Battling the banks: How can nations fight off speculation?

[RadioRaheem84]

In this age of rampant foreign investment and the financilization of capital, how can nations fight off rampant speculation that hurts their economies and rises up the price of necesseties such as food?

Venezuela nationalized some banks but still had to deal with inflation.

Are there any theoretical works out there by Marxists on how to stop the stock jobbers? Anything that has been written by contemporary Marxists on solutions to speculation, foreign investments and the like?

Thanks

[Die Neue Zeit]

Die Linke's Draft Program is a good start:

1) Nationalize the *entire* banking system
2) Implement a regime of capital controls (not just currency controls)
3) Ban derivative trading and such

[The Fighting_Crusnik]

Die Linke's Draft Program is a good start:

1) Nationalize the *entire* banking system
2) Implement a regime of capital controls (not just currency controls)
3) Ban derivative trading and such


This and reducing the importance AND power of money in society. Ideally, if a society in which everything is provided equally, and everything is provided abundantly, then the only purpose of money would be to buy a little more: But if people had an abundant supply of something, then they would be less inclined to buy extra which, in turn, would make money less useful and less important in the daily life of a person.

[Devrim]

In this age of rampant foreign investment and the financilization of capital, how can nations fight off rampant speculation that hurts their economies and rises up the price of necesseties such as food?

Venezuela nationalized some banks but still had to deal with inflation.

Are there any theoretical works out there by Marxists on how to stop the stock jobbers? Anything that has been written by contemporary Marxists on solutions to speculation, foreign investments and the like?

I think that maybe the question you should ask is whether it is the job of Marxists to advise capitalist states on how to be more successful.

Devrim

[Die Neue Zeit]

Devrim asked the wrong question.

There are immediate measures that benefit the capitalists and are also irrelevant for workers, like establishing a national securities regulator in place of a decentralized securities regulation system, or promoting racial and gender equality in the boardrooms.

There are immediate measures that benefit the workers but are also irrelevant for capitalists, like worker cooperatives with state aid.

There are immediate measures that benefit the workers but coincidentally benefit *some* capitalist segments, such as what I've suggested above in Post #2.

[Devrim]

1) Nationalize the *entire* banking system
2) Implement a regime of capital controls (not just currency controls)
3) Ban derivative trading and such

How do any of these things help workers?

Devrim

[Vladimir Innit Lenin]

The state should subsidise, in huge part, normal goods and luxury goods that fall within the food spectrum. This would insulate ordinary people from shocks in inflation, relating to food.

This system would work well in Cuba if it wasn't for chronic food shortages caused by both the US embargo and a non-too-clever agricultural sector.

[Die Neue Zeit]

How do any of these things help workers?

Devrim

A nationalized banking monopoly makes a dent against the current monetary regime which has no public control over the money supply. Bank crises, which affect things like... I dunno - mortgages for workers' homes (!) - can be avoided.

A regime of capital controls goes against a number of things: currency speculation, tax havens, capital flight, etc. all of which hurt workers.

A ban on derivatives trading and such curbs food and "commodity" (business-speak, not classical- or Marxist-speak) speculation, which helps workers' personal budgets.

Taken together, these also take out the pure finance capitalists.

[Widerstand]

Die Linke's Draft Program is a good start:

1) Nationalize the *entire* banking system
2) Implement a regime of capital controls (not just currency controls)
3) Ban derivative trading and such

Chances of Die Linke actually pushing this through should they ever be elected: zero.


A nationalized banking monopoly makes a dent against the current monetary regime which has no public control over the money supply.

"Public control" is the same as state control, which is essentially capitalist control.



A regime of capital controls goes against a number of things: currency speculation, tax havens, capital flight, etc. all of which hurt workers.

This is, quite obviously, a reformist approach of the worst kind. The implication that a strong economy is the ultimate interest of the working class can be used to justify a lot of atrocities, including colonialism and imperialism. It also reinforces the notion that the banking and speculation system is all that's wrong with capitalism.



A ban on derivatives trading and such curbs food and "commodity" (business-speak, not classical- or Marxist-speak) speculation, which helps workers' personal budgets.

