Why is this definitely true? Other economic/societal systems have fallen in the past. Why does that mean this one has to? Or is there some other reason why this statement is true?
I'm not trying to cast doubt upon this idea. I'm just trying to find out its justification, from a scientific perspective.
Cheers.
The appeal of capitalism over preceding systems is that although the proportional size of the creditor class is as small as the nobility was under feudalism, there is a possibility that anyone can earn and trade and gamble their way into it. Before capitalism, the only "rags-to-riches" stories were about children of nobility being lost in infancy.
As the system proceeds, the gap between creditor and debtor classes tends to enlarge, the size of the creditor class tends to shrink, and social mobility tends to decrease. These trends point toward a new hierarchy of classes which may not be based around kings but will still be hereditary and absolute, like feudalism was.
That's not what's actually happening currently, though. ZIRP has flipped the script of who is a "creditor" vs a "debtor". The creditor class is increasing due to the fact that more and more people have private savings, which they tend to put in the bank or a "conservative" mix of bonds (i.e. become creditors) and stocks because they need to have a rainy day fund or protected retirement savings (and individual workers risk tolerance will push them towards low return products), while the Capitalist class uses cheap debt to buy more and more assets. The rise in asset prices helps them pay off the loan (which was made with the savings of all those workers) and they get to keep the assets and move further ahead.
"Stocks" and "assets" these days are almost entirely interchangeable though.
There are fewer and fewer people who have a larger share of the pie. It doesn't matter whether you call them capital holders or creditors, they're people who get paid to do nothing. And while more laborers have investments, they aren't getting more value out of it than they put in through labor in the first place.
The distinction is important because debt is how Capitalists actually consolidate their holdings. Leverage lets you increase your rate of profit by borrowing against your existing assets to buy more machines and exploit more workers.. The whole reason for loans is that the person taking the loan can make more money than the interest they pay because they will invest it in various places they think that they can . If interest rates are artificially low, debtors get a "free lunch" in the form of excess returns while creditors (i.e. people with cash or bonds) lose out. Large capital holders don't provide credit unless required to by certain regulations or if the interest rate gets high enough that they can't find places to generate return.
The key distinction is that laborers will have a greater portion of their funds either in a safe bank account or in bonds because everyone needs a certain "cushion" to feel secure/not go bust, so they proportionally lose out as "creditors".
Tell me more about how all the richest and most powerful people in the economy are net debtors rather than net creditors.
Banks and financial services are at the top of the economy, and they have been for a long time.
Banks need people to take out loans to make money. No one will take out a loan if they don't think they can make more than the cost to borrow it. The idea that consumer debt drives accumulation is bunk - if workers go into debt, wages go up or the cost of capital rises to account for defaults, which lowers profitability and lowers the demand for loans, which lowers the bank's profits ultimately. Banks are only at the top of the economy because Capitalists are willing to borrow to make more.
wait, what do you mean by this?
Stuff like King Arthur, where the protagonists are raised in poverty and get a lucky break by a revelation of their true identities. No acts that they do are rewarded, it's just a matter of finding out their true ancestry.
Obviously in reality there were people who took command of armies and made themselves kings, as it always was.