Barely three months into 2023 and we have seen a series of major banking crises unfold right before our eyes. Silicon Valley Bank collapsed, followed by Signature Bank and Credit Suisse is encountering turmoils that send panic across the market. All these on top of global economic crises, inflation, rising cost of living, major economies of the world facing strong headwinds, energy crisis, stock market instability, post-pandemic recovery, and the Ukraine War; we are indeed living in a time of polycrisis, chaos and panic.
One thing that many people believe is that there is a financial crisis happening right now. But is that really the case?
While this may seem counterintuitive to many who are grappling with the impact of the pandemic on the economy, the current situation is nothing more than a game, and one that is being played according to the rules of capitalism.
Our current state of affairs is exactly what capitalism is designed for – imbalance and inequality. Those who hold the reins of power, the “big people with big money,” are simply playing with people’s lives, and no one seems to care. The game is rigged in favour of the elite, and they will always come out on top.
This sentiment can be summed up in the Japanese concept of “Shu Ha Ri,” which describes the stages of mastery in a discipline. The first stage, “Shu” (守), is characterized by following the rules and imitating the actions of those who came before. The second stage, “Ha” (破), involves breaking the rules and developing a personal style. The final stage, “Ri” (離), is the point at which the rules are transcended, and mastery is achieved. For those who believe that there is no financial crisis, we are currently in the “Ri” stage of capitalism. The rules are being broken and transcended, and those with the power to do so are manipulating the markets to their advantage. They induce panic and fear and then buy when prices are low, reaping the rewards when the markets eventually stabilize.
A recent example of this can be seen in Credit Suisse’s recent announcement that Saudi Arabia will no longer lend to the bank. This news caused panic among investors, and the bank’s share price plummeted. This fear reverberated and major stock markets plunged; billions were wiped out in one day. Saudi Arabia, through Aramco, has already earned $161 billion profit for 2022, they can now exert their power as a purchaser which can induce panic in the market, only to buy later when the prices are low. It is a testament to the power of the purchaser, and the lengths to which people will go to maintain that power. This is exactly what capitalism is designed for, a system that thrives on imbalance and inequality.
Less than 24 hours after this news, the Switzerland Central Bank announced a $54 billion lifeline and rescue to Credit Suisse. The Swiss will never let Credit Suisse fall and its stocks went soaring once again.
Amidst the chaos and turmoil of the financial world, what does this mean for the rest of us, for those who do not have the power or money to play this game? It means that we are at the mercy of those who do and that we must find ways to survive and thrive despite the rigged system.
In the end, the financial crisis may indeed be just a game, but it is a game that has real consequences for real people. It is up to us to decide whether we will continue to be pawns in this game, or whether we will fight back and demand a more equitable and just society.