The Merchants of Greed.



Capitalism has long had its critics, Lassalle, Marx, Lenin and a whole traffic jam of others. But it has stayed on the road, made some detours, struggled with road works but never shut up shop. For all its failures it has coped because there is no real alternative. Capitalism survives all attempts to destabilize it because it feeds our bases demands, summed up in the old adage, the seven deadly sins.

The one major challenge, that of communism would itself deconstruct from within because, ‘love thy neighbour’ was not as strong or as lucrative as self-interest. Of course, communism as practiced in Russia and elsewhere had many other faults, notably the transposition of ‘dictatorship of the proletariat’ to the dictatorship over the proletariat. The stymying of creativity, innovation and expression which could only be exhibited by the grace of authority was a major nail in its coffin.

Get into the groove, (Madonna) capitalism will dance to any tune whether upbeat or down beat. The one who winds up the machine gets to decide. It is all about power. The question is, will it be about the many or the few? The big boys feed at the top table at present, the ordinary Joes’ make do with the leftovers.

When we leave capitalism to the whims of the market, the neoclassical school of thCASYM14Seconomics, we get the tune, ‘Anything Goes’ (Cole Porter). No regulation – a free for all which benefits the rich. In consequence we had the banking collapse of 2007-2008 for which we are still paying. The poor have now suffered six (6) years of recession which shows no sign of abating. Before the actual crash, David Rubenstein, who himself had made $billions on Wall Street warned in 2007 that, “Greed has taken over”.  Cited by Suzanne McGee, Chasing Goldman Sachs p177

And so it proved. “What we’re experiencing is without doubt the direct product of the short-term greedy gambling that has become de rigueur in the world of finance”.

Geraint Anderson CITYBOY p306    a good and insightful read

th[6]Once greed enters the bloodstream it makes its way to the brain where it overpowers the prefrontal cortex, which deals with thinking, permeates the hypothalamus and amygdala. As the infection takes hold the brain starts to wither and emotion and sense are depleted.

The big boys are never really satisfied with their lot. Not only did they cause the banking crisis but later were found guilty of fixing the ‘libor’ rate and the ‘foreign exchange’ rate. For which they have had to pay fines. British banks have had to pay £38.5bn. Commenting, David Davis, of the think tank New City Agenda said, “A toxic culture which was decades in the making will take a generation to turn around”. (Sky news) Enough evidence to suggest that greed has no boundaries.

By 2010 the USA had pumped in $700bn to save the economy and had allocated in total an amazing $12.8 trillion, lent, spent or guaranteed. (Bloomberg News) In the UK £124bn has been spent and up to £1.2 trillion to shore up any fall out. News blog

It’s astonishing, the champagne swigging big boys cause the mess and the ordinary Joe is left to clean up. While the overwhelming majority of people suffer the constraints ofthITECD3RH the recession the rich get richer.

A TV programme Dispatches for Channel 4 aired some interesting statistics:

  • The richest 2,500 households had as much as the poorest five (5) million before the recession.
  • Today it reads the richest 2,500 households have as much as the poorest eight (8) million.
  • The richest 2,500 are three (3) times wealthier than in 2008.

pound-bag-displays-british-currency-and-wealth-100287376[1]The programme also highlighted that in the last twenty (20) years there has been no progress in income for the lowest 10% in the UK. This finding is backed up by eminent economists:

“Since the 1980s, income inequality has risen in the majority of countries. The most marked increase was seen in the UK and especially the US, which led the world in pro-rich policies”.

Ha-Joon Chang Economics: The User’s Guide p333

“…politics has shaped the market, and shaped it in ways that advantage the top at the expense of the rest.”

“The top one (1) per cent of Americans gained 93% of the additional income created in the country in 2010, as compared with 2009.”

Joseph E. Stiglitz The Price of Inequality p 32 & p61 respectively

The analysis by the two economists is given added weight by the Organisation for Economic Cooperation and Development (OECD) one of the top think tanks who state, “…that the UK economy would have been 20% bigger had the gap between rich and poor not widened since the 1980s”. The report goes on to say that, “… income inequality has a sizeable and statistically negative impact on growth”. Guardian 9-12-2014

There are numerous stories about companies and individual’s preoccupation with dodging the taxman. Goldman Sachs one of the prime culprits in the debacle that lead to the crash of 2008 is still at it. A high court judge has ordered them to reveal the size of their profit in a deal with Libya, e.g. sold the Libyans a poor package but reportedly made a profit of £350m. The Libyans are also suing the French bank Societe Generale for alleged bribery. Guardian 24-11-14

Goldman Sachs are also in the dock accused of rigging the price of platinum and palladium with cohorts, BASF of Germany, HSBC of the UK and the Standard Bank of South Africa. Now that’s what you call a cartel. The big boys working as a body to ensure they maximize their profits. I wonder what the neoclassical economist would make of that derivative of free trade.

