Introduction to Marxism

Compiled in 2010


The chapters of this pamphlet first appeared as individual articles in the newspaper Direct Action over a period of two and a half years, beginning with the paper’s first issue, in June 2008.

The aim of each article was to present an introductory explanation of some aspect of Marxism. In nearly every case, the space available was limited to 700 words, so there was no opportunity to go into great detail. Paradoxically, perhaps, this limitation had its advantages, limiting digressions and forcing a focus on the topic at hand.

The articles were written without any schedule of the order in which topics would be covered. In some cases, the topic for the issue of the paper was suggested by an economic or political event gaining prominence at the time. In this pamphlet, articles are therefore not presented in the order in which they were published, but in what I hope is a reasonably logical progression of ideas.

The first of the articles in Direct Action was intended as a concise statement of the fundamental ideas of the Revolutionary Socialist Party, and therefore differed from the subsequent articles in its far broader scope. It is included as the first article in this pamphlet as a summary of topics dealt with in more detail by later articles.

It is difficult in producing a pamphlet like this to decide exactly where to stop. Marxism is a science, and therefore its ideas form an integrated whole, so there is inevitably an arbitrary element in deciding to include topic C but not topic D. Moreover, a presentation of basic ideas such as this one of course cannot provide instant explanations of each day’s changing events. For an ongoing Marxist analysis and discussion of important issues, the reader is encouraged to include Direct Action in her/his regular reading.

Revolutionary socialism

Capitalism, through its direct application of scientific knowledge to the production of goods and services, has promoted the use and control of the forces of nature far more rapidly and extensively than any previous system of production. But because these powerful forces are controlled by capitalist firms’ drive for profit, they have been turned into increasingly powerful forces of destruction and impoverishment.

Capitalist production, driven by profits rather than human needs, churns out ever increasing masses of unneeded and even harmful commodities, in the process destroying the global balance of biological and chemical processes on which all life on Earth depends and threatening to create disastrous changes to the world’s climate. Scientific agricultural techniques, theoretically capable of feeding all humanity with ease, are blocked by capitalist markets and the competition between imperialist producers, so that hunger stalks the underdeveloped world. Human solidarity, within and between communities, is blocked by corporate greed and the deliberate creation of hostility towards people with a different skin colour, ethnicity or religion.

The capitalist system is based on such fundamental contradictions. They cannot be overcome by persuading corporations to be more reasonable or by electing “better” politicians to office. They can be done away with only by replacing capitalism with a socialist system of collectively owned and democratically planned production.

A fully socialist organisation of society will be a worldwide social system that eliminates the present gross inequalities between nations and peoples. But the revolutionary abolition of capitalism will necessarily take place initially in individual countries. This transition can begin only when the existing capitalist government in any particular country is replaced by a working people’s government, a government independent of capitalist control and resting upon mass revolutionary organisations created by the working people. Only then does the possibility exist for the working class and its allies among the small farmers, shopkeepers and middle-class professionals to completely dismantle the capitalist state and create a new state based on the mass democratic organisation of the working people, and to reorganise the economy along socialist lines.

Since the beginning of the 20th century, all the necessary material conditions for socialist revolution have existed within the imperialist countries and on a world scale. But more than the material conditions is required. Socialist revolution demands conscious action by the working class and its allies — the united action of millions of working men and women conscious of their social interests and the steps necessary to realise them. To assist the bringing about of such conscious united action by the working people, history has produced no better instrument than a mass revolutionary party, which is able to lead their partial struggles and eventually the overthrow of capitalism.

The creation of such a party, based on the scientific theory of socialism discovered by Karl Marx and Frederick Engels in the 19th century and further developed in the early 20th century by V.I. Lenin and the Russian Bolshevik party, is the aim of revolutionary socialists. The methods used in the construction of a mass revolutionary socialist party will necessarily vary with national circumstances and changing objective situations. But an essential component at every stage will be the largest possible nucleus of Marxist cadres, disciplined and united in determination to advance the scientific theory and practice of socialist revolution.

Where capitalism comes from

Contrary to what some ideologues would like us to believe, the economic arrangements we know as capitalism are not of long standing. Capitalism arose fairly recently in history (in the late mediaeval period), in a particular place (western Europe, mainly in Flanders and England). From there, it spread through most of the rest of the world, by both economic and military-political means, in what is a fairly short time in historical terms.

There were elements of capitalism that existed long before capitalism itself. The most important of these is commodity exchange, in which the makers of two different objects exchange these objects with each other. A limited amount of commodity exchange existed in ancient societies that had a developed division of labour. But exchange was not central to those societies; it normally involved only the surplus of a family’s production, such as the portion of a crop that it did not require for its own food, or objects not made locally, obtained by the wealthy through trade.

In capitalism, by contrast, commodity production is generalised. Nearly everything that is produced is produced in order to be sold — not in order to be consumed by the producers, with only leftovers being sold. In developed capitalist countries today, even most farmers do not produce most of their own food. But generalised commodity production by itself does not yet equal capitalism. At least two other things are necessary. One is capitalists. Those who became the early capitalists in western Europe were mainly people who had managed to accumulate some wealth within the decaying feudal system — successful craftsmen, traders and pirates (in international waters, there was often little difference between merchants and pirates), overseers who managed an estate on behalf of the feudal lord.

The final indispensable element of capitalism is workers. By “workers” I mean not merely people who work in some fashion, but people who do so in a particular social relationship. The workers necessary for capitalism are people who are able to work only if they do it for someone else (capitalists) in exchange for a wage. In mediaeval Europe, there were only insignificant numbers of such people. Most people were poor and had to grow crops to feed themselves, but in the feudal system they generally had the opportunity to do that (as long as they also fed their manor lord). People who were employed in something besides agriculture were generally part of the guild system, which took in very limited numbers of apprentices and strictly controlled the total production in each craft. In this situation, capitalism couldn’t really get going, because there weren’t enough people able and willing to work for would-be capitalists.

Then something changed. In Flanders, merchants who were trading with Palestine and the eastern Mediterranean began bringing under their control formerly independent weavers. The merchants would supply wool and buy the weavers’ cloth. Once the merchants had control of the wool supply, they could get rich by dictating prices to the weavers. As their businesses expanded, they needed greater and greater supplies of wool, and they turned to England to obtain these supplies.

Feudal lords in England soon realised that they could get more money from running sheep than from the crops they appropriated from their peasants. They began what became known as “enclosures” — seizing the common lands on which most of the rural population lived. Whole villages were depopulated and converted into sheep runs. Thousands upon thousands of peasants were suddenly deprived of the means of growing their own food. Some died, some became beggars, some emigrated, but some were hired by aspiring capitalists. The enclosures, which went on over a long period, created what capitalism needed — a working class, a class of people who could survive only by working for wages.

Moreover, once the working class had been created, it was automatically re-created in each generation. There was no chance for children of the working class to return to peasant farming. The competition from cheap capitalist production steadily reduced the already limited possibility of becoming an independent artisan through the guild system. While the occasional individual from a working-class family might, through exceptional talent or luck, scramble into the middle class or even become a small capitalist, the next generation always provided enough people who had no opportunity to make a living except by working for a boss.

(The above is necessarily a very condensed and simplified account. To get a full appreciation of the historical processes that created capitalism, one should read the section on “primitive accumulation” in Volume 1 of Marx’s Capital, which is quite understandable on its own.)


Nearly all societies in the world today are based on a division of labour. No individual or family produces everything it needs to live. Everyone specialises in one or a few activities. At least some of that activity goes to the benefit of others, and, in return, in one way or another, we receive the things we need that we don’t produce ourselves. The production and transfer of such goods and services is what makes up the economic system of any society.

“Exploitation” refers to a situation in which one part of a society (because of its ownership of key productive resources such as land, tools or administrative knowledge), lives off the goods and services produced by another part without providing an equal transfer of goods and services.

In the feudal economic system of medieval Europe, the division of labour was based primarily on the private ownership of the land by a hierarchy of hereditary warrior-landowners (feudal lords). The serfs were hereditary peasants and artisans, who were “bonded” to (unable to leave) a particular feudal manor. They produced nearly all the agricultural wealth, part of which was used to keep themselves alive, while the rest went to their feudal lord. In return, the serfs received very little, largely protection from raiding parties by foreigners and by the feudal lord in the next manor, who probably wouldn’t have been any worse. From today’s vantage point, it is not hard to recognise those feudal arrangements as exploitative.

In Australia today, there are no feudal-type arrangements requiring anyone to follow the occupation of their parents. This doesn’t mean that exploitation no longer exists, but only that it is now in a form that is not quite so obvious. In capitalist societies like Australia, most of the producers of foods and services don’t receive or give out their own product like a serf did. We go to work in a factory or an office. At the end of the week, we don’t share the products or the paperwork with our employer. Rather, we receive a wage, and the company that employs us keeps the entire product — whether it’s bread, cars or shipping manifests, the employer owns them, and we have no claim on them.

When the company then sells those products or services we have created, it normally receives more money for them than it has paid. The difference between what it receives and what it paid is its profit. Where does this difference come from? From exploitation: the company pays the workers less than the value their work adds to the product. At one level, it’s hard to see this exploitation: after you spend a day at work, making a part that goes into some larger product, it’s almost impossible to know how much value you have contributed to the final result. And, in reality, as individuals, we don’t really produce anything: one worker on an assembly line or on a dock or in an office can’t produce anything of value without all the other workers involved. But, collectively, each workplace creates more value than the employer pays for in wages.

How much more? That can vary a lot between particular workplaces, but overall, for any country as a whole, it’s a huge amount. Forbes magazine calculates that there are 1125 billionaires in the world. Their wealth is not something they produced. Any “work” that they do consists almost entirely of figuring out ways to increase their exploitation of people who do the real work.

The fortune of the wealthiest Australian, mining magnate Andrew Forrest, is around $10.4 billion. If you receive the average wage, don’t pay any tax and don’t spend anything, you can catch up with Forrest’s fortune in around 226,000 years. Or, to put it in a more comprehensible form, Forrest’s accumulated wealth is equal to everything that 226,000 workers receive in a year. The total fortune of the five wealthiest Australians is equal to the annual wages of 710,000 workers; the fortune of the richest 10 equals the wages of 1 million average workers. Or, looking at income rather than accumulated fortunes, last year BHP Billiton reported profits of $13.7 billion — equal to the wages of nearly 300,000 average workers.

Exploitation also occurs between nations, not just within them. The primary reason for the huge differences between rich and poor nations is the fact that rich nations exploit the poor ones. In the 19th and early 20th centuries, international exploitation was carried out mostly through direct colonial rule. Today it is done mainly through unequal terms of trade, permanent debt and financial manipulations.

In all the many ways it is carried out, exploitation is indispensable to capitalism. All profits (including many profits that are disguised as something else, such as “executive salaries”) come from the ability of capitalists to take from the rest of us more than they give.

Class struggle

Exploitation is an unequal economic relationship, in which one party to a transaction gains something at the expense of the other. That is a very broad definition; it would include being short-changed by a shopkeeper and other fairly trivial inequalities. The exploitation that is essential to capitalism is not so minor or occasional, but is built into the system. It is there all the time, and people’s roles as exploited or exploiters are essentially fixed. (By contrast, you don’t get short-changed every time you go to the shop, and customers might exploit the shopkeeper by paying with a counterfeit note.)

If you’re a worker in a capitalist society like Australia, you’re exploited by your employer. It doesn’t happen that the employer exploits the workers for some weeks or months and then the workers exploit their employer for a while. In the normal course of events, there is no mechanism through which workers could exploit their employers. And in exceptional situations, such as extreme economic crisis, in which a company has to pay its workers more than it makes from their work, the company simply stops trading.

