3.1. The Four Horsemen (of the GRiFTer Apocalypse)
“So that’s a brief history of Capitalism, which I hope you found enlightening, George?”
In response,George offered a somewhat resigned nod of his head.
“It’s important we demystify Capitalism rather than assume it’s a fact of life just because that’s what we’ve been told all our lives. Capitalism might have seemed a good idea 250 years ago, but that doesn’t mean it’s still the answer to our problems today. And the fact Capitalism is now killing the planet sure helps focus the mind.”
“Couldn’t agree more.” Confirmed George. “But that’s the past, and as I’ve asked you several times now, sir…” George now ran a couple of steps in front of the Director and turned to face him. “… WHAT’S THE FRIKKIN’ ALTERNATIVE ???”
“It’s coming, it’s coming,” replied the Director. “Just a couple more things to get out of the way before I deal with that. Because I need to bring you bang up to date with just how crazy the whole thing has become.”
“It gets worse?” asked George incredulously.
“I’m afraid so.” Replied the Director. “To be honest, I’m just getting started.”
“Shit….” Was all George could think to say.
“Since Thatcher and Reagan fired the Big Bang starting gun and unshackled the beast, all sorts of horrors have unfolded, to the point that it is now completely out of control. What we’ve got now is a Frankenstein’s monster laying waste to everything in its path. And if we want to stop it before it’s too late, we need to grab our pitchforks and torches and chase this Abominable Showman out of town. So, I hope it’s OK if I don’t start offering solutions before I’ve finished describing the problem?”
“OK”, replied George, accepting this logic while also knowing it was now just a mile to his hotel and that he’d soon be sitting down with a menu in his hand. “Let’s finish this.”
“Great! So here goes.” Said the Director, setting the scene for the season finale, “Until the ’70s, you could more or less set your watch by the financial crisis that would come around like clockwork. Every couple of decades, there’d be a crash followed by ten years of unemployment, strife, child poverty, starving families, food banks, social decay and the rest of it. You get the picture… and then the government would bail out the banks, using money they’d otherwise spend on the poor until the banks started speculating again, and we’d all be back at square one, having the same recurring nightmare.
“And that’s what we assumed would happen when Ronnie and Maggie got their hands on the levers of power. But this time, it was different, and not in a good way. After the Big Bang, we discovered that when you mix greedy capitalists with empowering technology, all hell breaks loose.”
At this, a distorted grimace came over George’s face.
“Back in the day, traders stood on the stock exchange floor waving their arms around. They could buy and sell to their heart’s content, and the only harm they could do was the occasional bankruptcy or, at worst, a crash. But in the 1980s, the computer came along and changed the game.
“The internet made electronic trading possible, which meant that Capitalism was no longer constrained by time or space and, over the next 30 years, it became so big and devious that no one knew how it worked anymore. It’s like that computer HAL from 2001: A Space Odyssey. It’s quietly killing us, but we can’t switch it off, and as it finds new ways to circumvent human oversight, it tightens its grip on society, and it’s only getting worse.
Take AI, for instance, which, as it becomes more prevalent, threatens the jobs traditionally done by humans. This is only good news to the free-market Capitalists, as it means production is less expensive. However, there are more practical concerns for humans, such as societal collapse. This is a conundrum that no one presently knows how to solve, and it highlights very well the fundamental problems of a Capitalist system. It does not serve humanity; humanity is just a resource that serves it. Something that became very apparent very quickly after the Big Bang, creating what I like to describe as The Four Horsemen Of The GRiFTer Apocalypse:
- G LOBALISED
- R ENT-SEEKING
- F INANCIALISED
- T AX EVADERS
“That’s why I call modern capitalists GRiFTers, you see?
Global – Rent-Seeking – Financialised – Tax Evaders.
GRiFTers! Get it? Clever, eh? I made that up all on my own,” smiled the Director, clearly pleased with himself.
“Very good,” replied George. “Catchy… Now, get on with it!”
3.2. Horseman # 1 – Globalised (Winner Takes It All)
“The main thing Ronnie and Maggie failed to anticipate when they unleashed the Big Bang was Globalisation.
“Marshall McLuhan had predicted it back in the 70s when he described a Global Village connected by electronic technology, and he warned us that this would distort reality and create tensions within societies. But who cares about trivialities like that when there’s money to be made?
