Some of you may recall the old television ad for the Smith Barney brokerage term, which featured actor John Houseman declaring, "We make money the old-fashioned way. We earn it."
Of course, neither Smith Barney nor its clients actually "earned" the money they made, nor do any investors for that matter. Investors, whether large or small, are merely hoping to rake off some of the wealth created by the people who really do the work, whether the company or corporation invested in provides tangible goods or intangible services. Karl Marx got a lot of things wrong, but his basic analysis of capitalism stands today, particularly his theory of surplus value. Basically, capitalism is a system of exploitation, no matter how much we try to pretty it up. And that basic fact about capitalism remains true whether or not a better system (for example, socialism) is actually possible.
That's why it may seem hard to feel a lot of sympathy for those who have now lost their money because they put their trust in Bernard Madoff, the latest "Wall Street wizard" to be facing charges for investment fraud. But we should feel sympathy nevertheless, particularly for the smaller players in the investment game, who hoped to live better lives by finding something else to do with their extra money other than simply park it at the bank (where it would only lose value to inflation.)
That's just one more reason why the recent attacks on the United Auto Workers and the allegedly high salaries paid to its members (not true, actually) are so off base. Are those who work hard for a living supposed to accept an increasingly impoverished state and give up their hard won benefits? Is that the kind of future we imagine for working people? Are only those who have a little (or a lot) to invest in the stock market or other vehicles for making money off of others' labor allowed to have decent lives?
The coming depression is going to create a lot of hardship, and in fact already is. But one good thing might come out of it: The more disillusioned investors the crash produces, the more people might realize that the entire system is rotten to the core.
Photo: Bernard Madoff.