Why Nothing will come of the Royal Commission

William Waite

With the release of the final report from the Banking Royal Commission there are justifiable demands that some serious penalties be dealt to those responsible for the misery that has accompanied the crime and misconduct of the banking and financial services industry. I am doubtful that the aggrieved public will enjoy any such satisfaction.

   The reason for the pessimism connected with this matter is explained by Douglas in his 1933 book Credit Power and Democracy -

Now by a convention, the origin of which goes back into the mists of antiquity, a debtor is the servant of his creditor until his debt is repaid, and since the banking system is the origin of modern money and never gives money, but always lends it, and since under our modern money economy we are all of us obliged to have the use of money, we are quite indisputably all of us directly or indirectly the servants of banks. … I feel sure you will agree without further argument that money at the present time is our master, and not our servant.

   Now one category of entity certainly ‘obliged to have the use of money’ is government. The international banking community watches the behaviour of governments very closely to see that they don’t overstep their position as debtors. There are probably only three actions that could be taken that would satisfy the community’s sense of justice. They are seizure of property to the extent that rich bankers are reduced to at least the ranks of wage slaves, jail time commensurate with the seriousness and number of offences committed and the cancellation of banking licences. My reading of the situation is that any attempt by public institutions, be they the judiciary, government, regulators etc. to apply these penalties would be considered by the money power as an overreach by servile elements, to be made an example of for the benefit of other (national) servants who would interfere with the power of international finance.

   For this view to be validated it is necessary to examine the mechanisms by which international finance exerts pressure on domestic policy. The relationship between governments and international ratings agencies clearly illustrates the master-servant relationship of banks and government. Apparently, ratings reflect the level of risk taken on by banks in lending to a particular entity, and the result of a downgrade for any borrower is more expensive credit. We often see the spectacle of government policy, particularly that associated with taxation, pulled around by the warnings and decrees of international ratings agencies.

   But it is probably the bad publicity governments fear more than the upshift in onerous credit conditions. After all the increase doesn’t come out of the pockets of government ministers. In short, it does not reflect well on a government if they are unable to head off a ratings downgrade. It usually comes with the charge of economic mismanagement, invariably true, though not for the reasons reported, which, in a political milieu dominated by economics is never welcome. The media, if not owned by those who own banks are up to their necks in debt, and can be relied on to reproduce whatever pro-banking message has been concocted in the board rooms of financial institutions. The government man/woman fears the negative media campaign probably more than anything else, so they are unlikely to do anything to attract the ire of those with the power to shape public relations.

   One can be sure that the international banking set, this most elite of clubs, are watching carefully the reaction of the political to the behaviour of the financial. Any serious attempt to impose on the jurisdiction of finance by bringing state power to bear on that of private banking power is likely to be interpreted as an intolerable interference by the servant in the business of the master. Methods of censure are examined above and will, I think, serve as sufficient deterrence to any serious alteration of business as usual.

   Up to this point no mention has been made of the real reason why nothing substantial can come out of the Royal Commission. Though I think it impossible that any of the three penalties mentioned will be handed down for the thousands of crimes committed against Australian law and Australian citizens, if by some miracle public demands for justice were met there would be no difference at all to the outcome. The Royal Commission never approached the problem because the purpose of the Royal Commission was to miss the point. So, you ask, what is the point that has so carefully been missed?

   The root of our dissatisfaction is that the profit of the Australian enterprise is being siphoned off by the banking system. Though the system is immoral the problem has got nothing to do with crime and misconduct in any technical sense. The financial system is empowered by licence to create debt against all our wealth. When we pledge collateral in either material or labour those things are pledged to the banking industry and they become the beneficiary of our activities without adding any real value to the relationship. There is no alternative to this for us, the people. For instance, the ABC interviews the criminal leaders of NAB and ask ‘why shouldn’t your customers go somewhere else.’ Where are they going to go? To a bank that does exactly the same thing. This is what Douglas meant by the ‘monopoly of credit.’ People, businesses and governments are forced to deal with banks because we are all ‘obliged to have the use of money.’ Since they are the only ones empowered to issue money, we are all their subjects as debtors. The Royal Commission came nowhere near this obvious problem and that was very likely the point of it.

   I’ll leave you with the quote from Antony Sutton. I recommend the entire lecture if you have a spare forty minutes - https://www.youtube.com/watch?v=hd4Q25r599U

And yet the way this world is put together it’s the Harrimans and the Hammers and the Morgans and the Rockefellers who are admired and lauded. And those who plead for human decency and state the facts of dictatorship are slanted and insulted. And we find regrettably academics falling all over themselves to perpetuate the myths.