A tale of two countries

As unemployment rockets around the world, with Britain the hardest hit major economy, workers on both sides of the Channel are beginning to take action against job cuts and attacks on living standards.

World output is forecast to fall for the first time since World War II as each day reveals an ever sharper decline of the capitalist economy. The International Labour Organisation is now forecasting that the global recession could cost up to 50 million jobs worldwide.

In France, yesterday’s “Black Thursday” saw up to two million people taking part in demonstrations around France, in protest against Sarkozy’s handling of the economic slump. Around a million public sector unions struck work, demanding extra help for ordinary families in place of state aid for the banks.

They called for an end to civil service job cuts, better pay and conditions, and rises in the minimum wage and welfare benefits to support consumption. Banners and chants showed a larger range of grievances, including demands for collective bargaining and opposition to the relaxation of Sunday trading rules.

But, closer to home, the unofficial strikes which broke out across the UK earlier this week, are taking an ugly, nationalist form. A dispute over the use of foreign workers at a UK refinery has spread to other sites, involving around 1,000 workers.

Before dawn this morning, several hundred demonstrators gathered outside Total’s Lindsey oil refinery at Immingham, near Grimsby, one of Britain’s biggest oil refineries. Angry building workers denounced the arrival of more than 200 Italian and Portuguese staff, brought in to construct a new unit.

A decision to bring in hundreds of Italian and Portuguese contractors to work a new £200m plant at the refinery at North Killingholme, North Lincolnshire, originally led to the protests. The British National Party (BNP) tried to hijack the walk-outs, which were not supported by the trade union Unite, to which many of the workers belong. Unite and the TUC itself, which has sat on its hands as the economic crisis rages, have provided no leadership whatsover.

Over past years and months the government and trade union leaders have helped set worker against worker by repeating the mantra, “British jobs for British workers”. The trade unions’ lack of action has led to frustration and provided fuel for the nationalists and racists. They have now made their move by sending BNP activists to join the picket lines. A BNP spokesman claimed that the strike against foreign labour was “a great day for British nationalism.”

But Bobby Buirds, a regional officer for Unite in Scotland, refused to denounce the rampant nationalism. He claimed that the workers at Grangemouth were striking to protect British jobs not to confront the foreign workers, but also reignited nationalism by claiming that “The argument is not against foreign workers, it’s against foreign companies discriminating against British labour,” he said. “This is a fight for work. It is a fight for the right to work in our own country. It is not a racist argument at all.”

New Labour has played fast and loose with nationalism in order to defuse attention from the way it has mortgaged Britain’s future to the bankers, financiers and global corporations. Environment secretary, Hilary Benn, claimed the angry workers were ”entitled to an answer”. And the chief cynic is of course Gordon Brown who set the fuse promising ‘British jobs for British workers’, a slogan taken up by some workers on strike outside refineries and power stations. Meanwhile at Davos, Brown is denouncing protectionism and calling “for the world to come together as one”.

Dr Johnson’s nostrum that “patriotism is the last refuge of a scoundrel” never rang so true as now.

Gerry Gold
Economics Editor

Wales grapples with 'green' realities

The economic slump is bringing about a transformation in the way people live and how they think about themselves and the future. They are soberly looking for new ideas and ways forward that address their very real anger and fears. But at the same time, there is enormous ideological pressure to keep them tied to the status quo, as I heard yesterday.

At a conference in Cardiff exploring green economic futures for Wales, the journalist and green campaigner Colin Hines peddled the illusion that “Mandelson and Brown are listening”. Having no answers themselves to the crisis, he claimed that ministers are ready to grab at proposals in “A Green New Deal”, which he published last year through the New Economics Foundation.

It is “the answer to their prayers”, Hines claimed. It would solve unemployment by training thousands of people to bring every home up to energy efficiency standards, along with other green measures. The reality is somewhat different, however. The real face of this government was shown last night in the vote in the House of Commons, where New Labour used every underhand pressure to force through support for Heathrow expansion.

Hines and his supporters are selling pie in the sky. The only jobs Brown is interested in are those that can provide short-term gain for the corporations in crisis. In fact, the corporations welcome unemployment at this moment. Some 80,000 jobs a day are being lost across the globe and employers are using fear to force down wages and conditions of the workers that remain.

The only green measures Brown will implement are greenwash measures. For example, the shortlisted proposals for tidal power at the mouth of the Severn announced on Tuesday include at number one, an expensive and ecologically catastrophic 10-mile barrage. It would cost £14bn to build, but would produce 8GW of power. At the same time the government has withdrawn subsidy to small-scale alternative energy projects, pending a new scheme which may, or may not, be implemented in 2010 – when the world will be a very different place.

The conference, sponsored by Science Shop Wales, noted the massive contradiction in green policies adopted by the Welsh Assembly. Alongside a commitment to reducing emissions is a continued commitment to growth at all costs, desperately trying to capture foreign direct investment to create jobs. As one of the speakers said, “how 20th century”. Those days are long gone. As the Tata global corporation sheds 1,200 Corus Steel jobs in Wales, the Assembly is desperately trying to convince Welsh people that it can keep the show on the road. It cannot.

At a Transition Town meeting in Llandeilo, Carmarthenshire, the previous evening, A World to Win was able to put forward another viewpoint - that the economic slump means that all measures to reduce emissions and protect eco-systems will be abandoned, unless they can be proved to deliver some short-term profits.

What is needed is a radical transformation of ownership – both of land and resources - and democratic control over the corporations and public services. Only an end to policies that put profit ahead of people – whether in climate change, health, transport or production – can save society from a terrible descent into chaos.

But, face it folks, this is not going to be brought about by the current system of unrepresentative, unresponsive, parliamentary democracy. So it was great to have a chance to launch the People’s Charter in Wales – where the original Chartist movement was such a power in the land and where the most radical solutions were considered by the men and women who carried out the Newport Uprising.

Penny Cole
Environment editor

Globalisation 'virus' hits Davos

Spare a thought for the great and the not-so-good who have gathered for the annual party of the rich and the powerful at the luxury resort of Davos in the Swiss mountains for the World Economic Forum (WEF). The 2,500 or so attendees, including 41 heads of state, have been obliged to scale down from the most expensive champagnes like Dom Perignon to “normal champagne”, according to reports. Some benighted delegates are even downgrading from champagne to white wine, according to a local hotelier. 

But the real difficulty they face is that the “Davos consensus”, which has hitherto prevailed at these and similar gatherings – that free-market, globalised capitalism would create a better world – is in now tatters. WEF founder, economist Klaus Schwab, even believes that the present downturn has led to an outbreak of schizophrenia at Davos. 

In his view, the present economic downturn is in reality an accumulation of “an imbalance in the global system, a credit crisis: above all a confidence crisis and a systems crisis”.  In addition, he points to other emergencies – global warming and water shortage, which have to be addressed as well. Schwab’s remedy is a new approach to global confidence and the creation of “an ethical value base and a better, more enhanced, co-ordinated and regulated global system”. 

But the dream of a new consensus is just that. The agreement made at the first G20 summit of developing nations, held last year in Washington, broke down in just a few days, after Russia and India imposed tariffs. Many in Davos will now be watching Wen Jiabao and Vladimir Putin, the Chinese and Russian prime ministers, as well as the leading Indian and US representatives, for further signs of economic nationalism. 

