The greed game the super rich and how they did it

[alan-b'stard]

This was broadcasted on the BBC two nights ago. But most people don't know it was first broadcasted on the 1st of April. Maybe people thought it was an April fools joke. Now they know different...

http://www.stwr.org/global-financial-crisis/super-rich-the-greed-game.html

[alan-b'stard]

BTW Kyzr, I believe this blows away your reply to my other thread on the credit crunch. It is quite obviouse and explained why they HAD TO offer loans to the financially challenged. THEY made their own bed long before they clutched at straws.

[alan-b'stard]

When I explain this to fellow workers, they are so angry it is almost beyond belief. many have seen this programme and are so pissed off that I have to calm them down. The thing is we work in Canary Wharf and have these (w)bankers coming to our wine bar every day. They sit and drink for hours EVERY LUNCH and thier lunch can last 2 to 3 hours... then they go back to work... WHATEVER THAT IS... This is before the crunch. Many years before. We all hate them. Theyare drunks and get quite abusive at the least reproach from us. And we own our company! Now we feel WE OWN THEM. AND THAT IS A FACT. I tell the girls, if they get shirty, tell them we are their boss, GET BACK TO WORK!

[alan-b'stard]

C'mon. Anyone want to dispute this? Any 'capitalist' want to fight? Or are you all pussies when things get difficult?

[KyzrSoze]

I agree to an extent. In your previous thread I was addressing the cited article which was woefully narrow focused. There are other significant causes for these problems that sometimes get missed.

I am aware of all of the info spelled out in the video, and as a former real estate agent I can add to it. I've seen these sorts of deals at the outset, the mortgage broker and the real estate agent doing everything they can to make sure the deal closes so that the cosing is profitable for them. The mortagage broker then selling off the mortgage asap, making a quick buck and ridding themselves of the risk.

The video highlights the super rich, but what I am describing are the low rungs on chain, the origin of the bad deal, the not at all rich who are taking advantage of their fellow citizens. It pints out the actual problem - greed. Greed that transcends all classes, income levels, races, and natinal borders.

Socialism has never worked for exactly the same reason. If you could push a button and change the world sytem to socialism, the greedy monsters in the present system would simply rise to the top of the new one. In that way all systems are equal, and in all cases it is the greedy individuals that need to be stopped.

[alan-b'stard]

Thanks for the response, Kyzr.

I don't think the article was narrow in focus. I think it was backed up absolutely by Robert Peston who is the 'economic expert' for the BBC. He has been crying in the wilderness for some years and is almost enemy number one to certain sections of society. The article differs only towards the end when Marx is brought into the equation when surplus value and the decling rate of profit are explained though obviously not in absolute detail.

Of course, the 'bottom feeders' of the system are the ones who actually sell dud assets and the board rooms of the elite wash their hands of actual work. They just lay the ground rules.

Only workers can create wealth. The casinos take what we create and gamble with other peoples money. They can 'make' billions but money cannot create wealth, they just shift it around, the wealth you and I make. Being 'clever' is not really work. And has no real value unless it creates something.

I believe businesses over 1000 employees should be run democratically as a co-op. Finances should be open to employee scrutiny and businesses should be run democratically and have constitutions. As the video says, is it moral that owners of firms can make tens of thousands of times the salary of their employees? A cap on the wealth of individuals is right and proper. Yes, hard work and good ideas should be rewarded but there should be a limit, just as there should be a limit on poverty, a line that nobody should be allowed to fall below.

[KyzrSoze]

I don't think the article was narrow in focus.

The article was very narrow in focus, the work of soemone who is quite distant from the subject and looking in from the outside. It misses the point because it is written in the voice of someone who isnt looking for the answer, only looking for the opportunity to kick capitalism and praise socialism. Of course this wouldnt have happened under socialism, because under socialism everyone would have been trading potato(e)s and driving Ladas.

In fact while I admire the aim, the integrity, of the Coop company, it works in 2008 primarily because capitalism exists right outside the door, and people with money show up to buy things. Sans that, the coop become people working together in the attempt to not starve. It gets to the heart socialism. Someone might get too much, so instead no one gets anything but the basics.

Again, the moral of the story here is greed. Capitalism isnt greed, socialism isnt greed, but greed can and has ruined both.

