Chilean Communist Party (Proletarian Action)
Index
Part 1: Critical approach to the positions of the CPG
• Reasons for a response to the Communist Party of Greece (CPG)
• Greece must leave NATO! Or should not it?
• The CPG’s subterfuge to avoid debate
• No support for capitalists?
• Reactionary Venezuela?
• The member organizations of the Platform “ignore or deny” that the current mode of production in the world is capitalist…
Part 2: Criticism of the ideological foundations of the CPG
• A handful of countries?
• “Imperialist pyramid” or Lenin’s theory of imperialism?
• Idealism hidden in “imperialist pyramid”
• Methodological error
• No participation of communists in governments led by the bourgeoisie?
• Are there no stages between capitalism and socialism?
• Erroneous positions are not harmless
• Incorrect and damaging derivations
Part 3: Imperialism vs. imperialism?
• A long work
• Brief and concise summary of the “imperialist pyramid” and the CPG study method
• A big mess
• China and Russia belong to the G20
• State presence in Russian companies
• Foreign penetration of the Russian economy
• “Gigantic amounts” of capital export from Russia
• The “big” Russian banking
(The previous sections have been published in past issues.)
The “big” Russian banking
Although the CPG does not see very capable of delving into the background of facts and actual data and, therefore, as we have seen in the previous sections, of thus applying theoretical thought to concrete practice, it seems to us that it does manage to grasp certain theoretical aspects of Leninist thought on imperialism, such as, for example, that finance capital was a product of the process of monopolization of social production in the countries that had an early development of the capitalist mode of production to such an extent that banking monopoly capital ended up merging with industrial and commercial monopoly capital, or that this process became evident at the beginning of the last century, or also that the amounts of capital which were and still are concentrated in fewer and fewer owners due to this process of monopolization allow them (the owners of this capital) to invest it abroad, or also that from this fact emanates the imperialist character of the countries which export such capitals abroad in immeasurable amounts.
“By far the most important economic factor,” said Hobson, “in Imperialism is the influence relating to investments. The growing cosmopolitanism of capital is the greatest economic change of this generation. Every advanced industrial nations is tending to place a larger share of its capital outside the limits of its own political area, in foreign countries, or in colonies, and to draw a growing income from this sources.” 1)
However, well the CPG seems to understand these aspects, in our opinion it does not seem to have adequately grasped the importance that Lenin’s theory of imperialism attaches to banking.
In this sense, i.e., in terms of a correct understanding of the imperialist phase of capitalism, it is important to understand that the fusion of banking, commercial and industrial monopoly capital does not represent a fusion in which these three central spheres of the economy have acquired the same degree of importance in national and world economic activity. Hilferding pointed out that the concentration of production transformed the role of banking, which was previously small and dependent on the industrial sector and focused on intermediating payments between industry and commerce, into a monopoly which now directs economic activity. The merger of monopoly banking capital with monopoly industrial and commercial capital gave rise to finance capital, which was not only the result of this unification, but placed the guiding axis of national economies in the banking sector, or more precisely in the financial sector.
Hilferding, in his meticulous words, pointed out:
“Finance capital means the unification of capital. The formerly separate spheres of industrial, commercial and banking capital are now placed under the common direction of high finance, in which the lords of industry and banking have unified in intimate personal union. This union has as its basis the superseding of the free competition of the individual capitalist by the great monopolistic associations. With it naturally changes the relation of the capitalist class to the power of the State.” 2)
And:
“The dependence of industry on the banks is then a consequence of property relations. An ever-increasing part of the capital of industry does not belong to the industrialists, who use it. They receive the disposal of the capital only through the bank, which represents the owner vis-à-vis them. On the other hand, the bank must fix an ever-increasing part of its capital in the industry. It thus becomes industrial capitalist to an ever-increasing degree. I name bank capital, i.e. capital in the form of money, which is thus transformed into industrial capital, finance capital. In the eyes of its owners it always retains the form of money, is placed by them in the form of money capital, in interest-bearing capital, and can always again be withdrawn in the form of money. In truth, however, the greater part of the capital thus placed in the banks is transformed into industrial capital, into productive capital (means of production and labor power) and fixed in the process of production. An ever increasing part of the capital used in industry is financial capital, capital at the disposal of the banks and in use by the industrialists.” 3)
Or in Lenin’s illuminating words:
“The principal and primary function of banks is to serve as middlemen in the making of payments. In so doing they transform inactive money capital into active, that is, into capital yielding a profit; they collect all kinds of money revenues and place them at the disposal of the capitalist class.
