The New Worker
The Weekly paper of the New Communist Party of Britain
Week commencing 15th April 2011
THE GOVERNMENT’S Independent Commission on Banking (ICB) delivered its report and recommendations on Monday and none of our readers will be surprised that the banks were said to be relieved at the mildness of the measures that are supposed to prevent another banking crisis like that in 2008.
There was no suggestion of a refusal in advance by the Government to bail out banks in distress, as had been called for by some hard line free marketeers. Sir John Vickers, who chaired the ICB, tried to forestall their complaints by insisting: “I absolutely reject any notion that we bottled it. These are absolutely far reaching reforms. In the modern history of UK banking I think this could be absolutely transformative.”
What he recommended was a separation between the retail functions of banks and the high-risk investment departments plus an exhortation to the retail high street banks to be “more competitive”.
The giant union Unite accused the ICB of “merely tinkering at the edges”. Unite spokesperson David Fleming said: “This is another missed opportunity to protect customers and staff from the corporate greed that brought disaster to our economy.
“Since the start of the crisis over 100,000 finance staff have lost their jobs, yet this interim report does nothing to promote a banking model more closely aligned to wider stakeholder interests and increased engagement, including with employees.
“Increased diversity and competition in the financial services’ sector can only be achieved through active support for varied models of banking, mutual building societies must be supported if we want to offer choice to consumers.
The recommendation to sell off bank branches will not bring radical change but simply brings more insecurity for working people in the finance sector and often harms communities where the bank branch closure means many will not have access to local financial services.”
Alas Fleming’s proposals are just as unrealistic as those of the ICB. Capitalist monopolisation is a process that cannot be reversed and even if it could the same mechanisms that produced it would apply again and the situation would be back where it started very quickly. The root cause is the very nature of capitalism, which is driven and powered by the pursuit of profit. This inevitably results in a periodic cycle where the race to produce more goods for sale ends up in a flooded market where those who have money to buy the goods are satiated and stop buying and those who have no money couldn’t buy anyway.
When the buying stops factories and shops go bankrupt, workers are thrown out of work and the proportion of people with no money to buy anything rises. There is a deepening crisis, often accompanied by wars between capitalist countries for new markets.
Wars help capitalism by destroying a lot of stuff and creating new markets. The companies that survive the crisis expand to fill the gaps left by those that went bankrupt and grow bigger. This monopolisation process is repeated until there are only a handful of giant companies are left.
The giant international banks are now so big that even the most powerful elected governments in the world cannot afford to let them collapse — hence the huge bail-outs of 2008. And whatever the Con-Dem Coalition is saying, they would do exactly the same when it happens again.
The giant banks are still driven to pursue profits above all else and in competition with each other dare not get left behind. So they will continue to be as reckless as ever and will continue to rely on the impoverished workers and tax payers of the western world to bail them out over and over again until those workers refuse and organise a proper socialist revolution.
At the annual general meeting of the Marx Memorial Library last Saturday one member suggested more lectures on the basics of Marxist economics, because a new generation of trade union and other progressive activists need to understand this, and the older stalwarts could also do with a refresher course. David Fleming proves how right she was.