Wednesday, June 30, 2010

Rail union calls for 'co-ordinated strikes' against Coalition

The imposition of austerity budgets to reduce budget deficits – adopted across Europe by governments of all persuasions – is suddenly looking too dangerous to investors in the global markets.

Now these gamblers are worried about a self-defeating downward spiral in Europe, and shifting their funds to Japan, whilst piling on the political pressure for President Obama to issue a new pile of fantasy finance by way of the Federal printing presses.

Indicators of deflation and declining production have emerged as the latest and biggest threat to the global capitalist economy. Not least is the Baltic Dry Index that measures the shipping of bulk goods around the world. This dropped by 40% last month.

These signs of the economy once again falling off a cliff – the much feared “double-dip” - are sure to aggravate the latest phase of the financial crisis. Tomorrow the European Central Bank’s emergency facility of €442bn (£361bn) of one-year loans ends. It’s the largest sum ever lent by a central bank. If the ECB fails to renew the scheme, there are fears that it will trigger a catastrophic banking collapse in Spain.

The chaotic reversals in the bond markets which lend to governments show that neither austerity budgets nor more quantitative easing/printing money can stop the rapid deterioration of the global economy.

In Britain, for example, it is reported that the Coalition’s cuts programme will add another 1.5 million to the dole queue. They will certainly not be taking part in a growth of consumer spending.

In essence, this destruction of people’s jobs and livelihoods is the inevitable consequence of the capitalist crisis – not its cause. It is too simplistic to view the cuts just as old-fashioned Toryism, especially when the Greek and Spanish “socialist” governments are doing the same and New Labour had a similar programme in store if it had won the general election.

This is the context for general secretary Bob Crow’s spirited address to the Rail, Maritime and Transport union’s annual conference. He told the delegates: “‘This ConDem administration has thrown down the biggest challenge to the trade union movement since Margaret Thatcher took on the National Union of Mineworkers.

"I have no hesitation in saying that it will take general and co-ordinated strike action across the public and private sectors to stop their savage assault on jobs, living standards and public services."

He went on: "The trade unions must form alliances with community groups, campaigns and pensioners' organisations in the biggest show of united resistance since the success of the anti-poll tax movement. Waving banners and placards will not be enough - it will take direct action to stop the Cameron and Clegg cuts machine.”

Crow is on the right track, but resistance alone cannot withstand or push back the impact of this crisis. Its scale is unprecedented and opposing the cuts must involve more than trying to force the government to change course, which would be a hopeless and futile pursuit.

A key lesson of the miners’ strike for jobs that Crow referred to is that the state and the discredited parliamentary system is a front for global corporate and financial interests and this is what we have to transform.

“General and co-ordinated strike action” - which would have to defy the anti-union laws to happen - is certainly needed. But the assault on jobs, living standards and public services can only be dealt with if the alliances Crow calls for become the basis for People’s Assemblies in a direct challenge to the power of the capitalist state to rule over us.

People’s Assemblies will go beyond protest, taking control of the resources that make up the productive economy and the financial system, and converting them from the playthings of global speculators into the means of meeting the needs of the majority.

Gerry Gold
Economics editor

Tuesday, June 29, 2010

Show the FA a red card

As the England squad trooped wearily off their flight home this morning, it was too easy to see them as the villains of the piece, the spoiled “golden generation” that failed miserably at the World Cup in South Africa. That’s less than half the story.

Neither the Football Association (FA), the players, the manager, nor the media pundits (who for the most part are looking for individuals to blame), have been able to put forward a coherent long-term strategy of where to go from here. This is hardly surprising as, to one degree or another, they are all themselves imprisoned in a set-up that perpetuates one failure after another at international level.

The fans, largely shut out of the administration of the game internationally and at club level, have no way of voicing their opinions of the way forward. They have been effectively cut adrift from the game, to be manipulated by the patriotic right-wing press.

Football in England is dominated by a lethal combination of a stifling bureaucracy, greed and big business. With the establishment of the Premier League in 1992 as an entity with commercial independence from the FA, corporate interests quickly moved in. Many of the clubs became PLCs with shares quoted on the stock exchange. Others were taken over by oligarchs and billionaires as playthings.

The market for players took off to the point now where a footballer can be “worth” up to £80m and be paid up to £9m a year, much of this financed by TV revenues which can go down as well as up. With these salaries, it is easy for the players to lose all sense of reality – and of community.

As a result of clubs trying to compete in this market, one club, Portsmouth, has gone bankrupt since the economic crash, and most of the rest have huge debts. The combined debts of Manchester United and Liverpool are over £1 billion and the Premier League is the most indebted in Europe. To keep the Premiership on the road, the best players in the world have to be attracted to play in it. Profits have to be made to keep the shareholders happy. Bringing young talent through under this system is well nigh impossible.

It was worth noting that German football is organised and owned quite differently. Last year a meeting of all first and second division clubs rejected by 35-1 a proposal to allow teams to be bought, sold and owned as they are here. Under existing rules, no "outside" investor can own more than 49% of a German club's shares and at least 51% must remain with club members. Germany also has more than 10 times the number of qualified coaches than England and a way of bringing young players through, as England discovered on Sunday.

The FA, apparently convinced that a top manager could overcome all these problems, splashed out £6m a year for the services of Fabio Capello, a practising Catholic (he prays twice a day), a top club manager certainly, but also with one or two blemishes: stubbornness, bordering on arrogance; and a rather unwelcome admiration for the Spanish fascist dictator General Franco.

Maybe there was more than meets the eye in the rebellion mounted by John Terry (who to his credit turned out for a protest against the BNP in Barking before the election) at the World Cup.

What can be done? A new model for the game could be the fans’ clubs created as a result of the disillusion and disgust with corporate behaviour at Manchester United and Wimbledon. The fans are the shareholders of the alternative clubs and they have one vote each to decide on future policy.

Establishing the primacy of the game itself over profit is well beyond the FA and the Premier League, however. They are part of the problem and not the solution (just look at the cost of Wembley compared to the stadia in South Africa). The administration of football nationally needs to be taken out of their hands and placed under the control of the fans and players at every level. A revolution off the pitch is a first step to a revolution on it!

Peter Arkell

Monday, June 28, 2010

Toronto is a turning point

The failure of the G20 summit in Toronto to find a common approach to tackling the global economic and financial crisis had an air of inevitability about it. After all, capitalism is not exactly a rational system where sensible men and women come together to sort out an international crisis.

If that were really the case, the 20th century would not have experienced two catastrophic world wars, for example. Nor would the inter-war years have been dominated by the calamity of the Great Depression in Europe and America, which only ended when the major powers took to the battlefields.

In reality, what the Toronto communiqué – which apparently took all of 54 hours to negotiate – heralds is another period of intense competition and rivalry. In an abandonment of the unity of the past three crisis-era Group of 20 summits, the leaders decided to adopt "differentiated and tailored" economic policies for each country. Earlier proposals for a unified approach to limiting the activities of major banks by imposing tighter capital requirements were also put on the back burner.

In other words, it’s every country for itself. Sound familiar?

President Obama’s plea not to start cutting budget deficits too soon because it might harm the “recovery” was simply ignored. All the major economies are cutting deficits – and America won’t be far behind. Obama, it was noted, praised Britain’s “courageous budget” of last week.

He is aware that his stimulation package has failed to revive the US economy. On the contrary, unemployment continues to grow despite an increase in state spending. The recession has wrecked the finances of many states too, which are dependent on local property and sales taxes.

The small southern California city of Maywood is disbanding its police force and firing all public sector employees. Every service is being contracted out. US states have an estimated $200bn budget shortfall, equivalent to 30% per cent of all state budgets. The federal government’s deficit is about $1.3 trillion and rising.

The impotence of the political elites who gathered in Toronto reflects a stark reality of the problematic and contradictory relationship between capitalist nation-state systems and the globalised economy. Masked while the world economy expanded, this conflict has worsened since the 2008 meltdown of the banks.

Modern globalisation has created immense economic and financial forces that are greater in their impact and power than the sum of their parts. They are way beyond the control of even the most powerful states. Take, for example, the financing of government borrowing through what is known as the bond market. This isn’t some single marketplace, with a sign outside the door but is a series of inter-linked buyers and sellers in Europe, Asia and America, trading electronically around the clock.

Participants include commercial and investment banks, hedge funds, insurance companies, pension funds and – of course – the governments that guarantee interest on fixed-term bonds. Identifying all the various buyers and sellers globally is a task in itself; “bucking” this market is virtually impossible because states never know when they might come under attack. Just ask the Greek government.

Toronto, with its insistence on halving budget deficits by 2013, makes the transition from recession to depression much more certain. The political classes in every country are locked in a deadly embrace with economic and financial forces too powerful and inaccessible to cope with. So they take it out on ordinary workers, cutting their wages, pensions, jobs and services.

