by Stephen Fleischman
Interest and Profit.
They fought about it in Shakespeare’s time.
Shakespeare wrote a play about it. A character emerged depicting the essence of it. Shylock in “The Merchant of Venice”—a portrait of capitalism, in the period of transition from the feudal system.
Can you take a pound of flesh and spill not a drop of blood? That was the restriction Portia, the self-proclaimed lawyer, tried to impose on Shylock in Shakespeare’s play. The pound of flesh was the interest Antonio would have to pay if he didn’t return the 3 thousand ducats he borrowed on time. Portia excoriated Shylock’s capitalist greed while defending his right to be a Jew, in a time of intense anti-Semitism.
David M. Boje, Professor of Management at New Mexico State University, says of the play, “this is a critique applicable to today’s global corporate model of financial capitalism …
“…Shakespeare brilliantly portrays a conflict between courtly (feudal) usurer’s capitalism and bourgeois merchant’s capitalism, the triumph of the new forms of adventuring over the old in the 16th century.”
In those times, usury (excessive interest) or even a normally accepted amount was considered a very bad sin in certain Islamic and Christian nations. Today, it’s the normal way of doing business and is one of the pillars of the capitalist system. Money making money.
However, money is only a medium of exchange. It has no intrinsic value. It replaces a barter system. All classical economists, including Adam Smith and David Ricardo, recognize some form of the labor theory of value where the value of a commodity is determined by the amount of labor-power that goes into producing it.
Karl Marx brought a new paradigm to the understanding of capitalism with the hypothesis that “profit is derived from the surplus-value that is extracted when workers put in more labor than is necessary to pay the cost of hiring their labor-power’.
This led him directly to the concept of the class struggle, the relations of production between capital and labor. Capitalism can only exist through the exploitation of the working class.
We’re in another period of transition, today—the next stage in our evolving economic system. Will it be socialism or something else?
Can we imagine a society where interest and profit do not exist?
Perhaps it was the road not taken when societies emerged from feudalism, with the lord dominant over the serf. Or even earlier, before the formation of class systems when human societies consisted of hunters and gathers, where members of the tribe were equal in some form of primitive communism.
Well, let’s see. The first thing we’ll have to learn, to achieve such a state on a higher level, is to bring out the best in people, not the worst—and to do that we must recognize that human nature is complex and is made up of both.
Compassion and a desire to serve one’s fellow man is as strong a drive in people as is greed. For a society, the stratagem must be to make the common good the standard behavioral form. The competition is in doing the best for mankind—rather than, “as long as I get mine, the devil take the hindmost”.
In the context of our country, in the failing state of capitalism, how do we save ourselves? Instead of making some pacts with the future, we are clinging to the failures of the past.
Our current attempts at health care reform are a good example.
In a show at providing universal health care for the nation, the people’s representatives dare not let these toxic words—socialized medicine or public option—cross their lips. Apparently, governments are no longer here to help our citizens. Powerful corporate entities, known as the health insurance industry, a part of the oligarchy that runs this country, won’t allow it. They literally own a good many of our Congressmen and Senators, enough of them to stop any kind of meaningful health care reform. Citizens are brainwashed into thinking that what helps the insurance industry helps them.
You can fool some of the people some of the time.
The rest of us are fighting back. The fight won’t be complete until the money changers are driven from the temple. If you can live with the mixed metaphor, we, the people, must take back our Congress, elect legislators that will represent us, not the special interests. Then, we might feel that we have a government that works.
If not, history will do it for us.
Instead of “The Merchant of Venice”, we will have to look to Shakespeare’s “Macbeth” or “Richard IIII” for a more violent solution.
One way or another, in Marx’s own words, “Capitalism will dig its own grave.”
by Stephen Fleischman
What happens when one mighty militarized nation smashes a small, defenseless country?
The United States of America has smashed Iraq. The militarized state of Israel is smashing the Gaza Strip.
We have only to wait for the effect to come around.
In Hinduism, the word Karma defines the universal principle of action and reaction that governs all life—the relationship between one event, called cause, and another, called effect, which is the direct consequence, or result, of the first.
