Sep 3, 2018
The stock market, which has been spiraling up for nine years and five months, hit new peaks again last week. A business columnist for the New York Times said this reflects “investor faith in a single fundamental fact: Big American companies are making lots of money.”
Yes, they are, lots and lots of money. Overall, profits were up 25% in the three months running from April to June, after rushing ahead 27% in the three months before that. The big Wall Street banks had their richest quarter ever.
The price for these super-profits is the destruction of our living standards, and of our working conditions.
The drive to increase profit is behind two-tier wages, part-time jobs, and temporary jobs. It’s the reason our jobs are run at break-neck speed – putting our bodies and our health at risk – while other people go without any job at all. It’s the reason paychecks don’t keep pace with prices.
The drive to increase profit funnels tax money into corporate accounts, starving public services of needed funds, depriving schools of resources.
Even new technologies become a means to drive up profit. The technologies that companies like Amazon or Microsoft or Apple capitalized on could be used to make work easier, to reduce the hours needed to produce the goods and services needed for society to flourish. The increased productivity coming from new technology could mean higher wages and shorter hours of work for everyone. Instead, this technology was narrowly aimed at only one thing: more profit. 2.53 billion dollars for Amazon in three months; 8.87 billion for Microsoft and 11.52 billion for Apple.
These super-profits aren’t a sign that the economy is becoming more prosperous. They haven’t led to the kind of investment that would produce decent jobs and increased incomes. They haven’t poured into improving the infrastructure of the society we live in.
No, the mass of these profits went almost entirely into the pockets of the super-rich. In the ten years running from 2008 through 2017, 94% of all corporate profit ended up, via stock buybacks and dividends, in the hands of the wealthy class which owns the vast majority of all the stock in the big companies.
And what have they done with this rush of money? They speculated, they poured more money into the stock markets, looking to make a quick buck from rapid shifts in prices. They bought property – only to sell it when its price went up. They bought hundreds of fancy apartments – not to live in, but to shield their wealth from taxes.
The drive for profit fundamentally threatens the health of the whole economy. This rapid accumulation of money led to the collapse of the housing market in 2008, and the bursting of the “dot.com bubble” in 2001. It’s what threatens our future today.
The drive for profit around the world leads to wars that encircle the globe – sometimes fought over oil, sometimes fought over rare metals, sometimes fought over the terms of trade.
This economic system is fundamentally unjust. Capitalism is based on the super-exploitation of the vast majority of the world’s population for the benefit of a very small minority.
To carry on a fight against capitalism has become a question of survival for working people. Simply to hang on to jobs and wages, to prevent the worsening of our situation, we have to fight. We have to bring our forces together as one class.
To make the economy function in the interest of everyone, we have to fight to throw out this capitalist class whose mad chase for profit grinds us all up today.