"You load 16 tons, what do you get?
Another day older and you're deeper in debt.
Saint Peter don't you call me, 'cause I can't go.
I owe my soul to the company store!"
In the early 1900's, one of the worst abuses of workers involved what was called the "company town". This was a town wholly owned by a mining company in a remote location. Workers were attracted to move there by the lure of high wages. However, once there, they discovered that the cost of living was even higher, kept there by the "...company store", the only source for the necessities of life. The company was free to hand out high wages, knowing they would take that same money back in as profits at the company store. No matter how hard the workers tried, they could never make enough money to live on and would be in debt to the company store. As long as they were in debt, the company could legally prevent the workers from leaving. It was a form of corporate slavery, concealed in a bookkeeping trick.
The abuses of the company towns led eventually to the formation of labor unions, and threatened at one point to spark a communist revolution in the United States. The threat of such a revolution caused corporations to adopt more humane attitudes towards their workers. As word spread of what a trap the company towns could be spread through folk songs similar to the one quoted above, workers simply refused to sign up, and the company towns faded into history.
I have received a lot of email regarding the article "The United States Government is Dying". Most of it has been positive. The negative email always seems to point out the standard of living Americans have, usually defined in terms of the possessions we own. But for the most part we don't own those things we display to others for their esteem and admiration. The vast majority of Americans are deeply in debt for the items they buy, TV sets, cars, recreational vehicles, vacations, even supermarkets have credit card machines to purchase food with. Using credit for the basic necessities of life has become so ubiquitous that it is almost invisible.
The debt-based economy has turned the entire nation into a "...company town". Americans are living on borrowing, and when the economy slows down, the repayment of those loans becomes a trap. Eventually, the lenders acquire those few things Americans own that actually have any worth, namely their homes. And it is worth reminding to those readers who claim that our nation is still doing well that private ownership of homes has been in decline for quite some time. Whereas home ownership was the reality for most of our parents and grandparents, a far larger percentage of Americans are now renting. Americans are working their lives out, and at the end, they have little but a few status-icons to show for it. Our rear ends are well decorated with designer jeans, but if you think about it, blue jeans are pretty much what the workers in those older company towns wore into the mines every day. Is there any difference between the blue jeans you wear, made expensive with a designer label, and their blue jeans, made expensive by the company store? Is it not really the same trap at work?
During the "boom times" of the 90s, the media assured us that the economy was doing wonderfully, that the good times would roll on forever. In reality, 80% of the population suffered a decline in living standards, and to make up for it, they bought on credit, assured that eventually there would be money to pay for it all. Then the crash happened. People are losing their homes, their retirements, their businesses, all those things they had worked for that had real worth, lost to that "company store" called the debt-based economy.
The trap is that the US Government has been running itself pretty much the same way. Never able to balance its books the US Government just keeps borrowing and borrowing to make ends meet. The people get stuck with the bills. The interest alone now exceeds all the income tax paid by all the US citizens. You're not supposed to notice, of course, since taxed into near poverty you too are living on your credit cards. And never mind that the government borrows so much money that it drives interest rates up, making the money you do have to borrow more costly to repay.
So for those who claim that an economy based on debts rather than on worth is a good thing, it usually is from the point of view of the bank which gets to print up those debt notes at whim and then lend them out at full value. But for the people, who are as trapped into paying the interest on all those debt notes spent, the nation has been turned into one gigantic "company town", where prices are always kept just a hair above wages, where the people are kept in perpetual debt, so that no matter how hard they work, the vast majority of Americans can never buy their soul back from that company store.
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