Alas, they are not alone. In Indonesia there is an investigation into tax avoidance of potentially $5bn and another investigation into the mining industry accused of tax evasion of some $2.33bn. Reuters 27-11-14

Apple have three cases to answer for, 1) trying to impose a monopoly on downloading which could cost them $1bn if they are found to have breached anti- trust law. Secondly, they are in the dock for colluding to force the price of e-books up. 3) Are appealing a decision in court against a settlement of $324.5m for colluding to hold down wages. (Reuters 2-12-2014) In Europe they are under scrutiny for the sweetheart tax deals that are causing a ruction there.

Microsoft is having problems in China where they have been forced to pay $137m in back taxes. The company is also caught up in the sweetheart deals as their income is channelled through “foreign operational centres” in Ireland, Singapore and Puerto Rico which have very lax tax arrangements. (Reuters)

The list goes on. I could write another page full of the games that the big boys play. Why are they never satisfied? There is a paradox here; they continually rip off the ordinary people but have laws on ‘insider trading’ to prevent them being ripped off. Talk about double standards, hypocrisy is not a strong enough word.

th2KBIHJ24We are continually being waylaid by the big boys via their use of cartels, monopolies and dodgy tax deals. There is no sense of community, no thought given to society; it is all very self- focussed. Their actions are like kicking someone in the teeth when they are already down and out.

What avenues can the people pursue that will give them some leverage in the decision making process? The road ahead is bleak, it’s dark and winding, it may seem forbidding but just keep telling yourselves that there is treasure at the end. Democracy can be that treasure. I know, some will throw their hands up in disbelief and feel like shooting the messenger but its democracy or the same old highwaymen as now. Democracy is at present controlled by the Sherriff of Nottingham but each of us can join Robin Hood and do some good.

Of course we become more reliant on government to do a better job and that raises issues of trust: “Rather than correcting the market’s failures, the political system was reinforcing them”. (Joseph E. Stiglitz) The Cambridge economist Ha-Joon Chang suggests an alternative, “The focus on the market has made most economists neglect vast areas of our economic life, with significant consequences for our well-being”. P455 A fellow economist Herbert Simon has estimated that, “…only about 20 per cent of economic activities in the US are organized through the market”.

According to Stiglitz, (p66) a Nobel Prize winning economist much of the inequality that we experience today is because of poor or lack of decision making by government and of course the influence of the big boys. Sad to say but many voters have turned away from the democratic process as they feel alienated by the system. It will be difficult to win the Joes’ back to exercise their rights; this is the challenge for the Left in politics and all those who believe in democracy.

I bring your attention to the rise of Ukip in Britain; you may not agree with the politics of the party but hopefully see the potential. The three main political parties have been seriously ruffled by the emergence of Ukip and have amended policy quicker than you can say – …. Off. People power can work – make it so! If not the big boys will swamp us with their global grab and our pockets will jingle with less and less.

Government can work; we have laws against cartels and monopolies, granted that hasn’t stopped the big boys but good government can make the laws tougher and enforce them. As far back as 1984 the US government broke up AT &T the giant telecommunications business. (Chang p385) The EU is seriously considering a similar move against Google who have cornered 90% of the market. However, the US has warned of ‘trade consequences’ – big boy influence. Telegraph 27-11-14

With the right people elected we can insist on waste management to stop the lucrative deals handed out to big business. We can monitor how our reps: vote and make that information public. Leave them to answer to the twitterati. We need more investigative journalist to expose the fraud or mismanagement in the political and business world.

The power is ours for the taking. Yet too often we hear the despair of many, “I’m only one, what difference will it make”. That is a sad reflection of how people have been made to feel powerless.

Don’t be a flibbertigibbet – stand up — shout out!

Don’t be a flibbertigibbet – put on your coat — go and vote!