Features

The British bank HSBC (Hong Kong and Shanghai Banking Corporation) employs 260, 000 people, has offices in 75 countries, and 54 million customers. [1]
From its earliest days, it has been involved in the international narcotics trade. It was founded in the wake of the British victories in the Opium Wars (1839-1842 and 1856-1860) against China. These two wars were very important to the strengthening of the British Empire and the century and a half waning of China. Through the Opium Wars, the British Empire forced China to accept opium importations coming from British India. China tried to oppose this commerce, but British arms, backed by Washington, proved stronger. London established a colony in Hong Kong in 1865, where HSBC was created by a Scottish merchant specializing in the opium trade— the basis of 70% of Hong Kong trade with the Indies.

The British bank HSBC, which employs 260, 000 people worldwide, is present in 75 countries, and claims to have 54 million customers [2] is another example of the “Too Big to Jail” phenomenon. [3] Over the last ten years, HSBC has laundered $881 million [4] for Mexican and Columbian drug cartels that are responsible for tens of thousands of firearm related assassinations. These relations continue in spite of dozens of warnings from different US government agencies including the Office of the Comptroller of the Currency. The profits from this business are so important that not only does HSBC continue, but it has also opened specialized services in its Mexico offices where drug dealers may simply hand in stocks of cash for cleaning. [5]

From 2010 to 2013, US authorities made agreements with banks, not to prosecute them in the home mortgage and illegal foreclosures scandal. Instead, they merely had to pay a small fine. Since the outbreak of the crisis in 2006-2007, more than 14 million families have been evicted from their homes — at least 500,000 illegally. With help from social movements such as Strike Debt [6], many victims have become organized to resist the sheriffs and refuse these evictions. In addition, thousands of lawsuits have been filed against the banks.

We all know the saying, “Too big to fail”. The way governments have managed the crisis caused by the banks has given rise to, “Too big to jail,” [7] which is equally poetic! [8] Although the US government let Lehman Bros. go to the wall in September 2008, no other bank has been closed or broken-up, no directors have been condemned to prison [9]. The only exception in the western world is Iceland, where the courts have put three bank directors in prison. Larus Welding, the CEO of Glitnir, Iceland’s third biggest bank at the time, which went bankrupt in 2008, was condemned, in December 2012, to nine months in prison. Sigurdur Einarsson and Hreidar Mar Sigurdsson, the two principal directors of Kaupthing [10] were condemned to five years and five and a half years in prison in December 2013. [11]

The United States cancelled the debts of some of its allies. The most obvious instance of this kind was the way the German debt was largely cancelled by the 1953 London Agreement. In order to make sure that the economy of West Germany would thrive and thus become a key element of stability in the Atlantic bloc, the creditor allies led by the United States made major concessions to German authorities and corporations - concessions that went beyond debt relief. A comparison between the way West Germany was treated after WWII and the current attitude to developing countries or to Greece today is a telling story.

As its initial name indicates (International Bank for reconstruction and development), the World Bank (WB) had two main objectives:
1. bring financial support to the reconstruction of the countries that had been devastated by the Second World War;
2. grant loans to contribute to the development of backward countries (as developing countries were then called). The US, that call the music at the WB and on the international scene, decided that they would do without the WB for their reconstruction mission in Europe and unilaterally set up a large financial programme intended to restore the European productive apparatus in the countries within their orbit.

This February, the Solidarity Labor Commission held a two-day retreat at which we reflected on Solidarity’s labor work and the rank-and-file union perspective that has guided it for decades. This outline of a renewed strategic perspective is what emerged from our discussions. Although there is much here that is new, this perspective reflects our attempt to interpret the trajectory of union reform work since the 1980s and the political dynamics of the current period through the lens of Solidarity’s long-standing commitment to a politics of “socialism from below.”

From 1950 to 1960, having no Marshall Plan to promote their growth, the developing countries proposed that a new UN body be created, based on a “one country, one vote” system designed to facilitate loans to their industries: SUNFED (Special United Nations Fund for Economic Development). The industrialized countries were fiercely opposed to this move, and successfully imposed a counter-proposal, the International Development Association (IDA), a branch of the World Bank, thus effectively putting an end to SUNFED. [12]

The World Bank and the IMF are specialized institutions of the UN, comparable in theory to the International Labour Organization (ILA) or the Food and Agriculture Organization of the United Nations (FAO). As such, they are supposed to cooperate closely with the various UN bodies and the other specialized institutions to achieve the objectives set out in the Charter and in the Universal Declaration of Human Rights.

Contrary to common belief, the mission of the World Bank is not to reduce poverty in developing countries. The Bank’s mission, as originally conceived by the victors of the Second World War, the United States and Great Britain in particular, was to help rebuild Europe, and secondarily to promote the economic growth of the countries in the South, many of which were still under colonial rule. It was this second mission that went by the name of “development” and which constantly increased in scope. The World Bank lent money first of all to the colonial powers (Great Britain, France, Belgium) to help them more effectively exploit their colonies. Then, when these colonies became independent, the Bank made them liable for the debt that had only been contracted by their former metropolis in order to better exploit their natural resources and their population.