Greece has moved centre stage as the global debt contagion engulfs Europe. But Italy, Portugal and Spain are not far behind, whilst France and even Germany, whose banks have many billions invested in the other countries, are waiting in the wings. No wonder EU leaders are holding a crisis meeting tomorrow.
Greek public sector workers are taking to the streets today in protest against the government’s austerity programme. This is designed to appease the hedge fund managers who are raising the cost of borrowing, and the foreign exchange dealers who have launched an unprecedented assault on the euro.
The Panhellenic Socialist Movement (PASOK) was elected in October and pledged to rescue Greek capitalism after the break-up of the previous right-wing government. But PASOK has struggled to get to grips with the worsening economic and social crisis.
Today’s strike by unions PASOK could once count on against pay and pension cuts is accompanied by a continuing blockade of main roads by farmers, including the border with Bulgaria. They are demanding financial support the government can’t afford to give.
The immediate threats to the country’s political stability arise from the payments due on its mountainous debts, now proving impossible to service as its economy – largely dependent on tourism and shipping – has taken a big hit from the global recession.
But the Greek government is not alone. It just happens to be the weakest of the pack of highly indebted countries which includes Portugal, Italy, Ireland, Spain, France, the UK and the US, not forgetting Dubai.
Greece’s public spending deficit exceeds 13% of the value of annual output of goods and services, Spain’s 11.4% and Portugal’s 9.3%. All these are far in excess of the 3% safe limit determined by rules set by the EU for countries using the euro currency.
These deficits are funded by borrowing – selling bonds to investors, speculators on the private markets whose only interest is “interest” or “yield”, the amount they can charge. As the problems of repayment mount, so does the cost of borrowing. The principle is the same whether we’re talking about global investors or doorstep, pay-day lenders. Fail to make a payment and the interest due is added to the principal - and then the rate rises. Defaulters are treated very severely. Brutally.
Some consider the UK safer from the effects of debt contagion, because it is outside the euro zone. But its deficit is way up there at more than 12%, and the pound is also under pressure from the foreign exchange traders.
Bankers and hedge fund managers now call the shots, demanding public sector wage and benefit cuts, tax rises, pension reductions and the ending of vital services. Respected figures like George Magnus, senior economic advisor to UBS Investment Bank, talk in hushed tones about the need for governments to balance the risks of a breakdown in “social cohesion” arising from the prescribed “structural reforms” needed to attract investors like him.
The system of elected government that Europeans have got used to during the thirty years of corporate-led globalisation cannot survive the scale of the devastation needed to sustain the capitalist system. Greece was ruled by a military Junta between 1967 and 1974; Spain’s fascist dictatorship lasted from 1939 until Franco died in 1975. The Salazar government in Portugal lasted from 1933 until his death in 1970. The Nazis came to power in 1933 as the effects of the Great Depression were felt throughout the world.
That Depression only came to an end when fascism and the Second World War eliminated the surplus productive capacity produced by the speculative growth of the 1920s. Today’s globalised financial, economic and political crisis exceeds by far the conditions of the 1930s. The costs of resolving it within the capitalist framework cannot be countenanced.
We invite you to join the discussion of alternative, revolutionary solutions put forward in our draft Manifesto.
Gerry Gold
Economics editor
Wednesday, February 10, 2010
Tuesday, February 09, 2010
China cracks down as turmoil grows
Signs of growing social tensions in China continue to mount, revealed by the jailing of an activist for documenting shoddy construction work to a decision in one province to assuage workers’ growing anger with a 13% pay rise.
Tan Zuoren has been jailed for five years for “subversion”, according to his lawyer this week. Ostensibly, the sentence was for emailed comments denouncing the Tiananmen Square massacre in June 1989. But as no one has gone to prison for such an “offence” for over a decade, the state’s motives lay elsewhere.
And you don’t have to look too hard. Tan’s removal from the scene coincided with his plans to publish a report on the collapse of school buildings during the 2008 Sichuan earthquake, in which more than 80,000 people died. Parents were angered by the fact that relatively new school buildings collapsed like a pack of cards and staged anti-government rallies in protest.
Tan’s trial in Chengdu, the capital of Sichuan province, was adjourned without a verdict in August last year. His lawyers said that they were unable to present their defence or call witnesses to testify on his behalf. Remember Beijing’s “bird nest” stadium? Well, its internationally acclaimed designer Ai Weiwei came to testify about the poor construction of school buildings – and was promptly beaten up and detained. He underwent emergency brain surgery in Germany.
“I think this is a very important case for China, more important than that of Liu Xiaobo,” said Ai, referring to a Chinese dissident jailed in December for 11 years for online essays calling for civil rights and multi-party elections. It shows the Chinese legal system has taken a big step backwards. Tan’s ‘crime’ was entirely one of speech, of conscience.”
