The US Command Economy
Capitalism is based upon concentration of resources. It is based upon concentrating wealth into a few hands, and concentrating power into a few hands. We consider capitalist economics to be based on concentrating wealth, and politics to be economics concentrated. Never is the accuracy of this view more apparent than following the $750 billion so-called bank bail out.
The reason why the banks need more money is because of the fixed character of capital. By fixed, I mean limited, as in finite, abbreviated and shrinking. Capitalism is a system of vice and greed. It is named for by society’s relationship to money, not to people. Yet capital can only buy things. That is all it can do. It cannot buy happiness, health or long life. It cannot stop war, cure disease, eliminate poverty, fix the environment. As long as a profit-motive exists, these social problems will always exist. Capitalism will profit from their existence rather than eradicate them.
The US government, as the world’s largest finance sector, has ways of accumulating capital, as do all other finance sectors, but the government is the most effective and forcible in concentrating large amounts of liquidity. Then it spends this money on what it needs to operate and function. Many of these things are beneficial for Americans. That is the role of any government, to benefit its constituents. Yet the State supersedes and intervenes in any beneficial powers we may derive from governmental agencies. There are agencies which exist merely for the exercise of authority, deriving from the real power of the State. When it comes time for the government to collect revenues, that is when it begins looking more like a raw, naked aggressor in our lives.
It is the State which prints money. The State allows the banks to regulate the finance system. The State functions as an ensemble of armed authorities prepared to deploy force to defend capitalism. So for those of us who want to eradicate capital, to deplete it entirely, by diluting wealth, well, the State is our enemy. We hope to dilute wealth by spreading it thru out society, rather than concentrating it. We believe, as this happens, capital will disappear and even the use of money. Just as people once became accustomed to trading in cowrie shells, then coins, then paper, society will one day soon become used to not having any form of exchange at all. We will develop a higher level of organization.
On depleting capital resources, a sister had asked if this would happen if working people merely did not invest in the stock market. By the workers not purchasing stocks and bonds, this strips a great deal of liquidity away from the capitalists. The bourgeoisie has required workers to invest in their own pension plans since the Nineties. This is because of several factors.
Primarily, the capitalist class developed a strategy to concentrate ever more capital into their hands. Because of the tendency of capital to concentrate, this meant that liquidity has to dry up somewhere. And in a vast, interwoven global economy, liquidity may dry up in Zimbabwe rather than Chicago. It may dry up in Burundi instead of in Harlem. Societies which depend upon cash rather than more exotic forms of capital get hit much harder than the exploited sectors within the capitalist center.
In the politics of Imperialism, the demagogues say you should be thankful that your ancestors were enslaved in America so you can enjoy the fruits of capitalism. Yet this destabilization effects blacks in America. Our communities have the same, fundamental contradictions as exist in Zimbabwe where a vicious US sanctions regime ravages African society. What is redlining or racist unemployment except forms of sanctions? The new redlining for blacks arrived during the subprime housing boom with the introduction of the ARM (adjustable rate mortgage). Rather than deny blacks and Latinos housing loans, the banks snagged them in and ripped them off.
This was part of the new finance strategy. It included ripping off working people during three periods, mainly defined by the Savings and Loans scandals, the DotCom shakeout, and the subprime housing boom. Regulatory changes under Reagan gave new powers to the S&Ls, after which 747 institutions failed during the crisis of the 80s and 90s. Those tied directly to specific S&L failures include the Bush family, the Clintons, and Jimmy Carter. The DotCom shakeout not only involved failures of many business involved in internet marketing, it was also a period marked by major scandals by major monopoly sector businesses like Tyco, MCI-Worldcom, Global Crossing, Adelphia and others. In looting billions, Enron burnt, for example, just one investor alone (the Pennsylvania Teachers Retirement Fund) for $55 million. Now, the latest bloodsucking scam, the subprime housing bust, has set in and sheriffs will be dispatched to collect your house lost to the ARM.
This command economy belongs to the capitalist era of development. Supply and demand has lost relevance for power and demand. Because as ever more contrived markets arise, society becomes conditioned to accept exploitation disguised as failure. This is how the command economy functions. It finds sophisticated ways to loot society, while the State hangs back, threatening force against anybody who organizes to counter these trends.
Capitalism must be totally eliminated and destroyed, and capital assets — such as the market for exotic paper — have to be diluted. This is what the stock speculators refer to as “asset-backed commercial paper” (ABCP). Stuff like “bearer bonds” which the banks print with serial numbers and security paper approved by the SEC and adhering to international standards.
There are other securities too, if you have ever read a “Nigerian Scam Letter.” It may be in the form of rubies, diamonds, gold, etc. Wealth in these forms may be difficult to eradicate, without complete collectivization of the economy. However they represent purely liquid value and not entire modes of capital resources, so they pose less of a threat to socialist society.
Back to ABCP. That can be, aside from the exotic paper, anything. From liquid assets in a bank, such as millions or billions of dollars in money or treasure socked away in a vault (as in bearer bonds) to futures in oil or food crops or any product yet to be brought to the market. (I got an education in how the commercial money market operates from a few issues of the London Financial Times during last years meltdown.)
And these things are represented on pieces of paper. Futures, for instance, may represent millions of shares to billions of shares and are based on pure market speculation. If you buy futures in, say, a tanker nine months from now at X-amount of dollars per barrel, that price is locked in. So if the price of oil dramatically rises over that period, you will make a killing on the price (not cost) of oil. You can send your tanker on a circuitous route to nowhere if you have not already auctioned it off, and wait for the price to rise even further. That is how the futures market works, so if you have futures in fruit of other perishable goods, you can allow a portion to perish so that the price can be pushed upwards. Who cares about ending starvation, in this system.
A piece of paper can control entire companies with balance sheets larger than many countries. Coca Cola, Pepsi, Millers Beer and other beverage manufacturers have facilities which could end the crisis for water purification in Africa, thereby stopping disease epidemics like guinea worm, infant diarrhea, and the back breaking labor of women who must travel miles to retrieve drinking water from wells. Ownership and control of such companies is determined on paper. On a damn ass abstraction! Lenin called it a “parasitic excresence”. Now tell me you don’t understand what I’m talkin bout, my people.
We tear up the paper and redistribute the resources. The resources must be totally redistributed, not only owned by the working class, but redistributed thru Africa, the Caribbean and Latin America. This is why self-led proletariat must organize a revolutionary center. They have to build their own center and cease the divisiveness and sectarianism which defines the Left.
Filed under: Black Dialectics |