“Closing Down Sale!” “Everything Must Go!” This is the crisis of overproduction. There is too much stuff on the market and not enough buyers. Firms go bust and suddenly there are lots of cheap deals to be had. Sometimes the firm is not going bust. It is just the annual stock clearance. My local furniture store is selling everything to make room for new stuff. Its chairs, tables, beds are being cleared out at knockdown prices to make room for more chairs, tables and beds. And it’s not like the old stock has passed its sell-by date.

Then there is so called “planned obsolescence”. Manufacturers tweak their products to provide some improved functionality and sometimes they do that, and it is worth upgrading. But mostly it is hype to persuade you to dump perfectly serviceable items in order to own the latest model.

Things are no longer built to last and cannot be repaired. If an electric kettle breaks down can you take it apart and replace the element? Modern laptops, tablets and smartphones are increasingly held together with glue instead of screws, making them nigh on impossible to disassemble either to repair or upgrade components.

At the other end of the scale, poor people are buying cheap rubbish because it is all they can afford. And it never lasts. I remember getting new shoes two or three times a year because they were all I could afford; they kept wearing out and their moulded soles and heels could not be repaired. Now I can afford to pay good money for decent shoes that last for years and save me money in the long run. They are also helping to save the planet because I am consuming less. My shoes have a reduced carbon footprint.

Some climate change campaigners have seized on overproduction to argue that we will have to lower our living standards to save the planet. They are missing the point. What we need is access to quality goods that last and are easy to repair, so we are not constantly replacing stuff. Overproduction is not a result of our greed. It is a feature of capitalism. They are producing so much, not to meet our needs, but to try and outsell the competition.

We are so used to overproduction that nobody really questions it anymore. It is even seen as a virtue by politicians who promise to fund their policies by promoting more economic growth and raising productivity.  That means producing more stuff for the market, which will increase the amount of tax the government can collect. It will also mean we have a “strong economy” that rich people want to invest in, and speculators will not sell us short in the currency markets.

This is always presented as being for our benefit. Make more, sell more, earn more, spend more. What’s not to like? Except that it never works for long because the system does not work for our benefit. Capitalist competition pushes up their costs. Costs push up prices. We need higher wages to keep up. When our costs start to eat into their profits, they have a crisis and we are made to pay.

It is not just that they have warehouses full of goods that are no longer profitable. They have factories that are no longer profitable. So they close them down. It does not matter if we lose our jobs, or become homeless, or if our children are living in poverty and not getting enough to eat. It does not matter if the government has to cut spending on schools and hospitals, or if libraries have to close amid council cuts. That is a “market adjustment”. It cannot be helped, and it is necessary to bring the system “back on track”.

It would not be quite so bad if we all followed the same rules. But some of the really big capitalist corporations are now “too big to fail”. They are so important to the economy that in a crisis they get bailed out by the government and we take a double hit to pay for it. And the biggest corporations are larger than most national economies. They think “market adjustments” should not apply to them, so they opt out of the market. The Bank of England is worried about the amount of private equity capital, £8 trillion, that is no longer on the market. Private equity capital is not traded on the stock exchange. It has fewer regulations and is often held by investment companies located in tax havens. But the assets they own are not in tax havens. Care homes, GP practices, high street names like Morrisons, ASDA and B & M, even your local veterinary practice: private equity is everywhere.

Overproduction is a condemnation of capitalism because it amounts to a colossal waste of resources at a time when we are trying to save the planet. It drives the system into crises that always affect the poorest in society more than the richest. It shows how irrational capitalism is by creating so much wealth and then destroying wealth in the midst of so much poverty.


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