While last night’s vote to approve the health bill marks the end of the parliamentary road – in more ways than one – the future of the NHS is far from being a done deal.
Only royal assent is needed to complete the legislation that brings competition right into the heart of the National Health Service and threatens its future.
And the gushing warmth of the parliamentary congratulations to the Queen on her diamond jubilee – with Ed Miliband suggesting to David Cameron that they should stand to applaud - ensures that happens very soon.
Living in the forlorn hope that Labour will repeal the bill is a waste of time. The ConDems actually built on what New Labour had done, especially in relation to virtually independent foundation trusts.
In any case, we can’t afford to wait until the general election of 2015. For the vast majority whose lives, literally, are bound up with the not-for-profit institution set up in 1948, defence of the principles of universal health care must be along a new path.
The same is true for pensions. Unions yesterday lost a legal battle to stop the government slashing up to 20% off public sector pensions by switching to the consumer price index instead of the normally faster-rising retail price index to calculate cost-of-living rises.
Siding with the Coalition, Master of the Rolls, Lord Neuberger, put it like this: “The government clearly believed the state of the economy was grave, and that any savings which could properly be made should be made – as soon as possible.” Unions are considering an appeal, but they’ll be wasting their time, and their members’ money.
The state of the capitalist economy is worse than grave, and the UK government, like most throughout the world, is willingly submitting to the relentless logic of contraction expressed through the simple measure of the credit rating calculated by agencies representing investors on the global capital markets.
Two of the three - Fitch and Standard & Poor – have already threatened to downgrade Britain’s AAA rating if the Coalition’s intensifying drive to cuts and privatisation continues to fail to deliver. The growth promised in last year’s budget hasn’t materialised, so the austerity assault will be ramped up in today’s budget – despite it deepening the recession.
Everything that can be handed over to the for-profit sector will be, and the latest victim is the handling of emergency calls to ambulance, fire and police, soon to be joined by the roads.
Simon Reed, vice-chairman of the Police Federation, which represents rank-and-file officers, warned that the momentum towards outsourcing was gathering pace. “This is the drip, drip, drip of privatisation,” he said. “They move in on something that might look like a good idea, and before we know it they are working in vast areas of British policing.”
Just as in the revolts of the Arab Spring, the police will soon be faced with a three way choice: to side with the repressive state forces seeking to preserve the status quo; to stand aside as new democratic forces arise; or to join with them in people's assemblies formed from workers in factories and offices, the professions, school and college students the unemployed, pensioners, community groups.
With the state’s forces ranged against the interests of the majority, and the parliamentary process a cul de sac, these new assemblies will become the focus for the democratic process that makes and carries out decisions in the interests of the people and small businesses.
They will work to identify and satisfy the unmet needs of the local population with respect to nutrition, housing, clothing, health, energy, safety, communications, transport, education and self-development, culture, sport, recreation, arts, entertainment, social support including security in older age.
And, as the democratic expression of the majority, they will give themselves the power to acquire the resources, including land, from their present owners in order to satisfy needs. That’s the best way to respond to what happened in Parliament yesterday.
Gerry Gold
Economics editor
Wednesday, March 21, 2012
Tuesday, March 20, 2012
Market state wrecks public services
The ConDems’ health bill is part of a major shift in the role of the state that dates back to the Thatcher period and the onset of corporate-driven globalisation in the early 1980s. Rather than a roll-back of history, we need real alternatives to what is effectively a market state.
As local councils struggling with reduced budgets prepare to “outsource” huge swathes of their services, and GPs line up to commission health services from all and sundry, the so-called “public services industry” (PSI) is licking its lips.
The PSI is made up mostly of commercial companies, many of them global operators like Serco, as well as some “third sector” voluntary, non-profit organisations. Together they take taxpayers’ money in return for providing services formerly delivered by the state
By 2007, driven by the Blair governments, the PSI had grown to mammoth proportions (link) with revenues of £80 billion year, representing 6% of the economy and employing 1.2 million people. These figures are undoubtedly far higher now.
Lobbying organisations such as the CBI Public Services Strategy Board, the PPP
Forum, the Business Services Association and the NHS Partners Network (which is actually part of the NHS Confederation) have developed close relations with government and the media.
Contractors have recruited many former government ministers and senior civil
servants as directors and advisors. Former health secretary Alan Milburn took several jobs with private health companies after leaving office.
The NHS concluded a contract with Bridgepoint Capital’s daughter company, Alliance Medical, six months after Milburn joined the parent company. Under the contract, Alliance Medical agreed to supply 130,000 MRI scans, of which fewer than half were eventually used. The government was nevertheless compelled to pay the full £16m contract price. The full scale of the revolving door between Whitehall and big business was revealed by Transparency International in its report, “Cabs for hire”.
Failure by contractors in areas like health service data management, the upgrade of the London Underground and care homes has left the state to pick up the financial pieces. Twenty-two hospitals face bankruptcy because they cannot meet exorbitant “private-finance initiative” contracts. Even the ConDems have had to come to the rescue with £1.5 billion of taxpayers’ money.
The ConDems’ bill to restructure the NHS in England is the latest chapter in a 20-year journey from a planned system to a competitive market for the supply of health care services. This began with the development of the internal market in the 1990s and the New Labour government extended it with the introduction of “patient choice”, foundation trusts, payment by results and independent sector treatment centres (ISTC).
There are nearly 35 ISTCs now operating alongside the NHS, carrying out surgical and other medical treatment on the basis of local contracts. Information about ISTCs is hard to come by on the grounds of “commercial confidentiality”, but a British Medical Association report says:
“The BMA is concerned because what evidence does exist suggests that where patients’ care is bought and sold, and where hospitals, doctors, nurses and carers have to compete with one another like businesses, we find poorer health outcomes for patients, lower quality care, rising bureaucracy and the erosion of relationships where co-operation is replaced with competition.”
As the state’s role is to enhance the development of capitalism, none of this should come as a surprise. As opportunities for making profit out of producing things declined in Britain, markets in public goods emerged to compensate. The private sector in turn drove down wages and conditions when they took over. Now the ConDems plan to drive down wages in the public sector to create a “level playing field” with big business.
Outsourcing state services is a project that all the major parties have championed. So returning to some mythical golden age of state ownership and provision is impossible. Instead, we need strategies aimed at ending the rule of the market state altogether, with policies and plans that shape a democratic future beyond profit and capitalism.
Paul Feldman
Communications editor
As local councils struggling with reduced budgets prepare to “outsource” huge swathes of their services, and GPs line up to commission health services from all and sundry, the so-called “public services industry” (PSI) is licking its lips.
The PSI is made up mostly of commercial companies, many of them global operators like Serco, as well as some “third sector” voluntary, non-profit organisations. Together they take taxpayers’ money in return for providing services formerly delivered by the state
By 2007, driven by the Blair governments, the PSI had grown to mammoth proportions (link) with revenues of £80 billion year, representing 6% of the economy and employing 1.2 million people. These figures are undoubtedly far higher now.
Lobbying organisations such as the CBI Public Services Strategy Board, the PPP
Forum, the Business Services Association and the NHS Partners Network (which is actually part of the NHS Confederation) have developed close relations with government and the media.
Contractors have recruited many former government ministers and senior civil
servants as directors and advisors. Former health secretary Alan Milburn took several jobs with private health companies after leaving office.
The NHS concluded a contract with Bridgepoint Capital’s daughter company, Alliance Medical, six months after Milburn joined the parent company. Under the contract, Alliance Medical agreed to supply 130,000 MRI scans, of which fewer than half were eventually used. The government was nevertheless compelled to pay the full £16m contract price. The full scale of the revolving door between Whitehall and big business was revealed by Transparency International in its report, “Cabs for hire”.
Failure by contractors in areas like health service data management, the upgrade of the London Underground and care homes has left the state to pick up the financial pieces. Twenty-two hospitals face bankruptcy because they cannot meet exorbitant “private-finance initiative” contracts. Even the ConDems have had to come to the rescue with £1.5 billion of taxpayers’ money.
The ConDems’ bill to restructure the NHS in England is the latest chapter in a 20-year journey from a planned system to a competitive market for the supply of health care services. This began with the development of the internal market in the 1990s and the New Labour government extended it with the introduction of “patient choice”, foundation trusts, payment by results and independent sector treatment centres (ISTC).
There are nearly 35 ISTCs now operating alongside the NHS, carrying out surgical and other medical treatment on the basis of local contracts. Information about ISTCs is hard to come by on the grounds of “commercial confidentiality”, but a British Medical Association report says:
“The BMA is concerned because what evidence does exist suggests that where patients’ care is bought and sold, and where hospitals, doctors, nurses and carers have to compete with one another like businesses, we find poorer health outcomes for patients, lower quality care, rising bureaucracy and the erosion of relationships where co-operation is replaced with competition.”
As the state’s role is to enhance the development of capitalism, none of this should come as a surprise. As opportunities for making profit out of producing things declined in Britain, markets in public goods emerged to compensate. The private sector in turn drove down wages and conditions when they took over. Now the ConDems plan to drive down wages in the public sector to create a “level playing field” with big business.
Outsourcing state services is a project that all the major parties have championed. So returning to some mythical golden age of state ownership and provision is impossible. Instead, we need strategies aimed at ending the rule of the market state altogether, with policies and plans that shape a democratic future beyond profit and capitalism.
