Saturday, September 20, 2008

Why Save Capitalism?

Most Americans are surprised at the collapse of capitalism.   I'm surprised it took so long.

I was brought up with 19th century beliefs, and Depression era values.   My parents suffered greatly as children in the Depression.   They expected another depression at any time, and passed that along to us children.

I was taught that capitalism couldn't work, because it relied on profits to continue, and that there would always come a time when profits would decrease, since the workers weren't paid the full value of their labor, and so were unable to buy enough back to keep profits coming to the capitalists.   

But the genius of capitalism that we keep hearing about has kept it going for a century more than expected by 19th century dreamers.   Two world wars and the great depression destroyed a lot of productive capacity, and the rebuilding after those disasters made it seem as if capitalism was booming.  All you have to do is disregard the human misery caused by these tragedies, and it appears that all was well.

The military-industrial complex created much "value" that didn't have to be bought back by the producers and brought foreign dollars eager to buy the weapons of mass destruction that Americans produced.  And the cheap labor and materials that America's military power provided the homeland made US worker's wages go farther.

Cheap foreign labor and endless credit seemed to work.  Even though people have been warning that this can't last, it certainly seemed to go on long past the time it should have collapsed.   Here's a warning from TWO years ago that it was all about to blow!

Now we're being told that the whole problem is greedy Americans who wanted to buy houses they couldn't afford.   No, that's not the problem.  

The problem is that Americans were given loans that were then packaged and resold again and again.   Obviously, a loan for, say, $500,000, which is resold to speculators until it is "worth" $5,000,000 isn't really worth $5,000,000, because even if the loan resets at a higher rate, the homeowner can't pay that much money.  Especially because half of working Americans make less than $40,000 a year.  But the world economy has been propped up by this creation of "wealth" for the last 8 years, at least.

Back to basics.  How can a people who make less than $40,000/year support the world's economy?  No matter how little the Chinese workers make, at some point America can't buy their products.

And how can Americans who can't pay their mortgages pay enough taxes to buy out AIG, Fannie Mae, Freddie Mac, etc, etc, etc?   The personal debt of Americans used to equal to the public debt (until last week).   

These government buyouts are pretending that people who can't pay their credit card bills or their mortgages can now pay all that, plus interest and million dollar salaries to the CEOs, to boot.

So will capitalism finally collapse?   And what will replace it?

I vote for cooperative sustainable peaceful relations among the people of this planet.  I vote for production for use, not profit and a system that lives lightly on earth, instead of exploiting and polluting it.  Our home planet, our only planet.

The alternative is mass misery, possible accompanied by war and/or famine, and a continued destruction of our ecosystem.

It seems like an easy choice.   Oh, wait.  There's no election that let's us decide.


ryk said...

I agree. The logical endpoint to the American form of capitalism is catastrophe. All remaining resources and capital controlled by a very few people, the rest of us starve.

wagelaborer said...

yep. Unless we get it together to cooperate in building a better society.

Nader Enthusiast said...

This animated google video on how banking works explains a lot.

Ikaria said...

Of course you are right. Ayone with eyes to see, can see your point. But what happens when those who are ruling us, are not even in touch with reality?

I was reading the following the other day:

and it made me feel so helpless.... and i don't even live in America, mind you. Anyway, thanks for writing this, it is good to see people awake and aware, and above all, with a sense of responsibility about our world and the future.

wagelaborer said...

Thank you naderenthusiast, for the video. My dad started trying to teach me about money in 6th grade, and I still don't quite get it.

I do see one problem with the video, though. They left out profit making as an example of an unsustainable system is true that you can't have a sustainable system with interest payments, but you have the same problem with profits.
As long as there are people trying to suck more money out of a finite system, whether it be interest or profits, it is not sustainable.
If we switched to production for use, not for profit or interest, then we only make what we need. Period. If there are 6,000,000,000 people we make only what they need. But we can get along with much less people and production. So instead of governments insisting on increasing population, we can have control of our fertility.
I have never understood why they push increasing population so much.

Nader Enthusiast said...

I was once told that "if your business is not growing, you are not succeeding" when I said my size was enough to live on. Isn't that stupid, growth for growth's sake?

Growth for the sake of growth is the ideology of the cancer cell. -Edward Abbey

I agree - too many people.