Justin Raimondo, in Antiwar.com (1-5-09), says that this latest aerial assault of shock and awe by the Israelis on the Gaza Strip and the subsequent invasion with tanks and artillery benefits al-Qaeda affiliates and the Israelis; and “the losers are the Palestinians and the American people, with the former enduring the slaughter and the later paying for it. We will pay for it not only in billions of our tax dollars, but in terms of the hate-America factor, which will skyrocket on the Arab ‘street’ and inspire many to take up arms against us.”
We have already seen this in “9/11”—the destruction of the World Trade towers. The glib explanation for it was, “They hate us because we’re rich, successful, democratic…” A more reasonable explanation for it would be that our lop-sided foreign policy relating to Israel and the Arab world had a lot to do with building up that hate.
Back in 1933, we had an economic collapse after a stock market crash that led to “the Great Depression”. In the 1932 presidential election, Herbert Hoover, Republican incumbent, lost to Franklin D. Roosevelt, Democrat, who was inaugurated in March of 1933. In that interim period between the November election and the inauguration date (later changed to January 20th), the country sank deeper into depression—very much like it is starting to do now, while waiting for the incoming Obama Administration to officially start governing the country.
Roosevelt took immediate action. He put through the Securities Act of 1933, the Glass-Steagall Act of 1933 and the Securities Exchange Act of 1934 to stem the downward spiral.
Glass-Steagall had the greater wallop. It got to the root of the problem. Up to that time, bankers and brokers were sometimes indistinguishable. Congress examined the mixing of the “commercial” and “investment” banking industries that occurred in the 1920s. There were conflicts of interest and fraud in many banking activities. The Glass-Steagall Act set up a stringent barrier to the mixing of these activities as well as establishing the Federal Deposit Insurance Corporation (FDIC) to protect bank deposits.
Glass-Steagall served the country very well for many years. It kept the manipulators and speculators at bay. Like church and state, commercial banking and investment banking must be kept separate.
But, in the 1980s, it fell apart. The “banksters” got the upper hand. The Depository Institutions Deregulation and Monetary Control Act was passed. It started nipping away at Glass-Steagall. A major blow came in November of 1999. Senator Phil Gramm of Texas, the notorious tax-cutter, led the charge. Provisions that prohibit a bank holding company from owning other financial companies were repealed by the Gramm-Leach-Bliley Act. The bill was signed into law by then-President Bill Clinton. The deregulators had a field day.
Our economy is now in free fall again, with no Glass-Steagall law to rescue it. In effect, we’ve come around to where we were at the end of the Hoover era in the early 1930s.
There must be a lesson here.
When the first settlers came to America, they found Native American tribes living in a state of primitive communism.
Lewis Henry Morgan, American anthropologist, explored this era in the development of human culture in his classic work, “Ancient Society”, published in 1877. He describes the “communism in living” evident in the village architecture of Native Americans.
Friedrich Engels, collaborator of Karl Marx, in his work, “The Origin of the Family, Private Property and the State”, published in 1884, was heavily influenced by Morgan’s evolutionary history. Engels postulated that primitive communism applied to early human societies because hunter-gatherer cultures did not create surpluses.
In a primitive communist society, all able bodied persons would have engaged in obtaining food, and everyone would share in what was produced by hunting and gathering. There would be almost no private property other than articles of clothing and similar personal items, because primitive society produced no surplus; what was produced was quickly consumed. The few things that existed for any length of time (tools, housing) were held communally. There would have been no state.
Primitive societies may have contained all of the features presently associated with the goals of “communism” as conceived today, exemplified by the Marxist slogan, “from each according to his ability, to each according to his needs”. In the Marxist view, such an arrangement will be made possible by the abundance of goods and services that a developed communist society will produce; the idea is that there will be enough to satisfy everyone’s needs
With the world now threatened by economic collapse, we may soon find ourselves in a situation where there are no surpluses.
What does this foretell?
Will we be in a state of communism, perhaps less primitive, more sophisticated?
Will we rebuild, but on a higher level?
What went around could come around….