In the time of neo-liberal globalization it is common for stock markets to be shown as an almighty “faceless” force, which moves behind the scenes and is guided by the “sacred and unbreakable laws of the market”, laws which are complicated and incomprehensible for the “common people”, those who are not initiated in their operations. But stock markets have a face and material substance. Behind them are banks, insurance companies, the holders of mutual and investment portfolios, multinational businesses.
These are the economic factors that map out the modern strategies of accumulation and concentration of economic power, applying policies of relentless bloodsucking of social wealth at a global level, having always the sympathy and contribution of governments and central banks.
With the global stock market value surpassing $50 trillion, a sum greater than the global GDP, stock exchanges have transformed into international centres where it is decided what will be produced, from who, which place on the planet, what price it will have, what will be the new development innovations, what will be thrown away from the production procedure and what will be created anew. In production markets with product stock exchanges as the protagonists, capital is gathered that surpasses the astronomical sum of $450 trillion, which means ten times the global GDP.
In the product stock exchange oil companies lead, multinationals of food and raw materials that control the largest part of global production in energy, food and raw materials speculate with product prices. There it is decided what products will be produced, from what countries and with what quantities, where they will be distributed and at what prices. Food multinationals and stock exchanges define the prices of products, which countries will starve to increase their profits.
In exchange markets – where the capital that gathers to speculate at the expense of local currencies reach on a daily basis $2 trillion and on a yearly basis over $400 trillion, ten times the global GDP – is decided every day the value of currencies, where their devaluation and appreciation through this huge market can destroy even a country of the capitalist centre in one night. In a nut shell ‘markets’ – as is common to call them in short – are the absolute Lords of the planet. When we speak of ‘markets’ we mean the transnational conglomerates which control the largest part of global production, multinational monetary institutions and investment companies. We mean an international economic ruling class that controls global economy.
The nucleus of the stock exchanges is the shareholder company which has given great flexibility to capital and which through it can at any given moment transfer from one business position to another, change place, even move through time, “betting” on future alterations and profits with the help of numerous stock market tools that has been discovered by the endless speculative imagination. This business model has given the opportunity to a few large investors, holding stocks from different businesses, to simultaneously control different sectors of economy with relatively few capitals, a fact that leads to the reinforcement of conglomerate monopolies, the concentration of capital and economic force.
Through the stock exchange and the endless hunt to raise as much profit as possible for the shareholders, capitalism succeeds the expansion of these mechanisms of pumping the surplus value at a national as well as international level and promotes the regime of international labour over-exploitation, the brutality of which is in unprecedented in human history.
Thus, the shameful wages, the poverty of the workers of all lands and the human misery brought by poverty, is in coordination with the indices of stock exchanges and is the reason for stock market expansion.
The more wages decrease and businesses profits increase, the more the workers living standards are downgraded, the more stock market speculation expands.
Maybe the social majority is in distress and poverty, maybe the GDP in a country goes up because rich people’s profits go up while the income of the many does not increase and the country is sinking in debt. Maybe the high speed development rhythms declare only the profitable opportunities for the capitalists and not the improvement of living conditions of societies. Maybe the indices prosper but people who live in poverty are miserable, but political authorities use these indices to convince us that the economic situation of the majority of the people is good. In a similar way the rise of the stock markets continues to be propagated as a basic factor that shows that economy is booming.
The argument that ‘the stock market development offers debts for the total of the economy’, is still dominating and the political elites directly or indirectly support the stock market prosperity, despite the fact that it’s more and more obvious that the stock market is a mechanism for snatching produced wealth and its aim is the concentration of the economic force to more and more less. The so-called ‘tidying up’ of business, or in other words – “rationalization” of its operation – in order for it to become more competitive, is used as a basic target of the businesses that want to be listed into the stock market, as well the ones that are already in, is nothing more than the ‘reduction of operational costs’. This in practice means either the reduction of workers wages or reduction of jobs and lay-offs or even shutting down businesses and transporting them to countries with cheaper wages.
Even the known philosophies surrounding the role of the stock exchanges, and presenting them as the fields where businesses inflate capital by avoiding lending in order to finance new investments, are just a scam today. It is easy for someone to accept that the profits from the stock market rise not only are not put into new investments but threaten the existing ones. It is known that large investment and financial organizations – the real masters of stock markets – which assess the listed and their development prospects, have several methods to cause the rise in share prices of companies.
The same investment institutions assess concessional lending to those businesses with the largest increase in their share value. These businesses offer to lend, supporting their business expansion. In other words companies have the possibility to borrow much more capital the more their shares go up and proceed to aggressive buy-outs of competitive businesses, a tactic that serves a basic capitalist principle, based on which a powerful business must expand with final target of the control of the market.
In this game of speculation, the businesses with better yields are in more danger, since the borrowing terms get more lenient as their stock price rises. As well, it is known that when ‘powerful’ business announces it’s going to bought out by another one, its share goes up immediately and the profits for the shareholders are assured. In the end, those listed in the stock market not only don’t inflate capital to raise their capitalist base, but on the contrary, it happens that the most ‘powerful’ of these show a decrease of capital and are in danger of bankruptcy when the stock market explosion is followed by the usual descent.
From this procedure those who are truly winners are the financial and investment institutions who orchestrate the process of buy-outs and mergers with their reports for those listed on the stock exchange, the stocks of which they promote up or down depending on their plans and inflate the surplus profits of the expansion from their participation in the stock composition of companies as well as the capital with which they borrow for this business expansion. We have examples like this all the time in the Greek market as well with a load of speculative portfolios and with multinational investment groups such as Citibank or JP Morgan, UBS etc. systematically “playing” with many listed in the Greek stock exchange.
