Culture and Life

by Rob Gowland

Arcane mysteries

I may have said this before, but capitalism's a curious 
business, isn't it? I mean, the overall process is simple enough 
to grasp: accumulate all the capital you can, whenever you can 
and wherever you can. And do whatever it takes to make that 
possible.

The leading capitalists are able to make or break governments, 
manipulate whole economies and live like kings. At the same time, 
prominent corporations crash and burn with alarming frequency.

The day to day running of "developed capitalism" is entrusted by 
the capitalist corporations to an army of financial advisers, 
traders, brokers, bankers and economists, all of whom have been 
assiduously taught to believe that accumulating personal wealth 
is the highest aspiration of a human being.

And so they struggle with the global chaos created by capitalism, 
trying to make sense of its contradictions and disorder. Like 
capitalism itself, but on a smaller scale, they lurch from one 
crisis to the next, desperately seeking to discern a pattern they 
can turn to their advantage.

For, while the overall process may be simple, in its details the 
process of capitalism is full of arcane mysteries, misinformation 
and a prevailing hysteria. Its minions are seized by unbridled 
optimism one moment, doom and gloom the next.

"Buy!" they scream, then just as loudly "Sell!", as the market 
ebbs and flows and the Aussie dollar gains (or loses) against the 
Greenback.

However, the leading capitalists, especially the ideologues of 
the system, clearly know exactly how the system works and why 
things happen as they do. Their problem is that they cannot 
impart that knowledge to the people, for it would expose them to 
the wrath of those they exploit and condemn to poverty amidst 
plenty.

Instead, they keep their army of financial workers misinformed 
about the nature of the system, and encourage them to master the 
intricacies of its supposed arcane mysteries.

Deliberately mislead as to how the system actually works, all 
these poor souls can do is closely observe what happens, and on 
the basis of that try to deduce whether a trend is developing 
(i.e., will it last beyond tomorrow) or whether it is merely a 
blip (or a glitch)?

On Monday, August 9, the Reserve Bank's quarterly assessment of 
the state of the Australian economy asserted that the economy was 
expanding at a good pace and the "strong world economy" would 
provide a further boost to growth.

The very next day, readers of the Daily Telegraph's 
financial pages learnt (presumably to their surprise, in the 
circumstances) that Australian stocks had been "hit across the 
board with banks and blue-chip miners leading the fall".

Financial reporter Ian Lovett informed readers that over the 
preceding couple of days, "Wall Street went on alert as lower 
July job numbers heightened fears the US economy was running on 
empty".

Eh? What happened to the "strong world economy"? Apparently the 
US economy is not part of it.

US financial experts had been confidently predicting that some 
240,000 new jobs would be added to the US economy in July. In 
fact, the number of new jobs only came to a miserable 32,000.

No wonder the spokespersons of capitalism sometimes seem a trifle 
harassed — or simply bewildered.

Joe Spadaro, an analyst for an outfit called Trend Resources, 
told the Telegraph "the US market looks terrible". He then 
proceeded to detail a litany of financial woes: "The Dow closed 
at a new low for the year and so did Nasdaq and the S&P 500. The 
advance-decline line made a new low, the US dollar fell and gold 
rose almost US$10."

The price of gold rises when capitalists lose faith in the 
ability of national currencies to retain their value. Currency 
analyst Frank Kennedy declared "this is just one more nail in the 
US dollar's coffin", a statement with decidedly downbeat 
implications.

Even the Reserve Bank, for all its upbeat talk about the nation's 
finances being so good and how "the strong world economy" would 
help drive an export recovery, included a caveat to the effect 
that that export recovery was in fact "overdue" and that debt was 
accumulating "too quickly".

But the proof of the pudding is in the eating, and Australian 
investment outfit ARGO is choosing to sit on $280 million in cash 
rather than invest it because they can't find "good value".

Like the Reserve, ARGO's Chairman Chris Harris also chose to 
ignore the sorry state of the US economy in a guarded statement 
as to why ARGO's management would "sooner just park it [the $280 
million] in cash": "Although both the Australian and global 
economic outlooks appear favourable at the present time, going 
forward domestic and international economies may be influenced by 
higher energy and mineral costs, together with interest rate and 
currency pressures."

Not looking too good, really, is it?