Workers, aside from a very few lucky exceptions who win the lottery, can’t choose to stop being exploited. Workers generally are in a situation of not being able to feed, clothe and house themselves except by hiring themselves out to an employer. People in this situation make up the working class. Those who hire them in order to live off the profits of their labour make up the capitalist class.

It doesn’t take a great deal of thought to realise that these two classes, workers and capitalists, have antagonistic economic interests. Workers and employers may barrack for the same football team; their kids may go to the same school; they may vote for the same political party. But when it comes to economic fundamentals, what is good for the one is bad for the other. If wages go up, profits go down; if wages go down, profits go up. Wages are not the only thing that determine the size of profits, but they are the most basic thing.

So the working class and the capitalist class have fundamentally opposed interests. This produces conflict between them as each seeks to protect and advance its own interests. There is an ongoing struggle between the exploiters and the exploited. This is most obvious when it is time for a workplace to negotiate a new agreement on wages and working conditions. But there are also broader struggles over things that affect most workers and most capitalists, such as a legal minimum wage or what are considered “normal” hours of work or how taxes will be levied and on whom. The ultimate struggle between them is over which class will decide how society functions.

In developed capitalist societies, enormous amounts of time, energy and money are expended in an effort to convince working people that what I have written above is untrue. Sometimes we’re told that workers and capitalists really have the same interests. Sometimes we’re told that there’s no such thing as a working class and capitalist class, that we’re all just individuals. The people behind the production and distribution of such notions are capitalists; they’re the ones who finance the think-tanks that push such ideas, for example. It’s worth their while trying to convince workers that class struggle doesn’t exist, so that workers won’t act together to resist exploitation and the capitalists’ efforts to increase it.

One way of denying the reality of class struggle is to claim that nearly everyone belongs to the same class, the “middle class”. And it is true that there are people who participate in the economy but are neither workers nor capitalists. However, in developed countries they are not as numerous as the working class, nor does their labour produce the bulk of the goods and services used by society. They include small farmers, shopkeepers, artisans and independent professionals such as doctors and lawyers.

As business operators, they have some interests in common with the capitalist class, particularly if they regularly hire some workers. But because they also work themselves and many of them are exploited indirectly by the capitalist class, they also have interests in common with the working class. For example, small farmers have more in common with workers because they are exploited through the capitalists’ control of markets in which farmers buy their machinery, seed, fertiliser etc., and in which they sell their produce to the small number of food processing companies or the two big grocery chains (Woolworths and Coles). Far from doing away with class struggle, the middle classes are seen by both capitalists and class-conscious workers as potential allies against their enemy.

Why capitalism needs oppression

Capitalism is a system based on exploitation. For Marxists, this has a precise scientific meaning. Capitalists take for themselves the monetary values created by or belonging to other people — usually workers, but also small farmers and, to varying degrees, small shop owners and nominally independent tradespeople. This value is what their capital consists of.

But exploitation does not exhaust the harmful effects that capitalism has on the rest of the world. Capitalist society also invents many forms of oppression, as well as perpetuating many inherited from earlier forms of social organisation. Oppression is the systematic imposition of inferior conditions of life on particular groups of people. Members of an oppressed group may be discriminated against economically, socially and/or politically.

Sometimes oppression has an economic impact; in some way, it increases the capitalists’ ability to exploit. An obvious example is discrimination against women or against a national or racial minority. The victims of such discrimination often receive lower wages than other workers, so this oppression adds directly to capitalists’ profits.

Capitalists gain a slightly more indirect economic benefit from militarism and war. Two world wars in the 20th century occurred primarily because the capitalists of the major imperialist countries were competing for colonies and semi-colonies, to monopolise the profits from them. Today capitalists are risking making the planet uninhabitable for much of the human race because behaving differently might reduce their profits.

Political motives

Capitalism also maintains oppressions in which profits are at most a very secondary consideration. The economic benefits that capitalists seek from war and militarism are less significant than their political role. The military forces maintained by imperialist countries like Australia are an ever present threat to the peoples of the underdeveloped countries: “Step too far out of line, don’t do as you’re told, and you’ll have a fight on your hands (in which we hold all the weapons)”. These forces are also the ultimate guarantee of capitalists’ power in their own country: that is, they are intended for use against their own working people if they get too far “out of line”.

Capitalists have to maintain a variety of oppressions because they are a very small minority in any society. If the exploited majority were to act together to put an end to exploitation, they could very easily overcome the capitalists. For this reason, the capitalists have a very strong vested interest in preventing the exploited majority from getting used to the idea of working together — on almost anything.

Oppression has a political function for capitalism if it sets one section of the exploited against another section. Male union members who think that a woman’s “real” place is at home won’t build a strong union. Parents who are concerned about their children going to school with immigrant children won’t be raising demands on the government to provide better education for everyone. People who think that a neighbouring country’s religion is dangerous to them won’t resist their own government’s militarism.


Socialism is about human liberation: from exploitation, and from all forms of oppression. There is a parody view — sometimes held by some socialists — that socialists therefore believe that victims of oppression should put off the struggle for their own liberation until “after the revolution”, at which point the new socialist government will put everything right. Such an attitude misses the essential point: we will never escape capitalism without uniting in action the great majority of the working people, who are now mostly disunited and often at loggerheads with each other because of discrimination and oppression.

So fighting for socialism necessarily means fighting to help the oppressed overcome their oppression now, not in some distant future. This is the meaning of “solidarity”: “We are with you because your future is also our future”. Anything else allows the capitalists to continue keeping us divided and unable to consistently confront our real enemy: them.

Why is there so much unemployment?

Australia has been much luckier than most countries in the current international recession. While unemployment has certainly increased, it has not risen as much as in most of the world and, at 5.4% (in May 2010), it is still lower than it was throughout the 1990s. Partly this is because some unemployment is disguised as underemployment (people not being able to work as many paid hours as they would like), or because the official statistics don’t count people who have given up looking for work. Mainly, however, it reflects the particularly fortunate position of Australian capitalism, which has raked in huge fortunes over the past two decades by selling vast quantities of raw materials to countries in Asia, particularly China.

So the relatively mild impact of unemployment here is an exception, a stroke of good luck that will vanish when economic changes in Asia and the rest of the world reduce the demand for Australia’s raw materials. The overall tendency of capitalism is continually to increase unemployment. This is evident even in Australia, if we look at a longer period than the last two decades. In the 1950s, unemployment in Australia averaged around 1%. In the 1960s, it was around 2%, in the 1970s 4%, in the 1980s 7.5% and the 1990s almost 9%. The rate for the 2000s, which will be about 5.5%, is thus considerably higher than in the 1950s, ’60s and ’70s, and it is likely to increase in coming years.

Necessary and surplus labour

Unemployment illuminates a striking paradox in capitalist economies. Capitalists obtain their wealth by exploiting workers. The more workers they exploit, the wealthier they become. Yet the capitalists, in managing their businesses, constantly seek to reduce the number of their workers — that is, they seek to get rid of the source of their wealth!

The explanation of this is that the values of the goods and services that workers produce during part of the work week cover the value of their wages. Marx called this part of work “necessary labour”, because it produced what was necessary to keep the workers alive and ensure their replacement when they died. The work performed during the rest of the work week is “surplus labour” because it is during that labour time that workers produce the values that make up capitalists’ profits.

It is to the advantage of the capitalists as a whole to exploit the greatest possible number of workers. But it is advantageous to each individual capitalist to reduce the number of his/her own workers to the extent that can be done without reducing output. When they can, capitalists will do this by forcing workers to work harder, but the easiest and most profitable way is usually to replace workers with machinery. While machinery itself does not generate values, it increases the productivity of labour, and hence decreases the cost per item of the capitalists using it, allowing them to gain an extra profit until the use of the machinery becomes general throughout the industry. Capitalism’s effort to increase surplus labour by reducing necessary labour therefore takes the paradoxical form of reducing the number of workers.

Unemployment also benefits the capitalist class as a whole by dividing the working class into two groups: those with and without jobs. Individual workers move back and forth between the two categories, which creates a constant pressure on wages from workers who are desperate to return to the active workforce. So, despite shedding occasional crocodile tears for the unemployed, the capitalists have every motive to oppose anything that relieves their situation.

A large pool of unemployed and underemployed workers functions as a “reserve army of labour”, as Marx and Engels termed it. This means that the capitalists can easily find the workers they need during economic booms, and dismiss these workers, without taking any responsibility for their survival, during bad times.

In the modern era, imperialist capitalism has concentrated the largest part of the labour reserve army in the Third World, the so-called developing countries. This reserve is made up of peasants driven off the land and workers formerly employed in industries that could not compete with the more technologically advanced imperialist firms. Thus much of what is often called “overpopulation” in the Third World is really a specific form of capitalist unemployment. It has often been pointed out that there is more than enough wealth in the world to feed and provide a reasonable standard of living to everyone. “Overpopulation” exists because it suits imperialist capital to maintain a high level of global unemployment.

What causes recessions?

Only a few years ago, the economic “experts” quoted in the commercial media were assuring us that major recessions were a thing of the past. The economists had figured out how to manage the economy, and as long as governments followed their advice, there would be nothing more serious than the occasional statistical blip. Then the real world intruded.

Capitalism has experienced recessions ever since it came into existence. Called by different names — panic, crisis, depression — these involved a major disruption of production because goods could not be sold profitably. Throughout the 19th century, these events occurred at fairly regular 7-10 year intervals. As capitalism attained its highest stage (imperialism), these disruptions became more complex and less regular. For example, major wars (especially the two world wars) can be viewed economically as taking the place of a recession by causing a major cutback in production of (civilian) goods. Because of competitive successes or failures, different major economies might suffer a recession at different times instead of simultaneously, and a country that was not synchronised with most of the others might avoid a recession by exporting to them.

Despite such changes in their form, recessions such as the one the world is now experiencing are not fundamentally different from those of the 19th century. They are crises of overproduction: companies have produced more goods than can be sold at a profit. This happens, unavoidably, because of some underlying contradictions that capitalism cannot escape.

Major contradictions

One contradiction is that between capitalist profit and workers’ ability to consume. Capitalist firms produce to make a profit, which means that the value of their product must be greater than what they pay for it. It follows necessarily that the workers employed by any capitalist firm could not buy all of what they produce. And what is true for the workers of any one firm is true for the workers and businesses of the system as a whole: if the workers could buy the entire production, there would be no profit and no capitalists.

Therefore, capitalists must find at least some customers who are not workers. Partly, they can be their own customers, by consuming luxury goods. Partly, they seek out new customers, but the world is finite, and competing for customers in other countries may solve the problem for one country’s capitalists but can’t do it for the whole world. Partly, they use the difference between production and immediate consumption to expand future production by buying more means of production (machinery, raw materials) but that only reproduces the problem on a larger scale. Hence capitalist profit implies a constant tendency to overproduce.

A second important contradiction is that competition forces capitalists to seek to lower the price of their product, by lowering their costs. One way of doing this is reducing wages, which exacerbates the problem of finding buyers. Another is through replacing workers with machines, which destroys the purchasing power of the displaced workers. More significantly for the capitalists as a whole, it increases the ratio between the total investment and the total profit (which depends on the number of workers). That is, it reduces the average rate of profit, making it more likely that any given decline in sales will make a business unprofitable.

No social control

These contradictions interact with another: that between planned production in the firm and the anarchy of social production. Producers in a capitalist society normally cannot know whether there will be a buyer for their products. No-one determines beforehand how many potatoes, buckets, machine tools or machine guns can be sold. Hence imbalances and disproportions — too much of one commodity, too little of another — are inevitable. Industries that have produced too much lay off workers, who therefore reduce their spending, which may mean that other industries suddenly have goods they can’t sell.

This is, of course, a very simplified outline. Many other factors interact with these contradictions to determine the timing and features of particular recessions. However, it indicates why recessions are not an accident, but an inherent characteristic of capitalist economies. No matter how many regulations or safeguards governments put in place, the current crisis will not be the last — unless we get rid of capitalism before the next one strikes.

