British banks lead imperialist offensive

Fight Racism! Fight Imperialism! No 6 September/October 1980

Britain’s workers face the worst job prospects since the 1930’s. Unemployment already well over two million can only rise with manufacturing output forecast to fall by 6% before the end of the year. Many young workers have no chance of a job. Youth unemployment is three and a half times as high as that for adults. Black workers have the worst prospects of all. Black workers are twice as likely to be unemployed as white workers and black youth four times as likely as their white counterparts.

Poverty in Britain is rapidly gaining ground. Nearly 15 million people, over 25% of the population are on or below the poverty line. The old-age workers for whom the capitalist system has no further use suffer worst of all. 3.7 million (44%) live on or below the poverty line. The cuts in the social services will make matters far worse. If the British workers are faced with the harsh prospects of the growing crisis of capitalism, the oppressed peoples of the world are confronted with far worse. Imperialism has created underdevelopment, has driven millions into poverty and starvation as it has squeezed out super-profits from its rapacious business activities all over the world.

In what the imperialists with their patronising deceit call ‘developing countries’, life expectancy is on average 20 years below that in the imperialist countries themselves. In whole areas of Africa life expectancy is only 42 years, in Bolivia it is 47, in Pakistan 50, whereas in Britain it is nearly 75. Infant mortality rates tell the same horrific story of imperialist brutality. 240 out of every 1000 children die in the black rural areas of South Africa, 282 in the Transkei. Other areas of Africa suffer similar appalling totals. In Asia the rate is over 150 per 1000, in South America 110. Whilst in Britain it is 13. Seventeen million children in the oppressed nations die before the age of five while imperialism reaps its profits.

While the prospects for workers and oppressed peoples throughout the world are rapidly deteriorating, there is great rejoicing in the citadels of imperialist finance: the British banks. Out of the growing worldwide poverty and starvation, British banks are accumulating vast amounts of wealth. Last year British banks were the most profitable in the world. Barclays Bank was the number one, being the world’s most profitable bank, with National Westminster second, Midland fifth and Lloyds seventh. Barclays profits in 1979 were £529.3m an increase of 42% on the previous year. The total profits of all four major clearing banks was over £1½bn, an increase of 43% over 1978. Their total assets amounted to nearly £91bn.

Imperialism — parasitic and decaying capitalism

As industrial production and manufacturing output decline, as millions of workers find themselves without work or livelihood, as hundreds of children are dying every day in the famine spreading through East Africa, the profits of imperialist banks keep growing and growing.

Yet banks produce no wealth. They simply control and move around vast quantities of money-capital and make enormous profits out of doing so. Their financial power has gained for them an increasing share of the profits which arise from the exploitation of workers in industry, mining and agriculture not only in Britain but throughout the world. The banks are totally parasitic. They foster and feed off the financial helplessness of others, especially of the oppressed peoples of the world. This is a characteristic of imperialism — parasitic and decaying capitalism.

Imperialism is accompanied by the enormous concentration and growth of the banks. These monopolistic banks by virtue of the size and extent of their operations, by their ability to give and restrict credits, through their connections with industry and commerce, can exercise a dominant control over capitalist society.

During the early phases of the post-war boom British businesses were able to finance their expansion from their massive profits made at home and abroad. With the growing crisis of capitalism, as the rate of profit started to fall they were forced to borrow from the banks — at first to continue their rapid expansion but later more and more just to survive.

A large slice of their profits go as interest payments to the banks. The hold of the banks over even large corporations rapidly increases. Rolls-Royce (1971) and British Leyland (1975) went bankrupt when the banks decided that their profit outlook did not merit them receiving further loans. Under capitalism production of material goods is at the mercy of a handful of powerful banks.

Banks lead assault on the oppressed nations.

As the fate of even large corporations can be determined by the banks, so the survival of the peoples of the oppressed nations massively in debt to the banks depends even more on the decisions of a few powerful imperialist bankers.

Imperialism has always exacted high profits from its investment in oppressed nations. In 1972-77 British imperialism declared a rate of profit of 18-20% from its investments in the oppressed nations. Compared to the return on domestic industry of between 3.6%-4.2% these are indeed super-profits. International banking is also an extremely profitable business.

The international banks have directed a great deal of their business towards the oppressed nations over the last ten years. At present banks provide almost two thirds of the net external financing required by the (non-Opec) oppressed nations compared to less than one third in the early seventies. The Eurocurrency market is a central source of loan capital throughout the world. Over the last period a greater proportion of these rapidly increasing credits went to the oppressed nations. Those going to the oppressed nations (Opec and non-Opec) increased from 36.4% ($3.5bn) in 1972 to 57.9% ($48bn) in 1979. Even if we include the international bond market used mainly by borrowers from the imperialist countries, 41.3% ($52.1bn) of total international borrowing went to the oppressed nations.

