In the first half of the 21st century, after more than 200 years of capitalist domination, humanity faces a series of inter-related crises that imperil the very existence of our species and our planet.

Two billion of the Earth's seven billion population lack adequate nutrition, sanitation, healthcare and education. The world faces a catastrophic energy crisis, as finite resources are depleted without the development of safe, sustainable alternatives. At the same time, burning fossil fuels is warming the planet and changing climate patterns with potentially disastrous consequences for us all. Wars continue to devastate human lives on a massive scale, while the existence and proliferation of weapons of mass destruction carry the threat of even greater horrors to come.

Communists hold capitalism primarily responsible for these crises, for taking the planet and its peoples towards the edge of the abyss.

The term 'capitalism' was coined by its early advocates, not by its opponents. It denotes the type of society in which the class of people who own industry and commerce largely shape economic, social, cultural and political developments. This capitalist class uses its power to extract surplus value from those who are employed, namely, the working class.

The capitalists, who own the means of production (industrial and commercial plant and machinery, land, energy and raw materials, etc.), pay workers a wage in return for their labour power. But human beings have the capacity to produce more value through their labour than the value of the wage they need to buy life's essential commodities. This 'surplus' value accrues to the employer when the products of that labour are sold as commodities at normal market prices. It is the source of capitalist profit, which funds share dividends, loan interest, commercial rent, expanded investment, etc. The extraction of surplus value is the essence of capitalist exploitation.

The super-exploitation of slave labour in the colonies provided much of the raw materials, the super-profits and the fresh capital vital for the industrialisation of Britain in the late 18th and early 19th centuries.

As capitalism developed, its 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 between them came to monopolise each major branch of the economy. Crucial to this development was the contribution of women’s work in the home to creating labour power’s capacity to produce surplus value. The oppression of women in society, which maintains this role, became even more important for monopoly capital as workers organised to fight for higher wages.

Through the fusion of banking and industrial capital to form finance capital, the banks and other financial institutions came to dominate industry and commerce. Finance capitalists used key shareholdings, directorships and credit to exercise control.

The monopolies were compelled to find more investment outlets abroad for their accumulated capital. In particular, they seized control of raw materials and cheap labour, thereby pre-empting imperialist rivals. More and more of these monopolies established themselves as transnational corporations (TNCs), locating some of their operations in at least one country beyond their home base.

This extension of economic power into already-conquered colonies and 'semi-colonies' (nominally independent but under foreign economic domination) was backed by the state power of their 'home' country. Thus capitalism entered its 'imperialist' stage towards the end of the 19th century.

The chief characteristics of imperialism are 'monopolisation' (the domination of each branch of the national economy by a small number of giant companies), inter-imperialist rivalry, and colonial or – in countries that have won formal political independence – neocolonial super-exploitation.

The conflict between British, German, French, Russian and other imperialisms culminated in the bloodbath of the First World War. In the Russian empire, the corruption and incompetence of a landlord-police state helped forge an alliance between the peasants’ struggle against landlordism and the workers’ struggle against capitalism. Out of this came the October Revolution of 1917, through which the Bolsheviks and their allies seized political state power and went on to found the Soviet Union.

In the leading capitalist countries, the demands of 'total war' stimulated important shifts in productive forces (plant, machinery, energy, labour, technology, etc.) and the economic relations between society's classes. The state intervened to take command of the war economy, promoting monopolisation 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 has been the system known as 'state-monopoly capitalism'. Big business came to play a more prominent and direct role in state and political affairs and vice-versa. The state used its financial, diplomatic and military power to protect and promote the interests of the monopolists.

Capitalism was re-stabilised in the mid-1920s. The capitalist state mobilised to defeat trade union militancy and attempts at revolution, productive capacity grew faster than workers' consuming power. This contradiction laid the basis for the 1929 financial crash and the Great Depression of the early 1930s. Only massive state intervention in the economy, including preparations for war, began to rebuild industry and ameliorate social conditions in Britain, the United States (US) and elsewhere.

In Germany, the ruling class turned to fascism – open terroristic dictatorship in the service of monopoly capital – to destroy the communist challenge and divide the working class movement. This was done partly in preparation for a new imperialist war to re-divide the world in favour of German monopoly capital. Initially, Nazi Germany was able to use the anti-Sovietism of the ruling classes of other imperialist countries to strengthen its own economic and military position.

