Competition, monopoly and planning: the market vs socialism

The defenders of capitalism like to tell us stories about free competition and the wonders of the market mechanism. But can we really talk about a 'free' market, when the world economy is dominated by 500 monopolies?

The development of capitalism has brought into being massive multinational corporations, most of them 'too big to fail', as we saw in 2008, when the state intervened to prop up many of them. These companies engage in planning on a massive scale, whilst, of course, claiming that planning is impossible.

Yet, at the same time the world market still maintains its chaotic existence, dominating everything and wreaking havoc across the world. How would socialist planning be different and what advantages do modern technology bring?

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Niklas: We’re going to speak here about a subject which is something that dominates the whole world as we know it today. But it wasn't always like that. When Marx wrote his most important works in the mid-1800s, capitalism was still playing a progressive role. Under a system of free competition, industry was being developed at a never-before-seen pace. In this period, the basis of our modern industry was laid. It was a period of free trade, in the sense that producers from all over the world were able to compete on an open market on a comparatively equal footing.

Lenin pointed out how Marx didn't just describe this period of free competition, but he also explained how this period would inevitably lead to another period. Lenin wrote the following:

“Half a century ago, when Marx was writing Capital, free competition appeared to the overwhelming majority of economists to be a ‘natural law’. Official science tried, by a conspiracy of silence, to kill the works of Marx, who by a theoretical and historical analysis of capitalism had proved that free competition gives rise to the concentration of production, which, in turn, at a certain stage of development, leads to monopoly. ”

Lenin wrote this in Imperialism: The Highest Stage of Capitalism. It brings to mind the constant sermons that have been delivered over the past few decades about the wonders of free market and competition, in spite of all the evidence to the contrary. In the session on the labour theory of value, comrades explained how modern bourgeois economic science has become completely mystical and can't explain anything. So, just like they denied the labour theory of value, when it comes to the question of monopoly, the economists refused to draw the obvious conclusion: that competition inevitably leads to monopoly.

In Imperialism, Lenin showed in facts and figures precisely how this process had taken place. He pointed out, for example, how one percent of the companies in the United States by 1909 were producing fifty percent of all commodities. And today this process has gone a lot further. Today, we have thirteen monopolies that control almost the entire car industry. We’ve got BMW, Daimler, Stellantis (which is Fiat, Chrysler, Opel and Vauxhall), Ford, Geely, General Motors, Honda, Hyundai-Kia, Nissan, Renault, Tata Motors, Toyota, and Volkswagen. Tesla is emerging as one of the major car producers outside of this traditional group of monopolies, but this one newcomer will only prepare the way for further monopolisation. The development of electric cars requires even more research and capital investments than the previous technologies, so this will further increase monopolisation in the car market.

In the US mass media market: in 1983, fifty companies controlled ninety percent of the market. By 2011, six companies controlled ninety percent of the market. That’s General Electric, News Corp, Disney, Viacom, Time Warner, and CBS. Since 2011, a couple of new companies have entered the scene, in particular Netflix and Amazon. But rather than opening up the markets for a new era of free competition, the entry of Netflix and Amazon has merely meant that all the previous monopolies have consolidated and merged even further.

In the electronics industry, with its requirement of a vast capital expenditure, the world market is also completely monopolised. There are lots of different kinds of microprocessors, nevertheless, eight companies control sixty percent of the world market. When it comes to memory modules for phones and computers, Samsung alone produces forty-five percent of all memory modules. Five companies (Samsung, Apple, Huawei, Xiaomi, and Oppo) control sixty-seven of the mobile phone market in the United States, and on the world scale, it isn't all that different.

The smallest semiconductors measure around four nanometers and the most modern microprocessors need to have those tiny, tiny parts in order to work. Ninety-two percent of those are supplied by one company called Taiwan Semiconductor Manufacturing Company (TSMC), and the remaining eight percent are produced by Samsung. In the wider market, including also the slightly bigger semiconductors, TSMC supplies 56 percent of semiconductors. It's not really hard to see why they can have such a dominant position. A single factory or foundry can cost as much as $20 billion to build. One key manufacturing tool that is needed in this process can cost $100 million each. The machines which produce these four-nanometer semiconductors are produced by only one company in the world, the Dutch company ASML. It also controls sixty percent of the global market for the machines used to produce bigger semiconductor components. The sums required to stay competitive in this market are immense. TSMC, in spite of its monopoly position, is still planning to spend $100 billion in the next three years on capital expenditure as well as research and development. This completely bars the way for new entrants into this industry, except with massive state aid. This is taking place now in the United States. The latest bill for this purpose is $230 billion, which the US is planning to spend in trying to develop its own industry.

Lenin explained this:

“The tendency towards monopoly arises from the huge size of the enterprises. This transformation of competition into monopoly is one of the most important – if not the most important – phenomena of modern capitalist economy.”

But we shouldn't imagine that just because you establish a monopoly at one time that it will remain so forever, or that such a situation where you have a kind of ultra-monopoly will introduce a period of stability. That would be a completely one-sided way of looking at it. Marx explained this in The Poverty of Philosophy. He said:

“In practical life we find not only competition, monopoly and the antagonism between them, but also the synthesis of the two, which is not a formula, but a movement. Monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists.”

What we observe here is a continuous process that's taking place, but what we will not see is a reversal back to the way that capitalism used to function 150 years ago. We’re not going to see a resurrection, in spite of the libertarians’ wet dreams, of free competition.

The question of imperialism isn't directly relevant to the topic we're discussing here, but I think it’s nevertheless important to mention because it's so intimately linked to the question of monopoly. In this same passage, Marx explains that the development of monopoly only sharpens existing contradictions in capitalism. If the monopolists restrict mutual competition by means of partial associations, competition increases among the workers, and the more the mass of the proletarians grow as against the monopolists of one nation, the more desperate competition becomes between the monopolists of different nations. The synthesis is of such a character that monopoly can only maintain itself by continually entering into the struggle of competition. So here you have already Marx sketching out the theme that Lenin was to pick up in his book, Imperialism, where he said that:

“Domination, and the violence that is associated with it, such are the relationships that are typical of the ‘latest phase of capitalist development’; this is what inevitably had to result, and has resulted, from the formation of all-powerful economic monopolies.”

