In late March/early April 2002, an advertisement in the national press caught my eye. Work from home, it said. Here is a business that you can operate part-time for just a few hours a week. High rewards are guaranteed, or virtually guaranteed, and you will have the full support of a leading international company, pre-eminent in its field. I don’t remember the actual wording, but that was the spiel.
The tabloids are full of such advertisements, even the supposedly upmarket tabloids, nevertheless for the effort of a free phone call what had I to lose? I dialled the 0800 number and spoke to a salesman, who waxed lyrical over his product. It turned out to be Blue Chip Trader, a computer program that analyses the stock market. The company was called the Micro Corporation.
The salesman said the cost of the software was £5,800, but there was a special offer which was spelled out in the letter which arrived with the brochure he would send shortly. It read:
Micro Corporation is offering a generous incentive for new clients to become involved in this exciting and rewarding money making opportunity. (To qualify for this offer, you must contact our enquiries desk within 24 hours of receiving this letter).
The bottom line was that Micro Corporation would be prepared to sell me this wondrous piece of software for £2,900 in the first instance, and only when I had made a substantial profit would the second instalment fall due.
This is a scam which is in use throughout the financial sector, and the marketing sector in general. A one time only, often one day only, discount: buy now and save £2,900. The idea is to convince the punter (or more often mug) that the salesman is doing him a favour. In this case, the punter can do himself a much bigger favour by not buying at all, and saving £5,800. [Plus VAT, I should add!] I told the salesman that I couldn’t find that sort of money at the drop of a hat because my funds were tied up, and sure enough he agreed to extend this deadline by a week. There was of course no mention of a refund if I were to lose all my dosh once I had signed up.
When it arrived, the brochure didn’t say much: “Creating wealth is about working smarter - not harder.”
Now that is certainly true, but Micro Corporation’s product is not about creating wealth; it is about playing the stock market, ie gambling.
The company’s website contained similar sales blurb:
“Do you realise how valuable your personal computer is?”
Yes, I use it to write poetry.
“Imagine making a living from home, using your computer for less than 2 hours per week!”
Imagine dating Britney Spears. That’s not gonna happen either.
“Why do some people make a fortune on the Stock Market and others lose? Many successful investors use the very latest technology to help them know the right time to buy, and more importantly, when to sell!”
Wrong. The people who always make money are the brokers. Some people make a fortune, usually for the same reason some people make a fortune playing the National Lottery. Luck. Most people who invest - and I mean invest - in the stock market will make a reasonable return over the long term.
I didn’t bother to take the on-line demo.
On the evening of April 17, the salesman phoned me back. I told him the bottom line was that he wanted to sell me a piece of software for £2,900 so that I could play the stock market. It’s gambling, I said. He replied that he didn’t see it as gambling because of the company’s track record, and that it was for people who were interested in making “serious money”.
After telling him I wanted to do something productive, I as good as put the phone down on him.
It is of course the United States which has the deserved reputation of pushing this sort of scam, although the British aren’t exactly novices, but surprisingly, Micro Corporation is an Australian company. I say surprisingly, but the sad truth is that since the fall of Communism, this sort of parasitic capitalism has become universal.
The salesman I spoke to may truly believe that he and his company are leading some sort of revolution, but the truth is they are bit players. Everyday in this country and the world over, fund managers and individuals are gambling on the stock market, with their own money in the case of the latter, or often as not with other people’s in the former, including their pension funds.
Fund managers and similar financial speculators earn - or rather are paid - unbelievable salaries, commissions and bonuses, although a few of them are relatively poorly paid. Here is one sad example:
The London Evening Standard (WEST END FINAL) reported in its June 19, 2002 edition on the front page that Mrs Julie Bower, who had sued her employer Schroder Securities for sexual discrimination, had won a record payout when the firm caved in. She was said to be set to receive £1.4 million.
She had been paid sixty times less than her male colleagues. Yes, sixty times less.
“An employment tribunal had heard how she was awarded a ‘lousy’ £25,000 annual bonus while two male colleagues pocketed £440,000 and £650,000.”
How many public sector workers, female or male, would consider a £25,000 annual bonus lousy?
Mrs Bower walked out of her £120,000 a year job in October 1999.
How many public sector workers would have walked out on a job that paid half that salary?
Mrs Bower’s ’lousy’ £25,000 bonus was, we are told, subsequently increased to £50,000, but should have been £170,000.
In 1913, Emily Davidson, an early women’s rights campaigner, was killed after she threw herself in front of the King’s racehorse in the Derby in protest at the fair sex being denied the vote. She must be turning in her grave.
Incredible though it may sound, Julie Bower was indeed one of the more oppressed members of the City financial elite. But what has she, or any of her fellow speculators, ever done to justify such enormous salaries?
These people do not produce so much as an ear of corn. They are not, like Bill Gates, putting the world on-line, empowering consumers, delivering news, education and entertainment at minimal cost to hundreds of millions of ordinary people across the globe. They are not, like Richard Branson, bringing consumer goods to the world at reasonable prices. They are not even like rock band Oasis entertaining the young generation. They are simply moving money from A to B to B to C and from C back to A, skimming a handsome profit for their employers off every transaction.
It was Margaret Thatcher who pledged to make Britain a nation of shareholders; this pledge has been long fulfilled, but many people besides the de rigueur Trotskyists and fellow travellers are beginning to question the practice if not the theory of this supposed people’s capitalism.
In real terms, food, consumer goods, and other essentials have never been cheaper, yet Britain and the entire world are drowning in debt. Some companies have acquired debts of staggering proportions. In September 1976, the Labour Government of the day went cap in hand to the International Monetary Fund for a £2.3 billion loan. Chancellor Healey said the only alternative would be austerity measures so harsh they would lead to rioting in the streets. Yet last year, British Telecom, one company, had amassed a staggering debt of £30 billion. *
Consulting the World Almanac at random, (individual countries beginning with the letter A), ** we find that in 1999, Albania, with a population of around 3½ million had a GDP of $5.6 billion; while Angola, population around 10.3 million, had a GDP of $11.6 billion. At current exchange rates that is around £11.5 billion in total. So British Telecom’s debts were equal to nearly three times the GDP of two of countries with a total population of some 15 million people. What sort of maniac would lend a company, any company, three times the GDP of 15 million people? The answer is speculators. Speculators and City bankers, which for all intrinsic purposes is the same thing.
The most frightening thing of all though is that the government, and increasingly ordinary people, view this madness as being what economics and the real world is actually about. They would rather gamble on the stock market than invest in real wealth. The tumble the American and world stock markets have taken in recent weeks hasn’t taught most of these people anything. When the real meltdown comes, it will not be the Julie Bowers of this world and her employers who pick up the tab, it will be ordinary working people. And that meltdown may be nearer than even the most pessimistic think.
* The Independent (on-line version), April 26, 2001.
** 2002 Edition, pages 768 & 769 respectively.
[This article was first published by the August 26, 2002 edition of Pravda, the English language on-line version of the prestigious Russian newspaper. It has been edited very slightly.]