To Avoid a Catastrophe, Expropriate the Banks

Feb 15, 2010

The following is a translation of an article from Lutte Ouvri re (Workers Struggle), the paper of a revolutionary workers organization active in France.

A new financial storm is shaking the world capitalist economy. After several weeks with stock prices rising, the markets reversed. The exchange rate of foreign currencies went up and down like a yo-yo, and securities representing government debts went wild–even while government officials claimed that the crisis is ending.

That was a lie. There is no end to layoffs and business closings–a sign that the productive economy, which creates material goods, which is what counts, hasn’t revived at all.

The only revival has been in the profits of big business and of the banks and finance. This “revival” concerns only the capitalist class.

But, now, in one blow, finance threatens the world with a new crisis. Its fundamental mechanism is clear. In order to save the bankers and business profits, governments have distributed billions of dollars. Not only did they take this money from what could have been devoted to public services, but they went into debt to an unprecedented extent.

The money the capitalists got wasn’t devoted to productive investment, to new factories, new machines, to the creation of jobs. It has served only for financial operations, that is to say, speculation. Yesterday, the main object of speculation in the financial markets was in businesses and stocks on the stock market. Today, it is in bonds that represent State debt.

All the States are indebted up to their necks. And the richest States, the U.S. in the lead, are much more indebted than the others.

The speculators are today honing in on what they consider the weak link among the States that use the Euro as their money: Greece. Their next targets are Spain, Portugal and Ireland.

By betting on the bankruptcy of a State, the speculators help to provoke it. They know it’s dangerous, but they could care less when that gives them a return on their investment! The result of all this is that the common currency, the Euro, in a few weeks lost 10% of its value in relation to the dollar. The Euro itself may well shatter under the blows of speculative operations.

No one knows where this new financial crisis will go. No one can stop it, for the simple reason that it would be necessary to prevent speculation. But no government will stop what brings the highest return to the owners of capital. They are all in the service of the bankers, the owners and the stock holders of big business.

The bankers led the world economy to the edge of catastrophe, before being saved with money from the States. Hardly had they been saved than they began to speculate again. The new catastrophe that they prepare may be more grave than the last one.

The only way to prevent the bankers from causing harm is to expropriate them without compensation. The economy needs banks, but it doesn’t need bankers. Banking activity needs to be submitted to the control of the population. Of course, it’s necessary to get back the fantastic sums that the State handed to the banks. And those should be used to create jobs in hospitals, schools, public transit and public services. The survival of society depends upon it.