Working people across Britain are being ruthlessly squeezed by every section of Britain’s capitalist class and the transnational companies that control the economy. In truth, we don’t face a “cost of living crisis” , we face a cost of profits crisis.
The small wage increases that are being won, in large part through rising industrial militancy, aren’t the cause of spiralling inflation, which is increasing at a rate that far outstrips even the largest wage rises. The vast majority of workers in Britain haven’t seen a real term wage increase since the 2008 financial crash.
A Cost of Living Crisis?
The cause of spiralling inflation is profiteering by the world’s major monopolies, all exploiting the opportunity to inflate their rate of profit through price increases. The rapacious drive to maximise monopoly profits at all costs to working people and to cynically exploit all crises has been seen most acutely in the energy sector. Even capitalist and state owned media have been forced to acknowledge this – but barely ever stray into even timid criticism of the energy profiteers.
The monopolies that dominate the energy and oil and gas sectors are manipulating and speculating on supplies, using the conflict in Ukraine as a smoke screen, and playing a most pivotal role, with their massive price hikes driving up prices all across the supply chain.
The vast majority of people are already unable to shoulder the increases in energy prices we’ve already seen on top of other rising costs and attacks on living standards. It’s only the summer and the October price cap increase is yet to come. This winter we stand to see the situation where it won’t just be the elderly, the unemployed and the impoverished who face the choice between heating and eating, but working people generally.
At the same time Centrica, the owner of British gas posted a 6-month operating profit of £1.34 billion recently– a 500% increase on last year. This rank profiteering – reflected across the few companies that dominate Britain’s energy sector, who hoovered up customers from smaller firms that went bust earlier in the year – comes directly at the expense of working people.
Oil and gas giant Shell have also announced 4-month profits of £9 billion at a time when petrol and diesel prices are already at record highs. Shell might have claimed to have withdrawn from Russia in protest at the Ukraine war, but they’re not above shamelessly profiteering from that same event that’s blamed for rising costs. Aramco, main funder of the Saudi theocracy and its war in Yemen posted record quarterly profits, up 90%, at $48 billion.
But the cancerous effect of monopoly capitalism on human society in Britain and globally is not just restricted to profiteering in driving up prices. Shell has continued to lead the onslaught against our planet with plans for new oil and gas fields in the North Sea at a time when record breaking heat waves and wildfires ravage Europe. British Gas were among the leading employers using fire and rehire during the pandemic to attack worker’s pay and conditions. Saudi Aramco directly and indirectly funds one of the most repressive regimes on earth, which exports medieval jihadism to the four corners of the world. These are just a handful of examples from one sector of monopoly domination.
State Monopoly Capitalism
For Communists, understanding the role of the monopolies under capitalism is key to our contemporary struggles and our aim to end the system itself and replace it with Socialism.
Britain’s Road to Socialism, the programme of the Communist Party and the YCL, explains that:
“Capitalism’s drive to maximise profit revolutionised industry, commerce, science, technology, culture, politics and society in general. In the most advanced capitalist countries, a small number of large combines, trusts and syndicates grew to monopolise each major branch of the economy. The drive to above-average monopoly profit stimulated the fusion of industrial capital and banking capital to produce a new financial oligarchy. As monopolisation and the over-accumulation of capital began to depress profitability, the finance capitalists increasingly turned to potential sources of super-profits abroad. Thus, capitalism expanded into its imperialist stage in the late 19th and early 20th centuries … The chief characteristics of imperialism, therefore, are monopolisation, colonial or – in countries that have won formal political independence – neocolonial super-exploitation, inter-imperialist rivalry and war.”
Lenin identified at an early stage the fundamental importance of the trend toward monopoly under capitalism:
“[I]t can be seen that at a certain stage of its development concentration itself, as it were, leads straight to monopoly, for a score or so of giant enterprises can easily arrive at an agreement, and on the other hand, the hindrance to competition, 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 the modern capitalist economy … 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. Today, monopoly has become a fact … the rise of monopolies, as the result of the concentration of production, is a general and fundamental law of the present stage of development of capitalism.” (Lenin, Imperialism, the Highest Stage of Capitalism)
Britain’s Road to Socialism explains the wide ranging effect of monopoly capitalism for humanity:
“Economically, socially, politically and culturally, capitalism has long ceased to play a progressive role in human development. Capitalism is dynamic in its drive to maximise profit, but this vital feature of capitalism threatens every aspect of humanity. Capitalism’s general crisis is society’s general crisis, as much in the nations of Britain as anywhere else.”