Ai remains a prominent target. Two of his Google e-mail accounts have been hacked into and state security agents have rifled through his bank accounts. The designer, who has lived in America, has also been told he could be deported if he doesn’t stop his criticism of human rights abuses.
The authorities’ extreme nervousness comes as China’s attempt to sustain its export-based economy stumbles. Inflation is rising following a massive stimulus programme while the major importers of its products in Europe, North America and Australia continue in recession with plummeting consumer demand.
Eastern Jiangsu province, which exports more than Brazil and South Africa combined, raised its monthly minimum wage rate 13% from about £80 a month to Rmb960 (£90) last week. Other provincial authorities are expected to follow suit. The settlements reflect not just a shortage of labour – many of the 20 million sacked last year have stayed in the countryside – but increasing militancy by workers who still earn a pittance. Nevertheless, manufacturers are certain to pass on wage increases in prices which will further dampen export prospects.
Meanwhile, intense security remains in force in Xinjiang and Tibet. Controls on the internet have been tightened in the past few months. Social networking sites such as Facebook and Twitter have been blocked. By all accounts, their role in Iran’s recent upheaval spooked China’s leaders.
The 74-million strong Communist Party which has overseen the turn to a capitalist economy, is dominated by those who joined to get a job or get on in the state machine. It only just survived Tiananmen intact. Since then, inequality and corruption has grown at an unstoppable pace. The collapse of the school buildings in Sichuan was undoubtedly the result of “skimming” by local authorities. How long the party itself can withstand the underlying social turmoil in China is no longer an academic question.
Paul Feldman
Communications editor
Tan Zuoren has been jailed for five years for “subversion”, according to his lawyer this week. Ostensibly, the sentence was for emailed comments denouncing the Tiananmen Square massacre in June 1989. But as no one has gone to prison for such an “offence” for over a decade, the state’s motives lay elsewhere.
And you don’t have to look too hard. Tan’s removal from the scene coincided with his plans to publish a report on the collapse of school buildings during the 2008 Sichuan earthquake, in which more than 80,000 people died. Parents were angered by the fact that relatively new school buildings collapsed like a pack of cards and staged anti-government rallies in protest.
Tan’s trial in Chengdu, the capital of Sichuan province, was adjourned without a verdict in August last year. His lawyers said that they were unable to present their defence or call witnesses to testify on his behalf. Remember Beijing’s “bird nest” stadium? Well, its internationally acclaimed designer Ai Weiwei came to testify about the poor construction of school buildings – and was promptly beaten up and detained. He underwent emergency brain surgery in Germany.
“I think this is a very important case for China, more important than that of Liu Xiaobo,” said Ai, referring to a Chinese dissident jailed in December for 11 years for online essays calling for civil rights and multi-party elections. It shows the Chinese legal system has taken a big step backwards. Tan’s ‘crime’ was entirely one of speech, of conscience.”
Ai remains a prominent target. Two of his Google e-mail accounts have been hacked into and state security agents have rifled through his bank accounts. The designer, who has lived in America, has also been told he could be deported if he doesn’t stop his criticism of human rights abuses.
The authorities’ extreme nervousness comes as China’s attempt to sustain its export-based economy stumbles. Inflation is rising following a massive stimulus programme while the major importers of its products in Europe, North America and Australia continue in recession with plummeting consumer demand.
Eastern Jiangsu province, which exports more than Brazil and South Africa combined, raised its monthly minimum wage rate 13% from about £80 a month to Rmb960 (£90) last week. Other provincial authorities are expected to follow suit. The settlements reflect not just a shortage of labour – many of the 20 million sacked last year have stayed in the countryside – but increasing militancy by workers who still earn a pittance. Nevertheless, manufacturers are certain to pass on wage increases in prices which will further dampen export prospects.
Meanwhile, intense security remains in force in Xinjiang and Tibet. Controls on the internet have been tightened in the past few months. Social networking sites such as Facebook and Twitter have been blocked. By all accounts, their role in Iran’s recent upheaval spooked China’s leaders.
The 74-million strong Communist Party which has overseen the turn to a capitalist economy, is dominated by those who joined to get a job or get on in the state machine. It only just survived Tiananmen intact. Since then, inequality and corruption has grown at an unstoppable pace. The collapse of the school buildings in Sichuan was undoubtedly the result of “skimming” by local authorities. How long the party itself can withstand the underlying social turmoil in China is no longer an academic question.
Paul Feldman
Communications editor
Monday, February 08, 2010
The real price of the 'green' Winter Olympics
The BBC animation promoting the Winter Olympics in Vancouver, begins with an Inuit athlete launching himself into a snowboarding run and, in the following few seconds, cleverly manages to feature the downhill skiing, ski-jump, toboggan and curling events.
The soundtrack is triumphant, the film exciting but also strangely ominous. For one thing it is in monochrome, the next thing one sees is our hero being pursued by wolves clearly intent on savaging him. He escapes by chopping his board in half to turn it into skis and then jumping over an enormous canyon.
