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The banking
sector works entirely with surplus value from the world economy as a whole
and does not itself add to the pot of surplus value. You may argue that
banks create wealth through investment but that is just moving liquidity
into areas that actually do create wealth. Banks don't create wealth they
facilitate the creation of wealth and the difference is very important. We
all know that 'quantitative easing' is basically devaluing a currency but
in a recession it is not so noticeable.
From the
above quote of Robert Peston it is clear to me that the thinking that led
to the recent financial crisis is being repeated such that any partial
recovery will be quickly followed by another financial crisis in
circumstances where governments can no longer afford to bail out the
banks. This is because for the immediate interests of the imperialists the
financial sector has grown to a size that is completely disproportionate
to the actual investment needs of capitalist industry.
There is only
one way in which the financial sector can be resized so that it meets the
needs of industry and is not bloated and inefficient as it has grown to be
now. This is for the socialist expropriation, nationalisation and then
internationalisation of the whole finance sector in the major imperialist
countries. That can only be achieved by socialist revolution.
Now consider
that the wealth facilitated by the finance sector = $A and the cost of the
finance sector to the productive sectors = $B then it is clear that whilst
$A is bigger than $B then the finance sector is adding to the world's
wealth but if $B become greater than $A then it is a drain upon the
development of the world economy. It is easy to imagine an extreme
example where half the worlds population work in the finance sector and
pretty much everyone would guess that in such a situation it would be a
drain upon the world's resources but where the finance sector isn't that
extreme size people don't seem that concerned by its growth.
However, this is
not only important to an understanding of the current capitalist crisis it
is also important for a socialist future where a finance sector will still
be needed for a considerable time.
Of course within
this 'crude look at the whole' there are millions of individual
contradictions but it is especially necessary for Marxists to grasp the
nature of the global economy and the bloated development of imperialism
since Lenin wrote about it in 1916.
You don't even
have to be a Marxist to understand that the US and UK finance sectors are
too big in relation to the total production of the world economy. It is
empirically verifiable or falsifiable as the case may be.
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Update 21 January 2010
The Chinese economy is still growing strongly and soon they will have the
second biggest GDP in the world behind the US. There is obviously,
despite the recession, still a strong demand for their manufactured goods
around the world and locally. However, the Chinese economy is still not
big enough to play the role that the US did in 1945 in rescuing many
developed countries from slump.
In
the US, Barack Obama is trying to regulate Wall Street so that the recent
financial meltdowns will become a thing of the past. This is,
however, impossible in a capitalist economy because the risk of failure
and failure itself is part of the system. If financial speculation is
reined in then the speculators will trade in other parts of the world that
are more favourable to their parasitic business. The ruling class in the
US will try to prevent this from happening and their financial interests
in the world's largest economy are far stronger than the presidency.
Only the US working class is powerful enough to take on such a force and
Obama is not their representative. The US ruling class will want to
unleash a new round of financial speculation to enrich themselves until
the next huge crash.
In
Britain the financial sector has developed far beyond the modest output of
the UK economy and has a tendency towards the Iceland and Ireland models
in terms of its relative size compared to the rest of the economy. It is
beyond the capacity of the UK parliament to deal with the financial sector
in the way that Obama wants in the US and besides it will not overcome the
crisis because the city of London provides a substantial portion of UK GDP
and any attempt to reduce it will prolong mass unemployment and poverty as
well. Again it is only the working class that has the strength to
take on and win against this powerful but decrepit ruling class in
Britain.
Roger Blackwell,
Norwich, UK.
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