This is for you, Dad.
I remember when the housing collapse sent a torpedo through my family. My father's concrete company collapsed almost overnight. My father lost his home. My uncle lost his home. I remember my brother helping my father count pocket change on our kitchen table. That was all the money he had left in the world. While this was happening in my home, I saw hedge funders literally drinking champagne as they looked down on the Occupy Wall Street protestors. I will never forget that.
My Father never recovered from that blow. He fell deeper and deeper into alcoholism and exists now as a shell of his former self, waiting for death.
This is all the money I have and I'd rather lose it all than give them what they need to destroy me. Taking money from me won't hurt me, because i don't value it at all. I'll burn it all down just to spite them.
This is for you, Dad.

reddit.com

Just one story from Reddit's 'Wall Street Bets' forum which has recently been catapulted into the media limelight as it led millions of its followers to invest in a dying company, GameStop, heavily shorted by big hedge fund players which meant they gained as the stock of the company fell. However, by skyrocketing the stock price, millions of investors have inflicted a heavy blow to the tune of billions of dollars on the hedge funds involved in this and other such operations, for example, American Air Lines, Nokia and Blackberry stock, which have been forced to sell off positions in other stocks to cover losses, thus generating a negative effect on the entire market which at the time of writing is seeing a downturn.

No doubt this story has captured the imagination of many more millions and has become a feature of mainstream media which has focussed to varying extents on the underlying meaning of these “short squeezes”. Not a few have focussed on the pent up frustration, rage even, of many of those involved who have expressed their bitterness at the situation they have found themselves in, often well educated with time on their hands (of course exacerbated by the current unemployment/lockdown situation) to delve into the opaque world of stock market transactions which have been opened up in recent times by internet technology with popular investment apps such as Robinhood, Etoro, and many more, offering instant purchase of stocks and other financial assets to anyone with a few hundred dollars to start up. The big hedge funds have been a target of this anger, but equally, a simple desire to make easy money possibly plays the dominant role, regardless of all the rhetoric of David vs Goliath, the underdog army taking on the Wall Street wolves at their own game and landing a hefty punch. Far from being an unadulterated noble sacrifice to send a message to the elite, there is evidence that billionaires are in on the get rich quick action.

As a result of this sudden turmoil, several legal issues have arisen. The above-mentioned popular investment apps have been severely criticised for stopping trading on the targeted stocks and big political players have weighed in on this aspect. But beyond the immediate media spectacle which anyone can freely explore, is there anything for Marxists to add?

The saga has brought important issues to the attention of a mass audience. It highlights the plight of many who have known nothing for generations now but a seemingly eternal economic downturn whose inception we can approximately locate in the early Seventies with the end of the post war boom. Since then the ruling class has globalised, financialised and generally shored up the system to maintain profitability at the expense of the working class. In the old ‘capitalist heartlands’ — together, still the richest countries in the world — precarious employment is the norm and significant numbers know little else but the nightmare of unemployment and poverty and its indelible scars. Despite the erosion of working class conditions and the removal of restrictions on capital which was the essence of globalisation, the returns on capital in the real world of production has never been enough to prevent a flight into the fantasy of speculation. This brought the crash of 2007-8 and further deterioration of the conditions of the masses.

The central banks stepped in with Quantitative Easing (QE): creation of fictitious capital to dole out to market-listed companies and disguise their bankruptcies. It marked the beginning of an unprecedented stock market rally which has continued to this day. No wonder that a recurring theme in the current unfolding short squeeze saga is the complaint that the majority have suffered whilst the financial elite have never had it so good. This has been clumsily framed as “socialism for the rich, capitalism for the rest of us”, indicating how governments have abandoned so many to a worsening spiral whilst looking after the interests of the tip-top elite.

Beyond the distraction of the short squeeze story, a bigger issue is gathering. Fuelled by the massive creation of money which has gone into overdrive during the recent pandemic, the stock market has entered even bigger bubble territory and is increasingly threatening a crash. Recently massive names such as Apple and Facebook issued great earning reports which previously would have sent their stocks to greater heights, but instead resulted in falls. The short squeeze has only added to growing doubts about the future of a decade-long rally.

The main point this hammers home is that there are no capitalist solutions for the overwhelming majority, the working-class majority. A few may, by luck and judgement, manage to press the right buttons at the right time and make some money on the markets, but we can say the same about gambling in general. The majority do not have the resources nor the information which will allow them to make fortunes investing. Come the downturns which inevitably arise, the little players are forced to sell, and the big players dive in. The law of capitalism is concentration, every crash is an opportunity for the elite to make a killing. The current pandemic is no exception.

The dream of “popular” capitalism crashes on the material reality which offers no level playing field. Assets and resources, be they stocks, houses, gold, Bitcoin, whatever, are inevitably torn out of the hands of the bit players who are forced to sell to survive every time capitalism crashes; crashes which occur on average less than a decade apart and devastate the majority whilst the richest can repeatedly weather the storm, buy cheap and become ever wealthier. Such is the law of the concentration of capital. The latest chapter of disaster capitalism has perfectly illustrated this:

Over two million people have died, and hundreds of millions of people are being forced into poverty while many of the richest – individuals and corporations – are thriving. Billionaire fortunes returned to their pre-pandemic highs in just nine months, while recovery for the world’s poorest people could take over a decade… The coronavirus crisis has swept across a world that was already extremely unequal. A world where a tiny group of over 2,000 billionaires had more wealth than they could spend in a thousand lifetimes. A world where nearly half of humanity was forced to scrape by on less than $5.50 a day. A world where, for 40 years, the richest 1% have earned more than double the income of the bottom half of the global population. A world where the richest 1% have consumed twice as much carbon as the bottom 50% for the last quarter of a century, driving climate destruction. A world where the growing gap between rich and poor both built on and exacerbated age-old inequalities of gender and race.

oxfam.org

You cannot beat the capitalist elite at their own game. The answer to the fury, the economic devastation suffered by the masses, the inequality which is now beyond grotesque and will only accelerate under capitalism, is not “investor activism”. There is no version of capitalism which offers anything bar economic devastation in the short term and no future at all in the long term. We must reject the fantasies of individual escape from the worsening working class condition and embrace the only path out of the spiral of destruction which lies ahead should we continue on the current trajectory. As we recently stated:

The overarching demand today has to be for a revolutionary social alternative to capitalism. This is the essential condition for starting to build that new society where, free from the laws of capital, it will be possible to produce for social need and to redistribute socially produced wealth to meet society and individual needs.

leftcom.org

There is no alternative.

Ant