By the same reason you can justify sweatshops and such.


Taken together, these take out the pure finance capitalists.

No they won't. They might do that in Germany, but even here I doubt it will have that effect. The capitalists will probably just find a way around the privatization, or get taken over by the state, forming semi-public/semi-private entities like Deutsche Bahn and Telekom.

[Die Neue Zeit]

Chances of Die Linke actually pushing this through should they ever be elected: zero.

I said "draft program." Also implied is the leading role of a programmatic party.


"Public control" is the same as state control, which is essentially capitalist control.

No it isn't the same. You're confusing the central roles of the state with those roles that it added but could be outsourced to a public political entity. The early soc-dems flirted with "economic parliaments," but the problem was that these were subordinated to the state governments (the main parliament and the cabinet). A sovereign socioeconomic government directly representative of ordinary people dealing with matters beyond "high politics" and law enforcement would be a public body that isn't a state body.


This is, quite obviously, a reformist approach of the worst kind. The implication that a strong economy is the ultimate interest of the working class can be used to justify a lot of atrocities, including colonialism and imperialism. It also reinforces the notion that the banking and speculation system is all that's wrong with capitalism.

I didn't say those were the only things that hurt workers. They're all manifestations of things meant to circumvent other things like higher labour bargaining power.

[Devrim]

A nationalized banking monopoly makes a dent against the current monetary regime which has no public control over the money supply. Bank crises, which affect things like... I dunno - mortgages for workers' homes (!) - can be avoided.

First why should one assume that just because banks were nationalised that 'public control' would be exercised? The state, which is what you mean is controlling things when you speak of 'public control', has to manage capital just as private capitalists do, and will be forced to behave in similar ways. Secondly the last banking crisis was international, as capitalism is today, and in a country like ours, which actually has strict controls on banks due to a spate of them going bankrupt in the past, still experienced the same problems.


A regime of capital controls goes against a number of things: currency speculation, tax havens, capital flight, etc. all of which hurt workers.

No, all of which hurts national capital. Unless you are going to tie the interests of the working class directly to the defence of national capital, this is a mute point.


A ban on derivatives trading and such curbs food and "commodity" (business-speak, not classical- or Marxist-speak) speculation, which helps workers' personal budgets.

Not necessarily, and I am bemused to understand how you come to these conclusions.


No it isn't the same. You're confusing the central roles of the state with those roles that it added but could be outsourced to a public political entity. The early soc-dems flirted with "economic parliaments," but the problem was that these were subordinated to the state governments (the main parliament and the cabinet). A sovereign socioeconomic government directly representative of ordinary people dealing with matters beyond "high politics" and law enforcement would be a public body that isn't a state body.

No, you are just talking your usual nonsense, public control obviously means state control.

Devrim

[RadioRaheem84]

I think you guys are mistaking the question I asked for mere reform.

I am thinking of a nation like Venezuela that claims to be on the path to socialism. Now just this once picture a nation on the transition to socialism but still has a lot of capital in the country, especially foreign, how can they beat the obvious speculation, capital flight, and devaluing of the currency that is so common among capitalists when trying to destabilize the economy of nation in transition.

I do not understand why left coms and anarchists in here have to assume that when someone says 'public' that it automatically translates into 'state' control of the capitalist variety which is not accountable to the people? I highly doubt that is was Die Neue meant.

Now does anyone else have a solution besides harping on Die Neue?

What is the left com Trot solution or the anarchist one?

[Die Neue Zeit]

^^^ Mine's the kind of substantive reform you won't see being advocated much by soc-dems and "Bastard Keynesians" - or even at least some Post-Keynesians.


First why should one assume that just because banks were nationalised that 'public control' would be exercised?

I was very careful with my words. I didn't say, "A nationalized banking monopoly establishes public control over the money supply." I said, "A nationalized banking monopoly makes a dent against the current monetary regime which has no public control over the money supply."

