Capitalism isn't working, so what is the alternative? This question must have at least crossed the minds of millions, perhaps hundreds of millions, around the world as they watched the credit crunch, financial meltdown and recession unfold over the past few months. The problem, of course, is that for those same millions most of their conditioning - from politicians, media, education and a good deal of their experience - will have been to answer that there is no alternative. No alternative to capitalism as such at any rate; no alternative that goes beyond a modified version of capitalism as represented by the "new" Keynesian, Gordon Brown, or perhaps Barack Obama.

In fact, a definite and clearly articulated alternative - socialism - has existed for at least 160 years (Karl Marx and Frederick Engels wrote The Communist Manifesto in 1848). Socialism is very straightforward and, compared to capitalism, extremely simple. It means social (or collective) ownership and control of the main means of production (land, factories, businesses, banks, etc) and production for human need, not profit, and with this the abolition of class divisions.

The trouble for many people is not that this is very complicated, or hard to understand, but that it just sounds too good to be true. Many of us get so ground down and demoralised by living under capitalism that we become convinced that nothing as evidently sane and good as socialism could possibly ever really happen - life just isn't like that, so there must be a catch somewhere.

In this article I intend to argue that socialism is not too good to be true, that it is a perfectly reasonable and practical way of organising society, and that the various objections to it which spring into our minds, because they have been planted there by the dominant capitalist ideology, are illusory or even downright silly. I say silly because when people are deeply prejudiced they often think arguments are obvious, because they are based on their prejudices, which are in fact absurd and which disappear like a puff of smoke the moment the matter is tested in practice.

For example, in Bristol in 1963 there was a dispute about whether black workers should be allowed to drive buses and some of the racists argued that black people lacked the speedy reactions needed for bus driving (like Pele and Mohammed Ali had slow reactions!). Another example: before Angela Rippon started reading the news in 1974, it was actually maintained by some sexist dinosaurs that the public wouldn't take the news seriously if it was read by a woman. Obviously such arguments evaporate as soon as the colour or gender bar is breached.

Let us begin by looking at something absolutely basic: feeding people. The world is currently richer and more productive than it has ever been in history, yet, according to the United Nations (UN), 963 million people live in hunger and fear of starvation, and about 25,000 people, mostly children, actually die of hunger, or causes related to hunger, every day. Is this because of a shortage of food? Not a bit of it.

According to the Institute for Food and Development Policy/Food First think-tank, "Enough wheat, rice and other grains are produced to provide every human being with 3,500 calories a day. That doesn't even count many other commonly eaten foods - vegetables, beans, nuts, root crops, fruits, grass-fed meats, and fish. Enough food is available to provide at least 4.3 pounds of food per person a day worldwide: two and a half pounds of grain, beans and nuts, about a pound of fruits and vegetables, and nearly another pound of meat, milk and eggs - enough to make most people fat! Even most 'hungry countries' have enough food for all their people right now. Many are net exporters of food and other agricultural products."

Perhaps the problem is transport - maybe the hungry are in remote parts of the world and the food can't reach them. On the contrary, many of them are in huge cities where planes, and sometimes tourists, fly every day - places like Calcutta, Rio de Janeiro or Dhaka. Even when they are in rural refugee camps the television cameras and crews seem to get there when they want to, but not the food. Besides, we know we have the means of getting planes with bombs to all the remote places of the earth.

Perhaps people just don't care if thousands of children starve. Actually this is not so. The UN is full of people who "care". There are numerous international charities, like Oxfam and Save the Children, who care a lot and depend on donations from people who care, and the poor countries themselves are full of NGOs doing their best, yet the hunger and the malnutrition continue. Why? There is one answer you can read on any website dealing with this issue and which all the agencies and charities from the UN down would agree on: poverty. People go hungry because they are poor and can't afford to buy the food available.

But actually this is only part of the story. What would we think of parents with four children and a larder full of food who allowed one of the children to starve on the grounds that the child could not afford to pay for the food? In fact poverty only leads to people going hungry for a reason that you don't find on the charity websites, namely that in capitalist society food, like almost everything else, is a commodity, a good produced for sale on the market in order to make a profit.

Distribution

Socialism would deal with this seemingly intractable problem of hunger in the easiest and most obvious way, the way any ordinary family deals with it, by not treating food as a commodity and simply distributing enough of it to people to ensure that everyone has enough for a healthy diet.

Just think about what this would mean: no more starving children, no more distended bellies and vacant, staring eyes, no need for kids to work 12 hours a day in sweatshops or for old people to die in the gutter or beggars to crawl in the dirt; so much human suffering ended. Even if it achieved nothing else, this alone would be enough to justify socialism a thousand times over. But, of course, it's too good to be true; there must be a catch somewhere!

This is where those "standard objections" pop into our heads, just as they have been programmed to do. If food was distributed free there would be no incentive. Wouldn't people all stop work? Actually, no. Very few people reading this article will ever have literally gone hungry, very few people in Britain do, but we haven't all stopped work. The truth is the opposite: if you are starving you soon lose the ability to work at all and people with a decent diet work much more productively than the malnourished.

As it happens there are two major "catches" to distributing food to the hungry: the first is that the big corporations would not be able to make their billions in profits out of it, and the second is that if it would work for food it would work for other things too - housing for example.

Shelter is one of the basic requirements of human life. Yet even in the richest cities in the richest country in the world, the US, there are homeless people sleeping on the streets, just as there are in London. In the mega-cities of the world's poorer countries, with their favellas and shanty towns, the problem is horrendous.

