Fundamental flaw at the heart of our economic system
Charlie Weston's straight-talking article (Irish Independent, August 17) paints a stark picture of our powerlessness as citizens in the face of unjust and exploitative banking practices. Eventually, we will have to collectively confront the fundamental flaw at the heart of our current economic system: the interests of the international financial markets are diametrically opposed to those of ordinary working people and the domestic economy.
Domestic economies need relative economic stability and predictability of prices in order to maintain business viability and job security, whereas financial markets want economic instability, since they make enormous profits betting on the outcomes of market fluctuations. For ordinary working people, money is a utility which we use to facilitate our standard of living and to create a functioning, real economy and society. For the financial markets, money is a commodity to be sold (loaned), traded, leveraged and gambled, to make money out of money.
The financial sector has created vast pyramids of leveraged capital composed of complex financial instruments called derivatives, which are essentially bets on some aspect of the real economy. When one of these pyramids or bubbles collapses, they know that we, the taxpayers, will have to foot the bill. Western central banks are flooding the financial system with free money to support these derivatives bubbles, as well as forcing national populations to pay the astronomical debts of bankrupted financial institutions. In the ideology of financialisation and market theory, no moral responsibility accrues to market actors or speculators.