CHAPTER XX.
CONSUMERISM, THE DEVELOPMENT OF CREDIT.
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With the development of credit for the majority of consumers, capitalist economy found a temporary and partial solution to the problem of overproduction and surplus capital. The capitalist, with the dexterity of an illusionist, has played a great confidence trick on the gullible, ignorant mass of society. This device shows the natural business cunning of the merchants and the typical logic that follows from the laws and mechanism of capitalist economy.
To put it in simple figurative terms, the capitalist was not going to raise the wages of his employees to allow them to buy the surplus of goods which was produced; but he would instead lend them the money to enable them to become a market for his products.
The poor 'donkeys' were very grateful, and the capitalist, using a little ink on his ledger, killed two birds with one stone and put in motion again the stagnant cycle of capitalist production and accumulation; This time with even more energy and speed than before.
There was profit to be made on the sale of the goods, and, in the same transaction and for the same commodity, an extra profit for the loan of the money.
But this was not all: by this stroke of the pen on the credit side of his ledger, the capitalist merchant forged a new chain for the worker. It is a chain of gold, but much stronger than the old one. To buy a commodity on credit is like a chain that the worker willingly puts around his neck: not only he has to sell his present daily labour power, as in the past, but he also sells his future labour. He commits a certain amount of his working time for a certain number of years to repay the debt he has incurred for the purchase of a commodity.
With this new economic device the person in debt, by selling his peace of mind and his little independence, shed some of his former material poverty, but by mortgaging his future he is forced to work harder and produce more.
For a time, the accumulation of profit almost doubled for the merchant and the money lender, and the worker, even if materially a little better off, became less proud and more submissive: A part time slave, chasing his own tail on the capitalist treadmill.
In essence, as we have seen, the capitalist must get in return more than he gives out. With consumer credit he gets a profit for the commodities he sells, and a profit for the credit he advances. But no matter how many deals and convolutions the invested capital is subjected to, and no matter how many capitalists are involved, all their profits, as everything else, must ultimately come from the sweat of the working man. Therefore, it should be evident that while the labourer is allowed to buy more of what he produces, he also must eventually work and produce a lot more. Yet, the majority of people are very grateful for being allowed to get into debt. They have been made to believe that if it was not for consumer credit we would have nothing. This is quite true, but only in the context of capitalist economy and merchant logic, not natural common sense.
This, in very simple terms, is the main essence of 'consumer credit', one of the elements which constitute the scourge of consumerism.
Consumer credit for the general public began to develop in the thirties, and it became widespread after the Second World War. During the period after the Great Depression Capitalism had lost credibility; therefore, at the same time as consumer credit was developing, there was a shift from a 'laissez faire' capitalist economy to a degree of government intervention to reduce unemployment and improve the standard of living of the population. It was a compromise between a free enterprise and a State controlled economy. In some countries this trend developed through a democratic process, in others through fascist dictatorships.
The boost that consumer credit could give to market demand could only be of a short duration. It should be evident that sooner or later one must stop buying on credit, or one will become over committed. If this occurs, then such person will have to stop buying anything but the bare necessities until he is out of debt. Therefore, after a buying spree on credit there is normally a long period of under consumption.
It should be obvious that to be in debt it is to gamble with one's own future, because when one sells his future labour to buy commodities, one has no guarantee of future employment or good health; hence the fear and insecurity, whether conscious or subconscious, that derives from being in debt.
A society in debt is an insecure society, and many of the major social ills and frustration derive from this new device in capitalist economy.
Many people of limited means, after struggling for years paying for the necessities of modern life, will swear to never put themselves in debt again. They will put up with their old fridges, TV sets, etc. for as long as possible, and live a more peaceful life without having to worry all the time about monthly repayments.
Such a trend, which the merchants call 'consumer resistance', is too dangerous for a consumer economy to be allowed to set in. Therefore, a two pronged attack has been mounted against this public resistance; an attack that is going on relentlessly all the time to maintain artificially the market demand: putting people in debt through advertising and planned obsolescence.