“And sure, there was Globalisation before the Big Bang. The East India Company was probably the first global corporation back in the 17th century. One of its most famous wheezes was when it forced Indian farmers to grow opium instead of food and then forced the Chinese to exchange this opium for their tea, silk and porcelain. When the Chinese government said, quite reasonably, I think, that they didn’t want this opium because it was causing widespread addiction, the East India Company started a war and essentially took over the country from which they then extracted taxes and, in return, gave the Chinese smallpox, measles and typhus! So yes, there was a sort of global corporation back in the day, but its modern successors are certainly carrying on the tradition with relish.”
“Nasty,” replied George, shaking his head in disgust.
“So Globalisation wasn’t exactly new, but the scale of what’s happened since the Big Bang has expanded the power of multinationals beyond anything previously imaginable.
“It’s no exaggeration to say that multinationals now run the world’s economy with little or no attachment to any one country. They are effectively above the law, and there’s little that an individual country can do about it. There’s no loyalty or sentimentality when it comes to
Capitalism. They’re called Multinationals for a reason: Profits before Patriotism.
“So now we’ve got to the point when two-thirds of the world’s 100 largest economies are global corporations rather than physical countries. Apple, for example, has a market cap of around $3 trillion, which is about the same size as the GDP of Britain or France, and its sole aim is to make a tiny elite richer than they already are, with as little thought given to their employees or the countries where they operate as is economically necessary.
I’ve got to mention one exception to this rule however: the special group of Chinese multinationals, such as Alibaba, Tencent, Huawei, and PingAn – a global insurance firm, for chrissakes! — and BYD, or Build Your Dreams: the world’s top-selling electric car maker. All of them are really just extensions of the Chinese State, so, in effect, the Chinese Government is becoming a sort of multinational in its own right, and if that doesn’t scare the shit out of all of us, I don’t know what will!
“It’s as if the whole world is now run by a cartel of East India Companies, all operating above the law and, in this respect, very similar to that Dragon in my story. So I hope you can see that, as I promised earlier on, I’m not exaggerating about any of this. We ought to feel disdain, disgust and revulsion for these out-of-control, anti-human organisations. If anything, they are our enemies, and yet we embrace them as if we were our friends. This is the crazy state of the world we’re living in!” The Director seemed to exasperate himself simply by uttering this statement.
“It does sound crazy,” admitted George, “I don’t think I’ve ever considered Apple as anything other than the good guys with my best interests at heart.” George was now feeling more than a little confused.
“That’s right”, agreed the Director, pleased to see that George was now engaging with something uncomfortable and challenging. “We tend to think of them as a benign force for good, but they’re nothing of the sort. In many ways, they’re plain evil, and what’s more, they’re growing bigger and more powerful every day. With all that power ought to come great responsibility, but instead, they behave more and more like mindless bullies. And that’s because they are, quite literally, mindless. In fact, it would be wrong to think of them as run by humans at all. Sure, at any one time, they are nominally being controlled by a CEO and a Chairman.”
“Or Chairwoman.” Pointed out George.
“Or Chairwoman,” conceded the Director with a nod. “But these humans come and go; just a nominal signature at the bottom of the trading accounts at the end of the year. These CEOs may have different styles and approaches, but fundamentally, they are merely puppets charged with delivering the same goal at the end of each year, which is to increase the value of the business.”
“Are you absolutely sure?” asked George, finding it hard to know if this was true, given how little he understood corporate finance.
“I’m afraid so.” Replied the Director, clearly deriving no pleasure from delivering this news.
“It’s dangerous to consider multinational corporations as entities built on human needs. They exist outside of the subtle world of human interaction to the point that they are now, more or less, autonomous from us and have little or no interest in us beyond our value as customers.”
“Really?” Asked George, still unwilling to fully buy into this narrative.
The Director could see George still needed proof, so he fumbled around in his memory banks to see if he could remember any of the hundreds of articles he’d read in The Economist, Financial Times or Wall Street Journal where evidence of these issues was commonplace.
“OK,” said the Director, relieved to recall one such example from relatively recent history. “Here’s an example of what I’m talking about. Do you know the Unilever Corporation? They make Axe deodorant, Dove soap and Hellmann’s mayonnaise?
“Sure.” Replied George. “I don’t use any of it now, but I bought an awful lot of Axe when I was 15 and trying to get laid.”
“Well,” continued the Director, patiently, “Around 2010, the CEO of Unilever had the idea that developing more sustainable and environmentally responsible products would probably be good for business, mostly, I’m guessing, because Dove had done so well after it ran ads featuring women in underwear who didn’t look like stick insects.”
“I remember.” Said George, recognising the campaign.
