Friday, May 29, 2009

A way out of the political crisis

When political systems become corrupted and lose their legitimacy, history shows that ordinary people will try to establish new forms of government. And if there was ever a time to draw on this long struggle for democracy it is now.

And make no mistake about it, this is a people’s struggle that we are talking about, not some manoeuvring by political elites who have always sought – and too often succeeded – to direct popular anger in ways that benefit themselves.

Two enduring episodes point to a way forward out of the present impasse of constitutional crisis and economic/financial meltdown. The first is the struggle waged by the Levellers during the English Civil War of 1641-9 and the second is that of the Chartists.

Levellers were the most politically conscious and organised section of the rank and file of the New Model Army, which under the leadership of Oliver Cromwell had defeated the forces of Charles I in the war between Parliament and the King.

In the winter of 1647, with Charles I held prisoner at Hampton Court, army representatives – or “agitators” as they were known – came together with civilian activists and senior officers to discuss the principles of a new political system. The Levellers put forward “An Agreement of the People” for debate at St Mary’s Church in Putney.

The Agreement contained a truly revolutionary thought that, in the event, was far ahead of its time. The existing Parliament was to be dissolved and a new one elected for a period of two years. As to the powers of this Parliament, it would be “inferior only to theirs who choose them” and be limited by “whatsoever is not expressly or impliedly reserved by the represented to themselves”. In other words, the people would control what Parliament could do, and not the other way round.

Edward Sexby, agitator and trooper, set the tone. The most powerful advocate of the rights of the common soldier told Cromwell bluntly:
The cause of our misery is upon two things. We sought to satisfy all men, and it was well; but in going about to do it we have dissatisfied all men. We have laboured to please a king and I think, except we go about to cut all our throats, we shall not please him; and we have gone to support an house which will prove rotten studs – I mean the Parliament, which consists of a company of rotten members. [emphasis added]

Although the King was executed two years later, the Levellers’ main demands for universal suffrage and control over Parliament were thwarted by leaders who represented a new ruling class. Two centuries later, the baton was passed in the historical sense to the Chartist movement. By then, Britain had been radically transformed. Capitalism had created a vast urban working class which had no political rights, while the new bourgeoisie had consolidated the power they inherited from the Civil War.

The Chartists, the first independent political movement of the masses, organised monster petitions, strikes and rallies in the struggle for the vote. And they organised several Conventions during two decades of Chartist activity from 1838.

One particular Convention considered itself an alternative to Parliament and vowed to sit until its demands were met. This is how we could pick up the baton from the Chartists. A Convention on Democracy, representing all those who favour truly democratic power, especially in terms of the economy, could present a way forward. Such a Convention could lay down a challenge to the existing power structures of capitalism and prepare the revolutionary change in society that our predecessors have laid the groundwork for.

Paul Feldman
AWTW communications editor

Thursday, May 28, 2009

Health advances under threat

Climate change is “the biggest global health threat of the 21st century”, according to the report of a year-long joint study by the University College London Institute for Global Health and the medical science magazine The Lancet. The gains made in the 19th and 20th centuries – countering infectious and pest-borne diseases, reducing malnutrition, improving infant and maternal mortality levels – could not only be lost, but put into reverse.

Summarising current research, the report sets out the threats to health and lives:

Hunger, illness, stunted growth and death due to under nutrition are set to worsen as climate change affects crops, forestry, livestock, fisheries, aquaculture, and water systems. Increases in extreme weather events will damage crops and disrupt farming. Sea level rise and flooding of coastal lands will lead to salination or contamination of fresh water and agricultural lands, and the loss of nursery areas for fishing. Drought, and changing patterns of plant and livestock diseases and pest infestations, reduction of income from animal production, decreased crop yields, lessened forest productivity, and changes in aquatic populations will all affect food production and security. The regions most likely to be adversely affected are those already most vulnerable to food insecurity and malnutrition

Populations with no immunity will be exposed to new infections such as malaria, and dengue fever. One model suggests that up to 320 million more people could be affected by malaria by 2080. As ocean temperatures rise, increased plankton blooms could provide nutrients for the cholera virus. Flooding brings outbreaks of diarrhoea, leptospirosis and cryptosporidiosis.

Current public health systems could not respond to these challenges and of course the most vulnerable people are in poor countries with minimal health infrastructure. A new advocacy and public health movement is called for to bring together governments, international agencies, non-governmental organisations, communities, and academics from all disciplines to adapt to the effects of climate change on health.

You can see where these public health specialists are coming from. They want a return to the pioneering days of public health, for example when in 1854, John Snow (the father of public health) tracked the source of a cholera outbreak around Broad Street in London to an infected water supply. This marked the beginning of a struggle for the transformation of water and sewage which remains the bedrock of health in Britain. Then there were the studies that connected rickets and tuberculosis with poverty, which led to poor children getting free milk.

None of these struggles were won by researchers and doctors alone, but by campaigns involving individuals and groups, including trade unions and working people’s associations. Achievements were made in the teeth of opposition from vested economic and political interests.

The report’s authors acknowledge that, so far, climate change has been viewed “only through the lens of economics”, with no sign that governments are mobilising the professional, civil and social forces needed to respond. But the “lens” in question – or rather, the tunnel vision of globalised corporations in pursuit of profit – is the only vision that governments have.

Taking on the vested interests of agri-business, Big Pharma, and all the energy-guzzling corporate giants who are preventing action on climate change, means bringing scientists and doctors together with the rest of civil society to create an unstoppable movement for change. Just as Snow and his supporters had to go to war against the establishment to make gains in public health in the past, so today’s passionate advocates will find it impossible to achieve what is required without a transformation of the status quo, not only in but also beyond, health care systems.

Penny Cole
Environment editor

Wednesday, May 27, 2009

Lies, damned lies and statistics

Apparently the number of people imagining that there will be more jobs available in the next six months in the United States has increased. This measure of “confidence” sent markets soaring yesterday. But these are the kinds of reports that sustain the now-fading springtime images of economic green shoots. Those who believe them should be warned about too much optimism.

The real story can be found in a variety of statistics and stark lines charting the continuing relentless descent of every part of the global economy. The latest chapter in the slow, drawn-out death of the US car industry sees Chrysler already officially bankrupt, and GM in its last days. The Union of Auto Workers is busy signing cost-cutting deals they hope will save some jobs. Canadian GM employees have accepted pay cuts of 30% in an attempt to keep plants open in Ontario.

With falling incomes for those in work and increasing unemployment there won’t be much spare cash around to sustain spending in North America. Japanese parts and machine tool suppliers are getting worried. According to Ikuo Mori, CEO of Fuji Heavy Industries. “Whatever happens to GM, the impact on the overall (U.S.) economy is going to be huge and it's going to hurt demand."

Standard and Poor’s Case-Shiller index of US home prices since the peak in 2006 – when the effects of the crisis first began to be felt – shows that the deterioration is accelerating. US home prices fell a record 19.1% in the first three months of this year. From the peak, they are down 32.2%. "We see no evidence that that a recovery in home prices has begun," said David Blitzer, chairman of the committee which compiles the index.

No green shoots there, then.

How about Japan and Germany? These two countries hosting major manufacturing corporations became heavily dependent on exports to the rest of the world as a consequence of globalisation. This chart shows Japan’s production, domestic consumption and exports since 2004. It’s been pretty much downhill all the way, and catastrophically so since the end of 2007.

The next one zooms in on Japan’s exports and capital investment over the last year, quarter by quarter.

Note the steady decline in capital investment approaching -40% as exports shrink by more than 70%. Measured by the market value of all final goods and services, Japan was the world’s second biggest producer in 2008 after the US and China, so it’s very important as an indicator of the health of the global economy.