[alan-b'stard]

The thing is this, Kyzr. I have been talking to you guys for what? A decade nearly and you still don't get it. Socialism existed for less than a decade and in one country. A country of peasants that was attacked by 13 other countries after a devastating war (the first world war). After overthrowing the ruling family they had to face the whole capitalist revenge. Of course it had no chance of success. Lenin and Trotsky realised this in the early twenties. But what do you do in that situation? Give up and face destruction from the west? Negotiate a peace or hope revolution may come from Britain, germany or America? They hung on and no-one came to the rescue. The German revolution was defeated by the freikorpse (Nazi's) Rosa Luxembourg was murdered by them http://en.wikipedia.org/wiki/Rosa_Luxemburg and we know what happened next...

Lenin, on his death bed tried to stop Stalin and was probably killed by him. Stalin tortured Lenin's wife and even spat in her face. Trotsky was exhiled and banished from Russian history. He was deleted, literally from socialist history in Russia despite being the greatest general in their history. He defeated those 13 armies and brought democracy to the red army. He fought on against Stalin from Mexico and was eventually murdered by the the forerunners of the KGB.

Stalin used the revolution for his own purpouses. He was a C*** and I hate his memory.

What I am saying is socialism has never existed. It is still a dream. But it is still the only solution, the only true democracy and our only hope of heaven here on earth.

[alan-b'stard]

A few words about Rosa. She was and is an inspiration.

Last words: belief in the revolution

Rosa Luxemburg's last known words, written on the evening of her murder, were about her belief in the masses, and in what she saw as the inevitability of revolution:

"The leadership has failed. Even so, the leadership can and must be recreated from the masses and out of the masses. The masses are the decisive element, they are the rock on which the final victory of the revolution will be built. The masses were on the heights; they have developed this 'defeat' into one of the historical defeats which are the pride and strength of international socialism. And that is why the future victory will bloom from this 'defeat'.

'Order reigns in Berlin!' You stupid henchmen! Your 'order' is built on sand. Tomorrow the revolution will already 'raise itself with a rattle' and announce with fanfare, to your terror:
I was, I am, I shall be!"[12]

[edit]
Quotations
Rosa Luxemburg's best-known quotation is: Freedom is always the freedom of dissenters (Freiheit ist immer Freiheit der Andersdenkenden), usually cited as Freedom is always and exclusively freedom for the one who thinks differently; this is from a fuller quotation:

Freedom only for the members of the government, only for the members of the Party – though they are quite numerous – is no freedom at all. Freedom is always the freedom of dissenters. The essence of political freedom depends not on the fanatics of "justice", but rather on all the invigorating, beneficial, and deterent effects of dissenters. If "freedom" becomes "privilege", the workings of political freedom are broken.

"Marxism is a revolutionary worldview that must always struggle for new revelations. Marxism must abhor nothing so much as the possibility that it becomes congealed in its current form. It is at its best when butting heads in self-criticism, and in historical thunder and lightning, it retains its strength".[citation needed]

"Without general elections, without unrestricted freedom of press and assembly, without a free struggle of opinion, life dies out in every public institution, becomes a mere semblance of life, in which only the bureaucracy remains as the active element".

"For us there is no minimal and no maximal program; socialism is one and the same thing: this is the minimum we have to realize today".

" "We stand today ... before the awful proposition: either the triumph of imperialism and the destruction of all culture, and, as in ancient Rome, depopulation, desolation, degeneration, a vast cemetery; or, the victory of socialism."


Memorials

Stencil Graffiti of Rosa Luxemburg on a portion of the Berlin Wall on display in Potsdamer Platz in Berlin. The title reads "I am a terrorist."

In Berlin's historic Mitte (city centre), the Rosa-Luxemburg-Platz and the eponymous U2 line U-Bahn were so named in her honour by the Communist East German government. The Volksbühne (People's Theatre) is in Rosa-Luxemburg-Platz. The names remain unchanged since reunification in 1989.

In 1919, Bertolt Brecht wrote the poetic memorial Epitaph honouring Rosa Luxemburg, and, in 1928, Kurt Weill set it to music as The Berlin Requiem:
Red Rosa now has vanished too. (...)
She told the poor what life is about,
And so the rich have rubbed her out.
May she rest in peace.