These multiple and interconnected economic, political and ecological crises demonstrate the dialectic at work. The very dynamics of globalised capital that powered decades of growth and expansion over the last four decades have turned into their own opposite. Instead of growth, there is contraction – an unprecedented fall in wealth. As one commentator points out, “the globalisation of the economy appears to have done the opposite [of leading to steadily rising prosperity] – spreading a dangerous economic virus around the world and creating the threat of another global depression”. 

The latest US National Intelligence Council report says that “the international system – as constructed following the Second World War - will be unrecognisable” while former US deputy treasury secretary Roger C Altman notes that “the financial and economic crash of 2008, the worst in over 75 years, is a major geopolitical setback for the US and Europe”. These are serious observations, to put it mildly. 

The severity and depth of the global crisis is forcing a new sobriety and concentrating minds at Davos. The triumphalism of the 1990s has disappeared, almost in an instant. The chastened advocates of capital will muse and drink and ski in their mountain retreat. They will fawn over brutal dictators like Putin and Jiabao. They will ponder “solutions” to force those who create value into unemployment, homelessness and poverty. 

But for ordinary people who are the victims of their system, the threatening catastrophe presents a great challenge. It’s clear that any “new systems of governance” will focus on an attempt to survive the crisis by preserving the rule of rich political and economic elites at the expense of the many – those who in fact create the values and wealth we all depend on for our survival. In the People’s Charter for Democracy, A World to Win outlines concrete solutions to the crisis which preserve and maintain the positive sides of globalisation while replacing the destructive, profit-motivated system of private ownership. The disarray at Davos should spur our efforts to build an irresistible momentum for revolutionary change along these lines. 

Corinna Lotz
AWTW secretary

When corporations 'manage' the food crisis

If you want to know what happens if you leave corporations, bankers and global capitalist agencies in charge of something important, you just have to look at what has happened to food supply in the developing world. In spite of pledges to halve hunger by 2015, it has continued to increase worldwide, reaching over 1 billion people this year.   

So when those responsible for the crisis gathered in Madrid yesterday to discuss “food security” over a two-day conference hosted by the Spanish government, they had no intention of allowing small farmers a real voice in proceedings. Instead, the World Trade Organisation (WTO), the International Monetary Fund (IMF), the World Bank and corporations like Monsanto were given space on the panels while representatives of small farmers –  who produce 80% of the world's food – were given only a few minutes from the floor. Only some handpicked NGOs are asked to give their opinion. 

The organisers were no doubt aware that nearly 50 organisations had just signed a statement condemning the corporations, the WTO et al for intensifying the food crisis with policies based on intensive sale and use of fertilisers, agrochemicals and genetically modified seeds, alongside the acquisition of large areas of fertile land.   

They would not have enjoyed the section that says: “The central cause of the current food crisis is the relentless promotion of the interests of large industrial corporations and the international trade that they control, to the detriment of food production at the local and national levels and the needs and interests of local food producers and communities. At the World Food Summit in 1996, when there were an estimated 830 million hungry people, governments pledged to halve the number by 2015. Today, in the midst of a terrible food crisis, the figure of hungry people has risen to well beyond 1 billion.” 

Funds designated to resolve the food crisis are being used by the World Bank and the AGRA (Alliance for a Green Revolution in Africa) in a way that can only intensify matters.

Transnational companies are moving into southern countries on a huge scale and starting to capture millions of hectares of land in order to bring agricultural production further under their control for industrial agrofuel and food production for the international market. 

Millions of peasants will be pushed out of food production, adding to the hungry in the rural areas and the slums of the big cities. The few that remain will work under full control of the transnational companies as workers or contract farmers, the statement warns. The signatories says that national governments should enhance food sovereignty and:

• bring the disastrous volatility of food prices in domestic markets to a standstill. 
  
• take full control over the import and export of food in order to stabilise local markets
• set up policies to actively support peasant-based food production and artisanal fishing, local markets and the implementation of agrarian and aquatic reform
• stop corporate land grabbing for industrial agro-fuels and food production. 
  

They also want United Nations agencies to exclude the WTO, IMF and the World Bank from implementing UN Task Force proposals and an end to the proliferation of what the statement describes as a “circus of the ongoing creation of new structures and spaces” said to be tackling the food crisis. 

Laudable as these aims are, they come up against the fact that not only the UN but most national governments are tied to the corporations and their agencies in a variety of ways. Extricating them from this relationship, creating truly democratic and sovereign governments alongside an independent UN, will require the defeat of the corporations and the seizure of their resources. The grave global economic crisis presents both small farmers and workers in the developed economies with a golden opportunity to take the initiative. 

Paul Feldman
AWTW communications editor

Avoiding a repeat of history

Karl Marx cited the words of his teacher Georg Hegel, when he recalled, “all facts and personages of great importance in world history occur, as it were, twice”, with Marx adding: “The first time as tragedy, the second as farce.” That déjà vu feeling came to mind while watching TV and reading the news over the weekend.                                            

The Wall Street crash of October 1929, when the American stock market came down to earth, was featured on BBC2 on Saturday evening. The Great Crash was, as the commentary said,  the precursor to the Great Depression, a global slump, the collapse of democracies in Europe, the rise of fascist regimes and World War Two. Like the present financial crash, the 1929 collapse had its origins in a speculative orgy based on credit. 

Fast forward almost 80 years later to last autumn. Lord Myners, a former banker from Rothschild’s sitting in an office above the Treasury, faced the total collapse of Britain’s banking system and recalled the scene for the weekend press, saying: “How close were we to a systemic collapse of the banking system? We were very close on Friday, October 10. 

“There were two or three hours when things felt very bad, nervous and fragile. Major depositors were trying to withdraw – and willing to pay penalties for early withdrawal – from a number of large banks. The whole system is like a house of cards. It would have been - Bank A today -  Bank B tomorrow -  Bank C the next, all the way down.” The Bank of England had to contact major creditors in Tokyo and New York to dissuade them from withdrawing vast sums from the Royal Bank of Scotland group. 

Back to Wall Street in October 1929. Bankers and the financial authorities tried innumerable measures to steady the ship and hold share values. But it didn’t stop a thousand banks going bankrupt and a shanty town of cardboard huts being created in Central Park, Manhattan! Nor did the New Deal policies of Roosevelt have much of an impact on the economic slump that quickly followed. 

Yesterday, Ruth Lee, an economic advisor to the Arbuthnot banking group, said of Myners’ remarks, “it was highly irresponsible for Myners to reveal the scale of the problems because it could wreck already fragile levels of confidence. We are not out of the woods yet … If it was panning out that way, then the government would have no choice but to step in and nationalise the whole financial system.” 

This begs the question - whose fragile “level of confidence” are people like Lee concerned about? Savers, workers or pensioners in Britain? Not at all. The authorities are concerned about foreign lenders and those who underwrite insurance risks about New Labour’s ability to honour government bonds that are flooding the market.

Despite those “in the know” wanting to keep mum, the truth of this crisis will out and we will have to face the facts and the consequential political decisions that the capitalist state and its agencies will use in an attempt to restore order. These realities cannot be ignored nor should they paralyse you. HIstory does not have to be repeated. To be forewarned it to be forearmed. Take up the struggle for your rights and fight for a transfer of economic and political power into the hands of working people as the way to avoid the catastrophe that followed 1929. Signing the People’s Charter for Democracy would be a practical first step.

Ray Rising

A Tom Paine for the 21st century!