Paul Feldman
Communications editor
Monday, March 19, 2012
Tory master plan for a new social order
“Our school is being absolutely bullied, and we are sick to death of it”, said one parent outside Downhills Primary School in Tottenham, North London, after the sacking by the government of the entire board of governors. “Absolutely appalling. Almost like a dawn raid. We live in a democracy, I thought,” said another.
Teachers, parents, councillors, the local MP and the (former) governors at the school are resisting a decree by Michael Gove, the education secretary, for the school to be transformed into an business-sponsored Academy. A plan for improving Downhills was in place and working, say campaigners, and an Ofsted inspection in September bore this out.
The Academy programme, together with the encouragement of so-called Free Schools, is the principal way in which the government is fragmenting — perhaps “fracturing” would be a more accurate word – the state education system. Academies, which are better resourced, will inevitably lead to even greater social divisions as parents try to get their children into the best schools.
The old arrangement of co-operation between schools within a local authority is rapidly being replaced by competition between them. Running parallel to this assault on the state schools is the opening up of the National Health Service to the market place and to the private sector. Their plans require that services and courses of treatment be put out to tender. This will inevitably lead to the dismantling of the old NHS as a universal provider of healthcare at the point of need, as different suppliers compete for business for profit.
In its haste to transform both basic education and health provision, the ConDem coalition has been forced to face down almost universal condemnation of its plans by the professionals who work in the services. Only last weekend, in a poll conducted by the Royal College of Physicians, seven out of 10 hospital doctors wanted the health and social care bill to be withdrawn. In fact the entire medical community is almost unanimous in its opposition.
So why is the coalition government ignoring health and education professionals? We were given a clue over the weekend when it announced that national pay rates for teachers, nurses and civil servants (among others) were to be scrapped. Workers in poorer parts of the country will have their pay frozen until they come into line with local private sector rates.
In the name of “more flexibility”, “genuine decision-making at the local level” and a “modern and responsive work-force”, the government is in fact driving fast towards a society where trade unions are sidelined, an atomised society divided in countless ways, but especially in the quality of health care and education on offer to different income groups.
Driven by the rolling economic crisis and by private sector outfits expressing their “dismay” at the quality of education and demanding a slice of the NHS and education budgets, the government is feeling its way towards a new social order with tax cuts for the rich, unemployment and poverty for the working-class youth. As a statement from the Anti-Academies Alliance puts it: “There will be winners and losers, mergers and acquisitions and fear and uncertainty as the grip of corporate raiders tightens on our schools”. And on our NHS it could be added.
Looking to the Labour Party for leadership, as most of the trade union leaders still do, is the road to ruin. The last Labour governments, after all, developed the Academy programme and accelerated the privatisation process in schools and the NHS. Labour's priority, like that of the Tories and the Lib Dems, is to save the capitalist system whatever the human cost.
So how else can the gathering opposition to this government be manifested except through local people’s assemblies where all community groups — including parents, teachers, health workers and users of NHS services — can work out new policies based on the needs of the people in general? A mass challenge aimed at replacing Tory rule for good is the only option left.
Peter Arkell
Teachers, parents, councillors, the local MP and the (former) governors at the school are resisting a decree by Michael Gove, the education secretary, for the school to be transformed into an business-sponsored Academy. A plan for improving Downhills was in place and working, say campaigners, and an Ofsted inspection in September bore this out.
The Academy programme, together with the encouragement of so-called Free Schools, is the principal way in which the government is fragmenting — perhaps “fracturing” would be a more accurate word – the state education system. Academies, which are better resourced, will inevitably lead to even greater social divisions as parents try to get their children into the best schools.
The old arrangement of co-operation between schools within a local authority is rapidly being replaced by competition between them. Running parallel to this assault on the state schools is the opening up of the National Health Service to the market place and to the private sector. Their plans require that services and courses of treatment be put out to tender. This will inevitably lead to the dismantling of the old NHS as a universal provider of healthcare at the point of need, as different suppliers compete for business for profit.
In its haste to transform both basic education and health provision, the ConDem coalition has been forced to face down almost universal condemnation of its plans by the professionals who work in the services. Only last weekend, in a poll conducted by the Royal College of Physicians, seven out of 10 hospital doctors wanted the health and social care bill to be withdrawn. In fact the entire medical community is almost unanimous in its opposition.
So why is the coalition government ignoring health and education professionals? We were given a clue over the weekend when it announced that national pay rates for teachers, nurses and civil servants (among others) were to be scrapped. Workers in poorer parts of the country will have their pay frozen until they come into line with local private sector rates.
In the name of “more flexibility”, “genuine decision-making at the local level” and a “modern and responsive work-force”, the government is in fact driving fast towards a society where trade unions are sidelined, an atomised society divided in countless ways, but especially in the quality of health care and education on offer to different income groups.