“OK, so this guy, Paul Polman, started selling this idea to his Board. They were also aware of a new trend called ESG – that’s
Environmental, Social and Governance issues — and they also knew Dove was doing well, so they let Polman get on with it. When he retired in 2019, a Scotsman called Alan Jope took over who was just as evangelical about environmental issues as Polman. So people began to believe Unilever might be a cool and progressive outfit.”
“Sounds great,” said George, “But is that a ‘but’ I hear coming?”
“Very perceptive, George,” said the Director, chuckling. “Because, while Jope had been busy trying to reduce the company’s carbon footprint and source more sustainable raw materials, the Board didn’t think the company’s value was increasing fast enough, and investors were starting to get jittery, causing its share price to fall. So it was bye-bye Jope and hello whatever the name of the next less socially compromised CEO willing to take his place might be.”
“Pathetic.” Was all George could think to say.
“Indeed.” Agreed the Director, “And that, my friend, in a nutshell, is how multinational corporations operate. They’re zombies running on auto-pilot. Sure, there’s a nominal crew sitting up front, happy to take their huge salaries and bonuses for hitting their targets, but show little long-term concern for how their actions hurt society or damage the planet.”
“I see.” Said George, now sounding defeated and more willing to accept the cold-hearted nature of multinationals.
Pleased that he’d made his point, the Director pressed on, wanting to elaborate further. “What’s more, in their desire to hit their financial targets, these multinationals are always on the lookout for clever ways to cut costs, and one of their favourite ruses is to outsource their labour to low-cost
markets. Suppose you make your products in poorer countries. In that case, the labour costs are lower, there are few or no unions to deal with, and regulators are less concerned about sweatshops. In fact, these are the perfect conditions multinationals look for while seeking to give the minimum back to these poorer economies in the form of taxes that would otherwise be used to improve public services.”
“Charming” muttered George in a desultory tone.
“What’s more, it’s standard practice for the likes of Apple, Microsoft, Amazon, Alphabet, Alibaba, BP, Shell, Walmart, Johnson & Johnson and the rest of them to bully the G20 economies as if the multinationals were the masters and the politicians were their servants.
“They do this by offering carrots such as campaign donations, ‘ trade trips, ‘ and the promise of building their new headquarters in a deprived city. They also do it through sticks, such as threatening to move their factories elsewhere. All in exchange for influence over government decision-making, particularly around tax policies. In fact, the ultimate irony is that many governments will even help build these factories, paid for with the taxes extracted from the same people who then have to work in them on minimum pay.
“And obviously, while all this is happening, zombie corporations spend as little time as possible considering their social obligations, with few, if any, having any concern for the environment, pollution, deforestation or habitat destruction. All of these are seen as inconveniences that get in the way of them making money. Is it any wonder we’ve got global warming?”
“Fuck, fuck, fuck, fuck, fuck!” said George in exasperation. “What is wrong with these people?”
“Well, technically,” corrected the Director, “they aren’t really people at all. They’re more like a self-driving car that’s careering towards a brick wall, but no one seems willing to put it into ‘manual’ and take over the steering. It all comes down to a lack of accountability. These behemoths operate above the law and beyond borders, moving their money and resources around to wherever suits them best, where they can avoid scrutiny and maximise their returns on investment. And they do it without any thought of the wider consequences.
“Take the Ukraine War, for example. When Russian oil supplies were sanctioned, the global fuel price went through the roof, meaning that the working classes had to spend a more significant proportion of their income refuelling their cars and heating their homes. The Oil Giants told us all how terrible this was while, at the same time, miraculously making record profits: Disaster Capitalism at its finest, my friend.
“That’s because, whenever sanctions are imposed, back channels are opened to get around the restrictions and keep the money flowing. When the UK government stopped the export of vital components needed to fight Putin’s special military operation, sales to Russia fell dramatically. However, when someone looked more closely at where these British businesses were now selling these same components, they noticed that the same equipment was flowing into Uzbekistan and Georgia instead. It turns out that while British taxpayers are donating billions of pounds to Ukraine in the form of financial aid and weapons, British businesses are happily supplying the Russian army through the back door! That’s an excellent example of the immorality of Capitalism, George. GRiFTers are more than happy to kill the little guys caught in the middle if the price is right.”
“Wow, that’s literally weapons-grade Capitalist bullshit right there!” exclaimed George, hardly able to believe what he was hearing.
“And there’s almost no chance of these sanction-busters getting caught because the regulators lack the resources to close the loopholes,” added the Director. “This is especially true given the revolving door that allows the GRiFTers to lure the best people from the regulatory bodies over to the dark side where their knowledge of government systems ensures the multinationals stay one step ahead of the law and the tax man.
