After the July Revolution [of 1830], when the liberal banker Laffitte led his compère, the Duke of Orléans, in triumph to the Hôtel de Ville, he let fall the words: “From now on the bankers will rule”. Laffitte had betrayed the secret of the revolution.It was not the French bourgeoisie that ruled under Louis Philippe, but one faction of it: bankers, stock-exchange kings, railway kings, owners of coal and iron mines and forests, a part of the landed proprietors associated with them – the so-called financial aristocracy. It sat on the throne, it dictated laws in the Chambers, it distributed public offices, from cabinet portfolios to tobacco bureau posts....Owing to its financial straits, the July Monarchy was dependent from the beginning on the big bourgeoisie, and its dependence on the big bourgeoisie was the inexhaustible source of increasing financial straits. It was impossible to subordinate the administration of the state to the interests of national production without balancing the budget, without establishing a balance between state expenditures and revenues. And how was this balance to be established without limiting state expenditures – that is, without encroaching on interests which were so many props of the ruling system – and without redistributing taxes – that is, without shifting a considerable share of the burden of taxation onto the shoulders of the big bourgeoisie itself?On the contrary, the faction of the bourgeoisie that ruled and legislated through the Chambers had a direct interest in the indebtedness of the state. The state deficit was really the main object of its speculation and the chief source of its enrichment. At the end of each year a new deficit. After the lapse of four or five years a new loan. And every new loan offered new opportunities to the finance aristocracy for defrauding the state, which was kept artificially on the verge of bankruptcy – it had to negotiate with the bankers under the most unfavorable conditions. Each new loan gave a further opportunity, that of plundering the public which invested its capital in state bonds by means of stock-exchange manipulations, the secrets of which the government and the majority in the Chambers were privy to. In general, the instability of state credit and the possession of state secrets gave the bankers and their associates in the Chambers and on the throne the possibility of evoking sudden, extraordinary fluctuations in the quotations of government securities, the result of which was always bound to be the ruin of a mass of smaller capitalists and the fabulously rapid enrichment of the big gamblers.
Saturday, July 30, 2011
the bankster and the debt crisis is old, old news
Karl Marx, in The Class Struggles in France, 1848 to 1850 - Part I: