Monday, 31 August 2009

Its high time to tame the market

Well, at last a regulator has had the guts to say we should rein in 'free' market financial capitalism. Not only that but he said that much of what it does is "socially useless". Of course it is perfectly possible to argue that all it does is socially useless, and unnecessary to boot. Lord Turner, head of the Financial Services Authority (FSA), had the nerve to suggest that financial transactions should be taxed. It would be better if most of those transactions were eliminated all together, and lets not forget that it was 'light touch regulation by the FSA, lauded by Gordon Brown, that lead to the economic crisis in the UK.

Of course there were predictable howls of rage from the British Bankers Association and plenty of flak from so called 'economists'. I understand that Lord Turner is a wealthy man. That's good for him because his comments amounted to a resignation letter and I don't doubt that he will soon be receiving his P45. Deputy business Editor of the Sunday Independent Simon Evans weighed in with an article entitled 'Turners anitdote would kill, not cure, the city" - lets hope so. Evans is typical of the conventional business media hacks who marvel at the market in the good times, then expect the state (i.e socialism') to ride to the rescue when the excesses of greed threaten chaos. He says that "failing to save Lehman's last year was a terrible mistake" - but why should taxpayers be expected to prop up the rich who serve no socially useful purpose. Those who live by the sword should die by it. He then goes on to say "But I don't know how to temper the City's greed" and rubbish any idea of a Tobin tax.

Well Simon, some of us do know how to temper the greed of capitalists. The intervention by the state, in the UK to the tune of £1.4 billion of taxpayers money, was the right thing to do in the short term. The rotten system of financial capitalism needed to be propped up to prevent greater harm to the people of the UK. But that was a first step. It should have been followed by the nationalisation and break up of the banks. Along with mutual societies such as credit unions, the state, subject to democratic control, should have a monopoly of credit, and banking services. The financial services sector has had a history of malpractice and ripping off the British people. Remember the mis-selling of pensions and endowment mortgages, and the ridiculous charges that they levy on ISAs and overdrafts?

We are being taken for a ride. Capitalist banks are socially irresponsible institutions who believe they should only be answerable to the market and not wider society. When they crash we suffer the consequences. Of course the imposition of any tax on financial transactions in the UK would make these money grubbers flee abroad. That is what they always threaten to do if democratically elected governments don't do as they are told. That is why we need international socialism to bring these people down. We need to assert control over our own lives by putting democracy above commercial interests, and ending the domination of the capitalist exploiters. That is what socialism is all about.

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