Programme of the World Revolution/Chapter 8
CHAPTER VIII.
BANKS, THE COMMON PROPERTY OF THE WORKERS.
NATIONALISATION OF BANKS.
We have seen above that the cause of all evils in a capitalist society lies in the fact that all the means of production belong to the landowners and capitalists. We have also seen that the only way out of this is to take the means of production out of the hands of the capitalist class (whether they be individual capitalists, or trusts, or a bourgeois State), and to transfer them into the hands of the working class. This can be done and is being done, now, that the workers and peasants possess such a strong weapon as is their Workers' Soviet Government.
It is perfectly understood that the first thing to be done in this direction is to deprive capital of its most essential and most important means of control: to take the principal economic fortresses of capital. The second is to begin with that which is not only easier to take, but easier also to organise and have control and account over, and which can be arranged in the smoothest way. We already know that the task of the working class and the poor peasantry does not consist in depriving the rich of their wealth, distributing this wealth among themselves, robbing and sharing the spoils. No; it consists in constructing society on the basis of labour, working according to a definite plan, and organising the production and distribution of products. Hence it follows that the working class must first of all take possession of these organisations which have up till now existed only for the profits of the capitalist, and divert them to their own use, by putting them on a different footing, thus making them serve not capitalists and landowners, not speculators and sharks, but the labouring mass.
That is why our party has put forward the demand (since carried into execution) for the nationalisation of banks, that is to say, for the transfer of banks into the hands of the workers' and peasants' Government.
It is generally believed that the chief significance of banks lies in the fact that their vaults are packed with piles of gold and heaps of paper money and valuables, for which reason the Communists are so eager to get the banks. But in reality this is not the case.
Modern banks are not only filled with money bags. Banks, as a matter of fact, represent the pinnacle of capitalist organisation which rules industry. The industrial capitalists make profits uninterruptedly, and capital flows to them in a continuous stream. What does the capitalist do with the profit acquired? A part of it is spent on eating, drinking and dissipation. Another part, considerably larger, is saved for extending his business at any given moment: he can only do so when a large enough "balance" has accumulated, a sum big enough, let us say, to build a new factory or set up a new plant. Until that happens he deposits his money into the bank so as not to have "dead" capital on his hands. He deposits it and gets definite interest on it. The question now is, does this capital remain in the bank, increasing there of itself? Certainly not. The bank transacts business with this money. It either establishes enterprises, making solid profits, or purchases shares of existing enterprises, or shares of enterprises just being formed. The dividend it obtains on its shares are considerably higher than the sums it pays to its clients.
The difference goes to form the profit of the bank. This difference accumulates, is again involved in transactions, and in this way the capital of the bank increases. Gradually the banks become the real heads of industrial enterprises; some enterprises are entirely owned by them, others, only partly. Experience has shown that it is enough to own thirty or forty per cent. of the total shares to become practically the controller of the whole enterprise. And that is what really happens. For instance, two bank manage and direct the entire industry of America. Tn Germany four banks hold in their hands the whole economic life of the country. The same thing to a certain extent held good for Russia. The great majority of big enterprises in Russia were limited companies.
Russian banks, too, were the owners of a large number of shares of these enterprises, so that the limited companies were in the closest union and in complete dependence on the bankers—were, in fact, under their heel. Seeing that one bank rules over many industrial enterprises, it is evident that a number of the largest banks are in reality the main directors of industry, the centre as it wore, in which the threads of various enterprises meet. That is why confiscating the banks, depriving private persons of control over banks, and transferring them into the hands of the workers' and peasants' government, in a word, the nationalisation of banks, should become a question of paramount importance to the working class. In response to this, the bourgeoisie, together with its press and the rest of its suite, have, of course, raised the cry of alarm: "the bolsheviks are robbers! The bolsheviks are thieves! Do not allow them to plunder the national wealth and the national savings!" But the reason for all this clamour is self-evident: the bourgeoisie felt that the nationalisation of banks was a transfer to the working class of the main fortress of capitalistic society—and therefore the first decisive step towards the destruction of their gain and exploitation. Once the proletariat has laid its hand on the banks, that means that it has already taken into its hands to a great extent the reins of industry.
On the other hand, it is not hard to see that without the nationalisation of banks it would have been impossible to weaken the power of the capitalist in works and factories. The modern factory depends on the bank; either the bank simply owns the whole factory or a part of its shares. In some cases it allows the factory credit in one form or another. Let us now suppose that the workmen of a certain factory have taken everything under their own control. If the bank of that factory is a private concern belonging to the bourgeoisie, the whole factory must stop work: it will simply be informed by the bank that there will be no further credit. And that is equivalent to cutting off a fortress from supplies. Under such conditions the workers would inevitably have to surrender and bow the knee to the master. That means that, in nationalising the banks, the Soviet Government simultaneously acquires the power of directing and managing finance, and various bonds and certificates which serve as substitutes for money; and thereby the bank, instead of hindering the transfer of industry into the hands of the working class, on the contrary lends its assistance in such transfer. The power that in the hands of the bankers was directed against the workers, now under these new circumstances becomes a power helping the working class, and directed against the capitalists.
The next task consists in uniting the different and formerly private banks into one national bank, to unite the work of the banks or, as it is called, to centralise the banking business. In that case the transfer of industry into the hands of the working class would convert the national bank into the principal counting house; an institution affecting mutual "payments" between different enterprises and separate branches of production. Let us suppose that the coal, steel, and iron industries depended on the central bank. Each one of these has to utilise the products of the others; the steel foundries must receive their coal from the coal mines, the steel works must get their steel from the foundries, and so on. It is evident that since all these enterprises depend entirely upon the bank, all kinds of "payments"can be settled by the mere transfer of accounts; banks become simply counting houses for central book-keeping, where the relations between the various sections of industry are made clear. In accordance with these relationships the bank supports ("finances") industry, supporting it with financial supplies.
Ultimately, should we he successful in duly organising the whole business (and that is what our party and the Soviet Government, at the head of which our party stands, is striving for) it would result in the following state of things: they are united by means of central national banks, at which the threads of the separate enterprises meet, grouped according to their respective specialities. The bank keeps an exact account of these enterprises and of all transactions effected between them which mutually counterbalance as one branch of production supplies products for another. In the bank, the book-keeping department of communal production, the general position of production is in this manner neglected. The centralised and nationalised banking business (that is to say, the united banking business that is in the hands of the workers' and peasants' State) is converted into a communal book-keeping department of the socialist co-operative production.