Capitalism - A flawed and corrupt system

Capitalism - where money is allowed in 'free markets' to flow in an unrestricted way ... and without any social/moral compass ... is flawed. In the hands of the greedy, corrupt and power-hungry, money is not used to help people, but to exploit them ... in pursuit of yet more money and power ... and over the last few decades these people have proved themselves to have no conscience or morals whatsoever.

Let's start with those who argue for 'free markets' all around the world. By arguing for this what they really mean is that they should be allowed to invest in whatever they want, whenever they want, wherever they want, and where they are most able to exploit the workforce/natural resources. If a country tries to defy them, and not allow their people to be exploited, then they will threaten them ... move their money elsewhere ... and force their communities/countries into ruin. 

Does this really happen? ... of course it does! And we see the consequences of this every day! It's why manufacturing moved to China, moving on to Vietnam ... and will eventually move to Africa (which is what China themselves are also starting to do). It's how corporations regularly threaten governments with moving their operations/jobs overseas, unless governments slash their tax bills and give them exactly what they want (e.g. Banks regularly threaten to move their centres of operation overseas to avoid taxes and any regulation restricting their immoral activities, and Vodafone were also recently let off £6bn in tax)!

Corrupt bankers, who created this global crisis, and forced governments to bail them out (using taxpayers money!) resulting in all the sovereign debt crises, are now using this bailout money in the "money markets" to force governments to take yet more bailouts (e.g. Eurozone crisis)! By wielding their power, they are forcing governments to slash public services and slash pay/conditions for the poor, in the form of "austerity programmes" (nb the UK Government is doing this whilst also slashing income tax for the ultra-rich and allowing executive/ bankers pay to soar)! 

The bankers have for decades created money out of thin air (legalized electronic counterfeiting!), lent it out at interest (money for nothing), and made 'debt slaves' of everyone. They have then been gambling this money on the 'money markets', with minimal regulation (and no 'gambling tax', despite every other form of gambling being heavily taxed!) ... where they personally take all the profits, and taxpayers take all of the risk and losses (nb this still hasn't changed)!

These are not 'free-markets', but 'corrupt markets', where the ultra-rich can openly exploit and devour the poor/hard-working. 'Free markets' would have allowed corrupt banks to fail ... they would not have handed them taxpayers money! The banks should pay the cost of 'insuring' themselves against failure, and be taxed accordingly (nb which would naturally be far greater than any traditional gambling tax)! However the Government are not doing this (nb a financial transaction tax is being vehemently opposed in the UK), as they are 'in the pockets' of the bankers and the ultra-rich ... and even if they weren't ... they would be continually threatened by them (e.g. with moving their operations overseas, moving their money, and/or forcing 'a run' on their currency/country).

If anyone has any doubt about the corrupt way in which capitalism is working ... one only needs to look at recent actions of the Bank of England and George Osborne. In the past they pumped an additional $325bn into the banks, via their so called 'Quantatitive Easing' programme, in the hope it would feed through to businesses and the wider economy ... but the banks lent very little of this out to actual businesses ... preferring to gamble with it and increase their bonuses again!

Because of this Osborne and King have just recently announced a scheme to give them more money ... but this time they are trying to position it as money they can only use to lend to real businesses! Says it all really! One Government minister also admitted this was needed because bankers were 'investing' elsewhere to get better 'returns' (i.e. in 'money for nothing' scams ... e.g. insurance, counterfeiting, gambling with other people's money)!

Moral businesses desperately trying to add value, help others and create jobs have been (and are still being) deliberately starved of money/resources ... by corrupt bankers who couldn't care a jot and are only interested in swelling their own immoral/grotesque fortunes. Adding real value to people's lives takes time, effort and resources/people, all an anathema to bankers ... as they cannot compete with legalized 'money for nothing' schemes ... 

'Free-market capitalism' effectively promotes 'money for nothing' schemes (e.g. 'financial engineering') and results in the systematic destruction of real economies/communities ... it blights communities ... and survives only because of ignorance, apathy and the centralization/control of power and capital (the 'means of production').

Moral businesses create value, corrupt bankers/financiers systematically leech from this and destroy value, and should be stopped from doing so ... We need state run community banking, investing in real business, and out of the hands of immoral bankers (gamblers), where money is invested by the people for the people ... and guess what ... we actually already effectively 'own' two banks as a result of recent bailouts ... so why don't we get on with it and put these to good use ... by putting capable, honorable and trustworthy community stakeholders on boards ... n.b. and we do not want Richard Branson or Philip Green types ... who preach to everyone, but pay no tax themselves)!

Corrupt economics: Destroying Value ... and Communities

The Government is currently promoting the fact that they are shifting their focus onto exports, manufacturing (cf finance) and growth (i.e. job creation).

However this once again appears to be all spin and no substance!

Our current trade deficit is at its worst level for seven years, manufacturing is shrinking (not increasing), and recent figures show that the vast majority of jobs currently being created are in finance (over 60%) - not manufacturing (less than 3%)! 

This Government tries to tell us the financial sector makes up a small part (less than 10%) of the total economy, which is a complete distortion ... this small figure does relate to the manufacturing sector, but not the financial sector ... and the job creation figures provide a truer picture of reality ...

Corrupt 'free market capitalism', is systematically backing/ promoting 'money for nothing' scams ... over 'real' hard-working businesses desperately trying to positively contribute to society and add real value to people's lives ..

It is well known and well documented (e.g. on this blog) that bankers (and finance companies in general) do not add any real value to society ... in fact they're actually systematically destroying value ... hence they need to be reigned in. 

