Downgrading America’s credit worthiness has sent shivers across the world. The world was already reeling from the economic meltdown. The experts are having a field day. They had blamed bankers for the meltdown. They are blaming US politicians for the downgrading. The experts are right as far as they go. They don’t go far enough. Never blindly trust the experts. They have an enormous amount of information. But information is not knowledge. Information must be collated to make a wise choice. The experts seem to be missing the wood for the trees. It is not enough to blame bankers and politicians. The world requires genuine reform of the system. The experts have offered no convincing proposals to reform the system.

Globalization has rendered feasible and imperative revolutionary reform of the system. Karl Marx was right and he was wrong. He was right in identifying human greed as the self destructive streak in capitalism. He was wrong in offering dictatorship of the proletariat as a solution. Marx underestimated the strength of democracy to cater to the aspirations of the people. The revolutionary fire of workers during early capitalism was defused by the upward mobility of labour. Recall the vulgar chant in Britain which summed this up:

“The working class can kiss my ar*e,
because I have become the foreman at last!”

Capitalists preferred to increase wages and reduce profit in order that their businesses continued to grow.

Marx dreamt of a global revolution. He was too far ahead of his time. Today technology has made possible a global revolution. The Internet has created a global community. Its search engines have given laymen access to information that was earlier confined to experts. On the basis of such information even laymen can search for solutions. As a layman entirely ignorant of economic theory I have my own proposal for economic reform. My solution is the creation of a system that gives the world not dictatorship but democracy of the proletariat. 

First let us recall some basic facts. Globalization has rendered the economy a thousand fold bigger than in the early days of capitalism. It has made monsters out of capitalists who straddle the world to devour profits, control media and fund politicians. Today the dominant economic axis is between America and China. Cheap Chinese labour, Chinese efficiency and big American capital, advanced western technology, got together to create the current situation. America spent far beyond its means. It created its huge foreign debt that led to the current crisis of US creditworthiness. The outstanding US public debt on 06 Aug 2011 was just over 14.5 Trillion Dollars. The population of the United States is estimated at 311,072,294. By these figures each US citizen's share of this debt is $46,847.80!  

How did this horrendous debt come into being? China advanced credit to America by buying US Treasuries to keep the partnership going. As a result America is a huge debtor to China. But is that a fact? Take a look at some figures. Of the total US debt all foreign countries combined own 4.5 trillion. Americans own 9.8 trillion! American capital has substantial ownership of foreign based companies. Thus while the American nation may suffer from the country’s huge foreign debt, American tycoons having a cozy relationship with various foreign governments continue to thrive. For the biggest corporate sharks the world is their oyster. They have no commitment to any nation, least of all to the ones in which they are based. Their driving force is personal profit. That is what globalization driven by the Murdochs and Kissingers has done to the capitalist system. The largest foreign creditor to the US is China which owns only 8 percent of the total US debt. But the Federal Reserve Board, in other words the big bankers, own 11.3 percent of the US debt. So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion. So who are the villains responsible for this crisis? Obviously the bad big bankers of American finance capital and the bad big brothers of Beijing’s communism are the villains. There is little to choose between them. They wallow in profit, luxury, corruption and undeserved income while their respective subjects struggle to survive. 

What is the solution? When a crisis confronts societies two options present themselves. One is to have less democracy; the other is to have more democracy. Almost invariably vested interests opt for less democracy. Almost invariably what is required is more democracy. That is how things are today. I have often advocated the introduction of full fledged industrial democracy. There is need for a workers’ sector of the economy in which employees share ownership, management and profit, and democratically elect professional management accountable to them. The establishment of this sector should in no way disturb the present dispensation of public and private units of industry. Let the three sectors – public, private and workers’ – compete in the market.

I believe the same experiment should be extended to banking. Banks can be established in which every depositor of a modest stipulated amount would automatically become part owner of the bank and partake of its profits. Let the mass of mini-capitalists compete in the open market against the monstrous mega-capitalists who have created the current global economic mess. Unless some such drastic reform is introduced the prospect of reforming capitalism remains bleak.

Common people little understand the esoteric wisdom of the world’s great economic experts. They better appreciate the simple wisdom of Mr. Micawber, Charles Dickens’ character in ‘David Copperfield’. What was Mr. Micawber’s advice?

“Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

A great pity all the wise experts in Washington did not follow this simple advice.