Chapter 3 Social Crisis and Social Class

System Crash: An Activist Guide to the Coming Democratic Revolution.

Three titans dominate global society: the corporations and the international capitalist class that controls them; the repressive state apparatuses and the political and military elites that run them; and the vast mass of humanity, the working class and the oppressed people of the world.

In this chapter, we focus on the third titan. We refer to the other two – capital and the state – only in so far as they impact upon the third. But that impact is huge, as the mass of the world’s people, 85% of humanity, are ground down by corporate power and state repression in a social crisis of unprecedented dimensions.

But our third titan, the people, is not simply a victim, not simply a great mass of the exploited and the oppressed: it is potentially the agent of its own emancipation. For there is no other: the corporations and the imperial-military-police states are embedded in a system hard-wired for ecological catastrophe, permanent war, and social devastation. Only the people have an interest in creating a new world based on democracy, equality, peace, and sustainability. Only the people have an interest in their own freedom.

The working class and the oppressed are both the victims of the system and, potentially, its destroyers; they are both the objects of history and, potentially, its subjects – the agents of revolutionary change, the makers of a new history, an alternative future. Because of this, the starting-point for all serious discussion of strategies for radical social change has to be the nature of the modern working class.

This is a heavily contested matter. Neoliberalism and postmodernism have shrouded the question of class in ideological fog. Neoliberalism has promoted the idea of individualism, aspiration, and ‘being your own person’, in the context of a ‘free market’ where anyone can ‘get on’ through their own efforts and talents, and where success is measured by income and material possessions.

Postmodernism – an influential academic theory that masquerades as progressive but is in fact deeply reactionary – reflects the dominant neoliberal ideology. Class and oppression, which are harsh material realities, are dissolved into multiple alternative ‘identities’, from which people can pick and choose, as if society were some gigantic cultural supermarket. Constructing ‘difference’ becomes an assertion of self. The splintering of society becomes ‘empowerment’. The solidarity that is the very essence of mass struggle from below is systematically picked apart in the ‘critical discourse’ of the university seminar.

Here we defend the Marxist concepts of class and oppression, and we reassert the centrality of united mass struggle from below to any serious project of radical change. We start by returning to the immediate experience (at the time of writing) of the pandemic.

Class and Covid

The disease discriminates. It seeks out the weak, the marginal, the black and the brown. The virus replicates in migrant dorms and meat-packing factories, in shanties and favelas, in slum cities where people live stacked in concrete tenements. It spreads where whole families live in single rooms, the water is from standpipes, and public healthcare does not exist. It infects mainly the poor, and kills mainly the poor.

The plague is not an ‘equaliser’. Even in the Global North, it discriminates, killing far more of the poor, the black, and the ailing than it does the rich and the middle class. The plague underscores the fracture lines of class inequality and racial oppression.

It does more than this: it exposes the negligence, incompetence, and corruption of neoliberal regimes aligned with corporate interests. It reveals that public health provision has been crippled by cuts and privatisation – crippled to the point of breakdown in a normal winter, crippled to the point of lethal danger in the context of pandemic.

And they were warned, again and again – warned that rampant agribusiness had become an incubator and transmitter of new viral diseases with pandemic potential, as the last domains of wild nature were penetrated, as ancient ecosystems were broken down and replaced with monocultures, as vast factory-farm complexes and new proletarian slums were constructed, and as global supply-chains were threaded across thousands of miles in a dozen directions.

The neoliberal regimes were warned. The experts knew the dangers. A succession of lethal outbreaks stretching back a quarter of a century had sounded the bell. But neoliberal governments did nothing, so when Covid went global, there were not enough critical-care beds, or ventilators, or PPE, or test facilities.

Worse still, some remained in denial as the disease got a grip, still doing nothing, peddling fascist-eugenicist garbage about ‘herd immunity’ (initially the line of UK premier Boris Johnson and his shadowy advisor Dominic Cummings), or saying it was just ‘a little flu’ (Brazilian president Jair Bolsonaro), or claiming ‘we have it totally under control’ (Donald Trump). And when they did finally act, ever faithful to the corporate rich whom they serve, they funnelled government money to private contractors, working for profit, so the provision of PPE, of testing facilities, of track-and-trace procedures was bungled.

Thus did the disease expose much more than the fracture-lines of exploitation and oppression; it revealed a dystopian neoliberal order in which every official statement is a lie, every political act is spin, every public need is commodified and sold to profiteers.

The pandemic has revealed the evil essence of neoliberalism. It is not so much an economic doctrine – though the myths of ‘free-market’ capitalism provide the window-dressing – as an exercise in class warfare. Its very essence is an exponential increase in the gap between the world’s richest and poorest.

