Future generations must not pay for this capitalist crisis

The bourgeoisie seeks to escape the effects of crisis by intensifying the exploitation of the working class. Ending the system of exploitation is the only way forward.

According to Sean O’Grady writing in the Independent, the Office for National Statistics has discovered that the present generation is leeching off future generations, since the luxuries that they have and are enjoying such as (formerly) free university education and (currently also) public sector pensions are and were unaffordable and were and are only paid for by mortgaging the incomes of future generations. To quote from his article:

The true scale of Britain’s national indebtedness was laid bare by the Office for National Statistics yesterday: almost £4tr, or £4,000bn, about four times higher than previously acknowledged.

It quantifies the burden that will be placed on future generations, and it is the ONS’s first attempt to draw together the ‘off-balance-sheet’ liabilities that have been accumulated by the state. The figures imply a huge ‘intergenerational transfer’ – broadly in favour of today’s ‘baby boomer’ generation at the expense of younger people and future generations.

The debt primarily consists of the cost of public sector and state pensions, and of payments promised to private contractors under private finance initiatives. It far exceeds any of the figures so far published for the national debt, the largest current estimate for which is £903bn. That is projected to rise to £1.3trn by 2015.

If the current generation of taxpayers wanted to remove the higher bills facing their children and grandchildren, they would now be paying around 30 percent more in tax.

The ONS data strengthens the government’s hand in its attempt to pull down state spending.

The ONS itemised the public sector’s main liabilities as:

* Future payments for the state old age pension: £1.1trn to £1.4trn

* Unfunded public sector pensions for teachers, NHS staff and civil servants: £770bn to £1.2tr

* Payments under private finance initiative contracts: £200bn

* Contingent liabilities (eg, bank deposit guarantees): £500bn

* Nuclear power plant decommissioning: £45bn

* Impact of financial sector interventions: £1tr to £1.5tr

Failure to cut back now or raise taxes – and there is little sign of the population clamouring to make life easier for the as-yet-unborn – will leave future taxpayers with an additional burden of £200,000 each over their lifetimes to pay for the public services enjoyed by this and previous generations. Even with current plans to reduce the deficit, the tax bill would still be as high as £150,000 over the life of someone born in 2011.” (‘Britain’s debt: The untold story’, 14 July 2010)

Because we live in a mad wonderland of capitalist ‘logic’, these arguments seem quite irrefutable. If one analyses what is actually happening, however, it becomes clear that the problem is not the unaffordably luxurious lives of British pensioners, but the unaffordably luxurious lives of British and foreign bloodsuckers – moneylenders, bankers, financiers – who, under a capitalist system, are able to position themselves where they are entitled to, and do, suck the lifeblood not only of future generations but above all of the current one.

In a sane, socialist, society, the whole scenario painted by Sean O’Grady simply cannot arise. What is produced by society belongs to society as a whole and is (after keeping back what is necessary for replacing means of production, expanding production, providing for people’s various social needs, and setting aside resources for emergency use) distributed among the producers.

If, as a result of natural disasters, for example, there are years of low production, then immediately the goods available for distribution become less and everybody has to tighten their belts, except to the extent that there are surplus goods stockpiled from previous years’ production that can be used to ease the situation.

Even in the insane, capitalist, society, it is not possible to distribute more than has been produced or saved from previous years. If, as a result of borrowing, people or countries are consuming more than they can ‘afford’ (ie, more than they have money to pay for), they are still not consuming more than is available for consumption. In most cases, if they did not consume it, it would go to waste.

The absurdity of the crisis of overproduction

The exhortations currently being made to us by our bourgeois government to the effect that we must tighten our belts are not being made because there is a shortage of goods or services available for distribution. On the contrary, they are being made because too much has been produced relative to the purchasing power of the masses – ordinary people do not have enough money in their pockets to pay for the goods and services available.

In a socialist society, the very concept of a crisis of overproduction would be an absurdity, for beside the carrying on of production on the basis of a plan to meet the needs of the population, increases in production would simply serve to vastly improve living standards for the masses and/or to facilitate shorter working hours without loss of pay or any other benefits.