Green shoots? Where? Germany, perhaps? The rest of Europe?

Germany was in fourth position in 2008. In the first quarter of this year, German exports and investment were in free fall, dropping by 9.7 per cent and 7.9 per cent compared with the previous three months. Industrial orders in the Eurozone in March were almost 27 per cent lower than a year before.

These are all quantitative indicators of a deepening crisis with no bottom in sight. At a certain point, quantitative limits are reached and qualitative changes must occur. This is a universal law of nature.

There are two possibilities contained within the contradictory, fast approaching historical moment. In its strange, insane way, retaining capitalist production as the organising principle of society requires the destruction of productive capacity on a scale to match the surplus built up by decades of ballooning credit-led investment.

The other choice is for social ownership and democratic control of the world’s productive resources, creating the things we need to survive in a sustainable way that protects the environment. When you think about it, the choice is obvious.

Gerry Gold
Economics editor

Tuesday, May 26, 2009

Power, representation and the state

There is now a competition between the Tories and some members of the New Labour cabinet about how to “redistribute power” in a bid to defuse an historic political crisis that shows no sign of abating.

Tory leader David Cameron is today setting out a series of proposals about changing the relationship between MPs and the government, including the idea of fixed-term parliaments, while Alan Johnson, the health secretary and a front-runner to succeed Gordon Brown, is advocating a form of proportional representation when it come to voting.

Cameron, astutely, put his finger on the key question in an article in The Guardian, where he wrote: “The anger, the suspicion and the cynicism – yes with politics and politicians, but with so much else besides – are the result of people's slow but sure realisation that they have very little control over the world around them, and over much that determines whether or not they'll live happy and fulfilling lives."

But what neither Cameron nor any other establishment politician is going to ever acknowledge is that this has always been the relationship between people and power in Britain and all other capitalist countries adorned with a representative democratic political system. Representation as a form of politics was designed from the outset to act as a barrier to and not as an access to power.

Representation as a modern political concept has its origins in the thinking of James Madison, one of the key architects of the American constitution. Concerned with the danger, to him, of “majority tyranny”, he wrote that representation provides a mechanism

to refine and enlarge the public views, by passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true interest of their country, and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partial considerations. Under such a regulation, it may well happen that the public voice, pronounced by the representatives of the people, will be more consonant to the public good than if pronounced by the people themselves, convened for the purpose.

So Madison’s objective was clear – to avoid decisions “pronounced by the people themselves”. Instead, they would be “represented”. Representation is, therefore, a transfer of power to others, its alienation. This seemingly voluntary giving up of power enabled then allowed the ruling classes to consolidate their rule through the construction of specialist institutions which evolved into the capitalist state, of which Parliament (and Congress in the US) is a subordinate part.

What Cameron and others are talking about are some cosmetic alterations to formal procedures in order to continue to disguise this essential truth about the nature of power in capitalist society: that ordinary people have no power – and can never access it – so long as the state continues to sustain the basic relationships of capitalism, whereby the rich and the powerful make the key decisions. This is the material basis for the alienation in society that Cameron refers to, which is reflecting itself in politics so sharply precisely because of the collapse of confidence in the capitalist economic and financial system.

In Unmasking the State, we put forward a series of proposals for a new, transitional democratic state which would replace the existing institutions and actually give ordinary people direct access for power so long denied them. Some of these ideas are summed up in our People’s Charter for Democracy, which we urge you to sign and help build the momentum for the revolutionary transfer of power itself to the majority.

Paul Feldman
AWTW communications editor

Monday, May 25, 2009

Vacuum at heart of the system

The expenses scandal continues to stoke up outrage and fury everywhere from deepest Tunbridge Wells right up to the north of Scotland, as the credibility of the political class continues to sink into the mire.

Commentators from New York to Berlin are realising that the crisis is far deeper than simple embarrassment over dodgy expenses claims, like Chancellor Alistair Darling’s for accountancy advice or New Labour deputy leader Harriett Harman’s £10,000 for a “media trainer”.

As a New York Times writer notes, “the expenses abuses are only the tip of a malaise that has seen parliament grow ever more remote from the voters, and governments grow ever more oblivious of Parliament”. He compares today’s popular resentment to the time when the Great Reform Act was “speeded through Parliament by riots in several cities”.

The constitutional crisis, marked by the resignation of Speaker Michael Martin, is much more than a storm over a jaded and discredited institution. Britain’s modern parliament was the result of a Civil War and the political revolution of 1688 which enabled the emerging capitalist class to rule after the end of the feudal monarchy. So what is happening now is no small thing. What is at stake is the entire capitalist system of political rule and control.

The leaders of all the parliamentary parties and editorialists from the Telegraph to the Guardian hope and pray they can soothe over anger by a “root and branch overhaul” that will restore the credibility of politicians to the people. Facing not only public scrutiny of their greed but also the loss of their seats in the next election, MPs are looking desperately for ways to rescue the existing order of things.

Health Secretary Alan Johnson, for example, is calling for electoral reform. Others hope that proportional representation will do the trick. The Tory leader David Cameron is purging his party of MPs from the shires – who have used expenses to clean their moats and build duck houses – in a bid to appease the electorate.

But what the advocates of parliamentary reform miss out is that behind the constitutional crisis is the even deeper crisis of globalised capitalism itself. The revelations of parliamentary sleaze shows Parliament for what it is – not the centre of real political power but a club of parasitic hangers-on, far more concerned with looking after their own interests than those of the electorate.

The question must therefore arise – where then are the real centres of power? These are actually to be found in the boardroms of the corporations and the banks. And it is no accident that the scandal comes in the wake of convulsions in the banking system which go to the very heart of globalised corporate capitalism.

It is becoming abundantly clear that all the parties which make up the existing political classes are incapable of dealing with the worsening economic crisis. In fact, they are far more concerned with hiding their own greed at a time when hundreds of thousands of people are losing their jobs, their savings and their pensions as the effects of the economic crisis take hold.

Yes, the existing parliamentarians need to be swept away. But we desperately need new forms of democracy and representation and that must happen at the same time as a fundamental restructuring of the economic system itself, to create not-for-profit forms of co-operative enterprises in place of a profit-driven capitalism that is in meltdown on all fronts.

Corinna Lotz
A World to Win secretary

Friday, May 22, 2009

Bankrupt - economically and politically

So now we have it – Britain is officially on the verge of state bankruptcy. And we’re not just talking high finance here but politics as well. This coincidence of the gravest economic and financial crisis of capitalism with the constitutional impasse at Westminster is truly an explosive cocktail.

The assessment by ratings agency Standard & Poor that the British state could lose its top AAA rating because its borrowing levels are too high, sent shock waves through the markets yesterday. This was the despite the fact that S & P’s assessment was based on figures already made known about public debt, which goes to show just how fragile and nervous the financial markets remain.

They have good reason to be. Figures published by the Bank of England almost at the same time as S & P was delivering its judgement, show that printing money in a bid to ease the credit crunch has had little or no effect. The Bank's Trends in Lending report showed that lending by Britain's major banks to businesses and households actually slowed in April. It seems that the £125 billion injected into the system by the Bank has disappeared down a financial black hole.

It’s the same story across the Atlantic, where that other great debtor nation in the global economy has just witnessed the collapse of another major bank, BankUnited in Florida, which was declared insolvent by the Federal authorities. The closure came just hours after Alan Greenspan, former chairman of the Federal Reserve, the US central bank, warned that the global banking crisis was far from over. Greenspan, of course, presided over – no encouraged – the untrammelled, unregulated explosion of the financial system until it became a world of fantasy finance.

