I am quiet sure a common question that everyone is asking him/herself “how do these banks make money?”. And this is a question the bank owners and law makers would not be happy with you having an answer to it. Many of us have, for many years, been looking at these tall building in the cities and asking ourselves who owns these buildings, who pays for them and where did they get the money? Some of us went even further asking why the banks are so super rich and the governments they serve are so poor?
So let us start with a simple analogy here, to unpack the whole thing. For domestic robbery, let us say you have R10,000 in your pocket and you have no any immediate plans to use it. The bank offers you a 5% interest on saving. Then you agree to put away your R10,000 with them at 5% interest in a saving account. But then someone needs R10,000 to buy a small car. The bank offers the person 8% interest on loan. At 8% interest convince the person to take the loan without explaining that 5% is in fact for someone else whom this R10,000 is taken from.
A simple math is that at 8% interest on loan and 5% interest on saving the difference is 3%, (8-5 = 3%), or simply 8% of R10,000 is R800 and 5% of R10,000 is R500. So the loan would be repaid at R10,800 including an interest while the saving would be at R10500 including an interest. A surplus of R300 is for the bank (R10,800 – R10,500 = R300) marked as profit. This means the bank did not have money before the saving and it now has money after the saving and loan at hidden interest inequality. This is pure robbery!
But the banks also make more money from the transaction fees at the ATMs; from deposits and withdrawals. These fees seem small, but in number of cash transactions by millions of hard working people a day the profits are huge. These transactions are often hidden, thereby changing almost every second day or week or month. It is hard to keep record of them as they are never fixed charged and they do this deliberately to puzzle the ATM users.
In all these, there are law makers playing their part. The state bureaucrats make laws that support these robberies. Often over-populated and controlled by the very same bourgeoisies they pass laws to strangle the hard working people of their hard earned money and make way for the banks to make more money. The bourgeoisie state introduces domestic fewer laws that are supposed to regulate the banks, but more laws are passed to regulate the people. A simple law is the law that restricts people from carrying certain amount of money with them. They are advised by the law to put their money in the banks and when they put it there or withdraws it disappears. This law was passed by the bourgeoisie class in parliament!
With this system, the hard working people would continue to be poor. The banks collaborate with the state to continue to rob the people of their money and this is legalized.
Now let us look at the global banking system and how the banks and the state can put more pressure on the poor nations. First let us look at how the IMF, World Bank and Global banks work. The governments apply for a loan at IMF or WB for example. The IMF has criteria to qualify for a loan. The one that is common is that your country must undergo certain reforms first. These reforms means opening your market for outside “foreign investments” and reduce spending on social spending; cut budgets for social welfare, grants, medicines, housing, electricity and water and sanitations.
However, is there a reason for the governments to apply for IMF loans if they have to cut on the basic needs of their own people in order to be able to repay the IMF loan? It sounds pathetic but let us come closer to reasoning, why? It is simply because this is a staged situation. Many regimes came to power because they were assisted by the Western governments (CIA, Mi6, Israel, and NATO) and they are puppets of the west. So they are under huge pressure to pleasing their puppets who wants to invest in their economies. They too are under a serious pressure to creating jobs for their own citizens who are waiting enviously. And in government programmes on job creation is infrastructure developments; building of roads, telecommunication, mining, electricity supply, dams and hospitals.
The government then decides to go to the IMF or WB for a loan to be able to build these infrastructures. Because of western governments foreign policies that country becomes a target of multinational corporations – backed by intelligence and military of the western imperialism. The money is approved by the IMF or WB with strings attached; open your market for foreign investment. The loan is approved by never handed over to governments. It is instead handed over to western corporations who would be building infrastructure in that country. The country create jobs in a short run and there is no sustainability, no enough income earned from taxes because of no one is employed in a long run, even the banks takes the taxes.
This is a foreign policy and its influence on the domestic policies; foreign Policy and Profits. The only class in these poor nations is the rich elites or corporate elites. As a group, major investors and high-level executives are the wealthiest people in capitalist society. They enjoy an abundance of all the good things capitalist societies have to offer: comfort, security, entertainment, sybaritic pleasures, freedom from toil and drudgery, the finest food, palatial residences, the best educational opportunities, and so on. They benefit most from the way in which the banking system and capitalist society is organized. This is almost axiomatic. It stands to reason that in a capitalist society the class that benefits is the capitalist class.
Foreign policy is a difficult subject to grasp. It pertains to events in, or policy with respect to, countries that are often remote and distant, with which we almost always have little familiarity and no direct experience on which to draw to make sense of what’s going on. We don’t often know the history or context. For example, if you’re trying to understand the conflict in Korea between the DPRK and the Republic of Korea (South Korea), it’s helpful to know Korea’s history and the context within which critical events have developed. But if you rely on the mass news media for your understanding, you’ll very likely be presented with ahistorical analyses and facts free from context, filtered through the prism of the goals of Western foreign policy.
The corporate elite uses think-tanks, advocacy organizations, public relations, lobby groups, political marketing, the mass media and injection of its members into high-level positions in the state, to shape public policy in its interests. These interests are exploiting labor, land, natural resources, and markets—here at home and abroad—to turn a profit and expand their capital.
The corporate elite is also over-represented in key positions in the state and important public policy decision-making processes. They are in parliament and in the banking system, they reward themselves in parliament and when you go into the mines, corporations and banks you will find that they hold key positions.
Most of the people appointed to South African cabinet positions come from high-level positions in the corporate world. They have companies and invested in offshore accounts. What’s more, the corporate elite successfully initiates, modifies and vetoes public policy alternatives. It dominates the public policy sphere by sponsoring and directing an extensive network of policy-formation and advocacy organizations that press the government to adopt pro-corporate policies. IMF friends and bankers are the ones that rip the rewards – in defending their robbery they call it personal freedoms. The poor are trapped in abject poverty while the elite, through the banking system, enjoy the abundance of wealth and riches of the state.
The corporate community owns the mass media and has a vast public relations network to get its point of view across to the public. It finances political campaigns, it effect regime changes and it put miseries on the lives of millions of people. And it shapes the behavior of politicians by holding out the promise of very lucrative post-political careers in the executive suite and positions on corporate boards of directors, in the banks and companies, to politicians who champion interests of the corporate community while in power.
The Guptas and the Gerbble business families and the “state capture” proves this to be current. The relationship between the state, the banks and the corporate elites is nothing but the robbery on the poor.