In a capitalist society, however, the high level of production leads to economic paralysis – the closure of factories, the loss of jobs, the withdrawal of public services, and snatching back of the pensions and social provisions essential for the elderly, as well as food from the mouths of babes – the defenceless being very much a favoured target in these conditions.

Where do the leeches come from?

In capitalist societies, what is produced by workers, whether in goods or services, does not belong to them or to their class, but is privately appropriated by the ruling bourgeois class; the employers who own the means of production.

This class appropriates all the surplus over and above what the working class receives by way of their wage packets directly and the social wage indirectly through various benefits. The surplus value they produce is therefore not available for providing workers with a higher standard of living. Instead, it is used by the bourgeoisie exclusively to increase its wealth and power.

Part of it is used, as would be the case in a socialist society, to replace used up means of production and to expand production – although the bourgeoisie only does this in the hope of increasing profits, not with a view to providing more of the goods and services that the working class needs.

But expanding production may not be the most profitable use. As a consequence of the recurrent crises of overproduction that are built into capitalism, when productive investment (ie, making stuff) is no longer profitable, capital seeks other ways to make a profit, for example, by making loans. These loans are made to enable the borrowers to acquire more of what they need – but strictly on the understanding that they will repay the debt by handing over to the capitalist a part of their future earnings plus interest.

In a capitalist society, the ownership of land and of other means of mass production – factories, machines, modes of transportation, raw materials, etc, enables a parasitic class to live off the labour of others.

As a means of distributing commodities, the medium of money is used, money being what is called a ‘universal equivalent’, which can be exchanged for any other commodity. Originally, traders typically used a readily portable and infinitely subdividable commodity, such as silver or gold, as the universal equivalent to facilitate the circulation of other commodities, but today these have been replaced by bank IOUs.

If you have £100, you have either bank notes that recognise your right to acquire commodities with a price amounting to £100 or a bank credit that will enable you to use a cheque or plastic card for the same purpose. A worker’s wages, although they are derived from the commodities he labours to produce, are paid by means of bank notes or bank credit, which are then exchanged by the worker to acquire the necessities of life for himself and his family.

The surplus produced by the workers for the capitalist who employs them will also be converted wherever possible into bank credits – ie, sold for money – some of which are used to continue the production process, some to expand it, some to distribute by way of profits, and some to use for loan sharking. The capitalist lends to the worker to enable the latter to make up wages too meagre to sustain an acceptable standard of living. But again, these loans have to be repaid from future earnings … and if these too are inadequate, the worker’s oppression goes from bad to worse.

In a modern capitalist state, there is a further twist to the tale, because where the worker does not or cannot borrow for himself, the state borrows on his behalf. The working class needs, for instance, a hospital. The state borrows the money from a capitalist at a good rate of interest – for the capitalist, that is – uses the money to pay another capitalist to employ workers to build it (keeping a healthy profit for himself, of course) and then presents the bill to the taxpayer. And if the taxpayer is unable to pay today, then the debt is passed on to future generations.

The same applies to the needs that workers have in old age. Part of the subsistence that workers should receive from what they produce is the wherewithal to sustain them in old age, when they are no longer able to work. The employer contributes on their behalf to a public or private pension fund for this purpose. But if the contributions are inadequate and/or if the capitalists, in gambling with the pension fund money, have managed to lose it, then the shortfalls are made good by government borrowing, with the bill presented to the taxpayer.

Reject the right of parasitism

But we have to ask by what right do the capitalists appropriate for their own private benefit any part of the fruits of the labour of the working class? Why should they be able to claim any part of our meagre wages in return for lending to workers what was in the first place produced by workers?

The capitalists are a parasitic growth that the working masses need to get off their backs. Instead of passing the burdens of the debts that the capitalists have forced onto the working class, either directly or through the bourgeois state onto future generations, the working class should demand the cancellation of these debts. More than that, it should for the sake of future generations refuse to recognise those ‘debts’.

We need to overthrow the whole system that maintains the rights of parasites, and to replace it with a socialist society which recognises instead the rights of the class which by its labour produces most of society’s wealth.