Next up is a huge, growling, fearsome bear which he vanquishes by using a curling stone as a weapon. Is this meant to be a satire? Perhaps there's some crafty person with seditious, anti-Olympics intent in the company which produced it, because after deconstructing the advertisement you could be forgiven for thinking so.
It is unusual, brilliantly executed and intended to present a positive and stirring invitation to watch the thrilling spectacle of the 2010 Winter Olympics, which opens on 12 February. However, with a sufficiently devious mind and some knowledge of the background to the Games, the images in the BBC promotion tell some ugly truths, albeit unwittingly.
Billed as the “greenest Olympics” ever, the preparations for the games are actually more likely to be the most environmentally destructive in the history of the Olympics of either variety. For instance, the wolves and the bear are not in reality powerful predators to be escaped or destroyed at all costs. They are in fact victims of the huge Olympic juggernaut which has rolled over forests, rivers and mountains, destroying habitats that the bears, the wolves, the salmon and other wild creatures depend upon.
The expansion of the Sea to Sky highway, undertaken to shorten the travel time between Vancouver and the ski resort of Whistler in time for the Olympics, in 2007 alone resulted in the deaths of eleven black bears due to accidents and habitat destruction. What the toll is three years later I do not know.
What of the human cost? Many Vancouverites are dreading the arrival of the Olympics to the city and surrounding region according to a column in Sports Illustrated. Apart from the disruption to people’s daily lives, massively increased surveillance, enhanced police and even military presence, there are deep and widespread concerns about homelessness.
For as with practically all Olympic venues image is everything – visitors to the city must not be upset by the sight of poverty, squalor or addiction. Many of those in this position are the indigenous “Indian” people and it is they, along with environmentalists, who are providing the backbone of the opposition to the whole Olympic five-ring circus.
“No Olympics on Stolen Land” is their slogan. Why stolen? Because most native land in the province of British Columbia, unlike the rest of Canada, is unceded and has never been the subject of treaties with the government of BC or of Canada. Nevertheless the government acts as if it is the legal owner and uses it to exploit its natural resources for profit. Logging, mining, building, expanding ski resorts on delicate ecological areas, irrespective of the rights and usage of much of this land by native peoples, has taken place in the past and continues at an accelerating rate today.
Widespread, focussed protests are also taking place at an increasing rate as the Olympic date draws near. Convergences are being planned and the Olympic torch relay across Canada is being disrupted by activists, using non-violent but militant and determined direct action. The opposition movement began to organise almost immediately the Games were awarded and has grown into a formidable force since.
The Games of course will go ahead, they cannot possibly be subverted now except perhaps by one element. The higher than average temperatures have resulted in an absence of one vital ingredient for a Winter Olympics – snow!
Fiona Harrington
The soundtrack is triumphant, the film exciting but also strangely ominous. For one thing it is in monochrome, the next thing one sees is our hero being pursued by wolves clearly intent on savaging him. He escapes by chopping his board in half to turn it into skis and then jumping over an enormous canyon.
Next up is a huge, growling, fearsome bear which he vanquishes by using a curling stone as a weapon. Is this meant to be a satire? Perhaps there's some crafty person with seditious, anti-Olympics intent in the company which produced it, because after deconstructing the advertisement you could be forgiven for thinking so.
It is unusual, brilliantly executed and intended to present a positive and stirring invitation to watch the thrilling spectacle of the 2010 Winter Olympics, which opens on 12 February. However, with a sufficiently devious mind and some knowledge of the background to the Games, the images in the BBC promotion tell some ugly truths, albeit unwittingly.
Billed as the “greenest Olympics” ever, the preparations for the games are actually more likely to be the most environmentally destructive in the history of the Olympics of either variety. For instance, the wolves and the bear are not in reality powerful predators to be escaped or destroyed at all costs. They are in fact victims of the huge Olympic juggernaut which has rolled over forests, rivers and mountains, destroying habitats that the bears, the wolves, the salmon and other wild creatures depend upon.
The expansion of the Sea to Sky highway, undertaken to shorten the travel time between Vancouver and the ski resort of Whistler in time for the Olympics, in 2007 alone resulted in the deaths of eleven black bears due to accidents and habitat destruction. What the toll is three years later I do not know.
What of the human cost? Many Vancouverites are dreading the arrival of the Olympics to the city and surrounding region according to a column in Sports Illustrated. Apart from the disruption to people’s daily lives, massively increased surveillance, enhanced police and even military presence, there are deep and widespread concerns about homelessness.
For as with practically all Olympic venues image is everything – visitors to the city must not be upset by the sight of poverty, squalor or addiction. Many of those in this position are the indigenous “Indian” people and it is they, along with environmentalists, who are providing the backbone of the opposition to the whole Olympic five-ring circus.
