NZ petition targets financialisation, the heartless heart of capitalism

by Grant Morgan

Michael Lewitt, who founded capital management firm HCM in 1991, has just authored a fix-the-system book titled “The Death of Capital: How Creative Policy Can Restore Stability”. He is a conservative free market capitalist.

In a recent column (see below), Lewitt bemoans how “the United States has strayed from a free market model to a system that privatizes gains and socializes losses”.

He continues: “During the last two decades, the American economy has suffered from a series of legal, fiscal and monetary policies that have favored speculation over production. The result has been the financialization of the economy, which has been characterized in economic terms by an unhealthy growth in debt at all levels of the economy and in cultural terms by the monetization of all values.”

Lewitt is calling for “a Tax on Speculation that would apply to the types of speculative activities that have so badly damaged the American economy, including naked credit default swaps, leveraged buyout, quantitative stock trading strategies and other stock and bond transactions”.

Lewitt’s strident criticisms of “speculation” and “financialisation”, and his call for a “Tax on Speculation”, personify the raging disunity within global elites which is starting to unravel their “Born to Rule” legitimacy. The Anti-Revolution is starting to eat its own babies.

Lewitt is trying to rein in financialisation in the belief this is required for American capitalism to overcome its critical “challenges”.

Marxists, however, understand that financialisation is capitalism’s main last hope of surviving a systemic crisis of profitability. If financialisation goes down the toilet, so does capitalism’s global economy. That’s why financialisation cannot be reformed into something else.

(For much more information on financialisation, and the convergence of systemic crises, see my essay, “Beware! The end is nigh! Why global capitalism is tipping towards collapse, and how we can act for a decent future”, http://unityaotearoa.blogspot.com/2010/03/grant-morgan-beware-end-is-nigh.html.)

On Budget Day, 20 May, it looks like the National-led government in New Zealand will raise GST to 15%. That is similar to save-the-speculators austerity measures by Europe’s governments which are sparking popular protests not only in Greece, but also Portugal and Spain.

On 22 May, two days after National’s budget, Socialist Worker and the Alliance are jointly launching a nationwide tax petition calling on Parliament to remove GST from food and tax financial speculation.

In effect, our petition is targeting financialisation, the heartless heart of neoliberal capitalism. As seen in Europe’s protests, financialisation is becoming the central battleground over what sort of economy we should have and who it should serve.

For more information on the tax petition, keep your eyes on UNITYblog website or email campaign co-ordinatir Vaughan Gunson at socialist-worker(a)pl.net.