Sunday, June 14, 2009

Bank Credit Versus Solidarity

In a recent discussion about the current economic meltdown, a friend assumed that I agreed with point #5 of the Communist Manifesto: "Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly." As the author of After the Revolution, What?, I felt obliged to think hard about whether I agreed or not. I decided I did not, and wrote the following explanation to my friend.

For better or worse I have no academic training in economics (only history and physics as an undergraduate, and biostatistics as a graduate student.) To my way of thinking, the language of economics masks much of the specifically capitalist nature of society with words and phrases that are so abstract that reality gets lost in the shuffle. By "reality" I mean material reality and social reality. Material reality is made out of matter. By "social reality" I mean things like trust, or mistrust between people, or services provided by some people for others, or the motivations of people. Symbols of real things, in contrast, are not the same as the things they symbolize. Money and bank ledgers and "credit" are symbols of real things, but we often forget that and treat the symbols as if they were the reality.

Let's look at the reality behind the phrase, "The bank extended credit to me by loaning me $1000 of capital." We all know what this means in the familiar language of economics. I get $1000 with which to buy things or services from other people who in turn can use that money to buy things or services from others ad infinitum (i.e. the money "flows") and after, say, one year, I need to give the banker $1000 plus some interest, which I hope to be able to do by using that $1000 to produce something (or provide some service) that I can sell for substantially more than $1000 plus interest ("profit").

What this phrase means, in reality, is that somebody (the "banker") has sufficient social power, and uses it, to tell other people to admit me into a social relationship with them in which they will give me what I ask them for (within limits symbolized by "$1000") and they will in turn be given an equivalent amount from other people when they ask for it, and so forth forever. The $1000, as a bank ledger or some paper, and the "flow of money" that occurs when people do this giving and receiving, is just an abstract symbol for this real social relationship of giving and receiving material stuff or human services. Also I have to give the banker, after a certain time, more material wealth than all that I received from the other people (the "principle") if I pay in kind, or I must give the banker promises (i.e. pieces of paper with portraits of dead presidents) from the other people to give the banker more material wealth than they collectively gave to me.

Now let's ask why people do what they do in this scenario, but without obscuring the social reality with economic language like "credit" etc. The banker does it a) because in return for simply writing a larger number in a bank ledger and waiting one year he gets a lot of material wealth and b) because unlike other people he has the social power to do it. I do it because I want people to give me things I need to live decently (food etc.) in exchange for my producing something that some of them think is useful or valuable. But why do the other people do it? Why do they give me stuff? They do it because they trust me and the other people to share things with each other: Sam gives me something knowing that Mary will later give him something and I will later give Sally something who in turn will give Mary something, and so on. When lots of people have lots of this trust then a complex, efficient and very productive economy will exist. When the number of people having this mutual trust is less, or when the level of trust is less, then the economy is less complex and efficient and less productive. At one extreme, everybody shares the way a family does among family members. At the other extreme nobody trusts anybody except for strict barter exchanges. In between these extreme cases is a money-based economy in which people only trust others to the extent that they have symbolic money to pay for material things or services.

Bankers get rich by having a monopoly of violence at their command (i.e. a state--police, courts, the military etc.) to prevent trust among people (i.e. solidarity) from developing to the point where money would be irrelevant because the economy would be a moneyless "gift" economy (i.e. like a big family.) People want and need some kind of an economy and therefore they want and need some degree of trust. In a capitalist society trust is only allowed to manifest as trust in money because solidarity is actively discouraged or even outlawed by the state. Thus sympathy strikes are illegal and corporations are not legally allowed to have solidarity goals, only "fiduciary responsibility" to their shareholders. Our society is arranged by those at the top in such a way that we are forced to compete for success in school or to get a job or keep it, and to always "look out for Number One."

Bankers, with the backing of the state, control and use money to collect interest, thereby forcing people either to be a capitalist making a profit (by paying wages less than the value added by labor to the product) or a worker selling his or her labor to a capitalist (or to the state).

The Communist Manifesto is wrong. It says we need to centralize credit in the hands of the state. No we don't. Credit is money that must be paid back with interest, and we neither need it nor want it, period. And we certainly don't need it to be held by a monopoly. Bankers need credit/money, not ordinary people. What we need is solidarity and trust among people. The capitalist state's main function is to destroy solidarity. We need to abolish the capitalist state and create a state (i.e. something with a monopoly of violence) whose purpose will be to prevent enemies of solidarity from attacking solidarity. Then trust can develop and people can share with each other to make a complex, efficient and productive economy without money or credit or bankers collecting interest. Even as a transitional stage, there is no need for money or credit to be monopolized anywhere. People or various organizations can give out IOUs (like the State of California was going to do when it didn't think it had enough to pay state income tax refunds earlier this year).

I know, some will warn that this is what happens when people don't study economics in college. :)

Wednesday, June 10, 2009

Don't Drink Obama's Egyptian Kool-Aid

President Obama's speech in Egypt was designed to make people forget who he's working for.

Don't be fooled! He's working for the people who elevated him to the presidency with over-the-top campaign funding and mass media adoration. He's working for the people who are using him now to transfer trillions of dollars from taxpayers into the hands of Goldman Sachs and company. He's working for the American corporate and government elite.

He works for the people who refuse to let advocates of a single-payer universal health care plan testify in the Senate, despite the fact that this is the only plan that would truly make good health care a right for all Americans equally, and despite the fact that this is what a solid majority of Americans want. The people Obama works for are the enemy of equality, solidarity and democracy.

Obama's masters order the commission of war crimes against civilians in Afghanistan and call it "fighting terrorism." They prop up a dictator in Egypt and a tyranny in Saudi Arabia and anti-democratic regimes all over the world and call it "spreading democracy." They provide the money and the weapons and the diplomatic cover so that Israel can carry out ethnic cleansing. They try to give legitimacy to this ethnic cleansing by calling it a step towards a "two state solution" that everybody is supposed to get excited about: one state exclusively for "the Jewish people"; and for the ethnically excluded, who will not be allowed to return to their homes and villages inside the Jewish state, a "Palestinian" state that will be "sovereign" just like Gaza is "unoccupied." The American ruling elite has pushed this racist garbage for decades, and today Obama is their obedient mouthpiece.

Obama's speech was designed to make people forget that the people he works for are the same people George W. Bush worked for. They cannot be unelected because they were never elected in the first place. If elections could really change who rules America they would be illegal.

Obama's speech was designed to make us forget how much we loved The Who when they sang, "Meet the new boss, same as the old boss."

I don't care how clever and polished their speechwriters are. Beware of smooth talking politicians who rob and pillage the people, murder civilians and carry out ethnic cleansing on behalf of the richest people in the world. Look at what they do, not what they say.

Don't drink Obama's Egyptian Kool Aid, as Gilad Atzmon, the famous anti-Zionist, has apparently done. Atzmon, after listening to Obama's speech, wrote of the president: "He is now marching America towards humanism. He reclaims the American ideology of liberty. I salute the man, I salute the great intellect, I salute the humanist."

Wrong! The people we should salute are the people who are fighting against Obama's masters, people who will, I hope, one day overthrow those enemies of all that is good and decent, along with politicians like Obama who serve them so expertly.


On a related note, a reader asked me to point out that our dear leader Obama pretends that Mahmoud Abbas is the President of the Palestine Authority when in fact his official term of office expired January 9, 2009, making his appointment of a U.S.-backed person as prime minister no more legal than Donald Duck's appointment of Daisy Duck as the prime minister. Legally, the next in succession to the now vacant presidency would have been the Parliament leader, who is a member of Hamas. So much for Obama spreading democracy and the rule of law.