J. Brudny
The Defence, Security and Resilience Bank (DSRB) is a war bank, a financial wing of NATO where governments pool tax dollars together with private capital to expand funding to the arms industry. Its purpose is simple: to enable NATO’s member countries to hit the military spending target of 5 percent of GDP, equal to $150 billion a year for Canada, at the expense of people’s needs such as vital social services.
The minds behind this project are not nurses, teachers and other workers. They are the biggest banks and arms manufacturers in the world, such as JPMorgan Chase which served as a key advisor in the plan for a NATO bank. Just recently, JPMorgan announced investments amounting to $1.5 trillion in the arms and critical minerals industries in order to “ensure the security” of the NATO bloc.
In other words, those who stand directly to gain from the drive to war are writing NATO policy.
JPMorgan boldly states that the goals of these investments span from reducing “excessive regulations [and] bureaucratic delay” to adjusting “an education system not aligned to the skills we need.” Simply, JPMorgan is using targeted investment to strip away what limited democratic oversight of the economy is still left, in favour of direct governance by finance capital.
Coupled with this, JPMorgan is seeking reforms to the education system tailored to the needs of finance capital, particularly weapons and technology monopolies. JPMorgan isn’t alone in this vision for the future, three of the five big Canadian banks – RBC, Scotia and CIBC – have all signed on to sponsor the DSRB, signalling their support for JPMorgan’s vision.
As finance capital becomes increasingly reliant on war and genocide to solidify its influence and control of markets abroad, there is a parallel development of an offensive against democracy and workers here in Canada. The DSRB will play a key role in this offensive.
According to the policy paper drafted by NATO based on JPMorgan’s insights, governments like Canada “spend too much” on healthcare and education. They argue that democratic budget processes are “too slow” and “too political” to meet NATO’s needs.
Translation: when people demand housing, hospitals, and schools, it gets in the way of weapons contracts. So they want to bypass the public.
Instead of Parliament debating military spending openly, the DSRB will guarantee profits for private banks and arms manufacturers through a new financial machine designed to run above democratic control. They are telling us plainly: democracy is an obstacle to their profits.
We can also see that the DSRB is response to successful organizing efforts, such as Scotiabank’s recent divestment from Elbit Systems as a result of a sustained BDS campaign. By using the DSRB as an investment mechanism instead of investing directly, private banks and corporations avoid public backlash and receive cover from the smoke screen of a multi-national financial institution which will make “following the money” much more difficult.
So how will the bank work?
First, member states will provide paid-in capital. That means tax dollars are fed directly into the bank. Second, the bright minds at NATO propose using seized Russian assets as seed money. This is presented as clever accounting, but in reality, it deepens global instability and escalates a conflict between nuclear powers.
Using tax dollars from member states, the DSRB will offer low-interest loans to private corporations, thus expanding a dangerous cycle of militarism and violence on the public dime. Most importantly, the DSRB will underwrite risk for commercial banks. This means that if a private bank wants to lend to an arms company and the deal looks risky, the DSRB steps in to guarantee it. If profits are made, corporations keep them. But if there are losses, they are borne by taxpayers – meaning all the rest of us.
NATO and JPMorgan call this a “counter-cyclical safety net.” This is a fancy way of saying that during economic downturns, when workers are losing jobs and governments claim there is no money for social programs, military spending will be locked in and protected by DSRB investment agreements.
Hospitals can close. Unemployment can skyrocket. But weapons contracts will be stable.
The goal is to secure a AAA credit rating so the bank can borrow cheaply on global markets even if many of the DSRB’s member countries do not have AAA ratings themselves. In other words, the stronger states guarantee the debts of the weaker ones, so the entire NATO bloc can expand arms production and foment global military conflict.
These debt guarantees will surely come with stipulated concessions, allowing the most powerful NATO States to essentially determine the internal political and economic policies of weaker partners. This is just one of the many demonstrations of the unequal dependencies within the NATO bloc, which situates the US on top, while everyone else vies for position.
We can see the most extreme manifestation of these unequal dependencies in the dismemberment of Ukraine in the blender of imperialist war. NATO has made good on its promise to “fight Russia down to the last Ukrainian,” which is currently resulting in state sanctioned kidnappings of military aged men in Ukraine in order to feed conscription.
While families are torn apart by this NATO-proxy war, the US recently signed ownership of Ukraine’s critical minerals over to itself, laying bare the real motivation to continue the war. For those in the middle ranks of NATO, such as Canada, no amount of maneuvering between the US and EU can avoid such a fate, which is endemic to NATO’s imperialist project.
With the ongoing drive to war as a backdrop, the Ontario provincial government put together a bid to host the DSRB here in Toronto – it is over 100 pages long, detailing tax breaks and other incentives to be given to the bank if Toronto is selected as the host city. In the report, we are told that military spending creates jobs and boosts the economy.
Even if this were true, we would reject it, because prosperity built on destruction, the deepening of Canadian imperialism, and the militarization of the economy is not prosperity that working people, or any people of conscience for that matter, can accept.
But it’s not true.
Military spending channels public money into corporate coffers. It does not circulate through communities the way healthcare, housing or education spending does. Weapons systems are capital-intensive, secretive and dominated by a handful of giant firms, the majority of which are based in the US.
Carney, Ford and Chow have all echoed claims that this war bank scheme will create thousands of jobs, but this is highly dubious. A study just released by Brown University in Rhode Island demonstrates that military spending is inefficient for job creation. The study, an update on a report from 2023, shows that military spending – including both government defence spending and various private military industries – produces an average of five jobs per $1 million in spending, including both direct jobs and jobs in the supply chain.
By contrast, thirteen jobs are created for every $1 million in education spending – nearly three times as much employment. Healthcare spending creates 84 percent more jobs than military spending, while infrastructure and clean energy create from 24 to 64 percent more.
Even on the government’s own terms, the DSRB fails. It will not solve the housing crisis. It will not lower grocery prices. It will not strengthen public healthcare. Rather than providing more of what workers need, the result of this NATO war bank will be a wealth transfer of billions of dollars from working people to multinational arms corporations guaranteed by the government, while locking Canada into permanent war footing.
But the DSRB is not inevitable.
It depends on public consent, quiet media coverage and the assumption that we will not notice. Therefore, we must expose it. We must oppose it. We must demand that public wealth serves people’s needs, not the profits of banks and arms manufacturers.
Whereas the DSRB represents a deliberate attack on democracy and the working classes – both at home and abroad – by finance capital, the working class and all people of conscience in Canada must respond with a broad, anti-monopoly, anti-imperialist alliance. This alliance must be comprised, first and foremost, of the peace movement and the labour movement, united with all those who are being squashed by the drive to war.
If the DSRB finds its home in Toronto it will create a long-term link between the city, its workers and NATO-imperialism. This poses serious roadblocks for the peace and labour movements to advance an agenda based on class struggle, anti-imperialism and internationalism, which is desperately needed to stave off the drive to war. Therefore, our demands must be clear:
NO WAR BANK IN TORONTO! CANADA OUT OF NATO!
The author is a member of the steering committee of the Toronto Association for Peace and Solidarity
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