,CAPITALISM 9 CRISIS1 AGA96 

,PEOPLE 3 

,AU?OR 3 ,IA9 ,MC,KAY 

,TEXT 3 

,) ! CRISIS 9 ! F9ANCE M>KETS RUMBL+ ON1 IT IS H>D TO MAKE ANY COMM5TS ON IT AS IT IS SURE TO BECOME R$UNDANT4 ,ITS ROOTS LIE 9 ! NATURE ( F9ANCIAL CAPITAL1 9 ITS T5D5CY TO G5]ATE BUBBLES AS RES\RCES >E P\R$ 9TO SPECIFIC M>KETS 9 AN ATTEMPT TO MAKE MONEY4 ,BE=E ! H\S+ BUBBLE1 IT WAS DOT4COM4 ,BE=E DOT4COM1 IT WAS ! ,SAV+S @& ,LOANS FIASCO444 

,! CREATION ( SU* BUBBLES IS JU/ AS REGUL> AS ! D5IALS ?AT A BUBBLE EXI/S4 ,SEEK+ PR(ITS1 BANKS CREATE CR$IT & F9ANCIAL 9/ITUTIONS SPECULATE4 ,! M>G9S = ]ROR DECREASE AS CAPITAL ACCUMULATES :ILE RIS+ 9EQUALITY MAKES AGGREGATE DEM& TEET] ON ! $GE4 ,RIS+ DEBT CANNOT COV] ! REPAYM5TS1 NEW BUY]S CANNOT 5T] ! M>KET & ! :OLE ?9K COLLAPSES4 ,IRRATIONAL EXUB]ANCE GIVES WAY TO FE> & PANIC1 EASY CR$IT TURNS 9TO EXP5SIVE1 H>D-TO-F9D CR$IT4 ,F9ANCIAL CAPITAL IMPACTS ON ! REAL ECONOMY AS 9DU/RY CANNOT F9D FUND+ & CONSUM]S CUT-BACK ON SP5D+4 ,9VE/M5TS NO LONG] PAY (F1 FIRMS GO UND] 70,CR$IT ,CRUN*3 ,! RETURN ( DEPRESSION8074 

,!N ! CALLS = WAGE CUTT+ & BAIL\TS BEG9 AS ?OSE :O DID NOT CAUSE ! CRISIS >E MADE TO PAY = IT4 ,AS USUAL4 

,SEE+ ! ,TORIES GR9D !IR TEE? & PROMISE TO RE-REGULATE F9ANCE M>KETS :ILE COMPLA9+ AB\T EXCESSIVE ,C,E,O PAY IS AMUS+4 ,:ILE TRY+ TO MAKE POLITICAL CAPITAL \T ( ,NEW ,LABOR'S PROBLEMS !Y FACE ! ALMO/ 9SURM\NTABLE PROBLEM ?AT ,BR[N FOLL[$ ! ,TORY BLUEPR9T 9 T]MS ( ! ,CITY - LEAVE WELL ALONE & LET ! WOND] ( ! M>KET DO ITS MAGIC4 ,AS ,BU%'S ,REPUBLICAN REGIME IS FAC+ ! SAME PROBLEMS1 !Y HAVE DECID$ ! BE/ C\RSE TO W9 VOTES IS TO PRES5T A QUASI-SOCIALI/ CRITIQUE ( F9ANCE CAPITAL6 ,:I* IS TO BE EXPECT$1 AS ,BU%'S REGIME HAS IMPLEM5T$ A QUASI-SOCIALI/ BAIL\T 7?AT IS1 0SOCIALI/0 9 ! USUAL CAPITALI/ S5SE ( 0/ATE AID = ! RI*1 M>KET DISCIPL9E = ! WORK+ CLASS074 

,9 ,AM]ICA1 ! ,REPUBLICAN POLITICIANS >E HAM/RUNG BY !IR [N RHETORIC & >E RESI/+ A BAIL\T4 ,!IR P]*ANCE = LESS OBVI\S =MS ( /ATE 9T]V5TION = CAPITAL HAS BECOME A H&ICAP N[ ?AT ! GOV]NM5T NE$S TO ACT4 ,! ,DEMOCRATS >E TRY+ !IR BE/ TO MAKE ! PACKAGE LESS OBVI\SLY PRO-CAPITAL1 ) SOME SUPPORT = 0,MA9 ,/REET0 RA!R ?AN ,WALL ,/REET4 ,/ILL1 !Y >E WORK+ )9 AN ADM9I/RATION :OSE RHETORIC 9 FAVOR ( 0FREE M>KETS01 LACKADAISICAL CONC]N = REGULATION & DEBT TO BIG BUS9ESS MEANS ?AT ANY BAIL\T WILL BE TAILOR$ TO ! FEW1 NOT ! MANY4 

,A MODEL DOOM$ TO FAILURE 

,! CURR5T CRISIS HAS DEEP ROOTS4 ,SOME >E 9 ! 9H]5T DYNAMICS ( CAPITALISM1 O!RS 9 ! P>TICUL> =M CURR5T CAPITALISM HAS TAK5 7NEO-LIB]ALISM74 ,SOME FL[ FROM ! IDEOLOGICAL JU/IFICATIONS = NEO-LIB]ALISM :I* ALL[$ ! NOTION ( UNREGULAT$ F9ANCE M>KETS TO GA9 SU* 9FLU5CE4 ,!SE >E TO BE F\ND 9 ! NEOCLASSICAL ANALYSIS ( ! F9ANCE M>KET4 

