Soaring Speculation and Insane Prices

Jul 14, 2008

The stock markets are in a panic. Since mid-May, the Dow Jones has lost over 14%. At the same time, prices are soaring–oil and raw materials go up and up, as do prices in the stores. Meanwhile, wages don’t budge.

It’s all linked. The big bourgeoisie has accumulated enormous amounts of capital. They got it off the backs of the laboring population; they made fewer workers produce more; they eliminated jobs, profiting from unemployment to push down wages.

But the problem the rich have is knowing what to do with all this capital they accumulated. Their personal spending on luxury goods, on sumptuous villas, on yachts the size of ocean liners, on private jets, on paintings by the old masters, only represent a drop in this ocean of riches. They wish to find even more places to put their capital, so it will bring them even more money, even faster.

The bourgeoisie is less and less inclined to put their capital into production. They know that low wages and soaring prices shrink the market for what can be sold. Real estate–which for years permitted the banks, developers, and construction companies to rake in huge profits–has fallen drastically. So today these people speculate in oil, they speculate in raw materials, just as some years ago they speculated in “new technologies.” As long as prices rise, there are short term profits to be made. Increase leads to increase ... up to the day when the bubble bursts. But for the moment, all they care about is that prices are going up–not about the social and human consequences of their speculation.

The price of oil soars. It has nothing to do with consumption in so-called “emerging” countries. Prices are going up only because the big companies bet that prices are going to continue to go up. These prices, for everyone who uses gasoline, or natural gas or heating oil, can lead the entire economy into a crisis. But what do the decision-makers care? They see no farther than their bank accounts.

A billion people in the world already suffer from malnutrition, but still the owners of capital speculate in corn, or in all the other grains that can be used as bio-fuels. The increase in basic food prices can lead to famine, can actually kill millions of men, women and children. But that isn’t a problem for the speculators.

This is the capitalist system, “the market economy,” which all the politicians like to brag about, declaring it to be the only possible economic system. The “free enterprise” they brag about is nothing but the freedom to exploit, to lay off, to close a factory–even when its production is useful–because it no longer brings in enough money. It’s the freedom to ruin cities, even entire regions.

Sooner or later, and sooner would be better, it’s necessary in the interest of all humanity that the working class hurls down this insane system and replaces it with an economic system whose goal will be to satisfy the needs of all people, and not to enrich a minority of profiteers.