The consequences of the ongoing crash are all too obvious. Thousands more British Airways staff are set to be fired as a result of the company’s catastrophic £400 million losses for the year, with chief executive Willie Walsh saying he saw "no signs of recovery anywhere". Others are more dramatic in their assessment. Martin Wolf, the Financial Times’ senior commentator, said the “the fiscal costs of this crisis will be comparable to those of a big war”, adding: “Thursday’s threatened downgrade by Standard & Poor’s is a reminder of those costs. Loss of jobs and incomes will also scar the lives of hundreds of millions of people around the world.”

As far as the S & P verdict is concerned, there is no doubt that huge public spending cuts are on being prepared – whoever wins the next election – because no way is the economy going to “recover” anytime soon and produce the increased tax revenues that would reduce the debt that itself results from bank bail-outs and a slump in economic activity.

The combination of a state edging towards bankruptcy that is planning to slash services and a political system that is rotten to the core, is not only dangerous – it is unacceptable. There is an urgent need to reorganise both the economy and create a new democratic politics, because action on jobs and spending can only be achieved at the level of the state.

Clearly, however, the present capitalist state system is increasingly paralysed by its own crisis and where it has acted in terms of bank bail-outs and printing of money, has made no essential difference in preventing economic meltdown. The background danger is that sinister forces lurking in the background will act of their own accord unless we can mobilise a viable challenge to the status quo with a view to carrying through a fundamental transformation of a failed economic and political system.

Paul Feldman
AWTW communications editor

Thursday, May 21, 2009

The roulette wheel of climate change

New projections from the most respected climate modeling methodology suggest that without rapid and massive action, global warming will be twice as severe as previously estimated six years ago – and possibly even worse.

The study uses the MIT Integrated Global Systems Model, a computer simulation developed by the Joint Program on the Science and Policy of Global Change and supported by the US government.

It is the only model that interactively includes not only information about atmospheric, oceanic and biological systems, but also detailed treatment of possible changes in human activities - such as the degree of economic growth, with its associated energy use, in different countries.

The new projections suggest a median probability of surface warming of 5.2 degrees Celsius by 2100, with a 90% probability range of 3.5 to 7.4 degrees. This can be compared to a median projected increase in the 2003 study of just 2.4 degrees.
Amongst the 400 complex projections that take into account diverse scenarios, in particular those where there is no political action to reduce emissions, look much worse than before.

To illustrate the range of probabilities revealed by the 400 simulations, the team at MIT produced a "roulette wheel" (see this page) that reflects the latest relative odds of various levels of temperature rise. The wheel provides a very graphic representation of just how serious the potential climate impacts are.

The team explain that their computer models match the known conditions, processes and past history of the relevant human and natural systems, and the researchers are therefore dependent on the accuracy of this current knowledge. They warn that the odds indicated may actually understate the problem, because the model does not fully incorporate positive feedbacks that can occur, for example, if increased temperatures caused a large-scale melting of permafrost.

Study co-author Ronald Prinn, the co-director of the Joint Program and director of MIT's Center for Global Change Science, insisted: "The least-cost option to lower the risk is to start now and steadily transform the global energy system over the coming decades to low or zero greenhouse gas-emitting technologies."
Unfortunately, science does not drive global decision-making. The terrible drama of human society is that we are capable of producing scientists who can explain exactly what is happening, but not so far, the social and political structures – in a word, states – that will act on this information. Quite the reverse - as the body of evidence grows, state action to reduce emissions is actually declining.

That is because states do not stand even-handedly above society, doing the best for all. They represent the interests of one class – the capitalist class – and everything is made subservient to that – even at the risk of human and ecological catastrophe, as set out in the evidence published by the International Panel on Climate Change.

The only way to resolve this problem is for the governance of countries to undergo a democratic revolution, bringing into being new structures that serve the interests of the majority. Market expediency would no longer rule and scientific evidence could be taken seriously and acted upon.

Penny Cole
Environment editor

Image courtesy / MIT Joint Program on the Science and Policy of Global Change

Wednesday, May 20, 2009

The 'R' word makes it appearance

That it is 300 years since a Speaker of the House of Commons was forced from office reflects a political crisis reverberating up from the deepest bowels of society. But a new Speaker, and new rules for the expenses system have as much chance of solving the constitutional emergency as the measures taken by governments and central banks have of fixing the global financial system.

Both the political and financial turbulence reflect seismic shifts much deeper in the class relations which are at the essence of today’s troubles. In Britain, claims for the cleaning of murky moats stir issues left unresolved by the English revolution, bringing them to the surface once more.

In the British Parliament, history found a place where the representatives of two classes could argue over the exploitation of the dispossessed third. The modern-day Liberals are the inheritors of the landowning aristocracy, and the Conservatives were established and continue to pursue the interests of capital of the specifically home-grown British variety.

At the end of the 19th century the representatives of the third class, the organised, industrialised workers, were persuaded by the Fabian Society that their interests could be pursued politically by a parliamentary party known as Labour, which would seek peaceful, gradual reforms and thus avoid the nasty Continental tradition of revolution.

Fast-forward 100 years and we find that the incessant, restless growth of capital periodically interrupted by worsening crises, has transformed national politics in every country. The period of parliamentary-based reformist politics came to an abrupt end around about 1979, marked by the fall of the Calllaghan government and the beginnings of the Thatcherite period of class war and corporate-driven globalisation.

Now, the collapse in demand for the products of transnational corporations addicted to credit-induced growth sets the agenda of every government which must attempt to find a route to stabilisation. But all routes are closed except those that destroy jobs, evict people from their homes, and wipe out their savings, forcing hundreds of millions into poverty and starvation.

Those who were persuaded that the market would provide them a better pension than the state are among the first victims. A report today by Ros Altmann, a governor at the London School of Economics, says: "Essentially the entire UK pensions system has been based on a bet that equities would always do well enough over the long-term to deliver reliably good pensions. The old idea that stock markets can always be relied on to deliver strong returns has left millions facing an impoverished old age."

This is not just a British problem. California is among the richest and is on the point of bankruptcy. Governor Arnold Schwarzenegger was last night facing a ballot defeat. Polls pointed to voter fury over the failure of the Republican governor and the Democratic-controlled legislature to balance the state's books. As Californians struggle with joblessness, home foreclosures and sharp losses in the stock market, the state has raised taxes, cut spending and borrowed to try and fix a $42-billion shortfall – and still remains more than $15 billion short of a balanced budget.

In Britain, voters aren’t going to be fobbed off with a few changes to the expenses system. Even the The Guardian, which has backed New Labour at every twist and turn, is now permitted to use the R word in its columns in an attempt to keep up with public anger which increasingly expresses itself in the use of the term revolution.

What voters are seeking is justice and retribution for the past – and access to power long denied them by a Parliamentary show that, when the curtains are drawn, is spending its time assembling a tawdry collection of crumpled receipts for dog food, pornographic movies and sticks of furniture together with fraudulent claims for mortgages on second homes. Introducing real democracy will require a social revolution that is both political and economic along the lines suggested by our People’s Charter for Democracy. Nothing less will do the trick.

Gerry Gold
Economics editor

Tuesday, May 19, 2009

State cracks at its weakest point

The scandal of MPs’ expenses has led to a constitutional crisis because it creates a vacuum within that part of the machinery of state that the ruling classes have used to hoodwink the populace about the true nature of democracy under capitalism.

There are several enduring myths about the present state and democracy. They suggest that capitalism and democracy are natural partners and that the ruling elites have championed the rights of ordinary people since time immemorial. And that Parliament was and remains the centre of this process.

