Review: It’s time to take over the banks
Dave Murray, Socialist Party England and Wales, reviews the new “It’s time to take over the banks” FBU pamphlet by Michael Roberts and Mick Brooks. Introduction by Matt Wrack, general secretary, FBU. Available online at www.fbu.org.uk
They say if you own a gun you can rob a bank, but if you own a bank you can rob a country. Of course this isn’t true: most banks have very effective security systems that make traditional bank robbery almost impossible. It also understates the banks’ power; they have, in recent years, robbed not a country, but a whole planet.
The great rip-off of 2008 was so vast that even Britain’s right-wing press have to sound off against the robbers – I googled “Daily Mail greedy bankers” and got 482,000 results – while at the same time giving the nod to the bailout, along with every other “serious” commentator and politician.
This pamphlet reminds us that in the UK alone the upfront cost of the 2008 banking crisis was £289 billion in taxpayers’ cash – over £80 billion more than the entire tax take from the finance sector between 2002 and 2008. The authors quote Bank of England chief Mervyn King: “Never in the field of financial endeavour, has so much money been owed by so few to so many”.
The authors also show that the banks are largely responsible for the current recession. Their stranglehold on credit chokes off new productive investment, while the resulting fall in tax revenue and rise in unemployment and underemployment is responsible for the government deficit.
They remind us of the colossal scale of the big banks’ literally criminal activities, such as manipulating interest rates, fraudulently selling PPI insurance, and laundering money for international crime cartels, not to mention the legalised theft represented by the mind-boggling money “earned” by those in the banking industry’s highest circles (231 Barclays employees pocketed £554 million between them in 2011).
What is unusual about this pamphlet, though, is its conclusion that the major banks should be publicly owned and democratically controlled. Brooks and Roberts don’t just leave it there.
They argue that under public ownership and democratic control, banks could have a healthy role in society, providing essential services in personal banking, giving loans to finance productive investment and turning away from casino-style speculation. This would be a marked contrast to the situation now where large corporations are sitting on mountains of cash and banks are refusing to lend to small businesses.
It would cost £55 billion to buy out current shareholders in the UK’s big five banks, but Brooks and Roberts argue that it would be better to cap compensation and to pay out only on the basis of a means test. In place of the existing boards, they call for boards on which bank workers, the broader labour movement and other “interest groups” such as mortgage holders and small businesses, would be represented. They unashamedly make a case for using a publicly owned banking system as a tool for economic planning.
While most labour movement leaders hang on the coat tails of Ed Miliband’s “blue Labour” project, a serious proposal from a militant trade union to wrest the banking system from the hands of our ruling class is very welcome.
This pamphlet is subtitled “a contribution to the debate from the Fire Brigades Union”. Matt Wrack says in his introduction that “it does not claim that this measure alone will resolve the crisis or shift economic power into the hands of the majority.”
True, but this measure would have to be a priority for any movement challenging the rule of capital. The Socialist Party stands clearly for a socialist government taking into public ownership not only the banking system but the top 150 or so companies that dominate the economy in Britain and run them under democratic working class control and management.
The pamphlet has limitations – the authors do not deal with the question of what kind of movement or party might act on their proposals, or what political and economic resistance the banks’ current owners or their state agents might put up. But, along with the motion passed at last year’s TUC calling for public ownership of the banks, it is a positive contribution to assembling a political programme to represent the interests of the working class. It should be widely read and discussed.