Chapter 1: Capitalism and crisis.

We live in a world of enormous economic and social contrasts. The combined wealth of the top 300 people now exceeds the total annual income of the world's one billion poorest. The richest one-fifth own 85% of the world's wealth, while the poorest one-fifth control less than 2%.

The scale and nature of economic activities at the dawn of the 21st century create wealth unimagined by previous generations. Developments in telecommunications and digital technology mean that information and money can cross the globe with ease. However, half the world's population have never used a telephone, and 840 million are illiterate - two thirds of them women.

Although the potential exists to create riches and distribute them around the world, chronic mass unemployment affects more than 820 million workers. Production and trade is dominated by giant transnational corporations like Exxon, Unilever, Shell and Microsoft. Assisted by their 'home' governments and states, and by the International Monetary Fund (IMF) and the World Bank, they strive to impose their monopoly across the world in the name of 'free trade' and globalisation. Billions of dollars are spent on armaments each year, but resources cannot be found to eradicate poverty and diseases such as malaria. Throughout the developing countries one and a half billion people have no safe water supply, two and a half billion lack sanitation and hundreds of millions suffer from chronic malnutrition, while their governments are up to their necks in debt to Western banks.

In the United States, resources can be found to explore space and even to militarise it. Yet at the same time, the stability of the life support system of our planet is under threat due to ozone depletion, the greenhouse effect, acid rain, deforestation, toxic wastes and the extinction of species.

After a century of unprecedented social, national and international conflict, war still blights one part of the world after another. Aided by Britain and other NATO powers, the United States acts as policeman, judge, jury and executioner on behalf of the 'international community'. Countries that depart from the American line like Yugoslavia, Libya, Iraq and Sudan are invaded or bombed with no regard for human rights or international law. The division of the world by the major imperialist trading blocs of North America, the European Union and Japan is increasing the danger of military conflict. The Cold War may be over, but the risk of nuclear annihilation still exists.

This crisis which grips the world is endemic to capitalism in its highest and most moribund stage, imperialism. Britain however, as a wealthy imperialist state, is not immune. Here too, the richest tenth of the population own half of Britain's wealth, while the poorest 50% own just 6% of it. Governments come and go, but the major economic decisions continue to be made in the boardrooms of the big financial institutions and monopoly corporations. At the stroke of a computer key, huge sums of money are moved out of Britain and around the world. Factories are shut down while investment is directed overseas, where wages are often lower and conditions worse. The Welfare State is put in jeopardy and hard-won gains are sacrificed, so that companies can remain profitable' in the global market place'.

Does the world - or indeed Britain - have to be like this? For much of the 20th century, Communists could answer with a categorical 'No' as the world appeared to be undergoing an irreversible transition to the higher system of socialism. Such arguments became much more difficult after the collapse of the Soviet Union and the East European socialist states. Various 'Third Way', 'New Age' and anarchistic ideas have stepped into the ideological vacuum.

The collapse of the Soviet Union and Eastern European socialism was a severe setback from which Communists have had to draw many lessons. Those societies certainly had many faults - not least their restriction of democracy - which contributed to their downfall. Nevertheless, developments since then confirm our basic analysis. Socialism, as it existed there, may have been overthrown, but capitalism fails billions of people the world over every day.

Capitalism is unable to tackle the problems of Britain and the world because it is a system based on private ownership and individual greed. Socialism, reborn and reinvigorated by mass participation, remains the only alternative. This conclusion is not a case of wishful thinking. It arises from our scientific, Marxist analysis of society and the class struggle within it.