In Britain, France, Spain, the US, China and elsewhere, communists led the fight during the 1930s to build a working class united front as the basis for a wider people's front against fascism.

The Soviet government and the international communist and working class movement were able to use the divisions within imperialism – chiefly between bourgeois democracy and fascism – to prevent a united front of the main imperialist powers against the Soviet Union. This made possible the defeat of fascism in what became a war of people's liberation.

The Second World War (1939-45) also marked the emergence of the US as the world’s leading imperialist power. It had already established its own colonies and semi-colonies in Asia and Central and South America.

The ability of the enlarged socialist bloc to ensure full employment and basic social provisions strengthened the determination of people in the capitalist world not to return to pre-war economic conditions. State-monopoly capitalism was compelled to establish or extend welfare and education systems. In Britain, for instance, essential industries and services were nationalised in order to ensure investment, economic growth and full employment. State-monopoly capitalism was rebuilt in West Germany and the basis laid for its rapid development in Japan.

Thus imperialism entered its second phase in the late 1940s, characterised nationally and internationally by the stabilisation and restructuring of capitalism. This was achieved largely through the use of capitalist state power to regulate economic demand, promote profitability and coordinate international trading and currency relations.

Capitalism’s productive forces grew at an unprecedented rate in the 1950s and 1960s, largely due to the scientific and technological revolution (STR) with its wide-scale application of computer and micro-electronic technology. The research and education needed to underpin the STR could only be organised and financed through substantial state involvement. The transnational corporations became the decisive monopolies of imperialism. In the pursuit of maximum global profit, their decisions – which sectors and markets to expand, which to contract, which productive forces to develop, which to make redundant – determined the fate not only of workforces but of whole communities, regions and nations.

Inter-imperialist rivalry was moderated by the common purpose of waging the Cold War against the Soviet Union and its allies – hence the founding of the North Atlantic Treaty Organisation (NATO) in 1949 – and ‘hot war’ in Korea and Vietnam.

Most colonies gained at least formal political independence during the post-war era. But the main imperialist powers retained a large measure of economic control through the operations of their TNCs and through such international bodies as the International Monetary Fund (IMF), the World Bank and the General Agreement on Tariffs and Trade. Wherever possible, pro-imperialist regimes were installed in the semi- and ex-colonies across the world, and brutal force was used to crush progressive, left-wing and anti-imperialist movements.

The uneven economic and political development of capitalism was aggravated on a global scale by imperialist intervention and the operations of the TNCs. While capitalism grew rapidly in the newly industrialised countries of the Far East, for example, large parts of Africa and South America fell further behind in economic and social development. Western imperialism ruthlessly plundered their natural resources, exploited their labour and plunged them into debt bondage.

In the leading capitalist economies, the prolonged period of post-war expansion – made possible by state intervention, the STR and rising productivity – was based on a strategy of class collaboration. Workers would enjoy job security, social benefits, employment rights and ever-higher living standards, while their trade union and political representatives would seek only to reform capitalism, not to challenge or abolish it. But cyclical and structural crises reasserted themselves more markedly from the late 1960s. In 1973, the international oil crisis exacerbated one such cyclical downturn and at the same time signalled the onset of today's gathering energy and ecological crisis.

Finance capital was confronted with rising prices, working class pressure to maintain living standards, military and political reverses in the Third World (the under-developed and developing countries) and the continuing political and technological challenge from the socialist countries. Moreover, the international monetary system disintegrated in the 1970s, as the main imperialist powers sought competitive advantage through currency devaluation. Speculators contributed to the instability.

In these conditions, the ideologists, economists and politicians of the 'New Right' gained ascendancy in US and British ruling class circles. Their aim was to restore and increase the profitability of monopoly capital through a wide-ranging onslaught against real wages, trade unionism, public and welfare services, progressive taxation, public ownership of industry and the utilities, and against banking and financial regulation. Thus imperialism began the transition to a third phase of development from the early 1980s.

Counter-revolution and the dismantling of socialism in eastern Europe and the Soviet Union from the late 1980s opened up enormous opportunities for monopoly capital to seize control of resources, transportation routes, utilities and markets in the former socialist countries and the Third World.

The result has been a prolonged and continuing world-wide imperialist offensive to maximise monopoly profit through 'neoliberal' policies of privatisation, deregulation, intensified exploitation of labour and the free movement of capital. This imperialist 'globalisation' is presented by its supporters and apologists as an inevitable economic process. However, from the outset it has been driven politically by the representatives of state-monopoly capitalism.

New and existing international agencies and mechanisms such as the World Trade Organisation, the General Agreement on Trade in Services, the IMF and the World Bank are utilised to enforce neoliberal policies. The European Union (EU) has played a leading role in this process, confirming its character as an alliance led by the most powerful state-monopoly capitalisms. It strives to overcome internal contradictions and transform itself into an imperialist ‘United States of Europe‘.

The champions of capitalist 'globalisation' seek to confront workers with two options: either yield to its logic of lower wages, intensified labour and permanent job insecurity – and hope to stay in work – or defy it, with allegedly dire consequences personally and for the nation's economy.

Third World and former socialist countries whose regimes may obstruct imperialist power are demonised as 'rogue' or 'failed' states, often on the basis of racist presumptions. They are accused of frustrating the will of the 'international community' (which usually means the US and its allies). Consequently, bombing missions or full-scale military invasions have been launched against Iraq, Lebanon, Libya, Somalia and Yugoslavia. 

Moreover, the September 2001 attacks on the US were used as the pretext to launch a bogus 'war on terror'. US, British and NATO forces extended and deepened imperialism's military, political and economic influence across the 'Greater Middle East' region, from North Africa to Pakistan, inflicting state terrorism on the peoples of Afghanistan and Iraq on a monstrous scale. The world’s biggest reserves of oil, along with vital supply routes, are located in this area, which is strategically located between China, India, Russia and the African continent.

Far from the downfall of the Soviet Union and the end of the Cold War producing a more peaceful world, the imperialist powers led by the US and Britain have since engaged in a massive escalation of armaments programmes, a non-stop series of military interventions and the expansion of NATO eastwards towards the borders of Russia. China is almost completely surrounded by imperialist military alliances and bases, while foregoing any bases of its own on foreign territory.

The whole history and experience of capitalism demonstrates that it is a system of crises and contradictions. The most fundamental, insoluble contradiction of capitalism is that between the social character of production – how society's goods and services are produced and distributed in a vast network across society – and the private character of its ownership and control.

The economy's productive forces are organised together in a complex, inter-dependent system on which society as a whole is based. Yet under capitalism, these forces are mostly owned or controlled by a small minority of the population – the main capitalist shareholders – who direct them to serve their own narrow individual and class interests, rather than the needs of society as a whole.

In their drive to maximise market share and profit, capitalist employers fight to raise productivity and hold down wages. The same drive also takes place in the public sector in order to minimise taxation of private sector profits and wages.

Here is the primary economic basis for the class struggle: between the monopoly capitalists and their state striving to maximise profit on the one side, and the whole working class striving to maximise wages and improve living standards on the other.

Yet working class purchasing power needs to be maintained if capitalism's commodities are all to be sold at a profit. This becomes increasingly difficult when economic growth turns into boom, as capitalists fight to expand sales, production and profits.

Increasing wages might ease the situation, but this eats into profits and only spurs the capitalists to boost production still further. An expansion of private credit or public expenditure might maintain demand in the economy for a limited time, but it has to be paid for as production continues to grow.

So the point is reached where the working class cannot afford to buy all of capitalism's commodities at prices which sustain profitability. Capitalist growth invariably ends in a crisis of 'over-production'. Commodities can no longer be sold at a profit and companies begin to cut back on production and investment, causing a slowdown or recession. Workers are laid off, further depressing demand in the economy. Production actually falls – sometimes in a sudden crash – and stagnates in depression.

Society's productive forces are destroyed as premises are closed, plant and machinery scrapped and large numbers of workers are forced into unemployment.

In the wake of such crises, the trend to monopoly is reinforced as stronger companies take over weaker ones and increase their own market share. This lays the basis for the cycle to begin again. It does so on the basis of another contradiction intrinsic to capitalism, between the drive for technological advance and the source of capitalist profit.

As companies innovate and mechanise to compete more effectively against each other, so the source of fresh surplus value in the economy as a whole – living labour power – occupies a smaller share of the production process. This depresses the general rate of profit. In order to counteract this tendency, capitalism searches perpetually for cheaper labour and materials, higher levels of productivity, new profit-making activities and fresh markets for its products.

