By Bob Lee
The media has been careful to portray the "mortgage crisis" as something that concerns only "homeowners." However, it has now evolved into a rapidly developing recession, or something worse. In fact, the world's central banks have been forced to intervene massively in various economies to prop up the financial institutions and guarantee that businesses can continue to borrow money to operate. Faced with beginnings of a run on the banks, the Bank of England had to go so far as to publicly declare it will prevent any bank in Britain from failing.
This is not the beginning of another "Great Depression" because this time the capitalist system (the market economy) can't be saved. Why? Because at the root of this crisis is the destruction of the market itself.
The market is based on the buying and selling of labor power. The market is being destroyed because jobs are being replaced with technology -- which means that people are unable to buy the products of their labor. Because more people are competing for fewer jobs, wages are falling and poverty and homelessness is arising. And the number of people competing for jobs is even larger because globalization means a global labor pool.
As one economist noted: "US job growth has been confined to domestic services. The lack of job growth in higher-productivity, higher-paid occupations associated with the American middle and upper middle classes will eventually kill the US consumer market."
Production has been replaced by speculation. It was this speculation that accounted for growth of the "sub-prime" mortgage market. These mortgages were packaged as securities and sold to speculators who were eager to gamble on anything that might turn a profit, because there is little if any profit left in investing in goods-producing industries.
The result of replacing people with robots and computers under capitalism is not simply more unemployment, but the creation and steady growth of a new class of permanently unemployed and under-employed workers who no longer have a place in the capitalist system. The homeless are the most visible expression of this new class. But, people from all walks of life are being drawn into the frey. Even the so-called "middle class" in America is not immune to being driven into the ranks of this new class, as white collar and unionized blue collar workers are more and more losing their jobs and/or suffering pay and benefit cuts.
To survive, this new class of dispossessed is compelled to fight for a new society where the necessaries of life are distributed according to need, not ability to pay.
At the opposite end of society, a new class of billionaires -- the wealthiest 400 people on earth control more assets than the bottom half of humanity today. And yet we have the abundance, in this country and worldwide, to take care of everyone on earth.
The destruction of the market means the end of the market economy. A new society must and will be built. The world of plenty produced by the new technology can and should be distributed to all based on need. Such a society will rely on the contribution, talents and skills of each and every member. The only question is who will guide and control that social transformation? If we leave it to the billionaires, we will be living in mass poverty under a corporate dictatorship. If we, the people dictate the nature of this transformation, then we can build a free society where no one will want for anything. The future is up to us.