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by Florian Hauschild
Tuesday, Oct. 09, 2012 at 4:15 AM
An unrestrained speculative capitalism emerged out of investment capitalism. New financing instruments are invented. Risks are trivialized or glossed over to soothe the population. Boundless indebtedness becomes the norm. The new age led to immediate profit eclipsing investment.
BANKS, BANKERS AND BANKSTERS
[The following summary of the 129 minute TV-documentary broadcast 10/2/2012 is translated from the German on the Internet, http://www.arte.de.]
The face of capitalism changed when conservative politicians in Great Britain and the US took over government at the beginning of the 1980s. Increasing deregulation enabled big banks and financial institutes to become more powerful. The free play of forces marginalized the social aspect of the market economy. A speculative capitalism arose whose actors did not avoid very risky transactions. In 2007 many real estate credits burst. The result is a worldwide financial crisis. The dramatic events are traced in a two-hour documentary film.
A “neoliberal revolution” that changed capitalism began with the assumption of power of Margaret Thatcher in Great Britain in 1979 and Ronald Reagan in the US in 1981. Politics increasingly refused its regulatory influence in favor of a free play of economic forces. Capitalism lost its social aspects more and more. Deregulation allowed banks to become ever more powerful. An unrestrained speculative capitalism emerged out of investment capitalism. New financing instruments are invented everywhere whose benefits are more than questionable. Risks are trivialized or glossed over to soothe the population. Boundless indebtedness of private and public budgets became the norm.
Commercial banks, hedge funds and insurances take undreamt-of risks. Money moves ever-faster around the world. Whether raw materials, real estate or inscrutable financial instruments, speculators stop at nothing if profits beckon. Nothing can deter them. Then the real estate credits burst first in the US in 2007 and a worldwide financial crisis began that continues today. The dramatic development of the last decades is traced in a two-part documentary by Jean-Michel Meurice and Fabrizio Calvi.
THE GREAT KILLING
[This summary of the 2012 TV-documentary from France and Finland to be broadcast on 10/16/2012 and 10/20/2012 is translated from the German on the Internet.]
With Margaret Thatcher’s 1979 election victory in Great Britain and Ronald Reagan’s US presidency from 1981, a “neoliberal revolution” began that radically changed capitalism by reducing its social aspects. This era came to an end in 2007 with a real estate crisis that plunged the western world into an economic depression and initiated a time of economic and political uncertainty with no end in sight in 2012.
When Margaret Thatcher in Great Britain and Ronald Reagan in the US took over government, these two convinced ideologues started an unparalleled deregulation campaign with the help of economic advisors of the most powerful big banks. Bit by bit, they shattered everything created after the Great Depression of 1929 and the postwar era to give capitalism a social component. Their successors, whether conservative or “leftist,” continued this policy. Ironically the last official act of the democrat Bill Clinton in the Oval Office was signing a law that completely disarmed the state and allowed the financial markets to develop as they pleased.
The new age led to general indebtedness and a speculative capitalism in which immediate profit is more enticing than investment. The whole world bears the risks and no longer the individual investor. A deep trench opened up between the production- and the financial-sector.
Speculation always existed in capitalism. What earlier was an exception now became the rule. Worldwide financial management fell out of joint. The oligopoly of the big banks was the uncertainty factor. Social inequality grew with the new economic elite. Then the reality of the financial giants tore us from our dreams. In 2007 the system imploded. The filmmakers Jean-Michel Meurice and Fabrizio Calvi offer insight in the mechanisms that led the world of finance into the current crisis.
THE DANCE OF GREED
[This summary of the 2012 TV-documentary is translated from the German on the Internet.]
In the course of the last 30 years, neoliberalism in economic policy enabled the banks to become ever-more powerful. Profit has the highest priority. Speculations define businesses instead of investments. Politics comes more and more under the influence of omnipresent financial managers. Will the present financial crisis change anything?
Commercial banks, hedge funds and insurances play with risks and trust, with true and false values and assets. Derivatives become increasingly complex. Commissions soar into the immeasurable. The money supply moves ever faster around the whole world. The danger of a financial bubble increases. Whether with raw materials, real estate credits or inscrutable financial instruments, speculators stop at nothing in their search for profit.
How could this system gain acceptance? Why couldn’t the states control it any more? The answer seems obvious: the bankers assumed power. In the United States the “octopus” named Goldman Sachs is all-pervasive and many men and women in power positions were or are still active for this bank. In Europe, above all in Brussels, the omnipresent banks dictate their laws to the states. Despite the global financial crisis, a change is not in sight.
HOW BANKS MAKE MONEY
Insights in the Snowball System
By Florian Hauschild and Tobias Tulinius
[This article published September 9, 2012 is translated abridged from the German on the Internet, http://le-bohemien.net/2011/09/09/wie-banken-geld-machen/.]
The mechanisms of the money system do not solve the classical problems of capitalism. An enlightened money system analysis is an expansion of capitalism criticism, not an abridged capitalism criticism. No criticism of certain occupational groups should be confused with the mathematical-logical facts of the money system. The goal is showing the problems in the money system have a systemic nature and are not confined to the actors.
In the social-political discourse, system-critical voices can be heard from nearly all political directions. “Conservatives” see that “leftists” were often right. Leftists admonished and warned that concrete capitalism does not function. In the meantime, this has become a truism.
However the expanding criticism has not changed present EU crisis management. With the controversial ESM Stability and Fiscal Pact, the European elite from Merkel to Sarkozy threatens to restrict nation-state possibilities, cement the European deficit in democracy and transparency and demonize critics of the bailout umbrellas.
Even if a coordinated economic- and financial policy is part of a currency union, the question is raised: under what presuppositions and criteria should this political change be realized.
The public debate about money is carried out tirelessly. But where money comes from and how our money system functions are hardly discussed. That compound interest anchored in the money system leads to increasing assets redistribution is irrefutable. Critics of this thesis are isolated and easily refuted…
The following questions result from democratic theory:
Why did the state transfer the license to create money to private banks? The direct award of credits to the public authority by the Central Bank was prohibited in the Eurozone since the second stage of the European Monetary Union of 1994. The state must borrow money from commercial banks.
Why does the state – all of us – become indebted to private banks for the money created by these banks?
Why is a functioning money system seen as a largely private and not as a public function?
Why are there no public communal banks that also create money?
Grappling with these questions leads to another crucial question: How is a democratic political system and a stable economic system possible without a just democratic money system? The question whether we live in a democracy or under a dictatorship of the financial markets depends on the kind of money system that we use (cf. www.pigs.de).
Free Internet Book, “Investing, not Betting,” 67pp, Brussels, April 2012
VIDEO: “The United States of ALEC,” www.billmoyers.com, September 30, 2012
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