The curious outing of David Laws

The story of how David Laws, the Lib Dem chief secretary to the Treasury, came to step down from his post at the weekend after just a couple of weeks in the job, is a curious one, to say the least.

Ostensibly, his departure was a straightforward “expenses scandal” tale. The Daily Telegraph revealed on Saturday that Laws had claimed £40,000 in Parliamentary expenses which had been used to pay rent for rooms in properties owned by his long-term, but secret, partner. The cabinet minister for cuts had used the expenses to hide the fact that he was gay.

By the end of the evening, the outed Laws – who immediately sent his own case for investigation by the Parliamentary Commissioner for Standards – had quit the Lib-Con coalition government, which was severely weakened as a result. Laws was an architect of the coalition agreement and the man put in charge of cutting the massive budget deficit.

He was replaced by Danny Alexander, a much younger and inexperienced politician. Lo and behold, he was next in the firing line. Today’s Telegraph accused Alexander of avoiding tax on the sale of a second home, something the Lib-Dem MP hotly disputed.

One of the questions in this murky affair is why did the Telegraph choose to publish their investigation at this particular time? And where did they get the information from? We ask, not because we hold any brief for the reactionary coalition government, but simply to check if something more serious than a scandal is involved.

The Telegraph, for example, is deeply ambivalent about the coalition. This leading Tory newspaper has columnists like Simon Heffer and Lord Tebbit who would like to see Cameron’s government collapse. They despise Cameron who they see as “not one of us” and who, the paper believes, used the election stalemate to form a coalition that would distance itself from “traditional Tory values”.

Last week, the Telegaph launched a campaign to defeat the coalition’s plans to raise the rate of capital gains tax and widen its scope. Some Tory backbenchers have also threatened to block the coalition’s plans for a referendum on the voting system and other policies they don’t like. They also reversed Cameron’s plans for a takeover of their backbench committee.

So the obvious question is: is there a systematic campaign by the Tory right-wing to destabilise the government. Who fed the Telegraph the closely-guarded information about Laws? Undoubtedly the paper has friends in high (and low) places, such as MI5 who presumably vetted Laws before he joined the cabinet. The paper has already said that its original investigation into Parliamentary expenses did not reveal what Laws had done. I am sure no one is readily going to provide the answers to these questions, but they are worth asking.

A major post-election political crisis was kept in the box only by Cameron and Clegg deciding to ditch their own programmes and party rank-and-files to form Britain’s first peacetime, full-scale coalition. The fact that the British state is near bankrupt, as one Tory cabinet member admitted over the weekend, will not stop its enemies from plotting against it..

These are uncharted, dangerous political times for the British state. There are signs that it is at war with itself, as well as ordinary people whose jobs and living standards are now in the coalition’s sights. Don’t be surprised if the Laws affair is only the first of many such stories.

Paul Feldman

Communications editor

Tory plans will destroy state education

By inviting all head teachers in the country to re-invent their schools as independent “academies”, Michael Gove, the new Tory education secretary, is really tempting them to abandon the principles and traditions of comprehensive state education.

Taking all schools away from elected local education authorities will further disadvantage students with learning difficulties as well as those who are challenged by their background and social environment.

Furthermore, the second plank of the proposals, the so-called “free schools” that will be set up and run by parents and other groups, will almost certainly fall into the hands of private companies before long. Private profit-making companies are waiting, jaws agape, for just such an opportunity.

Of course, it was the previous New Labour government that opened the doors wide for Tory plans. Driven, as always, by the wishes of big business and the employers’ organisations, the Blair/Brown governments enforced an unpopular and restrictive national curriculum onto the schools. It went along with a regime of constant testing, league tables according to exam results and the gradual privatisation of services.

And it was New Labour who foisted 200 academies onto the education landscape, against the wishes of most teachers and their unions, as a kind of Trojan Horse, in order, principally, to de-stabilise non-selective, neighbourhood comprehensive schools.

The new Tory proposals develop naturally out of this introduction of the market into the education system and they also profit from the general disillusion and frustration of teachers and parents with the New Labour model. They will seem attractive to many at first sight. Head teachers of those schools that have been labelled as “outstanding” have been promised a fast-tracked process so they can become academy schools by September.

There is no evidence that semi-independent, state-funded academies raise standards compared with other schools. There is plenty of evidence to show that they are divisive and expensive. Private business, disguised as charities, has a key role in the running of academies. Some now teach creationism as a scientific fact in opposition to the theory of evolution.

At present academies are allowed to select up to 10% of their new pupils. With this power, which may well be extended, they are able to cream off the brightest pupils, altering the balance of all the schools in the area.

They will soon establish themselves as the school of choice at the expense of others in the area. The former two-tier system of grammar schools and secondary modern schools looms again, though the new names given to them will no doubt try to cover up the fact.

These new schools will not only have extra freedoms over admissions and the curriculum, but they will have control over salaries, introducing competition for the best teachers. This measure is a direct challenge to the unions, which presently negotiate pay agreements on a national level.

The two main unions have condemned the proposals. Chris Keates, of NAS/UWT, accused the government of breaking up state education. “It is essential that those who care about social justice, fairness and equality, who value public services and care about the future of state education, do not allow this to happen,” she said

Christine Blower of the NUT commented: "Creating academies on the scale proposed by the government will have the effect of transferring billions of pounds of publicly funded assets in the form of buildings and land into the hands of private sponsors … This is a retrograde step which will cause social division and planning gridlock...What is needed is a good local school for every child working within their local family of schools."

The question is: What will they do about it? If the union leaders are serious, they will order immediate ballots of their members with a view to challenging the coalition government’s plans with industrial action. Unions should build a united campaign with parents, communities and other public sector workers in the firing line. It's now or never for the teaching unions' leaders.

Peter Arkell

Science and profit are the wrong mix

Disasters like the Mexican Gulf oil well leak shine a spotlight on capitalism’s everyday disregard for safety and its short-term approach to scientific data and knowledge.

For example, chemicals used to disperse oil pouring into the sea from the exploded Deepwater Horizon platform will do almost as much damage as the oil. Dispersal simply spreads the exposure of marine life to toxic chemicals over a greater period of time.

Riki Ott, a leading toxicologist who has written extensively about the Exxon Valdez oil tanker disaster in 1989, said in an interview: "This dispersed oil is extremely toxic to young life forms [which] are a lot more sensitive to toxic chemicals than adults. What we have in the open Gulf is a continuous exposure.”

The announcement this week of a new “life form” created in a laboratory at the J. Craig Venter Institute is another example. This self-reproducing organism made from “off-the-shelf” genes by a computer, has been labelled “extreme genetic engineering” by the ETC Group, which has been monitoring developments in synthetic biology for the past five years .

Dubbed Synthia, the organism was developed in a joint venture between geneticist Craig Venter and Synthetic Genomics Inc. This profit-driven initiative is targeted for use in agro-fuels, pollution clean-ups and industrial agriculture.

No surprise then to discover that one of Synthetic Genomics key investors is – BP. And the other? Exxon! And the third? The US government.

Jim Thomas of the environmental watchdog ETC Group calls synthetic biology a “high-risk profit-driven field” that threatens existing natural bio-diversity with no benefit to humanity as a whole.

But corporations and their client governments love bio and gene science because they smell profits. Supporters are right at the heart of governments. Steven Chu, Obama’s Energy Secretary, was formerly head of an institute which ran a synthetic genome project funded by – you’ve got it, BP.

There may be enthusiasm, and investment of taxpayers money, but there’s little regulation or oversight. Just as in the existing dirty old oil business, these new “clean” industries are left to chase the money, regardless of safety concerns.