“If you don’t believe me, the last time I looked, the Russian oligarchs were still sitting on their yachts in the Med, enjoying their caviar.”
“Bastards.” Muttered George.
“And to ensure we don’t ask too many awkward questions, these same GRiFTers employ an army of PR consultants to cover up their anti-social behaviour. In addition, they spend a fortune with equally unscrupulous
advertising agencies whose job is to put a friendly face on the household brands they own, thus ensuring we all continue to think of them as our trusted friends. But they aren’t really our friends. In fact, when you think about how they are lying to us and destroying our planet, it would probably be safer to see them as our enemies.”
“Fuck.” Said George.
“I’m afraid so.” Said the Director, as though he was breaking the bad news to a five-year-old that Santa didn’t exist. “They only care about us because they want our money. To them, we’re just consumers, which is essentially marketing jargon for a unit of consumption. The more consumers they attract, the more products they sell over time and the more profits they make. This is known as their profit ratio, which is the only thing they are actually interested in. You see, the profit ratio is the number used to evaluate a company’s ability to generate returns for shareholders and, thus, how much they can expect to receive if they sell it to market speculators. That’s the grubby world of GRiFTers for you. That’s all it’s about. How much can I sell this thing for?”
George shook his head as he came to terms with the idea that not only did Santa not exist, but that guy in the red suit who sits in Macy’s Grotto every Christmas is a child-hating sociopath!
“What’s more, they don’t mind being petty and cynical if it means making more money. So, they’ll sell us products with built-in obsolescence, forcing us to buy new ones every couple of years. They’ll switch the leads on our phones, so we can’t use them with later models. They’ll make it impossible to repair or replace broken parts, and if a customer has shown loyalty after being with them for a while, they’ll be charged more than the new customers they want to attract: They’ll then sell our data to third parties and remove all human contact from their customer service departments, happy to let us waste our day trying to resolve a problem with a product we’ve just bought from them. And when we finally get to speak to someone, we lose our temper with the minimum-wage, overworked call-handler on the other end of the line, who has no say over how their employer treats its customers and who, if they complain about their working conditions or how customers are treated, will lose their job. In the world of multinationals, we are all just cash cows being milked ’til we’re dry or until a legislative body steps in and threatens them with fines for misconduct. Such is the lawlessness of multinational corporations. They owe no loyalty to anyone and will exploit every opportunity to make a profit.”
George was now beginning to feel he wanted to punch Santa in the face.
“And there isn’t a hope in hell of reigning them in because the politicians are up to their own necks in this game as well, happy to allow and even promote unregulated international corporations if they can see a benefit for their own political careers. After stepping down from public office, there might be a whole raft of lucrative chairmanships or non-exec director posts to take up if they play their cards right, especially if they keep open their links with the politicians taking over from them.”
George was now lost for words, so made a growling sound instead.
“Of course, these corporations claim to self-regulate their behaviour to save the planet. They claim that Adam Smith’s market forces ensure they don’t abuse the system, and that their customers are their top priority. And if you believe that, I have some unicorn shit to sell you.”
George felt dizzied by all this bleak and depressing information but had nothing to add or challenge. Instead, he just fell silent and felt sad.
3.3 Horseman # 2 – Rent Seeking (Money for Nothing)
“Ready for the second horseman?” Asked the Director.
“If I must,” replied George, knowing he didn’t really have a choice.
“Well, this one is called the Rent Seeker, and while it doesn’t sound very scary, it’s probably the one I like the least.
“Thinking about it, I was scared of the rent-seeking landlady who owned my first apartment in Brooklyn,” recalled George, “But I wouldn’t say she was a horseman of the apocalypse exactly. Though, come to think of it, she did have big teeth.”
“Well, in a small way, she falls into this category too, George, because Rent Extractors don’t make anything of value; they don’t contribute anything. They just cream off a rent every time we use the things they’ve monopolised.”
“Hmm?” Said George thoughtfully, still unsure why this was such a bad thing.
“Well, I’m sure you know what it feels like to be on the wrong end of a game of Monopoly when your opponent has all the best properties?
“I know that feeling,” confirmed George. “It isn’t good, and there’s nothing you can do about it.”
“Well, Capitalist Rent Extractors are playing Monopoly on a global scale: Every time you land on one of their properties, you must sell some of your assets just to stay in the game.”
The Director thought for a while about whether he could come up with a better analogy. “So, imagine you live on one side of the river and have to cross a bridge to get to work.”
“OK, I get it,” agreed George, wondering where this was going.
“Well, imagine if the Mayor decides to sell the bridge to a Rent Seeker because he needs money to build a new hospital, and he’s been made an offer he can’t refuse.”