Private property and free markets

If you listen to capitalist economists, media commentators or major party politicians, two things you will always find treated with reverence are private property and free markets. These, we are told, are essential not only to economic progress but even to “democracy” and “freedom”. US presidents have used these holy concepts as justification for threatening, or launching, wars. But in reality, capitalism’s relations with private property and free markets are not so simple.

Capitalism could come into existence in England only by denying property rights to a big part of the population. Early capitalists obtained the workers they needed because of the enclosure of villages and common lands — that is, the confiscation of the property of the peasantry. In Australia in the colonial period, governments ensured that either there was a plentiful supply of convict labour or that free workers had little opportunity to farm the land that was taken from the Indigenous people.

To continue functioning, capitalism has to go on denying most property rights to most of the population. That is, workers may be allowed to own a car or a house or various other items of consumption. But the vast majority have to be obliged to keep working for capitalists, which means they have to be denied ownership of anything that would allow them to make a living by any other method. Once capitalism is well established, this tends to happen automatically, through the usual functioning of the economy: most workers can’t accumulate the money needed, say, to start their own small business, and most small businesses can’t compete with the big capitalist companies. Exceptions don’t happen frequently enough to disrupt the supply of workers.

In recent months, US capitalists have given the world quite a clear picture of how much they are willing to leave the “free market” to determine what does or doesn’t happen in the economy. In a nutshell, “market rules” apply even less today than they did in the early 19th century when E.G. Wakefield was promoting artificially high land prices in South Australia to ensure a workforce adequate for capital’s needs. In September, the US government took control of the two giant mortgage finance corporations Freddie Mac and Fannie Mae, which between them had something like US$5.4 trillion in liabilities, and considerably less than that in assets. It was estimated in the press that the US government might lose $100 billion on Freddie and Fannie, but that was soon outdone by Congress voting $700 billion more to buy up “toxic” debt. In effect, the US government is guaranteeing the repayment of investors who loaned money for the buying of overpriced housing.

This “nationalising” of private debts was not just a whimsical touch of the departing Bush administration. As an article in the New York Times recalled, the US government’s intervention to rescue the savings and loan system in the late 1980s cost taxpayers more than $120 billion. Other precedents included the rescue of the Lockheed Corporation and Penn Central Railroad by the Nixon administration, the bailing out of Chrysler by the Carter administration and $15 billion in loans and subsidies to airline companies to help them cope with the business downturn following the September 11, 2001, terrorist attacks.

The Times was discussing only the rescue of failing companies, so the article didn’t go into numerous other notorious instances of capitalist corporations using the state to create or guarantee their profits — such as Halliburton and the other corporations that are currently minting gold from blood in Afghanistan and Iraq.

The reality is that the ideas we are constantly being fed about government non-interference with free markets and the sanctity of private property are simply designed to mislead us so that we don’t notice the big companies robbing us. Think about it: We’re supposed to believe that somebody who has a billion dollars and is in danger of losing it — or who sees a chance to make another billion — won’t demand, and receive, state help. Nobody with that attitude would ever have a billion in the first place. All the talk about letting the markets run everything is just that — talk. What actually runs everything, including the governments of capitalist countries, is the big corporations.

How competition produces monopoly

In its earliest stages, capitalism necessarily began from what was provided by the feudal economy that preceded it. This was primarily an extremely low level of productivity, based mostly on very simple tools and producers (peasants and artisans) with few skills.

Because capitalism is production for profit by selling to an anonymous market, unlike feudalism, it sought constantly to increase production. Initially this was accomplished primarily through increasing the division of labour. Production of a commodity that previously had been made by a single person was divided into a series of tasks, each performed by a different individual. In his Wealth of Nations, published in 1776, the English political economist Adam Smith illustrated the enormous increase in productivity brought about by the division of labour in pin manufacture: a single individual, Smith wrote, could not make 20 pins in a day, but 10 specialised workers cooperating through a division of labour could make 48,000 in one day.

As the division of labour spread and intensified within the production processes of more and more commodities, the tasks performed by each individual worker became more and more simplified and standardised. This simplification made it easier to develop machinery that could do part or all of what had previously been done by a worker.

For capitalists, replacing workers with machinery reduced costs and increased output. Competition among capitalists therefore made it compulsory for every capitalist to introduce the latest machinery; if they didn’t, they would be undersold by those capitalists who did. Most of the profits of a business were ploughed back into it, to get newer and better machinery to keep up with the competition. Capitalist development therefore brought about a huge increase in the productivity of human labour.

But, less obviously, capitalism was also undermining this process. Over time, competition eliminated the less successful capitalists and increased the size and economic power of the companies that survived. Towards the end of the 19th century, major parts of the economies of the most advanced capitalist countries came to be controlled by a few firms, or only one. Increasingly, monopolies dominated capitalist economies.

Monopolies are usually hugely profitable. But their profits depend on ending greatly increased productivity. Monopolies gain their super-profits by restricting production, making the supply of their product fall below the demand. Because the product is scarce, its price and the monopoly’s profits go up. If a monopoly increased production, its product would become less scarce, and its monopoly profits would decline. So while a monopoly still seeks technological improvements that reduce its costs, it has less and less motive to invest in more productive equipment.

Of course, the power of a monopoly to limit production is not absolute. There is always at least a theoretical possibility that if a monopoly gets too far behind the times technologically, some other capitalist with new technology might break into the industry. In particular, there is a danger of some foreign capitalist, perhaps with support and subsidies from its government, breaking the monopoly.

It is also the case that monopolies can make things uncomfortable not only for ordinary people but also for capitalists operating in other areas, if the product of the monopoly is important to their own operations. For example, the antitrust laws passed in the United States in the late 19th and early 20th century were not totally opposed by all capitalists, some of whom were worried about being held to ransom by the Rockefeller family’s Standard Oil monopoly (which was partially broken up in 1911 by a Supreme Court ruling). Similarly, throughout most of the 20th century, developed capitalist countries that had a steel industry did everything they possibly could to maintain it, because steel was so fundamental to production of military equipment, and no country wanted to be left in a situation where it relied on a potential enemy (which was any other country) for its military production.

Still, there is an inherent tendency in capitalist competition to restrict the growth of productivity and create monopolies. And the super-profits of monopolies create a further dilemma: how to reinvest them. These profits cannot be reinvested in the industry that created them, because that would undermine further super-profits. This is the fundamental economic source of imperialism, which will be the topic of the next article in this series.


The winners of capitalist competition tend to become monopolies. Monopolies, in turn, reverse the character of capitalist investment. When there was widespread competition in an industry, there was great pressure on each company to reinvest its profits in order not to be left behind technologically and thus to lose out. But once an industry is a monopoly, or divided by agreement between a few large companies, there is a motive not to reinvest the resulting super-profits. A more efficient monopoly would tend to produce more goods, which reduces their relative scarcity and thus undermines monopoly super-profits.

So, where could successful monopolists invest their profits? To some extent, they invested them in local industries that were still competitive. But this only speeded up those fields’ march towards monopoly, thus increasing a country’s need to find new areas for investment. At the same time, the richest banks were also becoming monopolies, and big industrial and banking capital increasingly combined.

Investing abroad

From roughly 1880 onwards, the capitalist countries of Europe, North America and Australasia, plus Japan, increasingly sought these areas for investment in the less economically developed countries of the world. Previously, the international expansion of capital had focussed on obtaining raw materials and finding markets for its products. Capitalism was moving into a new era of imperialism, which was in place by the late 1890s, in which the main focus was on exporting capital that could not be invested as profitably at home.

Exporting capital involved considerably greater risks than exporting commodities. The sums invested were much greater, and they were generally tied up for longer periods as factories, mines or whatever. So the imperialists felt a strong need for political protection to ensure the safety of their capital and its profitable operations. That is, they needed to control the governments of the countries in which they invested. And they used the power of their own governments to secure that kind of control.

The imperialist scramble to dominate as much as possible of the world exploded in 1914 into the first World War and in 1939 into the second. After 1945, when the United States emerged as the overwhelmingly strongest imperialist power, the character of inter-imperialist rivalry changed, but the fundamentals of the imperialist system have remained.

Permanent underdevelopment

The outright looting of colonies and the profits of imperialist investors, shipped back home, were no longer available for investment in the countries where imperialism gained control. Hence these countries were deprived of the resources that they needed in order to develop as the imperialist countries had done. Imperialist investment widened and made permanent the gap between the developed and underdeveloped capitalist counties.

As a result, production in the underdeveloped countries is much less efficient in capitalist terms. And because a country is less productive, it is the loser in international trade. The prices it receives for its exports are low, and the prices it pays for imports from more developed countries are high. This is a self-perpetuating vicious circle: because its industries are inefficient, a country has a low income; because it has a low income, it cannot invest in improving its industrial efficiency. The beneficiaries of this vicious circle are the capitalists of the imperialist countries, who continuously drain value from the underdeveloped countries through trade and as interest on loans in addition to any profits on investments in those countries.

Of course, there is generally some degree of economic development taking place in underdeveloped countries. But it never occurs on as large a scale as in the imperialist countries, so the gap between the two is widening, not narrowing. As the gap increases, so too does the transfer of value.

Breaking free

Governments of many Third World countries have attempted various ways of breaking free of imperialism. The talk of “development” pushed by imperialist governments and organisations like the World Bank has proved to be only a means for imperialist corporations to sell producer goods to these countries, which further drains them of value and leaves them still unable to compete. Measures that seriously threaten imperialist interests are generally met with destabilisation and/or outright military intervention.

Attempts to break out of this system through capitalist methods are doomed to be self-defeating, further enriching the imperialists, who dominate the world market. Escaping the imperialist grip requires revolutionary political measures, such as those that are being carried out today by the revolutionary government in Venezuela.

The billions that come and go and come and go

An Australian Associated Press report a few months ago unintentionally pointed out one of the absurdities of modern capitalism. This is that a good part of the so-called wealth of capitalist societies doesn’t really exist. According to the report (as printed in the October 1, 2009, Sydney Morning Herald), the outbreak of the international economic crisis in 2008 caused personal wealth (excluding housing and self-owned businesses) in Australia to drop by 27%. It quoted the multinational Boston Consulting Group (BCG) as saying that Australian personal wealth fell by more than $600 billion from the year before. And — shed a tear for them — 32,790 households stopped being millionaires (leaving only 49,452).

But if you think back to the second half of 2008, did anything happen that actually destroyed great quantities of people’s assets? Was there anything comparable to the Victorian bushfires of early 2009, any great physical destruction of property? No. So where did those billions go? Equally mysterious is where they came from in the first place. According to a BCG official, “In the five years to 2008, total personal wealth in Australia still increased by 38 per cent”. Furthermore, although the article didn’t give figures, a significant part of the wealth lost in 2008 was recovered in 2009. Now you see it, now you don’t, now you do: what is going on?

The wealth that keeps appearing and disappearing is primarily the current price of shares listed on the stock exchange. If you own 10,000 shares of the Greed Corporation, and the shares are selling for $100 each, then you’re a millionaire. If the shares go down to $90, you’re not a millionaire any more, but if they go back to $100 or more, then you are once again.

But what makes the price of shares go up and down? Originally, because a “share” was legally just that — a proportional part of the ownership of a company — the price of a share depended on the value of the company’s property. If the company mainly consisted of a factory worth $10 million, and there were a million shares, then each share would be worth $10.

However, as capitalism developed and changed, so too did the immediate motives of shareholders. Capitalists don’t buy shares for the sake of owning them, but in order to receive some of the profits (“dividends”) from that company. In an earlier period, when most industries were competitive, there was usually a fairly direct relation between the size of a company’s physical assets (machinery etc) and its likely profits.

