(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
The world economy is hovering in what is the biggest economic thriller in a long, long time. Despite what some over-optimistic economics commentators have tried to do with blow-outs, the stock market crisis does not seem to be approaching any end for the foreseeable future. At the time of writing, the crisis has spread to European banks, and both Icelandic and Danish banks have had to thank themselves nicely. It is never nice to panic, but on the other hand it is questionable to see just how calm Norwegian politicians take this. Like when Lars Sponheim cheerfully chimes in on the Editors: "Everyone knows that when you have had a big party, you have to clean up the house afterwards", without realizing that this is the biggest stock market crisis since the crash in 1929. Or when Jens Stoltenberg and Kristin Halvorsen repeatedly repeat their firm mantra that we do not have to worry about the financial crisis coming to Norway. They are right that it probably will not hit us as much as over the dam, but to think that we up here should be shielded because we have an "orderly economy", at best, seems blue-eyed.
Even central bank governor Svein Gjedrem admits that he is surprised at how deep the crisis is and that no one foresaw how big the impact it would have on the economy. All major banks, including Nordea and DnB Nor, are announcing interest rate increases, and several savings banks believe that mortgage rates above 10 per cent can be normal. In addition, frightening numbers from Nav show that unemployment increased by 1000 people from August to September when adjusting for regular seasonal variations. This trend will not be enhanced by the effects of the financial crisis. According to new figures from the Forecast Center for Construction and Real Estate, as many as 40.000 may lose their jobs in the construction industry.
In such situations, it is always tempting to go for a scapegoat. Who can take the blame for the tragic human fates that the crisis will now create? The problem is that it is difficult to point to a specific mistake or a specific scapegoat behind the financial crisis. Yes, the US mortgage banks yawned too much, and yes, the bankers and Wall Street became too greedy. But still – have they actually behaved radically differently than what the other market players do normally? Can one blame someone who has done nothing but use the opportunities the system offers? Jens Stoltenberg himself has said that this is a systemic crisis, and he is not alone in thinking so. Several Norwegian market commentators agree that this was in many ways an inevitable consequence of a system that lends itself to megalomania. It is capitalism that is the scapegoat.
It is scary, but not unexpected, to see how a financial system in such a short time can go down for counting. When you base your entire financial system on a market almost completely without any kind of control, you end up with the current conditions. Although this crisis is the worst that has ravaged in a long time, it should not come as a shock to anyone that capitalism generates crises. To claim otherwise would be historyless. For us on the far left, it is, as always, interesting to see that Karl Marx's theories of capitalism as a system whose internal contradictions will lead to crises, once again prove to be true. Unfortunately, such a crisis entails much more than that left-wing radicals can accept that they are right. Already, three million American families have lost their homes as a result of the mortgage crisis. Nobel laureate in economics, Joseph Stiglitz, believes the crisis will not be over until at least five million families have become homeless.
The question is why should we accept that our fates are subject to fluctuating stock prices? Why should we accept the premise that these things must happen because it is the market that decides? The best thing this financial crisis can teach us is that another system is needed. It is time for an economy that can be controlled democratically, rather than being governed by a powerfully amputated invisible hand.
