The current economic slump is rooted in the wages system. Under the wages system, a producer is obliged to sell his or her labour power in the marketplace for commodities for a price in order to make a living. Your skills are commodities as is everything else for sale within the capitalist system.
CEOs also sell their skills; but more often than not, CEOs already own so much wealth that they don't need their salaries to make a living. They make a living from the already accumulated wealth which they legally own and which they usually invest in stocks, bonds, real estate and other commodities, including financial instruments like hedge funds and other nations' currencies. Yes, money is a commodity too. Hence, CEOs are not workers; they are capitalists. Capitalists live from the wealth they appropriate from the workers through the everyday operation of the wages system. This appropriation is backed up by contract law: you sell your skills for a wage in exchange for the employer owning the product of your labour. Contract law is backed up by the power invested in the State: police, prisons, armies, navies and other forms of coercion.
Like all other commodities, the price of one's skills is tied to the amount of socially necessary labour time which is embodied in them. In this case, the commodity for sale is located in one's mind and body and expressed as skills. This socially necessary labour time comprises the labourer's exchange-value. The price or wage which the worker gets for his or her skills fluctuates around the value which is embodied in the worker's acquired skills. The fluctuation of the price/wage is determined by the supply of and demand for that particular skill set on the labour markets of the world.
Capitalists never buy (or employ, if you will) workers' skills unless they can make a profit from selling the product (good or service) which the worker (almost always in combination with other workers within an industrial division of labour) can produce. Thus, workers produce new values during the eight more or less hours which they are employed; all of which leads to the creation of new embodiments of socially necessary labour time, which in turn, always amount to more value than the value which workers' skills embody and sell for on the labour market. The price of the goods and/or services which are produced exceeds the wages which workers' skills are bought for. Capitalists make profits from selling these goods and/or services in the global marketplace for commodities. If there are lots of buyers, then more workers' skills are purchased. It there are fewer buyers then, fewer workers' skills are purchased and the unemployment rate goes up.
Meanwhile, workers' productivity has gone up, up and up over the years; it never goes down. For example, even though there are fewer workers producing new values in the non-financial industries of the USA today than there were in the 1980s, there has been a marked increase total output of goods and services. At the same time, real wages (wages adjusted for inflation) have stagnated. As productivity (output per worker) has increased, the socially necessary labour time embodied in the new values being created has dropped and with that drop has come a drop in the prices of many commodities, if one measures those prices in terms of real, inflation adjusted money. Still, the fact that workers' real wages have stagnated has had a profound effect on sales of new values being produced by them on the world market and that fact has led to insufficient demand in the market and to a consequent contradiction.
How to get the workers of the world, especially in the industrialised States to buy more of the goods and services they produce for capitalists to sell and make more profits?
Credit, loans and so on. Most workers have turned their union cards in for credit cards. It's no accident that 60% of the personal bankruptcies in the USA of recent date can be traced to credit card debt.
Where do capitalists invest all the wealth they've appropriated from their hired producers when it is apparent that the workers cannot produce sufficient demand?
Debt.
What if this debt has no value to back it up? What if there is no worker producing a concrete value to back up the debt which is being bought and sold on the world financial market? What if this debt, which promises huge percentage of return on investment, turns out to be empty of value? What if a bunch of housing is marketed to increasing amounts of workers who cannot afford to buy, except by incurring debt levels which their meagre, stagnating, real wages cannot absorb?
Investments by various capitalists go bust! An $8 trillion housing bubble has burst. Thus, workers must be laid off because they are too productive and cannot buy all the stuff that they can make. Workers can make housing. Workers can make all the things that they need; but they must lose their means of making a living because the wages system needs some structural adjustment.
Don't worry. Be happy wage-slaves. Study your horror-scopes and pray to your deities. The glaciers are melting and the system is broken. But just wait awhile and let the invisible hand of the market work and all will be well....for there's pie in the sky when you die and the banks are made of marble.
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