I'm fairly sure, based on my interactions with many members of the Labour Party and others who consider themselves to be progressive, that few have looked at The Labour Theory Of Value. I believe that if they had, they would not have illusions that capitalism can be reformed. Considering this, I will attempt to apply part of this theory in the simplest of terms, in order to make my point.
The Labour Theory Of Value holds that no commodity has any value except for the amount of labour (socially useful work) instilled within it.
It may be a good idea to go and look it up (even Wiki has enough info to give you the gist).
All you have to do in the meantime, is to observe what has been happening around the World during the last few weeks.
As more and more people have had to down tools and stay away from work, in order to isolate themselves from the contagion of Covid-19, the economies of the World have been grinding down to a fraction of what they were. No labour = no commodities and no services!
Banks do not produce any value, since they do not do any socially useful work. If most of the population was wiped out by C-19 or anything else, the survivors would need shelter, food, clothing and medical treatment. These would be their only concerns, and money would be of absolutely no use to them. Banks therefore, would be the last organisations that survivors would be thinking about.
When you really think about what we need to survive in such a situation, it soon becomes obvious that money is useless.
Keeping this in mind, while taking a step backwards, and looking then at what we consider to be a normal society, it becomes much easier to see that money is only a means of measuring value, for the purpose of exchanging commodities, and is not in itself worth anything.
In a capitalist society money is used by those who do not contribute any socially useful labour, to extract value from those who do.
When a company borrows money (capital) from a bank in order to produce a commodity, the money which the bank hands over comes from interest paid to that bank from previous loans to other companies. The workers in the new company use their labour power to produce the commodity which is then sold, and part of the takings from these sales is paid to the bank in order to pay back the loan plus interest. We can see from this that the owner(s) of the new company have not been out of pocket, as it is the value produced by the workers which pays back the bank for the capital which was borrowed to start the company in the first place. It can also be seen that the bank has taken part of the value in interest even though the bank did not add any value in the process.
The money which the bank lent to the new company came from the interest it charged other companies who in turn, also extracted their value from the labour of their workers.
As we see from this, currently and historically, all of the capital which the banks hold and all of the profits (surplus value) that the shareholders obtain has been created by the socially useful labour of the workers. The situation has become a bit more complicated, especially in the last 4 decades since 'finance capitalism' has taken over the World's economies. This type of capitalism is based on debt. In this system, profits are made based on the value which will be created by workers in the future, though mortgages etc. and money itself has become a commodity, the accumulation of which has created the vast inequalities which have become visible to most people in recent times.
At the end of the day someone has to create the value behind this fictitious money - it does not just magically appear, and that someone will be the future generations of workers.
Today it has been revealed that several banks in the UK continued to pay dividends to their shareholders, despite being asked to pause this and divert this capital towards the fight against Covid-19. This shows the parasitic nature of banking.
Because of its very nature, Capitalism can not be made into a just and fair system. It is a system based on deception and exploitation. Profit is unearned income creamed off the top of the value created when our labour power is converted into a commodity and exchanged for money. Giving us a wee bit more of a share of the value that we create, as was done during the Keynesian years, still doesn't remove the profit motive and the clamour for endless growth. Neither does it change the deception that is inherent in the process.
When this pandemic is over and capitalism and its governments are crying poverty, despite having off-shored Trillions of Dollars into tax havens, they will try to impose austerity on the World's workers. They will do this by reducing our services and living standards, and they will also impose controls over our freedom of movement in order to prevent us from organising resistance to these measures.
If after seeing how the System, and the governments which prop it up, has explicitly put profits before lives, people remain unconvinced of the need to replace it, I believe we will be doomed.
⏩Mike Craig is a member of Left Horizons.