,ACCORD+ TO ! ,EFFICI5T ,M>KET ,HYPO!SIS1 9=MATION IS DISSEM9AT$ EQUALLY AMONG ALL M>KET P>TICIPANTS1 !Y ALL HOLD SIMIL> 9T]PRETATIONS ( ?AT 9=MATION & ALL CAN GET ACCESS TO ALL ! CR$IT !Y NE$ AT ANY TIME AT ! SAME RATE4 ,9 O!R WORDS1 EV]YONE IS CONSID]$ TO BE ID5TICAL 9 T]MS ( :AT !Y KN[1 :AT !Y CAN GET & :AT !Y DO ) ?AT KN[L$GE & CA%4 ,?IS RESULTS 9 A !ORY :I* >GUES ?AT /OCK M>KETS ACCURATELY PRICE /OCKS ON ! BASIS ( !IR UNKN[N FUTURE E>N+S1 I4E4 ?AT !SE ID5TICAL EXPECTATIONS BY ID5TICAL 9VE/ORS >E CORRECT4 ,9 O!R WORDS1 9VE/ORS >E ABLE TO CORRECTLY PR$ICT ! FUTURE & ACT 9 ! SAME WAY TO ! SAME 9=MATION4 ,YET IF EV]YONE HELD ID5TICAL OP9IONS !N !RE W\LD BE NO TRAD+ ( %>ES AS TRAD+ OBVI\SLY IMPLIES DIFF]5T OP9IONS ON H[ A /OCK WILL P]=M4 ,SIMIL>LY1 9 REALITY 9VE/ORS >E CR$IT RATION$1 ! RATE ( BORR[+ T5DS TO RISE AS ! AM\NT BORR[$ 9CREASES & ! BORR[+ RATE NORMALLY EXCE$S ! LEAD+ RATE4 ,! DEVELOP] ( ! !ORY WAS HONE/ 5\< TO /ATE ?AT ! 0CONSEQU5CE ( ACCOMMODAT+ SU* ASPECTS ( REALITY >E LIKELY TO BE DISA/R\S 9 T]MS ( ! USEFULNESS ( ! RESULT+ !ORY 444 ,! !ORY IS 9 A %AMBLES40 7,W4,F ,%>PE1 QUOT$ BY ,KE51 ,DEBUNK+ ,ECONOMICS1 P4 #b#c#c7 

,?US ! WORLD WAS TURN$ 9TO A S+LE P]SON SIMPLY TO PROVIDE A !ORY :I* %[$ ?AT /OCK M>KETS W]E 0EFFICI5T0 7I4E4 ACCURATELY REFLECT UNKN[N FUTURE E>N+S74 ,9 SPITE ( !SE SLI<T PROBLEMS1 ! !ORY WAS ACCEPT$ 9 ! MA9/REAM AS AN ACCURATE REFLECTION ( F9ANCE M>KETS4 ,:Y8 ,WELL1 ! IMPLICATIONS ( ?IS !ORY >E DEEPLY POLITICAL AS IT SUGGE/S ?AT F9ANCE M>KETS WILL NEV] EXP]I5CE BUBBLES & DEEP SLUMPS4 ,?AT ?IS CONTRADICTS ! WELL-KN[N HI/ORY ( ! /OCK M>KET WAS CONSID]$ UNIMPORTANT4 ,UNSURPRIS+LY1 0AS TIME W5T ON1 MORE & MORE DATA TURN$ UP :I* WAS NOT CONSI/5T )0 ! !ORY4 ,?IS IS BECAUSE ! MODEL'S WORLD 0IS CLE>LY NOT \R WORLD40 ,! !ORY 0CANNOT APPLY 9 A WORLD 9 :I* 9VE/ORS DIFF] 9 !IR EXPECTATIONS1 9 :I* ! FUTURE IS UNC]TA91 & 9 :I* BORR[+ IS RATION$40 ,IT 0%\LD NEV] HAVE BE5 GIV5 ANY CR$IBILITY -- YET 9/EAD IT BECAME AN >TICLE ( FAI? = ACADEMICS 9 F9ANCE1 & A COMMON BELIEF 9 ! COMM]CIAL WORLD ( F9ANCE40 7,KE51 ,OP4 ,CIT41 P4 #bdf & P4 #b#c#d7 

,?IS !ORY IS AT ! ROOT ( ! >GUM5T ?AT F9ANCE M>KETS %\LD BE D]EGULAT$ & AS MANY FUNDS AS POSSIBLE 9VE/$ 9 !M4 ,:ILE ! !ORY MAY B5EFIT ! M9ORITY ( %>E HOLD]S :O [N ! BULK ( %>ES & HELP !M PRESSURIZE GOV]NM5T POLICY1 IT IS H>D TO SEE H[ IT B5EFITS ! RE/ ( SOCIETY4 ,ALT]NATIVE1 MORE REALI/IC !ORIES1 >GUE ?AT F9ANCE M>KETS %[ 5DOG5\S 9/ABILITY1 RESULT 9 BAD 9VE/M5T AS WELL AS R$UC+ ! OV]ALL LEVEL ( 9VE/M5T AS 9VE/ORS WILL NOT FUND 9VE/M5TS :I* >E NOT PR$ICT$ TO HAVE A SUFFICI5TLY HI< RATE ( RETURN4 ,ALL ( :I* HAS A L>GE & NEGATIVE IMPACT ON ! REAL ECONOMY4 ,9/EAD1 ! ECONOMIC PR(ESSION EMBRAC$ A HI<LY UNREAL ECONOMIC !ORY :I* HAS 5C\RAG$ ! WORLD TO 9DULGE 9 /OCK M>KET SPECULATION AS IT >GUES ?AT !Y DO NOT HAVE BUBBLES1 BOOMS OR BUR/S 7?AT ! #a#i#iS /OCK M>KET BUBBLE F9ALLY BUR/ LIKE MANY PREVI\S ONES IS UNLIKELY TO /OP ?IS74 ,P]HAPS ?IS HAS TO DO ! IMPLICATIONS = ECONOMIC !ORY = ?IS F>CICAL ANALYSIS ( ! /OCK M>KET8 ,AS TWO MA9/REAM ECONOMI/S PUT IT3 