Go look at my Theory post on Financial National-Democratization (in Q's thread on nationalizing banks):

A national-democratized financial monopoly beyond even the limitations of the former Gosbank SSSR (USSR State Bank), along with the extension of this public monopoly on money supply control into the general provision of commercial and consumer credit, is the only way towards achieving at least substantive public control over the money supply. It is also the only way to make substantive inroads against the massive behemoth of derivatives trading.


The state, which is what you mean is controlling things when you speak of 'public control', has to manage capital just as private capitalists do, and will be forced to behave in similar ways. Secondly the last banking crisis was international, as capitalism is today, and in a country like ours, which actually has strict controls on banks due to a spate of them going bankrupt in the past, still experienced the same problems.

No, all of which hurts national capital. Unless you are going to tie the interests of the working class directly to the defence of national capital, this is a mute point.

On the European level, I'm in favour of an ECB financial monopoly and ECB-based capital controls.

You're ignoring the effect that currency speculation has on prices of consumer goods, that tax havens have on lost tax revenues for social services, that capital flight has on unemployment, etc.


Not necessarily, and I am bemused to understand how you come to these conclusions.

Just go look at derivatives trading in oil. One such instrument is called an "oil future." There are some "commodities" whose prices to consumers are very much directly tied to price speculation.


No, you are just talking your usual nonsense, public control obviously means state control.

I hereby direct your ignorance towards what Rudolf Hilferding wrote in the 1920s and 1930s.

[Devrim]

On the European level, I'm in favour of an ECB financial monopoly and ECB-based capital controls.

Who cares what absurd plans for managing capitalism you come up with? The defence of working class living standards is in no way connected to making capitalism more stable and profitable, which is what you advocate.


What is the left com Trot solution or the anarchist one?

As I stated above, left communist, and I presume most anarchist politics are not about finding ways to manage capital, but in the defence of working class living standards, which in Venezuela, as in Cuba, as in the rest of the capitalist world, are under attack.

Devrim

[Die Neue Zeit]

The tried, tested, and failed strategy of trying to grow political struggles (the basis of real class struggle) out of mere defensive and other economic struggles :rolleyes:


The defence of working class living standards is in no way connected to making capitalism more stable and profitable

Either read Post #5 above, again, or take a course in basic logic (the relevant lesson being Venn diagrams).

[RadioRaheem84]

As I stated above, left communist, and I presume most anarchist politics are not about finding ways to manage capital, but in the defence of working class living standards, which in Venezuela, as in Cuba, as in the rest of the capitalist world, are under attack.

I understand that. But in transition, imperialists not only attack other nations but also mess up the remaining economy with blockades and currency devaluations, etc.

What is the solution for this?

[Widerstand]

I said "draft program." Also implied is the leading role of a programmatic party.

I'm sorry, but imagining Die Linke occupying a leading role in a revolution is beyond ridiculous.



a public political entity.

Such as?


A sovereign socioeconomic government directly representative of ordinary people dealing with matters beyond "high politics" and law enforcement would be a public body that isn't a state body.

Why would the state accept such a body rivaling it's power? This seems about as realistic as the state reforming itself away.


I am thinking of a nation like Venezuela that claims to be on the path to socialism. Now just this once picture a nation on the transition to socialism but still has a lot of capital in the country, especially foreign, how can they beat the obvious speculation, capital flight, and devaluing of the currency that is so common among capitalists when trying to destabilize the economy of nation in transition.

Do you think any of the things you described could be fixed by an autonomous, isolated, 'public' banking system? No. And as long as foreign capital in whatever form, be it through import, export, foreign loans, foreigns banks, etc. is involved, a such a local banking system can be neither subject to 'public' control nor autonomous.



I do not understand why left coms and anarchists in here have to assume that when someone says 'public' that it automatically translates into 'state' control of the capitalist variety which is not accountable to the people? I highly doubt that is was Die Neue meant.

Enlighten me, what else does 'public' mean?



Now does anyone else have a solution besides harping on Die Neue?

What is the left com Trot solution or the anarchist one?

I'm not interested in the well being of a bourgeois national economy.

[Die Neue Zeit]

I'm sorry, but imagining Die Linke occupying a leading role in a revolution is beyond ridiculous.

I have no illusions in Die Linke. I do, however, give credit to those who drafted that Draft Program, most notably Oskar Lafontaine.


Why would the state accept such a body rivaling it's power? This seems about as realistic as the state reforming itself away.

"Workers councils" are a joke:

http://www.revleft.com/vb/separate-economic-parliaments-t118633/index.html
http://www.revleft.com/vb/material-separation-state-t120151/index.html

[Devrim]

I understand that. But in transition, imperialists not only attack other nations but also mess up the remaining economy with blockades and currency devaluations, etc.

What is the solution for this?

I don't think that Venezuela or Cuba are in any sort of transition between capitalism and socialism. I think they are completely capitalist systems.

In a more general context, my own personal opinion is that the working class must use the socialisation of the economy as a weapon in its struggle. How can you devalue a currency, which is being abolished?

Devrim

[RadioRaheem84]

I don't think that Venezuela or Cuba are in any sort of transition between capitalism and socialism. I think they are completely capitalist systems.

In a more general context, my own personal opinion is that the working class must use the socialisation of the economy as a weapon in its struggle. How can you devalue a currency, which is being abolished?

Devrim


I was being general, but even then the imperial nations can do damage to any trade that was done in the nation before. Are you saying the revolution will totally end the structure in a single week or something?

I guess I just do not understand what anarchists or left coms mean by transition.

[Widerstand]

I have no illusions in Die Linke. I do, however, give credit to those who drafted that Draft Program, most notably Oskar Lafontaine.

That's even worse...


"Workers councils" are a joke:

http://www.revleft.com/vb/separate-economic-parliaments-t118633/index.html
http://www.revleft.com/vb/material-separation-state-t120151/index.html

So your answer is that a state would do it because states in the past have thought about it?

[Widerstand]

I guess I just do not understand what anarchists or left coms mean by transition.

Certainly not the establishing of a highly bureaucratic state which is somehow supposed to reform itself away.

[Die Neue Zeit]

That's even worse...

"For exploitation veiled by religious and political illusions, (the bourgeoisie) has substituted naked, shameless, direct, brutal exploitation." (Proposed programmatic inclusion of Communist Manifesto text (http://www.revleft.com/vb/album.php?albumid=553&pictureid=4808))
"In time of war the loudest patriots are the greatest profiteers." (August Bebel (http://www.revleft.com/vb/album.php?albumid=553&pictureid=4807))
"Peace without annexations or indemnities" (a la Hugo Haase (http://www.revleft.com/vb/album.php?albumid=553&pictureid=4806))
"We want to overthrow capitalism" (Oskar Lafontaine (http://www.revleft.com/vb/die-linkes-oskar-t108987/index.html))


So your answer is that a state would do it because states in the past have thought about it?

Just to avoid teleological confusion, let's just say that past states have no bearing on present states not wanting to do it (double negative).

[ckaihatsu]

I tacitly agree with DNZ -- and so 'Thank'-ed his post at #8 -- in the sense that we'd be *open*, or tacitly accepting, of a banking-nationalization kind of reform if it was initiated by the state in response to mass militant actions on the ground for working class power. Of course revolutionaries are not going to make any kind of nationalization the *centerpiece* of their political activities, but if it should so happen to happen then it would be an incremental step *away* from laissez faire and all of the hyper-leveraged, fictitious, ballooning financial instruments mentioned here -- derivatives. In terms of class struggle it could *at least* serve as a barometer (actually, an accelerometer, to be more precise) of which way, and how far, the capitalist establishment is being forced to move.

[Devrim]

but if it should so happen to happen then it would be an incremental step *away* from laissez faire and all of the hyper-leveraged, fictitious, ballooning financial instruments mentioned here -- derivatives. In terms of class struggle it could *at least* serve as a barometer (actually, an accelerometer, to be more precise) of which way, and how far, the capitalist establishment is being forced to move.

The 'capitalist establishment' will employ different economic policies in different circumstances. The British state recently nationalised a bank, with incidentally the loss of 10,000 jobs. Do you think that it was connected to the class struggle in anyway?