As banking develops and becomes concentrated in a small number of establishments, the banks grow from modest middlemen into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw materials in any one country and in a number of countries. This transformation of numerous modest middlemen into a handful of monopolists is one of the fundamental processes in the growth of capitalism into capitalist imperialism; for this reason we must first of all examine the concentration of banking.” 4)
Therefore, the study of the imperialist character of a country and the understanding of finance capital pass inescapably through the study of the banking or financial sector.
Today it is the bank, or rather the financial institution, which controls the greater part (or even the totality) of national and international commerce and industry. But not all capital circulating in and between today’s economies is finance capital, even if it is the dominant capital and forms the backbone of capitalism today. If this sector falters, i.e., goes into crisis, national economies are threatened by a real systemic collapse. This is why governments around the world have carried out dozens of multi-billion dollar bank bailouts over the past two or three decades, in which nation states have used the entire population’s money to save their countries’ big banks from total collapse. 5)
Now, not all capital circulating nationally and globally is financial capital, just as not every country that has a banking sector possesses financial capital, and therefore not every country fulfills one of the conditions necessary to become an imperialist country.
The CPG and its non-dialectical method of analysis, which elevates the capitalist mode of production to imperialism, errs again in supposing that every country with a banking sector is imperialist.
Most, if not all countries have a national banking sector that is a driver of the economy, but not financial capital. This is, as we have seen, that capital which arises from the fusion of gigantic monopoly capitals of the banking, commercial and industrial sectors, which, because of its capacity to accumulate all the monetary capital and even the wages of the workers, organizes the economy around itself, that is, around the financial or banking sector, and which, because of its enormous size, can be exported abroad in colossal quantities.
The only thing of all this understanding of Lenin on finance capital that the CPG is able to take into account, either for lack of understanding of this theory or because it wants to underhandedly “adapt” Lenin’s theory to its “theory” of “the imperialist pyramid”, is the fact that a country possesses a bank. According to the CPG, and faithful to its linear and somewhat myopic analytical capacity, the fact that a country possesses a bank makes it directly an imperialist country.
Russia owns a banking sector. Therefore, it would be imperialist.
To verify the CPG assessment of Russia let us take a look at the Russian banking system and compare it with the banking systems of the imperialist countries:
Table 1: Assets of the 7 largest banks in Russia according to Banki.ru 2022 plus the total value of assets of the 359 Russian banks
In Russia there are a total of 359 banks6) with total assets in rubles of RUB 116,745,701,314,000, which corresponds to about USD 1,234,700 millions7). The largest Russian bank, Sberbank, has assets of about USD 413,410 billions. Alfa-Bank in turn has assets of USD 64,920 thousand and VTB has assets of approximately USD 209,5700 thousand. These values seem enormous.
What is the reality of banks in imperialist countries?
Let us begin by looking at the magnitudes of US banks. For this purpose we have selected from the Forbes 2023 list the 7 largest banks in the United States:
Table 2: Assets of the 7 largest U.S. banks according to the Forbes 2023 list
Since Forbes 2023 data excludes Russia and Banki.ru data is only published until 2022, we are forced to compare Russia’s 2022 data with the other countries’ 2023 data. But, for the purposes of this article, this is more than sufficient due to the sheer magnitude of the values analyzed. On such a scale, variations and inaccuracies are negligible.
