Where is it? I admit that finance at this level makes very little sense to me, but once upon a time there were individuals who put their savings into financial institutions which then put that money into this Ponzi scheme. So the money working people put aside from their wages in order to provide for their old age is no longer there. It has gone. It seemed to be real once - a measure of the reward for service rendered. Now it seems to have evaporated. At each point in this process of rendering cash into steam various individuals took fees and many earned bonuses. Most of these transactions, until the end, were probably legal. But something apparently magical has happened as what was once real has become unreal - contrary to Newtonian physics.
But it is not magic, however, for the money was never real in the first place. It never has had any reality - all it is is a set of agreements - nowadays represented in binary code and never existing outside those electronic impulses. Those who understand this language of unreal agreements grow rich and generally escape the ultimate consequences of their actions, while those who produce the goods and services measured in this language of agreements reached on the poker tables of international finance find themselves in unexpected poverty in their old age. Unable to meet the bills for essential services. Perhaps unable to have the medical treatments that could keep them healthy for longer. Sure, there are some, like Madoff who cross the line from legality to illegality but this seems to me to be simply a question of degree not of substance.
This is not the first bubble and it will not be the last - unless some other way of ensuring distribution of goods and services is found. The Soviet model did not work - neither, patently, does the Freidmanite free market - which has ended up, ironically, by fulfilling the dream of early 20th century socialism, the nationalisation of banks.
There is often an amazing apparent symmetry of events, however, and there was an early indication of where we were heading. Early in Margaret Thatcher's premiership a ferry was delivered to Townsend Thoresen and began its operations on the cross - channel route. it was one of three and their names reflected the triumphant ideology of both the Tory leader and her friend Reagan - Free Enterprise. On March 6, 1987, one of these, the Herald of Free Enterprise, sank as it was leaving Zeebrugge harbour. The official enquiry concluded:
.a full investigation into the circumstances of the disaster leads inexorably to the conclusion that the underlying or cardinal faults lay higher up in the Company. The Board of Directors did not appreciate their responsibility for the safe management of their ships. They did not apply their minds to the question: What orders should be given for the safety or our ships?
This seems to me to epitomise the whole ethos of the ideology of Free Enterprise - maximisation of profit with no thought of social responsibility. Early in its unholy career this fact was "heralded" in Zeebrugge harbour. Lest anyone claim that this criminal corporate negligence was a one-off, there had been an even worse indication a few years earlier in Bhopal, India, when spillage from the Union Carbide works killed and maimed thousands. Here, even the most basic safety measures had been cost-cut out . No-one in authority in corporations seemed to learn any lessons from such events- they simply campaigned, successfully, for even less regulation. The safety and livelihoods of human beings seem forever to take second place to the search for greater and greater profits for the corporate few.
We have now seen the results of this culture of greed and have an opportunity to rethink. I pray we take it