This reinforces the tendency of the most ruthless big capitalists to subject oppressed sections of society – women, black workers and immigrant labour – to super-exploitation at work, using them to undermine workers' terms, conditions and trade union strength.

The inherent contradictions of capitalism have intensified and broadened. Their consequences have become more serious during the imperialist era.

They embrace not only the economic but also the social, cultural and political spheres of capitalist society. For much of the 20th century, communists therefore referred to the all-round 'general crisis of capitalism'.

Its chief features were identified as:

  • The fatal sharpening of capitalism's contradictions (notably in relation to the new role of the state, the stagnation and growing instability of the economy and the deepening of class conflict).

  • The degeneration of capitalist politics, ideology, morality and culture with their demagogy, careerism, corruption, egoism and callousness.

  • The crisis and overthrow of imperialism's colonial system.

  • The emerging challenge from the forces of socialism led by the Soviet Union and the international socialist system.

This concept of 'general crisis' underestimated the capacity of state-monopoly capitalism to overcome crises, to withstand the socialist challenge, maintain exploitation abroad through neocolonialism, launch and sustain the STR and retain political, ideological and cultural dominance. It also over-estimated, from the late 1950s, the achievements of the socialist countries and their potential for immediate economic development.

Counter-revolution in the Soviet Union and eastern Europe temporarily reinvigorated capitalism ideologically, politically and, to a lesser extent, economically. This masked capitalism’s general crisis for a short time, yet its objective features remain. Indeed, they have returned to full view with a vengeance.

On the economic front, for instance, recent regional and global crises have assumed a substantially, and even predominantly, financial character. This reflects the increasingly parasitic nature of monopoly finance capital.

The liberalisation of financial markets from the 1980s led to a huge boom in trading. The development of global 24-hour financial, currency and commodity markets facilitated an explosion of speculation in stocks, shares, currencies, commodities and financial instruments of every kind. Sharp imbalances, shocks and raids have since precipitated severe crises, not only in the financial world but in the productive economy. Bankers, speculators and asset strippers in the City of London enjoyed lax regulation, attractive financial 'products', a favourable tax regime and easy access to tax havens under British protection.

In Britain and the US, the huge bubble in capital values based on insecure and fraudulent financial securities and derivatives, linked to debt and risk, burst in late 2007. The private, household and government debt that had maintained economic demand dried up, making the postponed cyclical downturn in the real productive economy all the sharper and more sudden.

Across the developed capitalist world, governments and central banks then had to rescue the financial monopolies and their markets with the biggest bail-outs in history, using public money and public institutions to do so. Yet, immediately afterwards, those same governments and central banks utterly failed to mobilise politically and financially to rescue public services and socially useful jobs, or even to introduce stricter national and international regulation of the financial system. Instead, from 2008, mass unemployment returned to the record post-war levels of the early 1980s.

Clearly, the world's major capitalist powers are unable or unwilling to control the immense anarchic, parasitical, anti-social financial forces unleashed by capitalist globalisation. Since the disintegration of the post-war system of international regulation, all attempts to construct a new financial and economic settlement have failed.

Thus the insoluble contradictions of capitalist production have become combined with, and aggravated by, the deep contradictions of capitalist exchange on a global scale. Together, they constitute the permanent structural crisis in the economic base of capitalist society.

The combined economic and financial crisis that commenced in 2007 also confirmed the tendency to synchronisation between the main capitalist economies. Capitalist 'globalisation' has made it more difficult for one major economy to grow out of crisis at the expense of others.

For Third World countries, crisis in the imperialist countries drags them down too, while most of the benefits of recovery and expansion are reaped by the TNCs. Monopoly capital uses state power to enforce its interests against rival imperialists and against Third World peoples through super-exploitation, trade inequality, war and forced mass migration. This reality illustrates another fundamental contradiction of capitalism: between imperialism's incessant drive for domination at home and abroad, and humanity's aspirations for peace, national self-determination and a civilised society. This contradiction has been highlighted by the fact that, while imperialism has used the crisis as an opportunity for super-exploitation of the Third World, China has become a major engine of world growth, not least in the developing countries.

