The Workers Party publishes the following opinion piece as the beginning of a discussion over the question of the need to end the independence of the Bank of England (BoE). The author here puts the view that the current independence of the Bank of England may be a blessing in disguise and that any future control must be accompanied by a radically different type of government and democracy.
The question of ending the independence of the BoE has arisen in the Workers Party as a possible campaign demand as we formulate a broader campaigning manifesto in the run up to Congress 2023.
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A part of the System
There has been much debate recently about the Bank of England and its role in our economy. We need to have a more open discussion about how the neo-liberal system works against both the national and working class interest.
The interests of the working class should be the primary interests of the Nation since they encompass the overwhelming majority of the population, including the ‘lower and middle’ middle classes, to all intents and purposes they are also workers under the control of owners and the total system.
The Bank of England is, certainly and necessarily given the nature of things at the moment, part of the permanent liberal (now neo-liberal) Government of the nation but the situation is complex. Investors are tending to attack the central banks for maintaining an interest rate-based war on inflation but it is inflation that is most destructive to working class households (especially where there is no trade union muscle power to correct the situation through wage increases). In that sense, in attempting to counter inflation the Banks are ‘on the side of’ the working classes rather than asset-rich upper middle classes though by accident rather than direct intention.
The bulk of the middle classes are screwed in both directions – by inflation and by interest rate rises. Unless high liberal fiscal expenditures are directly redistributive or redistributive in the future, they tend to increase inequity and general inflation – the drive to Net Zero and high defence spending are typical – unless the expenditures are directed to mass and full employment or long term infrastructure benefiting the mass of the population.
The contrary liberal trick is to drive down wages with mass migration. Liberal high expenditures (whether Labour or Tory) tend to steer funds into identity and special interest groups. Some workers will benefit, of course, yet recent liberal economics have largely been restricted to emergency doles to deal with crises that never change the structure of power in society and increase debt. It is the workers who ultimately pay for this debt. There is no long term redistributive or wealth-creating strategy involving a long term planned and co-ordinated investment in infrastructures, health, housing, education and so forth. Instead billions are lost on war paranoia, indirect green subsidies for business and ‘cultural’ nonsense.
The independence of the Bank of England would be a problem under a Socialist government but it is also a problem for a radical liberal Government enriching the upper middle classes. If truth be told, given the actuality of global capitalism, the Central Banks are currently holding things together against the wrong sort of collapse – the catastrophic sort that might lead to the rise of populist fascist solutions as happened after 1929. This is not to justify the system but only to suggest that what we may be seeing is a classic ‘internal contradiction’ inside late liberal capitalism. The ‘finance capitalists’ are less worried in fact by the Bank of England than by the politicisation of the international financial system and by economic warfare that is unravelling trade relations with Russia and (more significantly) China. ‘Business capitalists’ (manufacturing), on the other hand, depend on very low interest rates if they cannot raise prices themselves, but are also worried by trade restrictions and increased supply chain costs. Many oppose the war in the East as they opposed the Iraq War. This means, from the Right, a genuine desire for peace and low current government expenditures but higher long-term infrastructural spend. This is why you see so many doubts about Ukraine policy expressed privately (though less publicly) by the free market-sympathetic populist Right as opposed to the so-called ‘national conservatives’ who are gung-ho for aggression. There are many competing wheels within late liberal capitalism with ‘national capital’ often set against ‘internationalised capital’ (the true heart of neo-liberalism) and ‘finance capital’ in a tense and uncertain relationship with political liberalism.
The recovery of national political control over credit (and money) almost certainly requires that that recovery does not fall into the hands of national conservative pseudo-populism or a bunch of metro-liberals wanting to preserve their own asset values. This creates the irony that the independence of the Bank of England is probably a benefit under the current regime and control requires a new regime rather than just a shuffling of power between Tweedledum and Tweedledee. The relevance to the NATO question is that these two political elements want the distractions of constant external expansion to maintain an international neo-liberal structure of which NATO is just (now) the military wing. But all should feel free to disagree. Truth and mutual political education comes from vigorous debate.