Socialist planning would solve this problem very simply. Take Britain as a starting point. Strictly speaking, there is no housing shortage in Britain, only a shortage of affordable housing. Dealing with the immediate problem of homelessness would just involve requisitioning the empty properties, the mansions and second and third homes of the rich. But a permanent solution is easy to envisage. Use the census to estimate the housing needs of the population (something like this happens already) and establish a public house building programme, employing thousands of bricklayers, carpenters and other building workers to build slightly more houses than are needed. Then make the provision of a modest but decent residence for every family or individual citizen a basic right, in the same way that every child has a right to a place in school, or the NHS provides free healthcare for all. In other words, stop treating houses as a commodity and distribute them on the basis of need.

The same principles could be applied to transport. At present transport is a complete mess. Technologically, of course, it is possible to transport people around the world more efficiently than ever before in history, but under capitalism the organisation of transport is both inefficient and destructive. The main form of transport is the private car, and car ownership and use have become so widespread that the roads are clogged up (to the point where in London travel by horse and carriage in the 19th century was as quick) and the pollution generated is a major contributor to climate change.

The socialist solution is obvious: set up a comprehensive integrated system of free public transport. This would involve a huge expansion of the railways for freight and intercity travel, since they are clearly faster, more cost efficient and more environmentally friendly than cars and lorries. Within towns it could be a combination of trams, buses, subways, monorails, minibuses and bicycles. The precise details don't matter here. The point is that, provided the public transport was sufficiently extensive and effective, the private car, with its attendant problems of parking, congestion, accidents, petrol and pollution, could virtually be eliminated in urban areas (and rural areas too if the public network was extensive enough).

So at this point we have free food, housing and transport along with, I assume, free health and education. Inevitably the question arises, "How would this all be paid for?" Given the unbelievable sums raised to bail out the banks in recent months this question loses much of its charge, but in any case there are two answers to it depending on how far we look into the matter. The first answer is simply that it would be paid for out of taxation, as the NHS, schools and, of course, the armed services and their wars are at present. Clearly if food, housing and transport were all free, people would have more money to pay tax with.

However, looking a bit further we have to remember that money does not itself create wealth, or goods or services. Only the application of labour to nature does that. Money is just a means of exchanging goods and services that have become commodities. The less goods and services are treated as commodities, and socialism would systematically reduce commodity production until it disappeared, the less role money will have. So the real question becomes, would it be possible for society to allocate sufficient labour to grow and distribute enough food to feed everyone adequately, to build enough houses for everyone and to make and operate enough trains, trams, buses, etc to move people around. And we know the answer to this is yes because we more or less do it already.

But how would all these collectively owned industries be run? Wouldn't it involve vast armies of state bureaucrats, at best soulless jobsworths and at worst monstrous tyrants?

Given the history of state ownership and planning in the 20th century - Stalin's Russia and Kim Il-Sung's North Korea at one end and British Rail and the NHS at the other - this is a natural and important question. And the answer to it goes to the very heart of what we mean by the socialist alternative.

Socialist planning will not be socialist and will not work practically unless it is democratic and actively involves the mass of ordinary people. Again the years of conditioning ensure that a little conservative ideologue pops up in our head and says, "That'll never happen. Ordinary people, working class people, can't run things. They are not clever enough. They haven't had enough education or management training, etc. Besides, there will always be someone who gets to the top and takes advantage."

But to see the capabilities of working people just look at any workplace you know. If the manager is off sick or away on holiday, does it grind to halt? Of course not, because the workers, between them, already know how the place works. A few years ago in my workplace, a university, the vice-chancellor was suspended and then sacked for corruption and it was a while before he was replaced. The university ran perfectly normally. But if the caretakers (who, apart from the cleaners, are the lowest paid workers in the institution) stop working the whole place shuts down, or rather doesn't even open in the morning.

As for some people getting to the top and abusing their position, this will be a problem, not because it is human nature, but because socialism has to be built by people brought up under capitalism, not by saints and angels. The answer is to develop mechanisms for controlling and removing such individuals, and since the Paris Commune of 1871, the first real experiment in workers' power before it was crushed by the army, we have known what those mechanisms are: make all public officials subject to election and recall and pay them a worker's wage. And since the Russian Revolution we also know that these mechanisms work best when they are based on elections in workplaces and other institutions where collective debate can take place.

This was the great contribution of the soviet, or workers' council, which was first created spontaneously, by the workers of St Petersburg in the Russian Revolution of 1905. It continued to play this role in the revolution of October 1917 and subsequent struggles, to show that it is the main institution through which working people can establish political power over society as a whole. And that is the starting point for everything we have talked about so far.

Feeding the hungry, housing the homeless, ending inequality and class divisions, democratic planning of the economy, stopping climate change, establishing international peace and unity, and all the changes that socialism would bring have as their precondition the revolutionary overthrow of capitalism by the working class, first in one country and then internationally. Workers' councils are key to this. They begin, within capitalism, as organisers of the workers' struggle against the bosses, growing out of mass strikes and factory occupations. They develop into an alternative centre of power, rivalling the old capitalist state, and then in the decisive step of the revolution they replace the capitalists and establish workers' power - a power which rests on the objective position of the working class in the modern world economy but which also liberates and mobilises the creative energies and talents of tens of millions. Once that happens, a better world, a far better world, will move from being a possibility to being a reality.