0,TO REJECT ! ,EFFICI5T ,M>KET ,HYPO!SIS = ! :OLE /OCK M>KET 444 IMPLIES BROADLY ?AT PRODUCTION DECISIONS BAS$ ON /OCK PRICES WILL LEAD TO 9EFFICI5T CAPITAL ALLOCATIONS4 ,MORE G5]ALLY1 IF ! APPLICATION ( RATIONAL EXPECTATIONS !ORY TO ! VIRTUALLY 'IDEA' CONDITIONS PROVID$ BY ! /OCK M>KET FAILS1 !N :AT CONFID5CE CAN ECONOMI/S HAVE 9 ITS APPLICATION TO O!R >EAS ( ECONOMICS 444 80 7,M>% & ,M]TON1 QUOT$ BY ,D\G ,H5WOOD1 ,WALL ,/REET1 P4 #a#f#a7 

,UN=TUNATELY = IDEOLOGY1 REALITY HAS ?IS BAD HABIT ( DISPROV+ IT4 ,?IS CAN BE SE5 TODAY1 ) ! UNREGULAT$ 0EFFICI5T0 F9ANCE M>KETS PROV+ ?AT ! NEO-CLASSICAL DOGMAS :I* HAVE JU/IFI$ & RATIONALIZ$ ! ACTS & DESIRES ( F9ANCE CAPITAL >E AS UNREALI/IC & MISLEAD+ AS ! CRITICS >GU$4 ,UNSURPRIS+LY1 GIV5 ?IS FLAW$ !ORETICAL MODEL ! SO-CALL$ 0EXP]TS0 79CLUD+ ?OSE 9 GOV]NM5T7 NONE ( !M SAW ! CRISIS COM+ EV5 ?\< ! SIGNS ( A H\S+ BUBBLE HAVE EXI/$ = MANY1 MANY YE>S4 ,& N[ ! 0EXP]TS0 :O FAIL$ TO SEE ! PROBLEM >E N[ URG+ US TO BAIL\T ,WALL ,/REET6 ,BUT1 !N 1 ?AT IS !IR JOB - TO BOL/] ! ELITE4 

,?IS IS NOT TO SAY ?AT BAD ECONOMIC !ORY CAUS$ ?IS CRISIS4 ,NO1 BUT SU* IDEOLOGICAL POSITIONS HELP$ 5SURE ?AT D]EGULATION DESIR$ BY F9ANCE CAPITAL APPE>$ BO? OBJECTIVE & ECONOMICALLY S5SIBLE4 ,SU* IS ! MAGIC ( ! M>KET1 ) ! DEM& = ECONOMIC !ORY TO JU/IFY ! DESIRES = F9ANCE BE+ MEET ) AN APPROPRIATE SUPPLY4 

,PRIVATIZ+ PR(ITS1 SOCIALIZ+ CO/ & RISK 

,) ! F9ANCIAL M>KETS 9 A PANIC1 ! CALLS = BAIL\TS HAVE 9CREAS$4 ,! %OCK ( CRISIS IS BE+ US$ TO PU% ?R\< A BAIL\T = ! PEOPLE :O CAUS$ ! PROBLEMS 9 ! FIR/ PLACE1 ) ! /ATE 5SUR+ ?AT NO BILLIONAIRE OR BANK] IS LEFT BEH9D4 ,YET ?IS COMES 9TO ONE ( ! KEY DEF5SES ( CAPITALISM1 9EQUALITY & PR(ITS = ! FEW1 NAMELY ?AT !SE >E ! RESULT ( 0RISK TAK+40 ,RA!R ?AN LABOR BE+ EXPLOIT$1 NON-LABOR 9COME IS JU/IFI$ BECAUSE ITS [N]S TOOK A RISK 9 PROVID+ MONEY & DES]VE A REW>D = SO DO+4 

,FIR/1 IT MU/ BE NOT$ ?AT 9 ! MA9/REAM NEO-CLASSICAL MODEL1 RISK & UNC]TA9TY PLAYS NO ROLE 9 G5]AT+ PR(ITS4 ,ACCORD+ TO G5]AL EQUILIBRIUM !ORY1 !RE IS NO UNC]TA9TY 7! PRES5T & FUTURE >E KN[N7 & SO !RE IS NO ROLE = RISK4 ,AS SU*1 ! CONCEPT ( PR(ITS BE+ RELAT$ TO RISK IS MORE REALI/IC ?AN ! /&>D MODEL4 ,H[EV]1 ?IS IS UNREALI/IC 9 MANY O!R WAYS1 P>TICUL>LY 9 RELATION TO MOD]N-DAY CORPORATE CAPITALISM4 

