With Spain asking for a bailout and Greece on the verge of a major change in its finances, we can see a new Europe taking shape. The problem for most of us trying to understand what’s going on is that we are given commentaries that are essentially versions of the same story: how to save capitalism. Of course, it’s not expressed so crudely, or more people would scratch their heads and wonder why there is so much pain in order to save such a thing. Why, we might ask, should millions of people go without work, food, housing, education and health in order to save an ‘ism’?
But let’s look at what is happening. The politicians of the western world made it easier and ‘freer’ for financial institutions to lend (and buy) money. Anyone over 60 will remember that trying to borrow money to buy a house in the 60s and 70s was a very difficult thing to do. I borrowed money to buy a house in the 1970s (having tried and failed to get a council flat) and the deal was that it should be no more than 2 and a half times total household income. Most significantly, though, was who I borrowed from: a ‘mutual’. These ‘building societies’ – called different things in different parts of the world – were supposed to exist on a strict arrangement whereby they didn’t lend more than their customers saved. Your money as saver and lender was in theory ‘safe’. Of course it wasn’t without risk because the mutuals didn’t control the interest rate and so you could find yourself paying out much more interest than you had anticipated.
Two key political decisions changed this: to allow banks to sell mortgages; to allow building societies to ‘demutualise’. With these strokes, replicated all over the world, the buying and selling of property was turned into a money-making game. You will see over and over again, this is being described as a matter of all of us, with our noses in the trough becoming richer and richer and thus equally culpable in the present crash. This is a nonsense. A rock bottom certainty for people is that we try to shelter ourselves in whatever social groupings we find ourselves in – as individuals, couples, group, families or whatever. The housing stock determines for us how we should do this, in flats and houses, renting or buying, paying individually or collectively, to landlords, moneylenders, charities, housing associations or public authorities (usually local councils). The easier it is for us to get safety, comfort and security for the living unit we live in, so that is the more likely option we will make. In other words if on the high street, or in the newspaper or on TV we hear every day how we should ‘get on the housing ladder’ and every day, spaces and places are paraded in front of us that will be comfortable and secure for us to live in, then it is not logically or emotionally easy to resist this – nor, necessarily should we. Why would people opt to live in a slum if we are told that it’s ‘realistic’ to borrow to buy.
At the same time as these admonishments to buy were being made, the previous Tory government made the decisive move to allow people to buy their own council houses without any arrangement to build or provide any more.
It doesn’t take a degree in maths to figure out that the combination of these measures increased pressure on the available housing stock which the ‘market’ could only respond to in one way: put up the price of housing. In reality, of course this didn’t turn us all into wealthy people unless we chose to sell our houses at, say, London prices and move somewhere where the cost of housing was hundreds of thousands of pounds less. For most people, for most of the time, they can’t or don’t want to up sticks and move somewhere much, much cheaper. Part of being safe and secure is to be near work and near the people you have chosen to live near. The great dream held out by politicians was never the notion that families would be forever on the move, trying to make money out of their housing – not that it would be possible if everyone did it, anyway!
Of course, the people and institutions that really did become fat on this boom were the moneylenders – and then, the finance companies who bought the moneylenders’ loans, and the companies who bought the finance companies’ loans and the moneylenders who lent money (‘leverage’) to the companies who wanted to buy the finance companies’ loans…and so on.
There really is no equivalence or similarity between people trying to house themselves in safe and secure ways and people who speculate on this human need – not indeed is there a real comparison in the kinds of wealth we’re talking about here…
…until the crash.
So, let’s be clear and crude: this is a moneylenders’ crash. It’s not our crash. It’s not our greed. It is the illusion that money can breed money, that there is some kind of magic about money that merely by lending it, you can make more of it. That is the case, that is the illusion only for as long as people are earning enough to pay the interest on the loans. The moment it starts to turn out that people can’t pay that interest, the cracks appear, the cracks turn to breaks and the whole edifice crashes.
That’s where we are now. Many of the world’s big moneylenders are not getting their money back. They are in debt – to the tune of trillions of dollars.
