The New Worker
The Weekly paper of the New Communist Party of Britain
Week commencing 18th June 2010
NEW LABOUR economics guru Will Hutton last Monday in a Channel Four TV edition of Dispatches gave us a revealing and informative insight into the power and wealth of the big banks and the City of London.
He explained that the big banks have taken all the billions of pounds of bailout they were given by taxpayers two years ago and instead of using the money to restore industry and create jobs, they have simply continued to use it to gamble with futures, hedge funds and dozens of other complex ways of making profits for themselves while the rest of the country goes to the dogs.
They are still paying themselves huge bonuses and salaries. They are still recruiting rising stars with the “courage” to take big risks. And inevitably it will all collapse again — soon. Only then governments will not be able to bail them out and we will have a real, catastrophic depression.
The bankers claim they deserve their billions because they “create money” out of nothing and create jobs. But Hutton showed that the level of employment in the banking system has remained the same for over a decade.
Very little of their money is invested in manufacturing or in other types of jobs. We now see a real rift in the ruling class as manufacturing capitalists are furious with the bankers and moaning that they put more money in the banks than the banks do in them.
The banks find mortgage lending so lucrative they lend far more money than they have got. This has caused house prices to soar way beyond normal inflation over recent decades, way beyond the reach of most wage earners, and it creates toxic debt in the banking system.
It is a gamble that the borrowers will fill that toxic black-hole from paying out a very large slice of their future wages for decades to come. When they can do this no more the whole system collapses.
It is proof that bankers do not create money out of nowhere; all wealth is created by work and the money the bankers are using represents wealth yet to be created by the toil of the borrowers. It depends on the working class being enslaved by debt. But there comes a limit when workers can take on no more debt, when they are exhausted, driven into physical and mental illness by their efforts to keep up with the payments; when eventually they say “No more!” — and default.
Hutton also exposed the hidden power of the City of London — which can command a meeting with the Prime Minister the same day or the Queen within a week. Behind all the mediaeval ceremonies and costumes the City of London has enormous economic power — which originated in the heyday of the lucrative slave trade and which is still closely guarded.
The City has enormous power to lobby Parliament — it is a state within a state and a global economic power. Former bankers are always included in Cabinets and former Cabinet ministers take up lucrative jobs in the City as soon as they leave the front benches.
The banks are international powers and it will take international agreements between governments to even try to check them. But because they have such influence within the governments this will never happen.
But Hutton’s conclusions were disappointing. He called for more Government regulation of banks and for the big banks to be broken into small sections — giving more competition.
It cannot happen, the banks won’t allow it. But even if it did it would simply, temporarily reverse the process of monopolisation, which would kick in again and in a short time we would be back with just a handful of very powerful banks.
The elected government cannot overthrow the banks but the organised and mobilised working class can — it is the only force that can. Then the centralisation of economic control they have created can be used for the benefit of the whole people, to bring resources where they are most needed and to give us all a better quality of life.
But we need to get organising and mobilising fast; the next crash is on the way and in the chaos that follows it, if we don’t go forward to socialism there is a danger we will go back to something more tyrannical and oppressive than we can imagine.