Wednesday, November 9, 2011

External article: "The 99%, the 1% and ‘anti-finance’" by Oisín Mac Giallomóir at The Commune

A most interesting take about the myths of a 'fixable' Capitalism. Excerpts:
Two ideas have sprung up which are both wrong and dangerous. Firstly, there is the idea that is expounded by the Ron Paul loving, Ayn Rand reading, Austrian economics skimming, right-wing libertarians. An argument presented by many of these is that we are not truly living under capitalism but rather under corporatism, that is under a situation where the government and market are not sufficiently separated. The trouble here is supposedly the fact that people are not engaging in free market exchange, but rather the economy is being controlled by the big banks, large corporations and the government who are all hand in glove with one another.

Here there is a failure to understand the nature of the state in capitalism. (...) Workers work for their employers for a wage (...) it is not a neutral exchange. It can only happen if workers are excluded from control of the means of production. Workers only work for a wage because they do not have a means to live independent of waged work. Workers are excluded from control over the means of production because the means of production are privately owned. This private ownership is secured as a legal right with the full force of the violence of the state behind it. (...) The only reason there is poverty in the presence of great wealth, as in today’s society, is because that wealth is held privately and defended by the armed force of the police, the army, the courts and prisons.

The second wrong idea which has substantial currency in the Occupy movement is the vilification of finance. This is closely tied to the above delusions about the naturalness and political neutrality of capitalism. Finance is portrayed as parasitic on the real economy. The idea of a parasitic financial class is of course an old one.

(...) according to the anti-finance people, money creating money is precisely the perverse kind of capitalism for which the banks are at fault. But this is no perversion of capitalism and it does not happen because of the banks.

The function of banks or any financial intermediary in capitalism is to transfer funds from savers to investors, or put more simply, moving money from people who have it to capitalists who can invest it and make money out of it. They therefore play a very major role in capitalist production. Their role is far from parasitic on capitalism.


Without banks no capitalism. But equally, without capitalism no banks.

Read the full article at The Commune.

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