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posted 12 Jun 2019, 08:59 by Gerry Kangalee   [ updated 12 Jun 2019, 09:17 ]
David Walker
What do bankers and trade unionists have in common? I know that is not a matter of great concern to many people but it does offer a fascinating insight into how we, as average citizens, view two key actors in the business world. Were we to examine the operations of each in a dispassionate way, would we still view them in the same way at the end of the exercise?

Firstly what do they both do? At its most fundamental and basic level, they both provide invaluable and necessary services to businesses at large. How would any business function without the availability of finance and financial services by banks and other financial institutions? How would business function without the blue and white collar human resource that produces the goods and services that they need?

We see therefore that banks (read financial institutions at large) and trade unions deliver very similar services. Those services contribute to the successful operations of businesses and are rewarded for the delivery of said services by way of charges to businesses that affect the levels of profits achieved by those businesses. They are both irreplaceable in a modern economy.

In both cases they act on behalf of their members. Banks principally act on behalf of the owners/providers of capital to business. Trade unions act on behalf of workers who also deliver services to business. The providers of capital are mostly already wealthy individuals and shareholders of the banks. The beneficiaries of the returns negotiated by the trade unions are in the vast majority of cases, persons at the lower end of the income scale.

The level of claims by each on the revenue of a company has a profound impact on the profit attributable to that company. So given that they both provide invaluable and necessary services and that their members benefit financially from the commensurate payments by businesses, why do we regard them so differently?

Image result for bankers cartoonWhen, as recently occurred, banks announce record profits, our political leaders and we, to some extent, applaud them. This is happening in the face of a recession when we all are being asked to "tighten our belts". I've written before that far from tightening their belts, banks react to tough economic conditions by increasing the rates of interest charged to their business and other clients. For this, our leaders praise them.

Faced with the same economic conditions, workers and trade unions are expected to "be reasonable". We hear incessantly that seeking increases in pay for workers will destroy the companies that pay the workers. In difficult times, workers are expected to accept stagnant or even reduced pay and are treated as unpatriotic and unreasonable for seeking a living wage.

I am yet to hear a call for restraint by the banks. Why is their remuneration impervious to economic realities? Indeed, why is their remuneration increasing in direct opposition to the state of the economy? The same economy that justifies attacks on workers' pay routinely is used to support ever more rewards for the already wealthy owners of capital who control the banks.

There could scarcely be a better example than the recent events at Petrotrin. Faced with huge losses, management made the decision to sacrifice the workers. It was widely claimed that workers were overpaid and effectively authored their own demise by seeking better wages and working conditions. As a consequence, over 5,000 workers were sent home, the refinery mothballed and thousands more persons adversely affected.

While workers were first to come under attack, not a word was said about the number one drain on the company. Directors had borrowed twelve billion TT dollars, we've been told. Those borrowings were at an annual rate of interest of 9.75% or thereabouts. That annual interest payment was easily the biggest cause of the problems at Petrotrin.

Yet there was no effort to reduce it, or any condemnation of its excessive nature. Had workers been overpaid by more than 100% running to 500 million per year as the banks were, the trade union would have been roundly condemned. When we are charged excessive interest, as in this case, the administration doesn't bat an eyelid. Banks are allowed to bring companies to their knees and are praised for it.
Image result for trade unionists cartoonWe continue to praise the banks and their executives for extracting more and more from businesses every year in order to enhance the income of the already wealthy. We take great pleasure at the same time in condemning those in the trade unions who toil in the interests of better returns for the least wealthy in society.

I am not asking for socialist type treatment for labour. I am in fact asking you to recognise a simple truth. It is that in modern capitalist
 economies there is more in common between labour and the banks than conventionally accepted. The truth is that they are both providers of services to businesses and are a charge against profits. One is praised for maximizing the charges that they achieve regardless of the consequences. The other is condemned for doing far less. That cannot be right.

Would society and the economy not be better off with some semblance of balance in the way we view and treat with them both? Might 5,000 jobs have been saved if we treated banks and trade unions in a more equitable manner given that they are both service providers to business? At its most extreme, just as the workers were sent home, should the company not have also defaulted on their loans? Guaranteed loans do not attract rates nearing 10%.

In the light of the explanation above, I invite you to look again at your view of the roles of trade unions and banks and your relative acceptance of each.