Of Rosa Luxemburg, Trotskyist writer-historian Isaac Deutscher wrote: "In her assassination Hohenzollern Germany celebrated its last triumph and Nazi Germany its first."

[KyzrSoze]

Lenin, on his death bed tried to stop Stalin and was probably killed by him. Stalin tortured Lenin's wife and even spat in her face. Trotsky was exhiled and banished from Russian history. He was deleted, literally from socialist history in Russia despite being the greatest general in their history. He defeated those 13 armies and brought democracy to the red army. He fought on against Stalin from Mexico and was eventually murdered by the the forerunners of the KGB.

Stalin used the revolution for his own purpouses. He was a C*** and I hate his memory.

Exactly!

The leaders of the international bank community, the palyers that have caused our present problems - they would become the Stalins within revelution. This is true because there are always those in society who want more than what is considered fair by others. They are driven to succeed, and what ever form the top level of society make take, they will press toward that goal. Of course, among that group there are only a few with the brains to succeed the that degree, the others are still driven, but they content themselves by preying upon the lower levels of society.

Its the innate qualities of individual people that keep socialism a dream, because in order for it to work, everyone must be of one mind and committed to the cause, the best interest of the group over self. Because it is impossible to get that kind of concensus in any size group of people the only other way it works is to force that concensus by law. That puts someone on top in an enforcement capacity, and those with any drive are drawn to that position - then Stalin does what he always does...

It is a good dream, but it requires a level of perfection in humanity that doesnt exist. It is that lack of perfection that frustrates you now:

I don't have faith any longer in the people to change things for the better in social values.

And all of that only addresses one end of the human spectrum. The other end is those that simply are too lazy, too stupid, or too uninvolved to care. They are the ones that allow banks to sell them a rediculous loan in the first place. They are the ones that stand in line for old bread while Stalin runs amok, they are the ones that allow the Muslim extremists to speak and kill for them, their country and their religion.

[Commander]

You guys, this is a truly wonderful discussion, don't think I haven't been reading. I fully enjoy the polite and reciprocative debate you fellows seem to carry out here, it is very educational and should be viewed and absorbed by all. Please continue! -^

[alan-b'stard]

Hey, Commander. Long time no see. :) I don't think there is much more to say from my end but anyone can add their own thoughts if they feel the need.

You know what, Kyzr? You are probably right. But the thing is it is in our nature, I believe, to change things for the better. The vast majority of people want peace, prosperity and justice in the true sense of the word. This I believe is true of all peoples wherever they come from and whatever they believe in their hearts.

Even 5 years ago the reality of a black man becoming president of the USA would have been unthinkable, but guess what? It may not change a thing but many of us hope it will change a lot of things, hopefully for the better. Change can be step by step and occassionally it can be a huge leap forward. We come out of crisis a little more informed and work out ways to avoid the mistakes of the past.

BTW, that Palin women is scary. :eek:

[alan-b'stard]

What lies behind the current crisis in the banking system?
That article in full for those that didn't bother to read the link.


The turmoil is rooted in the so-called US “sub-prime” mortgage market, whose collapse over a year ago began the “credit crunch”.

This market developed as lenders raced to find new targets to sell their mortgages to.

They made loans available to people with low credit ratings or on low incomes at extortionate rates of interest.

This meant people took on a level of debt that was impossible to manage. The market began to unravel as it became clear that people could not afford to repay these levels of debt.

But the bad debts did not simply affect the lenders who issued the mortgages. They spread across the world financial system because of a “secondary market” in mortgage debt.

Mortgage debts were repackaged into bonds that were bought and sold by other institutions. Traders and banks speculated on the value of these bonds.

When people began to default on their mortgages last year it became clear that these bonds were far riskier an investment than many had previously believed.

But because of the way that the debts had been repackaged and sold on, no one was quite sure where the bad debts had ended up or how big they were.

Banks stopped lending to each other out of fear that they would not get their money back.

This created the “credit crunch” – when the credit between banks that had been easy to come by suddenly dried up.

Banks borrow and lend money to each other in the form of short term loans in the course of their everyday business.

Some, such as Northern Rock, relied heavily on this short term borrowing to finance their business, rather than using the traditional means of deposits in customer savings accounts.

