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Rediscovering the Great British Republican Tradition


For a Civic and Constitutional Republic


Issue No 50 Friday 30 October 2009




This week 

·        Why The Banks Can Blackmail Us

·        The Extraordinary True Recent history of   Afghanistan.




News Stories

Highlighting news stories important to the Civic Republican view, particularly those that are overlooked or little covered in the main media.





·        Why The Banks Can Blackmail Us



In the last issue Republican Party Newsletter cited the comments that Dr Rowan Williams, the Archbishop of Canterbury, made on BBC Newsnight’s “Aftershock” edition, screened in September. The archbishop was participating in a reflective discussion on the aftermath of the onset of Great Financial Crisis which referenced particularly the social and cultural aspects. With him in that fascinating discussion was the playwright, David Hare, whose most recent play The Power of Yes opened at the National Theatre’s Lyttelton Theatre in London at the beginning of October.

Mr Hare’s play concerns the current Great Financial Crisis and during the Newsnight programme he expressed some views on the crisis that are worth repeating here. The archbishop with whom he was in conversation was not afraid to go into the moral aspects of the affair and neither was David Hare. Not everything he said was original but he put a different slant on the crisis and the behaviour of the banking industry. He used the word “blackmail” in relation to the tactics of the bankers and this is surely not too strong a word in this context. The following is a transcript of part of his contribution to the discussion




‘We're now victims of a .. form of blackmail. A year ago we were being blackmailed by the financial institutions which essentially said.

“You have to offer us socialist intervention in order to save the entire capitalist system and you have no choice. And if we go down the rest of the economy will go down with us and we will drag you down”.

Now we're being told by the bankers that

“You have to leave us alone to go back to the old hocus-pocus and if we can go back to the old hocus-pocus we can’t get things going again”

At the moment there aren’t any politicians who are willing seriously to take on the blackmail. It's like a trade union - the financial industry at the moment, it's far more powerful than the miners were in the 1980's. This is a trade union that is holding the country to ransom and saying that

“If you start regulating us you will end the creativity that creates the prosperity in this country”

And I don't think politicians on either of the main front benches are willing to stand up to that blackmail.’


David Hare stresses the power that corporate finance has in our society and the hold it has over democratically elected politicians. But it would be wrong to simply imagine that this is because the politicians we have at the moment are particularly lacking in backbone. There is something far more fundamental at work here. Politicians are scared of bankers for reasons that are built into our current political structures.




The fundamental problem is that we rely too heavily on democracy and democratic leaders to govern the country. Democracy is and must be an essential aspect of any modern state (whether republic or parliamentary monarchy) but we need more than just democracy if we are to develop a just and equitable society. We need to develop our civil institutions far more than at present. We need to restore them to the prominence that they once enjoyed and to enhance their standing and influence. Without going into the details of how this should be done here, it broadly means developing both parts of our civil institutions – the civil society and the civil service. Both of these have been the subject of more and more attacks of recent years and their position has been substantially eroded accordingly.

Many people have allowed themselves to be educated into the idea that we should be suspicious of the civil society and the civil service even to the point of viewing them as threats. This view has gone hand in hand with an ever greater dependency and belief in democracy as the way to solve all our problems. The supreme irony in this is that just as our political dependency on democracy has magnified so our belief in our democratic politicians has crumbled. The expenses scandal of the summer of 2009 was a symptom not the cause of this. The cause is of much greater depth and longstanding. Part of the problem is that we have become like democracy junkies. The more democracy we have, or think we have, the more we seek to experiment with more and different democracy. But we never try to kick the habit.




There are numerous problems that can be associated with this dependency on democracy, but the one that is most pertinent to the discussion of the Great Financial Crisis concerns the relationship that democratically elected leaders have to corporate finance – the banking industry. A democratic politician is dependent in the first place for their position on the electorate that elected them. But this fact creates a fundamental and very human sense of insecurity in the minds of our politicians, for this electorate can change its mind for all sorts of reasons that may or may not be quite beyond control of the politician. Where are our democratic leaders to turn for assurance? The answer is as old as modern democracy. They turn to corporate finance.

The only other substantial forces within society to which they might look for support are those to which reference as already been made – those that make up the civil society The civil society is that collection of disparate non-democratically-elected institutions that hold power and influence. But the problem here is that these groupings do not always see their interests aligning with democratic politicians. And for good reason – they do not owe their existence to the politicians, nor for that matter to the electorate.

This is the very crux of the matter, for corporate finance does owe its existence to the political elite. But we need to understand exactly how this comes about. It is all about the creation of money. Corporate finance creates most of the money in our economy. But there is absolutely no reason why they should have this privilege. It is conferred on them by the government – by the democratic leaders. The government could itself create the money (as it has done exceptionally with the “quantitative easing” experiment) but it chooses not to do this. It shifts the power of money creation to private banking.

The result is that private banking has an outrageous amount of power. But it has to depend on the government for this power. There is nothing in the nature of banks that makes their holding of the power to create money inevitable. This is the nature of the compact that exists between democratic leaders and corporate finance and that has been ruining our economy since the industrial revolution causing crisis after crisis. The current crisis is only the latest on many such down the centuries and all have the same root – the overwhelming power of corporate finance.




But why are not civil society institutions subject to the same tendency to get into bed with bankers? This is all down to the mechanism by which they hold power and influence. They do not suffer the insecurity of democratic politicians. Consequently they can take a radically different attitude. The civil society by its nature is not at the behest of corporate finance. We saw this in a small way (see RPN no 48) which discussed the behaviour the head of the Bank of England, Mr Mervyn King, compared with that of the elected heads of the government. Mr King, simply by being free of the needs to please an electorate in order to retain his position, is capable of taking a longer perspective. This of course does not mean he is always right but it does mean he stands a better chance of being right.

Democratic politicians do not take an objective, independent view of banking because they are strictly beholden to the banking industry. This is why the “blackmail” that David Hare refers to goes on and on.

Democracy and plutocracy have long been bedfellows. We will never see a change in this as long as democracy remains the only political concept that we rely upon in our political culture. We can only change this by a constitutional change that will give proper weight to not only democratic institutions but civil institutions as well



Recommended article of the week




·        The Extraordinary True Recent history of Afghanistan.


This is the third part of the history of post WW1 Afghanistan unearthed by documentary film maker, Adam Curtis

Read Article


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……. …….until next time