“OK,” agreed George, still unsure what this was about.
“So the Mayor builds the hospital, and the Rent Seeker – who has now become a Rent Extractor – charges a toll every time you use his bridge.”
“Ah!” Said George, “I’ve seen this movie. Every time I land on Liverpool Street, I have to pay £10.”
“Exactly!” Said the Director. “And every year, the price for crossing the bridge goes up because the Rent Extractor has a monopoly because he now owns all the bridges.”
“That is a problem,” agreed George, “but at least we have a hospital, and the Rent Extractor has to maintain the bridge.”
“That’s true”, agreed the Director, “and that’s a good point, but the Rent Extractor is now making far more profit from the bridge than it costs to maintain it, and before long, he’ll use that profit to make the Mayor another offer, and he’ll buy the hospital too!”
“Just like in Monopoly!” exclaimed George, now understanding the analogy.
“Quite so!” Replied the Director, relieved that George had understood the point he was making. “And the thing to realise is that the Rent Seeker only bought the bridge because he’d made his money from charging rent on other assets, and nothing he does adds value to society. He’s just finding new ways to extract money from us.”
“So, he’s basically a parasite!” George exclaimed.
“Exactly!” Agreed the Director. “Rent Extractors are everywhere, dominating our lives. Big Tech has monopolised how we access online services. Financial institutions dominate the economy and pretty much write the regulations that allow them to charge excessive fees. Likewise, Big Pharma delays the entry of cheaper generic alternatives through patents and Energy Companies are the cornerstone of the stock market, so they benefit from government subsidies, tax breaks, and regulatory loopholes, and utilities such as electricity and water companies operate as regulated monopolies, which lets them charge monopoly prices and make excessive profits without competitive pressure.”
“I guess it’s easy when you have friends in high places.” Mused George.
“Take Spotify for example.” Continued the Director. “They charge a rent every time you listen to a song on their platform. Microsoft takes a rent every time you renew your software subscription. Facebook takes a rent….”
“I get the picture.” Interjected George, now feeling happy that he’d grasped the concept. “The one I hate the most is Ticketmaster. They don’t seem to do anything to make buying a ticket easier. They just charge you for getting in the way and making buying a ticket more complicated.”
“Yep, but that doesn’t stop the bastards from telling us how grateful we ought to be for what they do for us”, added the Director. “I pay a fortune to Murdoch every month just so I can watch my piddling little Raith Rovers football team on a Saturday. And then I not only pay him rent for this utterly over-the-top, hyperbolic service but also have to watch his endless, mindless betting adverts. I’m paying him for the privilege of watching his fucking adverts! It drives me up the wall!”
This made George laugh out loud, yet somehow sympathetically.
“Most of the time, Rent Seekers are just lazy middlemen, making money off ordinary people who could enjoy life perfectly well without them; ordinary people who might otherwise be spending their wages on useful things like clothing and food. The worst thing about the Rent Seeker business model is that it’s all based on finding ways to make people pay for things they could otherwise get for free. Which is why they hate the NHS. They would love to make money out of people being sick.”
“Just like they do in the States.” Confirmed George, remembering the times he’d spent a small fortune for a simple medical procedure.
“Can you smell something?” asked the Director, changing the subject abruptly.
A little surprised, George took a deep breath of the damp night air. “I can smell the Thames,” he said. “It’s a little funky, I guess.”
“That’s right,” replied the Director, pleased George had taken the bait. “The river smells like shit because it’s choked with sewerage. You see, back in 1989, Margaret Thatcher, in her Milton Friedman frenzy, sold Thames Water to private investors. It’s now owned by GRiFTers from all over the world, including pension funds. You know, the Global Corporations I was just talking about — the outfits that squirrel away their profits in tax havens.
“None of them have any interest in providing a vital service. They simply bought Thames as a way to make easy money. They’ll employ the same people who worked there before — though they probably fired a few of them to cut corners — they’ll invest the minimum possible to keep it all going and pump out a lot of money on PR to convince us of what a great job they’re doing. And then they’ll put their prices up, and their customers will have no choice but to pay it.”
“Leaches!” Shouted George, warming to this parasitic theme.
“By the way, Russia is what you’d call a rentier state, as all of its assets are now owned by the kleptocrats who grabbed whatever they could when the Soviet Union collapsed. The oligarchs now rent those assets back to the Russian people and launder the profits they make, mostly through the City of London, I’m ashamed to say.”