Remedial, curative action is not an option, just as it wasn’t in the 1930s. Telling the bond markets to take a running jump off a short pier, that they can whistle for their interest payments, for example, requires something quite different and quite revolutionary. The G20's failure at Toronto is a turning point. Now it’s our opportunity to seize the initiative.

Paul Feldman
Communications editor

Friday, June 25, 2010

Vuvuzela politics won't beat the banks

On the eve of the G20 meeting in Toronto this weekend, which will see further attempts to bring about a recovery from global economic and financial crisis differences have emerged between the US and Europe. Representatives of the world's 20 richest nations will be arguing over how to "manage their divergence".

US president Barack Obama has criticised the European imposition of austerity programmes of spending cuts and tax increases. At this point, the US is much more concerned with increasing spending to stimulate demand than reducing sovereign debt. This international tension is the political reflection of the battle between opposing teams in the Capitalist Rescue cup.

When the debt-fuelled global financial system went into meltdown in 2008, there was a sudden rush of enthusiasm for a new age of regulation that would, it was said, prevent a recurrence of the conditions that resulted in the worst credit crisis since the 1930s. The ghost of economist John Maynard Keynes was raised from the grave.

In the panic-stricken meantime central banks and governments around the world turned to the injection of ‘liquidity’ in the form of trillions of every currency to prop up the previously hugely profitable but now bankrupt commercial and investment banks and non-bank financial institutions. The marvellous rediscovery of the fool's gold of ‘quantitative easing’, the modern, electronic equivalent of printing money, allowed balance sheets and credit to be further expanded – miraculously treating like with like.

Controversy raged around the world about the actions to be taken over institutions judged ‘too big too fail’. Some were indeed ‘taken over’ by the state. Others were allowed to go to the wall.

Many of the best brains in banking and finance were set to work, tasked with designing a package of measures that would restore a degree of sanity to the madness that had drowned the world in a tsunami of unserviceable credit and debt. The team in favour of regulation, led by the Basel Committee on Banking Supervision, have been on the pitch, slugging it out with their opponents, amongst them the Institute of International Finance. The IIF are worried about the damaging effects of regulation. Basel’s captain Nout Wellink says ‘Raising capital and liquidity standards will reduce the probability of the event of a crisis. We will get greater stability of economic output and associated increases in welfare.” The IIF fought back with a warning that ‘global growth in the eurozone, the US and Japan would be cut by three percentage points between now and 2015 and as a result, 9.7m fewer jobs would be created over the period.’

Amongst the most important of the reforms put forward was to be a return to a more prudent relationship between a bank’s easily available capital assets and the amount of money it lent out.

Despite the chorus of calls for regulation, the pressure for a return to growth continues unabated, and the banks have lost little, if any, of their power. As a result synchronised bubbles and speculative excesses will re-emerge to undermine those who seek to regulate the financial markets.

As the G20 opens, the Financial Times reports that ‘Plans by global regulators to compel banks to set aside billions of dollars in extra capital to cope with future crises are to be pared back after intense lobbying by the industry. The committee is likely to shelve the idea that banks should be forced to maintain a longer term “net stable funding ratio” that aligns the maturity of their assets and liabilities.’

And then comes the bottom line ‘Analysts had also calculated that the Basel III reforms, were they implemented in conjunction with new taxes around the world – such as the liability tax announced by the UK government this week – could have cut a typical bank’s return on equity from 20 per cent to 5 per cent.’ For the capitalists and the masters of finance that would be an entirely unacceptable attack on profitability.

The rest of us need a way of ending the rule of the banks. Protests, resistance, shaking fists or even blasts from the vuvuzela won’t be enough. We need to build the forces which can take the economic and financial systems into social ownership and recast them on a not-profit basis.

Gerry Gold
Economics editor

Thursday, June 24, 2010

Public transport cuts spell hardship and fumes

As striking maintenance workers on London’s underground draw attention to cuts and safety risks, Budget cuts herald the end of local bus services in the rest of the country.

Already in rural areas people are forced to use their cars whether they like it or not. Now buses could become extinct outside of town and city centres as a result of the 25% cut in the government’s transport budget, according to the Campaign for Better Transport.

They warn that cutting the Government’s Bus Service Operator Grant – a grant which allows local authorities to subsidise routes that are crucial, but unprofitable – will remove 94 million miles of existing routes from subsidy, will result in 7% fewer services and a 6.5% fares increase.

Campaign Executive Director Stephen Joseph said:
“Bus cuts and fares rises will be below the radar, happening at a local level around the country, but they will have a huge impact on the poorest people and communities, and act as a barrier for people to get access to employment, training and public services.”

The Transport and Communities and Local Government departments spend around £2.4bn a year on buses, including up to £1bn on pensioners' bus passes and more than £400m on fuel subsidies.

In London bus and tube ticket prices are set to rise by 7% next January, two per cent higher than the rate of inflation. This follows this year’s 3.9% increase in tube fares and 12.7% rise in bus fares.

Train fares could increase by over 33% across the board over the next five years as a result of the cuts. Train travel in Britain is already the highest in Europe, up to 50% higher on average. And a government review is currently trying to find out why the rail network is costing three times more to maintain than it did when it was in public ownership.

The Rail Maritime and Transport union says the network is dogged by a culture of underfunding, cuts and unacceptable safety risks to staff and passengers. RMT members working on the maintenance and upgrading of the London underground are striking today against cuts in staffing and safety, though the bankrupt company that walked away from the upgrade contract had already had £312m of public money.

Bus and train companies continue to make huge profits in spite of the recession.

Transport is the source of 24% of the UK’s Co2 emissions. 89% of that comes from cars, trucks and vans. Personal car travel is the biggest culprit, at 58% of the total. Buses contribute just 2% and rail 3%.

Millions of pounds are being invested in developing electric cars, and this research benefits from the government’s various tax breaks for ‘entrepreneurs’. But there is no evidence that electric cars will have more than a marginal impact on Co2 emissions. As Professor Roger Kemp, who chaired a review by the Royal Academy of Engineering, said:

''Swapping gas guzzlers for electric vehicles will not solve our carbon emissions problem on its own. When most electricity in Britain is still generated by burning gas and coal, the difference between an electric car and a small, low-emission petrol or diesel car is negligible.”

The best, fairest and cheapest way to reduce the UK’s carbon emissions would be to get more people and goods off the roads and on to buses and trains. But that would be to defy the logic of profit. As far as the government is concerned, this is definitely not ‘the age of the train’ – or the bus.

One of the key roles of People’s Assemblies will be to challenge every bus route closure and fare increase, demanding that the books of the privatised transport companies are opened to scrutiny. We need a community-owned and controlled transport system, based on a well-financed integrated transport strategy.

Penny Cole
Environment editor

Wednesday, June 23, 2010

Prepare General Strike to bring down Coalition

Tory Chancellor Osborne’s collection of savage spending cuts and dramatic tax changes is intended to engineer a massive transfer of wealth to shareholders, whilst condemning millions to a life of grinding poverty on reduced benefits or on the dole. Claiming that “we are all in this together” is simply a lie.

It follows the £6 billion cuts announced in the days following the election. It comes in the wake of the scrapping of 12 major capital investment projects approved by New Labour in the dying days of its period of rule. And on top of cuts made by the outgoing New Labour government in higher education.

Much worse is to come. In the public sector, reducing the budget deficit will leave most departments – apart from health and international aid – facing a 25% reduction and the certainty of huge job losses. No advanced economy has ever made such drastic spending cuts in state budgets.

Pay for public sector workers will be frozen, initially for two years. As entire services are threatened with the axe, Cameron and Co. will be ratcheting up their caring, sharing approach. They will cynically encourage redundant workers to form co-operatives of volunteers to take them on with a pittance of a contract to cover expenses.

But for the private sector, the plan is quite different. Here the overarching idea is to make Britain an attractive place to do business, boosting profits by reducing corporation tax. Each year for four years the tax rate companies pay on the profits they fail to hide abroad will be reduced by 1%, bringing the headline rate down to 24% - amongst the lowest of all the developed countries.

With some of its measures, the Coalition is trying to disarm some of its potential critics with the appearance of concern for the poorest. As part-payment for the Liberal Democrats’ participation, the income tax allowance lower limit will be raised, exempting 880,000 of the lowest earners from paying tax. But this will be more than offset by the increase to 20% in VAT from next January. With housing benefit capped and child benefit frozen, it will hit the poorest hardest.

Further assaults on living standards are already planned. In a calculated move towards a national government the Con-Lib coalition is to be extended to include New Labour’s former work and pensions secretary John Hutton who will prepare the ground for an assault on state and public sector pensions. And then, in October, Osborne will announce his review of public spending which will detail the cuts to be made, department by department.

