In Defence of Marxism

It may be recession for some, but it is sweet bonanza for others! 

As the recession begins to bite deeper with every passing day, millions of ordinary people face losing their homes, bankers' profits are taking a hit, tens of thousands are facing the dole queues, the world is on the brink of economic recession, yet the super rich have never had it so good, especially the hedge fund managers.

Last year, the top hedge fund managers pocketed more money than ever before. Top of the bunch was John Paulson. His "earnings" last year came to $3.7bn (£1.87bn). Steaming up behind him were George Soros and James Simons. They made $2.9bn and $2.8bn a piece. Apparently, the least well-off punter amongst the 50 top hedge fund managers made a measly $210m.

The list of these recession-proof high-flyers was compiled by Alpha magazine. This was culled from firm's balance-sheets. The figures even shocked Alpha's editors. This year's table, they explained, "may well prove to be the greatest display of individual wealth creation in any year in the modern history of finance".

The reason for their success when all others are losing their heads, is simply gambling. Who said capitalism was like a gambling casino? All they needed to do was punt money on the favourite dog, sorry, market trend, and wait for it to come in. It is just like being at the Romford dog track on a Saturday night. You simply bet against some of the trends in the financial markets and win. It is as easy as that. Paulson exploited the turmoil in the sub-prime mortgage market, making a killing while several banks have been devastated. How easy is it to make money these days! You don't need to work or toil, only gamble against the odds.

You don't need to teach old dogs new tricks either. George Soros, who famously made $1bn in a day when he forced the Bank of England out of the European exchange rate mechanism in 1992, came out of retirement to return to betting. He had spotted a "cert" in the turmoil in the markets. As a result, he collected returns of more than 30%!

Eight of the top 50 earners are British-based, including Noam Gottesman and Pierre Lagrange of GLG who made $350m each, and Hugh Sloane and George Robinson of Sloane Robinson Investment Services who made $220m each. The highest-placed British trader was David Slager of Atticus Capital. He made $450m last year, placing him 13th on the list.

The existence of such fabulous gains as the rest of the financial world sinks is bringing out the chaos and anarchy of the capitalist system. Of course, it has produced some bleats from other capitalists. For instance, the US Treasury secretary, Henry Paulson, talked of the need for hedge funds to be more ‘transparent', whatever that means.

Between them, the top 50 managers in Alpha's list made $29bn last year. Not bad for a day at the races! When Alpha began compiling the table in 2002, Soros was on top with $700m - if he earned that amount today, he would only be placed ninth.

Inequality of wealth is more extreme in the citadel of world capitalism, America, today than for decades. According to Jared Bernstein, of the Economic Policy Institute in Washington, the gulf is greater than at any time since 1928, when a similar proportion of US national income - 23% - went to the top 1% of earners. That was a year before the 1929 Crash, the greatest crisis in the history of capitalism - well, so far.