The neoliberal counter-revolution

We can see the effects all around us. Take Britain. Following its test-run in Chile under the dictatorship imposed by the CIA-backed military coup in 1973, the neoliberal counter-revolution began with Britain’s Thatcher government in 1979. The damage done to the social fabric in the 40 years since has been extreme.

All the indices of misery were rising sharply, even before the impact of the pandemic and the new depression: the suicide rate among disabled people whose benefits have been cut off; the number of rough sleepers who cannot afford a home; the proportion of families forced to access food banks; the number of children living in poverty; the growth of the gig economy with its low pay, long hours, and zero-hours contracts; the rising burden of debt carried by students, the poor, and ordinary working-class households.

Every conceivable statistical measure shows the trend, in each country, and in global perspective. The world’s 2,150 billionaires have the same amount of wealth as the poorest 4.6 billion people who make up 60% of the global population. The 22 richest men in the world have more wealth that all of Africa’s women. The top 1% control 50% of the world’s wealth, the top 20% control 95%, the bottom 80% get by on just 5%.

Nothing like this has been seen in human history. The grotesque greed of today’s lords of capital surpasses that of Egyptian pharaohs, Roman emperors, Renaissance princes, and even the Gilded Age robber barons of the late 19th century.

It has not arisen by accident, through the working of some ‘hidden hand’; this is the voodoo economics of the system’s apologists. It is the result of deliberate policy, of a class war waged by the few against the many over the last 40 years.

The quarter century following the Second World War was shaped by three main global trends: the nuclear-armed confrontation and global proxy wars of the two opposing superpowers (‘the Cold War’); a long economic boom underpinned by state spending, especially arms spending, and US economic and financial pre-eminence; and a wave of anti-colonial ‘national liberation struggles’ in the so-called ‘Third World’.

In the ‘First World’ – the Western capitalist democracies – a social-democratic or welfare consensus prevailed. Economic growth meant full employment, strong unions, and rising living standards. Governments were committed to Keynesian state intervention, redistributive taxation, and improved public services. Tory politicians claimed ‘you’ve never had it so good’. Labour politicians talked of ‘the white-hot heat of the technological revolution’ and proclaimed a new era of ‘mass abundance’. Academics spoke of the ‘embourgeoisement’ of the working class and conducted surveys of ‘the affluent worker’.

In the ‘Second World’ – the Stalinist dictatorships of Eastern Europe – there was rapid state-managed industrialisation and marked improvement in living standards, housing, education, and healthcare. In the ‘Third World’ – the countries of the Global South emerging from colonial rule – newly independent regimes prioritised economic modernisation and social reform, winning a wide measure of popular consent for their ‘national-developmental’ programmes.

But the Great Boom slowed in the late 60s and finally came to an end with renewed crisis in 1973. This coincided with a global upsurge of mass struggle unlike anything seen since the 1930s. The system was so battered by both economic and political crisis between 1968 and 1975 that many believed revolution to be imminent.

But as the great social movements against oppression, war, exploitation, and dictatorship receded during the late 1970s, the international ruling class went onto the offensive. With slower growth, falling profits, and intensified competition, the system could no longer afford a ‘social-democratic’ consensus. The strong unions, high wages, social benefits, and public services built up during the Great Boom looked increasingly problematic. The radical demands of the mass movements of 1968-75 appeared utopian.

The neoliberal counter-revolution, pioneered in Britain under Thatcher and the United States under Reagan and then rolled out across the rest of the world, was an attempt to redistribute wealth from labour to capital by overturning the post-war consensus and reversing the advances made by working people since 1945. The rate of profit was to be restored. Wealth was to be siphoned upwards to the rich, not downwards to the rest. A new era of unregulated ‘get rich quick’ capital accumulation was to be facilitated.

The re-engineering of the economy was contradictory and dysfunctional. Neoliberalism has exacerbated the system’s long-term problems of over-accumulation (of capital) and under-consumption (by working people). We deal with this in Chapter 7. What concerns us here is the consequent remodelling of society, the growing chasm between rich and poor, and a global social crisis without precedent in human history.

The new working class

Capitalism is continuously transformative. Marx, writing at the infancy of the system, described this in a justly famous passage of The Communist Manifesto (1848):

The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society… Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air …

So it has been – and continues to be – in the transition from the state-managed national capitalism of the post-war years to the neoliberal globalised capitalism of the last generation. Manufacturing has shifted from the Global North to the Global South. Finance, communications, and services have expanded massively. Old industrial centres have become ‘rust-belt’ zones of industrial and social collapse. Whole battalions of unionised labour have dissolved. Where once there were miners, dockers, ship-builders, and car-workers, now there are call centres, warehouses, and superstores staffed by low-paid labour spied on by security cameras.

There is a new working class. It is black and white, women and men, migrant and indigenous. All of it is exploited – creating the wealth so much of which is then appropriated by the corporate rich – and much of it is also oppressed by racism, sexism, and homophobia.