Another key part of how the world functions today is finance capital. Again, Marx explained some of this in his writings, but during his lifetime he didn't see it in its full development. Lenin did, however. He wrote:

“The concentration of production; the monopolies arising therefrom; the merging or coalescence of the banks with industry – such is the history of the rise of finance capital and such is the content of that concept.”

As industries mature and monopolies dominate the particular branch of industries, superprofits are made, and surplus capital is created that cannot be profitably reinvested into that same branch of industry. So the surplus profits are then deposited into banks which can then redistribute this surplus capital into other more profitable industries – in less developed, less mature industries where there's more scope for investment. The banks become the conduit of surplus capital between different branches of industry. Credit seeks to equalise the rate of profit by moving money into the most profitable sectors, and the concentration of capital that occurs in the industry is also mirrored in the banking sector.

Long gone are the days when a bank consisted of one office in a town. Instead, we now have multinational corporations that span across the whole world with thousands or tens of thousands of branches. All the small local banks were taken over or put out of business. This happened in tandem with the monopolisation of industry, but this also coincided with a separate development. Those who dreamed that capitalism would become more benign the older it got, they call this process the “democratisation” of capital. Instead of having just one owner, as you would have had in the 1890s, the industry had now developed to such a degree that one individual capitalist (or even a family) was no longer sufficient in order to run a company. The system of shareholding was a way of spreading ownership across a number of different capitalists. In this way, they were able partially to overcome the limitations that private ownership placed on the further development of industry.

Again, Lenin explained:

“Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists.”

This “democratisation” of ownership, the spreading of ownership, far from creating a more benign capitalism, just strengthens the control of financial capital.

At present, the financial assets of the finance companies in the world are a total of $510 trillion. This is actually equal to the non-financial assets in the world economy, which they value at $520 trillion. A lot of these real assets are fictitious in their valuation, but it shows the tremendous power that financial corporations have over the economy.

Non-financial institutions also have large claims. Lots of workers have money and pension schemes, etc., but there is a vast difference there. Having some money saved in a pension fund gives you zero influence over how the company is run. You get no influence over how investments are made with your money. The same goes for lots of other types of investment companies, like hedge funds, etc.

Lenin said: “The democratisation of capital is, in fact, one of the ways of increasing the power of the financial oligarchy.” This spreading of ownership actually strengthened the domination of finance capital rather than the other way around. It gave monopoly capital even more power to dominate the smaller entities. In practice, holding a small minority of shares in the company was sufficient to control the whole company, provided of course, that there were no other shareholders with a bigger stake. So the consequence is that the bigger shareholders could control not just their own capital, but also the capital of their smaller peers. Lenin quotes Siemens, the German industrialist, who remarked in 1900 that the “one-pound share is the basis of British imperialism.”

Many mergers and takeovers take place by issuing new shares. This means that over time the bigger monopolies could accumulate even greater resources, even whilst diluting their ownership stake. The shareholders of the smaller companies are absorbed into a bigger whole, and their share would be too small to have an influence over the running of the company. In this way, big capital expropriates the small and medium capitalists. In certain countries, this was even institutionalised in a system where different types of shares have different voting rights, so there’s even more consolidation of the control of the company in the hands of the big shareholders. In this whole process, the banks became the gatekeepers. They supply loans, arrange the issue of shares, etc. Lenin says:

“All these reorganisations and reconstructions have a twofold significance for the banks: first, as profitable transactions; and secondly, as opportunities for securing control of the companies in difficulties.”

The expansion of credit drives the expansion of banking, and the monopolisation of the banking sector. Of course, having a loan is fine as long as you have the means of paying it back. But the moment you can no longer pay back your loan, or are struggling to make the payments, then the vultures start circling. These vultures are the banks, the hedge funds, etc. Finance capital steps in and tries to take a share of the company. So the expansion of credit also means the expansion of the power of these institutions.

Over the past few decades, we've seen a tripling of debt as a proportion of GDP in the advanced capitalist countries. Who buys the bonds and issues the debt? The banks and other financial institutions. And the collateral for this is a house (in the case of mortgages) or a share in a company (typical collateral for corporate debt). So the banks hold the world economy in their hands. They’re also one of the first parties that get a piece of the pie when a company enters into liquidation. Of course, in this process, the small and medium-sized companies are far more likely to succumb to difficulties than the bigger ones. Gradually, the banks and financial institutions grab a larger and larger share, not just of debt but also of ownership of companies.

On the board of many companies now sit the representatives of financial institutions. The board of directors of Tesla, for example, has two partners of venture-capitalist companies, one former chief investment officer of Japan’s government pension fund, and the son of Ruper Murdoch, who also owns a private-investment company. Walmart has on its board a representative of Morgan Stanley, and representatives of three other investment firms, including the chairman of the board, who is from an investment company. On Amazon’s board of directors, we find someone from Bridgewater Associates and someone from Goldman Sachs. Amazon’s ownership is quite interesting to look at. Jeff Bezos is a famous guy, he is the biggest shareholder in Amazon, and he owns ten percent of the company. But the Advisor Group, Vanguard Group and Blackrock all own between five and eight percent each. These are all various types of hedge funds or investment companies. In total, what they call “institutional investors” hold fifty-nine percent of the shares in Amazon.

Financial capital is also heavily involved in the oil industry. It's well known that they involve themselves in insuring oil shipments and in speculating on the price of oil, but a large number of them also have stakes in a very large number of oil companies. I saw a list of about eight or so investment companies, and each of them had a list of about twenty or thirty companies that they owned privately. They're privately owned by the bank, so there are no other shareholders in those companies. This includes everything from oil prospecting to oil maintenance. In the big oil companies, they only have about six percent of the shares. So today, to separate industrial capital from finance capital is practically impossible; they're one and the same. And this is of crucial importance.