Driven by the rolling economic crisis and by private sector outfits expressing their “dismay” at the quality of education and demanding a slice of the NHS and education budgets, the government is feeling its way towards a new social order with tax cuts for the rich, unemployment and poverty for the working-class youth. As a statement from the Anti-Academies Alliance puts it: “There will be winners and losers, mergers and acquisitions and fear and uncertainty as the grip of corporate raiders tightens on our schools”. And on our NHS it could be added.
Looking to the Labour Party for leadership, as most of the trade union leaders still do, is the road to ruin. The last Labour governments, after all, developed the Academy programme and accelerated the privatisation process in schools and the NHS. Labour's priority, like that of the Tories and the Lib Dems, is to save the capitalist system whatever the human cost.
So how else can the gathering opposition to this government be manifested except through local people’s assemblies where all community groups — including parents, teachers, health workers and users of NHS services — can work out new policies based on the needs of the people in general? A mass challenge aimed at replacing Tory rule for good is the only option left.
Peter Arkell
Thursday, March 15, 2012
'Poverty Games' comes to Glasgow
Visitors from Vancouver will join local people to carry the Poverty Olympics Torch in Glasgow's East End today, protesting at scandalous profiteering and evictions, as the city council implements its corporate vision for the Commonwealth Games in 2014.
The Poverty Olympics were launched in Canada's seventh largest city when the Winter Olympics of 2010, staged with the usual promises of regeneration and positive legacy, went down the same path. There is particular local anger that promises to build housing for the homeless never materialised.
As London braces itself for the Olympic onslaught, the same scenario is playing out there. The benefits will be entirely for the corporations while the £24bn cost will be paid by the public and in particular Londoners. As to the much-vaunted “legacy” cliaims, a report from global real estate firm CBRE states: "The ... greatest legacy will be the land that was assembled to host the Games thereby changing the landscape of East London.”
The report cites 4 million square feet of commercial space at Stratford, in addition to the massive Westfield Centre, private housing for sale by Inter IKEA on a site next the Olympic Park and the sale of the Olympic Athletes Village to a Qatari developer.
Meanwhile, tenants in London are being priced out of their homes. Landlords are using six-month shorthold tenancies to get tenants out in time for the Olympics, or even telling them they can stay, but vacate for the Olympic period. Monthly rent on a two-bedroom flat in Tower Hamlets or Hackney would normally be about £1,400; now they are being advertised as high as £7,500 a week to attract wealthy tourists coming to London for the Olympics.
In Glasgow, families, small businesses and the Accord Centre for people with learning disabilities, have been displaced to make way for the Commonwealth Games. The treatment of the poor and the rich by the council could not be more different.
Wealthy Mayfair property developer Charles Price bought a parcel of land in Dalmarnock that was already earmarked for the Games for £8 million sometime between 2002 and 2005. The council could have put a compulsory purchase order on it. Instead they paid £17 million; with £3m VAT that's £20 million pounds of public money.
Readers of this blog will know about Margaret Jaconelli and her family, who held out for months refusing to leave her flat because the council offered her a paltry £30,000, not enough to buy a flat anywhere in the city. In the end she was carried out by force, and she has still not received any compensation.
Plans for the area after the Games include a 160-bedroom hotel, a supermarket, various food outlets (you can guess which ones) and executive apartments priced will be well beyond the pockets of hard-pressed East Enders.
Modern Olympics and Games are in reality state-financed and public-subsidised land grabs, and regeneration is a myth. Any developments that are of benefit to the public –schools, hospitals - remain locked into the public/private partnership model, where the profit is privatised and the risk socialised.
The local authority - whether in Vancouver, London or Glasgow, buys land at inflated prices from developers, and uses compulsory purchase powers to evict householders, allotment holders or small business people who can't afford lawyers.
The money is all up front from the people's purse, but the benefits are nebulous and mainly unrealised. They pay to recapitalise derelict land and build new infrastructure, then the corporations move in.
The Olympic and Commonwealth Games have moved far away from sporting territory. It's time to boycott them entirely and focus instead on taking back control of our communities, and our sports facilities, making sure the majority benefit and not the wealthy few.
Penny Cole
Environment editor
The Poverty Olympics were launched in Canada's seventh largest city when the Winter Olympics of 2010, staged with the usual promises of regeneration and positive legacy, went down the same path. There is particular local anger that promises to build housing for the homeless never materialised.
As London braces itself for the Olympic onslaught, the same scenario is playing out there. The benefits will be entirely for the corporations while the £24bn cost will be paid by the public and in particular Londoners. As to the much-vaunted “legacy” cliaims, a report from global real estate firm CBRE states: "The ... greatest legacy will be the land that was assembled to host the Games thereby changing the landscape of East London.”