These legends have proved vital in cementing a relationship between rulers and the ruled, especially since 1884, by which time all men had finally achieved the vote. By then, however, the capitalist state had consolidated itself and as the political scientist Anthony King says in his book The British Constitution:

“Democracy, whether parliamentary or otherwise, was … a latecomer on the British political scene. It was a novel feature grafted on to a pre-existing constitutional structure. Largely for that reason, democracy in Britain, in the form of universal suffrage, was accepted as a humdrum matter of political practice long before any widespread enthusiasm developed for democracy as a set of political ideals that deserved to be promoted for its own sake.”
Nevertheless, this “humdrum” practice led to the building of the Labour Party and facilitated long periods of class compromise in the political sense. Some Labour governments were even able to make substantial reforms, like a free health service. That is what has come to an abrupt end and not just in recent weeks either.

The fact that New Labour MPs and cabinet ministers are even greedier than the Tories illustrates how far we have travelled down the road to the point where nothing of importance separates the three major parties and their unconditional commitment to global capitalism.

Nor is it an accident that the outrage has built at a time of the gravest economic crisis since the 1930s, when tens of thousands are losing their homes, their jobs and their pensions while the fat cats in and out of Parliament feel no pain whatsoever. The same MPs and ministers who have bailed out bankers and their pensions are caught with their own fingers in the till. What hypocrisy!
As to Parliament, it has had little or no effective control or real power for at least 125 years. The constitutional position of the House of Commons is to provide the raw material in the form of MPs who then go off and become something else – the government. The conventional idea that Parliament has lost power only in recent times is also rejected by King, who explains:

“Commentators frequently refer to the decline of parliament – that is, the House of Commons – in recent decades, but parliament’s decline as a legislative assembly began in the middle of the 19th century and was complete by, at the latest, the 1880s or 1890s. Nothing much of constitutional significance has happened [to parliament] since then…”
As Parliament is talking shop full of MPs on the make, while the government and the rest of the state machine hold on to serious power, it is clear that reforms will make little difference. Clearly, the cat is out of the bag in the sense that many voters now have little time for Parliament. An historic shift is under way and this explains why party leaders are running around like headless chickens trying to find a way forward, with some MPs hoping that replacing Speaker Martin will do the trick.

They couldn’t be more wrong. The state’s edifice has cracked at its weakest point and it threatens to bring the whole structure down with it.

Paul Feldman
AWTW communications editor

Monday, May 18, 2009

Parliament is beyond reform

When right-wing newspapers call for “revolution not reform” and leading Tory writers claim that the bond between rulers and ruled is “irreparably ruptured”, you can gauge the measure of the constitutional crisis now sweeping through the British state.

The Parliamentary system is in meltdown following the revelations about large-scale abuse of the Commons’ expenses system, whereby MPs of all the major parties claimed for just about everything, including mortgages already paid off. And not just backbench MPs either. The Cabinet has been at it too. Chancellor Alistair Darling is a serial tax evader who “flipped” the designation of his main residence four times in as many years to claim the maximum expenses.

This crisis is exericising the right wing, who perhaps sense the consequences better than the liberal media. Peter Oborne (whose book The Triumph of the Political Class foreshadowed what has been revealed) says: “This is hypocrisy of the most staggering order. The scandalous revelations over the past week about MPs' expenses have destroyed any concept of Britain having a virtuous governing class and have also irreparably ruptured the bond between rulers and ruled.” Fraser Nelson, writing in the Murdoch-owned News of the World, went further, declaring: “What started as a scandal is mutating into a constitutional crisis. And one that will have to end not just in reform, but in revolution.”

The scandal reveals not just a loss of confidence in the major parties but also, more significantly, in the parliamentary state itself in a way not seen before in modern British history. By and large, the majority have consented to the present system of government on the condition that it would a) act as a buffer between capitalists and citizens b) provide key services like housing, education, health and pensions c) protect liberties and human rights and d) protect the country from external threats.

That political bargain has broken down, a victim of corporate-driven globalisation which itself has now produced the prospect of the greatest economic and financial crash in history. Capitalism has been let rip in society, first under Thatcher and then courtesy of New Labour. The imposition of naked market forces has undermined not just areas like housing and pensions but also reinforced rampant individualism.

It’s easy to see the greed of MPs as a reflection of the atmosphere created in society at large. After all, why should they be excluded from making money by buying and selling homes just because they were MPs? Apart from siding with corporate and financial interests, the capitalist state under New Labour has destroyed many human rights and engaged in illegal wars in Iraq and Afghanistan that have actually increased the threat to the safety of ordinary people.

So the expenses scandal has brought to the surface frustrations that have been boiling up over decades. During the 1945 period, turnout at elections, for example, has plummeted from 83.9% in 1950 to 59.4% in 2001. It rose slightly in 2005, still leaving New Labour victorious with the votes of just one in four of the registered electorate.

Now it is reported that large numbers of the electorate plan to vote for smaller parties at the June 4 European elections in order to “punish” the major parties caught up in sleazegate. This includes the Greens as well as two far right parties, the BNP (which is cashing in on New Labour’s abandonment of low-paid white workers) and UKIP.

When a social or political institution fails, it’s time to move history on. This could be achieved, for example, through the calling of a People’s Convention for Democracy, charged with drawing up and then implementing a written democratic constitution. Delegates would be drawn from all ordinary sections of the community but exclude the rich and the powerful who are responsible for first the economic and now the political crisis. Instead of being cast as bystanders, we should seize the initiative before the right wing uses the expenses' scandal to close down the democratic process altogether.

The Convention’s aim should be the transfer of power not just from the corrupt political elites but also from the minority who have run the economy into the sands. In short, we need a revolutionary new system of government that goes beyond mere representation to forms of direct democracy in all areas of society, including the workplace. If Parliament is to have any future, it has to be in this context because it is certainly beyond reform.

Paul Feldman
AWTW communications editor

Friday, May 15, 2009

For a new democratic politics

Some leading political commentators have suggested that the present crisis gripping Parliament over fiddled expenses will fuel what they term “anti-politics” and that this is dangerous because it could play into the hands of the far right like the British National Party.

Seumas Milne was at it The Guardian, declaring that “the greatest danger of this week's parliamentary disgrace is the boost it will give to anti-politics: the roar of rage that they're all the same, the cynicism that nothing can ever really change”, while Steve Richards in The Independent has written that this week’s revelations have a “grisly simplicity that will fuel the existing anti-politics orthodoxy”.

The implication is that to be against “politics” as practised at Westminster is bad and dangerous. But surely Milne and Richards are making the mistake of identifying “politics” with democracy, confusing form with content. They are not the same thing. Politics is, according to dictionaries, the “art and science of governing” or “political activities” and opinions. So it’s difficult, if not impossible, to be “against” politics on these terms.

Democracy is a relatively newcomer in the modern history of politics and it is this side of the political equation that was struggled for in Britain by ordinary people who demanded a voice. The country was on the verge of revolution in 1832 when the ruling classes finally conceded a limited franchise. Chartists built a mass movement and laid plans for an insurrection in their struggle for the vote for working men.

If the disdain for Westminster “politics” has reached a crescendo, it is precisely because these historical gains which produced a representative, albeit limited, democracy have been undermined. Decisions at national and local level are made regardless of majority opinion – ranging from the invasion of Iraq, airport expansion, post office closures to bank bail-outs. When workplaces shut down because of the capitalist crisis we are not consulted. It is fait accompli. In terms of “political choice”, the differences between the mainstream parties are slim to non-existent.

So to be against this kind of “politics” is healthy and to be encouraged. Of course the political crisis opens the doors to the right, as it did in Italy (where the reformist left also had their chances, only to blow them because of their subservience to the same system). But it also creates opportunities if we can raise our horizons beyond the narrow confines of the parliamentary system and how to make it work better. It is better to see “anti politics” as a form of antimatter, containing vast amounts of potential energy that could provide the fuel for a new political democracy.