“No Olympics on Stolen Land” is their slogan. Why stolen? Because most native land in the province of British Columbia, unlike the rest of Canada, is unceded and has never been the subject of treaties with the government of BC or of Canada. Nevertheless the government acts as if it is the legal owner and uses it to exploit its natural resources for profit. Logging, mining, building, expanding ski resorts on delicate ecological areas, irrespective of the rights and usage of much of this land by native peoples, has taken place in the past and continues at an accelerating rate today.
Widespread, focussed protests are also taking place at an increasing rate as the Olympic date draws near. Convergences are being planned and the Olympic torch relay across Canada is being disrupted by activists, using non-violent but militant and determined direct action. The opposition movement began to organise almost immediately the Games were awarded and has grown into a formidable force since.
The Games of course will go ahead, they cannot possibly be subverted now except perhaps by one element. The higher than average temperatures have resulted in an absence of one vital ingredient for a Winter Olympics – snow!
Fiona Harrington
Friday, February 05, 2010
Greenpeace and the Chagos Islands
You may recently have received a petition from a well-meaning friend with a request to sign it and circulate, or it might have come to your notice in the form of an appeal from Greenpeace – “it” being the planned creation of one of the world’s largest marine reserves around the Chagos Islands in the Indian Ocean.
In November last year, the UK Marine Bill was passed into law for the purpose of protecting the seas around Britain through the creation of Marine Preservation Areas (MPAs) which we can all agree I am sure, are very good things to have. The protection of the seas, as opposed to fisheries, has long been neglected and the world’s oceans have for long enough been our common dumping grounds. So any initiative along the lines of MPAs can only be another Very Good Thing surely, particularly if championed by Greenpeace? Well not entirely.
You see another initiative announced by the Foreign Office in November 2009 was the setting up of two consultations – one to look at ways of providing better environmental protection for Antarctica, and the other to consider whether the Chagos Archipelago, which is a British Indian Ocean territory, should become an MPA. Many of you will be becoming aware I am sure by now, that an issue is beginning to emerge here.
Greenpeace is at present galvanising their membership to write to David Miliband the Foreign Secretary, calling on him to make sure that this reserve is in fact created and to help the consultation committee with their comments.
The consultation period closes on the 12th February so the time for action is limited as they point out. My suggestion however is that people should indeed write to Miliband urging him not to agree the creation of such a reserve on the basis of the dismal history of Diego Garcia, the main island of the Chagos Archipelago, which the British Government had such a treacherous hand in.
The background history of Diego Garcia and the fate of the Chagossians, or the Ilois people to give their correct ethnic name, is a story of treachery and betrayal which began in 1965 the year when Chagos, along with Mauritius, was to have received its independence. The Labour government of Harold Wilson at the insistence of the United States, leased the islands to Washington for 50 years making 2015 the year that the lease should run out. However, the US was also given the option of a 20 year extension which they appear, without consultation with the Ilois, to have taken up.
But then nobody has ever consulted them, not in 1965 when every man, woman and child was evicted from their island home with no compensation and no right of return. It was wholescale ethnic cleansing leaving the islands clear for the Americans to build a military base there. The base was used in the first Gulf War during the bombing raids on Iraq and again during the second war against Iraq and will probably be used in whatever other adventures the US regime embarks upon in the region.
The Ilois themselves have disappeared from view more or less. Many settled in Mauritius, inhabiting squalid slums, some came to Britain and have argued their case in the courts. They actually won the right to resettle. New Labour, however, has blocked all their attempts to return and continues to ignore the rights of these quiet people.
It is an outrage which has gathered little notice or controversy. The deliberate secrecy of the original deal with Washington and the continuing deception and betrayal are ugly and cruel. Therefore the issue of the plight and brave fight of the exiled people of Diego Garcia should be supported and publicised, with demands made for a right of return for all those who wish to and full consultation on the creation of an MPA. Marine reserves do not depend on the total clearance of humans, after all more such reserves are being considered for Britain. Why should Chagos be any different?
Fiona Harrington
In November last year, the UK Marine Bill was passed into law for the purpose of protecting the seas around Britain through the creation of Marine Preservation Areas (MPAs) which we can all agree I am sure, are very good things to have. The protection of the seas, as opposed to fisheries, has long been neglected and the world’s oceans have for long enough been our common dumping grounds. So any initiative along the lines of MPAs can only be another Very Good Thing surely, particularly if championed by Greenpeace? Well not entirely.
You see another initiative announced by the Foreign Office in November 2009 was the setting up of two consultations – one to look at ways of providing better environmental protection for Antarctica, and the other to consider whether the Chagos Archipelago, which is a British Indian Ocean territory, should become an MPA. Many of you will be becoming aware I am sure by now, that an issue is beginning to emerge here.
Greenpeace is at present galvanising their membership to write to David Miliband the Foreign Secretary, calling on him to make sure that this reserve is in fact created and to help the consultation committee with their comments.
The consultation period closes on the 12th February so the time for action is limited as they point out. My suggestion however is that people should indeed write to Miliband urging him not to agree the creation of such a reserve on the basis of the dismal history of Diego Garcia, the main island of the Chagos Archipelago, which the British Government had such a treacherous hand in.
The background history of Diego Garcia and the fate of the Chagossians, or the Ilois people to give their correct ethnic name, is a story of treachery and betrayal which began in 1965 the year when Chagos, along with Mauritius, was to have received its independence. The Labour government of Harold Wilson at the insistence of the United States, leased the islands to Washington for 50 years making 2015 the year that the lease should run out. However, the US was also given the option of a 20 year extension which they appear, without consultation with the Ilois, to have taken up.
But then nobody has ever consulted them, not in 1965 when every man, woman and child was evicted from their island home with no compensation and no right of return. It was wholescale ethnic cleansing leaving the islands clear for the Americans to build a military base there. The base was used in the first Gulf War during the bombing raids on Iraq and again during the second war against Iraq and will probably be used in whatever other adventures the US regime embarks upon in the region.
The Ilois themselves have disappeared from view more or less. Many settled in Mauritius, inhabiting squalid slums, some came to Britain and have argued their case in the courts. They actually won the right to resettle. New Labour, however, has blocked all their attempts to return and continues to ignore the rights of these quiet people.
It is an outrage which has gathered little notice or controversy. The deliberate secrecy of the original deal with Washington and the continuing deception and betrayal are ugly and cruel. Therefore the issue of the plight and brave fight of the exiled people of Diego Garcia should be supported and publicised, with demands made for a right of return for all those who wish to and full consultation on the creation of an MPA. Marine reserves do not depend on the total clearance of humans, after all more such reserves are being considered for Britain. Why should Chagos be any different?
Fiona Harrington
Thursday, February 04, 2010
Profits put energy supply under threat
Thousands more families will be forced into fuel poverty, and Britain’s energy supply is under threat, according to a shock report published yesterday by the energy regulator Ofgem.
Their “Project Discovery” review of the state of the energy market, warns: “The unprecedented combination of the global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations has combined to cast reasonable doubt over whether the current energy arrangements will deliver secure and sustainable energy supplies.”
The report goes as far as to suggest that a new kind of government-run supply company might be the only way to secure future supplies and affordability and highlights five key issues:
1. Only a tiny percentage of the £200bn investment needed over the next 10 years is committed from the energy corporations.
2. The falling carbon “price” means there is no incentive to investment in low carbon fuel generation.
3. There are no price incentives for energy companies to store gas to meet peak capacity or to keep prices down.
4. Relying on global markets creates risks to Britain’s security of supply.
5. The rising cost of gas and electricity may mean that increasing numbers of consumers can’t afford to heat their homes, and that industry and business will be less competitive.
This clear statement of the abject failure of the profit-driven energy market was underlined this week as a series of profit collapses were announced in this most volatile global market.
French energy giant EDF – profits down 40% over the year to February. Royal Dutch Shell – sacking another 1,000 people this year in addition to the 5,000 in 2008, as profits fell by 69%. BP – a 45% fall in profits for 2009. Exxon Mobil, the world's largest private oil company – a profit slump from $45bn in 2008 to $19bn in 2009.
While the profits, pricing cartels, and environmental destruction wrought by the energy giants remains an obscene blight on human society – they can’t even deliver a secure, affordable energy supply. Following privatisation in the UK, gas prices fell in real terms between 1995 to 2000 as competition developed. But since 2001, prices have risen continuously.
An average direct debit gas bill increased by £123 to £648 between 2008 and 2009. Electricity prices fell in real terms between 1992 to 2003, but since then have risen consistently. An average direct debit bill increased by £45 to £421 between 2008 and 2009. Overall, domestic energy prices have risen by 80% between 2004 and 2008, driving up fuel poverty.
In 2007, there were around 4 million fuel poor households in the UK, up from 3.5 million in 2006. Figures for 2008 and 2009 are not available yet, but the prediction is 3.6 million fuel poor households in 2008 and 4.6 million in 2009.
Energy and Climate Change Secretary Ed Miliband’s response to the Ofgem report was the equivalent of sticking his fingers in his ears and singing “la, la, la”. “The government is confident that Britain will meet its security of supply needs in the years ahead. Our Low Carbon Transition Plan has put in place a programme of action to deliver secure and increasingly low carbon energy supplies in the medium term through to 2020,” he said.
But as the BP boss Tony Hayward admitted in an interview today on Radio 4’s today programme, the private sector is not going to invest in low-carbon energy generation. BP itself has pulled out of offshore wind power because the profits are not short-term enough.
It doesn’t have to be like this. In our draft Manifesto of Revolutionary Solutions, we set out detailed proposals that can deliver secure affordable energy and reduce emissions. But first and foremost, we must take control of energy supply out of the hands of profit-driven corporations – and now even Ofgem knows it makes sense!
Penny Cole
Environment editor
Their “Project Discovery” review of the state of the energy market, warns: “The unprecedented combination of the global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations has combined to cast reasonable doubt over whether the current energy arrangements will deliver secure and sustainable energy supplies.”
The report goes as far as to suggest that a new kind of government-run supply company might be the only way to secure future supplies and affordability and highlights five key issues:
1. Only a tiny percentage of the £200bn investment needed over the next 10 years is committed from the energy corporations.
2. The falling carbon “price” means there is no incentive to investment in low carbon fuel generation.
3. There are no price incentives for energy companies to store gas to meet peak capacity or to keep prices down.
4. Relying on global markets creates risks to Britain’s security of supply.
5. The rising cost of gas and electricity may mean that increasing numbers of consumers can’t afford to heat their homes, and that industry and business will be less competitive.
This clear statement of the abject failure of the profit-driven energy market was underlined this week as a series of profit collapses were announced in this most volatile global market.
French energy giant EDF – profits down 40% over the year to February. Royal Dutch Shell – sacking another 1,000 people this year in addition to the 5,000 in 2008, as profits fell by 69%. BP – a 45% fall in profits for 2009. Exxon Mobil, the world's largest private oil company – a profit slump from $45bn in 2008 to $19bn in 2009.
While the profits, pricing cartels, and environmental destruction wrought by the energy giants remains an obscene blight on human society – they can’t even deliver a secure, affordable energy supply. Following privatisation in the UK, gas prices fell in real terms between 1995 to 2000 as competition developed. But since 2001, prices have risen continuously.
An average direct debit gas bill increased by £123 to £648 between 2008 and 2009. Electricity prices fell in real terms between 1992 to 2003, but since then have risen consistently. An average direct debit bill increased by £45 to £421 between 2008 and 2009. Overall, domestic energy prices have risen by 80% between 2004 and 2008, driving up fuel poverty.
In 2007, there were around 4 million fuel poor households in the UK, up from 3.5 million in 2006. Figures for 2008 and 2009 are not available yet, but the prediction is 3.6 million fuel poor households in 2008 and 4.6 million in 2009.
Energy and Climate Change Secretary Ed Miliband’s response to the Ofgem report was the equivalent of sticking his fingers in his ears and singing “la, la, la”. “The government is confident that Britain will meet its security of supply needs in the years ahead. Our Low Carbon Transition Plan has put in place a programme of action to deliver secure and increasingly low carbon energy supplies in the medium term through to 2020,” he said.
But as the BP boss Tony Hayward admitted in an interview today on Radio 4’s today programme, the private sector is not going to invest in low-carbon energy generation. BP itself has pulled out of offshore wind power because the profits are not short-term enough.
It doesn’t have to be like this. In our draft Manifesto of Revolutionary Solutions, we set out detailed proposals that can deliver secure affordable energy and reduce emissions. But first and foremost, we must take control of energy supply out of the hands of profit-driven corporations – and now even Ofgem knows it makes sense!
Penny Cole
Environment editor
Wednesday, February 03, 2010
Debt contagion spreads
In the aftermath of Davos, the annual skiing trip for the bankers, businessmen and tame governments of the global economy, one key theme runs through the post-mortems in the wake of the economic and financial crash: the free market requirements of corporations are in open conflict with the political constraints of a world of capitalist nation-states.
The Financial Times’ Martin Wolf, who moderated the “economic outlook” session sums it up like this: “We have a globalised economy, but politics remains local. In times of crisis, the pressure to look after the former dominates the latter.” What Wolf is indicating is that local “politics” either gets in the way and/or is not up to the job. He is right but Wolf fails to grasp that the contradiction between globalising corporations and nation-state politics is insoluble.
So struggling to take much if any comfort from the less-than-impressive signs of a return to growth after renewed and unprecedented overdoses of “stimulus”, the talk in darkened corners is now turning to “rebalancing the global economy” with all the unspecified pain for millions that brings in its wake.
The crash exposed massive over-capacity in production around the world, after decades of the increasingly credit-led investment needed to maintain the expansion on which capital feeds. In the last 12 months, many countries have relied on individual attempts at rescuing domestic economies, creating export-led growth as a result.
But it isn’t happening.
Whilst the stimulus enabled banks to refill their capital balances, and, particularly in China allowed production to continue and even grow, it has failed to get people buying. Consumers aren’t consuming.
In countries like Spain, the United States and the United Kingdom and its nearest neighbour Ireland, as well as some of the countries of the former Soviet Union consumption was funded by borrowing against absurd inflation in property prices. Property prices have collapsed, so consumption collapsed. It can’t be restored to previous levels. The patient has suffered a near fatal illness.
Growth certainly hasn’t returned to countries like the Ukraine where GDP fell 14% last year. All across the world unemployment is high and soaring, hours and wages are being cut. Pensions wiped out. In the US, where some of the production numbers look positive, Lawrence Summers, Barack Obama’s principal economic adviser, admits “what we are seeing in the US and perhaps in other places, is a statistical recovery and a human recession”.
The obscure language of the financial commentators can be difficult to untangle at times, but the threatening messages are getting clearer day by day. They speak on behalf of the global investors, speculators who move vast funds to the source of highest return. And the message to governments is this – those with an excess of debt had better give up on stimulus pretty soon to avoid the growing threat of state bankruptcy that is spreading like a global contagion.
Italy, Portugal, Spain, the UK, Iceland are joining Greece - which has its hand out for help to the International Monetary Fund and the European Union – in the emergency ward. Those with excess savings like China had better get their people increasing their consumption pronto, or face the consequences.
No wonder the political crisis is growing in all the major economies. Cut spending and the economy will dive (or die); don’t cut spending and the state faces bankruptcy. In short, there are no answers within the present framework. That doesn’t mean the forces of extreme reaction will give up and go home. If conventional nation-state politics won’t work, there is always the danger of unconventional “solutions”.
In our draft Manifesto of Revolutionary Solutions we set out our proposals to bring this obscene and increasingly dangerous system to its end. Join the discussion.
Gerry Gold
Economics editor
The Financial Times’ Martin Wolf, who moderated the “economic outlook” session sums it up like this: “We have a globalised economy, but politics remains local. In times of crisis, the pressure to look after the former dominates the latter.” What Wolf is indicating is that local “politics” either gets in the way and/or is not up to the job. He is right but Wolf fails to grasp that the contradiction between globalising corporations and nation-state politics is insoluble.
So struggling to take much if any comfort from the less-than-impressive signs of a return to growth after renewed and unprecedented overdoses of “stimulus”, the talk in darkened corners is now turning to “rebalancing the global economy” with all the unspecified pain for millions that brings in its wake.
The crash exposed massive over-capacity in production around the world, after decades of the increasingly credit-led investment needed to maintain the expansion on which capital feeds. In the last 12 months, many countries have relied on individual attempts at rescuing domestic economies, creating export-led growth as a result.
But it isn’t happening.
Whilst the stimulus enabled banks to refill their capital balances, and, particularly in China allowed production to continue and even grow, it has failed to get people buying. Consumers aren’t consuming.
In countries like Spain, the United States and the United Kingdom and its nearest neighbour Ireland, as well as some of the countries of the former Soviet Union consumption was funded by borrowing against absurd inflation in property prices. Property prices have collapsed, so consumption collapsed. It can’t be restored to previous levels. The patient has suffered a near fatal illness.
Growth certainly hasn’t returned to countries like the Ukraine where GDP fell 14% last year. All across the world unemployment is high and soaring, hours and wages are being cut. Pensions wiped out. In the US, where some of the production numbers look positive, Lawrence Summers, Barack Obama’s principal economic adviser, admits “what we are seeing in the US and perhaps in other places, is a statistical recovery and a human recession”.
The obscure language of the financial commentators can be difficult to untangle at times, but the threatening messages are getting clearer day by day. They speak on behalf of the global investors, speculators who move vast funds to the source of highest return. And the message to governments is this – those with an excess of debt had better give up on stimulus pretty soon to avoid the growing threat of state bankruptcy that is spreading like a global contagion.
Italy, Portugal, Spain, the UK, Iceland are joining Greece - which has its hand out for help to the International Monetary Fund and the European Union – in the emergency ward. Those with excess savings like China had better get their people increasing their consumption pronto, or face the consequences.
No wonder the political crisis is growing in all the major economies. Cut spending and the economy will dive (or die); don’t cut spending and the state faces bankruptcy. In short, there are no answers within the present framework. That doesn’t mean the forces of extreme reaction will give up and go home. If conventional nation-state politics won’t work, there is always the danger of unconventional “solutions”.
In our draft Manifesto of Revolutionary Solutions we set out our proposals to bring this obscene and increasingly dangerous system to its end. Join the discussion.
Gerry Gold
Economics editor
Tuesday, February 02, 2010
Constructing a new world
History has, of course, seen many manifestos come and go. But the social transformation needed to lift societies out of crisis do not simply appear spontaneously. It is vital to break free from received wisdoms and stereotypes and work out solutions to problems that until now have appeared insoluble.
So we are proud to announce that our draft Manifesto of Revolutionary Solutions goes live online today. The manifesto points to the contradictions with the capitalist system of production as the real causes of the ecological, economic and political crises that overshadow our world while proposing far-reaching solutions.
Revolutionary changes in history have been inspired by manifestos and declarations of one kind or another. You only have to think of Protestant reformer Luther’s 95 Theses nailed to a church door in 1517, the Declaration of the Rights of Man and of the Citizen in France in 1789, the Communist Manifesto of 1848 by Marx and Engels and the April Theses put forward by Lenin in 1917, to name but a few.
Thus, it is a happy coincidence that the life and work of a man who helped to instigate a cultural revolution in Europe is being celebrated in a major exhibition opening at Tate Modern this week. Theo Van Doesburg, who launched the magazine and the movement called De Stijl in 1917, was a Renaissance man. He was not only a painter, architect and designer, but also a writer and poet. Above all, he created an international network to change the course of art and life.
Van Doesburg, along with fellow painter Piet Mondrian, and other collaborators, worked for the possibility of a “deepened artistic culture” in which artists working in different fields would realise that they shared a common language. Tate Modern director Vicente Todolì and Edwin Jacobs, the curators, note that Van Doesburg “advocated collective enterprise rather than individualism”.
The Dutch artist sought to change not only the face of art, but the world itself. For him as for other avant-garde artists, what counted was how their art could promote new visions for life and society. Unlike Mondrian who has overshadowed him, Van Doesburg “saw art not on a singular course, but opening to multiple possibilities, as a bridge from the present to the future”.
Constructing a New World shows how the years between 1916 and the mid-1920s saw an unparalleled cultural flowering, spearheaded by a host of avant-garde magazines, sweep through Europe as designer-artists like Van Doesburg, El Lissitsky and Moholy Nagy travelled extensively, cross-fertilising each other’s countries and movements with innovations in all branches of the arts, including film, music and sculpture.
Modernism, just like the notion that revolutionary change is possible, has been much maligned and rejected over the past decades. The exhibition is a welcome chance to reassess it. Naturally, there was plenty of chaos, conflicts, falling outs and rows as different tendencies asserted themselves.
But the spirit of inquiry and collaboration, a multi-disciplinary approach towards human life and culture, the desire to use technology to provide a better life for the whole of society, a profound internationalism, the enthusiasm for scientific knowledge, the rejection of dogma and political censorship remain totally relevant.
It is in that same spirit that we ask you to participate and help widen the discussion about the Manifesto of Revolutionary Solutions so that it becomes a real instrument to inspire political, social and cultural change.
Corinna Lotz
A World to Win secretary
So we are proud to announce that our draft Manifesto of Revolutionary Solutions goes live online today. The manifesto points to the contradictions with the capitalist system of production as the real causes of the ecological, economic and political crises that overshadow our world while proposing far-reaching solutions.
Revolutionary changes in history have been inspired by manifestos and declarations of one kind or another. You only have to think of Protestant reformer Luther’s 95 Theses nailed to a church door in 1517, the Declaration of the Rights of Man and of the Citizen in France in 1789, the Communist Manifesto of 1848 by Marx and Engels and the April Theses put forward by Lenin in 1917, to name but a few.
Thus, it is a happy coincidence that the life and work of a man who helped to instigate a cultural revolution in Europe is being celebrated in a major exhibition opening at Tate Modern this week. Theo Van Doesburg, who launched the magazine and the movement called De Stijl in 1917, was a Renaissance man. He was not only a painter, architect and designer, but also a writer and poet. Above all, he created an international network to change the course of art and life.
Van Doesburg, along with fellow painter Piet Mondrian, and other collaborators, worked for the possibility of a “deepened artistic culture” in which artists working in different fields would realise that they shared a common language. Tate Modern director Vicente Todolì and Edwin Jacobs, the curators, note that Van Doesburg “advocated collective enterprise rather than individualism”.
The Dutch artist sought to change not only the face of art, but the world itself. For him as for other avant-garde artists, what counted was how their art could promote new visions for life and society. Unlike Mondrian who has overshadowed him, Van Doesburg “saw art not on a singular course, but opening to multiple possibilities, as a bridge from the present to the future”.
Constructing a New World shows how the years between 1916 and the mid-1920s saw an unparalleled cultural flowering, spearheaded by a host of avant-garde magazines, sweep through Europe as designer-artists like Van Doesburg, El Lissitsky and Moholy Nagy travelled extensively, cross-fertilising each other’s countries and movements with innovations in all branches of the arts, including film, music and sculpture.
Modernism, just like the notion that revolutionary change is possible, has been much maligned and rejected over the past decades. The exhibition is a welcome chance to reassess it. Naturally, there was plenty of chaos, conflicts, falling outs and rows as different tendencies asserted themselves.
But the spirit of inquiry and collaboration, a multi-disciplinary approach towards human life and culture, the desire to use technology to provide a better life for the whole of society, a profound internationalism, the enthusiasm for scientific knowledge, the rejection of dogma and political censorship remain totally relevant.
It is in that same spirit that we ask you to participate and help widen the discussion about the Manifesto of Revolutionary Solutions so that it becomes a real instrument to inspire political, social and cultural change.
Corinna Lotz
A World to Win secretary
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