The following article was featured in Practical Anarchy #14 (www.practicalanarchy.org). Sample copies of this issue are still available for and subscriptions are for four issues. Our next issue on healthcare will be out later in September.
Confessions of an Anarchist Tech-Stock Speculator
How anticapitalists can offer workers an alternative to the casino
By Eric Laursen
The big tech-stock bubble of the 1990s was starting to sag just a little bit in the spring of 2000, when I sat down for lunch with a former coworker named Phil in a diner in midtown Manhattan. After a lot of catching up, we got onto what was still the big topic for all kinds of people who should have known better: the stock market.
Buying and selling stocks wasn’t just a hobby in those days. It was how a subculture of so-called adults called day traders made their living; it was how lots of young college graduates expected to become millionaires overnight, once the software companies they worked for went public; it was how middle-class families were supposed to pay for their kids’ private school education; and above all, it was how workers in the new “knowledge economy” were supposed to save and provide for their retirement.
That may all sound pretty naïve now that the market is down 40% from where it was in the spring of 2000, unemployment is topping 6%, and economists are warning that the mighty US economy could be entering a deflationary spiral. Also when you consider that Phil and I were both financial journalists, with something like 35 years’ experience between us following the market and the people who make a living promoting it.
Also that I was an anarchist and a committed nonbeliever in the philosophy of capitalism. I’ve always aware of the contradiction between the way I make a living and my outside political work, but of course I’m not the first: Fourier was a stockjobber and Proudhon owned a printing business and sometimes played the Paris market, in fact. I’m convinced that my work against the state and the corporation, and on behalf of a society based on mutual aid, is going to be a lot more important in the long run than my minor function getting news to businesspeople.
The real problem is that even for a fully educated anticapitalist, employment, wages and salaries, and the products that the financial markets constantly urge us to buy create a form of hyperreality that can blind us to the social ties and obligations that we need to focus on in order to create a society that values people and communities. Seeing through that hyperreality is difficult because it attacks each of us individually, creating its own dialogue with us that seemingly ignores the people we are trying to organize with.
At the time I sat down for lunch with Phil, I had never worked for a company that was more than 15 years old, and two of my long-term employers had been brand new. I had never enjoyed what used to be considered a full package of benefits, including a guaranteed pension. I was lucky to have a health plan that included dental. The only retirement benefit I had was a 401(k) plan—a savings account that I didn’t have to pay taxes on until I retired, and that my employer threw a little money into as long as I made regular contributions myself.
Lots of stories used to appear in the financial press in those days about “401(k) millionaires” who had amassed so much money in their accounts that they’d been able to retire early and were off sailing in the Caribbean or building their dream houses in the Arizona desert. That wasn’t going to happen to me—I didn’t have those kinds of ambitions, and I knew the odds were against the bull market continuing another 30 years or so until I retired.
But my 401(k) was all I had, so I was making the maximum contribution each month and putting a bit additional into a separate investment account as well. There was no reason not to—my employer was giving me some extra money if I did. Meanwhile, right-wing ideologues were pushing a long-term campaign to privatize Social Security, the one guaranteed benefit that American workers still have. And no one was about to promise me anything more for when I got old.
So I listened when Phil told me about all the money he had made on CMGI, an Internet conglomerate that was getting tons of press for its incredibly successful investments in new Web ventures. CMGI had provided the capital to launch the AltaVista search engine, and its stock had shot up from less than to more than 0 a share in two years. Its CEO, David Wetherall, was reputed to be a genius with an ultra-sophisticated eye for promising technology companies with a “consumer edge.” Phil had bought CMGI at and was feeling fine.
This was the tech-stock bubble, wrapped up into one easy package for inexperienced investors. Thinking myself a prudent sort, I decided to take an intelligent gamble and see if CMGI couldn’t make me some money. I called the firm that handled my account and used some of my savings to purchase 70 shares at about 0 a share. Looking at some Wall Street analysts’ reports, I figured another 20% rise in the per-share price wasn’t out of the question and so I told myself that I would sell most of my holding when the stock topped 0 and put it into some safe municipal bonds, like most of the rest of my account.
Instead, the wobbly stock market started slipping downhill. CMGI, one of the flashiest success stories of the tech bubble, slipped faster than most. Worse, management had turned out to not be such geniuses with their latest ventures. Within a few weeks the stock had lost half its value. Within a few months it was hovering at around $.90 a share and Wetherall was on his way out the door. CMGI had become what was known as a penny stock, just another struggling little company trying to convince investors it was different from the thousands of others. I was out close to ,000.
I could have put a sell order in at a certain price, so that my broker would have automatically sold the stock if it got below that figure. But it somehow didn’t occur to me that the market was going to fall that fast, that soon. I knew it was dangerously overinflated from reading reports by leftist economists like Doug Henwood who of course turned out to have their feet more firmly planted on the ground than the Wall Street hucksters they call “stock analysts.” But I figured the gold rush had a few months more to run—one more big surge—before it was best to get out.
Buying CMGI wasn’t the only mistake I made as a tech-stock speculator. I bought Microsoft at a share, watched it climb above 0, then kept watching as it sagged to . And that was on the (I thought) sensible notion that however much I hate Bill Gates, I still use his products, so he must know how to keep making money in the software business. And a couple months before the bubble burst, I sold a gold fund I had inherited from my grandfather that had never gone anywhere—only to watch it soar after everyone started beating it out of stocks.
I was the victim of an old syndrome on Wall Street: last one in takes the biggest hit. Since then what’s left of my stocks have stabilized—they’ve even picked up a bit this year—and I’m glad to say that most of my money is in low-risk bond funds. Wall Street is again telling us that now’s the time to buy, because prices are low, but personally, I think there are too many good reasons why the US economy is not going to recover fast.