Both Lenin and Marx pointed out that this changed how capitalism functions. Lenin said that scattered capitalists are transformed into a single collective capitalist. Consider companies like Berkshire Hathaway, which is run by a quite famous banker. It’s one of the largest investment companies in the world. It owns “controlling shares” in a number of companies, which means its share of ownership is so big that no one else has an influence over the company. Its total assets are worth around $1 trillion. So about one five-hundredth of the entire wealth of the world is owned by this one company. The companies it owns produce energy, motorhomes, cut limestones, carpets, furniture, jewellery, ice cream, and electric cables, among other things. They also sell insurance, pilot training, cars, and logistics services. Those are the companies that they control, but they also have significant, smaller investments in American Express, Apple, Coca-Cola, and Wells Fargo. And what's the common denominator between these companies? There is none.

Blackrock is an asset management company. It manages $10 trillion worth of assets. That’s two percent of the world's total wealth. It’s a bit different from Berkshire Hathaway. With Berkshire Hathaway, you invest your money in shares of the company, and then the company owns lots of different other companies. Blackrock works a bit differently. Blackrock doesn't actually own the assets they manage. It merely manages funds of other investors. It uses these funds to buy assets, but Blackrock doesn't formally own these assets. Nonetheless, it controls and casts votes at the important meetings of these companies that they invest in.

This is now how the world is run. And what we can see here is that for these companies, profit now appears merely as interest. It doesn't matter which industry they're investing in. What matters is the returns. The capitalists who invest their money in Blackrock or Berkshire Hathaway are not involved in production at all. They have professional managers who run these investment companies. These professional managers, in turn, appoint other professional managers to run the companies that actually produce things. It doesn't matter whether they produce cars or they sell insurance, as long as it gives them a return on the investment.

With the development of joint-stock companies – and even more so with hedge funds, investment companies, pensions funds, etc., – property becomes, as Marx says, social property rather than private property. But it's social property within the confines of the capitalist system. It’s social property appropriated by the few. But this obviously doesn't mean that we're arriving at socialism or anything of the kind. As Lenin says:

“The distribution of means of production is not at all ‘universal’ but private, i.e., it conforms to the interest of big capital, and primarily, of huge, monopoly capital.”

Marx calls it “private production unchecked by private ownership.” Far from resolving the problems of capitalism, it only intensifies them. Lenin describes how this intensifies the anarchy inherent in capitalist production as a whole. Marx explains how the massive expansion of credit, joint stock companies, etc. accelerates the development of the productive forces worldwide and the world market. But at the same time, it provokes more violent outbursts of crisis.

That's precisely what we see today. A massive expansion of credit, a massive acceleration of monopolisation and concentration of ownership into tiny handfuls of people, and then the massive crises that burst to the surface. What does this development signify? According to Marx, they develop exploitation of labour into its purest form, but that this also “constitutes the form of transition to a new mode of production.” For Marx and Lenin, the development of monopoly capitalism and, with it imperialism, was a necessary point of transition from capitalism to socialism. Capitalism has created social property and social production. (By social production, I mean the interconnectedness of supply chains, of factories all over the world). The capitalists no longer play any role in production and have become completely parasitic.

What we're describing here is that the means of production have outgrown the mode of production. Within capitalism, the new society has already grown and developed, of course, in a completely distorted manner. We have social property with private ownership. We have social production but in private hands. This is why the productive forces are revolting against the confines placed upon them by capitalism. The tremendous impasse that the world finds itself in today is precisely because of this contradiction, or this revolt, by the productive forces. Capitalism has very neatly prepared the way for the expropriation of the capitalist class. Free competition created monopolies in production, and “democratic” share ownership has created a monopoly on ownership. Credit has concentrated the control of the world economy in the hands of a tiny handful of multinational corporations.

Forbes publishes a list of the top 500 to 1000 monopolies in the world. Maybe we should consider it a bit of a hit list, a list we can tick off for expropriation once we've taken power. To take over these companies will be sufficient to have the world economy under our control. Maybe we wouldn’t even have to expropriate all of those. The immense power of asset managers like Blackrock, retailers like Amazon or Walmart, or energy companies like Exxon or Total, means that we could plan the world economy without necessarily having to own every single company.

It's not just in questions of ownership where the potential for socialism has developed tremendously over the last few decades, or the size of the working class, which develops in tandem with the development of productive forces. (As Marx says, “capitalism produces its own grave-diggers”). But also, the technologies that some of these corporations have developed will massively simplify the future administration of a planned economy. These companies have created computer software and automated systems that are quite capable of running very complicated, very large chains of logistics with minimal human intervention.

Walmart was one of the pioneers of what they call “push supply chains”. Rather than letting each store manager decide what the shop is to stock, these stores are told by management, centrally, what to put in their shops. This is because they can use computer systems in a very sophisticated way to predict what people will be buying in each particular store, at any particular point in time. Information is collected straight from the cash registers, which are then connected to a huge database, which then passes on the information to Walmart’s suppliers. They can then adapt their production schedules in order to fit what is being bought at Walmart’s cash registers. There’s little room for human intervention, or for the market, to play a role in all this. In fact, here we have a centralised plan of production… for one company.

Amazon followed in Walmart's footsteps a few years ago. They fired all their warehouse purchasing managers and instead allowed computer algorithms to dictate purchases and logistics. Here, they could go even further than Walmart had done, because Amazon can track not just what you buy, but also what you don't buy. It’s like wearing a tracker when you're walking through the aisles of a physical shop. Amazon will track you all the way through: from the moment you open their website, all the way to when you make a purchase or don't make a purchase. But they also track what you do on lots of other websites and collect information relevant for what they need.

With this data, just like Walmart, they place their employees with their suppliers to ensure that systems were set up to communicate the data that suppliers require as effectively as possible. This ensures a steady stream of goods flowing to their customers, with minimal stock in the warehouses. Here we have a situation where, in a lot of cases, these retailers are basically dominating increasing parts of the supply chain by actually having their agents in the companies that supply them. So the retailers are now dominating their suppliers as well. Many of these Amazon suppliers only sell on Amazon, and Amazon can completely dictate terms to them.

To accomplish this, they had to develop huge processing power to process all the data that they were accumulating. This gave rise to the most profitable part of their business, which is cloud computing. This is a system which links together tens of thousands, or hundreds of thousands of computers in different parts of the world to function just as if they were one computer, thereby minimising wasted capacity. This accumulated computing power now makes things possible that would never have been possible in the past.

