Is socialism exploitative?

 The great liberal economist John Kenneth Galbraith once famously said: “Under capitalism man exploits man. Under communism it’s the other way round.” As Clive Crook wrote in an obituary following Galbraith’s death in 2006: “ If he didn't say it, he might as well have. It has an authentically Galbraithian ring: It seems profound, and it's funny. .. And it is a travesty of the truth.”

Let’s imagine for a second that there is a truth in there, what is it? Obviously the intent is to say that communism, what I would prefer to call socialism (despite the fact that socialism itself has a range of meanings), is essentially the same as capitalism in that both are exploitative social systems. Clearly, if that is the case there is no point in putting our effort into “creating socialism” as it would simply replicate the inequalities that characterise capitalism with a different set of exploiters. But Galbraith’s aphorism, if indeed he ever said it, needs a little addition. 

What it should say is: “Under capitalism a minority of people (a majority of which are probably men to be fair) exploit the majority of people.” Is this true? Defining a capitalist these days is not easy. Everybody who runs a coffee stall describes themselves as a “capitalist”, and actually many people who work think if they like money this makes them a capitalist. People often tell me that the word ‘socialist’ has become a nonsense because it has so many definitions, does anybody seriously think that is not true of the word ‘capitalist’ too? 

Let’s try to narrow this down, who are these ‘exploiters’? I’m going to suggest for sake of simplicity that it is the people who control industry. We all know there are a handful of billionaires in the World, according to Forbes there are currently 2,775 billionaires in the World. There is little doubt that these people are capitalists in the classic sense that they use their capital to make more capital. They are very successful at this Forbes reports that they increased their wealth by $8 trillion in 2020. Yes, 2020 the year when most people were struggling to maintain their standard of living through a pandemic that saw many ordinary workers across the globe with zero incomes and having to spend what small amount of capital they had merely to stay alive.

Billionaires are prima facie cases of exploiters, but they are not entirely alone. There are, approximately, 1.7 million people in World who are Chief Executive Officers of large companies, according to one estimate. I am not sure that all of these are technically capitalists, but they might be exploiters. When we talk about exploiting it tends to have negative connotations but the Labour relationship in a capitalist economy is both exploitative and based on a freely entered into relationship. Many people would argue that so long as the contract is entered into freely then it cannot possibly be exploitative. But, exploitation here just refers to the nature of that labour contract not that you entered into it freely. 

Nobody employs you as an act of altruism. Companies do not exist for your benefit, whatever they might try to convince you. The 50 largest companies in the World employ over 23.5 million people Worldwide. The global workforce consists of approximately 3 billion people Unsurprisingly, there is no list of every person on that list, unlike the lists of billionaires or CEO’s. The absence of a list tells us a number of things. Perhaps, it is because a list of 3 billion people would be unwieldy. Perhaps, given that all of us are on lists for tax, social security or employee lists, it is that our employers are keen to protect our anonymity. More likely, however, it is that the majority of workers do not matter very much. At least to the people who employ them.

According to the International Labour Organisation (ILO) report’Global Wage Report 2020-21’ real wage growth in the four years 2016-19 was between 0.9 and 1.6 per cent. But, the report notes that in 3 of the G20 countries real wages fell.Take a bow Italy, Japan and, you guessed it, the U.K. What this shows is that whilst we live in a globalised economy how you are treated in that economy is largely dependent on local conditions. It is unlikely, for example, that the British media will tell you that whilst your wages are falling in real terms in Germany they increased over the same period by 15%. Of course, whether wages are falling or rising, and remember this is on average, is less important than what they are rising or falling from. A 1% increase on a minimum wage is of little help to a family struggling to survive, whereas a 1% decrease on somebody earning in the upper quartile of wages is hardly likely to dent their lifestyle. That’s why what should worry us all is the fact that globally one in five people, 327 million workers, are paid less than the minimum wage.

