Finance Capital made Capitalism Redundant

Capitalism.
The strengths of capitalism were said to be promoting entrepreneurship, making the production processes dynamic, enhancing social wealth, providing better living to the mass of the people through employment, income etc. It did the above declared role and more well in its nascent days, though it did many ills like usurping of wealth of the other classes of the people including naked plunder for accumulation of initial capital, resorted to through often barbaric methods. Throughout its existence, it exploited all other classes of the people to extract profit for itself and shared with others, rent to the land lord, interest to the bank, tax to the state and bribe with the officials and politicians and accumulate capital for itself to re-invest.

Monopoly
As the capitalist mode of production advanced, monopoly was formed. Monopoly in production of various commodities, monopoly in distribution, monopoly in finance etc were formed by eating up small entrepreneurs and small and medium size enterprises. Those who were outsmarted were pushed, and still being continued to push, into the ranks of the working class.

Crisis of overproduction
As the capitalist production reaches a stage of saturation within in any economy, it start facing a peculiar situation where in it finds it difficult to sell all that are produced, simply because it takes away more than what it is given to the society. Naturally, the society will find it difficult to bleed out after a certain limit, with which it reduces consumption of the goods produced. Stock piles up and production is disrupted. The general crisis of capitalism starts with it.

Finance Capital
The crisis make the monopolisation process faster and painful to the majority of the entrepreneurs. The crisis deepens. Monopoly leads to acquisition, merger, cartel formation etc. Finally, the industrial capital merge with finance capital and monopoly finance capital emerges. This happened in Europe and America by the turn of 20th century, which was analysed by Com. V I Lenin in meticulous detail. By the end of 20th century this happened world over.

Overseas market
This crisis of over production is overcome by finding out overseas markets. Exports, exchange of goods with friendly nations, exploitation of market of colonies even to the extend of destroying the native production capabilities etc. When all the societies are transformed into its markets, still the same problem of over production arises. This time the global crisis.

War
When no other exit route is found for coming out of the crisis, various power centres of capital start demanding a reallocation of markets under the influence of other centres. Demand for redistribution of colonial market leads to war. War leads to destruction of productive forces, production capability and goods themselves. War itself boosts the demand for weapons. After the war, a new round of production expansion is initiated. The first and second world wars were the manifestations of this phenomenon in the back ground of general crisis of capitalism. Post second world war period was marked by detente caused by the presence of two power centres, one capitalist, profit mongering and other socialist welfare oriented. The manipulations and maneuvering of the capitalist power centre and the affinity of bulk of the nations to capitalism while at the same time availing the unstinted support from socialist block for development made the socialist block weak leading to its collapse.

The capitalism is marked by a series of sudden upheavals and periods of boom in between - it undergoes a cycle of periods of stability, progress, welfare, boom, crisis, madness and chaos.

Innovations
Science and Technology innovations like Printing Press, Steam Engine, Electricity, Telegraph, Telephony, Radio, Oil & Gas, Automobiles, Railway, Airlines, Computers and such many others were used to generate new products, services and their market and profit. Now the recent additions are Information Communication and Entertainment Technology (ICET), Bio-Technology, Nano-Technology etc. With Information technology, even knowledge is sought to be transformed into commodity.

Export of Capital
Export of goods started giving way for export of capital. This was made possible with the freeing of capital from the regional and national bindings with the use of IT networks. International Networks of financial institutions came into being. The merger of Industrial and Finance capital and establishment of share markets have already prepared the ground for such export of capital.

Capitalist boom
Solution to the crisis, intensification of the process of monopolisation, acquisition of overseas markets and all such other phenomenon found in the capitalism is repeated with every new innovation of technology, new production capabilities, new services etc. Those who act first and fast are the winners.

Capital accumulation through plunder rather than production of wealth
With every such changing phase of capitalism, the crisis, the monopoly formation, the finance capital, the war, the new innovations etc, every time, the primitive capital accumulation process is repeated. Any method is welcome for the capital. Outright plunder, eviction of farmers and small land holdings, usurping the public assets, taking over the natural resources so scarce and so essential for the sustenance of the eco system, the forests, the paddy fields, oil fields, the water bodies, the mines, the barren lands, nothing is exempted, often by naked force, at times through purchase, often with the help of the state, often by creating consent and so on. Every thing is added to the net worth of the enterprise.

Virtual Economy
As against the cement mortar economy of the real world material production, now the quantum of production, GDP etc are sought to be shown inflated through the count of repeated sale of financial instruments (called derivatives) and shares. None of these processes generate real wealth. The profit made through such transactions by any body is loss of somebody else. Virtual economy simply siphon off the wealth from the real world economy, that produces goods for human consumption.

Generation of real world new wealth is adversely affected. Production falls, creating shortage and depriving the essentials to the vast majority. Crisis of over production is overcome and trade booms. The chaotic cycle of capitalism repeats.

Production and Financing – Both have become social processes rather than individualistic ones.
With the emergence of finance capital and share markets the production and financing have become totally separated from the owners of means of production. Owners are totally alienated from the real world social processes. They being social in nature could be managed by the society without the intervention from a parasitic ownership.

Corruption in India
Corruption is encouraged by the finance capital in its pursuit of appropriation of social assets to artificially inflate profit to sustain the share market.

Marginalisation of Majority
Mis-appropriation of public assets by way of plunder, loot, privatisation of social assets, corporate subsidy etc, by the finance capital entities in tandem with the corrupt political class and the bureaucracy deprives the mass of the people of a decent living.

Inclusive India
An inclusive growth has to be ensured for an inclusive India. For this the loot of public property has to be arrested. Loot of public property is encouraged by the finance capital and consented by the political class and bureaucrats favouring the continuance of capitalism, sharing the loot among them.

System change
Contradiction within the present system of private appropriation of the fruits of social production and financing – the products and capital – throws the system into a cycle of periods of progress, welfare, boom, crisis, madness and chaos - makes capitalism detestable. By the transformation of capitalism into its highest stage, the imperialism, that is driven by global finance capital, capitalism has ceased to generate surplus and hence profit, which is the very motivating factor for its growth, in any measure sufficient for its sustenance. A time has reached when capitalism thrives not on surplus from the production process and profit there from, but from plunder of public assets. This primitive accumulation of capital at a time when sufficient production, surplus and profit are lacking, the system is thrown into a vicious circle of primitive accumulation of capital to show profit and that addition of capital demands more profit and hence more primitive accumulation.

This makes capitalism a system that appropriates and consumes social assets rather than one that increases social assets. To consume the public assets, capitalism is not needed. It has ceased to justify its existence. It has become redundant. It makes the life of vast sections of the people miserable. All the sections of people who suffer at the hands of global finance capital are coming out on the streets to end the rule of finance capital lead capitalism. It shall be replaced by a system of cohesive processes of production and appropriation, the social production and social appropriation. This change shall usher in a harmonious and peaceful period of growth and welfare, based on democracy and socialism.



Joseph Thomas

Appropriate Technology Promotion Society