Cloud computing makes the running of all these computer systems more resilient, cheaper, and less dependent on geography. In fact, here we have another example of socialised production. In this case, means of production - computers - are shared between many different multinational companies. Most banks now run their big computer systems on different cloud servers like Amazon or Google. Nationalising these cloud operators would be another key link in the chain of production. All this data they collect could surely be used to plan production, to develop strategies for managing logistics, and plan for changes in consumption. In fact, these big monopolies are already using the data that they collect in this manner. All this information is available, but obviously, we would use it for the good of society rather than for the good of the advertisers.

It is often implied that the success of Amazon is due to their ill-treatment of workers, but that's getting things the wrong way around. The way they treat their workers is to fit them into the machinery, to fit them into the tremendous pressure that's created by adjusting timed production based on computer algorithms. The workers are being treated like flexible machines, attempting to deprive them of all their humanity to make them fit into a logistics chain, to make them function like robots. Now Amazon is taking the next logical step in this process, and they're replacing many of the workers with machinery. Amazon says they're still hiring lots of people in various parts of the world, but Amazon has 1.6 million workers, and it has half a million robots, and the number of robots is increasing at a much faster rate than the number of employees. By linking up these robots to Amazon's powerful computer systems, they provide a formidable army that can keep Amazon's logistics chain moving.

When used for private profits, Amazon's resources only create misery for the workers. On the other hand, this development of robotics provides another important stepping stone in liberating humanity from the drudgery of manual labour. Their technological developments open up even more possibilities. New materials are revolutionising technology. You have technologies like 3D printing, which could become a bit like a replicator in Star Trek. All of this has tremendous potential, but it's not being used.

There’s a lot of talk about the future of automation, or at least, there was a lot of talk about it a couple of years ago. But there's a lot of talk and not very much investment. In many cases, it remains cheaper for the capitalists to employ workers than to buy machines. There is also excess capacity in many sectors, meaning there is no appetite for the capitalists to invest. Or, if one is to be more accurate, there is no appetite for the managers that are hired by the capitalists to invest. On the basis of capitalism, another leap forward in the productive forces is ruled out, and these technological developments remain merely potential.

In class society, expropriations are a dirty word, but the truth is that a tiny layer in our society has expropriated the property of the rest. The small businessman, the medium-sized businessman, and even some of the larger businesses have all been placed under the domination of the big multinational corporations. The workers have not had their property expropriated, but the products of their labour are being expropriated on a daily basis. And the workers’ role in production is being broken down into its smallest component parts: screwing in the same door on the same model car over and over again, or flipping burgers over and over again in the same monotonous motion. Human beings are really the most versatile, most capable animal that the universe has ever produced (as far as we know, at least), but these human beings are being reduced to repeating the most monotonous tasks over and over again. Capitalist production has created the most tremendous waste: a tremendous waste of human talent and ingenuity.

At the same time, workers have to submit to daily indignities of managers that don't understand anything about the job but still pretend that they know everything – engineers and consultants who haven't done a day of manual work in their entire lives. Even white-collar workers are finding their jobs de-skilled and reduced to their component parts. Lawyers, for example, face competition from computers, with the automatic writing of wills, etc. Doctors are having their working conditions eroded. Teachers have every single moment of their lessons controlled and monitored. The number of managers is exploding and creating an ever-increasing load of administration for the frontline workers. Management practices, cuts, and privatisation have made it impossible for many public sector workers to carry out their jobs and are causing widespread demoralisation.

Socialism will put human beings in charge of our own creations again. Planning, aided by vast developments in computer technology, will enable us to take control of production out of the anarchy of the market and put the workers back in charge. Rather than being a mere appendage of the machine, the worker will become the master of the machine.

This is our proposition. Workers’ control means that conscious human decision-making will determine the direction of society. The organisation of socialist production will be very different. We’re going to turn production on its head. Or more correctly, we are going to turn production the right way up. Production chains are already social. They use vast arrays of components from all across the world, involving thousands of different companies, which in turn employ hundreds of thousands of workers. This provides the basis of truly international planned production on a level that we've never seen before. It’s also the final nail in the coffin for the reactionary utopia of “socialism” in one country. Production now is truly global, and supply chains are in open revolt against the nation-states. With the rise of protectionism, it’s obvious that capitalism is in full reverse, rather than moving forward.

Humanity here has a choice: socialism, with its promise of superabundance, or the barbarism that capitalism has to offer. For us communists, we can see that the only way forward is to liberate the productive forces from both the nation-state and from private ownership. Capitalism has created the preconditions for socialism. What we now have to do is to realise it! Thank you.


Francesco: What we're focusing on here is the immense potential brought about by the development of capitalism in terms of knowledge, science, technique, methods of production, and organisation. These productive forces will provide the material basis for socialism once the straitjacket of private ownership of the means of production and the national state is removed. And this is true today, even as we are in capitalism’s senile age, which is riddled with crisis. We also see how the means of production and capital are being concentrated in the hands of a very few monopolies and finance capital, to an extent that even Marx and Lenin could not predict. As we know, all these means today are used by capitalism to maximise the appropriation of the value created by the working class, that is to maximise profit. Today, we can say that innovation under capitalism is increasing the exploitation of the working class. However, it also creates the material conditions for socialised production and distribution that are the material preconditions for socialism.

But how do we go from capitalism to socialism? Capitalism will not get out of the way on its own accord. It will stagger as a dying corpse, poisoning the lives of all of us until it's flushed away by revolutionary means. Only through the revolutionary overthrow of capitalism, will we be able to fully take control of these resources and put them at the service of true human development.

In order to achieve that, there needs to be a conscious act: the socialist revolution. This means the overthrow of the capitalist system and the oppressive machines that serve to secure the domination of the minority over a vast majority under the conditions of class society. That means the capitalist state. All this has to happen on an international scale.

I cannot deal here with the question of revolutionary strategy and tactics and the need for the revolutionary party. We will be discussing this in other sessions. All historical experience shows the burning need for these contradictions to be resolved. However, the workers themselves, in normal circumstances, are not aware of their power to run society. In my intervention, I will raise the question of how the working class can prepare to take control over society and run it, starting from the present level of the productive forces.