In the UN year of bio-diversity, capitalism is engaged in an orgy of destruction, leading to extinctions on a scale greater than the era of the dinosaurs. And as a recent study in the UK found, the rate of emergence of new species is at a standstill.

But new species created recklessly in the laboratory, are being released into the eco-system with little concern for the impact on other species – including human beings.

In China, the introduction of GM cotton has led to an explosion in pests destroying fruit, vegetable and maize crops grown nearby. The GM cotton has its own insecticide built in, allowing unrelated pests to thrive – so nearby farmers are overwhelmed, and even by spraying can’t get the pests under control.

Such unintended consequences are characteristic of the application of science in the capitalist era. The corporation’s use of scientific knowledge has only one intended consequence – the expansion of profit. Leaving science in the dirty hands of the corporations is a recipe for disaster.

Penny Cole

Environment editor

On a knife edge

Share markets around the world suffered another roller-coaster day yesterday as nervous traders decided it was a good time to sell. Everything points to the most dangerous moment for global capitalism since the autumn 2008 meltdown.

Many and varied reasons are being cited by the traders who sold (and later bought) shares during the day, moving huge sums to (relatively) safer places, including US Treasuries and German government bonds.

The Financial Times’ Chris Giles blamed Europe’s sovereign debt crisis, which, he said, “sent shock waves across the world as it proved that the recovery from the great recession was neither steady nor guaranteed.” It sounds authoritative and convincing.

"The main reason for the fall in South Korea, is the risk of war with North Korea," said Kim Joong-hyun, a strategist at Shinhan Investment in Seoul. The warship was sunk two months ago, on March 26, and North Korea’s leader Kim Jong Il has now severed all communications with the South.

The US Dow Jones sank below 10,000 due it was said, to disappointing news of falling house prices. New regulations on US financial institutions are adding to the problems, threatening banking profits. Credit in the US has been shrinking for two years - overall bank lending is down more than 20% percent from where it began 2009 - and Obama’s legislation has been under way for months.

In London, the FTSE 100 index of Britain's biggest companies dropped 2.5%, falling below the 5,000 mark to 4938. It was shadowed downward by markets in Germany, France and Spain. Here the reason given for the collapse was an instruction from the International Monetary Fund to Spain’s government to sort out its bankrupt banking sector. At the weekend, the Bank of Spain seized Cajasur, a small but troubled savings bank and trade unions have started preparations for a general strike.

Each of these and many other different localised “explanations” for market movements reveal aspects of the crisis in each region of the global economy. Others are searching for a connecting thread. Washington Post staff writers Howard Schneider and Neil Irwin believe they have found one in the realm of politics:

“The knife-edge psychology currently governing global markets has put the future of the US economic recovery in the hands of politicians in an assortment of European capitals. If one or more fail to make the expected progress on cutting budgets, restructuring economies or boosting growth, it could drain confidence in a broad and unsettling way. Credit markets worldwide could lock up and throw the global economy back into recession.”

They suggest that one false move could lead to a sovereign default in Europe, adding: “Bank holdings of European debt are now being studied with the same focus given to holdings of US mortgage-backed securities as the global financial crisis unfolded in 2008 - and with the same suspicion that problems in one part of the world could wreck others.”

What they are describing is a universal crisis of the capitalist system, brought about by decades of attempts to offset falling rates of profit with pumped up balloons of credit- and debt-led growth. Politicians and states are struggling in vain to keep up with the unravelling that began two years ago.

The crisis makes its appearance in the realms of the economy, in international relations, in the crisis of the democracy and the state, in the tipping of the planet’s ecosystems into irreversible changes, and in the degrading commodification of culture.

Many new people joined A World to Win on the revolutionary road at our conference last weekend because not one of these parts of the crisis can be resolved on its own or within the economic and political framework of capitalism. You should make the same choice.

Gerry Gold

Economics editor

For Gazans, the Nakba is a daily tragedy

This is the month when Palestinians remember their Nakba, or "catastrophe," during which millions of women, men and children were eventually pushed off their land and rendered homeless refugees during and after the founding of Israel in 1948.

For those living in the Gaza Strip, the tragedy worsens by the day. The blockade of the territory by Israel, sanctioned by the European Union and Washington, has led to a failing economy, rising unemployment and deteriorating power, sanitation and health facilities, according to a recent World Health Organization (WHO) report.

As a consequence of Israel’s blockade of the Gaza Strip, 98% of industrial operations have been shut down since 2007 and there are acute shortages of fuel, cash, cooking gas and other basic supplies. The ban on imports of building materials has prevented the rebuilding of some 6,400 homes destroyed or severely damaged by Israel’s military assault on Gaza in 2008-2009 and prevented the construction of some 7,500 homes to cater for an expanding population. Some 3,500 families are still displaced.

Water-related health problems are widespread in the Strip because of the blockade and Israel’s military operation in Gaza, which destroyed water and sanitation infrastructure, including reservoirs, wells, and thousands of kilometres of piping. “Gaza is not a refugee camp in a small remote place. It’s a city of one and a half million people with the needs of a developed urban environment that is used to certain standards. It needs certain standards of maintenance. Everybody should be worried because contaminated water has no borders,” said Filippo Grandi, commissioner-general of the UN agency for Palestinian refugees (UNRWA).

An electricity crisis continues in Gaza with the network only able to meet 70% of demand due to insufficient money to buy fuel for the Gaza power plant, and a lack of spare parts which is causing technical failures. Unemployment in occupied Palestinian territory is over 30%, rising to 67% among young people, according to the WHO report. Seven out of ten families were living on less than $1 a day in May 2008. Chronic malnutrition has risen in Gaza over the past few years to reach 10.2 percent.

Israel’s 2008-2009 military campaign damaged 15 of the Strip’s 27 hospitals and damaged or destroyed 43 of its 110 primary health care facilities, none of which have been repaired or rebuilt because of the construction materials ban. Some 15-20% of essential medicines are commonly out of stock and there are shortages of essential spare parts for many items of medical equipment, the WHO report said. As a result, the steady decline in the infant mortality rate in recent decades has stalled.

Israel’s blockade is ostensibly aimed at the Hamas government, which it and its allies refuse to recognise despite its election victory in 2007. In practice, however, the intention is to demoralise the Palestinians and deny them their right to self-determination. In this the Zionists have the support of Egypt’s authoritarian regime. It has blockaded Gaza’s border with Egypt, even driving a steel barrier deep into the ground to prevent Palestinians from using tunnels to bring in goods.

Gazans, however, continue to smuggle everything from fridges to fans, sheep to shampoo and even cars through the tunnels. The UN estimates that as much as 80% of imports into Gaza come through the tunnels. But the head of operations in Gaza for the UNRWA John Ging, says: "Everything is expensive because people are hostage to the dynamics of a black market."

For ordinary Palestinians, the blockade and deprivation imposed by the racist Israeli state are continuing reminders of the tragedy of the Nakba.

Paul Feldman

Communications

Let the battle commence

The £6.2 billion cuts package announced by chancellor George Osborne and his Lib Dem partner in crime David Laws will cost jobs and hit services, and are just the opening round in plans for savage reductions in public spending. The big issue is how workers and communities can defeat these plans.

Osborne claimed that the first tranche of cuts were aimed at eliminating “wasteful expenditure”. But the freeze on job recruitment in the civil service and the axing of a series of semi-government agencies can only result in fewer jobs and more intensive conditions for those who remain. The cancellation of private sector contracts will inevitably result in closure of medium-sized firms and send more people to the dole queue, which is already at its highest level since the early 1990s.

