|The News Line: Editorial
Friday, 14 September 2018
On tenth anniversary of world banking collapse – Forward to Socialism!
ON THE eve of the tenth anniversary of collapse into bankruptcy of the US investment bank Lehman Brothers, which brought the world’s capitalist banking and financial system to the very brink of complete collapse, Gordon Brown has warned that ‘a leaderless world is sleepwalking into a future crisis.’
In an interview with The Guardian newspaper yesterday, Brown, who was Labour prime minister in 2008 and before that had been chancellor of the exchequer in the Blair government, said that all the conditions that led to the collapse of Lehman’s remained unresolved and that the global economy was moving into ‘a decade of vulnerability’.
Brown said of the coming crisis: ‘It is very difficult to say what will trigger it but we are at the latter end of the economic cycle where people take greater risks. There are problems in emerging markets.’
He cited the huge growth of loans by the banks to commercial and industrial sectors, plunging them into debt which Brown warns could become un-repayable as interest rates on these loans are pushed up by central banks, saying the crisis ‘could arise in Asia because of the amount of lending through the shadow banking system.’ He added: ‘In an interconnected world there is an escalation of risks.’
What makes the situation worse today than ten years ago, Brown claims, is the ‘breakdown of trust’ between governments – in other words the vicious trade war being waged by the US under Trump against its capitalist rivals.
According to Brown, in 2008 the breakdown in trust between the banks (as they realised they were all sitting on massive amounts of debt that had been sold on to them by other banks) was more than compensated by co-ordinated action by capitalist governments.
The co-ordinated drive by the bourgeois governments of the US, UK and Europe to bail-out the banks pumped trillions of artificially created money into the financial system and made the working class of their own countries pay through savage austerity programmes.
Brown said: ‘In the next crisis, a breakdown of trust in the financial sector would be mirrored by a breakdown in trust between governments. There wouldn’t be the same willingness to cooperate but rather a tendency to blame each other for what’s gone wrong.’ This reality of capitalist nations engaged in life and death struggles for survival against their rivals and against their own working class is what is terrifying Brown.
He says: ‘Countries have retreated into nationalist silos and that has brought us protectionism and populism. Problems that are global as well as national and local are not being addressed. Countries are at war with each other on trade, climate change and nuclear proliferation.’
When Brown talks of ‘populism’ he is talking about the revolutionary movement of workers across the world against austerity that has seen the traditional parties of the bourgeoisie wiped out in country after country and the rise of anti-austerity, anti-capitalist movements.
Brown shows his true colours when, in his condemnation of the Tory austerity policies imposed on the working class since 2010, he says: ‘Austerity was based on an analysis that what had caused the global recession was the high level of public debt rather than the reckless action of the financial sector.’
This is rich coming from the man who as chancellor of the exchequer famously championed the deregulation of the City and banks with his ‘light touch’ regulation and who claimed to have stabilised capitalism and put an end to ‘boom and bust’.
Brown is now blaming it all on greedy bankers and holding out the forlorn hope that they can be tamed and brought to heel with a few regulations and capitalism saved. In fact, capitalism knows only one way out of its crisis and that is through making the working class at home pay, trade war against all rivals and wars abroad to reorder the entire world for exploitation. The banks can’t be tamed; they must be expropriated and placed under the control of the working class.
The only way forward for the working class is to smash this bankrupt and broken capitalist system through socialist revolution and advance to a socialist planned economy where production is for human needs.
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