The working class is capable of carrying out their tasks in a capitalist society, and without their kind permission, in the words of Ted Grant, “not a wheel turns, not a light shines.” However, this power becomes apparent only when exercised collectively as a class. The consciousness of this power develops as the workers enter into collective struggle. The crisis of capitalism is what forces the working class throughout the world to mobilise in defence of their conditions. As we speak, these convulsions are reaching revolutionary proportions in one country after another.

The demand for workers’ control over production is a powerful demand that should be raised in conditions where the workers are questioning the power of the capitalists within the factory or workplace. The pandemic, for example, posed in a sharp way the need for workers’ control over safety measures and working conditions, while the capitalists were pushing for business as usual.

Workers’ control of production means access to the accounts, contracts, financial flows, and every other aspect of the functioning of a capitalist company. It means questioning the right of the capitalist to hire and sack workers, or introduce any change in the working conditions or production, etc. It can prepare the grounds for the demand to expropriate the company by nationalising it and putting it under workers’ control and management. This process is just one step away from questioning the power of the capitalists to run society as a whole. Factory closures, mass sackings, or any of the ways that the crisis of capitalism is expressing itself, are creating the conditions for this demand to become central in the class struggle. It is a tool to raise the confidence of the working class in its own power.

However, workers’ control has to be understood as a transitional demand, in the sense that it reflects the rising class struggle and revolutionary consciousness. It introduces a regime of dual power in the factory or in the workplace. We should not have a romantic approach: because it undermines the control by the capitalists, workers’ control cannot be considered as a permanent conquest of any struggle. Capitalists can rely on the support of the trade union bureaucracy and the state to restore their control. Trotsky highlighted the contradiction posed by workers' control in a situation where ownership – and what it legally entails – remain in the hands of the capitalists. In 1931, writing about the situation in Germany, he wrote:

“The workers need control, not for platonic purposes, but in order to exert practical influence upon the production and commercial operations of the employers. This cannot, however, be attained unless the control is transformed into direct management. In a developed form, workers’ control thus implies a sort of economic dual power in the factory, the bank, commercial enterprises, and so forth.”

This is very different from what is being presented by the trade union bureaucracies or the capitalists as “workers’ participation.” So-called co-determination, or any other variants of social partnership introduced by the capitalists, are a means to involve the trade union bureaucracy in class collaboration and corrupt the layer of the aristocracy of labour at the expense of the mass of the workers. Again, Trotsky warned about this:

“If the participation of the workers in the management of production is to be lasting, stable, and ‘normal’, it must rest upon class collaboration and not upon class struggle. Such class collaboration can be realised only through the upper strata of the trade unions and the capitalist associations.”

The revolutionary approach to workers’ control is the opposite. What we want is to educate the working class to exercise dual power inside capitalist companies in connection with the situation leading to a revolutionary upheaval. Again, Trotsky continues, saying:

“After taking the path of control of production, the proletariat will inevitably press forward in the direction of the seizure of power and of the means of production.”

Workers’ control in the present conditions and in the run-up to the revolutionary transformation of society poses the question of workers’ management, but it cannot answer it until capitalism is overthrown. After capitalism is overthrown, workers’ control has to be generalised during the transition as a way to train the working class in workers’ management and to take over from the capitalists the running of the economy. If we compare the tasks facing us to the conditions faced by the Bolsheviks after the Russian Revolution, our task is immensely facilitated today by the important development of the productive forces and the level of widespread education, literacy, and access to culture among the working class. And yes, also by the concentration of capitalist production into monopoly capitalism. We should look at the revolutionary future of mankind with confidence! Thank you.

Franco: One of the symptoms of capitalism’s sickness is a labour shortage. Many companies complain that they can’t find enough employees. All economic sectors are affected: tourism, agriculture, retail, construction, airlines, manufacturing, software development, microchips, logistics, etc. This is an international problem affecting many countries. In Hungary, there are 80,000 job vacancies. In Switzerland, there are more than 100,000 job vacancies. Australia, 423,000. Germany, 558,000. In Canada, more than 900,000. Malaysia, 1.2 million job vacancies. Great Britain, 1.3 million. Along with other factors, labour shortage undermines the possibilities of an economic recovery after the pandemic.

What are the causes of the labour shortage? The shock of the pandemic clearly had a huge impact on the consciousness of many workers, who re-evaluated their lives and jobs. But the shock of the pandemic only exacerbated a process that already existed before. Bourgeois commentators blame the unemployment benefits granted by the state during the pandemic or accuse young people of no longer having the same work ethic as previous generations. However, the real causes are different. The first is the general decline of working conditions in the last decade, with lower wages, longer hours, precarious work, a high level of exploitation, and stress.

There is also a more general and deep cause for the labour shortage, a cause related to how the capitalist system itself works, to its internal contradictions. In all countries, labour shortages coexist with unemployment. Experts speak of a mismatch between labour supply and demand. The phenomenon was not entirely unknown in Marx’s time. For instance, in Capital, Marx describes how in London in the second half of 1866, between 80,000 and 90,000 workers had been dismissed, while at the same time several industry machineries were forced to lay idle for lack of labour. Marx explains the cause of this contradiction as the division of labour. I quote from Capital:

“It’s a glaring contradiction that there is a complaint of the want of hands, while at the same time many thousands are out of work, because the division of labour chains them to a particular branch of industry.”

By division of labour, Marx means the process of fragmentation, diversification, and specialisation of productive activities, which reduces the individual worker to a cog in a machine entirely dominated by the capitalists. It limits his technical skills exclusively to a partial and particular task he performs. This is why a skilled worker in a specific branch of production cannot easily perform another task with equally specific but completely different characteristics. According to Marx, under the division of labour, workers become little more than living accessories to the machines they use. And as you know, one part of a machine doesn't necessarily work in another.

This gives us a useful key to understanding what is happening today. In the vast majority of cases, what is lacking is not a generic workforce, but a skilled workforce: workers with particular technical skills and experience. Why are there not enough skilled workers? Because capitalists have drastically reduced investment in workers’ education in the last decade. First of all, by cuts in public spending for public schools and universities. The bourgeoisie also reduced the investments in training programs directly financed and managed by companies. It’s therefore quite clear that, on the one hand, massive investment will be needed to educate and retrain tens of millions of workers around the world, in order to obtain the skilled labour needed for production in the various industries. But on the other hand, the capitalists have no intention of making these investments. We can see once more the increasingly parasitic character of the bourgeoisie. The phenomenon of labour shortages may present itself in a more or less acute form in the coming period, depending on the general economic trend, but it can never disappear completely under capitalism, because it originates from the contradictions of the capitalist system itself.