The immediate cuts will be followed by an emergency budget next month and a major programme of reductions lasting years will be announced in the autumn. These are certain to include effective pay cuts for hundreds of thousands of public sector workers.

To plan how to defeat the coalition and its plans, we have to be clear what the cuts aimed at reducing the state’s £150 billion plus budget deficit are about. The deficit is a result of the meltdown of the financial system in 2008, the bank bail-outs and the consequent recession.

The economic globalisation that began in the 1980s was driven by debt – the debt of individual households, corporations and governments. There is a reason for that and it’s called capitalism. As we explain in our Manifesto of Revolutionary Solutions:

“Competition on price demands increases in the productivity of labour which reduces the hours needed for the production of a commodity. So the value, which is determined by the quantity of labour it contains, and hence the price of, and profit from each commodity tend to decline as a result. To offset the reducing profit derived from each ever-cheaper computer or car, more units of each type of commodity must be manufactured and sold.”

Because people’s income through wages can never be sufficient to buy all the goods produced globally, the financial system developed new ways to provide credit. This in turn got completely out of hand, as the Manifesto notes:

“The global cloud of credit expanded way beyond the value of productive capacity, goods and services it supposedly represented, engulfing the world in debt. By 2006, around 90% of the world’s credit was effectively worthless, sustained by and sustaining the fiction of endless growth ... The consumer boom gave way to a downward spiral that ended the dream of continuous credit-and-debt fuelled growth.”

The globalisation train is now running in reverse as global capitalism heads for an unparalleled slump. Countries with massive state debts are the weakest links in the chain. These include not just Greece and Spain but the United States and Britain.

The cuts are the expression of the destruction of capacity and assets by capitalism when it is in crisis and, of course, they only deepen the problems of the economy as more people become unemployed. The British coalition government has to make the cuts because that’s what the system demands, just as British Airways has to slash staff costs and benefits to survive.

So when Osborne says “we are in this together” and that today’s cuts are a first step to “improve the quality of people’s lives and build a better future” we know that he is simply lying. The immediate future is one of building an all-out struggle against the government, telling the trade union leaders that if they are at all serious, they will have to defy anti-union laws and lead immediate walk-outs.

Actions in Spain and Greece have already provided a significant lesson. Strikes, rallies and resistance must be part of a vision of a different society, one based on co-operation and co-ownership not competition and profit or they will not succeed. People’s Assemblies that take up the issue of power and an alternative to capitalist rule have a decisive role to play in the coming struggles.

Paul Feldman

Communications editor

End of 'old politics' is our chance

For all its outward appearance of partnership and harmony, the Lib-Con coalition government is an inherently unstable regime. Patched together solely to impose the burden of the economic and financial crisis on the backs of ordinary people, the coalition is a high-risk operation.

Far from ushering in a “new politics”, the coalition only operates by rejecting politics altogether, setting aside not just party differences but their parties as well. As we noted last week, we are witnessing a very British coup by David Cameron and Nick Clegg, which is already producing internal resistance.

Yesterday Cameron won his bid to allow government ministers and whips to have full membership of the Tory backbench 1922 Committee, but only by 168 votes to 118. Now plans are already afoot to create a new committee made up entirely of backbenchers. One backbencher said Cameron’s move was “very dangerous”. He added: “We are not lemmings like most Labour MPs – we don’t just do as we are told. It’s as if power has gone to David Cameron’s head.”

Many backbenchers are not enamoured with the joint programme of the coalition published yesterday, which ditches several cherished Tory policies on inheritance tax, stamp duty and abolition of the Human Rights Act. Similar simmering political tensions exist inside the Liberal Democrats too.

The coalition will shortly be involved in conflict on another front – with ordinary people.

The Lib-Con merged programme insists that the need to cut the deficit “takes precedence over any of the other measures in this agreement”. The £170 billion annual deficit results from a combination of bailing out the banks and the recession that followed the meltdown of the financial system in 2008.

Starting next week, the coalition will start to cut the deficit, which presently funds public services and jobs. Teachers and civil servants were placed in the immediate firing line yesterday, along with postal workers through the privatisation of the Royal Mail promoted by the Lib Dem’s Vince Cable. VAT is certain to rise along with other taxes to reduce living standards.

The insecure nature of the coalition makes it heavily dependent on the capitalist state bureaucracy for its survival. Leading officials applauded after Cameron went through the agreement with the Lib Dems in a public show of support senior civil servants are not normally given to. They, of course, facilitated the creation of the coalition in the first place. There is a distinct Bonapartist air about the two youngish public schoolboys now running the government, balancing between bureaucrats and sections of the electorate, while sidelining their parties.

Things can only get worse for them as the debt crisis which brought down the banks finds its way into governments, particularly in southern Europe. Panic measures have done nothing to stabilise the euro and the continent is on the brink of a major slump. Financial markets are demanding their pound of flesh and governments are no match for the beast they helped create in the first place.

We have to think about what is coming up the line. Serious conflict between public sector workers and the government is certain. Emergency measures against strikes cannot be ruled out. Yet opposing the dictatorship of the markets and the coalition has to have an objective beyond resistance itself.

Halting the cuts is only possible if the financial system and the basis of economic activity is reorganised to replace profit as its foundation with a socially-useful approach to meet society’s needs. Politically, the aim cannot be to replace Cameron/Clegg with a new generation of Blair/Brown type New Labour leaders. That would be just a change of management.

The crisis since the general election, with voters displaying a distinct lack of trust in any party or the Parliamentary system itself, must lead to a truly “new politics”, founded on a revolutionary, democratic transformation of capitalist society. The opportunities for building a people’s coalition against an unsustainable capitalist system are opening up before our eyes.

Paul Feldman

Communications editor

Behind the Red Shirt uprising

The uprising of the poor and peasant farmers is continuing across Thailand, in spite of yesterday’s violent break-up of the Red Shirt camp in central Bangkok.

Since the democracy protests began in March, about 80 people have been killed, 40 of them this week and possibly more. Shootings took place last night in a Buddhist temple where protesters took refuge as yesterday’s army assault began.

The Red Shirt movement – the United Front for Democracy Against Dictatorship – began in support of Prime Minister Thaksin Shinawatra, but has now gone far beyond simply demanding the recall of the exiled elected Prime Minister.

Shinawatra, now in exile accused of fraud and corruption, enriching his family and friends, was a populist politician and billionaire telecommunications tycoon who introduced reforms to help the rural poor.

He improved education, introduced a free basic universal healthcare system and suspended repayments on farmers’ loans. During his period in office from 2001 to 2007, the number of people living below the poverty line in Thailand halved.

When he was re-elected for an unprecedented second term, his tenure was ended by a military coup, but his party used their parliamentary majority to continue in office. Spurred on by the army and the monarchy, the opposition People’s Alliance for Democracy, went into revolt against the election result, denouncing a democracy where the poor uneducated majority could select the nation’s government.

Their ‘yellow shirt’ revolt was an extra-parliamentary coup against the democratic system. These representatives of the élite were not shot down or accused of terrorism however, quite the opposite: the current Foreign Minister was one of them. The courts dissolved Shinawatra’s party, and the army bullied other MPs into joining a new coalition.

A mass movement demanding a restoration of democracy began and there has been a rolling uprising since March. Prime Minister Abhisit's offer of a new election was a fraud and he would not agree to the protesters’ demand to put on trial those who ordered the shootings. When the army opened fire, the Red Shirt leaders give themselves up to face terrorism charges.

