Those with money can; those without are expected to take the punishment. If you’ve got resources, you move them out of stocks and shares and into gold and even jewellery. If you’ve just got your labour power to sell, you will be on the receiving end of the redundancy notice, short-time working and, coming soon, pay cuts. You will be expected to pay for a crisis not of your making.
Yesterday, the price of an ounce of gold hit record levels against the euro, sterling and Asian currencies on what one financial commentator said were “mounting concerns that global authorities are embarking on a ‘Zimbabwe-style’ debasement of the international monetary system”. Investors point to the virtual elimination of interest rates and the printing of money that is getting under way. Earlier in the week, gold soared to new heights on fears that Eastern Europe's banking crisis could trigger a wholesale collapse of the global financial system. It is now nearly $1000 an ounce. “Emerging Europe is the sub-prime of Europe and now everybody is running for the door,” one analyst commented.
Using gold as a store of wealth is a return to the precious metal’s role in ancient times, before the development of paper money under capitalism. "People can see that the only solution to the credit crisis is to devalue all fiat [government issue] currencies," said Peter Hambro, chairman of the Anglo-Russian mining group Peter Hambro Gold. "The job of central bankers is to allow this to happen in an orderly fashion through inflation. I'm afraid it is the only way to avoid disaster (!), but naturally investors are turning to gold as a form of wealth insurance."
But what about those without access to wealth on this scale? What about the tens of thousands of car workers in America and Britain who have lost their jobs or are about to do so? What are they supposed to do? What are about people who are losing their homes because they are out of work? Or people’s whose savings and pensions have been eroded or wiped out altogether? Who looks after their interests? The straight answer is no-one.
The capitalist state is designed only to enhance and defend the interests of powerful vested interests – which today means global corporations and financial institutions. If that means governments throwing billions at bankrupt banks, that’s what will happen. If that means giving corporations money so they can sack workers, as is happening in the United States with the car companies, then so be it.
Do union leaders look after workers’ interests? Do they hell! The leaders of the major unions have sat on their hands and watched as jobs disappear. In fact, they often collude with management. They make pathetic appeals to governments to keep plants open to be ready for an “upturn” in the economy. Their faith in the capitalist system is actually more boundless than that of capitalists themselves. They understand that when Japan’s exports collapse by 45% in a few months, as they have done, the world economy has actually fallen off a cliff already.
As no-one is looking after our interests, we have will to take care of them by ourselves, through co-ordinated action to change how real power is expressed and exercised in society. To stop the economic collapse from destroying the lives requires a bold challenge to capitalist economic and political power. The ruling elites have lost the right and the authority to govern us by presiding over and encouraging an unsustainable economic system that is in freefall.
Only a transfer of effective power can enable us to reorganise the economy to produce for need and not profit, and to shut down toxic banks altogether in favour of a mutually-owned and controlled financial system, along the lines suggested in our Charter for Democracy.
AWTW communications editor