“The world has gone mad and the system is broken…This set of circumstances is unsustainable… the world is approaching a big paradigm shift”. Not our words but those of billionaire financier Ray Dalio, in a recent LinkedIn post.
Dalio points to inflationary dynamics in the equity market – the home turf of an ‘asset manager’ such as himself – which mask systemic overproduction with an imaginary boom. Asset managers, venture capitalists and angel investors buy companies or shares that have no hope of ever turning a real profit.
Given low and even negative interest rates, buying up equity is a better investment than leaving cash in a bank to depreciate or stagnate. This is a finished recipe for massive inflationary bubbles, mirroring those in other sectors of the finance economy such as the derivatives and housing markets. But sooner or later, the whole ponzi scheme will come tumbling down, as it did in 2008.
If this was the end of it, Dalio knows he and his fellow billionaires would have no reason to worry. They would just reinflate the bubble and merrily swindle along, continuing to enjoy the high life with no fear of the consequences. But, as Dalio realises, there is a problem.
The financiers might be flush with cash, but the rest of us – the source of all their wealth – are being squeezed like never before. And when the bubble bursts, taking our pensions with it, it’ll be us left to pay the bill, with further wage cuts, government austerity measures, and unemployment.
What really worries Dalio and his ilk is this: we won’t pay!
A decade of attacks on the working class has completely eroded what support for the capitalist system previously existed. According to YouGov polling, more than a third of millennials in the US now approve of communism, while support for capitalism is in freefall. 70% of millennials in the USA said they were likely to vote for a socialist candidate in the elections.
A revolutionary wave
In the last few months, a revolutionary wave has spread across the world, extending all the way from Ecuador to Lebanon, from Catalonia to Hong Kong, from Iraq to Puerto Rico, and beyond. Young people have been at the forefront: leading evasiones in Chile, campaigning for Corbyn in Britain, and organising a 4 million strong #YouthStrike4Climate internationally.
When the bosses emptied our pockets after the 2008 crash, workers and youth were taken by surprise. Our generation had bought a lie that things would only get better. We were told that the crash was just a blip and with a short few years of belt-tightening the good times would return.
The story of the last ten years is the exposure of this great lie. Just let them try and pull the wool over our eyes again. Next time it’ll be the bosses who pay the bill, as we pull their tottering system to the ground and build a better world from their stolen wealth.