The current system is narrow, inadequate and operates to mask the real centres of power in British life - the executive, state institutions and the corporations. No amount of fiddling (pardon the pun) with the issue of MPs' expenses will change that. If the contempt for Parliament has reached new heights, it is because large sections of the electorate have for some time felt alienated politically, restricted to electing "representatives" once every five years to a body that is itself toothless.

The anger generated by the expenses' scandal could be mobilised to create new, alternative forms of democracy that, for example, give people power in their workplaces and communities along the lines suggested in the People's Charter for Democracy. By advocating an extension of democracy we can spike the guns not just of the BNP and the Tories, but of the state within the state that is watching and plotting in case Britain should become ungovernable at a time of mounting economic chaos.

Paul Feldman
AWTW communications editor

Thursday, May 14, 2009

Food crisis fuels new land grab

A new global land grab threatens not only the world's climate but the survival of some of the poorest people on the planet. From Brazil to Cuba, Mexico to Madagascar, governments and corporations are buying up land to bolster their own dwindling food and fuel resources.

Malaysia’s Federal Land Development Authority, for example, has a joint venture to clear up to 300,000 acres of Brazilian rainforest for palm oil plantations. The investment cost is just $800 million dollars. Calling for urgent action to halt the plunder, rainforest campaigners explain that:

“Global ecological sustainability and local well-being depend critically upon ending all industrial development in the world's remaining old forests – including plantations, logging, mining and dams. The amount of primary and old growth forests that have been lost has already overshot the carrying capacity of Earth. Globally there are not enough old forests to maintain climatic and hydrological cycles, meet local forest dwellers' needs, and to maintain ecosystems and the biosphere in total.”

Releasing stored carbon into the atmosphere, and cutting down crucial carbon sinks means faster climate change and more species extinction. But palm, soya and other cash crops grown for bio-diesel are claimed as climate change mitigation in the topsy turvy world of globalised capital. Every day some 30 square miles of virgin forest is cleared and the destruction is speeding up, in spite of all the pious statements of world governments.

The land grab is driven by growing food and fuel crises. China leases land in Cuba and Africa. Saudi Arabia holds the largest foreign ownership or control of African farmland in Sudan. Qatar has agricultural land in Indonesia, the Philippines, Bahrain, Kuwait and Burma. While a political crisis is leading to civil war in Pakistan, the government’s Investment Ministry has nevertheless put a million acres of farmland up for long-term investment or sale to foreign interests. All of this amounts to a new form of what might be called corporate imperialism, funded by sovereign wealth funds or corporations like Daewoo which are almost indistinguishable from state governments.

This is not empty land and not only forest is being cleared. People are being moved out of their homes to make way for foreign-owned agri-business. Species of all kinds are being burned up and sacrificed on the altar of profit.

Where they can, people are fighting back. The new government of Madagascar has repudiated a deal signed by the previous government, to lease 1.3 million hectares of land to Daewoo. Madagascans were so enraged by the plan they brought down the government earlier this year. In Kenya, protesters are trying to stop their government selling off their homes to Qatari interests.

As food and water shortages increase, powerful interests across the globe are declaring economic war on the poor. If need be they will take military action to ensure their survival. What they won’t do is voluntarily end the capitalist system of production and distribution which is at the heart of all our problems.

The planet grows enough calories to feed all its people already. But poor people can’t afford to buy food at prices that will deliver profits for investors. The crises of food, climate, water and fuel are in fact one major resource crisis driven by an unsustainable economic system. End that system, and we can begin to make a start on tackling these problems.

Penny Cole
Environment editor

Wednesday, May 13, 2009

'Green shoots' fantasy world

From international speculator George Soros, to the Organisation for Economic Co-operation and Development (OECD), to global stock markets, there is a concerted attempt to declare that the worst of the economic crisis is over. That’ll be no comfort for 244,000 in the UK who have joined the ranks of the unemployed and the thousands of school and university leavers this summer, whose job prospects are the worst for a generation.

The unemployment rate reached 7.1% by the end of March, rising from 6.3% at the end of December, the Office of National Statistics has reported. Unemployment in the first quarter of 2009 rose by the biggest amount since 1981 and the total of 2.22 million without work is the highest since 1996, the year before Labour came to power and will pass 3 million within a year.

One in six 18- to 24-year-olds is now out of work. At 676,000 (16.1% ) the level of youth unemployment is as high as in the mid-1990s. It is up almost one-third on last year; 227,000 under-25s have been without work for over six months. Professor John Philpott, the chief economist at the Chartered Institute of Personnel and Development (CIPD), described the data as "truly appalling". He said: "Youth employment prospects are crumbling. With the toll of job losses falling most heavily on the under-25s it will be a bleak summer and autumn for this year's crop of young talent."

So what is this “green shoots of recovery” nonsense all about? Actually, says the OECD, “the pace of the deterioration is easing” and “severe declines in economic output across the world are moderating”. In plain English, the crisis in the major economies is deepening – but at a slower pace!

Not in China, the world’s third largest economy, however. Exports continue to collapse, while imports of raw materials are in steep decline. Hao Daming, analyst at Galaxy Securities in Beijing weighed in with this: “The trade figures are worse than we expected. We will see exports dropping by at least 20% for the rest of 2009 as uncertain world demand will remain a drag.”

The slump in exports and imports, which has been mirrored across Asia, underscores the dramatic downturn in Western consumer demand. Chinese officials estimate 23 million migrant workers have lost their jobs because of the closure of thousands of export-oriented factories, undermining the hope that domestic demand can reverse the downward trend.

The real story is that the global capitalist economy is on a state-funded life support system. Central Banks in the United States, Europe and Britain are printing money like there is no tomorrow in a desperate bid to keep the financial system alive. With untold sums in toxic, worthless assets still overhanging the financial system, there is still no sign of an end to the credit freeze, however.

Only last week, the Bank of England announced another £50 billion injection in freshly printed money, leading some analysts to suggest that a third wave of bank crashes was on the horizon. A number of mutual building societies are also said to be in trouble because of falling house prices and repossessions.

Meanwhile, large sections of industrial capacity are being wiped out throughout the world, from the Corus steelworks on Teesside to car factories in Detroit as demand melts away. All talk of the “green shoots of recovery” is strictly for the birds and a further indication that capitalist policy makers and politicians inhabit a fantasy world all of their own.

Gerry Gold
Economics editor

Tuesday, May 12, 2009

'In the name of God, go'

What to do with Parliament? What to do with MPs who have bought and sold properties using taxpayers’ money, who have had their swimming pools cleaned and have even claimed for tons of horse manure on expenses? What to do with an institution that is said to be the cornerstone of the British constitution but whose members are preoccupied with feathering their own nests?

Similar concerns preoccupied Oliver Cromwell, whose statue stands in front of the Commons. In 1653, with the Civil War won, a tyrannical King executed, the rule of Parliament over monarchy irrevocably established and England now a republic known as the Commonwealth, MPs were trying to fix the new system to benefit themselves.

At 11 o'clock in the morning of 20 April 1653, Cromwell led a company of musketeers to Westminster. Having secured the approaches to the House, he addressed the Members in a speech about corruption that is worth repeating in the light of events three and half centuries later:

...It is high time for me to put an end to your sitting in this place, which you have dishonoured by your contempt of all virtue, and defiled by your practice of every vice; ye are a factious crew, and enemies to all good government; ye are a pack of mercenary wretches, and would like Esau sell your country for a mess of pottage, and like Judas betray your God for a few pieces of money.

