Cyprus Bank Robbery – an inside job!

It used to be that large-scale bank robberies were committed by the organised criminal underground, breaking into banks, holding the bank staff at gunpoint and stealing as much cash as they could stuff into their duffle bags before making off. Now another criminal gang – based in Europe – have devised a cunning plan to commit bank robberies without having to break into the premises or cracking open any difficult safe. The first trial run using this remote-controlled robbery method has taken place in Cyprus. The organising gang’s headquarters are hidden away in the heart of European Economic Community. It is a part of the international Bond and Finance Mafia, criminal fraternity who have managed to achieve a ‘protected’ status. Their actions are now backed up by the law, the police and the legal system.

The example of the Cyprus government taxing deposits initially over 100, 000 Euro’s indicates that this theft, although planned outside, is also an inside job. It is government officials who are the employed accomplices of this act of European piratical confiscation. This formula for saving the system from it own toxic debts – caused by crass stupidity, systemic contradictions and greed – has formed a probable template for future raids on depositors cash savings. Very few are safe now. This first European case as revealed by Cyprus, is the thin edge of a wedge. It almost certainly means whenever and wherever, the system implodes or is in danger of failing again, deposits will be seized. Given the size of the debts racked up by their greedy search for fees, profits and exorbitant government expenditure, this first raid upon Cypriot savings will most likely be insufficient. Further deposit-snatchings are almost inevitable there and elsewhere. And the fact that only large deposits are being taxed at 40% does not mean those with less escape even this first round of daylight robbery.

Not all the assets over 100,000 Euro’s in Cyprus banks belong to rich foreigners. Some are the operating capital of small businesses, parts of individual pension schemes, investment bonds belonging to other pension and savings schemes etc. Since these assets will be ‘snatched’ some businesses will collapse as a result, creating further unemployment. Some pensioners will have less in their pension pot and therefore both categories will have less to spend – sending the Cypriot economy further into recession. At the same time the bailout conditions, which triggered this bank-deposit theft, is to obtain a further loan. In other words it is not really a bailout – except for the banks and bond-holders. As a result the government of Cyprus will be ‘bailed into’ more debt than they are already in. This so-called ‘bailout’ is nothing more than an organised form of collective debt bondage for Cypriot citizens. And in this case, Cyprus is merely a small fish in the larger European savings lake from which the bond-holding buccaneers and their co-conspirators have gained exclusive fishing rights. For it is the case that all other European and North American countries have similar – in most cases greater – sovereign and banking debt problems.

International Buccaneers and Bandits.

Unlike their 17th and 18th century counterparts in the Golden age of Piracy, the modern buccaneers, flit around the International scene in aircraft. Nevertheless, Captain Kidd, Blackbeard, Anne Bonny and Henry Morgan, do have their analogues in the 21st. Jeroen Dijsselbloem, Mario Draghi, Christene Lagarde and others of the so-called European ‘troika’, and its crew are busily raiding countries, through QE and austerity leaving the inhabitants with precious little in their pockets or purses. Up to this recent development, the confiscation of assets from the white and blue-collar working and middle classes has been through structured unemployment, commodity price rises, increased bank, water, electricity, gas charges and council payments. Now and in future – as the crisis deepens – they have signalled their intent to come for those who still have something left in the banking system. No matter that it has been saved from the combined exertions of their working life, these funds are now fair game to be raided by the upholders of capital.

In many ways this new development has heralded another degenerate stage in the approaching end-game for the capitalist mode of production. The banking system was created to assist the development of commercial and later productive capital when the means of production and circulation became to large to be funded by individuals. In order to reassure the multitude of lenders that their deposits were safe, banking and governance had to have safeguards in place to ensure the honesty and fair-dealing of the financial sector. Although losses of assets and deposits could not be avoided in cases of accident, or ineptitude in capitalist enterprises, such losses were intended to be born by the borrower and the bank not those who had deposited their money for safe keeping.

Whilst it has always attracted crooks and dishonest actors, the capitalist banking system was based fundamentally upon the need for honesty and to safeguard from theft – absolutely – the customers deposit accounts. Now that final Rubicon has been crossed in Europe as it was in a slightly different form in Argentina during 2001. The recent actions against Cyprus indicates that all the political and financial industry reassurances that Libor-rigging type criminal activity and ‘laundering drug money’ will be rooted out are not to be trusted. For even if they are, there remains such ‘legal’ ways of ensuring sufficient bonuses and bailouts continue to grease the palms of industry insiders and their supporters in governments. Like a cancerous growth within, capitalism has for some time been eating away at the healthy tissue of the planet and society. It has again reached a critical, self-destructive stage.

Capitalism is self-destructing.

It has become glaringly obvious since the 2008 banking crisis that capitalism is not only destroying the lives and welfare of working people, but also destroying the basis of its own survival. If industrial and commercial capital cannot safely store its capital in money form during the necessary non-productive periods, or gain loan-capital when it needs it, a crucial part of the circulation of modern capital is potentially interrupted and trust in it undermined. In addition to a crisis of over-production in commodities, therefore a continuing crisis is also occurring at the point of commodity circulation. This secondary feature of the current crisis has now been further amplified by the activity of the capitalist financial sector in league with government and supra-government agencies. These two inner contradictions, relative over-production and financial speculation have developed to this crisis point because the capitalist mode of production has throughout the late post-Second-World-War period been an international economy on steroids.

Fuelled by surplus finance capital and advanced methods of production, during this period, the capitalist mode of production, has spewed out masses and multiples of every conceivable product, imagination and ingenuity could create. It has saturated the markets of the world with every possible electrical and mechanical device, along with vast numbers of items of plastic, wood, glass and woven materials. This commodity fetishism has been promoted to the point of a mesmerising superfluity – but only for those who can afford to purchase them. Yet this very advance in productive technique has at the same time served to reduce the relative number of paid workers. Therefore once again there is a constantly increasing crisis of relative over-production and a banking and governmental system which can no longer be weaned off its dependency on regular injections of other peoples cash. But at the same time there is a related crisis of social and political decay.

At the national, regional, city and town levels of social organisation, the capitalist system in the advanced countries is gradually collapsing. Such is the rise of low pay and unemployment that Local Authorities are already struggling to maintain services upon which the capitalist mode of production relies. Roads, health, pensions and education are all suffering reductions as the crisis develops. The USA provides perhaps the most vivid example a the moment. Schools in North America, for example are threatened with closure as the tax base shrinks. Chicago has a $1bilion deficit and the Mayor Rahm Emanuel has proposed closing Chicago schools. Also in the USA, Michigan has achieved a balanced budget but only by firing 20 percent of its workforce, increasing its water rates by up to 50%. However, Michigan is now close to being unable to function as a normal city, as are many other urban centres. Not too far in the future, the same fate faces Cyprus and many European cities and towns, as sovereign debt issues filter down to the local levels.

The current economic and financial problems have become so vast and complex that they cannot be humanly solved from within the capitalist system itself. Once again to preserve the capitalist system, the destruction of surplus-capital, the depreciation of currencies and the reduction of working class conditions are necessary. Under this system, there can be no further economic growth, until there has been substantial economic destruction. In the 20th century (late1930’s to1945) this process of stagnation, depreciation and destruction was rapidly achieved by total war. Short of another such world-wide conflagration, such decay and the writing down of surplus-capital can only be done via a more gradual procedure. This is the economic and political reality which is currently taking the form of numerous bankruptcies, insolvencies and pro-capitalist inspired reductions in jobs, wages, salaries, benefits and welfare services on the one hand, and rises in taxes, prices and now the first stages of the sequestration of people’s bank savings.

The revolutionary implications.

This latest ‘rip-off’ banking development, as well as the growing ecological devastation, is now hitting a section of the middle-classes and entering their consciousness as well as the blue and white-collar working class. This new phase has important implications. The role of the white-collar state workers along with the middle-classes in the developing crisis is crucial to whether a post-capitalist form of production becomes a possibility or an uncertainty. As noted above, for a long time the productive capacity of capitalism has led to relatively fewer workers in the productive spheres of capital and an increase in that of the non-productive. In the guise of the welfare state, it created a large-scale alternative form of non-profit making economic activity. This overall process was evident to Marx even in the 19th century, when massive concentrations of workers in industry, commerce and transport existed and were still developing. In discussing the merits and shortcomings of Ricardo, Marx noted the following;

“What he forgets to emphasise is the constantly growing number of the middle classes, those who stand between the workman on the one hand and the capitalist and landlord on the other. The middle classes maintain themselves to an ever increasing extent directly out of revenue, they are a burden weighing heavily on the working base and increase the social security and power of the upper ten thousand.” (Marx. ‘Theories of Surplus Value’. Volume 2. page 573.)

The middle-classes have from this intermediate position been the main sources of large-scale support for the capitalist system. When class-wide conflict between the working class and the individual and corporate capitalists and their pro-capitalist supporters take place they have invariably sided with capital. In the 20th century many fascist supporters were recruited from the middle classes. In European, North American and Latin American affairs, this class played a significant reactionary role. Outside of large-scale class upheavals they have also been the reliable voting strength for Liberal, Democratic, Conservative and Republican governments. However, the same centralisation and concentration of capital that has diminished the relative numbers of productive workers has also reduced the numbers of the middle classes. In Europe and the advanced countries, small businesses involved in production, commerce, banking and retail sectors have been progressively replaced by large, even mega sized enterprises.

And it is precisely these numerously populated classes that have probably understood most clearly the dangers of left totalitarianism in the form of Bolshevism and right totalitarianism in the form of Fascism. Yet in the 21st century their own economic and social status is increasingly precarious and their financial position is undermined by every dysfunctional tremor in the banking and financial sector. Their ‘shares’ are often negatively volatile, their salaries eroded, they have been miss-sold financial instruments and now their savings are targets for pillaging. This means they will increasingly argue for, and press in the direction of, a rolling back of the neo-liberal forms of capital. They will be part of a trend looking towards a post neo-liberal consensus. They have yet to be won to a revolutionary-humanist post-capitalist perspective from which they have nothing to fear. In the coming conversations with sections of the middle and working classes, the opportunists in the workers movement will undoubtedly engage in popular front type debates and actions in which anti-capitalist ideas will be sidelined, muted or even absent.

Revolutionary-Humanist anti-capitalists on the other hand whilst not disrespectfully dismissing out of hand any naive hopes and aspirations for a return to an ‘honest’ form of welfare capitalism, should engage them with their stark analyses of the capitalist mode of production and the degeneration of Bolshevism to the fore. In common struggles against austerity and for partial demands, anti-capitalists should not be sectarian with regard to any new (or previous) forces entering the various reformist struggles, whatever their origins. But neither should they hide or subordinate their views that the capitalist mode of production has reached a multiple end-game with regard to the economic, financial, social, moral and ecological future of the planet. It remains to be seen what kind of end-game is yet to unfold and how revolutionary-humanist orientated anti-capitalists can best influence it. Two issues of importance which can assist it unfolding in a positive direction for the majority of the population is by the promotion of sufficiently detailed anti-capitalist economic analyses and an honest evaluation of the degeneration of the Soviet Union.

Roy Ratcliffe (April 2013.)

[See also ‘Workers and others in the 21st century.’; ‘Defending Public Services’; ‘Marxism against Marx’; ‘The Five-fold Crisis of Capitalism.’ and ‘Crisis: so what else can we do?’]

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