The Coalition has embarked on a high risk, “kill or cure” programme based on figures for growth that are already under challenge and that are not possible in the context of the global crisis of capitalism. Eurozone economies are diving deeper into recession, while many German and French banks are reckoned to have solvency problems. They hold piles of Greek and Spanish government debt now worth far less than it was bought for.

This is not a government of strength but one thrown together in an emergency and which has no mandate for the unparalleled cuts it is making. The general election was a fraud because none of the major parties would come clean on what was being planned. So the electorate has every right to fight the Coalition.

Protest campaigns are already underway around the country. Trade unionists, pensioners and community groups are meeting to plan their actions to protect jobs and services. They should begin to create People’s Assemblies to co-ordinate their struggles and to plan for political and economic alternatives to a capitalist system now in profound economic and political crisis.

Unions who are opposed to the cuts will have to step up to the plate in the absence of any resistance from the Trades Union Congress. Brendan Barber, the TUC general secretary, could only say the budget was “economically dangerous and socially divisive”. He offered no challenge to the Coalition or its unacceptable budget whatsoever.

Bob Crow, general secretary of the rail union RMT, was more forthright, declaring: “There is no question that there will be widespread industrial and community resistance to the cuts agenda and RMT will be in the front line wherever people are making a stand.” This is good as far as it goes.

The RMT is part of an alliance called the Trade Union Coordinating Group, along with firefighters, civil servants, university and college teachers and other sections. The TUCG should start a campaign within the TUC to make preparations for an indefinite General Strike against the Coalition government, which is assuming the role of a dictatorship over the working population.

Resistance is not enough. The aim must be to bring down the Coalition and create a revolutionary government in its place. This is the road we have to take to prevent a social catastrophe far worse than that of the 1930s.

A World to Win
23 June 2010

Tuesday, June 22, 2010

In defence of football

The dramas playing out in South Africa over the England team have concentrated the minds of millions of fans around the world. The excitement being generated, the feelings of elation and despair offer an opportunity to think about the true meaning of sport.

Philosopher and literary theorist Terry Eagleton, recently threw down a challenge to football lovers. In a provocative article, he claims that the game is “the opium of the people, not to speak of their crack cocaine”.

Whilst acknowledging the “sublime artistry” sometimes displayed in football and the way it “blends dazzling individual talent with selfless teamwork”, Eagleton says that the World Cup is worse news than the Cameron government “for those seeking radical change”. He concludes that the game should be abolished.

Of course it is true that football, like other sports, and indeed like many aspects of culture, has been integrated into the money-spinning structures of global capitalism. Locals in South Africa cannot afford to buy tickets for the World Cup, not to mention the unemployed or supporters in other parts of Africa. England fans have shelled out £600 each for tickets plus another £3,000 to make the trip to Cape Town.

But is Eagleton right to say that the ruling classes can use football to “hold back change” by reinforcing their control over the minds of the masses? Is today’s game just a case of bread and circuses as in the days of ancient Rome, when emperors held sway over the common people by providing them with food and entertainment? That would mean that all forms of sport, art and entertainment are simply pre-packaged forms of propaganda which have no intrinsic value and no liberating qualities – and that human beings can never, ever break out of the prison of capitalist relations.

In reality the history of sport is one of open, unexpected moments - including some thrilling political events. Athletes Tommie Smith and John Carlos’ “Power to the People” salute at the Mexican Olympics in 1968 before global audiences of millions was just one unforgettable example. And, in the US today, the Major League Baseball Players Association has denounced Arizona’s racist new law which gives police draconian powers to stop any “authorised alien”.

Today, when communications involve millions of people who had hitherto been excluded, sport provides an example of how people can come together in ways that are both peaceful and thrilling. The rise and rise of talented football players from some of the poorest and smallest nations of the world are examples of what talent, training and the desire to succeed can do. In the US, 28% of Major League baseballers were born outside the US, for example. Eleven of Germany’s World Cup squad have foreign backgrounds. The world of athletics also provides inspiring examples, like the legendary Kenyan long-distance runners.

As one fan wrote in response to Eagleton’s rant:
“Nonsense. International cooperation is the only hope of the world; and while I find the various corporate attempts to highjack the world cup extremely boring, there can be no doubt that the world cup and football itself embody that prospect. It helps troubled kids and local communities; it gets kids learning about the value of team work - and few things in life feel as wonderful as scoring a goal. More importantly, it's just a bit of fun. Life is not always particularly easy - an hour and a half of drama is a welcome solace from the usual rubbish you have to put up with in life.”

The crisis of the England squad, symbolised by rows of empty seats at the match against Slovenia today, can ignite a debate about the future not only of football, but how sport can be freed from the prison of capitalist relations. Meanwhile, you can support A World to Win’s team playing in this Saturday’s Ctrl.Alt.Strike alternative World Cup.

Corinna Lotz
A World to Win Secretary

Monday, June 21, 2010

Tory right guns for Lib-Dems

When David Laws was forced to resign last month, we asked if the Tory right wing was trying to destabilise the Lib-Con coalition. With the announcement that Liberal Democrat Energy Secretary Chris Huhne is leaving his wife in the wake of gutter press exposure of his relationship with economic advisor Carina Trimingham, the cracks are widening.

Like the former Treasury Chief Secretary, Huhne is a heavyweight inside the Liberal Democrats. Already there is speculation about whether Cameron should ask for his resignation which would seriously weaken the government just as the Budget is due to be announced. The campaign against Huhne, must therefore be seen in a bigger picture.

Apart from the cardinal sin of being a Liberal Democrat in the first place, Huhne has opposed expanding nuclear power and is in favour of carbon capture technology. Last week the Coalition announced that the £80 million loan needed to make the castings for nuclear reactors was to be cut, which has enraged the pro-nuclear lobby.

As with Laws, the allegations of sexual or marital “impropriety” are simply a smokescreen for far more serious and sinister matters.

The real issue is: what forces are guiding the snooping hacks of the News of the World, whose stories were immediately picked up by the Daily Mail and the Sunday Telegraph? Who tipped them off to tail Trimingham to Huhne’s constituency home in Eastleigh and follow the couple on the train all the way back to Waterloo, tracking their movements and phone calls? Last year Huhne demanded an inquiry into the News of the World phone-hacking saying: "It strikes at the heart of the privacy any individual can expect in a civilised society."

Is it payback time, or is it possible that they are being helped by operatives in one of the intelligence agencies, MI5, MI6 and GCHQ? Richard Aldrich, the author of a new book about the GCHQ spy centre in Cheltenham, which absorbs the largest chunk of the £2.4bn budget, says that GCHQ holds “enormous surveillance powers”. The frightening truth, he says, is "no one is in control" of these powers.

As Cameron’s coalition comes under strain, he is singing the praises of the military. The Prime Minister wrote yesterday that it was the whole nation’s “social responsibility to put servicemen and women “at the front and centre of our national life”, adding “I want to see an explosion of red, white and blue all over the country”.

As the 300th soldier is killed and when the majority of citizens are opposed to the hopeless war in Afghanistan, the pressure is on to re-legitimise the armed forces. The ruling class need to put down a marker in the wake of the Saville Report which proved beyond question that British troops deliberately fired on innocent civilians. This explains why even General Sir Richard Dannatt has backed Cameron in saying that the Bloody Sunday shootings in Derry 38 years ago were “unjustified and unjustifiable”. That event must be firmly put in the past so that the troops can now be seen as self-less heroes who need “our” unstinting moral and financial support.

On the eve of what will is likely to be the most ferocious budget in history there are serious fears of civil unrest as the whirlwind of cuts hits jobs, services, pensions and pay.

No wonder that the media drums are beating to get support for the Armed Forces Day this Saturday. It’s time to join the campaign to build People’s Assemblies as the democratic alternative to these increasingly authoritarian state forces.

Corinna Lotz
A World to Win secretary

Friday, June 18, 2010

Profit and food are a deadly mix

Capitalism’s inability to feed the world, in spite of increased production and a slowdown in population growth, is underlined by a report which predicts that food prices will rise by 40% over the next decade.

Prices have remained high since the price spike of 2008, which led to food riots in many areas of Africa and Asia. High prices combined with the economic crisis have left about 1 billion people undernourished, says the annual report from the UN Food and Agriculture Organisation (FAO).

The price of grain is set to rise by between 15% and 40% in real terms, once adjusted for inflation, over the next decade. Vegetable oils will be 40% dearer will the cost of dairy food could rise between 16-45%.

Although the review suggests production can increase to meet demand, it warns that many people will not be able to afford the prices. It assumes that high energy prices will continue, and increase the cost of production and chemical inputs. This will have an impact on supplies and prices, and will increase the demand for bio-fuels. More areas will move out of food production and into oil crops.

The report explains that the extent to which world prices are reflected in domestic prices varies markedly by country. “The transmission of international prices to domestic markets can be impeded by border measures, domestic price supports and infrastructure weaknesses,” the FAC acknowledges.