,ACCORD+ TO CAPITALI/ MY?1 ?OSE :O TAKE ! RISKS %\LD PAY ! PRICE4 ,YET1 :5 PU% COMES TO %OVE1 ! SOCIALIZATION ( RISK IS ALWAYS !RE4 ,?IS IS BECAUSE1 IT IS CLAIM$1 ! IMPACT ( LETT+ ! BANKS FAIL W\LD H>M EV]YONE4 ,/RANGELY1 ?\<1 DUR+ ! GOOD TIMES ! IMPACT ( 9EQUALITY WAS IGNOR$4 ,IF ! FEW B5EFIT ! MANY CAN GO HANG2 IF ! FEW >E ?REAT5$1 !N ! MANY MU/ PAY4 ,?IS 0SOCIALIZATION ( RISK0 IS SOME?+ CAPITALISM IS BUILT ON1 NOT SOME K9D ( UNUSUAL EV5T APPLICABLE 9 BAD TIMES4 ,MO/ K9DS ( 0RISKS0 )9 CAPITALISM DO NOT CONTRIBUTE TO PRODUCTION &1 ?ANKS TO /ATE AID1 NOT ?AT RISKY4 

,SO APPEALS TO 0RISK0 TO JU/IFY CAPITALISM >E SOME:AT IRONIC1 GIV5 ! DOM9ANT ORGANIZATIONAL =M )9 CAPITALISM - ! CORPORATION4 ,!SE FIRMS >E BAS$ ON 0LIMIT$ LIABILITY0 :I* WAS DESIGN$ EXPLICITLY TO R$UCE ! RISK FAC$ BY 9VE/ORS4 ,AS ,JOEL ,BAKAN NOTES1 BE=E ?IS 0NO MATT] H[ MU*1 OR H[ LITTLE1 A P]SON HAD 9VE/$ 9 A COMPANY1 HE OR %E WAS P]SONALLY LIABLE1 )\T LIMIT1 = ! COMPANY'S DEBTS4 ,9VE/ORS' HOMES1 SAV+S1 & O!R P]SONAL ASSESS W\LD BE EXPOS$ TO CLAIMS BY CR$ITORS IF A COMPANY FAIL$1 MEAN+ ?AT A P]SON RISK$ F9ANCE RU9 SIMPLY BY [N+ %>ES 9 A COMPANY4 ,/OCKHOLD+ C\LD NOT BECOMES A TRULY ATTRACTIVE OPTION 444 UNTIL ?AT RISK WAS REMOV$1 :I* IT SOON WAS4 ,BY ! MIDDLE ( ! N9ETE5? C5TURY1 BUS9ESS LEAD]S & POLITICIANS BROADLY ADVOCAT$ *ANG+ ! LAW TO LIMIT ! LIABILITY ( %>EHOLD]S TO ! AM\NTS !Y HAD 9VE/$ 9 A COMPANY4 ,IF A P]SON B\<T @s#a WOR? ( %>ES1 !Y REASON$1 HE OR %E %\LD BE IMMUNE TO LIABILITY = ANY?+ BEYOND ?AT1 REG>DLESS ( :AT HAPP5$ TO ! COMPANY40 ,LIMIT$ LIABILITY'S 0SOLE PURPOSE 444 IS TO %IELD !M FROM LEGAL RESPONSIBILITY = CORPORATIONS' ACTIONS0 AS WELL AS R$UC+ ! RISKS ( 9VE/+ 7UNLIKE = SMALL BUS9ESSES74 7,! ,CORPORATION1 P4 #aa & P4 #g#i7 

,?IS MEANS ?AT /OCK HOLD]S 79VE/ORS7 9 A CORPORATION HOLD NO LIABILITY = ! CORPORATION'S DEBTS & OBLIGATIONS4 ,AS A RESULT ( ?IS /ATE GRANT$ PRIVILEGE1 POT5TIAL LOSSES CANNOT EXCE$ ! AM\NT :I* !Y PAID = !IR %>ES4 ,! RATIONALE US$ TO JU/IFY ?IS IS ! >GUM5T ?AT )\T LIMIT$ LIABILITY1 A CR$ITOR W\LD NOT LIKELY ALL[ ANY %>E TO BE SOLD TO A BUY] ( AT LEA/ EQUIVAL5T CR$ITWOR?9ESS AS ! SELL]4 ,?IS MEANS ?AT LIMIT$ LIABILITY ALL[S CORPORATIONS TO RAISE FUNDS = RISKI] 5T]PRISES BY R$UC+ RISKS & CO/S FROM ! [N]S & %IFT+ !M ONTO O!R MEMB]S ( SOCIETY 7I4E4 AN EXT]NALITY74 ,IT IS1 9 EFFECT1 A /ATE GRANT$ PRIVILEGE TO TRADE ) A LIMIT$ *ANCE ( LOSS BUT ) AN UNLIMIT$ *ANCE ( GA94 

,?IS IS AN 9T]E/+ D\BLE-/&>D4 ,IT SUGGE/S ?AT CORPORATIONS >E NOT1 9 FACT1 [N$ BY %>EHOLD]S AT ALL S9CE !Y TAKE ON NONE ( ! RESPONSIBILITY ( [N]%IP1 ESPECIALLY ! RESPONSIBILITY TO PAY BACK DEBTS4 ,:Y %\LD !Y HAVE ! PRIVILEGE ( GETT+ PR(IT DUR+ GOOD TIMES :5 !Y TAKE NONE ( ! RESPONSIBILITY DUR+ BAD TIMES8 ,CORPORATIONS >E CREATURES ( GOV]NM5T1 CREAT$ ) ! SOCIAL PRIVILEGES ( LIMIT$ F9ANCIAL LIABILITY ( %>EHOLD]S4 ,S9CE !IR DEBTS >E ULTIMATELY PUBLIC1 :Y %\LD !IR PR(ITS BE PRIVATE8 

,NE$LESS TO SAY1 ?IS R$UC+ ( RISK IS NOT LIMIT$ TO )9 A /ATE1 IT IS APPLI$ 9T]NATIONALLY AS WELL4 ,BIG BANKS & CORPORATIONS L5D MONEY TO DEVELOP+ NATIONS BUT 0! PEOPLE :O BORR[$ ! MONEY .<I4E4 ! LOCAL ELITE.> >5'T HELD RESPONSIBLE = IT4 ,IT'S ! PEOPLE 444 :O HAVE TO PAY .<! DEBTS.> (F 444 ,! L5D]S >E PROTECT$ FROM RISK4 ,?AT'S ONE ( ! MA9 FUNCTIONS ( ! ,I,M,F1 TO PROVIDE RISK FREE 9SURANCE TO PEOPLE :O L5D & 9VE/ 9 RISKY LOANS4 ,!Y E>N HI< YIELDS BECAUSE !RE'S A LOT ( RISK1 BUT !Y DON'T HAVE TO TAKE ! RISK1 BECAUSE IT'S SOCIALIZ$4 ,IT'S TRANSF]R$ 9 V>I\S WAYS TO ,NOR!RN TAXPAY]S ?R\< ! ,I,M,P & O!R DEVICES 444 ,! :OLE SY/EM IS ONE 9 :I* ! BORR[]S >E RELEAS$ FROM ! RESPONSIBILITY4 ,?AT'S TRANSF]R$ TO ! IMPOV]I%$ MASS ( ! POPULATION 9 !IR [N C\NTRIES4 ,& ! L5D]S >E PROTECT$ FROM RISK40 7,NOAM ,*OMSKY1 ,PROPAG&A & ! ,PUBLIC ,M9D1 P4 #a#b#e7 

,CAPITALISM1 IRONICALLY 5\<1 HAS DEVELOP$ PRECISELY BY EXT]NALIZ+ RISK & PLAC+ ! BURD5 ONTO O!R P>TIES -- SUPPLI]S1 CR$ITORS1 WORK]S &1 ULTIMATELY1 SOCIETY AS A :OLE4 0,CO/S & RISKS >E SOCIALIZ$10 9 O!R WORDS1 0& ! PR(IT IS PRIVATIZ$40 7,NOAM ,*OMSKY1 ,OP4 ,CIT41 P4 #a#h#e7 ,TO !N TURN R\ND & JU/IFY CORPORATE PR(ITS 9 T]MS ( RISK SEEMS TO BE HYPOCRITICAL 9 ! EXTREME1 P>TICUL>LY BY APPEAL+ TO EXAMPLES ( SMALL BUS9ESS PEOPLE :OM USUALLY FACE ! BURD5S CAUS$ BY CORPORATE EXT]NALIZ+ ( RISK6 ,D\G ,H5WOOD /ATES ! OBVI\S :5 HE WRITES %>EHOLD] 0LIABILITIES >E LIMIT$ BY DEF9ITION TO :AT !Y PAID = ! %>ES0 & 0!Y CAN ALWAYS SELL !IR %>ES 9 A TR\BL$ FIRM1 & IF !Y HAVE DIV]SIFI$ PORTFOLIOS1 !Y CAN H&LE AN OCCASIONAL WIPE\T ) H>DLY A /UMBLE4 ,EMPLOYES1 & (T5 CU/OM]S & SUPPLI]S1 >E R>ELY SO WELL-9SULAT$40 ,GIV5 ?AT ! 0SIGNALS EMITT$ BY ! /OCK M>KET >E EI!R IRRELEVANT OR H>MFUL TO REAL ECONOMIC ACTIVITY1 & ?AT ! /OCK M>KET ITSELF C\NTS = LITTLE OR NO?+ AS A S\RCE ( F9ANCE0 & ! >GUM5T = RISK AS A DEF5SE ( PR(ITS IS EXTREMELY WEAK4 7,WALL ,/REET1 P4 #bic & P4 #b#i#b7 