But a huge banner in the Red Shirt camp proclaimed throughout: “We are not terrorists”. After the army assault, the protesters dispersed and in the course of the day set fire to the stock exchange, several banks and the city’s biggest shopping mall. Throughout it has been not only the government but also the banks and other institutions representing global capital who have been the Red Shirt targets.

When news of the arrests and killings in the capital filtered out, there were protest across the country.

There has been an attempt to present the conflict as between the old feudal countryside and modernising urban dynamism. Others claim it is orchestrated from a distance by Shinawatra. All of this is nonsense. The feudal monarch supports the government and feudalism in Thailand – as everywhere else – is being actively broken up by globalisation and industrialisation.

The Red Shirt movement attracted many young city workers in a country where trade union rights are ignored and poverty wages prevail. But in the end this was not a movement solely about economy, or poverty, but about democratic rights.

It is an important lesson because the issue of democratic rights will galvanise movements against the global capitalist class and their undemocratic rule in every country. The kind of leadership that will enable democratic movements to transform society is top of the agenda for the "Taking the Revolutionary Road" conference on Saturday.

Penny Cole

How to end 'dictatorship of the market'

Protests and strikes are mounting throughout Europe as governments begin to carry out the austerity measures required to attract the investment funds needed to postpone state bankruptcy.

Mounting civil unrest is undermining investors’ confidence in European governments’ ability to impose the brutal measures on their populations.

It is patently clear that agreement on a €750 bailout package to prevent the collapse of the euro is hopelessly inadequate to stem the attack on the currency.

Panic moves in the USA, Germany and Venezuela yesterday against speculative investment markets are adding to the global instability as hedge funds look to move their headquarters and activities to the less-regulated East.

The German government banned “naked shorting” – the selling of shares and bonds that the sellers neither own nor have borrowed.

In the US, Chris Dodd, the Senate banking committee chairman, proposed letting regulators decide whether banks should be banned from dealing in all derivatives in a last-minute amendment to the financial regulation bill

Venezuela's Chavez-led government took control of foreign currency trading in an attempt to prevent further attacks on the bolivar.

The International Monetary Fund has forced Romania’s six-month old centrist government to promise cuts to state wages of 25% and to pensions of 15% as part of an effort to meet the requirements for the release of the next tranche of loans in a 20 billion-euro bailout package. This scale of attacks on living standards will prove to be just the down payment.

Trade unions in Romania have called a mass demonstration in Bucharest today. If their forecast turnout of 60,000 proves correct, the protest outside government headquarters will be one of the biggest since the revolutionary overthrow and execution of the Stalinist Nicolae Ceauşescu and his wife Elena in 1989.

Greek unions have called the fourth in a series of general strikes for tomorrow against a 10% cut in wages and spending in the public sector, an increased retirement age, VAT increases and the freezing of pensions.

A group of left-leaning members of the European Parliament – the United Left / Nordic Green Left (GUE/NGL) – are attempting organise co-ordinated protests in the week of 21 to 26 June against the power of the financial markets.

The MEPs have put together a series of left-sounding demands:

• Workers must not pay for the crisis - Make the super rich and bankers pay

• Solidarity with the Greek workers and for the unity of working people across Europe

• No to cutbacks, wage cuts, unemployment and increases in the retirement age

• No to privatisation of public services

• End the dictatorship of the financial markets, credit ratings institutions and the IMF

• Stop the bailouts of the banks - nationalise the banks and financial institutions in the interests of working people

But their intention to send use these protests to send “a clear message to the European establishments” and “building a European-wide resistance to the ongoing neo-liberal agenda” is wholly inadequate.

Financial markets are not susceptible to protest or even actions of the German state, representing the most powerful economy in Europe. Shares on European markets tumbled further, as did the euro, after Germany’s attempts to ban short-selling.

One London-based bond trader commented: "Nobody ever thought they'd do this in a million years and it raises the long-term question of who is now going to want to buy their debt."

A World to Win has a different set of aspirations to the MEPs. We’ll be discussing our plans to replace the dictatorship of financial market and the for-profit capitalist system with collectively owned, democratically managed not-for-profit system at our conference on Saturday.

Gerry Gold

Economics editor

Protests and strikes are mounting throughout Europe as governments begin to carry out the austerity measures required to attract the investment funds needed to postpone state bankruptcy.

Mounting civil unrest is undermining investors’ confidence in European governments’ ability to impose the brutal measures on their populations.

It is patently clear that agreement on a €750 bailout package to prevent the collapse of the euro is hopelessly adequate to stem the attack on the currency.

Panic moves in the USA, Germany and Venezuela yesterday against speculative investment markets are adding to the global instability as hedge funds look to move their headquarters and activities to the less-regulated East.

The German government banned “naked shorting” – the selling of shares and bonds that the sellers neither own nor have borrowed.

In the US, Chris Dodd, the Senate banking committee chairman, proposed letting regulators decide whether banks should be banned from dealing in all derivatives in a last-minute amendment to the financial regulation bill

Venezuela's Chavez-led government took control of foreign currency trading in an attempt to prevent further attacks on the bolivar.

The International Monetary Fund has forced Romania’s six-month old centrist government to promise cuts to state wages of 25% and to pensions of 15% as part of an effort to meet the requirements for the release of the next tranche of loans in a 20 billion-euro bailout package. This scale of attacks on living standards will prove to be just the down payment.

Trade unions in Romania have called a mass demonstration in Bucharest today. If their forecast turnout of 60,000 proves correct, the protest outside government headquarters will be one of the biggest since the revolutionary overthrow and execution of the Stalinist Nicolae Ceauşescu and his wife Elena in 1989.

Greek unions have called the fourth in a series of general strikes for tomorrow against a 10% cut in wages and spending in the public sector, an increased retirement age, VAT increases and the freezing of pensions.

A group of left-leaning members of the European Parliament – the United Left / Nordic Green Left (GUE/NGL) – are attempting organise co-ordinated protests in the week of 21 to 26 June against the power of the financial markets.

The MEPs have put together a series of left-sounding demands:

• Workers must not pay for the crisis - Make the super rich and bankers pay

• Solidarity with the Greek workers and for the unity of working people across Europe

• No to cutbacks, wage cuts, unemployment and increases in the retirement age

• No to privatisation of public services

• End the dictatorship of the financial markets, credit ratings institutions and the IMF

• Stop the bailouts of the banks - nationalise the banks and financial institutions in the interests of working people

But their intention to send use these protests to send “a clear message to the European establishments” and “building a European-wide resistance to the ongoing neo-liberal agenda” is wholly inadequate.

Financial markets are not susceptible to protest or even actions of the German state, representing the most powerful economy in Europe. Shares on European markets tumbled further, as did the euro, after Germany’s attempts to ban short-selling.

One London-based bond trader commented: "Nobody ever thought they'd do this in a million years and it raises the long-term question of who is now going to want to buy their debt."

A World to Win has a different set of aspirations to the MEPs. We’ll be discussing our plans to replace the dictatorship of financial market and the for-profit capitalist system with collectively owned, democratically managed not-for-profit system at our conference on Saturday.

Gerry Gold

Economics editor

Protests and strikes are mounting throughout Europe as governments begin to carry out the austerity measures required to attract the investment funds needed to postpone state bankruptcy.

Mounting civil unrest is undermining investors’ confidence in European governments’ ability to impose the brutal measures on their populations.

It is patently clear that agreement on a €750 bailout package to prevent the collapse of the euro is hopelessly adequate to stem the attack on the currency.

Panic moves in the USA, Germany and Venezuela yesterday against speculative investment markets are adding to the global instability as hedge funds look to move their headquarters and activities to the less-regulated East.

