Band-Aid

So the politicians are finally admitting that there is a recession. It took them long enough to figure that one out. Unfortunately the suffering of the working people hasn’t been the cause of their concern. It was only when the value of their stock portfolios started going down then they realized there was a problem. It makes one wonder if the market hadn’t tanked whether they would ever have admitted there was a recession. Probably not.

To understand the recession we should remember that there are three essential components to capitalism: the central position of private investment (i.e. capital), a primarily two-tiered class system of Laborers and Capitalists, and a totalitarian dictatorship by the markets. This market dictatorship, which is detached from society and is propped up by the State, is the means by which wealth is redistributed from the laborers to the capitalists.

The recent problems of the bursting housing bubble and rising gas prices helped caused the current recession because they drained money from the market, which therefore meant that there was less redistribution of wealth from the workers to the capitalists. Less redistribution meant less accumulation of wealth and therefore the less likely that the capitalists were going to reinvest. This lack of investment results in a vicious cycle of more layoffs, which in turn results in reduced consumer spending and a further reduction in the redistribution of wealth.

In an attempt to kick start this redistribution of wealth the politicians have decided upon a “stimulus package” that will consist largely of rebates. Critics on both the Left and Right have pointed out the numerous problems with this solution. Many of the recipients won’t use the rebates to make new purchases but to pay off their debts from their previous. Those that do spend it will buy many products that are foreign made so that much of this money will just leave the country rather than result in new domestic jobs. Even if the rebate helps it doesn’t go to the root of the problem, which is an economy based on consumption rather than production.

Contrast this with an economic democracy. In an economic democracy the goal would not be the redistribution of wealth from one class to another but instead would be the constant creation and maintenance of high quality jobs for everyone. Therefore, if signs of a recession began to appear then action would be taken to head it off by the social investment system so as to create new cooperative enterprises and to boost entrepreneurial activity.

This difference shows the superiority of economic democracy over capitalism. In capitalism a recession isn’t a problem until it begins to hurt the capitalists. In an economic democracy the welfare of everyone is a concern so a recession is never allowed to happen. Recovery in capitalism is based on a hope and a prayer that token efforts like tax rebates will spur consumers to spend the economy into recovery. While recovery in an economic democracy goes to the source of the problem and insures that everyone has high-paying employment opportunities.