To solve the problem at its root, we require a high level of economic planning, capable of rationally managing all available economic resources, starting with human resources. This level of planning will never be possible under capitalism, an anarchic, chaotic, and unbalanced system in which each capitalist acts on the narrow basis of his immediate economic interest, regardless of the long-term consequences.

It would be totally different if the means of production were expropriated, nationalised, and subjected to workers’ control. At that point, all the resources diverted to secure capitalist profits could be used for adequate wages, decent working conditions, and hours compatible with the demands of life. Work can really become a form of personal fulfilment, no longer an alienating form of exploitation from which we try to escape at the first opportunity. Resources directed unproductively on rent and speculation could be put to use, among other things, for the education and retraining of the workforce, which will be oriented according to the economic priorities democratically set by the working class.

Finally, in the more advanced context of a socialist planning system, the odious capitalist division of labour could be left behind, and human beings will be able to take a big step forward in their evolution. No longer a kind of automaton, chained to the task of a narrow professional segment, without any control or understanding of the overall production process, but well-rounded people with vast technical and cultural knowledge, capable of versatile roles in society, and finally masters of their own destiny. Thank you.

Lucas: The climate crisis is one of the biggest threats to the survival of mankind. The worldwide production, which has been built on fossil fuels for hundreds of years, needs to be completely transformed within a few decades. Bourgeois think tanks, like the International Energy Agency, actually published rather detailed plans on how to achieve this. For example, in Net Zero by 2050, they sketch out what amount of investment needs to be made, on what technology, when, and how. They proposed a real, rational, worldwide plan, but there are two problems.

As you know, capitalists only invest for profit. Big oil companies, with their best research departments and highly advanced technology, could play an important role in saving the climate. After all, they themselves were among the earliest predictors of global warming. However, as The Guardian recently showed, they are investing heavily in crude oil production, to an extent that even the most meagre climate goals of the Paris Climate Agreement will be shattered. In this article, The Guardian then proceeds to call on the bourgeois state and governments to do something. But we have to ask: who invades a country for democracy when a local African government doesn't want to strike a deal with a big oil company? Who defends the oil fields of the big companies in war-torn countries, and who secures the safe passage of the oil overseas? It is plain to see that the bourgeois state apparatus is one of the most important tools for big oil to conduct their business.

This is one aspect. The other one is that the plan of the International Energy Agency calls for boundless solidarity between states, for the most integrated cooperation of all nations. Modern renewables need rare elements that need to be allocated, big investments need to be made across different countries, and grids from different regions need to be connected. The imperialist clash over Ukraine shows us that this is not going to happen anytime soon. While Europe is restarting their coal-fired power plants to replace Russian gas, the US is beating the war drums against China. So these are good times for crude oil and reliable, uncomplicated, sources of energy that power tanks, missiles, and fighter jets.

However, there exists the political fever dream that this war can be the start of a genuine green energy transition. For example, the leadership of Fridays for Future in Austria spent a long time trying to convince the government that climate change is bad for capitalist interests. Now they see the chance that this war in Ukraine could start the transition away from Russian fossil fuels. Therefore, they are staunch war supporters. I quote them:

“It is the highest priority to break with fossil fuels and with our dependence on Russia. An EU-wide oil and gas embargo is our only chance to stop this war. The latest embarrassing and weak oil embargoes from Brussels are not enough. No matter how dreadful the embargo, the war will always be more dreadful.”

For some, this abrupt change of tone might be a strong contrast to the earlier peace-loving, pacifistic version of the Fridays for Future leadership in Austria. But as they say in German, “after you say A, you must also say B.” Once you've decided that the bourgeois state and the capitalists are the only force that can save society, then you have to follow these gentlemen to the depths of barbarism.

These people told us that it is unrealistic, utopian, and impractical to propagandise for workers’ control over big oil. How fast things can change. In Germany, the biggest real estate group, with thousands of housing units, stated it will cap the temperature of their tenants to save energy. The minister talks about rationing gas for industry. So the question is clearly posed: who should decide who gets the energy? Who should decide on how the means of production are used? The upcoming class escalations, for example on the industrial front, will give important things to the working class in this regard.

Last point: there is this argument that the working class should not fight for control over the means of production, because this will only end in instability, chaos, and suffering. We see that the opposite is true: the crisis of capitalism produces instability and chaos. This is what sets the working class in motion: to counter this barbarism and put an end to it once and for all. Thank you.

Alessandro: Niklas not only explained what Lenin explained in Imperialism at the turn of the 20th-century, but he also explained and applied that analysis in the context of capitalism today. Niklas has put forward a very important question: competition does not disappear with the rise of monopolies. There was a debate on this question within the Bolshevik party in 1917 between Lenin and Bukharin, where Lenin insisted on this. He explained that monopolistic capitalism hasn’t existed and never will exist anywhere in the world without there being many sectors of the economy in which competition still exists. Imperialism sharpens the contradictions. It interlinks free competition with monopoly, but it does not get rid of the problems associated with exchange and crisis.

This is what Marx explained in The Poverty of Philosophy, as Niklas quoted, and this is the phenomenon we have in front of us today. There does not exist an absolute monopoly. You can establish monopoly prices that last for three or four years based on agreements, but this equilibrium will always be broken, and a new equilibrium is established. The situation of global capitalism today, as Niklas explained, is the concentration of capital a hundred times more intense than in Lenin’s time. For example, in 2021 the degree of fusions, mergers, and concentrations of capital reached the highest level in all of history, $5.5 trillion, exceeding the record set in 2007 when the mergers reached $4.5 trillion. This means that in this turbulent period after the pandemic, there is even more concentration.