But in capitalist economies today, when there are many companies (not only banks) that are “too big to fail” (which means that the government subsidises them in one way or another), a corporation’s expected profits may have no connection at all with the amount of capital invested in physical assets. The expected profits can be based on a new technological discovery, or a bribe that will secure a government contract, or hopes of finding a scarce mineral, or plans to monopolise some scarce commodity, or a Ponzi scheme, or almost anything at all. It was for this reason that Karl Marx described the market value of traded paper certificates such as company stocks and bonds as “fictitious capital”.

So the “value” of corporations on the stock exchange is only partly based on real values, on capital actually invested in the purchase of machinery, raw materials and workers’ labour-power. A big part of the corporations’ “value” is merely a promise that nobody can be held to: put your money here, and you should get a good return. That is how the supposed wealth of Australians could go up and down so fast. A large part of that so-called wealth was in the form of paper certificates (shares) that were priced according to the expected profits of the corporations. When the economy plummeted, so did the expected profits and therefore the traded price of those paper certificates. When capitalists decided things were recovering, their profit expectations went up, and so did their paper wealth. In the meantime, however, many workers’ superannuation funds had been savaged.

What these vanishing and reappearing billions make clear is that much so-called wealth in capitalism is not something that exists now. It is only a legal title to profits from the future exploitation of workers’ labour. That makes mandatory super plans particularly vicious — workers are forced to hand over their retirement saving to capitalists to be gambled on investments in the exploitation of our fellow workers.

Capitalism shows we don’t need capitalists

When industrial capitalism developed in Western Europe in the 19th century, the great majority of businesses were privately owned. That is, they were the property of a single individual, or sometimes a family, or sometimes two or three partners with defined shares. There was no normal mechanism by which some outsider could become a part owner of the business.

Corporations, i.e., businesses owned jointly by many capitalists, had existed during the earlier phase of commercial capitalism, the most notable early one being the British East India Company (originally named the “Company of Merchants of London Trading into the East Indies”), which was formed in 1600. However, these corporations were rare and had considerable differences from modern corporations. Most were created through a royal charter or a specific legislative act and were confined to the activities specified in their charter.

Modern corporations

Capitalists are driven to accumulate ever more capital. Particularly in Britain, but also in the United States, capitalists pushed parliaments to pass laws that eased and assisted such accumulation. The form most suited to capitalist accumulation proved to be the modern corporation. In 1844 the British parliament passed a law allowing the establishment of corporations (“joint stock companies”) without any further legislation. In 1855, it enacted limited liability for registered “limited” companies; this meant that business people did not risk everything they owned by conducting a business, but only as much as they had invested. (The losers from this arrangement were mostly small businesses that supplied the corporations on credit and workers whose wages might never be paid if a corporation failed.)

The corporate form served capitalists in several ways. It made it easier for successful competitors to gobble up the losers (a process later renamed “mergers and acquisitions”). The selling of nominal ownership certificates — shares — became a method of gathering up the small scattered savings of millions of workers, farmers and small business people and turning those savings into additional capital to generate additional profits. And the use of those savings instead of their own funds enabled capitalists to take greater risks: when they won, they won; when they lost, the small “investors” lost.

When businesses were owned by only one or a few people, capitalists had a strong motive to be active in running the business, since it was their money that would be lost if the business went belly up. As the corporate form became predominant, this changed. As it became possible for individual capitalists to spread their ownership over many businesses, and possible for particular businesses to be owned by many capitalists, it became normal for the task of managing a business to be performed by hired agents.

Employee managers

Already by the time that Karl Marx was writing his analysis of capitalism, corporations had significantly altered the features of capitalism. Marx pointed out that the previous economic function of capitalists, the managing of businesses, was increasingly being performed by (well-paid) employees. This showed that capitalists perform no necessary economic role even within capitalist production. They are “necessary” only outside the productive process — to maintain the class divisions that allow them to appropriate the wealth produced by working people.

The fact that capitalists play no useful role in production has been partially obscured by the further development of corporations. This is because the hired managers of corporations often receive salaries that allow them to become capitalists in their own right. (One recent example in the news was Geoff Dixon’s $11 million salary for a few months’ work as chief executive of Qantas.) This can create the illusion that capitalists are still performing a useful function by managing an enterprise. But these CEOs are not normally appointed as managers because they are capitalists; they become capitalists because they are well rewarded for having managed in the interests of the capitalist owners.

The overall experience of modern capitalist economies leaves no room for doubt. Corporations can be managed by anyone with the requisite knowledge and skills, regardless of whether they are billionaires or paupers. This indicates why it will not be difficult for socialised economies in developed countries to manage themselves without capitalists — and to do so much more efficiently because working people will be in overall charge and insisting on management in their interest.


Nationalism is the belief that the members of a nation share common interests that are different from the interests of other nations and different from the interests of the human race as a whole. Furthermore, it is usually thought by nationalists that these national interests are more significant than the competing interests that may exist between different members or groups who belong to the nation.

Nations themselves are historical creations of capitalism. It was the rising bourgeoisie whose interests demanded the overturning of feudal or other pre-capitalist parochialism and the creation of a single market, single government and single language over a large territory. Creating the conditions for capitalists to prosper created nations. It should therefore not be surprising that nationalist ideology is a form of capitalist (bourgeois) ideology.

National interest

In a capitalist country, it is capitalists who own most of the wealth, who hold the power and who are accepted as spokespeople of the national interest. So when the specifics of any claimed national interest are looked at, it turns out that those specifics are the interests either of particular capitalists or of the capitalist class as a whole.

If our entire nation has common interests different from those of other nations, then it must make sense to buy products being sold by our nation’s capitalists rather than by capitalists from other nations, even if the latter’s products happen to be better or cheaper than those produced by our nation. And then it must be in workers’ longer term self-interest to accept lower wages so that the products from our nation can undersell those from other nations.

If national interest is more important than gender interest, then women should be willing to give birth to as many children as the nation requires, and take the burden of raising them and ensuring that they are good patriots, ready to kill for their country if necessary. They should be willing to enter or leave the workforce as the national interest demands.

If national interests are more important than human interests, then our nation should do as little as possible to stop climate change, and demand that others do more and do it first. (And if climate change makes our nation’s territory uninhabitable, at least the bearers of the national interest will have enough money to move elsewhere.)

During the time when capitalism still played a progressive historical role by overcoming feudalism, nationalism was capable of inspiring people to struggle against tyrannical monarchs, theocracy and superstition. But as capitalism increasingly turned into an obstacle to human progress, its ideology necessarily became reactionary as well.

National oppression

One of the ugliest features of nationalism is its use to justify the oppression or exploitation of other nations or nationalities. It is typical that the most vociferous nationalists in Australia are the hoons who attack migrants whom they consider insufficiently “Aussie”.

The historical process of forming nation-states resulted in many states including national minorities. Often, these minorities suffer discrimination or other disadvantage on the basis of their language or other distinct national features. Marxists distinguish between the nationalism of an oppressed nation and “ordinary” nationalism. As the Russian revolutionary V.I. Lenin put it, “The bourgeois nationalism of any oppressed nation has a general democratic content that is directed against oppression, and it is this content that we unconditionally support”.

Imperialism has created and maintained another form of national oppression. This is the sustained division of the world into economically developed and underdeveloped countries, and the former’s systematic exploitation of the latter. The rebellion of Third World peoples against their oppression and exploitation not only has a general democratic content that should be supported. A determined struggle against imperialism also necessarily challenges the exploitative relations it maintains, including exploitation by the local capitalist class, which is dependent upon imperialism. This is why anti-imperialist struggles can lead to socialist revolution, as in Vietnam and Cuba.

The state

Today the state is so all-pervasive in nearly everyone’s life that it can be difficult to imagine a society in which it didn’t exist. But there have been societies without a state, and Marxists expect that there will be another in the future.

The state is an organisation that seems to stand above society and regulate its operations and mutual relations. But tribal societies regulated themselves by custom and group decision, without any need for a special organisation to force individuals within the society to obey its rules. Such societies might have had temporary or traditional leaders, but their authority rested on general acceptance by the society, not on compulsion from an organised body of enforcers. Even when such societies fought with each other, the fighting was done by the whole group, or all the male members of it, not by a specialised army.

Class antagonisms

Historically, states arose when societies developed deep-seated antagonisms that threatened to consume the society in irreconcilable struggle. These antagonisms were between clashing economic interests: slaves and slave-owners, for example, or peasants and the landowning nobility for whom they were forced to work. In a society divided into hostile classes, the bearing of arms could no longer be the role of the entire society, because classes would use arms against each other rather than against external enemies. So the exercise of armed force became the exclusive right of particular specialised organisations.

The main function of these specialised organisations of armed force was to keep the class struggle within bounds that allowed the society to continue to exist. Not surprisingly, as states arose, they were formed and commanded by the economically strongest class, the class that owned the society’s major means of production — agricultural land — and used that ownership to exploit those who worked the land. So the specialised organisations of armed force became more than a means of keeping the class struggle in check; they became tools with which the exploiter class maintained its rule over and exploitation of the working people.

There is no contradiction between limiting the class struggle to “legal” channels and ensuring the dominance of one of the contending classes. Keeping the class struggle from overturning a particular social order necessarily means maintaining the fundamental relationship between the exploiting and exploited classes. Slaves generally have nothing to lose from the dissolution of a social system that holds them in bondage. The state keeps class antagonisms within safe bounds for the exploiter class by curtailing the exploited classes’ struggle for their liberation.

The state, especially the modern capitalist state, of course consists of more than the armed forces (the military); it includes a variety of civilian organisations that enforce compliance with the fundamental interests of the ruling class: the police force, the courts, prisons, the bureaucratic apparatus of “public” administration, parliament and the government (the executive committee at the head of the state). They are not all equally essential. There are capitalist states, for example, that get along for considerable periods without a parliament.

Standing army

What the capitalist state can’t do without is a standing army, commanded by officers either drawn from the capitalist class itself or paid high enough salaries to give them a personal interest in the maintenance of the capitalist system. In times of war or other social upheaval that weakens or destroys parts of the state, it is always the military machine that the capitalists seek to rebuild most urgently. States whose standing army has disintegrated or is too weak to enforce the will of the ruling class are known as “failed states”, because they cannot fulfil the state’s most essential function.

In the period of competitive capitalism, in the 19th century, a parliamentary “democratic” republic was the form of state most suited to capitalism. It was a relatively efficient method for different competing sectors of the capitalist class to reach compromise agreements among themselves. And because it created illusions among those workers included in the electoral franchise that the state represented their interests to some degree, it saved money by reducing the size of the armed force needed to guarantee capitalist rule.

But in the era of imperialism, of corporate capitalism, both the military and civilian bureaucratic organisations that constitute the state have grown far beyond anything known even in the most absolute monarchies of the 18th century. Even where imperialist states have maintained democratic forms, they are constantly increasing the strength of their military machine and their arsenals of repressive measures against working people.

It is because of the class character of any state that a socialist revolution must break up and dismantle the capitalist state and create a new one that will defend the interests of working people against the resistance of the capitalists to the replacement of capitalism with socialism.


If you conducted a random survey asking people what “democracy” means, probably the most frequent answer you would receive would be “government by the people” or “the people rule”. That’s not a bad answer; it’s the meaning of the Greek words from which “democracy” comes. Ancient Greece, particularly Athens, offers the best known examples of early democracy. But in ancient Greek democracies, the people who ruled were certainly not all the people. Women were not allowed to vote, and neither were the large number of slaves. So ancient Greek democracy applied only to a rather small part of the people. It was decisively shaped by two social distinctions, gender and class.

Limited by class

In modern democracies like Australia, women and men have an equal right to vote or stand for public office. People from all classes have the right, and indeed a legal obligation, to vote. But that doesn’t mean that there is now a democracy, anywhere, that doesn’t rely on and maintain certain class relations. There is no such thing as democracy in general. While Australian democracy doesn’t restrict the voting rights of large numbers of people, it very much restricts what the voters, and those they elect, are allowed to decide. We can vote for whoever we like, but the electoral system is stacked in favour of political parties that serve the interests of the capitalists.

