There’s been something of a debate in the bourgeois press recently about the failure of the mainstream economics profession to get to grips with the global economic crisis. What’s also worrying, over and above their ‘head in the sand’ focus on narrow mathematical models that constrain wider debate about the failure of neoliberalism, is their inability to recognise that a major shift is taking place in the way capitalism operates. As capital finds it increasingly difficult to make profit out of ‘making things’, it’s shifting its focus to ‘making money out of making money’. In the process a huge shadow banking system has been created where multiple financial institutions act like banks, but operate with impunity around the edges of the regulated banking sector.
It’s abundantly clear that this system is having a hugely de-stabilising effect on the broader economy by exacerbating economic cycles; engaging in inherently risky, often fraudulent lending; distorting markets through price-fixing and misuse of market intelligence; and fostering parasitic behaviour that actually destroys value by reducing the capital available for genuine wealth creation. The implications for the future of capitalism are significant as its internal contradictions build, its inherent instability becomes clearer and the prospect of catastrophic collapse looms closer.
Of course, this helps build the case for socialism, but it feels like the left needs to stimulate wider debate on the subject to steer people away from any notion that the current crisis can be resolved with a bit of tinkering at the margins. Maybe something for consideration through the pages of the Morning Star or debate at local events in the Croydon area?