Our previously fearless political leaders have declared that we are currently in a worldwide financial crisis. Around the globe, they are urging an injection of public funds to boost confidence in the market, and are also urging members of the public to remain confident and to spend their hard earned money.
This so-called financial crisis actually represents capitalism failing. It is blatantly evident that the economies of nations are failing to the extent that they are capitalistic. Capitalism, of course, is an economic system in which there is private ownership of the means of production, and thus, a system in which private capitalists decide what is produced when and where.
Capitalism is now on the brink of displaying to the world that it is a paper tiger. It is a tiger that has no real teeth and relies on the acclamation of the masses to give it any semblance of a roar. In other words, it relies upon perceived confidence for it to sustain itself. When an economic system relies upon confidence, rather than on the direct needs and abilities of human beings, it must always run on a razor’s edge.
Politicians, and their hand-maidens, the economists, generally fail to see that the capitalist system is all smoke and mirrors, and is propped up (or puffed up, to be more appropriate) by a banking sector which is also all smoke and mirrors. The devotees of capitalism not only lack insight, but also make the fundamental error of reifying the economy and reifying the market. Both of these are mere concepts, or theoretical constructs. They are no more real than ideas of the Easter Bunny.
Australia is now caught up in efforts to prop up this mirage of a system by such moves as guaranteeing the funds of those who have made deposits into the mainstream banks. It is odd to note that a major member of this community of banks, is the Commonwealth Bank of Australia, which, until its privatization in the latter part of the 1900’s, was owned by the commonwealth in the fundamental meaning of the term; that is, it was owned by the citizens, or, if you like, it was owned by all of us. Not only was it ours, but our deposits were guaranteed by the government; that is, they were guaranteed by all of us.
Many of the deposits in the mainstream banks are the modest savings of good citizens heeding the call to carefully manage such funds. Now, though, our commonwealth government wants to give substantial aid to banks and financial businesses that lie outside the mainstream of banking. They want to spend such huge amounts to assist these organisations to qualify for governmental guarantees of the funds invested in them. Those funds are not the funds of the prudent man in the street. They are the funds of the gamblers. They are the funds of the greedy. Capitalism is based upon greed and its instrument, gambling. So, in effect, all of the bail-out moves of the commonwealth government are aimed, wittingly or unwittingly, at the support of greed and gambling.
Some of us have trodden this track before, when politicians, economists and pundits had just enough integrity left to be honest with themselves and others by calling the circumstances of the 1930’s not a recession, but a depression. Some who trod that track have actively and enthusiastically contributed to the factors that have been significant in the current mess. Others, who have not trodden that track might be stupid and lacking in insight, and might be arguably not as culpable.
Those who lived through, or just after, the Great Depression of the 1930’s, will be able to dredge their memory banks to re-instate valuable strategies of survival. Many of us do not have to dredge our memory banks, as the survival techniques are deeply ingrained in our psyches as a result of direct experience or as a result of our early socialisation.
It is unfortunate that our Australian governments, both federal and state, have not sufficiently learned the lessons of the Great Depression. They seem to believe that acceptable spending can be many multiples of income. It is also unfortunate that the executives of even our mainstream banks have not learned these lessons, as evidenced by their practice of lending out many times more funds than the amounts they hold as deposits. Still, such executives operate in a capitalistic mould, and therefore are duty bound to be greedy. Our politicians do not even have this dubious excuse.
Battler
This so-called financial crisis actually represents capitalism failing. It is blatantly evident that the economies of nations are failing to the extent that they are capitalistic. Capitalism, of course, is an economic system in which there is private ownership of the means of production, and thus, a system in which private capitalists decide what is produced when and where.
Capitalism is now on the brink of displaying to the world that it is a paper tiger. It is a tiger that has no real teeth and relies on the acclamation of the masses to give it any semblance of a roar. In other words, it relies upon perceived confidence for it to sustain itself. When an economic system relies upon confidence, rather than on the direct needs and abilities of human beings, it must always run on a razor’s edge.
Politicians, and their hand-maidens, the economists, generally fail to see that the capitalist system is all smoke and mirrors, and is propped up (or puffed up, to be more appropriate) by a banking sector which is also all smoke and mirrors. The devotees of capitalism not only lack insight, but also make the fundamental error of reifying the economy and reifying the market. Both of these are mere concepts, or theoretical constructs. They are no more real than ideas of the Easter Bunny.
Australia is now caught up in efforts to prop up this mirage of a system by such moves as guaranteeing the funds of those who have made deposits into the mainstream banks. It is odd to note that a major member of this community of banks, is the Commonwealth Bank of Australia, which, until its privatization in the latter part of the 1900’s, was owned by the commonwealth in the fundamental meaning of the term; that is, it was owned by the citizens, or, if you like, it was owned by all of us. Not only was it ours, but our deposits were guaranteed by the government; that is, they were guaranteed by all of us.
Many of the deposits in the mainstream banks are the modest savings of good citizens heeding the call to carefully manage such funds. Now, though, our commonwealth government wants to give substantial aid to banks and financial businesses that lie outside the mainstream of banking. They want to spend such huge amounts to assist these organisations to qualify for governmental guarantees of the funds invested in them. Those funds are not the funds of the prudent man in the street. They are the funds of the gamblers. They are the funds of the greedy. Capitalism is based upon greed and its instrument, gambling. So, in effect, all of the bail-out moves of the commonwealth government are aimed, wittingly or unwittingly, at the support of greed and gambling.
Some of us have trodden this track before, when politicians, economists and pundits had just enough integrity left to be honest with themselves and others by calling the circumstances of the 1930’s not a recession, but a depression. Some who trod that track have actively and enthusiastically contributed to the factors that have been significant in the current mess. Others, who have not trodden that track might be stupid and lacking in insight, and might be arguably not as culpable.
Those who lived through, or just after, the Great Depression of the 1930’s, will be able to dredge their memory banks to re-instate valuable strategies of survival. Many of us do not have to dredge our memory banks, as the survival techniques are deeply ingrained in our psyches as a result of direct experience or as a result of our early socialisation.
It is unfortunate that our Australian governments, both federal and state, have not sufficiently learned the lessons of the Great Depression. They seem to believe that acceptable spending can be many multiples of income. It is also unfortunate that the executives of even our mainstream banks have not learned these lessons, as evidenced by their practice of lending out many times more funds than the amounts they hold as deposits. Still, such executives operate in a capitalistic mould, and therefore are duty bound to be greedy. Our politicians do not even have this dubious excuse.
Battler
2 comments:
I disagree. This is not the failure of capitalism but, a crisis caused by greedy, lying American Bankers, who have been loaning money to people who have no hope of repaying loans. These same greedy lying American Bankers, using now thouroughly discredited ratings agencies like Standard and Poors, then flogged off these so called "mortgage backed" loans to investors all around the world.
The problem is not capitalism, the problem is greedy, lying American Bankers. They are absolute scum and no one should ever deal with them again.
Further, George W. Bush and his scumbag Republican Party are also to blame because they failed to regulate what the American Banks were doing.
About time we formed a world financial system from which the Americans are excluded. They are liars, liars and nothing but liars.
You can find a spoof of the "SPEND TO GET OUT OF TROUBLE" urgings in order to help in the financial crisis, by Fred Thompson (remember him? Was a candidate for American president, ex actor and ex senator). Applies to Australia as well as USA.follow the link below.
http://www.youtube.com/watch?v=7IrR3o7x1ps&eurl=http://www.dvorak.org/blog/
As to the comment above this one, it was the Clinton Administration, not Bush's, that backed the Fannie May and Fred Mac fiasco.
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