GUEST BLOG: Dave Brownz – Revolutionizing the Banks


Chris Trotter writes that the Reserve Bank Governor Adrian Orr could be a ‘revolutionary’ by forcing the Aussie banks to hold more funds to cover liabilities in a crisis such as that of the big bust of 2008.   Trotter thinks that this opens the revolutionary road of converting state guarantees into state share holdings. By increasing the state share on the installment plan the banks could be fully nationalized. Who knew that the state banker could have found the balls to outflank Labour on the left and give us the means to realise ‘democratic socialism’?

The problem is that there is no evidence in support of this utopia.  The massive bailouts in 2008 that rescued capitalism did not result in creeping nationalisations. The banks survived, and once profitable again, bought back their shares. Similarly, industrial corporates like General Motors, did the same. So, what is missing from this ingenious plan?

What is missing is any understanding that nationalization, even in full, by the bourgeois state is the exception to the rule of private property. The state’s role is to represent capital, facilitating and protecting its rule over labour. In crises of falling profits which disrupt capitalism’s growth, this protection may extend to nationalizing property as an emergency measure in the interests of the capitalist class as-a-whole. The point is to use the powers of the state to rescue private capital and restore its profitability. The parliamentary left has always preached that nationalization or ‘socialisation’  is the peaceful road to socialism. But after all the booms and busts and wars for greed are summed up, nationalisation has been used as a tool to allow private capital to survive and accumulate.

This is proven by the fact that the neo-liberal counter-revolution of the 80’s and 90’s acted to simultaneously nationalize banks and corporates ‘too big to fail’, while also privatizing state assets, mainly in the ‘developing world’ to extract more surplus-value to restore falling profits at home.

In Aotearoa, this is well documented as in a social laboratory. State ownership was necessary to establish and sustain the market. It provides investment and subsidies where private capital is lacking or cannot risk investment. The market was not the child of Adam Smith’s “hidden hand” but Grey’s and Vogel’s “helping hand” of colonising wars and state aid. Yet such assets in public ownership are quickly privatized when they prove profitable. Neo-liberal NZ from the 1980’s to today, is living proof of that. Therefore, reality tells us that capitalist nationalization is in the last analysis a tool of the ruling class to protect and maintain private property and private profits.

It follows that for working people to take back what is their accumulated historic labour, expropriated as profits by the capitalist class in industry, services or banking, it is necessary to replace the class system in which capital rules over labour. Working people cannot buy their future freedom on the installment plan. The Reserve Bank cannot take over the banks by creeping nationalization, because its very existence is premised on regulating the role of money as the circulation of capital stolen from workers.

At a deeper level, the Reserve Bank, merely manages the circulation of money in market exchange which itself is one moment facilitating but not adding to the production of value in the capitalist system. Even the early Labour Government, formed to divert workers into bourgeois parliament, recognised that is was necessary to “socialise the means of production, distribution and exchange” – of course, peacefully in parliament.

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A workers’ government representing the interests of all working people is not possible without their own class state. Yet they cannot create a workers’ state without overthrowing the bourgeois state through an armed revolution capable of defeating the power concentrated in the hands of that class state. A workers’ state defended by the armed workers would then be able to expropriate capitalist property and begin to plan production for need and not profit.

Dave Brownz is TDBs guest Marxist blogger because every Left wing blog needs a Marxist


  1. Thats a depressing but persuasive assessment of the actions and results of so called socialist governments past David Brownz. But It probably was not the intention of those socially leaning governments of the time that the national investments undertaken on the nations behalf would be privatised once profitable, but the opportunistic actions of subsequent capitalist oriented administrations gaining power later on.
    In our case the 84 labour government would never have been elected if the public had any understanding of what they were going to do. And they certainly knew this clearly, so it was a well kept secret from the public. What a democracy can do to prevent such a transformative and destructive deceit of the democratic system is hard to know. It was an action that might have justified the kind violence that you advocate but that isn’t likely to happen in NZ without a massive deterioration in our vision of our national self respect.
    It requires a better understanding by the whole voting public of how economics should work, and only a few are sufficiently interested or have the time to study enough to understand it all. And among those that have the interest and have taken the time to study there is almost no agreement. So the prospects for getting it right are not great.
    But please carry your recommended course of action , namely “A workers’ government representing the interests of all working people is not possible without their own class state. Yet they cannot create a workers’ state without overthrowing the bourgeois state through an armed revolution capable of defeating the power concentrated in the hands of that class state. A workers’ state defended by the armed workers would then be able to expropriate capitalist property and begin to plan production for need and not profit.” on to the stable structure you envisage after the armed takeover is complete. Would there be election ever again in the future? would everyone be allowed to vote? Would anyone be allowed to stand for election. I think the example of the USSR is likely to be repeated any time this approach is taken, and the structure you describe will only ever be able to be maintained by a continuation of violent repression , now by the state imposed on it’s population.
    It has to be done democratically if there is to be democracy in the future , and you and Chris have the task of helping educate us all so that when as seems imminent the faults of the financial and extreme capitalist lasses faire model we have been following for 30+ years cause it to collapse again , and that will get everyones interest and attention and we will have another go at getting the fundamentals structures right.
    Good luck
    D J S

