze greater profits out of the exploitation of the workers. The workers fight to maintain and .increase their wages and improve their living conditions. This is the heart of the class struggle under capitalism which affects the whole of society and which at a certain stage becomes impelled to a revolutionary struggle aimed at changing the social system itself.


Under capitalism, the labor process is carried on by the joint effort of large numbers of workers operating modern, mass-production machinery. But while the labor and the production process is social, its fruits are privately appropriated by the owners of the social means of production. This contradiction is, in the last resort, the source of all the evils of capitalism — unemployment, economic and social insecurity, poverty, economic crisis and the drive to war.


It is a law of capitalism that it everywhere tends to concentrate the ownership of the means of production and of wealth into fewer and fewer hands. In town and countryside alike, small producers, traders and farmers are pushed to the wall by big capitalist firms. Out of and alongside the cut-throat competition of early capitalism, monopoly emerged. A few huge concerns, in which banking and industrial capital are merged and which are manipulated by a handful of finance-capitalist tycoons, come to dominate the entire economy. Competition among smaller capitalists gives way to competition amongst giant monopolies at home and abroad...


In the period of the deepening of the general crisis of the capitalist system, monopoly capital subordinates the state machine more and more directly to its interests and control — it merges with the state and uses it to extend still further monopoly-capitalist control of all sectors of economic and political life. The government has virtually become the political instrument of the small group of top monopolists to control the rest of society. Monopoly uses the state to provide orders, capital and subsidies, to secure foreign markets and investments, and to mitigate the consequences of economic crises. The principal aim of modern state-monopoly capitalism is the salvation of the capitalist system, the enrichment of the monopolies, the destruction of the socialist sector of the world, the suppression of the working-class movement and the national-liberation struggle.


State-monopoly capitalism leads to the further deepening of the contradictions between the interests of the overwhelming majority of the people and those of a handful of immensely wealthy finance-capitalists. The system of private ownership of the social means of production and their use for private profit is more and more a barrier to economic and social progress. State-monopoly capitalism deepens the crisis of capitalist politics and ideology, generates political reaction, and seeks to strengthen all the reactionary features of capitalist society. State-monopoly capitalism means a shrinking of democratic forms of control, with parliament increasingly by-passed. All the means of communication are controlled by a diminishing number of monopolies. Thus, alongside political power, there is monopoly control over the mass media, directed to influence the minds and attitudes of the people. State-monopoly capitalism undermines democracy...


Capitalist economy operates in cycles of boom, crisis, depression and recovery. Periodically, and at increasingly shorter intervals, expansion is followed by a glut of goods on the market. Plants close down, workers are thrown on the street — not because people have no need for what industry can produce, but because goods do not sell in quantities and at prices that would ensure a level of profit satisfactory to the capitalists. Productive capacity comes into conflict with the restricted purchasing power of the masses of the people. A slow recovery takes place and once more the cycle commences, again to lead to its crisis phase. Such periodic crises of relative over-production are a built-in feature of capitalism. When they occur the capitalists try to thrust the burden of the crisis on the backs of the workers and farmers, and they in turn are compelled to fight back.


The development of state-monopoly capitalism has modified some of the forms of expression of the features of the economic cycle. State-monopoly capitalism strengthens the economic positions of the capitalist state and enables it to actively intervene in the process of capitalist reproduction. The capitalist state has become an active force in the reproduction process. The scientific and technological revolution and the economic competition between socialism and capitalism demand it. Merging monopoly capital and the power of the state into a single mechanism has become objectively necessary for the capitalist system to function. This finds its reflection in increased government regulation of the economy and some form of indicative planning. However, these measures are not equivalent to genuine planned development of the economy. Indeed, planned development of the economy is incompatible with capitalist relations of private ownership and the spontaneous forces of the capitalist market. The socialization of production makes the capitalist superfluous. Monopoly capitalism, for all its state-monopoly regulation and certain planning elements, basically remains an anarchic market economy.


