Capitalism again


As I understand it, a lot of investment money ends up on the so-called “money market.”  When you start using investment money to place bets on stock prices or currency values, then it does not “grow business” or “create jobs.”  In that case, it does not do anything to create wealth or productivity.


This was, I think, one of the problems with the quantitative easing money that flooded the markets a few years ago.  The hope was that banks would use all this new liquidity to invest in new enterprises.  But that did not happen.  Instead they would do things like buying a hundred million dollars in Swiss francs and selling them a week later and make a profit of a few hundred thousand dollars.  Little crappy speculations like that. 

I have spent too much time in former communist Eastern Europe to have any belief whatsoever in Marxism.  But one part of Marx’s analysis was correct.  Originally money was intended to facilitate trade: it was Goods-Money-Goods.  At some point, with trade for profit, it became Money-Goods-Money.  Once it is just Money-for-Money, without any apparent connection to the production of wealth, then we have reached the perverse level where capitalism does not do anything for the general good.

Martin Bier
This is exactly right. And of course what this means is that capitalism of this type is simple looting. The logic is simple, if you are gaining wealth  without actually doing anything productive the question needs to be asked, where is this wealth coming from? It isn’t created out of thin air. Of course the answer is that these transactions are diverting real wealth  created by labor to those who engage in these manipulations. Ordinary capitalism supports an idle parasitic ownership class, but at least some positive use of labor occurs , benefit accrues to a larger number of people. But this form of capitalism only benefits these “pure capitalists” at the expense of everybody else.  
Bob Zannelli


About basicrulesoflife

Year 1935. Interests: Contemporary society problems, quality of life, happiness, understanding and changing ourselves - everything based on scientific evidence.
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