The economy is in such a steep decline that the top global corporations are now feeling the impact. The collapse of consumer demand is cutting the ground from under giants like Sony, which expects a record $2.9 billion annual operating loss, and Microsoft which is cutting 5,000 jobs worldwide – about 5% of its estimated 96,000 employees – and refusing to make a forecast of future profitability. 

With the news that December car production by global manufacturers operating in the UK declined to barely half of its 2007 level, the Society of Motor Manufacturers is looking for government support to sustain “valuable industrial capability during this exceptionally difficult period”. This is a hardly veiled threat to cease production altogether following Honda’s doubling of its two month Christmas shutdown. 

Some market watchers are at last beginning to appreciate the scale of the problem in the economy beyond the financial markets. "It is pretty bad when things are deteriorating so fast that even the largest companies in the world don't know how rapidly it is happening," said analyst Katherine Egbert. "We are certainly in the midst of a once-in-a-lifetime set of economic conditions," according to Microsoft’s chief executive Steve Ballmer. "The economy is resetting to a lower level" of spending, he said, adding that he did not expect a quick economic rebound. 

A UK survey of 100 major private sector employers reveals the toll that the crisis is taking on company pension schemes. The bursting of the credit balloon has driven the collective deficit of the UK's final salary pension schemes up to £195bn in December, and 25 of the 100 will act soon to end the schemes for current contributors, thereby abandoning the companies’ responsibilities for their employees’ future. 

The Pension Protection Fund said the deficit rose by 43% from the £136bn recorded at the end of November. The deterioration in pension finance has been largely due to the international credit crunch, the worldwide economic slowdown and the accompanying slump in share prices. In other words, the value of private sector pensions has simply blown away. Those who manage to hold on to their jobs until retirement age in the UK will have nothing to live on beyond what the state offers, which is now the worst in Europe. 

January 2009 marks 100 years since Lloyd George, Chancellor of the Exchequer under the Liberal government led by Herbert Asquith, paid the first UK state pensions. Lloyd George was influenced by the ideas of Tom Paine and especially his book The Rights of Man published in 1791. Paine strongly recommended progressive taxation, family allowances, old age pensions, maternity grants (as well as the abolition of the House of Lords and the creation of a democratic republic). 

The 21st century deepening global financial and economic disaster demands a renewal of Paine’s ideas in a radically fresh context. Paine’s ideas were ultimately incorporated into most bourgeois democratic states and economies. Now the state cannot deliver a basic standard of living for older citizens, and companies are destroying workers’ pensions. A transfer of political and economic power along the lines advocated in our People’s Charter for Democracy  is where we should begin. 

Gerry Gold
Economics editor

What a waste!

The fraud of profit-based recycling has been exposed, as the whole project disintegrates under the weight of the economic crisis. The market price of recycled materials has collapsed, and as a result there are warehouses full of waste paper filling up around the country.

Last September, when recycling prices peaked, a tonne of mixed paper fetched between £65 and £75. But today that has fallen to just £15. Paper that has been separated and is not contaminated peaked at between £90 to £115 a tonne. Now it is worth about £40. 

Recycling UK estimates that by March, there will be around 200,000 tons of waste paper in storage, costing local authorities as much as £2 million so far. The bill to council taxpayers is certain to rise. 

If stored longer than three months, the paper starts to rot and attract vermin, rendering it worthless. Then it will go to landfill or incineration. As a result, householders will receive a double blow – not only will their careful recycling be a waste of time, but the cost of this market failure will be passed on to them in higher council tax. And it is not only the storage costs: councils are taxed £32 for every ton they send to landfill and from 2010 could face a further EU fine of £150 a ton. 

As much as a third of Britain’s waste was being exported to China in recent years, where it was recycled to make packaging, in a multi-million dollar business. But as the demand for goods falls in the recession, the importers have stopped buying and as a result Britain and the US are disappearing under a mountain of rubbish. 

And hundreds of thousands of small-scale recyclers in China have been driven out of the market. Readers of this blog will remember how they were forced out Beijing for the duration of the Olympics. Now most of them are permanently unemployed. Official Chinese media say that four-fifths of China's recycling units have closed and that millions will eventually be left unemployed. 

Every link in the recycling chain is unravelling, and governments are powerless to call a halt. The main component of UK household waste is packaging. Yet New Labour refuses to bring in laws reducing the amount of packaging used by supermarkets. 

They prefer to consider fining and charging householders instead, as if families could control how much packaging they end up with. In fact a survey in October 2007 showed that low-cost supermarket Lidl has the most packaging per product, and the lowest level of recyclable material in it. But many families rely on these cheaper shops in order to survive at present. 

This vicious, profit-driven, circle has over the years destroyed whole eco-systems and thousands of acres of forest – and now the end products lie rotting in the ground. 

Only a transformation in the way goods are produced, packaged, distributed and sold can solve this issue in the long term. And that means bringing the whole production process under democratic control, so that eco-friendly ways of providing the things people need can be developed. 

The survey quoted above found that local shops and markets produce far less packaging, more of which could recycled, than the larger supermarkets. With no need to produce super-profits, community or worker-owned markets and shops will have no trouble coming up with a more sustainable and rational approach to the problem. 

Penny Cole
Environment editor

 

End a system that wrecks lives

This government is interested only in saving capitalism, not jobs. That’s the meaning of today’s unemployment figures, which show that people’s lives are being wrecked by a system that’s breaking apart. That’s the significance of writing a blank cheque to bankers, who promptly hoard taxpayers’ money to bolster their shattered balance sheets, while jobs disappear in their tens of thousands.   

No one knows how much the state has pledged to the bankers because the government refuses to come clean on that one; what we do know, however, is not a single penny has gone to save one job since the crisis exploded last summer. So official figures show that unemployment in November reached 1.92 million in November last year, a rise of more than 131,000 in three months. The real total is bound to be higher because many people do not register while others from outside the UK, like Polish workers, have simply returned home. 

Anyone looking for a positive response from New Labour will have to forget it. All employment minister Tony McNulty could say was that the figures were "very disappointing" and predicted things would "get worse before they get better". Just what sacked workers wanted to hear as they search for the address of their local unemployment office (aka “Job Centres”). 

McNulty and his fellow ministers labour under the illusion that bailing out the banks will get them lending again and that the economy will magically revive. This says more about New Labour’s infatuation with finance than it does about the government’s ability to grasp even the bare essentials of how capitalism operates. 

The global banking crisis actually expresses processes within the “real economy” and not the other way round. So long as the world economy continued to grow, and people repaid their borrowings, the merry-go-round could continue. As long ago as 2006, however, some American households hit by falling income, stopped paying their mortgages and the rest, as they say, is history. 

Suddenly exposed to the light of day were the results of the tendency for capitalism to over-produce commodities which consumers cannot purchase out of their normal income. This obvious contradiction itself expresses the predisposition for the rate of profit to fall as output per worker increases. Today’s crisis is thus the unravelling of this fatal flaw at the heart of present capitalist economic social relations. 

Not that New Labour could or would do anything to resolve this paradox, even if it could understand what was going on. For one, the state is capitalist in its nature and cannot, therefore, act in a way that challenges private ownership of big business and finance run for profit as the basis of the economy. Moreover, there is an objective, unstoppable momentum to the economic crisis which capitalist governments are incapable of arresting. 

You could actually see this in a graphic way yesterday, both in Britain and the United States. As the markets digested the second Brown government bail-out, shares and the pound fell sharply. Even as Obama was sworn in as president, banking shares nosedived on Wall Street. Firms continued to announce redundancies and closures because orders had dried up. 