The table on the left side shows that JPMorgan Chase Bank has assets totaling about USD 3,744.3 billion, i.e., it is a whopping 300% (i.e., 3(!) times larger) than all Russian banks combined! Or to put it differently, the combined assets of all Russian banks make just 30% of JPMorgan Chase bank, including the three largest Russian banks, Sperbank, Alfa-Bank and VTB. What “gigantic monopolies”! And so we can continue with the figures. Bank of America accounts for 250% of all Russian banks, Citigroup for about 190%, Wells Fargo for 150%, Goldman Sachs Group for 120%, Morgan Stanley for 90% and US Bancorp for 50% of all Russian banks.
Another factor to consider is that the total assets of Russian banks amounted to USD 3,347.72 billion in 2017. In that year, the total number of Russian banks was 614. Today, in 2023, the total assets of all Russian banks combined have shrunk by about a third (to about USD 1,234.7 billion). The difference between the total of Russian banks and the largest US banks was in 2017 smaller. The combined or total assets of Russian banks still exceeded the US monopoly banks, also the largest ones, i.e. JP Morgan Chase and Bank of America. This is no longer the case in 2023 which means that the gap between Russian banking and US banking has been on the rise.
Let us now compare Russian banks with the other imperialist banks.
The following table lists the assets of the largest banks of the imperialist countries and compares them with the assets of Russian banks as a whole. The results do not match the CPG valuations.
For example, for the case of Germany we note that Deutsche Bank’s assets account for more than 110% of the assets of the 359 Russian banks. In 2017, Russian banks still exceeded Deutsche Bank’s total assets, indicating that the gap between “big” Russian banking and (really) big German banking has widened here as well. Commerzbank’s total assets represent about 40% of the total assets of all Russian banks. The assets of EnBW Energie Baden-Württemberg8) 7%, Wüstenrot & Württembergische 5%, Deutsche Pfandbriefbank almost 5% and Aareal Bank 4% of all assets of the 359 Russian banks. Although these figures are small compared to U.S. banks or Deutsche Bank, it is remarkable that a single bank can be compared to more than 300 banks of a country, which shows that the German banking system is powerful compared to the Russian one. If we compare the largest bank in Russia with the largest bank in Germany, i.e. the “giant” Sberbank (of which we already know that 50% is state-owned) and Deutsche Bank, we see that the latter is more than three times larger than Sberbank. Commerzbank also exceeds Sberbank and represents 120% of Sberbank.
Table 3: Assets of the biggest banks of the seven imperialist countries according to the Forbes 2023 list.
The largest UK bank, HSBC Holdings, has total assets equal to 240% of the total assets of the 359 Russian banks. The same data is 150% for Barclays Bank, just over 80% for Lloyds Bankin Group, around 60% for Standard Chartered, around 10% for Prudential, over 20% for Aviva and just over 10% for St James’s Place.
If you compare the UK’s largest bank, HSBC Holdings, with Sberbank, the largest Russian bank, the figure is no less than just over 700%. In the case of Barclays, this data is over 400%. Lloyds Bankin Group’s assets is over 200% and Standard Chartered’s is almost 200% of the assets of all the Russian banks. The differences are gigantic. In the United Kingdom, too, the gap between Russian and British banks has widened.
The same trend is true for Japan, Canada, the United Kingdom and Italy… Sorry, in the case of Italy, as can be seen from the table above, this is not true. This is the only case in which the total assets of the 359 Russian banks manage to exceed an imperialist bank (see highlighted in red in the table).
What Russian “imperialism”!
The truth is that the CPG’s blunder about the Russian banking system is no longer so surprising. What is really shocking is the terrible fact that a single bank of an imperialist country is capable of outperforming the entire banking system of another country.
Is a weak banking system bad?
From the perspective of a country’s striving to be imperialist, it is certainly so. An imperialist country must have a strong banking system and a strong financial system in general because monopoly capital establishes itself in this sector to control the whole economy of the country. When the monopoly sector of the economy has under its control the reins of production and distribution of the country, the function of the State is reduced to its natural function: that of protecting private property and securing and maintaining the domination of one class over another. On the other hand, a weak banking system is a sign of three possible situations:
– of an economically weak country dependent on and colonized by finance capital (i.e. by imperialist monopoly capital),
– of a State which, despite the capitalist character of the country’s mode of production, is more or less able to intervene in the economy in accordance with the national interest,
– of both situations simultaneously.