Is there a single virtue now remaining amongst you? Is there one vice you do not possess? Ye have no more religion than my horse; gold is your God; which of you have not barter'd your conscience for bribes? Is there a man amongst you that has the least care for the good of the Commonwealth?

Ye sordid prostitutes, have you not defil'd this sacred place, and turn'd the Lord's temple into a den of thieves by your immoral principles and wicked practices? Ye are grown intolerably odious to the whole nation; you were deputed here by the people to get grievances redress'd; your country therefore calls upon me to cleanse the Augean Stable, by putting a final period to your iniquitous proceedings, and which by God's help and the strength He has given me, I now come to do.

I command ye, therefore, upon the peril of your lives, to depart immediately out of this place! Take away that shining bauble there, and lock up the doors. You have sat here too long for the good you do. In the name of God, go!”

At Cromwell's signal, Lieutenant-Colonel Worsley marched in with the musketeers to drive out the MPs. The doors were sealed and a wit pinned up a notice outside reading: "This House is to be let: now unfurnished."

Now, this is not 1653 and the revolutionary New Model Army that backed Cromwell’s dissolution is no longer. But history has come a full circle. The parliamentary system of rule that was eventually established (with few people having the vote until 1867) has clearly run its course.

The expenses’ scandal itself reflects a deeper crisis of democracy, where today’s Parliament is toothless and powerless in the face of the executive, who in turn are accountable to powerful corporate and financial interests and not the electorate.

Electing a cleaner, more honest group of MPs would not in itself be sufficient in what has developed into a full-scale crisis of the capitalist political system. It is not inconceivable that a corrupt Parliament becomes an excuse at some stage (especially at a time of social unrest) for direct, authoritarian rule.

What is required is a new, democratic constitution that would transfer power to the people in terms of direct control and ownership of productive and financial resources as well as new forms of more direct representation and participation in political life. If Parliament is to survive, it can only be as part of such a revolutionary transformation of the social system as a whole, in which people themselves are sovereign.

Paul Feldman
AWTW communications editor

Monday, May 11, 2009

Parliament versus the people

The shoddy and demeaning spectacle of MPs milking their expenses’ system at the taxpayers' expense for all it is worth knows no bounds. They have been claiming for just about everything: £60,000 (Employment minister Tony McNulty) for second home allowances, and £25,000 for security patrols (Barbara Follett) down to 69p for a packet of biscuits, £2.50 for eyeliner and even for Kit Kats and an Ikea carrier bag.

MPs have blatantly engaged in property speculation, using allowances to do up homes before selling them on. “Never in my 20 years in politics have I seen the public as angry as they are today and, frankly, who can blame them? It doesn't help that the revelations have come at a time of recession.” Thus the Liberal Democrat Norman Baker, MP for Lewes, East Sussex, once home of revolutionary democrat Tom Paine. Baker’s remarks are part of a growing chorus warning about the yawning credibility gap between the electorate and those who purport to represent them in parliament.

And are the Honourable Members, who include 13 members of Gordon Brown’s Cabinet, expressing any shame or remorse for their venal attitude to office? No, sublimely oblivious to criticism, they are complaining that their abuses were exposed to public scrutiny. The House of Commons authorities are even asking the police to track down the source of the leak that showed how deeply MPs’ snouts are in the trough.

As The Observer commented yesterday, the distance between MPs and ordinary people is now so big that they consider a £24,000 second home allowance as an “incidental” perk. For most, that is a lump sum they would never dream of seeing in their bank account. And so, warnings of the breakdown of trust upon which bourgeois parliamentary democracy relies are flying thick and fast:

 Baker concludes that auditing, transparency and limits on expenses must be imposed – warning that “If we do not, then the trust between the people and Parliament will have been irrevocably damaged, with all the dangers that holds."

 The Daily Telegraph, which first blew the whistle on MPs expenses, concludes that: "There is no doubt that the current system is rotten and cannot survive."

 The Daily Mail says it means a “terminal wipe-out” for New Labour and that Blairism’s claim to moral virtue has been “blown to shreds”. The question now, it asks, is what will be the consequences of all this. “For with such an unprecedented breakdown of Parliamentary integrity and loss of public trust, we are surely in uncharted territory.”

 And last, but not least, a Guardian blogger points out that the corruption shows “how alienated the political classes are from those they serve”, demanding that Oliver Cromwell come back with a peoples’ army to shut the whole thing down.

The haughty obliviousness of New Labour after 12 years in power is indeed mind-boggling. Of course the Conservatives, and indeed Sinn Fein, have also been playing the system for all that it’s worth, but New Labour’s arrogance is far greater than that of the rest combined. It comes at a time when income inequality in Britain is at its widest point in 40 years after 12 years of Labour government, a result of low wages and benefits held below inflation.

MPs have justified their greed by pointing to the difference between their pay and the vast salaries paid to executives in the private sector. In doing so they show that they have nothing in common with the people that they are supposed to represent. Instead they draw their “morality” from the capitalist economic system which parliamentary democracy oversees and keeps in place.

The populist right like the Daily Mail is aware that the limits of parliamentary democracy have been reached and that they will be breached. By its actions, New Labour is opening the doors to dictatorial rule. It’s time to sound the alarm bells loud and clear.

The current scandal shows the urgent need to campaign for a People’s Charter for Democracy. The aim is not to “re-build trust” in a corrupt and undemocratic parliament but to end the rule of political elites, and create new forms of direct local and national democracy through peoples’ assemblies.

Corinna Lotz
A World to Win secretary

Friday, May 08, 2009

Rail network heads for meltdown

The Faustian bargain between New Labour, the state and capitalist corporations is collapsing around the government’s ears and nowhere more so than in the rail industry. Led by the debt-ridden National Express, many companies that hold the rail franchises sold to them by the government are close to pulling out of their contracts because they can’t make enough profit to pay their way.

Although the railways were privatised by the Tories, New Labour quickly embraced the notion of public-private partnerships with even greater enthusiasm than its predecessors. An astonishing one-third of all “public services” are now in the hands of the private and voluntary sectors, with total contracts valued at more than £80 billion a year.

Determined to eliminate state subsidies year by year, New Labour has sought the highest bids for rail franchises. In August 2007, National Express agreed to pay £1.4 billion over seven years and four months for the East Coast franchise. GNER had been unable to keep up payments, despite offering much less. Only 18 months into the new franchise, National Express is looking for a get-out clause – or more money from the state.

The East Coast line, which links London with Edinburgh via York and Leeds, carries 17 million passengers a year and employs 3,100 staff. But passenger numbers are falling because of the recession (combined with the ludicrously rail fares). The transport group has £1.2 billion in debts. It has already made 700 workers redundant in the last six months.

Other companies are in similar difficulties, says the rail union RMT, which has warned of a meltdown on the rail network. If the National Express franchise collapses the firm could also be stripped of its East Anglia and c2c franchises. There are also question marks over Stagecoach’s South West Trains franchise and Arriva is facing heavy losses on its Cross Country line.

The rail debacle comes the wake of the fiasco on the London Underground, where Metronet, one of the companies contracted to modernise the system, pulled out last year. Private funding of the project was insisted on by Gordon Brown when chancellor. It has virtually bankrupted the network and led to soaring fares. There are similar stories to be told in areas like school and college building.

Now the government is trying to repeat the policy with the part-privatisation of Royal Mail. It wants a global corporation like TNT to take a share in the business to provide the investment to “modernise” the postal service, with all that would mean in terms of job losses and rising charges.

Bob Crow, the RMT general secretary, is right when he says: “What we have now is sub-prime companies running essential public services and that’s the consequence of rail privatisation. Rather than reading ransom notes from these companies RMT will be stepping up the political and public campaign to get shot of them.”

