THE BLOG

Have People Misunderstood the Meaning of Capitalism?

03/03/2014 10:35 GMT | Updated 30/04/2014 10:59 BST

You could be forgiven for thinking that trying to understand the inner workings of the financial system can be confusing for many. Often it's a flippant, ambiguous web of terminology and jargon that most get lost in whenever they watch the news, that when it comes to the business segments, people just saunter off about their day-to-day, or turn the TV down. Credit default swaps, quantitative easing, fractional reserve banking and leveraged buyouts are terms that would leave anyone without any interest in business somewhat monkey-brained.

After all, a cause is only really of any sort of relevance when it affects us directly. A bank run, house prices going up or bubbles bursting would have our attentions and pique our interests if we've got money tied up in the above mentioned. Why would most people need to get involved with treasury bonds if they're in pensions? Unfortunately, it's meant to be a tangled web of confusion because it's the way the system is set up. It's a system that only benefits the few and hinders the many. But is it capitalisms fault? No, not really.

In capitalism, you are allowed to rise, reap the benefits in a fair and just system and live the American dream, as it were. If you fall, there's no bailout using other people's money, no laundering of funds, banker bonuses or free money from the banks at record low interest rates. This is crony capitalism. This is neo-feudalism. Call it what you want, but don't call it capitalism. It would even be fair to go one further and call it fascism.

And it isn't too strong a word either. General Mussolini was spot on when he said that fascism should more properly be called corporatism because it is the merger of state and corporate power. Never has that been more on the mark to this present day. The last decade has seen an acceleration of a multinationals making their presence felt everywhere. From wars over oil pipelines, to the NSA collecting every little bit of data from us to sell to companies we've never heard of; make no mistake - this is just business.

What paved the way for this was Bill Clinton along with pressure from the Republicans in his tenure as President in the 90's deregulated the banks on Wall Street and provided huge tax cuts for the wealthy. For all the talk of a surplus, low gas prices, a dot com bubble and a strong economy, it will be an era that will live forever as being the one that kicked this financial crisis off, with the burst of a said dot com and housing bubbles, giving out mortgages to every Tom, Dick and Harry. There was only way this would end - a worldwide depression. Blaming George W Bush for just about everything during his time in office is a huge red herring and misdirected in so many ways, for he is only a continuation of a system that he carried forward where Clinton left off.

For anyone reading thinking it's all a conspiracy, then there's the revolving door of bankers and politicians. For instance, Hank Paulson, the Secretary of State under Bush in 2006-2009 was also a Goldman Sachs banker. Bill Clinton is a consultant for said bank, while Tony Blair also consults for JP Morgan respectively. The list goes on. In short, terms in office are a stopgap for the jobs that really pay out the big bucks.

Four words essentially ended capitalism: Too big to fail. If that isn't fascism by its very definition, then clearly something big is missing. A model to look on and admire is Iceland - an economy that collapsed, arrested those responsible and now have a sound footing economically. That is what true capitalism is.

Unfortunately, the City of London and Wall Street don't seem to think so and will go about their day to kick the can down the road for as long and hard as they possibly can.