You might think that people in, let’s say Indonesia, earning below the minimum wage is of little consequence to a person in York, New York or Berlin. But, you are in a globalised economy in which competing capitals are trying to better one another. As I’ve mentioned before every year companies post their profits and each year it is assumed that profits will rise. What this means is that companies are constantly competing with one another for new markets, cheaper production and bigger profits. And, this is one of the biggest contradictions of a capitalist system. Cheaper production inevitably means fewer and less well paid workers. But, whilst that benefits one capital, as you reduce people’s incomes they consume less and other capitals find they are over producing. Companies, quite literally, go to the wall. And, when they do it is the workforce who pay the ultimate price in terms of being driven into poverty. Globally some 197 million people are officially unemployed, millions more simply do not show up on any statistics at all and are scraping by through begging, scavenging or petty crime.

To return, then, to the point. Only a tiny minority of people in the World are exploiting others, whilst the vast majority are being exploited. Now, let me just make the point. In a capitalist economy people are exploited if their labour power is used to produce surplus value for somebody else. Exploitation occurs at the point where the person with nothing to sell but their labour power mixes their labour with raw materials provided by somebody (or something) that owns and controls the means of production. You may think it follows, therefore, that the unemployed - denied the opportunity to use their labour power - are not being exploited. In an economic sense that is true, but what they do is act as a brake on the demands of the employed. Unless you are in highly specialised work, and to some extent even then, unless you have accumulated the wealth necessary to sustain you, then unemployment hangs over you like Damocles sword, ready to fall at any moment.

One final point is worth making. In a social system based on free markets and democracy you are given the illusion of “power” through national elections which allow you to choose between approved political options. The idea is that you are given a choice between a narrow, but pro-capitalist, set of candidates or parties who may offer this or that reform but who can never seriously threaten the ability of individual capitals to continue with business as usual. The idea of universal suffrage (though still age restricted) is now the dominant representative democratic system throughout the World (there are one or two obvious omissions), but electing a government (no matter how ‘radical’ they may appear) simply shuffles those enacting the law. What it cannot do is change the social system itself. The exploiting class are rarely in parliament they are in boardrooms and elections of CEO’s are restricted entirely to shareholders if they are not simply appointees.

So, to return to Galbraith’s “under socialism it’s the opposite”. Far from showing in a witty form how socialism is simply the opposite side of an exploitative coin with capitalism, it offers the possibility of real change. When you reverse the positions what you end up with is socialism as a system where the majority of people exploit the minority. Already a massive improvement. Imagine we could list every single person who was impoverished because that list consisted of only 2,775 individuals? But the reality is that in such a social system exploitation, in a capitalist sense, would not exist. The very idea of socialism is to have production for need not for profit. If you remove the profit mechanism you do not, as is often asserted, remove motivation. People are motivated by all types of things and, for most people, profit is probably low on the list. Of course, in a society where success is measured by wealth people will certainly be motivated by the acquisition of wealth, but with different social relations some of those other motivations, particularly happiness and self-fulfilment, would be able to flourish.As even Forbes, a capitalist cheerleader, notes in a discussion on motivation: “ In the end, happiness is one of the greatest motivations to achieve.  Happiness fuels ones self-esteem and gives people hope for a better tomorrow. ”

Nobody becomes a socialist because all they care about is themselves. People who are attracted to socialism tend to be motivated by a deep concern for those less well off than they are. But, socialism is not a pity creed, it is a recognition that all of us are better off if none of us are worse off. It is a recognition that work is not just a way of filling your hours to earn enough to pay your rent/mortgage and put food on your table (assuming you can afford a table), but is also a way in which we can develop as human beings and nurture parts of our emotional development that require challenges and comradeship. When we turn the World around the role of exploiter will simply not exist because it won’t need to. That is why Galbraith and the millions of people who cling to these dangerously outmoded ideas are so wrong. They underestimate human beings capacity for compassion and thoughtfulnesss, a mistake incidentally, people on my side of the political fence often fall into out of their frustration with their fellow citizens seeming lack of engagement with others suffering.