The disparities in economic and social development between nations and whole regions of the world have increased over the past 20 years. This is the product of capitalist economic anarchy – where no effective economic planning takes place above the level of the individual enterprise or conglomerate – combined with the unequal distribution of monopoly and state power between the imperialist countries and the rest.

Capitalism's structural economic crisis has also produced a structural crisis of distribution on a world scale.

More than a billion of the Earth's seven billion people are severely undernourished or starving. Food production and distribution is organised by TNCs in order to maximise profits in the most lucrative markets, while Third World governments enslaved by debt collaborate in 'cash crop' farming, which leaves their own populations poor and hungry. Meanwhile, the EU routinely destroys mountains of food produced by subsidised agriculture in order to maintain prices and profits.

Hundreds of millions of adults and children have no access to medical services and a similar number – the majority of them women – are illiterate.

More than one billion people lack access to safe drinking water and sanitation, causing millions more deaths every year from preventable disease. Water and other energy resources that could be harnessed for those in direst need are instead exploited, diverted or neglected by capitalist monopolies seeking maximum profit.

Another dimension of capitalism's general crisis has come to the fore in recent decades, one which threatens the very future of the human race. Capitalism's rapacious, short-term drive to maximise monopoly profit now endangers our global environment and ecosystem.

The continuing growth in carbon emissions plays the main part in heating up the Earth, melting the polar ice-caps, raising sea levels, spreading desertification, disrupting weather patterns and destabilising some of the most vulnerable societies on our planet. Yet big business and the major capitalist powers refuse to take the drastic steps necessary to curb emissions, for fear of curtailing monopoly profits. Instead, they use sanctions, military intervention and compliant local dictatorships to maintain access to oil supplies.

Until and unless global warming is halted, many more people will join what are already some of the biggest forced migrations in human history, as millions flee the famines and resource wars inflicted on their homelands by imperialist super-exploitation and military intervention.

The depletion of finite resources such as coal, oil and natural gas, without the planned development of renewable alternatives, confronts humanity with the prospect of catastrophic energy shortages within a generation or two.

Yet instead of investing massively in alternative, safe and renewable energy generation and distribution, the EU promotes carbon emission trading schemes. These enable the industrial and financial monopolies to trade licences to pollute for profit, while shifting dirtier production to the developing countries when not limiting their industrialisation altogether.

Capitalism’s social crisis afflicts countries at every level of development. Almost everywhere, social inequality has widened over recent decades. The alienation of people from their local community and society – especially young people denied prospects and opportunities – has grown, together with associated problems of drug abuse, crime and anti-social behaviour.

In the sphere of politics, big business influence has nurtured naked careerism, hypocrisy and corruption. Large numbers of people in the advanced capitalist 'democracies' – especially among the working class – have turned away from bourgeois politics. This is reflected in declining levels of participation in political parties, together with higher levels of scepticism and hostility towards professional politicians.

At the same time, people will still mobilise in large numbers around issues relating to local services, unemployment, the environment, peace and racism.

Ideologically, while people's confidence in any viable alternative to capitalism was shaken across the world by the downfall of the Soviet Union, critical and antagonistic attitudes to capitalism continue to be widespread and have even increased in the wake of the post-2007 crisis.

The liberating potential of artistic and cultural activities for working class people, both as producers and as consumers, is continually undermined by capitalist ownership and power. Capitalism increasingly produces 'culture' as it does other commodities – for sale and at a profit or not at all – regardless of social need or the social good. ‘Popular culture’ is thereby turned into a commercial, conservative force that promotes ideas of selfishness, greed and individualism. Monopoly capitalist society is one in which the price of everything is proclaimed, while the real value of things to society as a whole is denied or distorted.

There is little in capitalist mass-produced 'culture' that reflects the real experience, collectivity and creativity of working class life, past or present.

New technology such as the internet can be used extensively by progressives and revolutionaries in the interests of human liberation. But capitalist ownership and state control also strive to promote it for the purposes of mass trivialisation and diversion, as well as for military and security projects that endanger everyone.

Economically, socially, politically and culturally, capitalism has long ceased to play a progressive role in human development. It does not lack dynamism in its quest for maximum profit, but this imperative of capitalist development threatens every aspect of humanity. Capitalism’s general crisis is society’s general crisis, as much in Britain as anywhere else.