The German government banned “naked shorting” – the selling of shares and bonds that the sellers neither own nor have borrowed.

In the US, Chris Dodd, the Senate banking committee chairman, proposed letting regulators decide whether banks should be banned from dealing in all derivatives in a last-minute amendment to the financial regulation bill

Venezuela's Chavez-led government took control of foreign currency trading in an attempt to prevent further attacks on the bolivar.

The International Monetary Fund has forced Romania’s six-month old centrist government to promise cuts to state wages of 25% and to pensions of 15% as part of an effort to meet the requirements for the release of the next tranche of loans in a 20 billion-euro bailout package. This scale of attacks on living standards will prove to be just the down payment.

Trade unions in Romania have called a mass demonstration in Bucharest today. If their forecast turnout of 60,000 proves correct, the protest outside government headquarters will be one of the biggest since the revolutionary overthrow and execution of the Stalinist Nicolae Ceauşescu and his wife Elena in 1989.

Greek unions have called the fourth in a series of general strikes for tomorrow against a 10% cut in wages and spending in the public sector, an increased retirement age, VAT increases and the freezing of pensions.

A group of left-leaning members of the European Parliament – the United Left / Nordic Green Left (GUE/NGL) – are attempting organise co-ordinated protests in the week of 21 to 26 June against the power of the financial markets.

The MEPs have put together a series of left-sounding demands:

• Workers must not pay for the crisis - Make the super rich and bankers pay

• Solidarity with the Greek workers and for the unity of working people across Europe

• No to cutbacks, wage cuts, unemployment and increases in the retirement age

• No to privatisation of public services

• End the dictatorship of the financial markets, credit ratings institutions and the IMF

• Stop the bailouts of the banks - nationalise the banks and financial institutions in the interests of working people

But their intention to send use these protests to send “a clear message to the European establishments” and “building a European-wide resistance to the ongoing neo-liberal agenda” is wholly inadequate.

Financial markets are not susceptible to protest or even actions of the German state, representing the most powerful economy in Europe. Shares on European markets tumbled further, as did the euro, after Germany’s attempts to ban short-selling.

One London-based bond trader commented: "Nobody ever thought they'd do this in a million years and it raises the long-term question of who is now going to want to buy their debt."

A World to Win has a different set of aspirations to the MEPs. We’ll be discussing our plans to replace the dictatorship of financial market and the for-profit capitalist system with collectively owned, democratically managed not-for-profit system at our conference on Saturday.

Gerry Gold

Economics editor

Time to defy anti-union laws

The High Court ruling against the planned British Airways cabin crew strike is not simply the outcome of a clearly partisan decision by Mr Justice McCombe. It is also the result of more than two decades of fearful inaction on the part of the trade union leaders.

Strike action did not become illegal only with yesterday’s ruling that a ballot of BA cabin crew was invalid because of failure to notify members about 13 spoiled ballot papers in an 81% vote in favour of action. For the abolition of the right to strike you have to go back to a series of anti-union laws passed by the 1979-1997 Tory government.

The law that was cited by the judge to block 20 days of planned strike action in defence of jobs and against victimisation was actually passed in 1992. And the union leaders have done nothing to challenge this or any other aspect of the anti-union legislation ever since. This is especially the case in relation to laws banning solidarity action as well as the requirement to hold a postal ballot.

As a result, strikes have often been ineffective and isolated with the union bureaucracy running scared of massive compensation claims by the employers. As it is, the Unite union could still face a £250,000 bill for strikes against BA in March as a result of yesterday’s judgement.

We mustn’t forget the legacy of the last 13 years of New Labour government either. Tony Blair once boasted that the laws restricting strike action were the toughest in Europe. So they were and that’s how they remained until Brown left Downing Street last week. And yet union leaders, especially Unite’s, continued to send the cheques through even though campaigns for the repeal of Tory anti-union laws fell on deaf ears.

There were, naturally, lots of fine words from the joint general secretaries of Unite, Tony Woodley and Derek Simpson outside the High Court. They said: "This judgment is an absolute disgrace and will rank as a landmark attack on free trade unionism and the right to take industrial action. Its implication is that it is now all but impossible to take legally protected strike action against any employer who wishes to seek an injunction on even the most trivial grounds."

Leaving aside the concessions Unite has offered BA in terms of reducing its wages bill and accepting a two-tier workforce, this statement would mean something more if it were a call to action to ignore a law that clearly denies cabin crew their human rights. Instead, Unite is relying on the Court of Appeal to find in their favour.

Even if the appeal is won, the employers will be back time and time again to frustrate workers (this is the second time BA alone has won in the courts). The technicalities of the postal ballot were largely ignored for a long period. But the recession has brought the employers out of the woodwork. Just before Christmas, the RMT rail union was prevented from going ahead with strikes over jobs.

After the BA ruling, Bob Crow, the RMT general secretary, said: "We warned after the [Easter] judgment that it bent the anti-trade union laws even further in favour of the employers and so it has proved. There is no doubt that this new Con-Dem government wants to effectively outlaw strikes in publicly used services before they swing the axe at our hospitals, schools and fire stations, and the courts are the battering ram to make that happen."

The trade unions were built in the face of laws that banned combinations, sent workers to prison, deported them to Australia and victimised activists. Protecting the funds of the unions such as they were was of secondary concern. Crow is right about what’s to come as the massive cuts programme bites. Workers cannot resist with one hand tied behind their backs by laws that prevent effective action. It’s time for union leaders to put up or shut up, to defy the anti-union laws or go meekly to the slaughter.

Paul Feldman

Communications editor

Take a leaf out of Picasso's book

The view that, deep down, all that human beings are really interested is in looking after themselves is, commonplace and at the same time a truism. Yet it begs the question that in today’s society, individual interests and those of humanity as a whole also coincide.

Today’s correspondence of a super-heated and plundered planet with an explosive economic, financial and political crisis self-evidently cannot be solved on an individual basis, neither by the ruling classes nor by the rest of us.

But the more this becomes apparent, the more a view of humanity as simply creatures of greedy instincts is trundled out again and again. The purveyors of this jaded (but unscientific) notion perform a vital function. Hiding behind a facile cynicism, they conveniently naturally dismiss notions of revolutionary political change.

Previewing a pioneering exhibition opening this week at Tate Liverpool, Professor Alex Danchev (military historian of St Antony’s College who has turned to art history) is given space in that paper of organised cynicism, The Guardian, to conclude that “Pablo Picasso, a painter without peer, lived and died an egotist. A party of one was his ideal station”. Danchev misses no opportunity to stick the knife into the artist, accusing him of “gesture politics” and “posturing”.

Of course Picasso’s very persona was that of an extrovert showman who enjoyed throwing spanners into the works and making provocative and perplexing statements. But that in no way was in contradiction to his impassioned opposition to Fascism and Nazism, and his campaign against war, in particular nuclear war.

Picasso was the most controversial artist of the last century. Along with Georges Braque he revolutionised painting and the way we see the world. His view of the human body and the human condition continue to excite and intrigue. Due in part to the astronomical sums fetched by his work, his artistic prowess remains in the public eye.

But the curators of Picasso: Peace and Freedom have assembled a mass of evidence to show there was less well known side to the man – he was a political animal through and through. His painting Guernica, an outcry against the Fascist bombing of a village in the Basque country in 1937, retains its power to provoke and inspire. So much so that a replica of Guernica in the Security Council of the United Nations was covered up on the eve of the Iraq war as the United States and Britain lied their way to an illegal invasion in 2003.

