Presentation for the seminar “Economics and Power” on 23 March 2015, House of Lords, London: Ladies and Gentlemen, To pay tribute to the Marxist jargon, in which Lord Skidelsky has phrased the title of my subject, I would like to start with a quote from Karl Marx: “The ideas of the ruling class are in every epoch the ruling ideas. … The ruling ideas are nothing more than the ideal expression of the dominant material relationships, … the relationships which make the one class the ruling one, therefore, the ideas of its dominance.” In my own words, that means that not all economic ideas are created equal.
On Thursday the ECB’s Governing Council will decide on whether to start a large bond buying program. I am afraid the decision is clear, though not for economic reasons. A few days later, the Greek will probably vote for a left leaning government under the Syriza-party, which wants to renegotiate the terms of the huge government debt, and is opposed to the EU-imposed austerity program which impoverished the country. There will be a standoff, a game of chicken, in which Brussels, Frankfort (the ECB) and Berlin
Let’s assume that there is a financial oligarchy which exerts strong political influence due to the vast amounts of money it controls. Let’s further assume that this financial oligarchy has succeeded in having financial markets deregulated and that this has enabled the financial industry to expand their business massively. Then, in some near or far future, their artfully constructed financial edifice breaks down, because it cannot be hidden any more that the accumulated claims cannot be serviced by the real economy.