Was Karl Marx right with his critics and analysis about the capitalist system, its crisis, and inequalities? The question must have crossed the minds of many people faced with the periodic failures of the world economy and financial systems in the last couple of decades, which seem to have made the poor poorer, ruined into poverty millions of people who were part of the middle class, while making many of the rich richer. The question is asked indirectly also by the makers of ‘The Big Short’ directed by Adam McKay, probably the best film made until now about the crush of the real-estate market followed by the financial system which started in 2007, and to some extent continues until today.
source http://trilbee.com/reviews/the-big-short-2016-movie-review
The housing market in the United States was expanding and seemed to be rocky solid in the 1990s and the early 2000s. It was supported by a banking system which did not only provided the credits that allowed all the strata of the population reach the house of their dreams, but also created new money from money and profits from profits for the investors. This kind of bubble BTW persists until today and endangers all the capitalist economy. The film describes how a few people involved with the investment funds and banking systems had foreseen the fall (‘The Big Short’) and made a profit out of it investing in credit default swaps, kind of insurance policies against the deficit of a system which was supposed never to fail. If you want this was like buying insurance policies against earthquakes with the confidence that an earthquake will happen in the next two years in one of the most stable areas in the world.
(video source Paramount Pictures)
Director McKay took a documentary book (Michael Lewis’ “The Big Short: Inside the Doomsday Machine,”) and turned it into docu-fiction of the best quality. In order to explain how the system worked he used the narrator who is also one of the heroes (played by Ryan Gosling) and a few real life celebrities to explain the dry financial terms. I certainly did not become an expert in economics after seeing this film, but I can understand what chef Antoine Bourdelle means with taking lower quality (‘B rated’) sea-food and putting it in his bouillabaisse, package with his ‘AAA rated’ prestige. The smart heroes take life each on screen thanks to well written dialogues and fine performances of such actors as Gosling, Christian Bale, Steve Carell, or Brad Pitt.
‘The Big Short’ proves that the financial and banking system that is supposed to support the capitalist economy is ill. It also proves that Hollywood at its best can make relevant movies that touch real life, while being good entertainment for smart viewers. In what concerns the question ‘was Karl Marx right?’ the answer is in my opinion that he was right in part of the analysis of the capitalist system, but was completely wrong in what concerns the cure. If a cure exists for the capitalist system, its name is certainly not communism.