Capitalism has been an immense boon to mankind. Nothing else that has been invented so far has been so good at creating wealth and making poor people rich. But like everything else, it is not immune to change and time. Has the era of capitalism passed? I think it has. Its method has always been to create wealth through the work of a generation of poorly paid helots, who have in their turn become a wealthy middle class benefitting from the labour of the next generation of helots. It has always been a two way process. The helots have generated the wealth but the wealthy who grew rich on their labour have used their wealth to pay the wages of the helots, and it is these wages that have been the first step in the process of escaping helotdom into middle class status. The first generation of helots were the Irish poor of Manchester described so vividly by Engels in 1844. Then it was the coolies of the British Empire. Then the peasants of the Asian tigers. And now it is the Chinese. But the era of the whole world growing wealthy on the backs of poorly paid Chinese labourers is itself now drawing to an end. The Chinese Government have launched a programme whereby the minimum wage in China will rise by 15% per year for the next five years. It will soon no longer be profitable for the rest of the world to have goods made in China, whereas the Chinese themselves will have a population so vast with a purchasing power so awesome they will not need the rest of the world – except to buy up the resources for which the rest of the world will soon find itself in stiff competition.
What will be the next generation of helots? It will be machines. According to Moore’s law computers double their computing power every few years. Imagine what they will be capable of by 2030. Not only will most industrial processes be robotized. The service sector of the economy too will be heavily mechanized. Already, you will have noticed, even checkout operators in supermarkets are being replaced by machines. But the problem with machines is that neither do they eat nor do they buy. The benign circle of capitalist wealth production will be broken. Instead of the poor benefitting from the purchases of the rich they will be unemployed, and themselves unable to either earn or purchase, and in unthinkable numbers. Capitalism has always been good at supply. It is demand that is its Achilles heel. There will be insufficient purchasing power to buy the vast torrent of goods that will pour out of the machines. The world will grind to a halt as it did in the nineteen thirties.
In any case the exploitation at which capitalism is so good is not now what we need. It is conservation of dwindling resources. Add to that climate change with its floods, droughts, sea level rises and whole countries going under water, capitalism is absolutely not what we need now. Unfortunately there are many people around as fervently devoted to its preservation as any Christian fundamentalist to the Bible. Indeed in a secular age it is to this creed that many of the fundamentalistically inclined have gone. They should think again. And quick.