The report cites 4 million square feet of commercial space at Stratford, in addition to the massive Westfield Centre, private housing for sale by Inter IKEA on a site next the Olympic Park and the sale of the Olympic Athletes Village to a Qatari developer.
Meanwhile, tenants in London are being priced out of their homes. Landlords are using six-month shorthold tenancies to get tenants out in time for the Olympics, or even telling them they can stay, but vacate for the Olympic period. Monthly rent on a two-bedroom flat in Tower Hamlets or Hackney would normally be about £1,400; now they are being advertised as high as £7,500 a week to attract wealthy tourists coming to London for the Olympics.
In Glasgow, families, small businesses and the Accord Centre for people with learning disabilities, have been displaced to make way for the Commonwealth Games. The treatment of the poor and the rich by the council could not be more different.
Wealthy Mayfair property developer Charles Price bought a parcel of land in Dalmarnock that was already earmarked for the Games for £8 million sometime between 2002 and 2005. The council could have put a compulsory purchase order on it. Instead they paid £17 million; with £3m VAT that's £20 million pounds of public money.
Readers of this blog will know about Margaret Jaconelli and her family, who held out for months refusing to leave her flat because the council offered her a paltry £30,000, not enough to buy a flat anywhere in the city. In the end she was carried out by force, and she has still not received any compensation.
Plans for the area after the Games include a 160-bedroom hotel, a supermarket, various food outlets (you can guess which ones) and executive apartments priced will be well beyond the pockets of hard-pressed East Enders.
Modern Olympics and Games are in reality state-financed and public-subsidised land grabs, and regeneration is a myth. Any developments that are of benefit to the public –schools, hospitals - remain locked into the public/private partnership model, where the profit is privatised and the risk socialised.
The local authority - whether in Vancouver, London or Glasgow, buys land at inflated prices from developers, and uses compulsory purchase powers to evict householders, allotment holders or small business people who can't afford lawyers.
The money is all up front from the people's purse, but the benefits are nebulous and mainly unrealised. They pay to recapitalise derelict land and build new infrastructure, then the corporations move in.
The Olympic and Commonwealth Games have moved far away from sporting territory. It's time to boycott them entirely and focus instead on taking back control of our communities, and our sports facilities, making sure the majority benefit and not the wealthy few.
Penny Cole
Environment editor
Wednesday, March 14, 2012
How the 'plutonomists' bought governments
Citigroup is something special. With the largest financial services network in the world, it is a banking and finance behemoth, effectively the defining organisation of the global economy.
In 2008, a government aid package was needed to prevent the collapse of its global transactions services division, which transports more than $3 trillion around the world each day for most of the 500 biggest US-based corporations and over 80 national governments and 60 central banks around the world.
Now there is concern that Citigroup isn’t strong enough to survive a renewed recession, according to stress tests carried out by the US Federal Reserve. If Citigroup were allowed to unravel into bankruptcy, "100 governments around the world would be trying to figure out how to pay their employees", according to the Wall Street Journal.
In 2005 and 2006, Citigroup analysts studying income inequalities wrote three internal papers known as the Plutonomy Memos addressed to their wealthiest of customers. Citigroup has gone to great lengths to suppress publication of the memos, and a new analysis by author Edward Fullbrook shows that Citigroup had another, deeper motive for keeping them secret.
At the time, as Fullbrook concludes, the super-rich “plutonomists” recognised “the subversion of democratic process as the ultimate key to their success”. They spend vast amounts to influence the political process, ensuring that the masses continued to vote against their own interests.
Fullbrook’s table, “the revolving door between Goldman Sachs and the Obama administration”, lists 32 people in the US government who have been employed by the world’s most influential investment bank. Even before the crash, Citigroup could see the writing on the wall, as Fullbrook quotes:
As we complete this column, the crisis undermining the super-rich and their representatives in government claimed another victim. Greg Smith, a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa, has just resigned.
"I can honestly say that the environment now is as toxic and destructive as I have ever seen it,” he said on the way out. Apparently the company’s eyes-wide-open pursuit of profit has turned it against its customers. “To put the problem in the simplest terms,” Smith says, “the interests of the client continue to be sidelined in the way the firm operates and thinks about making money".
Smith says it’s a problem of leadership. “The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an axe murderer) you will be promoted into a position of influence.”
On March 24, we’ll be discussing how different kinds of democratic leadership can help get us beyond capitalism. You’re invited to attend.
Gerry Gold
Economics editor
In 2008, a government aid package was needed to prevent the collapse of its global transactions services division, which transports more than $3 trillion around the world each day for most of the 500 biggest US-based corporations and over 80 national governments and 60 central banks around the world.
Now there is concern that Citigroup isn’t strong enough to survive a renewed recession, according to stress tests carried out by the US Federal Reserve. If Citigroup were allowed to unravel into bankruptcy, "100 governments around the world would be trying to figure out how to pay their employees", according to the Wall Street Journal.
