Financial Times: "It's good to be a capitalist" - or is it?

An astonishing article appeared in the Financial Times on Saturday 29th July. Written by Philip Coggan, a senior staff writer on the newspaper, it opened with brutal honesty by saying "it has been a great time to be a capitalist. All around the world, profits have been rising as a percentage of GDP". The author goes on to give examples showing how in Europe, the United States, and also now in Japan, profits are at record levels.

Why are profits high? "It is labour that has suffered... the slow growth in the compensation paid to labour has accounted for around 40 per cent of margin expansion over the past five years." And the author points to the entry of workers from China, India and the ex-Soviet bloc into the global work force as having caused downward pressure on wages; this is the main factor behind current high levels of profit.

We might expect that the capitalists would be jubilant at squeezing more profit from the working class. But what is surprising about the rest of the article is its nervousness, fear even, about the future. The writer says that "anyone taking the long view must be concerned that the news on profits cannot get any better than this." And this capitalist strategist, one of the cadres of the Financial Times, then admits what is really worrying him: "High profits and the extremes of wealth they imply can be extremely unpopular". Being more careful with his words - after all, the workers may be listening - he then says: "It is easy to assume that the liberalising processes of the past 20 years are irreversible. But such reforms have little bedrock support; they have been imposed on many countries by economic elites".

Not only does this strategist see the danger of movements of the workers. He is deeply pessimistic about the future of his system: "The globalised economy that has helped companies increase their profits is a fragile structure; it could be swept away just as the previous version was in 1914."

In a distorted way, from their own class position, the most intelligent capitalists come to the same conclusion as the Marxists. Profits are the unpaid labour of the working class. In the recent period, with the collapse of the Soviet Union and the move to capitalism in China, it has been possible to increase the rate of exploitation. But the capitalists themselves can see the contradictions in their own system, and they are deeply worried. This sober capitalist raises, in front of the bourgeois, the spectre of war and revolution.

They are right to be nervous, and we can take much heart from that.