Picasso joined the French Communist Party after the liberation of Paris in 1944, having lived through the dark years of the war and occupation. He stuck with the PCF despite, not because, of its Stalinist monstrosities. Almost unbelievably, Danchev portrays the artist as a “slavish” devotee of Stalinism when the opposite was the case. Picasso signed an open letter opposing the Soviet invasion of Hungary in 1956.

In staging this show, Lynda Morris and Christoph Grunenberg have thrown down a political gauntlet. They have assembled a mountain of evidence which challenges the view that Picasso’s politics were in some way secondary to his being as a person and an artist. The breadth and scope of his commitment to a host of causes, including racial equality, the campaign to prevent the execution of the Rosenbergs, against the death penalty and anti-Semitism is indisputable. Picasso has clearly come back to haunt those who seek to defend capitalism and its political institutions.

The depth of Picasso’s beliefs – and his conflicts with Stalinism - should inspire A World to Win’s Taking the Revolutionary Road conference this Saturday. In our Manifesto of Revolutionary Solutions we appeal to creative workers of all kinds to help end the prison of capitalist social relations. The Cold War may be well and truly over, but “the battle for Picasso’s mind” as the CIA dubbed it, goes on.

Corinna Lotz

Secretary

A World to Win

Picasso: Peace and Freedom is at the Tate Liverpool 21 May-30 August.

A very British coup

The political marriage between David Cameron and Nick Clegg in a ceremony in the garden at the back of Downing Street yesterday is not simply the result of a general election that failed to produce a party with an overall majority. Britain’s first coalition government for 70 years also shows that the process that produced New Labour is still at work.

In 1995, Tony Blair and Gordon Brown persuaded their party to ditch Clause IV of its constitution, which aspired to common ownership of the means of production and popular administration of the economy. Adopted in 1918, the clause was anathema to the “modernisers” who were busily creating “New” Labour.

The Blairites were adapting to a new world order summed up in the term “globalisation”. Where the Tories were divided on the issue, revealed in the splits over Europe, New Labour would embrace the free movement of capital, deregulation, public-private partnerships, the European Union, the World Trade Organisation and promote an “enterprise economy”.

Even before New Labour’s loss of nearly 100 seats last week, voters were turning their back on a government that had created vast inequality, put an end to social mobility and encouraged a casino economy. When a globalisation driven by the banks and corporations finally crashed in 2008, the die was cast and the raison d'être for New Labour was terminated.

With the Tory Party deeply divided between a right-wing that believes that anything not purely Anglo-Saxon is suspicious and “modernisers” who understand the world has changed, the electorate understandably failed to give them a mandate to govern alone when they went to the polls on May 8.

Cameron is astute enough to recognise that the old-style bourgeois party politics – based on some worked-out framework and an ideology related to things purely British – is dying. No single party seems likely to win an overall majority again. The election deadlock propelled this understanding into a swift and dramatic realignment with the Lib Dems. This is, in effect, Cameron’s Clause IV moment.

He and Clegg have in practice staged an audacious joint coup against their own parties, ignoring dissent and rumblings from rank-and-file members who only last week were at each other’s throats as they fought for votes. In some respects, the logic of their alliance might even signal the end of their parties in the shape that we know them now.

Both the prime minister and his deputy, for example, say they have put party politics to one side to govern in the “national interest”. In other words, they have taken the politics out of politics, a process that began with Blair and Brown who reduced government to a grinding form of managerialism.

The spurious “national interest”, as we know, is a not-so-clever mask for the interests that really count. These have everything to do with what the financial markets are demanding and nothing to do with those on the dole and the millions who will join them as Lib-Tory cuts and tax rises get going. New Labour saddled all households with £135,000 in debts. Cameron-Clegg's role is to make sure we make the payments.

As we pointed out yesterday, the global financial meltdown is visiting one country after another. In Spain, the Socialist Party government yesterday rushed through a ruthless cuts package to appease the money markets. Greece’s government – also claiming to be “socialist” – did so last week. Given half a chance, New Labour would have done the same.

In Britain, we now face what amounts to a “government of national emergency”. How will long will it before we are told that all opposition to the cuts is anti-patriotic behaviour? The new boys in Downing Street are a ruthless duo yet their bonhomie cannot disguise their relative weakness and isolation from their own parties. That is what lies behind the rapid march away from what is left of parliamentary democracy with a five-year, fixed term for the government and raising the bar for a no-confidence vote to 55%.

We certainly need a “new politics” and that’s the subject of our May 22 conference, Taking the Revolutionary Road.

Paul Feldman

Communications editor

Coalition will provoke extra-parliamentary struggles

The collapse of the Tories and Liberal Democrats into each other’s arms to form the first coalition government in modern times does not so much signify a “new politics” but the suspension of old-style politics in the face of a calamitous financial crisis.

New Labour was prepared to go down the same road. Its failure to woo the Lib Dems – Britain’s oldest capitalist party – led to Gordon Brown’s late evening resignation and his replacement by David Cameron. Most of the New Labour cabinet – members of Britain’s newest capitalist party – were relieved to be out of office and not having to make the savage cuts that the money markets are demanding.

On entering Downing Street, Cameron accepted responsibility for implementing the demands imposed by an unprecedented financial and economic crisis. Hours earlier the International Monetary Fund (IMF), eurozone authorities and European Central Bank (ECB) came together with the US Federal Reserve in a desperate King Canute-style 750 billion euros/1 trillion US dollars global alliance:

• On Monday the ECB reversed its policy and began to echo the British government in “quantitative easing”, buying up eurozone government bonds and accepting junk debt to prevent a string of state bankruptcies

• 27 European countries created an emergency loan facility of 60 billion euros aimed at stopping the Greek crisis spreading to Spain, Portugal and Ireland.

• The 16 eurozone countries together with Sweden and Poland have put together a 440 billion euros “special purpose vehicle”, a fund to defend themselves against foreign currency speculation.

• The IMF offered 250 billion euros in loans to stricken countries.

• The US Federal Reserve renewed the emergency measures it used during the global meltdown of autumn 2008 allowing foreign banks to borrow dollars.

All of these actions, promises and offers are conditional on governments old and new ratcheting up the brutal austerity programme that has already precipitated general strikes and street battles in Greece and Spain.

The new coalition replaces an administration which had spent 13 years cultivating the relationship with the financial masters of the universe. New Labour helped create the conditions which resulted in a system crash that began in 2008 and that is still unravelling.

The Cameron-Clegg coalition’s announcement that it will start to reduce the budget deficit by cutting public spending immediately with a £6 billion programme of “efficiency savings” is aimed at reassuring the hedge fund managers and other market traders whose gambling with bonds determines government action throughout the world. Liberal Democratic manifesto intentions to postpone the cuts to avoid a deflationary spiral have been ditched.

The coming assault on services, jobs, wages, pensions and benefits is certain to trigger an avalanche of conflict with millions of workers in education, health, social services as well as in the civil service who together make up the majority of the workforce.

Some say the New Labour project failed and is over. On the contrary, it served its purpose. It held the reins and reorganised the state while the Tories were in crisis. There is no going back to an earlier form of Labour as a reformist party because globalisation and the merger of the state with financial and corporate interests does not allow for this. To think otherwise is to perpetuate illusions about electoral politics when new forms of struggle beckon.

There are no electoral or parliamentary “solutions” to this crisis. If New Labour had won the election, savage cuts would still have been top of the agenda. The struggles immediately ahead will be extra-parliamentary in shape and form, beginning with the British Airways cabin crew strikes planned for next week.

