We have to look at the production relations, how individual people relate to each other to produce and consume the physical necessities of life. When the first phase of this crisis is over, the production relations will not change: people will be employed by the owners of the means of production, and the owners will still make a profit. We will still pay rent to a landlord or a mortgage — with interest — to a bank.
Our government is owned by capitalists, i.e. the owners of capital. They write the campaign donation checks, they provide employment to our elected officials after their terms are over. All that's happening is that capitalists are resolving the crisis by transferring wealth from the people to the capitalists. They sucked out the people's ownership of stock — concentrated in pension plans — in the last bubble; in this bubble they sucked out the value of people's homes. There's nothing left to suck out except people's actual productivity, which will now be sucked out directly with taxes. That's what
The game is just beginning. The financial crisis is, by itself, a fake crisis. We have so far lost nothing but money. We haven't lost any human life or productivity, as we might to an epidemic; we haven't lost any physical infrastructure, as we might to a hurricane or earthquake.
I think it was Kurt Vonnegut who used the baking a cake analogy to describe financial crises: We have flour, eggs, sugar, milk; we have bowls and spoons and a working oven; we have a cook who knows how to bake a cake and the time to do so. But we have run out of ounces and pounds. Money isn't a concrete thing with intrinsic value; it's an abstraction, the unit of measurement of value.
Capitalism is not about producing goods and services that have value. Capitalism is about producing goods and services that have value to individuals with money. If the mass of ordinary people have no wealth and no money, then it is unprofitable to produce what they need, no matter how much they need it. When money moves from the people to the capitalists, we are implicitly deprecating the needs, wants and values of the people and elevating those of the capitalists.
An honest Randian will say, "Yes, so what?" If people have no money, if the capitalists do not value their labor sufficiently to give them money, then it would be a sacrifice — to be condemned and abhorred above all else — to meet their needs. Fortunately, committed Randians are rare (and honest ones even rarer).
The next phase of the game, which will play out over the next ten years (and most sharply in the next two to four years), will be more concretely real to the masses of people. The capitalist class is in chaos, and the result of this chaos will be refocusing production to restore profitability, i.e. producing that which has value to the people with money. Since the great mass of people have no money, the capitalists will scale back production (and maintenance of the productive infrastructure) that meets the people's needs; they will refocus production on what meets their own needs. Since the capitalists themselves are in chaos, it will be difficult to determine even what meets their own needs, and production will fall even further.
It is in the next phase that we'll see an impetus towards real socialism: socializing the production of those goods and services that meet the physical, material needs of the masses of people: food, housing, clothing, education, and medical care, putting the production and consumption of these elements on a cost basis, not a value basis.
No matter how bad things get, the capitalists will bitterly resist, with every fiber of their being, with every weapon at their disposal (including the police and the army), socializing the production of the masses' necessities and putting their production and consumption on a cost basis. The value of these necessities is practically infinite, and it is only by controlling these necessities that capitalists can persuade ordinary people to work long hours and transfer the surplus value of their work to the capitalists: Without "work or starve" the capitalist class has no raison d'etre, it has no justification for being a class.
But without socializing these basic needs, millions of people will starve and die, and the rest will live in abject poverty while the capitalist class lives in unparalleled luxury. We need look no farther than just outside our own borders to see what happens when we fail to socialize basic production: the typical third-world economy with a minuscule privileged capitalist class, a tiny middle class serving their needs, and the great masses of people laboring in sweatshops for a meager living to earn those capitalists their luxuries and privileges.
This outcome can occur, and our size and history is no guarantee that it will not.