Sound familiar?
Marx intimately understood the important role that credit plays under capitalism, and how an excess of it occurs automatically, eventually leading to crisis.
This is because the capitalist market has definite limits, which capitalists constantly seek to overstep. The biggest limit is that of wages, which can only buy so many goods. But more goods are always produced than can be purchased (also called overproduction), especially when wages are constantly being driven down to boost profits.
Credit is the temporary cure-all that seems to bridge this gap — the larger the gap grows between wages and products produced, the more debt is needed to stave off a recession, or overproduction.
This is why interest rates were kept unnaturally low in the boom days, producing a tidal wave of debt. Not only were average people encouraged to take on large amounts of debt by corporations and governments alike, they needed the extra money to compensate for their stagnant or falling wages.
The delusion that such an obvious pyramid scheme could go on forever was shared by virtually every member of the U.S. two-party system. It is hard to fathom a bigger indictment of stupidity and greed.
If anything good is to come out of this crisis, lessons must be learned. Otherwise, we’ll go on repeating the same boom and bust cycle that has dominated the capitalist economy since the days of Marx.
This means accepting that we cannot simply regulate our way out of this crisis. Credit and debt did not cause the recession; they were merely symptoms of its coming. The disease lies in overproduction, which occurs naturally in an economic system that produces goods only for a market.
Now that the credit bubble has been broken, the class of corporate owners are seeking to off-load their overproduced products in another way. One classic method of doing this is war, where a defeated country’s market is exploited by the victor’s corporations inside its borders.
War and economic crisis are closely related phenomenon, both of which require an anti-capitalist perspective to combat. A system where goods and services are produced for social need, under the democratic control of the people, is not utopian, but an absolute necessity if the world is to progress past this increasingly turbulent period.
Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org). He can be reached at shamuscook@yahoo.com
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