That’s the only bit of financial advice you’ll get from this article, and it’s not guaranteed. I didn’t become a tech stock speculator because I believe in the magic of capitalism. The stock market is a casino that’s rigged to work for crooks who know how to lie, manipulate the rules, and use small investors to pump up stocks they know are worthless. Without the millions of people who they regularly turn into chumps, none of the Ken Lays, Bernie Ebbers, or Richard Scrushys would ever make any money, because their work consists mainly of spinning fables and finding new ways to take advantage of workers—their own and others’.
Still, corporate America continues to tell workers that social contracts like the one behind Social Security, which essentially obligates each generation of workers to take care of the one that’s no longer working, don’t add up and that loading our money into the stock market is our only hope of being able to retire with enough money to see us through. I’m not in the stock market investor because I want to be, but because in spite of the crashed market and the fraud that’s endemic to the management of big companies, some cash to play the casino is increasingly the only thing the boss offers an American wage earner in the way of a retirement benefit today.
Popular culture is now geared to reenforce the illusion. It made me uncomfortable when one of my boyhood heroes, Joey Ramone, was revealed as a stock market geek who regularly monitored Financial News Network and once wrote a song to Maria Bartiromo, CNBC’s market-report pinup. Of course I didn’t hate him for it—“everyone’s a closet lame,” he once sang. But the fact is that millions of people have been hoodwinked into believing that the stock market isn’t just the equivalent of an overnight trip to Atlantic City but their best hope for a minimally comfortable old age, and Joey helped give the whole thing the falsely hip image aura that helped “sell” investing to the public until the bottom dropped out.
Things weren’t always this way. Many large companies used to offer workers pension plans with guaranteed retirement income for life—it was part of the social compact that was supposed to get us to stop thinking about socialism and mutual aid. But the private pension never covered much more than 50% of the workforce, and now they’re being replaced with 401(k)s, which have no guarantee. (Meanwhile, corporate executives customarily cut themselves special deals that include guaranteed retirement packages.)
The indoctrination includes employers telling you not to think about social consequences in your investing, for example. Go ahead and invest in tobacco companies, military contractors, and biotech—even though socially responsible investment funds that exclude these types of companies routinely post just as good investment results as those that revel in rapaciousness. (If you work for an employer that provides a 401(k) that doesn’t offer at least one socially responsive fund as an investment option, ask why. See if the boss comes up with a good answer.)
How can we learn to see through the hyperreality and fraud of capitalist finance?
Early in the last century, American Federation of Labor President Samuel Gompers said workers should never rely on the government for welfare. Workers only want the freedom to fight for wages high enough for them to look after their own needs, he said, and should never be compelled to contribute money to programs (like old-age insurance) that would “rivet the masses of labor to the juggernaut of government.” Instead, they should provide for each other unions and other voluntary organizations.
Gompers died in 1924 and 10 years later the AF of L helped bring about the creation of Social Security. For a while, the system seemed to work. It expanded to cover 95% of all American workers, and later on labor helped to push Medicare into law. But now that the American political class appears likely to destroy these programs, maybe we should be listening to Gompers again. Of course, as workers, we should resist privatization of Social Security and Medicare, but as anarchists, we need to start considering what we mean by the term collective.
Try a little thought experiment, as Condoleeza Rice likes to put it: If you would trust members of your affinity group to watch out for you in the midst of a police riot, would you also trust them to see to your needs for food, shelter, and medical care when you are old and/or disabled? If you could, then how much would it matter to you if your employer was stingy with its 401(k) contributions—or didn’t offer any retirement benefit at all? How much less important would your boss, or the state, be to your life in the long run?
Establishing cooperative communities and collectives that aim to provide for their members from the time the join to the time they die would require commitment, resources, and skills that are hard to bring together outside government right now. But we have to learn to do it if we want our anarchist affinity groups to become something more than short- or medium-term experiments.
Here are a couple more questions worth asking: Would your affinity group or collective consider expanding to include elderly people in your neighborhood who can supply child care and perhaps other services, plus their wisdom, comradeship, and experience, in return for a place to live and other essentials they can no longer afford on their own? Should part of our project as anticapitalist organizers be to offer older people an alternative to being cast aside, either into inadequate public housing or into ritzy but empty retirement “communities”? If so, this could help us persuade active workers not to concentrate their hopes on the stock market casino and instead to trust their future to an autonomous community linked with others in a mutual aid network.
The anarchist community in many if not most places in North America is typically young both chronologically and culturally. If it’s going to stretch itself to become an alternative to capitalist society that millions of working communities can seriously consider, it has to figure out how to make a place for every kind of person throughout their lives. This could include liberating public spaces and abandoned buildings for shelters and community centers for the elderly, not just for squats and performance spaces. It could include training medics not just to treat activists injured on the street but to provide aid to elderly people cut off from Medicaid and city health services by budget cuts.
Up to now, anarchism has largely avoided the issue of how to integrate the non-working elderly into autonomous communities. In the 19th century this was because there was no such thing as “retirement.” In the 20th century, many more people were living past working age, but government mostly took care of the problem. Today, government wants to throw it back onto workers themselves. Anarchism can offer them something better than the casino.
Eric Laursen is an independent journalist and activist in New York City. He is currently helping to organize the NYC Campaign to Demilitarize the Police as well as researching a book on how social welfare services can be provided in a stateless, nonhierarchical society.
Practical Anarchy Magazine #14
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