“No nation will put up with so barefaced an exploitation of the community by a small band of dividend-mongers”, wrote Frederick Engels over a hundred years ago.
He was explaining why he considered full state control of the capitalist economy theoretically plausible but practically unlikely.
If “all the social functions of the capitalist are now performed by salaried employees”, then “the capitalist has no further social function than than of pocketing dividends, tearing off coupons, and gambling on the Stock Exchange”.
Today the capitalist class has devised many other ways of siphoning off income besides dividends. The big banks, all of which owe their continued operation to Government aid, and most of which are now substantially state-owned, are still paying “bonuses” to their top people.
In 2008, of all years, surely there can be no bonuses for “success” for bank bossses. Yet the top people at the Royal Bank of Scotland, about 80% Government-owned, are paying out about £1 billion to themselves in bonuses — £1 billion of the money doled to the bank by the Government to keep it in business.
Goldman Sachs, Morgan Stanley, Dresdner Kleinwort, and Merrill Lynch, all also dependent on Government aid, have already announced £6.4 billion in bonuses, being careful to choose a time just before Christmas to let it be known.
The bankers deserve it because of their special skills? The Financial Times, of all papers, reports that when four top bank bosses were asked by a committee of MPs on 10 February about their banking qualifications, “stripping the irrelevancies, the ansewr in every case was ‘nil’.”
The Government mumbles and complains, but still says it will not take direct control. The state’s dominant shareholding in the banks is being run at “arm’s length”, by a special agency. The chair of that agency, just appointed, is Glen Moreno, who for nine years until April last year was a “trustee” of Liechtenstein Global Trust (LGT). LGT’s main business is helping rich people hide their wealth out of the reach of tax-collectors: it is currently under investigation for outright tax-cheating by both German and British tax authorities.
The bonus-mongers are being supervised by... another bonus-monger.
The “free market” does not work as a way of regulating the huge concentrations of capital now in play. Production has already become an interconnected social process, rather than a matter of lots of individual units working independently and stimulating each other by competition.
The governments have no choice but to regulate the economy. But then the question is: who regulates? In what interest? On what criteria?
This “Labour” government is regulating capitalism with the prime criterion of making the banks profitable again. The labour movement should fight for a workers’ government which will sweep out the “small band of bonus-mongers” and introduce democratic and workers’ control of the economy, with planning for social need which will ensure decent, useful jobs for all workers.