At the same time, we see an increase in the role of the state at all levels. In the US, a bill is being discussed to limit US investment in China. The US, Italy, France, and the UK, are all intervening in order to defend their businesses to the point where they're actually carrying out new bourgeois nationalisations. Twenty years ago, if you looked at the list of the global Fortune 500 companies, only twenty-seven of those companies were state-owned. Today, that number is 110 state-owned companies on the Fortune 500. The largest share of this is the role played by Chinese capitalism. The supposed autonomy of the central banks is being questioned. Protectionism is growing at all levels, and we know the effect that protectionism had in the 1930s, which transformed the recession into a prolonged depression. So-called globalisation has turned in reverse, and all reformist illusions and neo-Kautskyian illusions (which were really in fashion during the 1990s and in the movement against globalisation) have been destroyed by reality.

The equation is complicated even more by the role that China is playing. We’ve spoken many times about the capitalist and imperialist character of China, and we recently published a document by the International that was very good. I just want to add a few observations. In the past forty years, China has developed a private sector that represents sixty percent of the GDP. Until 2015, everyone thought that the logic of the private market would continue to prevail. Instead, we're seeing a retreat, and the public companies have shown a clear recovery. Beijing has plans for concentration in the public sector. A wave of fusions and mergers that they think will allow Chinese industry to resist the impact of foreign capital entering the market. A series of laws are now being discussed about establishing increased controls over private industry in China, even to the point of appointing political commissars in the private industries and in the factories. Some people are talking about turning back the wheel, and say there’s a process of returning to a deformed workers’ state. I don’t think this is the case. Capitalism has totally entrenched itself in China, but we are faced with a very peculiar version of state capitalism. It’s a Bonapartist system in which Xi Jinping is concentrating all power in his own hands.

This is a consequence of the difficulties that China is passing through. It can no longer maintain the extreme rates of growth that it upheld in the past, and a mountain of problems is accumulating. With the problem of debt, which has exceeded 300% of the GDP, the speculative bubble in the real-estate sector, the risk of a sharp rise in inflation, youth unemployment that has reached nineteen percent, and the difficulty of developing an internal market without increasing the accumulated debt. At the same time, there are a number of weak links that are accumulating, including the attitude of the US and also the attitude of the European Union, which now considers China a systemic rival.

The most interesting feature of this epoch is that we have the crisis of the leading imperialist power, the United States, passing through a prolonged period of decline. At the same time, there is no other power that can impose itself on a global scale. This is an ideal condition for giving rise to social ferment and even for a pre-revolutionary outburst. We’ve seen it in history. The crisis that's being prepared and the rise of inflation around the world are factors that are going to give a very powerful impulse to economic struggles. We’ve seen it around the entire world.

The Chinese proletariat has changed a lot in recent years. It's gone through a renovation. A freshly proletarianised layer has formed. Ten million new workers enter the factories every year. We've already seen many labour struggles that have been brutally repressed by the state. And I’m sure that this represents the Achilles’ heel, this will be the weakest link of the Chinese system. The class struggle is the key variable. The workers can turn the tables in the conflict and destroy all the plans of the ruling class.

Capitalism has never been as parasitic as it is today. States are intervening in order to protect the interests of the super-rich, which is an admission of bankruptcy for the capitalist system. We want to use the state in the interests of the majority. Capitalism has socialised the economy but appropriation remains private. This is why we must expropriate the banks, the large companies, and put them under workers’ control. We’ve entered a new epoch, comrades. The parasitic epoch of capitalism. The system is completely rotten. We have to build a revolutionary organisation, an international of the working class, a subjective factor that can overthrow the system, and open the road to a new society: socialism. Thank you.

Ivan: A socialist economy is, first and foremost, a planned economy. What does this mean? Is any planned economy socialist? No, it isn’t. Capitalism is a chaos of competition, but in the age of imperialism, monopolies allow capitalism to go beyond its limits and plan ahead. If so, what is the advantage of centralised socialist planning? To understand this, we must look to the historical experience of the Soviet Union. The path to the socialist economy lies in overcoming alienation, on the one hand, and the commodity economy, on the other. Replacing the market with a plan today is more a technical task than a social one. But as long as alienation exists, commodities and class elements of the market will reappear again and again, in more and more ugly forms.

This is exactly what we saw in the Soviet Union. Formally, workers' wages were completely dependent only on qualifications, but in fact, wages varied drastically from factory to factory. This led to the emergence of a labour market and competition between factories and between workers.

Along with other forms of oppression, the October Revolution abolished the piecework wage system and equalised the wages of managers and skilled workers. Like nationalisation, these measures were implemented under pressure from the workers’ councils and party organisations in the factories. During the civil war, the mobilisation of advanced workers to the front led to the depletion of the working class and a drop in labour discipline. Under these conditions, the party leadership, including Lenin and Trotsky, looked upon piecework almost as a panacea.

Already by 1921, the piecework wage system exceeded fifty percent, despite the resistance of the workers’ councils. Not surprisingly, the growth of inequality went hand-in-hand with a decline in the activity and role of the councils.

This entire situation became even worse during the first Five-Year Plan, when Stalin used Lenin’s draft, How to Organise Competition, to fight against wage levelling. The bureaucratic competition was destroying the planned system. At first, the competition was between workshops, but by the second Five-Year Plan, the Stakhanov movement was emerging, destroying worker solidarity in any team. At a higher level, competition between plants and regions forced the bureaucrats to make decisions which maximised formal indicators, often at the cost of reduced production efficiency. This was combined with over-fulfillment of the plan when, figuratively speaking, more bolts were produced than nuts to go along with them. This led to overspending on raw materials and excessive material reserves of enterprises. This was an absolutely typical situation: in one plant, production was paralyzed because of an equipment breakage, while at another plant, the exact same equipment was in reserve and not being used.

In essence, “socialist” competition led to the emergence of bureaucratic competition between enterprises. But from the point of view of the new generation of bureaucrats and liberal intellectuals, this wasn’t the problem. They thought the problem lay in the absence of a market. They did not take into account the negative side of the experience of the New Economic Policy. For example, the books of Yuri Larin, which showed how the market leads to corruption and embezzlement in the public sector of the economy, were hidden from readers. The result was the collapse of the Soviet Union's economy.

