The detritus of neoliberal capitalism

The HSBC Swiss bank is not an isolated episode.   It is part of a general pattern exposing the underlying ideology which has been globally dominant over the last three decades.   That ideology has been about consolidating the power and wealth of the world’s richest class, particularly in the West.   It is based around the idea that the most efficient and successful way to run the world is through untrammeled markets freed to the highest possible degree of any external constraints.   The message for governments is: get out of the way and leave it all to markets to steer capital, employment and growth in the most profitable direction, and it will be best for everyone.   It hasn’t been, as the historical record shows.   The average annual GDP income growth in the UK in the 30 years before 1980 was 2.4%; in the 30 years after 1980 it was 1.7%.   But that has not prevented this ideology from gaining pernicious dominance in the Western consciousness reinforced by politicians of all parties paying lip service to it.

However multiple cracks are steadily becoming apparent in this ideology of which the HSBC Swiss bank scandal is only the latest example.   Most notably it led directly to the biggest financial crash for a century in 2008-9 which was triggered by an international recession severely aggravated by the recklessness and arrogance of over-powerful banks seeking profit maximization through sub-prime mortgages and exotic financial derivatives, abetted by supine politicians offering across-the-board deregulation of all financial constraints.   This was by far the worst crash, but internationally there were 6 others in the last 30 year period; in the previous 30 year period there were none.

At the political level neoliberal capitalism demanded freedom for a fundamentalist market regime.   The most essential ingredient for Western economic dominance was oil.   The Middle East contained 60% of global oil resources, and this was secured for Western interests partly by the perverse US-Saudi relationship, but more directly by the invasion and conquest of Iraq, justified by Bush as a consequence of 9/11 though Saddam, for all his wickedness, had nothing to do with 9/11.   That led to the successful Iraqi insurgency and triggered indirectly the continuing conflagration in the Middle East and the rise of Islamic State.

The increasing control by the wealthy elite in Western societies is shown by the growing revelations of the unchecked power of the financial sector, manifested not only by these latest HSBC depredations (reproducing very similar illegalities committed by HSBC banks in Mexico a few years ago), but more particularly by the massive illegality of rigging the Libor, Euribor and forex markets in the City of London and the further widespread market manipulation by PPI and the rigging of interest rate derivatives particularly targeted at small businesses.

5 thoughts on “The detritus of neoliberal capitalism

  1. Untill the banksters are locked up more swindling to come but both parties openned the door to this now it should be slammed shut so it cant happen again if the next government takes the private companies who fraudulently claim from the tax payers throw them out not reward with more contracts it seems even our minister’s are crooked taking backhanders from these isnt hard to do put the jobs back into government council hands were more jobs and the money not taking offshore

  2. It pretty much boils down to this;

    The politicians, (of all stripes,) are saying to the financial community/mafia, (more than occasionally, as in Mexico; literally so,) “But we trusted you.”

    To which the financial community are basically responding, “Well of course you shouldn’t have done, how could you ever have thought otherwise?”

    Which takes us no further and produces nothing but; a deadlock of blame, as it where.

    Meanwhile can we really do without the banking system, (and all the abuses that are so endemic, even institutional within it, if the evil career of Stephen Green at HSBC for example is anything to judge by and it is,) and if not, where do we go from here?

    Fully nationalizing the banks is one obvious alternative, (one currently being favored in Greece,) and a nationalized and fully independent audit office and officers would be another.

    However in world where Goldman-Sachs for an example of this, actually consist of well over 2000 separate legal entities it must also be time consider the bigger picture, in which unless we begin to send these criminal to jail nothing much is going to improve or change much for the better.

    But then we’ve been having this conversation, as it where since well before the collapse of Enron and the legislation, (Sabine-Oxley,) passed in wake of that fraud in the states remains adequate and comprehensive, what is missing is enforcement.

    As pointed out previously it was apparently made a preconditioning of HSBC paying a record £2 billion fine to the US regulators for, (“allegedly,”) financing terrorism and laundering drug money that Green and his co-conspirators at HSBC, (and beyond,) would gain immunity from criminal prosecution.

    As with the far more modest abuses conducted by A4e, G4S, AVANTA ans so on, proven criminality seems to be no obstacle whatsoever to these organizations conducting further business with entirely predicable results.

  3. “You can’t fall back on the private sector and say, ‘You take care of the nation’s banking system.’ That’s a fundamental function of the government, the Federal Reserve, the Treasury and the FDIC, etc. All of those agencies have a major role to play there.”

    Dick Cheney

  4. Then again, regarding the bigger picture here, there is, an ever more urgent and pressing, for most people, problem of this country’s growing and emerging oligarchy, termed variously as the upper classes, (misleading,) the super rich, (again very misleading,) our brand new and entirely self styled elite, an establishment, (packed by Blair with apparatchik political place-men, “chaps like us,” “the better sort of people,” all of which reflect however clumsily a completely dysfunctional state of affairs, where for one example of this, the brother of the shadow Chancellor of the Exchequer, (Andrew Balls,) himself a banker, was apparently awarded a bonus of £4.5 million.

    The very abuses that Labor is trying, so unconvincingly, to rail against.

    Apparatchik

    : a very loyal member of an organization (such as a company or political party) who always obeys orders.

    : a blindly devoted official, follower, or member of an organization (as a corporation or political party.)

    I may develop these ideas further at a later stage.

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