Yet, you can conceive of a state and a government that could act. One that would order a halt to redundancies and closures pending a reorganisation of the economy on co-operative lines. A state that would switch funds from the banks to pay the unemployed the average wage while the economy was reorganised. A government that would reconstitute the financial system on the basis of mutual ownership and control. A democratically-controlled political system that would issue a clarion call to workers in other countries to do the same. Getting to this point requires decisive, conscious revolutionary action. 

Paul Feldman
AWTW communications editor

The bankruptcy of 'politics'

The failure of a second state bail-out to resuscitate the corpse of British banking, as Lib Dem spokesman Vince Cable so eloquently put it, is a dramatic indication that the entire financial system is close to the precipice. With this looms the increasing possibility of state bankruptcy and an end to what now passes for conventional politics.

Britain now faces the distinct prospect that the present financial impasse will precipitate a collapse in day-to-day economic activity, which would produce immediate social anger and fear. If this were to happen, it is impossible to see the political landscape remaining unchanged. 

An authoritarian national government of the major parties is an outcome that cannot be easily ruled out. Such a regime could use existing draconian powers to suppress dissent alongside the declaration of a state of emergency. It would have to rely heavily on the police and the army to maintain order. 

Those of you who think this is simply a fantasy projection of someone who has read too many political thrillers have to answer the following questions: What happens when the state is unable to influence economic and financial events to the extent it can’t prevent the collapse of the banks, even by writing them a blank cheque? What are the consequences if Britain becomes “Iceland-on Thames”, needing a loan from the International Monetary Fund, or goes bankrupt, as economist and writer Will Hutton and others are now suggesting? 

What will be the impact on social order if millions are thrown out of work overnight?  And what are the implications of an unstoppable run on the pound, which gathered pace today, with Jim Rogers, the co-founder of Quantum fund with George Soros, telling Bloomberg News that “I would urge you to sell any sterling you might have”?

The fact is that we have entered a period of the unknown in British and world politics, where conventional or even unconventional policies cannot alter the course of the recession, which is now rapidly turning into a slump. Who could have predicted that the Royal Bank of Scotland’s shares would fall by 65% in one day to 12p each and that its losses for 2008 would total £28 billion? Or that banks which financed loans to British consumers and companies by borrowing on global markets would no longer be able to do so? 

As Anthony Hilton, leading financial commentator for the London Evening Standard, put it: “The fall from grace not just of the banking system but the global economy is unprecedented in its suddenness, its pace and the extent of the decline. There is no bottom in sight yet. In this regard, today's developments, momentous though they are, will not change much. To avoid economic disaster you need solvent banks. But on its own, those are not enough. You also need confidence.”  

Government ministers may rage at the banks for their reckless behaviour but the long and the short of it is that the expansion of the financial system ran alongside the rapid growth of the global economy, where consumers had access to buy goods they could barely otherwise afford. At the same time, the financial sector carried the economy – while producers of commodities struggled to make a profit – rewarding shareholders and providing employment for millions. 

New Labour cheered at every increase in house prices and consumer spending, claiming that capitalism had entered a new golden age. Well, it turned out to be a new iron age. Cheap and easy credit vanished and that exposed almost immediately the unsustainable nature of corporate-driven globalsation and the capitalist economic model. 

Now ordinary are people paying the price, whether they are taxpayers, workers facing the dole, people losing their homes, the retired dependent on interest from savings or pensions, or the school and university leavers without a future at all. The government has given the Bank of England permission to start printing money, the so-called nuclear option, in an attempt to get people spending and revive the economy. When that desperate last throw of the dice fails, as it surely will, the political and economic crisis will merge into one with all that implies.  

Paul Feldman
AWTW communications editor

Obama's 'tiger' comes to Washington

The veteran US civil rights campaigner Jesse Jackson has given voice to the deep contradictions that lay behind this extraordinary moment in politics on the eve of the inauguration of Barack Obama as the country’s first African-American president when he declared: “On Tuesday, it will be high noon in our politics, yet it is midnight in our economy.”

Today is Martin Luther King day in America, celebrating the birthday of the black leader who was assassinated in 1968. At that point, King was aiming to unite black and white workers to challenge capitalist interests and had an acute understanding of the class divisions in America.

Jackson says that the greatest challenges to the incoming president are “a financial system choking on its own excesses. Healthcare is broken. There is unaddressed and catastrophic climate change. Gilded age inequality and rising poverty abound”.
Even as vast amounts are being spent on the inauguration, poor Americans like the 2,102 citizens of Moun Bayou in the Mississippi delta, cannot even afford 25 cents to buy a school uniform for their children in thrift shops. Moun Bayou was the first town in the country to be run by black people.

Jackson and Obama are only too aware of the hopes the new president carries and the shoulders of people like King he stands on. Obama pointedly referred to King yesterday Obama as he spoke from the spot where King delivered his “I had a dream” speech. Despite the unprecedented economic and financial crisis, an amazing 79% of Americans are currently optimistic about the incoming adminstration. And if inspiration and talent could resolve America’s problems, there’d be no problem about the future. Many of the country’s best-known and loved musicians, actors, artists and poets are contributing to to create an amazing atmosphere. Aretha Franklin, Stevie Wonder, Bruce Springsteen, Sheryl Crow, Jay-Z, Alicia Keys, Bono, Mariah Carey, Wynton Marsalis and Beyoncé plus noted poets and performers are raising the political temperature.

The New Jersey singer Springsteen, for example, is amongst the politically articulate, noted for his anti-war lyrics and lyrical elegies to America’s rustbelts. He has been one of Obama’s strongest supporters, playing at five election rallies in 2008, saying: “We had a historically blind administration [Bush] who didn't take consideration of the past; thousands and thousands of people died, lives were ruined and terrible, terrible things occurred because, there was no sense of history.”

He summed up the historic meaning of the inauguration and the dramatic change symbolised by Obama’s election: “You proceed under the assumption that you can have some limited impact in the marketplace of ideas about the kind of place you live in, its values and the things that make it special to you. But you don't see it. And then something happens that you didn't think you might see in your lifetime, which is that that country actually shows its face one night, on election night.”

Obama is seeking keep up the momentum from his supporters. Speaking at the pre-inaugural concert in front of the Lincoln Memorial yesterday, he said the election proved that there is “no obstacle that can stand in the way of millions of voices asking for change”.

In steering a populist course Obama will be up against deeply entrenched interests. In a “permanent campaign”, he will seek to keep his 13 million supporters involved by email and social-networking techniques as a counter-weight to the vast power of the military-industrial complex associated with Bush and previous presidents.

As we said before, Obama is riding a tiger. There is no way that the proposed trillion dollar pay-out to the banks and big business will resolve the problems of the US economy, which are rooted in the contradictions of the capitalist system itself and are insoluble in the conventional sense.

As in the UK, the next generation of workers and youth will be made to pay for the financial ruin incurred by bankers and big business. The alternative is for the mass movement that swept Obama to the presidency to be taken forward to re-found the US, and with it the world economy, by carrying through a new American revolution to add to the one referred to by the president-elect yesterday. A World to Win’s campaign to acknowledge the crisis not just of capitalism but of bourgeois democracy itself can take strength from events in the US without falling prey to Obamamania.

Corinna Lotz
A World to Win secretary

Corporations warn against bail-out risk

Massive government spending to support financial institutions in countries including the US, United Kingdom, France, Italy, Spain and Australia will significantly further damage the weakening global economy, especially if, as predicted, China suffers a sharp slowdown this year. Those are not my words but come from an organisation that speaks for the major global corporations.

