Why should working people pay for the crimes of finance capital?

Giant lending and financial institutions have become bankrupt in the United States. They include Fannie Mae, Freddie Mac, AIG insurance, Merrill Lynch and Lehman Brothers. Every week there is news of more banks going down.

These giant financial institutions, which are reporting enormous losses today, pocketed huge profits in the recent past.  They made money gambling on real estate and housing prices.  They wooed working families to take cheap loans to purchase houses, thereby inflating housing demand and real estate prices.  They subsequently raised the rate of interest and fleeced the borrowers.  Today, thousands of families in the US have lost their homes and are still paying these institutions. Their debt servicing burden is higher than the value of the house they bought. There are reports of families having to sleep in their cars at night after having lost their homes.

Housing prices are falling every month in the US, as nobody wants to buy houses on credit any more. As a result, the liabilities of the lending institutions have become much more than their assets.  For many months, these institutions of finance capital hid their losses and showed healthy balance sheets.  They did this with the connivance of their auditors and well wishers in the government. Now they are unable to hide their losses any longer.

The Bush administration in the United States has announced its decision to bail out the biggest three of the financial giants with 700 billion dollars (Rupees 32 lakh crore) of public money.  People are being told that there is no alternative except for the Federal Government to bail out these institutions using public revenue and public debt. 

Working class and people in the US are protesting against this massive bail out at their expense. The state is not coming to the assistance of the homeless and debt burdened families.  It is coming to the assistance of those who robbed them, and it is robbing the people even more to finance this bail out. It is a measure of how parasitic the capitalist system has become.  People are naturally angered by this highway robbery in the name of market economy and good governance.

A small number of companies and groups of super rich individuals are playing with the wealth created by the combined labour of the working people.  They are gambling in real estate, stock markets, in commodities like oil and food. They are dealing with the social product in the most irresponsible way, in pursuit of narrow motives, playing havoc with working people's livelihood and security. 

Control of the nation's wealth by a few private players, and high degree of speculation to rob value from each other and from society at large, has become the nature of competition in the market at this highest stage of capitalism. 

Need to intensify the struggle against privatisation and liberalisation

In India, the big bourgeoisie, headed by the Tatas and Reliance, is hell bent on going ahead with its imperialist aim and program of globalisation through liberalisation and privatisation.  However, the fact cannot be hidden that opening all doors to foreign trade and capital flows has increased the vulnerability of the Indian economy to external shocks.  Already, the crash in the US has sent shock waves in Mumbai and other cities of our country.  Young business school graduates, who got hired by global companies like Lehman Brothers for more than one lakh rupees per month as salary, are now finding themselves thrown out of their jobs, with zero monthly income. Several outsourcing services and BPOs have closed down.

The main content of the program of financial sector reforms in India is to integrate banking, insurance, provident and pension funds, stock markets and mutual funds ever more closely with the global imperialist system and its capital markets. 

Is it wise to link the Indian financial sector more and more closely with the dollar dominated crisis ridden financial system of imperialism?  This has become a legitimate question to raise today. Will India not be better off being independent of the parasitic imperialist system of financial robbery?

The crisis of capitalism on the world scale, the crash of the financial giants in the US – points to the need to strengthen the demand to immediately call a halt to the privatisation and liberalisation program in our country.  The doors must be closed to the speculators playing havoc with our lives.

Financial intermediation is a social service.  It can and must be provided at cost price by public organisations, accountable to the people of a nation, a city, rural district or village. This is possible to achieve provided the working class and peasantry take power in their hands and get rid of private profiteering entities in the financial sector. 

Workers and peasants must demand and fight to eliminate private profiteering from the Indian financial sector. We must fight to reorient the financial sector and bring it under social ownership and control, thereby breaking out of the stranglehold of the imperialist system.  We must fight with the perspective of establishing workers' and peasants' rule in place of the rule of the parasitic bourgeoisie.