Donít get fooled again: The market is working properly
The Market is working just fine, doing what it always does.
AFSCME Local 444, retired
I managed to catch a sentence or two of Bush's appeal to the nation on the radio this morning. I normally have a hard time listening to a multi-millionaire draft dodging half-wit announce anything to 300 million people, but, for some reason I hung in their for three or four minutes.
It was as bad as I expected. It was bad enough seeing Bush sandwiched in between Bernanke and Paulson, the real policy makers, when he announced the bailout, but he tried to repeat what he has been told and make it sound intelligent.
The bit that jumped out at me was when he said that, "The market isn't behaving properly". Whoa there, Georgy! What are you talking about? The market is behaving exactly as it should, as it normally does under such conditions. This debt fueled boom has allowed capitalism to go beyond its limits, but the system cannot function like this forever, at some time it has to be brought back within those limits. The laws of the market have exerted themselves with a vengeance.
The capitalist system has within it inherent contradictions, elements of the system that are inconsistent with each other, hostile to each other. Such market crashes like the present financial crisis and the crash of 1929 are a product of these contradictions, as are the wars, misery and poverty we see around the world today. An analyst for the now defunct investment bank, Lehman Brothers, estimated that there have been 60 market crashes since 1622. "This neo-modern credit market is not very dissimilar after all from its classical predecessors", he said after the mortgage crisis hit last year. *
These crashes and the misery they inflict on society are an integral part of the capitalist system and arise due to the fact that the capitalist economy produces too much; it is "too efficient". Due to the private ownership of the means of production, workers are paid less in wages than we produce in value, we cannot buy back what we produce, or better yet, they can't sell it and realize that added value, the source of their profit. Capitalism has developed such massive productive capacity on a world scale that financial speculation is the better alternate use of capital; what's the point of building a huge factory or plant? It's too illiquid, too "fixed" and there's too many already. They gamble on everything from currencies to whether or not an individual, company, state or municipal government might de-fault on a loan. Some corporations in this period of excess capital even borrowed money to pay their shareholders. And then there's the short sellers.
Now, like 1929, the laws of the market are making themselves felt. George Bush is not simply stupid though, he is purposefully lying, trying to confuse people (other than himself) and hide reality. Workers who have lost jobs, their pensions or both are told that we are the problem. The American worker is paid too much, too spoiled, can't compete etc. etc. Lose your home? You made the wrong decisions. You chose to live beyond your means. Lost your job? Your wages were too high, demands to excessive etc. Poor? It's your fault. In other words, it is a personal problem; it has nothing to do with the system, the market. In fact, in the mass media, they generally won't even admit we live in a system at all. But in the pages and blogs of the serious capitalist journals, they talk of their system all the time. In a recent discussion on a blog in the Financial Times one well known economist comments, "Selfishness is so built into the concept of free-market capitalism that the idea of making a role for selflessness seems nearly hopeless."
When they talk to us, they tell us that selfishness is an inherent part of human nature, it is human nature that causes the misery and crisis, and human nature is inherently selfish.
This is a much safer way of explaining the origins of society's woes to the masses as the former leads to the question of the system itself. If human nature is inherently selfish and greedy as their media and religion tells us, then there's not much we can do about that except try to get in to heaven where we are told all will be well. But if it's the system, maybe if we change that system, we can organize production along different lines; we can change human behavior just like a plant that is moved to healthier soil, it grows healthier. We might even learn that this system is not the only system and hasn't existed forever.
The con continued this morning as I read my local paper. Bush warns that the economy will possibly collapse. Things will get worse, will cost us more; more jobs will be lost. In a show of class solidarity Bush talked of the collapsed investment banks as institutions that "found themselves saddled" with these "toxic" assets that the government is about to unload on the US taxpayer. He said that banks "found themselves" with questionable balance sheets. There was no mention of any culprits, no mention of any flaws within the system itself. If the heads of organized Labor showed such class solidarity and defended workers as strongly as the bourgeois politicians defend their class, we would be in good shape. Instead, they are busy getting Wall Street's other candidate, Barak Obama in to the White House in the hope that the Democrats will revive a floundering Labor movement.
Some friends of mine were recently hounded by the IRS; a working class family raising their children, doing everything right. If I had known about this new defense I could have told them to tell the IRS that they "found themselves" with more of a tax return than the IRS though they should have. Surely the IRS would have understood that.
The British Guardian wrote last week that "America's financial system failed in its two crucial responsibilities: managing capital and allocating capital. They are right. But capitalists don't manage and allocate capital in order for human beings to live a healthy life, if that was so, millions of people wouldn't be living in squalor in the cities of the world and millions of Iraqi's and a few thousand American youth would still be alive.
Another friend of mine is very skeptical about whether or not the working class can actually govern society and take charge of society's resources. He doesn't believe you can "govern by committee". This is not an uncommon argument but there is government by committee right now. They meet in Basle Switzerland and Jackson Hole Wyoming and other nice places.
The productive forces need new owners; capital needs new allocater's, new managers. We want different people on the committees.
*Fears Of A Crash UnfoundedóFor Now: 8-18-07 FT
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