It has been fascinating over the last few weeks to watch the whole edifice of market capitalism unravelling. There is of course a huge inevitability about it all – an entire system of world finance built on gambling and greed disintegrating. Others have written far more eloquently than I could about the spectacle, although the sight of the advocates of the market with their hands out to the state has certainly indicated the shameless greed and hypocrisy of these people.
I’m more interested now in picking up on some of the issues in domestic British politics.
Hedge funds and Tory funds
Not the least entertaining spectacle of the last few weeks has been the desperate attempt by the Conservative Party in the UK to avoid criticising the out-of-control financial institutions at the heart of the current crash. One by one, Tory leaders have said that we shouldn’t criticise the bankers. David Cameron says it won’t save a single job. Boris Johnson says we must protect the reputation of the City of London. Only now, with evidence of the backlash in the United States against the banking community, is George Osborne apparently willing to state that the banking community should take its share of the responsibility.
Here’s the reason why. A piece in the Times shows that hedge fund managers deeply involved in short-selling (i.e. gambling with your pension) are among the Tory Party’s largest donors, with regular personal access to David Cameron. Are these people really going to let a future Tory government undertake the sort of large scale regulation of the financial markets that the current situation requires? In whose interests will a Tory Government act?
It’s typical. The most important issue of the day, and not only do Cameron’s Tories have nothing to say; it just another occasion when the snouts are in the trough.
The fact remains: the people who are responsible for this mess – the financiers who developed ever more dodgy financial instruments, the hedge funds who have used short selling to speculate against the banks, are at the heart of the Conservative Party – and, to quite a considerable extent, are its wallet. Whatever rhetoric emerges from the Conservative Party conference, this is the background reality.