THE crash of the British banks continued yesterday after Royal Bank of Scotland declared a £27bn loss for 2008 on Monday and its share price collapsed by 67 per cent.
The share prices of HSBC, Barclays, and Lloyds TSB fell by 42 per cent, 68 per cent, and 33 per cent on Monday, and continued to crash on Tuesday.
The government’s decision to guarantee the £200bn of the bad debts that the banks have admitted to, led to an intense fear in the City of London that ratings agencies would judge the UK to be insolvent, leading to a major run on the pound and national bankruptcy.
This fear became more concentrated after the Treasury gave the Bank of England’s Monetary Policy Committee the option of printing money, since UK Treasury Bills cannot finance the amount of debt that the government is guaranteeing.
The pound slid to $1.39, a gigantic fall from the heady days of last year when it reached $2.08. But this is just the start of the collapse.
At the same time the motor car industry is sacking thousands, and grinding to a halt, giant High Street retailers are shutting shop, and unemployment is racing towards three million.
It is in this situation that PM Gordon Brown is saying that he is ruling nothing out in his struggle to save the capitalists and the bankers from the crisis of their own system.
This means that the entire burden of sustaining this bankrupt ruling class and its bankrupt system is to be piled onto the shoulders of the working class and the middle class.
Millions of innocents are to be destroyed so that the guilty can live in the manner to which they are accustomed, and their backward, historically out of date system can survive to drag humanity into a great slump and a third world war to redivide the world.
The Gordon Browns say that capitalism is real and is the only possible system, so the masses of the UK and the world will have to grin and bear the heavy blows that are about to be rained down on them.
Frederick Engels, in his work ‘Ludwig Feuerbach And The End of Classical German Philosophy’, discussed this issue of the reality and unreality of social systems when he analysed Hegel’s statement that ‘All that is real is rational, all that is rational is real.’
This is very much the position of Brown and Co in relation to capitalism – because it is there, it must be right.
But Engels pointed out that according to Hegel ‘not everything that exists is also real, without further qualification.’ He adds: ‘In the course of its development reality proves to be necessity’.
Thus adds Engels: ‘In 1789 the French monarchy had become so unreal, that is to say, so robbed of all necessity, so irrational, that it had to be destroyed by the Great Revolution, of which Hegel always speaks with the greatest enthusiasm.’
He continues: ‘In this case, therefore, the monarchy was the unreal and the revolution the real. And so, in the course of development, all that was previously real becomes unreal, loses its necessity, its right of existence, its rationality. And in the place of moribund reality comes a new, viable reality – peacefully if the old has enough intelligence to go to its death without a struggle; forcibly if it resists this necessity.’
Brown and the bankers are even more unreal today than was Marie Antoinette and ‘let them eat cake’ in 1789.
The Great Revolution of 1789 followed on from the unreal nature of the ‘divine right’ of Charles 1 to rule without parliaments, which became so unreal that it led to revolution in the 1640s.
Charles was forcibly removed from the scene when he resisted the necessary change in society, as were the Bourbons.
The UK and the world’s capitalists and bankers who are now insisting on their rights to be maintained as the ruling class, regardless of the consequences for the working class and society, are going to meet the same fate at the hands of socialist revolutions. These will bury unreal capitalism, and bring in a real, necessary and rational socialist society.