So what we are witnessing are various mechanisms in different parts of the world being engineered by the moneylenders and the countries (and continents) they find themselves in to save their skins. In essence, these are all the same: ‘how can we moneylenders get governments (‘the state’) to keep us afloat?’ Or put another way, ‘how can we major players in finance capitalism get our enemy, the state, to keep us trading, to keep us earning our dividends and salaries and bonuses?’
The answer, it seems, is to frighten left, right, centre politicians into ‘bailing out’ (through various mechanisms) these moneylending companies. But we have to keep reminding ourselves what this means. ‘Government money’ is not really a government’s money. It’s our bloody money! It’s the money we give to governments through our taxes so that governments will look after us. However, rather than these giant moneylenders just quietly and meekly taking our loan to them, doffing their caps at us, and promising to get it all back to us a.s.a.p., their friends and cousins in the world of finance take strength from the fact that we have lent or gifted them this money and turn round to tell us that our governments have been spending too much money…er…looking after us, with hospitals, schools, welfare, and money to local councils. This is the ‘austerity’ package – as if it is we who were profligate and not the crazed moneylenders!
This is is one of the things Marx talked about when he was talking about ‘class war’ (though in the original German and French it’s the war of the ‘classes’ (plural) not just ‘class’). Class war isn’t just what happens when Bob Crow tries to secure a decent wage for the members of the RMT – that’s just tabloid rubbish. These austerity packages all across the world are ‘class war’. They are attempts by the great moneylenders to pass their losses on to the mass of the population, and the greatest sufferers are those on the least money, those most reliant on ‘free’ services in order to support their lives. Unemployment in Spain is running at 1 in 4. There are 20 million people unemployed in the USA. That is war against people – a class war.
The system doesn’t work, Capitalism doesn’t work. It is showing yet again that it cannot do the one thing that it claims to be able to do which is to satisfy the needs of most people by supplying them with the goods and the services they need and want. In Spain there are millions of empty flats and houses, and millions of people who can’t afford to go and live in them. Capitalism is creating situations all over the world where it is making it not possible for millions to house themselves properly, eat properly, get a good education and good health care and decent local leisure facilities.
This is an unmitigated disaster for millions and millions of people.
I, along with many other people, don’t believe that the various schemes and mechanisms being cooked up by national governments, or blocs of countries, can solve this without causing even more devastation. That’s because capitalism doesn’t have a mechanism which will enable capitalists to share out the wealth they are hanging on to in the midst of all this. They can’t and won’t just dish out the dosh. At the last count, I read that UK corporates are holding over £700 billion. They won’t spend that, they won’t distribute that, they won’t invest that in ‘production’ or ‘services’ that we need because they fear they will lose it. Whether they intend to or not, they are waiting for the cost of labour and the cost of raw materials and plant and the cost of borrowing to get so low, they can risk starting up again.
I think the real left (not the bogus left which rushed to play this whole casino capitalist game in the first place) has to say very clearly:
This is as much of a crisis as war.
1. Austerity is a trick to make us pay for moneylenders’ debts.
2. Our governments should not be giving our money to moneylenders.
3. The only debts that should be guaranteed or underwritten are small private debts.
4. When the banks and moneylending institutions collapse, government should seize the assets.
5. The government should create a public service bank (or banks) which only charge interest to cover costs and whose funds are to be used to capitalise projects based on need: starting with a requisition and renovation of empty property for housing, followed by massive building of council housing that can’t be sold off, school and college renovation.
6. Key areas of production and distribution need to be identified as ‘essential’ (just as they did during the Second World War) and these should be put under government control, capitalised by the state bank(s) but run by committees of workers and consumers and publicly elected representatives.
This is all very abstract. Most of this can’t be fought for by writing a letter to the paper or by me writing a blog about it. The only way in the nearest and most immediate future is for groups of people wherever they are in work or as users of public services now under threat, to resist every single effort to make us pay one cent for the moneylenders’ losses. All cuts – wages, sackings, pensions, services – are taking money and wealth from us in order to keep the moneylenders earning their dividends, bonuses and massive wage packets. That is the only reason they are doing it. And they are only succeeding in getting away with it, by saying that those doctors over there, or those teachers over there are greedy and taking money away from you.
No, it was the moneylenders who took it away not doctors and teachers.