The World Economic Forum (WEF) is deeply concerned about the prospects for 2009 and beyond – and it shows. Its new report, Global Risks 2009, highlights the interconnectedness of financial, economic, environmental, social and political risks.

The WEF’s real worry is that the political response is inappropriate and too short-term, thereby adding to the long-term consequences of the global economic and financial crisis. There are also warnings that the worsening crisis will have multiple adverse impacts on the environment, food security, health and political stability with dire consequences for the half of the world’s population already living in areas of high water stress.

In a reference to the countless billions thrown at the banking system – another $20 billion was handed over to the Bank of America last night while everyone was asleep – the WEF warns: “It is dangerous to address immediate concerns without remedying the root causes of the problem, or sowing the seeds of new ones whose impact will not be immediate but may be strongly felt at a later date.”

Adding to existing debt, the key to the rescue plans promoted by Gordon Brown and Barack Obama, will intensify the downward spiral, the report says. Global share values will be driven further below the already steep drop-off of more than 50% on average as massive selling floods the markets.

The report dismisses deflation as a “short-term risk” and then forecasts that state pump-priming to try and rescue the global economy can easily lead to rapidly rising prices and adds: “Economic history is littered with periods during which governments reduced their debt burden through inflation.” Are the authors referring to the Weimar Republic in Germany in the early 1920s, whose collapse created conditions for the Nazi Party to flourish? We don’t know.

The WEF’s warnings coincided with a severe deterioration in the credit ratings for Greece only days after it was placed “on watch” following weeks of unrest. In the past week the ratings agency S&P also reviewed ten other high-rated industrialised western countries, warning Ireland, Portugal and Spain that their ratings are under threat too. Thomas Mayer, chief European economist at Deutsche Bank, said: "The downgrade of Greece is a wake-up call to everyone that there is a price to pay for taking on big levels of debt."

Ironically constituted as a non-profit foundation, the WEF is the collective voice of the global corporations with more than 1,000 member companies, typically with a turnover of more than US$5 billion. Its annual meeting in Davos, Switzerland, is designed to set the agenda for the world’s political leaders who revel in the luxury and limelight offered by the glittering event.

The crisis has changed all that and the language of the risk report is intended to convey a deep concern, reinforcing the public face of its headline commitment to “improving the state of the world”. It clearly reflects the concern in the corporate community that short-term actions by governments like New Labour do not address the problem of restoring profitability, which is the sole criterion by which capitalism judges itself.

Two things are implied here: governments are a hindrance rather than a help in this crisis and massive cuts in state spending are required to get capitalism back on its feet. We have been warned.

Gerry Gold
Economics editor

Fighting the third runway

The government’s go-ahead for a third runway and a sixth terminal at Heathrow will destroy 700 homes, liquidate the village of Sipson, make life unbearable for thousands living under new flight paths, and dramatically increase emissions of greenhouse gases. Is New Labour bothered? You must be joking!

Transport secretary Geoff Hoon will claim that by telling airlines they must use new less-polluting planes and by building a high-speed rail link into London from Heathrow, legally-binding emissions reduction targets can still be met. The truth is that if they are met it will be because from 2015, aviation is brought into the European emissions trading scheme. So the airlines will use phoney off-setting and carbon trading which does not reduce emissions globally at all.

There will be an additional 200,000 flights a year, and the expansion starts now. Because at the same time as giving the go-ahead for the runway, the government will agree that 60,000 more flights per year can use the existing runways. Hundreds of thousands more homes, schools and businesses will be affected by noise and low flying.

Support for anti-social expansion of the airport comes from those who will directly profit from it – the airport operators and the airlines. And there is opportunist backing from the Unite trade union, which hopes jobs will be created. It would be better if the union actually lifted even a tiny finger to fight just one of the thousands of redundancies now sweeping through the economy on a daily basis. Don’t hold your breath on that one, however.

Unite wrote to Labour MPs urging them to support the Heathrow expansion plans. But Unite does not need to worry, because Labour MPs are not going to be allowed a vote. The prime minister made clear yesterday he will rely on a 2006 vote approving aviation policy as his authority to proceed. And new laws forced through last year are specifically designed to stop the public using planning law to challenge the decision. Detailed plans will be railroaded through.

The Conservatives will use one of their debates to try to humiliate the government with a defeat on the question, but that too would have no legal force. All of which makes clear that we live in a non-functioning “democracy”, where the views of the people are entirely ignored and decisions railroaded through.

HACAN Clear Skies, the campaign against expansion, promised that the fight would go on, with a campaign of legal and direct action. John Stewart, of HACAN , made clear that campaigners are looking to Labour losing the next election to prevent the new runway being built. “The decision has been taken by two dinosaurs, Gordon Brown and Geoff Hoon, in collusion with the aviation industry. We are planning for life beyond the dinosaurs.”

But campaigners should not get too excited about a Tory win at the General Election. Remember how the Tories denounced the Maastricht Treaty for populist reasons and then went on to sign it? Once in office it is impossible to imagine a Conservative government going against the interests of big business.

It is not just New Labour but the whole parliamentary political system that is tied to corporate interests. This increasingly authoritarian system is immune to protest and pressure and will use the forces of the state to get what capitalism wants. Fighting Heathrow expansion – for the rights of communities and against corporate power – means seriously considering and then adopting sustainable economic and democratic political alternatives as outlined in our new book, Unmasking the State – a rough guide to real democracy.

Penny Cole
Environment editor

Bankers' government is bankrupt

Is there such a thing as a banking “expert”? We ask this question in the light of today’s announcement that New Labour has recruited a top City banker to the government to – wait for it – try and save the banking system. 

Mervyn Davies, chairman of Standard Chartered, will become Minister of State in Lord Mandelson's Department of Business, Enterprise and Regulatory Reform. He will be granted a peerage so that he can sit in the House of Lords, Downing Street said in a statement. 

According to the Daily Telegraph, Davies was personally courted by the prime minister for his “banking expertise”. He was involved in the government's autumn bank bail-out – which prevented bankruptcy but has signally failed to lift the financial system off life support. 

Davies’ appointment is unlikely to make any difference, therefore, except confirm that we truly have a bankers’ government in every aspect of the term. Such is the dire state of affairs in the world of capitalist finance that the government itself has essentially been transformed into a bank. From being the nominal property of the people who elected it, New Labour has become demutualised, privatised. It could and should be renamed New Labour Investments, Savings and Loans PLC.

How else can you explain Mandelson’s announcement today that the government is to guarantee up to £20 billion in bank loans to small businesses? This is the state transferring yet more taxpayers’ money to banks who have helped crash the economy. This is how desperate New Labour has become in trying and stave off what is looking more and more like an economy heading for a catastrophic slump. 

Business leaders have painted a bleak picture of the UK economy, with a survey suggesting the end of 2008 saw a "frightening deterioration". The British Chambers of Commerce (BCC) said its survey results were "awful" and the worst since it began in 1989. Elsewhere, a separate report suggested it had been the worst December for UK retail sales in at least 14 years. The British Retail Consortium figures on sales from the High Street and online said that like-for-like sales in December were down 3.3% on a year ago while total sales shrank 1.4%. This is despite the government cut in value added tax (VAT), which took effect in December.