What is the role of the state in this? What is state monopoly capitalism and how did it come about?
The Communist Manifesto famously declares that “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie”. But the development and intertwining of the power and interests of the state and the monopolies has advanced immeasurably since Marx’s time, just as the concentration of monopoly capital itself has intensified.
Britain’s Road to Socialism outlines this process in brief:
“In the leading capitalist countries, the demands of ‘total war’ in 1914-18 greatly enhanced and expanded their productive forces (the means of production, labour and technology) and the economic relations between society’s classes. The state intervened to take command of the war economy, promoting monopoly and methods of mass production which sharply raised the productivity of labour. The war thus accelerated the fusion between the economic power of the monopolies and the political power of the state (the government and civil service, parliament, the police and intelligence services, the armed forces, the courts and prison system, local government, etc.).
The result was the system known as ‘state-monopoly capitalism’. The capitalist state became progressively subordinated to the interests of one section of the capitalist class – monopoly-based finance capital – while the system’s growing contradictions led to increasing state intervention.”
In 2022, the functioning of state monopoly capitalism is clear to see:
“State Monopoly Capitalism serves the interests of the ruling class … Recent government policies in Britain show how ruling class interests are served and with what consequences for the economy, social justice, democracy, peace and the planet’s ecosystem … Over the past century, the capitalist state in Britain has increasingly been subordinated to the needs of finance capital and not to those of other sections of the capitalist class – such small business owners – or of the economy as a whole. Indeed, the British state today subsidises or stimulates much economic activity through public sector contracts, including for armaments, and through bond issues in the financial markets, as well as promoting and protecting overseas investment opportunities on which British finance capital depends for a large proportion of its profits.
Although Britain has millions of small firms, the dominant position in each sector of industry and services is usually held by no more than five or six big firms. They control the technology, monopolise access to export markets and use their market power to subordinate the smaller firms which act as suppliers, subcontractors and distributors.
These monopolies, whether public limited companies or private equity ventures, are invariably controlled by financial institutions. Banks and insurance companies own the dominant blocks of shares and use their power to buy and sell in order to extract maximum short-term profit.”
Again, turning to the example of the monopolies in the energy sector, we see the role of the state in guaranteeing and increasing monopoly profits. Ofgem, the government regulator supposed to ‘protect consumers’ and ‘guarantee free competition’ in the energy market in reality guarantees the profits of the ‘Big Six’. Ofgem facilitated the hoovering up of customers of smaller rival firms who went bust, underwrote state funding to the Big Six and have repeatedly raised the price cap to enable rank profiteering, placing most working people in Britain at risk of fuel poverty in short order. When working people inevitably are unable to pay debts accumulated to the Big Six, the bourgeois court system can be relied on to the enforce them. These same courts and ruling class politicians can be relied on to vindicate the use of fire and rehire by British Gas and to support and subsidise the new oil and gas fields by Shell.
While Communists fight for working class state power, the dictatorship of the proletariat – the dictatorship of the immense majority of working people in Britain – we see state monopoly capitalism for what it is, the dictatorship of a miniscule clique and the transnational monopoly corporations.
Capitalism isn’t a system of nebulous or vague conspiracy, the ruling class, the transnational monopoly corporations, finance capital and the governments they control are real, identifiable and dominate society in Britain and around the world. But history has shown us they can be challenged and defeated.
The universal and all-encompassing degrading effect of state monopoly capitalism on the material interests of all sections of the working class, the intermediate strata, human society generally and, in our epoch in particular, the planet, is also the main weakness and vulnerability of the capitalist system.
The reality is the profiteering of the monopolies will go one of two ways. As is happening right now, working people will be forced to pay: through increased prices, through real terms pay cuts and attacks on living standards and through taxpayer funded subsidies and handouts. Left unchallenged, the cost of profits crisis will mean misery for working people – but only if working people don’t fight back.
Resistance to the monopolies is also strengthening in 2022, from rising industrial militancy and strike action to campaigning against profiteering in the energy sector.
The Anti-Monopoly Alliance
Britain’s Road to Socialism asks the question “Which forces in society can be mobilised to resist the policies of state-monopoly capitalism? Which can be won for far-reaching change and socialism?”:
“Any serious strategy for socialist revolution in Britain must identify such forces at each stage of the process, developing policies that meet people’s interests and make inroads into capitalist power. The aim must be to maximise the forces for progress and socialist revolution and minimise those in opposition.