When the lending stopped, Northern Rock was plunged into disaster. The government stepped in to nationalise it last year.

Speculation has fuelled the crisis. As investors and traders lose confidence in their bets, they moved their money elsewhere, creating panic among others who then followed suit.

Is the crisis all the fault of speculators?

As banks have crumbled, we have seen obscene cases of people making millions of pounds from the collapse of these companies.

They did this through “short selling”. Traders, often working for secretive financial groups called hedge funds, take shares “on loan” for a given period of time.

They sell them immediately in the hope the price will drop and buy them back at a later date – hopefully at a lower price so that they can pocket the difference.

Even in the gambling dens of the stock market, sharp practice is frowned upon. So the government has banned this practice, for certain stocks and for a short time.

As the revolutionary socialist Karl Marx put it, the financial system is “one of the most effective vehicles of crises and swindle”.

For instance, “insider dealing” is illegal. But knowing in advance that a company is going to announce something, knowing whether that news is good or bad, and so knowing whether to buy or sell shares, is highly lucrative.

One study of 172 mergers on the US stock exchange found that insider dealing took place in every single case.

But the crisis is not just down to the activities of a few rogue traders. It is down to the chaotic nature of the whole financial system.

The bank HBOS got into trouble last week because of its huge debts, not because of short selling. Only 3 percent of its shares traded on the day of its collapse were down to this kind of activity.

Can the central banks save the market?

The US government has agreed to take on bad debts. This will swell the nation’s budget deficit to massive proportions.

That will affect the US’s ability to further intervene on any such scale if the markets go into freefall again.

We were told US state intervention had worked when it moved to underwrite the giant “monoline” insurers at the start of this year.

The same thing happened again when it bailed out Bear Stearns in March and once more when it effectively nationalised mortgage giants Freddie Mac and Fannie Mae earlier this month.

The US, Britain and other major states have injected massive amounts of public money into the system, so that banks can borrow cheaply.

There are limits, however, to how much of this can be done. For instance, the scale of the debts in circulation is far larger than the output of the world economy.

There is no guarantee that, apart from briefly lifting share prices, anything will be achieved by this. It is simply giving free money to the stock market, which may never be returned if the crisis continues. This happened when the US government attempted the same thing after the Wall Street Crash in the 1930s – the recession continued to grow apace.

The Chinese government holds billions in US government bonds and must be very nervous about their worth. More importantly even the US government is near the limits of what it can spend.

Meanwhile there is no sign that financial institutions will start lending or investing – they want to hold onto cash. That threatens the wider economy.

In the 1990s the Japanese government spent massively to try and reverse a similar situation. The result was it was burdened with huge debt repayments which meant a decade of recession and stagnation.

There are fears that in return for holding off an immediate collapse the giant US economy is doomed to a more drawn out crisis.

The collapse of the mighty US investment banks is a further blow to Wall Street’s financial dominance.

A US that is economically wounded remains the number one military power in the world and in this situation it could be pushed to wield that more power even more readily.

Why does the state intervene to save some firms but not others?

There have been major interventions by the state in recent weeks to try and prop up institutions, such as the takeover of Fannie Mae and Freddie Mac. They were said to be “too big to fail”.

But the US failed to bail out the giant Lehman Brothers just a few days later.

The ruling class has no answer to this crisis. It is divided over the best way to respond. It is worried about what impact failing banks will have on capitalism and the system’s credibility among ordinary people.

So last week Gordon Brown arranged a deal for Lloyds TSB to take over HBOS. HBOS needed to borrow billions of pounds a day to do business and the squeeze on lending – and its increased cost – meant this became harder to do.

The government could not risk Britain’s largest savings bank failing. One in five mortgages in Britain are with HBOS and one in ten people have current accounts with it.

Whether states bail out the banks also depends on the timing. Sometimes the ruling class may believe that the system can absorb a failure without it leading to more serious damage.

States have to consider their own levels of debt – whether they can afford to bail out companies or not. And state intervention raises ideological problems – nationalising companies challenges the neoliberal ideology that has dominated the world since the 1980s.

But because recession is inherent in capitalism our rulers cannot ultimately resolve it and divisions among them means there is no consistent response.

Why does capitalism go through cycles of booms and slumps?

