Stock market seizure - we won't pay for their mess!

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22 January 2008

After the crunch in the banking industry, the world's stock markets have been hit by a systemic seizure. This Monday and Tuesday morning saw some of the biggest falls in share prices for two decades, especially in the so-called "emerging" countries. The most wealthy countries, like the USA were less affected. But European markets saw drops of 5% to 9%.

In the City, Monday's fall was the 4th largest since 1987, at 5.8%. Within minutes of the Stock Exchange reopening on Tuesday, shares had lost another 3%. Over £70bn in share value has disappeared into thin air in less than 25 hours!

Such a sum sounds meaningless to most of us. However, it represents more than 6 weeks of government expenditure for the country's 60 odd million inhabitants! Not exactly petty cash!

However, this stock market crisis hasn't come out of the blue. Over the past year, share prices have been following a downward trend - especially since the middle of August, when the shortage of credit became too obvious to be denied.

Of course, this did not stop a self-satisfied Darling from hailing the "healthy fundamentals" of the British economy. And the odds are that this will be his line once again, when the hiccups of the stock market force him to make a statement.

Of course, to a large extent, the money which has disappeared from the stock markets was little more than fool's gold, anyway - the result of the frantic financial speculation on which a large part of the capitalist class relies to make its profits.

But fool's gold or not, this will not prevent the capitalists from seeking to recoup their losses. And it is not hard to figure out how they will try to do it. They will cut investment, meaning factory closures and job cuts. They will save on machinery, and therefore on safety. They will reduce costs, and therefore real wages. In short, they will present the working class with the bill. And for good measure, they will tell us that we have to keep our heads down and work harder, for the sake of the "British economy", the "national interest" or whatever other nonsense!

But, contrary to what Darling claims, this is precisely what is fundamentally unhealthy about this system. Why should workers foot the bill for the epileptic fits of the capitalists' bingo machine? For Brown and his big business friends, this goes without saying. But not for us. In fact, this would be a good time to prepare ourselves to make the capitalists pay for their mess for a change!