3.4 Eliminating other forms of exploitation
In addition to the exploitation of employees by employers, there are other
forms of unearned incomes, the most important of which are interest and
rent.
3.4.1 Usury
Interest, the getting of money from money itself, was regarded for thousands
of years as sinful. Philosophers like Aristotle condemned it. Papal encyclicals
banned it. Islamic law still forbids it in Muslim countries. But in capitalist
countries, such was the social power of the banks and other money lenders
that this moral objection came to be forgotten.
In capitalist countries which were undergoing very rapid industrialisation,
for instance, Japan in the 1950s or 1960s, lending money at interest did
serve a necessary economic purpose, since it allowed peoples savings to be
channelled, via the banks, to fund industrialisation. But once a country has
industrialised, firms finance most of their investment from internal profits.
Indeed they normally have more profit than they know how to invest. Instead
of borrowing from the banks, industrial firms run a financial surplus, and they
themselves lend to the banks. The banks now channel the financial surplus of
firms into loans to consumers, or to governments. Lending at interest looses
the temporary progressive function that it had during industrialisation and
reverts to being what morality and religion originally condemned : usury.
Socialism abolishes interest as a form of income. It has no class of rentiers
people who do no work but just live off the interest on their money. So it is
clear that at some point, that a government seriously intent upon socialism
has to pass legislation banning the lending of money at interest. It could
specify, for instance, that interest on debt could not be enforced in the civil
courts. It could impose severe criminal penalties on those who used threats
of harm to extort interest.
Before moving to a step such as this, a socialist government needs to put
in place replacements for the economic functions still served by lending, and
charging interest.
3.4.2 Rent
Rent is another type of exploitation. Socialists regard it as immoral since
the owner of land enriches himself, not by his own labour, but by the labour
of others combined with the niggardliness of nature. Rent is however an
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Paul Cockshott, Allin Cottrell, Heinz Dieterich