Every night, bourgeois economic analysts on cable TV give their interpretation of why the economy collapsed in the last year. They cite the reliance on credit, American's living beyond their means, credit default swaps, predatory lending, ponzi schemes, the Iraq War, the cost of pensions and health care, and some conservatives have even blamed affirmative action for the recession.
All of these have some truth to them, and certainly within a bourgeois economic context, they make sense. However they all miss the true underlining contradictions within the capitalist system which made the economic collapse inevitable.
To understand why the economy has fallen on hard times, we have to understand the contradiction within a commodity between its use value and its exchange value. In our current economic situation, this is epitomized in the housing bubble. The use value of a commodity such as a house is fairly obvious, people use a house to live in it. However the exchange value of a house is how much you can sell it for. The price can vary based on a number of factors, but the exchange value and the use value are two different aspects of a single object.
In the United States, deregulation of the credit industry allowed many to gain access to credit which they could not afford to repay, as the real wages of the US have slipped as inflation rose and wages stagnated as a response to the shrinking of the labor movement.
These loans were then spent on homes, which gave real estate companies the capital they needed to build homes for people. The problem with credit is that sooner or later the bill collector comes to collect. As this happened, the housing industry was forced into a tailspin.
The current crises in the bourgeoisie system has its roots in the creditization and proletarianization of America. However the spark that ignited the powder keg was the fact that there are more homes built than people who could afford them. There is more supply than demand, thus an imbalance in the market place which leads to retractions. First in the housing and construction industry, who are unable to collect rent money from evicted tenants. Followed by the credit companies which loaned so much money to home owners and home builders who were unable to pay it back. Followed by the businesses which relied on credit spending by consumers.
The banks did not make loans to help people own a home, or to run a business where people could have a job, they made the loans to charge exorbitant interest and make a profit.
So what must we do to get out of this crises? Well, regulation of the credit industry, raising the minimum wage, and public works spending are all nice moderate liberal reforms that would ease the crises, but do nothing to prevent future economic collapses. Some conservatives think that the unregulated market would eventually balance out, they are correct, but they don't take into consideration the human cost. This conservative position does not care how many people lose their jobs, their homes, or their small businesses, in the process of the market restabilizing itself, nor does it prevent future economic collapses.
We must ultimately form new collective and mutual ways of helping each other to live fulfilling lives. While the bourgeois economists such as Holman Jenkins defend bulldozing homes to drive the price of homes up to allow home builders to make a profit, and the dumping of grain into the ocean so that the market price rises, we must object to the domination of the exchange value of commodities, and seek to make the use value the prime objective. We must stand for homes for all, food for all, decent and democratic jobs for all.
The market will not institute these demands. Which is why we must organize so that a democratic government, one run, in Lincoln's words, 'by the people, for the people and of the people,' should plan the economy. This doesn't mean that every little knick knack should be nationalized, but expropriation of banks and major industries by the people would lead to an economic system which is planned for all people's needs. Compare this to the corporations which are run by small and secretive boards of trustees who plan their mammoth economies in an undemocratic fashion and serve only the interests of the rich who are able to buy their way onto these boards.
In many ways, we can build off of what has already been done. The US government has already essentially expropriated several banks, two car manufacturers, and an insurance company. The voting and tax paying citizens of the United States own these companies.
While President Obama stated that the US government will not micromanage GM, we should demand democratic control of these new institutions of democratic governance. Instead of using a Keynesian analysis, that the government should invest in order to revive the private market place, we should be arguing that the government exert democratic control over the companies that it now owns a majority stake in.
We should oppose any and all attempts to privatize or sell off the companies we now own. We should demand free and open elections of the board of trustees of these major industries by American citizens.
For the price of these companies, with the amount of money we payed to these banks, we should be able to elect their board of trustees. We can run candidates for these positions with progressive policies. Imagine a bank that won't give a loan to a company unless it agrees to unionize, or to give control of the company to the workers that keep it running. Imagine a GM that makes high speed railroads and cars powered through alternative clean energy, made out of recycled parts.
There are seeds of the counter-nationalization in all of the newly nationalized companies of course. In order to pay for the stimulus bill, the nationalization of different companies and the bank bailout, the Obama administration is borrowing money from international lenders such as the World Bank and International Monetary Fund.
In the short term, this means that these banks have less capital to invest in third world projects that are desperately needed by the worlds poor. In the long term, these banks will place demands on future loans, which will subvert democratic control of not only the industries we now own, by demanding privatization, but will also undermine democratic control of our government by taking the decision out of the hands of voters and placing it into the hands of bankers.