Nationalization: Will it be for the People or the Corporations?

“Cast aside illusions!” is the indispensable first step in grappling with crisis. An illusion is a false impression of reality. No problem can be solved that is not accurately described. Illusion prevents an accurate and objective description of a problem. As our nation slips deeper into crisis, the main tactic of the ruling class has been to prevent the people from accurately describing the problem, offering them one illusion after another.

The first and fundamental illusion is that the current crisis is within the system and caused by greed and mismanagement. The reality is that this is a crisis of the system. It is easier to accept a shallow and superficial illusion than to understand complex reality. However, the crisis is at such a point that revolutionaries must master the complex way the system works or they cannot describe the problem.

A fundamental characteristic of the capitalist system is that competition between capitalists produces more commodities than the market can absorb. If there is a market for ten cars, then ten capitalists will produce ten cars each. The ensuing battle for the market compels every capitalist to cut the cost of production. Labor saving machinery, speed-up and wage cuts lower the cost of production, but also lower the purchasing power of the working class, increasing the glut of products on the market. The result is the periodic slowing down or stopping of production until the surplus is purchased or destroyed. Then the race for the market starts again. This is crisis within the system.

What is different today? The capitalist system rests on the buying and selling of labor power — that is what creates value. In the struggle for the market, new electronic productive equipment was developed that did not simply make labor more efficient, it replaced it. As more and more capitalists are forced to use robotics, jobs disappear and labor power becomes obsolete. As a result more and more production is carried on with less and less labor. Inevitably more money flows into the hands of fewer and fewer capitalists while the mass of the workers become poorer and poorer as their wages decline and jobs disappear. Finally the point is reached when the people of the world are too poor to consume what the world has produced. Unsold products pile up, retailers cut orders, factories close down, and bills and mortgages are not paid. Banks do not dare lend money to businesses than might fail or to workers who may become unemployed. Without the grease of credit the gears of the system grind to a halt.

Conventional wisdom has it that since the drying up of the market caused the depression, then all that is needed is to create a market. This, it is said, can be done by guaranteeing business loans and putting spending money in the hands of the people. This was the essence of Roosevelt’s “New Deal.”

It didn’t work. It took the destruction and gigantic market of World War II to again grease the gears and expand the market. The Great Depression was the beginning of the final stage of the capitalist system. Today, the entire world is capitalist and there is nowhere to expand. The crisis within the system becomes deadly as it is joined by the crisis created by new, labor-replacing means of production that attack the very foundation of the system.
The illusion is we can spend our way out of the crisis. The reality is that this system, like all those before it, is coming to an end. A new system of social control over finance, production and distribution is already forming. Will the new system be shaped to the benefit of the billionaire ruling class or to the benefit of the mass of people? The question will be answered in our favor if millions of people become clear about the problem and their vision. They must become socially active and impose a democratic economy that reflects a democratic political system. The first step is to cast aside illusion and grapple with this difficult and dangerous reality.