We must define class, for there is much misunderstanding of this concept, and also much confusion about the relationship between exploitation and oppression.

Class has economic, social, and political dimensions. Economically, it revolves around the core process of exploitation, by which a minority ruling class extracts surplus from a majority working class. This happens in various ways.

Exploitation occurs in the workplace, where workers collectively produce wealth of greater value than the wages they are paid, with the difference taking the form of profit accumulated by corporate capital. The neoliberal counter-revolution was designed, in part, to increase profits by cutting wages, eroding conditions, and increasing workloads; and this was made possible by systematic union-busting to destroy collective organisation and atomise and precariatise the workforce.

Exploitation also occurs at the point of consumption and social reproduction. Monopoly power means routine overcharging for goods and services. Interest payments on mortgages and other forms of debt flow into private banks. Extortionate rents enrich private landlords. The privatisation of public services involves a recycling of tax revenues (paid by working people) into corporate profits. As ever more of society’s collective wealth is ‘commodified’ – turned into something that can be bought and sold to make profit for capital – the social surplus increases at the expense of the working class.

Around this core process of surplus appropriation revolve various social relationships: a primary relationship between the ruling class (the international bourgeoisie) and the working class (the international proletariat); and secondary relationships between sub-classes and sub-groups within classes, such as that between (‘middle class’) managers and ordinary workers in a workplace, or that between big corporations and small businesses.

The processes and relationships that constitute class are global. Nation-states and borders are historical constructs of capitalism. The working class is an international class with a collective interest in unity, struggle, and social transformation on a global scale. As Marx famously put it at the end of The Communist Manifesto: ‘The workers have nothing to lose but their chains. They have a world to win. Workers of all countries, Unite!’

Marx was writing when capitalism was in its infancy and the proletariat – as opposed to the peasantry – but a tiny proportion of the working people of the world. Yet, even then, he saw capitalism as a global system and the proletariat as an international class.

It is far more so today. Indeed, in the neoliberal era, capitalism has become a totally globalised system, the first in human history, having penetrated into every pore of both society and Nature. This is a vital point. It is one of the reasons that the current crisis must be considered the greatest in human history. So let us pursue it a little further.

The colonisation of the planet

Capitalism is ‘the self-expansion of value’. It grows exponentially, powered by the drive for profit, each round of accumulation immediately followed by the next on an enlarged scale. Over time, therefore, it eventually penetrates into, and percolates through, all the most distant recesses of the human and natural worlds – seeking resources to extract, labour to exploit, markets to dominate.

This process – evident to Marx, who wrote of it in the vivid terms quoted above – accelerates as the system expands, and the acceleration in the neoliberal era has been prodigious, driven in part by the system’s chronic problems of over-accumulation and under-consumption. So virtually every part of the natural world, and the vast majority of the world’s people, have now been subsumed into the process of world capital accumulation.

Modern capitalism is not only globalised to an unprecedented degree; it has also colonised more completely than ever before the planetary ecosystem and human society. Specifically, a rapid process of proletarianisation on a global scale over the last half century has largely destroyed the traditional peasantry, drawing vast masses into the global labour force, the majority of them condemned to remain ‘precarious’ or ‘surplus’.

This means the contemporary crisis is more globalised than any previous crisis. There are no crisis-free zones in the modern world. All of the world’s people are engulfed by the compound crisis of neoliberal capitalism – the pandemics of disease, the polluted nature and climate turmoil, the chronic stagnation, the grotesque inequalities, the vast pools of surplus and displaced humanity, the growing arsenals of weaponry, the endless wars, the police repression, the racism and misogyny, and so much more.

So the global class structure becomes the lens through which we must analyse the social crisis. Amid the constant churn, where ‘all that is solid melts into air’, we can identify two great class forces – the ruling class and the working class – and an intermediate layer, the middle class, which plays a crucial and complex role in sustaining the social order.

The class structure of modern world capitalism

The world’s labour force comprises approximately 3.5 billion of the world’s 7.5 billion people. A tiny minority of about 1% constitutes the ruling class. These are the people who own and control the giant corporations and who run major public institutions. Their incomes represent shares in the distribution of social surplus. It makes no difference what form these shares take. There is no meaningful difference between ‘fat cat’ salaries to corporate directors, ‘fat cat’ dividends from share holdings, ‘fat cat’ speculation on the financial markets, and ‘fat cat’ corruption in state enterprise: all these are simply alternative arrangements for sharing out the spoils at the top of society.

Marx described the capitalist class as ‘a band of warring brothers’. They compete for corporate advantage and personal advancement. They divide into factions with opposing interests – transnational capital versus national capital, banks versus industry, private corporations versus state enterprise, and so on. But the argument is strictly family. The capitalist class has a common interest in the exploitation of the working class and private appropriation of the social surplus; they stand united against any threat from below to their power and property.