Devrim

[ckaihatsu]

The 'capitalist establishment' will employ different economic policies in different circumstances. The British state recently nationalised a bank, with incidentally the loss of 10,000 jobs. Do you think that it was connected to the class struggle in anyway?

Devrim


Okay, so if capitalist policies change *not* due to class struggle / pressure from below, then it has to be because of objective changes in the capitalist economy itself -- possibly it could be from a mixture of the two, depending on actual conditions.

[Devrim]

Okay, so if capitalist policies change *not* due to class struggle / pressure from below, then it has to be because of objective changes in the capitalist economy itself -- possibly it could be from a mixture of the two, depending on actual conditions.

They change because of both as you say, but moves towards nationalisation don't by necessity have any connection to the class struggle.

Devrim

[Die Neue Zeit]

Okay, so if capitalist policies change *not* due to class struggle / pressure from below, then it has to be because of objective changes in the capitalist economy itself -- possibly it could be from a mixture of the two, depending on actual conditions.

That's the point I tried to make in Post #5, which Devrim still doesn't get.

Oh, and his example doesn't count: I said nationalizing the entire financial system, not an isolated bank here and there.

[Vladimir Innit Lenin]

Devrim - I don't think the example of a lone British bank being nationalised by a government which is neo-liberal in outlook can be used to refute Die Neue's point. Your point of the single bank is clearly something which, you correctly identify, is not related an iota with class struggle. However, I assume that Die Neue means that the entire financial system would be nationalised, and an element of workers' democracy introduced, by a Socialist government. This would clearly be progressive.

[Die Neue Zeit]

Even without "workers democracy" or a "Socialist government," nationalizing the entire financial system would be progressive. Of course, I advocate the half-way national-democratization for a reason.

[Vladimir Innit Lenin]

I'd argue that a non-Socialist government would not ever nationalise the entire financial system. Don't forget you're not just talking about every bank, but hedge funds, smaller derivatives traders, prop shops, clearing houses, the actual mechanisms of financial trade such as the stock exchanges. It surely would be an action exclusive to a non-capitalist force.

I'd still not argue that Gordon Brown nationalising a couple of banks is progressive. Recent history has shown this.

[Devrim]

Devrim - I don't think the example of a lone British bank being nationalised by a government which is neo-liberal in outlook can be used to refute Die Neue's point. Your point of the single bank is clearly something which, you correctly identify, is not related an iota with class struggle.

Yes, but my point was that nationalisation doesn't offer anything to the working class. It doesn't.


However, I assume that Die Neue means that the entire financial system would be nationalised, and an element of workers' democracy introduced, by a Socialist government. This would clearly be progressive.

It still doesn't offer anything to the working class if it is under a government which claims to be socialist, or talks of workers' democracy.

Devrim

[ckaihatsu]

Yes, but my point was that nationalisation doesn't offer anything to the working class. It doesn't.


We could say -- and this is only for the sake of argument, and nothing more -- that the capitalist class may, perhaps, not call for austerity measures *as quickly* if they aren't in the midst of bailing out finance-caused financial catastrophes -- something that's been occurring with increasing regularity anyway....

(And I know that recent nationalizations have just been a shell game, anyway, since a "good", *solvent* spin-off bank is maintained for select privileged investors while the main one is left sclerotic and allowed to sink, destroying *regular* investors' money.)

Just for the mental exercise we *may* stretch our imagination to say that a smoother road -- nationalization -- means fewer bumps for everyone, even if you (the working class) is the one *pushing the car*. The capitalist is still *at the wheel*, *controlling* the car, and the car is *going* nowhere -- very likely over a cliff quite soon -- though the capitalist won't acknowledge it or change course. The capitalist just keeps telling the working class to push harder, for longer stretches of time, and not to worry so much about enjoying the scenery going by. Even though it's headed for that cliff the capitalist is more concerned about *other* cars, controlled by *other* capitalists, pushed by *other* workers, that seem to be newer or sleeker or bigger, that are catching up. The capitalist seems to think that, somehow, the competition will just decide to slow down, yet it never actually happens that way. Since he's in the lead the capitalist figures he can swerve at the last moment and block the competition from advancing, but he's oblivious to the reality that it would cause a crash and force *all* cars over the cliff at the same time. Only the capitalists at the steering wheels of the cars have *golden parachutes*, though...!