Let’s unpack this bland statement. In a world of globalised unfairness the rich capitalist economies keep agricultural subsidies and hidden price subsidies in place, whilst the least developed countries are bullied into allowing market forces free rein in their home markets. Industrial agriculture enterprises continue to export food, while people living on their doorstep starve.

The FAO itself is entirely wedded to the free-market capitalist model, claiming that “there is a need for greater assurance of unimpeded access to global supplies” in order to “improve confidence in market functioning”. It unreservedly praises the trend towards the establishment of organised Commodity Exchanges in developing countries as a “welcome institutional development and a sign of market deepening”.

Yet Commodity Exchanges are at the centre of a great deal of reckless speculation, contributing to the economic crisis, and invariably at the expense of the smallest producers and poorest consumers. For the FAO, Commodity Exchanges are “useful and time-tested price discovery and hedging institutions, if they are regulated properly and attract sufficient volume to avoid monopolistic practices”.

Now that’s a very big “if”. More realistically, if there are increased profits to be made from food – which for capitalism is simply another commodity – then there will be increased speculation and market distortion. The outcome will be more hunger, the elimination of small farmers and further global land-grabbing by global investors and sovereign wealth funds.

This new form of rentiér capitalism will lead to further impoverishment of the soil as intensive farming methods are extended. New areas of marginal land cleared of scrub trees for bio-fuel production will add to global warming. The drive to clear virgin forest for palm oil plantations will increase – and at the climate summit in Cancun in December this activity will be given status as a carbon offset scheme. That’s the actual “time-tested” functioning of commodity markets in action.

The point is that capitalism is capable of extending the market in commodities into any area, but not of getting them to the people that need them in a fair, affordable way. In the case of training shoes or flat-screen TVs, that’s not the end of the world. When it comes to food, it is a life or death question for millions of hungry people. More than in any other area, food production is crying out for a new approach – ecologically sustainable, just and based on common ownership of land and global co-operation. Profit and food is a poisonous combination.

Penny Cole

Environment editor

Thursday, June 17, 2010

Europe in the eye of the storm

With Europe firmly at the epicentre of a new stage of the global financial crisis, the heads of government meeting in Brussels today is hoping for the best but undoubtedly preparing for the worst. As events spiral out of control, there are warnings of dire political consequences from predicted social unrest as governments slash and burn spending on public services and jobs.

The European Union itself is now under severe strain as an economic and political entity. Inter-bank lending is virtually frozen and the single currency severely weakened since the financial meltdown in Greece and the emergency intervention of the Intenational Monetary Fund.

Spain, in particular, is in dire trouble and we’re not talking about the country’s shock defeat by the Swiss at the World Cup. Unemployment is already a catastrophic 20% - twice that level among young people – and the Socialist Party government’s cuts programme has provoked plans for a General Strike.

As the crisis moves from banks to nation states, Spain is being talked about as the Lehman Brothers of the 2010 crash,. Many foreign banks are holding Spanish government debt that is no longer worth what it was bought for. With their own balance sheets looking decidedly unhealthy, the banks are on strike. Francisco Gonzalez, chairman of the BBVA financial services group, admitted: "Financial markets have withdrawn their confidence in our country. For most Spanish companies and entities, international capital markets are closed."

The comparison with Lehman Brothers is as serious as it can get. Lehman’s collapse in the autumn of 2008 plunged the world economy into recession. A collapse of the Spanish economy would usher in a deep, unparalleled slump. In the United States, top fund manager John Hussman, in his latest weekly market commentary, believes that the country is already in recession. Spain going belly up and asking for €250 billion to shore up its finances could prove the last straw.

The is what made billionaire philanthropist and investor George Soros issue a stark warning of how the deepening economic and financial crisis will strain political systems come to their limits. He told a conference: "If there is no exit, (it) is liable to give rise to social unrest and, if you follow the line, social unrest can give rise to demand for law and order and (sow the) seeds of what happened in the inter-war period.” This was a hardly disguised reference to the rise of Nazi Germany in the wake of the Wall Street crash and the onset of the Great Depression.

Soros is concerned that he “fiscal discipline” – cutting budget deficits – is a big policy mistake and that the thing to do is to maintain public spending along the lines advocated by John Maynard Keynes in the 1930s. That presupposes that a) this will lift capitalist economies out of recession and b) governments are free to adopt this course.

A year or so of central banks in America and Europe printing money à la Keynes in a bid to “restore growth” has failed. This is because the economic crisis is a combination of over-producton and mountains of debt which have wrecked the financial system and not one of under-consumption. In fact, much of the new money printed simply leaked out of national economies into global financial markets.

Of course, Soros is right in that cutting budget deficit will only worsen the crisis, leading to higher unemployment and severely reduced living standards. But with capitalist governments competing with each other for decreasing amounts of available credit, there is little choice in the matter. Spain and Greece have put the frighteners on the Clegg-Cameron coalition and tightening the regulation of the financial system is a little like bolting the stable door after the horse has fled.

The threat of dictatorship raised by Soros is not outlandish. Any idea that day-to-day politics is possible as this crisis unfolds should be put to one side, along with notions that the budget cuts can be thwarted with protest and pressure alone. Revolutionary economic and political solutions along the lines suggested in our Manifesto are more to the point.

Paul Feldman

Communications editor

Wednesday, June 16, 2010

Oil spill goes global

Estimates of the quantity of oil gushing into waters of the Gulf of Mexico continue to increase. BP’S own guess was originally as low as 1,000-5,000. Then the original 5,000 barrels a day grew to 60,000.

Now, more than two weeks into the capping operation, around 45,000 barrels are still poisoning the seas, destroying wildlife and wrecking livelihoods – and there is no prospect of stopping the flow. It is on track to become the worst oil spill since the first Gulf War in 1991, which spilt around six million barrels.

This worsening catastrophe does not just symbolise the intertwined ecological, economic, social and political consequences of capitalist production and distribution. It is at the centre of the universal crisis that is now changing the way of life of every person on the planet. The explosion was by no means an unforeseeable accident. The drive for growth to sustain profits produced a global economy lubricated by increasing amounts of credit and debt and fuelled by oil. As the oil became harder to extract, costs escalated, profits were hit and corners cut.

During the Congressional hearing of the Subcommittee on Energy and the Environment, in the US House of Representatives yesterday, Chair Ed Markey dismantled attempts by the other oil companies to isolate BP. He and other House Democrats ripped into the chiefs of oil companies for filing bogus oil-safety reports before drilling new deep-sea wells, saying they are no better prepared for an offshore disaster than BP. Congressional investigators found that all five of the nation’s major oil firms filed virtually the same safety report prior to drilling new wells - right down to citing a long-dead expert who could be called in the event of an emergency.

The economic consequences are resounding around the world. The highly lucrative local fishing industry has been closed down. Tourism is melting away. BP’s market value has declined by more than 40% since the Horizon drilling rig blew up. The value of pension funds dependent on BP’s profits is dropping like a stone. The mess on Florida’s beaches is heating up the campaign to seize BP’s assets and there are indications that the global corporation is exploring ways to protect its US operation through bankruptcy proceedings.

President Obama’s speech last night, broadcast from the Oval Office, was largely about the need to wean the US off of its addiction to oil. His attempt to divert attention from his inability to do anything effective about the spill not only failed to convince anyone but, according to many commentators, actually worsened the political crisis. As the Financial Times put it ‘And there was something in it to frustrate or antagonise virtually every stakeholder who was listening.’

In his response to BP’s testimony, Ed Markey eloquently expressed the contradiction at the heart of the crisis: “BP is more concerned about minimising its ‘liability’ for the costs of the clean-up than for the ‘livability of the Gulf’ ”.

But the US Congress is no more able to act to stop the destructive actions of global corporations like BP than it is to regulate the financial institutions that arrogantly straddle the world.

The moment has arrived for a new kind of politics and a new kind of democracy based upon collective stewardship of the planet we depend upon. Now is the time for a qualitative change in our relationship with nature. Let’s begin the job of reconstructing democracy from the bottom up through the building of an international network of People’s Assemblies.

Gerry Gold
Economics editor

Tuesday, June 15, 2010

Derry remembers Bloody Sunday dead

Thousands of people will march into the centre of Derry today along the route that a civil rights march planned to take on 30 January 1972. This time they will be marking the publication of the Saville report into the cold-blooded shooting dead of 14 people by British paratroopers on what became Bloody Sunday.

It was Wilson’s Labour government who had sent the troops into northern Ireland in August 1969. This action was followed by internment and direct rule from Westminster to suppress those who had upset the status quo by demanding their rights.

Against the will of the British army and police chiefs, former prime minister Blair gave in to pressure from Irish Taoiseach Bertie Ahern in agreeing to the Saville inquiry back in 1998. Blair was anxious to appease nationalist leaders in the north of Ireland to achieve the Good Friday peace agreement of 1998. The original 38-page inquiry, published in 1974 under Lord Widgery, appointed by Tory prime minister Edward Heath, had cleared the British troops of any wrongdoing and was clearly a whitewash.

