America: complicated, but not socialist

Editor's Note: Too often the debate on critical issues is frozen into simple-minded talking points. With this feature, we will try to change the game, to go for the non-obvious and seemingly counterintuitive argument. We encourage our readers to join in — either by writing us or joining in the debate online.

Today's "Two Views" comes as we approach the one year anniversary of the 2008 presidential election. Here we present two views of Barack Obama, the economy and change.

Oh, that socialism controversy! We are now to believe one of two things: that the bailout of the banks, the stimulus packages and the moves toward national health insurance are signs that President Barack Obama is taking America down the socialist road, or that Obama, a brave man in a tough spot, is doing everything he can to help the American people by generating jobs, taking care of their health needs, and generally making the government behave more responsibly.

What is actually happening in the U.S. is not that simple.

It is a critical attempt to shore up banks, which are the underpinnings of the whole capitalist economy. It is an attempt to address the evaporation of staggering amounts of "fictitious capital," as Karl Marx called it. It is an attempt to project leadership and certitude in the midst of a monumental crisis of confidence in the behemoth that is the U.S. economy.

It is all that and more.

But it is not socialism.

What happened in the fall of 2008 is what tends to happen with capitalism. When it does its job well — when it maximizes profit and squeezes the optimal amount of surplus value out of the people who produce wealth — it invariably produces too much capital, more than can actually be put to work reproducing itself. This stuff has limits, and the economy hit them big-time last fall.

But (you sniveling Marxist), you ask, what is surplus value and what does that have to do with anything? Quite a bit. Surplus value is that stuff produced beyond what it costs to purchase — something labor power alone is capable of doing.

So how does that work? In a place such as Dominican Republic, for example, Haitians are trucked in over the border to harvest sugar cane. They are put up in hovels called "bateys," often living as virtual slaves, indebted to the company store (some days eating only sugar cane), then sent back to Haiti (or beaten back by incited mobs of Dominicans). This all happens so the price of sugar can stay "competitive" with that of places such as Brazil or India. That is one way you "extract surplus value." It is generally how capitalism works, and it works everywhere from the sneaker factories in China to the Wal-Mart in Omaha.

Socialism, in principle (its feasibility is an entirely other column), would tend to reverse and restrict that practice, saying that the wealth produced by labor is the product of society and ought to go to everyone. That is simplistic, but it should be clear enough: That is not what is happening in Obama's America.

Instead, what we have seen is the government loaning unimaginable sums of money, garnered in part from countries such as China where all that "surplus value" has been harvested, and banks, which in turn prime the pumps of the profit-making machine.

But don't take my word for it. Here's how the prestigious financial magazine The Banker summed up the aftermath of the crisis: "Now that the initial shock, and panic, of the economic downturn has passed, policy makers need urgently to decide what form capitalism will take in the future ... Greed is still good, but it needs to be tempered by better regulation."

That's what's going on. It is not pretty and it is not socialism.