Giving these struggles a political shape and objective means going beyond a parliamentary politics that is in any case in deep freeze. A perspective around the building of a network of People’s Assemblies to challenge the state’s right to make the cuts is the best way to respond the anti-people coalition now in Downing Street. register for our May 22 conference to discuss how we can mobilise to take the revolutionary road with the aim of bringing the Cameron-Clegg regime down sooner rather than later.

Gerry Gold
Economics editor

The uncertainty principle in politics

The break-up of parliamentary politics is happening right before our eyes, most dramatically shown in the resignation under pressure of Gordon Brown and the frantic moves to cobble together some sort of coalition before the money markets decide Britain is another basket case.

All the major parties are bitterly divided about who to get into bed with. David Blunkett’s accusation that the Lib Dems were behaving “like every harlot in history” is hardly a term of endearment for a would-be partner in a coalition of the losers. A stable government looks a remote possibility. Political stalemate combined with an attack on the pound could yet produce an all-party “government of national emergency”.

Brown, of course, was the architect with Tony Blair of New Labour, which transformed the old party from a social democratic organisation into full-blown cheer-leaders for globalised capitalism, particularly in the financial sector. Brown’s first act was to create the Financial Services Authority as a hands-off “regulator” which would allow the City to do what it wanted.

Brown once famously declared he had put an end to Tory “boom and bust”. Well, he got that spectacularly wrong. Happy to rake in tax revenue from bank profits, New Labour ignored warnings that a boom based on unsustainable levels of credit would end in crash. Brown’s announcement that he is resigning as party leader reflects the impact of a crisis that has taken the British state towards bankruptcy.

The outcome of 29.6 million people casting their votes (under two thirds of the electorate, but 2 million more than last time) has produced an unprecedented political vacuum. This was not necessarily anyone’s intention. But the result is nonetheless the outcome of millions of individual decisions as voters rejected 13 years of New Labour rule, but refused to endorse other parties in an overwhelming way.

Around the world, scrambles by politicians to form one kind of unholy multi-party alliance or another have been par for the course in politics for a long time, but not in Britain. A vacuum in politics, as in nature, cannot persist for long. As we remarked the day after the election, the top priority for those overseeing the capitalist state at this time of extreme financial crisis is the need for stability:

Just read this account of yesterday evening in the City:

17:41 "A Lib-Lab coalition would be a big negative for sterling," Ian Stannard at BNP Paribas says. "The Government will be unstable and not have the ability to drive through the cuts required."

17:30 Pound is now at $1.4866 against the dollar, compared to $1.5056 earlier in the afternoon. Still falling too.

17:23 Euro has risen by more than half a cent against the pound following Brown's statement. Markets really spooked by prospect of more uncertainty.

17:14 Reaction to Brown's statement and subsequent fall in pound from Jeremy Cook, chief economist at World First:

“It’s pretty clear that the market wants certainty and that the news that Clegg is dilly-dallying between Labour and the Conservatives have not gone down well. I’m surprised that the markets haven’t hit sterling hard today, the EU plan has taken a bullet for us. As soon as that become old news however sterling is once again in the firing line”.

Due to the effects of globalisation on politics, the electoral base of both Tory and New Labour parties has changed in Britain, while the rise of the Liberal Democrats has destabilised the two-party system at the national level. These complex realities mark the end of an historical era and the opening up of a new political landscape in which the only certainty has become uncertainty.

Despite their differences, Cameron, Clegg, Mandelson and Balls will seek to impose the rule of the corporations and the markets. Forget all this rubbish about a “progressive alliance”. More like an anti-people alliance. We should seize this moment of no government to advocate strategies to achieve a real democracy in place of the Westminster charade.

Corinna Lotz

A World to Win secretary

It's all about power

The political crisis that has erupted in Britain following the general election provides a window of opportunity to bring the most basic of questions – who rules the country and in whose interests – right to the top of the agenda.

That is the focus of our ‘Taking the Revolutionary Road’ conference on May 22, which couldn’t be happening at a more opportune moment.

It is all too easy to be sucked into the drama around the frantic efforts being made to put together a coalition government of one variety or another. But behind the to-and-fro in Westminster, as the major capitalist parties jockey for power, is a profound political and economic crisis.

The political system is broken in a deeply significant way. A new system of weighing and distributing votes in the shape of proportional representation wouldn’t even begin to address the heart of the matter.

Many voted reluctantly last week. And a large proportion of those who dragged themselves to a polling station last week have no faith or trust in the parliamentary system. And for sound reasons that go way beyond the expenses scandal of the last parliament or the inadequacies of the first-past-the-post voting system.

As our Manifesto of Revolutionary Solutions points out: “Full-on globalisation has resulted in an unholy alliance between the state, political parties, corporate and financial power in all the major capitalist countries. From London to Washington, from Berlin to Rome, from Tokyo to Seoul, the reality is essentially the same.

“Democracy is reduced to a sham, a façade behind which real decisions are made and power exercised over ordinary people. The right to vote counts for little and the aspirations of ordinary people are denied by state systems that primarily function in the interests of big business.”

This analysis is borne out by the events since it became clear that the election had produced deadlock. The tell-tale phrase is how all parties at Westminster have pledged to rule in the “national interest”. What this means is all to clear once the patriotic rhetoric is stripped away.

The “interest” in question here is not that of ordinary working people struggling in their daily lives to make ends meet. What Brown, Cameron, Clegg and others are prattling on about is something quite different. The “interest” they will protect at all costs is vested in the financial markets and corporate boardrooms.

So irrespective of the make-up of the next government, it will come down on the interests of ordinary people like a ton of bricks, imposing savage cuts in living standards and services to satisfy the money markets who fund the British state’s massive deficit. The answer to the question about who rules Britain and in whose interests suddenly is made clearer as a result.

The financial and economic crisis can only worsen. At the weekend, the eurozone countries and the International Monetary Fund pledged €750 billion in rescue plans to try and reassure the markets that debts will be honoured. It merely serves to postpone the inevitable.

Whatever government emerges in Britain is certain to provoke large-scale resistance by trade unionists and communities as the full horror of the cuts becomes apparent. One of the immediate lessons from Greece, however, is that strikes and protests have not prevented the government from voting the cuts through the country’s parliament.

To fight to win means actually defeating and removing the government of the day, and in the process creating alternative structures to those of the capitalist state such as People’s Assemblies. In this way, ordinary people would get to rule in their own interests, replacing those of the money markets and boardrooms. By registering for the May 22 conference you would give this strategy a real boost.

Paul Feldman

Communications editor

Election crisis: markets call the shots

The hung parliament that has resulted from Britain’s inconclusive general election is certain to lead to a prolonged period of political instability slap bang in the middle of the gravest economic and financial crisis since the 1930s.

Now the horse-trading begins – behind the voters’ backs – to put together a government that is unlikely to see the year out. The Tories, New Labour and the Lib Dems don’t have much time, as the markets made clear while the last votes were being counted.

Sterling fell on the foreign exchange markets, while the cost of borrowing to fund the huge budget deficit rose as dealers in British bonds began to take evasive action. Shares on the FTSE 250 – which more closely reflects the British economy - fell by over 270 points. “They have got until the markets open on Monday to sort this out,” one dealer said.

Paralysis at Westminster comes amidst turmoil coursing through global markets in the wake of Greece’s bail-out by the International Monetary Fund and other eurozone countries. Few think the £100 billion rescue package will be sufficient and the resistance by Greek workers has further unnerved the markets.

“The election is shaping up to create the worst possible outcome at the worst possible time,” warned David Morrison, strategist at GFT. “Investors’ nerves are already jangling and this added uncertainty will undermine UK equities further. The sell-off in gilts [bonds] and sterling is a clear indication of how unimpressed the City is by the lack of a clear winner.”