For a start, the capitalists own all the major media, which do their best to condition our ideas of what the important issues are and which group of politicians is best able to deal with them. And when the party we vote for is elected to government, it turns out that there is nothing in the constitution that forces the government to keep its promises. If we feel really cheated, the only redress the electoral system offers us is the chance, after waiting three years, to vote for a different party.

This is because the electoral system is based on a small number of electorates each consisting of a large number of unorganised voters — around 80,000 in each federal seat — electing one representative. It is impossible for such a large number of voters to get together to hold their elected representative accountable. Indeed, the whole parliamentary system is structured so that the involvement of the great majority of working people in “deciding” government policy is restricted to marking a ballot paper in an isolated polling booth once every few years.

Military intervention

But even the best laid schemes can’t be guaranteed infallibility: it is not totally excluded that people who are serious about doing things like taking away the capitalists’ property might, in exceptional situations, manage to surmount all the obstacles and win election; they might even succeed in changing the constitution to allow a government to expropriate capitalist property. And whenever they feel there’s a serious threat of losing their property, the capitalists decide that they can do without an elected government for a while. That’s what they did in Chile in 1973 and tried to do in Venezuela in April 2002, by replacing the elected government with a military dictatorship.

Capitalist democracy never extends to having the people elect the commanders of the armed forces. The armed forces, like all the other institutions of rule under capitalism, are structured to ensure that the people at the top are drawn from the families of the big property owners or identify with the interests of the capitalists through being paid huge salaries. This is often justified by capitalist politicians with the argument that if you pay “peanuts”, you’ll get “monkeys” making the decisions about how the country is run. And who gets paid “peanuts”? Those who supply all the goods and services that keep the country running — working people.

Capitalist democracy is not “government of the people, by the people, for the people”. It is government of the people, by the capitalist politicians and the privileged “public service” officials (bureaucrats), for the capitalist class. Of course, capitalist democracy is preferable to capitalist dictatorship, just like being exploited by capitalists is usually better than being unemployed. Democratic forms of capitalist government offer working people easier conditions in which to organise to get rid of capitalism.

But capitalist democracy cannot be a tool for replacing capitalism with socialism. It is a means for protecting capitalist rule in periods when class conflicts are not too intense, and which the capitalists will try to replace with military dictatorship, fascism or whatever they think is needed when their form of democracy can no longer do the job. This is why a revolution, depriving the capitalists of the means to block majority rule by the working people, is necessary even in the freest of capitalist democracies.

Capitalist democracy and workers’ democracy

It is meaningful to modify the word “democracy” with a word such as “capitalist” or “workers” because democracy always has a social content, specifically a class content. Democracy is a system of class rule, in which one class advances its own interests at the expense of another class. To put it in other words, “democracy” refers to the form of rule — voting on decisions and/or the officials who will carry them out. But, in addition to form, there is a content to any state. Be it ever so democratic in form, a state always has a dictatorial content: it defends the interests of a particular class and suppresses any other class that threatens the ruling class.

Viewed in terms of class content, the Australian state is the dictatorship of the capitalists. This means there is always a major contradiction within a capitalist democracy like Australia. The capitalists, in every country, are only a small minority of the population. So the content of the capitalist state is in conflict with the democratic form, which most people understand to mean rule by the majority.

Clearly, this contradiction between content and form can be superseded only if a state defends a class that is a majority of the population. Therefore, in developed countries, where the working class is a majority, the only class dictatorship that can be really democratic is the dictatorship of the working class — the “dictatorship of the proletariat”, as it was more commonly called when workers were called proletarians. (This is not to say that a dictatorship of the proletariat has to be undemocratic in a country where peasants or urban semi-employed outnumber the working class. These layers are also exploited by capital, and they can therefore be persuaded to support the rule of the workers, especially if it is sensitive to their particular needs.)

Real majority rule

A real democracy will make the majority, the working people, into the ruling class. This will be done through a mass movement that replaces the state institutions the capitalists control — government, army, police, judiciary — with a government, military and other state institutions that are based on the mass organisation of working people. However, because the fundamental source of the capitalists’ domination over society is their ownership and control of the economy, ending their domination also requires an economic revolution. Once the factories and other means of production are no longer the property of capitalist employers, working people will have the possibility of deciding both what is produced and how it is produced.

Because socialist revolutions have so far occurred only in industrially underdeveloped countries surrounded by powerful capitalist states, they have not had the freedom of action that will be available once revolutions have occurred in the major capitalist countries. Revolutionary working people’s governments now have to divert economic resources from social needs to maintain defence forces against the threat of imperialist attack. And they have to buy the imports they need and sell their exports on world markets controlled and manipulated by imperialist governments and corporations.

Real achievements

Despite these huge obstacles, there have been many indications of the human solidarity and creativity that can be unleashed when the major decisions are made by the working majority rather than by the capitalist minority. Because working people are the ruling class in Cuba, they have withstood a 50-year blockade by US imperialism, have created the world’s only ecologically sustainable economy (according to the World Wildlife Fund for Nature) and send tens of thousands of doctors around the world to provide free medical care for the poor. The Bolivarian socialist revolution in Venezuela is still in the process of transferring capitalist property to a working people’s government, but it is already demonstrating the same sort of creativity and solidarity that characterises Cuba.

People beginning to consider the ideas of socialism sometimes ask for blueprints about how a socialist government in a developed country like Australia would be organised. But while the relatively brief history of socialist revolutions has provided many positive and negative lessons, socialism is not a set of diagrams or rules to be followed. Socialism is about creating the world’s first real democracy by making the working class the ruling class, internationally. When that happens, the new ruling class will have no trouble figuring out how best to rule.

Government ‘transparency’: what’s at stake?

In the negotiations between the two major parties and the Greens and independents over who would form the new federal government, “transparency” was a frequently mentioned issue. Tony Abbott and the Coalition were criticised, legitimately, for their effort to hide the real cost of their election promises. The agreement between the ALP and Tony Windsor and Rob Oakeshott pledged them, among other things, to “pursue” “transparent and accountable government”. After Windsor and Oakeshott announced their support for Labor, Julia Gillard gushed, “... let’s draw back the curtains and let the sun shine in, let our parliament be more open than it was before”, adding, “We will be held to higher standards of transparency and reform ...”

The concern about “transparency” — making the workings of government visible — is a legitimate one. It arises so frequently because the tendency of modern capitalism is too keep government business more and more hidden. The reason for this is quite simple. The longer capitalism survives, the more its governments serve the interests only of a declining minority of the population. This becomes more and more obvious with the passage of time — if people know what the government is doing.

‘Freedom of information’ laws

Some countries now have “freedom of information” laws of varying effectiveness. While in themselves these laws may be desirable, if they are real, they are not a sign of governments becoming more transparent. Rather, they are an attempt, usually unsuccessful, to stem governments’ hiding of more and more. There were no freedom of information laws 100 or 150 years ago because nobody at that time imagined how much capitalist governments would eventually try to hide.

What kind of information is being hidden? An Australian example is available. Thirty years ago, the Australian Bureau of Statistics used to publish a pocket-size book of 100 or 200 pages full of all sorts of facts. What I found most interesting in that booklet was the figures on income tax. It normally divided all taxpayers into groups by taxable income. For each group, the ABS showed the total taxable income and the total income tax the group paid. So it was easy to calculate the average income tax paid by each group: just divide the total tax by the total taxable income.

The highest rate of income tax was not paid by the people with the highest taxable income. It’s important to realise that we are talking here about taxable income: the income on which people are supposed to pay tax even after they’ve reduced their real income by failed investments, charitable contributions, bribes to politicians and all the other deductions available to the rich. Even after all those deductions, people on the highest “taxable” income paid income tax at a lower rate than some other groups. The highest rate was paid by people in the $50,000-70,000 range, people who (at prices 30 years ago) were in what was called the “upper middle class”, which would have included workers lucky enough to be on the top available wages.

The ABS of course did not explain what legal dodges allowed the rich not to pay tax on most of their “taxable” income. It simply reported the totals that revealed that Australia’s income tax, which was progressive up to a point, became regressive when it concerned the wealthy. In the previous version of Direct Action, which was published up to 1990, I sometimes wrote articles that referred to this example of the class bias of the government. I hope and presume that other people also did so.

Hiding figures

The government, at a leisurely pace that would not be tolerated today, finally dealt with the situation: the ABS stopped publishing those figures. I have recently tried searching the ABS web site and can not find even a reference to income tax, let alone revealing statistics about it.

This is the kind of secrecy that the independent and Green MPs should counter. It should not be just a matter of giving more information to parliament. There is too much hidden information that should be available to us all.

Direct action

Direct action has a long tradition in movements for social change. In its most fundamental sense, direct action is the idea that, if you want something done, you should do it yourself, not wait for someone else to do it for you.

Despite its mythology about “initiative” and “self-reliance”, capitalist society doesn’t really encourage doing things yourself. Initiative in making money is okay, but for most goals, we’re strongly encouraged to let someone else do it for us. Thus, if a factory near your house is polluting your environment, and you and your neighbours march in and close down the factory, it’s likely to be you, not the factory owner, who will end up in jail. Or are you and your co-workers underpaid? Again, if you march into the manager’s office and top up your wages out of the office safe, you can guess who the police and the capitalist media will accuse of being thieves.

Working through the system

What we’re taught from birth in capitalist society is that we should try to solve any problems we may have by “working through the system”. So, instead of directly closing down the polluting factory, you and your neighbours should hire a lawyer (two or three if you can afford it) to file legal challenges and lobby the government and generally do their best until all your money is gone, and you and your neighbours have all been killed by the pollution. Or, to obtain a wage large enough to live on, you shouldn’t strike, but should wait until the next parliamentary election and then vote for a party that, if it is elected to government, will — maybe — think about repealing the previous governing party’s ban on respectfully asking the boss to be charitable.

The problem with trying to solve problems by “working through the system” is that most problems are caused by the system; working within it generally multiplies problems rather than solving them. It is particularly fruitless to rely on parliament, because parliament always has a guaranteed majority of representatives who identify far more with the polluters and bosses than with the people who elect the politicians.

So direct action — doing things for yourself instead of hoping that some “representative” will do it for you — has long been deservedly popular in movements seeking progressive change. One might even wonder why it is that direct action is not more widely used.

Collective action

At least part of the answer to that question is that it is possible to engage in direct action in unproductive, or even counter-productive ways. The hypothetical examples above were about collective action, not individual action. This is because collective direct action is far more effective than individual or small-group direct action.

If you, all by yourself, pound on the door of the polluting factory, the owners may or may not let you in, but they will certainly be able to prevent you closing down their polluting operations. On the other hand, if 1000 or 10,000 neighbours bang on the door, the owners will probably keep it locked, but together you can block supplies entering and products leaving the factory, and you might get some media coverage that will encourage a public boycott of the company or pressure a government official into enforcing a law or regulation that was there all the time.


It is sometimes argued by people who are attracted by small-group direct actions that they can spark a response by broader layers — that masses of people can be inspired by a brave individual confronting the bosses or their government or police. While the sight of a few protesters being dragged off to jail can easily discourage political action rather than encouraging it, there can be an element of truth to such arguments.

“Sparks” can sometimes ignite something larger — provided the basis for that something larger has already been created. Consider the example of Rosa Parks, the African-American woman in Montgomery, Alabama, who in December 1955 was arrested for refusing to give up her bus seat to a white passenger, as required by the state’s racist segregation laws. In response, the city’s black population conducted a year-long bus boycott that succeeded in desegregating Montgomery’s buses. (Along the way, this powerful movement caused a federal district court and then the US Supreme Court to notice for the first time that Alabama’s bus segregation laws were unconstitutional.) This was one of the first victories of the US civil rights movement, and it spurred on that movement.