The middle class makes up about 15% of the world’s population. It comprises two main groups: the owners of medium-size businesses; and relatively secure, comfortable, well-paid managers and professionals, some working freelance, some formally employed, many of whom are involved in supervising and policing the labour of the working class. The middle class, long established in the Global North, is now fast-growing in the Global South. Because of its position, it tends to identify with the ruling class and share its world outlook: it is the natural mass base for all forms of right-wing politics.

The working class – and residual communities of peasant farmers – make up the remaining 85% of the world’s population. We define the working class not as sociologists do, but as socialists must, if we are to make proper sense of the world; that is, we define it in terms of the core process of exploitation. The working class includes all those who live by their own labour, who are paid less than the value of their labour, who are, therefore, excluded from any share in the distribution of the social surplus. This includes many small-business owners, self-employed people, freelancers, workers in the gig economy, and so on. It certainly includes many ‘professional’ workers – teachers, health workers, civil servants, local government officers, etc – often classified as ‘middle class’. And it has to include huge numbers of marginalised people who would work if they could, but who are denied the opportunity.

The global working class comprises three broad categories: a core working class of people who have a measure of job security, better pay and conditions, and usually a level of education or skill that gives their labour higher value on the jobs market; a precarious working class of people employed on short-term contracts, perhaps part-time or ‘zero hours’, with lower pay and worse conditions; and a marginal working class or ‘reserve army of labour’ – people largely surplus to the requirements of the system – who are only occasionally employed or not employed at all, and who are dependent on benefits or eke out a living in the informal sector.

The former group is relatively larger in the Global North, the latter two in the Global South; but all groups are represented across the world economy. Thus, whereas one in five (7 million) workers in Britain are precarious (or marginal), the global proportion is more than 60%. Migrant workers account for a huge proportion of the precarious and the marginal. One in three of the world’s workers today – 1 billion people – is a migrant, 750 million internal to their country of origin, 250 million working abroad.

Neoliberalism has meant not just growing inequality and rising poverty; it has also involved mass displacement, an epidemic of insecurity, lives turned upside down, and families and communities torn apart.

This is the meaning of class: this lived human experience of exploitation and oppression; this social misery visited upon the many by the few in the interests of profit.

It is economic and social processes rooted in capital accumulation that give rise to class. This means that class itself is a process – it is endlessly reproduced, and, as the system evolves, endlessly reconfigured. So there is a class ‘structure’, but not in the sense of a rigid set of closed categories, like a caste system, but only in the sense in which a growing plant may be said to have structure; in other words, class is an organic phenomenon in an eternal state of flux.

The process of class formation (and re-formation) happens regardless of whether people are aware of it. Indeed, the reality of it is veiled behind a thick smokescreen of right-wing ideology, pumped out constantly through all forms of media, the effect of which is to bamboozle people about their true condition and interests. The essence of socialist politics, in a sense, is that it seeks to disperse the fog and reveal the ugly reality of class society.

This brings us to the third aspect of class: class as a political force. When working people become aware of their true condition, and when they begin to organise to protect and advance their true interests, they become a political force and a potential agent of radical change. The aim of socialist politics is to change what is sometimes called ‘class in itself’ (the mere economic and social existence of class) into ‘class for itself’ (working people organised, mobilised, and fighting back).

We return to this – the working class as political force and agent of radical change – in the second part of this book. Before that, however, we want to deepen our understanding of the multi-dimensional character of the world capitalist crisis.

Anti*Capitalist Resistance will soon be publishing this new book on the world crisis and the popular resistance in print format. Because of the urgency of the political situation, however, we will be publishing the book chapters as a series of long-read online articles over the next month or so. This is the third chapter.

Neil Faulkner is the author of Alienation, Spectacle, and Revolution: a critical Marxist essay (out now on Resistance Books). He is the joint author of Creeping Fascism: what it is and how to fight it and System Crash: an activist guide to making revolution. Neil sadly passed away in 2022.

Phil Hearse is a member of Anti*Capitalist Resistance and joint author of both Creeping Fascism and System Crash.

Rowan Fortune is an editor and revolutionary socialist. On their weekly blog, they write on utopian literature and imagination, why grimdark is the dystopian fiction of our time and more. They wrote Writing Nowhere: A Beginner's Guide to Utopia; edited the anthology of utopian short fiction Citizens of Nowhere; and contributed to the multi-authored System Crash: An activist guide to making revolution.

Simon Hannah is a socialist, a union activist, and the author of A Party with Socialists in it: a history of the Labour Left, Can’t Pay, Won’t Pay: the fight to stop the poll tax, and System Crash: an activist guide to making revolution.

Join the discussion