The chaos that we see around us is only the latest crisis of capitalism. The global economy has undergone a series of recessions over the last 35 years, including in 1973, 1990-93, 1998 and 2001-2.

Profit rates have not recovered to the level they were at before the 1973 crisis. Each time a recession ends, the prophets of the free market tell us that all of the problems in the system have been fixed. But then they are thrown into panic by the next recession.

This cycle of booms and slumps is down to the competitive and anarchic nature of capitalism. Because there is no centralised plan for the economy, each company tries to grab the biggest share of the market by producing more of one or more goods.

This leads to more goods being produced than are needed and these pile up unsold – hitting profits, forcing companies to the wall and leading to workers being laid off.

Workers then have less money to buy goods, which makes the crisis worse and the system goes into slump.

The failings of some companies then helps with the revival of the system as their competitors buy up their technology and markets.

Underlying all of this is a fundamental problem with the system – the tendency of the rate of profit to fall.

Karl Marx identified this tendency over 100 years ago. It does not mean that actual profits fall – companies are still making billions and many are increasing their profits. But the rate of return on their investments, over time, tends to decrease.

This is because real value comes from workers’ labour. The value people create through work is greater than the amount they receive back in wages.

Therefore the capitalist is stealing some of the value workers’ labour has created. This “surplus value” forms the basis of profit.

But the pressure on bosses to compete means that they try to cut the amount that they have to invest in labour.

Instead they invest in new technologies that mean they will spend less on workers. They can produce the same or more with less people because of new technology or machinery.

It also means that they will try to increase the level of exploitation of workers – making people work harder for less.

Companies may benefit from investing in new technology in the short term because they can undercut their competitors. But once the other companies catch up, this advantage is lost, and bosses must try and find new ways of increasing their profits.

The falling rate of profit pushes capitalists to try and constantly find new ways of making money.

They may do this by developing new markets or by building up speculative bubbles.

This may keep the economy afloat temporarily and mask the problems that exist. But because crisis is built into the way that capitalism works, these same problems are bound to re-emerge in the future.

What are the financial markets?

At its simplest, the financial market is a large casino. But it is essential for the running of capitalism.

Capitalism is a system based on companies competing with each other to maximise their profits. Generally they invest some of their profits in new equipment in an attempt to gain an advantage over their competitors.

But if capitalists do not have an immediate outlet for their profits, or if they need to invest but do not have enough capital, the banking system, the stock exchange and similar institutions can provide a means of financing investment.

They can also provide an outlet for the profits of others. For example, a capitalist might save money in a bank account hoping to invest it later. The bank can then lend it to a different capitalist who wants to invest now.

But the financial system is also a source of instability. If there is a sudden fall in profit rates, or a loss of faith in the market, panic can spread rapidly through the system.

In modern capitalism, assets can take on a life of their own. Huge casinos develop – New York’s Wall Street or the City of London – where the rich can speculate on stocks and shares, currency prices or other investments.

Neoliberal deregulation has led to a flurry of new ways to gamble at the casino of the market.

Futures contracts, for instance, involve placing enormous bets on what the price of a commodity will be at a given time.

Futures are the simplest examples of derivatives – financial instruments whose value is “derived” from another simpler instrument. These derivatives allow traders to lay complex bets on the prices of stock and bonds without having to own them.

The theoretical value of all derivatives was $596 trillion at the end of 2007.

This spiralling of markets integrates the financial system on a global level. But it also leads to complete chaos when it all goes suddenly wrong.

One example is the effect of the market in mortgage debts that have collapsed in the last year.

Rather than holding debts and collecting interest payments companies merged them together and sold them as bonds. Others then gambled on the prices of these bonds.

Yet other institutions took out insurance on what these bonds would be worth – “credit default swaps”.

The recent bankruptcy of Lehman Brothers, the fourth biggest investment bank in the US, has triggered multi-billion dollar payments from insurers to people who held debt bonds.

But since these insurance deals are privately traded from one institution to another, no one has the slightest idea of who owes what to whom – or whether they can pay.

Will the financial crisis affect the wider economy?

The wider economy is affected by what goes on in the financial markets. The “real” economy is based on a division between workers and capitalists. Capitalists employ workers, paying them a wage which is typically far less than the value that they create.

