Will Hutton writes of the current financial crisis, “This is history’s joke: the crisis of capitalism long predicted by communists and socialists who are no longer able to take advantage of it.” He believes that “what needs to happen on top is an assault on the dark heart of the global financial system – the $55 trillion market in credit derivatives and, in particular, credit default swaps, the mechanisms routinely used to insure banks against losses on risky investments. This is a market more than twice the size of the combined GDP of the US, Japan and the EU. Until it is cleaned up and the toxic threat it poses is removed, the pandemic will continue. Even nationalised banks, and the countries standing behind them, could be overwhelmed by the scale of the losses now emerging.” And no one, he argues, believes in the financial system.
As well they shouldn’t, but to say that is simply to repeat the obvious.
[President George W.] Bush’s speech Saturday was interrupted on WNBC-TV by a commercial for the Broadway musical “A Tale of Two Cities,” the New York Daily News reported.
“It was the best of times, it was the worst of times,” the commercial said, showing the blade of a guillotine slamming down.
The phrase is the well known opening line of Charles Dickens’ “A Tale of Two Cities” — an epic story set against the French Revolution depicting the wide gap between the super rich and the growing number of poor people.
While Bush’s head certainly ought to be on the chopping block for crimes far more vast and far more severe than a laissez-faire attitude towards greed, I am hearing from more and more quarters that the ideology of deregulation is dead.
Capitalist Libertarians will disagree. They will argue that we still haven’t tried deregulation. But history has now illustrated on multiple occasions that the closer we come to their economic model, the closer we come to disaster.
It is not enough to protest political hierarchy. Economic hierarchy must also be addressed, but for capitalists to do this would require that they address a far deeper contradiction.
Capitalism relies on the idea that owners of resources (land and materials) will invest them, employing people who invest their labor and who will purchase finished products. Notice that I conflate consumers with workers, for they are the same people. Yet the highest value in capitalism is return not on the investment of labor but on the investment of resources. That means that workers are an expense to be minimized.
Capitalists reply that workers do not accept the risks that “entrepreneurs” do. Workers who have been cast aside for cheaper ones overseas and who are now compelled to accept employment at far lower pay would hardly say they have absorbed no risk. Their plight belies the capitalist Libertarian presumption that workers and bosses negotiate as equals.
Capitalism also accepts as given the ownership of resources, with no consideration for how those resources came to be owned overwhelmingly by a particular class of people. Let me put the question this way: Do you believe 1) that the god of Abraham exists, 2) that he is the original landlord of the earth, 3) that he authorized kings and popes to sell or give away his property, and 4) that he authorized them to do so in a way that would benefit a few people at the expense of the vast majority? Our present system of property ultimately relies upon this chain of authority and though we might find any or all of the links in this chain dubious, we acquiesce to the system of property it has established and we do not take back from the rich all that they have stolen over a period of several millennia. Not only are workers an expense to be minimized, but they are the victims of a grand theft.
Yet for all the talk of change and for all the criticism of discrepancies between rich and poor, I still see no acknowledgment that workers are due a living wage. Rather French President Nicolas Sarkozy claims that a European Union plan to guarantee inter-bank loans will, according to the BBC, “address all aspects of the crisis.”