  2. Yeah, well.
    The reason we have four australian banksters sucking out our bone marrow’s because we have rich bone marrow. Our stupid cockies would rather go up the back paddock and blow their brains out the window if the Hi-Lux than take direct action to protect their best interests, and by association, our best interests.
    But oh no. Just keep grinding on aye boys ?
    adrian orr’s no revolutionary. He’s just another suit stuffed with fatty organs which eats at one end then shits out the other.
    A real revolutionary would have had the banksters asset stripped then kicked out and the homeless housed. Not this fucking around.
    Welcome to Big Meh Country.

  3. Stay out of banking Dave Brownz- you put 2 and 2 together qne get five.
    Chis alludes to Jim Anderton considering how NZ might get control over the nation’s finances.
    Then Chris gives China as the case where this very maneouvre was accomplished – clever nationalisation.
    This is what he said:
    What the new communist government of China did, in the early 1950s, was to pass a law requiring all existing capitalist businesses above a certain size to make the Chinese state a 25 percent shareholder in the enterprise. Naturally, such a large shareholding would also entitle the state to be represented on the enterprise’s board of directors. As the years passed and the new regime consolidated itself, the legislation was amended constantly. Year by year, the state’s shareholding in the enterprise was increased – along with the number of its directors.

    Unsurprisingly, the value of these enterprises’ shares plummeted. Seeing which way the wind was blowing, all those Chinese capitalists with a lick of sense offered-up their business’s remaining shares to the state. The latter generously agreed to take these off their hands – albeit for a handful of cents on the dollar. In this way, China’s largest capitalist enterprises were legally, peacefully – and cheaply – acquired by the state. As an added bonus, most of the by-now-former capitalists took what was left of their money and ran – to Taiwan, Singapore and the United States.

    • This is Chump change. The US Federal Reserve Bank is the largest buyer of gold. It’s like the FED doesn’t even trust there own product.

    • Greywarbler. Yes, the Chinese CP engaged in a “protracted expropriation”. So did the Bolsheviks. The reason was that both revolutions began as national revolutions against imperialism in underdeveloped countries. To catch up with the advanced capitalist countries, and develop the economies so that socialism could be built, both attempted to keep capitalism running, allowing foreign firms to produce to take advantage of their management and technology. But this was still expropriation. It was clear to the capitalists that they had lost their power to direct the economy. But it was nothing like nationalisation on the installment plan with the capitalist’s still in power which Anderton believed possible. It was only possible because the workers and peasants had already taken power through revolutionary wars, in which the imperialists and national bourgeoisie were defeated militarily. But there was a difference in these two revolutions. In Russia it was led by workers, peasants and soldiers soviets who were clear that the new ruling class was the proletariat. In China it was led by a privileged bureaucracy at the head of a peasant army, without the active participation of proletariat whose leadership had been smashed with the connivance of Stalin in 1927. While the Bolsheviks always intended to expropriate the bourgeoisie, the Maoists thought they could form a bloc with the bourgeoisie until that bourgeoisie fled. The revolution today has to be global and led by workers and all oppressed people, organised in democratic councils or soviets so that the interests of the working masses are always served, rather than imperialist stooges, bureaucratic elites or new exploiting classes taking power away from the masses.

  4. When you mention ‘armed struggle’ many of us turn off your analysis Dave, despite Country Boy’s description of what depressed farmers do. So if we opt for Chris T’s argument we are choosing the status quo, reform of Capitalism which won’t change basic structures. CT is deluded if he thinks the cycle of ups and downs for workers will develop into a fair society long term, when we continue to be exploited. And increasing the pot an Aussie bank will hold here is going to revolutionise our economy how?

    As I indicate, the periods when the Capitalist state reforms conditions for workers, these are never guaranteed long-term because fundamentally its interests are the interests of capitalists. Even the good times for workers advantage capitalists more. Only a worker’s state can deliver a fair society and escape the vulnerability for workers embedded in the Capitalist state.

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