Dear Editor,
The article, “Solution to the Problems of the Banking System” is brilliant. It clearly explains how the people of our country are forced to bear the burden of capitalist loan defaults. Apart from this, people are at risk of losing their hard earned savings whenever any bank fails. Though public sector banks bear the brunt of the problem, it is not confined to them. Giving many facts, including examples from the US, the article establishes that there is no basis for the claim that privatisation will solve the problems of the banking system.
As is pointed out, “The source of the problem is that the present stage of capitalism is characterized by the drive of monopolies for maximum profits from every possible sphere. Monopoly capitalist greed has converted banking into a system of looting the people through all possible means.”
The article goes on to explain how due to their political connections, monopoly capitalists get huge loans from state-owned banks for all kinds of high risk, speculative investments. If they pay off, they gain. If they fail, they do not lose because they default on their debt service payments and the government shifts the burden of bank losses on to the backs of the entire people.
While your paper has always supported the struggles against privatisation, it has explained that who owns the banks is not the only issue. “The issue is whether the overriding motive of banking activity is to maximise capitalist profits or to serve the needs of society as a whole.”
Bank workers have been demanding that people’s money should be used for people, to fulfil the needs of society and not to fulfil capitalist greed. The article has explained that for this, the main issue is that the nature of the state has to be changed. The existing state which is an organ of capitalist rule needs to be replaced with a state of workers’ and peasants’ rule. Such a state will reorient the direction of economy towards welfare of the people.
What I particularly liked about this article is that it explains that what it is talking about is not an impossible dream. It has already been achieved in the Soviet Union, and there is much that we can learn from and be inspired by studying that experience.
The fundamental postulates of the Marxist theory of political economy that have been highlighted are extremely important. I believe that readers like me have to study them, ponder over them and understand their full significance.
The article pointed out that Gosbank was the sole bank in the Soviet Union and that it was directly accountable to the Ministry of Finance. As it was the only source of short-term credit to all economic enterprises and as credit was extended to them at only 2%-3% interest, usury was eliminated. With such low rates of interest and concrete encouragement given to farmers to make cooperatives and also participate in collective farming, why would they commit suicides?
It is crucial that enterprises engaged in large-scale production were converted from being the private property of capitalists into social property of the whole people. That is the only way that the direction of the economy can be altered towards satisfying people’s needs and ensuring their well-being. With a national accounting system and a credit system developed with measures for safeguarding against misuse of loans by borrowers, defaults and NPAs would have had no place.
With the Soviet state ensuring the safety of all deposits, there would have been no tragedies like the customers of PMC Bank committing suicide or dying from heart attacks!
Zero inflation and elimination of all kinds of financial speculation! Wow! It seems impossible and it certainly is, in the capitalist system!
Articles like these really inspire us and strengthen our conviction that socialism can and must be established.
Yours sincerely,
Deepti,
Mumbai