Banks cannot be “socialised.” They are part of capitalism and will end with the coming of Socialism. Under Socialism the functions performed by the banks will not have to be performed at all. The provision of the needs of life will be simplified once the means of production and distribution are made the common property of Society as a whole. At present the workers may not go to work producing and distributing food, clothing, and so on, without obtaining the permission of the owners of the land, factories and railways. Under capitalism we have to enter into a complicated and wasteful system of negotiating wages between workers and employers, negotiating for the purchase of raw materials, and then organising for the sale of the goods, and the allocation of the proceeds as rent, interest, profit and taxes. Underneath it all is the essential feature of capitalism, that the capitalists own the means of production and the goods produced by the workers they employ. The banks exist because of the monetary system by means of which capitalism carries on all these complex relationships between the individual owners of property, between them and the workers, and between both and the State. Money and banks only exist because of the private property system. Socialism will cut out all these intermediate steps. There will be no private ownership and control of the means of production and distribution. Society through its appropriate organisations will handle the much-simplified problem of producing goods in the quantities and in the places required, and of transporting them to the places where they are needed. There will be no wages system, no rent, interest or profit—hence no monetary system—and no banks. That is why Socialists oppose schemes put forward by Lord Beaverbrook on the one hand and by the Labour Party on the other for making privately owned banks into State banks. Socialists want no banks, neither better banks nor Government banks.

That Socialists are right in saying that the way banks are run is a capitalist question, not a workers’ question, is shown by the fact that there are many State banks but no countries where the workers’ problems have been solved. Would Lord Beaverbrook be found advocating State banks if they were a Socialist idea? New Zealand’s Labour Government has just made the bank into a State bank, but the Times, quite correctly, says that “New Zealand is moving towards State capitalism.” (Times, March 31st.) That is what it is, “State capitalism,” not Socialism. That is why the Times can say that the rest of the world will follow the experiments of the Labour Government “with sympathy and interest” (March 27th), and why another capitalist paper, the Manchester Guardian (March 31st), can say that the New Zealand Labour Government’s policy generally is only following “mildly in the footsteps of Mr. Roosevelt in the capitalist United States.” They would not be sympathetic towards Socialism as they are towards State capitalism.

It is when we come to the Labour Party that we find the most mischievous propaganda of all-mischievous, that is, in relation to the propaganda for Socialism. Labour Party writers such as Mr. Francis Williams, City Editor of the Daily Herald, always represent State banks as being Socialist institutions. In his case it is done out of pure ignorance of Socialism. Yet his own arguments for State banks are enough to show that there is nothing in them for the workers. In an article in the Daily Herald on March 27th, Mr. Williams tells us that the New Zealand Labour Government’s action had the support of “large numbers of business men and industrialists “—by industrialists, of course, is meant capitalists. He also tells us that “similar proposals are now under consideration (and will be carried through shortly) by the Liberal Government of Canada.” (Our italics.) Lastly, Mr. Williams relates with pride that the State bank in Sweden, where there is a Labour Government, has been so successful that “foreign capital has rushed to Sweden on many occasions.” All that Mr. Williams has shown is that State banks are compatible with capitalism and may even be better for capitalism’s needs than private banks have shown themselves to be under changing conditions since the War. In short, neither Mr. Williams nor State banks can help us with our problem of abolishing capitalism and establishing Socialism.