This time around – after an inquiry last 12 years and at the cost of £191 million –the report contains 5,000 pages. Its findings will suggest that allegations that the victims were carrying arms were unfounded. Even former senior army General Sir Michael Rose has admitted that eye-witnesses “testified that the killed and injured were unarmed, that some were shot in the back, that civilian protestors were injured when Army vehicles ran over them”.

Soldier 027 has had to come under Scotland Yard protection since his fellow paras want to wreak revenge on him for spilling the beans on how innocent demonstrators were gunned down. A 19-year-old radio operator with the Support Company of 1 Para in January 1972, he told the inquiry in October 2002 that demonstrators were not carrying arms, or anything that justified opening fire. "I had the distinct impression that this was a case of some soldiers realising this was an opportunity to fire their weapon and they didn't want to miss the chance."

The witness added: “Lance Corporal F, who gave evidence, and Soldier G, who has since died – appeared to be operating according to a plan. I have always been satisfied in my own mind that Lance Corporal F and Soldier G probably shot eight or 10 people that day. I thought it was their aggressive, positive actions which incited a few other loonies to join in. Unspeakable acts took place on Bloody Sunday. There was no justification for a single shot I saw fired."

No wonder there is an orchestrated campaign going on in the pro-army and pro-Tory media to rubbish the inquiry. Home Secretary Kenneth Clarke has called the 12-year inquiry a “disaster” that had got “ludicrously out of hand”. “Brave British soldiers”, cries the Daily Mail, “are about to be branded as criminals”.

The notion that the British state will prosecute its own soldiers for murder 38 years after the event, especially under these conditions, is unlikely. The authorities are even now hoping that an apology will be enough. But there is an undoubted nervousness about the publication of the report.

Cameron is going out of his way to keep the British army “onside”. In anticipation of the Saville report’s findings, he spent an inordinate amount of time in Afghanistan last week, doubling soldiers’ operational allowances to loud cheers from assembled troops.

He told them he wanted the armed forces to “be front and centre” of British life. It is also clear that the government wants the troops out of Afghanistan as soon as possible. It would, of course, be a mistake to read anything sinister into any of these manoeuvres as deep cuts in public spending, pensions, wages and services are being made ready.

Corinna Lotz
A World to Win secretary

Monday, June 14, 2010

They have lost control

The trouble with conspiracy theories is the impression given that “they” – bankers, politicians, the military etc – are always in control of events and will thus determine their outcomes to suit themselves. How wrong-headed and disarming this approach is.

Take the United States. Is President Obama in command of the environmental and economic disaster resulting from the BP oil rig explosion in the Gulf of Mexico? Clearly not. The White House can’t even find out how much oil is actually leaking from the ruptured well a mile below the surface.

What about the economy then? Obama’s government has spent countless billions of dollars trying to stimulate the economy, to no avail. Over 84,000 public sector jobs alone have been lost this year and unemployment overall is 10% and rising.

Now Obama insists another $50 billion is needed to save the jobs of thousands of teachers, fire fighters and police officers. Even fellow Democrats are expected to join Republicans to block the plans in Congress. The ability of a powerful government like America’s to determine the course of the economic crisis is patently absent. Not much control there then.

In Britain, you couldn’t say that the Lib-Dem coalition is “in control”. Its very formation was hardly a planned event but the result of circumstances beyond Clegg and Cameron’s control. We are talking about two things here – the result of the general election and the impact of the global financial crisis on Britain.

To appear to be in control, both coalition parties have had to marginalise their own rank and file and claim to be ruling in the “national interest” to save Britain from state bankruptcy. The coalition could flounder over the scale and impact of the spending cuts that are being prepared or as a result of any number of external events.

Surely someone out there must be in “control”, you would think? If it’s not the state and politicians, it’s got to be the bankers and the heads of the handful of transnational corporations that are the dominant forces in the global economy? They only wish they were, especially the CEO and chairman of BP!

The bankers thought they had command as they built the most far-reaching financial empire the world has ever seen. Ultimately, the line between reality and fantasy became so blurred that they lost what little control they possessed. It all went belly up in 2008 as fiction overwhelmed fact. With a huge overhang of debt still waiting to be accounted for, nothing will persuade the bankers to start lending again.

Now people say that financial markets are “in control”. But a market like this one is not some defined group of men and women sitting in known locations who can be told what to do or who will act in a rational way. Financial markets are greater than the sum of their many, many parts. That’s what makes them so unpredictable, prone to herd instinct and fear, rumour and gossip.

The essence of the capitalist beast in times of crisis like these is that far from being in control, there are many indications that it is actually out of control. Global warming, for example, is proceeding without any apparent political capacity to halt it. Recession is turning to slump and spending cuts will only make that more certain.

We shouldn’t conclude, however, that it is impossible to have a rational politics and economics in place of the chaos and turmoil that is global capitalism. For that to happen, we just need to exert out own potential power in new, democratic ways, putting the present elites out to grass.

Paul Feldman
Communications editor

Friday, June 11, 2010

Creative accounting blocks climate action

Rich nations could go on increasing carbon emissions by up to 8% if they exploit gaping loopholes in a new draft agreement which is going to the next UN climate summit in Mexico in December.

An analysis compiled by the Bolivian government and published by the United Nations at talks in Bonn this week shows that using a series of accounting tricks, rich nations could carry on business as usual.

Selling surplus carbon credits created when the Soviet economies collapsed in the 1980s is one ruse. Using carbon markets to “offset” emissions and adopting new rules giving credits for palm plantations on areas cleared of virgin forest would also do the trick.

Christian Figueres, the new UN climate chief, admitted: “The pledges that we have on the table are not sufficient to meet the 2ºC pledge made in Copenhagen, and certainly not enough to guarantee the survival of the most vulnerable and poorest."

Without the loopholes, rich countries would have to reduce emissions by 10-14% below 1990 levels by 2017 to meet the targets agreed at Copenhagen last December. With them, they could increase emissions by between 4% and 8% above 1990 levels and still meet Copenhagen’s already shameful targets.

Bolivia’s UN ambassador Pablo Solon warned: “The new data shows a frightening chasm between what the science says, what the people have asked for and Earth needs, and what rich countries are saying they are willing to do."

Friends of the Earth is one of the organisations that will be excluded from the climate summit in Cancun in November because the major economies don’t want any kind of public pressure and debate around the talks. FoE international climate change campaigner said this week: "The proposals on the table are riddled with loopholes so its not surprising that current targets will do nothing to protect the world from climate disaster."

So now it is clear – even limiting warming to 2ºC is not an honest target for rich countries. Their servility to profit-driven growth and to the power of markets, could lead to 4ºC and more.

The absence of serious commitment to change was underlined this week by an International Energy Authority report, showing that fossil fuel subsidies rose to $557bn in 2008, from $342bn in 2007. Renewable energy innovators struggle to get any help, but subsidies allow fossil fuel to be consumed at less than market price.

There is a mood of gloom amongst some climate campaigners, who fear that the impact of the economic slump, spending cuts and unemployment, and the propaganda onslaught by climate change deniers, means people no longer care about climate change.

But a survey by Cardiff University shows that 78% of British people think the climate is changing, a substantial base to build on. Four out of ten thought that the threat from global warming is exaggerated, but 42% disagreed. And a similar survey in the US shows that public concern about the issue is increasing.

The UN Climate Change talks have become a diversion from real political action aimed at halting the rise in emissions, and a front for continued inaction. Qumrul Chowdhury, who is lead negotiator for the least developed countries' block, asked in Bonn what would happen if the talks dragged on beyond Mexico, warned: "It will be tragic, a holocaust. I warn all the world that it will be at the expense of 1 billion people. We cannot afford to lose this battle."

He is right. But what is needed is a bold approach that makes the connection between the economic crisis which is devastating people’s lives across the world, the climate crisis and the crisis of democracy, where the views of the majority count for nothing.

For even if 100% of people in Britain wanted action on global warming, they could not get it within the national and global status quo of capitalism.

Penny Cole
Environment editor

Thursday, June 10, 2010

Groucho says it how it is

Perhaps John McDonnell could draw some comfort from Groucho Marx after his exclusion (for a second time) from the contest for leader of the Labour Party. Groucho once quipped that he wouldn’t want to belong to any club that would accept him as a member.

McDonnell could only have secured the required 33 nominations – he ended up with about half, including two right-wing mavericks Kate Hoey and Frank Fields – with the active support of the anti-socialist, New Labour majority that runs the party. It wasn’t going to happen.

They were never going to lend McDonnell their votes precisely because he has systematically struggled and campaigned against them, inside and outside parliament, on picket lines and in rallies. By all accounts, he did not pull his punches on Monday evening when he challenged the main contenders over New Labour’s record.