In 2005 and 2006, Citigroup analysts studying income inequalities wrote three internal papers known as the Plutonomy Memos addressed to their wealthiest of customers. Citigroup has gone to great lengths to suppress publication of the memos, and a new analysis by author Edward Fullbrook shows that Citigroup had another, deeper motive for keeping them secret.
At the time, as Fullbrook concludes, the super-rich “plutonomists” recognised “the subversion of democratic process as the ultimate key to their success”. They spend vast amounts to influence the political process, ensuring that the masses continued to vote against their own interests.
Fullbrook’s table, “the revolving door between Goldman Sachs and the Obama administration”, lists 32 people in the US government who have been employed by the world’s most influential investment bank. Even before the crash, Citigroup could see the writing on the wall, as Fullbrook quotes:
Perhaps the most immediate challenge to Plutonomy comes from the political process. Ultimately, the rise in income and wealth inequality to some extent is an economic disenfranchisement of the masses to the benefit of the few. However in democracies this is rarely tolerated forever. One of the key forces helping plutonomists over the last 20 years has been the rise in the profit share – the flip side of the fall in the wage share in GDP. As plutonomists or capitalists tend to be long [on] the profit share, they have benefited from trends like globalization and the productivity revolution, disproportionately. However, labour has, relatively speaking, lost out. We see the biggest threat to plutonomy as coming from a rise in political demands to reduce income inequality, spread the wealth more evenly, and challenge forces such as globalization which have benefited profit and wealth growth.
As we complete this column, the crisis undermining the super-rich and their representatives in government claimed another victim. Greg Smith, a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa, has just resigned.
"I can honestly say that the environment now is as toxic and destructive as I have ever seen it,” he said on the way out. Apparently the company’s eyes-wide-open pursuit of profit has turned it against its customers. “To put the problem in the simplest terms,” Smith says, “the interests of the client continue to be sidelined in the way the firm operates and thinks about making money".
Smith says it’s a problem of leadership. “The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an axe murderer) you will be promoted into a position of influence.”
On March 24, we’ll be discussing how different kinds of democratic leadership can help get us beyond capitalism. You’re invited to attend.
Gerry Gold
Economics editor
Tuesday, March 13, 2012
How the system is undemocratic
As the Occupy movement in London (and elsewhere), discusses next steps, it is as well to restate some basics about the extremely limited democracy we live under and what the alternatives might be.
Much of the debate in Occupy is bogged down around whether the consensus model of decision making is appropriate. Some suggest that the consensus approach is time-consuming and actually prevents or delays steps towards concrete action.
Some who defend consensus do so on the grounds that it is more inclusive than majority voting and that this is the way the movement demonstrates that it is different and more democratic than the prevailing political system.
Others extend the argument to imply that the general assembly/consensus model could if replicated somehow transform the way society as a whole goes forward and governs itself.
There is a danger, however, of missing the wood for the trees. The essence of why the contemporary social economic and political system – aka capitalism – is a shadow of democracy is not primarily the result of the way decisions are made.
Process is, of course, an issue. Most decisions are made behind closed doors and the voting system in Britain ensures that minority voices and interests are firmly excluded. But even if there were some improvements in these areas, the system would remain undemocratic.
Why? Because the system of state power is exercised primarily on behalf of dominant economic and financial interests in society. We have seen from bank bail-outs to cuts in corporation tax what these interests are.
A system compelled by law to pursue year-on-year increases in shareholder value above all else is inherently undemocratic because these interests do not (and can never) coincide with those of society as a whole. Moreover, the globalisation process has intensified this contradiction. Getting on for half of all shares on the London stock exchange are held by overseas investors, putting them further out of reach.
Social interests like decent, affordable housing, well-paid jobs, proper health care and a broad education are wider than those of shareholders. Yet the majority are excluded from economic decision-making activity. The first most people learn about job losses or cuts to services, for example, is when they are already a fait accompli.
In any case, a market-driven economy cannot possibly be democratic because interaction between the most powerful forces – hedge funds, bond dealers, handful of corporations in each sector, major investment banks etc – always decide the outcomes. Ordinary people are once again excluded. Their fates are decided on their behalf.
The political system is equally undemocratic because it accepts and encourages this status quo of minority rule. Political institutions are as much tied into the shareholder syndrome as the corporations and financial institutions. They depend on each other. Deregulation was carried through by the political system at the behest of the corporations, for example.
A politics that privileges narrow interests while claiming to rule on behalf of everyone is dishonest, undemocratic, essentially unaccountable. The system as a whole is beyond reform because of the symbiotic relationship between corporate and political power. It’s not a matter of choice but of historical necessity. Capitalism actually rules through state politics; corporate clout would be of little import if it had no political expression.