The latter is the case in Russia.
However, from the point of view of a state’s ability to cope with the growing systemic crises currently rooted in the financial system, a weak banking system is highly desirable, unless it is controlled by the state (as is the case in Russia). However, a “weak” financial system needs to be “compensated” by a strong industry, at least if the country’s claim is to achieve increasing degrees of national independence from imperialism. In this sense, we believe that the Russian government has partly succeeded in strengthening the country’s productive capacities. Nonetheless, we would like to see this tendency much more accentuated, because in the present circumstances, in which imperialism seeks to unleash a war against Russia and China, a war that from there will spread to all the peoples of the world, Russia’s (re)industrialization efforts do not yet seem to us to be sufficient. A Russia with a strong productive base, a bank at the service of national industrial development under strong state control, is in the interest of all the peoples of the world, because a Russia capable of opposing imperialism is the greatest support that the peoples can receive in their own struggle against imperialism. It is for this reason that we find the ideas spread by the CPG extremely harmful.
Whoever has understood the above, will not be astonished by the statements of the Russian president at the XXI Congress of the United Russia party in which he pointed out that Russia will not give up its sovereignty in exchange for “sausages”. Russia will be a sovereign and autarkic power or it will not exist. Western “recipes” will not work against Russia. Russia, he also pointed out, will make all decisions on its own, without being pushed into it by the outside. Russia has the right and the vital need to be strong. The magnitude of the historical tasks facing Russia requires the unity of all patriotic forces in the country.
What kind of imperialism is that which seeks to develop a sovereign and autarkic economy and not to allow itself to be dictated by Western “recipes”?
An imperialism that is not.
In the next section we will analyze the distribution of military bases in the world.
Notes
1) Hobson, J. A., “Imperialism, a study (1902)”, James Pott & Company, 1902, p. 56 and 57.
2) Hilferding, Rudolf, “Das Finanzkapital. Eine Studie über die jüngste Entwicklung des Kapitalismus” (in English: “Finance Capital: A Study in the Latest Phase of Capitalist Development”), Dietz Verlag, Berlin, 1955, p. 445, own translation into English.
3) Hilferding, Rudolf, op. cit. “Das Finanzkapital. Eine Studie…” p. 335
4) Lenin, V. I., “Imperialism, the Highest Stage of Capitalism, a popular outline”.
5) The latest case: According to Bloomberg and the Wall Street Journal, following the closure and receivership of Silicon Valley Bank (US) and Signature Bank (US) and the bailout of Credit Suisse (Switzerland), the US financial authorities (Fed and FDIC) provided dollars to central banks in other countries: the Bank of England, the Bank of Japan, the ECB, the Bank of Canada and the Swiss National Bank. These banks will have access to hundreds of billions of dollars by the end of April to help cushion the banking crisis.
Credit Suisse was bought by UBS for only $3 billion, even though the Swiss central bank bailout had poured $100 billion into the bank, making it clear that the bank’s “hole” must have been huge and its assets highly toxic (derivatives). Credit Suisse exemplifies the whole unhealthy structure of finance in the NATO-dominated world.
6) Banki.ru, as of February 2022.
“The rating (ranking) of Russian banks by key performance indicators is calculated according to Banki.ru’s methodology using the reports of Russian credit institutions published on the Bank of Russia’s website.
The latest rating update date is February 1, 2022. According to the Bank of Russia’s decision of March 6, 2022, from February 2022 banks will not be required to publish accounting (financial) statements according to Russian standards.”
7) https://es.investing.com/currencies/usd-rub-historical-data
8) At BW Energie Baden Württemberg AG, he is responsible for managing the corporate functions of human resources, finance and liquidity, corporate communications and group development.