McDonnell has also argued for a genuine socialist alternative to corporate globalisation, taking up the theme that another world is possible. So if he didn’t get on the ballot, it’s because of his principles which New Labour is consciously opposed to.

In 13 years in office, lest we forget, Blair and Brown – with the help of the two Milibands, Ed Balls and Andy Burnham – turned Labour into a management team for global capital. They gave political blessing to the generation of a gigantic financial bubble which has now burst, leading to massive spending cuts. And, make no mistake, if New Labour had won the election, they would be announcing major cuts as well.

The New Labour establishment has lent support to TV personality Diane Abbott to provide themselves with a cover of respectability. There is no other way to explain the last-minute rush to nominate her led by David Miliband. This followed McDonnell’s decision to withdraw under pressure from Abbott’s supporters, even though she had fewer nominations at the time.

It was ironic indeed that a black woman MP secured her 33rd vote from Phil Woolas. His anti-immigrant rhetoric as a minister in the outgoing government was music to the ears of the far right. Nevertheless, Woolas was given a big hug by the raging opportunist Abbott – who sends her son to a private school – after signing her papers. Steve Bell just about summed it up with his “Diane and the Tokens” cartoon in today's Guardian . Another Groucho Marx quip might be appropriate here: “Those are my principles, and if you don't like them... well, I have others.”

For all the media speculation about who succeeds Gordon Brown, the future will be decided on the streets and in communities and not in the House of Commons. We are moving into the territory of extra-parliamentary action as the Lib-Tory coalition prepares to cut wages, raise VAT and destroy whole areas of public services. This will be class war with a vengeance and – just as in the Thatcher period – Labour will oppose militant resistance to workers being made to pay for the crisis of capitalism.

The mass opposition to Cameron and Clegg that is on the horizon will need a dramatically fresh political perspective. Any idea of returning to New Labour is a nightmare too far and would, in any case, only be a change of management!

There is something in the coalition’s declaration that the “old politics” is dead. Why try and breathe new life into a corpse when the opportunity is there to create a revolutionary, democratic politics in its place? McDonnell and his supporters have an essential role to play in the discussion about where we go from here politically which they should not pass up.

Paul Feldman
Communications editor

Wednesday, June 09, 2010

Britain - a failed state

A system that produces a government intent on forcing people to cut their own throats is a failed state and we ought to find a democratic replacement for it as soon as possible.

The Conservative-led coalition of public school-educated ministers wants to make the whole of the British electorate party to decisions that will “change our way of life” over the next few years.

Cameron and Clegg’s already damaged coalition – together with the entire media circus – are engaged on a campaign of attempted mass hypnosis. If they had their way, they’d draw the entire population into a self-inflicted tsunami of devastating cuts in wages, jobs, pensions and public services on a scale never seen before. This is change for the very worst.

As the government’s new “independent” Office for Budget Responsibility will reveal, the economy is on much shakier ground than previously thought. Treasury growth forecasts which, if true, would have cut the budget deficit, are pure invention by the outgoing New Labour government. The OBR, by the way, is headed by Sir Alan Budd, who, in 2005 became a director of IG Group, which trades in financial derivatives and spread betting. Very “independent” then!

Attempts to restart economic growth through the printing of money inevitably came to nothing, both in Britain and in the United States. The crisis of the capitalist system has not gone away. Far from it, as John Authers writes in his new book for the Financial Times, "The fearful rise of markets”:

“The financial disaster of 2007 to 2009 … has not cured any of the underlying factors that led markets to become intertwined and overinflated and to endanger the world economy. This does not mean that another synchronised bubble followed by a crash is inevitable, but it does mean that such an event remains a distinct possibility.”

The global capitalist system has failed – economically and politically. So what follows is a short list of the changes to the social relations that define “our way of life” we think are worth considering.

First to go should be the profit-based financial system and all the associated wasteful, absurd activities that turn reasonable, well-educated, clever, potentially socially-useful people into crazed traders and wild-eyed speculators. They have gambled with everyone else’s pensions, savings and futures, and now hold governments around the world to ransom. Sure we’ll need a system of credit and money, but why not run it as a not-for-profit community service?

Then there’s the system of land and property ownership. This has survived more or less intact in Britain since the Middle Ages. It ties millions of people into paying the major part of their income as rent or interest in exchange for temporary occupation and use or the mirage of security as a house owner. It’ll be better, much better when all property is held in common. Socially-owned land and housing for all!

And that also applies to the ownership of capital – factories, offices, machines, tools, knowledge – all the durable things we’ve created that help us to produce what we need to live. As Marx explained, capital is value accumulated from many workers’ labour. For little more than 350 years the ownership of capital has given employers control over their employees.

Life will be better when private ownership, production for profit and the wages-for-labour employment contract is ended, and capital is under the control of the people who do the work that produces it.

We’ll need a new democratic process to make this happen. When Cameron’s campaign of persuasion meets popular opposition, he’ll either resort to force or the coalition will be driven out of power. Let’s build a real, much more democratic system of Peoples Assemblies that can make this new “way of life” a reality.

Gerry Gold
Economics editor

Tuesday, June 08, 2010

Beyond resistance

As the coalition government lines up massive spending cuts that even prime minister David Cameron acknowledges will shake society, a strategy that goes beyond resistance is needed if we are to defeat the Lib-Tory government’s plans.

Because make no mistake – that is what is involved. Throughout Europe, governments are impervious to protests and one-day strikes against cuts in pensions, pay and services. They can ride out storms that are only temporary.

Resistance isn’t futile, however, but to succeed it has to be part of a wider strategy that addresses the root cause of enormous budget deficits, namely the crisis of capitalism itself. If not, there is a real danger that protests could burn themselves out.

The coalition has seized the ideological high ground by presenting its plans as if “There is No Alternative” when it comes to saving the country from financial disaster. Inviting the public (and trade unions) to suggest where the axe should fall is part of this seductive approach.

Britain’s budget deficit in particular is the result of the dramatic plunge in capacity that followed hard on the heels of the 2008 global banking crash. The independent Institute for Fiscal Studies believes that the fall in the annual value of goods and services could be as high as 10% from pre-meltdown levels.

Government revenues of all kinds have dropped as production and consumption has plummeted. Tax takes from the financial sector, which propped up New Labour’s spending, have declined sharply, for example. With the housing market frozen, revenue from stamp duty has faded. Meanwhile, spending on unemployment and social security benefits has risen. And then there’s the cost of financing the banking bailouts.

In sum, the budget deficit expresses the crazy nature of an economic system driven by mammoth amounts of debt – personal, corporate and state. By the time of the 2008 meltdown, it was estimated that global debt was four times higher than the value of goods and services. Something had to give. And it did.

The destruction of capacity in the private sector is now to be followed by a similar massacre in the public sector. That is how capitalism traditionally “solves” its crisis.

So what kind of strategy do we need?

Firstly, it has to be a combined political and economic approach backed by mass mobilisation of people and their communities. As pressure on the government makes no difference – the demands of the financial markets carry far greater weight – the political aim is to bring the government down.

Obviously there’s no point in replacing the coalition with a rebranded version of New Labour, which in 13 years turned Britain into a playground for financial markets and speculators. As there is truly no alternative in this case, we should build
support for People’s Assemblies to challenge the existing political system.

Secondly, we have to demonstrate that the heart of the matter is capitalism itself. We have to terminate an economic system where artificially-induced booms are followed by slump on a regular basis. Democratically-owned and controlled sustainable production and finance is not only possible but absolutely necessary. Some ideas along these lines are outlined in our Manifesto of Revolutionary Solutions.

Opportunities exist to change the debate, to reject the capitalist state’s version of events. The anti-cuts committees that are already springing up around Britain should consider how to bring these essential political and economic questions into the heart of their campaigns. We must move beyond protest to prevent a calamitous reduction in living standards that the coalition and the bankers are preparing to impose on society.

Paul Feldman
Communications editor

Monday, June 07, 2010

Italy's political crisis raises old fears

As Italian trade unions prepare for a general strike later this month against public spending cuts, political tensions are once again rising within the unstable edifice that is the Italian state.

The background is the slow-motion collapse of the right-wing government led by Silvio Berlusconi, and the ruling classes’ desperate requirement for a stable regime that can carry through austerity measures.

Berlusconi is increasingly at odds with his coalition partners. Gianfranco Fini, the speaker of the Lower House and co-founder with Berlusconi of the ruling Party of Liberty, has formed a faction called Generation Italy and is manoeuvring for power.

The head of Italy's Northern League, a key ally of Berlusconi, has predicted the government will fall. Umberto Bossi, whose anti-immigrant party made strong gains in March regional elections, backed Berlusconi in his battle with Fini.

Meanwhile, public figures are taking the opportunity to remind the public of the plots aimed at destabilising the state during the 1990s and a clampdown on media freedom by the corrupt Berlusconi government has provoked a furious reaction.