Creating a real democracy that reflects social interests can only come through a transition to a new economic and political framework. General Assemblies and the assembly process are at the heart of the movement towards this goal.
A fresh constitutional settlement that embraces democratic institutions, new forms of co-ownership, decentralised community power and a range of social rights would for the first time give power to ordinary people. How to achieve this change ought to figure high on Occupy’s agenda.
Paul Feldman
Communications editor
Much of the debate in Occupy is bogged down around whether the consensus model of decision making is appropriate. Some suggest that the consensus approach is time-consuming and actually prevents or delays steps towards concrete action.
Some who defend consensus do so on the grounds that it is more inclusive than majority voting and that this is the way the movement demonstrates that it is different and more democratic than the prevailing political system.
Others extend the argument to imply that the general assembly/consensus model could if replicated somehow transform the way society as a whole goes forward and governs itself.
There is a danger, however, of missing the wood for the trees. The essence of why the contemporary social economic and political system – aka capitalism – is a shadow of democracy is not primarily the result of the way decisions are made.
Process is, of course, an issue. Most decisions are made behind closed doors and the voting system in Britain ensures that minority voices and interests are firmly excluded. But even if there were some improvements in these areas, the system would remain undemocratic.
Why? Because the system of state power is exercised primarily on behalf of dominant economic and financial interests in society. We have seen from bank bail-outs to cuts in corporation tax what these interests are.
A system compelled by law to pursue year-on-year increases in shareholder value above all else is inherently undemocratic because these interests do not (and can never) coincide with those of society as a whole. Moreover, the globalisation process has intensified this contradiction. Getting on for half of all shares on the London stock exchange are held by overseas investors, putting them further out of reach.
Social interests like decent, affordable housing, well-paid jobs, proper health care and a broad education are wider than those of shareholders. Yet the majority are excluded from economic decision-making activity. The first most people learn about job losses or cuts to services, for example, is when they are already a fait accompli.
In any case, a market-driven economy cannot possibly be democratic because interaction between the most powerful forces – hedge funds, bond dealers, handful of corporations in each sector, major investment banks etc – always decide the outcomes. Ordinary people are once again excluded. Their fates are decided on their behalf.
The political system is equally undemocratic because it accepts and encourages this status quo of minority rule. Political institutions are as much tied into the shareholder syndrome as the corporations and financial institutions. They depend on each other. Deregulation was carried through by the political system at the behest of the corporations, for example.
A politics that privileges narrow interests while claiming to rule on behalf of everyone is dishonest, undemocratic, essentially unaccountable. The system as a whole is beyond reform because of the symbiotic relationship between corporate and political power. It’s not a matter of choice but of historical necessity. Capitalism actually rules through state politics; corporate clout would be of little import if it had no political expression.
Creating a real democracy that reflects social interests can only come through a transition to a new economic and political framework. General Assemblies and the assembly process are at the heart of the movement towards this goal.
A fresh constitutional settlement that embraces democratic institutions, new forms of co-ownership, decentralised community power and a range of social rights would for the first time give power to ordinary people. How to achieve this change ought to figure high on Occupy’s agenda.
Paul Feldman
Communications editor
Monday, March 12, 2012
Young men as killing machines
We’ve been here before. The killing of at least 16 Afghan civilians - nine of them children - in Kandahar province on Saturday night evokes memories of another atrocity committed by US troops some 44 years ago.
On 16 March 1968, 150 US soldiers in a unit called Charlie Company, led by 24 year-old Lieutenant William Calley, marched into a hamlet called My Lai in Vietnam and massacred 500 unarmed civilians.
Charlie Company’s murder binge was witnessed by US helicopter crew circling above who tried to stop the killings and rescue survivors. Calley was eventually brought to justice and found guilty of murder. But his life sentence was reduced to three years and he was paroled in 1974. He was pardoned by President Nixon.
Therefore the US authorities’ promise of “a rapid and thorough investigation” into the Kandahar killings must be taken with a huge pinch of salt – let alone the notion that serious punishment will follow.
US officials claim that only one soldier was involved, but several survivors have given conflicting accounts. Residents heard aircraft and helicopters were overhead after midnight on Sunday morning. And 20-year-old Jan Agha, who survived the murder spree by pretending to be dead, said that more than one soldier entered his home.
In February US troops burned copies of the Koran and in January videos of Marines urinating on the bodies of Taliban were circulated. Similar incidents are well-known from Iraq. So is this really the case of a demented rogue? The truth is that holding civilians in contempt and losing all sense of humanity is what happens to the young men trained to be killing machines in countries whose culture, religion and traditions are totally alien to them.
The mother of one of the 404 British soldiers killed in Afghanistan said she only realised this when visiting the country after her son’s death.
The US-British-NATO operations are being conducted by governments who have increasingly lost legitimacy in the eyes of their electorates. Everyone knows they have no solution to the economic and financial crises except to impose intolerable burdens on ordinary people.
It’s not by chance that the six young British soldiers killed in last week’s attack were from unemployment black spots in Yorkshire.
The claims in parliament by David Cameron and Ed Miliband that the British are in Afghanistan to keep the streets of London safe are risible. Al Qaeda is no longer a force in Afghanistan and the Taliban have no intention of coming to Britain any time soon. British troops are no more than cannon fodder for other interests which include protecting the oil pipelines that criss-cross the region.
Journalist and author Simon Jenkins is on the button when he denounces military and political leaders as having lost all contact with reality. Jenkins is hardly a revolutionary, but could be accused of giving solace to the enemy when he writes: “The war the Taliban fighters are waging with vigour and success is to regain the integrity of Afghanistan, no more or less”.
Eventually, seven years after the My Lai massacre, the United States had to pull out of Vietnam, having spent around $770 billion and killed and maimed countless Vietnamese as well as losing nearly 60,000 US troops. The decade-long conflict left a trail of long-term devastation in its wake.
It’s the same in Afghanistan. Service widow Wendy Rayner has noted that after the war in Afghanistan is over, "the poor people who are left will go back to the same crappy lifestyle that they had before our lot went in".
With the US and Britain now turning their attentions towards Iran, the challenge of ending Nato-led wars is an urgent one. That means facing up to the historical fact that war, profits and capitalism are tied in to each other. Ending atrocities like those visited on the people of Afghanistan at the weekend surely means terminating a social system for which war is an extension of its rotten politics.
Corinna Lotz
A World to Win secretary
On 16 March 1968, 150 US soldiers in a unit called Charlie Company, led by 24 year-old Lieutenant William Calley, marched into a hamlet called My Lai in Vietnam and massacred 500 unarmed civilians.
Charlie Company’s murder binge was witnessed by US helicopter crew circling above who tried to stop the killings and rescue survivors. Calley was eventually brought to justice and found guilty of murder. But his life sentence was reduced to three years and he was paroled in 1974. He was pardoned by President Nixon.
Therefore the US authorities’ promise of “a rapid and thorough investigation” into the Kandahar killings must be taken with a huge pinch of salt – let alone the notion that serious punishment will follow.
US officials claim that only one soldier was involved, but several survivors have given conflicting accounts. Residents heard aircraft and helicopters were overhead after midnight on Sunday morning. And 20-year-old Jan Agha, who survived the murder spree by pretending to be dead, said that more than one soldier entered his home.
In February US troops burned copies of the Koran and in January videos of Marines urinating on the bodies of Taliban were circulated. Similar incidents are well-known from Iraq. So is this really the case of a demented rogue? The truth is that holding civilians in contempt and losing all sense of humanity is what happens to the young men trained to be killing machines in countries whose culture, religion and traditions are totally alien to them.
The mother of one of the 404 British soldiers killed in Afghanistan said she only realised this when visiting the country after her son’s death.
The US-British-NATO operations are being conducted by governments who have increasingly lost legitimacy in the eyes of their electorates. Everyone knows they have no solution to the economic and financial crises except to impose intolerable burdens on ordinary people.
It’s not by chance that the six young British soldiers killed in last week’s attack were from unemployment black spots in Yorkshire.
The claims in parliament by David Cameron and Ed Miliband that the British are in Afghanistan to keep the streets of London safe are risible. Al Qaeda is no longer a force in Afghanistan and the Taliban have no intention of coming to Britain any time soon. British troops are no more than cannon fodder for other interests which include protecting the oil pipelines that criss-cross the region.
Journalist and author Simon Jenkins is on the button when he denounces military and political leaders as having lost all contact with reality. Jenkins is hardly a revolutionary, but could be accused of giving solace to the enemy when he writes: “The war the Taliban fighters are waging with vigour and success is to regain the integrity of Afghanistan, no more or less”.
Eventually, seven years after the My Lai massacre, the United States had to pull out of Vietnam, having spent around $770 billion and killed and maimed countless Vietnamese as well as losing nearly 60,000 US troops. The decade-long conflict left a trail of long-term devastation in its wake.
It’s the same in Afghanistan. Service widow Wendy Rayner has noted that after the war in Afghanistan is over, "the poor people who are left will go back to the same crappy lifestyle that they had before our lot went in".
With the US and Britain now turning their attentions towards Iran, the challenge of ending Nato-led wars is an urgent one. That means facing up to the historical fact that war, profits and capitalism are tied in to each other. Ending atrocities like those visited on the people of Afghanistan at the weekend surely means terminating a social system for which war is an extension of its rotten politics.
Corinna Lotz
A World to Win secretary
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