Isn't this a crazy set up?

"Prudent consumers drag economy down" says an AP headline in the business section of today's San Francisco Chronicle. So the consumer, and as the vast majority of consumers are working people, that means us, is to blame for saving money.

The savings rate rose to 3.7% in December capping the year at 1.7%, three times the 0.6% for 2007 the article informs us. But wait! Not long ago I recall reading that working people were dragging the economy down due to our spending habits. "Irresponsible borrowers" we are. We were told we were the cause of the increased debt of not only ourselves but of the nation as the government had to beg the Chinese for cash; we are greedy and need to save more.

So we caused the present crisis by not saving and we are now preventing its solving by not spending. Is this what Marx called the anarchy of the market?

It is indeed a no win situation for us. The cause of this anarchy is something working people need to investigate and it is to Marxist economics we should look.

They want us to buy. They want us to purchase from them the products we make. In a free market economy where private individual(s) own the means of production (factories, workplaces and machines etc) the products that are made using their means of production and the Labor power (you and me) that they purchase are rightfully theirs to do with as they wish.

The problem is that in the course of the work time applied, they pay us wages. But the wages they pay us represent less than the total value of the products produced for sale? This is for society as a whole. This is because they work us over and above the time necessary to produce these wages. So the products produced in that time contain within them Labor that is paid for and Labor that is not paid for.

This is a great deal for the owners of the means of production and purchasers of our Labor power. Hiring of a human being is the goose that lays the golden egg for the capitalist and this unpaid Labor the source of their profit. Even if they they sell the product at its actual value, the cost of its production, they make money as they never paid for all the Labor used in its making.

But there is a bit of a snag here and it is not complicated when you think about it. If the total products in society exceed in value the total amount of wages, there is a constant problem of having more products than workers (consumers can buy back). The capitalists, the rightful owners of these products (might makes right by the way) lend us back some of the money they made off of our Labor----at a price mind you-----and that way we can buy the excess goods.

Capitalism has created such powerful productive forces though that they cannot operate these forces at full capacity and credit has its limits and eventually the whole machine grinds to a halt or near halt as we are experiencing now. They cannot stop themselves from producing because the unpaid Labor, the added value, that is the source of the golden egg is contained within the commodity that at the end of this process. But it cannot be realized, cannot be turned in to money form without a sale. This is why we live in a 24 hour market place.

This is why we are pressured to borrow form them to buy back our own products. And when the machine breaks down as it always does, we are blamed for not buying.

The increased savings rate is not really a savings rate at all. It is a survival mechanism. Savings are that little bit we can put away for the extras in life. This savings rate serves to pay our debts to them (the thanks for lending us back our money to buy our products) and to keep a roof over our heads or stave of starvation as we see all those around us losing their jobs and homes. We are terrorized in to saving.

Isn't this a crazy set up?