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Banks deal in the commodity money. The value represented in money can only originate in the surplus value extracted from exploited workers who have no choice but to sell their labour power.
When Lehman Brothers investment bank collapsed, it was like the economy of a large country defaulting. The episode left a black hole in the finances of world capital.
The losses have been passed around the world, from balance sheet to balance sheet, until Governments and global quasi-government institutions have engineered 'rescue packages' for the banks affected. In essence, this has meant passing the burden over to the taxpayer. In short, you, me and other ordinary working people.
Capital has had to come right back to where value originates in the first place. If anyone was in any doubt about where profit and the value that appears as money originates from, or if anyone once thought even that banks somehow magically created value, then the scales now should have fallen from their eyes.
In order to get out of its black hole of a financial crisis and carry on as before, capital and its government enforcers need to extract even more surplus value out of working people. Put simply this means workers will be forced to produce more, whilst getting back less as a proportion in return. This is manifested in a number of ways.
- Wages are simply cut.
- Wages rise, but not as much as inflation, meaning they are cut.
Incidentally,inflation is caused by states, which have the power to print money. This is known, euphemistically, as quantitative easing. More paper money chasing the same number of commodities equals a rise in prices. This does not matter so long as your wages are rising at the same rate too, but invariably they are not these days, resulting in real wage cuts. On the other hand, the holders of assets, (and I don't mean your stamp collection or even your house!) gain from inflation. The owners of the means of production, those who speculate in commodities, or those who live off the shares held in companies, see the value if their assets rise.
- Young people work for nothing - internships.
- Young people work for returns below the minimum wage - apprenticeships.
-Old people are being forced to work longer than ever before in the history of humankind before they have access to their pension, which is only made up of the value extracted from them in the first place, lengthening the number of years during which they are exploited for surplus labour.
- Two wage earners are now needed to maintain the average household, meaning that women are forced to return to the workplace soon after childbirth, whilst children are taken from their mothers into care from the start of their lives.
The mobilisation of the female labour force has halved the value of labour power in a generation. In short, the extra benefit of two workers combining their earning power has long since been whittled down.
-Wages are a burden on profit, but so too is the cost of public services, so these have to be cut. This not only means cuts to public sector jobs, wages and pensions, but to the availability of the very services themselves. Cut first are those services which least affect the functioning of capital, such as care for the elderly from whom capital can extract no more surplus value.
- Those previously deemed to be unfit for work, the physically and mentally ill, are being forced into the labour market. Capital wins all round here. By coming off benefits, the sick and damaged workers cease to be a burden on profit. They start to generate surplus value themselves by being vulnerable to low pay and high levels of exploitation, whilst exerting downward pressure on the wages of all workers by adding to the competition for jobs.
- High levels of immigration are maintained, despite the populist bluster from politicians at elections. Immigrant labour fills the job market gaps left by an ageing indigenous workforce. The indigenous population is exploited to such an extent that it has neitherthe time nor the money to carry out essential reproductive and child-rearing functions. Indeed, by minimising these formerly essential functions, and replacing them with immigrant labour, the cost of household subsistence falls and with it the wage burden on profit.
Many of the above moves to reduce the burden on profit are shielded by 'human rights' in various guises, but principally taking the form of equal opportunities legislation. Freedom and equality before the law are the mantras of capitalism. In capitalism they are also the basis of exploitation and wage slavery. No wonder capitalist governments drive people to die for these values in war.
John Dunn.
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