Under Berlusconi, telephone eavesdropping reached some of the highest levels in Europe. But now Berlusconi has decided that enough was enough after journalists published leaks that caught him and his cronies out.

Guido Bertolasi, the head of the Civil Protection Service, and Angelo Balducci, senior officials in the country’s public works department, have both been implicated in scandals as a result of leaked phone taps. Balducci was recorded arranging a date with a young Vatican choir singer.

A new gagging law is being driven through the Italian parliament which, far from offering protection from intrusive state snooping, will benefit corrupt politicians and Mafiosi. The “legge bavaglio” (gagging law) will restrict magistrates from using phone taps. But not only will the courts be affected. Journalists who publish material from leaks will risk heavy fines.

Parliamentarians, newspaper editors, journalists and 220,000 individuals have registered their opposition through the Aavaz website. A post-it note campaign by the Repubblica newspaper has drawn widespread support. The editor of the Corriere della Sera, Italy’s leading daily newspaper, Ferruccio de Bortoli, believes that “there’s no other reason [for the new law] beside fear of further investigations that could involve members of the government.”

Press freedom website, Reporters Without Borders, points out: “The jail sentence and the size of the fines that can be imposed is out of all proportion and has to be considered as a real censorship. How many news organisations would dare to carry out this kind of investigative reporting if they knew they were risking this kind of financial bombshell?”

With political anxiety on the rise, national anti-Mafia attorney Piero Grasso and ex-presidents Carlo Ciampi and Oscar Scalfaro took the opportunity last week to speak of their fears of a coup d’état during the early 1990s and the existence of elements within the state itself working with the Mafia to undermine the government.

Scalfaro, who was president of the Italian republic from 1992-1999, said there had been “a political vacuum… which is the greatest weakness of a democratic state. It would be difficult for any state to rule under these conditions.”

Social tensions are rising as the recession takes its toll. Youth unemployment has reached a record 30% nationally. Attacks on immigrants and gays have been on the rise in recent months, especially in the capital.

The election of pro-fascist Gianni Alemanno as mayor of Rome in 2008 was taken by the far right as a signal to launch their attacks. "These thugs don't get any support from the town hall, but they feel justified and encouraged by the political climate," said Flavia Servadei, who runs the gays Coming Out bar.

Berlusconi, 73, who is notorious for his efforts to appear young, has just invested £40 million in a biotech company researching how to prevent ageing. He took advantage of the disarray in the state to return to power in 2008. But despite Berlusconi’s efforts to live forever, there are even darker forces waiting in the wings.

Corinna Lotz
A World to Win secretary

Friday, June 04, 2010

The real cost of the World Cup

With the opening match of the 2010 World Cup just a week away, hopes that the huge cost of staging the tournament would “showcase” South Africa, encourage inward investment and boost living standards seems misplaced.

Instead, hosting the tournament has drawn accusations that the £4 billion would have been better spent on housing and education. These sit alongside claims of inflated ticket prices, draconian security measures, a wave of evictions around the host cities, empty hotel rooms and a clampdown on local businesses by football’s governing body, Fifa.

While South Africa is the richest country on the continent, phenomenal levels of poverty still exist. There is a global record HIV/AIDS population of 5.7 million out of 49 million; some 50% live below the poverty line and one in three people are out of work after 15 years of ANC government rule.

In 2004, when Fifa awarded the tournament to South Africa, consultants Grant Thornton predicted costs of just £200m on stadiums and infrastructure and a boost to gross domestic product of £2 billion. The total bill has risen tenfold, when you take the upgrading of transport and telecommunications infrastructure into account, as well as running costs.

The World Cup organisers had expected 750,000 foreign fans but it is now estimated that only 200,000 visitors are heading to South Africa. Fifa put 160,000 tickets up for sale on Thursday morning after sponsors returned thousands of unwanted seats. Many tickets were allocated to corporate packages which have not been taken up.

The South African government has allocated £122 million to ensure maximum security for the month-long world Cup tournament. Some £60 million has been spent on equipment, which - in addition to armoured vehicles and helicopters - includes sniper rifles, surveillance cameras, advanced bomb-disabling equipment and water cannons. One of the tasks of the 40,000 police and 20,000 soldiers on duty is to enforce Fifa’s ruling that only approved merchandise is on sale on match days within a one-mile radius.

Anti-poverty campaigners in South Africa are blaming the World Cup for a wave of evictions around some of the host cities. They say the poorest are being swept from the streets. Outside Cape Town, some 1,500 corrugated iron shacks laid out in rows have appeared over the last two years. "It's because of the World Cup, they never did this to us before," Marietta Monagee said. "They want to clean the city and they put us here so people don't see how we struggle."

Nicholas Tucker, publicity secretary of the Socialist Party of Azania, believes that hosting the World Cup was a mistake and that the billions of rands “have yet to be paid for in blood on the backs of the black working class over the next generation.” Tucker warns of discontent “in the face of the reality of rising unemployment, reduced wages, growing squatter camps, lowered education outcomes and failing health systems.” He accuses the ANC of being “owned lock stock and barrel by the IMF and World Bank overlords” and of scoring an “own goal” in staging the World Cup and asks:

“How does one reconcile the fact that some 28 million of our people live in the worst kind of squatter conditions imaginable? How does one reconcile the fact that some 28 million of our people do not have access to clean drinking water? How does one reconcile the fact that some 19 million of our people are still unemployed when we are fed the lie that our economy is stable and will weather the storms of the now evident global economic depression?”

One thing is certain, whoever picks up the final bill – including those for subsequently underused stadiums and facilities – it won’t be Fifa. The sport’s governing body is in practice a transnational corporation. It will pocket the vast majority of the money raised by the sale of media rights and global sponsorship deals as well as some of the income from ticket sales.

Paul Feldman
Communications editor

Thursday, June 03, 2010

UN climate talks are a sham

The views of the people are to be specifically excluded from the next round of United Nations climate talks in Mexico in December, but the interests of the corporations are right on board.

Plans for the talks at Cancun are currently being made at a meeting in Bonn and a working group looking at the arrangements says there must be no repeat of “the troubles at Copenhagen”.

To achieve this aim, countries will no longer be permitted to include NGOs, social justice or campaigning groups in their delegations. Inclusion of representatives of business, banks or corporations will be allowed, however.

And the voice of the people is also being kept out of the text for the talks. Bolivia had presented the conclusions of the World People’s Conference on Climate Change and the Rights of Mother Earth held in Cochabamba recently, for inclusion in the debate, but the chair of the talks entirely ignored them.

But the Copenhagen Accord, thrown together at the last minute at the end of 2009 by a handful of rich countries in order to prevent any binding agreement or indeed any action on climate change, will be on the table.

Ambassador Pablo Solon, Bolivia’s representative at the talks, today resubmitted the text from Cochabamba, saying the voices of the real victims of climate change are being excluded from the negotiations.

“In April 2010 more than 35,000 people from 140 countries gathered in Cochabamba, Bolivia, and developed the historic Cochabamba People’s Agreement, a consensus-based document reflecting substantive solutions to the climate crisis,” Solon said. “We are therefore deeply concerned that the new text proposed as a basis for climate change negotiations does not reflect any of the main conclusions reached in Cochabamba. We made these proposals in line with UN rules, by the April deadline, but still they have not been included.

“Proposals from Cochabamba have been side-lined but every single element of the so called ‘Copenhagen Accord’ has been included, even though it was not recognized by the United Nations. This means that on finance we are only considering $100 billion a year to respond to climate change – just $20 per person in the developing world – to solve climate change. It’s clear that climate change impacts are not going to be dealt with for just $20 per person.”

Solon accused the organisers of being “undemocratic and non-transparent” in excluding particular proposals from the negotiations. In total 18 different ideas were omitted, including 50% emission cuts for rich countries by 2017, a 300ppm greenhouse gas stabilization target, a proposal for a declaration on the Rights of Mother Earth and a new, realistic assessment of finance needed to fight climate change.

“There cannot be an equitable, transparent, and inclusive negotiation process, nor true solutions to the urgency of the climate crisis, if the UN negotiating text ignores the voices of the peoples of the world that the negotiators should be representing.” Solon insisted.

The reality is, of course, that the UN has caved in entirely to the rich capitalist nations. The lesson it learned from Copenhagen was that, whatever the planet needs, whatever humanity needs, and whatever text has been drawn up in advance, only the needs of the corporations count. Taking that on board, the UN has thrown in the towel, and is simply going through the motions in advance of Cancun, which organisers want to be held behind closed doors.

Bolivia is right to expose the UN Framework Negotiations and try to hold the governments of the advanced capitalist countries to account. But in the end the solution to the problem of climate change and implementation of the Cochabamba Accord can only take place as a result of revolutionary action to transform democracy to put the people in charge of the decisions.

