Bail Out of the People Movement marching on Wall Street, April 3, 2009.
Originally uploaded by Pan-African News Wire File Photos
By Fred Goldstein
Oct 24, 2009 12:03 AM
When the workers at Republic Windows and Doors in Chicago seized the factory last winter, their heroism in defying both their boss and the Bank of America electrified workers and progressive people all over the country and even around the world.
When they walked out of the factory in victory—with their demands for severance pay, wages and other benefits agreed to by BOA—they had accomplished what seemed impossible. Some 250 or more workers, mostly immigrants, had forced a giant financial behemoth, which controls hundreds of billions of dollars through its banking empire, to back up and meet their demands.
Revealed in that struggle was an important relationship that all class-conscious workers should take to heart. The capitalist boss of Republic Windows and Doors, the exploiter of the workers in his factory, was just a dependent of his giant creditor.
He needed the money from Bank of America to continue to carry out the exploitation of the workers. The boss lived off the profits sweated out of the labor of the workers. But without the money to keep going, he was unable to continue the cycle of exploitation. Thus, the workers were out of a job.
In a microcosm, that struggle revealed a basic truth. It is a class relationship that is concealed for the most part.
In capitalist society, exploitation and all economic activity begin with money. This explains the power of the banks. In order to live in the profit system, workers must sell their labor power. In order to thrive in the profit system, the boss must buy that labor power and the means of production. But that takes money.
Because of the special circumstances of their struggle, the small contingent of workers at Republic Windows and Doors was actually in combat with the real economic rulers of capitalist society.
Lenin on the special role of the banks
The dominance of the bankers was dramatically revealed on a larger scale when the financial crisis first broke out in September 2008 after the failure of Lehman Brothers. Bailout money poured into the coffers of the banks in return for the government taking shares in them. There was talk about the “nationalization” of the banks—a government takeover.
When the smoke cleared, there had been no government takeover of the banks. What really emerged was that the biggest, most powerful banks had made great inroads in taking over the financial reins of the government.
This is a confirmation of the Marxist analysis of imperialist society which V.I. Lenin, the architect of the Bolshevik revolution, elaborated in his book “Imperialism, the Highest Stage of Capitalism,” written in 1916 during World War I.
Lenin described the evolution of capitalism from its competitive stage in the 19th century to its monopoly stage in the 20th century. He showed how the means of production grew to gigantic proportions and how the imperialist powers divided up the globe among themselves into colonies and spheres of influence. He described the growth of giant monopolistic corporate cartels and syndicates that dominated the resources and markets of the globe. He pointed to the growing export of capital abroad and the super-exploitation of the colonial peoples.
Looking at the power behind it all, he singled out the role of the banks and how they came to dominate industry and created finance capital. In a famous section entitled “The Banks and Their New Role,” he wrote:
“The principal and primary function of banks is to serve as middlemen in the making of payments. In so doing they transform inactive money capital into active, that is, into capital yielding a profit; they collect all kinds of money revenues and place them at the disposal of the capitalist class.
“As banking develops and becomes concentrated in a small number of establishments, the banks grow from modest middlemen into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw materials in any one country and in a number of countries. This transformation of numerous modest middlemen into a handful of monopolists is one of the fundamental processes in the growth of capitalism into capitalist imperialism.” (Lenin's works can be found on http://www.marxists.org).
Later in the same work, Lenin described the parasitic nature of the financiers, which is so prominent in the present crisis:
“It is characteristic of capitalism in general that the ownership of capital is separated from the application of capital to production, that money capital is separated from industrial or productive capital, and that the rentier who lives entirely on income obtained from money capital is separated from the entrepreneur and from all who are directly concerned in the management of capital. Imperialism, or the domination of finance capital, is that highest stage of capitalism in which this separation reaches vast proportions. The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy.”
Much has been written of late about the so-called “financialization of capital,” as if it were a new discovery. The wealth of the banks and the magnitude of their speculation have grown immensely with the growth of capitalist imperialism. But Lenin described its evolution and fundamental features almost a century ago. Wall Street’s insatiable lust for profit cannot be treated in isolation from the analysis of imperialism as a form of society.
Lenin showed that the dominance of finance capital is an inevitable and irreversible stage of the capitalist system. Competitive capitalism grows into monopoly capitalism—the stage in which finance capital and the financial oligarchy have risen to the pinnacle of the system of exploitation and wage slavery, at home and abroad.
Banks suck profits from everywhere
The banks are tied to big oil, big industry, the insurance companies, all the hedge funds, the private equity funds, the mortgage brokers, the stock exchange and every other institution in society that thrives off the stolen labor of the workers.
The banks profit from every war and every intervention because wars are economic enterprises that take financing and involve fees and interest. The banks get profit from the government, which borrows from them at high interest rates to pay for wars. They also get profit from the military-industrial complex itself, which they finance. Plus they profit from the spoils when the Pentagon conquers territory.