“And that’s how Rent Seeking and Extracting works. It’s almost impossible to calculate how big the Rent Extractor economy is, but the four largest global companies are Apple, Microsoft, Alphabet and Amazon, all of which make most of their income from the rent we pay to use their platforms. They don’t take all your money at once; that would be too obvious. Instead, they go for a slow drip, drip, drip until they’ve sucked you dry. Call me old-fashioned, but I was always taught to value things made with love and skill and offered real benefits. Rent Extracting makes no attempt to do any of that. Instead, it simply takes advantage of its monopolies, creaming off trillions from the limited wages of the working class, mostly out of getting in the way and making a nuisance of themselves, and just like this shitty old river, I think that stinks.”
“Nothing in this life is certain except death, taxes and online subscriptions”, observed George drily. “This is really starting to creep me out. It’s like the Invasion of the Body Snatchers, where everyone’s out for my soul. Now that you’ve pointed out these ghouls, I can see how insidious they are.”
“Insidious! That’s a brilliant way to describe them!” congratulated the Director in resigned agreement. “You’d think they’d be ashamed of how they make their money, given they’re basically just glorified pimps. But, of course, they aren’t ashamed at all; they’re proud of themselves because it has made them unimaginably rich, and they’ve done it through minimal effort of their own. But this is how a hyper-capitalist GRiFTer society works, and that’s all that matters.”
3.4. Horseman # 3 – Financialisation (Take the Money and Run)
“Pointless middlemen.” Repeated George, doubling down on his disgust. “I’m almost afraid to ask, but what’s this Financialisation about then?”
“Well, I’m glad you asked,” smiled the Director in appreciation of this good-natured gesture. “This is a biggie, so buckle up.”
George mimed the act of putting on a seat belt and making a clunk-click sound, while looking determined and ready for action.
“Without wanting to get too technical about this, Financialisation is actually a form of Rent Extraction.”
“Really?” asked George, a little surprised. “If it’s just more Rent Extraction, why do you consider it a separate horseman?”
“An excellent question, George,” replied the Director, slightly surprised by this intelligent query. Perhaps he’d underestimated the American?
“I did think about that when I was writing the screenplay”, explained the Director, “but in reality, all four horsemen are a sort of Russian Doll, each fitting inside the other. It’s an ecosystem where GRiFTers keep us in the dark and exploit us whenever the opportunity arises!”
“God, that sounds dramatic!” Exclaimed George. “You’re going all Matrix on me again!”
“Well, let me explain it, and then you can decide if I’m over-exaggerating.”
“Be my guest: Convince me.” Invited George amiably.
“Financialisation describes how the world economy is now dominated by GRiFTers looking for ways to make money out of money. Well, George, I’m sure you know how bankers make their money? They certainly don’t just sit on a pile of cash and hand out dollar bills when you cash a cheque.”
I haven’t cashed a check, as we say in the States, since 2004!” Laughed George, “But I know what you mean.”
“Well, exactly, but as Alice explained in our film, banks make money out of speculating, which is just another word for gambling. You think a horse will win the 2:30 at Kempton Park, so you bet $5 on it, and if it wins, you get $20 back. It’s exactly the same for stocks and shares. If you think the war in Ukraine will make oil prices jump, you might buy $5 worth of shares in Tesla. Then, if you’re right, and there’s a bloody stalemate that causes the price of oil to go up, the stock price of electric cars will also go up, and the $5 of Tesla you own is now worth $100. Result: Happiness. Congratulations! You’ve just made $95 out of thin air, and that’s what you call financialisation. You made money out of money.”
“But that’s just how banks operate,” observed George. “There’s nothing wrong with that. If people couldn’t borrow money from a bank, they wouldn’t be able to start a business and make their own living. That’s just the way the economy works.”
“You’re right,’ agreed the Director, “That’s certainly how it worked in the old days, but the Big Bang, bank deregulation and the internet have turned the entire world economy into a super-nova of global speculation.
“When banks used to make money buying and selling physical things, now they’re only interested in making money out of money. It’s easier and less messy, and more money can be made there.
“And it’s not just the high street banks. These days, there are investment banks, insurance companies, pension funds, currency traders, hedge funds, private equity firms, global investors, and sovereign wealth funds, all up to their grubby necks, making as much money from the money they already own as they possibly can. And don’t get me started on the Global Investment Management Companies. Oh, if only they’d called themselves Partners; that way, their acronym would be GIMP – which would just about sum up these fabulously rich deviants with an unhealthy fetish for money.”
At this, George let out a snort of suppressed delight before asking, “So who are these GIMPS, pray tell?”