It’s true, a degree of economic inequality is inevitable under socialism, especially in an isolated workers’ state, but this is only half of the truth. The other half is this inequality continually destroys the basis of the workers’ state, the solidarity and enthusiasm of the masses. This is why the workers’ state is inherently unstable. It’s not a mixture of elements of capitalism and socialism, with their gradually changed ratios, but an imminent class struggle of these elements. Not only class contradictions, but also contradictions between the working class and its own state (and the state bureaucracy) are also inevitable. Would you say workers’ control was not enough? Only mass participation of workers in all levels of production and social management can overcome alienation. The current level of education of workers allows this. So what is the basis of socialist planning? It isn't the reasoning of intellectuals or the calculations of technocrats. It’s a real, authentic organisation of the working class as a whole which, by becoming a class for itself, destroys itself as a class. It’s a dialectical process. The working class will destroy its own state on the way to communism! Thanks, comrades.

Sum Up

Niklas: Thank you. This was a quite wide-ranging discussion, which I think was very interesting. I won't have time to deal with all the questions that were raised, because I have very little time.

I’m just going to start at the end with comrade Ivan’s intervention. I think this is a very important point that he made. If we say that we're for a workers’ state, what does that mean? Is it a state for the workers, that gives good things to workers? Is it a kind of benign state that gives the workers nice reforms? This is very much the conception of the Stalinists. Incidentally, this is very similar to the conception of the Social Democrats of what the state should be. But that’s not what we mean when we talk about the workers’ state. It’s a state by the workers, for the workers. It is a state which is run by the workers themselves at all levels. And that means certain things, about which comrade Ivan went into in a bit more detail.

Comrade Francesco also touched on the point of workers’ control and how workers can take control of factories, even under capitalism. But this is unstable without the generalised movement of the workers actually taking power in the whole of the country and eventually, the whole of the world. If you don't take power on a wider scale, if you don't generalise the movement, then obviously you remain isolated, and you will be destroyed.

The question of raising the level of the working class, educating them, etc. is a very important aspect. If you are to run society, you need a certain degree of education. Some parts of it are very complicated from a technical point of view. Thankfully, capitalism has helped us along quite a bit in this regard. In the advanced capitalist countries today, most workers have had not just primary education, but also secondary education. A great deal of workers have a high degree of numeracy as well as a high degree of literacy, which is necessary for their jobs. A whole layer of management has become proletarianised and are administrators which are running the companies on behalf of the capitalists.

The clerks used to be a privileged layer in the factory. Of course, there are still lots of layers of management who sympathise much more with the capitalists than with the workers, but there are also big layers of administrators who would now be on the side of the workers if there were a revolution. Our tasks, particularly outside the advanced capitalist countries, would still be to continue to raise the level and involve all workers, as far as possible, in the running of production and in the running of the whole society. And that's also one of the points that Franco made in his intervention.

Lucas then spoke about the question of the environment, climate change, etc. It's amazing how illiterate the environmentalists can be when it comes to economic questions! If they continue to fight this war of sanctions with Russia, some of the industries of Western Europe will face a complete disaster this winter when the gas runs out. When you close down these industries, often you can't restart them again for years, sometimes not even for decades. Then where would the industries be to create the green energy that we want? Instead, as Lucas mentioned, you have increased investment in coal and oil. These people are very fond of practical solutions, and this is a very “practical” solution. In fact, the policy of these kinds of environmentalists could be summarised with just a few words: it’s a shortcut over a steep cliff. Obviously, socialist planning would be able to resolve these problems, not immediately but over a period of time.

Comrade Alessandro touched on a number of important points. One of the points that he discussed was that monopolies don't remain forever static. Human society cannot simply stand still; it cannot just stop after reaching a certain point. Capitalism outlived this historic role sometime around 1914, but that doesn't mean that capitalism and history just stop until we have socialism. There’s a constant process taking place which is moving in one direction or another, and the same goes for monopolies. There's not a stasis which remains after a certain monopoly has been achieved. In one way or another, these monopolies are broken up, not to reestablish free competition but to reestablish a new constellation of monopolies. Even the bourgeois economists have worked out certain formulas for how this happens, which I learned about during my secondary education in economics.

These monopolies are not just static for all time, because there are big profits to be made in these industries. Also sometimes there is strategic importance for the whole of the capitalist class in a particular country to have their own industry of a particular kind. At present, and in the past period, we've had two companies in the world producing passenger aircraft. There’s Airbus and Boeing. One of them is subsidised by the American taxpayer and the other one by the European taxpayer. Now China, as a rising power, wants their own aircraft production, because they don't want to be reliant on the industries of France, Britain, the United States, and Germany. There are also certain interconnections between civilian aircraft production and the military side of things, military aircraft. So they are now investing a lot of money trying to develop their own aircraft and aerospace industry. Similarly, because Taiwan is threatened by China, and therefore US industries of all different kinds cannot rely on semiconductors coming from Taiwan, the US is now spending hundreds of billions of dollars to try to develop their own industries to compete with Taiwan’s semiconductor-manufacturing company, which as it happens, also started off as a state-subsidised enterprise.

I think the most important question which we dealt with in this discussion, the red thread that runs through Marx’s and Lenin’s writings on the topic, is that the conditions have been created for a socialist society. This is not just an academic discussion about what is the nature of share ownership, etc. Lenin and Marx studied this question because of its relevance to the question of the productive forces. Marx found that the conditions for socialism were already developing. They were already in existence when it came to Lenin’s time. That is to say: the conditions were ripe for the socialist revolution.

Another 106 years have passed since Lenin wrote Imperialism, and now conditions aren't just ripe, but they're rotten ripe. Capitalism really should have been overthrown a century ago. It’s beyond the scope of this discussion to explain why it wasn't overthrown 100 years ago. Now we have another chance, and we are quite aware of where things will go if we don't succeed. It is abundantly clear that we're not going to go back to the 1950s-style, well-fed capitalism in the advanced capitalist countries. It's also clear that there's no way that the rest of the world is ever going to reach that point either. The only way out is socialism – or else barbarism. That's why we need to redouble our efforts to build the forces of Marxism. That's the task for those of you who have joined the IMT already. For those of you who haven't joined yet, there’s an excellent form on the website which you can fill in and get in touch with us.