The financial markets are what Karl Marx called “fictitious capital”. Their activities do not generate new wealth or expand production. They are the gambling of profits created by workers – and ultimately they depend on the health of the real economy.

However exaggerated the claimed value of shares may be, they are related to the level of dividends that the firm pays out, which in turn is connected to profits. If profits are falling the firm will not be able to pay out dividends and share prices will fall.

Markets can, for a time, soar far above the values justified by real profit rates. This creates a speculative bubble that must inevitably burst.

There are real consequences when this happens. For instance, the main investors in hedge funds are pension funds. Ordinary people’s pensions are the chips they are gambling with.

Further crisis in the financial sector feeds back into the real economy. No credit means real companies going bankrupt and not just bankers losing their jobs.

The billions of pounds given by the government to PFI companies involved in schools and hospitals are tied up in the money markets. Each bail out and investment to help the market means giving public money to the bosses that could be spent on services.

What impact will the crisis have on ordinary people?

Commentators are speculating that we are about to see a repeat of the Great Depression of the 1930s. There are some similarities with that time – the role played by speculation and credit in the crash, for example.

But the truth is that no one knows whether we are facing a dramatic 1930s style crisis or a more protracted recession.

One thing is for certain – our rulers will try to make working class people pay for the crisis, just as they did in the 1930s. We are already seeing a big rise in redundancies and unemployment, with more job losses threatened. Britain’s housing market has virtually stalled.

The crisis in the financial sector means that banks are much less willing to give credit to people and businesses. This has several consequences.

The economy has been bolstered by the availability of cheap credit. Wages have been held down but people have still been able to buy consumer goods because of credit.

Now that this is no longer available – together with a rising cost of living, wage restraint and fear of unemployment – people are spending less. This increases the economy’s problems.

Governments are pumping billions into the financial sector to try and oil the wheels of capitalism.

They also bail out companies if they think that their failure will have a negative effect on the rest of the economy.

This is leading to an increase in countries’ budget deficits.

Some £87 billion has been added to Britain’s national debt because of the nationalisation of Northern Rock. National debt now stands at 43.3 percent of Britain’s income.

At the same time, rising unemployment means less money paid in taxes. New Labour and the Tories will attempt to push through cuts in government spending to deal with the deficit, threatening services and pensions.

Private companies will attempt to cut costs by attacking the final salary pension schemes of their workers.

What can ordinary people do to resist the attacks?

The key factor in how the recession impacts on us is how working class people fight back.

This turmoil is part of a global crisis. But the government could implement a number of measures to ease the pain for ordinary people – and we should demand that it does.

Many multinationals continue to make billions while workers are suffering. The energy companies rightly became the focus of attention when they raised energy prices while making record profits.

The government could implement a windfall tax on these profits. This could then be used to give subsidies to low paid workers and those on benefits to deal with the price rises.

The government could go further and introduce a cap on energy price rises. It could nationalise the energy companies. It could raise corporation tax to increase the amount of resources at its disposal to combat the effects of any recession.

Taxing the rich and the profits of the corporations could raise billions of pounds that could then be ploughed into council house building and public services.

The government could use the money to raise benefits and pensions.

We should demand that the government scraps its public sector pay limit, which means millions of workers are seeing their pay cut in real terms while prices soar.

There will need to be grassroots resistance to all the attacks, just as there was in the 1930s.

This means people organising to stop the repossession of homes, occupying factories and other workplaces against closures to save jobs, and intensifying the revolt against below-inflation pay deals among trade unionists.

Recessions bring the instability and madness of capitalism to the fore. Millions will now be questioning the whole basis of the system.

In this situation our rulers will try and divert blame for the crisis in other directions. They will try to scapegoat immigrants and the unemployed.

As competition between capitalists and states becomes more fierce, so does the possibility of more war. This is why it is crucial that ordinary people unite and fight together – both to halt the devastation that the recession will bring and to beat back attempts to move society to the right.

Are reforms enough?

Economic crisis is part of capitalism. The only way to end recession is to replace the anarchic system with a democratically planned economy based on workers’ control – socialism.

But this will not appear out of nowhere. It has to be created by ordinary people themselves.

Many people can see that the system doesn’t work for them – most starkly at times like this.

The problem is that we grow up in a system where the dominant ideas are that capitalism is the only way to organise society.