The banks profit from every layoff, every plant closing, every speed-up, because every business, large and small, is in debt to the banks and pays interest out of the surplus value it has wrung from the workers.
They profit from the debt of the workers. After workers are exploited on the job, their wages are converted into profit for the banks in the form of fees and exorbitant interest payments. Banks will make loans to corporations to break strikes but will deny loans to companies to pay workers’ benefits, as in the Republic Windows and Doors case.
Banks profit from the high cost of education, both from the interest they get from student loans and the fees from college and university trust funds that they manage. They profit from the health care crisis because they are completely intertwined with the insurance companies, the pharmaceutical companies and the medical-industrial complex.
And they make money from racism, which brings extra profits because of the lower wages paid to Black, Latino/a, Asian, Middle Eastern and Native peoples and because divisions within the working class keep all wages down and profits up.
The banks profit from sexism because women get paid less than men, to say nothing of women's unpaid labor in the home—which, among other things, provides the next generation of workers for the bosses free of charge.
They profit from lesbian, gay, bi and trans oppression, not only because it is divisive but because LGBT people are deprived of countless economic and social benefits available to straight people—benefits that would have to come out of the coffers of the government or the bosses.
There is no aspect of capitalist society in the imperialist epoch that is untouched by the bankers.
Banks get rich while workers sink
So it should be no surprise that Timothy Geithner, Larry Summers and other lackeys of the bankers—who are high-paid government officials but are lackeys nevertheless—scurry about trying to save their masters while the entire ship of the working class is sinking.
When the government orchestrated the bankruptcy of General Motors, tens of thousands of workers' jobs were destroyed through plant closings. But the biggest banks—including JPMorgan Chase, Citigroup and Credit Suisse, all of whom were getting money from the government—made sure that the bankruptcy settlement guaranteed them every penny of the $6 billion in loans they were owed. Other syndicates of bondholders also got paid off.
When the financial meltdown came in the fall of 2008 and the banks were in trouble, within days they had Henry Paulson write a three-page piece of legislation granting them $750 billion. Paulson, a former co-chair of Goldman Sachs and secretary of the Treasury under George W. Bush, made sure the legislation specified that neither Congress nor the courts could review or alter this colossal grant.
When Congress rebelled and voted down this outrageous giveaway over fear of mass anger, the bankers simply turned up the heat and got the vote reversed over the space of a weekend.
After a struggle among the banks, a small number of them emerged stronger than before the crisis. Banks that were bailed out because they were “too big to fail” have gotten bigger, richer and financially and politically more powerful.
What was revealed in microcosm in the Republic Windows and Doors strike is now being revealed on a society-wide scale. Financial vultures are using their power to swallow up more and more of the wealth of society while the working class is plunged into economic and social disaster.
Goldman Sachs announced that it made a record $3.1 billion in profits in the last quarter. It is scheduled to fork out $5.3 billion in bonuses to its team of bankers. (New York Times, Oct. 16) JPMorgan Chase had third-quarter profits of $3.6 billion, seven times higher than a year ago. (AFP, Oct. 14)
Meanwhile, home foreclosures went up 23 percent in the month of September. Workers are living out of their cars and being pushed into homeless shelters.
This is the perfect capitalist symmetry of wealth and exploitation. Bankers get rich while the masses are plunged deeper into crisis. The stock market goes up to 10,000 while unemployment edges up to 10 percent. (Real unemployment is nearer 18 percent.)
The latest numbers on the government stimulus plan reveal that $16 billion has been spent to create 30,000 jobs—a paltry result. About 8 million jobs have been lost and the number is climbing. But the bankers’ stimulus plan has yielded billions in profits and stock market riches.
Workers’ rebellion inevitable
This situation can only be temporary. It is all based on the fact that the workers have not yet begun to fight back on a wide scale. The relationship of class forces is temporarily on the side of the bankers and the bosses.
They are pushing everyone around now, including the Obama administration, which has catered to them. The banks have spent $220 million lobbying against even a minimal financial reform bill designed to restrain them from wild speculation and gambling—which touched off the present crisis in the first place.
The banks are the central nervous system and the organizers of capitalist imperialism. They dominate capitalist politics. Their representatives are always high up in every administration, Republican or Democrat. They break through every attempt to hold them back from plundering the workers because, as Lenin said, they gather all the financial resources of society into their hands. Money capital is the beginning point of the exploitation of labor, because capitalist industry must have funds. But the banks also use this financial power to promote speculation, gambling and financial extortion.
They think that they can go on like this forever. But they will soon see that there is a force mightier than capital, mightier than bankers. It is the force of tens of millions of workers and oppressed people, who will get to the point where they can’t take it any more. All the capitalists' money will not be able to stop the class struggle and a class war against capitalism itself.
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