“Oh my god, these are the likes of Blackrock, which manages the money from pension funds and individuals who want to make more money from the enormous amount they already own. To go back to my earlier horse racing analogy, Blackrock and their ilk are an incredibly wealthy and privileged bookmaker placing bets on behalf of their clients. But, instead of putting $5 on the favourite at Kempton, they gamble with over $11trillion a year, making their money from playing the Capitalist system. Rather cosily, they also advise governments about what’s happening with the world economy.
“A couple of years ago, the head of Blackrock, a guy called Larry Fink, had an attack of the vapours and let it be known that he was now more likely to invest in companies which showed a genuine commitment to reversing climate change. As a result, a whole new industry called ESG, which I mentioned before about Unilever, sprang up to help multinationals clean up their act. ESG, if you remember, stands for Environmental, Social and Governance. Some hope of that. Rather than see this as an opportunity to help the planet, these multinationals, with the help of their ESG consultants, simply developed new ways to cheat the system, particularly with a loophole called Carbon Trading. Eventually, Fink realised it was impossible to tell who was green and who was just greenwashing. So he threw in the towel, and everything reverted back to stinking Capitalist normality. Meanwhile, average global temperatures continued to rise.
“Carbon Trading is an excellent example of how the rules and regulations don’t apply in the world of finance. If there’s a profit to be made, the GRiFTers will simply make up new rules to justify their reasons for exploiting it. Take those subprime products I mentioned earlier when I described the Subprime Market Crash of 2008? They were just a childish way of bundling up bad debts and magically turning them into bankable assets. This is just one of the thousands of schemes that fall under the derivatives banner, such as futures, swaps, and options, all of which are too complicated and, frankly, too dull to go into detail about. The critical thing to know about them is that they’re just different ways to magic money out of thin air, which is ironic because these genius economists and bankers like to see themselves as rational and level-headed, making decisions based on facts and numbers. But don’t be fooled. It’s just a mirage wrapped in a three-piece suit and red braces. These hard-headed businessmen claim to deal in facts, yet, at the same time, they are happy to entertain ideas like Quantitative Easing (which is really just a euphemism for printing money) and Invisible Hands and Animal Spirits, noneof which would be out of place in a children’s fairy story. Yet when their precious capitalism is criticised or attacked, and someone suggests a Circular Economy or Degrowth as a potential alternative to Capitalism, they throw a hissy fit and claim that ideas of this sort are pure fantasy. Well, they can’t have it both ways.”
“Sounds like the Mad Hatters Tea Party!” Said George, perceptively, still plodding along beside him
“You’re so right.” Agreed the Director turning to look at George. “These days, Wall Street and the City of London are more like scenes from Lewis Carroll than a serious place of work where rational grown-ups have our best interests at heart.”
At this point, George rechecked his Richard Mille, like the White Rabbit, hoping the restaurant would still be open when they finally arrived.
“Financialisation just describes how the GRiFTers have got their finger into every little corner of our lives, from the water we drink to the fossil fuels we burn and the personal data they harvest from us. Walk down any high street and look at all those stores and supermarkets. You might think of them as individual businesses, but, in fact, most of them are owned by investment companies with about as much interest in high street retail as I have in the Kardashians. All they’re interested in is a business’s Return on Investment. And, as I’ve said, these returns can be improved through greater efficiencies such as redundancies, automation and cheaper raw materials. And you can now add to that a trend I’ve spotted recently called shrinkflation.”
“Shrinkflation?” Asked George, bemused.
“Yeah, shrinkflation — when, instead of putting up the prices, a lot of retailers now just do sneaky things with their packaging, which makes a box of detergent or a tube of toothpaste or a bar of chocolate look the same size when, actually, it might be 10% smaller.”
“So?” Asked George, still trying to understand why this was such a bad thing.
“So, now the sneaky supermarket is charging the same amount for a product that’s got 10% less in it!”
“Sneaky bastards…” said George quietly to himself as the penny dropped.
“It’s just the latest cynical way to keep their profits growing. And what do they do with these extra profits? They squirrel them away in their off-shore tax havens, contributing as little as possible to the customers they’ve just ripped off. In the world of GRiFTing, there’s nothing they can’t exploit for financial gain. It’s called the commodification of life.”
“Sneaky fuckers…” Repeated George, still trying to get over this latest revelation.
“Financialisation has taken over the world, George, and technology is driving it further from our day-to-day reality. High-frequency trading uses powerful computers and algorithms that trade stocks and shares in fractions of a second. The goal is to exploit market volatility and make a tiny profit on each transaction over a very short period. It’s a crazy way to make money, but it now makes up about two-thirds of all financial activity on the planet. And, of course, humans don’t get a look in.”
