Photo: A pile of products marked for destruction at an Amazon warehouse in Scotland (Source: ITV)
By Jakob Stein
On Tuesday, a report from an Amazon warehouse in Dunfermline, Scotland revealed that the company regularly destroys over 100,000 unused and returned products every week—a clear demonstration of how the imperialist global economy operates in response to its crises of overproduction.
The report from the British ruling-class media outlet ITV featured film documentation of thousands of unused products, from televisions and computers to books and even sealed packages of face masks, being put into large bins marked “destroy.” About half of everything destroyed is still in the shrink wrap, with some items being recycled, others brought to landfills, and the bulk incinerated. Only a small fraction are marked for donation.
With a weekly goal of 130,000 products destroyed per week, this single Amazon warehouse in Scotland is on pace to get rid of over 6 million products per year. While Amazon tries to hide and downplay this massive destruction of products, extrapolating these numbers to even a fraction of Amazon warehouses around the world demonstrates the profound nature and scale of the problem.
Much of the outrage in response to this report has come from an environmental waste standpoint, and Amazon has pledged to reduce the destruction of unused products, “working towards a goal of zero product disposal.” Amazon is not alone in this practice—large garment producers like Nike, H&M, and Burberry have also been reported to destroy large quantities of unsold products rather than putting them to good use, despite their similar claims about working toward ‘reducing waste.’ While these multibillion-dollar companies may find more ‘green’ ways to get rid of products in the future, the problem of millions of unsold goods cannot be fixed, as it is an unavoidable feature of capitalism—cyclical crises of overproduction.
On Crises of Overproduction
The problem of overproduction does not lie in producers making more than society can consume, but, rather, more than they can sell at a profitable price. The explanation given by the monopoly press for Amazon’s practice of destroying unsold commodities is that the producers are seeking to reduce the costs of storing their products at Amazon warehouses—and once they go unsold for too long it becomes cheaper to simply get rid of them rather than keep paying for storage. While this is true, it is only half of the story.
The principal contradiction at play is between the private nature of ownership and the social nature of production—that is, the massive scale of global production that includes gigantic factories and specialized division of labor which is only aided by the advance of technology. This means that society is capable of producing far more than ever before, but the products of that labor belong solely to the capitalists. As capitalists compete with each other to produce as much as possible, to continually expand the scale of production in order to undercut their competitors and gain the largest share of the market, they inevitably drive the prices of the commodities they produce down. In order to sell these products for a profit, they find other ways of saving money in the production process, including driving down wages and demanding intensified production by increasing workers’ workload.
To resolve the immediate problem of having to pay for storage, the capitalist producers could agree to cut their prices in order to increase sales of their unsold products or give them away for free; however, this would further lower profits and make it more difficult to sell more commodities profitably in the future. Continually marking down products also lowers stock prices. This is the worst possible outcome for the capitalist shareholders, as they make their living not from working, but from the dividends they collect from company profits. At the end of the day, their only real solutions are to fire workers, destroy excess products, and, as a last resort, close down factories until prices recover through reduced supply.
The eventual result of this process is countless workers, both employed and unemployed, who lack the ability to purchase the very commodities their class produces. It becomes more and more difficult for the capitalists to sell their products. While they might be able to stave off crisis by taking out loans or operating on credit, they cannot avoid the inevitable for long.
Crises of overproduction are thus nothing more than an intensification of the basic contradictions of capitalism—they are cyclical because these contradictions are inherent to the capitalist mode of production and inevitably rise to the point of crisis every ten years or so.
The New Depression and the COVID-19 Pandemic
The current crisis of overproduction actually preceded the global pandemic, with the National Bureau of Economic Research declaring that a recession had begun in the US in February 2020, before national quarantine measures were put into place. In fact, the global economy experienced what the International Monetary Fund described as a “synchronized slowdown” throughout 2019.
Naturally, capitalist economists blamed the initial global “slowdown” on Donald Trump’s ‘trade war’ with China. And once unemployment hit numbers not seen since the Great Depression nearly 100 years ago, the COVID-19 pandemic became a useful scapegoat for the economic crisis. While the pandemic did exacerbate the crisis, it did not cause it—the New Depression the world is living in today is the product of the natural functioning of capitalism itself.
As with every crisis of overproduction, the years immediately beforehand were seen as times of a ‘booming’ economy—even as the writing was on the wall, the proliferation of easy credit and low interest rates created a false sense of security for the capitalists. Overproduction crises cannot be resolved without shrinking production, with some companies downsizing while many small and medium-sized producers are forced out of business or swallowed up by their larger competitors.
The shutting down or slowing of production throughout the US over the course of the pandemic proved a useful tool for the ruling class—they were able to blame the economic problems on a health crisis while simultaneously hitting the ‘restart’ button on the economy. In the same vein, the stimulus checks that millions of unemployed and struggling workers relied on were not meant as a means of survival; instead, they served to ‘stimulate’ more consumption and purchasing. The contraction of production, facilitated in part by the stimulation of consumption, was meant to attack the real economic roots of the crisis.
As the New Depression thrust millions of workers into unemployment, the police murder of George Floyd was the spark that lit the country on fire. The May Uprisings were not just a response to police violence, which is a regular occurrence in the US and the rest of the world, but were also motivated by the deep and profound suffering the working class felt as their lives were thrown into disarray by the economic crisis. Politicians and other lackeys of the ruling class were quick to condemn expropriations of stores as ‘looting’; however, the scale of these justified actions of the masses pales in comparison to the amounts of food and material goods that are simply thrown away by companies like Amazon as a normal part of the functioning of capitalist society. The true crime is not expropriations that put much-needed resources in the hands of the masses, but the destruction of so many goods, which took so much hard work to produce, while so many lack even the basic means of survival.
The Anarchy of Markets vs. Planned Economy
The effects of the New Depression have been far-reaching for the global economy, and this is due to the fact that individual producers, no matter how large, are linked in an interdependent web. This interdependence is further complicated by the fact that these private companies are not working in concert with each other, but rather competing against one another. None of these corporations can fully predict the level of demand in the market, much less how much to produce in order to appropriately meet that demand.
For these reasons, private ownership—and the exchange of commodities in the market that is part and parcel of it—operate on the principle of anarchy rather than coordination. This is another factor that exacerbates and accelerates the cyclical crises of overproduction.
The only way to resolve these contradictions inherent in the capitalist mode of production is socialist revolution. In socialism, the economy is centrally planned, with production meant to adequately meet the needs of society as a whole rather than to produce as much as possible while destroying everything that can’t be sold at a profitable price. This is possible because in socialism, private ownership—which seeks to use production to enrich the ruling class rather than meet the people’s needs—is destroyed, and is replaced with public ownership. This means that the prevailing system of ownership is no longer in fundamental contradiction with the social nature of production, which is capable of producing everything that society needs.
By eliminating private ownership and the anarchy of capitalist markets, society will be truly capable of organizing production in a way that satisfies the needs of everyone while avoiding terrible economic crises that plague the world every ten or so years. The waste of companies like Amazon is only avoidable in this kind of socialist, planned economy that puts the broad masses of the people over profits for the few.
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