Sep 14, 2015
Stock markets around the world, including in this country, have engaged in a dizzying see-saw up and down that has led many economists to predict a new stock market crash and even a new crash of the world economy.
During the month of June, the Shanghai stock market fell more than 37 percent. The Chinese government tried to stop this fall, including by injecting 117 billion dollars into two Chinese banks. But this couldn’t slow down the speculators from pulling their capital out of the market. It couldn’t slow down the irrationality and sheep-like behavior that are inherent in financial speculation. This same Shanghai stock market had seen an equally irrational growth of 150 percent during the preceding year.
Similar speculative waves have hit the markets where raw materials are traded. In recent months there has been a general fall in the prices of primary goods like oil, metals, or coal. But primary materials, like all goods and anything that can be exchanged, are also objects of speculation. The swings in their prices only very distantly reflect changes in the actual economy.
Yet, while speculation is disconnected from the real economy, it is not separate. It is one of the ways the capitalists take society’s riches. These riches are obviously the product of concrete human labor.
Today, there is a never-ending growth in the share of capital devoted to speculation, at the expense of that devoted to investment. The capitalists don’t have confidence that their own economy can produce enough profits. They know that the market, that is to say consumption, is not growing. And that is even more true since the crisis of 2008, since the growth in unemployment and the austerity measures carried out by every government have impoverished the world’s populations.
The capitalists didn’t stop making profits during all the years of the crisis, taking a bigger and bigger share of all the riches produced, super-exploiting the workers and lowering their standard of living. In 2013, the profits of the 500 biggest companies grew to two trillion dollars. This astronomical sum came from taking ever more through exploitation, a veritable war waged by the capitalists against the working class. And all of this accumulated profit feeds the madness of financial speculation. On top of which, the trillions of dollars handed over to the banks since the 2008 crisis by every government have also swollen this flood, creating new, even bigger speculative bubbles – and along with them, the ever-present risk of stock market crashes all over the world.
Will this latest stock market crash lead to a “systemic” crisis, like the pretended experts say? No one knows. The only sure thing is that the billions of dollars used by the various governments to try to dam up the fall in the markets was taken from the pockets of the workers – like the billions that came before, that allowed the speculators to accumulate their fortunes.
It is also sure that there is no other way out of the financial madness of capitalism than to overthrow this system, and the parasitism that it fastens on all of humanity and threatens us all with catastrophe, regression, and ruin.