The mass campaign touched off by Rosa Parks’ brave act of defiance didn’t come from nowhere, however. She was part of a Montgomery movement against segregation that had been under way for some time, involving the Women’s Political Council and the local chapter of the National Association for the Advancement of Colored People, which was headed by Edgar Nixon, a militant trade unionist in the Brotherhood of Sleeping Car Porters (also known as the Pullman Porters Union).

A similar example from Australia is the mass strike wave in May 1969 in response to the jailing of Clarrie O’Shea, the Victorian secretary of the Australian Tramway & Motor Omnibus Employees’ Association. That strike wave made the penal powers of the federal Conciliation and Arbitration Act inoperable. The response to O’Shea’s jailing, like that to Parks’ arrest, had been prepared — in this case, by a decade-long campaign, especially in Victoria, where the “27 left-wing unions” had been organising to challenge the penal powers.

The direct action that is advocated by revolutionary socialists is the thought-out collective direct action that can win.

Why reformism doesn’t work

A revolution is needed in order to overcome the evils that capitalist society is subject to. But that doesn’t mean that nothing can be improved in the meantime. Quite the contrary: struggles for improvements — reforms — can be successful to one degree or another, depending on many different factors. In 19th century Europe, there were socialists who thought that an “iron law of wages” existed in capitalism, and that this made it pointless for workers to try to win wage rises. Marx and Engels clearly and emphatically disagreed with that idea. Workers’ resistance to capitalists’ attacks and their efforts to win reforms are essential parts of the class struggle that will eventually lead to socialist revolution.

However, even in Marx and Engels’ time, there were always sections and leaders of the labour movement, particularly in the wealthier countries such as England, who saw reforms and the effort to win them as something quite separate from socialist revolution. Some thought that the gradual accumulation of reforms would eventually transform capitalism into socialism. Others saw reforms as ends in themselves, changes that would sooner or later make life bearable for working people within capitalism. Either of these views, that reforms can be gradually accumulated to make the world a better place for the majority, is known as “reformism”.

Imperialism’s impact

The consolidation of the imperialist system at the end of the 19th century strengthened reformism in the imperialist countries. The enormously increased profits of the ruling classes in these countries gave them an extra cushion or reserve that they could use to quiet workers’ struggles when they threatened to become too militant. That is, the imperialists could more afford to make concessions than could their competitive capitalist predecessors. And these concessions could convince some workers, at least for a time, that perhaps capitalists weren’t so bad after all, that some of them could be persuaded to “see reason”. Many workers’ union or political leaders found it easy to adopt the same attitude, because it made things much easier and more secure for them.

But there are several good reasons that reformism doesn’t work as a strategy for defending or advancing workers’ interests. First of all, the capitalists make concessions only when they think that doing so is necessary in order to defend their longer term interests. If they know that workers have no intention of going beyond mild reforms, there is much less reason for them to make concessions.

Secondly, whenever the capitalists are forced to grant reforms, they immediately start calculating how to take back the concession or undo its effects. For example, among the reforms won by the heightened militancy of the 1960s was free university education, brought in by the Whitlam Labor government in 1974. But the capitalists were never happy with paying taxes so that workers’ children could get higher education, so a subsequent Labor government abolished free tertiary education in 1988 and began introducing the further changes that make it so difficult for students today.

New conditions

Thirdly, capitalist economy is continually changing conditions in ways that undermine reforms or that introduce new problems and oppressions. If a group of workers manage to win a big pay rise, it’s not very long before there’s a new machine to replace most of them, or a recession strikes and the factory closes unless they agree to a pay cut.

A fourth aspect is that capitalists can and often do grant reforms in ways that tend to divide oppressed and exploited people from each other. If there is more than one union in a workplace, for example, the boss may do a separate deal with one of them in the hope of setting workers against each other. When it was under pressure over its abuse of refugees, the Howard government tried to divide the movement that supported them by granting improvements for some types of refugees but not others.

None of this means that reforms aren’t desirable or that revolutionaries shouldn’t fight for them. But it indicates why socialists should not pretend that this or that reform is going to solve any problem permanently. We will solve problems permanently only when working people take control of the government and society; only after a revolution will permanent reforms be possible.

Does socialism contradict human nature?

Socialism, someone said to me recently, may be a fine idea, but unfortunately human nature would prevent it from operating as intended; by nature, people are too individualistic or competitive or greedy to live in a system of planned cooperation and solidarity. Is this the case?

There are undoubtedly some characteristics shared by virtually all human beings, such as an instinct for self-preservation: if you see a rock whizzing through the air toward your head, you duck without stopping to think about it. It is said that all human beings smile in the same way, and that they use their eyes similarly to convey meaning.

But the self-preservation instinct can be violated — some people commit suicide. Facial expressions may look the same in different cultures, but their meanings can vary considerably: Australian tourists in parts of Asia who suffer some minor misfortune have to learn that smiling can indicate embarrassment rather than amusement.

In any case, similarities at such a basic level cannot possibly explain even fairly simple social phenomena. Human nature doesn’t cause every country to drive on the same side of the road. How could it possibly determine much more complex social arrangements?

Different societies

If there were a human nature that dictated some particular form of behaviour, then all human societies would be fundamentally the same, or at least have the same values. But they aren’t, and they don’t. Developed capitalist societies have essentially similar economic structures and corresponding social values (norms of behaviour). But there have been and are other forms of social organisation, which have quite different values. Capitalism teaches us to relate to others primarily through economic relations: to seek a return on anything we extend to them. In pre-class societies and those in which class divisions are not highly developed, it is often the norm to welcome total strangers into the home and treat them as guests, with no thought or possibility of recompense.

Each form of social organisation has its own norms of behaviour, and it comes to regard these norms as part of human nature. Understood in this way, human nature is not something absolute and determined only by genetics. It is a changing product of history and social conditions, and as it evolves it can in turn alter those social conditions. If this were not the case, the entire human race would still be living in the same sort of society as our neolithic ancestors.

It should not be surprising that human nature is essentially a social product. One of the most basic characteristics of human beings is that we are social beings: wherever there are more than a handful of individuals, we form into a social economy of some sort. Whatever else it may consist of, human nature includes a proclivity to live with and collaborate productively in some way with other individuals. (There can be individuals who prefer isolation: hermits, lone hunters. But to the extent that they really avoid society, they are irrelevant to a discussion of how human nature influences social organisation.)

Capitalism and cooperation

Capitalism has a contradictory interaction with this human characteristic. Compared to pre-capitalist society, it greatly multiplies the scale of social production, driving ceaselessly to incorporate the entire planet. On the other hand, it alienates society’s producers from their own activity, because their product is the private property of the capitalists, who use it to exploit them. Moreover, the values of selfishness and greed that it maintains are in conflict with the solidarity and selflessness that are necessary for expanding human cooperation both quantitatively and qualitatively.

The impact of these contradictions is what creates the effort to make production social in all aspects, beginning with the abolition of capitalist property. As it develops, socialism will gradually create the new human nature that is needed. This creates conflicts with the old values of capitalism, but we know that a new human nature is possible because we can see it being created today even in societies like Cuba that have set out on the socialist path from an underdeveloped capitalism. Cuba’s unselfish humanitarian assistance to the world’s poor, for example in medicine, is concrete evidence that we can create the human nature we need.


Marxists believe that a revolution is necessary to open the road to socialism. But what does a revolution actually consist of? Advertisers and capitalist politicians would have us think a revolution is a pretty ordinary event, with their talk of “a revolutionary new soap powder” or an “education revolution”. The reality is quite different. A revolution is the overthrow of the existing ruling structures through the political actions of great masses of people and the replacement of those structures by new bodies. If the revolution is a socialist one, rather than the capitalist revolutions that took place in past centuries, then these new bodies will seek to institutionalise mass involvement in political affairs.

In developed capitalist countries like Australia, the great majority of the population are not involved in politics except episodically. For most, “political activity” doesn’t extend any further than placing a voting paper in a ballot box. The idea that great numbers of people should be involved on a frequent and regular basis in deciding social and economic policies and how they are implemented — that idea is completely foreign to most people, in ordinary circumstances.

Mass involvement

But revolutions don’t occur in ordinary circumstances. In a general sense, they become possible in a period when the structures of political and economic relations have become a growing obstacle to the further development of humanity’s productive forces. This is the kind of period we live in: one in which the continued operation of capitalist economies produces mass unemployment of productive resources (human labour and machinery) and is bringing about catastrophic climate change.

But for the general possibility of a revolution in economic and political relations to develop into an actual revolution in any particular country, something more is required. Large numbers of people have to decide that their current situation is intolerable and that it is both necessary and possible for them to change it. What causes massive numbers of people to reach such a decision is likely to vary at different times and places. Economic hardship, resulting from war or a capitalist economic slump, can become intolerable for large numbers, which is a reason that socialist revolutions have occurred more often in countries that are poor. But capitalism fosters a host of social evils — sexism, racial or national oppression, environmental destruction — that also have the potential to drive people into political action.

Whatever social condition it is that has become intolerable for a large number of people, they will not make a revolution unless they conclude that it is they themselves who have to change the situation, that it cannot be done for them by some hero or saviour. Coming to that conclusion can be a matter of experience and/or learning to see through the lies of politicians who claim, “We’ll take care of that for you”. One of the central roles of a revolutionary party is to spread an understanding that working people themselves have to take control of society.

Revolutionary structures

Because socialist revolutions involve great numbers of working people acting together in their own class interest, the most powerful revolutions tend to create structures based on mass involvement: the soviets in the Russian Revolution, the Committees in Defence of the Revolution in the Cuban Revolution. One of the questions being confronted in the Venezuelan revolution today is what kind of mass structures are most suitable in a situation where a large part of the population is involved in the “informal economy” rather than employed in factories. Whatever the form, the aim is the same — to unite in political action the greatest possible number of the revolution’s beneficiaries.

So a change in government policies is not a revolution, even if the change happens to be a desirable one. Revolution means changing not just policies, but more importantly the people who make the policies. In capitalist society, the people who make the policies may be capitalists themselves or their politicians or the government bureaucracy (the privileged officials at the head of government departments); it doesn’t matter, because they are all looking after the same interests. In a revolution, there is a radical change in the people who make the policies, and then ensure that they are implemented. In a socialist revolution, these people constitute the great majority, the working people themselves. It makes a world of difference.

How socialism became a science

From its very beginning, capitalism has always created resistance in those it exploits and oppresses. Well before capitalism had overrun the rest of the world, in Western Europe, where it originated, it was engendering opposition, at times quite fierce: sabotage of capitalist property, illegal workers’ associations, local rebellions. These indications that something was wrong led thoughtful people to seek solutions to the social evils they saw around them, such as the increasing dispossession of peasants, mass unemployment and petty crime.

The most thoughtful were able to perceive that these social problems had a common origin in the new social (economic) arrangements that were becoming dominant in Britain and other Western European countries with the rise of capitalism. Hence they developed schemes, often quite elaborate, for altering those arrangements. Some were even put into practice as models.

Perhaps the most notable of these was the cotton mill managed for three decades from 1800 by Robert Owen in New Lanark, Scotland, which became (in the words of Frederick Engels) “a model colony, in which drunkenness, police, magistrates, lawsuits, poor laws, charity, were unknown”, while still producing substantial profits for its owners.

The inventors of these schemes were usually described as “utopian socialists” (derived from the title of the early 16th century book by Sir Thomas More describing the fictional island Utopia, possessing an egalitarian classless society of artisan-farmers). They generally expected, or at least hoped, that “enlightened” rulers and the educated public would recognise the reasonableness of their proposals and therefore legislate or fund their implementation, and they were surprised and disappointed when this didn’t happen. The reason they failed was worked out by two German revolutionaries, Karl Marx and Frederick Engels, who established socialism as a science — a coherent body of knowledge describing the laws governing the development of a particular material system.