“The Matrix!” Blurted George in surprised recognition.
“I told you!” replied the Director with a hollow laugh. “In the 1980s, on average, a share was held for four months. Now, they’re held for less than a second, and no one is regulating this market. It’s a place where physical things are not built for their inherent value or utility for society but for the amount they can be bought, sold, speculated on, or rented out. And all without us mere humans having any say in the matter.
“And, of course, this is where the multinational GRiFTing corporations make their money, contributing to the deception, muddying the waters, moving their cash and resources around the world, playing with digital money that governments can’t keep track of, and making sure they pay as little tax as possible.
“And that, George, is Financialisation.”
The Director paused for breath. Whenever he reminded himself of this shit-show world he now lived in, it always pushed him into a sloth of depression. The two friends continued to walk silently for a couple of minutes, staring at the lights reflected in the river.
3.5 Horseman # 4 – Tax Evasion (Getting Away With It)
Eventually, George broke the silence. “That stinks!” He said.
“The river or the GRiFTers?” asked the Director, somewhat amused.
“Both!” replied George, “But mostly the GRiFTers. The river shouldn’t stink. We shouldn’t be polluting rivers in this day and age. That was something we did a hundred years ago. I thought society was supposed to evolve, but we seem to be going backwards.”
“We ARE going backwards,” confirmed the Director. “Since the Big Bang, the GRiFTers have taken over the world, turning it into a dehumanised financial space of balance sheets divorced from reality.
“They don’t care about rivers or fish. They don’t even care about climate change and the fact that it will soon be killing us. All they’re interested in is profit. Capitalism really is like HAL from 2001. We’ve given it enough power to do as it pleases, and it won’t stop until we’re all dead. There’s no ‘OFF’ switch for Capitalism.”
“So what can we do about it?” asked George respectfully, hoping for the elusive answer the Director still seemed unwilling to reveal.
“I honestly believe I’ve found its Achilles Heel,” replied the Director matter-of-factly. “But I hope you don’t mind if I take one more minute to describe this last horseman?”
“Oh, of course. I was so pissed off after the first three, I almost forgot there’s a fourth!” replied George, almost cheerfully.
“Thanks,” acknowledged the Director, “because unless we understand what we’re up against, we might not be angry enough to want to stop it.”
“Agreed.” Confirmed George, accepting the Director’s reasoning.
“OK, this last nasty little horseman is called Tax Evasion, which is relatively self-explanatory but has become an industrial-scale global scandal on steroids. At least, it ought to be a scandal, but the reality is that everyone now seems to take it for granted, which is an even bigger scandal.
“When you think about it, it’s pretty weird and frankly disgusting that such things as tax havens are tolerated. That it’s OK to have places where rich people can hide their money so they don’t have to help out the people who made them rich in the first place. It’s sick. But it’s normalised.
“As I’ve said already, thanks to Globalisation, Rent Extraction and Financialisation, it’s no longer possible to keep track of who owns what. This conveniently makes it far easier for unethical individuals and corporations to hide their money away.
“They take the rent they extract from us, but instead of paying taxes on that rent, as any reasonable, responsible, law-abiding, socially conscious individual might do, they quietly slip off to the Cayman Islands to stash their swag away where no one can see it.”
“Bastards.” Repeated George, although, in his defence, it didn’t sound too bad in an American accent.
The Director nodded. “Tax Evasion has become an art form and, given the number of creative accountants they pay to find loopholes to get around the rules, I’m surprised one of them hasn’t won the Turner Prize!It’s a game of cat and mouse, where they’ll use third parties, obscure tax laws and elaborate subsidiaries in low-tax regions, amongst other wheezes, to evade what any decent individual would feel it their duty to pay. But those rules are for the little people and don’t apply to GRiFTers.
“So the cat’s really a Bengal Tiger, and the mouse is a… a… mouse.” Suggested George, realising his analogy may not be perfect.
“Quite,” agreed the Director, sympathetically. “And the explosion in the digital economy and cryptocurrencies makes it all the easier for them to cheat the system. No one knows how much is lost to corporate tax evasion, but it’s at least half a trillion dollars a year. But, instead of putting these tax dodgers in jail, as they would an ordinary citizen who’d filled in his tax return wrong, governments essentially turn a blind eye. And all of this nefarious activity is protected by the cultural hegemony that stops us from asking too many difficult questions.”
“The Heggy, what now?” Asked George quizzically.
“Hegemony, George; it’s a Wizard of Oz sort of thing, but I’ll come to that in a minute.”
