The financial institutions of the People’s Republic of China, last stronghold of communism and Eden of laborers, are making the rounds to defend their huge profits. The Wall Street Journal reports that with economic growth decelerating and “public ire … mounting over the proliferation of fees,” China’s state-run banks are taking some heat.
The profits of the Industrial and Commercial Bank of China, owned by the state and often called the world’s largest bank, are up over 25 percent from just last year. The other three banks that make up China’s “big four” — Bank of China, China Construction Bank, and the Agricultural Bank of China — have enjoyed similar profit jumps.
For all of China’s economic growth in recent memory, the banks’ profits are something of a reminder to its people that a rising tide doesn’t necessarily lift all boats, at least not proportionally. Popular complaints about the banks, according to the Journal column, are related to poor service and to fees “for things as minor as changing an Internet password.”
So what are the conditions under which Chinese people — and all people — would “get what they pay for” from their financial services institutions? It may surprise some to know that this has been a central and activating question for anarchists from the birth of our movement. Anarchists have long understood money and credit to be at the center of questions about what makes a just, equitable and prosperous society.
Anarchy, as the manifestation of anarchism in practice, cannot and will not be a static condition — it doesn’t prescribe a particular or fixed scheme of organization for banks or credit. Indeed it resists both in theory and practice all attempts to standardize or make uniform the principles of organizing, whether in finance or elsewhere.
Standing opposite the suffocating centralization that attends the exercise of coercive authority, market anarchism divides and distributes power through society and in accordance with individual rights. Our free market is not the one trumpeted on CNBC’s Street Signs or by the Heritage Foundation. It is not a synonym for contemporary global capitalism.
For market anarchists, “free market” is very simply a phrase that conveys an economic system governed by free, mutually beneficial exchange, in which no individual or group enjoys special privileges that impede competition or allow them to forcibly monopolize land or resources. Even “money,” the commodity used to represent wealth and facilitate exchange, is itself a resource that ought to remain within the realm of competitive endeavor.
Nineteenth century anarchist Dyer D. Lum, committed to what he styled “the emancipation of credit,” argued that “the medium of exchange [should] be shorn of the difficulties which prevent labor from freely capitalizing products.”
He was of the opinion, shared by many American anarchists of his time, that the money monopoly — forged through state intervention on behalf of powerful interests — was among the principal impediments to a fair deal for labor. Surely a real free market in currency, Lum maintained, would not redound to the benefit of the powerful banks; their power instead followed from a paucity of competition, caused by regulatory barriers and fiat currency, allowing for usurious interest and extortionate fees.
China’s bank are a shining (or contemptible, as the case may be) example of just that lack of competition — and they’re not unique among their counterparts in other countries around the world. The only “reform” that banking needs is total emancipation from the plutocratic shackles of the state, the agency of violence that allows and upholds all monopoly.