Syriza and The Banks

Ahead of today's elections in Greece, around €3 billion has been removed from deposits in Greek banks.  Yet that is quite small beer compared with the withdrawal of around €70 billion that happened between 2010 and 2012.  It has still been enough to require the Greek banks to request emergency assistance from the Greek central bank, which ultimately has to obtain the funds from the ECB.  It raises the question, of what a Syriza government should do if it faces a run on the banks, similar to that which happened with Northern Rock in 2007, and happened with a series of other banks in September 2008, and happened again in 2010, as the Eurozone Debt Crisis erupted, as well as more recently happened with the banks in Cyprus.

The answer is that a Syriza government should allow those banks to go bust.  The worst thing it could do would be to step in and nationalise those banks, as no doubt some sections of the reformist Left will propose.  In 2007, when Northern Rock went bust, the British Government stepped in to nationalise it.  In effect what they did was to protect at least part of the investment of shareholders in the bank, and a much larger proportion of the investment of bond holders, and other money-lending capitalists, including those other banks and financial institutions that had recklessly lent to Northern Rock in the money markets, just as Northern Rock had recklessly lent to people buying property, at massively inflated prices, that they could not afford.

Moreover, after Labour rescued those investors, by nationalising Northern Rock, it then faced prolonged criticism and challenges in the courts, from shareholders, who claimed that they had not been compensated enough for the totally worthless shares they had held!  Allowing the banks to actually go bust avoids that problem.  It is then a fact that the shares and bonds have become worthless, and that the creditors of the bank, they be other European banks, the ECB or whoever, are not going to get their money back either.

But, as I argued some years ago, in relation to the Irish banks going bust, in the process, the workers in those banks, should occupy them, and begin to run them under workers control.  That means ensuring that ordinary workers, with deposits at the bank, can continue to have access to those deposits, and continue to meet their payments etc.  The bank going bust does not have to mean that there is a credit crunch caused by an absence of liquidity, it simply means that the fictitious capital owned by money-lending capitalists evaporates.  One thing that Syriza could do, would be to insist that the European Deposit Guarantee Scheme, which protects up to €100,000 for any individual, in a bank deposit, continues to apply, so that the savings of workers are protected.

Another thing that a Syriza government could do would be to ensure that any bank workers taking over such a bank that has become bust, would have the support of the government in converting it into a workers' co-operative, with all of the assets of the bank transferred to it.  Past experience shows why such an approach is preferable to the left reformist demand for nationalisation.  It means that the property is placed directly into the hands of the workers, rather than their enemies in the capitalist state.  Unlike nationalisation, which by definition is a purely nationalistic, reformist solution, establishing worker owned co-operative banks in Greece, enables them to join together with other worker owned co-operatives across Europe, and thereby to directly build a European wide, workers solution in opposition to those of capital.

As Kautsky said in the Erfurt Programme, the capitalist state never nationalises property in the interests of workers.  We should rather place faith only in our own direction actions.  Whatever concessions the capitalist state might appear to make, it will as the owner of such property always revoke them whenever it is advantageous to do so.  That can only happen when the property is in the hands of the workers themselves.  The experience of UCS shows what happens when workers having seized ownership of the means of production for themselves, are persuaded by left reformists to surrender it to the tender mercies of the capitalist state.

There is also a tactical/propaganda reason for a Syriza not to nationalise banks that have gone bust.  Already, the ideologists of conservatism are trying to muddy the waters by characterising Syriza in similar terms to old style, nationalistic, statist reformism.  On today's Murnaghan programme, the Deputy Editor of the Economist, for example, talked about Syriza pulling back from its original position of withdrawing from the EU.  But, of course, Syriza has never had such a position.  A large part of its strength is that it is forcing the issue of opposition to austerity on to the agenda within the context of a united struggle WITHIN the EU, against those conservative positions.

But, a reformist statist policy of nationalisation would facilitate such propaganda from conservatives. It would be portrayed as simply a repetition of the old Stalinist/Fabian policy of bureaucratic control from the top, and the truth is that any such policy will always tend to fall into that category.  By handing over the banks to the workers themselves, it undercuts the potential for such conservative opposition.  In the same way that had Labour Councils handed over their entire housing stock to organised tenants co-operatives, it would have made it impossible for Thatcher to have introduced the "Right to Buy" scheme, and would have made subsequent privatisations impossible, so rubber stamping an effective workers takeover of the banks and their conversion into co-operatives, would make it impossible for them to be handed back to private capitalists some time later, after they have been rescued by the capitalist state, as for example has happened with Northern Rock itself.

If those banks were incorporated into a European wide worker owned, co-operative federation, it would become virtually impossible without something close to a European wide conservative political counter-revolution taking place, for them to be forcibly taken out of the hands of the workers.  One of the most important roles that Syriza can play in relation to the banks is to encourage Greek workers to take their future into their own hands, and not to rely on that future being provided to them by the Greek capitalist state.  In so doing, it creates the conditions for those workers to build their own alternative community organisations as alternatives to those of that capitalist state, and it creates the basis of providing solutions that are centred around the division between worker owned property and capitalist property, as opposed to nationalised Greek capitalist property, versus European capitalist property.  It creates the conditions for a truly internationalist, workers' solution.