But the system also pushes people to fight back – and in doing so working class people gain confidence. People suddenly find that they can do things they once thought impossible – whether that is organising a strike, speaking at a public meeting or arguing with other people to win them to resisting attacks.

Fighting for reforms and challenging the priorities of the system breaks down the dominant ideology.

Revolutionaries fight for reforms for two reasons. The first is that we genuinely want such reforms – we want to stop the privatisation of services, challenge racism and improve workers’ rights because these things mean important changes to ordinary people’s quality of life.

But fighting for reforms also brings people into activity, and increases their confidence and questioning of the system.

The fact that capitalism cannot provide the things we need means that many people will be radicalised and see the need to fundamentally change the world.

[alan-b'stard]

As I said, I don't think the article was that narrow in viewpoint. I meet people everyday that think they are imformed yet cannot get an answer to the questions they raise. All the 'experts' for once are lost for words. They enjoy the good times and quite frankly know nothing about the real world and what ordinary workers put up with. Well, the masters of the universe have been been caught out this time, shot in the back with their own arrow.

;)

[alan-b'stard]

On the issue of co-operatives. I apologise for forgetting about this question. Well, actually it is quite probable that co-ops actuaaly began the whole idea of capitalism. Co-ops were founded to keep a fund of money as an insurance against disaster etc. We founded capitalism don't forget. You (Americans are new to the game) We founded the idea of banks, insurance and co-ops. All funded through working people for the purpouse of mutual, not private gain. So in effect, co-operatives gave capitalism birth... Not the other way round, old chap.

Cooperative efforts have occurred throughout history. Since early man cooperated with others to help kill large animals for survival, people have been cooperating to achieve objectives that they could not reach if they acted individually. Cooperation has occurred throughout the world. Ancient records show that Babylonians practiced cooperative farming and that the Chinese developed savings and loan associations similar to those in use today. In North America, clearing land in preparation for the planting of crops, threshing bees, and barn raisings all required cooperative efforts. In the United States, the first formal cooperative business is assumed to have been established in 1752, almost a quarter-century before the Declaration of Independence was signed. This cooperative, a mutual insurance company called the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, was organized by Benjamin Franklin and others, and it is still in operation today (Cobia).

The cooperative as a modern business structure originated in 19th century Britain. The Industrial Revolution had a profound effect on the way business was organized and on the working conditions and economic situations of many people. In response to the depressed economic conditions brought forth by industrialization, some people began to form cooperative businesses to meet their needs. Among them was a group of 28 workers who were dissatisfied with the merchants in their community. They formed a consumer cooperative known as the Rochdale Society of Equitable Pioneers in 1844. They began by opening a cooperative store that sold items such as flour and sugar to members, and the Society quickly grew to include other enterprises. The founders also established a unique combination of written policies that governed the affairs of the cooperative. Among these rules were: democratic control of members, payment of limited interest on capital, and net margins distributed to members according to level of patronage. Based on its success, the Rochdale set of policies soon became a model for other cooperative endeavors, and became known as the general principles that make a cooperative unique from other business structures.

Agricultural Cooperatives

Agricultural cooperatives are typically classified according to the three major functions they perform: marketing, supply, and service. Many cooperatives combine all three types of functions in their operations.

Marketing cooperatives

Marketing cooperatives help to sell their members' farm products and maximize the return that they receive for these goods. Their operations can be quite diversified and complex. Some marketing cooperatives perform a limited number of functions, while others vertically integrate their operations so that they perform more functions that add value to their members' products as they move from the farm to the consumer. Some cooperatives even sell products in grocery stores under their own brand name; Land O' Lakes and Ocean Spray are two prominent examples. Marketing cooperatives can serve their members in many ways, including bargaining for better prices, storing and selling members' grain, and processing farm products into more consumer-ready goods. In the United States, agricultural cooperatives handle about 30 percent of farmers' total farm marketing volume (Mather et al.).

Supply cooperatives

Supply cooperatives (sometimes referred to as purchasing cooperatives) sell farm supplies to their members. Products include production supplies such as seed, fertilizer, petroleum, chemicals, and farm equipment. American farmers purchase about 28 percent of their supply needs through cooperatives (Mather et al.).