New Labour is running out of options. It is desperate to avoid the direct printing of money to pump into the financial system because a) it’s the last throw of the dice b) nobody knows if it would work and c) it’s a recipe for runaway inflation. Little surprise, therefore, at a new survey shows that people in Britain are now less likely to trust banks, the stock market or the government's economic management than people in comparable nations.   

Asked to rate their trust in the government's management of the financial situation, British people award the government 4.5 out of 10, below the worldwide average of 5.2 and just ahead of Iceland on 4.4. Only Germany and Japan are gloomier, scoring 4.0 and 3.0 respectively in the poll. Britain ranks 16th out of 17 countries for public trust in its banks. 

What the survey indicates is that the government has no mandate for handing over vast sums of money to banks or any other form of capitalist enterprise. This is a bankers’ regime governing on behalf of the narrowest of monied interests, using the powers of the capitalist state. New Labour’s argument that there is no alternative is another big lie. None of the bail-outs have succeeded in halting the economy’s downward plunge. The banks are effectively bankrupt and so is the government. 

Paul Feldman
AWTW communications editor 

'Mass murder' in Gaza

It is not often that you find yourself in agreement with the maverick Labour MP Gerald Kaufman. Today, however, I find myself supporting his remarks in the House of Commons during the brief debate yesterday on Israel’s war on Gaza. 

He asked David Miliband, the foreign secretary “what the international reaction would be if Hamas had slaughtered nearly 900 Israelis and subjected nearly 1.5 million Israelis to degradation and deprivation?” 

Kaufman added, amid interruptions: “Is it not an incontrovertible fact that Olmert, Livni and Barak [Israel’s prime minister, foreign and defence ministers] are mass-murderers and war criminals … And they bring shame on the Jewish people whose star of David they use  they use as a flag in Gaza, but whose ethos and morals go completely against what this Israeli Government are doing.” 

The MP for Manchester, Gorton, is absolutely right. Slaughtering nearly a 1,000 people (to date), a third of them women and children, smashing hospitals and universities, shelling schools, deliberately killing non-combatants like police officers, using Gazans as human shields, deploying the banned phosphorous weapons – these are just some of the atrocities and war crimes that the Israeli government is guilty of. 

This is a carefully planned attempt to destroy Gaza. Indications are that the assault was planned as long as 18 months ago, coinciding with Hamas’s rise to power. A blockade was instituted, with the support of the European Union and the United States, to demoralise the population and try to turn them against Hamas. Shortly afterwards, the deputy defence minister Matan Vilnai, made his now infamous comment that, should the rocket fire continue, Gazans would face a "shoah" -  the Hebrew word for holocaust. 

The present offensive is designed to "send Gaza decades into the past," according to the head of the army command in Gaza, Yoav Galant. As to foreign minister Livni, tipped to be the next prime minster, she said yesterday that Israel was deliberately "going wild" in its use of military force in order to restore its deterrence capability. This is indeed the language of war criminals, who essentially view the Palestinians as Untermenschen, just as the Nazis did the Jews of Europe. 

Meanwhile, the UN's human rights body approved a resolution yesterday condemning the Israeli offensive for "massive violations of human rights" and indicated that it was compiling evidence of war crimes. Amnesty International says hitting residential streets with shells that send blast and shrapnel over a wide area constitutes "prima facie evidence of war crimes". 

None of this could happen without the tacit approval of the major powers, including Britain. David Miliband, the foreign secretary, has pointedly refused to condemn the bombing and shelling by Israel. Yesterday he trotted out the Israeli line once more, condemning Hamas, whose “motif is 'resistance” with methods that include terrorism. By contrast, he insisted, "Israel is meanwhile a thriving, democratic state”. 

Is this the same country that yesterday banned two Arab parties from contesting next month’s general election?  Arab members of the Central Elections Committee (CEC) walked out of the hall before the vote, shouting, "this is a fascist, racist state”. The vote to ban the parties was overwhelming, with one of the charges being that the parties were anti-Zionist.

 Which brings us back to Kaufman. He is right to denounce the Israeli government’s claims to be acting and speaking for Jews in Israel and elsewhere. What gives them the right? The Zionists who rule the country have, in fact, by their actions usurped the voice of Jews throughout the world and used it to inflict horrors on the Palestinians for more than 60 years. The only right they have is to be put on trial for war crimes. 

Paul Feldman
AWTW communications editor

Support unions' call for new People's Charter

Leaders of two major unions laid down a significant challenge at the weekend by calling for a mass campaign for a new People’s Charter, echoing the spirit of the great struggle for representation and political power waged by the 19th century Chartist movement.

Bob Crow of the National Union of Rail, Maritime and Transport (RMT) workers joined with Brian Paton of the Prison Officers Association (POA) to open a debate on a new course that goes beyond parliamentary politics. Speaking at a conference called by the RMT, Crow explained how his union had been expelled from New Labour after making the decision “to give money to organisations which support the working class more than the Labour Party”. New Labour “stands for privatisation, the continuation of anti-union laws and a European super state”, as did the Liberal and Tory parties.

The RMT leader also condemned the Trades Union Congress for providing “no leadership whatsoever as tens of thousands, if not millions, now face redundancy” and rightly insisted: “The people with real power are the global capitalists who dictate what the government does”.

It was urgent to work together in a better way and a campaign for a People’s Charter would provide “an alternative to what was taking place” and to involve millions in signing and debating. Nothing would be achieved, he stressed, by protesting outside conferences in Blackpool or Brighton. “It was better to sit on the runway”.

Brian Caton, general secretary of the Prison Officers Union, which in 2007 held an illegal strike for higher pay, warned that the far right would fill “the political vacuum” if an alternative movement was not built. The main political parties provided no real choice at all, he told the gathering.

“A People’s Charter is a good first step, based on objectives which we all share. We want trade union and human rights and we won’t get them from this government. We want liberty, justice and peace. I want to see the shackles that currently tie us down broken.” His next union conference will invite a range of left parties together to work for an alternative in the spirit of this approach.

Mary Davis, of the London Metropolitan University's Centre for Trade Union Studies, added a historic dimension to the call for a Charter. The Chartist movement of the 19th century had created the first political party of the working class, but explained that “our real history is hidden from us”.

The conditions for going beyond electoral politics were also raised by MP John McDonnell, chair of the Labour Representation Committee . He told the conference: “Electoral politics may not be where it’s at in the coming period. Not asking people for votes but organising for direct action. We may see forms of mobilisation on a mass scale which we haven’t seen for generations.”

Perhaps he had in mind possible reactions to the imminent government approval for a third runway at Heathrow, despite massive local opposition to the plans. McDonnell welcomed the concept of a Charter – whether it was a People’s Charter or a Workers Charter – to provide an alternative political analysis. Discussions and collaboration, recognising and appreciating each others’ differences would make a more sophisticated debate possible.

A World to Win unreservedly welcomes this powerful new call for a People’s Charter. In October, A World to Win launched its own People's Charter for Democracy to raise the question of a revolutionary alternative to the political and economic status quo.

As a speaker from the Wirral asked at Saturday’s conference: “Who is going to implement this Charter?” Our Charter does not appeal to the existing government or the state behind it. Rather, it suggests new ways in which the unrepresented masses can achieve new forms of representation and organise a transfer of power itself out of the hands of corporations and the capitalist state. We submit AWTW’s Charter as a contribution to this crucial debate to which the RMT and POA have given a tremendous boost.