,SO LOOK+ AT ! TYPICAL 0RISK0 ASSOCIAT$ ) CAPITALISM1 NAMELY PUTT+ MONEY 9TO ! /OCK M>KET & BUY+ %>ES1 ! IDEA ?AT 0RISK0 CONTRIBUTES TO PRODUCTION IS S]I\SLY FLAW$4 ,AS ,DAVID ,S*WEICK>T PO9TS \T1 0.<I.>N ! VA/ MAJORITY ( CASES1 :5 Y\ BUY /OCK1 Y\ GIVE Y\R MONEY NOT TO ! COMPANY BUT TO ANO!R PRIVATE 9DIVIDUAL4 ,Y\ BUY Y\R %>E ( /OCK FROM SOMEONE :O IS CA%+ 9 HIS %>E4 ,NOT A NICKEL ( Y\R MONEY GOES TO ! COMPANY ITSELF4 ,! COMPANY'S PR(ITS W\LD HAVE BE5 EXACTLY ! SAME1 ) OR )\T Y\R /OCK PUR*ASE40 7,AFT] ,CAPITALISM1 P4 #c#g7 ,9 FACT BETWE5 #aieb & #a#i#i#g1 AB\T #i#b.0 ( 9VE/M5T WAS PAID = BY FIRMS' [N 9T]NAL FUNDS & SO 0! /OCK M>KET CONTRIBUTES VIRTUALLY NO?+ TO ! F9ANC+ ( \TSIDE 9VE/M5T40 ,EV5 NEW /OCK (F]+S ONLY ACC\NT$ = #d.0 ( NON-F9ANCIAL CORPORATIONS CAPITAL EXP5DITURES4 7,H5WOOD1 ,OP4 ,CIT41 P4 #g#b7 0,9 SPITE ( ! /OCK M>KET'S L>GE SYMBOLIC VALUE1 IT IS NOTORI\S ?AT IT HAS RELATIVELY LITTLE TO DO ) ! PRODUCTION ( GOODS & S]VICES10 NOTES ,DAVID ,ELL]MAN4 0,! OV]:ELM+ BULK ( /OCK TRANSACTIONS >E 9 SECONDH& %>ES SO ! CAPITAL PAID = %>ES USUALLY GOES TO O!R /OCK TRAD]S1 NOT TO PRODUCTIVE 5T]PRISES ISSU+ NEW %>ES40 7,! ,DEMOCRATIC WORK]-[N$ FIRM1 P4 #a#i#i7 

,9 O!R WORDS1 MO/ 9VE/M5T IS SIMPLY ! 0RISK0 ASSOCIAT$ ) BUY+ A POT5TIAL 9COME /REAM 9 AN UNC]TA9 WORLD4 ,! BUY]'S ACTION HAS NOT CONTRIBUT$ TO PRODUC+ ?AT 9COME /REAM 9 ANY WAY :ATSOEV] YET IT RESULTS 9 A CLAIM ON ! LABOR ( O!RS4 ,AT BE/1 IT C\LD BE SAID ?AT A PREVI\S [N] ( ! %>ES AT SOME TIME 9 ! PA/ HAS 0CONTRIBUT$0 TO PRODUCTION BY PROVID+ MONEY BUT ?IS DOES NOT JU/IFY NON-LABOR 9COME4 ,9VE/+ 9 %>ES MAY RE>RANGE EXI/+ WEAL? 7(T5 TO ! GREAT ADVANTAGE ( ! RE>RANG]S7 BUT IT DOES PRODUCE ANY?+4 ,NEW WEAL? FL[S FROM PRODUCTION1 ! USE ( LABOR ON EXI/+ WEAL? TO CREATE NEW WEAL?4 

,IRONICALLY1 ! /OCK M>KET 7& ! RISK IT IS BAS$ ON7 H>MS ?IS PROCESS4 ,! NOTION ?AT DIVID5DS REPRES5T ! RETURN = 0RISK0 MAY BE FAULT$ BY LOOK+ AT H[ ! M>KETS OP]ATE 9 REALITY1 RA!R ?AN 9 !ORY4 ,/OCK M>KETS REACT TO REC5T MOVEM5TS 9 ! PRICE ( /OCK M>KETS1 CAUS+ PRICE MOVEM5TS TO BUILD UPON PRICE MOVEM5TS4 ,ACCORD+ TO ACADEMIC F9ANCE ECONOMI/ ,BOB ,HAUG51 ?IS RESULTS 9 F9ANCE M>KETS HAV+ 5DOG5\S 9/ABILITY1 ) SU* PRICE-DRIV5 VOLATILITY ACC\NT+ = OV] ?REE-QU>T]S ( ALL VOLATILITY 9 F9ANCE M>KETS4 ,?IS LEADS TO ! M>KET DIRECT+ 9VE/M5TS V]Y BADLY AS SOME 9VE/M5T IS WA/$ 9 OV]-VALU$ COMPANIES & UND]-VALU$ FIRMS CANNOT GET F9ANCE TO PRODUCE USEFUL GOODS4 ,! M>KET'S 5DOG5\S VOLATILITY R$UCES ! OV]ALL LEVEL ( 9VE/M5T AS 9VE/ORS WILL ONLY FUND PROJECTS :I* RETURN A SUFFICI5TLY HI< LEVEL ( RETURN4 ,?IS RESULTS 9 A S]I\S DRAG ON ECONOMIC GR[?4 ,AS SU*1 0RISK0 HAS A L>GE & NEGATIVE IMPACT ON ! REAL ECONOMY & IT SEEMS IRONIC TO REW>D SU* BEHAVIOR4 ,P>TICUL>LY AS ! HI< RATE ( RETURN IS MEANT TO COMP5SATE = ! RISK ( 9VE/+ 9 ! /OCK M>KET1 BUT 9 FACT MO/ ( ?IS RISK RESULTS FROM ! 5DOG5\S /ABILITY ( ! M>KET ITSELF4 7,/EVE ,KE51 ,DEBUNK+ ,ECONOMICS1 PP4 #b#d#i-#e7 