Service cooperatives

Service cooperatives provide various services to their members. For instance, cooperatives may offer services such as pesticide applications, seed cleaning, and artificial insemination. Service cooperatives also include organizations such as the Farm Credit System, a network of borrower-owned lending institutions that provide credit and other financial services to farmers, and rural electric cooperatives, which provide electricity to rural areas.

The first formal farmer cooperative to form in the United States occurred in 1810. However, agricultural cooperatives were not really perceived as a viable business organizational structure until after the Civil War (Cobia). Several farm organizations helped to promote cooperative development. The Grange, a farmer organization established to improve the economic and social position of the nation's farm population (National Grange), began to engage in cooperative marketing and purchasing. In 1875 it adopted the Rochdale system in carrying out its cooperative activities. Other farm organizations, including the Farmers Alliance and the Farmers Educational and Cooperative Union of America (known as the National Farmers Union), also began to promote cooperative development (Cobia). Farmers not affiliated with any farm organization also began to establish cooperatives. By 1900, at least 1,223 cooperatives were active in the United States (Mather et al.).

By the early 1900s the United States government began to pass laws that provided a favorable environment for cooperative development. A commission established in 1908 by President Roosevelt noted that the country lacked adequate credit for the agriculture sector, and their findings helped lead to the passing of the Federal Farm Loan Act in 1916, legislation that led to the creation of the Farm Credit System. The Capper-Volstead Act of 1922 was crucial for agricultural marketing cooperatives, as it provided limited antitrust immunity for farmers and ranchers who join together in cooperative marketing associations.

Government encouragement for agricultural cooperatives was highest during the 1920s and 1930s. Most state legislatures established agricultural cooperative acts during this time. America's agricultural sector went through a difficult period as prices collapsed after World War I ended. As part of the response to the adverse economic conditions, Presidents Harding, Coolidge, and Hoover all strongly endorsed the use of agricultural cooperatives. The Agricultural Marketing Act of 1929, which included the establishment of a fund for cooperative loans, also helped to strengthen the cooperative movement (Cobia).

According to the United States Department of Agriculture (USDA), the largest number of agricultural cooperatives occurred during 1929-30. At that time, the USDA recorded 12,000 farmer cooperatives (Mather et al.). Although the number of agricultural cooperatives has been decreasing since then, total business volume has been rising. In its 1997 survey, the USDA reported that 3,791 farmer cooperatives generated a net business volume of $106 billion, equal to the record high set in the previous year. The net income was near the record high of $2.36 billion reported in 1995 (Richardson et al.). The number of farmer cooperatives has decreased through various activities including dissolution, mergers or consolidations, and acquisitions as cooperatives, like other businesses, adjust to a changing economic environment (Mather et al.).

[KyzrSoze]

I hadnt read the deep history of Co-ops before now, but I imagine that the idea came to this country with the earliest colonists. My bank is a co-op or Credit Union, and our local power company is a co-op (Central Georgia EMC).

[alan-b'stard]

Yeah, our history is buried and who has time to look back in this world?

BTW, logging in to this forum to reply is beyond a joke. It takes me about ten attempts to get in. Anyone else have htis problem?

[alan-b'stard]

look up the word mutual... That is the key. the beginning and the end.

[KyzrSoze]

A little levity for the discussion - enjoy.

Vid 1 (http://www.hulu.com/watch/37241/the-colbert-report-tipwag---wall-street-jagoffs)

Vid 2 (http://www.hulu.com/watch/36323/the-colbert-report-the-word---ohmygodsocietyiscollapsing#s-p1-st-i1)

[alan-b'stard]

Computer says no... Only yankees can watch. ;)

[golos]

C'mon. Anyone want to dispute this? Any 'capitalist' want to fight? Or are you all pussies when things get difficult?

I speak for all capitalist in the world when I say none wants to lose their time discusing with a pseudo-socialist imbecile like you.

;)

[alan-b'stard]

Actually, Golos, I doubt very much you are a capitalist, at least not in the real sense of the word. More likely you are a capitalist lackey:

lack·eys
1. A liveried male servant; a footman.
2. A servile follower; a toady.
v. lack·eyed, lack·ey·ing, lack·eys
v.tr.
To wait on as a footman; attend.
v.intr.
To act in a servile manner; fawn.

:cool: