Seize the time in 2009

This was the year when the wheels came off the juggernaut of corporate-driven globalisation and revealed to a new generation that the capitalist economic and financial model is fundamentally flawed and unsustainable. An insoluble crisis centred at the heart of the system, in the United States and Britain, is certain to deepen in 2009.

In both countries, long-established financial institutions went to the wall or were put on state life-support. Mass unemployment looms from the subsequent collapse of production and consumption, creating the most significant crisis for capitalism since the Wall Street collapse of 1929 and the Great Depression that followed.

During 2008, famous financial institutions like Lehman Brothers, Fannie Mae, Freddie Mac and Washington Mutual, went to the wall in the United States. Events left the reputations of US banking giants in tatters, as the Financial Times, the bankers’ and employers’ broadsheet remarked under the banner: “The fallen giants of finance”. The US Federal Reserve had to bail out American International Group (AIG), the largest underwriters of commercial and industrial insurance in the United States and Citibank. An emergency rescue package rushed through Congress, with the threat of martial law in the background, made no difference.

Masters of the universe like Dick Fuld of the 158-year old Lehman Brothers bank, boss of some 26,000 employees, lost any connection whatsoever with business reality, according to banking insider Andrew Gowers, former Financial Times editor. Writing after Bear Stearns collapsed into the arms of JP Morgan Chase, he said: “On Wall Street blind panic had ensued and its focus was Lehman Brothers. The market has a phrase for this sort of event: the death spiral. Our freewheeling, globally integrated financial markets turn out to be built on sand.”

The sandcastle extended to Britain, where more than a decade of New Labour rule had encouraged the City of London to create its own fantasy world. Building societies became banks and banks built their profits through exploiting an exotic array of financial instruments. After the Wall Street debacle, the collapse of the British end of the casino could not be far behind. And so it proved in October, when the Royal Bank of Scotland and HBOS were within hours of total disintegration. The state bail-out totalled more than £600 billion. Now the British state’s finances are inextricably bound up with those of the banking sector, which shows absolutely no signs of recovery.

In fact, lending remains restricted and the banks are using government money to rebuild their balance sheets at the expense of borrowers and small businesses. Meanwhile, the UK stock market fell by a third during 2008 – it was down more than 40% in Japan - undermining the value of pensions dependent on the value of shares. The ruling elites have lost their confidence, as Lionel Barber, editor of the Financial Times, said in his end-of-year review:

“The twin shocks [Mumbai terror attack and the global financial crisis] certainly challenge assumptions which had appeared unassailable since the fall of the Berlin Wall: the innate superiority of the western model of market capitalism and the inevitable progress of globalisation, powered by the free movement of goods, labour, capital and services.”

As unemployment grows by leaps and bounds, the weakest firms are going to the wall. Household names like Woolworths – which survived the 1930s – and MFI are in liquidation, along with a host of other companies such as Adams, the children’s retailer. At least 600,000 jobs could go in the UK in 2009, according to a report by a personnel managers' professional body. The Chartered Institute of Personnel and Development says even those who escape redundancy face pay freezes.

In China, the global downturn meant that 10 million migrant workers lost their jobs during November. In addition it is estimated that 1.5 million Chinese graduates cannot find work. In Spain, unemployment stands at 11.3% for locals and around 17% amongst immigrant workers. In Greece, poor prospects and youth unemployment are in the background of ongoing unrest in Athens and elsewhere, which has seen weeks of confrontations between security forces, youth and workers.

Thousands of workers marched against job cuts through the Ukrainian capital Kiev just before Christmas. There were demonstrations throughout Russia as the economic crisis began to affect jobs and services. Migrant workers around the world are being hit first and hardest as the recession devours jobs and reduces pay. Unresolved self-determination struggles, such as in the North Caucasus, Georgia, Palestine, Tamil Nadu and Kashmir, became harsher as evidenced by the barbaric attack on Gaza by Israeli warplanes.

In Britain, we are experiencing an eerie calm before the storm, punctuated at present by outspoken warnings from high places – particularly the pulpits and altars of England’s cathedrals. These are strange times indeed when Roman Catholic Cardinals and Anglican Archbishops feel compelled to warn about the unravelling of the very fabric of capitalist society.

Over Christmas, Cardinal Cormac Murphy O’Connor, the Archbishop of Westminster, spoke of “spectacular cases of bad behaviour” in the financial world and warned of lost trust as ordinary people felt that only bankers and speculators were benefiting from the economy. The bishops of Manchester, Durham, Winchester, Carlisle and Hulme warned that Britain was suffering from an addiction to debt, family breakdown and a widening gap between rich and poor. They accused ministers of pursuing "scandalous" policies and reneging on promises.

Dealing as they do with matters of the spirit, religious leaders are sensitive to the way in which the meltdown of the global economy is causing the dogmas and “self-evident” truths of the past decades to disintegrate. As people lose their jobs, pensions and many rights they took for granted, their confidence in the system and trust in the state that administers and defends it also breaks down, as the bishops and others are only too aware.

For the past year A World to Win’s blogs and web pages provided an account of the crash of 2008. We’ve pointed the finger at the bourgeois politicians and states who are spinning around as they try to stop up the dam of capitalism by offering more and more free money to the banks, as if feeding an ever more voracious monster. A World to Win has shown that if existing states and governments are left in power, the rest of us will be dragged down to economic disaster, living in authoritarian, surveillance states.

In the less precise science of economic analysis we are a bit like the group of German astronomers who this month confirmed that there is a giant black hole at the centre of the Milky Way. They reached their conclusion after 16 years of monitoring the motion of the stars surrounding the hole, which is known as Sagittarius A*.

In a comparable way, our team at A World to Win has been monitoring the warped movement of the global economy around its very own black hole. We dubbed this infinite pit of absolute gravity ”fantasy finance or “fictitious capital” as Karl Marx called it. And, as astro-physicists know, activity around the edge of the black hole is most perilous as those who go there tend to disappear forever.

There is of course, a major difference between events in the interstellar universe and those here on Earth. Here, history – including economic history – is the sum of the myriad activities of conscious human beings, each of whom pursues a life-path according to her or his interests, consciously or unconsciously. Under the present system most human beings have no power to decide which way society will go. But moments come in history, when masses of people do assert their power over their rulers and bring about decisive changes.

As we have outlined in our books, the change from the present order of things to a better one needs to take forward all the best aspects of the current system and use them as the foundation of a not-for-profit production and exchange economy where protection of people and the planet is fundamental to everything. Developing strategies for a not-for-profit economy and a truly democratic form of politics is the most urgent issue of the day. We cannot predict or choose exactly how people will act in defence of their rights and living standards. But they must and will do so. Our job is to be ready for this by building up discussion and support for a revolutionary change.

We can take confidence from the fact that many million people around the world have been inspired by the US election to strengthen the understanding that human beings have the power to better their circumstances collectively thereby making history. Barack Obama’s defeat of the Republican Party showed that far from being all-powerful, the Bush regime had lost credibility. The failed military occupations of Afghanistan and Iraq have brought disenchantment with the notion that the US could “spread democracy” throughout the world. The biggest military power in the world is being seen to fail yet again.

Obama clinched the presidency by involving hundreds of thousands of US citizens in their homes and localities. His slogans Yes we can and Change we can believe in, promised a different future than the one offered by Bush, as well as the Clinton group which had hitherto dominated the Democratic Party. Naturally Obama is riding a dangerous tiger of popular expectation which the economic crisis will make it impossible to fulfil. But he showed that people can and will organise themselves to make change possible.

To be successful in this, means making use of all the expertise that human beings have accumulated through science, art and technology, to end the rule of profit-crazed, war-mongering minorities. To bring about the change, the soft-soaping and back-pedalling of reformist trade union leaders and their ilk is worse than useless. Appealing to New Labour, or any parliamentary coalition that may succeed it in the event of an election, to change its policies is living in dreamland.

Instead we should seize the opportunity presented by the crisis and make A World to Win into a powerful movement, based on the People’s Charter for Democracy. The coming year will bring unprecedented challenges to members and supporters of A World to Win and all those who seek to bring about revolutionary political and social change. It’s a chance that we cannot afford to miss.

Corinna Lotz

A World to Win secretary

The tragedy of the Palestinians

One thing in this turbulent world is always certain - the hypocrisy of the major powers when it comes to the slaughter of innocent Palestinians by Israeli bombs and rockets. Do we ever hear a word of condemnation from Washington and London as the bodies pile up? Never! 

David Miliband, the foreign secretary, today pointedly restricted himself to a call for an “urgent ceasefire”, as if two armies of fairly equal strength were battling it out somewhere. Nothing could be more inappropriate. Israel has the latest US-supplied warplanes and missiles (and atomic weapons) while the Palestinians in Gaza have a few primitive rockets. So the not-so-brave Israeli fighter pilots can bomb and kill at will, which is what they have done. 

Gazans are living in a giant prison camp, surrounded by Israeli forces, denied adequate food, water and medical supplies. Few have jobs and most Palestinians live in abject poverty. Now they are burying their children, killed by an act of state terror while Israel’s principal sponsors turn a blind eye. 

So when Miliband says that "we are now paying a terrible price for the slow and faltering pace of negotiations not just over the last year, probably not just over the last 15 years”, he of course fails to acknowledge his government’s responsibility. The elected Hamas government may not be everyone’s cup of tea but it was the democratic choice of the Palestinians in Gaza. 

What was their reward for a rare display of ballot box democracy in the Middle East? To be isolated by the US and Britain, along with the rest of the European Union because the voters had made the wrong choice! Bit difficult to negotiate in circumstances where the other side ignores you. 

Hamas this year declared a six-month ceasefire with Israel but the Zionists only intensified their attempts to create a Palestinian ghetto inside Gaza. As John Ging, the head of operations for the United Nations Relief and Works Agency for Palestine Refugees, said in November: "The people of Gaza did not benefit; they did not have any restoration of a dignified existence ... at the UN, our supplies were also restricted during the period of the ceasefire, to the point where we were left in a very vulnerable and precarious position and with a few days of closure we ran out of food."

Israel provoked Hamas until they got what they wanted – a resumption by frustrated and starving Gazans of rocket attacks. The response was an entirely disproportionate series of air raids on civilians and infrastructure which has left hundreds dead. A ground invasion will probably follow to “change the realities on the ground”, as the Israeli leaders chillingly put it, just before president-elect Obama takes office. 

Others are also culpable for the tragic plight of the Palestinians. "Arab silence is behind the bombings," read a banner held by one of several thousand people who turned out in the Sunni Arab city of Samarra north of Baghdad. The largest demonstration in the Arab world was in Egypt where 50,000 demonstrated in cities throughout the country. Egypt’s president Mubarak, a Washington stooge, ordered his border guards to shoot Gazans trying to cross into Egypt to escape Israeli air attacks. 

So for the Palestinians, 2008 ends as it began back in 1948 when the state of Israel was declared by rabid Zionist nationalists. They claimed falsely to speak for oppressed Jews everywhere and offered them a place to live at the expense of millions of Palestinians whose tragedy is still unfolding. As Marx once put it, a nation that oppresses another can never be free itself. Such is Israel today. 

Paul Feldman

AWTW communications editor

Warnings come thick and fast

First the financial crisis, followed by economic disintegration. Then the political and social crisis, which will probably lead to a military-style crackdown by the state. This is not my gloomy assessment but the view increasingly taken by right-wing commentators and aired in a recent report produced by the US Army War College’s Strategic Institute.

Civil unrest has already broken out in Greece, China and Russia as a consequence of the impact of the global economic recession. In Athens, young people hit hardest by unemployment have battled the police on the streets for more than two weeks. With the police patently unable to cope, only the hated army stands between the government and a political collapse.

Demonstrations have broken out – and been broken up – across Russia, whose fragile state finances are being devastated by plummeting oil prices. The rouble has lost 11% of its value in four months and unemployment is growing. Attempted protests have taken place in Moscow, Vladivostok, St. Petersburg and Kaliningrad. The Chinese authorities fear something similar as its export-led economy goes into free-fall. An estimated 40 million Chinese workers are expected to lose their jobs in the new few months and party officials have warned of "mass-scale social turmoil".

In less than a month, president-elect Obama will take office in the midst of the gravest crisis to hit the United States since the 1920s. The survival of major industries hangs by a thread. Loans given to the big carmakers are conditional on savage job cuts by the spring which the unions are opposing. Repossessions are running at record rates and some in the Pentagon are turning their minds to potential consequences for the military.

A recent report produced by the US Army War College’s Strategic Institute warns that the United States may experience massive civil unrest in the wake of a series of crises which it has termed "strategic shock”. The report, titled Known Unknowns: Unconventional Strategic Shocks in Defence Strategy Development, also suggests that the military may have to be used to quell domestic disorder. "Widespread civil violence inside the United States would force the defence establishment to reorient priorities in extremis to defend basic domestic order and human security," the report, authored by [Ret.] Lt. Col. Nathan Freir, reads.

Freir also warns that the incoming Obama administration should prepare for a "first term crisis" that could act as a catalyst for such unrest. "The current administration confronted a game-changing ’strategic shock’ [9/11] inside its first eight months in office," the report reads. "The next administration would be well-advised to expect the same during the course of its first term. Indeed, the odds are very high against any of the challenges routinely at the top of the traditional defence agenda triggering the next watershed inside DoD [Department of Defence]."

The Washington Post last month reported that the US military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe. In a September 8 Army Times article, it was announced that the first wave of the troop deployment in Colorado Springs, would be aimed at tackling "civil unrest and crowd control".

Ambrose Evans-Pritchard is an astute commentator for the right-wing Daily Telegraph who insists the financial and economic crisis has a long way to run. He has noted that Dominique Strauss-Kahn, the head of the International Monetary Fund, has warned that if economic growth is not restored promptly, then “social unrest may happen in many countries, including advanced economies … . the people have reacted with feelings going from surprise to anger, and from anger to fear”.

Evans-Pritchard, who acknowledges that the Marxist phrase “a crisis of capitalism” has made a comeback, says the crisis may overturn the "New World Order" adding: “The last great era of globalisation peaked just before 1914. You know the rest of the story.”

You can’t say we haven’t been warned. One of the things you could consider between now and 2009 is getting hold of a copy of Unmasking the State and having a read about some democratic alternatives to capitalist war and dictatorship.

Paul Feldman
AWTW communications editor

Please note that the next A World to Win blog will appear on December 31.

Henry Ford's model runs into the sand

Global production of cars is coming to a standstill. This is just the most dramatic and immediate result of a rapidly deteriorating crisis which has paralysed the global financial system and rapidly sent the world economy into recession.

Chrysler has halted production at all 30 of its factories for a month or maybe longer. The closures affect 46,000 workers directly, but, should the temporary closure become permanent, repercussions throughout the industry and the rest of the economy will affect millions in America and worldwide.

GM has suspended work on its $370m engine factory in Michigan, dashing hopes that climate change offers a route to a profitable future. It was planning to build a new small car engine, working towards fuel-efficient and all-electric cars, but the market for cars has disappeared along with all of the other things people used to buy, as unemployment rockets upwards.

The demand collapse is trashing all car manufacturers. GM said it was shutting down 30% of its North American production. Also on Wednesday, Ford announced it was to extend the normal two-week Christmas shut-down at 10 of its North American plants for an extra week.

The Canadian car parts sector, which employed 120,000 people in 2006, expects to see its profits tumble by two-thirds next year, and employment levels plunge 20% by 2010. Almost 600,000 jobs in Canada would be at risk from a collapse of Chrysler, Ford and General Motors. It’s no different in the UK where car sales are in meltdown and manufacturers are closing their factories well into the New Year and even longer.

Bourgeois economists and analysts have been brainstorming solutions now that everything tried in the last year has failed. Their problem is they can’t see beyond the constraints of the system which depends on capital expansion to generate profits. And right now there’s not much profit-making going on.

The fewer goods people buy, the less the profit made in production can be realised, and as prices begin to drop everything just gets worse. Even the oil-producing nations’ plan to cut production hasn’t prevented the price from falling below $40 a barrel from its peak of around $140 earlier in the year.

With a downward spiral of deflation beginning, governments and central banks are now prepared to consider just about anything that will make us buy the products they employ us to make. Interest rates are dropping towards zero, already a strange enough concept that opens the door to new possibilities.

The one which is perhaps at the same time both easiest and hardest to understand is looking the most popular just now. Instead of pouring taxpayers’ money into banks which just hold on to it to rebuild their reserves, costing each of us many thousands of pounds in the future, the new big idea is that governments and central banks start issuing new money – just printing notes, creating the stuff out of thin air and giving it direct to us in the hope that we’ll go out and start spending it.

Must be the Christmas spirit, you say? No they really mean it. The really, really wonderful thing is that with zero interest rates, the cash bonanza would be a no-interest giveaway. Trouble is – there’s always a catch – printing money devalues the currency and eventually leads to runaway inflation. Higher prices are, in any case, bound to follow the uncontrolled slide in sterling – unmatched in size since 1931, when Labour prime minister Ramsay MacDonald took the pound off the gold standard. Devaluation on this scale could also lead to a flight of capital from Britain and a collapse of the currency, some are warning.

Whichever way you look at it then, the capitalist economy is well and truly broken. In 1908, Henry Ford gave the world the Model T and the production line for cars. A century later, it’s time for a revolutionary new model.

Gerry Gold
Economics editor

Climate change tipping point

Another day, another set of warnings that runaway climate change is pushing the planet to a tipping point beyond which serious impacts cannot be avoided. Climate change researchers have found the Arctic region is warming faster than the rest of the world, and that this is happening much sooner than expected. 

They have told the annual meeting of the American Geophysical Union  (AGU) that air temperatures are higher than normal for autumn, because the sea ice melted in the summer, building up heat in the oceans. As the air cools in autumn, the sea releases this heat, which the scientists have been able to measure. 

It seems the International Panel on Climate Change (IPCC) worked with figures suggesting this “Arctic Amplification”, would not happen for decade at the earliest. The new figures show it has been happening for the last five years. 

This matters because if the sea ice covers less of the total area in winter and disappears altogether in summer, the climate will be profoundly affected. Some possible impacts are a permanent drought in the south-western United States, more storms and a shift in the Arctic Conveyor – the sea current that makes Europe and America habitable for humans and other animals. The meeting AGU heard that the IPCC model underestimates rising sea levels. They were looking at a predicted rise of between 28cm and 42cm by the end of the century. The new estimate is as much as 150cm by the end of the century. 

Of course we shouldn’t worry too much, because global capitalism and their supporting governments are on the case. Or are they? The  International Energy Authority this week helpfully published a report which shows how an increase in demand for fossil fuel up to 2030 can be met by dragging every last dirty ounce out of the ground as quickly as possible. 

And the German government caved in to heavy industry and energy corporations to doom the already inadequate European emissions reduction plan. Finally, the international climate change meeting in Poznan decided – well, it decided not to decide anything. Instead they are waiting for the glorious day when President Obama rides to the planet’s rescue with – well, with exactly the same policies that have failed to cut emissions since Kyoto 12 years ago, actually. 

The problem we face is that in a whole number of areas millions of us know what to do – it is simply that we lack the power to do it. For example, everyone knows that the answer to mortgage default is not to evict people from their homes, but to create a shared way forward where they can stay put and pay a fair rent. But still the banks go on with the evictions and the government won’t stop them even after the state bail-outs. 

On climate change, the action plan put forward by A World to Win in our book Running a Temperature is only one of many that show how to transform energy, transport, housing etc. before it is too late. The difference is that only our plan states clearly that without a transformation of democracy and power, we cannot even begin. 

And so as you watch the ice cube melting in your drink this holiday (and by the way, cheers!) make it a symbol of your decision to start next year by signing up to join A World to Win, becoming a local advocate and campaigner for the new People’s Charter for Democracy, and creating a movement take our fate into our own hands in 2009. 

Penny Cole
Environment editor

Brown prepares to cut and run

In 1997, New Labour chose Things Can Only Get Better by D:ream as its theme song for the election campaign. As speculation rises that prime minister Brown may call an election early in 2009, it is time for someone to record Things Can Only Get Worse. 

With unemployment soaring towards the 2 million mark by Christmas on today’s figures, reports that New Labour may cut and run before the full impact of the recession in human terms is revealed makes sense – if your only concern is holding on to power that is. 

The government knows that the financial and economic crisis is spiralling out of control. They’re just not telling anyone else that this is the case. So call a snap election around the idea that Brown has “saved the world”, as he told the Commons last week, and the electorate is likely to choose the devil they know (our saviour) rather than the one they don’t (Cameron).   

Or so the thinking inside No.10 goes. But it’s a race both against time and against the unpredictable. All the measures taken by the government – bailing out bankrupt banks, slashing interest rates and VAT and stoking up government debt – have had no discernible impact on a crisis that is global in scope and capitalist in nature.

The only shot left in the locker is printing more money, known as “quantitative easing”. And this is under serious consideration by the Bank of England, which would achieve this by buying more government bonds than are required and flooding the banks with the proceeds. No wonder analysts call this the ”nuclear option”. 

Such a move would be desperate and constitute an indictment of New Labour’s failures. You can see why Lord Mandelson (aka the Prince of Darkness) – who is about to part privatise the Royal Mail, adding to the jobless total – is urging Brown to make a dash to the polls before the Bank of England (which was set free by Brown when chancellor) pulls the rug from underneath the government’s feet. 

Experts are warning of a jobs catastrophe in 2009, with unemployment likely to top 3 million according to the Bank of England's labour market analyst, David Blanchflower."Where is the light at the end of the tunnel? I can't see any," he says. If he could actually see a light, it would probably be the train of depression coming the other way, for his estimates could well prove too conservative.

For example, more than 350,000 managers alone could lose their jobs during the next 12 months, according to the Management Consultancies Association (MCA), which also reports that two-thirds of top companies are expecting to lay off workers next year. Today’s official unemployment figures only go up to October and do not include the avalanche of job losses announced recently in banking and commerce. 

So as you ponder the “choice” between a capitalist government already in office and one waiting in the wings, here’s some preliminary advice about how to vote it you are invited to a polling station sometime in February 2009 – don’t! Why waste your hard-won right to vote on a bunch of creepy and useless politicians who will take your money and hand it over to the banks, big business or whoever? In fact, to anyone except those who need it most. 

An election in these circumstances will be a fraud on the voters and a further insult to the democratic process. Our time would be better spent campaigning for radically different, not to say revolutionary, solutions to a crisis which will otherwise engulf us all. 

Paul Feldman
AWTW communications editor

 

 

Just one big lie

When Bernard Madoff, who is allegedly responsible for a $50 billion fraud that has hit banks, hedge funds and wealthy individuals, told his staff that he was "finished" and that "it's all just one big lie", he could just as easily been referring to the global capitalist financial system as a whole and not just his own “investment” fund.

Madoff ran a one-man house of cards, building a pyramid of debt that was undone by the credit crunch. He promised fabulous returns of around 10%, which he “achieved” by taking money from other funds. Were the banks wary of such promises? Of course not. The Royal Bank of Scotland and HSBC were among those who were drawn into the game, cheering as they went along.

After all, they were operating their own house of cards, albeit a relatively legal one. They just defrauded society as a whole – and were then bailed out with taxpayers’ money by the bankers’ government led by that notorious creative accountant, Gordon Brown. The banks are reportedly prepared to write off every penny of what they are owed, knowing that the state will not let them fail. In the end, of courses, bank customers will pay through higher loan rates and a further tightening of credit.

Ah, what it is to be a banker when the rest of the world is facing unemployment, repossessions and poverty as 2008 draws to a close. Or when a million of school kids from poor families are denied access to free school meals because the wretched New Labour government has drawn the rules so tightly that very few qualify.

What the Madoff affair also reveals is that the financial crash is still in its infancy. The US authorities barely knew anything about Madoff’s mostly unregulated business dealings. The auditors to Madoff's $50bn fund were an unknown firm consisting of a 78-year-old retiree living in Florida, one accountant and a secretary, for example. Although Madoff registered his investment advisory business with the Securities and Exchange Commission (SEC) in 2006, it has only just been inspected by the regulator.


Why? Because casino capitalism really took off in the 21st century. The number of registered advisers went up 50% in the first part of the decade. As a result, only about one in ten is inspected each year. But even if the SEC had inspected Madoff’s investment firm, it might not have found anything wrong. "One of the biggest factors that make this situation very difficult is I think it was an unregulated pool of money," former SEC Commissioner Laura Unger said yesterday, adding that as a result the SEC appeared to have "no clear jurisdiction."

So there you have it. Regulation is non-existent and no one really knows what’s going on out there. This all points to a more furious unravelling of the whole house of cards, aka as the global financial system. The consequences in human terms will be catastrophic unless we are able to chart another course.

There is no point in the present banking and financial system. It is part of the big lie referred to by Madoff. You take in other people’s money and then gamble and speculate until the day of reckoning. Bankers and speculators should be put out of business, along with the government that props them up. The world is crying out for a saner economic and financial system based on co-operation and mutual ownership. That has to be our agenda for 2009.

Paul Feldman
AWTW communications editor

A state of terror

Gordon Brown is generously offering the “expertise” of the British security and intelligence services to fight al-Qaeda’s activities in Pakistan. But many are increasingly questioning the ability of the British capitalist state to protect anyone from attacks as well as its abuse of anti-terror powers to create an authoritarian regime.

The dust is not yet settled over Friday’s inquest verdict into the killing of Jean de Menezes. The jury’s 8-2 vote for an open verdict – the most damning available to it – showed that they did not believe the police account of what happened. Jurors held their nerve, despite coming under enormous pressure from the coroner who had ruled they could not say that the 27-year-old Brazilian electrician was unlawfully killed at Stockwell tube in July 2005.

Fellow passengers on the tube insisted during the inquest that the police had given no warning. Anna Dunwoodie, for example, said she thought the police were “out of control” and said there was a “sense of panic” when they rushed aboard the train. It was also revealed that the marksmen from C12 and C2 were allowed to “confer” after they realised that they had executed an innocent man.

It is not only the Menezes case which has shown an overweening and out-of-control police. After the arrest of MP Damian Green earlier this month by nine anti-terror officers, even the Financial Times ran a headline saying “The police, and the state, are out of control”. Philip Stephens went on to remark that the police’s "disdain for political process spoke eloquently to the authoritarian culture of our times”.

Meanwhile, data unearthed by under the Freedom of Information Act about the Kent police operation against climate protesters at Kingsnorth power station last summer showed that claims about “violent protesters” were untrue. The injuries reported by the 1,500 police on duty ludicrously included "stung on finger by possible wasp"; "officer injured sitting in car"; and "officer succumbed to sun and heat". Lib Dem justice spokesman David Howarth said: "That the minister could defend as 'proportionate' a £5.9m policing operation in which there was not a single injury to police officers caused by the protesters beggars belief. The threat posed by environmental direct action is being systematically overblown by both the government and the police.”

And, in yet another bizarre use of anti-terror powers, police detained photographer Jess Hurd under the Anti-Terrorism Act as she was taking photographs at the Canary Wharf wedding of gypsy couple Nora Quilligan and Danny Sheridan from the Dale Farm camp in Essex.

Meanwhile two Bills are going through parliament which will give yet more powers to the police. A new counter-terrorism Bill will give the home secretary greater powers to withhold intercept evidence from the families of the deceased in the interests of national security or the UK's relationship with another country or "otherwise in the public interest". Organisations like Inquest are warning that key evidence will be suppressed, especially in “contentious deaths involving state agents”. The coroner and lawyers would have to be vetted and the inquest would take place in secret.

And, yet another move by the surveillance state, the Coroners and Justice Bill, announced in the Queens Speech earlier this month, has been denounced by Phil Booth of NO2ID. He warns: “Rather than protecting our personal information, as it should be, the government is cutting away safeguards for its own data-trafficking convenience. This is a Bill to smash the rule of law and build the database state in its place.”

The rule of law is the last thing on New Labour’s mind, however. Brown’s regime is sitting atop social anger that is building towards an explosion as a result of the economic crisis. The government is keeping the state onside by giving it more and more powers to intimidate every sector of society, from political opponents to activists. The Menezes jury’s defiance of the state is to be commended. We should build on that and carry through the proposals outlined in our new book, Unmasking the State

Corinna Lotz
A World to Win secretary

Thinking the unthinkable

Despite Gordon Brown’s notions of saving the world – let alone Britain – the pound is now falling to its lowest-ever levels against the Euro. It is currently trading at 1.04 euros to the pound at some bureaux de change. Things are so bad that insiders are thinking the unthinkable – jettisoning Sterling and adopting the Euro!

The dollar too is falling at the rate of 6.6 per cent a year as new data revealed serious declines in household worth and mortgage borrowing. The dollar slid to its lowest in 13 years against the yen this morning as the Senate rejected a £14 billion bailout for General Motors, Chrysler and Ford. Unprecedented interest rate cuts, gigantic taxpayer-funded bank rescue packages and promises of government infrastructure spending – including the biggest in the US in half a century – have done nothing to stop the financial and economic meltdown in Britain or the US.

Production in the US is forecast to shrink by 4.1% this quarter and by another 3.4% and 0.8% in the first and second quarters of next year. "The news from the economy is bad. The recession that we had previously hoped to avoid is now with us in full gale force," says one report. By late 2009, the US unemployment rate is predicted to reach 8.5%, compared with 6.7% in November, as employers shed an additional two million jobs over the next year. In the UK, the CBI reported a five-year-low in export orders despite the advantages offered by the decline of the pound.

The worldwide collapse in demand has turned the economy upside down – from commodity speculation producing inflationary price increases in food and energy, to prices falling across the world. This side of the pond, current forecasts are suggesting that unemployment across Europe may rise from 17 to 21 million next year. In a debate organised by the Financial Times Friends of Europe group, Poul Nyrup Rasmussen, president of the Party of European Socialists, said he feared that there would be “a further dramatic increase to the other side of 25 million”.

The crisis is so deep and UK trade union leaders so short-sighted that they are offering to cut their members wages by 10% in the remnants of the UK steel industry – adding to the downward deflationary spiral. Former TUC leader John Monks, now head of the European Trade Union confederation, and steel union leaders instead of standing up for workers’ rights, are prostrate before the employers. The three steel unions have offered pay cuts of 10% on behalf of their members. What a curious state of affairs when the employers’ spokespeople are less gung-ho about wage cutting than the union leaders!

The Daily Telegraph – not known as a campaigner for workers’ rights – warns against widespread pay cuts: “Should [pay cuts] become widespread, they could contribute to a deflationary spiral as employer after employer cuts their workers’ pay. A 3% pay cut, if extended across the entire population, may not necessarily mean lower real incomes, but it does mean a higher debt burden. Debt, after all, retains its nominal value, regardless of our ability to pay. Given that the mountain of borrowing is precisely at the heart of the current crisis, such an outcome would be truly terrifying,” it comments.

Even the bosses’ very own newspaper, the Financial Times, argues caution: “No one should pretend that a pay cut is a panacea”, its leader says today.

Meanwhile, with interest rates approaching zero, the authorities, doing whatever it takes to save the system, are obliged to open up the next Pandora’s box. In case anyone is paying attention, they call it ’quantitative easing’, to throw you off the scent. It means increasing the money supply. Printing money. It’s been tried before. Many times. It doesn’t make things any better. Look at Zimbabwe. Or Germany in the 1930s.

Gerry Gold
Economics editor

EU climate talks fraud

In July this year, 200,000 Germans cheered Barack Obama when he promised a rally in Berlin that under his leadership, the US would join Europe in leading the fight against climate change. The only problem is that far from Europe showing the way, it is all falling apart.

As the European Union leaders meet in Brussels today, Germany, Poland and Italy are opposing key elements of the proposed new climate change strategy. The aim was to pass a binding European law making industries pay to pollute from 2013. A ceiling on emissions would be set and any firm emitting above the level for their industry would have to buy permits to do so. The ceiling would be gradually lowered, aiming for a reduction in emissions of 20% across Europe by 2020. The money raised from the sale of permits would be invested in developing alternative sources of non-polluting energy.

Now German Chancellor Angela Merkel has put the whole project in jeopardy, demanding that 30 key sectors, including chemicals, paper, glass, steel and cement, are given free permits. And since those sectors are responsible for 90% of emissions in the scheme, it would simply fall apart. There would be no incentives for, or money to invest in, alternative energy. The reason for Germany’s stand is clear enough – the corporations operating in those sectors in Germany have told the government that, in the midst of a slump, any additional costs are unacceptable. They have threatened to move their business to countries with no emissions caps.

Even if the scheme survives, what would happen to the income from the sale of permits? Britain wants most of it invested in developing new carbon capture technology, so that Europe can go on burning coal. But the majority of the other 26 countries want the funds used to subsidise the cost of meeting the targets. The Polish Prime Minister Donald Tusk says that since his country produces 90% of its energy from dirty coal, the scheme would destroy its economy and push up living costs. Overall, the poorest countries of the EU, he argues, would be bearing most of the burden.

And so while the 20% target will probably be agreed, the new scheme will operate with the same sleight of hand and market chicanery that has characterised the existing European carbon trading project. French Prime Minister Sarkozy, chairing the talks, is ready to allow a high proportion of claimed reductions to be met by companies buying cheap carbon credits from outside the EU. Just one example of what this means in practice was given this week by Kevin Smith of Carbon Trade Watch. He exposed plans by the German power giant RWE, to meet targets with credits bought from a Chinese dam project that has forced thousands of people from their homes and land. And of course, there will no reduction in emissions as a result – either in Germany or China!

This week Energy and Climate Change secretary Ed Miliband called for a mass movement along the lines of Make Poverty History, aimed at making climate change history. He has forgotten, apparently, that none of the agreements made by the G8 leaders at the time of that massive campaign have been fulfilled, and poverty is worse than ever as food and energy costs soar. Government actions are entirely linked to the demands and needs of the corporations, not the needs of the poor.

It was Obama who had it right, when he told that Berlin rally that climate change demands the same kind of mobilisation that brought down the Berlin wall. Of course that was just empty rhetoric on his part – but still, the kind of mass movement of millions of determined people that toppled the hated East German regime is exactly what we need to tackle climate change.

Penny Cole
Environment editor

The long struggle for human rights

Sixty years ago, on December 10 1948, the General Assembly of the United Nations adopted and proclaimed the landmark Universal Declaration of Human Rights (UDHR) as the basis for human development following six years of destructive and catastrophic world war. Many of the rights set out in the UDHR, however, remain aspirations for the vast majority and are routinely trampled upon by state bodies.

The UDHR preamble says: “Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people.”

Yet today, for example, the New Labour government is publishing proposals to penalise the most vulnerable and the poorest in society, who are dependent on state welfare benefits to keep them from absolute poverty despite the fact that Article 22 declares: “Everyone, as a member of society, has the right to social security…”

Article 12 states: “No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks." In Britain, state surveillance is routine through CCTV, email monitoring, stop and search and countless other intrusions.

Article 5 says “no one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment” and article 9 declares that “no one shall be subjected to arbitrary arrest, detention or exile”. Tell that to the American and British governments, who have carried out “extraordinary rendition” – kidnapping – of people, tortured them and then shipped them off to Guantanamo. Or to the dictatorial Russian government, which routinely picks up opponents and tortures Chechens and others fighting for their rights.

Article 30 states: "Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.” So how come the United States and Britain have invaded Iraq and occupied Afghanistan?

Other aspects of UDHR say that everyone has the “right to work”, to “just and favourable conditions of work and to protection against unemployment”. The global capitalist crisis means, however, that jobs are disappearing at a phenomenal rate in every country and “protection” from loss of a job is non-existent. Article 25 says that “everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care”. One in six of the world’s population subsists on a dollar a day.

The UDHR brought together a number of political and social rights (although not self-determination) which were themselves the result of countless struggles. The UDHR importantly reflected the achievements of the French Revolution of 1798 and the Russian Revolution of 1917. The UDHR also expressed the fact that the colonial period was coming to an end and that the Soviet Union was now as powerful militarily as the United States.

The UDHR is still worth struggling for, but how? As we move towards 2009, there is a new global catastrophe on the horizon which takes the shape of a slump, global warming, authoritarian rule and the tendency towards military conflict. More and more aspects of the UDHR will be trampled into the dust until we create wholly democratic, new state systems in place of what we live under today.

Paul Feldman
AWTW communications editor

Greece in revolt

The sustained revolt by Greek students and young workers in major cities throughout the country may have been triggered by the shooting of a 15-year-old by police but is actually a confrontation that was waiting to happen. And it reveals that in the country that first conceived of democracy, there is no future for the ideal within the confines of the existing Greek state.

Greece has suffered a long period of corrupt rule, both by the existing New Democracy, right-wing government and before them the social democrats of Pasok. As a result, many Greeks have long lost any semblance of respect for the state in terms of abiding by laws and regulations. Tax evasion, for example, is widespread, an indication that the country has become ungovernable. A World Bank study on Greece found that one in every nine euros of company revenues is not recorded and therefore not taxed. The 11% level of tax evasion is exceeded by an underground economy which is reckoned to amount to nearly 30% of gross domestic product.

As the state has floundered, the divisions between rich and poor have grown sharply. In a country of 11 million, one in five lives below the poverty line and there is mounting anger at the government’s attempt to cut budgets in line with the requirements set down by the European Union in order stay part of the eurozone. A series of corruption scandals have hit the inner circle of Costas Karamanlis, the prime minster. Unemployment is already at 8% on average and much higher among 20 to 25 year olds. All the signs point to a sharp rise in joblessness over the next few months as the global crisis takes its toll on the country.

Today, schools are shut and thousands will attend the funeral of 15-year-old Alexandros Grigoropoulos, killed by police at the weekend. Tomorrow, the trade unions which have been battling the government’s privatisation policies, have called for strike action in protest against his death. "A lot of teenagers identify with Grigoropoulos," said Christos Mazanitis, an Athenian journalist. "There's a whole generation out there who see their parents in debt and feel they have nothing to look forward to in the future. Fear and despair are what these riots are about."

The impotence of the state is even recognised by the right-wing, whose commentators are suggesting that Greece "will now be out of control" after the protests. Nikos Konstandaras, writing in the centre-right newspaper Kathimerini, said: "It is tragic that the loss of one life should highlight so many impasses in our society and our politics. Instead of seeing that our refusal to resolve problems makes them intractable, I fear the way that we will use this death will simply make our problems worse."

There is no certainly no answer to the despair of young people through another Pasok government. The party’s leaders are angling to return to power – to carry on where Karamanlis leaves off. "It is as if the state [machinery], the government, has collapsed," said Ioannis Rougissis, a spokesman for the opposition Pasok party. Clearly, Pasok sees its role as one of restoring the authority of the corrupt and ineffectual Greek capitalist state just at the moment when its grip on power is self-evidently draining away.

A reconstruction of the Greek state from top to bottom is the only practical way forward. This process, which will require organisation and a revolutionary strategy, would aim at a transfer of economic and political power to the majority as a basis for the equitable development of Greek society. Then, and only then, would the term democracy have any substantial meaning in modern Greece.


Paul Feldman
AWTW communications editor

‘A message to the workers of America’

As workers at a Chicago car plant face the loss of their jobs and money owed them by the company, they are showing a way out of the crisis by occupying their plant. The 260 women and men, who are members of the United Electrical, Radio and Machine Workers of America (UE) Local 1110, refused to leave the Republic Windows & Doors factory when it was due to shut down last Friday.

UE members began their action as the government announced that over half a million jobs had been lost in November alone as the recession in American began to turn to depression. More than 10.5 million American workers are now unemployed. Matters came to a head when the company’s main creditor, the Bank of America refused to extend loans. “We decided to do it because this is money that belongs to us," said Maria Roman, who has worked at the factory for eight years. "These are our rights." The union, which supports the sit-in, says that Republic had broken the law by trying to shut without giving 60 days notice of closure.

Workers suspect that the company plans to restart operations elsewhere. They are angry that Bank of America, which recently received a $25 billion taxpayer bailout, won't provide credit to Republic, “and won't loan a few million to this company so workers can keep their jobs" according to Ricardo Caceres, who has worked at the plant for six years. The UE’s action has won support from other workers and Latino activists who have been bringing food and money and local television is providing coverage. President-elect Obama, who hails from Chicago, is reportedly backing the workers’ action.

As the US motor industry has gone into meltdown - General Motors, Ford and Chrysler are begging US Congress for a $34 billion loan – national union leaders are falling over themselves to crawl before the employers. United Auto Workers union president Ron Gettelfinger has offered to suspend contractually-obligated pay for 3,500 for laid-off Ford, Chrysler and GM workers who are in its "Jobs Bank" where they currently receive 90% of their pay. The UAW would also let the firms delay $14 billion in payments to a new health care trust fund for retired workers.

Film maker Michael Moore, whose 1989 documentary Roger and Me exposed the destruction of Detroit communities by the city’s major carmakers, has stepped into the breach, rushing in where the supine union leaders refuse to tread. He says the executives should be fired “for the good of the workers, the country and the planet”. He hilariously describes the CEOs of the Big Three as “three blind mice” who had their knuckles slapped by Congress “and then were sent back home to write an essay called, Why You Should Give Me Billions of Dollars of Free Cash”.

Moore is spot on: “They [the big three] promised, if Congress gave them $18 billion now, they would, in turn, eliminate around 20,000 jobs,” he says. “You read that right. We give them billions so they can throw more Americans out of work. That's been their Big Idea for the last 30 years - layoff thousands in order to protect profits.” The car companies should not “receive a dime”, just as Moore says. He is right to call for an entire restructuring of the industry “to build only cars that are not primarily dependent on oil and, more importantly to build trains, buses, subways and light rail”.

Back in Chicago, the workers occupying the Republic factory are showing the way. "This is a message to the workers of America," said Vicente Rangel, the shop steward. "If we stand together, we will prevail until justice is done, and we get what we're due," he says. Their challenge to the employers and banks is raises questions about the economic and financial system as a whole. Saving jobs and developing an economy that benefits the planet and the people on it requires a transition to democratic ownership and control in every country. You can send messages of support at www.ueunion.org/republic_main.html


Corinna Lotz
A World to Win secretary

A system beyond repair

The global economy is in bad shape, nowhere more so than in the UK and each panic measure only makes matters worse. Following a total of 2% cut in the previous two months, the Bank of England has reduced its rate by a further 1% to 2% – equal to the lowest rate since the Bank of England was founded in 1694, when capitalism began to make its mark. That’s how serious the crisis is.

The sudden and brutal deterioration in the economic outlook across Europe also prompted the European Central Bank to cut its main policy rate by three-quarters of a percentage point to 2.5% – its largest reduction ever – just hours after Sweden’s central bank cut the country’s official borrowing costs by a record 1.75%.

This is the first time that UK interest rates have plumbed these depths since rates took on their current, central role in attempts to minimise the effects of recurrent crises. This was following the 1944 Bretton Woods arrangements to restart the normal business of making profits following the Second World War’s destruction of productive capacity and people.

The Bank of England’s decision is a futile bid to stimulate the economy by getting people spending again and cutting the cost of loans. But the banks are not rushing to play ball as they are mainly interested in rebuilding their shattered balance sheets. Suddenly the banks have become “risk averse” after decades of encouraging debt. Output in the UK fell by 0.5 per cent in the third quarter of this year. Unemployment is rising sharply. Consumer and business spending are stagnant while investment in housing is falling. Yet sharper declines in output and bigger rises in unemployment are expected.

Analysts are warning of the threat of deflation. The Financial Times
warns today: “This is not a normal slowdown. Falling commodity prices, collapsing demand and a damaged financial system may well turn some inflation indices negative: spells of falling prices are quite possible. If consumers start expecting prices to fall, this could uncork the poison of deflation.”

The voice of global capitalism is also concerned that panic measure following panic measure “risks spooking investors, causing long-term interest rate spikes and prompting flights from currencies”. Judging by the plummeting pound against the dollar and euro, this is already beginning. With reports that the government is about to start printing money – regarded as the “nuclear option” – in a yet another attempt to reflate the economy, the position with the pound can only deteriorate.

The financial crisis in the US is taking its toll on other countries. The huge volumes of Treasury bonds issued as part of an effort to reverse the economic slump threaten to stop access to credit by – and therefore bankrupt - Latin American governments facing financing needs of an estimated $250bn next year, The risk is that Latin American and other emerging market borrowers may be “crowded out” from credit markets by a US fiscal deficit that could exceed $1,000bn next year

And China? The source of cheap labour which was the motor of globalization is receiving criticism for its recently announced Keynesian “New Deal” programme pouring money into roads, docks and other export infrastructure. Critics say China should encourage spending to turn savers into big spenders.

The inevitable failure of all of these attempts to stave off the effects of the global financial and economic hurricane lead to just one conclusion: the capitalist system is out of control and beyond repair. And New Labour is undoubtedly preparing other, sinister and repressive measures to deal with the massive social unrest that is heading to a community near you in 2009.


Gerry Gold
Economics editor

Market can't meet climate change targets

The high-profile report of the Climate Change Committee (CCC) published this week, exposed all the weaknesses of the government’s policies, and addressed none of them.

At first sight, the CCC report makes seductive reading, with the highest targets adopted by any country, including a 42% reduction in emissions of all greenhouse gases by 2020. It details how the targets could be met with reductions in some sectors, and claims it is all entirely feasible “given power sector decarbonisation, energy efficiency improvements in homes, buildings and industry, and emissions reductions in transport”.

But in reality the report by the body set up to oversee progress on meeting statutory targets does no more than repeat the government’s existing (failed) strategy of relying on market forces to tackle climate change. So implementing the recommendations could push energy prices for consumers up an average of around £500 a year, driving more than 1.7 million Britons into fuel poverty, the report admits.

The section on transport is hypocrisy itself. The report says international aviation and shipping should be included in the “carbon budgets”, but no specific reductions for the sector are set out. Which allowed Lord Adair Turner, chair of the CCC, to say that airport expansion is not incompatible with achieving the targets.

A key focus of the report is the “decarbonisation of energy generation”. By raising the price of carbon, it is suggested, there will be market incentives for the rapid development of renewable energy. But as the government’s own renewable energy strategy admits “the market will need to determine which technologies should be used, and then deploy them”. The strategy continues: “In a market economy, policy alone cannot guarantee outcomes. How much these measures will deliver will depend on how energy companies, developers and investors in the market, and the supply chains which serve them, respond to the signals we provide.”

I think we know the answer to that already. They will respond as the banks did, greedily swallowing up any subsidy offered and continuing business as usual with no concern for homes, jobs or energy prices or indeed for the survival of life on earth.

One of the CCC report’s most revealing sections explains that “price formation for electricity occurs in a similar way to other commodity markets” – through short and medium-term contracts, spot prices and price/supply speculation. These are exactly the same disastrous trading methods that drove the financial sector over a cliff. Most people are unaware that greedy speculation lies behind their unaffordable bills.

The media got very excited about the report’s view that the government should not buy carbon offsets through the Clean Development Mechanism (CDM) to meet targets, but focus on achieving real reductions in domestic emissions. However, the reports says reductions achieved through the European Emissions Trading Scheme should be allowed. Under this scheme,companies purchase credits based on claimed cuts in emissions in the developing world (usually through projects damaging to the poorest communities). So the idea that this report will give Britain “clean hands” in terms of exploiting the trade in carbon is nonsense.

And since the use of CDM projects has the effect of leaking additional credits into the EU system, keeping the price of carbon low, there will be no incentives whatsoever for the market to develop renewable energy. Another market failure is on the cards!

The report puts nuclear power high on the agenda, claiming it can be economical if the carbon price is high enough and the risks deemed acceptable. So, how high is that exactly? And will it cover the hidden costs – both environmental and financial – of mining uranium and storing waste?

Whilst the report recommends only coal-fired power stations that can be “retro-fitted with carbon capture and storage mechanisms by 2020” should be permitted, this is not going to stop the government giving the go-ahead to Kingsnorth and others. They will simply extract some flimsy promise from the energy companies to “do their best” and “continue the research” and give the go-ahead anyway.

And now that we are in the midst of a global recession and slump we need to face it – what is actually on the cards is not green energy, but a green light to the corporations to do whatever it takes to boost growth and profits. At the same time as the CCC report was published, Ed Miliband’s aptly-titled Department of Energy and Climate Change, announced the biggest-ever sale of high-priced licences for North Sea oil and gas, with 171 new licences offered to 100 companies covering 257 blocks of the North Sea. Fossil fuels and nuclear – that’s the government’s real energy policy.

Miliband, along with environment ministers from most of the world’s countries, is in Poznan in Poland this week attempting to thrash out the parameters of some new global deal on climate change. Barack Obama won’t be there, but he has made clear that he wants to go down this same market-driven, profit-oriented, public subsidised route. Some 16 years on from the first earth summit in Rio and 11 years on from Kyoto, the world is no further forward.

In 2005, the Stern report on the economic impact of climate change said it was a result of “the biggest-ever market failure” and that failing to deal with it would bring about an economic and social catastrophe. Since then we have suffered some dramatic experiences of the inability of the market to deliver what human beings need. Leaving the market, and governments who cannot see life beyond the market, in charge of tackling climate change is suicidal.

Of course it is important not to simply dismiss the work done by this very expert CCC, because it shows clearly that it is entirely possible to meet extremely challenging reductions targets, if the social and political mechanisms were in place to make it happen.

As the Charter for Democracy launched by A World to Win and others states: “We urgently need to eliminate speculation and profit as the basis for society, ensuring that both ecological care and basic human needs shape production, consumption and lifestyles.” Only in that way can we begin to make significant reductions in carbon emissions, and start to cope with, and reverse, the life-threatening legacy of 30 years of capitalist globalisation.

Penny Cole
Environment Editor

Next stop the workhouse

The world is going to hell in a handcart, driven by the madness of the capitalist market economy. But wait, New Labour is about to leap into action to save us all. Today, Her Majesty’s government will through the Queen announce lie detector tests aimed at “benefit cheats” and harsher financial penalties for the disabled and lone parents who are considered not to have made a supreme effort to find work.

At last the government is getting its priorities right! The poor are obviously the main problem in society, if not the cause of the economic crisis, and what they need is discipline and more discipline. My only surprise is that New Labour has not actually resorted to a reintroduction of the Poor Law. In Victorian England, when people scrounged and begged instead of working for a pittance they were sent to the workhouse. That soon sorted them out!

The rate work and pensions minister James Purnell is going, however, the workhouse could will be his next proposal. Yesterday he published a review prepared by the academic Paul Gregg that proposed that all lone parents with children as young as one ought to be required to make themselves ready for work. Only in July, he proposed that it should be a requirement for lone parents with children aged seven or above to seek work (it is estimated there are 600,000 lone parents with children aged under seven). At this rate, those with unborn children will soon be in the frame.

"Sanctions would only apply to those who refuse to take steps to be job-ready that have been jointly agreed with their personal advisers in jobcentres," said a ministry official. From 2010 many of these advisers will be employed by the private sector or charities, as the privatisation of welfare continues apace in New Labour’s brave new world. Some of the charities now fear that mass unemployment will render their contracts useless. Have no pity for those who scrambled to help to implement the government’s agenda.

Purnell’s proposals have drawn a fierce reaction. John McDonnell MP described them as “New Labour's reactionary flailings” and warned: “The pressure that will be placed on lone parents will have a direct impact on the care that they can provide to their children - and affordable childcare is still not sufficiently available.” The TUC general secretary, Brendan Barber, said that the government’s approach “assumes a utopian world of unrestricted childcare and widely available jobs where only the lazy opt for life on the dole" while "thousands of people are joining the dole queue every day through no fault of their own." Barber is right about that, at least.

Yesterday, Glasgow-based Bowie Castlebank Group, which include photo-processing chains Klick Photopoint and Max Spielman and dry cleaner William Munro, was the latest firm to be placed in administration. The company employed 1,664 people at 314 shops across the UK. A survey from Markit Economics showed that the job market weakened rapidly in November as permanent placements declined at a record rate. The drop in permanent and temporary jobs was faster than at any point in the survey's 11-year history. "The UK jobs market is heading downhill at breakneck speed," said Mike Stevens at KPMG, a sponsor of the survey.

A coalition of trade union leaders and poverty campaigners has condemned the attacks on claimants and called on “the government to rethink its plans”. That is simply not going to happen. New Labour’s answer to the economic and financial crisis is to drive down conditions and wages to help get capitalism back on its feet again. If just one union leader recognised that fact and opened a campaign to defeat the government, it would be a step forward.

Paul Feldman
AWTW communications editor

Falling out with Obama

Even before Barack Obama takes office as the first African-American president, some American liberals and activists have expressed concern about the direction his administration might take. They point to his choice of Hillary Clinton as secretary of state, the retention of Robert Gate as defence secretary and the selection of James Jones, a prominent hawk who supported John McCain for president, as Obama’s national security advisor.

Those who are disappointed include Stephen Zunes, professor of Politics and chair of Middle Eastern Studies at the University of San Francisco. Writing on the radical news site Alternet, Zunes points out that Clinton has “more often than not sided with the Bush administration against fellow Democrats on key issues regarding America’s international legal obligations, particularly international humanitarian law”.

And, of course, Obama’s rival for the Democratic Party’s nomination infamously supported the invasion of Iraq in 2003. Zunes reminds people that Clinton has a record of dismissing reports by human rights monitors that highlight large-scale attacks against civilians. For example, following systematic assaults against civilian targets in its April 2002 offensive in the West Bank, Clinton co-sponsored a resolution defending the Israeli actions.

Katrina vanden Heuvel, editor of the The Nation – roughly equivalent to the New Statesman – is also rapidly becoming disenchanted with Obama. Writing about the president-elect’s foreign policy team, she says: “This team makes it more difficult to seize the extraordinary opportunity Obama's election has offered to reengage the world and reset America's priorities. Maybe being right about the greatest foreign policy disaster in U.S. history doesn't mean much inside the Beltway [Washington’s orbital motorway] ? How else to explain that not a single top member of Obama's foreign policy/national security team opposed the war – or the dubious claims leading up to it?”

There is an element of hurt in both these articles, of being spurned by the man they backed for the White House. But they also express some deep illusions about a) Obama and b) the American political system. Obama is a populist politician who won the presidency on behalf of one of America’s two major capitalist parties, the Democrats. Major corporations provided at least half of his campaign funds. Nowhere has he indicated that he was preparing to challenge the military-industrial complex that has a grip on American political life, including its foreign policy.

Secondly, the American state – for all its separation of powers and written constitution – is a capitalist state. The institutions of rule at federal and state level exist to maintain the status quo of private property and to come to its rescue in times of crisis. That’s what the financial bail-outs are all about. In this respect, Obama is considered a safe pair of hands and his election has not exactly sent the American ruling classes into a panic. American foreign policy, as ever, will be dictated by the requirements of big business and finance.

The Obama administration will, of course, take power in the midst of the greatest economic and financial collapse in the history of the United States. Anger about having to carry the burden of the crisis through unemployment and repossessions is largely the reason that Obama won in the first place. He mobilised a new generation of voters in a highly effective way under the slogan “change we can believe in”. Delivering on that pledge in terms of jobs and ending the recession will be beyond his presidency. The political crisis that follows the dashing of people’s hopes will provide the conditions for moving American democracy and politics into a renewed, revolutionary period.

Paul Feldman
AWTW communications editor

Questions behind the Mumbai terror attack

The terror attacks in Mumbai have focused attention on some fundamental questions that neither the Indian state – the so-called world’s biggest democracy – nor the Pakistani regime are capable of resolving. They include the status of Kashmir and discrimination against Muslims in India amid vast inequalities of wealth within the country as a whole.

It is of course deeply symbolic that the terrorists chose Mumbai as their target. With its 13.9 million inhabitants it is a potent sign both of India’s dreams and its grim realities. It is the centre of the Bollywood film industry, the country’s financial centre and also has vast slums. Financial and property speculation in India has reached unheard of proportions (with modest houses in Delhi selling at £1m). Now the global economic crisis is beginning to take its toll.

The Deccan Mujahideen, the shadowy and previously unknown group, which has claimed responsibility for the carnage, seem to model themselves on those who carried out bombings in other Indian cities during 1993, 2006 and 2007. Speaking from the Oberoi hotel, they told Indian television: "Muslims in India should not be persecuted. We love this as our country but when our mothers and sisters were being killed, where was everybody? Release all the mujahideens, and Muslims living in India should not be troubled."

Sumit Ganguly, the director of research at the Centre on American and Global Security at Indiana University, writing in the wake of the attacks, noted:

New Delhi has long trumpeted the claim that the country's approximately 140 million Muslims are immune to the call of jihad … At one level, India's policymakers haven't wanted to accept that, despite plenty of evidence to the contrary, Indian Muslims face substantial discrimination in many facets of everyday life. To cite but one example, Muslims constitute about 13 percent of the population but only about 3 percent of the elite Indian administrative service. Unsurprisingly, their second-class treatment has led some Muslims to lose faith in India's democratic institutions and to violently turn against the state.

Kashmir, meanwhile, remains divided between India and Pakistan. Some 400,000 Indian troops are in the region and they have vast, dictatorial powers. Troops have wide powers of arrest, the right to shoot to kill and to occupy and destroy property and to hold people without trial. More than two-thirds of Indian-administered Kashmir are Muslims, rising to over 90% in some areas. Two wars between India and Pakistan over Kashmir testify to the fact that it suits both countries to keep the dispute alive and to demonise one another’s governments. The terror attack on Mumbai may well have been intended to provoke a third war between the countries.

What the attacks and the sluggish response by the security forces pose above all is a questioning of the nature of the Indian state itself. Because it is one of the few countries in the region to hold regular elections and boasts a multi-party system, it has been hailed as the world’s biggest democracy. Much of this is due the legacy bequeathed by Gandhi’s fight against the British for independence. But the Congress Party he bequeathed has turned into a pro-big business, capitalist party, overseeing an economic transformation that has driven millions deeper into poverty.

Many of the institutions created by the leaders of the independence struggle have become deeply corrupt and are described by a leading historian as ”rotting away”. In its own way, India is affected by the malaise that has corroded and hollowed out the institutions and democratic processes set up half a century ago, as the world emerged from the second world war.

Will the Mumbai attacks now become an excuse, as 9/11 did in the US and 7/7 in Britain for India’s government to introduce anti-terror laws which take away the basic democratic rights of its citizens? In Britain and in India, democratic and state institutions are in crisis and are being unmasked as completely unable to protect citizens from economic disaster or terrorist attacks. Instead of helping people cope, the state is at best paralysed and at worst a creating the conditions for terror.

Corinna Lotz
AWTW secretary

Brown's boot boys in action

When anti-terror police are used to arrest the shadow immigration minister for the grave "crime" of leaking information to the media, the Tories' use of the term "Stalinesque" to describe events is absolutely justified.

If the police needed to question Damian Green, they could have asked him to drop by with his lawyer. Instead, he was detained for nine hours while his homes, office and business premises were searched before being released without charge. Was it a coincidence that Parliament was not sitting at the time?

There may not have been a direct order from the government to the Metropolitan Police to act against the MP, but such an operation would have had to be authorised at the highest levels. There's nothing like a nod and a wink in these circumstances

The arrest of Green is state intimidation, pure and simple of an elected politician going about his business and is a warning to everyone of where Brown's government is heading. Only recently, the Tories were accused by ministers of being "unpatriotic" for criticising the government over the economy. Now their leading members are being arrested.

The question is: which of New Labour's increasing number of political opponents is next in line for a visit from Brown's boot boys?

Paul Feldman
AWTW communications editor

New Labour's borrowing bombshell

When the government borrows, who does it borrow off? This question from a reader arose in response to Monday’s crisis budget, when chancellor Darling announced record sums of borrowing. It’s an arrow that gets straight to the heart of the problem.

The straightforward, short-term answer is that the government offers to borrow money from anyone who wants to lend it. In exchange, it offers “government bonds” or gilts, the original form of securities which, in the old days, were considered relatively low risk, because they were guaranteed by the state. And, so the theory went, governments can’t go bankrupt, because they control the issue of money – one of the many forms of credit.

In the longer term, there’s the question of paying the loans back, with interest. Governments raise the money to repay borrowing by taxing the creation of value, and value is created when people work, by the people who do the work. But the historically unprecedented scale of the expansion of credit over the last 30 years has changed things out of all recognition.

Now Martin Wolf, chief economics commentator at the Financial Times, says “the horrific numbers” in the pre-budget report might well lead to a questioning of the creditworthiness of the UK government. “A creditworthy government”, Wolf says, can shift excess debt from the private sector on to the backs of taxpayers. An uncreditworthy government cannot. If the cost of debt becomes too high, the latter will be forced into default, either openly or via inflation. In the UK’s case, inflation would be triggered by a flight from sterling.”

In other words, if the government is unable to raise the money through taxes to repay the “horrific” level of borrowing it will be in default, be bankrupt, become a failed state. A bit like Zimbabwe. In fact, the markets are already beginning to consider this possibility. The cost of insuring against the British government defaulting on its gilts in the next five years surged this week.

Darling makes assumptions about the future trajectory of the economy that don’t impress anyone. Wolf says “…the Treasury surely remains too optimistic: despite the scale of the shock to the world economy and the financial system, it assumes an annual peak to trough decline in GDP of a mere 1 per cent; an economic recovery in the second half of next year; and then a return to trend growth at 2¾ per cent a year, despite the need to shift output into capital-intensive, export-oriented manufactures. This is not plausible.”

That’s putting it mildly. The effects of the crisis have already erupted onto the high streets with big names Woolworth’s and MFI in administration, Curry’s and PC World making big losses. In and around Llantrisant, the home of the Royal Mint in Wales, hundreds of jobs have been blown away in a few hours, in Bosch car components, Oreal and Budelpack cosmetics, Hoover, the Serious Food Company and Ferrari’s – a chain of bakery shops.

Yesterday, representatives from the building industry and car manufacturers got to the head of the queue of those trying to persuade the government to help them stave off bankruptcy. They went away empty-handed, apparently. The government’s tax income is destined to fall off sharply for years to come.

There’s a bit more to this excellent question. Earlier attempts to raise impossible levels of taxes have produced social unrest and political change. In 1381, the most extreme and widespread insurrection in English history, the Peasant’s Revolt, was triggered by the poll tax. It was the beginning of the end for a society based on exploitation through landownership. Attempts by Charles I to raise money without recourse to Parliament contributed to the English Civil War and his execution in 1649. On March 31 1990,there were riots in London against the Community Charge, commonly known as the poll tax. Watch this space.

Gerry Gold
Economics editor

Save the reefs, not the banks

There is new and dramatic evidence that rising carbon emissions have increased the acidity of the world’s oceans ten times faster than predicted, endangering many species and corals.

Last year the International Panel on Climate Change (IPCC) reported that without urgent action to reduce CO2 emissions, most coral reefs would disappear by the end of this century. Now an eight-year long study monitoring pH (acidity) levels in an area of the north-east Pacific has found that acidity is increasing so fast that the survival of shellfish, molluscs and corals is under urgent threat.

Not all carbon dioxide emissions rise into the earth’s atmosphere. About one third of CO2 is fixed in the oceans - without this, the greenhouse effect that causes global warming would be dramatically worse. But dissolving CO2 in water creates carbonic acid, and that lowers alkalinity, making it harder for creatures to form shells.

Professor Timothy Wootton, head of the study carried out by Chicago University scientists, said the findings show that “variation on ocean pH through time was most strongly associated with increasing atmospheric carbon dioxide, which supports the prediction that increasing release of CO2 to the atmosphere leads to ocean acidification". And this is already damaging some species:

Our study reveals the strongest negative impacts of declining pH are on several species of particular importance – large calcifying mussels and goose barnacles. This finding illustrates several reasons why the effects of declining ocean pH are of general concern, as these species create critical habitats for other coastal species, are important players in coastal nutrient processing, and reflect the more general risks to shellfish harvesting.

Coral reefs are the most diverse ecosystems on the planet, inhabited by at least 25% of all marine species. Destroying them will have a dramatic effect on the marine food chain – not only threatening the loss of millions of species but also the lives and livelihoods of coastal communities.

So far, world governments have thrown $4.2 trillion at saving the wreckage of the banking system. US President-elect Barack Obama has promised to spend just $150 billion over the next 10 years to support the development of alternative energy. As Time magazine's special "energy issue" says:

The problem is, it won't be enough. As ambitious as Obama's campaign promises were — at least compared to his predecessor's — the future state of global energy will demand government policies with a much longer reach... The International Energy Agency's (IEA) annual World Energy Outlook, released Nov. 12, projects that global energy demand will increase by 45% between 2006 and 2030 — and that $26 trillion in power-supply investments will be necessary simply to meet those needs. Barring radical changes in our energy policy — beyond what Obama has pledged — greenhouse gas emissions will rise 45% by 2030, and extreme global warming would be virtually unavoidable

.

Meanwhile here in Britain, the climate change and energy Minister Ed Miliband made clear he plans to set aside air pollution targets in order to ease permission for a third runway at Heathrow, which is bitterly opposed by the local community. And he got the backing of Lord Adair Turner, chair of the “independent” Climate Change Committee (former director-general of the CBI, and executive at Standard Chartered Bank and Merrill Lynch and now head of the Financial Services Authority). Turner has made the astonishing claim that it would be possible to meet the target of cutting greenhouse gas emissions by 80% by the middle of this century even if aviation expands “especially if airlines were able to use biofuels or other low-carbon power sources”.

Meanwhile, back here in the real world, it is increasingly clear we need to remove the power of such people to determine decisions about our energy future. They would sacrifice millions of species – and millions of their fellow human beings – to keep the capitalist wagon rolling (even with several wheels already gone). We urgently need to seize the initiative, to develop and implement plans for a not-for-profit energy revolution, alongside urgent protection for species and habitats under threat. A World to Win says: “Save the reefs – not the banks!”

Penny Cole
Environment editor