Crow wants the government “to step in now and begin the process of renationalisation” and warns that it would be “political suicide” to bail out National Express. New Labour is, however, committed in blood to the pact with the devil of global capital that it made long before it even came to power in 1997. This deal says that the government will deploy the state, using taxpayer resources, to further the ambitions and profits of the corporations, both economic and financial.

The global crisis of capitalism has exposed all sides of the once cosy arrangement that drove forward the globalisation of the economy. Banks are broke, corporations can’t make profits and the state itself is staring bankruptcy in the face. Capitalism isn’t working, from whichever angle you look at it from, and the development of alternative economic AND political models, in theory and practice, is the priority.

Paul Feldman
AWTW communications editor

Thursday, May 07, 2009

Afghan 'Crusaders' claim more lives

The election of Barack Obama has definitely made a difference to the lives of the people of Afghanistan – his administration will offer a public apology and an inquiry when dozens of civilians are indiscriminately killed by American warplanes. And that’s it.

Apart from sanctimonious words from Hillary Clinton, the US secretary of state, there is no essential difference from the policies pursued by George W. Bush. The spurious “war on terror” continues, with over 60,000 foreign troops in occupation of Afghanistan. Obama is rushing another 30,000 American soldiers to the country shortly.

Rohul Amin, governor of Western Farah province where the bombing took place during a battle on Monday and Tuesday, said he feared 100 civilians had been killed. Others said the death toll could be even higher. If confirmed, it could make the incident the single deadliest for Afghan civilians since the US invasion in 2001.

Jessica Barry, spokeswoman for the International Committee of the Red Cross, also sent a team which reached the scene of the air strikes yesterday. "There were women and there were children who were killed. It seemed they were trying to shelter in houses when they were hit," she said. The team saw houses destroyed and dozens of bodies. Barry said that among those killed was a first aid volunteer for Afghanistan's Red Crescent, who died along with 13 members of his family.

As for inquiries, they are ten a penny when it comes to atrocities like these, in Afghanistan, Iraq or even Occupied Palestine. The Israelis hold them into the brutal actions of their soldiers. The United Nations holds inquiries into Israeli war crimes in Gaza – and, of course, nothing happens, apart from the fact that the Israeli government rejects the findings out of hand. The killing goes on.

The Israelis will say that Palestinian civilians were used as human shields, as if this justified the use of banned phosphorous bombs and shooting civilians out of hand; the Americans will say that the Taleban were definitely in the vicinity when their brave pilots launched the air strikes. And the killing will go on.

And if civilians evade the bombs in Afghanistan, there is always a chance that latter-day Crusaders, aka the US army, will tell you that Islam is bad and that Christianity is good. Al Jazeera has broadcast a video showing US soldiers being instructed by the military’s top chaplain to “hunt people for Jesus” as they spread Christianity to the overwhelmingly Muslim population.

The footage was shot by Brian Hughes, a documentary maker and former fighter pilot. In his report for Al Jazeera, Hughes revealed that soldiers had imported bibles translated into Pashto and Dari, Afghan languages. After the Pentagon disputed his account, he retorted: “[U.S. soldiers] weren’t talking about learning how to speak Dari or Pashto, by reading the Bible and using that as the tool for language lessons.” Hughes told Al Jazeera: “The only reason they would have these documents there was to distribute them to the Afghan people. And I knew it was wrong, and I knew that filming it … documenting it would be important.”

Today, Afghans staged an angry protest in the town of Farah, the provincial capital of the province where the bombing took place. They threw stones. Protesters were reportedly injured after shots were fired. The killing will go on.

Paul Feldman
AWTW communications editor

Wednesday, May 06, 2009

It's capitalism, stupid!

In the ominously quiet moments as the world awaits the next body blow in the struggle between the ill-matched but inseparable financial and economic systems, some of those on the sidelines look for an explanation that goes beyond greed.

They’re hoping to find something that might help to avoid a re-occurrence of the catastrophic series of implosions that mark the passing of the shadowy speculative organisations populating the world of fantasy finance. Or at least, they hope to provide an early warning of the sudden collapse of demand that wrecked the profits of corporations overproducing beyond the capacity of the market and the planet.

If this all seems a bit late in the day, this is because they were caught up in the hysteria of never-ending growth promised by regulators, politicians and financiers.

The Bank of England, which sat back entranced as a series of speculative bubbles grew in size, has published a talk given last month by Andrew G Haldane, its executive director responsible for financial stability. With a job title like that you’d be forgiven for thinking he’d be well ahead of the game – but, alas, he wasn’t and he still isn’t.

In a paper entitled “Rethinking the Financial Network”, and clearly written before the global threat of a H1N1 flu pandemic gripped the media, Haldane compares the panic effect of the 2002 Severe Acute Respiratory Syndrome (SARS) outbreak in China to the collapse into bankruptcy of Lehman brothers on September 15, 2008 and its catastrophic impact on global markets.

In his analysis of the financial system, Haldane draws on the theory of complex, adaptive systems, learning, he says from ecology, epidemiology, biology and engineering. This muddle-headed, eclectic approach is not new. People, among them Andrew Lo, director of the Massachusetts Institute of Technology’s Laboratory for Financial Engineering, have been using it for years to justify and explain the operation of free, in the sense of unregulated, stock and other financial markets.

The Green New Deal from the New Economics Foundation and “Prosperity without Growth” from the Sustainability Commission, both use it to argue for intervention. Coincidentally, Lo popped up yesterday in a Financial Times interview misusing Darwin’s theory of evolution and comparing the current crisis to the impact of a meteorite on the dinosaurs.

Haldane says that the evolution of a complex network of increasingly similar financial institutions meant that “sharp discontinuities in the financial system were an accident waiting to happen. The present crisis is the materialisation of that accident.” His prescription is better information, better regulation, and restructuring “to reduce the financial network’s dimensionality and complexity”.

In attempting to borrow from other sciences, Haldane, the NEF, Lo and the others essentially acknowledge that classical economic theories, whether of the free-market or interventionist schools, are dead in the water. But in ascribing the source of the current problems to increased complexity and external accident they completely miss the point about the nature of an overarching, objective, contradictory social system known to humanity as capitalism.

Crisis is an intrinsic part of the capitalist system of social relations and manifested itself long before the appearance of the complexity that Haldane and others describe. As far back as 1848, Marx and Engels in their Communist Manifesto already observed how bourgeois society “is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells” and how the history of capitalism, then comparatively young, was one of “the revolt of modern productive forces against modern conditions of production” and how “commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly”.

In other words, the problem is not at all that complex: it’s capitalism, stupid!

Gerry Gold
Economics editor

Tuesday, May 05, 2009

Marking the revolt against Stalinism

Twenty years ago today, the Hungarian government, under pressure from anti-Stalinist demonstrators, announced that it was opening its borders with Austria. Tens of thousands of East Germans flooded into Budapest, on their way to Western Europe. This human tidal wave led to the collapse of the Berlin Wall later that year and the reunification of Germany in 1990.

Meanwhile, thousands of miles away, a crack appeared in the seemingly impenetrable rule of another Stalinist regime. In China, hundreds of thousands of students and workers were marching through Beijing, Shanghai, Chonquing and other big cities. They were inspired by the fearless sit-in begun by students in Beijing’s Tiananmen Square in the heart of Beijing two weeks earlier.

The students began a sit-in to mourn party secretary-general Hu Yaobang, who had recently died, at the Monument to the People’s Heroes at the centre of the square. Within days, the demonstrations spread to more than 400 cities. Martial law was declared on May 20 by a split Politburo. By June 3, the 27th Army was firing on demonstrators in the square. This was the extraordinary moment when a man in a white shirt confronted a tank column on the Avenue of Eternal Peace.

