The Contradictions of Capitalism Explained

Friedrich Engels delivered a powerful critique of capitalism with the line: “The producers have nothing to consume because the consumers are wanting.”

This single, simple sentence exposes the illogicality of capitalist production: that workers, the very creators of society’s wealth, are denied access to the fruits of their labour because the capitalist system prioritises profit over human need.

The paradox of capitalism

Capitalism has been the dominant system of production since the demise of feudalism in the 17^th and 18^th centuries. It has not always been the system under which we live and will not be the dominant system of the future but to get to a better place, we must understand where we are now and the history of our social and economic development.

Capitalism, as the name clearly suggests, is a system of economic management that is driven by the pursuit of profit by a small class of owners – the bourgeoisie. This results in a bizarre and inhumane contradiction whereby shelves overflow with goods, while millions of workers go without. The system creates abundance, but that abundance becomes a crisis, called a crisis of production, because it is not enough for there to be need – there must also be demand, i.e. the ability to pay. The main reason why people don’t eat isn’t because of overpopulation or a lack of resources, it’s due to a lack the money to buy the food. For instance, 3.4 billion people live on less than $2.15 a day and therefore can’t afford to eat. (Global report on food crisis)

For the capitalists to continue to grow their profits, they must increasingly exploit those who produce everything for them, the workers. That means worsening conditions of employment, an increase in the cost of living, and the use of technological advances necessitating fewer people to undertake the work. All these outcomes result in the producers of everything, the workers, becoming increasingly unable to consume their output because they do not have enough wages to buy back what they make. The market then becomes ‘glutted’ – not because people don’t need food, clothes, medicine or housing, but because they cannot afford them. The goods remain unsold, factories close, jobs are lost, and the cycle of crisis deepens.

And the reason that you and everyone you speak with bemoan how expensive everything is and how bleak the future looks, is that the crisis is now deeper than it has even been. The system of capitalism is inevitably collapsing under its own contradictions.

A system against the worker

This wealth of the ruling elites was not earned through merit or invention. It was accumulated through colonial plunder, slave labour, and the ruthless exploitation of colonised peoples and we, the British working class, while still being exploited, were historically given a relative material uplift as a pay-off to suppress our class consciousness, our revolutionary tendencies and to be complacent and compliant to the empire’s crimes abroad. In this way, the super-profits extracted from the colonies allowed crumbs to fall from the table, temporarily buying social peace here at home. But as the peoples of the colonies fight and achieve their independence, the screws turn ever more tightly on the home front and as we are discovering, our life conditions are becoming increasingly difficult.

We all see and experience the consequences: working families relying on food banks, mass homelessness while homes lie empty, NHS waiting lists growing while private hospitals flourish. The contradiction identified by Engels has not lessened with time; it has intensified. Productivity has increased exponentially, yet the gap between rich and poor has widened. Technology could liberate humanity from toil, yet under capitalism it only throws more workers into the unemployed and underemployed who suffer so that wages can be kept low.

Today, the world’s billionaires number around 2,800 – a minuscule 0.000035% of the global population, or roughly one in every 2.9 million people. Their obscene wealth is measured in tens or even hundreds of billions, extracted from the labour of millions. And as inequality intensifies, the system edges closer to the next grotesque milestone: the world’s first trillionaire. Such an individual would hold more personal wealth than the GDP of entire continents, all while billions live on a few dollars a day. This is not a bug of capitalism; it is its defining feature.

Why socialism is the solution

Socialism – the social ownership and planned use of the means of production – will resolve this contradiction. Under socialism, production is not geared toward profit but toward human need. Workers would no longer be alienated from the goods they produce. A planned economy, under the democratic control of the working class, would ensure that everyone receives the necessities of life and participates in the creation of a just, rational, and humane society.

Engels’ quote is not simply a critique of the past; it is a call to arms for the present. As workers we must understand that capitalism is not broken – it is working exactly as it is designed to: to enrich the few and impoverish the many us! The only way out is revolution. The only way forward is socialism.