A significant development stemming from advances in information technology has been a change in the very nature of the capital assets of enterprise.
In the world of capitalism everything has a value. Everything, sport, art, literature, has poured into the melting pot of capital to be spewed out not as a cornucopia of plenty but a destructive paean to greed.
This has entailed a shift from the traditional importance of fixed assets towards increasing emphasis on the intangible ones of human capital needed for the knowledge intensive industries. The field of entertainment (pop music, sport or cinema) is heavily dependent on high cost human capital. These assets can only be valued on a balance sheet with extreme uncertainty. Added to this the new technological advances, for example by patenting genetically modified crops and the human genome.
In order, therefore, to apparently stabilise the global capitalist economy there is an intensive effort to find new outlets for investment capital. Naturally this has gone hand in hand with pressure to exploit every available opportunity to extract more value from existing business. Hence the further "modernisation" in Britain by the New Labour government of the gambling laws and allowing the advertising industry to target children. Feminism having already achieved its task by bringing women increasingly into the business vortex.
From the early days of industrial capitalism in the nineteenth century it had been widely accepted that the vital public services and utilities, such as water and energy, telecomunications and education, should be largely provided by organisations owned and controlled by the state.
These were regarded as natural monopolies not really requiring any form of competition and not considered an attractive opportunity for private capital.
In the United States subsequent to 1929-31 it was agreed that state regulation combined with subsidy as well as selective public investment was acceptable.
The privatisation policy of the Thatcher government in Britain hinged on the assumption that the public sector had failed to provide services that had hitherto been largely seen as its preserve and that the private sector, driven by its supposed inherent capacity to achieve greater cost-effectiveness should take them over.
What was never stated by the advocates of this was that it offered a much needed outlet for surplus investment funds.
The takeover of one company by another had been a defining feature of the capitalist market place. Of General Electric it has been said that "like a large shark it must keep moving and keep eating or perish."
There was a powerful incentive for investment banks to obtain a bigger share of the extremely lucrative business of mergers and acquisitions by means of high pressure marketing strategies targetting the chief executives and directors of these major corporations. It is noteworthy, moreover, that the powers of persuasion of the newly emerged financial conglomerates formed (including Citigroup, which has as its senior adviser, James Wolfensohn former World Bank chief, Merrill Lynch and Goldman Sachs) have also included personal offers to directors of client corporations to take up highly profitable share issues in unrelated companies.
Since the l970s financial deregulation has both enabled and encouraged commercial banks to diversify their activities across the whole range of financial services. Banks such as Citigroup, Merrill Lynch and Credit Suits First Boston have been engaged in systematic and deliberate lying to their investor clients.
It has long been an article of faith among the supporters of modern capitalism that the maintenance of confidence in the financial markets is a public good to be highly prized and carefully nurtured. Judged from this perspective, it may be considered proper that financial institutions and other corporations should be enabled to present their results in the most favourable light. And in the same way it is entirely rational to promote the development of structures and instruments that help to minimise the danger of systemic financial collapse.
This, in its turn, favoured the culture of fraud. The pressure on the managers of private sector companies under capitalism to maintain and increase profitability is inexorable. It is perhaps unsurprising that in periods of economic stagnation the chief executives and their henchmen would take advantage of the increased scope for misleading investors and engage in large scale falsification of their accounts.
Hence the frauds perpetrated by Enron, WorldCom and Global Crossing could not have existed for so long without the active complicity of outside bodies (notably auditors) which would normally have been expected to act as a restraint on them.
Auditors such as Arthur Andersen, Deloitte & Touche, Ernst & Young, KPMG and Price Waterhouse Coopers increasingly have come to generate most of their business from advising companies as consultants, including actual or potential audit clients, with the obvious danger of a conflict of interest.
Actuaries, whose role had been largely confined to calculating the appropriate level of insurance premiums based on statistical evidence of longevity, recently have been called to put a value on pension funds based on assumptions of future earnings which were supposed to be based on historic market trends. The result of which was to generate enormous exaggeration of the reported net worth not only of the pension funds but of the companies sponsoring them.
Credit Ratings agencies are an obscure but highly significant group of actors in the securities markets whose judgments on the creditworthiness of corporations (and even national governments) have a great influence on investor sentiment.
The Enron collapse focused attention on the fact that the credit rating business, which is largely unregulated and a duopoly of two private sector US companies (Moody's Investors Service and Standard & Poor's), was seriously lacking in transparency and potentially subject to conflicts of interest similar to those of accountants.
Since the 1980s stock exchanges have increasingly been transformed, with the blessing of the authorities, from staid quasipublic institutions owned and managed as non-profit organisations into profit-maximising corporations.
Third World countries, that hitherto had been regarded as too risky to justify investment, have in recent years been encouraged (not least by the IMF and the World Bank) to open up to foreign capital.
Successive financial crises in Mexico, East Asia and Russia demonstrated that, not only was investors' traditional scepticism about such markets justified, but that largely speculative funds had done lasting damage to many of the countries concerned by destablising their currencies and financial systems.