On the 14.th of March Greg Smith, an executive
director of Goldman Sachs, resigned publicly in the New York Times. He described
himself as appalled by the moral bankruptcy displayed by the Wall Street bank.
In his letter he layed out how Goldman help themselves before their clients,
how promotions are dished out for those who manage to persuade clients to
invest in stock or productsthat they are trying to get rid of due to their
unlikely profitability. Furthermore, he cited the blatant disrespect for anyone
‘not on board.’
The shadowy business practices of Goldman Sachs are well known. In April 2011 the Senate permanent subcommittee on investigations accused Goldman of deliberately selling mortgage-linked derivatives at inflated prices after it realised that the housing market was about to crash. The report also alleged that Goldman had attempted to cause as much pain as possible to investors caught on the wrong side of their investments to maximise their own profits. So, there is nothing new there then. What was remarkable was his hark back to "the secret sauce that made this place great" – which had been about “teamwork, integrity, a spirit of humility, and always doing right by our clients.” It is a commonly held belief that through reform it would be possible to create (or recreate, in the minds of certain capitalists) a friendly, ethical banking system. Unfortunately those who advocate reforming capitalism in the hope that it will bring an end to the selfish and greedy nature of business and provide prosperity for all will be left bitterly disappointed.
Due to the very nature of capitalism any reforms that are made can only provide short term benefits, sooner or later any improvements will be cut back in the march towards ever larger profits. The distinct interests of the ruling classes compared to those of workers ensures a conflict that can only be resolved by the working class taking things into their own hands. The initial demands of worker’s centre around three key demands. The raising of wages, the reduction of working hours without loss of pay and the freedom to organise-primarily to prevent workers from being forced to compete with each other in a race to the bottom. This directly contradicts the desire of the business owners’ who strive to ensure they obtain larger and larger profit margins.
The clear contradictions between workers fighting for more equal conditions and bosses trying to fight for greater personal wealth is just one of a number of contradictions inherent within capitalism. Reforms can help improve conditions in the short term but the unadulterated quest for profit means they will always be rescinded. Reforms won by the workers on one day will be taken from them by the capitalists on another, like those that can be seen today with the ConDem government’s onslaught on public services. It is for this reason that the eventual purpose of any workers struggle should be the complete removal of the capitalist system, and in its place a socialist economy that’s purpose is not mega profits for a privileged few, but a concerted effort to make the wealth of society available to all. Smith’s vision of a ‘secret sauce’ will do nothing for the lives of workers.
