Free market theory argues that hedge funds,…currency speculation, private equity firms and the other obscene money making machines are somehow vital to…the economy…. [This] is a joke. They contribute nothing…and are merely a means by which the super-rich get even richer. Real economic wealth is created by the working class who…create the goods and services that are vital to society…

(from Hedging their Bets, DA39 summer 2007)

Almost totally lacking in regulation – that is, until the recent “stable door bolting” emergency restrictions against “short selling” and betting on declines in financial markets – hedge funds and their ilk have constantly moved trillions of dollars around the globe searching for ever higher returns and leaving economic chaos in their wake. And so it has proven yet again.

Economic uncertainty, which had rumbled on for over a year, spilt spectacularly back into the headlines at the end of September, when the free market dream was abruptly brought crashing to its knees on both sides of the Atlantic. As the world financial system melts down and the economy convulses in response, the resulting shock waves will no doubt be felt far and wide for years to come.

The ensuing chaos in the banking sector has brought a rash of institutional failures and state backed rescue deals involving astronomical sums of public money to find what could become the biggest bail out in history. Meanwhile, although markets may not actually be paying attention to our advice to “never trust a politician” (DA41), Brown and co’s calls for calm and assurances of stability have certainly gone unheeded – at least before the bail out.

Now the same super-rich elite that profited from the collapses in the likes of Russia and Asia during the 1990s have once more disappeared over the hill with billions. This time, however, it is those western economies that sit at the very heart of the modern imperialist web that are taking the hit. How this is going to play out in terms of the dominant ideology within capitalism remains to be seen. But some shift in the balance between state intervention (or “socialism” as some knuckle headed U.S. Republicans would call it) and free market laissez faire-y land seems inevitable.

Nevertheless, the spiralling cost of the downturn – in the form of soaring prices, rising unemployment, shrinking wage packets and increasing taxation – will yet again be borne by ordinary people. The actions of the hedge fund managers and the other speculators are nothing short of legalised theft; the actions of Bush, Brown and their like in bailing out the banks is nothing les than socialising the losses of private shareholders to protect the obscene profits of their super-rich friends, whose very greed is the root cause of the recession in the first place.

More than ever, these attacks on our living standards underline the need for working class organisation and solidarity in order to mount some resistance to the onslaught. In the longer term, this is the means by which we, as a class, can overcome both the state and the chaos of the market. If nothing else, surely the current crisis is proof enough that capitalism needs to be consigned to the annals of history where it so rightly belongs. Only then will society’s true economic wealth be harnessed, not to chase profit around the globe, but for the benefit of all.

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