The hold of the international banks is now devastating. The total debt burden of all oppressed nations is expected to reach $451bn (£190bn) this year. To service this debt will require $88bn (£37bn). More than half the debt owed to the imperialist nations is owed to the private sector — mainly the banks. The non-Opec oppressed nations will need $27bn (£11.4bn) a year alone simply to pay their total interest payment on their debt of $150bn (£63bn).

The continuing increase in the price of oil — which has made the oil multinationals the most profitable corporations in the world — together with the growing burden of debt, has confronted the people of the oppressed nations with a growing crisis of desperate poverty and hunger. The external debt of the oppressed nations rose from 19% of their GNP in 1973 to 25% today. It is still rising. Brazil with the highest debt in the world, over $50bn (£21bn) last year had to pay over 60% of its export income on debts servicing alone. Turkey having debts of about $12bn (£6.7bn) has no real possibility of paying it back as most of its export earnings are needed to pay for oil. Repressive regimes in many of these countries, backed to the hilt by the imperialists, stand as guarantor for their imperialist creditors. Arms are a major export from the imperialist nations to these countries — we can understand why!

British banks strengthen British imperialism

A myth exists among the privileged strata of the British labour movement. It is a myth that is also peddled by the British left. Its argument is that the decline of Britain’s industrial production shows that Britain is a declining imperialist power or not even an imperialist power at all. Tony Benn puts this view, a view shared both by the Labour Party and the CPGB, most clearly of all:

‘Britain has moved from Empire to Colony status. It is a colony in which the IMF decides our monetary policy, the international and multinational companies decided our industrial policy and the EEC decided our legislative and taxation policies.’

Britain which has bulldozed its way through most of the oppressed nations of the world, which still brutalises the people of its oldest colony Ireland, which is the major backer of the racist South African state and whose banks are the most profitable in the world, is called a colony!

The more ‘left’ you go, the more subtle the tune. The SWP denies not only the export of capital to the oppressed countries but also denies the existence of a privileged strata of working class that has arisen on the basis of the super-profits of imperialism. That is the SWP denies the essence of imperialism. All of the British left have failed to expose and denounce the imperialist role of the banks. Mr Frank Richards of the RCT has emerged as a leading apologist for the British banks by arguing that the world-wide export of capital by the British banks shows the weakness of British imperialism! From Tony Benn through the CPGB to the SWP and RCT we see the left covering up for British imperialism.

The facts, which these petit-bourgeois will-fully ignore, speak loudly. The export of capital to the rest of the world by British banks has in the recent period reached staggering proportions. It dwarfs all other investment abroad. In 1962 UK banking and commercial claims abroad stood at £2.3bn — 18% of the total of all British assets held abroad. In 1979 they were 73% of all external assets reaching the massive total of £133.5bn. For the record, British banks at the end of March 1979 had assets of $32.7bn (£13.8bn) in non-Opec oppressed nations. Its claims outside the main industrial capitalist countries were in the region of $90.4bn (£38bn) including $14.7bn (£6.2bn) in the socialist bloc. British banks have large investments in countries like Brazil, South Africa, South Korea, where workers defending their jobs and wages are shot down by troops acting in the interests of imperialism. Is it any wonder that those who deny the essence of imperialism wantonly ignore the role of British banks leading the offensive against oppressed nations, and wantonly ignore the pillage and devastation British banks inflict on millions and millions of oppressed peoples.

British workers and the banks

British banks are leading British imperialism’s drive to maintain a commanding position throughout the world. Only if Britain stays a major imperialist power will it be possible out of the super-profits of imperialism for the ruling class to maintain a small privileged strata of the working class to defend capitalism. This strata, whose spokesmen include Tony Benn on the left of the Labour Party, are isolated from the unemployment and falling living standards threatening the vast majority of the working class.

While workers in Britain face growing unemployment and falling living standards, the banks make massive profits. While the workers and peasants of the oppressed nations are driven to poverty and death by the brutal rule of imperialist backed repressive regimes, the banks exact enormous profits. The workers and oppressed peoples have the same enemy — the imperialist banks. The peoples of the oppressed nations are fighting back. In Iran, Ireland, Nicaragua, Southern Africa and many other places they have taken up the fight against imperialism. When the uprising began in Soweto in 1976, one of the first targets was the township branch of Barclays Bank. The black youth of St Pauls expressed the same revolutionary spirit when they burnt down Lloyds Bank in St Pauls. All British workers must begin to take on the banks. In the interests of all workers, they must call for more than the nationalisation of the banks. For nationalisation, given Britain’s imperialist role, is a demand for the state to direct an even more organised repression and exploitation of oppressed peoples. This is why this demand could be a key element in the programme of the Labour Party because it can only be in the interests of the small privileged strata of the British working class.

Communists stand with the oppressed peoples of the world in their struggle against imperialism. Communists therefore demand the nationalisation of the banks and the liquidation of all oppressed nations debts. Only by fighting for this demand can the British working class show its determination to unite with the oppressed peoples to destroy their common enemy, the imperialist British banks.

David Reed

September 1980