Those producers who could not produce more value than they consumed in doing so, would ultimately go out of business. This insistence upon either alternately, efficiency or bankruptcy, brought Capitalism to global triumph and its establishment as the dominant economic system was assured.
When Capitalism reached perfection, and every producer produced more value than he consumed in the course of production, so that prices were more than incomes, not just production had to be financed with increased debt, but enough consumption also to keep the system going. Economic convulsions appeared, recessions, economic downturns and ultimately severe depressions erupted, so there was no option but to crank up debt to also fund consumption.
Once consumption had to also be financed by increased debt there was no road back; we could only go forward with increased debt every year or recession would result. This was the Keynesian “solution”.
This efficiency of Capitalism was actually measured for the year 2014 for the US and this showed how far capitalism has come. Consumer production was $2.4 trillion more than consumers’ incomes and this amounted to a profit of $7,500 per American, and $30,000 per family of four.
http://www.socialcredit.com.au/uploads/NationalAccountsPrototype.pdf is the link which displays this. By 2014 the US economy was so efficient that its consumers’ incomes were insufficient to buy their own production by $7,500 each that year. So did all this production stay on the shelves and rot? No; because it was managed in the usual way. Well how?
The total indebtedness of Americans was increased that year by $2.3 trillion. Actually the debt didn’t have to increase at all, provided that consumers’ purchasing power did. This could have been done by distributing some debt free credit, or a national dividend for that matter. This however would have violated the financial system’s maxim that all money must belong to it, and only be rented out to society.
In this way the profitability of our economies compels total indebtedness to increase each year. The USA’s debt now runs at over $90 trillion and the World’s at over $200 trillion. When people are organised under Capitalism they are efficient; they produce more than they are paid to do it, and they can’t therefore buy the extra goods without increasing their debt to the banking system to bring more money into existence.
The world is going bankrupt to finance its own profitability. I suppose it is easier than creating some money which is not debt. I suppose also, that there may be intelligent life in outer space, but how much do we have here?
Oh stop it! My head hurts! And I am not going down that road! Debt without any other option is what we have; opposing it demands thought and effort. Establishing political democracy took hundreds of years. Economic democracy with some economic votes being distributed freely because our country is profitable, will take us just as long. So best go and tell someone else, old mate, your words are wasted upon me.
Yes I will do that. Thanks for the encouragement.