By Judith Orr
Downloading PDF. Please wait... Issue 329

Economic crisis: Crash course in capitalism

This article is over 13 years, 10 months old
It will be years for the full effects of the crash of September 2008 to be felt.
Issue 329

The mainstream media ran out of superlatives as they struggled to keep up with the events that threatened the whole basis of the capitalist system. All reflected shock and disbelief that everything that seemed so solid had melted into air.

Every economic crisis in history has been met with similar incredulity and copious explanations as to why very specific conditions caused the “never ending” boom to bust.

Today there are millions of people asking why this most recent and catastrophic crash happened. The only answers they are being given by media pundits and economists imply that the market is like some angry beast that has to be placated. Or, as one economist on Radio 4’s Today programme claimed, the crash happened because “the market was concerned” about the true values of banks’ assets.

The market is portrayed as a living thing with a mind of its own. The bankers, bosses and captains of industry, who we were told were best able to harness the vitality of the system, turn out to be mere victims of its whims. As Karl Marx pointed out over 100 years ago, modern capitalist society is “like the sorcerer, who is no longer able to control the powers of the netherworld whom he has called up by his spells”.

Yet New Labour has been lecturing us for years about the limitless possibilities of the free market which has been forced into every area of our lives. Only the market can deliver efficient services; only profit driven entrepreneurs can make our hospitals clean, our children educated and our trains run – or so the mantra goes.

Tony Blair used to extol the virtues of the risk-taking “wealth creators” in the City. Gordon Brown once told bankers at a Mansion House banquet, “What you, as the City of London, have achieved for financial services we as a government now aspire to achieve for the whole economy.” Such an aspiration should send a chill down our spines.

Brown won a temporary reprieve from those challenging his leadership because of the scale of the global crisis. But he continues to lead Labour’s wholesale capitulation to the neoliberal project, and this is the fault line that threatens to bring him, his government and his party down. When he said in his much anticipated conference speech that he stood for “fair markets”, he showed that he has no intention of changing course.

He will continue to prop up the institutions that, far from creating wealth, merely gamble with the wealth created by others, while workers lose their jobs and families lose their homes.

In workplaces and living rooms, pubs and colleges, across the country people are now talking about the system, about capitalism. They are asking why governments who claim to have no money for public services or workers’ pay rises have suddenly got billions to keep major banks afloat. They are asking questions and socialists have to offer answers.

We are used to being told that “socialism would never work”. The experience of recent weeks, and the fallout that threatens the livelihoods of millions of the most vulnerable across the world, will convince many that capitalism isn’t working and that maybe it is worth looking at an alternative way of organising society.

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