Inflation and the prices of basic commodities under the incumbent Pakistani Muslim League (Nawaz) [PML(N)] government have risen enormously wreaking havoc on the lives of ordinary people. Purchasing power is declining rapidly with the depreciating value of incomes and salaries.
The high rate of inflation over a long period of time has had some serious economic, social and political consequences. Real income and the wages of the poor have fallen and the profits of landlords, big business houses and foreign investors have risen alarmingly.
There has never been such a gulf between the rich and the poor and it is widening with a ferocious velocity. The fierce resentment and anger of the masses against this economic brutality is palpable. The cynical indifference and contempt of the ruling elite for the oppressed is unashamed.
Imran Khan’s Pakistan Tehreek-e-Insaf Party (PTI) and the Islamic fundamentalist Jamaat e Islami called for a rally in Lahore on December 22nd to protest against price rises. The Pakistan People’s Party’s (PPP) heir apparent, Bilawal Bhutto Zardari, and other leaders of the elite’s formal opposition parties are supporting Mr Khan. From a general point of view, this is a positive step as one of the real issues in mainstream politics is now being addressed after a long time. But within society there is tangible scepticism of anything really being done about price rises.
There is no hope in hell that Imran Khan can persuade the regime to scale back the price rises or even if he himself comes to power, he will be able to reduce the prices of commodities. What is also true is that Sharif and his coterie do not want any of this either. They desperately want to control this spiralling inflation. However, the country faces surmounting fiscal deficits, inflation, abuse of resources and a decaying physical, social and administrative infrastructure.
The fact of the matter is that the system on which their political rule is based cannot sustain itself without inflicting such wounds as price rises on the toiling masses. This was also true in the previous PPP led coalition government. Any future government in this capitalist system in terminal decay would do the same if not worse. Never in the country’s history has the price of products been substantially reduced.
In a capitalist system commodities are produced not for the benefit and consumption of people but for the profits of the owners of the means of production. There are two types of ‘capital’ that are involved in the production of human needs. ‘Variable’ capital comprises the labour necessary for production along with the raw materials and the services consumed. ‘Constant’ capital is the investment of the capitalists in the machinery, buildings and technology involved in production. This investment comes from ‘borrowing’ capital from the banks, capital that has been deposited by society as a whole.
One way in which the capitalists try to increase their profits is through a reduction in ‘variable’ capital. The key for capitalist is to increase their rate of profit. However, to sustain the rate of profit, cuts in ‘variable’ capital can take place up to a point, as consumption by workers will diminish thus contracting the market and thus affecting profits also.
To prop up the market and the rate of profit the state intervenes by pumping financial liquidity through borrowing. (It can also do this by printing money – pump priming or QE).This is known as Keynesianism. But this creates inflation and ultimately the profits wither and the system is in crisis.
The bourgeois alternative to Keynesianism is known as ‘monetarism’. This is intended to eliminate the role of the state and every sector of the state and the economy is privatised to boost the rate of profit. This again deregulates price controls and exacerbates price rises. This was the ‘old’ capitalism of the 1860’s that was reintroduced after the failure of Keynesianism in the 1970’s. The ‘monetarist’ model, with all its privatisations and cuts in public welfare, in turn required a massive injection of credit for it to work, which in turn resulted in the biggest crash of capitalism in 2008.
Impoverishing the working classes and increasing the prices of the commodities of consumption are necessary to sustain the rate of profit under capitalism. Imran Khan and Jamaat e Islami are ardent supporters of capitalism. Their economic foundation is based on the policy of capitalist investment whose sole purpose is to seek higher and higher profits. Maulana Maudoodi, the founder of Jamaat, wrote extensive works on Islamic jurisprudence (Tafseers) to validate and subscribe to the capitalist system. No wonder he was supported and sponsored by the Muslim bourgeoisie and imperialism in their crusades against the planned economy and socialism. Jamaat is still today the ideological and belligerent bulwark of this exploitative system. The economic doctrine of the Sharifs and other parties in the imposed political spectrum are absolutely the same. So where is the difference? Thus their rally is more political gimmickry to dupe rather than relieve the masses from these atrocious price rises.
Jamaat knows that it will never capture the imagination of the Pakistani masses and this explains why it has either sat in the laps of the military or the Establishment’s sponsored right-wing leaders like Sharif and now Imran Khan to attain their aim of creating a despotic Islamic emirate. The PTI has in fact become a mass front of the Jamaat. All the main policies of the Khyber Pakhtunkhwa (PPK) government are being overseen by Jamaat’s bigoted ideologues. The hard fact is that all the different shades of right-wing parties and religious outfits are squabbling for power to share the loot in the name of political Islam and Pakistani nationalist chauvinism. The economic agendas of the so-called secularists and the liberals are not much different.
The crisis of capitalism is tearing apart the social fabric of this tragic land. Price rises to a rotting infrastructure have brought misery and devastation for the masses. None of these can be resolved on a capitalist basis. This agonising gulf between the rich and poor has been amplified on a world scale with the catastrophic crisis of capitalism. A Credit Suisse report revealed that 32 million people control $98.7 trillion. That means that 41 percent of the world’s wealth is in the hands of 0.7 percent of the total adult population. At the other extreme 68.7 percent of the world’s adult population controls just 3 percent of its wealth.
These figures confirm Marx’s prediction concerning the concentration of Capital: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.” (Capital, vol. 1, chapter 25).
The situation in Pakistan is even worse. With the organic crisis of capitalism deepening the menace of price rises will continue to pulverise society. The only alternative is a planned socialist economy where the cause and incentive of production is not profit but the fulfilment of human need.