,RA!R ?AN 9DIVIDUAL EVALUATIONS DET]M9+ 0RISK01 !SE EVALUATIONS WILL BE DEP5D5T ON ! CLASS POSITION ( ! 9DIVIDUALS 9VOLV$4 ,AS ,S*WEICK>T NOTES1 0L>GE NUMB]S ( PEOPLE SIMPLY DO NOT HAVE ANY DISCRETION>Y FUNDS TO 9VE/4 ,!Y CAN'T PLAY AT ALL 444 AMONG ?OSE :O CAN PLAY1 SOME >E BETT] SITUAT$ ?AN O!RS4 ,WEAL? GIVES ACCESS TO 9=MATION1 EXP]T ADVICE1 & OPPORTUNITIES = DIV]SIFICATION ?AT ! SMALL 9VE/OR (T5 LACKS40 7,AFT] ,CAPITALISM1 P4 #c#d7 ,AS SU*1 PR(ITS DO NOT REFLECT ! REAL CO/ ( RISK BUT RA!R ! SC>CITY ( PEOPLE ) ANY?+ TO RISK 7I4E4 9EQUALITY ( WEAL?74 

,SIMIL>LY1 GIV5 ?AT ! CAPITALI/S 7OR !IR HIR$ MANAG]S7 HAVE A MONOPOLY ( DECISION MAK+ P[] )9 A FIRM1 ANY RISKS MADE BY A COMPANY REFLECTS ?AT HI]>*Y4 ,AS SU*1 RISK & ! ABILITY TO TAKE RISKS >E MONOPOLIZ$ 9 A FEW H&S4 ,IF PR(IT IS ! PRODUCT ( RISK !N1 ULTIMATELY1 IT IS ! PRODUCT ( A HI]>*ICAL COMPANY /RUCTURE &1 CONSEQU5TLY1 CAPITALI/S >E SIMPLY REW>D+ !MSELVES BECAUSE !Y HAVE P[] )9 ! WORKPLACE4 ,9 O!R WORDS1 BECAUSE MANAG]S MONOPOLIZE DECISION MAK+ 70RISK07 !Y ALSO MONOPOLIZE ! SURPLUS VALUE PRODUC$ BY WORK]S4 ,H[EV]1 ! =M] 9 NO WAY JU/IFIES ?IS APPROPRIATION NOR DOES IT CREATE IT4 

,AS PRODUCTION IS 9H]5TLY COLLECTIVE UND] CAPITALISM1 SO MU/ BE ! RISK4 ,AS ,PR\DHON PUT IT1 IT MAY BE >GU$ ?AT ! CAPITALI/ 0ALONE RUNS ! RISK ( ! 5T]PRISE0 BUT ?IS IGNORES ! FACT ?AT CAPITALI/ CANNOT 0ALONE WORK A M9E OR RUN A RAILROAD0 NOR 0ALONE C>RY ON A FACTORY1 SAIL A %IP1 PLAY A TRAG$Y1 BUILD ! ,PAN!ON40 ,HE ASK$3 0,CAN ANYBODY DO SU* ?+S AS !SE1 EV5 IF HE HAS ALL ! CAPITAL NECESS>Y80 ,& SO 0ASSOCIATION0 BECOMES 0ABSOLUTELY NECESS>Y & RI<T0 AS ! 0WORK TO BE ACCOMPLI%$0 IS 0! COMMON & UNDIVID$ PROP]TY ( ALL ?OSE :O TAKE P>T !RE940 ,IF NOT1 %>EHOLD]S W\LD 0PLUND] ! BODIES & S\LS ( ! WAGE-WORK]S0 & IT W\LD BE 0AN \TRAGE UPON HUMAN DIGNITY & P]SONALITY40 7,! ,G5]AL ,IDEA ( ! ,REVOLUTION1 P4 #b#a#i7 ,AS PRODUCTION IS COLLECTIVE1 SO IS ! RISK FAC$ &1 CONSEQU5TLY1 RISK CANNOT BE US$ TO JU/IFY EXCLUD+ PEOPLE FROM CONTROLL+ !IR [N WORK+ LIVES OR ! FRUIT ( !IR LABOR4 

,NE$LESS TO SAY1 ! MO/ S]I\S CONSEQU5CES ( 0RISK0 >E USUALLY SUFF]$ BY WORK+ PEOPLE :O CAN LOSE !IR JOBS1 HEAL? & EV5 LIVES ALL DEP5D+ ON H[ ! RISKS ( ! WEAL?Y TURN \T 9 AN UNC]TA9 WORLD4 ,AS SU*1 IT IS ONE ?+ TO GAMBLE Y\R [N 9COME ON A RISKY DECISION BUT QUITE ANO!R :5 ?AT DECISION CAN RU9 ! LIVES ( O!RS4 ,) ! PANICS 9 ! F9ANCE M>KETS1 N[ IS AN IDEAL TIME = AN>*I/S TO >GUE ?AT RUNN+ AN ECONOMY BAS$ ON ALL[+ ! FEW TO CONTROL1 GAMBLE & PR(IT FROM ! LABOR ( ! MANY IS NOT ONLY IMMORAL1 IT DOES NOT WORK4 

