Novelist. Author of APSARAS and tales from the beautiful Saigh Valley. First person to quantify spiritual values.

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Monday 17 August 2009

Capitalism- The answer or the problem

From 19/8/09

LAST issue I looked at the one of the two
pillars of Western life, Democracy and concluded
it wasn't working. The people cannot
be trusted to vote for the well being of
the nation.The lemmings still vote for the
Lemming party despite their manifesto saying
that there is a risk of drowning in the
I now turn to the other bastion of our way
of life; Capitalism. For many centuries it
has provided the means to push the
Western world forward as a centre of industry,
excellence and innovation that could
never be matched by say, the communist
countries. Nobody can surely dispute that
the Americans with their business enterprise
forged ahead of Russia during the
crucial Cold War years.
Now, however, following the banking fiasco,
do we need to look again at how we
finance our lives or do we simply have to
move with the times and regulate the system
Naturally, all trade, should operate on a
barter system. The invention of money
made the system more efficient and the
creation of banks was the lubricant that
greased the cogs of the machinery. Until
recently the system worked well, with most
conflicts of human interest being balanced
on the scales of supply and demand. In
recent decades, however, there has arisen
a field of endeavour that has shaken the
system so much it was derailed. Bankers
using more sophisticated financial instruments,
motivated by unrestrained greed,
have devised a way to make money for
nothing; almost like a perpetual motion
machine. Even better they haven't had to
use their own money to achieve this. They
don't create anything, they don't manufacture
anything and they don't even provide a
service. All they do is move vast quantities
of other peoples money around and take
huge commissions at every stage.Is it any
wonder that the system started to creak
with Nick Leeson and Bearings Bank and
eventually collapse with Lehman Brothers
and others.
The manipulation of markets by these
hedge funds and investment banks affects
ordinary people in the performance of their
savings and more importantly in their pensions.
How is it that one day a company,
well run and trading successfully, can be
worth so much and yet the very next day a
trader takes fright and the share price
plummets? If your pension has exposure to
these shares it will suffer.The recession will
mean many people losing their homes and
well run businesses because of the markdown
of their asset value. It can't be right.
The Finacial Services Authority (FSA)
said this week that they didn't want to pursue
further regulation of the bonus system
in case it weekened the City's ability to
attract the best people and protect the
country's pre-eminance in the Financial
world. Bollocks! Surely we can curb the
excesses and still operate a world beating
financial industry. The Banks should not be
allowed to run as both a Savings bank,
holding public money and an investment
bank, speculating on the stock exchanges
and commodity markets around the world.
Secondly, the Government should introduce
a new and significantly higher level of
tax on the profits of speculation that will
reduce the ability of the Banks to pay
frankly ridiculous bonuses.
That the FSA has lost its appetite to take
on the big Banks shouldn't surprise us. I
may be a cynic but it seems to me that a lot
of senior politicians leave Parliament and
take up lucrative positions in the financial
sector. As an example we need look no further
than the last Prime Minister, Tony Blair.
It is well know that he has advisory jobs
with JP Morgan and the Zurich group who
pay him £500,000 each, per annum. Nice
work if you can get it. Let's make a prediction,
shall we. What odds that Gordon
Brown will take an equally well paid job in
the industry when he eventually retires
from ruining the United Kingdom.

By Kevill Davies, who is the author of
'Apsaras' availabe from all on line

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