In the future 'adding real value' needs to be positively backed/promoted ... and destroying value needs to be made illegal or, as a minimum, taxed very heavily to replace/cover any value it may destroy (i.e. just like other forms of gambling, tobacco, alcohol etc currently are). This Government is vehemently resisting any financial transaction tax ... which would be a good start to achieving this goal ... and why? ... well, they are 'in the pockets of the bankers', are also threatened by them (e.g. threats to move their centres overseas if they don't like what the Government is doing) ... and they allow this corrupt banking system to counterfeit money and to keep the 'means of production' (i.e. money/capital) mostly in the hands of themselves (over 60% of all new jobs/investment) ... so they can create and exploit yet more 'money for nothing' scams (i.e. 'financial engineering')!

They are systematically stealing taxpayers money, plundering and destroying communities, and stealing people's future ... by burdening communities with debt slavery for decades to come. 

Capitalism is better described as the 'economics of exploitation' ... and this is not being tackled because we also have a mockery of a democracy.

As Aristotle once said ...

"Democracy is when the indigent, and not the men of property, are the rulers"

... and ...  

"In a democracy the poor will have more power than the rich, because there are more of them, and the will of the majority is supreme" ... 

Adding Value or Destroying Value ?

A recent study by the New Economics Foundation (NEF) has examined the social value and financial cost of a number of professions ... with enlightening, but perhaps not surprising, results ... for instance they highlight how highly paid groups such as bankers and tax accountants systematically destroy value, rather than add value, to society ...

The Foundation applied a new form of job evaluation to calculate the total contribution various jobs make to society, including for the first time the impact on communities and environment. A spokesperson for the Foundation said: "Pay levels often don't reflect the true value that is being created. As a society, we need a pay structure which rewards those jobs that create most societal benefit rather than those that generate profits at the expense of society and the environment" ... and went on to say ... "there should be a relationship between what we are paid and the value our work generates for society".

A total of six different jobs were examined and their levels of pay, as well as the overall value they contribute to the society, were compared:

The elite banker - "Rather than being wealth creators bankers are being handsomely rewarded for bringing the global financial system to the brink of collapse. Paid between £500,000 and £80m a year, leading bankers destroy £7 of value for every pound they generate".

Childcare workers - "Both for families and society as a whole, looking after children could not be more important. As well as providing a valuable service for families, they release earnings potential by allowing parents to continue working. For every pound they are paid they generate up to £9.50 worth of benefits to society."

Hospital cleaners - "Play a vital role in the workings of healthcare facilities. They not only clean hospitals and maintain hygiene standards but also contribute to wider health outcomes. For every pound paid, over £10 in social value is created."

Advertising executives - The industry "encourages high spending and indebtedness. It can create insatiable aspirations, fuelling feelings of dissatisfaction, inadequacy and stress. For a salary of between £50,000 and £12m top advertising executives destroy £11 of value for every pound in value they generate".

Tax accountants - "Every pound that a tax accountant saves a client is a pound which otherwise would have gone to HM Revenue. For a salary of between £75,000 and £200,000, tax accountants destroy £47 in value, for every pound they generate."

Waste recycling workers - "Do a range of different jobs that relate to processing and preventing waste and promoting recycling. Carbon emissions are significantly reduced. There is also a value in reusing goods. For every pound of value spent on wages, £12 of value is generated for society."

The example professions chosen will certainly promote debate about this important (and philosophical) aspect of 21st century 'economics', and whilst such work is still clearly in its infancy, it already starting to highlight a number of potential ways pay (and taxation systems) are likely to evolve in the future ... e.g. becoming more closely aligned to the level of social (and environmental) value actually provided to the 'economy' ...

When places like the UK decide to progressively move towards becoming a 21st century 'economy' is a very different question however ... as the those currently in "Power" will resist it at all costs, and the level of failure/despair will have to become far worse before the majority of ordinary hard-working people (who are currently adding all the value!) decide to do something about it ... take a look at this post for instance - however, when they do decide to act ... change things will (e.g. take a look at another of my recent posts for instance, as well as this recent one from fellow blogger, writingsonthewall, too).

This post was referred to on Robert Peston's blog "New ice age for bankers" post 98.

Adding Value or Poverty - No-one owes the UK a living

Another interesting post from a fellow blogger to ponder ...

... this time referring to the 'fairy tale' we have lived in and the 'harsh reality' the UK now faces:

"I think some people are missing a big point ... the big point being that we're not just anybody, we're British.

Consequently, normal laws of economics don't apply to us. Hadn't you heard? For example, we're not subject to the economic cycle like lesser mortals - 'boom and bust' has been abolished by that Nobel economist of the future, his Holiness Gordon. The abolition of boom and bust was a great weight off my mind when I heard about it, I must say. Sorted. Well done, Gordon.

Being British exempts us from manufacturing - for goodness' sake, don't you realise that working in a factory can make your clothes grubby, and you could even get dirt under your fingernails? Certainly beneath our dignity as Brits.

We don't mind doing a little work, mind, but we feel much more comfortable in 'service' jobs - as far as manual labour is concerned, well, that's what foreigners are for, isn't it?

We're proud to be "a nation of shopkeepers"... and hairdressers, consultants, estate agents, civil servants, care professionals, and, er ... consultants. Obese, us? Never - we get plenty of exercise, walking down to the benefits office.

OTT, I know, but the British mentality has been painfully close to this caricature, unfortunately. Most people seemed perfectly happy living on North Sea oil revenues, financial services, and borrowing against artificial rises in housing equity.

Well, those gravy trains have hit the buffers. We can learn how to work, or we can get used to a new concept - poverty. As we're about to find out very soon, no-one owes the UK a living".

Are such insights misguided, or getting too close to the truth ? ... you decide!