Nevertheless, regulation and indicative planning or programming do have an influence on the capitalist economy to some extent, without being able to rid it of its organic disproportions and economic crises. This finds its most notable expression in an inability to assure rapid and non-inflationary economic advance and full and effective employment of labor power and capital. Economic growth inevitably results in overheating the economy, producing excessive tensions and unevenness of development, instability, slumps in the economy, monetary and financial crisis. All these show that state-monopoly capitalism cannot eliminate economic insecurity, recession, depression and mass unemployment.


Underlying economic crisis is the basic contradiction of capitalism — between the social character of production and the private capitalist appropriation of the goods produced. The idea that capitalism is an affluent society, a welfare state, a consumer society, that it has outlived economic crisis and can provide full employment and continuously rising living standards is manifestly false. Under all conditions capitalism works against the interests of the working class. Because the system is based on the exploitation of labor by capital for profit, there can be no real security for the working people. The insatiable drive of capital for profit and its ever-increasing exploitation and speed-up tend to undermine whatever wage gains are won through struggle. At the same time, monopoly capital robs the wage-earner by its manipulation of the money and price system and by government taxation policy through which the national income is redistributed in favor of the wealthy.


Workers and farmers cannot purchase the necessities of life without being forced into debt. Their homes are mortgaged. Instalment buying penalizes them through extortionate interest rates. They are never sure of their possessions. The workers are compelled continually to struggle to maintain and increase their wages. The poor pay more taxes, in proportion to their income, than the rich. The tax system — with its direct and indirect taxes — makes the rich richer and the poor poorer.


Capitalism replaced the individual labor and hand tools of the early craftsmen by the social, collective labor of factory wage-workers operating large-scale machinery. But the new means of mass production remained in private hands, being operated in the interest of private profit. Hence, today, technical progress and automation which should, by easing labor, shorten the work-day, become for the capitalists a means of increasing exploitation, depriving more and more workers of employment. Instead of bringing benefits to the Canadian people, technological advance under private monopoly ownership tends to undermine their security and livelihood.


The great achievements of the revolution in science and technology have not changed the exploitative essence of capitalism and consequently have not and will not emancipate the working class, nor improve basically its position in capitalist society whatever the increase in the growth rate of production or the increase in national wealth may be. The more progress there is in technology, the higher the rate of exploitation, the more obvious the deepening gulf between monopoly and the working people. Capital takes the lion's share of the fruits of technology. The revolution in science and technology has not only aggravated all the former contradictions of capitalism — it has engendered new ones. The most acute social problem is unemployment, which will become a more serious problem as industry enters a higher stage of automation. This trend will continue and will sharpen social conflicts. The fundamental solution is not to limit or hinder technological development but to change capitalist private relations of production into social relations, with the working people thereby becoming the beneficiaries of the revolution in science and technology.


The number of wage-earners in the population grows as the farm population declines and more and more former small producers are brought into the ranks of those who work for wages. Service, professional and office workers grow in numbers, and alongside this there is a tendency for those workers who actually produce industrial goods to decline proportionately.


Monopoly capital through its domination of the economy, the state apparatus, the media of mass communications, book publication and educational materials, culture and entertainment, exerts steady pressure on every phase of peoples' lives. It squeezes out the small producer and small business people. It thwarts the growth of the arts and sciences and of all aspects of cultural life in Canada. It turns more and more professionals and intellectuals into servants of the big corporations. It subjects the health of the working people to constant and increasing strain.


Poverty, urban blight, air, land and water pollution and lack of decent housing are becoming more acute. These are the social consequences of monopoly capitalism...The capitalist system has outlived its usefulness. It has become parasitic, unable and unwilling to satisfy the growing needs of the people. Consequently, labor's struggles for peace, democracy, in-dependence and its economic needs are actually struggles against the unbridled rule of Canadian monopoly and U.S. imperialism.