Jan 7, 2019
The following article is the editorial from The Spark’s workplace newsletters for the week of January 1.
Coming into the end of December, the stock markets were down between 10 and 12% for the year, and almost 20% since the peak they hit in September. Markets became increasingly volatile, jumping up, falling further down, jumping up again, falling still further down.
In other words, the markets were beset by speculation. The holders of billions of dollars of wealth throw money into the markets one day, only to pull it out two days later – even two hours or two minutes later. Computer programs calculate exactly when to put the money in and when to take it out.
If you were playing poker in a game that was run like this, you would know it is crooked.
And that’s exactly what this is: crooked – not only the stock markets, but commodities markets also, where speculators run riot, pushing the price of oil and foodstuffs up, only to drop it down. They can make as much money gambling on a drop in price, as on an increase.
The money that flooded into speculation in these markets came from the value created by the labor of men and women who produced the goods and services the economy rests on.
For more than four decades, ever since the ongoing crisis hit in the 1970s, the capitalist class that owns the economy has taken an ever larger share of the value that labor produces.
That’s why the gap between the CEO’s of all the big companies and their workers has flagrantly increased. In the 1950s, the typical CEO of a big company made 20 times as much money as the rank-and-file worker in his company. Today, that CEO makes 361 times as much. Not only do they make more money than we do – they always have – today they take an ever bigger share of the value produced in every company.
What’s true for companies is true for the economy as a whole: the wealthiest 400 people in the country today own more than half of the country’s total wealth. These are people who do nothing but own, collecting the value that is created by millions of workers. They are the very tip-top of the capitalist class, the parasites who live off of what other people produce.
The whole capitalist class is accumulating an increasing share of the country’s wealth. Instead of putting it back into production, they speculate, turning the whole economy into a riotous casino.
Even their own economists are worried today. Are we to have another 2008, when speculation in mortgages brought about a near collapse of the whole financial system? Or another 2001, when the so-called dot-com bubble burst? With speculation, the risk is serious. With the extraordinary level of government debt run up to bail out the banks in 2008, the risk is grave.
But even without a collapse, speculation has taken a deadly toll on the whole society.
The money that flooded into speculation came from extreme company profits. And those profits came from wages that didn’t go up. They came from jobs that were reduced from permanent full-time, to temporary part-time. They came from a large share of the population pushed completely out of the work force. They came from pensions that were dropped, medical care that became more costly.
The money to speculate came from the reduction in the standard of living of those of us who work. And as the standard of living went down, so did life expectancy of the population.
The money that flooded into speculation came from government subsidies to big companies’ profits – stolen out of public money needed for education, needed for roads, needed for bridges, needed for public transit, needed for public health. Instead of the decent functioning of the whole society, governments subsidized speculation.
This abomination is what capitalism produces today. It will keep producing it until the working class decides to fight back, until the power of the working class is mobilized to impose the needs of the population.