Never mind!

[Vladimir Innit Lenin]

Yes, but my point was that nationalisation doesn't offer anything to the working class. It doesn't.



It still doesn't offer anything to the working class if it is under a government which claims to be socialist, or talks of workers' democracy.

Devrim

Why not?

Even if banks were transformed into being 'by the workers, for the workers'. I.e. totally worker controlled at board level, workers' committees at branch level that have relative autonomy and full workers' democracy pertaining to this situation?

What is your solution, relating to the financial system and banks in particular?

[Die Neue Zeit]

I'd argue that a non-Socialist government would not ever nationalise the entire financial system. Don't forget you're not just talking about every bank, but hedge funds, smaller derivatives traders, prop shops, clearing houses, the actual mechanisms of financial trade such as the stock exchanges. It surely would be an action exclusive to a non-capitalist force.

I'd still not argue that Gordon Brown nationalising a couple of banks is progressive. Recent history has shown this.

There was an article in the Financial Times calling for the permanent nationalization of the whole financial system awhile back, which I referenced in my work. This goes beyond the likes of Roubini, Taleb and even the Post-Keynesian bunch (they too don't like permanent nationalization).

I don't think it's a transitional measure because it could actually be used as a last resort ploy of sorts by "industrialist" and "entrepreneurial" lobbying.


It still doesn't offer anything to the working class if it is under a government which claims to be socialist, or talks of workers' democracy.

Since you're against left reforms in general, it is incumbent upon you to explain (!) why there are absolutely no benefits. I'll be waiting.

[Devrim]

Since you're against left reforms in general, it is incumbent upon you to explain (!) why there are no benefits. I'll be waiting.

I'm not 'against' 'left reforms' in specific or general. I just don't think that capitalism can provide permanent economic reforms for the working class anymore. If it was shown that it could, I would support them. Suggestions of how to manage the economy are not reforms for the working class, but discussions about capitalist management policy.


Even if banks were transformed into being 'by the workers, for the workers'. I.e. totally worker controlled at board level, workers' committees at branch level that have relative autonomy and full workers' democracy pertaining to this situation?

Somehow I don't think this is even on the agenda.

Devrim

[Vladimir Innit Lenin]

It was a hypothetical question, Devrim. If we had the support, and the material conditions were right, for a progressive bourgeois workers' party, let us say, to enact such measures, would you support them?

[Widerstand]

It was a hypothetical question, Devrim. If we had the support, and the material conditions were right, for a progressive bourgeois workers' party, let us say, to enact such measures, would you support them?

If it was possible to reform capitalism away we'd be reformists.

[Devrim]

It was a hypothetical question, Devrim. If we had the support, and the material conditions were right, for a progressive bourgeois workers' party, let us say, to enact such measures, would you support them?

But I don't think that the conditions can be 'right'. It is not a question of a slight change in material conditions, but one of the current epoch, that of imperialism.

If those 'reforms' were enacted today, they would certainly be measures aimed at increasing the exploitation of the working class.

No factions of the bourgeoisie are progressive, and the idea of a "progressive bourgeois workers' party" is a contradiction in terms.

If there were a bourgeois party that could give real material forms to the working class, say for example a five day thirty hour week with no loss in purchasing power, of course I would support it. It would be in my material interests to, and I would be a fool not to.

Nevertheless, we can be pretty certain that it is not going to happen.

Devrim

[Die Neue Zeit]

I'm not 'against' 'left reforms' in specific or general. I just don't think that capitalism can provide permanent economic reforms for the working class anymore. If it was shown that it could, I would support them. Suggestions of how to manage the economy are not reforms for the working class, but discussions about capitalist management policy.

Capitalism /= Bourgeoisie

You're confusing the system with the actors, and you place too much stock in the decadence crap. And of course, proper state capitalism can be progressive (despite your tendency to call the bureaucracy "bourgeois").