If the City was unimpressed, so too were the electorate. Their refusal to give any party a clear mandate could be seen to express a fear that such an outcome would make massive cuts in services and living standards more certain. While the turnout was up slightly on 2005, in many inner-city areas it was below 60%. More than one in three registered voters did not participate, despite intense pressure to do so.

Clearly the TV debates did nothing to enable voters to distinguish one party from another, apart from the style of the respective leaders. Many undecided voters failed to work out a choice in time while thousands of those who made up their minds late in the day found themselves locked out because polling stations were understaffed.

All the major parties have now pledged to act “in the national interest”, which is tantamount to saying that the markets must be mollified by a cross-party agreement to make the cuts they hinted at but shied away from spelling out in any detail during the election campaign. Ruling in the people’s interest is not an option for any of them.

One thing is clear. New Labour spent 13 years in office promoting a market capitalist economy that ultimately crashed and in doing so created the political space for the hated Tories to make a comeback from the dead. In 1997, New Labour got 43% of the vote and more than 12 million votes. Now they are down to a 29% share and 8 million votes.

A majority New Labour government is now no longer a practical possibility in British politics. Any pact with the Lib Dems would simply confirm a new political alignment that is not so much “progressive” as anti-socialist, anti-trade union and pro-business.

The election result shows that the Parliamentary system is in melt-down, one that reflects the real chaos in global economics and finance. An anti-people regime without any mandate will set about clobbering the electorate very shortly. On that basis, we have an absolute right to oppose and reject whatever government and policies emerges this weekend. More than that, we should set out creating the framework for a real democracy in the shape of a network of People’s Assemblies. The old system is broken and can’t be fixed.

Paul Feldman

Communications editor

Voters in for 'the shock of their lives'

Nothing that happened during this election has persuaded us that our call on people to hang on to their votes and instead focus on building the framework for a new political democracy in Britain was mistaken. In fact, quite the opposite.

As the campaign came to resemble a TV game show, it was clear that none of the major parties was prepared to admit that if elected to office they would have to make cuts in public spending on a scale that could easily destabilise society. Even when august bodies like the Institute for Fiscal Studies said as much, the conspiracy of silence persisted.

Little wonder then opinion pollsters found record levels of undecided voters who were unable to believe anything they had heard since the election was called. The turbulence in the polls equally reflected as the Independent’s Steve Richards put it, the fact that “a majority of voters yearn for a new way of conducting politics”.

There is no apparent enthusiasm for any party among those intending to vote today. Most people are voting against something rather than in favour of this set of policies. For example, some will vote New Labour to keep the Tories out even while admitting that Blair and Brown’s governments have pursued free market capitalist policies that even Thatcher shied away from in the 1980s.

Richards hopes that a hung parliament will enable to the Liberal Democrats to exact proportional representation as the price for supporting either the Tories or New Labour if, as seems likely, no party wins an overall majority and there is a hung parliament. But PR wouldn’t even begin to solve the political crisis – in fact, it could even intensify it. In any case, it’s a distant prospect when more immediate issues are crowding in.

The ruling classes disassociate themselves from the crisis in Greece, saying that the British economy is far stronger and there is no risk of struggling to make the repayments on the equivalent of a £163 billion mortgage, which is the current size of the budget deficit. Yet at 11% of the value of the country’s annual production, Britain’s deficit is larger than Greece’s.

And keeping it under control presupposes a growth in the economy which is simply not there. Unemployment is rising and output is stagnant. The eurozone is in crisis following the near-default by Greece with German chancellor Angela Merkel declaring that the future of the European Union itself is at stake. A slump on the continent will take Britain down with it.

For the truth about what happens next, you have to turn to the bankers’ own newspaper, the Financial Times. As its weekend editorial declared: “Whichever party wins this election will need to sack public sector staff, cut their wages, slash benefits, reduce pensions and axe services. None, however, has deigned to explain that.”

It forecast that voters “are in for the shock of their lives – and will respond with fury when they learn the truth”, warning: “Their anger, moreover, will not be directed at bankers or bureaucrats. It will be aimed at the politicians who hid their plans from the public.” The FT even went so far as to claim that no party would be able to claim a mandate to cut the state because each had hidden the truth from the electorate.

So, not only has this election been a massive fraud on the electorate, there is no way out of the emerging political and financial crisis through the existing parliamentary system. A popular revolt is on the cards. The second half of our call – to start the campaign for People’s Assemblies to challenge and ultimately replace Britain’s failed state – is right on the money.

Paul Feldman

Communications editor

Greek workers light the fuse

The general strike that got under way in Greece today, bringing the country to a standstill, is a foretaste of the struggles to come throughout the capitalist world as the global financial crisis moves from the banking system to debt-ridden sovereign states.

Stock on markets around the world from Europe to Brazil, to the US and Canada fell as the horrible truth dawned on the hedge fund managers that gamble with peoples’ lives. And the truth? It’s a two-headed monster.

Head 1: Greek workers aren’t prepared to accept the pain for a crisis not of their making, including savage wage and pension cuts and tax increases.

Head 2: Greece is just one of the many countries caught up in the consequences of the worsening global crisis and the only “solutions” available will trigger revolt throughout the world.

Spain is reported to be talking to the International Monetary Fund (IMF) about its own bail-out. Iceland remains paralysed after a referendum showed its population overwhelmingly opposed to the terms of the rescue of its banks. None of the major parties contending for votes in Britain’s fraudulent election tomorrow can admit the scale of the assault on the electorate that will follow immediately a government is cobbled together.

According to the Financial Times columnist Wolfgang Munchau, the bailout funds needed for Greece, Portugal, Spain, Ireland and possibly Italy could add up to “somewhere between €500bn ($665bn, £435bn) and €1,000bn”. The demand for new credit from all those countries will drive up interest rates “at a time when they are either in recession or just limping out of one”.

His conclusion? “The private sector in some of those countries is simply not viable at those higher rates.” It’s a prescient conclusion. In other words it means capitalist production is no longer sustainable. But that doesn’t stop them trying to fix it.

The turmoil in Greece began when the Greek government, led by the “socialist” PASOK party, found it impossible to pay the interest on loans made to cover the country’s soaring budget deficit. But even the three-year bail out package totalling nearly £100 billion, funded by the Eurozone countries and the IMF, may be inadequate for the purpose, such is the level of indebtedness.

Finance Minister George Papaconstantinou, looking both ways, said Greece had been called on to make a "basic choice between collapse or salvation". He said: "It is not going to be easy on Greek citizens, despite the efforts that have been made and will continue to be made to protect the weakest in society." But he then acknowledged the real intent – to win back the trust of the lenders: “The whole idea of the programme is … return to markets as soon as possible, so we’re hoping that next year we’ll be doing that.”

New emergency legislation authorising the cuts and tax rises is now being drafted and is due to be put before parliament for approval by the end of the week in time for the IMF’s Board meeting on Sunday to consider Greece’s application for help. It’s there and in the boardrooms of the capitalist corporations and financial markets that the key decisions are made affecting the lives of ordinary people in every country.

No one anywhere in the world voted for the bail-out of the global banking system funded by colossal sums of government debt. The “choice” in the British general election is non-existent. Only pain, pain and more pain is on the ballot form, in the form of the three major capitalist parties. Greek workers have lit the fuse of resistance which will spread like wildfire over the coming months. It’s time for a new kind of democracy. Join us on the revolutionary road. Sign up for our conference on May 22^nd.

Gerry Gold

Economics editor