The over-charging of large businesses comes as a natural result of the stock market expansion of inflated stock-equity businesses and expansionist policies, while when the moment of crisis arrives, then “economic giants” collapse like paper towers while their lenders are in the corner buying the once seemingly mighty companies ‘for a piece of bread’. This condition intensifies economic gathering, since through buy-outs and mergers the multinational-conglomerate groups spread their control onto new markets. It’s a given that the real winners are the multinational financial and investment institutions, who extend their hegemonic position in this modern process of accumulation inflating the surplus profits from the procedure of the business expansion with borrowed money.
The stock market explosion in Greece at the end of the ’90s was orchestrated with the cooperation of the Greek State and local capitalists. It brought the stock exchange to the centre of economic life and thousands of Greeks and immigrants believed that they found their own El Dorado. The transnational capital entered the game en masse right after the devaluation of the Drachma [Previous unit of currency before the Euro] by the Simitis [Prime-minister from '96 to '04 and former leader of PASOK] government to snatch the savings, the fortunes – even the lendings – of the ‘local victims’ that were channeled into the stock exchange, raising the indices sky high and leading the stock market capitalization for the first time to astronomical sizes, more than two times the Greek GDP.
The ‘bubble’ took unprecedented dimensions and the large shareholders collected the profits and left. What followed was the precipitation of indices that left the small time shareholders holding in their hands shares which are garbage. One million people played and lost fortunes in the stock market in ’99, most were completely destroyed, some committed suicide. And of course this massive discord was nothing but a result of a conscious policy by the government and parties, with the overall index of the State on the parliamentary agenda.
The stock market ‘bubble’ of ’99 – and the para-philology about “popular capitalism” that accompanied the ’90s but found its best practical application at the end of the decade -, was necessary for the social modernization promoted by PASOK because it contributed to the complete decriminalization of speculation, the idealization of wealth as a sovereign value, the legalization to a great extent of the banks loansharking which from then on took great dimensions, proportionate to the stock market profits that vulture-bankers took in.
The then government of PASOK with the help of State-controlled stock market companies and companies that had been founded together with members of both major parties, as well as the contribution of large sums from the insurance funds in the stock market to “dope up” the indices (sums that, of course, “were lost” in the pockets of politicians, government executives and big businessmen), orchestrated one of the biggest frauds in Greek history.
It is undoubtedly a theft of mythical dimensions, the biggest most massive transfer of wealth towards the more privileged classes.
Banks, party members and large businesses in Greece got rich by stealing the billions of Drachmas from small time investors and sucking the blood of small businesses that entered en masse with the ‘support’ of the banks. From the stock market explosion and the collapse that followed ’99, the gathering of capital in Greece went forward at a fast pace strengthening monopolies and oligopolies in the Greek market.
Consequent of ’99 is that foreign capital participated in the shareholder creation of large Greek companies controlling them and owning the biggest part of the stock market capitalization. The contribution of the Greek stock exchange was defining in the establishment and control of the economic life of the land by a bunch of Greek tycoons and foreign large investors, a fact which has not taught the necessary social and political lessons.
It might be that since then, small time shareholders systematically abstain from the Greek stock exchange, despite any attempts of economical and political authorities to attract the lower-middle class and their savings. One part though, of the middle class in Greece continues to own fortunes in the form of shares, bonds and other brokerage products and expects the increase of its personal wealth from the practices of relentless executives and managers, from the intensity of labour exploitation and from the poverty of the workers.
The blindness caused by the thirst for wealth does not allow any of those who chase quick profit to see that with the prosperity of stock exchanges, from which they hope to get rich from, they support – besides the intensity of labour exploitation – indirectly the debts of households, since with this consumption increases and profits flock to the businesses raising at the same time their stock market indices. In this way, social inequality constantly increases, as one part of society gets rich from the debts of another obviously larger one and the many are destroyed in order for the few to prosper.
Let’s not fool ourselves, the participation of anyone in stock market speculation is a clearly anti-social practice, it is aggressive towards the proletarians, it materially and morally reinforces the bosses and the rich and contributes in the strengthening of social and class inequalities. And if for the rich the cold indifference to the source of their wealth and the cynicism in front of the hunt for profit is a given because of their class, for the poor such a stance should be ethically unacceptable and reprehensible .
Since many professional politicians, whatever their political affiliation, own large amounts of shares in their vaults, it becomes understandable why it’s not only a matter of political position when it comes to blindly supporting the stock exchange, but also a matter of personal interest. Just like it is a matter of personal interest, the adoption of policies by those who have the State power, or reinforce whichever business, depending on which capitalist they have invested their future profits in.
The portfolios of politicians and their families reflect in an undeniable manner even for the more naive, the personal benefit of political power from the so-called “intertwining” of the political and economic sphere. And for sure an MP cannot be exempted from this reality just because he is a leftist, such as Alavanos of Sinaspismos, who – besides his huge fortune which declares that his interests are light years away from the interests of the non privileged – holds a not-insignificant number of stocks. Even more, a leftist party such as the KKE (communist party) cannot be exempted, despite the fact that it hides well its business deals and activities.
Such cases of Leftists, who claim that their purpose is the defence of the rights of the workers, the poor, who denounce economic exploitation and uneven distribution of wealth, elastic and uninsured labour and the exploitation of immigrants, the bloodsucking of households by the banks, who often heavily criticize casino-capitalism and on the other hand get rich through the stock market, are raw liars and hypocrites.
Because participation in the stock market today legalizes the most thieving regime of sucking social wealth via labour, we should denounce as frauds and hypocrites all those who use leftist rhetoric for a better world while at the same time preserve and support the existing exploitative and oppressive regime. From cases like this we have nothing more to expect but deceit.