Sir, – To hear the chief economist of HSBC bank echoing Karl Marx is surely a significant event. At the recent Left Forum in New York, Chris Hedges recalled Marx’s observations on capitalism. They concurred uncannily with HSBC’s Stephen King’s dire warnings last week that “The world economy is sailing across the ocean without any lifeboats to use in case of emergency.”
Marx predicted that unregulated capitalism harboured the seeds of its own destruction. As wealth is channelled inexorably up from workers to the financial elites, incomes stagnate and the capacity for consumer spending and business investment inevitably declines. Degradation of workers’ incomes, employment rights and job security undermines trust in the economic system and curbs economic participation. The structures that support a functioning society, such as public services and welfare, become hollowed out as late capitalism scrapes the last vestiges of wealth out of a defunct system.
Politics becomes subordinate to economics, subservient to the dictates of global capital. The economy becomes dependent on a scaffolding of mountainous debt, which is disingenuously packaged and sold on the markets, creating a bubble of what Marx called “fictitious capital”. One bubble burst in 2008 – no doubt there are more to come.
Without the counterbalancing forces of effective financial regulation and wealth distribution, as embedded in social democracy, capitalism engenders such gross inequality and public impoverishment that it inevitably shudders to a halt. King describes these current world economy problems as “titanic”.
And while the wealth of the the elites continues to expand, the appalling social and personal costs of “austerity” are borne by ordinary people who bear no responsibility for the gross mismanagement of the global economy. – Yours, etc,
MAEVE HALPIN,
Ranelagh,
Dublin 6.