How society changes

Marx and Engels realised that societies change, not because of the good or bad ideas that thinkers come up with, but as a result of changes in the way they produce all the things they need in order to survive. Social arrangements, whether legitimised by tradition, religion or law, necessarily correspond to the way social life is produced.

But as methods of production gradually change, earlier social arrangements become less and less suitable to the underlying production methods. The growing contradiction between the social order and the forces of production is what gives rise to the perception that social institutions are irrational or unjust and must be changed.

The understanding that society evolves under the impact of its interaction with the natural environment through production is known as historical materialism. This understanding was a prerequisite for converting socialism from a vague hope into a science. The second necessary element, Engels later wrote, was Marx’s discovery of the laws of surplus value — the fundamental mechanism by which capitalism exploits the working class, by paying workers less than the value that they add to their product.

These two discoveries of course only provided the basis for the science. “The next thing”, as Engels wrote, “was to work out all its details and relations”. Among other matters, this involved Marx’s monumental investigation of the laws that govern the operations of capitalist economy. This development of the science, which of course involved as well a careful attention to the actual course of political developments in capitalist countries, led to a further fundamental law of scientific socialism.

Social classes

The utopian socialists who preceded Marx and Engels developed their ideas at a time when the capitalist mode of production had only begun to develop and the class contradictions it creates were underdeveloped. This was a basic reason that the utopian socialists were unable to conceive of a way of realising their socialist goals other than appealing to the good will of “enlightened” rulers and wealthy property owners repulsed by the social evils generated by capitalism.

For Marx and Engels, their economic and political researches made it clear that the social problems created by capitalism could be overcome, as they wrote in the Communist Manifesto, only by “rais[ing] the proletariat to the position of ruling class”, from which position it would be able to begin to reorganise social arrangements to effect the transition to socialism.

This is because the working class, which is created by and indispensable to capitalism, is also the social class that has the social power and the material interest to overthrow it and replace it with socialism. And it is also why Marx and Engels themselves spent such a great part of their lives seeking to build the revolutionary working-class parties and other labour movement organisations that would be needed by the proletariat to carry out its historic task.

Leninism: organising for revolution

Marx and Engels’ establishment of the scientific basis of socialism was indispensable to the struggle for a better world because the fight against capitalism must be a conscious one in a way that capitalism’s fight against feudalism was not.

In the Middle Ages in Western Europe, the feudal nobility existed primarily upon the exploitation of the peasantry. Especially in towns outside the direct control of the feudal nobility, it was possible for the new capitalist class gradually to accumulate wealth based upon trade and small-scale production.

Eventually, the capitalists’ accumulation of economic power became the basis for political power, surpassing or overthrowing the authority of the nobility. Of course, the capitalists created political leaders in the course of the struggle against feudalism, but the essential basis of that struggle — the accumulation of sufficient wealth to allow them to replace the nobility as the ruling class — occurred largely spontaneously, without anyone planning or foreseeing it.

Unlike feudalism, which was a relatively static system of production, capitalism is driven constantly to expand. It does this both extensively, by spreading the conditions it requires around the globe, and intensively, by pushing commodity relations and exploitation into every aspect of social life.

Furthermore, capitalism is impossible without the continual exploitation of the working class. These two dynamics mean that there is no social space in which the working class could gradually gather the economic and then political power to overthrow the capitalists, as the capitalists had been able to do to the feudal nobility.


Because capitalism permits no isolated social “islands” where the workers might gradually grow into a new ruling class, the working class has to become the ruling class by overthrowing the capitalists before it has economic power.

This means that it has to be far more conscious, far more aware of what needs to be done to become the ruling class. And this consciousness has to be embodied in some social form that is capable of acting on it — both to overthrow the capitalist ruling class politically and then to destroy its economic power by building a socialist economy. That is, it requires organisation.

The Russian revolutionary Vladimir Ilyich Lenin did more than any other Marxist to develop the kind of organisation that could embody a scientific understanding of what the working class needs to do in order to overthrow the capitalists. Over the course of several decades of revolutionary activity, Lenin and his comrades worked out that a specific type of revolutionary party was the organisation best suited to the task.

Capitalism imposes quite different conditions and experiences on different workers. As a result, the political consciousness of workers varies considerably, both between different groups of workers at any point and, over time, within the same group of workers.

This meant, Lenin concluded, that a revolutionary workers’ party would need to be based on a Marxist understanding and be a cadre organisation that grouped the most class-conscious revolutionary workers at any particular time and which could reach out to win broader layers of working people to its ranks at times of deep social crisis and heightened class struggle.

Democratic centralism

It would trivialise Lenin’s enormous contributions to revolutionary theory and practice to attempt to summarise them here. However, it may be important to deal with one particular issue, because it is often misrepresented in an effort to discredit the kind of party that Lenin advocated and built. This is what Lenin and the Bolshevik party called “democratic centralism”.

While Marxists can and do learn as much as possible from past struggles, political situations never repeat themselves exactly. This means that the practice of a revolutionary party will always involve a certain amount of trial and error. Democratic centralism seeks to minimise errors and ensure that they are corrected as quickly as possible.

It means that, in deciding what to do, party members should have the maximum possible freedom to discuss among themselves alternative courses of action, basing themselves on their accumulated knowledge of Marxism. The members then vote on the course that seems best and unite to carry it out.

After a suitable experience of the chosen course, the party then again collectively discusses whether to continue, modify or abandon the previous decision. In this way, the party can continually check its ideas and actions through the test of practice.

Fighting climate change needs more than science

Last month (March 2010), I was fortunate to hear Phillip Adams’ ABC Radio interview with Dr James Hansen, the US scientist who has done so much to awaken the world to the fact that our climate is already changing and that it will change catastrophically if we don’t very quickly stop dumping carbon dioxide and other greenhouse gases into the atmosphere.

Hansen is a physical scientist, which is to say that he studies phenomena that would go on even if human beings didn’t exist: ice melts when the ambient temperature rises above 0°C; when objects that contain carbon burn, carbon dioxide is released; the Earth’s surface temperature is dependent, among other things, on the gases that make up its atmosphere.

Yet one of the themes of the interview was the attacks on Hansen for what he has said. How can that be? If you dispute Hansen’s warnings about global warming, then you have to be one of two things: another scientist who has sufficient evidence and a plausible theory to contradict what Hansen argues (no one has come forward who fits that description); or a dupe of coal and oil corporations and similar polluters, whose owners figure they’ll be rich enough to get by even if most of the rest of the human race starves or drowns. The big polluters spend a lot of money trying to confuse the public about climate change. A strategy for countering climate change needs to take account of that reality.

Hansen’s expertise in the science of global temperature, his clear warning that we have to do something to reverse the build-up of greenhouse gases in the atmosphere, doesn’t mean that his suggestions for how to do this have the same validity. Part of what Hansen advocates as a way of countering greenhouse gas build-up is an increased use of nuclear power. Hansen himself would undoubtedly acknowledge that there are other equally qualified scientists, who agree about the need to combat climate change, but who think that nuclear power is not the way to do it, because of the dangers associated with that technology.

A political policy that ignores scientific realities is headed for disaster. But agreement on scientific knowledge doesn’t dictate that there is a single scientific position on how to deal with a problem. Edward Teller, honoured as the “father of the H-bomb” by US imperialism, based his work on the theories of Albert Einstein, who after World War II published a well-known essay on the need for socialism. Two scientists who were equally convinced of the same physical science principles had quite different political outlooks. That is normal.

So, in looking at how to deal with climate change, we need to keep in mind the relation between what is scientifically sound and what is socially possible. That we need to reduce the carbon dioxide level in the atmosphere is a scientific fact. How to do that is a political question that involves social change. The mistake made by Hansen (and also by his scientist opponents if they confine themselves only to questions such as how likely a nuclear reactor is to melt down) is to assume that capitalist societies decide such matters on the basis of what scientific opinion says is best for the humanity. They don’t. They decide them on the basis of what is best — often in the very short term — for those who dominate economic life.

In terms of what actually happens, it doesn’t matter whether Hansen or his scientific opponents are correct about nuclear power. Which side presents the best scientific arguments will have only an indirect effect, by influencing public opinion and to that extent modifying what capitalist governments can get away with in serving the interests of big business.

The nonsense of climate change denial that gets run every day in the capitalist media should be a more than sufficient indicator of why science alone is not enough — why we need a mass movement that can act on the basis of science and overthrow the rotten system that threatens to make our planet uninhabitable. Only then will we be able to make really scientific decisions about how our society should operate.

Why are there so many socialist groups?

“Why can’t the left get together? Why are there so many different socialist groups?” Sometimes these questions are just an attempt to belittle the socialist left by right-wingers (who nevertheless think it perfectly normal that there should be many pro-capitalist parties). But it is also a serious question from unaffiliated leftists.

The fundamental reason that there are many socialist organisations is that there are many different ideas about how to achieve socialism. At first glance, it might seem a reasonable idea that everyone who shares the goal of socialism should unite in a single organisation. But what could such an organisation do in a united way? Some members would think that socialism only requires electing a majority of socialists to parliament, while others might think that socialists should run in parliamentary elections only to propagandise their ideas of the need for socialist revolution. Some members would consider the ACTU and other union chiefs potential allies; other members would regard them as part of the problem. Such an organisation would contain all sorts of ideas even about what the organisation itself should try to be — should it seek to build a leadership for the working class, or is its aim only to unite various existing struggles as much as it can?

So “left unity”, if it’s that general, is too vague to mean much. But left unity to support a strike: that’s possible. Or left unity to build an anti-war demonstration can usually be achieved with a bit of effort and a willingness to compromise (because there may be different ideas of what the demands should be or where the demo should be held). If a campaign is ongoing, an organisation (campaign committee) may be formed as the vehicle for that instance of left unity. That is, if it is to be more than a pious wish, left unity has to be specific. This is important for revolutionary socialists because a general “left unity” is necessarily limited to the lowest common denominator. All the members of a “left unity” party might agree that socialist candidates should be supported ahead of the ALP or Greens in elections, but they won’t agree on what the candidate should say (or do, if he/she is elected).

The left of the “united” party may agree with the reformist demands of the right (although regarding them as inadequate as a solution to fundamental problems facing working people), but the right will refuse to agree to anything too radical. This is how “broad” parties can become traps that subordinate the left to the right. Anything too radical endangers “unity”. Another way to put it is that any left unity that is really useful will be unity in action. A “unity” of people who don’t agree on how to get where they want to go will tend to prevent action rather than assist it.

The question of left unity has arisen recently because on April 2 (2010) the Victorian Socialist Alliance (SA) began circulating a leaflet on the topic, the apparent intent being to encourage cooperation among socialist organisations in relating to the coming state elections and the federal election contest in Victoria. This is no doubt a desirable aim, but unfortunately the SA sought to advance it with mistaken arguments for “left unity” in general, which may do more harm than good.

Why is the left weak?

The SA leaflet points to the undoubted reality that the socialist left in Australia is far weaker than we all would like. However, it goes on to declare, without a hint of evidence, that the “key” reason for this weakness is that the left is “deeply divided and disunited”. The argument is that the left could be much larger and more effective merely by being more united. This is a rather lopsided view of the world.

The Australian political situation is determined by far more influential factors than the supposed failures of left parties. For at least three decades, since the ALP-ACTU Accord, there has been a steady retreat of the Australian union movement, with only occasional and partial attempts at resistance, which were smashed by the capitalist state (BLF, airline pilots). As a result, union membership is at the lowest level in a century, and the working class has suffered setback after setback. Meanwhile, Australian capitalism has enjoyed unprecedented prosperity, based largely on the export of coal and iron ore to China and Japan. From the end of the 1991 recession until 2008, Australian capitalism underwent only one, relatively mild, recession. In the global crisis that erupted in 2008, Australia has been one of the least affected of the developed capitalist countries.

