Bankers' bonuses - daylight robbery!

Take the banks into full public ownership and control

National Shop Stewards Network protest outside Bank of England, photo Paul Mattsson

Those who have helped to blight and ruin the lives of millions of workers, through mass unemployment and the brutal repossession of homes, should receive not one penny in so-called 'bonuses'.

Peter Taaffe, Socialist Party general secretary

When John 'Two-Jags' Prescott - a willing participant in the New Labour project that spawned these financial creatures - inveighs against the bankers and calls for a public campaign against the proposed bonus payouts of £1 billion at Royal Bank of Scotland (RBS), it indicates the mass rage on this issue.

Prescott even mentioned the 'C word': "This is raw capitalism and this country rejects it"! Correct! But didn't he serve in the government alongside Gordon Brown and Tony Blair which supported and did everything to strengthen neo-liberal "raw capitalism"?

When questioned on Newsnight, he wasn't able to answer the accusation that it was him and his government that helped to create this situation. They promoted 'performance related pay', though for the bankers with the perversion that no satisfactory performance was even necessary.

Vince Cable, the Liberal Democrat spokesperson, pointed out that following the bursting of the 'South Sea Bubble' speculation in 1720, a parliamentary resolution proposed that bankers be tied up in sacks filled with snakes and thrown into the river Thames!

However it is guaranteed that the parliamentary committee that is 'interrogating' bankers this week will be full of 'sound and fury signifying nothing'.

Alistair Darling and Gordon Brown are intending, under the enormous pressure that has built up, to introduce some curbs. But so far they have not even proposed what Barack Obama has suggested for the US, a 'cap' of $500,000 on the pay of what he has correctly described as the "shameful" US banking fraternity who want federal bailouts.

Economic abyss

National Shop Stewards Network protest outside Bank of England, photo Paul Mattsson

In fact, the proposal is $500,000 too much. The overwhelming majority of the American people on the edge of an economic abyss clearly believe they shouldn't get a cent.

In reality, all capitalist politicians are only proposing minimal action because of the public clamour against the greedy bankers. Obama remains firmly within the framework of the capitalist system; "we do not disparage wealth" (of the rich) he has said.

Their dilemma was summed up by Barney Frank, the chairperson of the US House of Representatives Finance Committee, who said of America's bankers: "People really hate you. And they are starting to hate us because we have been hanging out with you. You've got to help us deal with that".

The argument that RBS, which has received £20 billion from us, the 'taxpayers', ie the working and middle classes, must pay at least £500 million in bonuses because of "contractual obligations" is completely spurious.

This in a week when The Guardian has revealed that so-called 'British' companies, including banks like Barclays, use tax avoidance schemes to prevent payment of anything between £3.7 billion to £13 billion to HM Revenue and Customs.

Prescott also correctly stated that "these bankers would have been on the dole" if RBS had been allowed to go to the wall. He fulminated: "No ifs, no buts, don't pay the bonuses".

Amen, says every worker and middle-class person in Britain facing the burden of this crisis. The problem is how to carry out Prescott's laudable aims. The government is once more merely proposing a delaying mechanism, another "review".

Headed by a failed banker

Moreover, this is to be headed by a failed banker from the tottering investment bank Morgan Stanley, who himself has taken multi-million pound bonuses - a classic case of the proverbial "poacher turned (tame) gamekeeper".

Neither Prescott nor the MPs on the House of Commons committee foresaw the pernicious effect of the work of the financial plutocrats and the breathtaking arrogance of them daring to suggest that they continue to profit from their past misdeeds.

But socialists and Marxists did. Tommy Sheridan, for instance, when Brown himself knighted Fred 'The Shred' Goodwin, declared: "It's an absolute outrage that this man is to receive a knighthood for 'services to the community' when all the community has received from him is low wages and unemployment" (Daily Mirror). Tommy's reward is to be pilloried and dragged once more, this time with his wife, before the capitalist courts in a case he has already won once!

Moreover, this was at a time when Jeff Randall of the Daily Telegraph was hailing Goodwin as a "world-class banker" and another characterised him as a "genuine business hero". The whole of the 'business community', and all of the three major capitalist parties, were in reality on their knees singing hosannas to the City of London and the financial 'wizards'.

Osborne and Cameron, the Tory leaders, would have us believe they and their party are innocents in all this. In fact, the roots of this crisis were created by their party when led by Mrs Thatcher and her massive 'big bang', the deregulation of finance capitalism. The result has been a huge polarisation of wealth which has ended in a devastating economic crisis and the 'big bang' of mass unemployment. The economic forecasting think tank ITEM now says that three and a half million workers could be 'out on the stones' in Britain, with one and a quarter million of this horrendous figure being under the age of 25.

This whole sorry bunch of capitalists, rooted as they are in a system that elevates the lust for profit over social need, cannot be expected to take effective action against their 'own', the bankers, other than to trim one or two fingernails. Why in any case do bankers under capitalism 'need bonuses' for super-exploiting the rest of us? They are on stratospheric salaries already. Managers, for instance, as late as the 1980s took home perhaps 20 times the average wage of their workforce, a managerial wage which was too high even then. Today, when the average wage is put at £25,000 a year (not an hour), their 'remuneration' is on average 275 times this figure and some receive a lot more than this.

And what is the net result of this? An anonymous cabinet minister told The Guardian: "The banks are f***ed, we're f***ed, the country's f***ed". But not as much as the working class and the poor because they are the ones expected to carry the can. Therefore we must demand not a penny in 'bonuses' for bankers, both in the 'nationalised' and the private sectors.

But how can this demand be enforced? Darling the Chancellor says "commercial interests" are best at running the banks. Really? After 30 years when they have had the full 'freedom of the park' and have consequently wreaked havoc? Nationalisation, not in the capitalist, pro-boss way but in a democratic socialist fashion, is the first step in beginning to use the economic levers of power to benefit the majority, working and middle class people. Then Northern Rock for example, which has been bailed out by us and expects to dole out £8 million in bonuses to its executives while turfing workers out of their houses, may begin to act in the interests of ordinary working-class people.

Open the books

A precondition for effective action is to open the books of the banks. The argument that "bonuses need to be paid for specialised staff" is so much hooey. An average bin worker, car worker, steelworker or teacher, especially if they came together collectively in democratic committees controlling the banking industry, could do a lot better than these bankers, who did not even understand what they were doing with their financial alchemy.

A democratic form of organising a nationalised banking sector would draw in bank workers and other workers and their representatives, delegates of small business people, homeowners, etc. The organisations that represent working people, the trade unions, should be involved, as should 'consumers', including mortgage holders.

But, argue the opponents of nationalisation, "there would be a flight of capital". The capitalists will always seek to sabotage measures they think are against their interests. The way to deal with this blackmail is to introduce a state monopoly of foreign trade, as a means of controlling all imports and exports including capital. Bold action is required, not tinkering, if a new road of prosperity and hope is to be opened up to the British people.

Not a penny to the bankers in 'bonuses'!
Open the books to inspection by committees of workers, householders, consumers and small business people!
No compensation to the financial 'wizards' who have ruined the economic position of Britain and with it the lives of millions!
For a socialist, democratic, nationalised banking and financial sector.
For a state monopoly of foreign trade.
For a socialist plan of production democratically drawn up and implemented by committees of workers, trade unionists, small business people and consumers.

Above all, for the creation of a powerful movement now for a new mass workers' party that can make these demands relevant and realistic for millions of workers who are looking for a lead.

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In The Socialist 11 February 2009:

Bankers' bonuses - daylight robbery!