Corinna Lotz
A World to Win secretary

Capitalism heads for year zero

Barack Obama yesterday raised the spectre of an irreversible crisis, with the situation getting “dramatically worse”, if his spending plans to boost the US economy were delayed. Is he being alarmist? And will his plans for a $775 billion “shock therapy” package work? 

How can we assess the likely success of these and related measures being proposed by governments around the world? Estimates of the extent of the financial and economic crisis have varied widely, continuing to worsen since the sub-prime mortgage default problem first began to make its appearance in the spring of 2007, an early but ominous sign of something far deeper. 

One closely-watched indicator is the Bank of England’s base rate. Yesterday the BofE cut its rate yet again, one of the other strategies being deployed to prevent the rapidly deepening recession turning into an economic catastrophe. Now at 1½%, less than a third of its level only three months ago, the rate is lower than at any time since the Bank’s foundation in 1694. It is expected to go lower still. People with savings and pensions have already seen the income from their investments drop by more than half. 

On this measure, the turndown takes the economy back to the beginnings of the epoch of capitalist production. The nearer it gets to zero, the more certain is the resort to printing money, and a further devaluation of currencies already weakened by the implosion of fantasy finance. 

Another indicator is falling production. The collapse in September of the global financial services corporation Lehman Brothers - the largest bankruptcy in US history - marked a new phase of the financial crisis, and its impact on production has been dramatic.  With credit markets remaining frozen, the whole developed world is now characterised by a sudden slowdown in consumption and a virtual stop in industrial production, as we reported last week. 

Retail giants are shrinking and closing as sales dry up. The roll call of historic names lengthens day-by day. Nissan in Sunderland, widely regarded as the epitome of efficient modern car plants globally, announced a cut of 1,200 jobs, nearly one in four of its UK workforce. This is just a part of Nissan’s response to demand which has fallen by 25 to 30% already, pushing its stocks of unsold cars to 93,000 in Europe. Estimates put the knock-on effect locally as high as a further 20,000 jobs. 

Nissan’s workers will not trust Lord Mandelson’s pledge to help then find new jobs as quickly as possible. As for their union “leaders”, Unite union joint general secretary Derek Simpson’s offered no resistance, saying pathetically: "The economy will improve and, when it does, Nissan will need these workers' skills again.” Thank you and good night.

The lesson from Obama’s warning on one side of the Atlantic and the flurry of government activity on this side, together with the virtual elimination of interest rates, is that the system is broken at every level and it shows. The US government’s spending deficit is already running at $1 trillion, for example, even before the president-elect’s package is added on. There is, unsurprisingly, a growing reluctance by foreign investors to deposit funds in either the US or UK.  

If the banks can’t and won’t make credit available, if production is being slashed because consumers can’t and won’t buy unnecessary commodities, then clearly there is something fundamentally wrong. In this context, “stimulus packages” make no essential difference.

The alternative is to seize the banks and the corporations, keeping people in their jobs and homes, pending the reorganisation of the economy on rational, not-for-profit, co-operative lines, producing sustainable goods to satisfy social needs. At least we would then have a measure of control over events rather than being passive victims of the unravelling of the capitalist market economy. No one, of course, is suggesting Obama or Brown will do any such thing. They will use the capitalist state to try and save capitalism at our expense. Therein lies the political challenge.

Gerry Gold
Economics editor

Put supermarkets’ bloated profits on a diet

The government’s New Year campaign against obesity and for healthier living is a shameful piece of hypocrisy because it ignores the real causes of the health crisis. 

In the so-called Change4Life campaign launched with expensive advertising, the website explains that “it can be hard these days to live a happy, healthy life ... The way we live in modern society means a lot of us, especially our kids, have fallen into unhealthy habits”. 

But presenting the fact that “if we carry on as we are 90% of today’s children could be overweight or obese by 2050”, as if it is some naturally occurring social phenomenon, is a total fraud. This health crisis is a direct result of a distorted society where generating profit is the sole criteria of everything, and governments collude in conditioning us to accept that. 

The system is dependent on people consuming, and over-consuming – and that applies as much to food as to other commodities. Through advertising, sponsorships of popular culture, and of course the whole structure of food distribution through the global giant supermarkets, these profits are sustained. 

Over the last 30 years of globalisation and the industrialisation of food, agri-business and food supply and retail giants have been allowed to carry out uncontrolled experiments. People eat what are in effect poisonous substances because the governments they elect to safeguard their health, allow them to be freely sold and promoted. 

An example of this is the development of so-called trans-fats, used because they are cheaper than natural oils and fats. Trans-fats increase unhealthy cholesterol and are implicated in cancer; they are in your food now. And it’s also a fact that poorer people who can’t afford to eat well often end up buying cheaper junk food, which encourages obesity. 

Nobody asked us if we wanted this to happen – we have no control over the content of our food. And New Labour cannot even enforce an agreed system of food labelling so that people can try to make rational decisions when they are shopping – it remains a voluntary code. The levels of fat, sugar and salt in products are still hard to fathom – it is a case of “buyer beware, because the state won’t help you”. 

As to urging young people to do more exercise, we should note that more than four out of 10 school and community playing fields in England have been lost since 1992. There used to be 78,000 pitches on 26,000 sites; now there are 44,000 pitches on 21,000 sites. Hundreds of swimming pools have been closed down while fitness centres are too expensive for many to afford. Tens of millions of pounds have been removed from funding grassroots sport to pay for the 2012 corporate Olympics. Government funding for “elite sportsmen and women” has increased by 230% since 2000. In the same period, funding for the bodies that pay for community sport went up by just 7%. 

The government has created a national curriculum where schools struggle to provide even two hours a week of healthy exercise or sport for children. Children who should be out playing, running and enjoying themselves instead have their noses to the grindstone, being prepared for the world of work (or unemployment). British schools are like fast food outlets – corporately-produced ingredients, put together by underpaid overworked staff to make unsatisfying and unhealthy products, which children are then forced to consume. 

As for adults, leaving the car and using public transport would help most people get fitter. But since public transport is so poor and underfunded, people are forced to stick to the car to get to work on time. 

The best way to take control of your life, and your family’s health, is to join with millions of others in a struggle to end the bloated profits of the supermarkets and agri-corporations and bring the production and distribution of food under social control. Now that’s a real incentive to live longer, lose weight and get fit – good luck with the diet! 

Penny Cole
Environment editor

One solution - one secular state

Outrage and shock is growing around the world as the Israeli war on Gaza takes its toll on a defenceless civilian population. The slaughter of women and children at a United Nations school compound yesterday prompted Venezuela to expel diplomatic staff from the country and angry demonstrations are taking place in many countries against the US-backed attacks.

The atrocities perpetrated by the Israeli military are war crimes on a large scale. Of that there is no doubt. John Ging, head of the United Nations Relief and Works Agency (UNWRA) in Gaza says bluntly that Palestinians are being terrorised, adding: “There is no place safe in Gaza for ordinary people. One million are without electricity, 750,000 have no water, hospitals are overwhelmed, with heroic staff working around the clock.”

He confirmed that UNWRA had provided the Israeli military with the exact GPS co-ordinates of all UN facilities, which are clearly marked with UN flags, brightly lit at night. In fact the Israeli Defence Force (IDF) spokesman did not deny knowing it was a UN facility, simply claiming that Hamas was using the building to launch rockets. Yet another lie to justify the latest atrocity.

As politicians and diplomats at the UN try to patch together a ceasefire/truce, we might ask: what does Israel actually seek to achieve with this ferocious assault on people, most of whom are defenceless civilians? The IDF claims that it plans to root out Hamas fighters who are launching puny rockets at southern Israel. But despite its vastly superior firepower – and the powerful backing of the US - it can never achieve a lasting victory, as some military experts are already noting.