,WE NE$ A SOCIETY :I* IS NOT BAS$ ON BRIB+ ! RI* TO 5SURE 9VE/M5T & ECONOMIC DEVELOPM5T4 ,WE NE$1 AS AN>*I/S HAVE LONG >GU$1 AN ECONOMY 9 :I* ?OSE :O DO ! WORK CONTROL BO? IT & ITS PRODUCT4 ,UNLESS WE GET ! MESSAGE \T ?AT CAPITALISM NE$S TO BE 5D$1 NOT PROPP$-UP1 !N ANY SOLUTION TO ! CURR5T PANICS WILL BE PAID = BY ! WORK+ CLASS & ! ELITE WILL1 AS ALWAYS1 B5EFIT FROM ! SACRIFICES ( ! MANY4 

,:AT N[8 

,( C\RSE1 ! FAI?FUL FEW WILL BE COMPLA9+ ?AT ! F9ANCIAL WOES >E DO TO !RE BE+ TOO MU*1 RA!R ?AN TOO LITTLE1 /ATE 9T]F]5CE4 ,H[EV]1 ! AWKW>D FACT ?AT OV] #c YE>S ( F9ANCIAL D]EGULATION HAS PRODUC$ ?IS CRISIS WILL 5SURE ?AT !Y WILL REMA9 ON ! FR+ES - P>TICUL>LY AS ! CAPITALI/ CLASS NE$ /ATE ACTION N[1 NOT PI\S PROCLAMATIONS ON ! NE$ = LIQUIDATION TO CREATE A WOND]FUL 0PURE0 SY/EM ON ! RU9S4 

,ON ! LEFT1 WE CAN EXPECT ! DU/+ (F ( CALLS = NATIONALIZATION4 ,= ! RE=MI/ LEFT1 ! ,SW$I% F9ANCIAL RESCUE ( ! E>LY #a#i#iS IS ! PREF]R$ OPTION RA!R ?AN A ,REPUBLICAN-/YLE ,SAV+S & ,LOAN /YLE APPROA*4 ,= ! 0REVOLUTION>Y0 LEFT1 ! AIM WILL BE FULL-BL[N /ATE CAPITALISM )1 AS ,L59 PROMIS$1 ! 0SOCIALI/0 /ATE NATIONALIZ+ ! BANKS & SO CREAT+ N9E-T5?S ( ! SOCIALISM 9 ONE FELL SWOOP4 

,:ILE SOCIAL ,KEYNESIANISM MAY BE PREF]ABLE TO NEO-LIB]ALISM OR ,L59I/ 0SOCIALISM01 AN>*I/S %\LD BE /RESS+ ?AT ?IS IS NOT \R ONLY ALT]NATIVES4 ,WE NE$ TO RAISE ! PO9T ?AT ?IS IS A CRAZY WAY TO RUN AN ECONOMY1 ?AT WE DO NOT NE$ TO LIVE ?IS WAY BRIB+ ! RI* TO 9VE/4 ,P>TICUL>LY AS !Y DO NOT DO A GOOD JOB ( IT 70,/OP PANIC 9 ! ,CITY -- ABOLI% CAPITALISM6074 ,WE NE$ TO RAISE ! NECESSITY = AN>*ISM AS REPLAC+ CAPITALI/S ) /ATE BUREAUCRATS IS NO REAL *ANGE4 

,! GREAT UNKN[N 9 !SE TIMES IS WORK+ CLASS PEOPLE4 ,IF WE REMA9 QUIET !N ANY BAIL\T WILL REFLECT ! 9T]E/S ( BIG BUS9ESS1 NO /R+S ATTA*$4 ,IF WE REMA9 QUIET !N ! CO/S ( RECOV]Y WILL BE 9FLICT$ ON US 9 ! %APE ( RIS+ UNEMPLOYM5T1 L[] WAGES1 HI<] TAXES4 ,IF WE REMA9 QUIET1 !N NEO-LIB]ALISM WILL %RUG (F ?IS CRISIS LIKE ! PREVI\S ONES & CONT9UE PRIVATIZ+ ! GA9S :ILE SOCIALIZ+ ! LOSSES & CO/S4 

,\R TASK AS AN>*I/S IS TO RAISE \R VOICES & 5C\RAGE DIRECT ACTION4 ,ATTEMPTS TO CUT WAGES MU/ BE RESI/$ AS WE DID NOT CREATE ?IS CRISIS & BECAUSE IT WILL MAKE IT WORSE 70,W\LD CUTT+ WAGES R$UCE UNEMPLOYM5T8074 ,ATTEMPTS TO CLOSE WORKPLACES MU/ BE MEET BY OCCUPATIONS4 ,ATTEMPTS TO EVICT FAMILIES FROM !IR HOMES MU/ BE /OPP$4 ,WE NE$ TO SOCIALIZE ! MEANS ( LIFE1 NOT HAVE !M RUN BY A FEW CAPITALI/S OR /ATE BUREAUCRATS4 ,TO DO ?AT1 WE NE$ TO ORGANIZE COMMUNITY & WORKPLACE ASSEMBLIES & BUILD AN ALT]NATIVE TO A SY/EM 9 CRISIS1 ONE BAS$ ON SOLID>ITY & FRE$OM4 

,FROM 3 ,!,AN>*I/,LIBR>Y4ORG4 

,*RONOLOGY 3 
,FEBRU>Y #b1 #bba 3 ,CAPITALISM 9 CRISIS1 AGA96 -- ,ADD$4 
,JANU>Y #g1 #bbb 3 ,CAPITALISM 9 CRISIS1 AGA96 -- ,UPDAT$4 

 FILE G5]AT$ FROM 3  
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