Workers and capitalists.

In England, as in all capitalist societies, a continual struggle takes place between workers trying to preserve or advance their pay and conditions, and capitalists attempting to cut costs and boost profits.

The capitalist class is dominated by big shareholders who own most of industry, land, commerce, the banks and the mass media. The overwhelming majority of people can live only by selling their labour power to a capitalist employer, or to the state sector which maintains capitalist society. Most retired and unemployed workers are receiving a portion of the wealth produced by their past or future labour power. Parents receiving child-related benefits and allowances are rearing future providers of labour power for capitalism. That makes most of the population of England objectively working class, whatever their own individual perspective.

Under capitalism, the price of commodities that workers produce reflects the average labour time taken to produce them, including their inputs (raw materials, power, wear and tear of machinery etc.) But the revenue that capitalists receive from the sale of those commodities is more than enough to pay the wages bill, other production costs, taxes and renewed investment. The balance - capitalist profit - goes mostly in dividends to shareholder capitalists, in rent to landowning capitalists and in interest payments to money-lending capitalists.

Where does this capitalist profit come from? It is the value created by the company workforce, over and above the value of their wages. Workers in Britain's manufacturing industry, for example, create almost twice the value of their wages. The portion they do not receive back in wages or social benefits is the 'surplus value' kept by their employers. Here is the source of capitalist profit, and in this way workers are exploited under capitalism.

As employers seek to minimise costs and to squeeze more surplus value out of their workforce, they will try to hold down wages while also investing in machinery and equipment that saves labour costs and enables them to produce commodities more cheaply than their competitors. As the price of a commodity is determined largely by the average labour time taken to produce it, companies producing it at below average cost and value will make extra profits at the expense of the high-cost ones.

In the state sector, workers in local government and the civil and public services are also engaged in a struggle with employers. Lower costs and higher productivity of labour will keep public expenditure down - which means lower taxes, less pressure to increase wages and therefore bigger net profits in the private sector.

Whether in the private or public sector, it is in the interests of the capitalist class to reduce labour costs by employing workers who can be discriminated against on the basis of their race, gender, or age. Divisions within the working class on these and other grounds assist the capitalists to force down the general level of wages and other labour-related costs. That is why it is in the interests of all workers to unite against discrimination and inequality.

Across the economy as a whole, the drive of capitalists to maximise productivity and profit has a contradictory effect. As the work process is increasingly mechanised in the drive for higher productivity, for lower labour costs and greater market share, so the proportion of the economy's capital invested in the workforce which creates new value - and therefore surplus value - diminishes. Employers are compelled to combat this tendency of the overall rate of profit to fall by reducing the real value of wages, intensifying the work rate, reorganising the work process, introducing continuous working, etc.

Thus the capitalists are impelled to increase production while at the same time restricting the purchasing power of the vast majority of consumers, namely the working class.

As a consequence, the point is reached periodically when not all the commodities produced can be sold at a profit. Orders for new machinery to increase output are cut back; workers in those sectors are laid off and their spending power diminishes; more commodities are unsold and, in turn, the workers who produce them are sacked. Soon the whole economy goes into a downward spiral of wage cuts, redundancy, closure and mass unemployment. As workers resist, the capitalist class exploits all the divisions that exist within the working class, deploying the forces of the capitalist state against the labour movement and any scapegoats' who can also be blamed for the crisis.

In these crises of 'over-production' which are increasingly frequent and widespread, smaller and weaker companies go the wall as plant and machinery is scrapped. Bigger capitalist firms weather the storm until it becomes profitable to produce once more, utilising cheap labour provided by mass unemployment, cheap credit and cheap means of production.

Thus the relations of production under capitalism - based on private ownership and profit - increasingly squander and periodically destroy society's productive forces. Yet these productive forces, if planned and owned and nurtured by society as a whole, could already more than satisfy the material needs of all the world's people.