More and more observers are increasingly seeing the Gaza offensive as “tragic and self-defeating”. Michael Clarke of the Royal United Services Institute, questions whether the Israeli defence chiefs are pursuing the correct overall strategy. "In terms of day-to-day tactics they [Israeli defence chiefs] know what they are doing, but it's not clear they know what the strategic goal of this operation really is," he says. "You can't go into a territory like this and eradicate Hamas in any meaningful sense.”

Veteran observers like Robert Fisk are noting what should be crystal clear to all but the most blinkered. The latest bloodbath perpetrated by Israeli forces is stoking up more hatred against what is seen as “The West” around the Arab and Muslim world. The question is: does the United States and the rest really give a damn? After all, they need some reason to carry on with their “war on terror”.

In fact, the rise of Hamas, much like the Taleban, is a case of the big-power sorcerers’ apprentice. As Stephen Zunes has pointed out,“if it were not for misguided Israeli and American policies, Hamas would not be in control of the territory in the first place”. He explains how Israel initially encouraged the rise of the Palestinian Islamist movement as a counter to the Palestine Liberation Organisation, the secular coalition composed of Fatah and various leftist and nationalist movements.

After Israel cut off negotiations with the Palestinians in 2001 and carried out a devastating military offensive as well as undermining the Palestinian economy, support for Hamas grew from 15 percent in 1993 to 44% of the vote in the January 2006 elections. Hamas was seen as the only force opposing Israeli occupation.

No wonder that the Middle East peace process is getting nowhere. It is not intended to. The present crisis makes the campaign for a unified secular state that guarantees rights and freedoms to Palestinians and Jews alike the only viable long-term solution. So Hugo Chavez’s call to the people of Israel to deal with their leaders, who launched the offensive in no small part to get themselves re-elected, is not a pipe-dream but a realistic proposal.

Corinna Lotz

AWTW secretary

New debt time bomb primed

As the economy heads inexorably for catastrophic collapse, the failure of capitalist politicians to come up with any answers – or indeed accept any responsibility for the crisis – is glaring. That, however, does not mean there are no solutions to hand. It’s just that they don’t spring from a conventional approach to what’s happening. 

New Labour has temporarily bailed out the banks with up to £500 billion of taxpayers’ money, slashed interest rates and cut VAT. Yet none of this has made the slightest difference to the economy. Major firms are going to the wall, falling like ninepins – including Wedgwoods, Woolworths, Adams – while others like Marks and Spencer are slashing staff numbers. Unemployment is soaring as are repossessions. 

Waiting for the economy to “bounce back” through the defiant action of consumers spending in the shops is not going to happen. A new survey  shows that a quarter of all British families will have no disposable income at all in 2009. Worse, much worse, is around the corner without decisive action to fundamentally change the political and economic landscape – in the shape of a corporate debt meltdown. 

The real story behind the financial crisis is the relentless, reckless and ultimately unsustainable “growth” driven by the corporations. The aim was to sustain profits but, as the cost of goods fell, this could only be done through greater and greater sales. This treadmill was maintained and funded by loans and bonds of one sort or another. In turn, these loans fuelled the financial markets, which bought and sold corporate debt. This led only in one direction – to a world of fantasy finance, which is now in the process of disintegration. 

Now much of this corporate debt is up for repayment - and hard-pressed banks are not in a position to take no for an answer. As the Sunday Telegraph explained: “For many companies which have survived the credit crisis the greater challenge lies ahead - the task of navigating through a record £110bn of debt that will have to be repaid in 2009. 

“But the bomb was primed by the companies themselves as they drew down hundreds of billions of pounds of cheap debt over the last decade to help fuel growth. Now that world has come crashing down and the money drawn has become a ticking time-bomb with companies waking up to the stark reality that lenders are demanding their cash back.” 

There is no way that the capitalist state can bail out corporations and banks at the same time. And what difference what it make if they could? None! The prospect of this kind of financial Armageddon, with accompanying job losses, defies every-day thinking. That’s why we have to build a movement that is prepared to move beyond the severe limitations of the existing political and economic framework. 

As the People’s Charter for Democracy says: “The existing system of government fails to represent the interests of the vast majority of people … the state’s primary purpose is to promote business interests at the expense of ordinary working people.” It goes on to suggest new forms of democratic rule. 

The Charter also indicates a way out of the economic crisis, through a transfer of resources to “co-operative forms of ownership and workplace control of major corporations, enterprises and services” and to “eliminate speculation and profit as the basis for society”. These are revolutionary ideas and proposals. But with the economic crisis out of control, they are eminently practical and necessary. Sign the Charter petition today and build the momentum for change. 

Paul Feldman
AWTW communications editor

Gaza - a crime against humanity

The war against the defenceless people of Gaza by one of the most powerful military machines in the world is another crime against humanity to add to the existing lengthy indictment of the reactionary and racist rulers of Israel. 

Here is a population of 1.5 million crowded into a tiny strip of land without water or electricity and desperately short of food and medical supplies. They are isolated in a Palestinian ghetto, surrounded by Israeli armour on the one side and Egyptian border troops on the other. There is no escape for them from the artillery, tank fire or bombs. While children in Britain prepare to return to school after the holidays, their counterparts in Gaza are being blown to pieces by American-supplied and financed weaponry. 

Of course, many others apart from the Israelis are complicit in the barbaric treatment of the Palestinian people. For there is no doubt that the aerial bombardment followed by a ground invasion could not have taken place without the explicit approval of Washington and the tacit agreement of European governments, alongside those of Egypt and Jordan who blame Hamas for the violence. 

Talk of a “ceasefire” by politicians like Gordon Brown is particularly sickening. New Labour helped make the war on Gaza possible by agreeing to characterise the Hamas regime as a “terrorist” organisation and blocking any contact with it following that organisation’s victory in democratic elections in 2006. Gazans are thus paying the price for the deranged “war on terror”, under which all opponents of major power policies are targets, up to and including governments. 

There are other even more cynical factors behind the present war on Gaza. Sporadic rocket attacks from Gaza have taken place for 18 months or so with few casualties. Now, however, the present Israeli coalition government has collapsed, brought down by corruption allegations. So the timing of the war on Gaza is an attempt to show how tough it can be in a bid to outflank the rival Likud party, which is even further to the right, at the elections scheduled for February.

While most of the British trade union movement remains silent, to their credit the transport union RMT has denounced the slaughter in Gaza, which has claimed over 500 lives. General secretary Bob Crow said: “It has been the failure of governments such as our own to demand an end to Israel’s illegal occupation of Palestinian lands since 1967 that has encouraged horrific acts such as those we have witnessed in recent days.”

Crow is right but we need to go further. Unions like the RMT should launch a campaign for a trade and cultural boycott campaign of Israel as part of the struggle for a new perspective for the long-standing conflict. Negotiations for a two-state “solution” are doomed because Israel’s leaders have not the slightest intention of allowing it to happen, now or in the future because it runs contrary to their Zionist nationalist dogma which has served ordinary Jews so badly. 

The only viable alternative, therefore, is a single, secular revolutionary state in the area where Jew and Palestinian can live together. Building support for this project will pose the political defeat of reactionary regimes throughout the region. It’s a tall order but all other roads are closed off. 

Paul Feldman
AWTW communications editor