Even as you read this, the Chinese government is clamping down on bloggers and journalists, petrified at unrest on the anniversary of the brutal crackdown in which around 3,000 people lost their lives as troops fired on demonstrators. Café Sentido reports : “As the 20th anniversary of the Tiananmen Square massacres approaches, the event itself remains taboo in China, forbidden from discussion on state-run television and even banned from results pages on search engines like Google, Yahoo and MSN, operating inside China.”

The Chinese government was one of the very few Stalinist regimes to survive the global revolutionary events of 1989. Elsewhere bureaucracies were breaking up. Mikhail Gorbachev’s withdrawal of troops from Afghanistan and Eastern Europe at the beginning of 1989 had marked the dawn of a new era for the Soviet Union and the countries it dominated politically and militarily. In Poland, Hungary, East Germany, Romania, Bulgaria and Czechoslovakia dictatorships toppled like ninepins.

A new generation has sprung to life since that year that shook the world. Then the media crowed about the “end of communism”. But now capitalist triumphalism is a thing of the past. The global economy is in its deepest crisis and the arrogance that followed the end of the Soviet Union has given way to a patent loss of confidence amongst the ruling classes.

The hope that the masses who made 1989 happen would turn their energies against the capitalist system was premature. Many were dazzled by the consumer capitalism that they experienced, then in full swing. But the glitter of McDonald’s, BMW and game players is losing its shine as millions are thrust into unemployment, bankruptcy and repossession. In China, the Stalinist-imposed ruthless brand of capitalism is falling apart and the authorities are fighting a losing battle to stay in control over increasingly angry masses.

The regimes that fell in 1989 hid their true identity behind socialist phraseology while they carved out special privileges for themselves. Just as the students and workers of 1989 unmasked them, the challenge for today’s generation is to dismantle the political system that pretends to rule in our interests today. A recent YouGov poll revealed that in 1989, 35% thought that politicians were generally “good people”. Only 17% believe that today. And, confidence in the police has fallen from 70% down to 46%. Draw your own conclusions.

Corinna Lotz
A World to Win secretary

Monday, May 04, 2009

New Labour vultures gather

As senior New Labour politicians form a queue to deny they are seeking to replace Gordon Brown as leader of the party and take over as prime minister, they are bringing the curtain down on an era that began exactly 30 years ago today.

On May 4, 1979, Margaret Thatcher led the Tory Party to victory at the general election and Britain was never the same again. She ruthlessly set about the task of modernising an ailing British capitalism at the expense of working people and the trade unions.

The Thatcherite period of rule was marked by one conflict after another – war with Argentina, the miners’ strike, poll tax and a string of privatisations to name but a few – as the economy was subjected to a new period of intense, corporate-driven globalisation. Unemployment soared and the scars of this economic blitzkrieg are still felt in hundreds of communities up and down the country, where unemployment has been passed down through successive generations.

The mantra that the market provided all the solutions and could regulate itself, drawn from the dogmas of American monetarist Milton Friedman, took over in every field, private and public. Financial markets were set free – and where there were no markets – in the NHS for example – one was created.

The relief when 18 years of Tory rule ended in 1997 was palpable, until the voters quickly discovered that New Labour’s leaders were actually Thatcher’s heirs. Tony Blair and Gordon Brown had modelled themselves on the Tory leader’s outlook and gave it their own spin. As the penny dropped, disillusioned voters stopped casting their ballots to the point where New Labour won the 2002 election with the backing of just one in four of registered electors.

The consequences of New Labour rule have been just as squalid as those that resulted from the Thatcher period. Gross inequality in society, market-driven policies imposed on every sector, from schools to the London Underground, an illegal Iraq war launched on lies and pretexts as a former head of MI6 makes clear today, and a political degeneration that knows no bounds.

The crisis now engulfing the Brown government is not just of its own making. It has everything to do with the global economic crisis that is signalling the definite end of period of capitalism marked by an unparalleled expansion into every corner of the globe.

Today’s collapse of production and trade alongside the disintegration of the financial system, has been coming for some time. Early warning signals could be seen in the Asia-Russia financial crisis in the late 1990s and the dot com meltdown of Internet-based companies in 2000. Soaring house prices and an explosion in credit in the 21st century only served to disguise the storm that has now broken with a vengeance.

Now members of the New Labour cabinet are hovering over a political corpse like vultures, ready to pick the bones of the party clean as they jostle for Brown’s job. A fat lot of good it will do them because they clearly have no chance of success in the coming general election and the Tories will return to inflict savage spending cuts on those who can least bear them.

The moral of this 30-year story is not only that the corporate-driven globalisation period has self-terminated but that the politics that helped to drive the free-market train also belong on the refuse tip of history. If there was ever a time to create a new politics that aims to put an end to class-based divisions in society, it surely is now.

Paul Feldman
AWTW communications editor

Friday, May 01, 2009

The truth behind Brown's boom

A committee of MPs today blames the “reckless behaviour” of the banks for the financial crisis, which is as neat a way of any of letting the New Labour government off the hook as any yet devised.

The Treasury committee’s view of the collapse of the financial system is partial and one-sided and a bit short on history. If the banks were reckless – and they were – it was because they were encouraged to be so. And no one in government complained as the tax receipts rolled in, especially not Gordon Brown who was chancellor for the decade when the credit-fuelled boom took off.

Why were the banks “reckless” and take extraordinary risks with their lending? That is the question. Why, as the committee asks, did bankers make “an astonishing mess of the financial system”? The answer usually given is that they were “greedy” and simply loved piling up the bonuses and forgot to look out for tomorrow.

That doesn’t really get below the surface, however, and puts the collapse of the global financial system down to a few badly-behaved individuals. The real truth is that the so-called boom Britain has experienced was only made possible by a massive extension of credit (and its opposite, debt) under the direction of the government.

It is not that Brown did not know what was going on. His government actively encouraged London to become one of the centres of fantasy finance, which inevitably contributed to the series of bubbles that have now burst and broken the back of the global economy in the process.

Verification of this comes from the Institute of Fiscal Studies, whose director Robert Chote, shows how the Treasury actually knew that the boom was not what it appeared to be. Between 1998 and 2008, output in the economy was 3-4 per cent above its sustainable level, he estimates, in what he calls “an alternative view of history”.

This view, he said, would “cast a much less flattering light” on Brown’s record as chancellor. “It would certainly suggest that he should have been running a much stronger fiscal position.” In plain English, Brown’s officials suspected it would end in tears, and should have reined in spending, but decided to keep the illusion going in the hope that the days of boom and bust were a thing of the past.

Chote explains how much of the so-called boom actually amounted to an increase in share and house prices, which people cashed in on to fuel consumer spending on imports. Yet this activity was treated as if it were a sustainable growth in the real economy. Apparently, the Treasury is now rewriting history to try and disguise what happened.

Of course, the banks contributed. Why shouldn’t they have? They are in business to make money and if that could be done by recycling dodgy loans as securities, creating more and more complex ways of moving funds around the globe, increasing profits as they went, they knew that the government was behind them all the way, to the point where Brown told them in June 2007 that they had created a new “golden age” in the City.

Ultimately, the banks and the government responded to the fact that the only way that the expansion of the goods-producing side of the global economy could be maintained was through greater and greater amounts of fictitious or fantasy finance. The collapse of one has revealed the massive over-capacity and over-production in the other, which is why trade has collapsed around the globe. Global capitalism as a whole is unsustainable any way you look at it and the best way to mark May Day is to renew our efforts to put it out of its misery.

Paul Feldman
AWTW communications editor