Penny Cole
Environment editor

Wednesday, June 02, 2010

The case for seizing BP

The crashing sound that is the price of BP shares falling through the floor highlights not only the environmental consequences of deep water drilling for oil but also the fatal dependency on stock markets when it comes to workers’ pensions.

At the time of writing, the company’s market value was down by one third since the Horizon Deepwater drilling rig operated by Swiss corporation Transocean, exploded six weeks ago, killing 11 workers, and started pouring oil into the Gulf of Mexico.

This huge and sudden decline in its value and the growing uncertainty over the fate of BP places the pensions of millions in jeopardy. The company paid £6.6 billion in dividends last year – equal to £1 in every £7 paid out by all the companies in the FTSE 100 – and is a major holding in most pension funds. Most private pensions in the UK are dependent on investment funds managed by companies which are major shareholders in BP, previously the UK’s most valuable company.

The oil spill disaster is an open and shut case for abolishing the unsustainable nature of capitalist ownership and production for profit. Even former US Secretary of Labour Robert Reich has called for the US government to take the company into a “temporary receivership.”

Seize BP launches a nationwide campaign of protests in cities across the US from tomorrow. It is a part of the Answer coalition which consists of hundreds of organisations and prominent individuals and scores of campaigning centres in cities and towns across the US.

The national steering committee represents major national organisations that have campaigned against US intervention in Latin America, the Caribbean, the Middle East and Asia, as well as for social and economic justice for working and poor people in America itself. Seize BP says:

There must be remediation and compensation for all damages flowing from BP’s oil spill, including all losses to people, economy and otherwise. It should not be up to BP to decide if and when to dole out compensation.

BP reaped $5.6 billion of profits in the first quarter of 2010 and $17 billion in 2009. This is money made from BP’s aggressive push into ultra-hazardous deep water offshore drilling that has taken the lives of 11 workers in the recent explosion, and caused human misery and environmental wreckage that will persist for years to come. These huge sums are pure profit — what remains after all accounting manoeuvres and payments of the massive salaries and luxurious perks to executives.

Here, BP has committed acts causing devastation that threatens the spoliation and poisoning of the shorelands, wildlife, human health and economy of no less than the five states that have frontal coastline on the Gulf of Mexico: Texas, Louisiana, Mississippi, Alabama and Florida. Worst case scenarios would pollute and destroy the frontal coastlines of states up the Atlantic seaboard.

BP’s conduct constitutes an assault on the people and environment of the surrounding region of the Gulf of Mexico. BP’s assets should be immediately seized, and placed in a trust, in amounts proportionate to — and sufficient to fully compensate for — all projected harm from its dangerous and reckless acts in pursuit of super-profits.

The sticking point revolves about who is actually going to seize BP? Obama’s White House is certainly not going to, that’s for sure, however loud and militant the protests and petitions are. Expropriation of BP and other transnational corporations would be a revolutionary act, founded on mass mobilisation and a simultaneous political struggle for power. For the sake of both the environment and people’s pensions, this has to be the way forward.

Gerry Gold
Economics editor

Tuesday, June 01, 2010

Israel continues to get away with murder

If the Israeli government thought it could get away with an act of piracy on the high seas, then it was because it had a green light from Washington and other capitals around the world to act with impunity in defiance of international law.

When the Israelis sent out warnings that it would intercept the aid convoy which set out from Turkey in a bid to break the blockade, the rest of the world said nothing. Worse, Turkey and Greece continued with plans for joint military exercises with Israel which only after the killing of at least 10 activists, who resisted when the ships were attacked, have they called off.

Washington officially supports the barbaric blockade of Gaza imposed in 2007. President Obama has simply continued with the policy of his predecessor which has created the biggest prison camp in the world aka Gaza. European Union governments, by refusing to recognise Hamas after its election victory, have sustained this policy.

Obama's support for the rogue state of Israel predictably led to a watering down of the Security Council statement issued today. It condemns only “those acts” that led to the assault, avoiding the mention of Israel directly, and asks for an “impartial investigation”. A call for the end of the blockade is noticeable by its absence. What a farce the United Nations has become, its resolutions demanding an end to Israel’s illegal occupation of the West Bank and Gaza gathering dust since they were passed decades ago.

With the help of the deeply reactionary Mubarak regime in Cairo, Israel has forced most of Gaza’s 1.5 million people into abject poverty and ill health through a blockade that resembles a medieval siege. Last year, a military assault killed more than 1,500 Palestinians and destroyed key plant and infrastructure. According to Amnesty International, the people of Gaza are victims of a systematic act of collective punishment by Israel’s government.

The blunt truth is that the present Israeli government has no intention of conceding an inch on the right of the Palestinians to self-determination. Knowing that Washington is a paper tiger on the matter, the Israelis continue apace with settlement building and the takeover of East Jerusalem.

Prime minister Netanyahu was on his way to Washington when the attack on the ships took place. He was due to agree to talks about talks with the Palestinians. Of course, he turned back en route to deal with the crisis that has resulted. How convenient the attack proved!

Netanyahu and company can't solve the problem of Gaza peacefully because that would call into question the whole basis for the state of Israel and the occupation, which is a key factor in the growth of the economy. Settlement building is big business – and it is done with cheap Palestinian labour.

But the gap between rich and poor in Israel itself is wider than ever. Palestinians inside the country are the poorest – and are now flexing their muscles. The authorities are currently prosecuting an Israeli Arab leader of the boycott movement, Ameer Makhoul. He was tortured into making a false confession, and is now on trial for his life.

In the end it is only action within Israel itself and a change of direction on the part of the Palestinians through the emergence of a new leadership that can change the situation. Ultimately, the “humanitarian” campaigns do not provide the answers. Palestinians need a fresh framework for the Intifada, which connects with the poor in Israel and exposes the relationship between Zionism and capitalism.

Hamas and Fatah between them have led the Palestinians into a dead end. A new, united way forward based on a single, secular state in the region for both Jew and Arab is not only necessary but is now patently the only realistic option.

Paul Feldman
Communications editor

Israel continues to get away with murder

If the Israeli government thought it could get away with an act of piracy on the high seas, then it was because it had a green light from Washington and other capitals around the world to act with impunity in defiance of international law.

When the Israelis sent out warnings that it would intercept the aid convoy which set out from Turkey in a bid to break the blockade, the rest of the world said nothing. Worse, Turkey and Greece continued with plans for joint military exercises with Israel which only after the killing of at least 10 activists, who resisted when the ships were attacked, have they called off.

Washington officially supports the barbaric blockade of Gaza imposed in 2007. President Obama has simply continued with the policy of his predecessor which has created the biggest prison camp in the world aka Gaza. European Union governments, by refusing to recognise Hamas after its election victory, have sustained this policy.

Obama's support for the rogue state of Israel predictably led to a watering down of the Security Council statement issued today. It condemns only “those acts” that led to the assault, avoiding the mention of Israel directly, and asks for an “impartial investigation”. A call for the end of the blockade is noticeable by its absence. What a farce the United Nations has become, its resolutions demanding an end to Israel’s illegal occupation of the West Bank and Gaza gathering dust since they were passed decades ago.

With the help of the deeply reactionary Mubarak regime in Cairo, Israel has forced most of Gaza’s 1.5 million people into abject poverty and ill health through a blockade that resembles a medieval siege. Last year, a military assault killed more than 1,500 Palestinians and destroyed key plant and infrastructure. According to Amnesty International, the people of Gaza are victims of a systematic act of collective punishment by Israel’s government.

The blunt truth is that the present Israeli government has no intention of conceding an inch on the right of the Palestinians to self-determination. Knowing that Washington is a paper tiger on the matter, the Israelis continue apace with settlement building and the takeover of East Jerusalem.

Prime minister Netanyahu was on his way to Washington when the attack on the ships took place. He was due to agree to talks about talks with the Palestinians. Of course, he turned back en route to deal with the crisis that has resulted. How convenient the attack proved!

Netanyahu and company can't solve the problem of Gaza peacefully because that would call into question the whole basis for the state of Israel and the occupation, which is a key factor in the growth of the economy. Settlement building is big business – and it is done with cheap Palestinian labour.

But the gap between rich and poor in Israel itself is wider than ever. Palestinians inside the country are the poorest – and are now flexing their muscles. The authorities are currently prosecuting an Israeli Arab leader of the boycott movement, Ameer Makhoul. He was tortured into making a false confession, and is now on trial for his life.

In the end it is only action within Israel itself and a change of direction on the part of the Palestinians through the emergence of a new leadership that can change the situation. Ultimately, the “humanitarian” campaigns do not provide the answers. Palestinians need a fresh framework for the Intifada, which connects with the poor in Israel and exposes the relationship between Zionism and capitalism.

Hamas and Fatah between them have led the Palestinians into a dead end. A new, united way forward based on a single, secular state in the region for both Jew and Arab is not only necessary but is now patently the only realistic option.

Paul Feldman
Communications editor