Whether or not the current collapse of the world banking system means the capitalist system itself is collapsing, it certainly reflects on the credit society we are now living in.
Living on credit has become a way of life, not least in the mortgage sector, where in the crazy rush to ‘own property’ people mortgage themselves up to the hilt. Of course they don’t ‘own’ these properties at all, not until their mortgage is fully paid off. They are merely living on credit on the mortgage company’s property, and paying thru the nose in interest charges.
Then there is the current fad for bank loans, overdrafts and credit cards. All this living on credit indicates that our current society doesn’t even undestand what money is.
Money is simply payment for labor. A bank note is a voucher to certify that a worker has labored, and thus created value, and is payment for his or her labor, that is all.
Thus any money received which is NOT in payment for labor is either stolen from someone’s wage packet, is borrowed from someone, or is the result of gambling of some sort, be it on the stock markets, in the casinos, on the lottery, at Bingo, or wherever. Buying and selling commodities is legitimate, so long as prices are controlled. When you pay for a commodity you are paying for the labor embodied in producing it, or for the labor which would be required for reproducing it. This is why artwork and rare items increase in value, especially after the artist has died. Nevertheless, you are still paying for the labor and skills involved in producing the said commodity. Of course in a Socialist/Communist society, with controlled prices, the laws of supply and demand would not apply, and so the rarity value of any commodity would be limited. Nobody would pay hundrends of thousands of pounds, or millions, for paint on canvas, no matter how talented the artist.
Interest over and above the level of inflation (there would be no inflation in a Socialist/Communist society, where prices are controlled) is money stolen from workers’ wage packets, pure and simple, as are dividends to shareholders, and all the capitalist’s profits not plowed back into the business.
The sooner we get back to the idea that money has to be earned by working for it, the better.
In a Socialist society every able-bodied man and woman is expected to work and is rewarded accordingly ‘to each according to their work’. Exceptions are of course made for those physically or mentally unable to work, as society has a duty to look after these unfortunate people, but in actual fact they are relatively few in number. Most people, however disabled, have the ability to do some sort of work, even if it’s only sitting in front of a computer at home and doing tasks there.
Society also has a responsibility for the very young and the retired, to educate the former and to reward the latter for a lifetime of service to the community.
Paying money to able-bodied people to be unemployed is a complete nonsense. Jobs must be created where they don’t exist, and this can ONLY be done in a Socialist or Communist society, where all available work is shared out. This means a shorter working day, a shorter working week and indeed a shorter working life (i.e. early retirement) as technology makes labor more productive. There is no room for capitalist profit in such a system, or for shareholders’ dividends.
In a society where the means of production, distribution and exchange is commonly owned, either by the State, as publicly owned companies or as cooperatives/mutual societies, everyone becomes equal shareholders and shares in the benefits. As Socialist society develops then more emphasis is placed on need rather than renumeration for work. If Communism proper is ever achieved, then society would operate on the principle ‘from each according to their ability, to each according to their needs’.
Under Socialism or Communism there is no room for all this living on credit or gambling on stock exchanges with the stolen wages of the workers. There is no need to live on credit because everybody will be provided with low-cost housing at a minimal rent to cover maintenance. Taxes will be relatively low, since all the banking and financial institutions will be owned by the State and run for the people. 100% secure, and also providing the State with a vast reserve of cash to finance the various public services.
So whichever way you look at it, the current financial crisis is indeed a sign of the weakness of the capitalist system.
Many will say: ‘ah, but Socialism also failed’ but this is simply not true. Socialism did not fail. In the Soviet Union and the other Socialist countries it achieved much in the way of security and good public services for the people, but it was distorted by a dictatorial system which allowed opportunists and careerists to gain control, and syphon off much of the communal wealth for themselves.
In all Socialist countries except Yugoslavia, an inefficient system of State-owned monopolies, with little or no incentive for their workers to be efficient or productive, also contributed to the collapse of the system. As did the arms race forced on the Soviet Union by the United States, a deliberate policy designed to undermine Socialism economically.
By learning from the mistakes of the 20th century, and from the economic success of Yugoslavia, Socialism in the 21st century can build an efficient, competitive system with a mixture of cooperatives/mutual societies and publicly owned companies competing in a Socialist market place, and at the same time rewarding the workers in these industries and services with a share of the profits, thus providing an incentive to be efficient and productive. A few industries and services, such as the railways, the banks and financial institutions, and possibly the utility companies (water, gas, electricity) are candidates for State-owned monopolies, but again the workers in these industries and services should be rewarded with a share of the profits.
There will be no need for credit in a Socialist or Communist society. All needs will be addressed, everything provided from cradle to grave. A caring society, in which everyone able to do so works and is in turn rewarded and looked after, and where those not able to work thru age or disability are also looked after.
Student debt is a current feature of our society. I feel it was right that grants were discontinued, since this was the poor underprivileged working class subsidizing the rich and often lazy upper classes to while away their time at ‘uni’, often studying totally useless subjects which would never get them a job, and spending more time on social activities than attending lectures or studying.
However, this problem could be solved by requiring that each student study subjects which would get them jobs. These university places could be sponsored by the companies/organizations needing recruits with degrees in those subjects, and the salaries paid to these recruits would include a deduction for their university education.
Studying other subjects not likely to be useful to a career is low priority, and should be secondary to either working or studying a subject which WILL result in a career. Such subjects would not be so well financed, so places would be quite rightly limited. When sufficient money is available for universal university education, and we all have loads of spare time on our hands, then we can while away years studying subjects just to keep us occupied. Right now, education for careers and jobs is the priority.
The mad scramble for luxuries and fancy homes, all trying to outdo everyone else, is a symptom of our sick, materialistic capitalist society. If people want such things, which are not really necessary, then they must work extra hard for them. So long as your property and possessions have been earned by good honest labor, and are not the stolen proceeds of the labor of others, then you can buy more or less what you like. But true Socialism must avoid the mistake of creating a highly-paid elite; each person must truly be only rewarded according to their work and contribution to society. This includes politicians, performers/artists of all descriptions, diplomats, etc.. It was corruption in these areas which created a parasitical ruling class which distorted Socialism and exploited the toiling masses in the former Socialist countries, even though the basis of Socialism remained intact, as did the excellent social and public services. Basic needs were catered for, but the ruling clique creamed off the luxuries for themselves.
This was NOT true Socialism, and such corruption was able to continue because of the collapse of socialist democracy. Therefore always there must be the opportunity for a credible opposition and alternative government thru muti-party free elections albeit within the confines of a Socialist Constitution.
Mortgages and living on credit would NOT be encouraged in a Socialist society, where interest would be made illegal, and therefore nobody would have the incentive to lend money to others. If you want something you can’t afford, then you have work and save for it.