To these specific causes of political quiescence among working people we should add the more general factors that are common in imperialist countries: the existence of a privileged layer of workers, made possible by corporate super-profits; the division of the working class on sexual, racial, ethnic etc. lines; the prevalence of nationalism, with the accompanying idea that Australian bosses and workers share interests in common against the workers of other nations, particularly the oppressed nations of the Third World.

In short, there are a host of objective circumstances that cause the socialist movement to be small in Australia today. Of course, the left can make the situation worse or less bad by behaving stupidly or cleverly. But it is pure pie in the sky to declare that “left unity” — or any other shibboleth — can bring a qualitative difference in socialist influence. The task for socialists today is not to pursue imagined short cuts to mass influence, but to gather the cadres and political resources that will be needed when objective circumstances push masses of working people into struggle. As history has shown repeatedly, such upsurges can occur very quickly.

Lessons of experience

Of course, if three or four socialist groups in a city unite to build a demonstration, it will usually be bigger than if only one group builds it. But everyday experience teaches that unity is no magic wand with which to conjure up mass support. For example, the Stop the War Coalition is a united action group involving most or all of the socialist organisations. Its demonstration on the seventh anniversary of the invasion of Iraq in March was certainly a worthwhile action. But it drew only 100 people in Sydney. The STWC action in Brisbane attracted only 30.

And there has been another, much more extensive, test of the idea that the kind of unity advocated by the SA can overcome the marginalisation of the left. That test is the SA itself. It was established by eight socialist groups in 2001 to run united socialist election campaigns. While it stuck with that objective, it won a greater hearing for socialist ideas, although it certainly did not achieve a mass following. However, even these limited gains were destroyed when the Democratic Socialist Party (later Democratic Socialist Perspective) in late 2003 decided to push the SA into becoming a single multi-tendency party. There was not sufficient agreement among the affiliated groups to make a united party realistic, and the result was not growth but the shrinking of the SA into the DSP and a few people it influenced. After nine years, the SA involves fewer active socialists than were in the DSP alone when the SA was established.

The DSP, which in January officially dissolved into the SA while maintaining its existence as a “non-caucusing tendency”, tries to avoid acknowledging this reality. Thus the SA website still describes the SA as being founded by eight socialist groups, and the Victorian leaflet declares: “As its name suggests, it is a coalition of socialists from a range of political backgrounds and traditions”. But neither the website nor the leaflet tells readers that seven of those founding groups pulled out of the SA years ago. The SA is no more a step towards left unity than any of the other socialist groups, and pretending that it is doesn’t aid real left unity.


According to the Victorian leaflet, the SA believes that “the differences which do exist [among socialist groups] can be contained within a single organisation”. This ignores reality. For example, the Socialist Alternative (  ) group, while formally opposed to US threats against Cuba, considers Cuba to be a capitalist state and advocates a mass armed uprising to overthrow the Cuban government. The SA has a policy of solidarity with Cuba against US threats, but it hasn’t adopted a position on supporting Cuba’s socialist revolution. Perhaps, therefore, the SA could co-exist with SAlt in a united organisation in regard to its policy toward Cuba. But how could the Revolutionary Socialist Party, which regards the Cuban Revolution as an inspiring example to the working people of the world of socialist politics in action, get along in the same party with socialists who advocate the overthrow of the Cuban government?

Since the SA doesn’t have a program that explains how it thinks we can win socialism, perhaps it has no objection to unity with people who advocate the Communist Party of Australia program, which says that the road to socialism passes through a broad “people’s front” made up of socialists and nationalists (“patriots”) whose electoral victory will cause “parliaments and councils … [to] be transformed into institutions which take decisions and adopt laws expressing the will of the overwhelming majority of the people”. But how could those views be “contained” in the same party with the view that socialism can only be achieved through the revolutionary overthrow of the capitalist state, not an attempt to capture it through elections?

And socialists who believe that there are no “national” or cross-class solutions to capitalist economic crises would certainly not want to have as their spokesperson the SA’s Tim Gooden, the secretary of the Geelong and Region Trades and Labour Council. Gooden, with the evident approval of SA’s leaders, endorsed the “good programs” of the Geelong Manufacturing Council. The GMC is an employer-dominated body set up by the Australian Chamber of Manufactures (now the Australian Industry Group), the Geelong Development Board and the City of Greater Geelong. Gooden also called for “a single office front that can support all workers and businesses that are going through transition”.

Furthermore, at its seventh national conference, in January, the SA officially endorsed a cross-class business project, Hepburn Wind Co-operative Ltd, whose chairperson, Simon Holmes a Court (of the multi-millionaire Holmes a Court family) explained to ABC Radio’s AM program in 2008, “Like any business, we will, after we take our revenue in, we will pay out our expenses and what’s left over is profit … the majority of the profits will go to the individuals who invest in our cooperative”. With financial support from the Victorian Labor government and loans from the Bendigo and Adelaide banks, in February Hepburn Wind contracted to purchase two wind turbines from the German-based REpower Systems corporation, which in 2009 made a gross profit of €238 million. REpower Systems will also be contracted to provide the maintenance and service workers for the Hepburn wind farm.

If fundamentally different viewpoints on how to solve the climate change problem or any of the other problems generated by the capitalist profit system actually existed in a single organisation, it would create far more disunity than exists at present, as members of the one party publicly argued for competing and contradictory positions. Either that, or one of the viewpoints would have to decide not to propagate its views. Since the Victorian leaflet proclaims that the SA has “policy positions” but “is not an “ideological’ grouping”, perhaps that is what it has in mind.

Socialism: yes, it is possible

“Socialism sounds like a great idea, but it’s not really feasible. At least in the developed countries, workers are too brainwashed by the system, and the ruling class is just too powerful to be overthrown.” That is not a precise quotation from any specific person, but socialists frequently encounter arguments to this effect. It is a widespread view in developed capitalist countries like Australia. How accurate is it?

It is certainly true that no developed capitalist country today is anywhere near a socialist revolution in the short term. Nevertheless, there are sound reasons to be confident that capitalism can and will be overthrown, in both the underdeveloped and developed countries.

Experience shapes ideas

Working people in the Third World and the imperialist countries are not different species. They are born with the same needs, abilities and aspirations. If workers in Latin America today behave more militantly than workers in Germany or Australia, it is because of the differing experiences that have shaped their consciousness. For most workers in the West, most of the time, capitalism delivers a tolerable standard of living. The capitalists tell us, “Life wasn’t meant to be easy” — in the immortal words of Malcolm Fraser — and it isn’t easy, but for most people here, it isn’t unbearable. For working people in the underdeveloped capitalist countries, life is a lot less easy, and that creates a much greater willingness to think about changing things radically and to take a chance on doing it.

However, it is also the case that things are not getting easier for the working majority in most developed countries. This is not just a temporary result of the international economic crisis; it’s a long-term trend. For example, if you allow for inflation, wages in the United States are no better today than they were 20 years ago. Expressed in 2008 dollars, US average wages in that year were $18.52 an hour, compared to $18.76 in 1979, and well below the 1972 figure of $20.06. In Australia 30 years ago, tertiary education was free, meaning that many children from working-class families could go to university. Now they can do so only by taking on a huge debt. Our living conditions are being altered for the worse at a growing rate: war and the threat of war; lengthening hospital waiting lists; congested roads and worsening public transport; food contaminated or genetically modified with results that won’t be known for years; the growing reality of climate change. Even if real wages were going up — and for most people they’re not — that wouldn’t compensate.

Capitalism can’t provide a decent living for more than a tiny minority. No matter how much they already possess, the logic of capitalism requires capitalists to take more and more away from the rest of us. That reality is sinking in at different rates in different places, but it is sinking in, and as it does so, it will lead to a radicalisation in the outlook of working people — a recognition that the way society is organised needs to be radically changed.

Power of example

Capitalism’s failures need not be the most powerful impetus for socialism. In the 1960s, when living standards were still rising in most imperialist countries, the Vietnamese people’s determined struggle for national liberation and socialism inspired millions around the world with the proof that it is possible to oppose imperialism and win. Today, the equally inspiring example of the Cuban Revolution is being multiplied by the Bolivarian socialist revolution in Venezuela. Together, these revolutions will provide evidence for those feeling capitalism’s oppression and exploitation that there is a practical and realistic alternative.

Marx and Engels pointed out that capitalism constantly creates its own “gravediggers”, the working class. While capitalism seeks to keep the working class mystified and divided, workers are united objectively by their experience of exploitation and their common interest in ending it. Conversely, while capitalists are united ideologically in defence of their system, they are objectively divided by their competing economic interests, which continually disrupt efforts to “manage” their economy for the common capitalist good; what is good for each individual capitalist is bad for their system as a whole. These considerations are the basis of what is known as “revolutionary optimism”: the understanding that capitalism will continue to engender revolts against itself until those revolts overthrow it.

What can an individual do?

It’s easy enough to see that there are many things in this world that need changing. Figuring out how to change them is a bit more complicated.

Capitalism’s apologists advance two arguments in their attempts to prevent change. One is that fundamental change is impossible: things are the way they are because that’s the way they have to be; people are inherently selfish and greedy, and capitalism is the only system that can really cope with that. This argument is debunked, among other things, by the human solidarity exhibited in revolutions, which is why capitalist media try so hard to discredit examples such as Vietnam, Cuba and Venezuela.

The apologists’ second argument is quite contradictory of the first. It says that things can be changed if enough individuals modify their behaviour. So corrupt politics can be ended by voting for good politicians, or environmental destruction can be stopped by individual shoppers buying “green” products.

What these contradictory arguments have in common is the attempt to prevent individuals doing anything that is really effective in bringing change. The conclusion of both is that the most we should attempt is small changes within the existing system. What these arguments ignore is that human society is in a continually deepening crisis that won’t be overcome unless we replace capitalism with socialism, and that individuals acting in isolation can’t do that.

United action

Individuals gain the strength to change things by acting together. That’s why workers unite in trade unions: to gain the strength to contest the way the boss tries to exploit them. It’s true that Australian unions haven’t been very effective at that of late, thanks to widespread misleadership that puts the interests of the Labor Party ahead of the interests of union members. But just the possibility that unions might shake off misleadership and start to be effective representatives of their members can be a certain restraint on bosses.

The example of trade unions indicates that unity alone isn’t enough to change the world, or even to prevent things getting worse. To be effective, unity has to be conscious: aware of what needs to be done, how to do it and when. That kind of consciousness isn’t the characteristic or property of any individual. It can come only from a sharing of learning and experience.

How can large numbers of different individuals learn together and remember what they have learned? The most effective way by far is through a political party. What a party has learned about how to accomplish its members’ collective goals is embodied in its program. For people who recognise that changing the world for the better requires a revolution to overthrow capitalism, it follows that we should seek to construct a party that can do that. This is obviously a long-term project, not something that can be done quickly, especially in a rich capitalist country where the great majority of working people are still far from convinced that a socialist revolution is necessary and possible.

Urgent tasks

The fact that building a revolutionary party is a difficult, time-consuming process makes it all the more urgent to do what we can now. Revolutionaries can’t win thousands, or even hundreds, of new members in Australia today, but small revolutionary groups can do a lot of the necessary preparation for the mass revolutionary party that will become possible as experience convinces more and more people that capitalism is a dead end.

The capitalist mass media never tire of the theme that membership in a small revolutionary party is at best a waste of time and at worst something akin to being caught up in a religious cult. This is just another way to reinforce the twin lies that things can’t be changed, or can be changed only by piecemeal individual actions.

If you’ve become convinced that socialist revolution is necessary, you don’t have to wait for someone to create a mass revolutionary party that you can join. There is no shortage of revolutionary activity that can be done today. Individuals can make a big difference now by joining us in that work in the Revolutionary Socialist Party.