Different classes and sections of society have their own reasons for challenging aspects of monopoly capitalism, even if they do not understand their situation in political or ideological terms. The point is that they share a common enemy which exploits workers here and abroad, oppresses large sections of society, strives constantly to roll back democratic rights, blocks progress on every front, generates militarism and war, and now threatens the future of our planet. As ever, the ruling capitalist class tries to prolong its domination by fostering and exploiting divisions among working people based on race, origin, sex, gender, age, status, and any other feature that serves its purpose. This enemy, state-monopoly capitalism, will have to be overthrown because it cannot be fundamentally reformed.
The working class has the most direct interest in overthrowing capitalism. After all, this is the system which exploits workers, excludes them from real decision making in the workplace and in wider society, condemns them to poverty at one or more stages in life, and confines most of them to a lifetime of inequality and insecurity … what enables the working class, uniquely, to be the leading force in the struggle for socialism is its potential collective power to challenge and overthrow capitalism and build a new society”
But it is not enough simply to identify the class forces capable not only of challenging and defeating state monopoly capitalism. Britain’s Road to Socialism also asks “What kind of strategy would unite the maximum forces for progress, reforms and socialism in Britain at each stage of the revolutionary process?:
“Its starting point must be to identify the strategic dimensions of this process. In doing so, the Alternative Economic and Political Strategy (AEPS) sets out to engage in the class struggle on the economic, political and ideological fronts.
It also proposes the kind of policies that can promote the interests of the working class and the mass of the peoples of Britain, bringing together a broad alliance of forces that can strive to make inroads into the wealth and power of the capitalist class. Such a left-wing programme (LWP) would need to embrace important economic, environmental, social, cultural, financial, democratic and foreign policy questions. One of its key objectives must be to eliminate the gross inequalities in income and wealth between the nations and regions of Britain, based ultimately as they are on class exploitation and inequality.
This struggle against the policies of British state-monopoly capitalism can open the road to socialism, although any strategy for such fundamental change must be able to outline the distinct stages of revolutionary transformation.”
The generalised crisis confronting capitalism Britain and the ruling class’ response of more ruthless exploitation of working people offers the opportunity to broaden the battle lines and draw more and more working people into an anti-monopoly alliance – in fact it demands that we do just that. The fight against the rising cost of living, attacks on jobs and to save the planet is the fight against the monopolies. In time, this fight can open the struggle for ending capitalism itself and building a Socialist system.
Britain’s Road to Socialism explains that:
“[P]eople experience capitalism’s negative effects not only in their workplaces, but in their communities and in their social, cultural and leisure activities. Students, pensioners, tenants, environmentalists and other movements, pressure groups, local community-based bodies, charities and the like challenge significant aspects of the current system, even though they may not always see their stance in ideological or political terms. They embrace people not only from different sections within the working class, but often from other classes and strata in society.
However, if these movements and struggles proceed in isolation from one another, they can only challenge the ruling class on single, isolated issues but not its overall domination and control.
Yet they all face a common enemy: British state-monopoly capitalism, which blocks advance on every front. Here lies the objective basis for uniting these forces in an anti-monopoly alliance, in favour of redeveloping Britain’s productive economy and combating the anti-democratic use of state power against the interests of the great majority of people.”
Britain’s labour movement, the best organised and most advanced section of our class, can and must lead play a leading in the anti-monopoly alliance. Only the labour movement has the organisational capacity to overcome the forces of state-monopoly capitalism. The increases in industrial militancy and trade union membership, for the first time in many decades, that we are living through are an exciting and encouraging development.
However history has also shown that a Communist Party and YCL that exercise mass influence will be essential if Britain is to take the road to socialism in practice, through political class struggle. Part of the Communist Party’s role is to provide a vision of socialism and a practical strategy for achieving it, including through the Alternative Economic and Political Strategy and the Left-Wing Programme. Communists therefore seek to work as part of the broad labour and progressive movements, organising and urging them to unite around policies and in actions which raise the combativeness, confidence and political consciousness of the working class. Key to this is building an understanding of the role of state monopoly capitalism and the necessity of a broad democratic anti-monopoly alliance.
One of our primary duties as young communists is to develop our understanding of how state monopoly capitalism in Britain operates today, the forces which can challenge it and the strategy through which they can be united – and putting this strategy, the strategy set out in our programme Britain’s Road to Socialism, into practise.
Our commitment in 2022 must be to build the Communist Party and the YCL into a vigorous and disciplined Communist movement in Britain which can play a vanguard role in the anti-monopoly alliance and “open the road to Socialism” in Britain.
Johnnie Hunter, is the YCL’s General Secretary